What Are Culture Differences in Management - Literature review Example

Introduction Cross cultural management is loosely defined as a concept that attempts to analyse the impact of culture from a management perspective (Fisher & Portiger, 2012). This concept mainly derives from the aspect of organisational “Corporate culture is the pattern of shared beliefs, attitudes, assumptions and values in an organisation which shape the way people act and interact and strongly influences the ways in which things get done,” (Armstrong, 1994, p. 45). Essentially, organisational culture reflects the beliefs shared by the members of the organisation. These beliefs are shaped by the values of a certain group of people. Dbhaibo & Harb (2010, p. 5) concurs with this notion when they state that “values are frequently used to shed light on the behaviour and attitudes of individuals and the functioning of institutions, organisations, and cultures.” Basically, values are beliefs or concepts that shape the behaviour of people. As such, this report seeks to review different sources of available literature about the concept of cross cultural management. The paper will also focus on main themes discussed by the authors with regards to this particular subject. The paper will also draw a conclusion based on the main points discussed by the authors in different literature reviewed in various studies related to cross cultural management. The significance of understanding the role of culture from a managerial perspective Globalisation has resulted in deregulation of business environment across countries where it can be seen that free trade is promoted among nations (Buckman, 2004). This has also made it possible for different organisations to operate in different countries whereby knowledge transfer is promoted. However, foreign companies need to take into consideration the aspect of culture in their operations in order to satisfy the needs of different people affected by the activities of the company. In as far as the concept of management is concerned, it can be observed that the managers should take into consideration the cultural values of different people so that they can develop a sense of belongingness to the company. The effectiveness of the managers in foreign companies determines the success or failure of the organization. Hofstede’s framework of cultural diversity One of the most renowned researchers in the field of culture and cultural differences is Geert Hofstede who conducted a classical survey involving 160 000 IBM employees in 40 different countries (Robbins, 1993). He identified four value dimensions in which the countries differed and these include the following: power distance which is concerned with how power is distributed, uncertainty avoidance which talks about how uncertainty is found to be uncomfortable, individualism/collectivism which is concerned with the extent to which people make their decisions as well as masculinity/femininity. According to this framework of cultural diversity, it can be noted that different countries use different values and it is the duty of the leaders to ensure that they know the cultural values used in particular countries they will be operating in. Various studies related to the subject of management across cultures indicate that foreign managers and the managers in operating in a host country in case of multinational organizations should have knowledge about different cultures of the countries involved so that they can modify their management principles in order to suit the business environment obtaining from the host country since culture has a great impact on the operations of a particular company Gopolan & Stahl (2001). Understanding the impact of national culture on management practices According to a research conducted by Gopolan & Stahl (2001) entitled, “Application of management theories and practices to Indian business environment: understanding the impact of national culture,” the authors argue that most of the management theories originate from America and these are culture specific. Whilst most of the management ideas that are technical in nature can be easily transferred to other countries, it can be noted that most of the management ideas from America are culture specific hence they cannot be universally transplanted to other countries like India. According to Hofstede’s framework of cultural diversity, it can be noted that America’s national culture is individualistic given that it emphasises on aspects such individual growth and success in terms of wealth accumulation while India’s national culture is largely based on collectivism. By and large, these two countries differ in terms of their national culture which entails hat people in these two countries have different values. Therefore, the management approach that is used in these two countries significantly differ as a result of the varying cultures which derive from the value systems of the respective countries. Osland & Bird also suggest that Americans are different from people who come from Asian countries by virtue of being individualistic while the Asians believe in collectivism. Another study conducted by Fischer & Portiger (2012) entitled “Are cultural values the same as the values of individuals? An examination of similarities in personal, social and cultural value structures,” shows that the value system of a certain group of people has a great impact on their behaviour. This study found that there is a strong correlation between individual values and group values since these have a great impact on their behaviour. In most cases, values are used to measure the level of satisfaction and well being of the individuals. To a larger extent, it can be seen that the values held by a certain group of people has a great impact on their behaviour especially in organizations. According to different studies, it can be seen that the values that are not compatible with the culture of a certain group of people negatively impacts on their performance at work. It can be seen that companies that are concerned with their success in business should not wholly import their values to the locals in the host country since this can affect their performance at work. This view that national culture has a bearing on the behaviour of managers is also supported by Kalliny (2011) in a research entitled “Differences between American, Egyptian and Lebanese Humor: Styles Implications for International Management. This study noted that Arab culture is too traditional and conservative compared to American culture which is liberal. Therefore, the Arabs and the Americans behave differently and this affects their leadership styles. Managers operating in foreign countries ought to take this aspect into consideration since this affects their behaviour as well as that of their employees. Kraisser et al (2010) also support this view when they suggest that national culture impact on almost all facets of business hence the need for managers to take this into account when they are operating in different countries. Another research conducted by Dbhaibo & Harb (2010) entitled “Values and Justice as Predictors of Perceived Stress in Lebanese Organisational Settings” stresses the importance of values of people in an organisation since it impacts on their performance. The others suggest that an incongruence or misfit in values between employees and their co-workers can also contribute to perceptions of stress. If the employees are not satisfied with the way they are treated or the values imposed upon them then they are likely to feel alienated from the organization. This can contribute to an increase in stress which can affect their performance. Organizational justice is influential on the workers given that they derive their satisfaction of work from the treatment they are given by the management. It is prudent for the management to ensure that they implement organizational values that are compatible with individual values since these are very important in as far as performance if concerned. Impact of culture on leadership Judge (2001) also carried a researched titled “Is a Leaders Character Culture-Bound or Culture-Free? An Empirical Comparison of the Character Traits of American and Taiwanese CEOs” and found out that culture has a great impact on the behaviour and ultimately character of the leader. In this study, it has been noted that there is a wide gap between the character of American CEOs and Taiwanese CEOs. Their leadership traits mainly derive from their value systems originating from their own countries. Therefore, nationalities from these two countries ought to take into consideration the values of the host country if they are operating in a foreign country. Efforts should be made by people from these countries to homogenize their cultures if they are operating in a foreign country so as to be able to satisfy the needs of the people affected by the operations of the organization in a certain country. On the other hand, it can be noted that Jackson (2011) also conducted another entitled "From cultural values to cross-cultural interfaces: Hofstede goes to Africa" and this study differs from other studies related to the impact of culture on management. The other argues from the perspective that Hofstede’s cultural dimensions to management which is mainly used as the basis for cultural studies and organization has some shortcomings since it does not address the issue of measures that need to be taken in order to address the aspect of different cultural interfaces in different areas. Hofstede’s cultural dimensions were criticized by McSweeny (2010) who suggests that the survey was only carried on one organization therefore overlooked some of the important issues. National Culture and Advertising Decisions Deleersnyder et al (2009) also carried a research entitled “The Role of National Culture in Advertising’s Sensitivity to Business Cycles: An Investigation Across Continents” and they propose that national culture influences advertising decisions through the perceptions of the managers in the company’s strategy as well as the decision making process with regards to setting the budget for advertising. This study was carried out in 37 different countries and the results indicate that managers who are conscious of the cultural issues obtaining in a certain country are winners with regards to appealing to the interests of many customers towards the products offered in the market. It is therefore imperative for advertising executives to carry out a research about the structure of a certain culture in a given country before they advertise their offerings in the market. Potential buyers have various perceptions towards a certain product and these perceptions shape their behaviour. Therefore, it can be noted that the cultural values of a certain group of people shapes their attitude towards something and this influences their buyer behaviour. If the advertisement is not compatible with their values, then the targeted people can shun the products offered. Summary of the findings of the studies reviewed above A critical analysis of different researches related to cross cultural management mainly use Hofstede’s cultural dimensions as the theoretical framework of their studies. As noted above, a similar theme has recurred in many studies which brings us to the conclusion that the concept of national culture has a very important role in the practice of management. To a larger extent, it can be noted that culture of the organisation plays a pivotal role in ensuring that the employees are satisfied with their job. Managers of multinational companies need to take into consideration the cultural values of the people in the host country in order to manage them effectively. References Armstrong, M. (1994). Improving organisational effectiveness. London. Kogan Page. Buckman, G. (2004). Globalisation: Tame it or scrap it. New York: Zed Books. Dbaibo, Dania & Charles Harb.“Values and Justice as Predictors of Perceived Stress in Lebanese Organisational Settings.” Applied Psychology: An International Review, 2010 Deleersnyder, B. et al. “The Role of National Culture in Advertising’s Sensitivity to Business Cycles: An Investigation Across Continents.” Journal of Marketing Research 623 Vol. XLVI (October 2009), 623–636 Fischer, R. & Poortinga, Y.H. “Are cultural values the same as the values of individuals? An examination of similarities in personal, social and cultural value structures” International Journal of Cross Cultural Management 2012 12: 157. Hofstede, Gert. “Cultural constraints in management theories.” Academy of Management Executive, 1993 Vol. 7 No. Gopolan, Suresh & Stahl, Angie. “Application of management theories and practices to Indian business environment: understanding the impact of national culture.” (2001). American Business review. Judge, William Q. “Is a Leaders Character Culture-Bound or Culture-Free? An Empirical Comparison of the Character Traits of American and Taiwanese CEOs.” Journal of Leadership & Organizational Studies 2001 8: 63. Kalliny, Morris, Kevin W. Cruthirds and Michael S. Minor “Differences between American, Egyptian and Lebanese Humor Styles : Implications for International Management.” International Journal of Cross Cultural Management 2006 6: 121. Kreisser, Patrick. “Cultural Influences on Entrepreneurial Orientation: The Impact of National Culture on Risk Taking and Proactiveness in SMEs.” September 2010. Oslond Joyce, S. & Allan Bird. “Beyond sophisticated stereotyping: Cultural sensemaking in context.” Academy of Management Executive. 2000, Vol. 14, No. 1. McSweeney, Brendan. “Hofstedes Model of National Cultural Differences and their Consequences: A Triumph of Faith - a Failure of Analysis.” Human Relations 2002 55: 89. Robbins, S.P. (1993). Organisational behaviour: Concepts, controversies and applications.6th Edition. NJ: Prentice Hall. Terence Jackson. (2011),"From cultural values to cross-cultural interfaces: Hofstede goes to Africa,” Journal of Organizational Change Management, Vol. 24 Iss: 4 pp. 532 – 558. Read More