Cross-Cultural Business - Case Study Example

CROSS CULTURAL BUSINESS LITERATURE REVIEW By Insert Your Name Presented to Instructor’s Name, Course Institution Name, Location Date Due Introduction Today, a number of countries, especially from Asia are experiencing a period of change. Rather than being treated as among the retrograde countries in the contemporary world, Asian countries are playing a vital role in the global economy. For instance, Japan has realized attained a solid presence in the global economy, especially since it is a chief producer and exporter. Other nations that have shown significant growth potential in consumption, exportation and manufacturing include Taiwan, Singapore, South Korea, Thailand, and Hong Kong. The major issue in this case has resulted from the growing partnerships between companies in Asian countries and those based in America and Europe. However, these partnerships have resulted to issues pertaining to effective management due to the influence of traditional values, traditions, objectives, and practices (Graen and Hui 1996, p. 62). This paper will discuss whether cross-cultural interactions have any influence the productivity of a firm, particularly in the advent of globalization. Discussion Diversities Prevalent Across Cultures People from different countries have different ways of behaving and practice different beliefs. To begin with, different cultures and countries differ based on the ways in which they perceive different issues pertaining to language, organizations, and language. This is contributes to nominal differences. Language, for instance, defines the phenomena of people in a different perspective (Brannen and Doz 2010, p. 237). To manage change in a different culture therefore entails understanding how different cultures define various events or objects. A particular connotation in one culture may be entirely different from another. In the US for instance, commitment to an organization means that one is willing to be associated with a given firm, and identify himself with its values and goals (Guang and Trotter 2012, p. 6457). In the case of people from Asian countries, especially China, individuals usually show commitment to an enterprise that portrays traditional values from China, particularly those that are familial in nature. They do not lay significant emphasis towards the values and objectives that a firm shows towards individuals. Conversely, some cultures indicate nominal differences, even though they have identical cultures or have a common language origin. Among the Americans, for example, they treat a biscuit as a biscuit, unlike in the case of the British (Guang and Trotter 2012, p. 6460). Systematic differences also contributes to cultural and national differences. Here, individuals practice diverse beliefs, values, as well as philosophy that is attributed to social regulations. These differences contribute to a blatant, yet manifested phenomena towards a culture or a country. For instance, the American culture is regarded as individualistic, whereas the one of the Chinese is collectivistic (Lee 2013, p. 55). Most researchers in the area of management reflect on these kinds of differences to help them understand the values and beliefs of a particular culture or country. In the case of collectivist cultures, the participants mostly reflect on collective goals and objectives, unlike individualistic cultures, which are more aligned to realizing personal goals (Usunier 1998, p. 67). In this perspective, therefore, it is true that both systematic and nominal differences play a vital role in dictating how organizations from different cultures and countries perceive change management. Managers from distinct cultures and countries should emphasize on both systematic and nominal differences to help them understand and manage the differences in an effective way (Usunier 1998, p. 68). However, they should understand that managing the differences across cultures and countries may be costly or inconsequential, and therefore, should take their time in understanding the consequences and costs involved before embarking on the process. Differences in Business Approaches towards Managing Culture Different organizations follow diverse ways of managing culture. These differences prevails due to the prevalence of “two cultures” and the “third culture.” These approaches are entirely different. Two cultures, for instance, prevail when a firm’s partners who come from different cultures exercise strange practices while interacting which each other. These business associates may or may not know each other, meaning that the relationship that prevails between them is a low quality one (Brannen and Doz 2010, p. 238). Here, the members of may accept or reject each other’s cultural diversities making them to impose their unique values to individuals from the different culture. They may also tend to inflict their unique cultural practices to each other. This practice is mostly evident in the case of those firms that inflict their whole system to associates from a different culture, without considering the systematic or nominal differences that exist between them (Lee 2013, p. 59). Whenever the associates accept that certain cultural differences prevail between them they accept them. Also, they may accept the culture of their partners but still retain their own. For instance, when a company of American origin honours workers from China, it should accept the visits that the family members of a certain work make to the company, though it may still emphasize on its American values to judge the practices that the Chinese workers undertake (Tubridy 2011, para. 1). The third culture approach with respect to change management emphasizes on bridging the two cultures, and later surpassing them. Third culture focuses on eliminating the differences that prevail across diverse cultural practices. Here, only the nominal differences get recognized, though it is appropriate to note the systematic diversities also. Here, the business associates from different cultures formulate organizational practices that the employees from the two cultures can accept and implement in a firm (Tubridy 2011, para. 4). Distinct Traits of Two Cultures and the Third Culture Two cultures and the third culture have various differences. In the event of the two-culture approach, the dealings that organizations undertake emphasize on protecting an individual’s interests, and the partners are not attracted to each other’s practices. In this case, the members focus on realizing short-term goals, thereby forcing them to embark on severe hostility and competition even while within the organization (Brannen and Doz 2010, p. 241). Here, legal contracts are the ones that regulate their individualistic practices, though they often suffer when they breach the contracts. The associates are reliant on a win-lose state, whereby one believes that in order to gain from a particular enterprise deal, the other party should lose, or realize insignificant gains (Maude 2011, p. 54). With regard to the case of the third culture, the partners emphasize on being cultural “insiders” as opposed to “outsiders.” An individual who serves as a cultural insider develops respect for the cultural practices of his partners, and does not judge them based on how they practice their own cultural values. Instead of developing a mutual disinterest attitude, the individuals in the case of third culture develop mutual trust and respect (Maude 2011, p. 59). Since they become reliable and genuine business associates, they are capable of focusing on long-term goals of an enterprise. When they are doing business, the associates develop reliance on mutual obligation and handshakes to undertake their processes is a professional manner (Luo and Shenkar 2011, p. 5). The third culture business associates mostly target a win-win state, where they can boost their profitability when they cooperate with each other. In this case, it is true that the third culture plays a vital role in driving an enterprise towards success, since it facilitates effective cross-cultural relationships. This culture is effective since it creates room for flexibility while engaging in business dealings (Luo and Shenkar 2011, p. 7). The associates develop reliance on trust as opposed to tedious lawsuits, which make an enterprise to be in efficient, and brings down the level of control by outsiders. It makes the partners to make more effort and utilize the capabilities of their partners to avoid failing a firm (Guang and Trotter 2012, p. 6462). Case Study of Third Culture Relevance in an Organization In the recent past, a major Japanese manufacturing organization asked one of its associates to help introduce venture to a different country that was characterized by diverse cultural practices. The company was to be introduced to Michigan, US. The executives of the enterprise feared that the cross-cultural differences that prevailed between them would lead to failure of the company, since the same venture failed in Australia. Here, the executives of the firm wondered what challenges that the company encountered in Australia, though they believed to have done everything according to plan. Their business development plan targeted growing from a small company before embarking on high-end practices. The plant they had built in the home country was operating appropriately. After breaking it down to Australia, everything was working well and no problems were reported initially. They also hired local executives to handle the operations of the company based on its procedures and philosophy (Graen and Hui 1996, p. 66). However, the cross-cultural relationship between the expatriate and local executives did not develop according to plan. Though the Australian and Japanese colleagues were friendly, something between the two cultures did not work well. After the Japanese managers gave instructions to the Australian managers, they did things, which revealed that they failed to understand the guidelines. This is especially because the Japanese and Australian executives did not become partners. As a result, the Australian managers were not interested in seeing the company excel, particularly because these partners did not practice third culture. The embarrassment in this case became evident since the Japanese and Australian executives failed to develop an effective cross-cultural relationship. This resulted to the production of low-quality products, grievances, and severe strikes (Graen and Hui 1996, p. 67). For the company to succeed in pursuing its operations in Michigan, the executives in the region can make the company succeed once they select the managers carefully based on ethnocentricity, empathy and compatibility. Here, they should train them in handling cross-cultural relationships, skills and knowledge, as well as adopt a third culture approach in helping the American and Japanese managers to work together before implementing their plan. In this case, they would not make a similar mistake like the one they made in Australia since they have developed a third culture, which will help the executives to cooperate and contribute towards the success of the company. Therefore, it is true that third culture lays a vital role in helping mutual respect, trust, and obligation, which the executives from both Japan and America can exercise towards each other (Graen and Hui 1996, p. 67). Influence of Transculturals in Business Performance One of the major issues that enterprises encounter is how to develop a third culture. To address this issue, it is vital to consider the kind of workforce needed. Research reveals that transculturals play a vital role in helping to create a third culture in a firm. These are individuals who look for opportunities of growth beyond their own culture to help them develop an understanding of the different ways in which distinct cultures function without any biases, and make reasonable cross-cultural decisions (Lee 2013, p. 55). Cultures have a significant influence on the manner in which their members behave, as well as their mode of thinking. They are the ones that help to transfer beliefs and values from current generation to the other, and also dictate norms to them. In order to gain recognition is a given culture, a member recognises his society based on the way his culture is socialised (Lee 2013, p. 58). In this case, it is appropriate to undertake sufficient research on what cross-culture entails to help an individual go past his culture’s socialization. Since most people who practice cross-cultural approaches are normally insiders of their culture, it is appropriate for two associates to identify those executives who are capable of being transculturals (Guang and Trotter 2012, p. 6463). This move becomes effective when the executives are offered an opportunity to network with each other easily. Conclusion The relationships that are developed through third culture and transculturals help business partners to interact with each other in-depth. It is vital for enterprises to develop a third culture, especially if they want to develop effective relationships with foreign associates. After developing a cross-culture relationship, the partners should make sure that no particular culture dominates the other. Instead, the partners from the two distinct cultures are supposed to work together to help them in developing a third culture, which directs the manner in which the two workers can work in harmony. This practice helps to introduce new ways of handling duties in an effective manner, and hence realize the goals and objectives of an enterprise together. References Brannen, YM & Doz, YL 2010, ‘From a distance and detached to up close and personal: Bridging strategic and cross-cultural perspectives in international management research and practice’, Scandinavian Journal of Management, vol. 26, no. 3, pp. 236-247. Graen, G & Hui, C 1996, ‘Managing changes in globalizing business: how to manage cross- cultural’, Journal of Organizational Change Management, viewed 9, no. 3, pp. `62-72. Guang, T & Trotter, D 2012, ‘Key issues in cross-cultural business communication: Anthropological approaches to international business’, African Journal of Business Management, vol. 6, no. 22, pp. 6456-6464. Lee, YF 2013, Managerial philosophy of Chinese CEOs in modern business: A cross-cultural study’, Tékhne, vol. 11, no. 2, pp. 54-63. Luo, Y & Shenkar, O 2011, ‘Toward a perspective of cultural friction in international business’, Journal of International Management, vol. 17, no. 1, pp. 1-14. Maude, B 2011, Managing Cross-Cultural Communication: Principles and Practice, Palgrave Macmillan, London. Tubridy, D 2011, Cross cultural business relationships, viewed 19 August 2014, . Usunier, JC 1998, International and Cross-Cultural Management Research, SAGE Publications Ltd, New York. Read More