Cultural Intelligence in the Modern Manager - Essay Example

Critically evaluate the importance of "culture intelligence for the modern international manager: Managers of international business corporations as well as management scholars agree that understanding the nuances and subtleties associated with foreign cultures is an essential aspect of successful operations there. What has come to be termed as “culture intelligence” is an important ingredient for running a trans-national enterprise. Several studies and research projects done on this subject have also inferred the same. In this essay, we will explore this topic in detail, by citing suitable academic sources in support of stated arguments. To begin with, modern theories of management such as Transformational Leadership and Leader Member Exchange (LMX) identify and emphasize the relevance of cultural knowledge for successful management. These Transformational/Charismatic leadership theories that take into account aspects of local culture “offer the promise of extraordinary individual and organizational outcomes. Leaders motivate followers to perform beyond expected levels by activating higher order needs, fostering a climate of trust, and inducing them to transcend their self-interest for the organizations sake. Numerous investigations point to the robustness of the effects of such leadership on individual and organizational outcomes such as job satisfaction, organizational commitment, and performance” (Briscoe & Schuler, 2004) Further, the scope and applicability of Human Resource Management practices in a country whose culture is alien to the top management has transpired into a considerable debate across academia and industry. The issue is especially relevant to trans-national corporations when their operations are expanded to new locales as a result of neo-liberal economic outcomes. Performance Management is a strategic management process, which is purported to achieve the company’s bottom-line, “enables the MNC to continuously evaluate and improve individual, subsidiary unit, and corporate performance against clearly defined, preset objectives that are directly linked to company strategy” (Lindholm, 1999). Since this subject is not rigorously researched yet, the effects of culturally sensitive Performance Management on job satisfaction among staff in subsidiary facilities, which is comprised of foreign nationals and where cultural sensibilities may be very different from that of the offices at home country. On top of that, the inadequate research in this area is indicative of the scarcity of research regarding the attitudes of host-country staff, especially the blue collar workers in subsidiaries abroad. Managers of Multinational Organizations are hampered by the relative lack of research in the area of “culture intelligence”. A few recent studies in this area, provides evidence that cultural differences do “influence elements of employee performance and that the transferability of managerial processes between countries cannot be assumed” (Lindholm, 1999). The conventional management theory based on the mistaken belief that “one size fits all”, no longer holds true in light of worldwide economic globalization. Successful management practices and business processes in the United States and Europe does not imply that they can be applied anywhere in the world. To the contrary, management styles, values, ethics, priorities and methods vary from one cultural group to another. Yet, many modern managers are not willing to embrace a region-specific management approach, based on local sensibilities, sentiments and values. The reason why managers are slow to adopt this principle can be partially attributed to the fact that the phenomenon of Globalization induces a certain standardization/generalization of commodities. The management is pulled in two opposing directions by globalization. First, they are required to standardization their commodities in order to achieve economies of scale and keep quality factors in check. Secondly, they are expected to adopt culture-specific specialized business practices. Many international managers apparently flounder in striking a balance between these two imperatives. In other words, “the current drive toward globalization makes it harder. Globalization leads to standardization. Big Macs are the same around the world, but McDonalds management practices should not be. Just as Big Macs in Moscow are status and luxury while Big Macs in New York are utilitarian, requisite management practices differ across cultures even when products do not” (Newman & Nollen, 1996). There is more evidence that suggests that managers of trans-national business enterprises should be flexible in their management practices. The much acclaimed ‘pay-for-performance’ model of providing incentives to employees worked really well in American and British companies. But, when this ‘pay-for-performance’ approach was applied to East Asian countries like Japan and South Korea, they proved a failure. Similarly, “quality circles are widely used and effective in Japan but have not delivered the same performance results in the U.S. despite no lack of trying” (Alon & Shenker, 2003). Hence, the evidence is quite conclusive: In order to attain impressive business performance, the new breed of managers needs to adapt their core processes and practices as per the dictates of the particular business environment. And units located abroad which operate according to national cultural expectation of that particular country will achieve better results than those units who adhere to rigid business practices. In sum, to cite a famous saying: when in Rome, be a Roman. At this juncture, a more comprehensive definition of regional/national/local culture is called for. National culture is defined as “the values, beliefs and assumptions learned in early childhood that distinguish one group of people from another”. It is profoundly inculcated in day to day life and is not easy to change. It is also a core organizing principle of workers’ perception of their job, their approach to it, and their expectations from their employers. Culture represents a community’s preferred mode of organizing its affairs. In this context, “When management practices are inconsistent with these deeply held values, employees are likely to feel dissatisfied, distracted, uncomfortable, and uncommitted. As a result, they may be less able or willing to perform well. Management practices that reinforce national cultural values are more likely to yield predictable behaviour, self-efficacy and high performance because congruent management practices are consistent with existing behavioural expectations and routines that transcend the workplace. Employees are not distracted from work performance by management practices that ask them to behave in ways that are consistent with extant national cultural values.” (Scandura & Williams, 1999) The need for managers of multinational business corporations to acquire “culture intelligence” is emphasized by more research findings. For example, “employee participation” is a key factor in the success of an organization. If the ‘power distance’ between the top rung of management and the lower level workers is wide, then the business may face adverse outcomes. It has been shown by recent studies that cultural awareness on part of top management goes a long way in narrowing the ‘power distance’ and hence aiding the bottom line. Having said so, the concept of cultural awareness need not always imply participative management, for in countries such as Mexico; this arrangement does not seem to work. Management scholars have categorized national cultures into ‘high power distance cultures’ and ‘low power distance cultures’. Mexico, it is found falls in the first category, implying that the workers there prefer a more authoritarian management practices. In contrast, in the United States and much of Europe, ‘low power distance’ between management and workforce tends to get better results for the business. Hence, modern managers, when they refer to “culture intelligence” need to take into account the complexities and nuances involved therein and plan their approach accordingly (Scandura & Williams, 1999). Another key component of “culture intelligence” is ‘uncertainty avoidance’. It is defined as the extent to which employees feel insecure about “uncertain, unknown, or unstructured situations”. Again, employees from different parts of the world, react differently to any given work situation. In organizations, “uncertainty avoidance is manifested by the clarity of plans, policies, procedures, and systems. Reliance on clear procedures, well-known strategies, and well-understood rules helps employees reduce uncertainty and cope with their discomfort with unknown situations”. Although this particular parameter of cultural assessment is quite subjective, a scientific interpretation of this subjective information can help international managers in their decision making. In other words, though some researchers “acknowledged that the linear notions of right, wrong and truth implicit in the dimension are characteristic of Western thought and are not seen as strongly in Eastern philosophies, they nevertheless agree that the dimension is consistent and relevant to understanding national culture” (Maddox, 1993). Another broad cultural classification that international managers should keep in mind is the Individualism-Collectivism divide. It is generally agreed that Asian cultures are community centric, and the emphasis is on communal well-being rather than individual success. On the other hand, Western nations are said to be individual-centric, where individual choice and progress are placed ahead of collective welfare. For the modern manager, who purviews operations in more than one nation, remembering this distinction are very helpful, as it is an important way of differentiating among national cultures. Individual-centric cultures exhibit low social cohesion, as each member is expected to cater to their own needs and that of their immediate family members. In such societies, an individual gains social mobility through his own efforts. Collective cultures, in contrast, “rely on membership in groups -- social classes, communities, religions, or extended families -- for identity and status. People are protected by the group and are expected to act in the groups best interests. The Anglo countries of Britain, Australia, New Zealand, Ireland, Canada, and the U.S. are very individualistic cultures. East Asian countries such as Taiwan, Korea, Singapore, and Hong Kong are very collective cultures. In organizations, individualism is manifested as autonomy, individual responsibility for results, and individual-level rewards. Collective management practices emphasize work unit solidarity and team-based rewards” (Briscoe & Schuler, 2004). Another key dimension to modern human resource management is the perceptions of masculinity and femininity within organizations. The more advanced national cultures tend to have more equity between men and women in terms of career opportunities, remuneration packages, etc. Conservative national cultures on the other hand tend to display a patriarchal arrangement of society, with women expected to assume roles that are subordinate to men. But the distinction between masculine and feminine cultures is not as simplistic as that. Masculine cultures are characterized by “doing and acquiring rather than thinking and observing, similar to the ‘orientation toward activity’ dimension of work”. Further, these cultures value accomplishment and look down upon failure. On the other hand, feminine cultures tend to value affiliation and teamwork more and do not give importance to failures to achieve goals. While there is fluidity and abstractness in this concept, scholars have identified the cultures of such countries as Japan, the United States and Western European countries as Masculine. Nordic countries such as Denmark, Norway and Sweden typify feminine work culture. In the modern work environment, this aspect of work is reflected “in merit-based opportunities for high earnings, recognition, advancement, and rewards, characteristics almost taken for granted in the U.S” (Maddox, 1993). More feminine management practices prioritize the quality of interpersonal employee relations and quality of working life as is generally seen with Nordic nations. For the modern international manager, keeping in mind this key distinction can go a long way in dealing with personnel worldwide. An aspect of national culture that is not commonly discussed is the long-term versus short-term perspective of a particular culture. This is a new dimension added to international HRM in recent years. Researchers such as Hofstede, who have done extensive work on cultural impact at the workplace, are making efforts “to capture such special dimensions that might be particularly relevant in Asia”. To elaborate, long-term-oriented cultures are identified by their broad list of objectives attached to their business. It is also typified by such characteristics as “patience, perseverance, respect for ones elders and ancestors, and a sense of obedience and duty toward the larger good” (Marc & Farbrother, 2003). Such management cultures are prevalent in Asian countries like Singapore, Japan, Taiwan and Hong Kong. Anglo-centric nations such as the United States and United Kingdom have a more short-term approach to their businesses, focusing more on the financial results of the next three months or so. Needless to say, such a mindset is the primary reason for the disastrous state of world’s environment and ecosystems; and such pressing problems as global warming. So, it is not an overstatement to say that the Western managers can improve their legacy and leave behind a better world for future generations, if only they can adopt the broader and more comprehensive business agendas, as typified by the aforementioned Asian countries. To sum up, the following is a good rule of thumb for modern international managers, whose formal education tends to orient their business objectives toward the short-term, the importance of culture-specific approaches: “In long-term-oriented countries, work units with a longer term outlook will be higher performing than work units with a shorter term outlook. In short-term oriented countries, work units with a shorter term outlook will be higher performing than work units with a longer term outlook” (Marc & Farbrother, 2003). Let us now see in detail the relevance of “culture intelligence” in a region that reveres religion and tradition, namely the Middle East. Being the richest source of crude oil, the Middle East region is very important for Western democracies that are its top clientele for oil exports. Given this fact, many Western nations, including the United Kingdom, have set up offices and operations in many countries in this region, including Iraq, Saudi Arabia, Kuwait, Jordan, etc. But for the Oxbridge trained modern manager, understanding the Arabic and Islamic way of life is not easy, for the two cultures are so starkly different. It goes without saying then, that overcoming this cultural barrier is a decisive factor for succeeding in this part of the world. In the context of doing business in the Middle East, the following observation is especially true: “Another challenge for these immigrant managers is assuming responsibility for achieving the organizations objectives and goals within the framework of the new culture. The knowledge, expertise, and "know how" that immigrant managers have acquired at home may or may not be applicable in their new environment. Doing business in a new culture becomes a serious and challenging task for most immigrants…Moreover, research in determining the influence of culture on management style is limited. Even more lacking is research that examines the effects of culture on the management style of Middle Eastern managers working in American (new culture) organizations.” (Tayeb, 2000) Finally, for modern international managers to acquire “culture intelligence”, they have to understand the different strands of managerial style, as briefly stated below: 1. Coercive style of management defined by ‘do it the way I tell you’ attitude. 2. Affiliative managerial mindset, which puts ‘people first and work next’. 3. Authoritative style of conducting business, which draws firm lines of organizational behaviour, but within a fair and balanced framework 4. Democratic managerial style is synonymous with ‘participative’ work-culture. 5. Managers as coaches adopt the role of mentors and apply a ‘developmental’ leadership style. 6. Finally, there are Pace-setting managers who apply a "do it myself" pace-setting style and tend to exhibit high standards, expect self-direction from themselves and their subordinates, and lead by example or ‘modelling’. (Townsend, et. al., 1990) In conclusion, it could be asserted that this essay has broadly and critically explored the importance of “culture intelligence” for the modern international manager. In a world economy that is dictated by the phenomenon of globalization, it is imperative for international managers to modify their approach to business based on the region they are operating in. The religious sentiments, community norms and personal values that comprise any given national culture need to be properly understood, not only for the management teams to achieve profits, but also to feel welcome in their host countries. References Alon, I. & Shenker, O. (Eds.). (2003). Chinese Culture, Organizational Behavior, and International Business Management. Westport, CT: Praeger. Bakhtari, H. (1995). Cultural Effects on Management Style: A Comparative Study of American and Middle Eastern Management Styles. International Studies of Management & Organization, 25(3), 97+. Briscoe, D. R., & Schuler, R. S. (2004). International Human Resource Management: Policies & Practices for the Global Enterprise. New York: Routledge. Keeley, T. D. (2001). International Human Resource Management in Japanese Firms: Their Greatest Challenge. New York: Palgrave. Lee, J., Roehl, T. W., & Choe, S. (2000). What Makes Management Style Similar and Distinct across Borders? Growth, Experience and Culture in Korean and Japanese Firms. Journal of International Business Studies, 31(4), 631. Lindell, M., & Arvonen, J. (1996). The Nordic Management Style in a European Context. International Studies of Management & Organization, 26(3), 73+. Lindholm, N. (1999). National Culture and Performance Management in MNC Subsidiaries. International Studies of Management & Organization, 29(4), 45. Maddox, R. C. (1993). Cross-Cultural Problems in International Business: The Role of the Cultural Integration Function. Westport, CT: Quorum Books. Marc, D., & Farbrother, S. (2003, October). Changing Organization Culture, One Face at a Time. Public Management, 85, 14+. Newman, K. L., & Nollen, S. D. (1996). Culture and Congruence: The Fit between Management Practices and National Culture. Journal of International Business Studies, 27(4), 753+. Pillai, R., Scandura, T. A., & Williams, E. A. (1999). Leadership and Organizational Justice: Similarities and Differences across Cultures. Journal of International Business Studies, 30(4), 763. Selmer, J. (Ed.). (1998). International Management in China: Cross-Cultural Issues. London: Routledge. Tayeb, M. H. (2000). The Management of International Enterprises: A Socio-Political View. New York: Macmillan. Townsend, A. M., Scott, K. D., & Markham, S. E. (1990). An Examination of Country and Culture-Based Differences in Compensation Practices. Journal of International Business Studies, 21(4), 667+. Read More