Management In Cross-Cultural Companies within Asia and the USA - Essay Example

Running Head: Management In Cross Cultural Companies within Asia and the U.S. : Management In Cross Cultural Companies within Asia and the U.S. Author’s Name Institution’s Name Introduction A work of this nature presents great risk over oversimplification and sweeping generalizations for which many exceptions can be found. A meaningful reduction of that risk would require a manifold increase in length or a reduction in scope to perhaps one country or regional grouping. Nevertheless, keeping in mind the need to avoid stereotyping, the mistake of assuming that every Indian, Filipino or Arab we meet conforms to the profiles described in preceding chapters, we can compare behaviors driven by different core value systems and discuss how we might adapt our behaviors to perform effectively in different cultural settings. Nowhere has the practice of management been studied as thoroughly as in the United States. Most management models and techniques have been developed in the United States and, as one might expect, have been conceived in the context of its dominant cultural values. This was not the result of a conscious decision to ignore others but simply an inevitable consequence of the individuals involved doing what all people do, viewing the world, their work, and other people through the filter of their own, native, cultural frame of reference. Moreover, the people they studied while conducting the research that led to the development of those models and techniques were also Americans who generally embrace U.S. cultural values. Had Abraham Maslow been Chinese, it is extremely unlikely that he would have hypothesized that individual self-actualization sits atop the hierarchy of needs. Had Frederick Herzberg, in developing his well-known, two-factor, job-enrichment model, studied accountants and engineers in a country with strong uncertainty avoidance, like Mexico, rather than in Pittsburgh, it is very unlikely that he would have found that job security is not a motivator. Had he studied a feminine culture like Scandinavia, it is very unlikely that he would have found that good workplace relationships were not a motivator. All of this may seem quite provincial and unsophisticated to a younger reader, but the simple fact is that international business and cross-cultural management were not important considerations when the bulk of U.S. management theory and practical prescriptions were developed. Indeed it was this very question of the applicability to other cultures of American management practices that lies at the heart of Hofstede's research (1980; 1993). Rationale For The Study All cultures are less individualistic than the United States. All non-Western European and non Anglo countries are collectivist to some degree. In those countries it is important to recognize the dominant collective unit; in most it is the extended family. There also may be strong tribal ties in Arab countries and in less developed countries generally. The Japanese, have strong loyalties to their employer and nation. Whatever the in-group, an individual's identity and self-concept lie more in membership in that group than in a sense of self or self-interest. The greatest adjustment for U.S. managers in collectivist cultures is to recognize that they are no longer managing individuals but instead they are directing and controlling groups. Individuals prefer not to be singled out for any reason, prefer rewards based on group performance, and are more comfortable with smaller differences in compensation between levels. It may be necessary to take into account in-group membership in hiring, promotion, and disciplinary decisions, and nepotism may be the norm. Individuals may feel compelled to act in the interests of the group when those interests conflict with those of the employer. It will be necessary to communicate in ways that do not cause loss of face within the in-group, and shame will be a more effective control device than guilt. The largest power distances are in Asian and Arab countries. Other cultures have long histories of submission to some form of authority whether it be the abstract virtues of Confucianism, a sword-wielding samurai, the Koran, the Pope, or the czar. Large-power-distance cultures generally expect managers to function as benevolent autocrats who know a lot about the nature of their subordinates' work. Firm direction with respect both to desired outcomes and methods is the norm. In "being" cultures with large power distance, workers tend to welcome a warm, paternal relationship with their superiors, even if distant in terms of power. A special case is "doing" Japan, where managers are not expected to be autocratic but are expected to build consensus among their subordinates. It is important to recognize the difference between consultation, as practiced in Japan where power distance is moderately large and decisions essentially top-down, and true participation, where power distance is very small. In these cultures, workers expect little direct supervision, instead preferring only to have expectations clarified and then to be left alone to get the job done. Moreover, they expect to have a say in decisions that affect not only their work but matters of company policy and strategy. Compensation differentials tend to be smaller in these more egalitarian cultures. Problem Statement The greatest challenge for U.S. managers with respect to power distance is for those who prefer a consultative or participative style and find themselves managing employees with large power distance. Efforts to involve such employees in decision making appear odd to them and might even be seen as evidence of weakness or inadequate technical knowledge. Asking them for advice conflicts with the common expectation among such employees that managers attain their position by virtue of superior knowledge of the task and operational skill. Managers are also expected to act the part in terms of dress, manner, and privilege. Acting like "one of the guys," a manner comfortable and natural for many Americans, confuses subordinates. In turn, U.S. managers have to behave with more formality and deference toward superiors. Masculinity is the most complex of Hofstede's value dimensions because it has several components that can conflict. Japan is at the top of the scale because it is highly "doing" and highly male-dominated. The United States ranks quite high because it is an assertive, aggressive, materialistic, achievement-oriented "doing" culture. Cultures like those of Hong Kong are masculine for the same reason. Others like the Philippines and India are masculine because they have overwhelmingly strong, traditional gender roles, enough to offset their more-feminine "being" natures. Most Arab and Asian countries are in the middle range because they combine the two. They value hard work in large part because it is essential to being a good citizen--it is a felt obligation to others, much as it is in Japan. The difference is that it is more egalitarian, driven primarily by a desire to maintain relationships among peers and community, whereas the primary obligation felt by the Japanese is hierarchical, toward one's superior, employer, and even to Japan itself. The greatest challenge for U.S. managers on this dimension is coping with the "being" culture. It is important to recognize that "being" people can and will work hard. It is just that they work to live not live to work. Work, for them, is a means to an end, not an end in itself. The desired end for "being" people typically is a whole and satisfying home and family life, and work is endured in order to maintain it. In practical terms, one should expect "being" people to be less willing to work long hours or take work home and be more likely to expect employer concessions to family needs. Importance of the Study The matter of extremely traditional gender roles does not appear to be as much of a concern as it might seem to a U.S. firm considering sending a woman to work in such an environment. According to Adler (Lane, DiStefano & Moznewski, 1997), men from these cultures are aware of differing attitudes toward women in the workplace in less traditional countries, and most treat a woman in a properly professional manner after they understand the woman's role and responsibilities. However, it is incumbent upon the firm to make that understanding clear. There are two issues here for U.S. managers. The first has to do with stronger uncertainty avoidance found in all Arab countries and all mainland Asian countries except India, usually grounded in a lengthy history of strong central rule or elaborate legal systems. The second has to do with the existence of different sources of weak uncertainty avoidance, whether weaker or stronger than the United States, in "doing" cultures like the United States and "being" cultures like Indonesia, India, and the Philippines. In countries with stronger uncertainty avoidance than the United States, workers desire more structure and order and are less receptive to deviation from precedent or rules and to innovation and new ideas. Things and people that are different are best avoided (remember that uncertainty avoidance is not risk avoidance--people with strong uncertainty avoidance will take familiar risks, and coping measures can be very creative (Hofstede, 1991). There is a strong sense of an external locus of control and constraint on entrepreneurial thinking, and security is a strong motivator. This resistance to change poses a substantial difficulty for U.S. managers who sense intuitively that change is the only constant and, applying their internal locus of control, that they must be proactive to be effective. "Doing" cultures tend to be weak in uncertainty avoidance because they have learned that they can use technology to harness nature and shape events to their liking, at least to some degree. In so doing, they have experienced positive outcomes in their material standard of living and have thus grown to think that change is good. There are many "being" cultures with weak uncertainty avoidance that are very comfortable with change but not because they have grown accustomed to initiating it. Instead, these cultures, typically agrarian, are highly dependent on nature, have witnessed endless changes both good and bad, and have simply become inured to change, which they see as normal, inevitable, but totally beyond their control. This is fatalism, and its implication for managers is that it makes it difficult for people to understand the point of setting goals, developing detailed long range plans, or taking on major initiatives. Overview of the Study Like other countries with Christian and, especially, Protestant roots, the U.S. has a universalist system of ethics, which means that Americans rely on universal truths and principals codified as laws, rules, and contracts to regulate behavior. U.S. businesses will do business with anyone and then sue if a contract is violated. Particularists value personal relationships more than conformance with inflexible, abstract standards and therefore will do business only with those they know and trust. Contracts are statements of general intent and, taking the fatalistic view, will naturally require modification as circumstances change, as inevitably they must. To presume that all changes can be anticipated and appropriate contingencies established beforehand is seen as presumptuous (One mustn't tempt Mother Nature!). The universalist, usually weak in uncertainty avoidance, anticipates that any problems that arise during the execution of a contract can be fixed. On an individual level, this distinction is felt primarily in the application of situational rather than absolute ethical standards and the way people communicate. Whereas the univeralist is utilitarian in the sense of acting in ways that serve the common interest, the particularist acts in ways that serve more-limited interests. A particularly challenging aspect of this behavior for typically meritocratic U.S. managers is the practice of nepotism or any other form of favoritism that departs from objective standards. With respect to communication, what strikes the universalist as fudging, embellishing, hiding, or otherwise distorting the straightforward, honest, concisely stated, truth is wrong. Particularists not only break rules but violate the "truth" to maintain and promote valued relationships, or to save face in collectivist cultures. Where "face-saving" behavior is the norm, it is more difficult to involve in group discussions individuals who do not want to be seen as representing themselves as more knowledgeable and, at the same time, do not want to risk making an error before their peers. Another challenge is to respond to the necessity to build social relationships when seeking business in high-context cultures. This requires two very different modifications, one behavioral and the other intellectual. The first is patience. The second is to learn about the host culture, its past and present, beyond the business arena and to develop the knowledge base to be conversant on a broad range of topics. Some say that it is only the most productive people who are concerned about wasting time because they are so productive. However, many cultures, even some of the more productive ones, do not consider time as a valuable resource to be conserved. It is not that time is wasted but more a matter of different priorities (that is, values) as to how it should be expended. U.S. managers who become frustrated by losing the time necessary to build social relationships in collectivist or particularistic cultures before doing business fail to realize that building social relationships is part of doing business. In effect, they are working when socializing and stroking. Related is the notion of polychronic time, as opposed to monochronic. "Doing" cultures are monochronic, meaning that people do one thing at a time and generally dislike interruptions or diversions. People of "being" cultures do many things at once and do not resent interruptions. The consequences can be maddening for a monochronic person having a discussion with a polychronic person who is constantly taking phone calls and dealing with other visitors. What seems insulting or at least inconsiderate usually is nothing of the kind. The same is true for someone who is constantly late honoring appointments (Hall, 1987). The driving consideration is that additional time necessary to cultivate the immediate relationship is more important than the abstract and universalist notion of punctuality. Most Americans take great pride in being "just plain folks" in the workplace--informal, friendly, and approachable. Though perhaps overbearing and immodest as tourists, at least with respect to being Americans, at home they tend toward modesty, content to let their achievements speak for themselves. For most, status is very much a matter of what one has accomplished rather than one's family background or even age. Class systems or any other basis for ascribing status violate some very essential American ideals, such as social mobility and the universalist principle of fairness. U.S. managers confronting ascribed status must be more deferential to age, education, or whatever the basis is for ascription. It must be taken into account in personnel decisions; for example, a promotion based on merit must be considered carefully if the promotion places that person in authority over someone of higher ascribed status, perhaps someone older (as is usually the case in Japan, for example) or of a higher social class (recall that social class and wealth are not necessarily the same). Such a promotion may well be impossible, and that circumstance will be recognized and accepted by others of that same culture. A leadership style consistent with McGregor's (1960) Theory X is based on assumptions that workers require thorough supervision, explicit direction, and coercion and derive little satisfaction from their work in and of itself but only from the sustenance and security it provides. This authoritarian style would seem clearly out of place in cultures with small power distance. Conversely, Theory Y assumptions, which hold that workers are motivated best by responsibility, autonomy, trust, and a more open, communicative environment, seem ill suited for large-power-distance cultures. However, Adler (1991) suggests that a Theory Y style is well suited to those cultures because workers share common interests among themselves and with management, value relationships, and prefer an egalitarian workplace, that is, the collectivist values that often coincide with large power distance. That coincidence suggests that a Theory Y style has very broad applicability, at least with respect to the leader's assumptions about worker motivation. Workers in large-power-distance cultures would still expect their leaders to make the decisions, clarify expectations, and demonstrate strength and technical proficiency. Collectivist cultures should be well suited to participative or consensus decision-making and lateral cooperation, but the typical coincidence of large power distance tends to constrain interaction even when authority figures solicit input from subordinates. The distance literally divides manager and worker; the worker feels dependent upon the manager yet considers the manager unapproachable and not to be challenged even when the manager seeks to close the distance. Moreover, the worker, who assumes the manager to be more knowledgeable, wonders why the manager is asking for advice. Face-saving cultures pose an additional problem because individuals are reluctant to step forward. It may be necessary in such circumstances to seek opinions from selected individuals privately. The ideal setting for these techniques would appear to be one that combines collectivism with small power distance. Individualism tends to breed competition more readily than cooperation. Therefore, those U.S. managers who do seek to promote cross-functional or interdisciplinary cooperation should find less organizational compartmentalization and rivalry abroad. The key to encouraging participation, or just a greater willingness to speak up, among large-power-distance subordinates is to build trust. It is important to let them know what is needed from them and why, and there should be an explanation that this is the preferred kind of relationship. Then patience, maintaining a low key, and repeated requests for input will be called for. Any lack of technical expertise should be discussed openly with an explanation that that is less expected in the manager's home culture. An especially tough problem or challenge may be a good, first opportunity, where an "all-hands" effort is clearly necessary. Any contributions should be praised, and by all means no messengers should be shot. Reaction to the first, tentative contributions will be scrutinized carefully by the contributor and by observers and will be communicated rapidly to all others. A decision not to accept an idea ought to be explained. Strong uncertainty avoidance can cause people to question whether a problem should be accepted as is rather than solved, in effect denying the need for a decision. It also causes a search for familiar solutions rather than innovative ones. Collectivism slows down the decision-making process but makes implementation easier and faster. It also tends to produce "satisfying" solutions rather than maximizing (seizing upon the first mutually acceptable alternative identified rather than a more exhaustive search for the optimal solution). The holistic thinking typical of Asian cultures results in alternatives being considered at once rather than sequentially. Everyone but the Northern Europeans and other Anglos are more high context than the United States. Assertiveness, loudness, butting in, and all the typical behaviors used to make oneself heard in a meeting in the United States are dysfunctional in a high-context setting. It is more productive to rely on written material and objective data to communicate the merits of one's product than upon aggressive personal selling. Boasting must be avoided, and any claim that cannot be supported is likely to be a fatal injury. There will be more attention to the quality of the relationships emerging during negotiations and less to the merits of the facts, which should be available in print to be read by anyone with a need. High-context participants are assessing the long-term viability of the personal relationships being developed. The negotiation must be conducted in such a way that its ultimate results are expected by all to be beneficial for all. The intent should be to maximize cooperation not rivalry. High-context negotiators do not engage in zero-sum games. Confrontation and excessive competitiveness produce disharmony and are thus to be avoided. That having been said, it is important to recognize, however, that Asian negotiators can be very tough even while conducting themselves very harmoniously. This is especially likely when the Asian counterpart senses a favorable balance in bargaining power. Alternatively, shaming may be used by Asians to compensate for weakness. High-context people tend to maintain large networks of contacts that share information, and they like to gather lots of information prior to and during negotiations. High-context people take great pride in their arts and culture and have a deep sense of history. Demonstration of some knowledge and appreciation in these areas helps build such relationships. An educated foreigner may well know more about the United States and its culture than does the U.S. visitor. Motivation is an extremely complex issue even when considered only in the context of one culture. Adam Smith assumed that individuals were motivated by the rational pursuit of maximized self-interest or utility. The problem is defining that interest. Smith, and most economists, presume that it is material wealth. However, human beings have many needs and various means to satisfy them. We place different values on those means according to the priority of our needs and the degree to which different means satisfy them. Maslow (1962) arranged our needs in a hierarchy--basic needs such as food, safety, health, and security are at the bottom, followed by social needs, and then psychological needs, esteem, and then self--actualization at the top. He argued that as lower order needs are satisfied, people are motivated to act in ways that satisfy higher-order needs until they reach the point where maximizing individual potential becomes the primary motivator. Thus Maslow might suggest that after people are satisfied with their personal and social circumstances, which most were in his world, all that is left to motivate them is to challenge them with very stimulating work. One criticism of this model is the argument that many people see work only as a means to an end and that they seek esteem and to maximize their potential in family or leisure activities. Another is the likelihood that different needs become more or less salient at any particular time, depending on the circumstances. For example, someone may be working like the devil late in the day to get a report done early primarily to avoid missing an important social engagement later that evening. Taking a broader view, people who are working hard to maximize their potential may eventually find themselves doing so primarily to preserve their job security in a more intensely competitive environment. Notwithstanding the difficulties with Maslow's hierarchy, we have many other models contending to explain motivation in the workplace. Are we motivated by money, and if so, is it to enhance our material well being or as a symbol of ability and achievement? Are we motivated by challenging goals? an enriched or more whole task? Are we motivated by achievement? Power? Affiliation? Are we motivated by promotions and increasingly greater responsibility and prestige? Are we motivated by a measure of expectancy that quantifies the relationship between our sense that we can do the job, the value we place on the expected outcomes, and our estimate of the likelihood that promised outcomes will be delivered? Clearly, it remains difficult to determine what motivates people in our own culture. Now we confront the reality that whatever models are thought to be applicable in this culture must be assessed for applicability in another, and then must be modified to adapt to a different value system. Because values link needs and behavior, motivation is highly culture specific. The theories of motivation developed and applied in the United States reflect our values. Goal theory (Latham and Locke, 1984) relies heavily on the assumption that we are driven by a need for achievement. Job enrichment is based heavily on Herzberg's (1968) hypothesis that motivation is a function of the characteristics of the work itself, whereas contextual factors such as compensation, working conditions, and relationships with coworkers can have, at best, only no effect; they serve only as demotivators if deemed unsatisfactory. Like Maslow's hierarchy, Herzberg's hypothesis has been subject to rigorous challenge in the United States. Consider its validity in a culture with strong uncertainty avoidance where security is very important and the ambiguity associated with variation (for example, job enlargement, enrichment, rotation) in the work will be stressful, or in developing countries where compensation is poor, or in a collective culture where autonomy is less important and even undesirable. Expectancy theory (Vroom 1964) applies only where there is internal locus of control. Incentive or contingency-based compensation requires not only an internal locus but a dominant need for achievement. The need for achievement (McClelland, 1961) is subordinate to a need for power where power distance is large or to a need for affiliation in collectivist or feminine cultures. More-collectivist cultures prefer evaluation and reward of group performance more than individual performance. Collectivists are less comfortable with great extremes in rewards based on performance or position, and with ostentatious perquisites. This also applies in the more communitarian or feminine among individualist cultures. Contingency-based compensation will be less welcome where uncertainty avoidance is strong. Feminine, uncertainty avoiding, and collectivist cultures place more importance upon benefits and working hours and conditions conducive to an enhanced family life. Although all this seems very daunting, many managers in the culturally diverse United States are accustomed to coping with different value systems and motivational drives within their own, wholly domestic work forces. The problem in foreign cultures is more in degree than in kind. Consider the conditions necessary for MBO to work well. Superiors and subordinates must feel that they can communicate, even argue, openly and honestly about what can and ought to be done, levels of attainment to be set, and the existence of and potential solutions for whatever difficulties might emerge (small power distance, high-content communication). The subordinate must internalize the challenge (individualism) and must be motivated by achievement more than by security (masculinity, weak uncertainty avoidance). The subordinate must feel some degree of confidence that the goal can be met and produce a detailed plan and budget that will meet the goal (internal locus of control). The subordinate, particularly for stretch goals, is expected to think and act entrepreneurially and creatively, that is, "outside the box" (masculinity, low uncertainty avoidance, internal locus). It is difficult to imagine a management practice more tailored (even if unconsciously) to the system of core values that dominate business in the United States. Consider the implications of trying to institute MBO in a "being" culture characterized by collectivism, large power distance, fatalism and external locus of control, femininity and high-context communication. This is precisely what Hofstede had in mind when he argued that not all U.S. management practices can be applied universally. References Adler, Nancy J. (1991). International Dimensions of Organizational Behavior, Boston: PWS-Kent. Hall, Edward T. (1987). The Dance of Life: The Other Dimension of Time, Garden City, N.Y.: Anchor Press/Doubleday. Herzberg, Frederick. (1968). "One More Time: How Do You Motivate Employees?" Harvard Business Review 46, no. 1 (January-February): 54 - 62. Hofstede, Geert. (1991). "Cultural Constraints in Management Theories". Academy of Management Executive 7(1): 81 - 94. Hofsted, Geert. (1993). Cultures and Organizations: Software of the Mind, New York: McGraw-Hill)\. Hofstede, Geert. (1980). Culture's Consequences: International Differences in Work-Related Values, Beverly Hills: Sage. Lane, Henry W., Joseph J. DiStefano, and Martha Moznewski. (1997). International Management Behavior, Cambridge, Mass.: Blackwell. Latham, Gary, and Edwin A. Locke. (1984). Goal Setting: A Motivational Theory that Works, Englewood Cliffs, N.J.: Prentice Hall. Maslow, Abraham H. (1962). Toward a Psychology of Being, Princeton: Van Nostrand. McGregor, Douglas. (1960). The Human Side of Enterprise, New York: McGrawHill)\. McClelland, David. (1961). The Achieving Society, New York: Irvington. Vroom, Victor H. (1964). Work and Motivation, New York: Wiley. Read More