The Role of Intercultural Differences in the Success of Organizations - Case Study Example

INTERCULTURAL MANAGEMENT ANALYSIS Student’s name Code+ course name Professor’s name University name City, State Date Introduction Culture is the long term characters exhibited by people in the society. Culture is based on factors like language, dressing, eating habits, religion and many other factors. Culture defines people in the society. Intercultural management analysis (IMA), on the other hand, tries to analyze people’s cultural orientation. Classification of people is defined through people’s country of origin, their upbringing and education among other factors. People tend to act in certain ways based on their backgrounds. An understanding of IMA is important in the business world. It empowers senior managers and business leaders through knowledge on how to manage their employees better. IMA has become an important skill for managers due to globalization. The work environment, today, attracts talent from diverse nationalities. The cultural mix in the companies can be a source of success or failure to an organization. Misunderstandings and failure to compromise result to underperformance in an organization. When cultural understanding is fostered in a multicultural organization, there is more synergy and greater results are achieved. Global managers who have related with managers from other cultures would have refined their own cultural contexts (Jacob 2003). Blue Ridge is a company faced with cultural orientation crises. This joint venture has attracted talent from different nationalities. The company faces dissolution after many years of success in international markets and especially Spain which had been initially hard to penetrate. It took two years to establish the joint venture in Spain due to business restrictions and conservative nature of the Spaniards. The bone of contention seems to be the growth of the market in Spain by the Delta. That has been an issue since the appointment of the first manager who never ventured to other regions like Madrid. The situation improved later after Costas appointed a new manager after earlier disagreements. The Current top managers from Delta Foods Corporation which include the new VP and the finance Director seem to have a different leadership style than what the joint venture was accustomed to. The new leadership wants dissolution of the joint venture without giving consideration to perspective of the other partners. Cultural differences seem to play a key role in this scenario. The issues affecting the joint venture can be analyzed using a systematic approach in order to make an informed diagnosis and offer a solution to the ailing organization. The methodologies include the use of cultural comparisons, MBI Analysis, EXCELL Cultural Scenario Map, bridging and integration. Cultural Comparison Cultural information on Finland, Spain, Greece and America Sodergran, Costas & Spanish (as per textbook pg 252-264) Cultural conceptualization Observations Preference for Collectivism over Individualism (FIN=63; SPN=51 ; GR=35;US=91) Costa values team work (Collectivism) Sodergran prefers to work (individualism) The Spaniards work in team but keeps to themselves(individualism) Power distance (FIN=33; SPN=57; GR= 60 ;US=40) Sodergran do not regard hierarchy, he feels Spanish have exerted too much self acclaimed power. Costas respect the informal mentor Spanish are more inclined to hierarchy Masculinity (FIN= 26 SPN=42 ; GR=57; US=62 ) Sodergran do not allow consensus (masculinity) while Costas value consensus (feminine). The Spanish not much aggressive on growth (feminine) Uncertainty Avoidance FIN= 59 SPN=86 ; GR=100; US=46 ) Uncertainty of dissolution disturb Costas and the Spanish (High avoidance) while Sodergran is not disturbed (low avoidance) Finland Low Power distance Power is decentralized and managers count on the experience of their team members Individualist The Finish have high preference for a loosely-knit social framework Feminine managers strive for consensus, people value equality, solidarity and quality in their working lives Moderate Uncertainty avoidance high preference for avoiding uncertainty Spain High Power distance Spain has a hierarchical society, people accept a hierarchical order Individualist They are moderately individualistic but work in teams Feminine country where the key word is consensus High Uncertainty avoidance   People like to have rules for everything, changes cause stress Observations Very different approach between Sodergran and Spaniards, Sodergran don not respect hierarchy while the latter do. Sodergran is very individualistic, no team work while the Spaniards works as a team and are cohesive. Sodergran seems masculine since he is motivated by success and not consensus. The Spaniards are not too ambitious The Spaniards have high avoidance. While Sodergran Is for the change- dissolution Greece High Power distance The society that believes hierarchy should be respected and inequalities amongst people are acceptable. Collectivist Greece is a collectivist culture; people from birth are integrated together. Masculine The Greeks are masculine which means they adore virtues like success Uncertainty avoidance Greeks are not at all comfortable in ambiguous situations America Low Power distance the degree to which a person is able to influence other people’s ideas and behaviour is low Individualistic Highly individualistic Masculine The society is driven by competition, achievement and success. Uncertainty avoidance There is a fair degree of acceptance for new ideas. Observations Costas believe in respect for hierarchy. Costas exhibit a collectivist nature and also individualistic characters. He embrace team work, but he do not have a family. Costa is driven by success. He did not want to work in a local company at home country. Costas dread uncertainty as in the case of the dissolution. MBI Model Case: Sodergran and Costas want to pull out of a joint venture Key Business Issue(s): Spanish wonder how to respond the on joint venture dissolution issue Goal(s): To save Blue Ridge Spain from dissolution of the joint venture Key Players: Sodergran, Costas and Spanish Mapping Key cultural models and scores used for this case? Sodergran, Costas Spanish 1) Select Relevant Cultural Dimensions Individualism/Collectivism Masculinity/Femininity Preference for Hierarchy and Power Distance 2) Describe strengths and differences of each culture Costas is reconciliatory (feminine) as he tries to calm down his colleague during the strategy meeting he is by the common good of the joint venture (collectivist). On the other hand, Sodergran demands that the targets must be achieved as it is in the contract (masculinity) and does not give a chance for dialogue (individualism). The Spanish embarrass (low power distance) Sodergran in the meeting. 3) Identify the impact of these strengths and differences Even after the acrimonious meeting, Sodergran do not bother to reconcile the team (masculinity) he keeps to himself (individualism) but Costas goes aged to write an email (feminine) detailing the need for maintaining the joint venture (Collectivism). Bridging 1) Prepare Preparing is about setting the ground for communication in one’s own mind through motivation and confidence (Lane et al., 2009, 71). Sodergran should change his attitude towards Costas and the Spaniards. He believes that Costas holds resentment since he was not appointed the VP. He also asserts that the Spaniards senior managers have exerted undue influence in the company. 2)De-center There are two main elements of de-centering 1)taking the other person’s perspective & 2)explaining without blame (Lane et al., 2009, 72) Sodergran should rethink about the company’s strategy again through participatory approach from all the stakeholders. This would avoid a scenario whereby the stakeholders would feel that the strategy is imposed on them without consultation and also the planned dissolution of the joint venture was not well planned. 3) Re-center Re-centering is about 1) establishing a common ground and 2) agreeing on norms acceptable to all parties (Lane et al., 2009, 75) Sodergran should organize for another meeting which all the parties would be given a chance for dialogue and give views of the planned dissolution. EXCELL Cultural Scenario Map Case: Sodergran instructs Costas to come up with a JV dissolution plan. Scenario: Dissolution of the JV must go on. Social Competency: Seeking opting out of the joint venture Preparation: Review cultural information on Finland, Spain, Greece and America. Prepare an MBI analysis on the situation. Wait for a conclusive discussion before drafting the document. Stage Verbal Behaviour Non –Verbal Values A. Attending/ Approach Dear Sodergran, I wish to inform you sir that I have already finished working on the draft as instructed. Not applicable for this case. Courtesy Politeness B. Bridging I’m in a dilemma and greatly concerned about the dissolution. I find it necessary we hold a stakeholders meeting debate on the issue. Not applicable for this case. Concern Respect Motivation Confidence C. Commenting I am hoping you will honor my request and call for this important meeting soon. Not applicable for this case. Motivation Confidence Polite Direct Participative Open D. Departure/ Developing I hope that soon you will be calling for the meeting before I go ahead with the task you have appointed me to do Kind Regards, Not applicable for this case. Motivation Confidence Appreciation Integrating Managing the differences to generate higher performance There are three main integration skills: 1) Managing participation 2)Resolving disagreement/ conflict 3) Building on ideas (Lane et al., 2009, 79) There are a number of ways that participation can be generated and managed (Lane et al. 2009). Sodergran and Costas seem to be on the opposite as far as cultural orientation is concerned. There is need for an urgent reconciliatory meeting between the two and the other stakeholders as things seems to have gone out of hand after the board meeting ended in acrimony. The meeting should be open for dialogue from all the parties. Business solutions The proposed dissolution of the joint venture would be a costly affair as mentioned by Costas email correspondence. He justifies the continuation of the joint venture through a brief analysis of time and cost implications. Terralumen Company had also compromised to meet half of the requirement in expansion growth as proposed by Sodergran. It would also be very difficult to continue with the Spain market of Delta pulls out of the joint venture. It took two years to establish a working relationship with the Spanish company. If Delta opts to buy or go alone, the main challenge would be to handle the market. The best case scenario is to withhold the planned dissolution and work on the modalities of growing the Spain market a target which seems to cause conflict. Strategies on growing the market would be the easiest to implement rather than starting all over again. There is need for an objective assessment to the new management team. The new directors seem to be in experienced on international business relations. They are too focused on buyout rather than joint ventures. Costas have the right experience to steer the joint venture forward. Sodergran was hired from a different company and he may not have enough experience in handling food related businesses. Given his age, he might not attract the same respect from other senior colleagues. He has not taken enough time to understand the business. The strategic plan he is proposing at the board meeting was drafted by consultants. The managers from Terralumen look down upon the proposal by terming it as recommendation by newly minted MBA graduates with little knowledge about the business. The best thing the new VP would have learned first is the operations of the joint venture without involvement of third parties. First hand exposure would have been an opener on how to handle any emerging issues without proper guidelines. Delta’s withdrawal from the loan commitment was also ill advised as well as the sale of the company real estate by Terralumen managers. Personal Reflection The knowledge of IMA is an important skill in addressing issues arising from differences which are cultural oriented. Work environment especially where there are employees from diverse cultures can be very challenging. IMA help managers to understand the employees better which improves problem solving. Communication skills are one of the most important skills in handling crisis. The current scenario at the joint venture has been fuelled by communication breakdown in the organization. The senior managers should embrace open policy communication for the better of the organization. The dissolution plan is emotive to Costas who have been with the company for many years yet he has been allocated the duty of drafting the dissolution plan. Costas had tried to intervene on the imminent wounding up of the joint venture. He maintains a positive feeling on a possibility for Delta withholding the plan. He personally manages to calm the board members which went awry due to misunderstanding with Sodergran. It would be advisable to approach the matter at hand with a lot of sensitivity. Costas seem to be very sober on the matter unlike the Spanish. Dialogue is important in any agreement where consensus is required. All the senior managers should endeavor to handle the issue as equal partners. Conclusion Intercultural differences play a significant role in the success of organizations. Human resource is a major asset to an organization. When difference arises due to management styles, amicable solutions should always be sought before making any drastic decisions. References Di Stefano, L. D., Imon S. S., Lee H., Di Stefano J. J. 2004. Bridging differences: a model for effective communication between different disciplines through conservation training programs for professionals. City & Time, 1(2). Retrieved from http://www.ct.ceci-br.org Jacob, N. 2003. Intercultural Management. Kogan Page Ltd, London. Lane H.W., Maznevski M.L., Di Stefano J.J., Dietz J. 2009. International Management Behavior: Leading with a Global Mindset. 6th Ed. Chichester, UK: Wiley. Mak, A. S. 2000. Extending social skills for success in international students: The EXCELL Program. International Education–ej (On-line Serial), 4 (2). Available http://www.canberra edu.au/education/crie/ 2000 2001/ieej4 Read More