Cultural Profiling Tools for Global Business Leaders - Literature review Example

School: Topic: cultural profiling tools for global business leaders Lecturer: Contents 2 Introduction 4 Literature Review 5 Hall’s Cultural Factors 5 Hofstede’s Cultural Model 7 Discussion 9 Conclusion 13 Recommendations 14 References 16 Abstract Culture has been found to be a very dynamic concept. Culture is also unique and highly identifiable with people based on where they are coming from. The combination of this form of dynamism and uniqueness give managers of cross cultural organisations a lot of dilemma as to how to manage their organisations in such a way that each person’s cultural needs are provided for. The paper has showed that to solve the dilemma, it is important for managers of cross cultural organisations to have cultural profiles for their employees. Such cultural profiles are however created based on the use of cultural profiling assessments, which are developed into cultural profiling tools. Of the numerous approaches to undertaking cultural profiling assessment, the use of quantitative mechanisms has been noted to be very ideal as it easily accommodates changes. But for the cultural profiling assessment to be very effective, it is important that their creation will be based on a cultural model, of which Hofstede’s cultural dimensions have been noted to be a highly used option. Introduction Walker (2009) observed that cross culture management within the global business environment has become more relevant now than it was two decades back. There are a number of factors that have brought this about, including the fact that there are now fewer cross border restrictions associated with foreign direct investments of different forms (Castells, 1996). As multinational companies go international, they are confronted with the need to working with human resource from different cultural backgrounds. This is so because such companies either transport human resource from the parent company to the new international market or work with local human resource in the new market. In the first instance, the transported human resource has to adjust to the culture of the new market while in the second instance the company’s top hierarchy have to adapt to the culture of the local human resource. It is against this backdrop that cross culture management is very relevant for today’s multinational business manager. In this paper, the relevance of having a cultural profiling tool at the workplace as a means of understanding the cultural dynamics of workers is thoroughly explored. This is explored against the background of using cultural dimension models to take decisions at the workplace for the promotion of effective global business leadership. The paper also contains recommendations on how multinational business managers can diversify their cultural profiling tools to have cultural profile assessments that best meet the changing dynamics of today’s competitive global market. This is because culture is dynamic and so culture profiling tools must also keep changing to reflect changing trends of culture (Osland & Bird, 2004). Literature Review Different academic researches have been performed to produce theoretical evidence on the use of cultural models and why they are relevant for the modern business manager. The literature review is dedicated to reviewing theoretical evidence on two of these cultural models which are Hall’s cultural factors and Hofstede’s cultural dimensions. Hall’s Cultural Factors Hall’s cultural factors may generally be divided into high context and low context (Hall, 1976). This form of simplification have been used in several theoretical researches including those of Baba, Gluesing, Rantner & Wagner (2004) and Trompenaars and Hampden-Turner (1997) where the high context was likened to Trompenaar’s particularism and the low context likened to universalism by Trompenaar. Explaining further, Hall (1966) stated that countries where there is high context culture, there are several contextual elements which are well documented. As a result of this, it is very easy for people in high context culture to understand the rules and values that govern what they do. As people in high context cultures have understanding for the rules, it is expected that they will be more particular about conducting themselves in ways that ensure adherence to the rule. Hall (1990) however argued the opposite of this when he stated that those in high context culture take a lot for granted. Those in the US have been particularly mentioned in a number of studies to exhibit high context (Hall, 1990). For managers, they have been admonished to appreciate the fact that how workers across cultures conduct themselves towards the rule may be mainly due to their cultural context and not because they have such individual behaviour (Noll & Wilkins, 2004). Writing on low context cultures, Hall (1983) explained that countries noted to have such culture hardly have any avenues by which contextual elements are recorded or documented. As a result of this, people are always sceptical as to which actions of theirs are going contrary to the rules and which ones are in accordance with rules. This background has a lot of implication for the organisational attitude of such people because they have been found to take very little for granted (Gopal, Mukhopadhyay & Krishnan, 2002). Certainly, little is taken for granted because it is difficult to predict the outcomes and consequences of their actions. In a study by Carrithers (1992), it was argued that those in low context cultures include those in France who would generally need more explanations to organisational rules. This is because in a cultural context, they are hardly known to any such forms of documentations and explicit definition of rules. Smith (1991) named specific characteristics of people from low context cultures as including their preference for verbal communication than body language, preference for outward reaction than inward reactions, and having now commitment to relationship. Hall (1985) also said such people value time and hold it as a recognised product. Hofstede’s Cultural Model Hofstede’s cultural model has five major dimensions from which the cultures of cross-cultural organisational teams can be identified with. The first dimension is power/distance (PD) which explains the extent to which power is accepted by the people within the organisation (Pfeffer, 1994). In a study by Spencer-Oatey (2002), Asian countries, particularly Malaysia was found to have high PD where centralised and strong hierarchies exist. Those in Europe and America however have low PD as they exhibit flatter organisations. The second dimension is individualism (IDV), which explains the extent of ties that people exhibit at the workplace (Hofstede, 1991). Olson and Olson (2003) stressed that countries with low IDV and those with high IDV show different attitudes towards group work. For instance countries in Central America, particularly those in Panama and Guatemala have been found to have low IDV, where they cherish the need to work in harmony and unity. Those in Africa and America on the other hand have high IDV where there is strong respect for privacy and individual achievement (Hofstede, 2001). There is also the dimension of masculinity (MAS), which explains the extent to which roles are defined as being for males or for females (Noll & Wilkins, 2004). Just as the others, there are high MAS and low MAS. High MAS has been used to describe countries where there is great respect for traditional male and female roles (Hinkel, 1995). Such countries have been found to include those in Asia, particularly Japan (Spencer-Oatey, 2002). Child (2002) also argued that most European countries, particularly Sweden and countries in the Scandinavia have low MAS, where women and men can perform any roles at all. The fourth dimension is uncertainty/avoidance (UAI), which defines the extent to which members within the organisation show anxiety when performing any roles, whether those assigned to them or those they deem to try their hands on (Osland & Bird, 2004). Nickerson (1999) noted that in countries with high UAI, employees are always sceptical when it comes to anxious situations. They would therefore want very formal business rules to be in place to define what they can do and what they cannot do. A typical example of this is Belgians who are noted to have scored as high as 94 on the UAI scale (Olson & Olson, 2003). People in France have however been said to have low UAI, where they would always want to take up challenging roles at the workplace even if they are not very certain about the outcomes (Hofstede, 2001). The final dimension is long term orientation (LTO), which explains the value that a particular culture places on long standing and short term traditions (Baba et al., 2004). Hofstede noted that as a result of Confucian philosophy, people in Asian countries have very high LTO, which makes them place premium on family as the basis for society (Barrett & Walsham, 1995). Most Western countries, particularly those in UK and US have however been noted to have low LTO as they emphasise on equality and individualism rather than family integration. Discussion The discussion section of the paper is dedicated to discussing ways in which the cultural dimensions affect business decisions of global business leaders and how these leaders can base on the cultural dimensions to develop cultural profiling tools to make cross-cultural management easier. Particular emphasis is placed on the use of Hofstede’s five dimensions. Walker (2009) explained that the various cultural dimensions as identified in the literature review are models that can be used for the creation of cultural profiling tools. But for the cultural profiling tools to be created, it is important for managers of cross cultural teams to undertake comprehensive cultural profile assessments of their organisations. Cultural profile assessment has been explained as a cultural itemisation procedure where managers of cross cultural organisations measure their employees’ personal preferences with respect to various cultural dimensions. Using the Hofstede’s cultural model as an example, the manager would use the cultural profile assessment to measure each employee’s personal preferences for the five cultural dimensions whether the employee rates as high or low for each of them (Walker, 2009). When the Hall’s cultural factors is used, the cultural profile assessment will be used to measure whether a particular employee falls within a high context culture or a low context culture. Based on the outcome that is derived from the cultural profile assessment, the manager then creates a tool that specifically assigns a cultural identity to each employee at the workplace. Gopal, Mukhopadhyay & Krishnan (2002) explained that having a cultural profiling tool from which the manager can readily refer to makes it easier to treat each employee as a unique person with an identifiable cultural need. The practice of engraining in cultural profiling assessment for the purpose of creating a cultural profile or a cultural profiling tool has been described as an important process which ought to be undertaken with all the seriousness it requires. This is because the extent of accuracy attached to the cultural preferences collection process for the profile has been likened to how successful the use of the profile will be (Giddens, 1990). This means that when managers of cross cultural organisations fail to achieve accuracy and perfection whiles constructing the cultural profile tool, they cannot expect to use the tool to achieve the purpose for which it is created. Based on this, Walker (2000) recommended the use of quantitative approaches for the creation of the cultural profile assessments. This is because such quantitative approaches are specific in nature and can easily be changed to suit changing cultural dynamics. It is for this reason that the Hofstede’s cultural model has mostly been used. This is because with this model, it is easier to assign scores to each employee’s personal preference based on the five cultural dimensions (Vygotsky, 1978). As part of the quantitative cultural assessment process, the manager will be expected to either present a questionnaire to the employees or engage them in an interview that borders on their cultural preferences. The outcome of the questioning process is then compared to literature to rate or score each employee. In the table below, an example of a cultural profiling tool is prepared for a typical employee based on Hofstede’s cultural dimension. The rating is however done in categorised manner whereby employees are identified as either being high or low for each of the models. Dimension Rating Employees General characteristics Cross-cultural managerial strategy P/D High Strict hierarchies Centralised organisational structure Gaps in authority and use of power Recognise leader’s powers and authority Let employees go to the top for answers to questions Low Informal organisational structures Flatter companies Equality among employees and supervisors Promote team work Use democratic decision making styles IDV High High value for personal time Respect for privacy Appreciation of individual achievements Demand fewer personal information Promote open discussion and debates Low Emphasis on team work Strong believe in intrinsic rewards Strong regard for harmony than honesty Respect individual differences Minimise the exhibition of feelings and emotions MAS High Male and female roles are differentiated Reward based gender Punishment based on gender Assign roles cautiously according to gender Discourage emotional discussions based on gender Low No differences in assignment of roles Unilateral reward system Unilateral punishment system Avoid discrimination with role assignments Treat men and women equally UAI High Formal business processes Existence of business structures Does not deal with differences Set clear goals, expectations and achievement parameters Use a lot of gestures in expressing emotions Low Informal business processes Preference for long term strategies Readily embrace change and risk Avoid the imposition of rules Use emotional response less often LTO High Strong work ethics Emphasises on family as basis for society Cherishes education and training Respect available traditions Reward perseverance Low Admonishes equality Creativity based on individualism Seek self actualisation Let there be same standards and rules for all Feel free to introduce changes promptly Adapted from Hofstede Cultural Dimensions A manager of a cross cultural organisation who uses the cultural profiling tool given above would only have to fill in the part of employees, where names of employees are written in the columns according to how best their personal preferences are explained by the dimensions. Conclusion To conclude, it will be reiterated that cultural management is an important determinant of success or failure at the workplace. This is particularly so when the organisation in question is a multinational company. This is because of the likelihood that a multinational company will have people from many different cultural backgrounds coming together to work for the collective good of the organisation. It is for this reason that a thorough understanding of cultural dimensions and models by managers of cross cultural organisations is very necessary. Managers are expected to have adequate knowledge about different cultural dimensions and how each of these affects the actions and inactions of their employees. This is because the literature review has clearly demonstrated that no two employees will act in exactly the same way, based on where they are coming from. It is therefore important that managers of cross cultural organisations will see their employees as unique people with different cultural needs and requirements. As much as these cultural needs and requirements are fulfilled in the assignment and assessment of roles, it can be expected that the very best of outcomes will be produced by the employees. Recommendations From the literature review and discussion above, there are a number of recommendations that will be made for professional cross cultural management practice. In the first place, it is important for managers to see each employee as a uniquely different cultural entity. Whiles this is being done, it is important for managers to create an environment that ensures that each person’s cultural preference is well catered for. As much as possible, managers must avoid any forms of discrimination and partiality that is shifted towards people who share similar cultural preferences as them. What is more, it is recommended that manager will make provisions available at the workplace to cater for each person’s cultural preference. This is because the need to make distinctions among the employees will not be necessary if the employees are not going to have the means by which they will exhibit and use the cultural differences (Child, 2002). Then also, it is recommended that managers must ensure that their cultural profiling assessment is as periodic and updated as possible. This is very important as it will ensure that the organisation will keep pace with changing dynamics of culture as a social concept (Walker, 2000). References Baba, M. L., Gluesing, J., Rantner, H., & Wagner, K. H. (2004). The contexts of knowing: Nature history of a globally distributed team. Journal of Organizational Behavior, 25, pp. 547-587. Barrett, M., & Walsham, G. (1995). Managing IT for business innovation: Issues of culture, learning, and leadership in a Jamaican insurance company. 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