Culture and Management - Essay Example

Culture and Management Name Institution Culture and Management To live and work in the global world, one is required to be innovative as ‘outsider’ with the ability to see a particular thing in different ways. Being an expatriate manager can be both a challenge and competitive advantage (Cullen and Parboteeah, 2014). Expatriate managers seeing and thinking differently about a need, a problem and a niche have a better chance of developing an innovative approach that is unique and competitive. Therefore, they require some cross-cultural intelligence. We can define cultural intelligence as the ability to link and benefit from any cultural complexity of individuals with deferring nationalities, personalities, backgrounds and organisational cultures (Sullivan, 2008). It combines the emotional, practical and cognitive concepts of cross-cultural encounters and guarantees a more efficient and effective cross-cultural collaboration. The term ‘cultural intelligence’ entails being skilled and flexible enough in understanding a culture, acquiring an understanding about it from frequent interaction with it and eventually reshaping ones thinking and behaviour to be sympathetic about the culture and more skilled when interacting with people from the culture (Sullivan, 2008). Currently, cultural intelligence is a huge problem; the relational schemas, cognitive paradigms and value systems among cultures vary significantly (Cullen and Parboteeah, 2014). For example, people coming from different cultures can potentially have different attitudes towards factors such as hierarchy, time, and ambiguity to name a few. This paper will critically explore the statement: “We live in a globalised world whereby expatriate managers from developed countries of the world simply need to replicate the technical and emotional intelligence they have accumulated in their home country to be successful in any overseas business assignments they may encounter.” Due to globalisation, businesses are affected hugely by national regulation, global institutions and culture (Harorimana, 2010). Culture can be defined as a concept researched and studied for a long period of time that influences the available aspects of the society. It is the collective programming in the mind that differentiates the members of a particular society from those of others which makes them unique. Culture is passed along generations and nationality and influences the values and norms across social systems (Kurtines, Gewirtz and Lamb, 2014). With regard to national culture, the main category is the nation and with regard to organisation cultures, the main category is the organisation. In addition to national and organisation, business culture, age group culture and so on is different. However, the use of the phase ‘culture’ for the mentioned categories does not mean they are similar phenomena. This is particularly the instance of organisation culture and national culture (Kurtines, Gewirtz and Lamb, 2014). In general, cultural differences have a huge influence on business effectiveness. Cultural backgrounds influence the way people think, act and interpret each other’s contributions. For instance, the success or failure in communication highly depends on such competence and the skill in the area of culture affects an organisation’s bottom-line. Culture elements such as language, non-verbal behaviour, customs, religion and social institutions among others are the sources of cultural differences and conflict (Harorimana, 2010). Culture influences management practices. To start with, organisation culture and national culture are two different phenomena. National culture differs at the level of values. According to Hefstede, national culture has four independent dimensions (McSweeney, 2002). With regard to Power Distance, it involves the range at which the less powerful parties accept that power is distributed inequality. It suggests that a cultural level of inequality is recognised by the employees as much as the leaders. This means that all societies and countries are unequal. However, some are more unequal that others. On the other hand, individualism versus collectivism is the extent to which people are somehow integrated into groups (Hofstede, 2001). With regard to individualist, in societies, ties between people are loose and each person is expected to look after herself or the immediate companion such a family member. However, with regard to collectivist, societies are integrated into strong and cohesive in-groups where everyone is expected to extend his or her protection to the extended family for unquestioning loyalty. Masculinity versus femininity is the distribution of roles taking into consideration the sexes. A woman’s value differs less than men’s values in many societies (McSweeney, 2002). For instance, women in feminine societies have equal modest values as men and in the masculine societies; they are assertive and competitive but less than men. In addition, Uncertainty Avoidance encompasses a society’s degree of tolerance for ambiguity and refers to an individual’s search for truth. Uncertainty Avoidance indicates the extent to which a culture packages its members to be confortable or uncomfortable in a given unstructured situation (Hofstede, 2001). Uncertainty avoiding cultures minimize the occurrence of unstructured situations by enforcing strict security measures, laws and regulations by a belief in absolute truth. On the other hand, uncertainty accepting cultures are tolerant to new opinions and have few rules and are relativist (Hofstede, 2001). The national culture affects children, citizens, managers, leaders among other people. Therefore, management practices of a country tend to be culturally dependent; what works in one country may not work in another (Pauleen, 2007). Structuring of organisations are mostly influenced by power distance and uncertainty avoidance since organising depends on who should possess the power of decision and what rules will be followed to achieve desired goals. The answers to the questions are influenced by Power Distance and Uncertainty Avoidance. In the case study involving organisational conflict, it has been seen that French students from a country of large power distance and high degree of uncertainty avoidance tend to treat organisations as pyramid of people and also advocate measures to focus on the authority while Germans from their countries of strong uncertainty avoidance and small power distance tend to treat organisations as well-oiled machine (Pauleen, 2007). French organisations generally tend to concentrate authority and German organisations tend to need structure and people more. Large power distance and weak uncertainty avoidance found in Asia and Africa lead to an implicit organisational model that defines it as an extended family. The mix between uncertainty avoidance and power distance tend to affect motivation of employees, performance appraisal, humanitarian of work, and strategic management (Pauleen, 2007). In contract, in spite of their superficial nature and dimensions, organisation culture is difficult to change since they develop into collective habits. The management strategic choice can revolve around accepting and using the already existing culture or changing the existing one. There are some dimensions that describe organisation culture; work-oriented versus employee-oriented cultures, tightly-controlled versus loosely-controlled cultures, professional versus parochial cultures, pragmatic versus normative cultures etc. In addition, culture influences accounting practices. Accounting involves two general accounting concepts: financial accounting and managerial accounting (Askary, Pounder and Hassan, 2008). They entail factors such as budgeting, value, costing and variance. Any accounting practice is considered to having rhetorical, descriptive and explanatory modes. Accounts are not accepted always and are bound to reinterpret and modification. For instance, accounting practices like preparing financial statement disclosure and detecting misstatements may appear to be the same across the world since they are under identical standards. Nevertheless, accounting practices sometimes contain a number of differences influenced by cultural frameworks where they are performed. Accounting standards are formed by accounting practices that imply rules of accounting carried out in a given culture (Chan and Lai, 2003). This is to say that rules develop differently as a result of the way in which organisational relationships evolve across cultures. Organisational relationships differ owing to the culture and surrounding where the relationship is formed in addition to external factors including differing laws, political climate etc. (Aitken, 2005). Therefore, when accounting standards originate from accounting practices that are influenced by culture as a result of business relationships, then we can say that accounting is driven by the culture. For instance, an important practice in accounting is errors and auditing. The general role of an accountant is to ascertain fairness of an organisation’s financial statements. In order for any auditor to complete a fair opinion on an audit, he or she is expected to resist being subject to any conflict of interest. This could be a challenge especially in a large power distance environment where auditors may be pressured to give a particular opinion by a powerful client. Even though accounting standards supports professional judgement, any auditor in such culture may feel more obliged to please the authority to avoid public embarrassment more than to adhere to the accounting standards (Chow et al., 2002). Therefore, auditors found in a large power distance society are indebted to take a different method in performing their work than those found in small power distance society. Moreover, culture also tends to influence financial decisions. Cultural differences may influence the way people approach different business decisions. Consider for instance, when a person is asked whether he or she would like to invest in something like a stock. He or she knows nothing about the stock except the performance of the stock over a period of months. The value of the stock has appreciated but does that mean it is an attractive investment? The appropriate answer depends on the environment and culture where one comes from (Xiao and Wang, 2009). Financial systems are very critical to business operation today and have a powerful influence. The concept of financialization refers to power of financial sector over frameworks like economics and politics. Financialization is a system of values owing to the prioritization of an equity culture where shareholder value together with profitability has taken the lead as the fundamental aspects of economic activity (Martin, 2002). Regulation of financial markets according to financialization concept is viewed with suspicion since it reduces market efficiency. Despite the popularity of financialization, there exist some alternatives that tend to have growing currency such as Islamic finance which differ from conventional finance in buying and selling real things and borrowing and lending flitting things (Erturk et al., 2008). International Human Resource issues concerns those that take place as a result of internationalisation of business (Graham, 2010). Effective Human Resource management is a fundamental determinant of organisational success and therefore, the performance of Expatriates is very important. Many multinational corporations recruit managers and subordinates from diverse cultural backgrounds. Such employees can be transferred within firms across nations due to staff shortage, trust, for organisational development, management development and control (Hughes, Ginnett and Curphy, 2009). However, expatriates may fail due to reasons such as non-socialisation as a result of self-orientation, cultural toughness and family-related issues. In contrast, expatriate may succeed due to good technical and managerial skils, interpersonal skills, language abilities and family abilities. However, for this to happen, they should undertake training during and also after deployement to ensure socialisation (Lowe et al., 2002). Whether involved in issues of negotiation or managing, the success or failure of any organisation abroad highly depends on how significantly its employees exercise their knowledge and skills in the new location (Feraro and Briody, 2013). Such ability relies heavily on the job-related expertise and a person’s sensitivity and responsiveness in a new cultural environment. A common assumption leading to failure in international business is that if an individual is successful in the home country, he or she will be successful in different culture. As expatriate managers encounter different cultural concepts found across the world, there is always a tendency to be overwhelmed by the available differences and infrequently look at the commonalities (Feraro and Briody, 2013). But for societies to survive, they are confronted by universal need that should be satisfied. When culture finds ways of satisfying these needs, a universal cultural pattern emerges. A number of commonalities are present since all cultures have generated solutions to problems facing the general population (Feraro and Briody, 2013). An expatriate manager requires cultural intelligence in order to be successful overseas (Ko, 2000). Cultural intelligence is the ability to develop an effective collaboration in situations heightened by cultural differences. It encompasses the ability to act appropriately in multicultural situations and have an open mind that is curious about differences. Cultural intelligence has three dimensions; emotion, understanding and action. Emotion relates to the feeling component of a particular situation (Ko, 2000). Feelings are based on belief on what way to behave. The emotional dimension entails the motivation to achieve a successful inter-cultural encounter. Motivations originate from external and internal drivers such as attraction of things, goals and objectives that determine how much we are ready to invest in any situation. This dimension is referred to as intercultural engagement (Park, 2006). On the other hand, cognitive dimension is the objective component and is based on the ability to develop mental structures that assist in understanding the encounter and making judgements with regard to conceptual frameworks and language. This dimension requires a person to understand what culture is and have knowledge of one’s culture. It is referred to cultural understanding. The third dimension is action which entails what one decides to do based on judgements of a situation. It is the activity and communication that takes place during cultural encounter. This dimension connects the other two dimensions together as is referred to as intercultural communication (Weber, 2002). To sum it up, the learning about culture entails learning about other attitudes and values. However, this is done by putting them into practice by using ones behaviour to connect the cultural environments. In order to succeed in new environments, it is essential to have the tools and knowledge of how to act in these new places and not to behave the same everywhere without considering local factors that responds to an embedded code. Cultural intelligence opens up essential dimensions not only in relation to comprehension of the world we are in but also in terms of management. When working in new countries, we are part of a team that concepts of services, quality, and hierarchy to name a few are most diverse. Working in a cultural diverse environments means considering cognitive paradigm and reference values. It is therefore important to look at things from different points of view. References Aitken, R 2005, A Direct Personal Stake”: Cultural Economy, Mass Investment and the New York Stock Exchange, Review of International Political Economy, vol. 12, no. 2, p. 334-65. 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