Managing across Culture - Essay Example

MANAGING ACROSS CULTURES TABLE OF CONTENTS WHAT IS CULTURE? 4 NATIONAL CULTURE 5 Cultural Value Dimensions 5 THE CONCEPT OF CULTURE 6 BUSINESS AND GLOBALIZATION 7 CROSS CULTURE AND BUSINESS PRACTICES 8 MANAGING CULTURAL DIVERSITY IN A GLOBAL WORLD 9 Negotiating Alliances 10 Human Resources 10 Everyday Work 11 MANAGEMENT STYLES IN DIFFERENT CULTURES 12 France 12 UK 12 Germany 13 Italy 14 Sweden 15 MANAGERS IN MNCS 15 CROSS CULTURE NEGOTIATION 16 Step One – Preparation 17 Step Two - Relationship Building 18 Step Three - The Exchange of Task Related Information 18 Step Four – Persuasion 18 Step Five - Concessions and Agreement 18 SKILLS AND COMPETENCIES OF GLOBAL MANAGERS 19 Knowledge Competencies 19 Interpersonal competencies 20 Personal competencies 20 Best Practice standards 21 CONCLUSION 22 References 23 WHAT IS CULTURE? There is no standard definition of culture, and it is defined differently by many people. Following are some comprehensive definitions of culture. “The system of shared values, beliefs, customs, artifacts and behaviours which members of the society make use of in order to cope with different worlds and transmission takes place from generation to generation through learning. " umanitoba.ca " Culture is the integrated pattern of human knowledge, belief, and behavior that depends upon the capacity for learning and transmitting knowledge to succeeding generations.” Marriam Webster Dictionary " Culture is a shared, learned, symbolic system of values, beliefs and attitudes that shapes and influences perception and behavior -- an abstract mental blueprint or mental code. “eou.edu Anthropologists most commonly use the term "culture" to refer to the universal human capacity to classify, codify and communicate their experiences symbolically. The features of humans are defined using this capacity. Nevertheless, the aspects of culture between the human’s to their closest relatives in the animal kingdom by primatologists.[1] We can also state that culture is the way people survive in accordance to their language, beliefs, history, language or the way they dress up. NATIONAL CULTURE The beliefs, values and assumptions that a person learns in early childhood is what differentiates two societies. (Beck and Moore, 1995; Hofstede, 1991). Cultural Value Dimensions Hofstede (1980) analyszed the main and most important criteria by which the cultures differ over nations. These included four criteria; Uncertainty Avoidance, Masculinity-Femininity Individualism-Collectivism and Power Distance. The most important factor out of these are National Culture that affects the strategic Human Resource Management. The main reason behind this being the values that underlie human resource management (HRM) are not totally determined by individual country’s values. As Kanungo (1995, p. 11) pointed out: “…as many of our human resource management tools have been developed mainly within the context of economically developed nations, most them do not have a proper use for developing countries. Mostly the traditional US-based HRM theories, lack contextual embeddedness, strong individualistic orientation, and they emphasize on freewill …mismatching the most salient things about the nature of work and human systems in the developing nations.”. THE CONCEPT OF CULTURE In order to understand that basic the consequence of cultures within an organization it is important to understand the concept of culture: “…the cultural core is composed of tacit and explicit assumptions or understandings which are held commonly by a group of people; some particular configuration of the assumptions and understanding is distinctive to the group; these assumptions/understandings serve as guides to acceptable and unacceptable perceptions, feelings, behaviors and thoughts; these are learned and passed to the newer members of every group with help of social interaction; being dynamic culture changes over time” (Milliken and Martins, 1989). The creation of organization culture takes place when communication of organizational culture takes place through management by the practices of staff appraisal, recruitment, flexible work arrangement and remuneration. All these practices result of social interactions between employees. This leads to influencing perception, actions, thoughts, and the feelings of employees in manners which are consistent with the reality of their culture. Culture guides the selection, interpretation, and communication of information in ways that is meaningful to the employees. Management has to understand employees’ national cultural values and beliefs in order to shape organizational culture (K’obonyo; Dimba, 2007). Management practices can be hinder due the cultural difference faced by manager in today’s globalize world. The value system of people are affected by the instutions that these people build together; their family structure, religious organizations, educational structures, associations, government’s form, law, literature work organizations, settlement patterns, and buildings (K’obonyo; Dimba, 2007). According to Hofstede (1983) the system of values affect the feelings, actions, human thinking and behavior of institutions and organizations in a manner that is predictable. BUSINESS AND GLOBALIZATION Due to the wave of globalization of business many firms are going international. This result into work force which are diverse in interests, backgrounds, training, and nationalities. A major challenge is presented by cultural diversity in both domestic and global work settings, as the same requirement of skill and core competence is needed everywhere. (K’obonyo; Dimba, 2007).. The biggest differentiating factors between countries having an impact on HRM are linked. These include political, legal, economic and historical environments, labor-market characteristics, socio-cultural characteristics of the workplace and society. Since cultures are the basis of people’s behavior, culture ends up being the most curcial element of Human Resource Management. Sonja and Phillips (2004) have argued about the employees in the organization living within a larger complex society. Sondergaard (1994) commented that the cultures across nations are more evident features of a country which create forces decentralized in MNCs in order to operate in an effective manner. Employees perceptions, values, and how much of themselves they invest in their jobs or the organization itself are affected by the culture and values. In order to gain profit and have success in host country MNCs must be reactive to the existing values and attitudes in that country. According to Pratt and Rafaeli (1997) managers that identify the existence of cultural values should ask empirical question, and not base things on a priori assumption. CROSS CULTURE AND BUSINESS PRACTICES In today’s corporate world multi – cultural activities has become prominent and valuable for business success. After the introduction of synergy between corporate culture and managerial values, to perform the task successfully cross- culture practices have to be implemented in order to acquire effective strategic option. This leads to a prominent effect on the perceptions of people from totally different cultures and how all of these cultural values affect affairs in business in a totally different environment. Many organizations takes step to avoid cultural risk as organizational practices are based on culture in today’s global world (Cross Culture, 2008). An effective interaction with environment is necessary for existence and survival organizations. Thus organizations depend on relationships between organizational culture and their cultural values. Environment and interactive forces which surrounds organization, frames organizational culture. Management practices in different organizations shape organizational cultures. It seems that, the values of managers in a main element in the practices of the management, as a sub-set which is dimensional of culture. To communicate organizational culture in a mutual way An alliance of different management practices through cross-cultural expression is developed (Cross Culture, 2008). MANAGING CULTURAL DIVERSITY IN A GLOBAL WORLD Let’s look at an example to define the cultural difference; a simple example of this is the way in which phone is use in different cultures: an American walks into his apartment after a week away and switches on the answer phone; an Italian rings his mother. One requires an add-on device; the other needs single number dialing and favored-number discounts. These differences may appear inconsequential, but they are intensely culture-driven (Burman). Managerial approaches and systems allowing difference which originate from such differences is what is needed by business which are expanding and going international. This might be "national" cultural diversity for example a joint venture between two nations or intra-national diversity involving the range of cultures within a single nation example in the USA, or internal cultural diversity where managers need to deal with foreign-owned transnational companies in their own country (Burman). Following are few examples to make the concept of national culture in today’s global world clearer; Negotiating Alliances Problems of ethics and trust are huge when it comes to cross-cultural joint ventures and alliances. How can a balance between the necessary and the conditional in business ethics be achieved? And how is a long lasting relationship based on trust with people from different cultures be built? How can managers be prepared for the very different styles when they will be going to the negotiating table? These are some of the questions that arose when we talk about cross cultural alliances. We can not just setting bargaining range and follow pre established rules. These should be enough to make a deal, but cannot necessarily be used to set up a lasting alliance. To possibly be able to influence the part which is different it is extremely important to get hold of the deep structures - religious, social, ethnic and ethical. This will lead to influencing the way the reasoning is done, the way reactions are given to different negotiation styles, what is expected and how they are heard (Burman). Human Resources Speaking of human resource the following questions arise; how can a human resource specialist who has training in his own culture, through a brief interview make a rough assessment of a candidate's capabilities and be able to deal with problems of recruiting staff from different cultures? Is psychological testing when applied cross-culturally valid? How much knowledge do most human resource managers have about other school and university systems? Consider a German manager who has an option to chose between an Italian, Japanese and Portuguese. This requires the understanding of not just the totally different education systems in all of these coutries but also the manners in which the educational background influences the thought patterns and managerial style (Burman). Everyday Work For a pleasant corporate life the back-room humor and the off – stage relationship is important but it can be a problem in today’s global world where company consist of people from different cultural backgrounds. Company jokes and in-group stories, can be translated differently by people belonging to different culture. What may seem laudable to a Briton, an Italian can see as risible. Companies which imposed a global corporate culture, such as IBM, did not face the cultural problems of a worldwide organization (Burman). Cultural and ideological rivalry is one of the greatest problems, which has often turned into a war. At moments of tension, when a minor conflict might have permanent consequences, stereotypes and prejudices boil up. It is often seen that similar cultures end up experiencing greatest traumas: for example serious problems often occur where they are least expected - say, between Britain and Denmark while differences such as those between the US and Japan are obvious, (Burman). MANAGEMENT STYLES IN DIFFERENT CULTURES France France has a centralized management system. France is the pioneer for the general use of formal procedures, written rules, schemes, and frameworks. French are risk aversive and stronger tendency towards risk avoidance is seen when compared to the British or Swedes. The method of management which ahve been developed by the French seem to be aimed more at risk control. There is strong tendency to define and organize brotherhoods to avoid uncertainty. There are several examples of networks of old-boys from highly ranked universities where members are willing to help each other. In French politics and business affairs the old-boy networks play a powerful role. UK UK follows a pragmatic management system. Social skills and pragmatism is traditionally emphasized by British managers. Politeness, frankness, self-control, and self-discipline are their cultural assets. This leads them to be concerned with interpersonal skills and persuasion. At the same time, they show ethnocentric attitudes towards foreigners. There is greater individualism in British managers, creating formal and impersonal climates for business dealings as they have greater task-orientation. As British do not look for a life-time employment and a steady career in one company British firms are reluctant to invest heavily on training and employee education. In contrast to the Swiss, Japanese and Germans British managers have more of a short term perspective for the development of their business. Germany German’s have a professional management style and many of their characteristics can be dated to their national educational system and engineering, technical training and craft is its main strengths. The workers from Germany have knowledge and skills greater than the demands of any single job. In the culture of Germany a crucial role is played by professionalism, and also there is a requirement of a considerable degree of self-programming and self-discipline. German managers gain authority and respect based more on their professional status than their position in hierarchy. The high level of qualification allows German managers to act through flatter hierarchies and larger spans of control. Prussian heritage of bureaucracy, which has been cultivated in large corporations, is still seen in several German organizations. Usually, the rules are more properly documented and defined. The characteristics that particularly apply to German management model are punctuality, discipline, accuracy, and orderliness. Germans are risk aversive, in other words reluctant to take risk thus do not enter in an uncertain venture. Italy Italian firms have a dependent management style. Family and business is a greater sense are related much closely Italian firms have a greater long term orientation and business commitment. On the contrary the Italians have a greater preference to be independent and have a greater willingness to take more risk for their own venture. This leads to the creation of a climate where there is strong rivalry between competition of small and medium firms and of continuous formation of new business. Like French the Italian style of managers is more paternalistic. Managers from Italy have a greater requirement for uncertainty control and clarity. They are particularly suspicious of ambiguous organizational structures. There is greater emphasis on hierarchy and follow an autocratic leadership style. Sweden Sweden has a participative management style. As Sweden has a small home market many Swedish firms have established subsidiaries in foreign countries. Swedes have a greater level of skills of foreign language. Swedish social structure is more democratic and cooperative than elitist and competitive. There is very little acceptance of distribution of power being unequal in organizations and very little fear of situations of uncertainty. In their structure and leadership style companies reflect social values of trust, democracy, and cooperation. Organizational structures are more complex and ambiguous. Decision making takes a much longer time because decision-making and coordination are reached through negotiation processes and mutual adjustment after reaching consensus MANAGERS IN MNCS Local national in management position is more preferable than foreign manager, reason being: a) This implies lower costs b) A local national has a thorough knowledge of the culture and the market. Local nationals being made managers can cause many problems as many of them may not even be transferred to other operations of the company which can end up in frustration and nationalistic feelings. All international businesses face the normal problems like quotas, tariff, taxation, cultural differences, payment for international transactions and government control over profits. Beside that MNCs also face the difficult and challenging problems of human rights and labor standards, terrorism and marketing practices CROSS CULTURE NEGOTIATION Negotiation is the process of discussion between parties, by which two or more parties aim to reach a mutually acceptable agreement. The number of stakeholders involved in cross border negotiation makes negotiating across borders more complex. In the global world of today, the negotiation process is faced with many difficulties mainly due to the negotiation process. The unimposing sales efforts is accounted for the ignorance of native bargaining rituals, more than any other single factor. The most important differences that come in the negotiation process are (1) the tye and amount of preparation for a negotiation, (2) the emphasis in relation to task and interpersonal skills, (3) general principle reliance more than issues that are specific, and (4) the people that are present and their influence. To maximize company’s goal and to control the process managers must familiarize themselves with the cultural background and underlying motivations of the negotiators—and the tactics and procedures they use. The negotiation process comprises five stages: (1) preparation, (2) relationship building, (3) the exchange of task related information, (4) persuasion, and (5) concessions and agreement. Step One - Preparation Negotiator must familiarize them with The entire context and background of their counterparts To the specific subjects to be negotiated Differences in culture, language, and environment Managers must have an understanding of their own negotiating style. Managers should find out as much as possible about the kinds of demands that might be made, the composition of the opposing team, the relative authority that the members possess, develop a profile of their counterparts Step Two – Relationship Building In many countries of the world like Mexico and China, taking time to build mutual trust before starting business discussions much more significance than it is in America. It is the personal commitment that is made by these individuals which is the basis for the enforcement of contracts, instead of the legal system which is made use of in America. Step Three - Exchanging Task Related Information During this stage each side states its position by making presentations, normally followed by a question-and-answer session. Step Four- Persuasion There are recognizable tactics for this stage. During this stage both parties try to persuade the other to accept more of their position by giving up some of their own. Step Five - Concessions and Agreements To reach an agreement and sign it, at this stage each side will make various concessions. (Americans take contracts very seriously; Russians often renege on their contracts. Since Japanese give preference to operations based on understanding and social trust, they consider a formal contract to be an insult and also a wastage of time and money. SKILLS AND COMPETENCIES OF GLOBAL MANAGERS Globalization has made traditional business methods redundant. In today’s global world managers who continue to practice the traditional managerial skills are finding themselves ineffective. Under the influence of globalization, the political borders get little relevance, the interdependence of economies increases, and national differences are central issues of business due to dissimilarities in societal cultures. The traditional manager has to become global manager to be competitive in the global marketplace. The competencies required by global managers are categorized into following broad heads: (1) Knowledge competencies (2) Interpersonal competencies (3) Personal competencies. Knowledge Competencies Knowledge competency is important to be able to successfully complete the task that include factual information which pertain to a clear understanding of business, industry and technology. The major competency here comprise of technology savvy, cultural and cross cultural awareness, international knowledge, industry savvy, global risk management, and a standard of best practices. (Mrs CleverWorkarounds, 2008). Interpersonal competencies To have knowledge is not enough as along with that global managers need to have appropriate skills that help in transferring all the knowledge that they have into affirmative action. Interpersonal competencies include social/relationship interaction or management of employees and staff. Competency in this area will be productive when dealing with others (Mrs CleverWorkarounds, 2008). Personal competencies In order to effectively attain the knowledge personal traits plays a key role, further the personal characteristics or traits of a person also affect how the knowledge will be executed. Along with knowledge and skills personal traits make a global manager. The personal traits of the person affect his attainment of knowledge and also how the skills are performed (Mrs CleverWorkarounds, 2008). Best Practice standards In order to understand and comply with the standards of the best practices in a greatly competitive global market has high advantages for the global managers, and thus to the overall organization. Implementation of these standards helps in providing guarantees to all of the stakeholders and gives assurance to them that the organization is in compliance with the standard requirements. For example these are legislative frameworks: SOX and HIPAA (Healthcare) in the USA, and BASEL II (financial risk management) in the European Union; Compliance frameworks such as GAAP (Accounting), COBiT, COSO (control frameworks), ISO9001 (Quality); Frameworks to improve process/visibility such as Six Sigma, LEAN, and Kaizen; Frameworks to improve specific disciplines such as PMBOK and, Prince II (Project Management) (P. Culmsee, personal communication. May 4, 2008). In business the part of best practice should also incorporate ethics and corporate social responsibility. Trust can be built making use of these voluntary benchmarks, show that integrity is possessed by the organization, and will improve the reputation thus act as a competitive advantage. Social and environmental ethics and viewing business separately although, in order to make sure that the industries are respectful parts of the community and the society and NGOs are showing the way to social awareness (Mrs CleverWorkarounds, 2008). CONCLUSION In order to avoid potential conflicts, and to bring about an improvement in the disastrous rate of failure of joint ventures, it extremely important to start cultural training. This sometimes involves in-house training, and is also provided by consultants and business schools. The training should also seek the causes of cultural difference and problems faced by the organizations rather than dealing with traditional problems. In other words, to survive and achieve success in this face pace global world, where cross – culture communication and negotiation has become a prominent feature, training employees and management to deal and have knowledge about different cultures has become essential and one of the vital tool for organization’s success. We can conclude here by pointing that in order to be effective in globalize world manager need to adopt skills and competencies of a global manager and adhere to the managerial standards and skills set for the global managers (Mrs CleverWorkarounds, 2008). Human Resource Department plays a vital role in development of skills and this perspective in the mind of their managers. In order to provide assistance to local managers to understand the different perspectives and cultural programs like cross cultural awareness training, emotional intelligence training, management of diversity training need to be introduced. Hence we can conclude that along with the personal traits of manager, HR also plays a crucial role in the development of skills and competencies necessary to be an efficient and successful global managers (Mrs CleverWorkarounds, 2008).   References Berson, Y; Erez, M; Adler, S. 2004. Reflections of organizational identity and national culture on managerial roles in a multinational corporation Buss, I. 2004. Leadership Development: A Scandinavian Model Burman, E. Managing Cultural Diversity In A Global World. [Internet]. Available from < http://www.workinfo.com/free/downloads/299.htm> [Accessed on 24th December, 2008] Cross Culture and Business Practice. [Internet]. Available from [Accessed on 24th December, 2008] Definition of culture. [Internet]. Available from < http://www.roshan-institute.org/templates/System/details.asp?id=39783&PID=474552 > [Accessed on 24th December, 2008] Holmberg, I; Kerblom, S. 2006. Modelling leadership—Implicit leadership theories in Sweden K’obonyo,P; Dimba, B. 2007. Influence of Culture on Strategic Human Resource Management (SHRM) Practices in Multinational Companies (MNC) in Kenya: A Critical Literature Review Mrs CleverWorkarounds - Skills and Competencies of Global Managers. [Internet]. Available from [Accessed on 24th December, 2008] The Influence of Cultural Diversity on Workgroup Interaction: Mediating Factors and Conceptualization Issues. [Internet]. Available from [Accessed on 24th December, 2008] Read More