The Relevance of Cross-Cultural Management within International Business - Essay Example

Cross Cultural Management Name of Student: Name of Course: Name of Instructor: Date of Submission: Table of Contents Table of Contents 2 1.0 Introduction 3 2.0 International Business 3 3.0 The Relevance of Cross Cultural Management within International Business 4 4.0 Why Some Companies fail to underline Cross Cultural Management in the International Business 6 5.0 Recommendations 7 6.0 Conclusion 8 References 9 Cross Cultural Management 1.0 Introduction Cross cultural management takes into consideration the cultural, racial and ethnic differences that occur with changes in demographics and geographical regions around the world. With increased globalization that has led to the growth of international businesses, there has been a growing need for international organizations to integrate cross cultural management in their core business management functions (Keyong & Ying 2010, p.224). The following essay will give an in depth discussion of international businesses, the relevance of cross cultural management within the international business and lastly explain why some companies fail to underline cross cultural understanding. 2.0 International Business International business is associated with the exchange of goods and services across international borders. International business is a function of globalization. Globalization is the increased interdependence of social, economic and political systems across borders. It is influenced by developments in transport and communication that makes it easier for the efficient transmission of information form one part of the globe to the other and the movement of people and goods across borders. International business has grown tremendously in the recent times owing to developments in globalization (Keyong & Ying 2010, p.224). On this point, it is worth drawing attention to the fact that internationalizations of business have taken the focus of organizations from the stable and single cultures of their home country to the dynamic cultures in the globe. For this reason, the need for cross cultural management that empowers organizations to manage their activities in various cultures has gained substantial importance. Culture is defined as a set of values, ways of living and concepts that are shared amongst people from a specific social group (Kawar 2012, p.105). They are normally inherited from one generation to another; hence making culture a distinguishing factor of that specific group. Cross cultural management integrates cultural competencies in management that enable organizations to deal with the diversity appropriately (Grebliakaite & Daugeliene 2010, p.148). According to Holfestede’s model, an organization is able to understand cultural diversity by analyzing individualism versus collectivism, power distance, uncertainty avoidance and masculinity versus femininity aspects in its employees and operations (Kawar 2012, p.106). There are various approaches that an organization can take to address cross cultural management (Fontaine 2007, p.125). The approach taken should be within specific situations to an organization. Organizational management should acknowledge the fact that successful cross cultural management translates to increased performance in international business (Vecchi & Brennan 2009, p.150). The following section will discuss the relevance of cross cultural management within international business. 3.0 The Relevance of Cross Cultural Management within International Business As outlined in the section above, successful cross cultural management translates to increased performance of companies in the international market. This means that it has significant importance within international business. One of the importances of cross cultural management is that it enables organizations to manage their human resources better. On this point, it is worth acknowledging the fact that human resources are one of the importance assets to an organization (Pedigo & Marshall 2004, p.183). An organization that has a competent human resource is able to get its strategies implemented successful hence tending to be more successful. The internationalization of business has made it harder for organizations to be able to source for competent employees from the global labor market so as to be able to get their strategies implemented. Additionally, organizations now find themselves with a culturally diverse human resource whose management becomes a challenge owing to the differences in the workforce (Scroggin & Benson 2010, p.409). If these differences are not solved, the performance of the human resources tends to be low; hence translating to poor performance. This makes cross cultural management important to international business. The second importance of cross cultural management is knowledge dissemination and transfer. Knowledge is either tacit or explicit. There is a close relationship between knowledge and innovation. On this point, it is should be appreciated that innovation is an important element of the modern organizations (Plessis 2007, p.21). Innovation marks the boundary between successful and sustainable organizations from unsuccessful ones. On the other hand, knowledge has a close relationship with human resources. Successful cross cultural management enables organizations to be able to attract new knowledge in addition to exchanging information at cultural and professional levels (Chini 2004, p.187). With appropriate cross cultural management strategies in place, international business are able to acquire important knowledge on international markets that enables them to innovate their processes and products so as to adjust to the customer requirements in the new markets. Successful cross cultural management also enables organizations to manage virtual teams appropriately. Virtual teams have become a key practice in modern organizations. With the development in communication technologies, remote working and management has become more accepted. Modern technologies like Skype, mobile telephone, social media and other internet technologies have made it possible for people in different geographical conditions to communicate in real time with each other. This concept that been widely integrated in international business. However, its success is dependent on the ability of organizations to use appropriate cross cultural management practices. Lastly, cross cultural management enables organizations to develop core multicultural skills. For an organization that aims at succeeding in several markets, it is important that it develops strategies that enable it to manage its operations in its various countries of operations. Multicultural skills enable organizations an organization to manage its operations differently in regions A, B & C and other regions with respect to the cultural differences in the regions. On this point, it should be acknowledged that organizations that have a deeper understanding of the markets in which that operate in are better placed to succeed as compared to those that do not. 4.0 Why Some Companies fail to underline Cross Cultural Management in the International Business Even though the importance of cross cultural management cannot be downplayed in international business, some organizations fail to underline the relevance in business. One of the reasons as to why they fail to do so is ineffective management. Management is an important business function that ensures that an organization is able to utilize its resources optimally. In instances where the management does not have value for cross cultural management, the organization fails to uphold the relevance of the core international business practice. One of the important cross cultural management practices that are important to an organization is international human resource management (Kawar 2012, p.106). International human resource management is a function of human resource management that takes into consideration the challenges that come up in international operations. Another reason as to why some organizations fail to underline the relevance of cross cultural management is that the need to consider it varies across industries, countries, functions and people (Kawar 2012, p.106). On this point, it should be acknowledged that the importance of cross cultural management varies from industry to industry. For instance, a service industry will need to integrate in more cross cultural management concepts more than a manufacturing company owing to its direct contact with customers. Additionally, organizations that have operations in sister countries do not have to integrate in more cross cultural competencies as compared to those that venture in far countries. For instance, a Chinese company that starts operating in Japan will need to integrate less cross cultural management concepts as compared to when it ventures in Germany. The variability extends to various people and business functions. 5.0 Recommendations It is recommended that international business come up with appropriate strategies that enable them to manage their operations in the international market. The organizations should acknowledge the fact that successful cross cultural management translates to enhanced performance (Vecchi & Brennan 2009, p.150). Organizational management should take into consideration key cultural competencies in each international market that it operates in (Csath 2006, p.13). By doing so, they will be able to come up with business solutions that are able to satisfy the customer requirements in the various countries. One way of doing this is by coming up with international human resource management strategies since culture is centralized to social patterns (Scroggin & Benson 2010, p.409). Generalization should be kept at minimal levels so as to avoid any assumptions that may come up with such actions. 6.0 Conclusion In conclusion, this report has given an insight to cross cultural management in international business. It was identified that globalization has led to an increase in international business around the globe. The recent developments in transport and communication technologies have contributed greatly to the growth of international business. With borderless business, organizations have been faced with the challenge of managing the cultural diversity that is associated with international markets. The report outlined that cross cultural management is the solution to the management of cultural diversity. The importance of cross cultural management were identified to be knowledge dissemination and transfer, better management of human resources, better management of virtual/ remote working and the development of bicultural skills. It was identified that efficient cross cultural management increases the performance of organizations hence its value to international businesses cannot be downplayed. The failure of the management to acknowledged the importance of cross cultural management and the its varying importance in different industries, countries, functions and people were identified to be the main reasons as to why organizations do not underline its importance in international business. References Chini, C., 2004. Effective Knowledge Transfer In Multinational Corporations, New York: Palgrave Macmillan. Csath, M.,2006. The problem of going from training to learning: the case of Hungary, Development and Learning in Organizations, Vol. 20, No. 1, pp.13 - 15 Fontaine, R.,2007. Cross-Cultural Management: Six Perspectives, Cross Cultural Management: An International Journal, Vol. 14, No. 2, pp.125 - 135 Kawar, T., 2012. Cultural Differences in Management, International Journal of Business and Social Science, Vol, 3, No. 6, pp. Keyong, D., & Ying, L., 2010. Cross – Cultural Management in China, Cross Cultural Management, Vol. 17, No. 3, pp. 223-224 Grebliakaite, J., & Daugeliene, R., 2010. The Growing Need of Cross Cultural Management and Ethics n Business, European Integration Studies, No. 4, pp. 148- 152 Pedigo, K., & Marshall, V., 2004. International Ethical Dilemmas Confronting Australian Managers: Implications For The Training And Development Of Employees Working Overseas, Journal Of European Industrial Training, Vol. 28 No. 2/3/4, pp.183 - 198 Plessis, M.,2007. The role of knowledge management in innovation, Journal of Knowledge Management, Vol. 11, No. 4, pp.20 - 29 Scroggins, W., & Benson, P., 2010. International Human Resource Management: Diversity, Issues and Challenges, Personnel Review, Vol. 39, No.: 4, pp.409 - 413 \ Vecchi, A., & Brennan, L., 2009. Quality management: a cross-cultural perspective", Cross Cultural Management: An International Journal, Vol. 16, No. 2, pp.149 - 164 Read More