Cross-Cultural Management
The report is all about organizational cultural and managerial implications between two different countries. In developing competitive environment, culture plays a vital role in developing economy condition and bringing stability in the market with the help of globalization.
The difference in culture develops a challenge for international business to manage their business activities efficiently because change in culture affects directly to the business performance (Steers and Nardon, 2010).
Generally, Home country and Host country culture is different from each other and this difference is seen in their values, beliefs, ideas and society. For international manager, it is very important to understand the cultural difference in both home and host countries so that challenges and opportunities are meet efficiently and effectively.
The main purpose of this report is to discuss similarities and differences in organizational culture and managerial processes between two different countries. The two different countries selected for this study are Pakistan and US.
In addition, this study will help in examining different key aspects that help in determining the actual cultural difference in both the countries.
The key aspects that will be examine are individualism vs group orientation, superior-subordinate relationships, communications, autocratic versus delegated leadership, decision-making and managing teams (Hofstede Insights, 2017).
Moreover, this report will use Greet Hofstede theory that helps in demonstrating easily a difference between two countries culture. This overall report will help in developing understanding the organizational cultural difference with managerial processes which international manager might face while developing a business.
Culture is a defined as a concept of collective programming where culture help in distinguishing a group of people from another human group. Giddens et al., (2016) clearly stated that culture is a reflection of custom, belief, religion, value, attitude, etc of a particular country that help in easily differentiating one country customs and values from the other country.
Each and every country has its own cultural background that helps in differentiating the culture into different areas such as cultural diversity, foreign culture, and popular culture and so on.
At the same time, Almond and Verba (2015) also determined that human intellectual appreciation and achievement of art easily helps in identifying and understanding the cultural background of that human.
Moreover, Kramsch (2013) also defined that culture is something that help international business to easily understand the culture and market trend of that particular country. The most important feature of culture is that it is not inherent in an individual but person learn this things from other.
The culture is something that is shared with an individual and societies as well as culture defines two different traits i.e., human nature and individual personality. In oppose too it, Matsumoto and Juang (2016) also argued that culture somewhere affects the human thinking and behavior pattern that human uses to communicate with each other.
There are different features of understanding a culture for expanding international business is that culture is a continuous process that is followed by generation to generation i.e., when a child is born, he/ she is taught same culture. Every culture has its own symbols that help in recognizing the culture very effectively (Alvesson, 2012).
The symbol of culture is equally analyzed like a language of particular culture because in Pakistan and US there is different symbol to show one gesture towards a thing like welcoming a person. In US, person is welcome by a warm hug and hand shake whereas in Pakistan, person is welcomed by saying Wa alaykumu s-salam.
Thus, every culture has its own benefits like culture changes with the change in market demand and trends that people of that particular country tries to adopt.
Like in Pakistan, culture is very define and static in comparison to US because in Pakistan, every Muslim citizen follows their religions and customs very strictly mainly women who lives under burka in front of other people.
The culture difference is done only on the basis of society and people behavior that they follows or adopts a particular culture. In the research study of Wagner (2016), it is clearly mentioned that due to globalization, international business got opportunity to expand and develop their business in a new market. But, there is a challenge for international business in terms of difference in the culture of countries.
Introduction of Pakistan (Home Country)
Pakistan is one of the leading developing countries in Asia that focuses on increasing semi-industrialized economy. In 1947, the subcontinent was partition in two parts i.e., India and Pakistan. India is known as Hindu country and Pakistan is known as Muslims country.
After partition, both India and Pakistan went for three major wars because of which many millions of people were killed. The GDP growth rate of Pakistan is also decreasing i.e., in year 2017, GDP rate is 5.5 % in comparison to year 2016 which 5.7% (Trading Economics, 2017).
This indicates that Pakistan economy condition is not stable as well as poorest in comparison to other countries like US, India, and Germany.
The 95-97% culture followed by Pakistanis is Muslim because after partition, number of Muslims shifted to Pakistan and followed their religions.
While studying, Sabzwari and Azhar (2011) mentioned that in comparison to previous years, now Pakistan has great economic stability and potential but internal political system has hampered all its economy in terms of lack of direct foreign investment, chronic state conflict with the country India.
The fluctuating growth rate of Pakistan somewhere reflects the country unemployment situation as there are some people who are underemployed and unemployed.
Introduction of United States of America (Host Country)
United States (US) is one of the leading and developed economies that provide an opportunity for trading and investment businesses. The US economic scenario clearly states that GDP growth rate is high in comparison to other countries.
The GDP rate is 3.2% which is higher than the last year GDP growth rate (Trading Economics, 2017). In simple terms, increase in GDP growth rate leads to increase in the country stability and economic development with the increase in number of opportunities.
In USA, there is one religion that USA citizens follows is Christian religion and also they adopt modern culture which defines the culture, belief and values.
This modern culture easily defines the effective cultural background of the country that helps international business to develop their business to a large extent as this country economy provides various opportunities.
However, the USA is considered as highly competitive economy where international business will face high level of competition in the USA market (Panico and Nazroo, 2011).
The US economy condition also started fluctuating when USA got migrated from the British and immigrated with the country Europe. Thus, the USA faces a linguistic difference from other countries as this country involves major cultural diversity and regional relationship.
Similarities and differences in managerial processes and organizational culture
In today’s multicultural global business environment, international manager are frequently focusing towards the cultural difference in order to accomplish the organizational goals and objectives successfully.
The managerial processes are interlinked with the organizational culture as managerial activities create difficulty for an international manager to understand the culture of international business culture.
According to Bellini et al., (2013) there is a huge difference in the managerial processes and organizational culture because every organization develops its own working environment or culture that each employee has to adopt in order to organize and make the work done efficiently and smoothly.
The organizational culture is always different from the national culture and also affects or creates impact on the international business. The research study of Bolman and Deal (2017) stated that national culture of two countries is different and that affects the international business performance to a large extent because there is difference in their beliefs, ideas and cultural values.
But on the other side, there are some similarities between the managerial processes and organizational change which is limited in both the countries because there is huge difference in Pakistan and USA culture.
The similarity observed in both the countries culture is that there is only one religion which is followed equally by both the countries i.e., in Pakistan, Muslim religion is followed in comparison to USA where Christian religion is followed.
In addition, Griffin and Moorhead (2011) also stated that there is one major difference in both the countries is difference in language and that affects the international business i.e., in Pakistan, Urdu language is spoken only whereas in USA, only English language is spoken.
For studying the cross-cultural environment of two different countries, Greet Hofstede theory is conducted for understanding that how cultural difference is valuable for developing international business as well as how cultural difference creates influence over the workplace environment (Hatch and Cunliffe, 2013).
Professor Greet Hofstede developed a model that helps in examining the result of worldwide survey in which he survey large employee base value of IBM between 1963 and 1973. During this survey, he used data from different 40 countries employees and later he extended employee base to 50 different countries.
This survey helped him initially in studying and identifying the four following value dimensions such as individualism vs collectivism, power distance, uncertainty avoidance and masculinity.
But in 1991, fifth dimension is also identified after the research by Michael Bond i.e., long term orientation. These all dimensions are developed in order to understand the cross- cultural difference between two or more countries (Moran et al., 2014).
However, all these dimensions became popular with the name of Greet Hofstede theory that defines the National Culture efficiently. For understanding the implications of culture and managerial on the organization in both the countries, then different dimensions of culture is analyzed.
The different dimensions of culture includes such as power distance, individualism vs collectivism, long term orientation vs short term orientation, uncertainty avoidance vs taking business risk and much more.
Power distance
Power distance is a cultural dimension that helps in dealing with fact that all individuals are not equal in the societies. This dimension clearly states the level of acceptance by the society over the unequal power distribution with certain situation.
For example, in India, employee is provided with the superior authority and power on the basis of his/her position in the organization. The above graph clearly indicates that Pakistan culture represents power distance which is high from the USA.
According to Greet Hofstede, Power distance of Pakistan scored 55 in comparison to the USA power distance scored 40 (Hofstede Insights, 2017). In Pakistan, power distance is clearly seen in organization because there people acknowledges the superior on the basis of position making.
On the other side, the USA culture for power distance is low because there people are working for themselves and usually treat each other equally at the workplace. However, the difference in both the countries can also be observed on organizational culture and managerial processes also.
Individualism vs collectivism
Individualism is something tendency of people who looks forward for themselves and their family benefits & achievements rather than putting society needs ahead. Hartnell et al., (2016) clearly defined that collectivism is a culture or approach which develop tendency in the people to work together for a developing a society.
In similar manner, organization culture also differs in both the countries. According to Hofstede insights (2017), Pakistan culture scored 19 i.e., Pakistan believe less in individualism whereas the USA culture scored very high in individualism i.e., 91.
In Pakistan, collectivism is also followed in comparison to the USA, because in Pakistan believes in achievement of group rather than individual. In Pakistan, there is high social framework and emotional desires that belongs in an organization and the employees strongly beliefs in working as collectively rather than individually.
But in the USA, organization also adopts some social framework then also organization culture encourages employees to work for themselves rather than supporting others.
Long term orientation vs short term orientation
This is fifth cultural dimensions of Hofstede theory that help in defining the culture on the basis past, present and future preferences of the individual. In this, long term orientation is related to individual accepts satisfactions from material,
emotional needs and social desires whereas short term orientation is related to individual who don’t like to get delay in getting satisfied from material, emotional needs and social desires. As per Hofstede theory, Pakistan has scored 50 in comparison to the USA scores i.e., 26.
In Pakistan, people are concern about their investment returns and for that they follow pragmatic approach in which they encourage modern culture and prepare themselves for the future. Similarly in the USA, people are more concern about their short-term returns and this indicates that the American people are short-term orientated (Hajro et al., 2017).
Uncertainty avoidance
Uncertainty avoidance is next cultural dimensions extent because of which people feels less secured and threatened in the society because of ambiguous environment or situation. In the USA, organizational culture is developed in such a manner that people believe that there is less risk and uncertainty.
In comparison to the USA, Pakistan people face more threat and dangerous situations which directly affect the culture and people behavior. From Hofstede dimension model,
it can be determine that Pakistan scored 70 in uncertainty avoidance which reflects that people of Pakistan have rigid or annoying behavior and code of belief towards uncertainty.
At the same time, the USA scored 46 in this dimensions and this indicates that in the USA, people feel secure and behave properly as cultural environment of organization is very effective in terms of belief and values. This dimension reflects the clear difference n the culture of both the countries.
Masculinity
Masculinity is defined as a degree level in which man is valued on the basis of materialism, assertiveness and qualities. This dimension helps in identifying that how males are more dominating in the society in comparison to feminine.
According to the study of Hofstede theory, Pakistan scored 50 and the USA scored 62. This indicates that there is a difference in the degree of male values and female values in the society (Bauer and Matzler, 2014).
In Pakistan, males and females are equally dominating the culture of the society whereas in the USA, males are dominating the society. The high score of the USA indicates that masculine society is well driven towards achieving a high success orientation.
Cultural and managerial processes implications between Pakistan and the USA
The cultural difference in both the countries somewhere affects organizational culture and managerial processes that creates influence over the business and employee performance to some extent.
As per Hofstede Theory research, there are some differences and similarities in both the nations that define their cultural values and beliefs efficiently and effectively.
In addition, this research also helped in comparing the organizational culture with the cultural dimensions on the basis of managerial practices which are adopted by the organization. Saeed et al., (2010) defined organization culture as a system that represents the collective values, beliefs, customs and values which employee behave in one organization from others.
It is very important that national culture of two different countries is helpful in defining and making understand the organizational culture on the basis of different factors such as type of technology, stakeholder’s expectation, personality, insecurity feeling and so on.
Usually, it is seen that organization in same country follows or shapes its organization structure and culture similarly like national culture (Khan, 2010).
Moreover, organizational culture and managerial process of one country get affected from the national culture and also from international culture when they decide to develop their business in international culture.
The Hofstede dimensions of culture help the organization in understanding the cultural difference mainly international manager gets benefits from stated dimensions.
Through this, it became easier for an international manager to focus towards developing a relation with the employees and communicate them organizational culture and objectives (Haroon et al., 2012).
The difference in the culture encourages the manager to focus towards developing same culture within as organization. For achieving an organization success in the international level, it is very important for manager to effectively communicate and develop effective culture which motivates the employees to work efficiently and attain an organizational goals and objectives (Ronen and Shenkar, 2013).
For establishing international business successfully, international manager required to develop and use effective strategic communication process that help subordinates to communicate with their superiors easily.
In addition to this, cultural dimensions also help international manager in making decision efficiently because it is identified that in both the countries, power distance has more influence over the society and also in organization.
However, for differentiating between the organizational cultural and managerial process of both the countries (Pakistan and the USA), various dimensions are followed such as:
Power distance
According Hofstede research, the USA scored less then Pakistan and this indicates clearly that in Pakistan, there is power distance in superior and employees that somewhere creates influence over employee’s behavior.
The organization culture is maintained at international level by reducing a power distance this will help the manager to understand the employee requirements and develop relationship with them.
In international business (Pakistan), it is challenge for a manager to develop a culture which has less impact of power distance between superior and employees so that business attain its goals efficiently as well as help in promoting team work and creating positive attitude among employees (Ajmal et al., 2010).
In this situation, managers have to make more efforts and develop friendly environment so that employee feel free to communicate with each other. In the USA international business, manager can easily attain its business goals as there is less power distance.
Individualism vs collectivism
Individualism and collectivism culture is something which must be concerned by international manager while developing business at an international level. In Pakistan, collectivism culture is followed in concern to this manager is required to develop a collectivist approach is such a manner that performance of each individual is measure in a group (Zheng et al., 2010).
But in the USA, individualism culture is followed where international manager must consider that performance of each employee should be measured individually rather than collectively in order to manage and develop strong employee relationship.
Long term orientation vs short term orientation
In Pakistan, long term orientation in organization culture is followed by an international manager in order create a healthy environment by encouraging employees to adopt new environment and out their full efforts to achieve organizational goals.
On the other hand, it is also found that in the USA, employees are concern more about their short term return and benefits which they get in terms of rewards and recognition form.
Uncertainty avoidance
In Pakistan, there is high uncertainty avoidance and that somewhere develops difficulty for international manager because employees from such organizations strictly follow their code of beliefs and behaviour.
This creates difficulty for manager to make employees focus on attaining new opportunity because have threat of risk to start something new (Cameron and Green, 2015).
In comparison to Pakistan, the USA organizational culture is more effective because there employees are ready to take risk for achieving new opportunity.
Masculinity
The implication of using this cultural dimension by an international manager help in understanding that there is a difference in the cultural standards and male value in the society.
Through this study, it is found that in Pakistan, there is equal value of male and female which creates influence and dominates the society. But in the USA, male is dominating more over the society in comparison to female because female dominates the society in terms of quality of life and caring other (Ernst et al., 2010).
In context to this, international managers needs to focus on creating a culture that provides equal value to both male and female in order to encourage them to perform their rest.
From the above study, it can be concluded that every countries have their own values, customs, culture and beliefs which make their country different from other countries.
With the help of this study, it is observed that there is high difference in the cultural background of an organization in both countries i.e., Pakistan and the USA.
But at the same time, this study helped in describing the culture value for an organization i.e., how well they (both countries) are in defining their cultural point of view and also how efficiently they manages the difference in their managerial processes and activities.
The use of Greet Hofstede theory helped in examining and analyzing the different dimensions of culture that help in determining difference and similarity in the cultural value of both the countries.
In Pakistan, collectivism is followed and in the USA, individualism is followed and also both Pakistan and the USA shares similarity in managing their long term orientation that help managers in focusing towards developing relationship with the international customers.
Further, this study also helped in developing understanding related to the implications of managerial processes and cultural in both the countries. The implication of using the cultural dimensions in managerial processes helped international manager in communicating and making decision more efficiently.
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