SIB7504 Cross Cultural Management Assignment Sample
Introduction
Cross cultural management helps the organisations to deal with stakeholders in its corporations to effectively handle diverse cultural backgrounds (Rezaei, Sadeghi and Bresciani 2020). With the onset of globalisation and internationalisation, it is necessary that cross-cultural management becomes a core part of all organisations. Globalisation has increased significantly over the years, and advancements in technologies and easing of world trade organisations have speeded up the process of internationalisation.
These have led to high risks, especially cross-cultural, commercial, and political risks. Hence, the investment and running the business overseas involves higher risks and makes it inevitable to inculcate cross-cultural discrepancies and devise appropriate strategies to deal with them. According to the view of ÓhÉigeartaigh et al. (2020), the failure to cross-cultural management arises from several reasons such as political issues, legal suites and especially cross- cultural issues. The insufficient knowledge of cross-cultural awareness and its impact on the global corporations’ operations can bring undesirable outcomes.
Management of the cross-cultural challenges in the international context is akin to the Hygiene factors of the Dual motivator factor theory devised by Herzberg. Hence, embracing cross-cultural diversity and inculcating the right strategies to embrace cultural differences is the key to success and attaining competitive advantage by effectively managing human resources across cultural boundaries.
The essay encapsulates the review of academic literature on the way that national culture can be used by multinational corporations (Yousaf 2020). It also expounds upon the code of practice in ethical behaviour and smooth operations of the global corporations, and lastly expounds upon cross-cultural management for planning negotiations in domestic ventures which has a district cultural base. The role of cross-cultural management is an important one regards to organisational culture, business ethics and others.
For example, through cross-cultural management, managers and leaders influence and monitor the organisational behaviour of the employees in line with the ethical stand and values of the organisation, regarding cultural inclusion, diversity, code of conduct and others.
The essay will be focussing on discussing the role of cross-cultural management in regulating organisational or institutional culture, in regards to codes of conduct, business ethics, inclusion and others. The focus will be on evaluating the role of the leadership in ensuring that the workplace is culturally diverse and free of any conflicts between varying cultures.
Cross Cultural Management
Every country has some specific culture that affects the working style of people, organisational culture and policies in a business organisation. The culture of a country also affects the strategies of multinational companies. The cultural differences are underwood when such strategies are made.
Figure 1: Hofstede’s Cultural Dimensions for the United States of America and China
(Source: Hofstede Insights 2022)
According to Huang and Crotts (2019), Hofstede’s Cultural Dimension Theory has six dimensions: power distance, individualism, masculinity, uncertainty avoidance, long-term orientation, and indulgence. The power distance score for China is 80 and the United States of America is 40.
This shows that the power is concentrated in the hands of only a few people in China and the subordinates have to listen to their commands. While in the United States of America power is distributed among people. According to the score of individualism as depicted in the above graph (figure 1), it is understood that the people of China work towards the interests of groups rather than individual interests like in the United States of America.
Starbucks in China has received an award named “Aon Best Employers – China 2018” for the fourth consecutive year (Starbucks Stories. 2022). This shows that employees in China work in the best interest of the organisation.
The masculinity score does not have much difference in the case of China and the United States of America. This shows that China and the United States of America believe in achievement, heroism, and material rewards. The long-term avoidance score is 87 in China and 26 in the United States of America. This indicates that China has a very pragmatic culture. People in China are more open to change than the United States of America. The society of the United States of America is normative.
The indulgence score of the United States of America is 68, which indicates that the people of this country give importance to their desires and impulses. They also give importance to their personal lives along with professional lives. According to Kraman et al. (2018), China is a restrained society. This shows that Chinese people suppress their desires and leisure activities.
For example, Procter and Gamble had improved parental benefits in 2016 for the United States of America but in other countries, these benefits had started in 2017. The difference in uncertainty avoidance score between China and the United States of America is 16. This shows that Chinese people can easily live with ambiguity. They are adaptable to changes. This implies that the “self-actualisation” and “belongingness” needs are more developed in employees who are native to America, than employees from Chinese origins, creating differences in way of work and approach to team-building, leading to conflicts.
While in comparison the United States of America, the people of the country are not much comfortable with ambiguity. They may not be able to adapt to changes fast compared to the people of China.With the help of Hofstede’s Cultural Dimensions Theory, it is understood that there exist cultural differences between China and the United States of America. Multinational companies adopt these differences and make strategies that can focus on diversity and maintain a harmonious culture in the organisation.
For example, in large multinational companies like Amazon, the workplace can include people of Chinese origin, as well people of American origin. The cultural differences between these two groups can be a cause of conflict due to differences in the cultural dimensions discussed earlier, mainly due to culture shock.
Through cross-cultural management, the leaders and the managers can focus on providing cultural intelligence, cultural knowledge, team building exercise and others to increase interaction and improve communication between the different cultural groups. This can be an efficient strategy for reducing the risks and impacts of conflicts between the groups.
Cross-Cultural Management in international joint ventures
As per Obiria (2020) opinion, the effective use of cross-cultural teams is essential to obtain a source of experiences and innovation in thinking to enhance the competitive position of the global multinational organisations. Cultural differences can interfere in successfully completing the projects in the multinational global business communities.
In order to attain the goals of a project and overcome cultural misunderstandings, the managers must give cultural sensitivity and promote creativity and motivation with flexible leadership. The managers in global corporations encounter cultural differences and hence effective strategies for cross-cultural management is necessary. Cross cultural management is essential in negotiations with the domestic country whose cultural base may be starkly distinct from the home country (Fernando 2018).
For instance, if Primark plans an expansion to India, it belongs to the US and its quest for expansion to India needs to consider the cultural differences which both countries possess. Primark in joint venture needs to have effective strategies to negotiate to build relationships and resolve the disputes. When negotiations occur with foreign suppliers, there can be several obstacles such as unfamiliar laws and government that are absent from us suppliers.
Hence, international negotiations need to understand cultural differences. Culture pertains to different values, within the community or nation, and understanding them is essential to attain understanding of attitudes, behaviours and norms.
Firstly, communication in international business is important for planning negotiations for new international joint ventures with domestic partners. Not understanding the cultural differences can hinder building business relationships. The cultural barriers may make it difficult to understand the behaviour of others. Cultural differences can influence the firm and substances in a deal hindering effective planning negotiations as well.
For instance, when McDonald had its first franchise operations deal in Thailand, it insisted on a traditional American menu. Later, under pressure from the Thai franchise, it permitted the sales of noodles and the sales increment with these changes. Hence, it is evident that culture differences require adopting a new system in management and adopting new products. Moreover, even the communication varied in Thailand where McDonald’s menu had a Thai written version as well.
Lastly communication also influences the way that people reflect values and behaviours at the negotiations or deals. For instance, in the USA or UK the major aim in business planning negotiations is upon signing contracts in a legal way but in India the focus is upon building relationships for the long-term.
The importance of communications in International business for planning negotiations to handle cultural differences can be adopted for better communications.
Firstly, the planning negotiations must have the global corporations show respect to the foreign land culture. Respect for cultural differences will get better business deals. Mc Donald’s is an illustration of using this in its expansion to India. McDonalds responds to the culture and customs in India and ditched the beef burgers to be able to expand to India as per cultural differences (Singireddy 2020).
Secondly, it also opened the world’s first franchise with only vegetarian burgers in the holy shrine in Kashmir in India. International joint ventures are based on equity cross-border alliances, which are formed by two legally distinct organisations and has its headquarters in different countries.
For creation of the international joint ventures which represents the approach to enter an international market and seek efficiency with combining resources and strategies for the Multinational corporations to establish effective communications for cross border alliances. International joint ventures are highly impacted through the cultural differences which makes it evitable to apply suitable planning negotiations for the global corporations for internationalisation (Haeruddin et al., 2020).
Institution, Negotiation and Culture
With the growing list of human rights, it is essential that behaviour and operations of the MNC’s in western countries culture like the USA and Eastern culture like China, In order to conduct activities effectively, it is essential that code of practice is applied in the MNC as per the differentiated cultures to conduct business operations.
Moreover, the cultural differences can often lead to culture shock, which in turn can aggravate into workplace bullying. To help in preventing such issues, the adoption of core values and codes of conduct for regulating organisational behaviour of employees is essential.
The codes of conduct and practice for the MNC addresses the relevant issues in activities such as relation between the world markers in regards to advertising, marketing, and labour markets.
The companies which operate in multiple locations around the globe need to embrace a single code of ethics and apply them effectively. The international corporation must have its code of practice operate as per the host country’s cultural norms and ethics in the business process. Hence, moulding the company culture needs to fit the local customs and attitudes by understanding the cultural differences.
Applying the theoretical framework Trompenaars cultural model is an appropriate one to apply in the case of effective planning negotiations and maintaining code of conduct for joint ventures for international organisations which have its host country culture and the local domestic country in which it plans to expand with stark cultural differences.
Trompenaars identifies seven dimensions of culture (Carolina 2019). The first dimension is universalism vs particularism, where culture baked-on universalism tries to treat all cases as sane, and particularism focuses on more importance to relationship than business negotiation motives and objectives and its inevitable in countries such as China and India.
Hence, in planning negotiations of a host country from particularism culture to have its way in countries following particularism need to inculcate investment in building relations and meeting needs of the population. If a corporation from particularism wants expansion to universalist culture it needs to be more logical in its approach.
The second perspective is individualism vs communitarianism. The individualism culture believes that decision-makers can be independent and based on self-actualisation. The communitarism has great values for loyalty in groups and social groups such as Africa, China and India.
For planning negotiation in individualistic culture people must be encouraged to use their own initiatives but in communitarianism, the rewards must be on group and the entire team must collaborate in decision-making. The cultural differences can give rise to conflicts and disagreements between team members from different cultures. However, through cross-cultural management, the managers can help in improving interaction and communication between the team members for resolving conflicts.
The next domain is neutral vs affective. The neutral culture has people who do not have emotional displays and affective culture has a high value of emotions. Hence, to operate on neutral cultures, one needs to read in between the lines, and in working or communicating in affective cultures, one needs to clearly demonstrate emotions.
The next domain is specific vs diffuse where a specific culture existing in countries like the UK, or US has a tendency to demarcate personal and private life and focus on direct communication. The diffusive cultures have interconnected personal and work lives, such as India and China. Hence when working with diffusive cults, the relationship must be built upon in any planning negotiation. In specific cultures the business planning must focus on setting clear objectives and not relationships.
The next domain is achievement vs ascription where achievements can be obtained, job titles are earned through knowledge and skills, Decisions and planning are done in line with logical arguments such as in the UK and US. But in ascription cultures, the social status and hierarchy play a key role. Hence, to operate in business negotiations in achievement culture, one must bring individual talents to the forefront.
In ascription cultures, respect to higher social status and hierarchies is a must. The sequential vs synchronous dimension is the next domain under the model. The sequential time culture is where people like projects to be complete in stages, and everything must be done on time. Example US and UK. The synchronous the time culture the people sess the past , the present and future as interwoven., and hence they prefer several tasks to be done at a time, Hence deadlines are flexible. These include countries like Japan, and India.
Hence in order to have effective communications in sequential time culture is to keep the deadlines strong and committed but in synchronous work culture, autonomy and flexibility is permitted in meetings.
The last dimension is the internal and external directions. The internal culture has people who believe in control over the environment to attain goals such as Australian, UK, and UK.
Whereas in external directions the people must believe in setting relationships in business planning negotiation like India, Saudi Arabia and China. In order to have effective planning negotiation of MNC, it is inevitable to allow people autonomy to use the relationships to attain goals. The internal direction culture dimension has people who can set clear goals and objectives for all business meetings.
Figure 2: Trompenaars Cultural dimensions
(Source: Expert Program Management 2022)
Conclusion
In a nutshell, we can conclude that the essay has encapsulated the cultural review of the academic literature on the cultural dimension and its application to the multinational corporations for devising effective strategies and adopting right business communication and conduct using cultural theoretical models for attaining success as a global corporation.
References
Carolina, Ț., 2019. DIMENSIONS OF NATIONAL CULTURE–CROSS-CULTURAL THEORIES. Studies in Business & Economics, 14(3).
Expertprogrammanagement.com. 2022. [online] Available at: <https://expertprogrammanagement.com/2017/10/trompenaars-cultural-dimensions/> [Accessed 17 April 2022].
Fernando, M., 2018. CROSS-CULTURAL LEADERSHIP. Leadership: Regional and Global Perspectives, p.138.
Haeruddin, M.I.M., Farhansyah, A., Haeruddin, M.I. and Mansur, M.A.R., 2020. We could be so good together. International Journal of Educational Administration, Management, and Leadership, pp.77-84.
Hofstede Insights. 2022. Home – Hofstede Insights Organisational Culture Consulting. [online] Available at: <https://www.hofstede-insights.com/> [Accessed 17 April 2022].
Huang, S.S. and Crotts, J., 2019. Relationships between Hofstede’s cultural dimensions and tourist satisfaction: A cross-country cross-sample examination. Tourism Management, 72, pp.232-241.
Kraman, S., Huling, A.M., Qin, S., Zhang, W., Jiang, A., Xu, J., Xu, L. and Mathew, M., 2018. Hofstede’s cultural dimensions & ethics among accountants in the USA and China. Copyright 2018 by Institute for Global Business Research, Nashville, TN, USA, 275.
Iberia, P.B., 2020. Managing Cross-Cultural Differences in Projects Estimations, pp 1-3
ÓhÉigeartaigh, S.S., Whittlestone, J., Liu, Y., Zeng, Y., and Liu, Z., 2020. Overcoming barriers to cross-cultural cooperation in AI ethics and governance. Philosophy & Technology, 33(4), pp.571-593.
Rezaei, M., Jafari-Sadeghi, V. and Bresciani, S., 2020. What drives the process of knowledge management in a cross-cultural setting: The impact of social capital. European Business Review.
Singireddy, M., 2020. Mcdonald’s: Global Marketing. International Journal of Health and Economic Development, 6(2), pp.16-27.
Starbucks Stories. 2022. Starbucks Recognised as Employer of Choice in China. [online] Available at: <https://stories.starbucks.com/press/2018/starbucks-recognized-as-employer-of-choice-in-china/> [Accessed 17 April 2022].
Yousaf, S., 2020. Dissection of Herzberg’s Two-Factor Theory to Predict Job Satisfaction: Empirical Evidence from the Telecommunication Industry of Pakistan Seeham Yousaf. The Lahore Journal of Business, 8(2), pp.85-128.
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