The Challenges of Cross-Cultural Management for Business Organizations

Dicuss about the Significance of cross-cultural management for the business organizations.

This report introduces the significance of cross-cultural management for the business organizations in order to ensure the successful running of the business. While going global, the business organizations encounter challenges due to the difference in cultures of the countries. Thus, it is essential for the business organizations to manage cross-culture effectively. Effective management of cross-culture provides an opportunity for the business organizations to gather customers by respecting their cultures, norms, religion and ethnicity. As commented by Thomas and Peterson (2017), culture is defined as the collective system of norms and values that are shared among a group of people that eventually determines their living style and belief.

This report introduces the significance and effectiveness of cross-cultural management for business organizations that aim towards international establishment by considering the impact of individuals, group, social stratification, social mobility, religious and ethical systems, language and education. The report also highlights the impact and significance of Hofstede’s cultural dimensions ineffective management of cross-culture. 

Hofstede’s cultural dimension is one of the most significant theories that help in understanding cross-cultural management. As commented by Rienties and Tempelaar (2013), the six principles of Hofstede’s cultural dimensions include power distance, individualism versus collectivism, masculinity versus femininity, uncertainty avoidance, long-term orientation versus short terms orientation and indulgence versus restraint. The cultural dimensions highlight individual preferences from one another that eventually distinguish them. The concept of power distance highlights that the individuals with less power believe that power within the organization is distributed unequally. Thus, conflict is evident according to this cultural dimension of Hofstede, as individuals with less power feel dominated at the workplace. As a result, it is essential to maintain a balance by restricting the unequal use of power and dominance by the management. This can be achieved by the business organizations by developing equal employment, facilities and pay policies for individuals from the different cultural background. 

As mentioned by Mazanec et al., (2015), uncertainty avoidance highlights the impact of the cultural events that make the individuals either comfortable or uncomfortable. This is because, in cross-culture management, the society tries to control the uncontrollable, as the society needs to deal with the future that is not known. The uncertainty avoidance is higher in cross-culture management due to the difference in culture between the existing cultures of different countries. Thus, countries with rigid behaviour, attitudes and beliefs are intolerant towards other cultures giving rise to conflicts and barriers to cross-culture management. It has been seen that country with weaker uncertainty avoidance index has the more relaxed cultural attitude that considers practice more than principles. Hofstede’s long term versus and short-term orientation is another factor that determines the cross-culture management. According to this factor, it is essential for the business organizations to relate to their past in order to deal with their challenges in the present and in the future (Dartey-Baah, 2013). Thus, cross-culture management is hampered if the business organizations tend to maintain time honoured norms and traditions while viewing societal change. This is because it is essential for the business organizations to change with time and become flexible in order to welcome and incorporate societal changes.

The Impact of Hofstede’s Cultural Dimensions on Cross-Cultural Management

As mentioned by Beugelsdijk, Maseland and Hoorn (2015), indulgence highlights the free gratitude of the society of basic and natural human needs for enjoying the life. However, on the contrary, restraint is defined as suppression of gratification that is regulated by the social norms strictly. Thus, indulgence and restraint affect the cross-culture management, as the conflicts are evident due to indulgence and restraint of social norms. The distribution of emotional roles between the genders also determines the cross-culture management. It has been seen that the society is highly male dominated and this gender is provided with better employment, offers and pay professionally. In spite of being highly qualified, the females are provided with a less professional opportunity in terms of employment and pay (Ting & Ying, 2013). This often gives rise to conflicts in cross-culture management due to inequality among the genders thereby, hampering the business organizations and their progress.

Various internal and external contextual factors determine the cross-cultural management effectively and successfully. As commented by Eisenberg et al., (2013), language is one of the key media that determines the success and failure of cross-culture management. Language is the medium through which the business organizations communicate with their potential customers, internal and external stakeholders and internal partners. Thus, it is essential for the business organizations to know the language of the country of expansion as well as ensure that the partners are to understand their language efficiently. Language has been one of the greatest barriers in cross-culture management, as communication helps in sharing ideas and understanding other’s view. Thus, both the parties need to manage the verbal and non-verbal language used for communication in order to ensure effective cross-cultural management.

However, as argued by French (2015), religion and religious belief is another factor that hampers the effective management of cross-culture. Religion is the shared ritual and belief followed by the community and influences their beliefs and style of living. It is essential for the business organizations to understand and respect the religion and beliefs while managing cross-culture, as this determines the success. It is often seen unable to manage religious and ethical systems hamper the success of the business organizations. For instance, Biriyani Palace needs to ensure that they understand and respect the religion of Australia, that is, Christianity while running their business in terms of developing their menu and type of food items. Effective management of religious and ethical beliefs by the business organizations provides an opportunity to understand, incorporate and respect the sentiments and psychology of the target customers. This helps in better expansion of business by gathering more customers and earning more profit or revenue.

Language as a Barrier to Effective Cross-Cultural Management

Individuals also play a crucial role is ensuring effective cross-culture management. According to Bird and Mendenhall (2016), individualism helps in promoting dynamism while working together for the business organizations. However, as criticized by Mach and Baruch (2015), individualism results in lack of organizational loyalty as well as failure to gain organization specific knowledge. Moreover, fierce and tough competition between the individuals within the business organizations leads to the ineffective workforce as team building is hampered. In cross-culture, individualism is highly noticed, as the workplace consists of employees from different religious background and belief. Thus, competition between the individual employees results in conflicts thereby, limiting the ability of the business organization to develop a strong business network. As mentioned by Adekola and Sergi (2016), the social stratification of the country highly influences the cross-cultural management and organization of businesses. This is because while managing cross-culture, a higher level of consciousness over others and the way individuals from different classes work together varies largely.

It is essential for the business organizations to mitigate conflicts and issues identified in cross-culture management that determines the success of the business. Effective cross-culture management will help in gaining competitive advantage in the business along with expanding business and incurring profit and higher revenue.

The suitable recommendations for the business organizations to ensure effective cross-culture management include cross-culture literacy, mitigating ethnocentrism, regio-centric staffing policy, polycentric staffing policy, acquire knowledge about employee cultures and clarify norms and maintaining them effectively (Bird and Mendenhall, 2016).

As commented by Froese and Peltokorpi (2013), cross-culture literacy needs to be developed by the individuals and by the business organizations. Adequate cross-cultural literacy will help the business organizations to be aware of each other’s culture. As a result, the business organizations will able to ensure that they and the employees have deeper understanding and respect for the cross-culture. In addition, cross-culture literacy will also help the business organizations to develop business framework and policies that will respect both the cultures. However, as argued by Berry (2015), the business organizations need to mitigate ethnocentrism completely while running a business with different cultures. This will help the business organization to mitigate the belief of superiority of own culture compared to the other culture. The business organizations can also develop regio-centric business policies. This will help the business organization to consider regional beliefs, norms and customs for their business thereby, ensuring effective cross-culture management. This can be done by the business organization by acquiring cultural knowledge about the region and the employees (Adekunle & Jude, 2014).

Religion and its Implications for Cross-Cultural Management

Conclusion

In this report, it can be concluded that cross-culture conflict is evident for the business organization due to the difference in cultural background, ethnicity, attitude and belief. Thus, it is essential for the business organization to ensure effective cross-culture management for better business expansion, customer growth and profit generation. Hofstede’s cultural dimension sheds light on the different factors that play a crucial role in managing cross-culture. Hofstede’s cultural dimension also helped in understanding the significance of effective cross-culture management for the success of the business. The national beliefs, individual beliefs, social stratification and religious beliefs help in effective management of cross-culture for the business organization. For international expansion, cross-culture management is essential as this determines the success of the overall business. The business organizations need to understand and respect the cultures of the host country while developing policies for the business and the employees. This can be achieved by ensuring cross-cultural literacy, mitigating ethnocentrism, acquiring cultural knowledge about the employees and develop regio-centric business policies.

References

Adekola, A., & Sergi, B. S. (2016). Global business management: A cross-cultural perspective. Routledge.

Adekunle, A. S., & Jude, A. I. (2014). Cross-Cultural Management Practice: The Impact on Nigerian Organization. Cross-Cultural Management, 6(9).

Berry, J. W. (2015). Global psychology: implications for cross-cultural research and management. Cross Cultural Management, 22(3), 342-355.

Beugelsdijk, S., Maseland, R., & Hoorn, A. (2015). Are scores on Hofstede’s dimensions of national culture stable over time? A cohort analysis. Global Strategy Journal, 5(3), 223-240.

Bird, A., & Mendenhall, M. E. (2016). From cross-cultural management to global leadership: Evolution and adaptation. Journal of World Business, 51(1), 115-126.

Dartey-Baah, K. (2013). The cultural approach to the management of the international human resource: An analysis of Hofstede’s cultural dimensions. International Journal of Business Administration, 4(2), 39.

Eisenberg, J., Lee, H. J., Brück, F., Brenner, B., Claes, M. T., Mironski, J., & Bell, R. (2013). Can business schools make students culturally competent? Effects of cross-cultural management courses on cultural intelligence. Academy of Management Learning & Education, 12(4), 603-621.

French, R. (2015). Cross-cultural management in work organisations. Kogan Page Publishers.

Froese, F. J., & Peltokorpi, V. (2013). Organizational expatriates and self-initiated expatriates: differences in cross-cultural adjustment and job satisfaction. The International Journal of Human Resource Management, 24(10), 1953-1967.

Mach, M., & Baruch, Y. (2015). Team performance in cross cultural project teams: The moderated mediation role of consensus, heterogeneity, faultlines and trust. Cross Cultural Management, 22(3), 464-486.

Mazanec, J. A., Crotts, J. C., Gursoy, D., & Lu, L. (2015). Homogeneity versus heterogeneity of cultural values: An item-response theoretical approach applying Hofstede’s cultural dimensions in a single nation. Tourism Management, 48, 299-304.

Rienties, B., & Tempelaar, D. (2013). The role of cultural dimensions of international and Dutch students on academic and social integration and academic performance in the Netherlands. International Journal of Intercultural Relations, 37(2), 188-201.

Thomas, D. C., & Peterson, M. F. (2017). Cross-cultural management: Essential concepts. Sage Publications.

Ting, S. K. T., & Ying, C. Y. (2013). Culture dimensions comparison: A study of Malaysia and South Korea. Review of Integrative Business and Economics Research, 2(1), 535.