cross cultural management

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Managing across cultures:

Managing across cultures

Cultural Difference & Management Approaches:

Cultural Difference & Management Approaches Some cultural differences having direct impact on management approaches: Centralized versus de-centralized decision making Safety versus risk Individual versus group rewards Informal versus formal procedures High versus low organizational loyalty Cooperation versus competition Short-term versus long-term horizon Stability versus innovation

Hofstede Cultural Dimensions :

Hofstede Cultural Dimensions Geerd Hofstede found there are four dimensions of culture that help to explain how and why people from various cultures behave as they do. Based on data gathered from 2 questionnaire surveys with over 116,000 respondents from over 70 countries Hofstede’s research has been criticized as it surveyed individuals only from IBM’s local subsidiaries worldwide

Hofstede Cultural Dimensions :

Hofstede Cultural Dimensions Hofstede’s four dimensions: Power Distance Uncertainly Avoidance Individualism Masculinity

Power Distance:

Power Distance The extent to which less powerful members of institutions and organizations accept that power is distributed unequally Societies in which people blindly obey the orders of their superiors have high power distance Follow orders as a matter of procedure. In societies with high power distance strict obedience is found even at the upper level. E.g. Mexico, South Korea, and India Organization with low-power distance will: Be decentralized and have flatter organization structures Also have a smaller proportion of supervisory personnel, and the lower level will often consist of highly qualified people.

Uncertainty Avoidance:

Uncertainty Avoidance The extent to which people feel threatened by ambiguous situations, and have created beliefs and institutions that try to avoid these Countries with people who do not like uncertainty tend to have a high need for security and a strong belief in expert and their knowledge – Germany , Japan and Spain Cultures with low uncertainty avoidance have people who are more willing to accept that risks are associated with the unknown, that life must go on in spite of this – Denmark & Great Britain Countries with high-uncertainty-avoidance cultures have : A great deal of structuring of organization activities, more written rules, less risk taking by managers, lower labor turnover and less ambitious employees

Individualism & Collectivism:

Individualism & Collectivism Hofstede measured this cultural difference on a bipolar continuum with individualism at one end and collectivism at the other Individualism is the tendency of people to look after themselves and their immediate family only – US, Canada, Australia, Denmark, Sweden Collectivism is the tendency of people to belong to group or collectives and to look after each other in exchange for loyalty – Indonesia, Pakistan & a number Latin American countries Wealthy countries have higher individualism scores and poorer countries have higher collectivism scores Countries with high individualism also tend to have , greater individual initiative, and promotions based on market value rather seniority.

Masculinity & Femininity:

Masculinity & Femininity Hofstede measured this dimension on a continuum ranging from masculinity to femininity Masculinity – A culture in which the dominant values in society are success, money, and things Femininity – A culture in which the dominant values in society are caring for others and the quality of life

Masculinity & Femininity:

Masculinity & Femininity High masculinity index Place great importance on earnings, recognition, advancement, and challenges. Individuals are encouraged to be independent decision makers, and achievement is defined in terms of recognition and wealth. Favor large scale enterprises with economic growth as the prime objective. School system is geared toward encouraging high performance The workplace is often characterized by high job stress and high degree of control exercised on employees – Japan High femininity index Place great importance on cooperation, a friendly atmosphere, and employment security. Individuals are encouraged to be group decision makers Employees get more credit for being responsible and get more freedom Tend to favor small-scale enterprises, school system is designed to teach social adaptation

Multicultural Management:

Multicultural Management

Cultural Contrast in Motivation:

Cultural Contrast in Motivation America Japan Arab Management Style Leadership: Friendliness Functional Group activities Coaching, Parenthood Control Independence, space, money, Time Group harmony Parenthood Recognition Individual contribution Group Identity Individual status; class & society Material Awards Salary, commission, profit sharing Annual bonus, fringe benefits Gift for self/family, salary increase Threats Loss of job Out of group Reputation, demotion

Leadership across cultures:

Leadership across cultures Leadership is the ability to influence others in order to work towards achievement of shared goals To be a successful leader, in the context of a globalised business environment, managers must posses certain traits: Cosmopolitan Skilled at International Communication Culturally Sensitive Capable of Rapid Acculturation Knowledge about Cultural and Institutional Influences on Management A facilitator of Subordinates’ Intercultural Performance User of Cultural Synergy A Promoter and User of the Growing World Culture

Leader’s Role and Cultural Impact:

Leader’s Role and Cultural Impact Leader’s Role Headquarters Subsidy Cultural Impact Visioneering Sets the corporate vision and mission Enforces the corporate vision and mission and sets unit goals Not influenced by host culture Energizing Establishing enabling environment to achieve organisational objectives Ability to emulate similar energy and have the host unit achieve its objectives Largely influenced by the host country’s culture particularly with reference to directive, participative and charismatic styles Efficiency Initiating the use of necessary tools & practices that drive productivity Ability to emulate and, where necessary deviate from parent company’s tools & practices Local culture does not impact on leadership style Results Driving for results Driving for results Highly culture sensitive Rules and procedures Country and industry specific Ensuring coordination and control as desired by the head office High degree of local dependence as well as integrate globally for corporate parity and sense of equity

Building a Multicultural Organisation:

Building a Multicultural Organisation Creating Pluralism Achieving Leadership Diversity Structured Integration Integration of Informal network Bias-free organisation Organsiational Identification Minimsing Inter-group Conflict

Communicating Across Cultures:

Communicating Across Cultures Communication Dimensions: Crucial issues in inter-cultural communications are: language & culture, differences between high and low context cultures, use of interpreters and non-verbal communication. If these are taken care of, inter-cultural communication will be effective. Language and culture High and low context languages Use of interpreters Non-verbal communication

Halls and Halls Cross Culture Classification:

Halls and Halls Cross Culture Classification Halls and Halls in 1987 provided another basis for cross-cultural classification. They divided the world into two types of cultures: Low Content Cultures High Content Cultures The dimension used by him for such a division were context (High/Low) and flow of messages (Explicit/Implicit) he contrasted high and low context cultures in the manners outlined in the next slide

Halls and Halls Cross Culture Classification:

Halls and Halls Cross Culture Classification Low Context Cultures High Context Culture Paper work encouraged More reliance on verbal communication No rooms for emotions Emotions are given importance No role of trust in getting job Trust considered important Time considered precious Easy going w.rt . time Project clearances based on facts Based on personal background Lawyers are important Less important US, Germany, Switzerland India, Australia, Arab countries

National context: HRM:

National context: HRM Cross-national differences in HRM and the pressure to adapt to local conditions depend on several national context. The national context includes: Social Institutions Family, religion, economy, education Business culture Factor conditions Quality, quantity and accessibility of raw material Quantity , quality & cost of human resource available Scientific, technical & market-related knowledge available to firm Cost & amount of capital available to firms for operations & expansion Type, quality & costs of supporting institutions such as education, transportation & communication facilities.

National context: HRM:

National context: HRM The HR practices that are country specific Employee selection Training Compensation Performance appraisal Industrial relations

Multicultural teams:

Multicultural teams Multicultural teams can be divided into 3 types Token teams , in which only one member is from another culture, e.g. a group of Japanese retailers and a British attorney who are looking into the benefits and shortcomings of setting up operations in Spain Bicultural teams have members from two countries, e.g. a team of four Mexicans and four Canadians who have formed a team to explore the possibility of investing in Russia Multicultural teams have members from three or more cultures, e.g. a group of 3 Americans, 3 Germans, 3 Chinese & 3 British managers looking after mining operations in Chile

Multicultural teams:

Multicultural teams Four strategies have been suggested to tackle problems of multicultural teams: Adaptation : Acknowledging cultural gaps openly and working around them Structured Intervention : changing the shape of the team Managerial Intervention : setting norms early, or bringing in a higher level manager Exit : removing a team member when other options have failed

Multicultural teams:

Multicultural teams The other ways of managing culturally diverse teams are selection, visioneering, power and respect Task related selection: selecting team members for task-related abilities rather than ethnicity Establishing a vision : help teams agree on his/her vision or super ordinate goal that cuts across individual differences. Equalizing power : leader must guard against vesting disproportionate power in any country specific team members Creating mutual respect : team leader can enhance mutual respect by selecting members of equal ability, making prior accomplishments and skills known to all team members, and minimizing early judgment based on ethnic stereotypes

Work values:

Work values Independence Flexible work hours Choosing alternative career paths Conformity Clearly defined work schedule Well identified career paths with limited flexibility Individualism Individual accountability for work assigned More focus on self in addressing concerns Collectivism B uilding & encouraging interdependencies at work Tendency to form groups, and collate through identifying some factors of commonality, like gender & religion Authority Ability to assert authority when something needs to be done Position, title and status are important and determine the degree of influence Equality Lack of relevance for designations, title, hierarchy Similar benefits and privileges across the organization Compliance Acceptance of policies & rules as organizational limitations Non-adherence merits reprimand & corrective action Empowerment Scope to propose changes to policies and processes Participatory approach to decision making on work-related aspects