Cross-cultural differences in management in the contemporary business environment occur more frequently than it did in the past. It is on the managers to manage these differences efficiently ensuring success to the organization (Bird and Mendenhall 2016). Managing across cultures requires managers to acquire the ability to identify and accept likeness and differences among cultures of different nations. Understanding the needs and demands of the consumers from different cultural backgrounds allows companies to strategize accordingly. To provide an instance, a company based in the U.S. or the U.K. may face management situations while controlling offshore activities in Asian countries where the culture is completely different. The cultural principles and values followed in the U.K. and the U.K. are different from those followed in the Asian countries and hence it would be difficult for the company to control the management in those countries.
The report aims to discuss the potential areas of cultural incompatibility and tensions faced by companies based in Liverpool, U.K. in conducting business operations in international market. In the countries where international activities could be done include China, India, Brazil and the UAE. Further, the report will address the various barriers to intercultural communication that companies face while operating in international markets. In addition, the report will also highlight the reasons behind these barriers that include differences in cultural values. Then, the report will discuss the effects of these cultural differences and resulting barriers on the world of work. It will then provide recommendations on the strategies the companies could follow to ensure effective management.
Cultural incompatibility refers to the issues faced by people in intercultural situations where they are not comfortable with interacting to people from different cultures. Within international business environments, cultural incompatibility leads to poor performance and failed outcomes from the organizations. When it comes to mergers especially, cultural incompatibility results in catastrophic outcomes for both the organizations involved. The U.K based companies thus have to make sure that they establish cultural compatibility with the said countries prior to establishing any business there. As Shi and Cai (2013) have pointed out, cultural incompatibility influences the psychology of the people involved especially in cases of mergers and acquisitions. The author further states that cultural incompatibility could be moderated with the acquisition of cultural orientation. Cultural orientation requires the managers to have a deeper knowledge about the cultures other than their own so that they could be compatible with any culture within the organization.
As the U.K companies attempting to work with countries of china, India, Brazil and UAE, cultural incompatibility is bound to be there that must be addressed. However, it is first important for the companies to consider the incompatibilities and tensions that could occur while working there. In India, certain aspects of the culture could make the U.K expatriates feel uncomfortable like the language. Many Indians are not enough proficient in English language and thus communication is going to be a big problem (Jhunjhunwala 2012). Further, the Indian companies follow a hierarchical system of governance and hence they follow the top to bottom approach to decision-making. The Brazilian business environment on the other hand, is very different from that of India in that the Brazilians are more interested in socializing and making friends. Apart from that, they follow a vertical hierarchical system where the managers make bulk of the decisions. The U.K. business managers will have to become accustomed to these otherwise there is bound to be incompatibility. In the UAE, similar to India, language is a great barrier that the U.K. managers might face while working there since majority of people speak Arabic or Urdu language. Further, the string adherence to religious laws and customs could also be considered some tensions areas. China is quite different when it comes to business however, it also has strong adherence to culture. The Chinese are extremely punctual and professional when it comes to business and they consider it an insult if someone shows up late for any meeting. They are reserved in their behaviors while greeting others and bow down to people as mark of respect. In this case, the U.K managers might face some incompatibility because in the U.K, people shake hands to greet each other.
Communication is the key to effective cross-cultural management and every business knows this. Intercultural communication in particular is vital in managing international business especially the offshore activities. Any disturbance created in intercultural communication costs heavily on the organization. Therefore, companies are extremely careful while choosing expatriates for managing operations in countries with different cultural backgrounds. Gibson (2002), states that intercultural communication is the “hottest label of the modern time”. According to the author, although the concept is the most sought after in the business world, increasing number of people are becoming aware that having a technical knowledge of it is more important than just possessing soft skills. Samovar et al. (2014) on the other hand, state that the globalization phenomenon has created an environment for businesses where cross-cultural awareness and intercultural communication competencies have become everyday necessity. The authors are true in stating that the importance of intercultural communication competency has become an essential component of the business strategies prepared by managers across organizations. However, certain barriers to intercultural communication cause these strategies to fall flat and cause huge loss to the companies.
According to Gut, Wilczewski and Gorbaniuk (2017) barriers to intercultural communication arise when companies fail to understand the differences in culture and acknowledge those differences. These barriers are often results of the miscommunication between ‘low context cultures and ‘high context cultures’. Low context culture means the culture that does not believe in implicit communication. In low context culture, messages and information are clearly conveyed without any hidden meaning. High context cultures on the other hand, rely on implicit communication. In high-context cultures, a message or information could have meanings hidden meanings and one has to have strong background information to understand the messages. While the United Kingdom is a country with low context culture, China, Brazil, UAE and India, all come under high context cultures. It is thus obvious that the companies based in the U.K. will face some barriers while communicating with employees from China, India, Brazil and the UAE. These barriers are also caused due to the differences in the cultural dimensions of the countries. Hofstede’s cultural dimension scale could provide a better view of the barriers that are caused in intercultural communication. A comparison of U.K. with the four chosen countries reveals some interesting facts that result in barriers. The power distance index (PDI) shows that all the four countries easily accept inequality in power distribution while the U.K. with a score of 35, shows that the country believes in minimization of inequality. A low score in PDI apparently results in a high score in Individualism for the U.K and low score for other four countries. When it comes to masculinity, there is not much difference in the scores thus suggesting that all the countries highly value achievement, success and competition. Under the Uncertainty Avoidance Index (UAI), Brazil and the UAE are remarkably different from the U.K with the scores of 76 and 80 respectively as compared to a score of 35. These scores reveal the fact that Brazil and UAE are not open to uncertain or strange situations and hence maintain high codes of behavior and beliefs. China scores high on the Long-term orientation index meaning the culture is very pragmatic. They believe in truth being dependant on the present situation, time and context. The U.K. with a neutral score of 51 does not reveal much.
With these differences, it is possible to understand the cause of the barriers that arise or might arise in the future while conducting international business activities there. Further discussion on the cultural values of the different organizations in the chosen country shall provide an added knowledge of international offshore activities and the problems that might arise managing these activities.
Bennett (1998) state, “values within the culture of an organization influence the perception of situation and problems”. According to the authors, the cultural values of an organization could be changed through ethical grounds of the organization. In the views of Jackson (2001) however, having a strong sense of international management trends could also be helpful in shaping an organization’s cultural values.
Cultural values within organizations are at times different from the values of the national culture. Therefore, a U.K. based company might have strong organizational cultural values but where equality is practices and so on, but if it does not comply with the national culture, it might not work. It is however important to note that in most cases, the organizational culture aligns with the national culture perfectly. It has been found in several studies that national culture and organizational culture mostly differ at the level where national culture focus on values while symbols, rituals and heroes are the facets defining organizational culture. Although it was revealed in a study conducted by Van Muijen and Koopman (1994), that national preferences influence the organizational values, it is undeniable that cultural values do influence organizations especially at the international level.
The companies based in Liverpool might have an issue with other organizations within the national cultures while they might not face such issues with organizations in the chosen four countries. In such cases, the role of the leaders becomes extremely crucial because they influence the way organizations manage cross-cultural differences. Nazarian, Irani and Ali (2013), have further evaluated cultural values in terms of organizational culture and national culture and found that company size acts as a moderator between the two types of culture – national and organizational. The authors conducted a thorough study in Iran and found that education and position both could serve as important controls of the link between national culture and organizational culture.
In the context of U.K., the country maintains cultural values that are reflected in its management of business operations as well. The business environment is very competitive and has strong regard for the Corporate Social Responsibility (CSR). The managers from British are very punctual and do not like to waste time on waiting. The business managers consider it very impolite if someone comes late to meetings and so on. In contrast to this however, in India, they appreciate punctuality but often fail o reciprocate it. Brazilians believe in flexible punctuality meaning that the meetings might start and end late and might be cancelled hours before scheduled time. China, on the other hand, has serious and high regards for punctuality and considers late arrival as a serious offence (Forbes.com 2018). Further differences in cultural values could also be found between the countries that make it difficult for managers to control business activities efficiently. It thus brings forth the required attention managers in Liverpool-based organizations must give to intercultural communication while managing international activities in the chosen countries.
These above-mentioned barriers to intercultural communication and differences in cultural values heavily influence the world of work. The world of work here refers to the work carried out by organizations, particularly by managers. Cultural differences effect the working environment within the organizations especially when it is not managed properly. When an expatriate manager from U.K. is asked to look over the business operations in some other country like China, the UAE or even Brazil and India, it is important that he or she be properly trained. In the Chinese context, as Jaw et al. (2007) have found, the cultural values like Confucian dynamism collide constantly with the organizational values of openness to change and others. The authors have also found that Confucian dynamism is more powerful a cultural factors that Hofstede’s dimensions when it comes to work values of the Chinese employees. This revelation is important for U.K managers prior to operating in the country or even providing training to organizations looking to develop their offshore activities.
Intercultural communication is successfully achieved when the messages are clearly conveyed and understood by the sender and the receiver respectively. However, when a manager from a low-context culture like the U.K has the responsibility to control employees from a high context culture like India or the Brazil, the situation becomes difficult. To cite an example, the U.K manager might arrive to office well on time before any important meeting but the Indian or Brazilian employees will arrive at their own convenient time. To the British manager, it would be an unprofessional conduct but to the Indian or Brazilian employees, it is acceptable and permissible. Thus, conflicts are bound to occur in such situations.
Further, the disturbances arising in intercultural communication at the workplace in an international business setup could inflict huge damage to companies. The expatriate managers from U.K. would have to face difficulties when interacting in meetings because in the Arab countries, it is important that most senior person be greeted first. It is a sign of respect in the Muslim culture especially but if the U.K managers fail to understand this, it might create problems. In other instances, Brazilians give high value to friendship and they even have a saying, “to our friends, everything; to others, the law” and thus managers from U.K must be very careful while carrying out business operations.
The differences in cultural values between U.K and other chosen countries also affect the world of work because it creates a rift between an expatriate manager and local employees. The dissimilarities in cultural values result in dissimilarities in the style of management as well. While the Asian and Latin American cultural values find it easier and better to follow leaders, employees in U.K have difficulty accepting unequal power. Thus, if a situation arrives when an employee from U.K has to work under a manager from these countries, he or she might not be able to adjust properly. On the other hand, when a manager from Asian or Latin American countries has to manage a team of U.K employees, he or she might face trouble interacting because the employees will not accept absolute power of the manager.
In order to make sure that the management teams of any U.K company successfully achieve their objective of operating in the said countries, certain strategies could be suggested.
Conclusion
To conclude, it could be stated that managing business operations in the countries of India, China, Brazil and the UAE is easy only if proper training is given to the U.K managers. Further, the problems with intercultural communication and differences in cultural values decide the fate of any business and it is important for business managers to address properly these issues. The report provided an extensive discussion on the problems of cultural incompatibility and tensions arising from these differences. The report provided some strategies the companies in U.K could apply in order to ensure smooth functioning of the business.
References:
Bennett, M.J., 1998. Basic Concepts of Intercultural Communication: Selected Readings. Intercultural Press, Inc., PO Box 700, Yarmouth, ME 04096.
Bird, A. and Mendenhall, M.E., 2016. From cross-cultural management to global leadership: Evolution and adaptation. Journal of World Business, 51(1), pp.115-126.
Forbes.com 2018. How Cultural Conflict Undermines Workplace Creativity. [online] Forbes.com. Available at: https://www.forbes.com/sites/hbsworkingknowledge/2013/12/09/how-cultural-conflict-undermines-workplace-creativity/#245ae6c5214f [Accessed 13 Aug. 2018].
Gibson, R., 2002. Intercultural Business Communication: An Introduction to the Theory and Practice of Intercultural Business Communication for Teachers, Language Trainers, and Business People. Oxford University Press.
Gut, A., Wilczewski, M. and Gorbaniuk, O., 2017. Cultural differences, stereotypes and communication needs in intercultural communication in a global multicultural environment. The Employees’ perspective. Journal of Intercultural Communication, 43.
Jackson, T., 2001. Cultural values and management ethics: A 10-nation study. Human Relations, 54(10), pp.1267-1302.
Jaw, B.S., Ling, Y.H., Yu-Ping Wang, C. and Chang, W.C., 2007. The impact of culture on Chinese employees’ work values. Personnel Review, 36(1), pp.128-144.
Jhunjhunwala, S., 2012. Review of Indian work culture and challenges faced by Indians in the era of globalisation. Interscience Management Review (IMR), 2(2), pp.70-73.
Nazarian, A., Irani, Z. and Ali, M., 2013. The relationship between national culture and organisational culture: the case of Iranian private sector organisations. Journal of Economics, Business and Management, 1(1), pp.11-16.
Samovar, L.A., Porter, R.E., McDaniel, E.R. and Roy, C.S., 2014. Intercultural communication: A reader. Cengage Learning.
Shi, J. and Cai, H.J., 2013. Cultural Incompatibility Influences Psychological Reactions in Cross-Border Mergers and Acquisitions: The Moderating Role of Multicultural Orientation. In The 19th International Conference on Industrial Engineering and Engineering Management (pp. 371-377). Springer, Berlin, Heidelberg.
Van Muijen, J.J. and Koopman, P.L., 1994. The influence of national culture on organizational culture: A comparative study between 10 countries. European Journal of Work and Organizational Psychology, 4(4), pp.367-380.
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