Internationalization of the economy has influenced companies to operate their business globally. The global operation has impact managers with several challenges. Market, product, and production plans must be coordinated on a worldwide basis. The global operation necessitates organization structure to balance centralized home-office control with adequate local autonomy. As companies have started their business operation on the international front, the number of their employees has increased. Increase in the employee's abroad management is faced with new global challenges. The three broad international business management challenges were identified by the management gurus as follows (Robert, Kossek & Ozeki, 1998):
a) Deployment: To get the right skills where it is required in an organization regardless of the geographical location.
b) Knowledge and creativity distribution: Spreading the knowledge and practices throughout the organization regardless of where they have actually originated.
c) Talent identification and development on global basis: To identify who possess the ability to function effectively in a global organization and working on the development of such abilities.
When confronted with such challenges, organizations have had to reorganize policies and procedures for handling global assignments. It will require organization to go through thorough study of the cultural differences and cross-cultural values and principals, technical and language aspects which might require thorough training program.
Cross-Cultural Management of the organizations
Inter-country differences impact managerial as well as operational processes of the businesses. Pluralism, diversity and collectivism created differences in values, attitudes of the people thus creating its impact on the behaviors and reaction of the people from country to country. Economic factors and labor cost factors help determine whether business emphasis should be on efficiency, commitment building or some other strategy. Industrial relations specifically the relation between worker, the union and the employer manifest themselves to the adoption of global business processes.
Culture Theory and its determining factors
Culture in its broadest sense can be defined as the collectiveness of society's idiosyncratic ideas, beliefs, values and knowledge. It depicts the ways human interacts and correlate with their environments. Cultural theory is related to the branches of social science, political science, sociology and communication. Cultural theory defines the core concepts of culture. Cultural studies often concentrate on the ways that relates to subjects of ideology, nationality, ethnicity, social class and gender (Serrat, 2008). Cultural theory takes all account of business like marketing, production and financial aspect into its dimension. In the global business culture leaves its traces on the policies, new-processes and management strategies.
Application of cultural theories
Wide-ranging cultural differences from country to country require corresponding differences in the management practices among company's foreign subsidiary. The cultural theory intends to examine subject matters of different countries in terms of cultural practices and the power relationships. These theories understand the complex structure of cultural values and analyze the political and social impacts on it. The cultural theories are subjected to political criticisms and ethical standards. They tend to share knowledge within societies and equip people from different nations to be well aware of the norms, values, behavioral pattern and psychological patterns of these societies.
Cultural Variations in different parts of the world
For the purpose of comparing different cultures it's important to analyze operative identities of different dimensions of culture across the nations and identify the similar aspects or dimension which is common to all culture.
A study conducted on the behavioral patterns of the managers from Hong Kong, the People's Republic of China and United States conclude that U.S. managers are mostly concerned with getting the job done whereas Chinese managers were most concerned with maintaining a harmonious environment and the Hong Kong managers fell between these two extremes (Ralston, Elsass, Gustafson, Chenung & Terpstra 1992).
A study conducted by Professor Geert Hofstede had recognized other across-cultural differences in his study. The study has signifies that nations have different set of power needs thus societies power distance differs to the extent that the less powerful members of the institutions accept and expect that power will be distributed unequally (Hofstede, 1992). These inequalities are exhibited to greater degree in country like Mexico as compared to Sweden. Masculinity vs. femininity passes on to the extent to which society values assertiveness-masculinity vs. caring-femininity. Japan and Australia is among those countries that rank high in masculinity as compared to Denmark and Chile that ranked low.
Management studies have found that Mexican workers prefer formal working environment where managers and subordinates prefer to keep certain level of distance among them. However, the cultural environment of the United States organizatiuons is more of informal and friendlier (Schuler, 1996). Same studies have shown that individualism is not valued as highly as it is in United States. Consequently, workers don't give as much importance on self-determination as the workers of United States and they expect to receive a wider range of services and benefits for themselves and their families.
Communicating Across the cultures
Another face of cultural theory is the communication across the cultures. In the global work place organizations are exposed to multiple cultures and diversity in workforce tent to be at the most. This diversity pushes organizations to build strong communication bridges across the cultures so that lack of communication can be avoided which can result in number of managerial and functional setbacks. Diversity in the workforce increases workforce creativity, expand the alternatives for solving the problems, decision can be made with views from different perspectives, flexibility in the organization increases and organization is moved towards more creative and learning center with talents and skills of people from different backgrounds.
The barrier is built in across-culture communication with the natural feeling of judgment and evaluation. Its natural urge that people tend to judge, evaluate and approve another person's perspective. The disliking and disagreements are shown in negating others person's point-of-view, his/her perception of something and not approving other person's conceptual framework. This results in bad feelings, discouragement, lack of confidence and unpleasant relationship among people. In the daily routine social networking it is commonly observed that making evaluation by the people is very common in all form of communication. The consequences of these evaluations are intensified when they are associated with feelings and emotions. Stronger the feelings regarding the subject matter being evaluated the chances of creating mutual understanding between the communicating parties will be thinned (Roger, C., & Roethlisberger, F.J 1991).
Gateway to real and effective communication across-culture and avoiding these evaluative tendencies can be created when organizations workforce have the listening power and understanding strength. The paramount to this concept is the concept of empathy which means seeing the expressed ideas and attitude from other person's perspective. This required understanding of the goals and objectives of the other person and their feelings associated with it. It is easy said than done. The philosophy of psychotherapy deals with it which involves building amiable relationship with people through better communication among them. The theory of psychotherapist works well with small group of people resolving issues or communicating on the matter of religion, racial or industrial tensions face-to-face. Dealing with communication issue across-culture has more complex and formalized structure.
People from different backgrounds, experiences and motivations working in geographically dispersed locations have more complex communication challenges and understanding problems. Some school of thoughts have the opinion that when people from different backgrounds, motives and value sets communicate with each other it is more likely that they will not agree to the same point thus effective communication can't be built between them. However, there is another school of thought which says that when both the parties have given freedom of expression they are more likely to build strong relationship exhibiting effective communication (Roger, C., & Roethlisberger, F.J 1991). People from different cultures when are free to express their feelings, opinions and point-of-views mutual understanding between the workforce is build and outcomes are much better as compared to people of similar backgrounds communicating for results.
Avoiding cultural Shock through communication
Organizations when functioning globally have workforce from diversified backgrounds. If their values are not respected, they are not ethically accepted in the workforce and their experience is not valued then it can lead to a cultural shock and disturbance in the organization. Managers are not able to motivate their staff and work on their skills and abilities for the achievement of the organization's goals and objectives. When there arises conflict in the organization due to cross-culture differences its wise enough to manage the communication through a moderator. A moderator's role is to listen to the whole conversation non-evaluatively and with thorough understanding with unbiased views. The process of bridging communication gaps with the help of moderator can be imitated any time without waiting for the other party to take any action. For the success of this process it's important that moderator at least gets cooperation from one of the party.
The moderator will be responsible to deal with the dishonesty, defensive attitude, embellishments and lies that have structures failure to communication. The defensive attitude is likely to be changed soon…