Globalization of business has led to cross border flows of physical, financial and human resources. It has resulted in both a large number of people working abroad, as well as an increasingly multi cultural domestic work environment. To face the ever growing competition, organizations are expanding their businesses, outsourcing and even establishing offices overseas. Organizations are not only searching the world for opportunities to sell or source but also to find intellectual capital- the world’s best talent and ideas.
This brings new employees of different origin, language and national culture thus adding complexities to the culture of domestic organizations.
Effective use of cross cultural teams can provide a source of experience and innovative thinking to enhance the competitive position of organizations. However, cultural differences often lead to misunderstandings, frustrations, cultural shock etc. These have to be tackled effectively if the benefits of a diverse and talented workforce are to be realized.
Another dynamic factor that brings about a cultural change within organizations is cross border acquisitions.
Many domestic companies are entering foreign markets and signing merger deals. Other companies such as the ones in the IT sector have businesses which depend heavily upon foreign markets. This has necessitated the development of competent “global managers” who would be able to work in new environments efficiently and will act as a bridge between the parent company and its subsidiaries. Working effectively in cross-cultural context is becoming of vital competence for aspiring managers.
Organizational research has shown that cross- cultural training mitigates or proactively guards against the frustrations, misunderstandings and culture shock often resulting from cross-cultural interactions that lead to poor adjustment and job performance.
(Harris and Kumra 2000). This paper attempts to define the possible sources of cross-cultural differences and illustrate a failed cross cultural merger through a case study. It then goes on to highlight the cross cultural challenges and issues to be considered in designing cross cultural training. OBJECTIVES OF THE STUDY: 1.
To understand the influential factors that lead to cross-cultural differences. 2. To identify the key cross cultural challenges. 3. To identify issues to be considered while designing cross cultural training. METHODOLOGY: A literature survey was conducted to study the issue and its various implications. Information was gathered from various articles about cross cultural training. An opinion survey was conducted regarding key issues in cross-cultural training. A total of 10 professionals from large multinational organizations both in India and abroad responded to the survey between 1st and 30th November 2009.
The responses were collected through interviews and telephonic conversations. This was a preliminary study, and the small size of the sample means that definitive conclusions cannot be drawn, but rather an indicative trend can be observed. Sample 1. 10 respondents from 10 different companies responded to the survey. 2. Positions held within the organizations: Senior Management level 3. Organizations: Financial Services, Consumer Business, Construction, Manufacturing, Import and Export, Telecoms, Media and Technology 4. Size of Organizations: more than 1000 employees
Culture is a powerful force which plays an important role in how businesses are run and managerial decisions are made. Professionals in today’s multicultural global business community frequently encounter cultural differences which can at times interfere with the organizational working. The nature of international collaborations is such that professionals need to be aware of differing perspectives and cultures. Working across significant differences in culture is a complex process involving intellectual and emotional challenges. It takes learning and exposure to accurately interpret the vagaries of cross-cultural issues.
Sensitivity to other global views- managing in a different culture and new business environment presents challenges for the individuals, their team and the organization. To understand these challenges, one must first understand the definition of culture. Culture can be defined as, “A perceptual structure of human activities that include, behaviors, values, arts, beliefs, languages, custom, dress, rituals, manners, religion, laws, morality, & code of honors. ” It basically refers to a group of people with whom we share common experiences that shape the way we understand the world.
It includes groups that we are born into, such as gender, race, or national origin. It can also include groups that we join and become part of. For example, we can acquire a new culture by moving to a new region and even by a change in our economic status. In an organization, culture defines, decision-making practices, communication styles, working styles and influences how we act and respond in the working world. Cultures differ distinctively in the ways they seek to resolve universal problems. These differences can create obstacles to smooth collaborations.
When people from different cultural groups take on the challenge of managing international businesses by working together with the global community, cultural values sometimes conflict. One can misunderstand another, and react in ways that can hinder what are otherwise promising partnerships. There are several frameworks which have been developed in making comparisons across cultures. One of the most widely used frameworks in managerial settings, is that of Geert Hofstede. Dr. Geert Hofstede conducted perhaps the most comprehensive study of how values in the workplace are influenced by culture.
From 1967 to 1973, while working at IBM as a psychologist, he collected and analyzed data from over 100,000 individuals from forty countries. From those results, and later additions, Hofstede developed a model that identifies four primary dimensions to differentiate cultures. He later added a fifth dimension, Long-term Orientation. Hofstede’s five cultural dimensions: 1. Power Distance Index (PDI) focuses on the degree of equality, or inequality, between people in the country’s society. A High Power Distance ranking indicates that inequalities of power and wealth have been allowed to grow within the society.
These societies are more likely to follow a caste system that does not allow significant upward mobility of its citizens. A Low Power Distance ranking indicates the society de-emphasizes the differences between citizen’s power and wealth. In these societies equality and opportunity for everyone is stressed. 2. Individualism (IDV) focuses on the degree the society reinforces individual or collective, achievement and interpersonal relationships. A High Individualism ranking indicates that individuality and individual rights are paramount within the society.
Individuals in these societies may tend to form a larger number of looser relationships. A Low Individualism ranking typifies societies of a more collectivist nature with close ties between individuals. These cultures reinforce extended families and collectives where everyone takes responsibility for fellow members of their group. 3. Masculinity (MAS) focuses on the degree the society reinforces, or does not reinforce, the traditional masculine work role model of male achievement, control, and power. A High Masculinity ranking indicates the country experiences a high degree of gender differentiation.
In these cultures, males dominate a significant portion of the society and power structure, with females being controlled by male domination. A Low Masculinity ranking indicates the country has a low level of differentiation and discrimination between genders. In these cultures, females are treated equally to males in all aspects of the society. 4. Uncertainty Avoidance Index (UAI) focuses on the level of tolerance for uncertainty and ambiguity within the society – i. e. unstructured situations. A High Uncertainty Avoidance ranking indicates the country has a low tolerance for uncertainty and ambiguity.
This creates a rule-oriented society that institutes laws, rules, regulations, and controls in order to reduce the amount of uncertainty. A Low Uncertainty Avoidance ranking indicates the country has less concern about ambiguity and uncertainty and has more tolerance for a variety of opinions. This is reflected in a society that is less rule-oriented, more readily accepts change, and takes more and greater risks. Geert Hofstede added the following fifth (5th) dimension after conducting an additional international study using a survey instrument developed with Chinese employees and managers.
That survey resulted in addition of the Confucian dynamism. Subsequently, Hofstede described that dimension as a culture’s long-term Orientation. 5. Long-Term Orientation (LTO) focuses on the degree to which the society embraces, or does not embrace, long-term devotion to traditional, forward thinking values. High Long-Term Orientation ranking indicates the country prescribes to the values of long-term commitments and respect for tradition. This is thought to support a strong work ethic where long-term rewards are expected as a result of today’s hard work.
However, business may take longer to develop in this society, particularly for an “outsider”. A Low Long-Term Orientation ranking indicates the country does not reinforce the concept of long-term, traditional orientation. In this culture, change can occur more rapidly as long-term traditions and commitments do not become impediments to change. India’s ranking on the five cultural dimensions of Hofstede: [pic] India has Power Distance (PDI) as the highest Hofstede Dimension for the culture, with a ranking of 77 compared to a world average of 56. 5.
This Power Distance score for India indicates a high level of inequality of power and wealth within the society. This condition is not necessarily subverted upon the population, but rather accepted by the population as a cultural norm. India’s Long Term Orientation (LTO) Dimension rank is 61, with the world average at 48. A higher LTO score can be indicative of a culture that is perseverant and parsimonious . India has Masculinity as the third highest ranking Hofstede Dimension at 56, with the world average just slightly lower at 51. The higher the country ranks in this Dimension, the greater the gap between values of men and women.
It may also generate a more competitive and assertive female population, although still less than the male population. India’s lowest ranking Dimension is Uncertainty Avoidance (UAI) at 40, compared to the world average of 65. On the lower end of this ranking, the culture may be more open to unstructured ideas and situations. The population may have fewer rules and regulations with which to attempt control of every unknown and unexpected event or situation, as is the case in high Uncertainty Avoidance countries. Defining Cross Cultural Training:
Cross-cultural training in general can be defined as “Any intervention aimed at increasing an individual’s capability to cope with and work in foreign environment” (Tung, 1981, in Zakaria, 2000). Hence cross-cultural training involves all the methods like lectures, simulation etc. used to make the person familiar with a different culture. It involves interacting with and/ or comparing two or more cultures, & understanding their values, beliefs, & norms. The term cross-cultural training hence is broad enough to include differences in areas like language abilities, business etiquettes, beliefs and values, social system, negotiating styles etc. f any culture. Cross-cultural training has also been defined as “Formal methods to prepare people for more effective interpersonal relations and job success when they interact extensively with individuals from cultures other than their own” (Brislin and Yoshida, 1994). The advantages from cross-cultural training have been listed as following (Zakaria, 2000: 2): 1. A means for constant switching from an automatic, home culture international management mode to a culturally adaptable and acceptable one 2.
An aid to improve coping with unexpected events and cultural shock in a new culture 3. A means to reduce uncertainty of interactions with foreign nationals 4. A means for enhancing expatriates coping abilities Design of cross-cultural training: Organizations are required to choose between culture specific or culture general training, which areas of the culture to focus upon and what are the personal requirements of the person who might have to deal with a situation like this or who is shifting to a different culture for work.
The study by Hun and Jenkins (1998) mentions following issues for the cross-cultural training: 1. Different aspects of time like punctuality- The time factor here involve two dimensions that are punctuality and relationship dimension. While in some cultures like USA starting and ending on time are very important in others like South American countries that may be considered exceptional. Some cultures prefer to take time for relationship building, which may not be acceptable at all in others. Hence cross-cultural barriers related to time need to be taken care of. 2.
Linguistic barriers- English is being used for most transactions but then usage of English tends to change with the country contexts. For example the pronunciation in India is significantly different from the American way. Secondly certain terms may have different meaning in different languages; hence context also plays an important role. In case of countries with different languages the expatriates must be trained in opening dialogues and discussions with the help of translators. 3. Different business practices- Like conduct in meeting and unstructured and open discussion.
Hofstede’s (2001) dimensions like power distance can play an important role in situations like conduct during the meetings. In cultures with lower power distance the employees may tend to call their bosses with their first names while this may be impossible in cultures with higher power distances. Hence developing a first hand knowledge about the practices is very important. 4. Cultural stress (ambiguity and difference of perceptions)- The training should also involve methods to counter stress and to interpret situations. The expatriates will have to understand the situations on their own and then form perceptions.
The training should avoid any kind of stereotyping where trainees may be lead to believe certain things about any culture. The culture may broadly explain value system of a community or country but every individual is different. Hence any individual with a pre-formed notion about the culture will be shocked to see people different from his beliefs leading to lot of confusion and stress. 5. Body language and greetings- The way emotions are expressed in the various cultures may differ, for example the face expressions and hand gestures may convey different meanings in different cultures.
Cross-cultural training should have components related to both general orientation and specific skill development (Harrison, 1994). The component of general orientation here consists of self assessment (dealing with change, stress management and identifying attributes) and cultural awareness (general dimensions, national values and work place incidents). The specific development on the other hand consists of knowledge acquisition (area studies, language studies and host attitudes) and skills training (case studies, area simulation and behavior modeling).
Hence the training should focus on providing trainee the knowledge about national cultures and attitudes in the host country in the first phase while in second phase the trainee should be made to go through a rigorous process of handling the situations in a simulated environment. This will help the trainee to acquire hands-on experience. The paper by Nicola (1993) suggests following issues for cross-cultural training: •Feed back •Getting beyond culturally determined stereotypes •How to raise and deal with cultural stereotype How to counsel employees •Coaching and team building •Resolving conflicts (those including various ethnic groups at work place) •Counseling so as to go beyond all kinds of stereotypes and perceptions. After the internet revolution things have vastly changed for various organizations. For example many firms use internet as a medium to coordinate between different employees working in different locations as a team like one of the team members would be in India, other one might be in Europe and third one in South America.
The group dynamics in these situations becomes very important; hence the employees must also be trained at handling people from diverse cultures at the same time ensuring equal treatment and opportunities for all. One of the most important factors that is often forgotten while designing the training programs is the requirement of the employees. The design of training program should be made keeping in mind the length of stay in the host country, type of function he/she will have to perform, degree of socialization required by the employee and the personal characteristics of the employees (like interpersonal skills).
Hence cross-cultural training program should be customized for each employee to a certain extent. It’s not only the employee who needs to be trained; the family of employee should also be trained on certain issues like cultural differences. Many firms have started giving due importance to the training of spouse because the socialization of expatriate and job success to a large extent will depend upon socialization of his family Key Cross Cultural Challenges: Cultural dissimilarities affect the ability to be effective in a foreign market.
Some of the root causes for the problems arising in International businesses result from differences in communication styles, decision-making styles and working styles. • Communication Style – The way people communicate varies widely between and even within cultures. Recognizing the impact of culture on communication style is essential to the success of cross-cultural business communication. • Decision making- Decision- making processes differ from culture to culture.
Some cultures emphasize individual autonomy and responsibility while others focus more on group participation. • Working styles- The working styles may differ on the basis of elements such as leadership, conflict management, level of co-operation, competition among colleagues, teamwork, autonomy, etc. Case Study: Daimler Chrysler- A Cultural Mismatch? Synopsis: An example of a cross-cultural failure has been that of DaimlerChrysler. Both sides in the partnership set out to show that intercultural hurdles would and could be overcome in their global merger.
Articles in the Wall Street Journal and Business Week suggested however that Daimler Chrysler underestimated the influence of culture, and due to culture clash, almost two years later was still struggling to become a unified global organization. In the period leading up to the Daimler-Chrysler merger, both firms were performing quite well (Chrysler was the most profitable American automaker), and there was widespread expectation that the merger would be successful (Cook 1998). People in both organizations expected that their merger of equals” would allow each unit to benefit from the other’s strengths and capabilities. Stockholders in both companies overwhelmingly approved the merger and the stock prices and analyst predictions reflected this optimism.