Challenges Of Cross-Cultural Team: A Case Study Of Aldi Supermarket Essay.

Discuss about the Challenges of Cross-Cultural Team.

Corporate sectors have been using the concept of cross culture within their business operation. According to the views of corporate culture, they prioritize the ways in which interaction takes place between the management and the employees (Bonache and Noethen 2014). The dress code, office set-up, business hours, hiring decision, the ways in which clients are treated and even the business hours are dependent on the employees working and the culture to which they belongs. Cross culture is an important concept in business nowadays. The way to initiate the harmony between different groups of people within the organization and improve the efficiency of the same with their help is known as managing cross-cultural team (Corkindale 2015). Through these methods the company can develop by increasing their understanding of the ways in which different groups of people belonging to different culture communicate and interact amongst themselves. There have been several theories relating to cross cultural dimension as used by the different companies within their course of operation and the benefits it yielded to the company.

The chosen organization for this report is Aldi supermarket. Karl Albrecht and Theo Albrecht have founded the supermarket chain established in Germany. According to BBC news published on 2016, the company was planning to employ 5000 staff in their company. The company has several district managers within their organization who has been engaged in managing the daily business and keeping things into law and order (Ward 2015). They have around 25 expatriate area managers in their team. They are also into expanding their business into Chinese market for which they need to recruit new managers in their organization.

This report tries to focus on the ways in which these cross-cultural dimensions can be helpful in the recruitment procedure of the company and the challenges faced by the management of the company. The first segment of the report gives a brief review of the existing literature and the beneficial impact of cross-cultural dimension. In addition, the ways in which Hofstede model has been used in the company has also been observed through this report. The ways in which the company uses the theory of Hofstede while trying to recruit the expatriate managers and the problems faced by them in their operation has been highlighted in the second segment of this report. The report also tried to focus on the skills and abilities that a successful manager must possess in any organization.  The multivariate criteria that can be used to analyze the capability of an international manager has also been observed here. The final part of the report highlights the acculturation issues faced within the organization.

Cross-Cultural Model by Geert Hofstede

The advent of time has led many companies to improve their procedure of recruitment within their organizations. According to Anand and Chitra Devi (2016), the companies are now moving towards having an e-recruitment procedure through which it is going to hire its employees even the top-level management groups. Through this paper, the author saw that still today there is superiority of the real-time communication over the e-recruitment process. Again the paper also highlights that HR department is benefitted by the e-recruitment as much of their work pressure is relieved through this (Anand and Chitra Devi 2016).

Another journal reveals that in some companies of Sweden the recruitment of top managements are done based on the parameter of homosociality. The entire recruitment procedure has given more importance to two different practices through which recruitment took place. They are: hierarchy and competency and giving preference to males than females (Holgersson 2013). In other words through the report, it has been observed that in countries like Sweden preference is given to male employees than female employees.

According to the Engelen et al. (2014) there has been an established relationship between the top management leadership and the level of innovation within the firm.  Through the journal the author has tried to find out the ways in which any organization is benefited by the level of innovation and the behavior of the leader in this respect. The report found out that there are 6 components in the transformational behavior of the leaders. It is these components of the leaders that has influenced the innovation within the organization in a positive way (Engelen et al. 2014) It has also been observed that the extent to which the components have influenced the organization is different but each of them has a positive impact within the company.

Another journal suggests that the influence of cultural relationship of the employees on the designing of new products and the technological innovation within the domain which leads to the growth of the organization (Turro, Urbano and Peris-Ortiz 2014). The report found out that there has been a positive relationship between the design innovations on strengthening the market share of the organization. It has been observed that as individualism increases there has been an increase in the positive influence of the organization’s business strategy.

The above literature survey suggests that throughout the global economy, different organizations have opted for different methods while recruiting the top-level managers within their organization. In spite of the fact that different methods have been used, all the organizations came into one concluding point that is everyone realized the need and benefit of using cross-cultural dimension within their organization. Most of the organizations have started employing people from different cultures within their organization’s domain.

The following part initially talks about a brief theory of the Greer Hofstede Model followed by the issues, which Aldi faces in recruiting their expatriate managers.

Hofstede was a social psychologist who was an ex-employer of IBM. The model was initiated with a survey done on the employees of IBM globally during 1969-73. The main purpose of his model was to establish the impact of the different culture on the values imbibed on the people of that nation. In other hand, this model was established to understand the influence of these six different components on the organization (De Mooij 2015). The six different dimensions of Hofstede’s model is given as follows: 

Individualistic/ Collectivism: This dimension tries to highlight the ways in which individual people prioritizes their own needs and goals in their daily business operation. The ways in which the individual needs of these employees can influence and generate the goals and needs of the entire organization is shown through this dimension (Evanschitzky et al. 2014).

Masculine/ Feminine: This dimension highlights the gender biasness existing within the society. Under the feminine culture there is less differentiation amongst the males and females within the society. On other hand, there are different rules for masculine society whereby the females and males are treated differently.

Uncertainty Avoidance: The capability of people to adept to the changes in the society, organization and work culture has been seen through this dimension. People can be classified as risk lovers, risk neutral and risk averse. The risk lovers show low level of uncertainty avoidance that is they are capable of diving into uncertain situations whereas the risk averse person shows high uncertainty avoidance where they are not ready to adopt uncertain situation (Corkindale 2015).

Power Distance: This dimension highlights the employee’s capability to acknowledge the existence of inequality within the organization. There is always existence of inequality in terms of income distribution and power distribution within the society. The ways in which the employees accept this disparity matter a lot in their performance.

Time Perspective: The success of an organization depends on future planning of the company, long term perspective. The short time goals taken up by the company based on their past and present situation matters a lot for the company’s growth.

Indulgence/Restraint: The extent to which any organization gets benefitted by taking up little fun sessions amidst the strict rules of the company is seen through this dimension (Wurtz and Suutari 2014). If the employees are engaged into work for the entire office hours then it would dampen their productivity and henceforth little fun activity and enjoyment should be provided within the same.

The managers of Aldi has comes from different regions with different imbibed cultures. It has been seen that they often faces several issues in their daily course of business. Few such issues faced by them have been discussed below with comparison with the learning of the Hofstede’s model. Before discussing the issue, a graph comparing Aldi operating in Australia and in two other nation has been provided based on Geert Hofstede’s Model.

Figure 1: Comparison of ALDI in Australia, Denmark and Sweden

Source: geert-hofstede.com

The graph above shows that Aldi has performed differently in different nation when it has been judged on Hofstede’s model. Along with Aldi operating at Australia, the performance of the company in two other nation have been highlighted through the graph. It is clearly seen that other than long-term orientation and indulgence, the ranks in all other parameters are well above when compared with other two nations. In Australia, the component of masculinity got highest rank whereas the other two nations namely, Denmark and Sweden ranks much below. Hence, the graph above indicates that there is existence of gender biasness within the Australian nation when it comes to hiring the top level managers in the organization.   

Individualistic approach: Each individual has some cultures and ethics imbibed within them, which gets reflected in the way they conduct themselves n their life, in front of the society and within their business domain (Gido and Clements 2014). The managers of Aldi who have been hired from other nations face the problem of conflict whereby they try to abide by their culture and takes time in adapting the already existing culture within the society.  Facing problem in cultural aspect can seriously dampen their performance and hence there is a need for Aldi to implement the cross-cultural approach thoroughly within their system.

Masculine: It has already been observed from the figure above that within Australia, ALDI has been showing strict biasness while recruiting their management employees in top ranks.  Though the nation talks about bringing gender equality but whenever it comes to recruiting a high level executive in their company they give preference to the male candidate. One possible reason could be that it is easier for the males to leave their home and reside abroad for work purpose whereas the female might face problems in moving abroad.  Even there has been several instances where the expatriate management employees feel lonely when staying amidst everyone in their organization (Cuddy et al 2015).

Uncertainty avoidance: The Company gets a score of 54 in this dimension. It is also nearly double than it got in other two nation. Hence, while recruiting the managers the issues faced by Aldi are that it recruits the managers who are risk averse in nature.

Long term Orientation: The Company ranks low in this dimension. While recruiting the managers the company thinks of the short-term goals and not the long-term scenario. However, it reality the company should think about the long-term prospective of the organization when recruiting the managers as recruiting them, providing them with proper training requires huge amount of cost that is to be borne by the company (Gooderham, Gooderham and Grogaard 2013). Hence, the focus should be on short-term goals.

Indulgence: The expatriate managers are often stressed out in their initial days within their organization. The stressed out managers cannot perform well and it can demoralize the other employees within the organization. Henceforth, indulgence in the form of group interaction, short fun sessions and other fun-filled activities often helps them to get accustomed within their organization (Wurtz and Suutari 2014). This short session not only helps the managers to relief their stress but also it helps the lower level employees to have a healthy work relation with the higher authority creating synchronization between the different hierarchy.

The discussion above clearly highlighted the issues that Aldi faced in their domain when recruiting expatriate managers. The company believes in retaining its employees and avoids hiring new people in the top managerial level arriving from different cultures and nations. Henceforth, It has been observed that in order to retain their previous employees the company offers them a lump-sum salary hike along with other facilities like iPhone and AUDI A3. Aldi provides high amount of rewards and recognition to their employees because the company believes in promoting their staff within their domain. Other than the above-mentioned issues, the recruitment procedure within the organization prioritizes some other issues like the experience of the candidate who is sitting for the position. In addition, the company also looks for ability of the competing candidates and the ways in which the manager can adopt the different culture within the organization.

The success of any business depends largely on the skills and effectiveness of the top-notch managers within that organization. The efficiency of the managers gets highly prioritized when the company or organization is involved in managing cross country teams (Bonache and Noethen 2014). The main reason is that managers who deals with teams of indigenous people are well aware of the cultural notions imbibed within its employees and the things that could hurt their sentiments (Gooderham, Gooderham and Grogaard 2013). On other hand, within cross-cultural teams the employees may have sentiments regarding several different issues and may be compatible working under several schemes. Henceforth, the abilities and skills that a successful expatriate international manager must possess have been discussed here.

The international must possess this following abilities and skills:

Self-Awareness: It has been observed that people at the higher authority have the tendency to be bossy and always assumes that they are right while their juniors might be wrong. The basic notion of becoming a successful international manager is to realize the fact that they might not always be right while others might not always be wrong. In other words, the international manager must possess the skill of having self-awareness whereby they recognize and accept the fact that other view can differ from his views (Gido and Clements 2014).

Adventurousness: The ability to take risk and grasp a new method in business operation deviating from the traditional ways is very necessary for the long term growth of any organization. Hence, a good international manager must be adventurous in their work and try out new innovative ways of operation. In case of Aldi, it is this innovative idea taken up by its expatriate managers that led to the growth of the organization.

Good negotiator: Working in a globally acknowledged company requires good negotiating skills of the managers. There may be several cases where they need to negotiate with the clients and other companies and establish their own views in front of them while strategically disregarding the opponent’s views.

Well-Spoken: The important skill that successful managers possess is that of being an orator. In order to be in a brownie point and win over others while communicating with international clients, the managers have to be a good orator. In addition, if the person can speak in the native language of his client, then he gets an upper hand in influencing and getting a good business done (Moran, Abramson and Moran 2014).

Presence or flexibility: An expatriate manager must possess a charismatic attitude reflected through his energy level, dress, interests, self confidence and code of conduct. The way in which the person can gel with his colleagues matters a lot in the success of the business.  

Sensitive towards cultural diversity: The ability to adopt the cultural diversity within the organization is the most important skill that international managers must possess. It might happen that not being able to eat raw fish or touching your colleagues or clients with left hand might offset the manager image as well as de-motivate the potential clients. Hence, the managers must be well-informed and adapted to the rituals of the region where he or she may be posted in their job.

Open minded: A successful international managers are also found to be open minded. They are ready to accept the fact that some other organization or people within the organization might be better than them. By accepting this fact they always try to improve themselves and match with the global situation.

It has been observed that the managers of Aldi possess almost all the skills mentioned above. It is during the recruitment procedure of these managers that the higher authority checks and analyzes the charismatic personality of the competing candidates. The higher authority gives more importance to the X-factors rather than the academic knowledge of the candidates. The managers of Aldi have been seen to possess high level of dedication in their work field with an in depth understanding about the same.

Multivariate analysis presents the opportunity of using statistical tools for analyzing multiple independent variables with multiple criterion variables. Human behaviour and the studies related to the same is complex. It makes studying the dependent outcomes of such behaviour hard, as the behaviours cannot be described in terms of other variables. Measuring these traits directly is not possible, which requires multiple factors of variables to determine the behaviour of the dependent variable. The observation and the variables have to be analyzed simultaneously, which makes the process more difficult. Multivariate analysis helps the researcher in using all the independent variables to analyze the dependent variable simultaneously and find out at the same time the significances of the independent variables on the dependent variable.

Literature review:    

According to Mach and Baruch (2015), the scope of using multivariate analysis in effectively managing cross cultural teams is huge as the independent variables determines altogether the effectiveness of the dependent variable. The conditional effects of team composition keeping in mind the expatriation and repatriation of the, on the performance can be done thorough multivariate analysis. It will help to understand how group consensus, collective orientation of team, and trust among the members of the team help explaining the objective performance of the team in the context of cross cultural teams. The research has its boundaries in the sense of the countries of origin from where the team members belong. According to the ideas given by Davies (2015), the change of origin places plays a crucial role in determining the significance of the independent variables. The result shows one of the things that bind a team together is trust.

Following the views of Burns, Minnick and Starks (2015), it can be said that, there are many variables that determines whether the trust and bond between the team members will be built. The reason the team lacks trust and bond among the team members are numerous. For example, the gap between two member’s payments differentiates between the members. The structure the organizations follow in the cross-country model is that of a tournament structure. It also determines the values and ethical grounds of the organizations. The variables regarding the differences between cultures and thought process of the workers are thus has to be taken with unbiased attitude.

According to the ideas given by Moran, Abramson and Moran (2014), the cross culture teams are now available in all the economies around the globe due to the globalization. With more reduction in barriers, the international economy increases by its size. It nourishes cross culture teams at different stages of production in the organizations. Although there are cultural dissimilarities in different countries, but the integration of the market has created a scenario where the problems organizations face are more or less similar across the globe. Following the views of Cramton and Hinds (2014), it can be stated that, the variables that define several issues in cross-cultural teams are similar in different countries, which are operating in the open market structure. In Multinational Corporations, the same work culture is followed in its overseas companies. This might disconnect employees from their cultural roots in the overseas companies. It creates problems, which are the results of misunderstanding between the team members. The reasons of the misunderstanding are sensitization of social culture of the locality.

As stated by Stahl and Tung (2015), the cross-cultural teams are supposed to increase the team’s morale and motivate the team members working in a diverse workforce. It helps growing a sense of responsibility and commitment in the team. The cultural differences can be shown using the Hofstede’s model of cultural dimensions. The individualistic or collective dimensions give the idea about the demands that has to be taken care of by the managers by prioritizing the significance of the demands. As stated by Pioch and Gerhard (2014), the management rules might differ due to the structural differences in the societies. The six cultural dimensions in Hofstede’s model can be used as the independent variables to understand the cross cultural teams’ issues in global business. According to the ideas given by Dürr et al. (2016), the global businesses require recruitment of managers, who are internationally experienced. Hiring international managers will help the organizations to address the issues of cross-cultural teams. This can also be used as a measuring scale for the managers. According to Charleston, Mattos and Chapman (2017), the international managers will be far more advanced in addressing the cross cultural issues than the local managers. The cross cultural teams also depends on the level of communication that the manager provides. Different people from different cultural backgrounds have different ways of communication. The international managers’ job here is to provide the team an opportunity to communicate freely following the ethical boundaries of the organization. The manager also has to train the team members different ways of communication that they can use while communicating.

According to the ideas Verbeke (2013), the international managers are required to do follow certain strategies, which will help them in creating a strong bond within the team with people from different cultures. The managers should have the quality of acculturating a new work environment with different cultural aspects and values. Capability is required where the managers have to be both qualified and experienced to manage a team with people from different cultures. The international managers have to care for the people they lead in an unbiased manner while showing same level of passion for different cultures. Interacting effectively with the people from different cultural backgrounds to develop relation which will support good communication is one of the most important and critical responsibilities of the international managers. As stated by Metzger (2014), dealing with cultural diversity requires awareness of the surroundings in the team as well as outside of the team. The manager has to make sure that this awareness is properly achieved before approaching the employees collectively. Comparing and finding out the contrasts in the behaviours from different cultures is a quality that the managers must have to manage a cross cultural team. From these requirements the independent variables can be drawn which will be required to find out whether a manager is capable of being an international manager.

The objective of this research is to find out whether an individual manager is capable to become an international manager.

The person is not eligible for being the international manager in Aldi.

The person is eligible for being the international manager in Aldi.

o run this multivariate analysis primary data is required. Secondary data has no significant impact on the results. The primary data will be used for each individual to find out whether a manager can be recruited as an international manager.

The primary data will be collected from the subjects’ past records in different platforms. The data will be collected using the managers’ past employer’s data bank as the source. This data might be stored in order to create a variable through which future subjects can be judged (Aldridge, Kilgo and Christensen 2014). The same process will be used for all the subjects individually. The data will be collected for the manager’s experience in the field, managing ability, performance of the teams under his supervision, understanding of different cultures, attitude towards the other cultures, and others. These are the independent variables required for the multivariate analysis. The dependent variable is the credibility of the international manager.

The independent variables will be recorded and then divided into two categories. The manager’s experience in the field, performance of the teams under his supervision, and managing ability will be broadly taken in production category. Understanding of different cultures and attitude towards the other cultures will be broadly categorized under sensitivity regarding cultures. “Hofstede’s cultural dimensions” study will help in creating the variables under the context of cultures (Geppert, Williams and Wortmann 2015).

For the analysis purpose Microsoft Excel software will be used where the significance of the independent variables on the dependent variable will be analyzed. From the analysis the null hypothesis or alternative hypothesis will be selected as true for a person of interest. The result of the final analysis will be used as the subject’s score. This score of all the available managers will be compared for finding out which manager will be the most suitable for the job of international manager in the organization Aldi.

The outcomes from the analysis are expected to have a significant effect on the management recruiting process. The independent variables for each subject are expected to be of high significance with the dependent variable. For those, who are not good with cross-cultural teams will the null hypothesis H0 will be true. For the others, the alternative hypothesis H1 will be true.

The definition of acculturation states that it is a process where a cultural change occurs. Multiple cultures meeting, often results in a mixture of the cultures in the society. The process of mixing of the cultures is termed as acculturation (Thomas and Peterson 2014). It is considered as a direct change of one’s culture under the influence of other culture. Acculturation issues might be present in expatriation and repatriation of international managers. The issues are discussed below:

During expatriation, one person permanently or temporarily starts living in a foreign country among their culture. The international managers who are expatriated face several issues regarding acculturation. The managers looking for acculturation after expatriation faces problems regarding several contemporary issues like transition and high expectation. Moreover, the providers of diversified cultures can be divided in dominant and non-dominant. The different cultures, in the context of acculturation have to be merged to form a mixed culture.  According to Tee, Goh and Cheah (2015), in the case of expatriation, a person feels out of place in an acculturated society or working place.  It leads to loneliness and frustration for the person. The issue of cultural differences can disturb the person considered. Here, the international manager can suffer due to the cultural differences and thus should have experience with different cultures. The cost of staying in the circle full of new people from different culture can be intimidating for a person. The cost can be in the terms of mental and physical. The mental or psychological issues can come in the form of frustration and depression. The physical issues will incorporate workplace violence, change in cost of living, and other physical matters.

According to Ang and Dyne (2015), the new person be it a manager or a team member can face problems regarding relationship with the team members. The new people a person meets during expatriation might present different cultural values, which his cultural values do not approve. This will create a situation of dilemma disrupting the workplace environment.

The issues related to the repatriation can present severe problems for the workers in a team. Normally, during repatriation the workers become relaxed assuming that the process will be easy and the cultural fit will be perfect. Often the process presents problems, which creates distance and lack of trust in the team. This can break the team spirit and hence the productivity of the team as a whole. According to Hoch and Kozlowski (2014), the international managers during repatriation might expect the team to function in a way, which otherwise he would not have expected. The unrealistic expectation might lead to bad managing of the production process. It can ruin the communication process in the company.

Following the views of Nahavandi (2016), it can be said that, leaving the system the manager became used to might result in emotional shocks. Often the managers think that the culture in the organization is the same as it was when he left before. In reality, the cultural traits of an organization changes with time. This creates cultural gap between expectations of the international manager and the team he backs to. This will again create communication gap and affect the teams’ productivity in a negative way. The cultural values are evolving in nature. During repatriation, the manager might face almost a new set of cultural values. It might give the international manager the feeling like expatriation. This will again produce challenges for the manager to work with the production units.

Conclusion:

The report can be summarized by stating that for an organization to run successfully within the global domain it needs lots of market research and adaptive capacity within themselves. Following Geert Hofstede’s cultural dimesnsion model it has been observed that an expatriate managers faces several issues in their daily line of operation. The recruitment of the manager follows several cautious steps taken by the higher authority based on several criteria. An international manager must possess several qualities and skills so that the company gets benefitted in the long run by exploiting those skills of the top-notch managers. The several skills include being a good orator, being adaptive and culturally sentimental, flexible and a good negotiator. It can be said that the multivariate analysis will help the international organization Aldi in recruiting international managers. The main issues regarding hiring an international manager incorporate productivity, performance, and cultural sensitivity. If the international manager has experience of working in an environment with cross cultural teams, then he will add value to the production process. This will help Aldi in recruiting the potential workers for the production and other purposes. The multivariate analysis shows that the independent variables will figure out how much those can affect the dependent variable. The independent variables cover both production and cultural contexts. The cross cultural working environment is a challenging one for the international managers for which the acculturation issues occur. The acculturation issues can occur in expatriation and repatriation of the international managers. During expatriation the acculturation issues creates boundaries for the international manager to work with the new employees. The cultural gaps become more prominent which affects the team’s productivity. Aldi has to ensure that the international manager is chosen abiding the multivariate analysis in such a way that the cultural gaps have no impact on the productivity. The moral situation of the international managers can also be disturbed due to the issues of repatriation. In this case, unrealistic expectations mostly lead to unachieved goals.

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