Cross-Cultural Management: Importance and Relevance for Global Business

The Importance of Cross-Cultural Management

?Cross-cultural management (CCM) is the explanation of individuals’ behavior within organizations worldwide and indicates the relationship between employees and customers from many different backgrounds (Adler, 2008).

?In its essence, CCM is aimed at understanding differences in culture as a consequence of the interactions between organizations around the world. Cross-cultural management can be referred to as the process of attaining organizational objectives within a cross-cultural context by effectively using available resources.

?The concept of CCM, according to (Thomas and Peterson, 2014) considers differences at various levels ranging from culture, work teams, preferences and consumers’ values on a global business context.

As the global business environment broadens, organizations are expanding their businesses in order to acquire new geographical markets.

?This expansion also stimulates movement of workforce.

?Okoro (2013) recommends that such global organizations be culture sensitive in order to benefit from this global trend.

?Tech advancement has largely influenced the way business is conducted on the global scale, making it relatively easier to communicate both with employees and customers worldwide.

As such cross-cultural interactions have become common practice both within the workplace and outside. Okoro (2013) suggests that managers will need to understand:

?how to communicate;

?cultural taboos;

?cultural diversity in order to develop and execute plans.

?Nkomo and Cox (1996) as supported by Gilbert and Ivancevich (2002) explain that cultural diversity differentiates one person from the other through a broad range of obvious and perceived qualities as well as abilities.

?Tylor (2010), defines culture as that set of elements assimilated by an individual part of a society, among which: education, principles, ethics, law and other customs typical of a particular community.

?As Lustig and Koester (1999) indicated, culture results from experience, background, values and beliefs learned over time, which consequentlyshape ideas, behavior and thoughts.

?Cavusgil et al. (2007), support that cultural diversity is essential to global business as it shapes values, norms and individuals’ outlook on life as a whole.

?Culture is what determines how people carry on their daily lives (Cullen and Parvoteeah, 2008)

?CCM analyses people’s behavior when working for international organizations and guides them to engage with counterparties from different cultures (Adler, 2008).

Global Diversity Management: refers to the set of strategies and procedures aimed at fitting the diverse variety of cultures, upbringings and values in relation to the international operations of a company (Özbilgin, Tatli, & Jonsen, 2015, p. 10).

?Business is more global in this century than ever before and with this globalization, comes the challenge of integration.

The Concept of Culture and the Role It Plays in Cross-Cultural Management

?Delocalizing business implies diversifying the workforce. However the main objective of the business and the core values of the organization are still fundamental to business success.

?Undoubtedly, culture represents an aspect of considerable importance both personally and professionally. It is vital to apply effective multicultural management of employees to obtain maximum returns from their potential towards achieving organizational goals (Tutar,Altinoz and Cakiroglu, 2014).

?Organizations where these aspects are disregarded, risk creating a nonproductive climate (Aksu, 2008) and are eventually destined to fail (Dereli, 2005).

?Organizations with a high value for diversity management tend to have better chances to integrate the global market which is increasingly multicultural (Harish and Verma, 1996). A work environment that is designed to be inclusive of all employees, irrespective of age, gender, sexual orientation, religion, ethnicity and color, illustrates a positive corporate image.

?Browaeys and Price (2008) discuss the existence of culture in multiple dimensions that act on the organization. These dimensions and their effect on organizational culture in relation to the behavior of individual members, are widely analyzed by Geert Hofstede in the theory of cultural dimensions (Adeoye andTomei, 2014).

?Hofstede argues that values and organizational behaviors are represented more effectively by culture, than by demography (Kundu, 2001). As a result of movements, individuals tend to be born in a family of a different culture but grow up acquiring a completely different one as a result of the environmental influences. It can be said therefore that culture can be learned through acculturation or a customization.

?Hofstede (1980) has identified five cultural dimensions. These dimensions have been widely accepted by managers looking for a method of comparison between efficient cultures.

Given the global nature of WTA’s business operations, implementing CCM is relevant for several reasons:

? It provides a framework for the acquisition of cultural intelligence. Peterson (2004), describes this type of intelligence as the ability to adapt one's behavior to the values of the interlocutor. This particular skill includes:

Linguistic intelligence: knowing how to navigate between the native language of the clients, and the international business English, to give particular emphasis to communication.

Spatial intelligence: which concerns the surrounding space during, for example, meetings.

Intrapersonal intelligence: represents the degree of awareness of one’s culture and the ability to adapt to that of the other

Interpersonal intelligence: can be referred to as ones ability to relate with others and the drive behind their actions.

A proficient use of these skills can promote communication between people of different cultures (Chaney and Martin, 2011)

? It helps to identify the best method of communication between individuals with different cultural backgrounds. Hall (1959) coined the term "intercultural communication" to describe communication process between cultures. Mastering intercultural communication is therefore vital to obtaining international competitive advantage (Kawar, 2012).

? Mindfulness and receptivity towards the cultural differences across employees and business units tend to guarantee more successful outcomes. According to Matveev and Mitler (2004), to adequately manage cultural differences in organizations operating in different countries, three main components are needed. These components are:

• Cultural knowledge, that is acceptance of the diversity existing between cultures. This can be achieved through a thorough knowledge about how each country differs socially (Mor Barak, 2014), resulting therefore in a more flexible managerial approach.

• Skills, represented by the degree to which managers are able to relate with colleagues from different cultures, adapting strategies and methods of communication in an efficient way (Scott & Byrd, 2012).
• Personality orientation. That is the extent to which multicultural managers are able to identify themselves with the cultures they interact with (Matveev and Mitler, 2004).

Scott and Byrd (2012) hold these components as fundamental pillars when it comes to cross-cultural management.

However, unified support and synchronized coordination must be applied by the management to design strategies applicable worldwide (Gundling and Zanchettin, 2007;Ye?il, 2007; Helvac?o?lu and Özutku, 2010).