International Business Environment

Cross Cultural Management Issues

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Introduction to International Business Environment

International business environment comprises of numerous political and economical factors that can either facilitates or hinders organization ability to conduct their functions at foreign market in an effective way (International business environment, 2014). In present scenario, many organizations are directing their efforts in terms of operating their business functions at the global environment with an aim to pursue higher profits. While working in the overseas business environment one of the most prominent issue identified that is being faced by the managers of an organizations is related to managing the cross cultural issues. The cultural issue that is being faced by enterprises influences them to carry out various kinds of changes in their functions in an effective way (Griffin, 2010). However, if managers of an organization do not perform it then its significant effect can be seen on the sales and profitability related conditions of firm. This report will basically showcases that to what extent can the cultural theories of Hofstede and Trompenaars be applied to provide an understanding of how to deal with potential cross cultural management issues.

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Critical evaluation of the Hofstede cultural dimensions theory

In order to function in the today’s competitive and global business environment it is being required by the managers of an organization to comply with the practice like managing the people and their prospective customers that belongs to varied culture. However, this type of management work can be performed by seeking compliance from the different types of cultural theories (Lafortune, 2009). With the help of these theories guidance can be provided to managers of an organization in terms managing the diversity of people within an enterprise in an effective way. In addition to this, it is with the help of such type of theories only an effective solution with respect to cross cultural management issues can be provided to the managers. In this respect, there are numerous types of cultural theories identified. It comprises of Mary Douglas cultural theory, Social and cultural theory, cultural theory, Hofstede cultural dimensions theory along with Trompenaars cultural dimensions etc. Among all identified theories, the critical evaluation of basic two theories is done. It is of Hofstede and Trompenaars cultural dimensions theory.

Description of Hofstede cultural dimensions theory

The first approach is of Hofstede cultural dimensions theory (Hofstede's Cultural Dimensions, 2014). This theory showcases the framework of cross-cultural communication that was developed by psychologist named Dr Geert Hofstede in year 1970. This theory basically showcases the effect of society cultural on the values of the people and their behavior. Hofstede cultural dimensions theory has its application in several fields such as cross cultural communication, international management, cross cultural psychology along with the paradigm of the research etc (Morgan, 2009). In order to develop the varied cultural dimensions for his theory Dr Geert Hofstede has carried out his research on an organization which contains people from 40 different countries. After conducting thorough research on the specific enterprise, initially there was an identification of four distinct dimensions of culture. Models had been completed by him on account of adding fifth dimensions. In this respect, five dimensions of culture have been identified. It comprises of power/Distance (PD), Individualism (IDV), and Masculinity (MAS), uncertainty / avoidance index (UAI) and long term orientation (LTO) etc. The dimensions identified will provide great help to those organizations that are operating their function in an international environment and have been facing the issue like cross cultural management (Reiss, 2012).

Hofstede cultural theory dimension of power/Distance (PD)

The first dimension which is explained by Geert Hofstede showcases the relationship between degree of power and distance accepted by the members of particular society. While operating functions in some other nation selection with respect to the use of specific type of structure is the most prominent issues that are largely being faced by the managers of company. For example, it has been seen that people that belong to Indian culture accept unequal distribution power and appropriately understand their role in the system (Spencer, 2003). However, a person that belongs to European culture sees themselves in an equal position. By determining the behavior of people that belong to the different cultural, management of Taj hotels and resorts has directed their efforts in terms of using the different type of structure in accordance with the needs and desires of the specific individuals. For example, in order to maintain the satisfaction and motivation of their Indian employees management of Taj hotels and resorts has used the strong and centralized hierarchy within company. But, the motivation of European workers is being maintained by them by adopting flatter organizational structure which allows their employees to freely express their views in front of the management of an organization in an effective way (Williams, 2007). In addition to this, it has also been seen that European workers gives more emphasis on teamwork approach and this particular need of workers can be fulfilled by the managers of Taj hotels and resorts by using flatter organizational structure within an enterprise.

Hofstede cultural theory dimension of Individualism

In addition to this, Individualism is another dimension of Geert Hofstede cross cultural theory. This dimension locates the behavior of individuals into two different types of aspects such as high and low IDV score (Dong and Liu, 2010). While employing people from the different country that most common management related issues that is being faced by organization is related to enhancing the motivation of their employees that are from varied cultures in an effective way. This is because the aspect relating to the motivation differs from one individual to that of another and it is largely being framed by their society values. For example, if on the basis of analysis it has been found out by the management of Taj hotels and resorts that the people that belong to Indian culture resides at high IDV score (Fontaine, 2007). In the similar way, it has also been identified by the management that people that belong to European culture resides at the low IDV score. This particular problem of an enterprise can be solved out by them by seeking the compliance from Geert Hofstede second dimension. By linking the performance with the reward of an employee motivation of the Indian peoples can be enhanced by the managers of an organization. In the similar way, by providing intrinsic rewards to an individual’s motivation of the people belong to the European culture can be enhanced (Ascalon, Schleicher and Born, 2008). However, in this respect it can be critically evaluated that in spite of living in the same country it is not possible that everybody would think in the same way. It is due to the presence of this aspect an effectiveness of individualism dimension will not occur.

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Tesco is one of a most famous retail organization that operates its function in both countries such as UK and China. While operating function in China the most common issue that is being faced be them is related to their antique and customs. The people that lived in China shows their respect towards other person by bowing their heads down rather than shaking hand with other persons. But in United Kingdom it’s just reverse approach is followed. The emotions and values of Chinese people are affected if the persons who are conducting business in that particular country do not follow this approach. This showcases that Chinese people resides at the low IDV score. Thus the motivation of the employees and customers living in China can be maintained by the manager of Tesco by showing respect towards their culture in an effective way.

Hofstede cultural theory dimension of Masculinity

The decision with respect to the employment of male and female ratio within an organization is another most prominent issues which is being faced the managers of an organization that are operating its function in the country other than its own nation. For example, India is one of such type of country that resides at the high Masculinity score. The country where this score is found at the higher pace indicates that in such nation men are utmost importance then women (Rehg, Gundlach and Grigorian, 2012). Besides this, low Masculinity score is found out for the country like United Kingdom. With the help of this score management of Taj hotels and resorts can direct their efforts in terms of forming the decision with respect to the employment of male and female ratio in an enterprise. For example, while operating in India managers of Taj hotels and resorts has to clearly define the distinction between men and women works. In addition to this, they also have to direct their efforts in terms of residing the men at the top level position than that of women. However, this particular thing is not seen in the case of the country like United Kingdom that showcases low Masculinity score (Lombardo, 2011). This is because people that belong to this score treat men and women on an equal basis. So while directing recruitment practices in such type of nation managers of Taj hotels and resorts have to comply with this thing in an effective way. It is with the help of such type of practices only cross cultural management issues can be managed by an organization that operates its function in some other country.

Hofstede cultural theory dimension of Long term orientation

Further with this, long term orientation is another cultural dimension which was given by Geert Hofstede. This dimension provides information about that how much society values long-standing other than short term values and traditions. For example, if on the basis of analysis it has been found out by the managers of Taj hotels and resorts that peoples in India resides at high LTO score (Lee and et.al., 2005). Then in such circumstances motivation of the Indian employees working in their hotel can be enhanced by them by showcasing their respect towards their tradition. This can be performed by them by placing Indian god paintings and pictures at the entrance of their hotel. In addition to this, if Indian women are allowed to wear sarees they can show respect for people as it comes in their culture. However, it has been identified by the managers of Taj hotels and resorts that people in UK indicate low LTO score. This type of person gives more emphasizes on the equality and always wanted that they are required to be treated by others in the same manner as other would like to be treated (Emmerling and Boyatzis, 2012).

McDonald that possesses its branch in UK also, has faced issue in their food which contains beef meat while operating their function in India. In Indian culture eating of beef meat is considered as one of the most biggest crime as in their culture cow are being considered as an equivalent to their god. This showcases the values and tradition of Indian culture resides at high LTO score. However, the motivation of the people living in India can be enhanced by McDonald by showing the respect and concern towards their values and culture. This can be performed by them by using some other meat instead of cow.

However, motivation of such type of individual can be enhanced by the enterprise by providing them an opportunity to showcases their creativity in front of the managers of an organization. From the Hofstede cross cultural dimensions theory it can be said that by locating the views and behavior of the society at varied identified approaches direction with respect to the managing the obtained cross cultural issues within an organization can be proved (Deng and Gibson, 2009). It will also enable the corporation like Taj hotels and resorts that is to effectively mark their presence at competitive global business environment. However, many of the critics of the theory has critically evaluated that Hofstede has identified these dimensions by considering each members of society at homogenous aspect but at actual pace there is a difference in the view points of an individual is being found out though they belong to the varied culture. It is due to the presence of this aspect only an effectiveness of Hofstede identified cultural dimension cannot be measured Critical analysis of (Hofstede’s model of cultural dimensions, 2014).

Critical evaluation of Trompenaars cross cultural dimensions theory

Besides this, there is one more cultural approach identified named as Trompenaars cross cultural dimensions theory. This theory showcases the framework of cross cultural communication which is being by Fons Trompenaars and Charles Hampden-Turner and was developed by the in the year 1997 (Akoto, 2014). With an aim to get the detailed information regarding the people that belong to the varied culture both researchers had spend their 10 years in researching the preferences and values of peoples in large numbers of cultures. The model of Trompenaars showcases seven national cultural differences dimensions among which five orientation will basically depicts about the ways in which human beings will going to deal with each others. The dimensions involves following such as Universalism vs. particularism, Individualism vs. collectivism, Neutral vs. emotional, Specific vs. diffuse, Achievement vs. ascription, Sequential vs. synchronic as well as Internal vs. external control etc (The Seven Dimensions of Culture, 2014). The model as provided by Trompenaars is effective because with the help of it corporations working in some other nation will be able to direct their efforts in terms of drawing their understanding with respect to difference between the cultures.

Trompenaars cultural theory dimension of Universalism vs. particularism

By seeking assistance from this model people that belong to the varied culture can be managed by the managers of an organization such as Taj hotels and resorts that operates its function in both BRIC and European country such as United Kingdom. The first dimension for this theory is identified is related to Universalism vs. particularism (Griffin, 2010). With the help of this approach corporation cross cultural management issue relating to the forming an organization on the more of rules basis or relationships basis can be solved out by the managers of an enterprise in an effective way (seven dimensions of culture, 2014) For example, the most common cultural issue that is being faced by Taj while operating their function in UK is that whether to build an organizational structure on relationship oriented or task oriented. At first instance company has directed their efforts in terms of using relationship oriented structure within an organization but it has failed as person that belongs to the European culture gives more emphasizes on universalism principle. However, the management of such type of people can be directed by the managers of Taj hotels and resorts by forming rigid rules, policies and obligations within an enterprise. In addition to this, the motivation of an individual that belongs to such type of culture can be enhanced by relying on the promises which is being promised by the company in their framed policy.

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For example, if management of Taj hotels and resorts has promised to their employees that they will increase the significant amount of their salary within a given possible time limit (Dong and Liu, 2010). Then they should have to rely on these promises in an effective way. This is because if it is not done then it is leads to hotel in terms of decreased profits and sales. However, it has been identified that India is being counted among one of such country where peoples gives more emphasizes on particularism principle of cultural dimension theory. The satisfaction level of such type of individual can be enhanced by forming social group within an enterprise. From this it can be said that by adopting varied type of management strategy, peoples that belongs to the varied culture can be managed by Taj hotels and resorts in an effective way (Ascalon, Schleicher and Born, 2008).

Trompenaars cultural theory dimension of individualism vs Communitarianism

The management problem relating to the whether to work in a group or an individual basis in the particular nation can be solved out by the managers of an organization by seeking the compliance from the second dimension of Trompenaars cross cultural theory. For example, it has been identified by the Trompenaars that people that belong to European countries gives more emphasizes on individualism principle. An individual that resides in this principle always believes in personal freedom and achievement. The work from such type of individual can be carried out by the management of Taj hotels and resorts by following individualism perspective in mind. In addition to this, by linking individual performance with the appropriate reward motivation of the workers working within a nation can be enhanced in an effective way. However, it’s just opposite case is being seen in the case of Communitarianism principle where Indian employees working in Taj hotels and resorts tends to be resides. The people that belong to this approach prefer to work in the group basis (Rehg, Gundlach and Grigorian, 2012). On the other hand, they always wanted that their performance need not to b praised and reward on the individual basis but on the group basis.

Trompenaars cultural theory dimension of Specific vs. diffuse

Specific verses diffuse is the third dimension of Trompenaars cross cultural theory. With the help of this principle generally obtained cross cultural management issue relating to the managing personal relationship within an organization or not can be solved out by the management of Taj hotels and resorts in an effective way (Lombardo, 2011). For example, people of the European country belong to the specific principle of cultural dimensions theory where they keep their work and personal lives separate. So while directing working with such type of individual management of Taj hotels and resorts should strictly have to direct their focus on the corporate objective. However, if managers of Taj hotels and resorts has decided to direct their working with the Indian people at that time such type of condition will not being seen as they belongs to diffuse principles. Indian people gives more emphasizes on maintaining personal relationship within an organization. The support to such type of approaches can be provided by the management of an enterprise by using flatter organizational structure (Emmerling and Boyatzis, 2012).

Trompenaars cultural theory dimension of Achievement Versus Ascription

By segregating the work of people in the form of Achievement Versus Ascription dimension, For example, Taj hotel and resorts has faced cross cultural management issue relating to the employing monetary and non monetary reward system within an organization. In order to motivate individuals living in UK at first instance manager of Taj hotel and resorts has decided to implement non monetary reward system within an organization but corporation is failed in doing so as people from European culture gives more emphasizes on the achievement related approach. For them reward and good performance matter most then that of position in an organization. This showcase that people from the European culture resides at the Achievement oriented dimension of Trompenaars cross cultural theory. However, the satisfaction of such type of individual can be maintained by the managers of Taj hotels and resorts by monetary reward system within an enterprise. However, people that belong to the Indian culture give more emphasizes on Ascription related approach (Akoto, 2014). For these kinds of people power, title and position within an enterprise matters a lot. The motivation and satisfaction of such type of individuals can be maintained by the managers of an organization such as Taj hotels and resorts by employing non monetary reward scheme within an enterprise.

Internal and external direction is another approach of the Trompenaars cross cultural theory. A person that belongs to internal direction believes that they can direct their control over the nature and environment where they tend to be possessed. In addition to this, it reverse thing can be seen in the case of external direction (Deng and Gibson, 2009). By locating people in this particular aspect varied efforts can be taken by the managers of Taj hotels and resorts in terms of improving the motivation of their employees in an effective way.

Conclusion

Attributing all the facts from the report it can be concluded that, by seeking compliance from these identified theories such as Hofstede and Trompenaars the cross cultural management related aspect can be managed by an organization in an effective way. In addition to this, by locating people on different types of identified principle of respective theories motivation and satisfaction of the employees can be enhanced in an effective way. Overall, this will result to the corporation that operates its function in an international nation in terms of incensed profits and sales. Further with this, with the help of these identified approaches various strategies with respect to the managing the work of cross cultural employees can be identified in an effective manner.

References

  • Ascalon, M. E., Schleicher, D. J. and Born, M. P., 2008. Cross-cultural social intelligence: An assessment for employees working in cross-national contexts. Cross Cultural Management: An International Journal.
  • Deng, L. and Gibson, P., 2009. Mapping and modeling the capacities that underlie effective cross-cultural leadership: An interpretive study with practical outcomes. Cross Cultural Management: An International Journal.
  • Dong, K. and Liu, Y., 2010. Cross-cultural management in China. Cross Cultural Management: An International Journal.
  • Emmerling, R. J. and Boyatzis, R. E., 2012. Emotional and social intelligence competencies: cross cultural implications. Cross Cultural Management: An International Journal.
  • Fontaine, R., 2007. Cross-cultural management: six perspectives. Cross Cultural Management: An International Journal.
  • Griffin, R. W., 2010. Management. 10th ed. Cengage Learning.
  • Lafortune, L., 2009. Professional competencies for accompanying change: A frame of reference. PUQ.
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