Cross cultural management 3rd hapter 12 (14) cultural diversity in organisations

Managing cultural differences• One fundamental problem with globalization is the management of cultural differences: how do executives conceive the interaction between different cultur

Chapter 12

Cultural diversity in

organisations

Managing cultural differences

• One fundamental problem with globalization is the management of cultural differences: how do

executives conceive the interaction between

different cultures?

Management culture in multinationals

Théry (2002) distinguishes three types of

management culture:

– Dominant management culture

• a copy of the multinational’s home country

– Dominant transnational management culture

• created by the mother-company’s founders

– Minimum management culture

• leaving room for national cultures.

Transnational organisation

• Bartlett and Ghoshal (1989) propose a model for the organisation of the future:

– the transnational company

– This type of company has a management mentality which combines:

1.Flexibility

2.Efficiency

3.Transfer of expertise.

• Top management’s role at both HQ and in

subsidiaries is:

– to co-ordinate these capacities (polycentric);

– to integrate the different influences of the functional and geographic groups into the management

process;

– to create a common vision, a shared set of values which reflects managers’ goals.

Transnational organisation (Continued)

Perceived cons of ‘diversity’

Managers perceive diversity as a source of both

problems and advantages

•Problems

– Communication and integration

– Practices adopted by the organization across the board

– Diversity among employees may:

• cause misunderstandings

• obstruct team work and productivity.

Perceived pros of ‘diversity’

• Advantages

– Multinationals are:

1 more flexible

2 open to new ideas

3 more aware of consumers’ needs.

– Diversity is advantageous when the concern must:

1 reposition itself

2 generate ideas

3 develop projects

4 open itself to fresh perspectives.

Adler (2002)

• Competence:

– involves a full range of resources:

– Knowledge, skills, cognitive abilities.

• Key to competence:

– Ability to integrate these resources

– Through the channel of communication and human interaction.

What is competence?

Figure II.1 What is competence?

Source: Figure based on the concept developed by Le Boterf (1994)

• Intercultural management is required:

– one which can adapt its way of communicating,

negotiating and leading to the cultural context of the country concerned.

• Managers:

– must become aware of their own cultural preferences – case by case:

• search for ways of working that are adapted to those of the other culture.

Transcultural competence

Transcultural competence:

- the ability t o bridge the differences between the native and destination culture

– To develop the propensity to reconcile seemingly

opposing values

• At the heart of transcultural competence:

– principle of reconciliation

– Success of such competence

• Determined by feedback from peers on business performance

• Correlated to degree of business success abroad.

Hypercultural competence (Continued)

Sub-levels of competence:

1 Cross-cultural competence:

– functioning according to rules of more than one cultural

system – responding in a culturally sensitive and appropriate manner –

2 Intercultural competence:

– communicating and collaborating successfully and effectively with others,

Hypercultural competence (Continued)

3 Transcultural competence:

• bridging differences between the native and destination

culture

• developing the propensity (tendency) to reconcile (settle) seemingly opposing values.

4.Intracultural competence:

– capability to leverage cultural and/or ethnic diversity within teams.

• Internationalisation:

– has reinforced the importance of cultural diversity

rather than reduce it.

• Need managers:

– who can use the intercultural situations within/outside the companies to the company’s advantage.

• Managers need to:

– acquire tools

– acquire working methods to develop sufficient