Organisational Processes

UNIT 20 CROSS-CULTURAL ISSUES

Objectives

After going through this unit, you should be able to:

• understand cross-cultural differences in individual behaviour, managerial

responses and attitudes;
• pinpoint how rewards, leadership, and communication acquire different
perspectives across culture;
• appreciate the importance of cross-cultural orientation and training programmes
in global context.
Structure
20.1 Introduction
20.2 Cultural Differences and Similarities
20.3 Behaviour in Global Perspective
20.4 Cultural Shock
20.5 Managerial Responses
20.6 Decision Making Across Cultures
20.7 Motivation Across Cultures
20.8 Rewards Across Cultures
20.9 Leadership Across Cultures
20.10 Power and Conflict Across Cultures
20.11 Communication Across Cultures
20.12 Environment Across Cultures
20.13 Organisation Structures and Technology Across, Cultures
20.14 Cross-Cultural Training
20.15 Summary
20.16 Self-Assessment Questions
20.17 Further Readings

20.1 INTRODUCTION

In a global village, human resource management and organisational behaviour are

expected to play crucial role in the process of internationalisation of business.
Gobalisation has its impact on people management. The management is required to
cope with problems of alien cultures, unfamiliar laws, languages, attitudes, practices,
competitors, managerial styles, work ethics, and so on. Human resource function
such as hiring, maintaining and remunerating must acquire global perspective. To
face this challenge, the management must be flexible and proactive. By helping the
best qualified people execute the company's strategy on a global scale, the
management can become a source of competitive advantage for the company.

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 Cross-cultural Issues
20.2 CULTURAL DIFFERENCES AND SIMILARITIES

For understanding cultural issues in organisational setting against international

perspective, it is essential to understand employee behaviour. Five basic conclusions
can be drawn about cross-cultural impact on employee behaviour:

First, individual behaviour in organisational setting varies across cultures. Thus,

employees based in India, Japan, U.S. and Germany are likely to have different
attitudes and patterns of behaviour. The behaviour patterns are likely to be
widespread and pervasive within an organisation.

Second, culture itself is an important variable for this variation. There are also other
factors like differing standards of living and varied geographical conditions which
cause variations in behaviour. However, culture is a significant factor.

Third, although behaviour within organisational setting remains quite diverse across
cultures, organisations themselves appear to be increasingly similar. Hence,
managerial practices at a general level may be alike, but the people who work within
organisations differ markedly.

Fourth, the same manager behaves differently in different cultural settings. A

manager may adopt one set of behaviours when working in one culture, but may
change those behaviours when moved into a different culture.

Lastly, cultural diversity can be an important source of energy in enhancing

organisational effectiveness. More and more organisations are realising the virtues of
cultural diversity, but surprisingly, little do they know how to manage it.

Cross-cultural management literature is replete with studies examining cross-national

differences in individual behaviour, managerial attitudes, values and beliefs.
Behaviour variations can be studied in terms of individual differences, managerial
responses, motivation, and rewards across cultures.

20.3 BEHAVIOUR IN GLOBAL PERSPECTIVE

Individualism and Collectivism: Individualism pertains to societies in which the ties

between individuals are loose. Collectivism as its opposite pertains to societies in
which people from birth onwards are integrated into strong, cohesive in-groups.

People in a culture characterised by individualism, tend to put their careers before

their organisations and usually assess how situations will affect them personally.
People in a culture dominated by collectivism tend to place organisation needs before
their own needs. Canada, New Zealand, Netherlands, U.K., U.S.A. are some of the
countries characterised by individualism. Collectivism is said to dominate in India,,
Japan, Germany, Peru, Columbia, Greece, Mexico, Pakistan, and Singapore. India
and Japan are characterised by a high level of collectivism.

Power Distance: Power distance is defined as "the extent to which the less powerful
members of institutions and organisations within a country expect and accept that
power is distributed inequally" (Hofstede, 1991).

Power distance refers to the acceptance of the idea by employees that in an

organisation people will have different levels of power. In a high-distance culture,
boss is supreme and s/he along can make decisions. Others cannot question but
simply follow orders and instructions. In a low-power distance culture, employees
accept the boss as long as s/he is right. 27
Organisational Processes Norway, Germany, Ireland, Denmark, New Zealand, Austria, and U.S. represent
cultures with low-power distance. Brazil, Mexico, Indonesia, Spain, France, Japan,
India, and Singapore are examples of societies with a high power distance. Japan and
India are known for their high level of power distance. In India, power distance is
operated not through the managerial hierarchy but also through the social system of
segmentation and stratification. Power distance explains why there is a great interest
in the study of leadership in India and Japan.

Uncertainty Avoidance: Uncertainty avoidance is defined as "the extent to which the

members of a culture feel threatened by uncertain or unknown situations" (Hofstede,
1991). Extreme uncertainty creates high anxiety, Uncertainty is alleviated by
technology, law, religion, and by written and unwritten codes of behaviour.

This represents the extent to which people accept or avoid feelings of uncertainty.
For example, some people thrive on the excitement and stimulation they experience
from the prospect of challenges and new opportunities. Other people want predictable
and definite futures.

Canada, U.S., Australia, Denmark, Norway, Singapore, and Hong Kong belong to the
first category whereas France, Belgium, Peru, Argentina, Italy, Austria, Japan, and
Israel are said to possess people who are motivated to avoid uncertainty in their
worklines.

Masculinity/Feminity: Masculinity pertains to societies in which social gender roles

are clearly distinct; feminity pertains to societies in which social gender roles
overlap.

The degree of masculinity or feminity is seen as the extent to which cultures value
qualities like assertiveness and materialism on the one hand and people and quality of
life on the other. Masculine societies are characterised by extensive divisions of
social roles by sex and the divisions are narrow in feminine societies. Japan, U.S.,
Austria, India, Germany, and Israel are masculine, whereas Finland, Denmark,
Sweden and Norway are feminine societies. The cultural value of
masculinity/feminity has an impact on the study of employee well-being and related
issues.

20.4 CULTURAL SHOCK

According to Anthropologists, cultural shock involves anxiety and doubt caused by
an overload of unfamiliar expectations and social cues.

Because of differences in culture, an employee posted outside his or her home

country will experience confusion, alienation, disorientation, and emotional
upheavel. This is known as culture shock. An executive transferred from India to
Korea, for example, would experience anxiety because of alien culture, foreign
langauge, unaccustomed climate and unfamiliar food habits. But the anxiety is less
when s/he is posted to Singapore where one comes across large number of Indians
and hotels run by Indians.

Many employees of multinational corporations do not know how to deal with a

cultural adjustment process. This experience can be painful and devastating. At its
extreme, it can prevent growth and self-actualisation. When an individual's
psychological security is threatened, the consequences may not be healthy for him,
his family, or the organisation s/he represents.

20.5 MANAGERIAL RESPONSES

Managerial responses vary across cultures. Specific behaviours depend upon attitudes
managers hold about employees. Managerial responses are shaped by the cultures of
28 the land. Managers in Japan, for instance, strongly believe that a manager should be
 Cross-cultural Issues
able to answer any question s/he is asked. On the other hand, Swedish managers have
the least concern for knowing all the answers. In France, the manager's role is thought
to be that of an expert, whereas in the U.S. the manager is viewed as a problem
solver.

Managerial behaviour is rapidly changing, particularly among European managers. In

general, these managers are becoming better educated, career-oriented, more willing
to work co-operatively with labour, more willing to delegate, and more cosmopolitan.

20.6 DECISION MAKING ACROSS CULTURES

Even if people were to follow the same basic steps when making decision, there
exists widespread differences in the way people from various cultures may go about
doing so.

There exist cultural differences with respect to who is expected to make decisions. In
Sweden, for example, it is traditional for employees at all levels to be involved in the
decisions affecting them. However, in Pakistan, where autocratic decision making is
expected, it would be considered a sign of weakness for a manager to consult his
subordinate about a decision.

Another cultural difference in decision making has to do with the amount of time
taken to make a decision. For example, in the U.S. one mark of a good decision
maker is that s/he is "decisive", and make it without delay. On the other hand, in
some other cultures time urgency is downplayed. In Egypt, for example, the more
important the matter, the more time the decision maker is expected to take in
reaching a decision.

20.7 MOTIVATION ACROSS CULTURES

Motivation theories and approaches are mainly developed in America. Nevertheless,

some of the theories and techniques do apply to other societies as well. For example,
equity theory has takers in Korea, Japan and the U.S. Maslow's theory too has found
itself applicable but with changes in the needs priorities. In Greece and Japan, for
example, security needs are more important, whereas social needs tend to dominate
in Norway and Sweden.

Employees in different cultures perceive work differently, For Indians, work is not
just an economic reward, but it also deems to confer status and dignity. But for
Americans, work is equated just with economic rewards.

20.8 REWARDS ACROSS CULTURES

Employees' expectations from their jobs depend on respective cultures. Naturally,

rewards also vary across cultures. For example, job security is more valued in some
cultures than in others. In certain societies like the U.S. for example, individual
rewards like recognition, promotion and merit pay increase are more valued. On the
other hand, in Japan, employees place a higher value on group rewards and
recognition. It is essential that a manager must understand the varying expectations
and rewards of employees and provide them accordingly.

20.9 LEADERSHIP ACROSS CULTURES

Cultural factors influence the effectiveness of specific leadership actions, and

determine varying leadership styles in different countries. In a society with a high
power-distance, employees routinely expect the leader to make decisions, solve 29
Organisational Processes problems, and assign tasks. In such a culture, any effort by the1leader to promote
participative style of management will be opposed. On the other hand, under
conditions of low-power-distance any directive behaviour by the leader will not be
tolerated. Employees expect empowerment from the leader.

We must note that leaders play different roles in various cultures. For example, in
Europe, managers go beyond the boundaries of formal managerial roles. In China,
leaders are expected to remain formal and function within the formal roles assigned
to them. Whereas in Japan, the role of a leader is more of a facilitator to group
performance and less as control mechanism.

20.10 POWER AND CONFLICT ACROSS CULTURES

Power and conflict area part of organisational life in certain countries. For instance,
in the United States power and conflict are accepted and attempts are even made in
organisations to create and sustain moderate level of conflict. Such a level of conflict
is perceived to be beneficial for organisational effectiveness. In Japan, the focus is on
conformity, group harmony, and the like.

20.11 COMMUNICATION ACROSS CULTURES

Different words may mean different things to different people. In addition to different
vocabularies, cross-cultural communication is made difficult by the fact that in
different languages even the same word can mean different things.

Communication problem will arise because of alien language and unfamiliar body
gestures. In international perspective, two issues namely, language and coordination
are relevant.

Language: Some words are understood differently in different countries. An example

is that Japanese managers rarely come out with direct "no" to mother's request. The
manner in which they avoid saying "no" is to say "yes" and then follow the
affirmative answer with a detailed explanation which in effect means "no". General
Motors produced a car called the Nova, which did not sell well in Italy where "no va"
means "does not go". In China, Coco-Cola means "bite the head of a dead tadpole".

Even nonverbal communication varies across cultures. Colours and body language,
for example, can convey quite a different message in one culture than in another.
Thus, managers should be forewarned that they cannot take everything for granted
while dealing with people from another culture. They must acquire familiarity with
verbal and nonverbal languages of that culture.

Coordination: Communication across countries has another dimension namely, the

need for coordination. For example, when an Indian executive talks to his or her
counterpart in Gerrnany, he must not only contend with differences in language, but
also with a time difference of several hours.

Studies suggest that even when both persons in an international transaction know
each other's language, communication may still suffer. In addition to the most basic
verbal communication skills, non-verbal communication may create serious
misunderstandings. Even though we share many values, beliefs and attitudes, we
misinterpret and misunderstand each other. This is so even when we are dealing with
our own people. The problem simply becomes accentuated when we deal with
persons of foreign origin.

In brief, we are left with three cross-cultural communication options: (a) stick to
30 one's own language, (b) rely on translators, or (c) learn the local language.
 Cross-cultural Issues
20.12 ENVIRONMENT ACROSS CULTURES

Environment in certain countries is stable and predictable, whereas in other societies

it is dynamic and turbulent. The economies of Japan, Sweden and the U.S., for
example, are fairly stable. Although competitive forces within them vary, they
generally remain strong free-market economies.

Environment also varies in terms of its complexity. The Japanese environment,

though stable, is highly complex. Our country too has a complex environment
reflecting, as it were, unity in diversity.

20.13 ORGANISATION STRUCTURES AND

TECHNOLOGY ACROSS CULTURES

More and more companies are becoming international and to cope with the demands
of varying cultures, these firms adopt different organisational structures, and
technology. International conglomerates have international headquarters that
coordinate the activities of businesses scattered across the globe.

Two aspects of technology have their impact on organisational effectiveness. They

are: (a) variations in available technology, and (b) variations in attitudes towards
technology. With regard to availability of technology, there are wide variations
across cultures. Some countries are highly backward and unable to absorb imported
technology. Attitudes towards technology also vary across cultures. Western
countries generally have positive attitude towards technology, but most Asian
countries tend to view applied knowledge with suspicion.

20.14 CROSS-CULTURAL TRAINING

Increasing numbers of multinational organisation, and intercompany interactions

among them, are a compelling reason for cross-cultural training. The importance of
cross-cultural sensitivity, empathy, and ability to communicate with people from
different cultures are of great concern world-wide. Cross-cultural orientation and
training programmes teach individuals belonging to one culture ways of interacting
effectively with minimal interpersonal misunderstanding in another culture. Training
is a worthwhile investment in terms of public relations and goodwill for the
company.

There is some consensus among cross-cultural trainers that certain basic areas need to
be dealt with:

1. Self-awareness

2. Awareness of one's culture

3. Belief and values

4. Host country area information

5. Culture and the natives' expectations

6. The expatriate's purpose for going abroad

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Organisational Processes The extent of responsibility and risk in performance.

Activity 1

Do you have any personal experience in cross-cultural dealings? If so, what lessons
have you learned?

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20.15 SUMMARY
For more than one reason companies are expanding their horizon of operations.
Globalisation of business has come to stay. It is essential for any manager to
understand the dynamics of cross-cultural issues and needs. Cross-cultural impact on
an organisation includes such aspects as individual behaviour, group dynamics,
leadership, environment, technology and organisation structure. Culture differences
influence perception of people about work, group harmony, discipline, and other
aspects of life, Ample evidence points to how cultural differences in values, beliefs,
traits, and decision styles influence different management practices. For instance, the
individualistic performance appraisal, compensation and reward practices
characteristic of the U.S. human resource system are not the norm in more
collectiveness Asian cultures.

20.16 SELF-ASSESSMENT QUESTIONS

1. What are some of the cross-cultural issues in an organisational setting?

2. "Cross-cultural behaviour influences individual and organisational behaviour".

Discuss.

20.17 FURTHER READINGS

Aswathappa, K., Organisational Behaviour - Text and Cases, Himalaya Publishing
House, 1997.

Nelson, L.D., Quick, C.J., Organizational Behaviour-Foundations, Realities and

Challenge, South-Western College Publishing, Cincinnati, Ohio, 2000.

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