Managing and Leading People Across Cultural Borders

Managing and Leading People Across Cultural Borders

Introduction

Managers and professionals of modern time face a great number of challenges. For instance, they have to work in multicultural teams, manage sophisticated reorganizations, support mergers, acquisitions, and international teamwork among others. All these responsibilities require intensive cooperation with people from different cultural background, speaking different languages, or not having similar way of thinking, and working in a different building, city or country. Cultural intelligence refers to the ability to apply personal style of leadership in a manner that fits cultural context. Some of the world’s multinational companies have strategies in place to ensure that people from different cultures can work together because they recognize the implications of cultural conflicts. Effective diversity policies that consider cultural intelligence can improve productivity at the workplace. In this regard, this paper discusses management and leadership across cultural borders. A case study of Coca-Cola will be used to show how cultural intelligence has been applied in multinational companies and by expatriates.

Critical Analysis and Research

Various researchers including Hofstede and Trompenaars have developed different cultural topologies, each with slightly different cultural dimensions and value patterns. Hofstede’s cultural dimensions describe the impacts of a culture of a society on values of tis members, and how these values are linked to behaviour by using a structure analysis (Hofstede 2011). Hofstede cultural model incorporates cultural intelligence by describing the relationship between one’s culture and behaviour. Essentially, knowledge about culture influences one’s behaviour in a multicultural setting. With regard to Hofstede’s and Trompenaars’ cultural dimension, the proceeding section considers the implications of multiculturalism on Coca-Cola’s leadership cultural intelligence.

Hofstede’s Cultural Dimension

At national level, Hofstede pioneered five cultural dimensions: individualism versus collectivism, power distance index (PDI), uncertainty avoidance index (UAI), masculinity versus femininity, and long-term orientation (LTO) (Hofstede 2010). Power distance refers to the degree to which less powerful members of institutions anticipate equal power distribution. Cultures endorsing low power distance acknowledge democratic power relationships (Dickson et al. 2012). Coca-Cola’s culturally intelligent leadership integrates democracy in low PDI countries, such as the US. The democratic leadership at Coca-Cola involves the management sharing decision-making abilities with group members.

Individualism versus collectivism refers to the extent to which individuals are integrated into groups (Gertsen & Søderberg 2010). Individualistic cultures lay particular stress on the personal achievements and individual rights. On the contrary, collectivist cultures stress group achievement. In relation to this dimension, Coca-Cola rewards individual employees in individualistic societies, such as the US. In collectivist societies, such as Costa Rica, the company might focus its rewards on performing groups.

UAI reflects the degree to which the society tries to cope with anxiety by minimizing uncertainty (Hahn & Bunyaratavej 2010). Cultures with a high UAI seem to be adamant to organizational change for fear of uncertainty. Such cultures have several laws and regulations. On the other hand, cultures with a low UAI accept change and have few rules. Consequently, in relation to this dimension, Coca-Cola should be keen to introduce change in countries such as Greece and Japan, which have a high UAI.

Masculinity versus femininity dimension concerns the emotional roles of genders. Masculine cultures seem to put stress on competitiveness, materialism, and assertiveness, while feminine cultures value the quality of life and relationships (Lee & Sukoco 2010). A cultural conflict might arise if the management stresses competitiveness or materialism in feminine cultures. In masculine societies such as Japan Coca-Cola encourages competition among employees.

LTO versus STO refers to how a society describes time horizon. According to Minkov and Blagoev (2012), LTO societies view the future with a lot of hope and foster practical values aligned towards rewards. On the contrary, STO societies stress values related to the past and present. Consequently, in countries such as Vietnam, an LTO society, Coca-Cola leadership should focus on giving employees hope about their future as employees.

Trompenaars’ Cultural Dimension

By using five relational orientations as the foundation, Trompenaars pioneered seven critical cultural dimensions: universalism versus particularism, specific versus diffuse cultures, achievement versus ascription cultures, individualism versus communitarianism, affective versus neutral cultures, time as a sequence versus time as synchronization, and inner-directed versus outer-directed (Moran, Abramson & Moran 2014).

Universalism versus particularism cultural dimension stresses the significance of either rules or relationships. In universalist cultures, law, values, and obligations are more important than relationships (Moran, Abramson & Moran 2014). In such cultures, including US, UK and Canada, Coca-Cola cultural intelligence strategy is to assist employees comprehend how their work relates to the beliefs and values. In addition, employees in these cultures tend to follow clear instructions and processes. On the other hand, in particularistic cultures, such as China and Latin America, Coca-Cola should be flexible when making organizational decisions. Only important rules should be highlighted. Trompenaars’ individualism versus collectivism dimension has been discussed under Hofstede’s cultural dimension because they are similar (Ramalu et al. 2010).

Neutral versus emotional cultural dimension concerns the way members of a society display their emotions. In neutral cultures, members try to hide their emotions. In countries such as the UK, Germany and Netherlands, the manager should watch employees’ reactions carefully because they might be unwilling to express their emotions (Shi & Wang 2011). Unlike neutral cultures, emotional cultures allow people to express their emotions. Coca-Cola’s cultural intelligence strategy in cultures such as Spain, France, and Italy, is to use emotions to communicate organizational objectives.

Specific versus diffuse cultural dimension concerned the degree to which members of the society keep distance between their business and private lives. In specific cultures, business and private lives are very separate. Coca-Cola should exercise instructional leadership in specific cultures, which include the US, Germany, and the UK. In diffuse cultures, business and private lives overlap (Tung & Verbeke 2010). In these cultures, the leadership should be prepared to engage employees in social issues and private matters.

Ascription versus achievement concerns the way members of a society view status. Achievement cultures believe that what an individual does, determines his or her worth (Taras, Kirkman & Steel 2010). Coca-Cola leaders strive to become role models all over the world. Some of the nations with achievement cultures, where the good role model aspect of Coca-Cola has an impact, include the United States, Canada, and Australia. On the other hand, in ascription cultures, members of the society believe that one should be valued for what he or she is (Tang, Yin & Nelson 2010). Power, position and title are important in ascription cultures. France, Japan and Italy are some of the countries with ascription cultures.

Sequential versus synchronous time dimension is concerned with managing time. Sequential cultures stress orderliness of events, punctuality and planning. Consequently, when operating in such cultures, which include the US, the UK, and Germany, the management of Coca-Cola must focus on one project at a time and set clear deadlines. In synchronous cultures, the past, present and future are perceived to be intertwined. In such cultures (Mexico, Japan and Argentina), the management can pursue multitasking strategies.

Comparison between Hofstede’s and Trompenaars’ Cultural Models

Certain orientations of values in Hofstede’s dimensions are similar to the orientations in Trompenaars’ dimensions. Two of seven dimensions of Trompenaars seem to reflect Hofstede’s dimensions of individualism versus collectivism and, to some extent, power distance (Ramalu et al. 2010). Trompenaars’ ascription versus achievement dimension is almost similar to Hofstede’s power distance.

Multinationals and the Role of Expatriates

Global mobility constitutes an irrefutable reality for many multinationals. In addition, the increasing number of multinational or transnational corporations is in dire need of competent and culturally intelligent employees who can work in various nations and with people from diverse cultures. Nevertheless, the policies for recruiting and training such employees often had mundane results (Hahn & Bunyaratavej 2010). Coca-Cola, being one of the ever-expanding multinational companies, will have to adopt the strategies below in order to select culturally intelligent expatriates.

Targeting students studying abroad is one of the appropriate strategies for selecting expatriates. Hahn and Bunyaratavej (2010) argued that the expatriates of the future are the current students. As a result, it is necessary to examine the effectiveness and ability of the student population for multinational assignment. While expatriates are citizens of nation and live and work in another one, students studying abroad are citizens of one country and study in another one. Students studying abroad are almost similar to expatriates because they experience similar processes of cultural adaptation and learning, coping with being an immigrant in the host nation (Gertsen & Søderberg 2010). In addition, similar to expatriates, they experience pressure of performing. However, unlike expatriates, students studying overseas might encounter additional stress of exploring their personal identity and developing into adults. In addition, some overseas learning institutions comprise students from different cultural backgrounds. Studying abroad exposes students to various cultures to which they have to adjust (Hahn & Bunyaratavej 2010). Multinationals should target such students because they have adequate knowledge concerning different cultures of students at their institution.

Expatriate Selection Policies

The first policy is the ethnocentric recruitment policy. According to Tung and Verbeke (2010), this policy results in preference for all key positions everywhere in the universe to be occupied by parent-country nationals (PCNs). This policy is more likely to be adopted during the early stages of internationalization of a multinational company. This policy requires all top position holders to be culturally intelligent (Gertsen & Søderberg 2010).

The second policy is the polycentric policy. In this policy, home-country nationals are recruited to manage subsidiaries within their countries. However, parent-country nationals are still recruited to occupy corporate headquarters (Ramalu et al. 2010). This policy has the advantage of reducing costs related to cultural training, since it eliminates the need for the parent company to familiarize with the national culture.

The third policy is the regiocentric policy. According to Ramalu et al. (2010), it is a mixed approach to expatriate recruitment. It is mainly available in multinationals having operations that are segmented based on a geographical region. It also allows the transferring of executives between the subsidiaries and corporate headquarters. It has the advantage of bringing several cultures together, which can enhance cultural competence among the executives.

The last policy is the geocentric policy, which concerns the nationality of a candidate or the country of assignment. Multinationals using this policy select and train the most suitable individual for the job (Ramalu et al. 2010). However, the geocentric policy can only be successful if the expatriate has a deep knowledge about several cultures and is willing to adjust to various cultural backgrounds.

Strategies for Adapting

The first strategy for adapting to new cultures as an expatriate is cultural awareness. Dickson et al. (2012) defined cultural awareness as developing sensitivity and understanding of other people’s culture. It often engrosses internal changes in terms of values and attitudes. According Dickson et al. (2012), cultural awareness might also refer to the qualities of flexibility and openness that individuals develop in relation to people of other cultures. Expatriates might develop biases and prejudices against certain cultures, which might hinder communication in their new working environment. In order to adapt, an expatriate must eliminate these biases. This can be achieved through not allowing cultural differences become the foundation of criticism against the host country’s culture.

The second strategy is resolving ethical dilemmas. Moran, Abramson and Moran (2014) defined ethical dilemmas as a sophisticated situation frequently involving a clear mental conflict between moral imperatives, in which obeying one would lead to transgressing the other. There are three ways of resolving ethical dilemmas, which include ethical relativism, ethical absolutism, and ethical universalism. When using ethical relativism, the expatriate makes ethical decisions based on what the locals consider right – “when in Rome, do as the Romans do”. This might force the expatriate to go against his or her moral value. When using ethical universalism, the expatriate makes ethical decisions based on what is universally wrong or right. For instance, it is globally incorrect to bribe government authorities. When using ethical absolutism, the expatriate makes decision based on the values of the parent country regardless of its practices and culture.

The Most Crucial Issues for Individuals with the Ambition for an International Career and the Relevance of Cultural Intelligence for an Expatriate Operating Across Cultural Borders

Cultural awareness is one of the most crucial requirements for individuals pursuing an international career. According to Dickson et al. (2012), it is the basis of communication. As a result, it becomes important when there is a need to communicate with people from other cultures. The way an expatriate interprets situations might different from the way PCNs perceive them. This might result in conflicts and eventually failure to achieve organizational goals. Conflicts arise when an expatriate uses his or her own meanings to make sense of PCNs’ reality. Being culturally intelligent will guarantee the attainment of organizational objectives.

Raising Multicultural Awareness

Multicultural awareness can be raised through multi-cultural and diversity training. Ramalu et al. (2010) argued that building a cultural synergy can be achieved only via properly considered cultural awareness training. This training will improve cultural knowledge among employees so that they will learn more concerning others nations and cultures. Such information is likely to remove negative judgments previously held by employees. Being knowledgeable about other people’s culture implies knowing their values and ways of communication. This can reduce cultural conflicts at the workplace.

Conclusions

This paper has discussed management and leadership across cultural borders. The cultural topologies of Hofstede and Trompenaars were used to illustrate the implications of cultural diversity on Coca-Cola’s management. However, certain orientations in Trompenaars’ model are almost similar to Hofstede’s dimension of individualism versus collectivism. Some of the widely applied expatriate selection policies included the ethnocentric, regiocentric, polycentric, and geocentric policies. Expatriates can adapt to overseas cultures through resolving ethical dilemmas and undergoing cultural awareness training. Cultural awareness is one of the most crucial requirements for individuals aspiring to become expatriates.