Cross cultural management
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Cross cultural management is linked with management of different types of team by considering the differences in culture, preferences along with preference of customers in the market where operations are being carried out. In the modern era, due to expansion at global level management of enterprise has to deal with different types of individuals who may vary from one another on the basis of religion, culture etc (Moran, 2011). Further, many time it is possible that due to differences in culture of staff members they may not prefer to work with each other and this has adverse impact on business. The present study is based on international company which provides management advice to different firms such as Google, Shell International and new finance company named Clever Clogs International. At present Clever clogs is expanding its activities from Lebanon to Amstedam. Therefore, company is transferring one female manager to whom training on cross culture has to be delivered.
The Main aim of the present study is to understand about the concept of cross cultural management as it plays significant role for the companies who are operating at global level. Further, expansion is taking place from Lebanon to Amsterdam which is located in Netherlands. The main reason behind expansion is that organization wants to change the banking system with the objective to avoid another economic crash. For handling overall operations linked with expansion a manager has to be transferred and the selected one is female. Further, she is having right skills and knowledge which would be appropriate for the present assignment. With the aim to expand appropriately in the new market training has to be imparted to manager so that she can deal with different type of individuals within workplace at global level. In the era of globalization business has to deal with different type of individuals and it sometime acts as hurdle. Companies operating in finance sector have to deal with large number of customers on daily basis and individuals from different background are hired within the workplace so that they can deliver best possible services to the target market (Alves and Lovelace, 2006).
Therefore, effective ways have to be undertaken by Clever Clogs international so that during the phase of expansion large number of individual can be handled easily and this can support in accomplishment of the aim being set by enterprise for expansion. In the finance industry it has become necessary for every company to understand the overall need along with expectations of its target market and providing appropriate customer service to meet need of customers. So, to meet these goals it is necessary for managers of financial company like Clever Clogs international to undertake effective ways through which cross cultural issues can be tackled in appropriate manner and it can provide base to business in carrying out overall operations in the market. Due to presence of cultural differences every individual differs from one another and it can be in the form of thinking and overall perception (Deng, 2009). Further, when individuals are from different religion them their working style also differs and this also acts as hurdle especially at the time when individuals within the workplace carries out operations with one another for the accomplishment of one common goal. One of the biggest challenges faced by finance industry due to globalization is presence of cultural differences and identifying suitable way with the help of which cross cultural workforce can be managed easily.
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Different factors are present at macro level which needs to be considered by the manager of Clever clogs International so that overall operations of the business can be carried out in appropriate manner. Further, this factors may directly influence the business operations and business is new in the market of Netherlands.
Political condition: Government of Netherlands is regarded as constitutional and hereditary monarchy. Further, three party coalition is present in the parliamentary majority. The parties named labor, liberal and democrats are having major power since the 1998 election and as per the USA trade (Dong, 2010). Gov country guide implementing a specific coalition agreement aimed at fiscal consolidation. Moreover, the entire system of Netherlands is adversely affected due to corruption where anti corruption measure ensures government integrity along with public tolerance. The legal framework being developed strongly focuses on protection of private property rights and enforcement of contracts.
Economic condition: Netherlands is regarded as one of the most developed economy of the world where large number of companies operates. Country is one of the biggest player in the world’s trade and global transfer of capital. At present GDP of country is US$350 billion with an annual growth rate of 2.7 percent. Rate of inflation is 3.5% and the major trading partners are EU along with USA (Ahmad, 2009). Expansion of Clever Clogs international in the market of Netherlands can provide ample of opportunities to business as economy is developed and this can provide opportunities to financial institutions operating in the market.
Social environment: Large number of people are living in Netherlands who differs from each other in terms of culture, religion etc. Further, their need and requirement varies from each other. Due to difference in religion of individuals companies operating in the market of Netherlands and for the same it are required for businesses to develop different strategies as this can support in accomplishment of overall aims along with objectives (Grunewald and Baron, 2008). During the stage of expansion Clever Clogs international will hire individuals who are having different culture and for effective management it is required for manager appointed to consider appropriate ways so that overall performance of business in the new market can be enhanced easily.
So, these are the range of crucial factors present at macro level which business has to undertake with the aim of cross cultural management and this can provide a base in understanding about individuals from different background and religion.
Model proposed by Hofstede is a framework for cross cultural communication and it highlights the effects of society culture on value of its members and how they are associated with behavior of individuals living in the society. The key dimensions of this model are as follows:
Figure 1: Comparison of Hofstede dimension between Netherlands and Lebanon
(Source: The hofstede centre., 2015)
Power distance: This dimension highlights the degree to which less powerful members of the society accept and expects that power is not distributed equally (Sandhu and Suppiah, 2011). In country like Lebanon high degree of index is present where hierarchy is clearly established without any specific reason power. On the other hand in country like Netherlands low degree of index is present where people living in the society questions authority and they attempt to distribute. So, this supports in knowing how people living in the society are granted power.
Individualism vs collectivism: This index assist in exploring the degree to which individuals living in the society are integrated into groups. Individual indicates when people living in the society are not regarded as integral part of group and in case of collectivism represents a society in which tightly integrated relationship exist between families (Frost and Walker, 2007). In country like Lebanon concept of collectivism is adopted when individuals are allowed to work in team and they are integral part of it. Further, in country like Netherlands concept of individualism is present where individuals have to work on their own.
Uncertainty avoidance index: It is regarded as society’s tolerance for ambiguity in which individuals living in the society embrace an event which may be unexpected or unknown to them. Higher degree of index represents low acceptance of differing thoughts and lower one shows more acceptance of thoughts (Yan and Hunt, 2005). In country like Lebanon level of avoidance is low where people usually accepts different thoughts and in Netherlands level of uncertainty avoidance is high where individuals living in the society accepts low thoughts and this is favorable for Clogs Clever International.
Masculinity vs femininity: Masculinity is regarded as preference in society for achievement along with material reward for success. Generally preference is given for cooperation, quality of life etc. Further, women living in the society tend to represent different values. In feminine society womens tend to share caring views which is equal with men (Greet Hofstede and cultural dimension theory: An overview., 2011). Further, in masculine society women are regarded to be more competitive and empathic too. In country like Lebanon society is of masculinity nature where men are more emphatic as compared with women. Further, in Netherlands femininity is present where women plays integral role in the society.
Long term vs short term orientation: This dimension is directly linked with connection of past with current and future challenges. Lower index directly represents that traditions are honored and they are kept properly. On the other hand higher degree represents adaptation and circumstantial where problem solving is regarded to be necessity. In country like Lebanon lower degree of index is present and it shows traditions are honored where short term orientation is present. Whereas in Netherlands long term views are considered and this assist in economic development (Penley, 2006).
Indulgence vs restraint: This dimension supports in measuring the level of happiness and is linked with the fact where human desires are considered and they can live happy life. In country like Lebanon individuals need along with desires are not considered but on the other hand in Netherlands life along with emotions of individuals are considered where indulgence is high. Therefore, in this way Lebanon is different from Netherlands by considering the overall dimensions of Hofstede model.
Model developed by Hofstede is relevant enough in understanding about the factors which are present at macro level and they directly affects business operations. All the dimensions are key to organizational success and provide a base in accomplishment of desired aims along with objectives. Dimensions present such as power distance index, individualism vs. collectivism, uncertainty avoidance index, masculinity vs. femininity etc are effective enough in understanding about the market condition (Gelfand and Aycan, 2007). Further, it highlights how cultural differences has direct impact on any society and it is necessary for every business such as Clogs clever international to take develop effective strategies so that it is possible to manage different individuals within workplace in form of culture, religion in appropriate manner. Further, at macro level social factors are highly effective and it affects business operations. Due to this reason undertaking Hofstede model is quite effective and it has assisted in understanding about different dimensions along with their significance in the modern era (Dong, 2010).
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Large numbers of challenges are present which manager of Clever Clogs will face at the time of operating in the market of Netherlands. Culture difference is regarded as one of the major challenge where individual living in the society varies from one another in the form of religion, culture etc and this directly influences their way of working (Alves and Lovelace, 2006). Apart from this, when individual varies from one another then they do not prefer to interact with each other and it acts as hurdle especially at the time when they have to work in team.
Development model of intercultural sensitivity is effective enough in understanding about cross cultural management where it considers large number of stages such as denial, defense, minimization, acceptance, adaptation and integration. In the phase of denial individuals does not prefer to interact with one another and lack of interest is present in identifying cultural difference (MacLachlan, 2010). Defense is another stage where individual consider all other cultures to be inferior, in stage of minimization individuals believe that all culture shares common value, in acceptance other cultures are perceived negatively, in adaptation individual obtains ability to adopt their behavior and in integration this stage is accomplished through long term expatriates living. So the model of cross cultural management highlights different stages and overall behavior of individuals.
One of the biggest challenge for management is to manage team of diversified individuals and this is only possible when proper knowledge is present in relation with culture and religion of individuals living in the society. Apart from this other challenges are also present such as change in political, economical, legal environment which manager of Clever clogs has to consider necessarily.
From the entire study it has been found that cross cultural management is most important in the present era. Manager of clever clogs international has to consider large number of factors at global level especially management of diversified workforce so that organization can easily operate in the market of Netherland. Further, Hofstede model applied has supported in understanding the range of dimension affecting business operations at global level. Therefore, with the help of this it is possible for business to operate efficiently in the market and can easily grab growth opportunities.
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