Cultural Competence and Management in the Globalized Business

Cultural Competence and Management in the Globalized Business Source of photo: Dreamstime. com By Leila Valoura - January, 2018

Do You Agree With That? • Diversity is increasing and globalization is leading to a growing number of international projects. • Cultural differences can either be a source of creativity and enlarged perspectives or they can be a source of difficulties and miscommunication.

Cultural Diversity in Business • Public companies in the top mark for ethnic and racial diversity in management are 35% more likely to have financial returns above their industries’ averages. • Working with people who are different from you may challenge your brain to overcome its stale ways of thinking and sharpen its performance. Source: 2015 Mc. Kinsey “Diversity Matters” Report

However. . .

Presentation Preview We will discuss: The development of cultural competence in the workplace, as well as how this can positively affect organizations’ management. Source of photo: Shutterstock

“The Global Village” Think about stakeholders you work with (creditors, directors, employees, government and its agencies, shareholders, suppliers, unions, the community etc).

Strengths & Weaknesses Source: 2017 SIETAR-USA Presentation by Valérie Berset-Price, Founder of Professional Passport, Portland, Oregon.

What is Culture? • Culture is “the collective programming of the mind, which distinguishes the members of one group or category of people from others”. - Professor Geert Hofstede *Important*: This does not imply that everyone in a given society is programmed in the same way. Keep individual differences in mind.

National Cultures Since the 1960 s, professor Geert Hofstede has conducted one of the most comprehensive studies of how values in the workplace are influenced by culture. He analyzed a large database of employee value scores collected within IBM and respondent groups such as commercial airline pilots, civil service managers, consumers, students, and ‘elites’ in a high number of countries. Source of photo: Tilburg University

The Six Dimensions (6 -D) Model of National Culture • This model by Hofstede is only one of the cultural models available. Its strength is that it analyzes organizational culture versus national culture. Thus, his findings are often used by multinational managers in enhancing employee motivation and reducing conflict. • The model is a good start for our cultural analysis but it requires further effort when it comes to understanding individuals we work with. We need to go beyond simple generalizations.

The 6 -D Model

• The fundamental issue here is how a society handles inequalities among people. • Low Power Distance: People strive to equalize the distribution of power. Ex: USA (40) • High Power Distance: People accept hierarchy without further justification. Ex: China (80)

• The fundamental issue here is the degree of interdependence a society maintains among its members. • Low Individualism: Individuals can expect their relatives or members of a particular in-group to look after them in exchange for unquestioning loyalty. Ex: China (20) • High Individualism: Individuals are expected to take care of only themselves and their immediate families. Ex: USA (91)

• Masculinity represents a preference for achievement, assertiveness, and material rewards for success. • Femininity represents cooperation, modesty, caring for the weak and quality of life. • Low Masculinity score: More consensus-oriented. Ex: USA (62) / China (66) • High Masculinity score: More competitive.

• The degree to which the members of a society feel uncomfortable with uncertainty and ambiguity. • Low Uncertainty Avoidance: A more relaxed attitude in which practice counts more than principles. Ex: China (30) / USA (46) • High Uncertainty Avoidance: Rigid codes of belief and behavior, as well as intolerance of unorthodox behavior or ideas.

• The links with a society’s own past while dealing with the challenges of the present and the future. • Low Long-term Orientation: Time-honored traditions and norms are maintained. Societal changes are seen with suspicion. Ex: USA (26) • High Long-term Orientation: A more pragmatic approach that encourages thrift and efforts in modern education as a way to prepare for the future. Ex: China (87)

• The extent to which people try to control their desires and impulses. • Low Indulgence: A relatively strong control over their urges (restraint). Ex: China (24) • High Indulgence: A tendency toward a relatively weak control over their impulses. Ex: USA (68)

Miscommunication

Steps You Can Take • Commit to boosting your own cultural competency. • Actively seek out new perspectives and ideas. • Treat others how they want to be treated. • Observe diverse traditions, celebrations, and holidays from other cultures. • Contribute to the cultural diversity of your own workplace. Source: HULT – International Business School

Challenges 1. Over-simplification of national identities – Cultural categories are just a reference, not the whole picture. – Superficial similarities, caused by globalization (similar clothing or the use of similar technologies), do *not* mean deeper similarities. 2. Organizations’ tendency to neglect deep cultural competence training – Lack of a clear conceptual framework to prepare PMs to deal with any new situation or culture. – Lack of awareness about one’s own culture.

Organizational Simulations Source: Eagle’s Flight Deep cross-cultural issues can be uncovered by simple games in which we simulate situations from our workplace reality. Staging an international negotiation or even getting stuck in an elevator together: these things can give enough material for hours of debriefing and tremendous learning.

E-mail: leilavaloura@gmail. com