Cross-Cultural Issues
Managing Cultural Diversity to optimize Professional Productivity
Introduction to cultural diversity (Aminone Ogbu-Sifo)
1.1. The presence of cultural diversity in a corporate context
Taylor Cox in his book ”Cultural Diversity in Organizations” (Cox, 1993) describes managing diversity as “planning and implementing organizational systems and practices to manage people so that the potential advantages of diversity can be maximized while its potential disadvantages are minimized”
Diversity holds such a prominent place in any organization, strong enough to make or mar its effectiveness/productivity. The issues in cultural diversity range from age to gender; from educational background to work ethics; from geographical location to government policies/involvement. All of these (and many more), when considered individually, play a firm role in whether or not a company turns out productive.
Diversity is not restricted to national boundaries. It is worth noting that every organization can attest to a certain level of diversity even without recruiting across races. This is because; the concept of diversity (given the definition above) is evident even in individuals from the same geographical/cultural background. It begins in us as individuals – from our personal analysis/perception of situations to our personal values, we are diverse. All of these go a long way to influence motivation and output on the job.
1.2 Managing cultural diversity
In the work environment, we begin to identify the subject of cultural diversity right from the way interpersonal communication is handled between co-workers to the way tasks/instructions are treated/handled (i.e. perception of authority); right down to time management and decision making etc. These issues are addressed in Hofstede’s (Hofstede XXXX) dimensions of culture as: * Power distance; * Individualism vs. Collectivism; * Feminity vs. Masculinity and *Uncertainty avoidance. In the event that one or all of these factors are not taken into consideration in any work environment (especially in a cross-cultural setting), there is likely to be reduced productivity.
A key step to successfully managing cultural diversity in the corporate environment is first acknowledging difference. Acknowledging that every culture (whether national or corporate) has its own approach to business, and this approach is most likely going to differ from what one has been used to over time. The key would be to highlight these differences so that they do not get in the way of ”the job” and adversely affect productivity. Once highlighted and properly positioned, indeed these differences can rather contribute to the necessary creative mix that every organization requires to remain competitive.
Our interviewee clearly identifies one way to effectively manage cultural diversity by adaptability. In other words, a deliberate shift from ethnocentricity to a broader view on cultural acceptability/relativity. Ethnocentricity here refers to the idea that ones way (of handling office tasks) is superior to the others’. This kind of attitude, if/when perceived by other team members, could result in a less-than-satisfactory work environment. Thus, the idea of adaptability would be to ”learn to do things the way you see them being done ”.
Managing cultural differences may seem an easy task but may prove difficult in its actualisation. This is because, if we are to employ the method of adaptability, we might end up feeling a sense of loss of one’s own personal culture. Thus, it is important, especially on the part of the manager to know where to draw the line between adapting and inculcating the other culture.
There is the need to curb existing stereotypes that could very well disrupt teamwork. And this can only be identified by effective leadership. Even our interviewee admits to nursing stereotypes about certain countries visited. Thus she identifies the need to ”re-evaluate” such stereotypes in order to create a tension-free work environment. Very little (or nothing) can be achieved in the presence of tension/friction.
Indeed professionalism can be measured by how well we are able to put aside our differences (I.e. individual and cultural) and work together to achieve a common goal – company objectives. As the ultimate goal of any organization is to make (and optimize) profits, it becomes impossible to work anywhere without taking this into cognizance. A major part of achieving this is in our ability to handle existing diversity and promote oneness. The soul reason for wanting to promote this sense of oneness could be just for maximizing productivity – in any case that’s the primary reason for the company’s existence.
Diversity itself can be an added advantage for any firm to maximise productivity. In their book “Managing Across Cultures”, Schneider and Barsoux identify certain advantages of cultural diversity which include:
- The marketing argument i.e. increasing the company’s ability to respond to cultural preferences of local markets;
- The cost argument i.e. reducing the costs incurred by turnover of non-home country managers;
- The problem-solving argument i.e. improving the decision-making process through broader/wider range of perspectives and critical analysis;
- The creativity argument i.e. enhancing creativity through diversity of perspectives with less emphasis on conformity.
- Attempting to ignore cultural diversity will prove to be very costly to the organization- creating conflict and wasting time- both of which eventually affect output/productivity.
2. Corporate Context (Laurence Chavanne)
2.1 History of the company
Smith International was founded in 1902 by Herman C. Smith in a blacksmith shop in a small town of California, U.S.A. When oil was discovered in the nearby area, Herman C. Smith applied his knowledge and used his gear to modify and improve oil tools. Sometimes, he constructed new tools on demand. From that ordinary shop, SMITH expanded into a globally diversified Fortune 500 oilfield tools and Services Company.
Operating through three business units, Smith Oilfield, M-I SWACO, and Wilson, Smith International provides an extensive line of technologically advanced products and engineering services.
Smith core competencies include (http://www.smith.com/):
* Worldwide capabilities with around 400 locations in over 80 countries with oil and gas activity as well as legal, financial and human resources management infrastructures to support the business.
� Established customer relationships with independent, international and multi-national oil and gas companies, national oil companies and other organizations that utilize their products and services.
2.2 Role in the company
Our interviewee has worked for two years with Sarbanes Oxley (SOX) Compliance Senior, Smith International (Oilfield Services Industry) coordinating the performance of financial controls risk assessment to determine in-scope locations for fiscal year SOX 404 financial audits.
The job of our interviewee requires extensive travelling to carryout audit functions for various subsidiaries. However, as an auditor, this extensive travelling does not entail long stay periods in these foreign countries. In this case, we are dealing with a maximum stay of three weeks in any one particular foreign country. Nevertheless, she offers a large scope of internationality in terms of the number of working environments experienced over a six-year period.
Responsible for managing audit teams on extensive local (within the US) and international projects termed as ‘fast-paced and budget-tight’, the need to optimize productivity within such a short period becomes a more daunting task. It is interesting to note that though the nature of the job does not require a lot of interpersonal interaction (such as giving seminars or conducting interviews), the issue of cultural diversity still poses a problem and almost stands to disrupt productivity if not properly managed.
We identify two levels of coordination being carried out:
A poorly managed team at either of these levels could cause a negative ripple effect, resulting in conflict and eventually unachieved goal.
3. Research and Theoretical Part
While analyzing the outcome of our interview with F.F, we have been applying a set of theoretical models, which are related to intercultural- and inter-organizational communication issues as well as the communication itself. The meaning of this is to use the theories, all of them confirmed by a significant amount of research, as a viewing glass through which we see the interview outcome in a way that would help us process it and write a conclusion.
The most significant theories and the most relevant aspects of them as described below.
One of the most important theories for us was Geert Hofstedes theory about cultural differences between nations. This theory is based on a cross-national study of the replies from employees at IBM subsidiaries in different countries to a certain questionnaire (Hofstede 1991). The questions asked in this survey were related to the employees’ personal valuations of their current job situation. Hofstede’s own definition of values is: a broad tendency to prefer certain states of affaires over others” (Hofstede 1984) and the reason behind the analysis of values was that values can be seen as the core of the culture from which other cultural manifestations such as symbols and rituals are justified. Hofstede states four dimensions (in later research, Hofstede has discovered a fifth dimension but since this dimension hasn’t been confirmed by further studies in the same extent as the original four, we decided not to apply it to our research project.) that exist in all 53 of the studied national cultures. The basis of this study is that every culture has similar problems in certain areas and that the ways of solving these problems vary between cultures. Every problem area represents a dimension of the culture and can therefore be viewed as an aspect that can be compared to the same aspect in other cultures (Hofstede 1991). As mentioned above, Hofstede determines the dimensions as: Power Distance, Uncertainty Avoidance, Individualism and Masculinity (Hofstede 1984). For every dimension, Hofstede statistically calculates an index and every country then receives a certain score. However, for the purpose of this fieldwork and regarding our interview we have mainly focussed on two of the four dimensions.
Power Distance
The power distance dimension takes off in how different cultures or countries handles inequalities. Hofstede defines Power Distance as follows: to which degree the less powerful members of institutions and companies in a country expect or accept that power is not equally distributed (Hofstede 1991). The reasoning is built on that the size of the power distance is determined by the values of the less powerful members whilst the distribution of power is determined by the more powerful members actions (Hofstede 1991).
What it implies is that the people not in charge, the people being led, expect to have some influence over the decisions that are made and what type of leadership – authoritarian, paternalistic, consultative, democratic – they prefer. Studies have shown that differences in power distance exists both within the leaders’ group and the rest of the people but that the differences become much more obvious when being presented in statements from the leaders.
Masculinity
Hofstede’s masculinity dimension, describes the emphasis different cultures put on demarcation between gender roles and how they look at masculine versus feminine approaches. Hofstede has analyzed work objectives as an indicator of a society’s masculinity that is comparable to other societies. Rewards, recognition, promotion and challenges are considered to be masculine measures, whereas managerial relations, cooperation and area of living are more feminine. A country’s masculinity is determined by how much value and impact each of these measures is considered to have on the culture.
Empathy
* Understanding others sensing others – The theory of empathy highlights the fact that feelings and perspectives of others should be taken as active concerns. It states that active listening and understanding other peoples’ perspectives are crucial aspects of successfully managing the surrounding business environment.
� Service orientation – It develops the sense of identifying and anticipating customer needs. It generally helps to raise customer satisfaction and develops the authenticity for precious deals.
� Developing others – Recognition and active coaching Gole identifes as the core aspects for motivation and developing the employees’ skills. Regular performance appraisal keeps the employees’ driving force high to perform well.
* Leveraging diversity – Another important factor of empathy theory is regarding a multicultural environment as an opportunity and not a threat. Understanding different worldviews and revealing individual strengths help to find the right allocation of cultural diversity.
* Political awareness – Provides the understanding of views and activities directed by competitors and customers. It builds the ability to grasp political and social affairs of organizations.
4 Conclusion
Analyzing the interview with F.F. requires a deliberate consideration of both the business environment as well as the overall context her job is related to. It is necessary to note that F.F. works as an auditor employed by a U.S.-based mother company being exposed to several subsidiaries in different countries always for a short period of time instead of working as an expatriate. Due to her background (Nigerian-American) as well as working in various countries we assume a certain level of cultural knowledge that has an impact on managing her tasks abroad.
However, F.F.’s projects are mostly limited by a timeframe of two or three weeks. Therefore detecting and particularly managing the cultural differences becomes even more challenging. According to the interview, language barriers expose a major challenge while managing cross-cultural business teams for Smith International. Working with interpreters is certainly one measure to overcome this hurdle. However, this course of action does not fully replace a one-to-one communication. Moreover, defining the origin of cultural differences may become an issue, too as within a short period of time it might be harder to determine whether one is facing discrepancies in national or in corporate culture. The cultural differences mentioned in the interview such as lay-off policies (Norway vs. Nigeria), fasting periods and management of time we interpret as differences in national culture. Especially fasting periods and other comparable events in a subsidiary’s country as well as time management result in varying patterns of work ethics in each country.
For our interviewee the most important goal regarding her projects is to get the job done within a short period of time or in other words managing the conflict between the time needed vs. resource availability (quality of HR, employees’ sense for priorities, budget, etc). In general auditing can be described as a highly task and goal oriented job. Nevertheless national culture including values and beliefs, as mentioned above, will always have an impact on F.F.’s current job. Regarding relationship and power as further cultural elements she mentions choosing a rather strict and non-casual appearance to start and maintain a relationship to business partners in new environments. As contributing reasons for this approach she agrees on age and gender. Nevertheless she stresses that “…the power really is more in the title than in the individual.”. As one major advantage for working in countries with different power structures our interviewee points out her multi-cultural background enabling her to adapt to both horizontal as well as vertical command chains.
This leads to an interesting aspect. Venezuela and Mexico, two countries she has worked with are known for very high indexes in power distance and masculinity according to Hofstede. Mrs. F.F. does not mention her authority ever being question in neither of these two countries. Furthermore these countries tend to maintain high context cultures (Hall, 1976), which means that in theory “developing trust is a critical first step in business” and decisions are “more governed by intuition and feeling than by reason”. However, she highlights that employees in less developed countries from her experience have a higher acceptance of recommendations she provides (based on facts and numbers), whereas in Canada for instance, characterized as a low-power-distance-country, people tend to be less open for recommendations and advisory.
|
|
Power Distance |
Uncertainty Avoidance |
Individualism |
Masculinity |
|
Canada |
39 |
48 |
80 |
52 |
|
Mexico |
81 |
82 |
30 |
69 |
|
Venezuela |
81 |
76 |
12 |
73 |
On the one hand a low power-distance-index in Canada explains the occurring arguments while high power-distance-indexes in Mexico and Venezuela leading to a high acceptance of authority support Hofstede’s theory likewise. However, high masculinity indexes and the fact of these two countries being considered as high context cultures should lead to contrary outcomes in theory. Therefore it is to be questioned whether her role as a team leader and her advisory being accepted in these two countries is either simply due to the fact that auditing can be considered as a task related job only or due to a professional management of cultural differences or maybe even due to a co-action of these two aspects.
Giving recommendations is certainly the most difficult part of the overall conclusion. Our interviewee points out: “… the key to success in international situations is adaptability. I quickly learn to do things the way I see them doing it.”. This attitude fits fairly well into the definition of culture being a “shared set of solutions to problems of external adaptation and internal integration”.[1] Her background (being a CPA, three years of work experience with Ernst & Young) proves remarkable professional experience with the age of 26 besides managing cross-cultural issues in daily business situations. Awareness of cultural differences, adaptability to new environments as well as overcoming stereotypes are valuable strengths F.F. already possesses. All in all we consider the right balance of expertise and empathy as the key success factor for future progress in cross-cultural business teams and making further steps in a continuing personal career development.
Bibliography
Book
* T. Cox, Cultural Diversity in Organization, Berrett-Koehler Publishers, Inc., San Francisco CA, 1993, page
� S.C. Schneider, J-L Barsoux, Managing across cultures, Upper Saddle River: Prentice Hall, Essex, England 1998, page .
� D. Goleman, Working with Emotional Intelligence , Bantam, New York, 1998, pages 137, 138, 146, 151, 154, 155 and 160.
Website
* Updated on 11 February; Viewed on 19 February, <http://www.smith.com/>
[1] Cross-cultural-communication Session 1