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Course BUSI1313: Cross-cultural Management Course School/Level BU/UG

Coursework Case Analysis Assessment Weight 50.00%
Tutor U Veersma Submission Deadline 12/03/2010

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000532454 Matilda Akinyemi

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NAME: MATILDA C. AKINYEMI
STUDENT NO. 000532454

TUTOR: DR. WIM VANDEKERCKHOVE

TOPIC: CASE ANALYSIS:

Purpose of The Analysis:

Section ‘A’ is expected to provide advice to Monsieur Liataud, on his Business

Objects, guiding him on the policy he should adopt during his business operations in
various countries; as well as the process of employing people from various cultures.
The analysis will apply the principle of Hofstede (1983), theory on culture and
workplace, including other areas of importance such as language, education, and
communication. Based on the scope of the business, which will cover various
countries and diverse cultures, the policy will take into consideration Perimutter
(1969), Typology of Multi-National Corporations theory to determine choice of policy.
It will also apply “SMART” analysis in order to justify actions to be taken.

The second choice of question is No. 2 on the list, which deals with advising
Monsieur Liataud on how to form and manage multi-cultural team successfully. This
will apply the ‘Motivation Theory, Expectancy Theory, and Goal-Setting Theory.’
These theories will examine the importance of the intrinsic and extrinsic rewards and
their impact on selection and retention of employees.

Section A: Relative Theories:

The analysis will apply the four dimensional study of ‘culture and the workplace’
carried out by Hofstede (1983) pages 75-89. Hofstede’s theory has been the most
popular theory on the relationship of culture and value in workplace over the years.
The four dimensional theory approach claimed to have summarised different cultures
under four categories – power distance, individualism versus collectivism,
uncertainty avoidance, and masculinity versus femininity. Hofstede’s power distance
dimension identified people as unequal on both their physical and intellectual
capabilities. He argued that high power distance cultures are preeminent in such
countries that allow inequalities to grow over a period of time. While low power
distance cultures are common with the societies that play down on the individual
inequalities. The second dimension is individualism versus collectivism dimension
which focused on the relationship between individuals and other members of the
family or society. The third dimension is uncertainty avoidance which dealt with the
ability of different cultures to be able to accept and tolerate uncertainty, especially in
the areas of job security, career patterns, including retirement benefits. The fourth
dimension is masculinity versus femininity, which looked at the relationship between
gender and work roles, and this can affect the decision making process in the areas
of work value and salaries, especially in such societies that are high on masculinity
table. All these areas of disparities in the cultural behaviour of different societies
should be considered for the operational success of Multi-National Corporations.

Another important areas to take into consideration are ‘Language, Education and
Communication.’ The area of language includes both spoken and unspoken types.
There is no doubt that language plays a very important role in any form of business
transactions including the shaping of the whole world. According to Edward and Lee
(1929) pages 207-14, language shapes the way people perceive the world, it also
helps to define culture. They stated that countries with more than one language
often have more than one culture. This will impact on the way of business dealings
with such countries by Multi-National Corporations. There is also problem with the
unspoken language. Unspoken language serves as nonverbal communication, and
it is frequently used in our everyday transactions, perhaps more in some countries.
Unspoken language can easily be misinterpreted by different cultural values. The
inability to understand the nonverbal gesture of another culture leads to
communication failure, and it can affect Multi-National Corporations in their business
transactions. The act of communication is part of our daily functions. It looks simple
but it is very complicated especially in multi-cultural societies. Another important
area that can impact on the decision making process of Multi-National Corporations
is education. The educational procedures of different societies can affect Human
Resource Management. According to French (2007) page 166, Human Resource
Management can differ between societies due to distinctive institutional features
within individual countries even among the Western nations. Schneider and Barsoux
(1997) page 149, identified the sharp difference between the Human Resource
Management approach in the United States and Europe due to difference in
disciplines, psychology and sociology. The difference in disciplines impacts on the
relationship between people and organisations. The discipline for Human Resource
Management in United States is sociology, and its primary concern is on the
improvement of workers motivation. Boxall and Purcell (2003), page 166, advocated
a hybrid approach which takes into consideration the Company’s internal strengths
and weaknesses, combined with the external analysis of opportunities and threats.
According to Schramm (2006), traditionally, organisations depend on the knowledge,
skills and abilities of their workforce for success. Therefore, it is not just being
educated but the source of the education is of high importance too.

Strategic International Human Resource Management:

This part will examine four categories of Perimutter (1969), theory on ‘Typology of
Multi-National Corporations strategies. The analysis of different models of multi-
cultural management options will enable Monsieur Liataud to make choice on
management style for his companies.

1. Exportive/Ethnocentric –This is a centralised system. The practice is

dominant in style. It simply transfers the home country’s management
practices to the foreign subsidiaries. It controls and coordinates the whole
affairs of the Firm from the Head quarters.
2. Adaptive/Polycentric – This is adaptive and decentralised. In this system
some elements of international guidelines are being followed. It observes
some knowledge transfer between the home and subsidiary countries.
3. Integrative/Geocentric – This system applies global approach in terms of
goals and values. It applies the best Human Resource Management
 practices from different cultures. It encourages and recognises diversity. It
gives attention to local needs and applies flexibility.
4. Regiocentric – This observes regional values and markets. There is gradual
development of organisational culture that is detached from the country; tailor-
made to suit the purpose of the region.

For global diversity management to be effective it will be necessary to adopt the

‘Integrative/Geocentric approach. This will promote the inclusion of all units both
culturally and in the decision making process. Cox (1994), stated that multicultural
work environment will not be achieved until all employees feel valued and trusted as
part of the organisation. Another important component in global diversity
management is flexibility in the design of Human Resource practices. Cox (1994),
argued that unless Human Resources are designed with sensitivity, it will meet with
resistance due to cultural differences. According to him, this will require co-
operation from the local ‘informants’ who will willingly share local knowledge and
norms with the officials from the Headquarters. Most importantly, it is necessary to
establish bi-directional communication, to avoid imposing ethnocentric oriented
organisational culture on the host country. According to Dunavant and Heiss (2005),
some Multi-National Corporations have been unsuccessful due to the non-
involvement of their foreign subsidiaries in their programme planning. Schneider
and Barsoux (2003), pointed out the importance of giving access to cross-cultural
training and opportunities to work as teams for the development of global
competencies. According to Cox et al. (1991), organisations that effectively manage
global diversity will achieve better unit of overall firm performance across their global
units, thereby achieving a better overall firm performance. The achievement of these
specified areas will require high organisational innovation.

According to Cavanaugh (1997), the key in developing a global diversity programme

is to attend closely to the definitions and practices that are part of the diversity
initiative such that:

(a) Definitions of diversity take into consideration the socio-historical power

discrepancies within each cultural context without assuming that definitions of
diversity and meaningful societal group differences coincide across countries,
and carefully considering the local impact of encouraging the employment and
advancement of members of disadvantaged groups.
(b) Goals for alleviating specific sources of discrimination are locally defined;
while also ensuring that,
(c) The overall goals and objectives of the global diversity initiative are unified
across global units so as not to fragment the organisation’s attainment of its
larger purpose of fostering and maintaining diversity.

On the strength of all the areas of global diversity identified above, the analysis
recommends that Monsieur Liataud, should implement the “Integrative/Geocentric”
concept. It also recommends the application of a conceptual framework by Nishi and
Ozbilgin (2007), stated below, for the management of all of his businesses across
the world.

Global Diversity Management: A Conceptual Framework

1. Inclusion of Global Units: Seeking and using global input for decisions that
affect its global units.
 2. Flexibility of Human Resource Management: Deriving a clear understanding
of local context. Designing and implementing culturally consistent
management policies, practices and procedures.
3. Global Diversity Definitions and Practices: Definitions of diversity sensitive to
cultural context. Unifying organisational diversity initiatives that encourage
inclusion, but allow flexibility for local programmes; global accountability.
Local targets for alleviating workforce discrimination. Recognizing local
repercussions of protecting target groups, for example, gender, religion and
others. Local director of diversity programmes.
4. Development of Global Competencies – Global talent development for
employees worldwide. International assignments as part of systematic talent
development. Cross-cultural training for all employees with global contacts.
Inclusion of employees in global work teams. Encouragement of cross-
national social networks.

Application of SMART Analysis:

“SMART is an acronym used to describe key characteristics of appraisal objectives.”

SMART stands for – Specific, Measurable, Attainable, Reliable and Timely. Getting
this right will make room for setting the right objectives for the success of the
organisation, individuals and teams. At the same time, care must be taken, making
sure that reviews are being carried out in order to reflect and remain current with
business objectives.

Monsieur Liataud’s businesses will operate successfully in any part of International

Market, if he follows the principles of Human Resource Management as stated
above.

Section B: Management of Multi-cultural Teams:

It will be necessary to define ‘culture’ at this stage. Over the years, scholars have not
been able to agree to the meaning of culture. Hofstede (1984), an expert in cross-
cultural differences and management, identified culture as “the collective
programming of the mind which distinguishes the members of human group from
another... Culture, in this sense, includes systems of values. Values are among the
building blocks of cultures.” Values provide the context within which a society’s
norms are established and justified. Hill (2009) page 89, pointed out that cultural
values are not just abstract concepts, they involve considerable emotional
significance; and people can argue, fight and even die over their cultural values.

According to Drucker (2007) page 410 - Management is about human beings. Its
task is to make people capable of joint performance, to make their strengths effective
and their weaknesses irrelevant. This is what organisation is all about. That is why
management is a critical and determining factor in business operations. He
emphasized that we depend on management for our livelihoods and our ability to
contribute and achieve. Routledge and Kegan (2007) page 413, referred to
management as an - Art, Science, Magic and Politics. In other words the theory
identified management as a specialist skill. Notwithstanding, the point is that there is
no specific ideal management style. Rather, it is the responsibility of managers to
strive to become successful in their roles. According to Mullins (2007), irrespective
of all the techniques at their disposal, managers generally act at intuitive level.
Managers may have absorbed the latest thinking on core competencies, but they are
more likely to base their decisions on prejudice or personal opinion rather than a
neat theory. According to Silverthorne (2009) page10, cultural norms influence
managers behaviour and employees reactions to their behaviour. Effective
management requires managers to meet the expectations of employees that will
reflect on their cultural values. It argued that values are influenced by the nationality
of the manager and the business environment. All these will engender the
techniques for motivating subordinates and enhance employees job satisfaction. He
argued that employees will be more productive and satisfied with their work in a
conducive working environment which understands and accepts the social norms of
the subordinates.

The importance of Motivation in Management:

According to Tolman and Honzik (1930) page 534, Expectancy Theory states that
humans act according to their conscious expectations that a particular behaviour will
lead to specific desirable goals. The same observation has been shared by a
current theorist Vroom (1964), he stated that human behaviour is directed by
subjective probability, which includes individual’s expectation of an outcome through
his or her behaviour. Locke (1968), shared the same opinions in his ‘Goal Theory.’
He stated that both motivation and performance will be high if individuals set goals
which are challenging and acceptable, and where feedback is given on performance.
This theory has become very popular framework as part of operational tools within
organisations. This is because it specifies the importance of self-monitoring against
set targets. Arnolds and Boshoff (2002), acknowledged the wide use of Maslow
(1943), basic needs theory. Maslow’s basic need theory identified people as
“wanting beings,” that are always wanting more depending on what they already
have. His theory analysed the five basic areas of human needs as – self
actualisation, esteem, love, safety and physiological. Maslow’s theory has been
challenged and modified by other theorists such as Alderfer (1972). Alderfer’s theory
included – Existence needs, Relatedness needs and Growth needs. Another
theorist that challenged Maslow’s basic needs theory is Herzberg (1968) two-factor
‘Hygiene and Maintenance theory. Herzberg’s theory incorporated the importance of
motivation at work and job satisfaction. It brought to attention the importance of job
design in the quality of work life. It also creates an atmosphere of self-satisfaction
including self-actualisation. It identified the importance of both the intrinsic and
extrinsic rewards at workforce.

Cross-Cultural Management:

According to Silverthorne (2009) page 10, cultural norms influence managers

behaviour and employees reactions too. Effective management requires managers
to meet the expectations of employees with their cultural values in mind. It argued
that values are influenced by the nationality of the manager and the business
environment. They will enhance the techniques for motivating subordinates and
employees job satisfaction. He argued that employees will be more productive and
satisfied with their work in a conducive working environment that understands and
accepts the social norms of the subordinates. Within cultures, values play important
roles in organisation. He stated that motivation is a very important element of work
behaviour. He argued that Intrinsic reward is generally preferred in less developed
countries than extrinsic rewards. Different types of rewards for motivation are
effective in different countries, and the level of development of culture and other
societal issues play important roles. In cross-cultural settings differences in values
can be a serious management issue, in turnover, organisational commitment and
conflict. The issue of relative importance and effectiveness of global versus local
standards for Human Resource procedures most often impact on local rules, norms
and regulations. For example, there are differences in selection, evaluation and
appraisal procedures in different countries. He argued that “differences in
negotiation and communication styles can cause serious problems and make the
difference in whether a multinational company, mergers or joint ventures succeed
across culture.“

Conclusion:

Finally, though current theories provide useful framework, but their application
across cultures should be undertaken very carefully, due to rapid change in business
environment. As companies expand across national borders, managers also need to
think globally in order to be successful. According to Silverthorne (2009) page 13, as
managers think globally, they should act locally. In other words, managers need to
act in line with local, cultural needs, and expectations. This analysis will be useful
and applicable to Monsieur Liataud, for his service delivery in his business
expansion plan, because the analysis is broad and it covers most areas of concern
in the operational dimension any given Multi-National Corporation.

References:

1. Alderfer, C.P.(1972) Existence, Relations and Growth, Collier Macmillan.

2. Arnolds C.A. and Boshoff, C. (2002) International Journal of Human
Management and Employment Relations.
3. Boxall, P. and Purcell, J. (2003) Strategy and Human Resource
Management, New York, Palgrave Macmillan.
4. Cavanaugh, J.M. (1997) Managing The Politics of Workplace Difference.
CA: Sage, pp. 31-53.
5. Cavanaugh, J.M. (1997) Managing The Politics of Workplace Difference.
CA: Sage, pp. 31-53.
6. Cox, T. et al, (1991) ‘Effects of Ethnic Group Cultural Differences on
Cooperative Behaviour on a Group Task,’ The Academy of Management
Journal, 34(4): 827-47.
7. Cox, T. et al, (1991) ‘Effects of Ethnic Group Cultural Differences on
Cooperative Behaviour on a Group Task,’ The Academy of Management
Journal, 34(4): 827-47
8. Cox, T.H. (1994) Cultural Diversity in Organisations: Theory, Research
and Practice. San Francisco, CA: Berrett-Koehler.
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Diversity Best Practices.
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