With the rapid increase in the globalization of business, workforces are becoming
increasingly diverse and multicultural because of this there are issues arising for HR
managers. With the growing Significance of developing economies in the global
business environment, Human Resource Management is facing increased difficulty in
managing cross-border cultural relationships. Increasing competition both nationally
and internationally have resulted in a deeper focus upon effective human resource
management. Organizational leaders and policy makers are required to know how
human resources (HR) are managed in different parts of the world and how they
should perceive and react to different cultural beliefs and practices.
1. Increased awareness of cultural difference in workplaces.
2. Increased need of cross-cultural understanding in business environment;
3. Management of global talent;
4. Increased popularity of virtual global teams.
These trends have transformed the role of a manager into a much more complex
form than it was before. Cultural adaptation issues have become unavoidable
alongside the introduction of global business orientations. As India is becoming an
increasingly important destination for many foreign investors and multinational
corporations it is very important to understand these trends to avoid cross cultural
1) A set of ideas, concepts or notions, especially values are shared by the
members of a culture.
2) This set of ideas is transferred from one generation to another through
3) Culture exists from the past actions of members of a group. Culture is
4) Culture moulds behavior and changes one’s perception of the world.
After understanding the definition of culture, it is important to realize how people
acquire their culture and learn about behaviors and values that are accepted or
rejected by their society. This process is known as cultural conditioning, which is
specific to particular groups and varies significantly from culture to culture. The
process of conditioning starts to develop in early childhood but continues to
develop throughout the life of an adult as new behaviors and values are acquired
Hofstede in 1980 has presented a classic study of work values to compare cultures
across different countries. The study is based on attitude surveys of 117,000 IBM
employees representing 40 different countries, which later expanded to include 50
countries. Hofstede presented four dimensions derived from differences in national
cultures. Each dimension was given a score ranging from 0 to 100. The four
dimensions were individualism-collectivism, power distance, uncertainty avoidance,
Individualist – It refers to the extent to which an individual identifies one’s self.
Characteristics include being self sufficient and self-dependent without the need
for reliance on the group. The success of the individual is independent of the
success of the group.
Collectivist – An individual associates himself with a large group or a team, for
example, family or work team. The success and survival of the individual is
dependent on the team’s success. Cooperation and integrity are required of all
the team members in a group. All the group members are similar in their
psychological and emotional orientation but this may vary with members of
Power Distance – It demonstrates the attitude of the society toward power
differences, that is, how cultures perceive the notion of power and status. It comes
into play especially in workplace relationships, particularly in the relationship
between managers and subordinates. Depending on acceptable power differences,
there can be high power and low power distance cultures.
Uncertainty avoidance – This model deals with interpretation of uncertainty of
life in various cultures. All societies are affected by uncertainty but the level of
threat varies differently among different cultures. Some cultures feel highly
anxious about the uncertainty in life and are known as high uncertainty
avoidance, while low uncertainty avoidance cultures are more tolerant to threats
Masculinity-femininity – It is the extent to which cultures differentiate between
gender roles. Male orientations are characterized by ambition and excellence
whereas female orientations have propensity more toward quality of life and
Cross-cultural management describes organizational behavior within countries and
cultures; compares organizational behavior across countries and cultures; and seeks
to understand how to improve the interaction of co–workers, managers, executives,
clients, suppliers, and alliance partners from around the world. Thus here, we can
experience that in present day's scenario where people employed in multinational
companies (MNCs) are from various cultures and each and every employee is
different in his attitudes, practices, behavior and values. Thus it becomes very
difficult for a manager to manage his subordinates who are diverse in their culture.
There emerges need to understand and gain knowledge on different cultures. It
helps employees to know each others' cultures and languages. This helps, in turn, in
keeping the employees integrated in the organization so that they cooperate with
each other in attaining the goals of the organization.
One of the main tasks of management is solving of problems that appear at
encountering individual company and national cultures. Managers of international
companies often face challenges of cultural differences. There are three sources of
1. Corporate company culture:
The corporate company culture elements are such as history of the company,
company's experience, leadership and dominant coalition, ownership, stage of
development and business diversity.
2. Professional industry culture:
The professional industry culture comprises of two elements; functional
orientation and industry norms. Functional orientation includes marketing,
finance, engineering, research and development functions. Industry norms
include technology, change, key success factors, and types of customers.
3. National ethnic culture:
National ethnic culture includes elements such as country history, education,
social organization, religion and philosophy.
The major cultural differences could be categorized into two major dimensions. Both
approaches propose a set of cultural dimensions along which dominant value systems
can be ordered. These value systems affect human thinking, feeling, and acting, and the
behavior of organizations and institutions in predictable ways. The two sets of
dimensions reflect basic problems that any society has to cope with but for which
solutions differ. They are similar in some respects and different in others. The
dimensions can be grouped into several categories:
1. Relations between people
2) Motivational orientation
3) Attitudes toward time
As the managers and the employees in a multinational organization gradually
understand the dimensions and differences, it is the duty of both managers and the
employees to adopt the strategies to keep the diversity at bay. Following are the
strategies which help us to overcome the obstacles of cross-cultural differences;
1)Good knowledge of foreign culture:
2)Respect of a foreign culture:
3)Helpful steps in the relationship to a foreign culture:
4)Ignore the cultural differences:
As the globalization is increasing, cultural differences are bound to be found in workforce. It
becomes very important for a manager to deal with complex issues arising out of the cultural
differences and mould the differences into benefits. The managers and employees in an
organization should respect the other cultures prevailing in the workforce. This will enable them
to eradicate the differences and unite them which further leads to attain the organizational
objectives smoothly. The managers could deal with their employees with sound coordination
and delegation becomes easy as well. The cultural differences in multinational companies are
taken as positive factor and helps in building synergies. This shapes the organization to equip
the best to fight against the rivals and get more competitive advantage of it. Once the cultural
differences are managed in proper way by the managers, it becomes easy for the organization to
flourish in all cultures across the globe.
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