• Subject Name : Management

Cross Cultural Management

With the increase of globalisation, the markets have the tendency to become hyper competitive. For a global human resource manager this can be an extremely challenging prospect as they have to be extremely clear about the strategic orientation of the human resource department. Factors like offshore sourcing, global value chain and global division of labour have led to acceptance of cultural diversity even in the work place. In fact, for any senior level manager. These differences are a now a way to capitalise and pave the way for organisational effectiveness. The approaches taken up by the managers to meet this challenged determine the outcome where the capabilities of the multicultural workforce are utilised. Meeting the challenges of ethnic and cultural landscapes becomes extremely important as a manager. To increase the competitive advantage the managers, have to understand the importance of various aspects of organisational factors and staffing approaches and ensure the success of the company.

  1. When it comes to the selection and recruitment of an effective management team, what staffing approach should you take, and what will global HRM’s role be in the process?

The composition of an effective team is one of the most crucial parts of the process of gaining competitive advantage when a company goes overseas. Understanding the local context and cultural advantages in an astute manner is what gives global managers a good foothold about how the company can operate there. Therein lies the significance of an effective staffing approach. The staffing approach used should be able to fulfil the needs for both global stability and local flexibility. An integrated global management system will be able to help management employees adapt to the dynamic market environment while generating an awareness of cross-cultural identities and implications across the staff board.

The three types of staffing approach that companies with cross cultural operations can take up they are as follows:

  • Home country national approach
    This is the ethno-centric staffing approach where the senior management employees of the parent country take up new positions in the host country. This strategy uses the employees from the home country to travel abroad to live and work in the country. The parent company usually believe that these employees will have a better idea about conducting operations in the new county. Instead of hiring the locals they appoint their parent company employees for key positions as they feel this will help them gain a key foothold in the new country in terms of expertise and technical experience.

The biggest advantage of this approach is the fact that the central belief is the organisation can be easily infused from the home county to the new host country easily. The ease of communication and understanding between the parent company and the subsidiary will be more convenient. The greater understanding of the company politics and implementations of the business strategy will be prevalent in spite the change. This is also an excellent opportunity for the employees in terms of career development and local experience.

Some of the disadvantages of this staffing approach is the fact that adapting to the new foreign environment may take longer duration for these employees and this many affect their productivity. Another huge disadvantage is that the employee may not always be able to grasp the nuances of cultural sensitivity when it comes to transfers. Cost of visa and languages barriers are few other logistical factors that may affect the decision.

  • Host Country National

This is the staffing approach where instead of sending employees from the parent country, people who were born in the host country are employed for the key positions. This is also known as the polycentric staffing approach and it heavily focuses on the norms and approaches of the host country. The corporate personnel is hired from the local country are country national are able to bring in the specific knowledge of the area to the new operations of the subsidiary. Most of the European firms follow this approach.

The biggest advantage with this approach is that no time is wasted in the transition as the corporate personnel from the local country will have the knowledge about the area and better understanding of local laws and norms. There is no language barrier or any other logistical costs to be incurred.it also provides excellent career advancement opportunities for the locals thereby increasing their commitment and devotion to the home country.

Some of the disadvantages associated with this method are the fact that the host country personnel may not understand the parent company principles and objectives unless they are provided with adequate training. Sometimes there might be language barriers between the host country personnel and the parent company. The us vs them perception due to disparities in condition may affect the operations.

  • Third country national

This is the third staffing approach that is also known as the geocentric staffing approach that does not focus over any nationality. It gives the ley positions at a new host country to the corporate personnel who is the most qualified and suitable for the job. The employment is decided without thinking of their nationality or preferred language. These are mostly third country nationals and the selections happen from a huge pool of global candidates. This is perhaps the best compromise between bringing in the adequate technical expertise of the parent company while adapting to the numerous socio economic and political circumstance sin the new host country.

The biggest advantage in this staffing approach is the fact that third country nationals may actually be able to bring the global perspective that is required in cross cultural operations. They are generally less expensive when compared to the first approach and are international managers. There is also the chance that the third country national will be better suited to the new host country’s socio economic and political stance and have better understanding of that country. The tendency to create national identification for a global company is a huge no and this approach will be helpful in negating that (Bird, A. and Mendenhall, M.E., 2016).

The biggest disadvantage with this approach is the fact that it may hinder the operations in the local country in a way that makes the locals feel like their opportunities were taken away. possible rise to impediments because they wanted key positions in the new subsidiary could be a problem in the future for the parent country depending on the sensitivity of both the third country national and the host country. In this situation traditional national hostilities must be considered.

As per my understanding the best approach in this scenario would be the selection of the third staffing approach that is the geo centric staffing approach as I feel it is the perfect blend of parent company understanding with the requisite amount of fresh perspective that will actually create a beneficial impact on the operations of the new subsidiary in a new country. As for the traditional hostility and lack of motivation on behalf of the local workers the employment selection should be such that it is able to recognise exceptional adaptive qualities and genuine understanding of the company principle in the new candidates. They must more idea and knowledge about the host country to help in easing their transition. This may also help in reduction of excessive subsidiary control of management as the parent company will be able to conduct its centralised was of operations without national bias from any side. Considering the highly sophisticated personnel selection system it allows the company to form a contemporary team of global managers that can help in the shift to an internationally astute perspective. The tendency to create national identification for a global company is a huge no and this approach will be helpful in negating that (Moore, F. and Mahadevan, J., 2020)

Training upon the cultures and traditions and sensibilities of the host country becomes immensely important for the GHRM and senior management teams in order to become successful there. From co-ordination to decision making, the strategic responsibilities of a global HRM have to be in perfect alignment of the company ideology and principles. Int his situation the global HRM can help me select the candidate by providing me information about 5 specific factors like job factors, relational dimensions, motivational state, family situation, and language skills. The core competencies require a certain degree of centralization and these stay uniform across nations. So the global HRM can make adequate decision in filtering information as per that. The level of co ordination also has to be of a very high level to execute decisions that are mindful of the cross-cultural sensitivities. Because of the numerous branches all over the possibilities of multiple integrating systems operating simultaneously is not just high but also extremely justified to deal with various aspects of operations. The candidates must have adequate technical expertise and the GHRM should set essential training processes to ensure the transfer of the same. The GHRM has to ensure that they understand the origins of the corporate culture across the globe and the sensibilities of the host country so that we can educate our managers about their global behaviour. the communication process, and overall ease in operations conducted across the globe will be a responsibility of the GHRM and human resources department of the parent country.

  1. The approaches you should take to: leadership and motivation, communications and negotiating, decision making and organisational relationships.

The capacity to manage and leverage cultural differences plays a huge role in ensuring success. When it comes to leadership, communication, negotiations and other management skills, in a cross-cultural context, the central operations will be the same but the day to day communications will have to adjusted as per the local cultural context. From negotiations to leadership, a certain ease has to be introduced along with the freedom and pace of communication. It is only through this ease of communication can a system be put in place where management employees can keep their individual differences aside to communicate in an effective manner and ensure best possible results. The significance of a system or a protocol that gives employees and team members the space to acknowledge and understand the cultural and individual disparities with adequate ease is duly undervalued considering the returns. The skills of GHRM must be bridging these differences and they should also have a team of highly competent management employees who understand what it means to ride the waves of dynamic global market competition.

  • The clarity of the company vison and an effective leadership’s skill in explaining the same to their team of diverse employees can be rudimentary in ensuring levels of unprecedented success. The leader has to be inspiring enough to communicate his goals to his team members and help them understand the intensity of the operations. Their ability to set a standard for competency and goal achievement can be translated as motivational in any language, hence the team members get to see a proactive leader at all times. The leader should most importantly have a profound sense of cultural intelligence in order to navigate the often-uncertain seas of cross-cultural management. High levels of motivation and enthusiasm are a big plus, but the leader must be aware enough to understand the strengths and weakness of their team at all given points so as to thrive in the local environment first and then make delible impacts on global operations.
  • The motivation aspect in a cross-cultural management situation plays a huge role in consolidating the workforce in line with the parent company’s vision and principles. In order to create a scenario where millions of people work as per one centralised operation base there has to be high levels of belonging ness and motivation among the employees. All of this depends on the punishment and reward mechanism. The emphasis is more on rewards where incentives bonuses and exposure create a sense of enthusiasm among the employees to perform better. Regular training programmes that ensure the transmission of core company values into the employees are also extremely important in creating a sense of loyalty towards the company. In order to stimulate the inner potential of all the employees in a way that they start working for the company and improve both their quality and quantity, it can be enabled through this process of incentive. It also creates a sense of initiative and inspires the employee to achieve the company objectives by completely mobilising their enthusiasm. Other motivational factors that are intangible but can have a huge impact in the cross-cultural aspect of management are appreciation, recognition, career progression, encouragement etc. these factors will drive them towards better performance because the lack of any such catalyst can cause them to feel less engaged at work.
  • Communication is the most important pillar of cross-cultural management situation. With the advancement of technology, the process has become easier. The key in this context is to manage the very nuance of communication in a way that employees all over are on the same page about the company operations. Whether it through virtual forms or the company employee present on site the company principles should be communicated adequately, regularly and constantly. The main reason behind building a proper framework for communication in the cross-cultural management context is the fact that it will enable the parent company to narrate and send across the rules, tactics and goals through enhanced form of communication for better understanding among the subsidiary employees. Similarly, the minutest details of the day to day operations also need to be communicated to the parent company for them to effectively monitor the operations. Communication is the most important facet as it the onus of keeping up with the information falls on both parties and they must ensure that there is no loss of information despite the distance.
    understanding the complexity of intercultural communication is also of essence in this situation as it helps in analysing the situation better. By being attentive to the sensitivities of the host country, they are able to respond better to the needs and consumer demands of the locals. Only effective communication can help in bridging this gap. Once the seamless transfer of information takes place, the company will be better equipped to amend and revamp their international objectives and methods. This comprehension of the demands and consumer trends is aided by communication frameworks (Gullestrup, H., 2009).
  • Negotiations in cross cultural setups are an extension of the communication framework as so much of the time is going to be spent understanding the needs and demands and ideas across different cultures and countries. The existence of difference of opinions and disparities is albeit natural, how the GHRM and senior leaders a mange to dissolve the differences to create decisions that will have a positive impact is the main objective of negotiations. The art of negotiations is truly the most significant way of dealing with differences that may arise and end up completely negating the process of cross-cultural agreements. From union conflicts in host countries to agendas discussed with senior management it is this careful ideation and proposition of thoughts, ideals and incentives that keeps the operations going in a positive manner. Negotiations are the reasons how cross-cultural differences are dissolved to create a unified decision that ill help the parent company and its subsidiaries. The understanding of the socio-economic realities and welfare benefits helps the parent company create situations in which them helping the host country can help their business. Understanding the cultural context and local sensitivities in full comprehension, enables the parent country in executing their operations successfully. The negotiation and communication aspect further ensure that each and every member of the board is on the same page (Chmielecki, M., 2017).
  • Decision making in the cross cultural context is one of the most important parts of the operations. This involves a thorough understanding and complete assimilation of the local sensibilities in order to make an effective decision. Once regional market and their sales trends are understood it can be determined whether the same procedure should be applied to other markets. Understanding consumer decision making styles is what will determine the decision-making skills of managers. The cultural environment of a company will play huge role in influencing the decision making of the managers. A good manager will properly evaluate the problems and the various number of solutions to make a decision. In the cross-cultural context, the global manager chosen needs to have an understanding of different cultural and global markets to understand the implication of each decision as it is these decisions that influence the entire operational outcome of the company. The most crucial factors of decision making are Assessments and evaluations. Evaluations must be rational and judicial. It is known that the rationalization is limited due to the human and cultural factors. Substantial amount of experience and through idea of about probabilities an economy is needed in order to have effective decisions. Decision making should eventually be conducted in a manner that it benefits the company (Liu, X., 2019).
  • Organisational relationships are the direct extension of communication and negotiations, they are what eventually determines the success of the company. The emotional intelligence and the cultural intelligence of the key employees situated across the globe can determine the overall influence on the operations and sales. Understanding the depth of cultural diversity to make decision that will help in creation of reality where the needs and demands of each cultural are understood and reciprocated eventually reflects in the everyday business operations and helps in creation of communication frame work where everyone can be on the same page. Creating a sense of bond that encourages the employee to perform better while feeling mutual belonginess with the parent company can only be established through creation of meaningful organisational relationships. Team building activities open communication and active encouragement are some of the ways in which meaningful relationships can be created at work. The cultural and emotional intelligence of the global leader plays a huge role here their flexibility can lead to creation of proper examples in this context (Varoutsa, E. and Scapens, R.W., 2018).

3. Finally, you feel you need to reflect on the relative importance of your own national cultural background to understanding others from different cultures. What lessons can you learn about working in a multi-cultural environment?

In my experience I can see the clear relation between effective cross-cultural management and stimulation of creativity and inner potential of employees The power of diversity is something that must be leveraged enough to impact employees and company output. If a business has capability to touch lives across the globe all differences must be assimilated and celebrated to add the touch of personalization and uniqueness in the delivery of the service or product. On the team competency level. Diversity can be an extremely influential tool as it can give remarkable insights into different psyches that lead to important level decisions for operations. These numerous multi-faceted perspectives not only make the process more creative; they also help the company operations become more inclusive. Business today are intertwined and they need as much as input as possible in order to maximise performances. Managing the cultural diversity can provide such innate insights about the consumer trends of a particular country that it is almost impossible to detect these nuances through only one central origin of operations the fact that certain companies can appoint global leaders to meet the corporate and organisational demands in a subsidiary in another host country- it can make a huge impact on the pace of its global operations due to the regional advantage. The contextual significance becomes a crucial aspect in understanding the consumer trends of all the places and helps the parent company strategi sein an effective manner. The pace of adaption and the new ways of thinking can completely transform the product and the service to create a new paradigm that could be experienced globally thus transforming the company forever (Mahadevan, J., 2020).

I feel that the increasing level of awareness about the cultural and ethnic sensitivities about a region helps in bringing a fresh perspective into the operations and decision-making process that is necessary for avoiding stagnation. They help in provision of more relevant contest for structural and organisational change that the company might need in order to procure a competitive advantage on a global scale. And the managerial implications of a process like this must be dealt with utmost precision and attention to ensure a level of success at the global level (Boussebaa, M., 2020).

The two most significant factors in the cross-cultural management include communication and building of effective organisational relationship. This is what helps in the creation of atmosphere that meet the principles of the parent company and also the expectation of new region. Due to globalisation, the world is becoming smaller and smaller, and management team must take into account these cultural differences to form a team that will help them actualise their company goals in the most lucrative manner possible.

Taking a proactive approach in accepting the heterogeneity that comes with cross cultural management will enable companies to stimulate the growth process and create exciting opportunities for people across the globe. The sooner the companies understand the relevance of accepting the diversity the more easily will they be able to stimulate the efficiency and creativity in the company. Cross cultural management is pretty intensively creating opportunities of exposure for talented individuals across the globe who do not need to worry about their nationality. The qualification and individual capabilities of an individual can help them attain lucrative opportunities to serve in top managerial positions in these big companies.

This has become possible only because of the process of globalisation and liberalisation that has opened up the international market and created a universal economy. Due to this companies can now conduct businesses anywhere, which is why tuning in to the sensitivities of the local region becomes so essential. In this sense, diversity then becomes the systematic and planned commitment of the organisations to reward, recruit and retain a heterogenous mixture of employees. The cultural diversity in the work place is exercised through the co-existence of individual from various background and this management requires a concrete organisational culture that is not affected by race gender or nationality.

For the workforce to be fully integrated into the workplace, there needs to be absolutely no discrimination and there has to be a sense of belongingness that makes them want to work hard for the company.

References for The Role of Enterprise Risk Management

Varoutsa, E. and Scapens, R.W., 2018. Trust and control in evolving inter-organisational relationships. Accounting, Auditing & Accountability Journal.

Liu, X., 2019. The role of enterprise risk management in sustainable decision-making: A cross-cultural comparison. Sustainability11(10), p.2939.

Boussebaa, M., 2020. From cultural differences to cultural globalization: towards a new research agenda in cross-cultural management studies. critical perspectives on international business.

Chmielecki, M. and Sulkowski, L., 2017. NEGOTIATION METAPHORS IN A CROSS-CULTURAL SETTING-RESEARCH FINDINGS FROM CHINA, IRELAND, POLAND AND THE UNITED STATES. Economic and Social Development: Book of Proceedings, pp.553-560.

Gullestrup, H., 2009. The complexity of intercultural communication in cross-cultural management. Journal of Intercultural Communication, (6).

Moore, F. and Mahadevan, J., 2020. Ethnography and cross-cultural management. The SAGE Handbook of Contemporary Cross-Cultural Management, p.127.

Bird, A. and Mendenhall, M.E., 2016. From cross-cultural management to global leadership: Evolution and adaptation. Journal of World Business51(1), pp.115-126.

Mahadevan, J., 2020. The concept of culture in cross-cultural management: genealogical considerations. SAGE Handbook of Contemporary Cross-Cultural Management. London: SAGE.

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