cross cultural analysis

Submitted to: Mr. Humayun Zafar

Submitted By:

Abdullah Soomro (10658)Ammar Khan (10018)Misbah Saleem (4258)Qurat-ul-ain Rind (10603)Sonia Chagani (10068)

December 14, 2014

Cross-Cultural Analysis

In the light of Cross-cultural communication, Knowledge Management, Human Resource Management and Leadership

Cross-cultural Analysis

Letter of Transmittal

Mr. Humayun ZafarInstitute of Business ManagementKorangi Creek,Karachi-75190

We are pleased to submit our report on the topic “Cross-cultural Analysis” at Institute of Business Management (IoBM).

During all the phases and stages of report research, writing and analyzing the report, we gained useful knowledge about the subject.

We as a group have tried our level best to cover our targeted aspects of the subject and we hope that this report will serve its purpose. All rules and regulations for the preparation of the formal report have been taken into consideration.

We would dearly like to thank you for the faith you showed in our capabilities and the encouragement you gave us when assigning us the report. If there is anything else you wish to know, we will be glad to assist. Please accept our report contentedly and without any regrets.

Thanking you,

Abdullah Soomro (10658)Ammar Khan (10018)Misbah Saleem (4258)Qurat-ul-ain Rind (10603)Sonia Chagani (10068)

Page 1 of 38


Letter of Acknowledgement

We would like to express our whole hearted thanks to Almighty Allah by whose grace and blessings

we have the knowledge; insight and opportunity to complete this report.

Most importantly, we are grateful to our instructor, Mr Humayun Zafar, for sharing with us his

invaluable insights regarding comparative management practices during the course of this semester

that enabled us to write this report.

Page 2 of 38


Contents

Cross-cultural Analysis – An Introduction............................................................................................5

Different Definitions of culture..........................................................................................................5

Different models of cross-cultural analysis........................................................................................5

Characteristics of Culture..................................................................................................................5

Cross Cultural Communication.............................................................................................................6

Strong and Good Collaboration is a Must..........................................................................................6

Cross-Cultural Communication – The New Way................................................................................6

Understanding Diversity of Cultures..................................................................................................7

Developing Awareness of Separate Cultures.....................................................................................7

Tolerance Demand............................................................................................................................8

Keeping it Simple...............................................................................................................................8

Take Help if You Need It....................................................................................................................9

International Organizations and Operations.....................................................................................9

Findings.......................................................................................................................................10

Cross-cultural Knowledge management............................................................................................10

Towards redefining cross-cultural management as knowledge management................................11

Three ways of looking at culture as management knowledge.........................................................11

Why Knowledge Management is Important to the Success of your Company................................12

Three key reasons why actively managing knowledge is important to a company’s success..........12

Cross-cultural Diversity in Knowledge Management.......................................................................13

American.....................................................................................................................................13

Japanese......................................................................................................................................13

European.....................................................................................................................................13

China............................................................................................................................................14

A Successful Cross-Cultural Knowledge Management Model..........................................................15

Selected Cross-Cultural Factors in Human Resource Management...................................................16

Introduction.....................................................................................................................................16

Business Case for Cross-Cultural HRM.............................................................................................17

Cultural Value Dimensions...............................................................................................................17

Corporate and Organizational Cultures...........................................................................................19

Page 3 of 38


Building Business Relationships.......................................................................................................20

Mini-Case Study #1:.....................................................................................................................21

“The Indian Story”.......................................................................................................................21

The Role of Language......................................................................................................................21

Cultural Perceptions of Organizational Justice................................................................................22

Cross-Cultural Decision-Making.......................................................................................................24

Cross-Cultural Performance Feedback.............................................................................................25

Mini-Case Study #2:.....................................................................................................................26

Cross-Cultural Performance Feedback.........................................................................................26

Developing Global Mindset.............................................................................................................27

Career Perspectives Across Cultures................................................................................................28

Cross Cultural Leadership...................................................................................................................29

Creating Cross-Culturally Competent Leaders for Global Teams.....................................................30

Conceptual framework of cross-cultural competence.................................................................30

Explanation..................................................................................................................................30

McGill University’s Case Study.........................................................................................................30

Leadership challenges in cross cultural ventures.............................................................................30

An EHS first story from Alcan...........................................................................................................30

History of Alcan...........................................................................................................................32

Making EHS a priority at Alcan, Ningxia.......................................................................................32

The Global Aluminum Industry....................................................................................................32

Major Environmental challenges.................................................................................................32

Environmental Benefits...............................................................................................................33

Creation of the Joint Venture Alcan Ningxia................................................................................33

Management of the Joint Venture..............................................................................................33

Analysis of the Case.....................................................................................................................33

References...........................................................................................................................................36

Page 4 of 38


Cross-cultural Analysis – An Introduction

Different Definitions of culture“Culture is that complex whole which includes knowledge, belief, art, morals, law, custom, and any

other capabilities and habits acquired by man as a member of society."

“Culture is the systems of knowledge shared by a relatively large group of people”.

“Culture in its broadest sense is cultivated behavior; that is the totality of a person's learned,

accumulated experience which is socially transmitted, or more briefly, behavior through social

learning”

*A culture is a way of life of a group of people--the behaviors, beliefs, values, and symbols that they

accept, generally without thinking about them, and that are passed along by communication and

imitation from one generation to the next”.

*Culture is symbolic communication. Some of its symbols include a group's skills, knowledge,

attitudes, values, and motives. The meanings of the symbols are learned and deliberately

perpetuated in a society through its institutions”.

Different models of cross-cultural analysisThe ‘Iceberg’ and the ‘Onion’ models are widely known. The popular ‘Iceberg model’ of culture,

identifies a visible area consisting of behavior or clothing or symbols and artifacts of some form and

a level of values or an invisible level.

‘Onion’ mode’ have a set of four layers, each of which includes the lower level or is a result of the

lower level. According to this view, ‘culture’ is like an onion that can be peeled, layer-by layer to

reveal the content.

Hofstede sees culture as “the collective programming of the mind which distinguishes the members

of one group or category of people from another.”

Cross-cultural analysis often plots ‘dimensions’ such as orientation to time, space, communication,

competitiveness, power etc., as complimentary pairs of attributes and different cultures are

positioned in a continuum between these.

Characteristics of CultureCulture has five basic characteristics: It is learned, shared, based on symbols, integrated, and

dynamic. All cultures share these basic features.

Page 5 of 38


Culture is learned. It is not biological; we do not inherit it. Much of learning culture is

unconscious. We learn culture from families, peers, institutions, and media. The process of

learning culture is known as enculturation. While all humans have basic biological needs

such as food, sleep, and sex, the way we fulfill those needs varies cross-culturally.

Culture is shared. Because we share culture with other members of our group, we are able

to act in socially appropriate ways as well as predict how others will act. Despite the shared

nature of culture, that doesn’t mean that culture is homogenous (the same). The multiple

cultural worlds that exist in any society are discussed in detail below.

Culture is based on symbols. A symbol is something that stands for something else. Symbols

vary cross-culturally and are arbitrary. They only have meaning when people in a culture

agree on their use. Language, money and art are all symbols. Language is the most

important symbolic component of culture.

Culture is integrated. This is known as holism, or the various parts of a culture being

interconnected. All aspects of a culture are related to one another and to truly understand a

culture, one must learn about all of its parts, not only a few.

Culture is dynamic. This simply means that cultures interact and change. Because most

cultures are in contact with other cultures, they exchange ideas and symbols. All cultures

change, otherwise, they would have problems adapting to changing environments. And

because cultures are integrated, if one component in the system changes, it is likely that the

entire system must adjust.

Cross Cultural Communication

Strong and Good Collaboration is a MustIt's no secret that today's workplace is quickly becoming large, as the company nature expands to

contain assorted geographic locations and span countless cultures. What can be tough, though,

understand how to converse efficiently alongside people who articulate one more speech, or who

rely on disparate way to grasp a public goal.

Cross-Cultural Communication – The New Way The Internet and present knowledge have opened up new marketplaces that permit us to advance

our companies to new geographic locations and cultures. And given that it can nowadays be as facile

to work alongside people remotely as it is to work face-to-face, cross-cultural contact is increasingly

the new norm.

Page 6 of 38


After all, if contact is electronic, it's as facile to work alongside someone in one more state as it is to

work alongside someone in the subsequent town.

And why check yourself to working alongside people inside convenient steering distance after, just

as conveniently, you can work alongside the most insightful people in the whole world?

For those of us who are innate English-speakers, it is opportune that English seems to be the speech

that people use if they desire to grasp the widest probable audience. Though, even for innate English

talkers, cross-cultural contact can be an issue: Just observer the public incomprehension that can

from time to time arise amid people from disparate English-speaking countries.

Understanding Diversity of CulturesGiven disparate traditional contexts, this brings new contact trials to the workplace. Even after

operatives placed in disparate locations or workplaces articulate the same speech (for instance,

correspondences amid English-speakers in the U.S. and English-speakers in the UK), there are a little

traditional contrasts that ought to be believed in a power to optimize contact amid the two parties.

In such cases, a competent contact strategy begins alongside the understanding that the sender of

the memo and the receiver of the memo are from disparate sophistications and backgrounds. Of

sequence, this introduces a precise number of uncertainties, making contact even extra complex.

Without becoming into sophistications and sub-cultures, it is perhaps most vital for people to

comprehend that a frank understanding of traditional diversity is the key to competent cross-cultural

communications. Lacking vitally studying individual sophistications and tongues in detail, we have to

all discover how to larger converse alongside people and clusters whose early speech, or speech of

choice, does not match our own.

Developing Awareness of Separate CulturesHowever, a little discovering the basics concerning sophistication and at least something concerning

the speech of contact in disparate states is important. This is vital even for the frank level of

understanding needed to involve in appropriate greetings and physical link that can be a complex

span inter-culturally. For instance, kissing a company associate is not believed an appropriate

company exercise in the U.S., but in Paris, one peck on every single cheek is an satisfactory greeting.

And, the stable handshake that is extensively consented in the U.S. is not understood in all

supplementary cultures.

While countless firms nowadays proposal training in the disparate sophistications whereas the firm

conducts company, it is vital that operatives conversing across sophistications exercise patience and

Page 7 of 38


work to rise their vision and understanding of these cultures. This needs the skill to discern that a

person's own behaviors and replies are oftentimes socially driven and that as they could not match

our own, they are socially appropriate.

If a head or manager of a team that is working across sophistications or incorporates people who

articulate disparate tongues, exercise disparate faiths, or are associates of a area that needs a new

understanding, he or she needs to work to communicate this.

Consider each distinct needs the people on your team could have. For instance, they could discern

disparate celebrations, or even have disparate hours of operation. Be mindful of period zone

contrasts and work to retain everyone encompassed cognizant and respectful of such differences.

Generally articulating, patience, courtesy and a bit of curiosity go a long way. And, if you are unsure

of each contrast that could continue, plainly ask team members. Again, this could best be completed

in a one-on-one setting so that no one touches "put on the spot" or self-conscious, perhaps even

humiliated, concerning debating their own needs or contrasts or needs.

Tolerance Demand Next, nurture and demand understanding and agreement. In acting this, a slight education will

normally do the trick. Clarify to team associates that the portion of the team that works out of the

Australia workplace, for example, will be working in a disparate period zone, so electronic contact

and/or revisit phone calls will experience a delay. And, associates of the India workplace will

additionally discern disparate celebrations (such as Mahatma Gandhi's Birthday, on October 2).

Most people will worth the data and will work hard to comprehend disparate needs and disparate

way utilized to grasp public goals. Though, after this is not the case, managed by example and make

it clear that you anticipate to be pursued down a trail of open-mindedness, agreement and

tolerance.

Keeping it SimpleWhen you converse, retain in mind that even nevertheless English is believed the global speech of

company; it is a blunder to accept that every single businessperson articulates good English. In fact,

merely concerning half of the 800 million people who articulate English learned it as a early

language. And, those who articulate it as a subsequent speech are frequently extra manipulated

than innate speakers.

When you converse cross-culturally, make particular efforts to keeping your contact clear, easy and

unambiguous.

Page 8 of 38


And (sadly) circumvent humor till you understand that the person you're conversing alongside "gets

it" and isn't insulted by it. Humor is notoriously culture-specific: Countless things that bypass for

humor in one sophistication can be perceived as grossly impolite in another.

Take Help if You Need ItFinally, if speech barriers present themselves, it could be in every single one's best attention to

retain a reliable, experienced translator.

Because English is not the early speech of countless global businesspeople, their use of the speech

could be peppered alongside culture-specific or non-standard English phrases, that can hamper the

contact process. Again, possessing a translator on hand (even if just across the early periods of work)

could be the best resolution here. The translator can aid everyone encompassed to understand

traditional and contact contrasts and safeguard that all parties, even though of geographic locale

and background, come jointly and stay jointly across prosperous undertaking completion.

Furthermore, Cross cultural Communication is also explained by Ephraim Okoro, a PHD from Harvard

University in the following articles;

International Organizations and Operations: An Analysis of Cross-Cultural Communication Effectiveness and Management OrientationThe globe nature of business has come to be exceedingly convoluted as extra and extra firms and

confidential entrepreneurs contest to increase their marketplace allocate and differentiate their

brands in the globe marketplace. Globalization has increased customer awareness, crafted new

demands and standards, and made states extra interdependent. It is nowadays imperative that

companies in disparate states rise their sensitivity and respect for one another’s traditional contrasts

in order to benefit from the development of global company in the twenty- early century.

Corporations that have embraced appropriate acculturation strategies, retained competent

traditional awareness ideal, and evaded ethnocentric association style in their development and

development efforts have been successful. Supplementary studies recognized the main reasons of

the demise of globe company ventures, quoting their managers’ lack of intercultural skills, wreck to

involve in cross-cultural transactions, inability to converse efficiently in the globe marketplace,

unacceptable exercise of company ethics and etiquette, and nonexistence of compromise

agreement. Globe managers ought to institute cross-cultural training in their abilities in order to

raise effectiveness across sophistications, come to be effectual cross-cultural negotiators, and

sensitize to the benefits of counterparts.

Page 9 of 38


This report provides an analytical framework and recommendations for adaptation of multinational

association strategies for sustainable company competitiveness in the present awaken of globe

economy.

FindingsAs company associations commence on globe ventures and competitiveness, grasping traditional

contrasts, inter-cultural contact, and cross traditional arbitration and decision-making are the most

public trial to global management. Accomplishment or wreck in grasping a varied or multicultural

workforce mainly depends on the skill of managers at all levels to converse efficiently alongside

people from disparate backgrounds and nationalities, and displaying respect for traditional

differences. Global company is the outgrowth of globalization that is driven chiefly by commercial

interdependency and advances in knowledge, but the accomplishment in globe company ventures

will be altered by the inability of global managers to comprehend appropriate company etiquette,

habits, and benefits demanded to conduct company amid states of the world.

Indeed, a number of association and contact studies powerfully indicate that an understanding

traditional contrasts as well as competent intercultural contact competence will not merely aid

companies to connection the contact gap amid states encompassed in global transactions

arbitrations, but it will additionally enable multinational and multicultural managers to prosper in

their assorted external procedures, globe combined ventures, and crucial alliances. Because contact

is culture-bound and sophistication specific, it is vital that states encompassed in global company

dedicate adequate period to discover, comprehend, and worth the disparate ethical and traditional

customs and appropriate etiquette for leading company deals on a globe scale.

The buy of these competitive globe skills and competences will enable high-growth companies

institute permanent crucial connections and retain their workforce for longer eras of time. In light of

the gains and complexities associated alongside globalization and multinational procedures,

nurturing cross-cultural awareness and skills, and growing multicultural sensitivity and globe attitude

by managers will lead to sustainable development in global business.

Cross-cultural Knowledge ManagementStrategies and processes designed to identify, capture, structure, value, leverage, and share an

organization's intellectual assets to enhance its performance and competitiveness.

Knowledge management (KM), defined broadly as a loose set of ideas, tools and practices centering

on the creation, communication and utilization of knowledge in organizations.

Page 10 of 38


Knowledge management is the practice of identifying, creating, communicating, socializing,

measuring and improving knowledge to support strategic objectives.

Knowledge management is the practice, process and culture of creating, sharing and improving an

organization's knowledge.

Towards redefining cross-cultural management as knowledge management

The importance of culture in the knowledge management domain is widely recognized. In

discussions of knowledge management, knowledge economy, and the knowledge based view of the

firm culture is prominently present. Culture is particularly seen as a potential source of barriers for

processes such as knowledge sharing and development.

A knowledge management perspective gives a new approach to cross-cultural management. Under

this perspective cross-cultural management is the art of appreciating the value and interrelationship

between three kinds of cultural knowledge. Implications of this concept are that it challenges HRM

as the ‘rightful’ home of cross-cultural management, creates meaningful categories for knowledge

managers, and presents an approach to culture that were constructed for a by-gone corporate era.

Three ways of looking at culture as management knowledge

In order to understand culture as a knowledge resource which firms can use to competitive

advantage, it is necessary to deconstruct culture into usable categories.

General cultural knowledge refers to freely available knowledge about cultures. This kind of

knowledge is explicit and is already available in on-line or printed reference sources such the world-

wide web, encyclopedias, country surveys in newspapers and so forth.

Specific cultural knowledge is that which is specific to a given source of common knowledge. It is

subjective in the sense that it is selected for relevance to the firms’ operations. Such knowledge can

be tacit and explicit according to the convention, but perhaps more crucial is the degree of relevant

pre-existing knowledge on the part of those who gather and interpret it.

Cross-cultural know-how is a part of a firm’s core competence, whereby its knowledge-sharing and

organizational learning contribute to international competitive advantage. Cross-cultural know-how

is a store of learning for cross-cultural knowledge-sharing throughout companies’ entire webs of

relationships and is primarily internally created knowledge applied in cross-cultural interactions. It

may be derivative of the two other kinds of cultural knowledge, but this kind of know-how is often

subjective and experiential. This kind of know-how may have a very high implicit content. It is

Page 11 of 38


knowledge that is passed from head to head. It facilitates interaction, informs participative

competence and stimulates cross-cultural collaborative learning.

Why Knowledge Management is Important to the Success of your Company

Managing cultural knowledge is crucial to success in cultivating and maintaining long-term business

relationships in multicultural environments. Knowledge Management provides the long needed

technological support for cross-cultural management in the tedious task of improving knowledge

sharing in multi-national companies and using knowledge effectively in international joint ventures.

Multinational corporations, which operate across international frontiers on a global level, must

manage their knowledge resources and their multi-cultural employees. It looks at how individuals of

different nationalities and cultures must operate as a team with some control of the multi-national

corporation's knowledge database. It shows how knowledge is the greatest of all assets, and how

the provision of cross-cultural experiences should always be available.

Multinational corporations are mediators of knowledge, values and experience. Numerous cases

reflect these shortcomings with respect to understanding the complexity of rooted cross-cultural

knowledge, notions of trust, dealing with uncertainties, lack of personal connectedness or

relationships, and geographical as well as cultural distance.

Three key reasons why actively managing knowledge is important to a company’s success are:Facilitates decision-making capabilities:

GE’s Corporate Executive Council (CEC) is an example of how one company put a knowledge

management system in place to help executives cut through the noise, share information, and

improve their decision-making. The CEC is composed of the heads of GE’s fourteen major businesses

and the two-day sessions are forums for sharing best practices, accelerating progress, and discussing

successes, failures, and experiences (Garvin, 2000, p. 195). While information overload or needing

knowledge from people in other parts of the company for decision-making can handicap managers,

putting in place knowledge management systems can facilitate better, more informed decisions.

Builds learning organizations by making learning routine:

The U.S. Army’s After Action Reviews (AARs) are an example of a knowledge management system

that has helped build the Army into a learning organization by making learning routine. This has

created a culture where everyone continuously assesses themselves, their units, and their

organization, looking for ways to improve. After every important activity or event, Army teams

Page 12 of 38


review assignments, identify successes and failures, and seek ways to perform better the next time.

This approach to capturing learning from experience builds knowledge that can then be used to

streamline operations and improve processes.

Stimulates cultural change and innovation:

Actively managing organizational knowledge can also stimulate cultural change and innovation by

encouraging the free flow of ideas. For example, GE’s Change Acceleration Process (CAP) program

includes management development, business-unit leadership, and focused workshops. CAP was

created to not only “convey the latest knowledge to up-and-coming managers” but also “open up

dialogue, instill corporate values, and stimulate cultural change”. In this complex, global business

environment, these types of knowledge management programs can help managers embrace change

and encourage ideas and insight, which often lead to innovation, even for local mom and pop

business owners.

Cross-cultural similarities and differences between Knowledge Management approaches/Cross-cultural Diversity in Knowledge Management

AmericanAmerican approach is based on the idea that knowledge, capital and labor are the strategic sources

of sustainable competitive advantage for companies, branches of industry and for the whole nations.

In the USA the main practical KM issues are collection, distribution, re-use and measurement of

already existing “explicit” (encoded) knowledge and information, i.e. formation and use of the

knowledge database. In the USA KM is implemented by means of technologies, with the language of

economics, while social factors, power and conflicts are not paid much attention to. The main

feature of the USA knowledge economy is information processing. European and Japanese

approaches are totally different

JapaneseThe emphasis is on new knowledge creation, which, in the long run, is the main source of

innovations. New knowledge creation is a dynamic process where personality is important,

therefore, it cannot be managed in a command-and-control manner.

EuropeanKnowledge could have multiple meanings and this is one of the basic statements of

deconstructivism. Knowledge and work connected with it are regarded as discourses. Discourse

means speech/understanding embodied into a certain communicative situation and therefore, it is a

Page 13 of 38


category with distinctive social content. Discourse appears when various levels of power,

institutions, mastery and collective knowledge interact. As a result, there is a need for a clear

approach to conflict regulation and providing legitimacy.KM is a political discourse, which helps

particular groups of agents(possessing knowledge) to legitimate, create strategies and distribute

resources.

ChinaIt is willingness and capability to learn that makes a person a human being; and knowledge is one of

the main virtues. The Chinese believe that the best approach to KM is to provide knowers with

various methods, techniques and skills, create flexible organizational structure, communication

opportunities, and then leave the knowing agents to learn, create, share and apply knowledge in the

way they feel comfortable.

Analyzing similarities and differences between various KM approaches, we can see that in the USA

Knowledge Management is supported by technologies, with the help of the language of economy,

while social factors, power and conflicts are paid less attention to. In Japan implicit knowledge is

emphasized, while technologies act just as means for its transfer and accumulation. The difference

between American and European approaches is that in the American style politics, power and

conflicts tend to be seen as negative for organizational performance: “What tends to doom projects

is fighting over who owns the knowledge, then the project is doomed”. In the European approach

such questions are not so important as well as issues of dividing knowledge into implicit and explicit.

In China KM approach is centralized and integrated, it synthesizes technologies, human knowledge

and institutional initiatives.

Distinctive Features of KM

ApproachAmerican Japanese European Chinese

MissionI am successful, therefore I exist

I love, therefore I exist

I gain practicalexperience,

therefore, I exist

I am learning,therefore I exist

Mentality Individualism Groupism Deconstructivism Pragmatism

Objective Advantage in the nearest future

Long-term advantage Legitimacy Wisdom

Focus Explicit, encodedknowledge

Tacit, subjective knowledge Useful knowledge Concealed

knowledge

Strategy Knowledge use Creativity, transformation Integration

Strategy of reforms,

probation

Page 14 of 38


A Successful Cross-Cultural Knowledge Management Model Effective knowledge management systems are essential components for establishing global cross-

cultural competence. They provide the ability to codify knowledge and personal experience, making

it available to the entire organization.

The following model, developed by Global Dynamics Inc., demonstrates how a knowledge

management system establishes cross-cultural competence within a global organization:

This knowledge management model demonstrates a systematic approach to capturing and retaining,

in a central database, all of the global information obtained through every training program that has

a global and cross-cultural component. The system enables deployment of this information across all

groups within the corporation, crossing silos and functional areas through the database and internal

social networking.

For example, all information about a specific country, including all the people working with or in that

country, is in that database. Because there may be more than one group working in a particular

country, personnel are encouraged to use the database to identify those individuals and connect

through appropriate groups in internal socially networks. Through these groups, they can discuss

their experiences, challenges, successes and tap into (and add to) the company’s collective

intelligence about the particular country.

Deliver a core cross-cultural competency course for all employees which captures and

categorize each participant’s global challenges, issues, personal goals, case studies, “lessons

learned” and e-mail addresses to form an electronic community.

Establish curriculum ‘paths’ based on building specific core competencies. For example,

creation of a path focused on building cross-cultural teaming excellence while other paths

could be focused on developing future global leaders, negotiators and project managers.

Provide for the ability for each associate to create their electronic, competency roadmap

and skills component. Systematically track individual progress toward competency goals.

Establish an International Assignment “series of interventions” in support of Expatriates and

Repatriates.

Record “lessons learned” throughout each international assignment.

Capture international issues and trigger personal coaching based on individual

circumstances.

Page 15 of 38


Analyze the information to identify, interpret trends, and identify process improvement

opportunities.

Establish a cross-cultural library of blended learning courseware consisting of in-house

developed programs and available through third-party partnerships that support the

roadmap concept.

“Query” the collective knowledge derived from the case studies, “lessons learned” and

personal/business experiences maintained in the database.

Selected Cross-Cultural Factors in Human Resource Management

Introduction

As a concept and as a reality, culture is broad and multifaceted. On a daily basis, culture influences

who we are—as individuals, families, communities, professions, industries, organizations and nations

—and how we interact with each other within and across regional and national borders. Defined as a

set of values and beliefs with learned behaviors shared within a particular society, culture provides a

sense of identity and belonging. From language, communication styles, history and religion to norms,

values, symbolism and ways of being, “culture” is everywhere.

Human resource management is the formal structure within an organization responsible for all

decisions, strategies, factors, principles, operations, practices, functions, activities and methods

related to the management of people In domestic and global workplace settings, people in

organizations reflect their respective cultures. As shifting demographics bring together people of

many cultural backgrounds, human resource management (HRM) must be thoughtfully examined—

and sometimes altered—to support organizational goals. SHRM Special Expertise Panel members

point out that for sustainability, organizational leaders must expand their perspectives from a local

to a worldly view. SHRM’s 2008 Workplace Forecast highlights several trends in culture that will

likely have a major impact on the workplace:

1. heightened awareness of cultural differences in domestic and global workplaces;

2. greater need for cross-cultural understanding/savvy in business settings;

3. managing talent globally;

4. greater emphasis on global leadership competencies; and

5. increased use of virtual global teams.

Page 16 of 38


Thus, HR professionals experienced in workplace diversity and cross-cultural communication are

well-positioned to develop and implement culturally appropriate HRM strategies, policies and

practices. While not exhaustive, this Research Quarterly focuses on selected cross-cultural factors in

HRM in today’s workplace and provides insights for HR to better serve the needs of the organization.

Business Case for Cross-Cultural HRM

With the advent of globalization, research on cross-cultural organizational behavior has become a

pathway to understand the dynamics of multicultural domestic and international workplaces. In fact,

successful organizations of the 21st century require leaders who understand culturally diverse work

environments and can work effectively with different cultures that have varying work ethics, norms

and business protocols. Yet, diverse cultures create HRM challenges. As Lisbeth Claus, Ph.D., SPHR,

GPHR, associate professor of global HR at Willamette University, points out, “the HRM challenges lie

between the various types of cultures—the cultures of emerging and developed countries and the

growing heterogeneity of the workforce in terms of multiculturalism.”

Gaining cross-cultural competence takes time, education, experience, openness and sensitivity.

When people lack intercultural skills, miscommunications can damage business relationships,

deadlines can be missed, projects may fail and talented people will go to the competition. Key HR

responsibilities are to understand how cross-cultural factors interact with HRM, be the conduit for

organizational learning for cross-cultural intelligence and foster cross-cultural communication

throughout the organization.

Cultural Value Dimensions

Cross-cultural intelligence is the ability to switch ethnic and/or national contexts and quickly learn

new patterns of social interaction with appropriate behavioral responses. This competence is

essential to work effectively in multicultural environments. Thus, linking future career paths and

global business success with cultural competence is important for HR to emphasize, with the goal

that managers are motivated to acquire new behaviors and skills and understand the benefits of

learning from different cultures. To become culturally competent, the first step is to have a solid

understanding of one’s own values and how they shape cultural identity. Within this process, it is

also important to realize that different cultures often exhibit different values.

Cross-cultural management researchers and theorists (i.e., Edward Hall, Geert Hofstede and Fons

Trompenaars) have developed cultural value dimensions, often within the realm of comparing

national cultures (see Figure 1).

Page 17 of 38


Today, many of these terms are used to explain cross-cultural differences in the workplace. For the

purpose of discussion, several major cultural value dimensions are defined below:

1. High power distance indicates that hierarchy is important.

2. Uncertainty avoidance is achieved by behavior that results in fewer unforeseen

consequences.

3. High-context cultures rely upon an internalized social context and/or physical environment

(such as body language) and face-to-face communication for all or a large part of the

message (e.g., indirect, subtle, ambiguous), whereas low-context cultures rely on direct

messages (e.g., clear, stated in words, with emphasis on time management, punctuality and

deadlines).

4. Collectivism refers to societies in which the group is valued over the individual and the

individual’s responsibility to the group overrides the individual’s rights; individualism refers

to societies that emphasize individual achievements and rights.

5. Long term orientation indicates that cultural values are future-looking, including thrift,

perseverance, humility/shame, and observe hierarchical relationships, whereas short-term

orientation values look to the past, such as respecting tradition.

The concept of “face” is yet another term essential for understanding cross-cultural communication.

Face is a sense of self-respect in an interaction and may be related to social status, a projected

identity and/or a communication phenomenon. Facework strategies include verbal and nonverbal

cues, acts of self-preservation and management impression interaction. In Chinese society, for

example, the concept of guanxi is that of personal relationships, trust and returning favors to

support a network of influence.

Page 18 of 38


Through cultural value dimensions, HR will gain a greater awareness of miscommunication or

cultural conflict that may occur in the multicultural workplace. The cultural factors outlined in Figure

2 offer another way to consider key cultural differences.

Corporate and Organizational Cultures

The culture of an organization’s headquarters may highly influence the overall organizational

culture. Specific factors determine the shape of corporate culture:

1. the relationship between employees and the company;

2. the hierarchical system of authority; and

3. the overall view of employees about the company’s future, including its mission and goals,

and their respective roles in the organization.

According to cross-cultural researchers and management consultants Fons Trompenaars and Charles

Hampden-Turner, there is a link between corporate and national cultures. Organizations can be

classified into four different ideal-types of corporate culture, based on their focus on

tasks/relationship and the extent of hierarchy:

1. the family;

2. the Eiffel Tower;

3. the guided missile; and

4. the incubator

Page 19 of 38


These models of corporate culture provide insights as to why HRM policies and programs differ. In

the family model, a high-context culture, the leaders set the tone. This model gives high priority to

doing the right things rather than doing things right. Pleasing one’s superior, for example, is

considered a reward in itself. Within this corporate model, some HRM policies, such as pay for

performance, are viewed as threatening to family bonds. Countries that often use the family model

include Japan, Italy, France and Spain. The Eiffel Tower model—contrary to the family model, where

relationships are most important—is based on prescribed roles and functions within a rigid system

(e.g., Germany). In this model, people are viewed as capital and cash resources. Typical HRM

strategies in the Eiffel Tower culture include workforce planning and performance appraisal systems.

The guided missile model is egalitarian, impersonal and task-oriented (e.g., United States, United

Kingdom). The focus is on achieving the end goal (“do whatever it takes”), and the value of

employees is in how they perform and to what extent they contribute to the overall outcome. For

example, teams serve as vehicles to accomplish goals and are disbanded once the goal is reached.

HRM strategies focus on management by objective and pay for performance. At the other end of the

spectrum, the incubator model has a different philosophy, wherein the fulfillment of individuals is

more important than the organization. The structure is egalitarian, personal and individualistic, such

as entrepreneurial firms in Silicon Valley in California and many Scandinavian companies, where the

goal is innovative products or services. HRM strategies focus on rewards for innovation. As

illustrated through these four corporate culture models, approaches to work, authority, problem

solving and relationship building differ. This information provides HR with additional insight when

working with companies of different corporate cultures.

Building Business Relationships

Building optimal business relationships requires global fluency. Global fluency—defined as “facility

with cultural behaviors that help an organization thrive in an ever-changing global business

environment”—is a competitive advantage to establish and maintain good business relationships.

To promote people working effectively with those of other cultures, cross-cultural training assists

employees in becoming knowledgeable about cross-cultural communication in terms of their own

cultural values, behaviors and assumptions, and those of other cultures. Cross-cultural

communication also includes global business etiquette—from greeting behaviors, exchanging

business cards and toasting at business dinners to work attitudes, appropriate work attire and

nonverbal communication. To not cause offense, it is helpful to be aware of differences in greetings,

such as the handshake. Another differing communication style is the use of silence, a form of

nonverbal communication. In high-context cultures, such as in Asian countries, silence indicates

Page 20 of 38


thoughtfulness in decision-making. In contrast, people in low-context cultures, such as the dominant

culture in the United States, are uncomfortable with silence and tend to fill the void with ‘small talk,’

such as comments about the weather. People establish rapport in accordance with their cultural

values. Based on social capital theory and the importance of social networks, a recent study explored

intercultural communication strategies for business relationship building through interviews with

business executives in China, India, New Zealand and South Africa. The findings indicate that building

a business relationship is defined within the sociocultural and economic contexts of the respective

cultures and that depending on the culture, different strategies are used to build and maintain

business relationships. The following mini-case study demonstrates a success story from the

viewpoint of the Indian culture.

Mini-Case Study #1:

“The Indian Story”

A senior manager works at an Indian company that sells a broad array of products (groceries, liquor,

durable goods) and describes his philosophy Building optimal business relationships requires global

fluency about relationship building with an example from his company:

“To successfully achieve our business goals, establishing and maintaining relationships with

distributors is an essential strategy. Some of our customers are large firms, managed by graduates

from the elite university I attended. This link creates strong networking opportunities. Once this jan

pehchan (connection) is made, it is critical to invest time in this relationship, and I always counsel my

subordinates on the importance of relationship building. One employee in particular is very good at

maintaining relationships. He works hard to do so, even going to the airport or train station without

prior arrangement to meet clients upon their arrival, once at 5 a.m.! This effort shows that he is

sincere and demonstrates how far he will go to maintain this valuable relationship. This personalized

service adds to our commitment to nurture a long-term business relationship.”

Effective cross-cultural communication is necessary to build and maintain business relationships. To

support their organizations, HR professionals can develop HRM practices and policies that promote

cross-cultural training and reward managers for their part in educating employees on effective cross-

cultural communication.

The Role of Language

Today, communicating in the global marketplace requires new perspectives and new communication

skills. In fact, the appropriate use of language in cross-cultural settings often depends on the

Page 21 of 38


situation. Thus, when developing HRM policies, practices and initiatives, it is important to consider

the role of language in cross-cultural environments. For example, to roll out new initiatives

worldwide, it may be necessary (and often required by law) to translate HRM policies and programs

into other languages. Colgate- Palmolive Company is an example of an organization that has

effectively communicated key HRM programs to its global workforce. Keeping in mind the different

languages spoken in the firm, two critical HRM core value initiatives, Valuing Colgate People and

Managing with Respect, were translated into 10 languages. Valuing Colgate People includes a

section on the company’s business ethics, code of conduct and business practice guidelines. These

initiatives set the stage for the organization’s strategy to become a best place to work. When

working with people from different cultures and/or countries, organizational leaders must know how

to “read” body language, a key communication factor in high-context cultures. Misunderstanding

body language can lead to inaccurate expectations. With many Western companies now doing

business with India, a good example of a common cross-cultural difference is one of the head

gestures by Indians. As cross-cultural trainer and management consultant Craig Storti explains, the

Indian head gesture for “yes” appears similar to how Westerners shake their head to indicate “no.”

When seeing this gesture, Westerners may think that the Indian has disagreed, when that is not

necessarily so. Taking time to understand communication through body language can make the

difference in a positive or negative outcome. These various points are representative of the many

scenarios that require flexibility and knowledge about language and cross-cultural communication.

Finally, although the international language of business is English, not everyone speaks English

fluently. When non-native English speakers come in contact with native English speakers, the result

is often miscommunication.

International English, a relatively new term, describes a mode of communication increasingly used

in international business where non-native English speakers speak English with native English

speakers. International English requires the avoidance of culturally laden language, such as cultural

shortcuts, metaphors, jargon, slang and idiomatic phrases. U.S. Americans, for example, often use

metaphors with sports terms, such as “all the bases are covered” or “we want a level playing field,”

most of which are not understood by non-native English speakers. Interestingly, it takes time and

practice for native English speakers to become proficient with the use of International English and to

consciously avoid using phrases or terms that are culturally based.

Cultural Perceptions of Organizational Justice

Regarding fairness in the workplace, organizational justice is a central theme within the employee

relations domain. A fair workplace helps maintain employee commitment, contributes to job

Page 22 of 38


satisfaction and minimizes absenteeism and turnover. There are three broad categories of

organizational justice:

1. procedural justice (fairness of methods used);

2. interactional justice (the quality of treatment); and

3. distributive justice (perception of process and fairness of the outcome).

In a culturally diverse workforce, perceptions of justice may vary due to cultural values. A recent

study examined cultural factors that influence how employees form overall justice perceptions in the

United States, China, Korea and Japan. The study examined employee reactions in industry sectors

such as finance, education, service, information technology and manufacturing.

According to the study, the effect of perception of fairness on turnover is greater for Americans than

for Chinese or Koreans. Americans are more likely to leave their organization as a result of perceived

organizational injustice than are Japanese, Chinese or Korean employees. Yet, not all studies point to

differences regarding justice based on country culture. The results of one study suggest that cultural

dimensions should not be used as a generalization. This study considered whether individualist (low

power distance) or collectivist dimensions (high power distance) had the most impact on

organizational justice perceptions regarding employee work outcome relationships at a

multinational bank with Hong Kong Chinese and American employees. While employees from low

power distance cultures were more influenced toward perceived justice, a key finding was that the

perceptions of fairness were important to both groups. This study suggests that for managing in

different cultures, workplace justice and its corresponding positive effects are important, no matter

a country’s cultural values. Turnover is another key aspect related to organizational justice. In an

increasingly diverse workforce, turnover due to unfairness in the workplace is very costly. While

research on domestic and cross-cultural issues in relation to fairness in the workplace is relatively

new, studies demonstrate how insensitivity can damage work relations and result in increased

turnover. A recent study of U.S. employees found that more than 2 million managers and

professionals leave their jobs as a result of inappropriate and insensitive comments in their

organizations, costing U.S. employers $64 billion annually. The study highlights that illegal

discrimination is no longer the greatest threat when it comes to attracting, recruiting and retaining

talent. Rather, every-day inappropriate behaviors are the root cause of losing talented employees.

By ensuring that HRM policies and practices—including consequences for inappropriate behaviors in

the workplace—are fair, consistently applied and culturally appropriate, HR can create a work

environment that fosters respect, employee commitment and contribution. However, it should be

noted that not all localized policies and practices may be consistent with corporate policies.

Page 23 of 38


Cross-Cultural Decision-Making

Decisions in the workplace are influenced by cultural viewpoints, beliefs, assumptions and values.

Cultural values have an impact on why and how decisions are made and implemented. Although

cross-cultural decision-making is rarely a topic of discussion, this information provides valuable

insight for HR to improve communication in the workplace. Figure 3 illustrates cultural variations

involved in decision making, based on questions such as

1. do managers of different cultures view problems in similar ways;

2. do they seek out similar kinds of information to investigate problems;

3. do they come up with similar solutions;

4. are different strategies used to determine alternatives; and

5. do they implement their decisions in similar ways

Culturally influenced decision-making can be seen in various aspects of HRM. Change management is

one example where culture influences decision-making. In a culture that is future-oriented, such as

the United States, with strongly held beliefs about people’s ability to learn and change, HR creates

change management programs with the goal to be more productive and efficient in serving internal

and external customers (e.g., employee training programs on new technology). In contrast, in a

company with a hierarchical management style—common in Japan, for example— where major

decisions are made by a senior-level manager, HR would be unlikely to promote a program that

emphasizes team decision-making.

Whether in a domestic or global workplace, HR needs to be cognizant of cross-cultural decision-

making and the corresponding influence on HRM. By being aware of cultural differences in the

decision-making process (e.g., the reasons for making decisions, the various ways that decisions are

Page 24 of 38


made in different cultures, the party responsible for making those decisions—individuals, groups,

various levels within the organization—and the ways decisions are implemented), HR can better

gauge culturally appropriate decisions and work with managers of other cultures in the decision-

making process.

Cross-Cultural Performance Feedback

Lack of cross-cultural sensitivity in the performance appraisal process can result in negative impact

on communication, employee morale, teamwork and turnover. It is critical that managers be

culturally appropriate when assessing performance and delivering feedback. Additionally, to get

better performance results in culturally diverse employee populations, companies may need to re-

examine and redefine their performance standards to ensure cultural bias does not influence the

performance appraisal process. However, as the literature shows, performance management is

originally a Western practice. When coming from an international perspective, there are

complexities primarily due to cultural and structural constructs that may not directly match the

Western use of performance management.

Researchers Philip Harris and Robert Moran point out that at the cross-cultural level, how

performance is defined and judged is “culture-bound.” In an individualistic society, such as the

United States, performance is judged on productivity, timeliness, quality of output, job-specific

knowledge and proficiency, with emphasis placed on individual and work outcomes, not on the

group and work process. At the same time, culture influences the communication of performance

feedback. In a collectivist or high context culture, such as India and Japan, where in-group harmony

and interpersonal relationships are highly valued, it is recommended to give feedback in a manner

that is subtle, indirect and non-confrontational. Researchers suggest that for certain feedback

processes, such as 360-degree feedback, which involves explicit feedback, employees be trained to

understand and utilize such feedback, particularly if it does not match their cultural orientation of

communication. Presented by authors Milliman, Taylor and Czaplewski, the following mini-case

study illustrates a critical incident in which cultural differences in the performance feedback process

contributed to an unexpected response. This situation is an example of one that may commonly

occur without cross-cultural training about how feedback is perceived and received in different

cultural contexts.

Page 25 of 38


Mini-Case Study #2:

Cross-Cultural Performance Feedback

Fred, a team leader in software engineering at a U.S.-based multinational enterprise, leads a virtual

work group. His team is working on a new product and is under pressure to meet quality standards

and get the product to the marketplace. Some of his team members are located in Malaysia. Since

the team was provided with technology for global communications, such as electronic group

software and teleconferencing, the company did not provide cross-cultural training. Fred writes an

e-mail to his counterpart team leader, Hisham, in Malaysia to inform him that the testing process

must end and the next phase of the project must now go forward. Hisham does not respond to

Fred’s e-mail for many days, and the Malaysian team continues to do testing on the product.

For the final stage of the project, Fred flies to Malaysia. Two weeks after the U.S. deadline has

passed, the project is successfully completed. Within the company’s goal to operate as a global

company, one of the new practices is 360-degree feedback. In his supervisory role, Fred gathers the

required feedback and then meets with Hisham. Fred informs Hisham that while he performed well

on the project, there were issues upon which he could improve. Fred documents the feedback in an

e-mail to Hisham, with a copy to Hisham’s supervisor in Malaysia. From Fred’s viewpoint, he has

completed the performance appraisal in accordance with the company standards, feeling that he has

been both fair and transparent. Back in the United States the following week, Fred is quite surprised

to learn that Hisham, immediately following the performance appraisal meeting, applied for a

transfer to another team. Fred recalls that Hisham was quiet during the performance appraisal. He

thinks that the transfer is for the best, particularly if Hisham cannot deal with constructive criticism.

After all, Fred knows that the success of the project is what is most important.

In this mini-case study, different cultural dimensions are involved:

1. Malaysia is a high-context culture where communication requires awareness of facial

expressions, tone of voice and eye contact, and

2. the United States is a low-context culture where people depend more on words than on

external expressions for meaning.

Differences in collectivism-individualism also explain the miscommunication between Fred and

Hisham. Collectivism emphasizes creating harmony and loyalty between people. Yet, due to Fred’s

direct and assertive approach in the performance appraisal, Hisham experienced individual criticism

and consequently suffered a loss of “face” for his team. On his end, Fred acted within the values of

his individualistic culture and emphasized individual responsibility, not group responsibility, in

Page 26 of 38


Hisham’s performance appraisal. Clearly, Fred is unaware of the cultural context in which he spoke

to Hisham. Had Fred received cross-cultural training regarding the Malaysian workplace and

appropriately communicated his feedback, Hirsham may not have requested the transfer. To break

the cross-cultural conflict cycle, organizational learning is essential.

Examples of learning mechanisms are many:

1. HR puts systems in place to catch cultural issues and then addresses them;

2. supervisors bring cultural dilemmas to the attention of HR;

3. HR learns about cultural conflicts through exit interviews;

4. progress reports sent to managers may flag cross-cultural issues;

5. HR trains managers and team members on communication style differences between

cultures; and

6. Prior to sending managers to work abroad, HR provides them with cultural informants, such

as mentors and/or managers with multicultural expertise, to offer support and advice.

As highlighted in a study on society culture and HRM practices, the methods of communication—

downward and upward— are strongly linked to cultural value dimensions. This research points out

that in a culture of high power distance, it is unlikely that the manager would use electronic methods

in communication. Again, the lesson here is that managers be trained to be culturally appropriate

when communicating performance feedback.

Developing Global Mindset

The SHRM’s 2008 Workplace Forecast cites training and developing global leaders as a global trend

to which organizations are now responding. In particular, intercultural competence is emerging as a

key focus in global leadership development, with the critical themes of cross-cultural communication

skills, developing global mindset and respecting cultural diversity. In fact, global mindset has become

an essential competency in global business strategy. As researchers Gupta et al. emphasize, “a

deeply embedded global mindset is a prerequisite for global industry dominance.” From a cross-

cultural viewpoint, Paul Evans, Vladimir Pucik and Jean-Louis Barsoux, experts in global HR

management, point out that it is “global mindset”—a state of mind—that differentiates global

managers. Global mindset is the ability to work effectively across organizational, functional and

cross-cultural boundaries. The strongest mechanism to develop global mindset is the international

assignment. HR can foster development of global mindset by ensuring that talented employees

worldwide—no matter their passport country—have equal access to opportunities. Focused learning

programs can also promote global mindset.

Page 27 of 38


Multinational corporations such as Unilever, Johnson & Johnson and General Electric have effectively

used in-house experiential action-learning programs for a broad cross-section of high-potential

employees to speed up the development of global mindset. Global mindset is ongoing, driven by

four factors:

1. curiosity about the world and the desire to know more;

2. awareness of one’s current mindset;

3. exposure to novelty and diversity; and

4. a specific intention to develop an integrated perspective that weaves together many aspects

of knowledge about different markets and cultures.

Global mindset is of value for local/ domestic organizations as well as companies in the global

marketplace. At the local level, for instance, a company might use global mindset to benchmark

product and process innovations of competitors outside its domestic borders. For organizations

operating in other countries, having global mindset helps people relate to others in different cultural

contexts and then develop the foundation essential for “interpersonal glue,” such as in cross-border

mergers (e.g., Alcatel and Lucent). Ultimately, global mindset greatly fosters global learning, allowing

for faster access to other markets or providing quality customer service to diverse groups. As HR

supports its organization in training for global competencies, global mindset should head the list of

essential cross-cultural factors in HRM.

Career Perspectives across Cultures

Research about cross-cultural perspectives on careers offers insights on similarities and differences

from cultural and national contexts. Career development, a part of human resource planning, is an

HRM strategy within talent management. However, Western career attributes and definitions, which

dominate the career development literature, are not always representative of how people in other

cultures view and formulate careers. Proactive career behavior by individuals to promote their

career plans, for example, is uncommon in high power distance cultures, where HR decisions are

usually centralized. Where hierarchical status takes priority, decisions for promotions may be made

by high-level executives. In contrast, HR planning in low-power distance cultures (e.g., United States,

United Kingdom) often includes input from managers at many levels. In high power distance and

paternalistic cultures (e.g., France), employees often look to their superiors for guidance, whom they

assume know what is best for their career development. Recent studies look at career beliefs, social

networking and the influence of political, social and economic changes on career concepts in nations

around the world. One study explores career-life success and family social support among successful

Page 28 of 38


women in Argentina, Canada and Mexico. In all three countries, women now consider broader

measures of career success than have been traditionally viewed, such as learning and contributing to

society. In Canada and Mexico, many women now see receiving recognition in the workplace as

evidence of career success. A study in Russia notes that new career beliefs and behaviors are

emerging, in great part due to multinational corporations entering Russia and introducing Western

ideas about career development (e.g., mentoring and coaching, management education and

training, professional development). Yet, another study found that social or informal networks are

greatly used in the job search process in both the United States and China, with a different focus by

workers in each country. Social networks in the United States (an individualistic culture) are used to

open doors for opportunities and gain information. In comparison, social networks in China (a

collectivist culture) emphasize guanxi (the importance of interdependence of relationships, based on

trust and expectations of returning favors). Thus, research illustrates that while cultural viewpoints

about career development are gradually changing, differences based on cultural values and past

history continue to influence careers in today’s global marketplace. This information provides HR

with a broader understanding of what is valued in a career through the eyes of other cultures as well

as a movement toward global career values.

As globalization continues to expand, it is increasingly important for HR to understand the

implications of HRM in a changing world. Not all HRM strategies will fit every situation.

Communication styles and cultural value dimensions need to be taken into consideration when

establishing or changing HRM strategies, policies and practices. Whether in domestic or global

business environments, HRM must adapt to cross-cultural factors for the success of the organization

and its people.

Cross Cultural LeadershipCross-Cultural Leadership has developed as a way to understand leaders who work in the

newly globalized market. Today’s international organizations require leaders who can adjust to

different environments quickly and work with partners and employees of other cultures (House et

al., 2001). It cannot be assumed that a manager who is successful in one country will be successful in

another (Javidan et al., 2006; Brodbeck et al., 2000).

There are many different approaches to human interaction, which are influenced by the culture in

which we were raised. Cross-Cultural Leadership requires that we recognize these differences and

put processes in place to help people work together effectively. It is not just about help people from

Page 29 of 38


other cultures to adapt to our existing culture; it goes much further to integrate the entire workplace

(“old” and new).

Creating Cross-Culturally Competent Leaders for Global TeamsBy Norhayati Zakaria, University Utara Malaysia

Norhayati Zakaria is a Senior Lecturer at the University Utara Malaysia in the Department of

International Business, College of Law, Government, and International Studies. Her research

expertise combines several interdisciplinary fields, including cross-cultural management,

international business, and computer-mediated communication technology.

The following figure demonstrates how these three areas can be used as a basis for developing key

cross-cultural competencies: behavioral, cognitive and affective skills (Zakaria, 2008; Chen &

Starosta, 1996).

Page 30 of 38


Conceptual framework of cross-cultural competence

ExplanationWe can develop cross-culturally competent leaders by examining the competencies, traits and

behaviors these global leaders need. According to Zakaria (2008), three areas are crucial:

1. Cultural awareness: Undergo general and culture-specific training, learn dos and don’ts.

2. Cultural sensitivity: Inculcate sensitivity, appreciation, tolerance and respect for others and

diversity.

3. Cultural adroitness: Model culturally appropriate behaviors acting in ways that are

appropriate and relevant to the people we are leading and managing.

McGill University’s Case Study

Leadership challenges in cross cultural ventures

An EHS first story from AlcanYang Xiaoping was a wagon pusher working for a contractor at the Alcan Aluminum Smelting

Complex, Ningxia, China. The Plant is a joint venture created in 2004 between Alcan, The Qingtongxia

Aluminum Group Company (QTX) and Ningxia Electric Power Development and Investment Company

Limited. Before the creation of joint venture, environment, health and safety (EHS) practices at the

facility were poor and record keeping virtually non-existent.

Page 31 of 38


Subsequent to Alcan’s involvement, EHS performance at the smelting complex improved

dramatically. However, on January 12, 2006, Mr. Xiaoping suffered a fatal injury when he was crushed

between two loaded wagons being pushed by hand into the combined pedestrian and vehicular

entrance of the complex. The case is described largely through the eyes of Alexandre Gomez, the

CEO of the joint venture

History of AlcanFounded in 1902, Alcon is one of the world’s leading supplier of Bauxite, Alumina, Aluminum and

leading Fabricator of engineered and packaging materials. It employs 68000 workers in 430 locations

in 61 countries and regions. It has expanded rapidly in recent years driven by the acquisition of

Switzerland-based Algroup (Alusuisse) in 2000 and Paris-based Pachiney in 2003. With its Head Office

in Montreal, Canada, Alcan is a public Company traded on the Toronto, New York, London, Paris and

Swiss Stock Exchanges with 2006 revenues of US$ 23.6 billion.

Making EHS a priority at Alcan, NingxiaAlexandre Gomez, 20 year company veteran was previously Plant Manager at Alcan Operations,

Brazil and Canada. Since 2004, Ningxia facility has shown substantial improvements in productivity

and profitability. While relations with the Chinese joint venture partners are generally good. It is clear

that local partner’s priorities are low cost and profitability. Alcan on the other hand regards, Ningxia

as a model facility and is implementing business practices that are customary within Alcan yet far

exceed Chinese standards. While directed towards long term profitability and growth within the

Chinese market these business practices include very high EHS standards and goals.

The Global Aluminum IndustryEmploys over 1 million people and constitutes a sizable presence in both the developed and the

developing worlds. The industry includes over 3000 companies, employing 200,000 workers in

Europe, 42000 in Japan, 17500 in Australia and 21000 in Canada. Four large Companies that is Alcon,

Alcoa, BHP Billiton and Norsk Hydro dominate the industry. In recent years the company Rusal from

Russia and Chalco from China have also become important producers.

Since 2000, the Aluminum Industry has been subject to a wave of consolidation driven by long term

decline in the real price of Aluminum and eroding margins, pressure to improve ROI, Technological

changes, competition from other materials such as plastic and steel and changing demands by global

customers.

Major Environmental challengesHigh Energy Consumption, Emission for the primary Aluminum production, related Green House

Gases, of particular concern where smelting is powered by coal fired generators, fluorides, sulfur

Page 32 of 38


compounds, Bauxite Residue, high rate of work related injuries, major health issues such as exposure

to heat and noise, respiratory and dermal contact with chemicals, heavy weight lifting, fall from

heights, major safety issues, burns and explosions and water conservation.

Environmental BenefitsThe full life cycle benefits of Aluminum Applications and its properties can contribute to the global

reduction of GHG emissions in various product applications:

Light Weight: Replacing heavier materials in transportation

Recyclability: Aluminum can be indefinitely recycled without losing its properties

Brightness: New products for renewable solar energy applications

Creation of the Joint Venture Alcan NingxiaAs one of the largest and fastest growing industrial economies in the world and the world’s fastest

growing consumer of Aluminum, China is a particularly attractive market for Aluminum producers.

China has over 100 Aluminum smelters most of which are small in scale. The government has

adopted a policy to shut down small scale smelters by 2007 thus tightening supply and reducing

environmental and health concerns. Prior to Alcan Ningxia, Alcan’s presence in China included an

extrusion and fabrication plant, 4 fabricated parts plant and an Aluminum composite panel plant.

Alcan invested approximately US$150 million for 50% participation and a secure coal-fired power

supply in an existing 150 kilo tons per year modern pre-bake smelter located in the Ningxia

autonomous region of People’s Republic of China.

Investing in Ningxia joint venture was a strategic business move to enhance Alcan’s position in the

world’s fastest growing economy and the world’s second largest consumer of unwrought Aluminum.

The investment also ensures long-term access to dedicated power on competitive terms, sufficient to

meet the energy requirements of the smelter. Alcan was attracted by the new plant and its

progressive leadership. For its part, Alcan offered both management skills and Alumina then in short

supply in China.

Mr. Gomes commented on the remoteness of the facility:

It’s not too far from the truth, that almost everyone is local except the three or four expatriates. It’s

very difficult to hire people, but also to lose people, as mobility is very low and nearly all employees

have lived here most of their lives. Ningxia is quite a remote place a desert and not very appealing for

the Chinese people. But it is appealing to the expatriates for the adventure growth and learning.

Page 33 of 38


Management of the Joint VentureThe management group at Ningxia is a mix of foreign and local managers. The CEO of the joint

venture, Mr. Gomes is Brazilian. Beside the CEO there are two expatriate managers, The Chief

Technical Officer who is Canadian and the CFO who is British. The management team has 6 directors,

4 of whom are local and 16 managers and supervisors who are Chinese. In 2004 the plant had 1300

employees, most under the age of 40 of which 30% were contractors. The Chinese Government

favors Unions and Alcan elected to allow the Ningxia employees to unionize.

Analysis of the Case

Competing Priorities Faced By Mr. Gomes:a. Productivity

b. quality

c. operating costs

d. profitability

e. EHS

What Enabled EHS To Be FIRSTa. Corporate Support, Training, Line Managers compensation tied to EHS First Performance

b. Some standards Universally applied at all facilities, Targets set including leading and lagging

indicators

Challenges Language, Culture, Remoteness of the region, Contract Workers

Alcan’s Economic, Legal, Ethical, Philanthropic Responsibilities To Its Stake Holders

Legal responsibilities to its employees to provide a work environment that is safe for the

employees’ health

A legal, economic responsibility to its shareholders to manage Alcan’s assets in a fiscally

responsible manner.

Above all Alcan has chosen to ethical in all its business practices by exceeding countries’ legal

environment, designed, implemented and continuously improved EHS practices both at plant level

and in the local communities in which they operate.

Corporate Social ResponsibilityAlcan’s actions fall in line with corporate social performance because Alcan’s community involvement

project involved sharing medical expertise and improving hospital hygiene standards.

Advantages and Disadvantages of Employing Contract WorkersAdvantages include Lower Cost, Flexibility, May have specialty skills not regularly used i.e. brick layer

Page 34 of 38


Disadvantages include Quality Control, Following EHS Standards, High turnover can make training

ineffective

What should the Company in Mr. Xiaoping’s CaseIn case of Mr. Xiaoping’s accident, the temporary solution is to keep wagons a minimum of 50 feet

apart. By doing this management would be sending a message, make a safer environment, make a

clear statement about the importance of safety and show respect for a lost life.

Actions Already Taken Reduction in No. of Contract workers from 30% to 2.5 %

Communicating EHS First rules and requiring contractors to meet Alcan’s EHS standards

Use same contractors over and over leading to reduced turnover

Providing EHS First Training

Each contractor EHS performance monitored and feedback reported to the contractor

Only those that meet Alcan’s EHS First standards are hired

Economically Measurable Benefits of EHS Reduced liabilities and Insurance Premiums

Reduction of Illness/Injury Treatment Costs

Workmen’s Compensation Insurance Costs

Reduced Absenteeism

Greater employee health, morale and well being

Increased productivity and profitability

Non-Economic Benefits of EHS Enhanced Reputation, Market Share and Stakeholder’s relationships

Environmental Benefits

Good Public Relations

Community Benefits

Fend off Public Interest Groups

Good ROIInvested US $ 36 million to date to roll out EHS First, received economic benefits of US $ 43 million.

Management PracticesEHS FIRST Policies, programs and processes, best practices from around the world were utilized in its

design such as ISO 14001, ISO 9001 and best practices from Algroup and Paris based Pachiney.

Page 35 of 38


References

http://leadership.wharton.upenn.edu/l_change/publications/house1.pdf

http://www.immi.se/intercultural/nr6/gullestrup.pdf

http://www.centreofexcellence.net/J/JBM/Vol1/No1/1.pdf

http://revistaie.ase.ro/content/52/05%20-%20Albescu,%20Pugna.pdf

http://www.theseus.fi/bitstream/handle/10024/20819/Thesis-Pu%20Jing.pdf

http://leadership.wharton.upenn.edu/l_change/publications/house1.pdf

Page 36 of 38


Page 37 of 38

cross cultural analysis

Documents