Managing Across Cultures: Cross-Cultural Challenges and Solutions

This report delves into the complexities of cross-cultural challenges faced by organizations during internationalization. It begins with a literature review exploring the impact of differing cultural values, drawing upon Hofstede's cultural dimensions and other relevant research to highlight potential obstacles to global business expansion. The report examines specific challenges, including communication barriers, workplace etiquette, organizational hierarchy, ethnocentrism, conflict resolution, and differing approaches to task completion. Real-world examples of companies like Starbucks and McDonald's are used to illustrate the consequences of failing to address these cultural nuances. Finally, the report offers detailed recommendations for organizations seeking to overcome these challenges, emphasizing the importance of understanding cultural differences, developing effective communication strategies, and fostering a culturally sensitive work environment. The recommendations include the importance of understanding the communication style of the target country and applying Hofstede's dimensions to better understand cultural factors. The report recommends developing an effective communication strategy and respecting cultural variations.

Cross cultural challenges 0
Differences in cultural values
Student’s name
1/3/2019

Cross cultural challenges 1
Contents
Literature Review.......................................................................................................................2
Introduction................................................................................................................................2
Challenges faced by the organization in internationalization....................................................4
Real world example................................................................................................................6
Part II..........................................................................................................................................7
Recommendations......................................................................................................................7
References................................................................................................................................12

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The difference in cultural values
Literature Review
Introduction
This chapter seeks to reflect literature review on the cultural values and the differences in the
cultural values, which creates challenges for the company to expand its business globally.
The term cultural values refer to the norms and ways of behavior conditioning attitudes and
reactions to events and various phenomena in the context of a culture. It helps in determining
the factors that influence the choices of the individuals (Iribarne, 2012).
The term culture is defined as our collective experience as a society and its impact on our
reaction and decision-making relative to every-day facts and circumstances. In order to
expand the business globally, it becomes important to understand the cross-cultural
challenges, which can hinder the performance of the company. The literature review is
conducted on the differences in the cultural values that are faced by the company Tesco in
operating its business globally (Rhoades, 2010).
Tesco is a United Kingdom-based global supermarket chain, which was founded by Jack
Cohen in the year 1919. The company has made thousands of loyal customers and it is one of
the largest food retailers in the world. The company applies various strategies to meet the
changing requirements of the customers and increase its market share but it also faces the
cultural challenges that build the roadblocks in developing the business in the other countries
and maintain its competitive advantage (Welbourne, Gangadharan and Sariol, 2015).
According to Qing Wang (2013), The Tesco Company failed to implement its strategy of
providing club card to the Chinese customers because here the customers have more buying
power and there are various companies that offer such loyalty programmes.
According to Hofstede (2014), culture is defined as the collective mental programming of the
human mind, which distinguishes one group of people from another. It reflects the difference
in the perceptions of the people, their culture and the values. Culture in this sense is a system
of collectively held values. The author has developed the cultural dimensions that help in
analyzing the cultural challenges among the different countries.

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 Power distance
It refers to the degree of inequality expected and accepted by the people in the
organization. It is analyzed that in countries like the United States there is less
acceptance of the inequality and creates a problem in the distribution of the powers
among the workforce while in the country like China there is high acceptance of
power distance among the workforce of the organization. There is a high distribution
of powers and leads to the creation of superior-subordinate relationships (Moore,
2015).
 Individualism
It refers to the degree of interdependence the society maintains among its members. In
the country like America there is a high degree of individualism and adopts the
culture where the information flows in informal ways and the workforce at all the
levels are participative while In China, there is a low degree of individualism. The
company adopts the culture of collectivism and there are formal flows of
communications, which can create a challenge for the company to expand its business
globally (Primecz, Romani and Sackmann, 2011).
 Masculinity versus Feminity
Masculinity refers to the society that focuses on achieving success, competition and
focuses on being the best while feminity focuses on living quality of life rather than
focusing on standing out of crowd. In a country like China, the culture more focuses
on masculinity and drives to achieve success through competition while in America
the people more focus on living quality life. Such differences in perception create the
cultural challenge for the organization to operate in culturally diverse societies
(Tjosvold, 2017).
 Uncertainty avoidance
It refers to the degree with which the people of the country feel threated of the
unknown situations. In America, there is a higher level of uncertainty avoidance as
the organization focus to take measures for the unknown uncertainties in future while
In Chinese culture there is a low degree of uncertainty avoidance the organization
focus on the present and in turn can create a hurdle for the long-term success of the
company (Steers, Nardon and Sanchez-Runde, 2013).

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 Long-term orientation
In America, the score for long-term orientation is less because people are prone to
analyze the information while in China; the score for long-term orientation is high
because people are pragmatic. They follow and adapt the changing trends, which can
create a challenge for the Tesco because the company will not be able to be so
pragmatic to the changing situations.
Supporting the above views, Hofstede mentioned that theories of cultural values help
in analyzing the dimensions and factors that brings a challenge for the company is
expanding its business globally. It helps the company in overcoming the barriers,
which can hinder the performance of the company and provides them with a deep
understanding of the cultural dimensions.
Contracting to the above views, Triandis (2012) stated that theories of the cultural
values address limited aspects of the culture rather than seeking to capture a full range
of potentially relevant value dimensions. He states that the Hofstede model of cultural
values also lacks data from the important regions of the world.
Supporting the above views Triandis, (2012) stated that cultural values represent the
implicitly or explicitly shared, abstract ideas about what is good, right and desirable in
society. The cultural values are the bases for the specific norms that tell the people
what is appropriate in various situations.
Challenges faced by the organization in internationalization
 Communication
It is analyzed that communication is the major barrier to the success of the enterprise
in other countries as the difference in perceptions can create misconceptions and will
lead to false decisions. Finns prefer directness and brevity in communicating while
the professionals from India value indirect communication, which creates the
environment of delay in decision-making and a formal relationship is maintained. In
foreign countries hug, a kiss is perceived formal while in northeast regions the
workforce can become offensive and leads to cultural conflicts (Linan, Nabi, and
Krueger, 2016).
 Workplace etiquette

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It is analyzed that formality of address is a big consideration when dealing with the
business partners of different countries (Sharma, Singh and Pathak, 2018). For
instance in Asian countries like Korea, China people prefer to use formal surnames
while Americans or Canadians tend to use the first name. The concept of punctuality
also acts as a challenge for the organizations because in Mexican or Italian countries
being late is acceptable while Americans, on the other hand, reach before time. Such
issues create dissatisfaction among the partners (Thomas and Peterson, 2017).
 Organization hierarchy
The organizational hierarchy and the attitude towards the management roles also
create a challenge for the organization. It depicts the country’s level of social equality.
In the country like Japan, the society values the organization hierarchy follows the
traditional forms and respects the seniority. However, in Scandinavian countries like
Norway, the organization prefers flat hierarchical structures, develops informal
communications, and merely focuses on equality (Beugelsdijk et al, 2018).
 Ethnocentrism
It refers to the potential barrier of easy adaption of another culture. It occurs when the
people are pre-disposed to believe that their homeland conditions are best. It becomes
difficult to understand and adapt the local culture to create products for the firm
(Hugman, 2013).
 Different attitudes towards conflict
It is analyzed that the organization faces the challenge of difference in attitude of the
workforce towards conflicts. In the United States, a conflict is not desirable but if it
occurs, it is advisable to solve the conflict b having face-to-face meetings while in
case of eastern countries occurrence of open conflict is considered as embarrassing or
demeaning. The organization feels to resolve the conflict quietly and prefer to resolve
it through written text (Henson, 2016).
 Different approaches to completing the task
It is observed that variations in culture create different approaches to accomplish the
task. In Asian and Hispanic culture the organization focuses on developing a
relationship and then focuses on achieving the task while the European American
believe to achieve the task and develop a relationship during that time. Such a

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difference in perceptions creates a challenge for the organizations that want to expand
its business globally (Alvesson, 2013).
Real world example
 Starbucks failed in Austria because of the difference in culture, values, and beliefs of
the consumer. It is analyzed that in the culture of Austria having coffee while walking
is considered as bad behavior and the country follows the traditional culture of using
heavy cups for coffee, however, the country was not able to accept the paper or the
plastic glasses. The customers perceived the Starbucks coffee as expensive for the
average consumers and thus the company failed to expand its market share in Austria
(Mourdoukoutas, 2018).
 Mc Donald’s was not able to succeed in Japan because the Japanese people follow the
culture where the tradition of making obentos lunchboxes which are made by the
mothers for their children and rice was the main dish in that lunch box. The company
fails to expand in Japan because the hamburger offered by Mc Donald’s has been
considered a snack and was not able to expand its market share (Jos White, 2017).
However, in support of the above views, the organization must deeply understand the
differences in the cultural values to understand the local behavior and develop the
strategies according to the requirements of the specific country.
Part II
Recommendations
In today’s era, every company aims to expand its business operations and diversify its
business across the world (Sharma, 2016). To accomplish such objectives the company must
adopt the appropriate strategy that focuses on understanding the diverse culture, the values
and the beliefs of different counties and the changing taste and preferences of the customers
to fulfill their changing requirements and must understand the language of the people. It must
develop an effective communication style according to the culture of the country.

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I. To overcome the communication barriers that the organization faces the
companies must understand the communication style of different cultures. In the
country like America, Australia the people are open and more emotional the
communication here is precise while in Japan and India people are subtler and
prefer the communication that is indirect and the implied information. Some
cultures actively make discussions on the facts and communicate calmly while
some belong to the cultures where the persons are good listeners and are reactive
(Vaiman and Brewster, 2015). However, to effectively communicate and expand
the market share the organization needs to deeply understand the culture of the
country, there preferred communication style so as to develop the interest of the
customers and able to sustain its competitive advantage over the other countries.
The organization needs to understand and accept the differences in cultural values.
The organization can apply the Hofstede dimensions of cultural value to
understand the difference in the cultural factors and respond accordingly (Saleem
and Larimo, 2017).
After understanding of the cultural differences, the organization must develop an effective
communication strategy, which is more open and must be flexible according to the
fluctuating requirements. The company must respect and accept the variations in the culture
and must develop the emotion-driven communication style (Michigan State University.
2018). The manager of the company must not be frustrated to manage the culturally diverse
workforce instead, it must focus to understand the change in behavior must communicate and
learn their cultures. It will help the company in developing the interest of the culturally
diverse workforce and creating a coordinating environment.
In order to create a coordinating environment, the company must develop the incentive and
reward programme, which will help in motivating the employees and will help to recruit the
talent from the different geographical locations. The manager of the company must
understand the reaction and the behavior of the employees towards the set rules and
procedures and the leadership style adopted by the organization so that the interest of the
subordinates is maintained and the company is able to expand its production. Communication
acts as the major barrier of developing cross-cultural business because the difference in
communication styles may lead to misunderstandings and creates conflict among the
employees.

Cross cultural challenges 8
The company must ensure that there are proper channels for communicating among the
organization. It must focus that proper language is used and the information flows through
the right medium. The company using phone calls for sharing of evident information must
ensure that the information is repeated so that it does not lead to any misunderstandings. The
company must adopt the language that is comfortable for all the employees so that it does not
affect the decisions of the organization and there is proper flow of the information among all
the levels of the organization. As the company moves to other countries, the organization
must deeply understand the local culture of the employees and their expectations and
preferences to develop the interest of the employees and further motivates and encourages
them to work efficiently for the organization.
II. The manager must focus on knowing himself. In order to understand the culture of
others, it is important to understand our own preferences, motivations, work
values, and the style of the management. For this, the manager must use the spony
profiling model in which there is questionnaire of 250 questions, is filled by three
colleagues to understand the communication style of the manager, and will help in
knowing the personality and the work values of the manager. The result from this
model will help in analyzing the manager’s motivation and preferences in the 12
styles described under the spony profiling model. Using this model will enable the
manager to analyze its strength and the weakness and the areas where the change
is required. For instance, if a manager is working in western culture like China
and India the manager needs to enhance the skills of monitoring by tamping down
the traditional practices of the western culture. Conversely, if the manager of
China working with western culture needs to be flexible, pioneer and must focus
on developing networking with the other partners. This type of model will help the
manager or the leader in realizing and developing the potentials that suit the
changing requirements of the competitive environment. It is analyzed that the
company must focus on providing learning and training to the managers so that
experience will help in undertaking improved negotiations and development of
strong relationships with the business partners that will help in maximizing the
productivity of the company to the other countries. Learning and cultivating cross-
cultural skills helps the business to achieve success and expand its business
globally. The manager must develop the tolerance to ambiguity and must carefully
handle the uncertainties that can hamper the performance of the organization. The

Cross cultural challenges 9
manager must have the quality of perceptiveness to closely analyze and appreciate
the information in the speech and the behavior of others. The manager must
develop the skills to have close interpersonal relationships with the members of
the organization and must have the flexibility and the adaptability to accept the
cultural diversity and develop the innovative products that meet the changing
requirements of the customers.
III. The third recommendation to overcome the cultural differences is that the
company must understand the factual and imperative knowledge about the other
culture and must try to speak the language of the diverse workforce. The manager
must understand the culture, values, and beliefs of the diverse workforce to create
a cooperative working environment and able to develop a competitive advantage
(Forward Focus, 2015). The organization must understand the changing taste and
preferences of the customers to develop the product that suits their requirement
and helps in the company in increasing its productivity. The company must
closely analyze the language; preferences of the customers to make the required
alterations (Hopkins, 2016). The company must maintain the workplace etiquette
as it highly affects the performance of the organization. It must understand the
culture of the country where the company is planning to develop its business. For
example, if the company is planning to do business in Mexican cities then the
person must use the formal last name to start the interaction; they belong to the
culture where shake hands and a hug is a formal way to greet the person and take
a long time in developing the contract. The manager must be patient and must
behave ethically to the diverse business partners. It must learn the language
preferred by the business partner to develop a long-term relationship with the
partners and able to negotiate better. The manager must develop a deep
understanding of the culture so that the company is able to develop a product that
suits their requirements (Welbourne, Gangadharan, and Sariol, 2015) The
manager must avoid the cultural biases and the degree of ethnocentrism must be
reducing because higher the ethnocentrism leads to higher probability of conflicts.
It creates a barrier for the company to accept the culture of the other and considers
its culture as the superior one.
From the above discussion, it is analyzed that the organization who wants to
expand its business globally need to understand the local culture deeply, the

Cross cultural challenges 10
languages used, the changing taste and preferences of the customers and must
develop the strategy accordingly. It must respect all the diverse cultures and must
realize the value of the employees to develop their interest in the organization and
able to achieve maximum efficiency in its operation.

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References
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distance and firm internationalization: A meta-analytical review and theoretical
implications. Journal of Management, 44(1), pp.89-130
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China-because-of-cultural-differences [Accessed 3/1/19]
Forward Focus. (2015) How to resolve cross-cultural misunderstandings before they arise
[Online]. Available from: https://www.forwardfocusinc.com/inspire-leaders/cross-cultural-
management-challenges-and-how-to-face-them/ [Accessed 3/1/19]
Henson, R. (2016) Successful global leadership: Frameworks for cross cultural managers
and organization. Newyork: Springer nature
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https://www.hofstede-insights.com/country-comparison/china,the-usa/ [Accessed 3/1/19]
Hopkins, B. (2016) Cultural differences and improving performance: How values and beliefs
influence organizational performance. London: Routledge
Hugman, R. (2013) Culture, values and ethics in social work: Embracing diversity. Canada:
Routledge
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of differences. London: Routledge
Linan, F., Nabi, G. and Krueger, N. (2016) Cultural values and entrepreneurship. United
Kingdom: Routledge