Cross-Cultural Differences in Business

This assignment examines the influence of cross-cultural differences on businesses operating in diverse environments. It highlights communication barriers, challenges in adapting to new cultures, and the importance of cultural intelligence for successful management. The analysis draws upon Hofstede's six cultural dimensions and explores strategies for mitigating cultural conflicts in organizations.

Cross cultural
management

Contents
INTRODUCTION...........................................................................................................................1
TASK ..............................................................................................................................................1
1. Contrast two cultures and discuss what potential problems might arise for people from
these two cultures doing business with one another...............................................................1
2. Cross-cultural communication as being an under-estimated challenge in international
management............................................................................................................................5
CONCLUSION ..........................................................................................................................10
REFERENCES .............................................................................................................................11

INTRODUCTION
Cross culture is the thing which is required to consider by the multinational companies while
expanding their operations in diverse nations. Although, there is a strong need to analyse the
cross culture in order to gain the competitive advantage. However, efficient use of cross culture
teams could render a source of experience and creative thinking in order to improve competitive
gain of a firm. although, cultural disputes could interfere along with the completing of the
projects in this global business community. In order to attain pre-set targets and avoid cultural
misunderstandings, project managers are required to culturally sensitive and encourage
innovation and motivation via dynamic leadership (Cross and et. al., 2018). This report is going
to elaborate universal cross cultural management theories so that the any kind of issues which are
related to cross culture problems. Here, there are certain kinds of examples which are related to
the success and failure in the global, diverse cultural communication.
TASK
1 Comparison between two cultures and issues faced in the same
In this era, various multinational companies counteract on the diverse cultural issues, that
could assist to gain the sustainable development of the organisation. This report elaborates most
universal and generally recognised concepts of the cultural deviations and illustrates them along
with an examples form global project management. There are two main cultural research which
have been made by Geet Hofstede and Fons Trmpenaar. Both of the approaches propose a
unified cultural dimensions along with the dominant value systems that could be ordered. These
kind of value systems influence human attitude, feeling and acting and the behaviour of the
companies and organisations in the forecasting manner. these two sets of dimensions
demonstrate basic issues which any society needs to cope up with but for which answer differs.
They are same in few aspect and different in other manner. dimensions could be grouped into
diverse categories:
1) Connection between people: In America people are very much anthusiatic towards their
work and give maximum contribution towards achieving the goals and targets of the
firm. The mode of motivating employees in America and china will be different as their
expectations and desires vary from one another (Brunet-Thornton and Bures, 2012).
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While operating in theses countries it has to be evaluated that what criteria needs to be
maintained so that accordingly the desired result is achieved.
2) Motivation orientation: Societies selected various ways to cope up with the inherent
vagueness of living. Under this category, Hofstede determines three dimensions:
masculinity versus femininity, amount of uncertainty avoidance, and power distance.
3) Attitude towards time: Hofstede differentiates between a long term versus a short-term
orientation. Trompenaars determines two kinds of dimensions: sequential versus
synchronic.
Main role of superior is to render guidance, safety and care to subordinate, and role of the
subordinate, in return, is to be the loyal and deferential to the superior. Fatalism is the belief that
this is not quite easy to control the results of one’s actions and henceforth, trying so hard to gain
something and forming long terms plans which are not worthwhile workouts (Bian and Forsythe,
2012).
However, there are mainly so many cross cultural differences can occur. The main theory talked
about proposed talked of four dimensions, namely power distance, uncertainty avoidance,
individualism vs. collectivism and masculinity vs. femininity.
Hofstede’s work serves as the main thing for the other researches in cross cultural
psychology, which permits various researchers to study diverse aspects of the global business
and communication. These dimensions are founded by Hofstede illustrates detailed embedded
values of various cultures. These kind of values does not impact not only how people with the
diverse cultural backgrounds behave, but likewise manner under which they would probably
behave when placed in a work linked context.
There are six Hofstede dimensions and they understand countries, culture and people.
As per Hofstede, culture is the mind’s collective programming which distinguish between
one category of individual and members of one group from other group. The term category may
apply countries, religions, areas throughout countries, genders, companies or occupations.
1. Power distance: This means that inequality which does not elaborates from above, but
from below. This is the extent to which companies and communities accept power
differentials.
2. Uncertainty Avoidance: This is the extent to which the members linked to a society
which are capable of coping with future vagueness without going via stress.
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3. Individualism vs. Collectivism: Individualism fix against its opposite collectivism
elaborates extent to that individuals are inclined toward staying in the groups.
4. Masculinity vs. Femininity: This revolve throughout emotional role distribution
between genders, which is again a major concern in a number of societies.
5. Long term vs. Short-term orientation: This is relied on the Confucian dynamism.
Indulgence vs. Restraint: Dimension of indulgence vs. restraint concentrates on the happiness
(Lasserre, 2017). A community which practices indulgence incorporate room for moderately free
gratification of the natural and basic human drives related to incorporating in entertainment and
enjoying life.
International comparison of culture on the basis of Hofstede’s Dimensions:
In relation to the country’s scores on the scale of 1 to 120 (Here, 1 reflects the lowest and 120
reflects the highest), following global comparison incorporated between cultures:
 Emerging countries’ like India have more score with related to power distance index
while United Kingdom have lesser score. For example, Guatemala has a score of 95
while Israel scores 13 along with a little power distance.
 As far as Individualism index is concerned, a significant gap exists between emerging
and developed nations. On the other hand, developed nations like United Kingdom and
North America are largely individualistic, while India and other African and Asian
countries have little individualism index along with sound collectivist values.
More vagueness avoidance scores are possessed by Latin American nations and their
eastern and southern Europe (Muenjohn and Armstrong, 2015). The score is less for Indian and
other Anglo culture nations. For example, Germany has a great uncertainty avoidance nation
with 65 score.
While expanding a business in the emerging country like China, there is a strong need to
know the various kinds of market structure. So that the business could grow effectively.
Although, cross-cultural diversity is the main cause which arise while expanding the business
operations and before going to expand the operation, there is a strict need to know the market
culture and assess effectively. However, this can be said that the business can in that case, there
is a strong need to make cross culture analysis so that the manager can make an effective strategy
in order gain the sustainability. While analysing the cross culture analysis, various barriers could
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arise. Some of them are: language, ethnicity, racial background, religious beliefs, Gender, Age,
class, education.
Language: This the major issue which arise among the employees who belongs to diverse
culture (Kawar, 2012). However, this can be said that there must be a proper communication
among them so that any kind of communication gap can’t arise. Although, this is the perfect
thing which will have to consider by the top level manager while exercising business operations
among various countries.
Racial background: This is the main tool which can be considered while planning for
expansion. If these kind of activities are done in the workplace, then the situation would become
worse. There is a strong need to not to happen these things at the workplace.
Gender: This can be a major issue which can’t be ignored while exercising business
operations in the workplace. However, this is the main tools that can be considered while
expanding the business.
These are the major cross cultural issues that are required to be overcome by the
organisation for expanding their operations. However, this can be said that this is the major thing
that are required to be done (Nielsen and Nielsen, 2013). In workplace, entire these above
mentioned barriers might be the cause of culture related issues, but they could then add
differences in the working practices and communication styles between departments, with
consumers, with other nations and between senior management and other employee in the
workforce.
Hofstede's and handy models of organizational culture plays a very eminent role in
understanding choice or preferences of different individuals whomsoever are belong from
several communities. Basically, it is not easy to establish a new business at foreign marketplace
such as American and Chinese entrepreneurs are facing numerous of issues or barriers while
expanding their business in different market due to changes in languages, consumer choice,
preferences, culture and so on (Bian and Forsythe, 2012). Thus, with the help of organizational
culture model managers can easily analyse various issues which is encountered by them during
sharing business with each other. For example; culture, religion, norms, beliefs, values of
Chinese society are fully distinguishing from other nation just like America. Therefore, it has
been observed that an organization needs to learn or analyse culture of both the nation before
expanding their business across the nation in order to overcome several barriers which might
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take place during expanding business. For example; language obstacles which may create
between several societies because Chinese or Americans are having distinct way of expressing
their views or opinions.
2. How stereotyping act as a barrier or aid in effective communication
Stereotype are assumptions which are made about a particular group of persons
irrespective of their actual characteristics or traits. It can be both negative and positive. Multi-
cultural means having blend of different culture within an organization. During this era, almost
every organization is having employees from different nationality with difference in cultural and
backgrounds (Runyan and et. al., 2012). On one hand, where a company seems to have an
advantage of generating diverse and innovative ideas, handling varied clientele and related
problems more effectively, introducing new approaches and so on, but on the other side of the
coin the most common and obvious challenge arising from it is the language barrier among staff
member. Cross-cultural comprises of people with different characteristic such as age, gender,
nationality, language, origin and ethnicity that act as a distinguishing factor for them. Generally,
MNC's practices cross-cultural approach. When company proceed to its expansion phase, it
incorporates cross-cultural environment in their business as a result employees of multiple
ethnicity are incorporated in the workplace. Along with international management there comes
cross-culture communication which is to be managed effectively (Busch, 2012). Cross-cultural
communication give rise to differences while exchange and negotiate practices are performed by
means of language, gestures and body language.
Cultural practices are encountered at every stage of life. An individual face challenges
while switching to different workplace as he always holds a belief about his very own culture is
best of all. CCC arises because of philosophical teachings and creates misconceptions into the
minds of people (Friedman and et. al., 2012). These differences give rise to conflicts between
individual or groups. For example, Japanese and American culture is way more different from
each other. One has collectivism while has individualism nature. Below is a table that shows
differences in communication between two origins.
S.NO. Chinese Employee (Sender) American Employee(Receiver)
1 I see No
2 This is difficult This is impossible
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3 Interesting proposal Stupid proposal
This shows how different culture can affect communication in work place. To minimize
these differences knowledge is the key element. In a company, when two people of different
cultures confront each other, they must agree upon the fact that every individual working there is
a part of organisation and his participation is equally important.
Effects of cross culture barriers of communication are as follows:
Language- Business dealing with multi culture employees or clientele encounters the
problem of arsing misunderstanding due to occurrence of difference in language, beliefs &
perception which further leads to high level of anxiety ending up in breakdown in
communication these two parties ultimately affecting the outcome (Brunet-Thornton and Bures,
2012). Thus, it becomes very important and crucial for an organization to deal with these
differences beforehand only by incorporating some strategies to overcome language barriers.
Global platform gives rise to multiple languages, as not every business operates in English
language only. This barrier arises because of use of inappropriate language or use of foreign
language. Thus, one should always ask the other person to repeat what they have heard and
understood.
1. Culture-Every culture has its own value, belief, language and behaviour system. And thus
same wording or gestures may have perceived differently by different people from varied
culture. Ignoring this factor may lead to prohibition in exchange of messages which can
have critical impact on business.
Company culture- Company culture means norms are standard of a company. It includes
organization's policies, procedures, strategies and decorum that create a unique culture internally.
Expansion in business unit require to have a knowledge of current culture along with possible
obstacles that are present in different country, so as to withstand these cultural differences and
pay genuine respect to each other’s culture (Maringe and Foskett, 2012). To rectify this problem
proper observations are to be made and adjustments are to be created.
To overcome these barriers following steps can be taken:
 Proactive: To develop this factor one has to be pre-prepared of creating and controlling a
situation rather than just responding to it. Initially, trusted partnership must be established
rather that business profit.
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 Cultural rapport: Thorough study and analysis of culture must be done so that effective
decision can be taken for marketing strategy. Business needs and establishments can be
developed by building cultural rapport. For example, meeting of Saudi Crown Prince
Abdullah and US President George Bush at his farm house, they were photographed
through blue bonnets, which shows sign of friendship and trust. This signifies the fact
that sometimes to manage international relations one can have to go beyond their
personal zone.
 Productive interactions: Staff members must be made secure about their interventions.
Sessions for mutual interactions must be organize to develop a sense of unity among
employees. These interactions will help to overcome cultural differences and gaps as
people accept more when they know more.
Know your facts: Before penetrating into a different market segment, be well prepare
about do's and don'ts of the country (Koo Moon, Kwon Choi and Shik Jung, 2012). Prepare
documentation of historical data, economic issues, major industries, geography, market status,
etc. Ignoring these factors may cause embarrassment for business unit. For example, one of the
major challenge that McDonald's faced while penetrating into Indian market was the acceptance
of food by country nationals because half of its population is vegetarian and demanded separate
menu. Therefore, a complete new line of vegetarian menu was created. Separation of various
stages was maintained throughout the process.
Cross-Cultural communication plays a vital role in establishing a business unit at global
platform. When communication is effective and practices cultural norms and beliefs, it gives rise
to purchasing rate of product and service. Ineffective communication may give rise to
inappropriate, confuse and in some cases offend people thus breaking relations with investors
and employees (Ang and Van Dyne, 2015). Various efforts, techniques and measures are to be
practised to overcome hurdles in cross-cultural management such as understanding cultural
diversity, awareness of individual culture and mutual acceptance. Perceptions among employees
are to be developed where people incorporate acceptance factor amongst them (Ang and Van
Dyne, 2015). To succeed in global market, company need to understand, evaluate and overcome
major uncertainties and to stay competitive in the market. Effective cross-cultural management is
the key to succeed in today's era of globalization.
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Basically, the importance of cross-cultural management lies on developing co-operation
between organisations in diverse nations where difficulties might emerge as of the diverse
cultural backgrounds.
As, in this era, more and more organisations are having their operations worldwide. This
is the reason, why there more concentrations on the cultural related aspects. Culture is the thing
that human beings learn and as an outcome, leaning needs communications. Which is the most
important aspects for doing the business globally. This is the main way of coding and decoding
language and symbol as well which are used in that language. For instance, humans
communicate via so many ways than the language like facial expressions, gestures, posture and
others.
In other words, culture and communication could be treated as insuperable, if one is to be
disclosed to a specific culture, then communication is strongly required. The main thing is to
introduce ‘inter-cultural communication’ which is basically known as the communication done
between the two individuals who are from diverse cultures (Caligiuri and Tarique, 2012). On the
other hand, there is other thing as well which is international communication which simply refers
to the communication which takes place between countries and governments instead of
individuals. Henceforth, there must be a sound knowledge of intercultural communication and
global business communication which is much essential for the organisation which are looking to
expand their business throughout the world.
However, this can be said that the cross cultural differences do exist among diverse
cultures. These kinds of diversity have an influence among individuals from diverse cultures.
Since, there are diverse organisations which have to be run in diverse parts of the planet,
individuals are exposed to diverse cultures which they are required to adopt. As an outcome,
various barriers might occur (Thomas and Peterson, 2017). Communication is one of them.
However, there are so many differences among cultures, individuals are required to adapt with
these differences. For instance, expatriates whose work needs being exposed to the cultures
entirely different from their get absorbed to the new culture, they get into system and they get
used to status quo (Velo, 2011). This is said the cultural intelligence which assist individuals
overcome the constraints they address as of the diversity in the cultures.
In management, this can be said that there are various organisations which are run their
nations. For instances, orange for communication and precharge for cement and both are from
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France and have their operations among various nations. However, they have adopted various
cultures in order to gain the sustainability for the long run. On a broad concept people are
divided on different basis such as race culture gender etc. it is assumed that people belonging to a
particular category share same characteristics. it is not necessary that it is always true as people
now have their own perspective and behave accordingly. When cross culture takes place it acts
as a barrier as making presumptions without knowing the fact restricts the level of
communication. It reduces the willingness of people to understand each other and therefore the
knowledge remains confined and hence effects the communication. For instance, it is found that
there are better opportunities to outsource the labour from another country but due to
stereotyping entrepreneurs do not opt for this option. This way the talent remains limited which
has its direct impact on the growth capacity of organisation. It is important that education is
provided to the employees so that they can be provided with the information that how business
profits can be raised using the ideas and suggestions of other people. Seniors should be appointed
so that they can maintain a fair work place as this will help in creating a better and productive
working surroundings.
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CONCLUSION
From the above mentioned report, this can be said that the cultural differences impact the
businesses occurring in cross-cultural contexts. Various issues which are related to these kind of
issues emerge in matters of actively participation, communication and other relational region.
Although, if top level managers assess with respect to Hofstede’s six cultural dimensions, these
kind of issues could have assessed via diverse perspective, and more essential steps to address
these kind of problems could be taken.
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REFERENCES
Books and Journals:
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