Cross-Cultural Management Challenges: Netherlands Expansion Report

This report examines cross-cultural management, focusing on the expansion of Clever Clogs International from Lebanon to Amsterdam, Netherlands. The report aims to understand cross-cultural management's significance for global companies, particularly in the finance sector. It provides an overview of the macro-level facts of the Netherlands, including political, economic, and social environments, and compares the cultural dimensions of the Netherlands and Lebanon using Hofstede's model (power distance, individualism vs. collectivism, uncertainty avoidance, masculinity vs. femininity, long-term vs. short-term orientation, and indulgence vs. restraint). The report critiques Hofstede's model and analyzes the business and management challenges Clever Clogs International will face, such as cultural differences and managing a diverse workforce. It highlights the importance of understanding these differences for successful international operations and expansion.

Cross cultural
Management

Table of Contents
Introduction......................................................................................................................................1
Aim of the report.............................................................................................................................1
Overview of macro level facts of Netherlands................................................................................2
Comparison of country of Netherlands............................................................................................3
Crtique of Hofstede work................................................................................................................6
Analysis of business and management challenges..........................................................................6
Conclusion.......................................................................................................................................7
REFERENCES................................................................................................................................8

LIST OF TABLE
Figure 1: Comparison of Hofstede dimension between Netherlands and Lebanon........................4

Introduction
Cross cultural management is linked with management of different types of team by
considering the differences in culture, preferences along with preference of customers in the
market where operations are being carried out. In the modern era, due to expansion at global
level management of enterprise has to deal with different types of individuals who may vary
from one another on the basis of religion, culture etc (Moran, 2011). Further, many time it is
possible that due to differences in culture of staff members they may not prefer to work with
each other and this has adverse impact on business. The present study is based on international
company which provides management advice to different firms such as Google, Shell
International and new finance company named Clever Clogs International. At present Clever
clogs is expanding its activities from Lebanon to Amstedam. Therefore, company is transferring
one female manager to whom training on cross culture has to be delivered.
Aim of the report
The Main aim of the present study is to understand about the concept of cross cultural
management as it plays significant role for the companies who are operating at global level.
Further, expansion is taking place from Lebanon to Amsterdam which is located in Netherlands.
The main reason behind expansion is that organization wants to change the banking system with
the objective to avoid another economic crash. For handling overall operations linked with
expansion a manager has to be transferred and the selected one is female. Further, she is having
right skills and knowledge which would be appropriate for the present assignment. With the aim
to expand appropriately in the new market training has to be imparted to manager so that she can
deal with different type of individuals within workplace at global level. In the era of
globalization business has to deal with different type of individuals and it sometime acts as
hurdle. Companies operating in finance sector have to deal with large number of customers on
daily basis and individuals from different background are hired within the workplace so that they
can deliver best possible services to the target market (Alves and Lovelace, 2006).
Therefore, effective ways have to be undertaken by Clever Clogs international so that
during the phase of expansion large number of individual can be handled easily and this can
support in accomplishment of the aim being set by enterprise for expansion. In the finance
industry it has become necessary for every company to understand the overall need along with
expectations of its target market and providing appropriate customer service to meet need of
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customers. So, to meet these goals it is necessary for managers of financial company like Clever
Clogs international to undertake effective ways through which cross cultural issues can be
tackled in appropriate manner and it can provide base to business in carrying out overall
operations in the market. Due to presence of cultural differences every individual differs from
one another and it can be in the form of thinking and overall perception (Deng, 2009). Further,
when individuals are from different religion them their working style also differs and this also
acts as hurdle especially at the time when individuals within the workplace carries out operations
with one another for the accomplishment of one common goal. One of the biggest challenges
faced by finance industry due to globalization is presence of cultural differences and identifying
suitable way with the help of which cross cultural workforce can be managed easily.
Overview of macro level facts of Netherlands
Different factors are present at macro level which needs to be considered by the manager
of Clever clogs International so that overall operations of the business can be carried out in
appropriate manner. Further, this factors may directly influence the business operations and
business is new in the market of Netherlands.
 Political condition: Government of Netherlands is regarded as constitutional and
hereditary monarchy. Further, three party coalition is present in the parliamentary
majority. The parties named labor, liberal and democrats are having major power since
the 1998 election and as per the USA trade (Dong, 2010). Gov country guide
implementing a specific coalition agreement aimed at fiscal consolidation. Moreover, the
entire system of Netherlands is adversely affected due to corruption where anti corruption
measure ensures government integrity along with public tolerance. The legal framework
being developed strongly focuses on protection of private property rights and
enforcement of contracts.
 Economic condition: Netherlands is regarded as one of the most developed economy of
the world where large number of companies operates. Country is one of the biggest
player in the world’s trade and global transfer of capital. At present GDP of country is
US$350 billion with an annual growth rate of 2.7 percent. Rate of inflation is 3.5% and
the major trading partners are EU along with USA (Ahmad, 2009). Expansion of Clever
Clogs international in the market of Netherlands can provide ample of opportunities to
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business as economy is developed and this can provide opportunities to financial
institutions operating in the market.
 Social environment: Large number of people are living in Netherlands who differs from
each other in terms of culture, religion etc. Further, their need and requirement varies
from each other. Due to difference in religion of individuals companies operating in the
market of Netherlands and for the same it are required for businesses to develop different
strategies as this can support in accomplishment of overall aims along with objectives
(Grunewald and Baron, 2008). During the stage of expansion Clever Clogs international
will hire individuals who are having different culture and for effective management it is
required for manager appointed to consider appropriate ways so that overall performance
of business in the new market can be enhanced easily.
So, these are the range of crucial factors present at macro level which business has to
undertake with the aim of cross cultural management and this can provide a base in
understanding about individuals from different background and religion.
Comparison of country of Netherlands
Model proposed by Hofstede is a framework for cross cultural communication and it
highlights the effects of society culture on value of its members and how they are associated with
behavior of individuals living in the society. The key dimensions of this model are as follows:
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Figure 1: Comparison of Hofstede dimension between Netherlands and Lebanon
(Source: The hofstede centre., 2015)
 Power distance: This dimension highlights the degree to which less powerful members of
the society accept and expects that power is not distributed equally (Sandhu and Suppiah,
2011). In country like Lebanon high degree of index is present where hierarchy is clearly
established without any specific reason power. On the other hand in country like
Netherlands low degree of index is present where people living in the society questions
authority and they attempt to distribute. So, this supports in knowing how people living in
the society are granted power.
 Individualism vs collectivism: This index assist in exploring the degree to which
individuals living in the society are integrated into groups. Individual indicates when
people living in the society are not regarded as integral part of group and in case of
collectivism represents a society in which tightly integrated relationship exist between
families (Frost and Walker, 2007). In country like Lebanon concept of collectivism is
adopted when individuals are allowed to work in team and they are integral part of it.
Further, in country like Netherlands concept of individualism is present where individuals
have to work on their own.
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 Uncertainty avoidance index: It is regarded as society’s tolerance for ambiguity in which
individuals living in the society embrace an event which may be unexpected or unknown
to them. Higher degree of index represents low acceptance of differing thoughts and
lower one shows more acceptance of thoughts (Yan and Hunt, 2005). In country like
Lebanon level of avoidance is low where people usually accepts different thoughts and in
Netherlands level of uncertainty avoidance is high where individuals living in the society
accepts low thoughts and this is favorable for Clogs Clever International.
 Masculinity vs femininity: Masculinity is regarded as preference in society for
achievement along with material reward for success. Generally preference is given for
cooperation, quality of life etc. Further, women living in the society tend to represent
different values. In feminine society womens tend to share caring views which is equal
with men (Greet Hofstede and cultural dimension theory: An overview., 2011). Further,
in masculine society women are regarded to be more competitive and empathic too. In
country like Lebanon society is of masculinity nature where men are more emphatic as
compared with women. Further, in Netherlands femininity is present where women plays
integral role in the society.
 Long term vs short term orientation: This dimension is directly linked with connection
of past with current and future challenges. Lower index directly represents that traditions
are honored and they are kept properly. On the other hand higher degree represents
adaptation and circumstantial where problem solving is regarded to be necessity. In
country like Lebanon lower degree of index is present and it shows traditions are honored
where short term orientation is present. Whereas in Netherlands long term views are
considered and this assist in economic development (Penley, 2006).
 Indulgence vs restraint: This dimension supports in measuring the level of happiness
and is linked with the fact where human desires are considered and they can live happy
life. In country like Lebanon individuals need along with desires are not considered but
on the other hand in Netherlands life along with emotions of individuals are considered
where indulgence is high.
Therefore, in this way Lebanon is different from Netherlands by considering the overall
dimensions of Hofstede model.
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Crtique of Hofstede work
Model developed by Hofstede is relevant enough in understanding about the factors
which are present at macro level and they directly affects business operations. All the dimensions
are key to organizational success and provide a base in accomplishment of desired aims along
with objectives. Dimensions present such as power distance index, individualism vs.
collectivism, uncertainty avoidance index, masculinity vs. femininity etc are effective enough in
understanding about the market condition (Gelfand and Aycan, 2007). Further, it highlights how
cultural differences has direct impact on any society and it is necessary for every business such
as Clogs clever international to take develop effective strategies so that it is possible to manage
different individuals within workplace in form of culture, religion in appropriate manner.
Further, at macro level social factors are highly effective and it affects business operations. Due
to this reason undertaking Hofstede model is quite effective and it has assisted in understanding
about different dimensions along with their significance in the modern era (Dong, 2010).
Analysis of business and management challenges
Large numbers of challenges are present which manager of Clever Clogs will face at the
time of operating in the market of Netherlands. Culture difference is regarded as one of the major
challenge where individual living in the society varies from one another in the form of religion,
culture etc and this directly influences their way of working (Alves and Lovelace, 2006). Apart
from this, when individual varies from one another then they do not prefer to interact with each
other and it acts as hurdle especially at the time when they have to work in team.
Development model of intercultural sensitivity is effective enough in understanding about
cross cultural management where it considers large number of stages such as denial, defense,
minimization, acceptance, adaptation and integration. In the phase of denial individuals does not
prefer to interact with one another and lack of interest is present in identifying cultural difference
(MacLachlan, 2010). Defense is another stage where individual consider all other cultures to be
inferior, in stage of minimization individuals believe that all culture shares common value, in
acceptance other cultures are perceived negatively, in adaptation individual obtains ability to
adopt their behavior and in integration this stage is accomplished through long term expatriates
living. So the model of cross cultural management highlights different stages and overall
behavior of individuals.
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One of the biggest challenge for management is to manage team of diversified
individuals and this is only possible when proper knowledge is present in relation with culture
and religion of individuals living in the society. Apart from this other challenges are also present
such as change in political, economical, legal environment which manager of Clever clogs has to
consider necessarily.
Conclusion
From the entire study it has been found that cross cultural management is most important
in the present era. Manager of clever clogs international has to consider large number of factors
at global level especially management of diversified workforce so that organization can easily
operate in the market of Netherland. Further, Hofstede model applied has supported in
understanding the range of dimension affecting business operations at global level. Therefore,
with the help of this it is possible for business to operate efficiently in the market and can easily
grab growth opportunities.
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REFERENCES
Books and journals
Ahmad, K., 2009. Leadership and work motivation from the cross cultural perspective.
International Journal of Commerce and Management. 19(1). pp.72 – 84.
Alves, J. and Lovelace, K., 2006. A cross‐cultural perspective of self‐leadership. Journal of
Managerial Psychology. 21 (4). pp.338 – 359.
Deng, L., 2009. Mapping and modeling the capacities that underlie effective cross‐cultural
leadership: An interpretive study with practical outcomes. Cross Cultural Management:
An International Journal. 16 (4). pp.347 – 366.
Dong, K., 2010. Cross‐cultural management in China. Cross Cultural Management: An
International Journal. 17 (3). pp.223 – 243.
Frost, J. and Walker, M., 2007. Cross cultural leadership. Engineering Management. 17(3).
Pp.27-29.
Gelfand, M. J. and Aycan, Z., 2007. Cross-cultural organizational behavior. Annu. Rev.
Psychol. 58. Pp.479-514.
Grunewald, D. and Baron, P., 2008. Acme vending. Cross Cultural Management: An
International Journal. 9(4).pp.5–18.
Moran, R., 2011. Managing Cultural Differences. Routledge.Robert, C., 2009. Mapping and
modeling the capacities that underlie effective cross‐cultural leadership: An interpretive
study with practical outcomes. Cross Cultural Management: An International Journal. 16
(4). pp.347 – 366.
Penley, D. R., 2006. Cross-Cultural Leadership. Xulon Press.
Sandhu, S. M. and Suppiah, V. 2011. Organisational culture's influence on tacit knowledge-
sharing behavior. Journal of Knowledge Management. 15(3). pp.462 – 477.
Yan, J. and Hunt, J. G. J., 2005. A cross cultural perspective on perceived leadership
effectiveness. International Journal of Cross Cultural Management. 5(1). Pp.49-66.
Online
Greet Hofstede and cultural dimension theory: An overview., 2011. [Online]. Accessed through
< http://news.telelangue.com/en/2011/09/cultural-theory>. [Accessed on 17th Dec 2015].
MacLachlan, M., 2010. Cross cultural theory: Developmental model of intercultural sensitivity.
[Online]. Accessed through <
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https://www.communicaid.com/cross-cultural-training/blog/cross-cultural-theory-
developmental-model-of-intercultural-sensitivity/>. [Accessed on 17th Dec 2015].
The hofstede centre., 2015. [Image]. Accessed through <
http://geert-hofstede.com/netherlands.html >. [Accessed on 17th Dec 2015].
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