Literature Review: Intercultural Management in Business Environment

This literature review delves into the critical role of intercultural management in international business. It begins by analyzing the significance of cultural dimensions, including Hofstede's framework, in shaping business practices across different countries. The review explores how cultural differences impact various aspects of international business, such as communication, employee motivation, and overall organizational strategy. Furthermore, it examines diverse strategies for managing cross-cultural situations in the workplace, emphasizing the importance of effective communication, awareness, and the creation of a healthy and inclusive work environment. The review synthesizes various perspectives from academic journals and books, providing a comprehensive understanding of the challenges and opportunities presented by cultural diversity in the global business landscape.

INTERCULTURAL
MANAGEMENT IN
BUSINESS

TABLE OF CONTENTS
LITERATURE REVIEW................................................................................................................1
Introduction..................................................................................................................................1
Understanding different cultural dimensions...............................................................................1
Impact of culture on international business.................................................................................2
Different strategies used in international business context in managing cross cultural situations
in the workplace...........................................................................................................................3
Conclusion...................................................................................................................................4
REFERENCES................................................................................................................................5

LITERATURE REVIEW
Introduction
Cultural difference in business plays a vital and important role because if it is not
managed in an appropriate and effective manner then it can directly impact an organization in
both positive and negative manner. This literature review will lay emphasis upon analysis of
theories and concepts related to cultural regularity and variability and ways in which these
frameworks related to cultural difference can be applied to international business management.
Understanding different cultural dimensions
According to Adamczyk, (2017) Difference in cultural dimensions is of regularity and
variability. These dimensions of culture are mostly on the basis of difference in values, beliefs,
principles, ethics, attitude. Difference in cultural dimensions can be explained with the help of
Hofstede's Cultural Dimensions framework. It is a kind of framework that can be used two
understand difference in culture in different countries and ways in which different strategies can
be adopted by business to do business in different nations in an appropriate manner. This
difference in cultural dimension directly impact overall business settings so that an organization
can sustain in all business environment in all the nations in which they operate.
As explained by Beugelsdijk, Kostova and Roth, (2017) Hofstede's Cultural Dimensions
framework categorizes culture in six difference categories. First is power distance index, that
focuses upon ways in which power and inequality within an organization is tolerated. If power
distance index is high then that means that power or inequality within an organization can be
tolerated, whereas if this index is lower then that means that inequality and power cannot be
tolerated. Organization need to bring changes within their overall organizational structure in such
a manner that people from different power index countries can adjust easily. Second dimension
is individualism vs. collectivism in which individualism focus upon attaining personal goals,
whereas collectivism achieve goals and wellbeing of personal groups. Third is uncertainty
avoidance index, if this index is high then tolerance for uncertainty and risk taking for people is
low and if this index is lower than that means uncertainty and risk taking can be tolerated by
people,
Boussebaa, (2020) further explains that, fourth dimension is masculinity vs. femininity.
Masculinity means gender roles within society are predefined whereas femininity means gender
roles are fluid. Fifth dimension is long-term orientation vs. short-term orientation long term
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orientation people focus upon achieving long term success, whereas, short term orientation
people focus upon achieving short term goals. Last dimension is indulgence vs. restraint in which
indulgence means people focus upon enjoying life and having fun whereas, restraint means
society suppress needs of people though social norms. So from this analysis it can be said that
different cultural dimension directly impact international business in many different ways.
Difference in acceptance of people to accept power or inequality difference directly impact
motivational and satisfaction level of employees because of which their overall performance gets
impacted. Hofstede's Cultural Dimensions framework can directly help internal organization to
understand values, beliefs, thinking and mentality of people from different cultural background
in an appropriate manner. This understanding helps them in developing strategies though which
barriers created by cultural differences can be reduced.
Impact of culture on international business
According to the view of Mladenović and et. al., (2017) Culture plays a vital role in
international business. It not only influence ways in which business operates or works but it
further influences overall thinking, mentality, behaviour and communication of people. Cultural
difference can force a business to bring changes within their strategy. High cultural diversity can
create various kinds of barriers for business which can directly impact overall revenue,
productivity of an organization. It can become one of the main reasons because of which
employer and employee relationship can get impacted. if a global organization wants to enhance
their overall sales, revenue, develop positive brand image globally it is important for them to
focus upon cultural diversity so its negative impact upon business at international level can be
reduced.
As per the view of Ferraro and Briody, (2017) there are various kinds of frameworks that
can be used to explain impact of culture upon business international business. Halls cultural
factors is one of the frameworks that can be used to explain context of culture and ways in which
it impacts international business. Halls says that a culture can be divided on the basis of context,
time, and space. First in terms of context, culture can be divided into two contexts: high and low
context. Difference between these cultural contexts majorly impact verbal and non-verbal
communication. High context culture people take rules for granted. They do not understand
unwritten rules of culture and are mostly reserved. Whereas, low context culture people focus
more upon rules. Such kind of people require more understanding so that chances of
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misunderstanding can be reduced. When people of two different cultural context work together
barriers in communication can occur because of which overall productivity of employees can get
impacted. This can impact international business in many ways and sustainability of business can
also get impacted. due to this it can become difficult for global organizations to manage their
employees, their work and productivity globally.
In addition to this, Nandan, (2020) explains that, as per halls cultural factors, time and
space also create barriers in culture that has a direct impact upon international business. Culture
can be divided into monochronic time and polychronic time. People of monochronic time focus
upon doing only one ting at a time and concentrate upon only one job which is in their hand.
Whereas people of polychronic focus upon doing many things at one time. It can be said that
such people are multi- tasking mostly because such people put relationship first before their job.
This difference impacts overall thinking of people and ways in which they prioritize their job and
relationship with employer. This difference can impact international business in many different
ways. Lastly culture can also impact international business in terms of space. Some people focus
upon maintaining their personal space because less personal space availability can directly
impact their overall work. Some people focus upon maintaining ownership of their space and
such people require ownership of their space like of their work or task given to them because non
availability of ownership of their task or job can demotivate them to, they can lose interest in
doing a work. So, from this analysis it is clear that it is important for global organizations to
focus upon reducing or maintaining cultural difference in order to maintain or manage their
diverse workforce as any kind of presence of cultural difference can impact business at
international level.
Different strategies used in international business context in managing cross cultural situations in
the workplace
According to the view of Dubey, (2018) there are various kinds of ways in which cross
cultural situation within organizations can be managed. It is important for organizations to focus
upon using appropriate strategies so that they can manage their culturally diverse workforce and
gain control over their cross- cultural situation. Organization should focus upon maintaining a
healthy working environment. This can be done by generating awareness among employees by
celebrating different culture and motivating different cultural perspective of people so that others
can get aware of co- workers perspective and way in which they live their lives.
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As per the view of Zhu, (2017) one of the best strategies for managing cross- cultural
situation is by maintaining effective and efficient communication. Effective communication
helps in resolving any kind of misunderstanding among employees, it helps them in
understanding perspective of other co- workers and employees in an effective and appropriate
manner. Effective communication only be maintained by keeping an open- mind, having
complete knowledge of cultural difference that exist within organization, practising non- verbal
communication so that relationship between management and employees can be managed in an
effective and appropriate manner.
In addition to this, Zhu, (2017) explains that, one of the best strategies for managing
cross- cultural situation each and every employee working within a team or on a particular task
with others, each of them need their own space. Some of them require their own personal space
whereas some of them require ownership of their own work or task while working within a team.
Management or leaders can focus upon reducing information gap among employees so that feel
comfortable and space required by them can be provided to them so that overall team work or
task can be completed in an appropriate manner. An organization should also focus upon
developing motivational strategies for their culturally diverse workforce as per their values,
beliefs and thinking. Motivating employees by providing them with range of benefits as per their
needs and requirement is one of the best way through which cultural diversity within an
organization can be maintained and cross- culture relationship within an international business
can be maintained easily and effectively.
Conclusion
From the above literature review it has been summarized that there are various kinds of
theories that can be used to understand cultural differences and ways in which this difference can
impact international business in both positive and negative manner.
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REFERENCES
Books and Journals
Adamczyk, M., 2017. The importance of cultural differences in international business. Central
European Review of Economics and Management. 1(2). pp.151-170.
Beugelsdijk, S., Kostova, T. and Roth, K., 2017. An overview of Hofstede-inspired country-level
culture research in international business since 2006. Journal of International Business
Studies. 48(1). pp.30-47.
Boussebaa, M., 2020. From cultural differences to cultural globalization: towards a new research
agenda in cross-cultural management studies. critical perspectives on international
business.
Dubey, S.S., 2018. Leadership Strategies in Cross-Culture Settings: Processes and Practices.
In Handbook of Research on Cross-Cultural Business Education (pp. 199-223). IGI
Global.
Ferraro, G.P. and Briody, E.K., 2017. The cultural dimension of global business. Taylor &
Francis.
Mladenović, S.S., and et. al., 2017. Cross-cultural dimensions influence on business
internationalization by soft computing technique. Computers in Human Behavior. 75.
pp.865-869.
Nandan, S., 2020. Organizational Culture Dimensions as Drivers of Employee Engagement for
Business Sustainability: Towards a Conceptual Framework. In Sustainable Human
Resource Management (pp. 109-132). Springer, Singapore.
Zhu, W., 2017. A cross-cultural pragmatic study of rapport-management strategies in Chinese
and English academic upward request emails. Language and Intercultural
Communication. 17(2). pp.210-228.
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