Challenges of Managing Teams in Multinational Companies: Research

This report delves into the multifaceted challenges of managing teams within multinational companies. It examines the impact of globalization on organizational structures, emphasizing the importance of understanding and navigating cultural differences among employees. The research identifies key issues such as communication barriers, differing perceptions of power, cultural insensitivity, and the difficulties of engaging remote workers. The report explores theoretical concepts of cross-cultural management and provides an overview of the challenges faced by managers of global teams. The report also discusses the impact of time zones, language differences, and performance management systems on team dynamics. The literature review highlights several factors that affect communication strategies, team cohesion, and the need for cultural training. The report concludes by emphasizing the need for effective strategies to minimize conflict and maximize efficiency within cross-cultural teams. The report references multiple scholarly sources to support its findings.

Running head: BUSINESS RESEARCH METHODOLOGY
Business Research Methodology
Challenges of managing team in multinational companies
Assignment 1
Name of Student
Name of the University
Author Note

1
BUSINESS RESEARCH METHODOLOGY
Introduction
The organizations of modern times are getting connected to each other not only for
gaining more number of customers but also for recruiting the best manpower from the industry
(Sekaran and Bougie 2016). Modern day technology has made it possible to connect with firms
across the world. The globalization has bridged the cultural gaps between the countries and there
has been a subsequent reduction of the differences between them. The organizational leaders
need to realize the way they would interact with the employees and understand the cultural
differences of the employees (Reiche, Mendenhall and Stahl 2016). It is important to manage the
cultural uniqueness of the countries of operation of the company so that there is no hurting of the
religious sentiments of employees of other geographical location.
The leaders who manage a cross cultural set of teams are often scrutinized by their
employees and they are often questioned about their decisions. The position of a leader is gained
through consistent respect and good work, which can be lost in an instant if he fails to manage
the culturally diverse team of the organization. This paper would analyze the different
challenges of managing team in multinational companies. This assignment would strive to
understand the different theoretical concepts concerning the cross cultural management of teams
in the various multinational companies. The multiple challenges faced by the cross cultural
managers would be elaborated in detail and suitable solutions would be sought.
Project Objective
The primary objective of the project is to understand the different challenges faced by the
cross cultural teams. The objective is to understand the perspective of the managers of the

2
BUSINESS RESEARCH METHODOLOGY
multinational firms concerning the management of the cross cultural teams. The basic objectives
of this project is enumerated below-
 To understand the different aspects of the cross cultural teams
 To explore the different management practices of global teams in multinational
companies
 To identify the different challenges faced by global team in their day to day management
Project Scope
The organizational leaders have to manage a diverse workforce in which the employees
are located in different parts of the geography (Sekaran and Bougie 2016). They often have to
interact, monitor, supervise and evaluate the performances of the team which are located at
distant locations. It becomes difficult for the managers to supervise the teams which they cannot
see or get in touch every day. The only modes of communication are the online tools of
communication, which often becomes a challenge for them. This project would consider that the
teams of the multinational companies are located in different countries and they are far from
each other. This review would exclude the teams which are located in the same country but in
different locations. The teams which are located in the same country, same time zones and same
geographical regions are outside the scope of this project.
Literature Review
As opined by Hair (2015), the cross cultural teams operate in a competitive environment,
where the businesses strive to deliver the services and products for satisfying the global
customers. The world has recent mobile as well as cloud technologies that have reduced the
various barriers of communication. As opposed by Northouse (2015), the new global economy

3
BUSINESS RESEARCH METHODOLOGY
has fostered more competition and also there has been an increase in the demand of the
customers. There has been greater collaboration across the organizations as well as project
centric organizations. The companies are striving to create a global strategy for attaining
communication success. The first step that should be taken by the global project teams is to
formulate a suitable formal communication strategy which would mean a reduction of the
obstacles faced by the teams. These would ensure that there would be greater exchange, sharing
as well as interpretation of the information that is critical for business success.
The global firms should consider several factors before formulating communication
strategy (Gu et al. 2014). They should understand the global teams as being disperse
stakeholders who would have considerable distances between themselves. They should ensure
team cohesion and address the drawbacks of each team. There should be more instances of
interactions between the global teams which would remove the barriers between them, if any.
The managers also need to focus on the multi-lingual work environments which can cause
several delays as well as relay of inaccurate information. The managers should strive to find a
common medium of communication in which both the parties would be able to understand the
words of each other. The global teams are working in different time zones and hence there
should be the selection of certain members who would communicate key ideas or agendas of the
team meetings to the employees working in respective regions. There should be the presence of
global representatives who would communicate the information from one region to another.
According to Thomas and Peterson (2017), the success of the global economy is
dependent on the dispersed locations in the different areas of the globe. It is imperative to build
the best functional expertise around the world along with the integration of local knowledge for
penetrating in the different markets of the world. The managers who actually lead a global team

4
BUSINESS RESEARCH METHODOLOGY
have to face stiff challenges. When there are multiple countries involved and there are diverse
functional backgrounds, then there are high chances of misunderstanding and distrust which can
create havoc in the team.
As opined by Maldonado and Vera (2014), one of the most common issues in the cross
cultural team management is the perception of power. There are different structural factors that
determine the number and location of the team members. The basic issue lies with the perception
of power enjoyed by the team members located in different locations. For example, the
employees located in United States may feel that their European counterparts in Switzerland may
have more power. As supported by Erez et al. (2013), this kind of imbalance gives rise to
negative influences on the people. The more powerful members would try to believe that the less
powerful ones would contribute less to the betterment of the organization. The team members
located in the company headquarters are perceived to enjoy better and enhanced powers as
compared to the on-site locations (Lisak and Erez 2015). This may sometimes lead to greater
conflict resolution among the team members.
As commented by Bower and Cohen (2014), the cross cultural teams are bound to have
cultural differences in the team. The employees of one country may have several indifferences
for employees of other nations. There can be great degree of stereotypes in which the employees
deliver low performance due to their unfair perception of the other cultures (Staub 2013). For
example, Indian employees have grudges against their US counterparts, in which there are bound
to be conflicts if the people of both these countries belong to the same organizational team.
There can be different local perceptions, languages, cultural beliefs and others which govern the
employees of one region. The issues of cultural insensitivity are common in cross border teams.

5
BUSINESS RESEARCH METHODOLOGY
The viewpoints of Moran, Abramson and Moran (2014) suggest that it is important to
implement zero tolerance policy for addressing the cultural differences among employees
working in different geographical locations. It is important to remind the team members about
the organizational goals and the common shared purpose of their existence. The leader of the
company should motivate each individual employee and remind their importance in fulfilling the
corporate objectives. The employees should be encouraged to talk about their culture and should
be taught about respecting other’s cultures. There should be enhancement of the organizational
culture that fosters the openness and respect towards each other’s cultural backgrounds.
As stated by Compact (2013), the act of keeping the remote workers engaged is a
difficult task to accomplish. The remote workers working in an on-shore task may feel less
motivated to work than the employees who visit office every day. This would also have an effect
on their productivity as there would be considerable poor work quality. There may be situation in
which the employees would feel no zeal to work and fail the deadlines of project. There is no
substitute for face to face communication and the employees located in distant locations may feel
that they have the power of doing anything and no one is there to monitor them ( Innanen,
Tolvanen and Salmela-Aro 2014). The remote workers may find it difficult to participate in a
mid-night conference which is called by his boss located in dives geographical location.
As opined by David (2013), there are issues with the performance management system
in a cross border team. It becomes difficult for the managers to monitor measure and evaluate the
performance of the employees who are located in a diverse geographical location. This often
creates gap when it comes to managing their performances in a performance appraisal process
(Deresky 2017). In a cross border team, the boss is unable to measure the performance of the
team members and the level of dedication that are situated in far off locations.

6
BUSINESS RESEARCH METHODOLOGY
The findings of Reiche, Mendenhall and Stahl (2016) reveals that managing a global
team means that there is slow pace of decision making process. In case of group interaction,
reviews, meeting and others, it would be a difficult process to manage the employees located in
distant locations. The employees who have their supervisors in other parts of the world may feel
left out. They may also have slow pace of understanding of their major job duties and
responsibilities. The supervisors would have sluggish rate in the decision making process.
There would be more certain barriers of communication when there are cross border
teams. The tough messages may be misunderstood by the distant team member. There is also a
possibility of misunderstanding of simple messages as the other person is unable to perceive the
look of the sender. This causes significant barriers of communication in global teams, which
needs to be managed effectively.
As opined by Maley and Moeller (2014), it is important to invest in cultural training
where there should be hiring of a consultant who would provide orientation to the employees
regarding cross cultural management coordination. It is also important to implement employee
friendly practices in which the employees working in global teams would be benefitted.
Conclusion
The cross-border management is one of the most important factors of the global
management in which there are several problems that are encountered by the global teams. The
global teams not only try to minimize the conflicts but also try to maximize their efficiency.
However, there are instances when they are unable to do so and hence there is a significant
reduction in the productivity of the firm. This literature review has strived to focus on the
different parameters of the cross-cultural team conflicts and how they can be reduced.

7
BUSINESS RESEARCH METHODOLOGY
References
Bower, G.H. and Cohen, P.R., 2014. Emotional influences in memory and thinking: Data and
theory. Affect and cognition, pp.291-331.
Compact, U.G., 2013. Global corporate sustainability report 2013. UN Global Compact
Reports, 5(1), pp.1-28.
David, H., 2013. The" task approach" to labor markets: an overview (No. w18711). National
Bureau of Economic Research.
Deresky, H., 2017. International management: Managing across borders and cultures. Pearson
Education India.
Erez, M., Lisak, A., Harush, R., Glikson, E., Nouri, R. and Shokef, E., 2013. Going global:
Developing management students' cultural intelligence and global identity in culturally diverse
virtual teams. Academy of Management Learning & Education, 12(3), pp.330-355.
Gu, V.C., Hoffman, J.J., Cao, Q. and Schniederjans, M.J., 2014. The effects of organizational
culture and environmental pressures on IT project performance: A moderation
perspective. International Journal of Project Management, 32(7), pp.1170-1181.
Hair, J.F., 2015. Essentials of business research methods. ME Sharpe.
Innanen, H., Tolvanen, A. and Salmela-Aro, K., 2014. Burnout, work engagement and
workaholism among highly educated employees: Profiles, antecedents and outcomes. Burnout
Research, 1(1), pp.38-49.

8
BUSINESS RESEARCH METHODOLOGY
Landis, D. and Brislin, R.W. eds., 2013. Handbook of intercultural training: Issues in training
methodology (Vol. 116). Elsevier.
Lisak, A. and Erez, M., 2015. Leadership emergence in multicultural teams: The power of global
characteristics. Journal of World Business, 50(1), pp.3-14.
Maldonado, T. and Vera, D., 2014. Leadership skills for international crises: The role of cultural
intelligence and improvisation. Organizational Dynamics, 43(4), pp.257-265.
Maley, J.F. and Moeller, M., 2014. Global performance management systems: The role of trust
as perceived by country managers. Journal of Business Research, 67(1), pp.2803-2810.
Moran, R.T., Abramson, N.R. and Moran, S.V., 2014. Managing cultural differences. Routledge.
Northouse, P.G., 2015. Leadership: Theory and practice. Sage publications.
Reiche, B.S., Mendenhall, M.E. and Stahl, G.K. eds., 2016. Readings and cases in international
human resource management. Taylor & Francis.
Sekaran, U. and Bougie, R., 2016. Research methods for business: A skill building approach.
John Wiley & Sons.
Staub, E., 2013. Positive social behavior and morality: Social and personal influences. Elsevier.
Thomas, D.C. and Peterson, M.F., 2017. Cross-cultural management: Essential concepts. Sage
Publications.