Group Research Paper

Topic 9- Cross-Cultural Teams: People Issues in Global Business General Framework

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Table of Contents

Executive summary. 3

Introduction. 3

Challenges in recruiting and managing cross-cultural teams. 3

Conclusion. 12

Who did what?. 13

Reference List 17

Executive summary

The group research paper is based on the issues prevailing in cross-cultural teams, and focus has been given on the condition of international managers. At first, a brief introduction of cross-cultural teams has been demonstrated. Thereafter, the paper has been divided into four basic components. The components are expatriate manager issues, skills of successful managers, demonstration about the multivariate analysis of the recruitment process and lastly, acculturation issues faced by international managers. Relevant literary sources have been used to support the arguments made in individual components of the paper. Global businesses can be managed effectively if the training and development process of international managers is systematically conducted.

Introduction

A cross-cultural team can be defined as a team consisting of people who belong to different cultural background. It is necessary for companies to understand the reasons behind different behaviours of employees. Behaviour is shaped by cultural upbringing. Due to the differences in behaviour conflict and issues in the team arises. It is impossible to lead a global team if the leaders lack a basic understanding of the individuals that comprises a team. In this report, the focus shall be given on the challenges that cross-cultural teams face. The broader area has been subdivided into four main sections. At first, the issues faced by expatriate managers while handling a global team shall be explored. Following that, the necessary skills or abilities that international managers must possess will also be discussed using relevant literature. The usefulness of multivariate analysis in recruitment cases shall be explored with relevant examples. Lastly, issues faced by international managers while trying to learn the cultural practices of another country shall be discussed in the paper.

Challenges in recruiting and managing cross-cultural teams

Issues faced by expatriate managers

Expatriate managers can be referred as those who are residents of another country and has been appointed to work in a different country. They are appointed in a different country because they possess specialised skills and knowledge about the organisation where they have been employed. It is challenging for HR managers to find or appoint another candidate who possess the same degree of skills and knowledge in their respective area. However, managing a cross-cultural team is not easy for an expatriate manager despite possessing enough skills and expertise. While handling international assignments, the managers are likely to face huge challenges. International assignments give an opportunity to staff to develop their careers. They are supposed to coordinate the global business lines, manage international subsidiaries, share organisational knowledge and also widen the organisational boundaries into new markets (Mansor et al., 2014). Hence, the responsibilities of expatriate managers are multi-fold in nature. Consequently, errors, issues and failures are a natural phenomenon.

A study conducted on 16 Australian MNCs operating in China showed that these internalised firms are good at performance appraisals and goal setting; however, they are poor at mentoring and training (Fee et al., 2011). Similarly, another study on cross-cultural management highlighted the challenges of expatriates in a detailed way. The study revealed that training and adjustments issues were common when Anglo-American managers were appointed to conduct the business operations of the company in Hong Kong location. Hong Kong is an Asian country, and naturally, the cultural practices and traditions are different from America. The social roles are defined differently, and therefore, the expatriate managers have been facing issues while making interpersonal interactions. Again, the culture shock was a significant factor and expatriates have been facing issues both at a micro-level and a macro-level. In order to adjust to a different environment, expatriate managers need to work hard and enhance their professional or technical expertise. It is necessary for expatriates to focus on active learning and ensure effective communication.

Another study has been conducted on expatriate managers in the UAE. The purpose of the study was to examine the level of cultural awareness and skill-related issues of those managers. The leadership experiences and management within an Islamic context is unique. Huge numbers of expatriate managers are increasingly recruited in the UAE because the nation has recently gained economic prosperity and growth (AlMazrouei and Pech, 2015). The findings of the study reveal that factors such as religious practices, paternalistic style of management, Arabic language and customs related to time management and female dress code tend to affect the experiences of expatriate managers in UAE. It is evident that the national culture and sensitive components of the culture in the UAE tend to affect the perspectives of expatriate managers. In order to ensure effective local staff management, it is necessary for the expatriates to gain enough knowledge about the local culture.

Drawing upon Hofstede’s theory

In this context, it is necessary to understand Hofstede’s cultural dimensions theory. He has developed a framework to understand cross-cultural communication. The theory suggests that the values and culture in a society tend to affect the behaviour of the members of that society. He has used six different dimensions and considered four nations such as China, Brazil, Germany and the US. The dimensions are Power Distance Index (PDI), Collectivism vs. Individualism (IDV), Uncertainty Avoidance (UAI), Masculinity vs. femininity (MAS), Long-term orientation vs. short-term orientation (LTO) and Indulgence vs. restraint (IND). It is worthy of consideration that when PDI is high, an organisation has a well-established hierarchy. It means that people with a higher power in the organisation exerts higher control on others. Similarly, organisations that thrive on individualism tend to place a higher value on the task rather than relationships with team members. Contrarily, an organisation that values a collectivist mindset tends to create a people-oriented culture. The Masculinity vs. Femininity (MAS) dimension is another interesting dimension studied by Hofstede. Organisations that prefer masculine characters such as assertiveness, material rewards and heroism are completely achievement focussed. Similarly, in feminine societies, value is placed upon cooperation rather than competitiveness. Again, the LTO dimension shows that some organisations value short-term goals while some value long-term goals. Lastly, in certain societies indulgence or freedom is valued and organisations operating in those societies tend to understand the importance of fulfilling human desires. Contrarily, some cultures values restraint or strict guidelines. Naturally, restrained organisations operate by following strict social norms. A study on Kuwaiti sample showed that gender differences exist for five different dimensions outlined by Hofstede (AlAnezi and Alansari, 2016). These dimensions are PDI, IDV, MAS, UAI and LTO. Hence, expatriate managers consistently face challenges because the cultural dimensions are different in a foreign nation. Most organisations operating in hotel industry operates all across the world and an expatriate manager naturally faces challenges due to different cultural practices prevalent across the world. While managing a hotel in a foreign country, an expatriate manager is supposed to consider the three important dimensions such as the power distance, uncertainty avoidance and collectivism/individualism (Lee, 2015).

Figure 1: Dimensions that define culture

(Source: sciencedirect.com, 2020)

Abilities and skills of successful international managers

When a company has global presence, it is necessary for managers to acquire skills and knowledge related to the culture where the company operates. International managers face multitude challenges and it is vital to ensure complete acquisition of language capabilities as well as cultural awareness. Specific competencies of managers make turn them effective leaders. In order to ensure the completion of a project successfully, study shows that in case of simple projects leaders should use transactional style and in case of complex projects, leaders must show transformational style of leadership (Muller and Turner, 2011). Moreover, the necessary skills and abilities of international managers has been outlined below-

• Possess strategic perspectives- In order to operate in an international environment; the manager should possess a clear view and deep industry-knowledge. This in turn, allows the managers to anticipate the economic or market trends (Zenger, 2020). Based on a long-term view, these managers consider broad strategy and translate them into meaningful objectives.
• Focus on building committed teams- International managers understand that global teams need to stay committed and engaged. It would be possible to derive practical results if team members show deep commitment towards one another. Global leaders focus on long-term goals and therefore, they stretch their boundaries as well as the boundaries of their team.
• Risk taking abilities- Capitalising on risk is one of the basic skills that has been acquired by international managers. Irrespective of the type of industry, risks prevail and international managers are aware of the upcoming risks. Risks can be related to financial or legal matters. Operating at an international level requires courage; therefore, global leaders are willing to take as much risk as possible.
• Possess expertise about the business- Doing business around the world can be inherently challenging because technological complexities are rising at a faster rate. In case, the managers are unaware of industry standards and specific knowledge required for running the business, the business is likely to fail. Therefore, successful international managers make consistent efforts to learn, grow and adapt to the fast-paced business environment.
• Get exposed to other cultures- International managers are supposed to get exposed to different sectors and nations. The thinking style of people differs in different cultures and people across different cultures deal with others differently. A textile plant in Germany will operate differently than a textile plant in India. This is because the cultural dimensions will be different.
• Good understanding of communication- Having brilliant ideas is not enough if an individual fails to communicate the idea properly (Forum, 2020). International managers are aware of the fact that good communication allows an individual to make advancements in their career. They deal with crucial clients and cannot afford to mess up an opportunity due to the lack of communication skills.

Figure 2: Qualities of international managers

(Source: researchgate.net, 2020)

Usage of multivariate analysis in the recruitment process of international managers

Multivariate analysis is done on the basis of multivariate statistics and it mainly includes more than one observation. The outcome of the observation also depends on more than one variable. The value of any dependent variable tends to vary based on the value of more than one independent variable in case of multivariate analysis. Hence, change in one variable tends to have an impact upon another variable. Therefore, while recruiting managers for a company’s international location, it is necessary to consider certain variables. The variables are independent and have an effect on the overall recruitment process of international managers. A multivariate analysis can be done by considering the following external and internal variables-

External variables

• Socio-economic factors– The changes political, social and economic changes occurring in a country certainly have an effect on the HR practices. For example, in Rome, the changing social and political paradigms since the 90s has a profound effect on the recruitment process of the organisations operating in Rome because the organisations are extremely sensitive to the external environment (Chitescu and Lixandru, 2016).
• Demand and supply- Manpower availability within and outside a nation tends to affect the recruitment process.
• Rate of employment- The location where an organisation operates will certainly have an effect on the employment conditions. In other words, the labour market conditions will affect the recruitment efforts of an organisation. In case, the unemployment rate of an economy is high, it will influence the applicants’ availability.
• Organisation’s image- The recruitment process would be affected by the level of goodwill of an organisation. In case an organisation has managed to develop goodwill of its own, it is possible for the management to take decisions freely. The management is less likely to face fewer constraints during the recruitment process.
• Market competition- When an organisation operates in a fiercely competitive market, it is necessary for the organisation to change or modify its HR practices and policies from time to time. The policies adopted by the company should be better than its competitors. Hence, in order to ensure the recruitment of right candidates for the right position, it is necessary to review the recruitment practices of the competitors.

Internal variables-

• Type of work- One of the common internal variables that would affect the recruitment policy of an organisation is the nature and type of work. An organisation consist various types of teams and the type of work varies accordingly. Therefore, while recruiting an international manager, the organisation might consider appointing the manager in a project team or a troubleshooting team.
• Organisation culture- Organisational culture focussed on embracing diversity and reducing discrimination in the workplace is more likely to recruit candidates belonging from a foreign nation. A study conducted on the recruitment process of Nigeria-based gas and oil construction industry showed that the host community culture has an impact on the organisational selection and recruitment process (Anthony, 2015). Both company needs and cultural influences tend to affect the recruitment process.
• Career planning- Attitude of managers towards career growth and development tends to affect the recruitment process. Some managers might be enthusiastic about exploring new opportunities across the international locations of the company. Hence, they are naturally attracted towards the career development opportunities.
• Organisation’s growth rate- The growth and performance of an organisation depends on the degree to which modern-day businesses use its recruitment strategy. In order to retain international managers, the organisation must be able to afford the annual pay of international managers. As per the reports in Glassdoor, around 84% of job seekers are attracted to the image of a business (Strategy, 2019). Business image is built upon business growth and performance.
• Recruitment cost- Costs related to advertisements, salary of in-house recruiters, travel expenses and recruiter fees of third party makes up the overall recruitment cost in an organisation. In case, an organisation fails to bear these costs, it will have a negative impact on the recruitment process of international managers.

Therefore, the mentioned external and internal variables can be considered for a multivariate analysis of the recruitment process. It is important to note that the external variables will act independent of the internal variables during the recruitment process. For instance, organisational needs might be completely different from market trends. Similarly, recruitment costs or other such financial implications are not related to any of the external variables such as market competition or demand and supply. Apart from the outlined variables, the other variables that might affect recruitment process are demographic factors of a potential international manager. Factors such as gender, age and literacy level are few of those demographic factors.

Acculturation issues in expatriation and repatriation of international managers

Multinational organisations are increasingly focussed on enhancing the training, selection and recruitment process of overseas personnel. Notably, in international human resource management literature, the significance of the training and selection process has been widely discussed. Previous studies also suggested that more than 60% organisations rarely provide adequate acculturation training to the expatriates. Even if training is provided, it is of “limited” nature. For instance, organisations used to provide a brief cultural overview, area briefings and basic language study to the expatriate managers. There was a lack of a comprehensive and valid acculturation training method. It led to issues such as loss of local employees, overseas blunders, poor relations with host country governments and breaking of joint ventures. Hence, managerial expertise along with proper cross-cultural training became a necessity. The issues arising due to the lack of a proper acculturation process has been discussed briefly below-

Excessive burnout

A study conducted on the hospitality industry suggested that expatriate management skills vary based on the origin country of the expatriate (Causin et al., 2011). In certain nations, value is placed upon expatriate and repatriate management skills than other countries. Moreover, it is necessary to consider training activities designed for cross-cultural teams and the role of the parent company is paramount in this case. Due to poor acculturation and expatriate management process, burnout is one of the common issues faced by international managers. It becomes impossible to adjust to a culture that is completely unknown to the manager. Naturally, the job satisfaction levels reduce if an expatriate is unable to adjust to their surroundings. The findings on the study done on expatriate management revealed that higher degree of interaction and work adjustment leads to reduced degree of burnout among the expatriates (Silbiger et al., 2017).

Poor work-life balance

Lack of work-life balance is another issue that prevails due to poor acculturation process. The repatriates and the expatriates are unable to manage the demands of a new workplace and it has a negative impact on their subjective well-being. Research shows that personal environment and subjective well-being of an expatriate manager leads to the success of any international assignment (Fischlmayr and Kollinger, 2010). In this study, the focus has been given on female expatriates and it is evident that female expatriate managers have more difficulty while maintaining a balanced family life when they are engaged in any international assignment. There is no time for building social networks, leisure activities or sports. Women expatriates deal with more stress and pressure while working on an international assignment.

Figure 3: Factors affecting work-life balance of international managers

(Source: researchgate.net, 2020)

Language barriers

Language is one of the essential components of organisational communication. However, international managers are likely to face language barriers while handling foreign assignments or teams. It has a direct impact on trust formation. A study was conducted on senior managers and team leaders of 15 multinational teams in Germany-based automotive companies (Tenzer et al., 2014). The results show that the trustworthiness of the members of the teams gets affected due to their emotional and cognitive response to language barriers.

Conclusion

The report has been written by considering the operations of cross cultural or global teams in modern society. Managing a global team can be challenging for the appointees and the managers are likely to face recruitment and management issues. One of the most common reasons behind conflict within cross-cultural teams is that employees and managers do not share the same cultural background. Hence, drawing upon the cultural dimensions and its effects on individual behaviour, the issues faced by expatriate manager has been explored. Hofstede’s theory has been considered and aligned with the issues faced by managers. Following that, it has been demonstrated that international managers must possess risk taking and strategy forming abilities to succeed in an international environment. The manager is supposed to possess excellent communication skills and greater exposure to different cultures around the world. The report also consists of a multivariate analysis of the external and internal variables that might affect the recruitment and selection process. The variables are completely independent of each other. Nevertheless, the variables can positively and negatively affect the recruitment process of MNCs operating at a global level. Lastly, the issues arising due to poor acculturation process has been outlined in the report.

Who did what?

Reference List

AlAnezi, A. and Alansari, B., 2016. Gender differences in Hofstede’s cultural dimensions among a Kuwaiti sample. European Psychiatry, 33, pp.S503-S504.

AlMazrouei, H. and Pech, R.J., 2015. Working in the UAE: expatriate management experiences. Journal of Islamic Accounting and Business Research.

Anthony, S., 2015. Impact of organisational culture on recruitment and selection practices in the oil and gas construction industry in Nigeria: Saipem in focus. European Scientific Journal, 11(16).

Causin, G.F., Ayoun, B. and Moreo, P., 2011. Expatriation in the hotel industry. International Journal of Contemporary Hospitality Management.

Chitescu, R.I. and Lixandru, M., 2016. The influence of the social, political and economic impact on human resources, as a determinant factor of sustainable development. Procedia Economics and Finance, 39, pp.820-826.

Fee, A., McGrath‐Champ, S. and Yang, X., 2011. Expatriate performance management and firm internationalisation: Australian multinationals in China. Asia Pacific Journal of Human Resources, 49(3), pp.365-384.

Fischlmayr, I.C. and Kollinger, I., 2010. Work-life balance–a neglected issue among Austrian female expatriates. The International Journal of Human Resource Management, 21(4), pp.455-487.

Forum, W. 2020. The Four Skills You Need To Become A Global Leader. [online] Forbes. Available at: https://www.forbes.com/sites/worldeconomicforum/2016/01/06/the-four-skills-you-need-to-become-a-global-leader/#2354a5ee2dbd [Accessed 4 Jun. 2020].

Lee, T.J., 2015. Implications of cultural differences for expatriate managers in the global hotel industry. Tourism Analysis, 20(4), pp.425-431.

Mansor, M.F.B., Hamid, N.B.A., Kamil, S.B. and bt Abu, N.H., 2014. Determinants of expatriate manager failures in the international assignment. Advances in Environmental Biology, pp.584-593.

Müller, R. and Turner, R., 2010. Leadership competency profiles of successful project managers. International Journal of project management, 28(5), pp.437-448.

Silbiger, A., Berger, R., Barnes, B.R. and WS Renwick, D., 2017. Improving expatriation success: the roles of regulatory focus and burnout. British Journal of Management, 28(2), pp.231-247.

Strategy, H. 2019. Business Growth Starts With Your Recruitment Strategy. [online] Business News Daily. Available at: https://www.businessnewsdaily.com/9591-recruitment-growth-strategies.html [Accessed 4 Jun. 2020].

Tenzer, H., Pudelko, M. and Harzing, A.W., 2014. The impact of language barriers on trust formation in multinational teams. Journal of International Business Studies, 45(5), pp.508-535.

Zenger, J. 2020. The 6 Competencies Global Leaders Need To Succeed. [online] Forbes. Available at: https://www.forbes.com/sites/jackzenger/2014/06/26/the-6-competencies-global-leaders-need-to-succeed/#862d75556f12 [Accessed 4 Jun. 2020].