Introduction
In 1993, Geerd Hofstede wrote about the universal management and was of the belief that management is not universal and each country has its own management principles. Fast forwarding 23 years and the world has certainly changed. With companies involved in global business and the use of the internet in global commerce the world has gotten smaller and more and more business people are recognizing that individual differences remain important. However the level of differences are lessened as people have learned to work together to achieve common goals. This paper will study the changes that the global ecommerce organizations have effected in the business organizations of difference countries.
The Global internet businesses and working relationships that have insured are part of the changes that have occurred in the past twenty years that creates a different methodology for working together. Translations programs, world clocks, email, and a host of apps equalize the playing field that in the past language had separated the workforces.
Many philanthropic businesses became interested in sustainability issues which had a paternalistic effect on the developing countries which has taught both sides of the management teams how to effectively work together in areas of the environment to help all people who share the planet.
In 1980, Geerd Hofstede wrote a book that asked if American theories apply abroad. The answer was that no they do not apply but thirty years later the answer appears to be a yes. This is verified in the wave of immigration to the United States in which many people are immigrating to achieve the life that Americans are believed to have. They are chasing the American Dream. In the thirty years, many people have gone before and their working day by day with international companies has helped in addition to the Internet to create not only a diverse America but a diverse international population.
This paper will look at some of the historic changes that have taken place in the past 20-30 years that have caused a shift in cultural differences in the modern world. The main focus will be the nature of the global impact of the internet causing many of the changes from the original theories of Hofstede . Many of the key dimensions of culture are still in play although in a changed manner. Different management styles are still very much in use although they have changed accordingly with the lack of a defined hierarchy of positions as there was thirty years ago, One example is that managers were known to have secretaries and the managers did not do their administrative or 'secretarial" tasks. In today's environment, 'administrative assistants, come in both genders, and each manager has their own email account, calendar, voice mail and many of the tasks are assumed by the manage that had in the past been the function of a 'support personnel. This change causes the managers to be more on the front line in dealing with international mangers.
The education of today's managers include the international challenges as part of the course work so that it is not for a moment perceived as something unusual. Email, podcasts, international calling, all are methods of normal business. Today's young managers were just being born when the Gerdt Hofstede studies were done so the studies appear as historic rather than factual to the millennial. Millennial are conditioned to see people of different cultures through the media and electronic world so it is not the major differences in the work place as there were years ago. However, the Hofstede still have creditability in some areas as this paper will attempt to demonstrate.
ACADEMIC OBJECTIVES
Nationality is the desire of people of the same ethnic group that form one or more political nations. Nations are political units as well as ethnic groups. Nations are also sociological and psychological units as well. They give an individual a sense of being. Since nationality effects the cultural norms of workers the important to this study cannot be underestimated.
Individual versus collectivism is a cultural dimension of Geert Hofstede and the culture of an individual dictates their perchance toward individual or collective methods of performing on a project. Global projects are assigned on the most part by education and expertise of the members of the team. The Project manager is the person who is most likely to deal with the individual versus collectivism cultural aspects of the members.
The project for the purposes of this illustration is one with strict deadlines. Cultural dimensions of "Eastern" versus "Western" approaches to the project begin to be apparent. In this example, an American and a Chinese manager are assigned to complete the computer code for the assumed project. Both will get the task done. However, the American in the Western dimension of individualism will complete the project by leaving other tasks aside and devote the increased amount of time and pressure to the project. The Chinese with an "Eastern" or collectivist dimensional approach will work long hours with several people and use the "we" approach instead of "I”.
The importance of this dimension and the other dimensions in the cultural affects on organizations is important for the project managers and those working in global organizations. The differences are not as stark as in the past because this type of workforce has become the norm rather than the exception.
Although all the dimensions have a role in the computerized generation to some extent the second one to be examined in the literature review is the indulgences and the restraint theory. The measure of happiness that an individual feels in their life has an effect on their work performance and in the organization that they are part of. Indulgent dimension looks for happiness and joy and more of a free living hippie type of style. The opposite or counterpart is the society that evolves with strict rules and certain forms of emotions that control the actions in their life.
SETTING THE SCENE
Work and culture are naturally different that in the early days of the research of Hofstede and this paper will look at the literature that seeks out the differences in cultural organizations in 2016. There are six dimensions of the Hofstede theory but this paper will focus on the two most prominent, the indulgent and the individual and the collective and restraint. All the dimensions are still relevant to some extent
There are four different management styles that have been proposed by several theorists. At each end of the spectrum is autocratic and permissive.
Literature Review
Management Styles
Business leaders like to make decisions in different ways. Because of this they are not looking or likely to accept a one size fits all approach to a set of management principles. Global leaders are not looking for a cookbook set of principles and practices to use in negotiations or the work flow of business. Instead the desire is to accommodate the difference and to get the job done. Global leaders are not going to accept any one of the encompassing set of universal principles. In a globalized business environment it is still important to know the leadership style of the mangers. Business leaders have unique decision making styles. These styles reflect the differences in cultural values and the need for achievement, affiliation, power, and information . The globalization of industry makes it a pre-requisite to foster business relationships in the environment. In an effort to expound on Hofstede’s' theories, a survey of Japanese and Chinese managers found that they perceived Western (particularly American) thinking was different that their own . Several of their differences occurred in the areas of objective, analytic and personal thinking. Also an American style is to analyze and conceptualize rather than rely on personal power. In a Chinese or Japanese deal that is a joint venture with Americans then the Chinese and Japanese will keep a high degree of control in the project which adds to the complexity of the project. Americans resent the tight control as a micro managing of the project and will try to change or offer competing strategies to change the balance of control.
Looking at the European approach in the global business climate, there are four styles that all tend to relate to the European choosing a decision style. For examples the Germans so not feel the need to become acquainted personally in making a business decision. The French are stand-offish and often characterized as aloof and the Swedes who are looking for a consensus or a working together middle ground. Americans try to make small talk and get to know the other managers to some extent. Americans also try to rush into the negotiations and get the decision maker to come forth with a final decision for the British though this is into a well received idea. And in dealing with the British it is not wise to rush them to make decisions .
The cultural differences influence a decision and the effects of the differences can affect the decision that is made in many cultures. One study on cognitive theories indicates that there is a relationship between the cognitive culture background and decision making. Corporate managers in all cultures make decisions with some cultural bias though and it is important to understand the background into this decision making. Cross culture cooperation depends on the respect for cultural differences. One such example is the hierarchy that American corporate structure involves in making a decision. A higher level manager can override the work products of a team of managers unilaterally so the managers have no recourse but to accept the decision.
The same approach to final decision making is different for Japanese managers. Since the decisions are made by a team consensus, the leader of the team is bound by that group decision. A group decision by the Chinese is more akin to the American hierarchy structure but the Chinese do not ask their employees for their opinions in a decision. The leaders make the decisions by themselves and without question from the managers. The Chinese will however, sell, the idea to the mangers as the Chinese pace a high value on the complete harmony in the group.
Add to the difference in the global business to the perspective is the Middle Eastern bloc and the countries in the Middle East act differently in their approach to global business ventures and decision making. The area includes many separate sects such as Muslims, Arabs, Turks, Iranians, Christians and many other groups. Mohammed is the driving religious leader to most of the population. Mohammed believed in a collective thought process to make a decision. His teachings are part of the global process that many will use to approach the global ventures. The ultimate decision on a global venture will be made according to the hierarchy and the unquestioned final decision is made by the "shura' or top leader. This person does not enter into the decision making process with other global mangers so the only way for this person to receive the diverse input from the group is through the advisers of the shura.
In reviewing the different ways that business decisions are made, it is important to examine the management styles of those people who are the managers working on the global projects. There are four basic styles that apply to the managers in global world universally and they will fit into one of the four styles. Decision making is defined as the action or process of making decisions especially important ones . The four different types of decision-making processes that depend on the cultural background and the decision making styles that are dependent on the values and the beliefs of the people involved in the decision making. In a narrow-sample strategy used empirical research that confirmed that cultural values do influence decisions and decision-makings styles . This study compared the hypotheses of the cultural difference in Croatia, Slovenia, and Hungary between the Hofstede's dimensions of national culture and decision making style.
China is the home of many skilled business men and women. As the Muslims look to Muhammad, a religious leader, the Chinese look to Confucius for an example of its logic in making decisions. The ideas of Confucius make the idea of parents and family the center of all decisions. This principle is called "guanxi" and has many implications for decision makings such as there is not an imperative answer. Life is not black and white but based on the particular situation, look for the long term is the most common factor in the answer to a problem. Preservation of the culture is all important and Chinese decisions are made in that context.
The context in which the Chinese consider when making decisions is important in the globalization of industry and commerce. Context looks to the decision maker and how the decision maker comes to the conclusion of the decision. The value of the decision maker comes from the culture and the cognitive abilities also come from eh culture. Both of these forces, value and cognition are part and parcel of the decision and according to one study, Rowe & Bloulgarides although written in 1983, considered the situational variables and the authors concluded that the decision style approach has many applications in processing an efficient management tool .
There is no right or wrong way to come to the decision in a management situation. There is a growing need to know how managers make decisions in different parts of the world. This is not without a dilemma in that the plan for how people are to work together. The only reasonable answer is to work with respect. This answer was put forth by both of the religious leaders, Muhammed and Confucius. Knowledge and respect in global business brings people together. In this sharing they make decisions using knowledge of the other's culture as a tool. Managers need though to be mindful of the differences to predict how a manager will react in a given situation knowing the cultural decision making style.
Types of Management Styles
Several management styles have evolved through the process of many cultures coming together in a global business environment. These different approaches give an indication of the approaches to the responsibilities and working relationships in the global business. Since many scholars have looked at these relationships, four major approaches to management have emerged as viable descriptions to the emerging styles. Likert in his book in 1967 classified these different styles into four approaches. The approaches are on a continuum of participative, paternalistic, exploitative and autocratic. A fifth, a consultative management style was identified as an organic style by Burns & Stalker . The fifth or organic management system is environmental and changes with the market and technological innovation. The increased technology has totally changed the characteristics that the millennial use in the management styles as they themselves are a result of change.
In addition to the technological changes are the changes to the business environment itself. The rise of the entrepreneur has created a manager that includes all the four styles plus many more. In 1993, Business Week in an article said that entrepreneurship accounted for the majority of new business and that cellular would replace cord phones with new personal communications systems. They were right in their predictions. However for this to happen, many managers throughout the world helped to bring the state of communications from the cord phone to the advances states that we enjoy today.
The managers on these telecommunications problems inevitably had difference management styles. Every individual has a cultural mosaic. Mosaic tiles represent the work ethic of the manager. The chart shows how the tiles can merge to influence behavior. Tiles that remain independent do not contribute to the individual and are areas of potential conflict. For example, women are interested in social values more than men who were more interested in organizational performance .This is just one sample of the cultural mosaics fitting together.
Figure 1 Bipartite representation of cultural mosaic
Another example is the change from a stereotype of the more perfect manager as being a male, thereby exhibiting male dominating characteristics. This has changed in recent years as the female manage becomes more prominent. Global leaders are female in some countries and in other countries such as the United States the female is are vying for a position of President.
Beside the gender roles are the tiles that encompass the cultural differences that are apparent with the male and female gender roles. Globalization that has occurred in the markets along with the political changes, high levels of mobility and the high technology skills of the millennial have had an influence on all of the mosaics including the male and female gender tiles. However there is still validly in the stereotypes as they illustrate a pattern of behavior in the conduct of business that original from a cultural impact of the nation of their birth . These complexities are very relevant for the staffing managers in a global firm. The management and the issuance of international assignments have been altered by the changing management styles in the globalization efforts. One study looked at the effects of this on supply side management and the successful results have been attempted included short-term assignments, and virtual assignments .
Different Cultural Settings and Dimensions
The Globe study or Global Leadership and Organizational Behavior Effectiveness , showed that leader or manager effectiveness is based from the societal norms, values, and beliefs. They likened the effect to the old adage, When in Rome do as the Romans do" which seems to still be an effective management tool globally. Age old wisdom appears to be the most reliable in the high technology age of the 21st century. In order to gauge the cultural differences in the manager the GLOBE looked at the findings of other theorist, Hofstede (1980), Schwartz (1994) Smith (1995) Inglehart (1997) .
They are:
“Power Distance: The degree to which members of a collective expect power to be distributed equally.
Uncertainty Avoidance: The extent to which a society, organization, or group relies on social norms, rules, and procedures to alleviate unpredictability of future events.
Humane Orientation: The degree to which a collective encourages and rewards individuals for being fair, altruistic, generous, caring, and kind to others.
Collectivism I: (Institutional) the degree to which organizational and societal
Institutional practices encourage and reward collective distribution of resources and collective action.
Collectivism II: (In-Group) the degree to which individuals expresses pride, loyalty, and cohesiveness in their organizations or families.
Assertiveness: The degree to which individuals are assertive, confrontational, and aggressive in their relationships with others.
Gender Egalitarianism: The degree to which a collective minimizes gender inequality.
Future Orientation: The extent to which individuals engage in future-oriented behaviors such as delaying gratification, planning, and investing in the future.
Performance Orientation: The degree to which a collective encourages and rewards group members for performance improvement and excellence." .
In a method of comparing the countries, a cultural similarity quotient was assigned to the cultures that are the most alike. The country clusters were analyzed based on the responses of the managers and then a table was formed whose results indicate that the performance oriented leader is the highest ranking for the Anglo cluster and the Anglo countries are the only performance oriented in the country clusters.
In addition, those from France and Germany exhibited the highest amount of deliberate and precise approach to decision making. Those contingent countries created leadership roles that are valued differently and most contained similar tendencies. The significance of the GLOBE study was that it is considered one of the most comprehensive studies as it takes into account the results of many theorists and it does prove the Roman adage is still in effect that the study of the relationship of the culture is important to the concepts of leadership . Through the use of qualitative and quantitative methods, conclusions were formed that the relationship is still important in society.
Once that is in certain that there are cultural dimensions in play that affect management styles how are they to be measured. Geerdt Hofstede, has on his website, a Cultural Compass. This Cultural compass is a tool to assess individual preferences at the level of national cultures. This tool is designed for social and professional situations to add to the experience in international situations.
Adding to the belief of Hofstede that the cultural differences are still important even in a global world is the theory of Tompenaars who advocated for a framework for cross cultural communication. The very practical application of pay for performance does not work in the United States and that is the unions that have insisted on pay per hour. In other cultures, managers work well in this system. Tompenaars compares the dimensions of universal versus particularize in this aspect. Sometimes he admits a manager has to choose between the better of two evils rather than the better of the two. This becomes apparent in deciding how to choose an R& D location for a global company. Some cultures, especially the Europeans, want to be at home. The choice could mean the life or death of the company.
Taking another look at the Power distance index (PDI) of Hofstede
Figure 2 Hofstede Ten Difference between Small and Large Power Distance Societies
As the chart shows the difference between power and inequality comes from the followers, the use of power comes from the leaders. Power Distance is the extent with which less powerful members of organizations and institutions accepts and expects that power is distributed unequally. There is sufficient evidence that inequality exists and the level of inequality is endorsed by both leaders and followers. All societies are unequal without a doubt. Some societies are more unequal than others.
Another dimension that is particularity relevant is the differences between the degrees within the Indulgent versus the Restraint index. This paper has addressed some of the ramifications of these differences in examples of global workings . The addition of the indulgent versus restraint dimension borrowed from the work of Michael Minkov . The Chinese are masters of the restraint dimension. The Chinese combine restraint with moral and stance restraint. Moderation and few worldly positions are also indicative of a restraint society. The Chinese Culture connection is opposed to the Anglo countries that are lacking in moral discipline. Countries such as Brazil, Scandinavia, etc do not innately have the same moral discipline. In dubbed with the moral discipline the Chinese have a work dynamism which places a high importance on thrift and persistence. In economic growth the implications are far reaching.
If one looks at the growth of China as an economic power in the recent past the evidence of this cultural dimension is proof enough.
Figure 3 (Minkov, 2011)
The Goldman Sachs chart of stabilizing economies to drive global growth in 2016 shows the stark contrast to the respective GDP (Gross Domestic Product). The GDP is the broadest measure of the total economic activity in a country so this indicator is an important one concerning the global and internal productivity in all the countries. Divergent monetary policies have developed and they have developed along the lines of the indulgent versus restraint dimension. AS the chart shows the two most restraint economics have the highest expected GDP out of all the countries. As you move through the chart to the right the more indulgent countries appear. It is not to say that the most right side of the chart countries have the most indulgent dimension it is simply noteworthy that as far as economic concerns are following the indulgent versus restraint dimension guidelines. Goldman also indicates that Japan and some small countries in Europe are rebounding from recessive economies.
Figure 4 Goldman Sachs
.
Cultural dimensions influence on Business communications
Communications is the language of business and whether managers are sending their own emails or using a secretary to send a corporate correspondence the goal is to convey a particular business initiative. The cultural dimension theory applies to the methods of communications in order to achieve the desired results. Cross-cultural communication does require being aware of the cultural differences as with all correspondence the writer needs to consider who is reading the message. Cross cultural communications involves how people from different cultures speak and communicate.
A simple example of cross cultural communications happens when an exchange student comes to a host country and lives with a family of a student of the same age. This exchange is simplistic but highly representative of the cross cultural communication dimension. In a quantitative study by Susan Herring a group of high school students participated in pre and post test procedures with questions to measure what they thought of a country to what they now know of the people and the country they visited. Results indicate a change in attitudes when speaking to others of the culture. Teachers in both countries were surprised at the amount of learning that the students participated in during the time of the exchange and the level of new appreciation that they now had.
Fast forward this type of exchange to the business world and the same type of learning is evident. Understanding cross cultural companywide communications can add to the business experiences. The average business can expect a 30% increase in a competitive market advantage in the global market .
The Internet and all the digital modern technology have opened new tools for communication, many are not face to face but some like conference calls and Face time are now acceptable forms of business communication. It is not unusual to deal with people of other cultures and so a pattern of tolerance of others cultures has crept into the economic motives of the business person.
The communication language of business in a cross cultural market is simple. Short well chosen sentences work well in a cross cultural setting. The cultural mores that we have discussed earlier will initiative some cultures to long winded discussions. However this is not the preferred method of communication in the cross cultural context. Humor that may be well recognized by the business partners on the block is not funny to the Australian counterpart .
Figure 5 Barriers in Cross Cultural Communication
The barriers to cross cultural communication as illustrated in this example are important to consider in effectuating an appropriate communication. Taking for example, the avoid stereotyping of the graph. This is a very important concept to consider in the communication to avoid any miscommunication. Not all whites are the cause of the Civil War, not all blacks were slaves, and many other negative stereotypes just lead to wrong communication and missed opportunities. The ideas of cross cultural communication are identical to every business communication if you keep in mind that the reader is the subject of the communication. The receiver has to decode what the message is that the sender is expressing . Looking at the communication in cross cultural aspects would be a simple message sent to different cultures for example, message asking for your ideas would be well received by most managers in the United States and received in a positive way. However it should be a positive message in India also but it is not. In India, the employees would see the manager as not have the sense to make the decision so the manager must be incompetent. Such as easy message can be totally perceived differently be the receivers.
Cross cultural communication can be nonverbal also and this comes into play in meeting that take place on a Skype platform or in person. An example would be in the masculinity characteristics of the Japanese being so high, females play a less than dominant role. The lowest ranking factor is individualism according to Geert Hostede . As far as the communication during a face to face meeting, Japanese do not shake hands nor do they smile. If an American uses the word "ok" it might mean money. As Hofstede amply says, “Culture is more often a source of conflict than of synergy. Cultural differences are a nuisance at best and often a disaster".
Conclusion and Summary
There could be a tendency to group all people into a model and say that all Japanese hate women or all Americans are slobs. The theories espouse in cultural dimensions or management styles do not intend to be applied as an assumption that all people of the nationality will react in the same manner. There is an emphasis in this study on generality. The theories are generally true. The theories are based on an analysis of answers to questionnaires. These questionnaires are given to many of similar employee types by the way that they were administered and never meant to be a cookbook of how to deal with all business people. This is especially true with the millennial that are cross bred and more in tuned with global communications. Many factors could have influenced the response on the test so that needs to be considered.
However, there is no denying that the results are substantive. The management leadership styles alone have so much significance in the modern business world that the application is still considered very influential.
The different management styles are apparent now more than ever as the United States, Japan and China all vie for the leading manufacturer. Manufacturing of even the smallest to items brings a substantial increase in the GDP of each country. The United States lags behind in export performance. The U.S. has a significant deficit but this year they have doubts over the economic data of China. The Chinese have been sluggish in the past few months that have negatively affected the U.S. exports. The doubts that have been created in the failure of the Chinese to recover are causing many to question the information coming from China. As a cultural dimension the data from the Chinese had been believed to be accurate as it is not part o their culture to lie or fake a production quota. Now with the continuing of the downturn affected employees in other markets are questioning. The future of the economy of many countries depends on the accuracy of the data.
Understanding the properties and prospects of nations requires that all people be tolerant and open to the rich and diverse cultures in the world. No single concept or methodology or test procedure will ever encompass all the differences but as a concept for performance they will all certainly become a guide.
This paper has achieved the purpose of verifying that there is no universal management theory or principle. Cultural differences come into play in most communications and can alter the discourse. Using the proper techniques when speaking to people of various cultural backgrounds in effective but more than that shows respect for the culture. In business this respect can help to achieve the desired results of the communication as much as the message. The global economy has not created a universal nationality as some would have hoped and knowing and acknowledging these differences still remains a process in communication.
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