Globalization of business and unprecedented progress of expatriate across borders have shaped MNC’s that comprise a combination of people from many different cultures. Managing an organization with a multicultural work force produces challenge in term of management practices and leadership approach due to different view points of elicits (Brewster et al, 2005). Generally benefits and problems of culturally heterogeneous companies can be closely related to how efficiently it is managed. The purpose will be of this dissertation to gain a deeper understanding of how to manage a culturally diverse company. To accomplish this purpose I will try to explore the benefits and problems of culturally diverse company as well as the effective management practices and the leadership approaches necessary for managing a culturally diverse organization. The data will be collected on the basis of in depth interviews with management and employees.
Theoretical background of the dissertation is about cultural diversity and management of cultural diversity.
The concept of culture
In order to make a dissertation about cross-cultural differences and management it is compulsory to describe what the concept of culture is.
There are many views in what a culture contains. A common notion is that culture is associated with human values (Hassi and Storti, 2011). Culture consists of patterns, explicit and implicit of and for actions acquired and transmitted by symbols, constituting the distinctive achievement of human groups, including their embodiment in objects. The important core of culture consists of traditional (i.e., historically derived and selected) ideas and especially their attached values; culture systems may on the one hand be considered as products of action on the other, as conditioning fundamentals of future action (Holden, 2002).
Sometimes cultural anthropologists do research in industrial and business economic frame work. These types of studies focus on, that organizations can be developed into, as societies in small with distinctive social structures, which can be reflected in different models for actions, languages, discourses, laws, rituals, ceremonies, histories, myths etc. In short, business organisations can be viewed upon as mini cultures that operate in a broader national culture context, but can be viewed upon as cultures in its own as well. A company’s culture is revealed by the attitudes and values, the managing approach and the problem resolving behaviour by its members (Konecna, 2006).
National culture and organisational culture is highly related or organisational culture cascades or evolves from national culture. Organisational culture is the distinctive configuration of norms, values, beliefs, ways of behaving and so on that symbolize the behaviour which groups and individuals amalgamate to get things done (Abrahamson, 2011).
What is cross cultural management?
Management is a word which is often used in the business literature as well as in the practical business reality at present. Its use goes back in time, till the description of industrialism starts.
The swift growth of population diversity and globalisation compel workplace diversity and subsequently cross cultural management significance. More commonly multiculturalism is perceived as in cross cultural management essentially evolved from assimilation. Cultural pluralism is the antecedent to multiculturalism (Cieri et al, 2005). Konecna argues that under the principle of cultural pluralism, ‘we should have to value the diverse, should have to recognize and appreciate it, should have to organize our own felt uniqueness with a singularity not less but even more demanding. Konecna adds that assimilation is the enemy of the excellence, the true and the beautiful because under its philosophy, those who cannot be transformed are expelled, isolated and devastated (2006).
Company view on cultural diversity
Cross cultural management illustrates and evaluates organizational behaviour with in culture and seek to comprehend and improve the interaction of co workers, managers, clients, suppliers and alliance partners from countries and cultures around the world. Managing diversity includes a practice of creating and maintaining an environment that naturally allocates all individuals to reach their full potential and pursuits of organizational objectives. Organization can effectively manage cultural diverse work force through the effective integration of HR use (Scroggins and Benson, 2010).
Some organizational cultures are more constructive and supportive than others therefore the organizational analysis on diversity can create some hurdles. Poorly integrated heterogeneous group can be at least as destructive for companies as homogeneous groups, but diverse groups are not necessarily more useful than homogeneous ones. The impact of cultural diversity can have both pessimistic and optimistic influences on team output. Team members can face some complications to see understand and act on situation in similar ways and cultural diversity formulates a reaching harmony more difficult (Steger et al, 2011).
In other words multi cultural teams state less harmony than most homogeneous teams. The high level of mistrust miscommunication and stress condense the team unity. Lack of unity in cultural diverse teams causes reduced effectiveness of team functioning. Cultural differences can decrease team ability to act proper. Mistrust is as one of the common dilemma in multicultural teams and can effect from unintentional cross cultural misinterpretation rather than actual dislike. Another cause of mistrust is inaccurate stereotyping. Team members often stereotype colleagues from other cultures instead of seeing their skills. When there are more within culture conversations it is sign of mistrust and people incline to other people of their own cultures rather than to people of another culture (Lucas et al, 2006).
The globalisation imperative
Besides population diversity, the flow in globalisation has thrown cross cultural management. The growth in globalisation has enlarged world trade and capital movement, and as a result, cross country movements of labour resources has grown (Black et al 1992). Globalisation provided another compelling rationale for organisations to think cross cultural management. The growth of globalisation and industrialisation put debate on cross cultural transfers resulting in cultures becoming more similar (convergence), distinct (divergence) or integrated (convergence). Under the convergence thesis, globalisation and industrialisation bring about a behaviour that squeezes free market capitalism (Brewster et al, 2005).
Growing cultural diversity of population as a management concern
The relevance of increasing population diversity to management is fundamental because inevitably, the cultural diversity of population gets higher to the workplace and marketplace not only domestically but also internationally (Hassi and Storti, 2011). In its most basic form, management is the coordination of man, capital, mechanism and material to accomplish the organisational objectives. The recognised management experts affirm that the first macro environmental force that manager should observe its population because people make up the markets (Shortland, 2009).
Cross cultural management expansion and explosion
Recognising the merits of a broad diversity management concept, Hassi and Storti observe that too much increase of the diversity management concept can result in a diminishing of focus and resources. In the same stratum, while there is no direct empirical evidence that recognizes diversity management concept’s complication as one of the causes of the uncertainty or slow adoption of cross cultural policy in the workplace, the same may not be unbelievable (2011).
Black et al (1992) acknowledge that diversity management is so multifaceted that it may take 15 to 20 years before organisations can fully implement it on a sustainable level. The expansion of cross cultural management to diversity management has its own merits. However diversity management’s expansion may have diminished the focus and resources for cross cultural management.
One of the inputs to getting better the implementation level of cross cultural policy could be, therefore employing an evolutionary concept in terms of focus on the scope of diversity management starting with the most basic cultural diversity. Besides, an examination of culture’s context and its scopes reveal that all the other diversity could have originated from cultural diversity. Thus, a focus on cross cultural management would cover other differences between individuals (French and Bell, 1999).
Management approach and company culture
Management approach plays a critical role in the outcome of a company. Frequently, array in the management approach between the top management of the companies is a cause of a failure (Martin, and Jackson, 2005). Some experts identify management approach as a factor persuading the corporate culture of an organisation. But some claim that it is the culture of an organisation that influences the management style.
IHRM policies and practices
According to Margaret et al, (2005) IHRM policies and practices engage the development of how individuals and specific HR activities should be managed. IHRM policies and practices involve, those are related to planning, staffing, appraising, compensating, training, development and labour relation. HR planning certifies that MNC has appropriate people at the right place and time. Staffing policies promote from expatriatation from third country nationals and host country nationals. Performance appraisals are incorporated in the competitive strategies of MNC head quarters and host units. Compensation policies should be strategically and culturally relevant. Training and development organize individuals to operate in an enthusiastic way (Steger et al, 2011).
The main research question of dissertation is
How did a culturally diverse company facilitate and implement cross cultural management processes?
With the given purpose below so broad in scope, I will limit my research through emphasizing on the most important aspects, namely the following research objectives.
i. To study the processes at work to implement and evaluate MNC’s Cross cultural management system
ii. To describe the benefits and weakness of culturally diverse company
iii. To know the managerial qualities necessary for managing a culturally diverse company
iv. To know the major IHRM issues encountered by culturally diverse MNC.
Importance and purpose of the study
According to (Ritzer and Smart, 2003) research strategy can be used for all three purposes exploratory, descriptive or explanatory. This research is primarily descriptive because the stated research questions are formulated in a descriptive way of a specific research area. It will be somewhat explorative as well. It will try to explore the objective which is under study. The research will also be explanatory when I will draw my detailed finding. The importance of the study is the better orientation of culturally diverse organization.
The reasoning approach and research strategy
This study will follow the phenomenological inquiry. Such an approach is chosen because of its suitability to the study’s objectives, foremost of which is to know a cross cultural management process. Thus, this study deals on the basic assumption of interpretivism, that is, people are collectively involved in interpreting their constantly changing world, socially constructing realities together. Interpretivism employs mainly an inductive reasoning style (Bryman & Bell 2007). In inductive logic, the researcher will begin with specific observations, attempt to make sense of the situation, and then will continue towards general patterns. This process requires understanding the multiple relationships among dimensions that emerge from the data.
Initially secondary data of the company will be collected from the organization to understand the nature of the company. This empirical data can be used to initially guide the main areas of interest to be explored (Easterby-Smith et al, 2001). The main source of data collection will be through primary research. The student will collect primary data mainly in the course of multiple given tools at the case study organisation.
Case study research method
Case study is an empirical inquiry that ‘investigates a contemporary phenomenon within its real life context, when the boundaries between phenomenon and context are not clearly evident, and in which multiple sources of evidence are used. It is a research method which can be either qualitative or quantitative, or the combination of both. Case studies can employ multiple level of analysis within a single study (Travers, 2001).This is a case study and will be explored through qualitative research. The purpose of the qualitative research is to gain a deeper understanding and description of problem through gathering and analysing data
Focus group discussion
Focus group discussions have been chosen as a method of primary data collection because of their association with the social constructionist paradigm. A group exercise, including approximately 5-6 respondents, will be used to collect data relating to their experiences and opinions with regards to management of the company. The researcher will conduct the participants through the discussion to develop a better consideration of the phenomenon under investigation. A topic guide will be created to provide a structure and to ensure that the narrative flows easily, stays on topic and addresses the required areas of enquiry (Easterby-Smith et al, 2008). This flexible approach will enable the researcher to focus or discard some lines of enquiry as the session continues.
In depth, open-ended interviews lead to an understanding of the meaning that respondents attribute to a phenomenon (Saunders et al, 2009). The interview is perhaps the most widely adopted data collection technique in qualitative research because of the great flexibility and depth of data it offers, while at the same time it enables the researcher to have a holistic view. The interview guide will be open ended in the dissertation to decrease bias and will be based upon the outcome of the focus group discussion. These interviews will be done through face to face contact.
Non probability sampling can be conducted through quota, judgement, convenience, and purposive sampling (Bryman and Bell, 2007). In this study I will choose purposive sampling which will allow using my judgement to choose the respondents that best enable to answer my research question, and to meet the objective of the study.
Both the written documents and interview transcripts will be subjected to microanalysis. Documents and interview transcripts is analysed simultaneously as they are completed, thus they are utilised in formulating further questions during the interviews. Coding is the activity of producing categories and transmitting the selected data accordingly. In qualitative research this means browsing through the data and building sense of the patterns and categorising by chosen themes. This particular approach does not predetermine the themes but certainly shapes those (Sarantakos, 2005). The data will be analysed through coding.
The analysing of the data collected will be done according to the themes presented in the research (Saunders et al, 2009). The recorded interviews will be transcribed with the general level of detail as mentioned above and the answers of the interviewees will be analysed. The first phase will be bringing together all the data obtained, the second phase will be to divide the data into different subject categories and the final phase will be to analyze it. In other words, the data will be collected, categorized and then analyzed.