The chief aim of this paper is to present a cross-cultural briefing report on behalf of Clever Clogs International to its new female Muslim manager in her mid-thirties who Clever Clogs International intends to transfer from Lebanon to Amsterdam, Netherlands. The report will focus on the current state of globalization and the current challenges facing multinational executives. It will include an overview of the macro-level facts of The Netherlands. The company operates in the finance industry. It seeks to transform the way the banking structure operates to circumvent another financial collapse. Many challenges originate from cross-cultural changes in a management setting. This report will address some of these challenges before offering advice to the new manager on how to deal with the said issues.
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Macro-level Facts of The Netherlands
The advancement in the field of technology and communication has increased the speed and ease with which companies can manage their international operations. This development coupled with the increasing liberalization in trade and investment has made globalization a reality. Because of globalization, numerous organizations and companies are operating in multiple countries (Velo 2011). Companies such as Clever Clogs International are expanding across borders to create international competitiveness while reducing the cost of production, as well as exploiting the new markets availed by trade liberalization and economic integration.
These expansions may be lucrative and attractive, although they come with several challenges. Aside from adapting to a new culture, the new manager will need to be alive to the fact that numerous challenges affect her work in the new environment. These challenges include political risks, cross-cultural risks, and currency risks. Companies may also fall victim to the effects of contemporary global threats such as terrorism and currency crisis in the new countries where they (companies) seek to expand.
According to the CIA Handbook (2015), The Netherlands experiences cool summers and mild winters. It has a population of 16.8 million people. The country has been given a score of 73.7 on the 2015 index of Economic Freedom. The Heritage Foundation (2015) asserts that the Netherlands is the 17th freest nation in the world to conduct business in. The country has a GDP of 700.5 Billion dollars and 41,711 dollars per capita income. In 2015, the country has witnessed a -0.8% growth in GDP. Its unemployment rates stand at 6.7%.
It has an inflation (CPI) rate of 2.6%. In the past five years, excessive government spending and increased perceptions of corruption have put the economic freedom of The Netherlands under pressure. Despite a few negative trends witnessed lately, The Netherlands’ economy is strongly founded on economic freedom. The Heritage Foundation and the Wall Street Journal claim that the property rights and investment regimes of the country are the second freest in the world. Hence, in terms of economic freedom, The Netherlands is an ideal environment for Clever Clogs International to send its new manager (Central Intelligence Agency 2015).
Dutch is the official language of the Netherlands. The term Dutch may also be used to refer to the people of The Netherlands. Of its 16.8 million people, the country consists of an estimated 47% Christians with 42% non-religious people and 5% other religions, which include Muslims, Hindus, Buddhists, and Orthodox (The CIA World Fact Book 2015). As of 2015, The Netherlands registered a 0.41% population growth rate. About 91% of the Dutch population lives in urban areas. Amsterdam has a population of 1.091 million. The Netherlands comprises 12 administrative provinces. The Netherlands practices a civil law system based on the French system and the Napoleonic code. The country does not permit dual citizenship. The macro-level figures and facts indicate that The Netherlands is an extremely conducive environment for the new executive of Clever Clogs International to work in.
A Brief Comparison Based on Hofstede’s Work
Hofstede (1993) defines culture as the communal programming of the intellect, which discriminates the constituents of one group or class of individuals from another. Culture includes norms, values, rituals, and ways of thinking. The new manager has proved valuable to Clever Clogs International in Lebanon. Nevertheless, according to Hofstede’s dimensional approach to cross-cultural comparison, the company must know that her performance of the new assignment in The Netherlands is subject to her ability to adapt and deal with cross-cultural issues in the country.
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The country has a culture that is different from that of Lebanon. This difference in culture means a different business environment and a different setting, in which the new manager of Clever Clogs International will have to adapt to perform her assignment satisfactorily. After examining the macro-level facts of The Netherlands, it is crucial to analyze the macro-level indices of Lebanon to give a comparison based on Hofstede’s dimensional approach to cross-cultural issues.
Lebanon is located in the Middle East, bordering Syria and Israel. It is a small country with an estimated population of 4.5 million. In the 2015 Economic Freedom Index by the Heritage Foundation in conjunction with the Wall Street Journal, Lebanon is ranked the 94th freest economy to conduct business in. Since its independence in 1943, Lebanon has faced political instability, which has led to restrictive business and economic practices. Lebanon comprises 95% Arabic people, 4% Armenians, while the other categories make up 1%. Muslims are the majority in Lebanon, with 54% of the population being Muslims while 40.5% of them are Christians. The country has a population growth rate of 0.86%. Lebanon has a mixed legal system that allows dual citizenship. The country has a GDP of 66.3 billion dollars. It’s per capita income is 14,845 dollars. In Lebanon, the unemployment rate is at 6.6% while the inflation (CPI) is 3.2%.
Hofstede (1993) originally identified four basic problem areas, which are common in many countries, but with different solutions from country to country. The four areas include social disparity, including how people relate with authority, how the individual relates with the group, the implications of masculinity and femininity, the consequences of being born a girl or a boy, and finally, techniques of dealing with uncertainty, which relates to controlling aggression and the manifestation of emotions.
These four elementary problems embody the dimensions of culture. Dimensions are aspects of culture, which can be measured to other cultures. The above fundamental issues match the dimensions, which Hofstede regarded as supremacy distance, communalism versus individuality, womanliness versus manliness, and ambiguity evasion. Clever Clogs International should understand that these four areas form a four-dimensional model of differences among national cultures.
The Netherlands is a small-power-difference-index nation while Lebanon falls into the category of large power difference index. This finding implies several things, which Clever Clogs International must be aware of and impart on its employee before sending her to the Netherlands. In countries with small power index differences such as The Netherlands, inequalities among people are minimized. Hierarchy in organizations means an inequality of roles established for convenience. Sub-ordinates expect to be consulted in such countries. In countries with large power index differences such as Lebanon, inequalities among people are expected and desired. In these countries, hierarchy reflects the existential inequality between higher-ups and lowdowns. Sub-ordinates expect to be told what to do. Individualism index is higher in The Netherlands than in Lebanon.
At approximated individualism indices of 80 for The Netherlands and 38 for Lebanon, the new manager must understand that to succeed in The Netherlands, she must shift towards management of individuals and not groups as expected in Lebanon where she has previously worked. She must also be aware that unlike in Lebanon where relationship prevails over task, tasks prevail over relationships in The Netherlands. On the masculinity index, Lebanon, which is categorized as an Arabic country, has a substantially higher masculinity index, as opposed to The Netherlands, which has a comparatively low index. In countries with high masculinity indices such as Lebanon, managers are expected to be authoritative and decisive.
Equity and performance are stressed. Competition among colleagues is encouraged. Countries that have low masculinity indices such as The Netherlands stress on equality, solidarity, and quality of work life. In these countries, managers use intuition. They strive for consensus. There is a relatively small disparity in the uncertainty avoidance index of the two countries. In general, countries with weak uncertainty avoidance indices discourage the display of aggression and emotions. Tolerance and moderation are encouraged in these countries. Countries with strong uncertainty avoidance figures encourage ventilation of aggression and emotions at proper times and in the appropriate places. Conservativism or extremism is encouraged in these countries.
Relevance of Macro-level Indices for Daily Management Practise
Hofstede’s research has been labeled the most essential model for the study of culture and business management. Consequently, his research has been broadly quoted, discussed, and even challenged. The chief criticism against Hofstede’s original research is that it has become out-dated, especially due to modern globalization and the rapidly varying contemporary issues. Hofstede’s model is based on the assumption that national culture is very stable. Critics disagree with this assertion by asserting that culture shifts over time.
Steel and Taras (2010) affirm that the society that has been experiencing modernization, industrialization, and economic growth and that it is likely to move towards a set of values of industrialization, which is automatically away from the conservative values. The changes in cultural values are clear evidence that culture can be influenced by various factors such as gender, age, and generation (Leung et al. 2005). These factors have a higher propensity to influence the operations of Clever Clogs International compared to the generalized macro-level indices.
Similarly, several steps can limit the relevance of macro-level indices to the daily management operations of Clever Clogs International. One such step is pre-departure training for the female Muslim manager in her mid-thirties. This training may include teaching her the Dutch language and orienting her in geography culture and customs of the Dutch people. Clever Clogs International can also encourage adjustment of the new manager by making special efforts to help her and her family to be settled in the new country.
The company can also assign her a mentor to help during the transition. Incentives and assurances such as the promise of a better position upon completing the two-year assignment in The Netherlands can also motivate the new manager to deal with cross-cultural adjustment more enthusiastically. Finally, Clever Clogs International should put in place measures to prepare the female Muslim manager for re-entry after completing her assignment in The Netherlands. Many employees who spend time adjusting to foreign cultures experience culture shock upon returning to their countries. Preparation for re-entry can help to prevent this situation.
Challenges the International Manager is Likely to Face
Value Difference and Person-Organisation Fit
Siegel, Licht, and Schwartz (2011) propose that the manager should learn the needs of the employees and address them appropriately in a manner that preserves their social and cultural fabric. The new manager has been immensely successful in the last four years working for Clever Clogs International to the extent of earning two promotions during the time. The new leader has received tremendous success that has earned her two promotions in a period of four years. Thus, it is desirable that despite exposing her to an international work environment with diverse cultural differences, Clever Clog International retains her.
Communication and Negotiation
As identified by Thomas and Peterson (2014), the foremost challenge an international manager will face anywhere in the world is the lack of clarity in communication. One may learn the language and be capable of rudimentary communication. However, some subtle components of a language are unique to different languages, which one might not be trained in. To avoid this challenge, communication can be made clear by writing and following up to check that employees have understood what the manager intends to pass across.
Challenges in clarity of communication and the time taken to adapt to the new environment may slow down the decision-making process. Research by Kline (2010) has shown that employee inclusion in the decision-making process is critical to the success of an organization that depends on human resources to provide a competitive edge. However, the manager should the employees to include in the decision-making process since such a process should be limited. The manager should evaluate the employees according to their motivating factors. Hausknecht, Hiller, and Vance (2008) suggest that being involved in the decision-making process not only motivates the highly knowledgeable and skilled employees but also helps them to cultivate organizational commitment.
According to Patel (2013), the foremost responsibility of a leader in an organization such as Clever Clogs International is to inspire diverse workers to work towards a common goal. In this case, the common goal is to change the way the banking systems work to avoid another economic crisis. Coming from a culturally different country, international managers face the challenge of influencing employees with different conceptions of equality and notions of authority to achieve singular objectives. The international manager should adopt leadership strategies, which transcend religious and social differences to encourage goal harmonization in the entire organization.
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The female Muslim manager has had impressive success working for Clever Clogs International over the past four years. If she is to replicate the success in the Netherlands, she should:
- Ensure clarity in communication and/or use written communication where applicable since it is less susceptible to misinterpretation
- Evaluate the employees according to their motivating factors to determine the employees to include in the decision-making process
- Understand the fundamental factual differences between Lebanon, the country that she is currently working in, and The Netherlands
Central Intelligence Agency 2015, The World Fact Book, Web.
Hausknecht, P, Hiller, J & Vance, J 2008, ‘Work-Unit Absenteeism: Effects of Satisfaction, Commitment, Labour Market Conditions, and Time’, Academy of Management Journal, vol. 51, no. 6, pp. 1224–1243.
Heritage Foundation 2015, Index of Economic Freedom, Web.
Hofstede, G 1993, ‘Cultural Constraints Management Theories’, Academy of Management Executive, vol. 7, no. 1, pp. 81-94.
Kline, J 2010, Ethics for International Business: Decision-Making in a Global Political Economy, Routledge, New York, NY.
Patel, T 2013, Cross-Cultural Management: A Transactional Approach, Routledge, London.
Siegel, J, Licht, A & Schwartz, S 2011, ‘Egalitarianism and International Investment’, Journal of Financial Economics, vol. 102, no.1, pp. 624-642.
Steel, P & Taras, V 2010, ‘Culture as a consequence: A Multi-Level Multivariate, meta-Analysis of The Effect Individual and Country Characteristics on work-related cultural values’, Journal of International Management, vol. 16, no. 3, pp. 211-233.
Thomas, D & Petersen, F 2014, Cross-Cultural Management: Essential Concepts, Thousand Oaks, California, CA.
Velo, V 2011, ‘Cross Cultural Management: Human resource management and organisational behaviour collection’, Illustrated Reprint, vol. 1, no. 1, pp. 129-147.