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Leadership and Cross-Cultural Differences

Abstract

The paper provides a detailed overview of cross-cultural leadership and management in the workplace, in an effort to better signify the need to embrace acceptance and diversity in treatment of employees. The importance of working and adapting to modern challenges in treating one’s employees was stated, and the particular need to find suitable approaches to a wide array of views will also be discussed. To maximize work performance and efficiency in accomplishing tasks and meeting goals, unleashing the largest possible potential of one’s workers is necessary, as it is the only way to make qualitative change in the workplace environment.

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An overview of the two of the more well-known frameworks for accessing cultural differences are discussed, which are the Hofstede framework and the GLOBE study. Both are similar in essence but different in their scope and methods of presenting final findings. The Hofstede method presents data in forms of dichotomies, with each culture being somewhere one the scale from one end to the other. The method allows professionals to quickly review and understand the data on different cultures, as well as to effectively compare the differences between individuals. The framework is especially effective in recognizing the weaker and stronger parts of individuals, and findings necessary ways of remedying them on a global level. Leaders use the data obtained with this method to more effectively construct plans for the future and find suitable approaches to their worker engagement.

The GLOBE model, similarly, can be used to address differences in behavior, understanding and approach between employees. Finding suitable ways of facilitating interaction and communication within the workplace, establishing relations and findings compromise is what this framework gives the best incentive for. It also establishes the core qualities a leader should take into account when working with a diverse company, and the ways of approaching people stemming from different cultures.

Introduction

Leadership is an essential and extremely important process for managing a company. A variety of qualities and skills are needed to be an efficient leader, and any business is unable to thrive without the proper management from the top. A successful entrepreneur brings their employees together, covers their weaknesses and strengthens their best traits. The process of managing the collective efforts of workers can be difficult, especially if a particular company is big in size or scope of its operation. A good leader must be able to find common ground with a large variety of people and effectively present themselves to others in a way that elicits trust and support. In the ever-developing economy of today, global trade and relations take center stage as countries become more interconnected with each other than at any point in history.

People of different backgrounds, origins and walks of life are able to work together to achieve common goals. Effective leaders need to recognize the cultural differences between their workers and to address them in a manner that benefits the company. Many techniques for managing cross-cultural development and growth in a company have been constructed in an effort to aid leaders and managers to better work as a team. The approaches centred on finding middle ground between different people or bringing out the best qualities in each kind of person have their own place in the business sphere and understanding them properly is the key to leading a successful enterprise. During the course of this paper an overview of the best methods of managing a cross-cultural business will be attempted in an effort to better understand the ins and outs of working with a diverse arrangement of individuals.

First, a deeper look into the main cultural frameworks of operation for leaders will be made. A wide variety of different approaches to leading cross-cultural cooperation in a company were made, and each of them possesses its own set of positive and negative outcomes. The Hofstede framework and the GLOBE study will be examined in particular. Their key components and presuppositions will be discussed and taken into account. Relevance for business ventures and overall effectiveness in leadership will be evaluated. After examining the available frameworks as a point of reference, a look at a specific company will be attempted.

The direct example can give an opportunity to better understand the scope of influence cross-cultural trends have on leadership, as well as the possible detriments/benefits it can bring. Overlooking the example used, as well as the research evidence found throughout the paper, the finishing part of the work will be dedicated to drawing conclusions and finding palpable patterns on the topic of cross-culture management and leadership. Recommendations based on evidence and research will be made, as a way to derive benefit from the work put into this paper. In the end, overall conclusions from the research and discussions brought upon will be drawn, allowing for further introspection and deeper understanding of the issue. The report will outline the ways in which management and leadership can be affected by efforts of working with a diverse crowd of people, and how the approach can be beneficial to a working environment.

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Cultural Frameworks

Hofstede framework

Key Components

Hofstede has a particular and strict procedure for analyzing cross-cultural relationships in the workplace. His works notes and explains that people descending from different cultures have an array of differing behaviors and approaches to work. This means that people raised in specific cultures are affected by them in both their outlook on life and their work tendencies. For Hofstede, culture is something that programs a person to act in certain way and distinguishes them from other individuals. To better understand differences in culture, the man has developed 5 distinct dimensions for its measurement and for understanding the variables between people.

The categories are: power distance, uncertainty avoidance, individualism-collectivism, masculinity-femininity, and long-term-short-term orientation (Hofstede Insights). Every dimension is presented as a spectrum from high to low, depending on each case separately. This means that even similar cultures can have differences in their evaluation, which helps to better understand their unique traits and utilize them within a structured plan (Lee & Liu 2012).

Power distance is the measurement used to evaluate how inequality is seen by the members of a culture. A high value signifies a strong belief in the hierarchical order between people, and the rigidity of power structures. People coming from societies with high power distance scores are likely to feel more disconnected from people in positions above them (Hofstede Insights). The strict view on power relations inside the company contributes to internal tensions and an inability to establish close communications. Individualism-collectivism dichotomy presents another view on culture, as it describes a group’s self-image and attitude towards others.

Individualism is regarded as a high point, and the term is used to describe the types of societies where people are encouraged to look after themselves, their immediate family and friends. Individualistic societies encourage people to view relationships with broader community as less interconnected and seek profit for themselves or the people they care about (Hofstede Insights). On the other hand, collectivism it’s a cultural outlook that encourages people to take care of Each other, regardless of their familial closeness (Hofstede Insights). Collectivist societies foster tight knit relationships between colleagues and workers, allowing them to rely on each other in support, both emotional and material.

The dichotomy can be used to analyze and describe people’s tendency to either work in their self-benefit or in the benefit of a broader community. In many cases, individualism positions people as individuals capable of their unique goals, thoughts and behaviors, while collectivism usually considers people in clusters. Collectivism, however, also has its benefits as it fosters loyalty and trust in each other, which further increases a company’s ability to work as a whole.

The third dichotomy, femininity versus masculinity, establishes a difference in attitude towards people and the core values held by the members of a culture. Masculinity in this context is divorced from its proper meaning and is used to describe a number of qualities, including heroism, assertiveness, and a focus on attaining success (Hofstede Insights). Femininity, all the while, is described as a more careful approach favoring cooperation, care for others, and better quality of life (Hofstede Insights). The two sets of characteristics closely resemble the traits traditionally associated with the two genders, and their respective roles in society.

Both sides of the spectrum can find their use in a corporate environment, but the competitive nature of business can often favor the masculine traits more. Next dimension for evaluation is the uncertainty avoidance index. The notion reveals how a particular society relates to the uncertainty of the future and unorthodox approaches to emerging issues. A higher value signifies a bigger degree of control and the rigidity of approaches used by the people, as newer solutions are treated with distrust (Hofstede Insights). Such cultures are more traditional and more likely to use established methods for reaching their goals.

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Communities with a lower uncertainty avoidance index, on the other hand, exhibit a tendency to be more flexible and more able to accept uncommon practices (Hofstede Insights). Unorthodox behaviors and approaches are either encouraged or tolerated to a high degree. The disparity between the two means that the former group can be more stable and reliable, and the other can better make use of new developments in the business industry.

The next variable proposed by Hofstede is the long-term orientation vs. short term normative orientation. The two extremes determine a society’s look at its future and the past. Those groups scoring lower on the dimension can be described as preferring history and tradition, in both their approaches to dealing with the future ahead (Hofstede Insights). Societies scoring higher, on the other hand, are better able to adapt to changing environments of time and encourage development in preparation for the future. The difference means that the latter are able to embrace developments in society more freely, and grow at a quicker pace.

The former, on the other hand, are hindered by their inability to see newer perspectives. The last and final dimension discussed in the man’s work is the indulgence/restraint dichotomy, which the relates to the society’s interaction with gratification and pleasure. The indulgence extreme is used to describe the societies which find activities that fulfilled basic human desires quickly to be preferable, while the other end describes societies where abidance to social norms and regulations is more preferable (Hofstede Insights). Those prioritising self-control can be expected to fare better with long-term goals and strategies, as it falls within the base expectations of their society. Indulgent communities, on the other hand, place bigger value on personal rights and the ability of a person to behave as an individual in pursuit of their own happiness.

Relevance in Business

In the business sphere, the framework proposed by Hofstede allows leaders to better understand their employees and the cultures they come from, resulting in a more nuanced and intricate approach to leadership. In large part due to the different backgrounds people come from, their views on the work environment under placing it can differ. One person can be infinitely more capable of accomplishing task than another, all, thanks to the environment they grew up in. The ability to distinguish their recognizable traits from each community Allows leaders and entrepreneurs to assess the weaknesses and strengths of their employees to better manage the time and resources spent. Knowing what a particular person can or cannot do well can give a leader the ability to assign them work in accordance with the unique traits of their society.

Encouraging people to occupy roles that best suit them can both increase productivity and job satisfaction (Effectiveness of Transformational Leadership among Different Cultures 2020). Unique approaches to management and leadership can also allow people to better communicate and work together to achieve a common goal. Overall, Hofstede’s technique is very effective in Quickly assessing basic information pertaining to a person’s character and attitude towards certain issues, and stirring the business in the preferable direction.

GLOBE study

Key Components

The GLOBE study is a large project made in 2004 to access the cultural differences present in different societies, and processing their implications for the leadership of organizations. The framework accesses the most apparent qualities of various cultures and makes an effort to further expand on their effect on leaders. The research project was constructed as a multi-leveled complex program for accessing the relations between societal trends and tendencies and their effect on leadership.

The study focuses heavily on the notion of “Societal Culture” which, in this context is used to describe the shared values identities and attitudes towards particular events in the members of a specific group or community. The researchers measured and identified specific signifiers to understand and evaluate a culture, using them to compare different cultures together. Nine specific cultural dimensions were identified, allowing further examinations and considerations to be both organized and thoughtful.

Performance Orientation is the first of such categories, used to display whether a particular culture encourages and rewards effective and fruitful performance in its individuals (2004, 2007 Studies – GLOBE Project). This quality is obviously important for business, as employee performance is the cornerstone of smooth operations and continuous development. Therefore, finding the employees that are accustomed to working hard and being efficient can be rather rewarding for a leader. The assessment can also provide context for the differences in attitude and behavior between workers, which can be further used to adjust the strategic approach.

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Assertiveness is the second measurement used by the GLOBE framework to access their data. It determines whether a particular culture is likely to display an aggressive and straightforward attitude towards working with others (2004, 2007 Studies – GLOBE Project). The measurement grades the degree of being confrontational and assertive in people. The information obtained can be used to guide team building efforts, and understand which people will be able to work best together, and which individuals are better to be put alone. The ability to gauge and predict a person’s attitude towards others if greatly beneficial to constructing a friendly and efficient work environment for every person.

Future Orientation is a value used to understand individuals ability to engage in future-related activities and account for the upcoming events. Such skills as planning, investments and continued work on a particular task are related to this dimension, and can differ greatly depending on the culture a person was raised in (2004, 2007 Studies – GLOBE Project). The information obtained through this part of the evaluation is also invaluable in planning and goal setting, as the leader can get a clear picture of their employee’s ability to self-regulate and work on long-term projects. Those exhibiting high amounts of future orientation can be put to good use on longer endeavors that require significant foresight.

Humane Orientation is similarly a trait that is most useful in forming teams and establishing communication, which requires an ability to work together on common goals and objectives from people. The measurement gauges the society inhabitants’ ability to show care, kindness, compassion and display altruistic tendencies towards others (2004, 2007 Studies – GLOBE Project). The caring tendencies that can be evaluated by this criterion are especially needed when working with other people and securing contacts, as well as communicating with outside parties for the benefit of a business. Finding people most suitable for the job through having a look at the cultures relevant to them can be rather effective and quick.

Next on the list, Institutional Collectivism, evaluates whether a society encourages and facilitates collective effort. The notion of collective action manifests in people’s desire to share resources and work as a single entity (2004, 2007 Studies – GLOBE Project). The degree to which collective action and initiatives are encouraged determines this parameter. This criterion, it is important to mention, refers only to a society’s overall tendency to encourage collective action, not an individual’s experience inside a particular group or community. This measurement is identified as In-Group Collectivism. It defines the degree to which people express loyalty and devotion to a particular movement or group, a loyalty to a particular cause and the willingness to support it.

Gender Egalitarianism is one of the more important qualities, as it addresses how a society approaches issues of gendered and treatment of people based on their identity (2004, 2007 Studies – GLOBE Project). The degree to which the gender disparities are mended and minimized is measured here, and it is especially needed in the world of today. With the deepened understanding of the concept of gender and social progressivism, it is becoming increasingly important to treat people with equal amount of respect and give each individual an ability to develop and prosper in the work environment.

Power Distance is a dimension determining a society’s ability to accept or work within existing power structures. The degree to which authority and privilege among the powerful are accepted is the main determining factor for this criterion. Uncertainty Avoidance is the last dimension determined by the GLOBE study, allowing it to properly assess and evaluate the status of a particular culture. In the context of the study, the concept describes the ability of a community and culture to use their rules, regulations and norms to alleviate the anxiety of facing the unpredictability of the future (2004, 2007 Studies – GLOBE Project). The desire to avoid facing uncertainty is reflected in the way people embrace their traditions and restrictions, as they allow individuals to feel a sense of purpose and order to an otherwise unpredictable life.

Researchers of the GLOBE framework have also determined that people of different cultures have differing expectations of their leaders, and require specific approaches to best maximize their potential in the workplace. The study has evaluated the efforts of an array of leaders and identified the most recognizable traits of their work. Charismatic approach to leadership, orientation on teamwork, the ability to make others participate in plans, consideration for the efforts and struggles of others, autonomy and the ability to keep one’s self-image are all qualities integral to a good entrepreneur, and focusing on particular traits can be beneficial in working with a particular group or demographic (Grove).

Relevance in Business

Overall, the evaluation and overview provided by the GLOBE framework is very detailed and effectively highlights the differences of cultural approach and development. Encompassing a similar assortment of qualities to Hofstede, the framework labors to expand on them further and allow a more nuanced, although longer, look into the considerations behind adopting a cross-cultural leadership strategy. The use of the evaluation criteria to properly determine the proper course of action is great for increasing work efficiency and the capabilities of a company through properly managing its human resources. By carefully considering the information obtained from an evaluation, an entrepreneur can build better cooperation with their employees and guide the company to further growth and expansion.

Cross-Cultural Differences in a Specific Company

Taking a specific company as an example of a cross-cultural workplace to better understand the struggles and benefits this arrangement brings, a look at one such company will be made. For the purposes of this evaluation, the Coca-Cola company was chosen as a suitable candidate. With a variety of offices in all countries of the world, it is one of the major representatives of the Cross-Cultural business.

Positive Effects

A considerate approach to Cross-Culture communication and work allows the company to effectively work with people from all over the world, growing exponentially and expanding onto newer markets. The company takes international communication seriously, employing specialists to help its workers properly adjust to having to work in a differing environment (McMahon). The company effectively recognizes the need to approach workers from different cultures with nuance and facilitates good communication between its branches. The company is said to emphasise communication and dialogue within its workforce, which facilities creation of new ideas and better collective work, both of which are extremely necessary for a global company (International Conference Of Ligs University, 2020).

Greater ability to interact with customers, suppliers and people within the workplace is what allows the company to prosper for a prolonged period of time. In previous years, the company was at points unable to display the ability of its leader to effectively navigate people of different cultures, which has led to major business losses (Mendenhall, 2006). The Coca-Cola company has learned from that experience and become more invested in creating a diverse and open workforce.

Negative Effects

Of the negative effects of Cross-Cultural leadership efforts is that a company can lose the connection with its brand image and identity if it starts to shift its approach too heavily. A need to cater to the need and the best abilities of the many opens up the company for the potential of getting separated from its recognizable qualities and features. In Coca-Cola’s case, that did not seem to become an issue, but the consideration must be taken nevertheless.

Conclusion

In conclusion, the corporate environment is a place where many people have to interact and work together on a constant basis to meet certain goals and objectives. Leaders, as the people that are most effectively able to see the needs and the future developments of a company, have to adapt to the changing environments of today. With a large variety of people from different backgrounds and walks of life needing to be properly addressed and managed, leader figures should adopt tactics for evaluating the strong and weak sides of their employees to more efficiently work with them. The process is diverse, and can be accomplished through a variety of methods, including multiple systems of evaluation.

The Hofstede framework for evaluating cultures and their unique traits. The overview presents dimensions in pairs, creating a dichotomy that is both effective in translating the point across and providing relevant information to the management. It allows us to measure the culture’s attitude to work, power structures, cooperation, emotions and a person’s self. The GLOBE study, in a similar vein, has a number of criteria to assess culturally significant parts of a person’s attitude. The framework gives context to a similar but broader array of qualities than Hofstede’s approach, and can be effective in providing further context for a person’s actions, behavior and thoughts.

It also outlines the primary qualities of a leader and establishes the notion of differing needs from members of a particular culture. A look onto the work of a particular company in terms of its approach to cross-cultural communication was also made, with Coca-Cola taking the center stage. The company can be considered one of the more effective examples of a culturally diverse company, which is notable in the ever-changing world of today.

References

Lee, Y., & Liu, W. (2012). Leadership Behaviors and Culture Dimensions in the Financial Industry. Journal of Applied Finance and Banking, 2, 1-2.

Effectiveness of Transformational Leadership among Different Cultures. (2020). International Journal of Social Sciences and Educational Studies, 7(3). Web.

Hofstede Insights. National Culture. Web.

2007 Studies – GLOBE Project. Web.

Grove, C. Introduction to the GLOBE Research Project on Leadership Worldwide. GROVEWELL LLC . Web.

Mendenhall, M. E. (2006). The Elusive, yet Critical Challenge of Developing Global Leaders. European Management Journal, 24(6), 422–429. Web.

McMahon, L. Three Companies That Are Taking Culture Seriously…and Profiting. Web.

International Conference Of Ligs University. (2020). Intercultural Communication In Business Environment. Ligs University. Web.

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