Globalization and Multicultural Management

Susan Vonsild

Interlink

Cross-cultural management studies the behavior of people in organizations around the world and trains people to work in organizations with employee and client populations.It describes organizational behavior within countries and cultures;Compares organizational behavior across cultures and countries:

and perhaps, most importantly, seeks to understand and improve the interaction of co-workers, clients, suppliers, and alliance partners from different countries and cultures. Cross-cultural management thus expands the scope of domestic management to encompass the international and multicultural spheres.

Cross-cultural management

Adler: “International Dimensions of Organizational Behavior” (1991)

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Management challenge in a globalized world

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Aalborg Industries Selskaber

Aalborg Industries Selskaber

São PauloSão Paulo

RotterdamRotterdam

AalborgAalborg StockholmStockholm

RaumaRauma

DubaiDubai

SingaporeSingapore

JakartaJakarta

Hong KongHong Kong

ShanghaiShanghaiQingdaoQingdao

TokyoTokyoKobeKobe

BusanBusan

DalianDalian

PetrópolisPetrópolis

HoustonHouston

MiamiMiami

GuangzhouGuangzhou

NanjingNanjing

Marine aktiviteterIndustri aktiviteterFabrikker

Marine aktiviteterIndustri aktiviteterFabrikker

MacaéMacaé

HanoiHanoi

Business forms new & old:

• HQ-Subsidiaries• Projects• Joint ventures• M&A• Strategic alliances, partnerships• Outsourcing/Offshoring

>> Mgt of operations which are located in different organisations in different parts of the world with personnel of diverse backgrounds.

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Changing structures & management capabilities

From traditional hierarchical structures emphasizing either-or choices (centralization vs decentralization, product vs geographcial divisions) >>

Transnational, integrated networks of assets and resources with multidimensional mgt perspectives and capabilities, and flexible coordinative processes.

Managers must be able to sense and intepret complex and dynamic environmental changes; able to develop & integrate multiple strategic capabilities; able to build & manage the new organisations required to link these sensing and response capabilities; and deliver coordinated action on a world-wide basis.

Bartlett & Ghoshal, ”Building Transnational Capabilties: The Management Challenge” (2000)

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Changing management capabilities

Global business management:worldwide business strategistarchitect of assets and resources configurationcross-border coordinator

Worldwide functional management:worldwide intelligence scannercross-polinator of ”best practices”champion of transnational innovation

Geographic subsidiary management:bicultural interpreternational defender & advocatefrontline Implementer of Corporate stategy

Top level corporate managemnntproviding direction & purposeleveraing corporate performanceensuring continual renewal

Bartlett & Ghoshal, ”Building Transnational Capabilties: The Management Challenge” (2000

problem/threat opportunity/resource

culture gets “in the way”

culture as a source of competitive advantage

Culture as a:

“importance of releasing cultural synergies at the interfaces where knowledge, values and experience are exchanged”

Søderberg & Holden “Rethinking Cross Cultural Management in a Globalizing Business World” (2002)

Example: Indian Global Sales Manager for a Danish company from his office in Shanghai.

How to get that competitive advantage?

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Model of core problems & core solutions (Holden 2002)

Core problems

Ethnocentrism in the face of

Cultural diversity experienced as

Cultural shock which varies with exerience and may be lesser or greater in impact

Core solutions

Adaptation as first reaction to cultural shock

Adjustment as a more permanent & positive reaction

Development of intercultural skills: creating ”the cross-cultural manager”

Culture

Authority, responsibility & accountability

Urgency

CommitmentAgreements & contracts

Risk-takingKonflikt

CommunicationThe way and style

information is shared

StructureExtent to which uncertainty

creates discomfort

Individual/groupWhether individual or

group takes precedence

TimeThe view of and way time is used

PowerExtent to which

power is distributed

Critical Cultural Variables

Source: Interlink

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Multi-cultural teams

“The central operating mode for a global enterprises is the

creation, organization and management of multi-cultural

teams – groups that represent diversity in functional

capability, experience levels and cultural backgrounds.

Rheinsmith, “The Manager’s Guide to Globalization” (1993)

Guidelines for diagnosing the effectiveness of multicultural teams

1. Begin as one would with mono-cultural teams until there is a problem that appears to have a cultural basis.

2. Differences in national culture, while important, are usually secondary

3.The mistake made by many managers is not that they leap to cultural solutions from personal differences, but that they do not know enough about cultural differences to determine whether or not they are a factor.

Multi-cultural teams

A manager or facilitator should use the following order in examining potential team difficulties:- personal styles- stage of team development- effective team functioning- stages of professional development- national culture- corporate culture- functional culture

Diagnosing difficulties in team

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Group task

• What are the evidences of paradigm shift in the Vicks case?