Successful managers in the new global business reality will be able to deal with multiple cultural differences. Those who are truly effective will also understand that these multiple cultures exist simultaneously. Not only are there national cultures, there are ethnic, religious, and professional cultures—to name just a few. However, rather than considering cultural differences as a problem with which one must cope, practitioners can take this new understanding of reality as a challenge to develop special skills that will help them deal with this multicultural context and handle the differences in sensitive and synergistic ways. If they can do this, they have a chance to be a step—or more—ahead of the competition.
It must be admitted that this new reality has challenged conventional thinking in a number of areas. For example, if an organization is doing business globally, it obviously must be concerned about cross-cultural management, but what—exactly—does that mean? And, is it only those businesses that have international divisions that need to be concerned? What about those that sell to customers in another part of the globe—or buy from companies located in another part of the world?
More than Geo-political Concepts of Culture
Not too long ago someone talking about “cross-cultural management” would have meant being aware of, and sensitive to, the different expectations and norms of people who lived in different countries. Today we know that it is much more complex than that. Furthermore, it is a concern for many businesses that do not have international divisions. To put it another way, there are some key assumptions that have traditionally been made when speaking of culture that are now called into question:
- that nations, national cultures, and national cultural identities are of central importance;
- that cultural boundaries coincide with national boundaries; and
- that national, and hence cultural identity, is a given, single, and stable characteristic of an individual.
Recent developments in world politics, economies, technology, and the social demographics of the workplace have demonstrated the importance of looking beyond this one idea of culture.
In the political sphere, established national boundaries have been challenged, and in some cases destroyed, as ethnic or regional identities have grown stronger. Vivid examples are seen in Central and Eastern Europe (the former USSR, the former Yugoslavia, the former Czechoslovakia), in Asia (the Koreas) and in Western Europe. The separatist movements and the striving toward stronger regional independence that are prevalent in Western European countries such as Ireland, Italy, Spain, Belgium, and even Germany, are further evidence of a decline in the meaning and relative impact of “nation-state” as the boundary for businesses and their daily operations. Economic as well as political questions are increasingly discussed in regard to regions or continents, such as the European Union, NAFTA, Mercasor, the Pacific Rim or ASEAN, the Tiger countries or the NICs.
Business and Globalization
In practice, globalization of business has occurred predominantly in three ways, none of which necessarily involves national boundaries. Firms have created international, multinational or global firms; they have acquired or merged with firms already established in a desirable market elsewhere; and/or they have formed strategic alliances and networks. As a result, interdependencies have grown dramatically around the globe.
Joint ventures, strategic alliances, mergers, and acquisitions now offer companies—regardless of size—the chance to stay competitive and the opportunity to participate in resource-intensive, long-term projects. However, the resultant workforces are diverse in interests, backgrounds, training, and nationalities—even within the same firm and the same geographic location. The “expatriate” assignment frequently is replaced by “transpatriate” activity. For example, at Asea Brown Boveri, the Swiss-Swedish merger, it is not uncommon for 125 employees of a department (or “profit center”) to carry passports of 25 different countries and for some members to hold citizenship in multiple countries. In describing work at Eastman Kodak, an employee noted that it was common for:
…people of many nationalities (to)…lead multicultural teams, work on multi-country projects, and travel monthly outside their home countries. In any year, they may work in Paris, Shanghai, Istanbul, Moscow, or Buenos Aires with colleagues from a different set of countries.
Beyond physical relocation or travel, radical developments in communication technology have enabled a global economy to evolve in which companies and individuals have access to markets far beyond those in which they are geographically located. The pervasiveness and power of the Internet have made the entire globe the potential marketplace and workplace, fostering the rise of distant work and virtual teams. These “non-co-located” teams of international, multinational, or global corporations tend to be multinational and multicultural in composition.
Additionally, apart from transfers initiated by companies, the ever-growing global movement of people has also contributed to an increasingly multicultural workforce worldwide. From North America and Europe to Singapore and Hong Kong, managers are faced with the increased representation of a variety of national cultures within the workforce. This is coupled with growing attention to differences in ethnicity (different from national culture), gender, age, and sexual preference among workers. The mosaic of cultural diversity presents a major challenge both in global and domestic work settings, as there is growing recognition that “the skills and core competencies [including cross-cultural management] traditionally required of executives on international assignments will also be required of managers in a domestic context.”
A Multiple Cultures Perspective
To understand this phenomenon and what it means for management, there must be a broader, more flexible conceptualization of culture and cultural identity developed—a multiple cultures perspective.
It has long been recognized that multiple cultures exist within larger societies and organizations. However, by borrowing the term “culture” from the field of anthropology, researchers who studied organization culture often incorporated what they assumed was an anthropological presupposition of “one culture to a society.” But an organization is not a simple, primitive society, as was the traditional field site of anthropological research. Rather, it is a heterogeneous, pluralistic system whose members live within a larger complex society. Therefore, while members of an organization may develop shared sets of assumptions within the organization setting that are special to that organization and that become that organization’s culture in some sense, they also bring with them the various sets of assumptions that they acquire outside of the organization. Thus, the organization—the workplace—potentially has a multiplicity of separate, overlapping, superimposed, or nested cultures within it. The organization’s participants maintain simultaneous membership in any number of these cultural groups. These are not limited to national cultures.
Organization research shows the membership body of any particular group may be, for example, nested within the organization, forming sub-organizational cultures according to function, tenure, hierarchy, ethnicity, nationality, gender, role, location, or work group. At the organizational level, a single business, a global enterprise, a conglomerate, or a family firm may compose a single cultural group. Professions or guilds may form a trans-organizational culture, as may cross-organizational project teams. At the supra-organizational level, cultural groups may arise within geographic regions of a country, economic regions, industries, and ideologies, such as religious or political groups. From a multiple cultures perspective, it can be seen that any and all of these types of cultural groupings may exist and co-exist within an organization.
For the manager, then, identifying the existence of a cultural grouping of any sort should be an empirical question, not an a priori assumption. One certainly cannot assume that national culture is the most relevant cultural identity to the individual or the organization, or that national cultural identity impacts all areas of interpersonal interaction. At the individual level, people may identify with, and hold membership in, several cultural groups simultaneously.
This more complex view of individuals operating within organizations and making sense of events within that context has been supported by findings from recent identity research. It is also supported by more recent theoretical and empirical diversity research that goes beyond the visible differences of gender, race, and age to acknowledge that differences based on shared cognitive traits such as educational background and profession also exist. These findings suggest that different cultural identities and values may mediate the way in which individuals within the organization perceive, value, and react to such things as the work environment and how much of themselves they invest in their jobs or the organization itself.
The Concept of Culture
At the heart of “cross cultural” or “multiple cultures” is the concept of “culture.” To fully understand the implications of multiple cultures within an organization, it is important to understand the basic concept of culture. As used here:
the core of culture is composed of explicit and tacit assumptions or understandings commonly held by a group of people; a particular configuration of assumptions/understandings is distinctive to the group; these assumptions/understandings serve as guides to acceptable and unacceptable perceptions, thoughts, feelings and behaviors; they are learned and passed on to new members of the group through social interaction; culture is dynamic—it changes over time.
This has several implications for understanding organizations and individuals alike.
The Emergence of Culture
This definition implies that culture is a collective social phenomenon—that it can be created, rather than just inherited, by group members. Once in existence, it subtly influences perception, thought, action, and feeling of group members in ways that are consistent with the cultural reality of that group. It guides the selection, interpretation, and communication of information in ways that are meaningful to the group. To understand a culture, one must understand the basic assumptions of that particular group. Furthermore, this approach assumes that a culture may exist or emerge whenever a set of basic assumptions are held in common by a group of people. It may even be possible to anticipate the emergence of a cultural subgroup if you recognize that there are emerging shared assumptions.
Since individuals are seen as simultaneous carriers of several cultural identities, depending on the issue at hand, a different cultural identity may become salient at a given moment. For instance, in a study of a strike at Scandinavian Airlines, SAS, the researcher found that the salience of flight attendants’ various cultural identities (profession, organization, nationality) could change depending on the issue at hand and identities being threatened.
Researchers recently have started to focus explicitly on the emergence, existence, and interplay of individuals’ multiple cultural identities within organizational contexts. Their results seriously question both monolithic identities and the unquestioned equation of culture with nation. Whereas, typically, cross-national comparative research has asked “What are the differences in management attitudes and behaviors across national [read ‘cultural’] boundaries?” and “How do national cultural values affect management practices?” It may be more meaningful to ask questions such as:
- When, and under what conditions do certain cultural groups or identifies become salient and more relevant than others?
- How do various cultures interact?
- What is it that representatives of different national cultures create through their interaction, and,
- What are the implications for managerial practice?
To begin with the first question, there is research support for the idea that the salience of any particular cultural identity will increase when that identity is confronted or perceived to be threatened. We have learned from studies conducted in the western hemisphere that the differences that separate interacting people are the ones that tend to become salient. It has also been suggested that the larger the differences between interacting groups, regardless of whether these differences are real or imagined, the more likely are individuals to distinguish between “we” and “them”, or in-group and out-group membership. Other factors that influence identification with a group include the distinctiveness of the group values and practices in relation to those of comparable groups (including negatively-valued distinctions), the prestige of the group, the salience of the out-group(s), and the degree of inter-group competition. Other factors associated with group formation such as interpersonal interaction, similarity, liking, proximity, shared goals or threats, common history may also influence the choice of the group with which someone identifies.
The most obvious differentiating characteristics seem to be highly visible ones, such as race, skin color, language, and religion. We have some indication that these more obvious differentiating criteria may also be used just for convenience, to explain differences within a socially acceptable framework (e.g., national stereotypes) or because of the lack of other cognitive categories available to the individuals. For instance, research in a German-French joint venture found that national stereotypes (socially-acceptable, and obvious) were predominantly used to explain difficulties that emerged in daily work, despite the fact that regional and organizational culture differences tended to be stronger than these national differences.
What Does It Mean for Management?
Based on all of these findings, rather than finding ways to bridge differences in national cultures, the question may become how to build on similarities engendered in other commonly-held cultures for creative solutions and how to use and manage differences. Thus, the multiple cultures perspective helps to address the primary difficulty that most strategic alliances, mergers and acquisitions face today: how to realize the synergies that were initially promised and expected.
For example, synergy may not just happen in multi-cultural teams in terms of members’ national culture. Instead, it requires active work through a team development process that is based on tolerance and appreciation of differences. In addition, research results from a longitudinal study of top management team heterogeneity and from the re-interpretation of prior studies on this topic suggest that, if adjusted for power, cognitive diversity (such as differences in functional background or profession or industry) can have a positive impact on organizational performance.
To return to our original point, to effectively live in the new global business reality, people need to develop an appreciation for multiple cultures that exist simultaneously. Rather than considering cultural differences as a problem with which one must cope, this new reality requires practitioners to develop special skills to help them deal with this multicultural context and handle the differences in sensitive and synergistic ways.
** This paper is excerpted and adapted from N. A. Boyacigiller, M. J. Kleinberg, M. E. Phillips, & S. A. Sackmann, “Conceptualizing Culture: Elucidating the Streams of Research in International Cross-Cultural Research,” a chapter in B. J. Punnett & O. Shenkar (eds.) Handbook of International Management Research (2nd. ed.) (Ann Arbor: University of Michigan Press, forthcoming). An expansion of this excerpt won an “Outstanding Paper” award at the International Western Academy of Management Conference, Lima, Peru (July, 2002).
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 For example, see J. K. Conlon and M. Giovagnoli, The Power of Two: How Companies of All Sizes Can Build Alliance Networks that Generate Business Opportunities, (San Francisco: Jossey-Bass, 1998); S. I. Davis, Bank Mergers: Lessons for the Future, (Palgrave, 2001); G. Hamel, Y. L. Doz, & C. K. Prahalad, “Collaborate with your Competitors — and Win,” Harvard Business Review, (January-February, 1989): 133-139; H. Siegwart & G. Neugebauer (eds.) Mega-Fusionen (Mega-Mergers) (Bern: Verlag Paul Haupt, 1998).
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 For example, P. C. Earley & E. Mosakowski, “Creating Hybrid Team Cultures: An Empirical Test of Transnational Team Functioning,” Academy of Management Journal, 43 (1) (2000): 26 – 49.
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