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International management is the process of applying management concepts and techniques across national borders (Luthans & Doh, 2009). Of the various interdependent environments confronted in international management, differences in national culture present international managers with challenges and opportunities that require them to develop additional competencies to managing at a domestic level.
National culture is defined as the set of collective beliefs and values that distinguish people of one nationality from those of another (Hofstede, 1991). In the study of national cultures, Hofstede (1980) and more recently, Trompenaars (1994), have identified a number of cultural dimensions that can be employed to explore the characteristics of different national cultures.
In comparing the roles and responsibilities of an international and domestic manager, a number of similarities and differences become evident. In respect to the similarities, both types of managers' roles comprise of planning, organising, leading and controlling activities directed at an organisation's resources to achieve organisational goals. However, the complexity in the international manager's role compared to the domestic manager rises from the cultural variations within their area of responsibility. An international manager operates across national borders, each with its own set of unique cultural values and beliefs, whereas a domestic manager operates within a national border. It is the challenges and opportunities imposed by these cultural variables that require international managers to develop additional competencies to domestic managers.
The cultural implications on the planning and decision making processes can be explored thorough the varying values across nations on accepted levels of power inequality and uncertainty avoidance.
The degree of power inequality accepted by people, coined by Hofstede (1980) as 'power distance', varies across nations (Hofstede, 2001) resulting in differences in organisaitonal structures and subsequent decision making processes. For example, in countries where power inequality is commonly accepted, such as India (Hofstede, 2001), managers are likely to expect strict obedience from their subordinates, resulting in centralised decision making processes and tall organisational structures (Luthans & Doh, 2009). In contrast, countries where power inequality is not so commonly accepted, such as Australia (Hofstede, 2001), managers are likely to involve their subordinates resulting in decentralised decision making processes and flatter organisational structures (Luthans & Doh, 2009).
The differences in 'power distance' across nations require international managers, more so than domestic managers, to understand the variance in people's perceptions of equality and its effect on organisational structures. In order to do this, international managers will need to be culturally sensitive, and be adaptive and flexible in implementing the necessary level of autocratic or participatory leadership to meet the cultural demands.
The differences across nations in people's tendencies to avoid uncertain outcomes (Hofstede, 2001), results in international managers working in environments that range from risk-aversion to risk-promoting practices. For example, an international manager who works between Australia and Japan will be met with low and high uncertainly avoidance values respectively (Hofstede 2001), requiring them to make necessary changes to their managerial practices. In this case, the international manager will need to be able to implement more rigid policies and procedures in Japan to satisfy the risk-averse stakeholders, whilst giving the Australian subordinates greater flexibility and freedom to take more risks.
Other cultural dimensions that have implications for the international manager in planning and making decisions, include the differences across nations in an individual's belief in controlling outcomes, the extent to which the people are past or present-orientated as opposed to future-orientated, and the importance placed on meeting schedules and deadlines (Trompenaars 1993). In order to meet these challenges, an international manager, more so than a domestic manager, will need to be able to assess the national cultural dimensions and modify their managerial practices accordingly.
The effect of national culture on the organisation of human resources can be explored through people's attitude towards work.
The difference in the work ethics of people can be related to the tendency of people to look after their individual interests (individualism) as opposed to the need to form a group and look after the collective interests (collectivism) (Hofstede, 2001). It can be inferred from the literature (Luthans & Doh, 2009; Deresky, 2002) that people in countries with individualism values tend to show greater support for the Puritan work ethic, more individual initiative and perform better when working individually. In contrast, people attributed to collectivism values tend to have less support for the Puritan work ethic, less individual initiative and prefer to work in a group orientation. For example, in 'individualism' societies such as the USA (Hofstede, 2001), people tend to be independent, motivated by career enhancing opportunities and individual rewards (Vance & Paik, 2006). In contrast, employees in a collective society like Japan tend to be loyal to the organisation, emphasise on job stability, and would be likely to regard individual rewards as breaking their team unity (Vance & Paik, 2006). Such divergence in work ethics requires international managers to develop additional competencies to domestic managers to initiate individually tailored strategies for organising human resources.
The challenges in the leadership and controlling processes in international management can be explored through the difficulties experienced with communication across national cultures.
Although language difference remains a fundamental challenge, however it is the subtle cultural variances, termed 'cultural noise' that remains a major challenge in communication across national cultures (Deresky, 2002). The primary cause of cultural noise is the context, ranging from high to low, in which the communication takes place (Hall & Hall, 1983).
High-context communication is common amongst collective societies where individuals are often introverted and tend to closely link work and private life together (Luthans & Doh, 2009). In these cultures, communication is often implicit and one often tends to interpret and understand messages by making assumptions based on people's knowledge of others and their surroundings (Luthans & Doh, 2009). This leads to a strong emphasis being placed on personal relationships and trust for communication.
Low-context communication is common amongst individualism societies with people who are often extroverted and tend to separate their work and private life (Luthans & Doh, 2009). In these societies, people do not make assumptions and tend to communicate explicitly (Deresky, 2002).
International managers are exploited to these cross-cultural communication challenges to a greater extent than domestic managers, requiring for them to develop additional competencies dependent on the cultural context of the host nation to facilitate effective communication. In high-context societies, international managers will need to focus on developing personal relationships and trust and have a greater understanding of the social structures. This will require for them to show genuine interest in the other culture, and be patient and open in building personal relationships with their counterparts. In low-context societies, international managers will need to be direct and comprehensive in their communication and be able to exchange information in analytical, technical and direct language. This will require for them to be logical and rational in communicating with their counterparts.
International managers can also tackle these cross-cultural communication challenges by developing sound interpersonal skills supplemented "active listening, backward and forward translations of information in different languages, collaborative negotiation style" (Stanek 2000) and nonverbal communication skills (Deresky, 2002).
Although non verbal language can assist in overcoming the differences of language context, however, differences in meanings of non verbal signs across nations can also pose as a challenge for international managers. For example, certain facial expressions and gestures may be universal in action, however, their meanings may be culturally specific and therefore cannot be generalised (Deresky, 2002). Moreover, the concept of personal space and the level and duration of eye contact varies across nation's contributing to miscommunication. International managers, in comparison to domestic managers, will have to learn these non verbal cultural norms to prevent themselves from sending unintentional messages.
International management is influenced by the challenges of numerous national cultural dimensions of which some have been described above. Although international managers will need to possess all the characteristics of a domestic manager (Townsend & Cairns, 2003), however, from the above examples, it is axiomatic that they will need to develop additional competencies to "reconcile the dilemmas of cultural diversity imposed upon management" (Stahl, 2001, p.197).
At the core of developing these cultural sensitive competencies lays the international managers need to understand their own national culture and its implication on management. Through this realisation and reflection of one's own national culture, an international manager is able to stray away from developing either a parochial or ethnocentric attitude (Deresky, 2002). In order to do this, an international manager will need to have the ability to 'step outside the square' of his or her norms and acknowledge that their perception of things is based on their own perspective of things.
Having understood one's own culture and it's implication on management, the international manager will then need to have the ability to sense required changes in managerial practices by learning about other national cultures. It is imperative that the international manager remains objective in their assessment of national cultures and avoid the tendency to stereotype a national character. To be able to do this, Kealey and Rube (1983, as cited in Stahl, 2001) identified that international managers will need to be genuinely "open and interested in other people and ideas" and be "sensitive to their feelings and thoughts". It is also important that international managers remain "nonjudgmental" (Kuhlmann & Stahl, 1996, as cited in Stahl, 2001) in forming a composite picture of a national culture and maintain a focus on strategy (Funakawa, 1997, as cited in Townsend & Cairns, 2003) when forming policies and procedures.
The range of competencies that an international manager will need to develop in order to implement culturally sensitive managerial practices will largely depend on the degree of cultural variations between the manager's the host nation's culture. Generally, the international manager, more so than the domestic manager, will need to be "adaptiveâ€¦ not [be] rigidâ€¦ [and] flexible" (Kealey & Rube, 1983, as cited in Stahl, 2001) in their management approaches. In contrast to domestic managers, international managers often have to work in ambiguous situations and outside their comfort zones requiring them to have greater tolerance for ambiguity (Kuhlmann & Stahl, 1996, as cited in Stahl, 2001) and instinctive ability (Stanek, 2000) in making decisions.
The growing trend towards globalisation has led to increased prevalence of international managers working sporadically across the globe. Additionally, Luthans and Doh (2009) propose that cultural values in countries are not static and instead they undergo a process of transition. As a result of these factors, international managers to a greater degree than domestic managers will need to be scanning the environment for cultural challenges and modify their practices accordingly. To be able to do this, the international manager will need to be capable of being an independent, self-motivated learner, who "seeks opportunities to learn" and is "open to criticism and feedback" (Spreitzer et al, 1997, as cited in Townsend & Cairns 2003).
Although differences in national cultural bring about challenges, however, there are also some opportunities to be gained. Different national cultures present international managers with invaluable practical experience in managing across cultural diversity. With the growing trend in globalisation, this experience will assist international managers in developing a global perspective that can assist in forming a geocentric approach to international management. International managers can also use their experiences to cross-pollinate others back at home, to develop innovative products and solutions.
The emergence of globalisation and its trend in migration has resulted in increased prevalence of domestic managers overseeing a multicultural workforce. Although, domestic managers work within a nation border, but at times they also have to manage a myriad of cultures often segregated by language, customs, and religion within their country. These factors emphasise domestic managers to also have the cross-cultural management competencies of international managers. Nevertheless, the fundamental difference between international and domestic managers is that the latter group has the benefit of managing subordinates within the familiarity of their own national background. It is the absence of this familiarity for the international manager, ranging from extreme to subtle cultural variations, which require for them to develop additional competencies compared to a domestic manager.