Impact of Cross Culture on Organizations

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Part 2: Culture in Communication: Literature Review

Part 3: Research Overview

Part 4: Data Analysis:

1. Communication Styles
2. Distance Factors in Communication
3. Leadership Styles in Organizations
4. Gender Factors in Organizations

This paper assesses empirically the impact of cross culture issues on Digital house PVT LTDs managers and employees performance. In carrying out the study, stratified random sampling was used to select 50 employees who have been working in the company in various positions. Relevant data were collected using a structured questionnaire. For further analysis of the questionnaire Microsoft Excel and SPSS (Statistical package of social science) had been used.

The findings showed that cross cultural issues brings about communication, age and gender among the Digital House PVT LTD.’s employees, which resulting increasing conflict among the employees, arising unclear messages, and discrimination with both the genders, hence leading company to reduce in their performance. Based on these results and findings, ultimately it was recommended that Digital House to reduce unclear message, discrimination by giving priority to both the gender and keeping good internal communication system within the company.

Chapter 01

1.1 Background of the study

Culture can be defined as the norms, beliefs, informal values and the pattern of behavior of an individual (Alvesson , 2002, p.5). Furthermore Alvesson (2002) justifies that, “Culture is the creation of meaning through which human beings interpret their experiences and guide their actions.” Cultural issue can eminently influence on the organizations success. More often researchers demonstrates that it is the glue of the organization, Which acts as a compass which directs an organization to its destination (Tharp, no year). Cultural issues are very common problems all around the world. The cultural issues can occur in many different ways depending on the size, location and the custom culture of that organization. These cultural issues sometimes occur even due to the attitudes of the employees.

According to the researchers’ organization (Digital House), there are different people from different backgrounds working therefore cross culture is a vital issue in the organization thus developing a cross-cultural competence enhances the people’s mindset or the perspective (Walker, Walker and Schmitz, 2003). Moreover the Current situation of Digital house (DH) according to the top management is having cultural issues within the organization. This gradually has an impact of the performance of the organization. In addition, monitoring this issue suggest that the major cultural issues involved are communication, age and gender.

Hence this research is carried out to explore the impact of the issue of communication, age and gender on organizational performance. Besides, the researcher will explore and analyze the cause for cultural issues within the organization and how it impacts on the organizations performance and how to overcome the hurdles to maintain a balanced culture within the organization.

1.2 Problem Justification

The 3 main areas of cultural effects that have been selected to this research are communication, age and gender. Whilst analyzing the three main issues it can be understood that they have significance impact on the organization. For instance Communication can bring problem in 2 ways which can be known as a language problem or distance problem. Language problem means the employees might have problems in speaking different languages. Distance problem refers to the actual distance of communication from one country to another. For example: if the company wants to know about a particular order or product in Japan then it’s not that easy to communicate just as we think, definitely the process will take some time. In other words we can say it’s less comfortable to communicate to another country while compared to our own country. The reasons will be as follows:

• Language should be familiar.
• Planning has to be done before communicating
• Professionalism should be shown by our communication
• The correct communication medium should be used to communicate.

So these are some important issues to be considered before the communication starts.

Then next we can discuss about the gender problems. This is also a very common problem which mainly occurs in religion wise. For EG: if we take digital house into consideration some Muslim females are not comfortable to communicate with male employees. So this problem can cause lack of communication which can lead to poor planning and a lot of misunderstandings within the organization itself.

Then another problem in gender would be gender discrimination. This would be an internal effect which is caused by the organization itself. For EG: according to the digital house they have more males while compared to the females. This can be gender discrimination. The question arises why the management can’t recruit females as the top managers. Whilst taking Digital house into consideration they recruit less females to the managerial roles, since the top managers perspective is that female employees are less efficient. Thereby this can affect the organizational performance as it goes on.

Then finally coming into the age factor, this is also another major cause to the drop of sales. The Digital House contains many employees at different ages which cause internal problems. For EG: when it comes to a decision making the elderly managers think the young people are less intelligent and they will be left out when decision making is done. So this is a very bad sign practiced by the company. Actually the young blood will have better innovative ideas since they know very well about the technological side. But whereas the older people in the company won’t have the extent to think very deeply about technologies.

So getting the plans and suggestions from the young blood people is very important to increase the performance of the organization. In other words all age groups should be treated as the same to overcome the problems in the organization. This will help them to make effective decisions and there will be a better understanding among each other.

1.3 Research topic

“An investigation into how the cross culture issues of communication, age and gender problem can have an effect on the organization performance?”

1.4 Objective

This research is carried out

• To explore the impact of cross cultural issue of communication, age and gender on organizational performance.
• Analyze the theoretical concepts of cross cultural differences in individual behavior, managerial responses and attitudes.
• To analyze how cross cultural issues may result in misunderstanding of people regarding conflict collaboration

1.5 Research questions

• How does communication affect organizational performance?
• How does age affect organizational performance?
• How does gender affect organizational performance?
• Does the cultural issue always be positive or negative to the organization?

1.6 Significance of the study

Cultural issues in an organization are silent killers on the organization sales. Actually it depends on the cultural issue certain issues can affect the organizational performance in a great manner. It’s the organizations top managers’ responsibility to look deep on to these issues and to bring a solution for it. It’s important to them to understand the causes of cultural effects in an organization and why they occur. However through this research it will help the managers to identify the problems and to improve the employee’s condition to a better standard in which the employees are free from cultural effects. And also it will make the management to think deeply to come out with positive ideas to solve the cultural effects in a positive manner which will make the organization to be constant without any failures.

Chapter 02

2.1 Culture

Culture in the study of international relations may be defined as the sharing and transmitting of consciousness within and across national boundaries, and the cultural approach as a perspective that pays particular attention to this phenomenon. (Hofstede, 1980). Culture is the expression of human values. It may be very intense and conscious, as in art objects and performances or religious practice. It may be pervasive and relatively unconscious, in the rituals of food, the use of time or family celebrations. It embraces the extremes of this spectrum and everything between. Culture is everything we don’t have to do to survive – but are compelled to do to feel human. (Schutz, 1970). Culture or civilization, taken in its wide ethnographic sense, is that complex whole which includes knowledge, belief, art, morals, law, custom, and any other capabilities and habits acquired by man as a member of society.

Schien (1985) justifies Culture refers to the pattern of human activity and the symbols that give significance to these activities. Culture manifests itself in terms of the art, literature, costumes, customs, language, religion and religious rituals. The people and their pattern of life make up the culture of a region. Cultures vary in the different parts of the world. They are different across the land boundaries and the diversity in cultures results in the diversity in people around the world. Culture also consists of the system of beliefs held by the people of the region, their principles of life and their moral values. The patterns of behavior of the people of a particular region also form a part of the region’s culture. The word ‘culture’ that hails from the Latin word, ‘cultura’ derived from ‘colere’, means, ‘to cultivate’. Hence the way in which the minds of the masses inhabiting a particular region are cultivated, in some way determines the culture of a region.

Montserrat-Howlett (1992) says that Culture is shared, by which we mean that every culture is shared by a group of people. Depending on the region they live in, the climatic conditions they thrive in and their historical heritage, they form a set of values and beliefs. This set of their principles of life shapes their culture. No culture belongs to an individual. It is rather shared among many people of a certain part of the world. It belongs to a single community and not to any single human being. Culture is learned. The members of a culture share certain ideals, which shape their lives. Generations learn to follow these ideals and principles. Culture propagates through generations, which adopt their old customs and traditions as a part of their culture. The ideals they base their lives on is a part of their culture. Cultural values are imparted from one generation to another, thus resulting in a continual of traditions that are a part of culture. The language, the literature and the art forms pass across generations. Culture is learned, understood and adopted by the younger generations of society.

Robbins (2003) noted that there are seven key characteristic which are the basic of an organizational culture, this gives a clear picture on organizational culture and the understandings of employees and how they are supposed to behave. The characteristics are:

• Innovation and risk taking. The degree to which employees are encouraged to be innovative and take risks.
• Attention to detail. The degree to which employees are expected to exhibit precision, analysis, and attention to detail.
• Outcome orientation. The degree to which the management focuses on results or outcomes rather than on the techniques and processes used to achieve those outcomes.
• People orientation. The degree to which management decisions take into consideration the effects of outcomes on people within the organization.
• Team orientation. The degree to which work activities are organized around teams rather than individuals.
• Aggressiveness. The degree to which people are aggressive and competitive rather than easy going.
• Stability. The degree to which organizational activities emphasize maintaining the status quo in contrast to growth.

(Robbins, 2003, p.525)

2.2 Elements and characteristics of culture

Oak (1951) justifies that when it comes to the elements of the culture it would be as follows. The language, other forms of expression as also the thoughts and emotions of the people, their social and cultural norms, their principles and beliefs are the basic elements of culture. For an effective transfer of culture from one generation to another, it has to be translated in terms of symbols, which represent the cultural values of a community. Language, art and religion form the system of symbols that render a deep meaning to culture. Despite the efforts of the older generations to transfer their cultural values to the forthcoming generations, many tend to remain unaware of their culture. People are often found to have an incomplete knowledge of their culture. People seldom know their culture completely.

A gradual change is characteristic to almost every culture. Cultures are subject to change. Culture loses some of its traits and gains new ones. The aspects of culture that change vary across societies. With the passage of time, new technologies emerge, new modes of work come up, social thinking undergoes transitions and so does culture. Every culture changes in time although the rate of change of every culture varies. Studies have brought out a fact that no culture can remain in isolation. There is hardly any social community that is completely isolated from the rest of the world. Every culture hence is mostly influenced by cultures of the surrounding regions. Cultural values are prone to be affected by the values of communities in close vicinity. The cultures, which emerged during the same periods of time often, show certain similarities. Modern times have witnessed an mix of cultures. Cultures are blended together giving rise to shared cultures.

The author believes that it is our moral responsibility to understand our culture. There is a need to study our cultural values and ideals, which have been shaping our society. It is necessary to have respect and pride for our culture. There is a need to peep into the past that has shaped our present.

2.3 About cross culture and communication

The term cross-cultural implies interaction with persons of different cultural, ethnic, racial, gender, sexual orientation, religious, age and class backgrounds.  Cross-cultural communication is a process of exchanging, negotiating, and mediating one’s cultural differences through language, non-verbal gestures, and space relationships.  It is also the process by which people express their openness to an intercultural experience. (Zurcher. 1965).

Cross culture can be experienced by an employee who is transferred to a location in another country. The employee must learn the language and culture of those around him, and vice-versa. This can be more difficult if this person is acting in a managerial capacity; someone in this position who cannot effectively communicate with or understand their employees’ actions can lose their credibility. In an ever-expanding global economy, cross culture and adaptability will continue to be important factors in the business world. (Meadows, 1965) says the meaning of cross-cultural lies in the impact that culture has on an individual and his community, and the effects of this impact when different cultures are combined. The culture in which a person is raised plays a significant role in shaping his values, morals, behaviors and attitudes. These characteristics impact how a person thinks, and what his overall mind-set is toward the world around him. When a person is met with the principles and ideals of a different culture a cross- cultural interaction takes place.

The key to effective cross-cultural communication is knowledge. First, it is essential that people understand the potential problems of cross-cultural communication, and makes a conscious effort to overcome these problems. Second, it is important to assume that one’s efforts will not always be successful, and adjust one’s behavior appropriately.

For example, one should always assume that there is a significant possibility that cultural differences are causing communication problems, and be willing to be patient and forgiving, rather than hostile and aggressive, if problems develop. One should respond slowly and carefully in cross-cultural exchanges, not jumping to the conclusion that you know what is being thought and said.

Schutz, (1970), justifies that active listening can sometimes be used to check this out-by repeating what one thinks he or she heard, one can confirm that one understands the communication accurately. If words are used differently between languages or cultural groups, however, even active listening can overlook misunderstandings.

Often intermediaries who are familiar with both cultures can be helpful in cross-cultural communication situations. They can translate both the substance and the manner of what is said. For instance, they can tone down strong statements that would be considered appropriate in one culture but not in another, before they are given to people from a culture that does not talk together in such a strong way. They can also adjust the timing of what is said and done. Some cultures move quickly to the point; others talk about other things long enough to establish rapport or a relationship with the other person. If discussion on the primary topic begins too soon, the group that needs a “warm up” first will feel uncomfortable. A mediator or intermediary who understands this can explain the problem, and make appropriate procedural adjustments.

However Bell (1976) believes that sometimes intermediaries can make communication even more difficult. If a mediator is the same culture or nationality as one of the disputants, but not the other, this gives the appearance of bias, even when none exists. Even when bias is not intended, it is common for mediators to be more supportive or more understanding of the person who is of his or her own culture, simply because they understand them better. Yet when the mediator is of a third cultural group, the potential for cross-cultural misunderstandings increases further. In this case engaging in extra discussions about the process and the manner of carrying out the discussions is appropriate, as is extra time for confirming and re-confirming understandings at every step in the dialogue or negotiating process.

2.4 The layers of culture

When it comes to culture it can be categorized into different layers as follows.

2.4.1 The outer layer: explicit products

(Geertz, 1973), the explicit culture is the observable reality of the language, food, buildings, houses, monuments, agriculture, shrines, markets, fashions and art. They are symbols of a deeper level of culture. Discriminations mostly start on this symbolic and observable level. For EG: if we see a group of Japanese managers bowing, we are obviously observing explicit culture as the sheer act of bending. However, if we ask the Japanese “why do you bow” a question they may not welcome since it’s their traditional culture.

2.4.2 The middle layer: norms and values

The above culture reflects deeper layers of cultures, the norms and values of an individual group. Norms are the mutual sense a group has of what is “right and wrong”. Norms can develop on a formal level as written laws, and on an informal level as social control. Values on the other hand, determine the definition of good and bad and are therefore closely related to the ideals shared by a group.

A culture is relatively stable when the norms reflect the values of the group. When this is not the case, there will most likely be a weakened tension. While the norms, consciously or subconsciously, give us a feeling of this is how I normally should behave. Values give us a feeling of this is how I aspire or desire to behave. (Kluchhohn, and Strodtbeck, 1961) says a value serves as a criterion to determine a choice from existing alternatives. It is the concept an individual or group has regarding the desirable. For instance, in one culture people might agree with the value. “Hard work is essential to a prosperous society. Yet the behavioral norm sanctioned by the group may be, do not work harder than the other members of the group because then we would all be expected to do more and would end up worse off. Here the norm differs from the value.

For EG: some Japanese might say that they bow because they like to greet people, that is a value. Other might say they don’t know why except that they do it because the others do it too. Then we are talking about a norm.

2.5 Importance of culture

The cultural values of a community give it an identity of its own. A community gains a character and a personality of its own, because of the culture of its people. Culture is shared by the members of a community. It is learned and passed from the older generation to the newer ones. For an effective transfer of culture from one generation to another, it has to be translated into symbols. Language, art and religion serve as the symbolic means of transfer of cultural values between generations.

Culture is bond that ties the people of region or community together. It is that one common bond, which brings the people of a community together. The customs and tradition that the people of a community follow, the festival they celebrate, the kind of clothing they wear, the food they eat and, most importantly, the cultural values they adhere to, bind them together.

Culture is seen as system of social control, wherein people shape their standard and behavior. The cultural values form the founding principles of one’s life. They influenced one’s principles and philosophies of life. They influence one’s way of living and thus impact social life. The importance of culture lies in the fact that is a link between people and their value system.

2.6 The impact of culture on business

In this world we have millions of businesses and out of these millions Digital house is also one of the business which is located in Srilanka. Different business can affect them with different cultures. As we have come across a long way we clearly understand the meaning of culture and how bad it can be at certain times to businesses.

Lawrence, & Lorsch, (1967) believes that even with experienced international companies, many well intended universal applications of management theory have turned out badly. For EG: pay for performance has in many instances been a failure on the African continent because there are particular though unspoken, rules about the sequence and timing of reward and promotions. At the same time international managers have it difficult because they must operate on a number of different premises at any one time. These premises arise from their culture of origin, the culture in which they are working and the culture of the organization which employs them.

In every culture in the world such occurrence as authority, bureaucracy, creativity, good fellowship, verification and accountability are experienced in different ways. That we use the same words to describe them tends to make us un-ware that our cultural biases and our accustomed conduct may not be appropriate or shared. (Bartlett, and Ghosal.1990) in the common world there is a theory that internationalization will create or at least lead to a common culture worldwide. This would make the life of the international managers much simpler. People point to McDonald’s or KFC as examples of tastes. Markets and hence cultures becoming similar everywhere. There are, indeed, many products and services becoming common to world markets. What is important to consider, however, is not what they are and where they are found physically, but what they mean to people in each culture.

The essence of culture is not what is visible on the surface. It is the shared ways groups of people understand and interpret the world. Dining at McDonald’s is a show of status in Moscow whereas it is a fast meal for a fast buck in New York. If business people want to gain understanding of and allegiance to their corporate goals, policies, products or services wherever they are doing business, they must understand what those and others aspects of management mean in different cultures.

So finally the internationalization of business life requires more knowledge of cultural patterns. In more communitarian cultures like France, Germany and large parts of Asia it may not be so successful, Employees may not accept that individual members of the group should excel in a way that reveals the shortcomings of their members. Their definition of an “outstanding individual” is one who benefits those closest to him or her. Customers in more communitarian cultures also take offence at the “quick buck” mentality of the best sales people they prefer to build up relationships carefully, and maintain them.

2.7 The impact of cultural effects in organizations in different ways

There are of course many factors that affect the creation and evolution of organizational cultures. The presence or absence of competitors, local, regional, national and global economic conditions, the nature of business, the nature of the available labor supply and so on. Many of these factors are highly distinctive and are likely to have unique effects on specific kinds of organizations. However some factors are likely to have similar effects on a variety of organizations. The effects for organization can be in different ways. Will take a short look in all the 3 ways:

1. Effects in which the nature of the social culture has an impact on the nature of the organization.
2. Effects in which the nature of the global industry has an impact on the nature of the organization.
3. And finally the effect in which the nature of the industry as it is cleared in a given society has an impact on the nature of the organization.

2.7.1 Industry effects

The fact that different industries impose different demands on organizations is obvious and well supported in the organizational strategy. According to Goold (1990) and Chhokar (2000) argue that the nature of the industry influences organizational culture through the constraints it places on the behavior of all persons in the organization. Further, specific organizational practices may be essential if an organization hopes to survive in the industry. In addition (Burns and Stalker, 1961) says that industry driven assumptions lead to value systems that are consistent with these assumptions and these value development of the industry within a society and national economic system are just few of the other factors that can affect the ways in which a given industry is enacted in a given society.

For EG: A model of organizational design for effectiveness that incorporates a consideration of the effects of the market, the current technology, the industrial environment, and the social culture. More importantly, they discuss the interactions of the market, the technology, and the industry with the social culture as having an impact on the design of an effective organization.

2.7.2 Society effects

According to Smith, (1996) they are describing the potential negative outcomes that can accrue to an organization that strays from the expectation to match society and industry norms. Still it seems clear that social characteristics can and do influence the characteristics of the organizations within the society. In looking for such effects, therefore one should expect to see, similarities among all or certainly most organizations within the society and a clear origin at the social level for the organization level similarities. At the same time Hayes and Prakasam (1982) found that social differences in power distance predicted the type of consultant client relationship preferred in those societies. Firms in countries characterized by high power distance preferred relationships that were more directives and less collaborative.

2.8 Summary

After coming to the end of the literature review we have found many definitions on culture by different authors. According to the above definitions it was found out that different authors explain their own point of view on culture. Some authors have also explained using their own cultural examples. As it continues cultural background has been covered mainly focusing the factors of culture like communication, cross culture, gender, and how culture affects different situations like organizational performance, how communication affects culture and many more information related to culture.

Cultures vary in their approaches to the given environment, between belief that it can be controlled by the individual and belief that the individual must respond to external circumstances. We should not however, make the error of assuming that inner direction and outer direction are exclusive options. All cultures necessarily take some notice of what is inside or outside. To fail to do so would lead inner directed cultures into a headlong rush to a disaster. While outer directed cultures would try to please everyone and dissolve their energies by over observance.

Leaders in these stress how much they have learnt from their mistakes and from other’s objections or criticisms. One reason staff suggestions enrich several Asian organizations and participation is so high is because listening rather than disclaiming is seen as the more admirable trait. Such cultures do not clash openly. To go against what someone else is saying is to ride roughshod over nature. Major change can come from both outside and inside. Once again we see that culture is about where a circle starts or where a manager conceives of change originating. To conceive of the organization as an open system operating within a larger system allows both inner-directed and outer-directed orientations to develop.

A complex market is not an objective description so much as a cultural perception. For EG to an Ethiopian or to an American, feedback sessions where people explore their mistakes can be useful feedback according to American management culture and enforced admissions of failure in a German management culture. One culture may be inspired by the very thing that depresses another. Rather than there being one best way of organization there are several ways, some very much more culturally appropriate and affective than others, but all of them giving international managers additional strings to their bow if they are willing and able to clarify the reactions of foreign cultures.

We saw that culture presents itself to us in layers. The outer layers are the products and artifacts that symbolize the deeper, more basic values and assumptions about life. The different layers are not independent from one another, but are complementary. The shared meanings that are the core of cultures is man- made are incorporated into people within a culture, yet transcend the people in the culture. In other words, the shared meanings of a group are within them and cause them to interpret things in particular ways, but are also open to be changed if more effective solutions