As processes’ globalization spreads out within some companies, the workforce has become increasingly diverse, rising awareness over cross-cultural management needs. This phenomenon can be explained by the global economic context: people are constantly in motion (jobs or destination wise), investments are being traded at an unprecedented rate in history and this volume of exchanges is still growing. Indeed, cultures are not linked to their historical place of birth. Given that even the SMEs (Small and Medium-sized Enterprises) can operate across the globe, companies must henceforth, more than ever, integrate the various cultures and values that they encounter through their activities into their corporate strategies.
However, what does cross-cultural management refers to? It can be described as a management style including cultural differences by transforming them into a powerful asset to increase companies’ performance.
In this article, we will try to explain why CCM is important regarding the current business context and how managers can act as facilitators by embracing cultural differences. Then, we will try to understand why this topic, which seems to be relevant regarding today’s global economic context, is underestimated.
Why are cross-cultural competencies critical to your company and its long-term sustainability?
Firstly, and as explained in the introduction, the emergence of CCM is a natural consequence of the realities brought by globalization, technological advancements, competition between the growing number of international corporations and the free flow of persons, goods and capital. As a consequence, people can lack abilities to adjust to new cultures and to behave accordingly when encountering an unknown one. Global businesses must understand how to communicate with employees and customers from different cultures in order to fulfill the organization’s missions and build values for stakeholders.
An important misconception companies often have when thinking about CCM is the following: they see it as an issue directly related to race or gender. In fact, not only companies, but also people assume “workplace diversity” is only a matter of race or gender. However, “diversity” can also be linked to culture, heritage, age, education, experience, language, traditions, etc. Thanks to the current digitalization era, this “diversity” becomes more and more part of our environment. As companies are able to cost-effectively trade their capitals and resources, they still need to adapt to the complexity of specific political, economic and cultural frameworks. In other words, a growing number of companies will have to deal with foreign governments or specificities of the local workforce (traditions, work habits, body language, etc.) in order to ensure a business-friendly environment. Furthermore, since their employees will be working with people from different cultures, companies will need to leverage the unique skills of every employee and create cohesion. The need to integrate CCM within a corporate strategy is fundamental because, once again, it is a misconception that there is no connection between business activities and culture: any people who come from different cultural backgrounds and who grew up in different environments with a different set of experiences, will require “cross-cultural” skills to improve cooperation.
Now, the question can be asked: who should be in charge of this change of mindset and work habits? It appears that managers will be directly affected by this change of conception, and therefore, will have to make cultures understandable for their employees. In addition, managers need to present them as a new set of tools that will guide groups to new answers that can become new opportunities for firms.
Nowadays, successful leaders are no longer linked to deep technical skills and professional experiences. Managers must operate in an increasingly global and cross-cultural context which requires more than a set of leadership behaviors such as setting goals, delivering results, building capabilities (development of knowledge, management skills, etc.) and inspiring others.
In order to create a sustainable work environment for cross-cultural teams, managers need to lead the way. They will have to know how to combine the different cultural values present within their organization: their own, the ones of their subordinates and those of their customers. The real objective is to develop cultural awareness within a company by, for example, providing online tools such as videos or podcasts. Indeed, these tools can help employees to grasp cultural differences and develop strategies for preventing future problems.
Also, they must communicate to encourage the acculturation of their collaborators. This implies that the managers must intervene to facilitate the adaptation of their employees to the surrounding cultures. There are multiple ways to encourage and inspire people to learn about other cultures such as learning new languages, trying new food and interacting with people from different backgrounds. Companies can also publish and distribute information on how business is conducted in different countries; so that, when employees travel, they know how to behave. In fact, facial expressions and gestures may have different meanings depending on the culture. The anticipation of those kind of cultural behaviors can create a difference during, for example, a negotiation process. To sum up, the need for CCM is paramount for any company willing to operate abroad.
But why is this field of expertise underestimated and therefore not included in most companies’ corporate strategy?
To begin with, this recent discipline does not attract a lot of people, despite its growing importance in the economic world. Everyone is convinced that they can use their common sense to solve misunderstandings that may arise. Unfortunately, common sense appears to be insufficient. It is necessary to take into account time, space, authority and the impact of the context. Higher educations have slowly gathered interest on the subject and different institutions are setting up intercultural management modules. The idea is to allow students to grasp cultural differences and the necessary communication toolkit in order to develop behaviors that will ensure productivity and efficiency within multicultural teams.
However, another explanation can be given. Most of the cross-cultural researches and practices are often reflections of western countries. Books about cross-cultural management tend to implicitly favor western perspectives and opinions. This reinforces the inequalities between developed and developing countries (in terms of knowledge development) that can contribute to western imperialism. These accusations are very serious for a discipline that praise mutual understanding, respect of differences and non-imposition of ethnocentric views.
To sum up and as shown in this article, this discipline is only at the beginning of its development. In fact, current experts limit themselves by providing an analytical grid to identify cultural differences, but do not offer methods to transform interculturality into a viable source of business performance. In other words, it seems that only a certain range of perspectives were taken into consideration, and this is now viewed by some authors as a limitation for the development of this field of expertise. Among others, this explains why managers and executives tend to choose pragmatic management methods in order to ensure cultural cohesion of their organizations. However, in a world where both human capital and investment flows are uninterrupted, the integration of this discipline within a corporate strategy will be unavoidable and more importantly, a source of performance for an organization.
What can be the next step for CCM? Unfortunately, CCM implies a constant training over time whereas cultures are dynamic, fluid, and changing. However, “cultural agility” can be a solution and can be described as the competency which enable professionals to perform successfully in cross-cultural situations. Culturally agile professionals succeed in contexts where the successful outcome of their jobs, roles, positions, or tasks depend on dealing with an unfamiliar set of cultural norms. Instead of preparing employees to accept/understand a different specific culture, companies can develop employees’ cultural agility in order to make them better equipped to handle any cultural context that they will have to encounter.