Q1 – Examine the corporate and cultural differences the UK managers may encounter when working in an overseas branch in a country of your choice and explain how the managers might address these differences. You are required to state the country you have chosen at the start of your answer. (Examine means; to observe carefully and critically inspect) Q2 – Evaluate the qualities that the branch manager will need in order to be effective in their role Both questions are related and need to be focussed on content/theory/examples from the financial services industry. Use a report style For Q1 (2500 words – 30 marks) 1. Intro 2. Developing the case study 3. Issues arising 4. Developing theoretical support and referencing 5 Brief summary / conclusion For Q2 (1500 words – 20 marks) 1. Brief Introduction to management / leadership 2. Range of different theoretical concepts 3. Brief Summary / Conclusion
Understanding international cultures
Although it is generally accepted that the increase in travel and technology has led to a blurring of some distinctions of culture, there are still clearly definable differences in culture between different countries and ethnic groups. Cultural differences are typically manifest in areas such as food, customs, language, housing and entertainment. It is important that those working on an international basis also understand that culture impacts on the ways in which people work and behave when working. Although the outward signs of work (dress, technology, etc) might be increasingly similar regardless of the country of operation, there are ways in which people can be offended, and business propositions damaged, if there is not an understanding of the culture of the country in which the activities are being conducted.
There are many examples of simple actions being interpreted differently in different cultures. For example:
• In the USA a firm, short handshake is seen as being confident. In Africa it is appropriate for a handshake to be limp and last several minutes.
• In Austria it would not be appropriate to address someone by their first name after several times of meeting. In the UK it would not be uncommon to move to using first names during an initial meeting.
• In Japan it is not usual to say that something is not possible. It is more likely that an individual will simply be told that something ‘is very difficult’. Those who are not used to Japanese culture might think that this means that it is still possible, albeit difficult, when they are really being told that something is impossible.
It is also important to note that accepted behaviours might vary within different countries. This will be particularly true in large countries, such as the USA, where there are a number of different cultures within the country.
Cultural behaviours in different countries have also become blurred due to the broadcasting of television programmes internationally. For example, an increasing number of North American TV programmes are broadcast internationally, resulting in young people copying gestures and phrases commonly used on these programmes which do not naturally fit with the culture of the country where they are living.
Faith beliefs have a significant impact on culture. Within a society it is not unusual to have a number of subcultures which relate to different religious or spiritual affiliations. This can cause some tensions, particularly when the nature of their beliefs is misunderstood by other sub-cultures.
When taking an international assignment or working with people from other cultures, it is important that employees selected are able to reflect on their own assumptions about difference and approach such differences with awareness and sensitivity. Part of this process is taking the time to understand the nature of their assignment, the context in which they will operate and the people they will invariably impact.
The nature of ‘culture’
In understanding cultures, an important starting point is a high level of self-awareness and one’s own cultural assumptions. There are varying definitions of culture, but a common theme of these definitions is that it is a way that a society is shaped. The culture is a distinct way of life with common values, attitudes and behaviours that are adopted by the society. It is the ‘way we do things round here’.
Schein (1985)1 suggested that there are three levels at which culture is expressed.
Level one: easily observed rituals and behaviours
In every society there are ‘artefacts’: customs, languages, dress codes and rituals that are observable. Employees operating on an international basis need to be sensitised to take time to observe these manifestations of culture, so not to minimise offence to local employees with whom they are interacting. As already noted, this could be a matter of things as simple as shaking hands or using an appropriate form of address.
Employees who are taking up international assignments would benefit from psychometric evaluation to raise their self-awareness and briefings in advance of their placement so that they are made aware of local rituals and behaviours. For more information
Level two: values and beliefs
The values and beliefs regarding working practices vary around the world. An employee on an international assignment needs to understand the core values and beliefs of the country where s/he is operating, and accommodate these in business operation. For example, this could impact on the leadership style within organisations. In France it is usual for a leader to stand apart from the team and to be the expert who the team defer to. In Scandinavian countries it is more usual for the leader to adopt a democratic and participative style of leadership.
Level three: basic assumptions
These are more difficult for employees to identify because they are the assumptions underlying the way in which the society operates and are usually ‘taken for granted’ rather than visibly manifest. Employees taking international placements could benefit from a period of mentoring from an employee who has previously worked in the country and might be able to give insights into these basic assumptions. For more information:
Differences in national cultures
Cultures in different countries vary, and considerable research has taken place to understand the differences in more detail. One of the most widely used frameworks for determining the differences was developed by Hofstede2 who suggested that the differences in culture between countries could be explained by four main factors:
This is the extent to which organisations and societies believe that power should be distributed equally or unequally. In work terms this relates to the centralisation of authority within an organisation, and the extent to which leadership is autocratic. Societies with ‘high power distance’ are hierarchical organisations in which it is accepted that the more senior employees have more power. Countries with a high power distance include the Philippines, Singapore, France and Greece. Countries with a low power distance have flatter organisation structures and a less autocratic style of management, examples being the UK, Sweden and New Zealand.
In a culture where there is a high power distance employees must realise that the hierarchical structure in the organisation should be respected. In such countries it would be inappropriate to expect a more junior employee to make an important decision without deference to more senior management.
Uncertainty avoidance is the extent to which organisations and societies feel uncomfortable with ambiguous situations, and the extent to which they will try to avoid uncertain situations. France is an example of a country with a high uncertainty avoidance, and in this country there is a strong bureaucratic structure which helps to avoid risk taking. Countries such as the UK, Sweden and Norway have low uncertainty avoidance and have more flexible structures and accept more diverse views.
In a culture where there is high uncertainty avoidance employees must accept that there is likely to be a certain amount of bureaucracy associated with business activities. Trying to avoid this bureaucracy is likely to be impossible, and also likely to cause difficulties with local employees.
Individualism is the extent to which people operate as part of a group, or on an individual basis. In the USA, for example, individualism is high and people look after themselves. This is also increasing true of the UK, with individuals moving towards personal employment contracts and individually negotiated reward packages. In countries with low individualism, such as Japan, being part of a group is a strong need and promotes considerable loyalty to that group.
In a culture where there is low individualism (a collectivist society) there is considerable focus on operating as part of a group. Employees working in such countries on an international placement need to understand that they must fit in as part of a group, and not try to encourage individuals to operate separately to the group to which they belong.
When working internationally, it is important that employees consider the dimensions of culture relating to the country where they are to be placed, and identify the way in which behaviour must be modified so as to fit in with the cultural approaches.
Trompenaars is a researcher who has looked at different dimensions of culture3. He has identified seven key differences between country cultures:
Achievement v ascription
In different cultures individuals will use different emphases in answering the question of what they do. In the UK people will tell you their profession if they are asked what they do. In Japan they will say who they work for. This shows a difference in the importance placed on what people achieve themselves, and the emphasis they place on another group.
In a culture where there is strong loyalty to a group employees must be careful not to say or do anything that suggests a negative opinion of that group. That could be more damaging to a business situation, in such cultures, than personally offending an individual.
Sequential v synchronic
This dimension relates to time. Time can be thought of as both the speed at which it passes and the current time. In Western societies there tends to be a lot of focus on the future. In the Asia Pacific region the past is as important as the present, with little emphasis on the future.
In Western societies there is a lot of emphasis on time management, and it would be considered rude to be late for a meeting without good reason being given. In other cultures there is a more relaxed attitude to time, and hurrying someone along or showing anger at a meeting starting late would be seen as inappropriate.
Internal v external control
In cultures with an internal control (such as the USA) people tend to think that they can control, or overcome, any constraints imposed by the environment. However, in cultures with a stronger external control, such as in many European countries, there is not the same view that environmental restrictions can be overcome. In such cultures there will be more emphasis on finding a solution within the restrictions that exist, rather than trying to work out ways to remove or challenge those restrictions.
Individualism v collectivism
This dimension has already been addressed, see earlier.
Universalism v particularism
This is the extent to which people believe that general principles are important compared with unique circumstances and relationships. Trompenaars suggests that there are four key implications of this for international businesses:
• Contracts. In a particularistic culture, drawing up a lengthy and detailed contract may be seen as a lack of trust or respect. It is presumed that those involved in the contract are trustworthy, and that once their word is given the contract is confirmed.
• The timing of business trips. Those who are from a universalist culture need to take time to build up strong relationships. This might mean that a number of trips and meetings need to take place before a business deal can be agreed.
• The role of head office. In universalist cultures, head offices tend to control global functions, whereas they do not do this in particularistic cultures. In a universalist culture, therefore, business will need to be agreed and approved by a head office.
• Job evaluation and reward. In universalist cultures, there is more likely to be standardised evaluation and measurement, but in particularistic cultures there is more likely to be individual determination of evaluation and reward.
Specific v diffuse
This dimension addresses the extent to which individuals are comfortable dealing with other people. Those in specific cultures (such as the USA and UK) tend to have a lot of openness, and less private life. They appear more direct, open and extrovert – even to the extent of appearing abrasive at times. They are more likely to separate work and home life. Those with diffuse relationships (such as Germany) are the opposite – appearing more indirect, closed and introvert and are more likely to evade issues.
Affectivity v neutrality
This dimension refers to the ways in which different cultures express relationships. In affective cultures it is natural to express emotions very openly, but in neutral cultures emotions are kept in check. This can be particularly evident in communication. In countries such as the UK it is usual to respond to someone once they have finished talking, and not to interrupt them (indeed, interrupting can be interpreted as being very rude). In Latin countries it is usual for people to talk over each other. In Oriental cultures it is usual to have gaps in conversations.
Research like that by Hofstede and Trompenaars provide a generalised statement about countries and their culture. It is important for the assignee to understand that everyone is subject to stereotyping and it is more important to observe and test one’s assumptions with an appropriate level of sensitivity.
When sensitising assignees, they should be encouraged to spend time exploring the culture for themselves, and learning and understanding the specific values and behaviours that are acceptable within an organisation where they will be working
Employees working internationally need to be able to work effectively in the country and culture where they are placed. This requires any potential assignee to have a high level of self-awareness of their own assumptions and sensitivities. To operate effectively their must examine their own cultural constructs and understand how these will impact on their judgements and their perceptions of the behaviour of others from different cultural backgrounds. Once that is ascertained, a helpful next step is to explore the dimensions and definitions of culture that have been outlined in this factsheet. For a successful assignment, these factors should be given as much consideration as the assignee’s technical competence for the international posting.
1. SCHEIN, E.H. (1985) Organisational culture and leadership. San Francisco, CA: Jossey-Bass.
2. HOFSTEDE, G. (2001) Culture’s consequences. London: Thousand Oaks.
3. TROMPENAARS, F. (1993) Riding the waves of culture: understanding cultural diversity in business. London: Economist Books.
Books and reports
BREWSTER, C., SPARROW, P. and VERNON, G. (2011) International human resource management. 3rd ed. London: Chartered Institute of Personnel and Development. (Especially Part One: Cross-cultural management)
HOFSTEDE, G (1991) Cultures and organisations: software of the mind. London: McGraw-Hill
ILES, P. and ZHANG, C. (2013) International human resource management: a cross-cultural comparative approach. London: Chartered Institute of Personnel and Development.
RENNIE, A. and McGEE, R. (2012) International human resource management. CIPD Toolkit. London: Chartered Institute of Personnel and Development.
RIGHT MANAGEMENT and TUCKER INTERNATIONAL (2012) Leading across cultures in the human age: a groundbreaking study of the intercultural competencies required for global leadership success. Tucker International. Available at: http://research.right.com/leadingacrosscultures
SINCLAIR, A. and ROBERTSON-SMITH, G. (2008) Managing teams across cultures: how to manage across borders, time zones and cultures. Horsham: Roffey Park Institute.
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FITZSIMMONS, S.R., MISKA, C. and STAHL, G.K. (2011) Multicultural employees: global business’ untapped resource. Organizational Dynamics. Vol 40, No 3, July-September. pp199-206.
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