Managing a Culturally Diverse Workforce

Executive Summary

With the globalization, Managing a culturally diverse workforce is now a norm for businesses. A diverse workforce allows businesses to be more innovative and productive. However, management of culturally diverse workforce has become one of the key challenges for organizations. The purpose of this report is to analyze the influence of culture on working style of employees and management style and also to study the importance of training the management to become inter-culturally competent. There are primarily four styles of management which include autocratic style of management, democratic style, laissez-faire management style and paternalistic style. The diversity training can be categorized into awareness based training and skill based training. Awareness based training involves creating awareness among the management regarding the cultural differences and the tools for awareness based training include experiential exercises and use of case studies. Skill based diversity trainings are targeted on developing managers ability to handle diversity and the tools for skill based training include lectures, learning courses, seminars, role plays, interactive games. Effective management of diverse workforce allows the organization to become more tolerant towards other cultures and results in enhanced productivity and increased employee motivation.

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Introduction

In this era of increased mobility and globalization, a culturally diverse workforce is now a norm for businesses. According to Chua, Roth & Lemoine (2015), an inclusive workforce enables the businesses to create and execute new as well as creative business processes. It implies that efficient management of workforce diversity can lead to improved social and economic performance. However, a manager may find it difficult to motivate people hailing from different cultures to work towards a common organisational goal. If managers fail to manage the workforce, organisation suffers loss. Hence, it is utmost important for organisations to train their managers to be inter culturally competent.

The main issues discussed in this report are as follows:

  • How culture influences working styles
  • Different management styles
  • The importance of training managers to become inter-culturally competent

How Culture Influences Working Styles

Culture is broadly defined as the ways in which individuals of a particular society manifest their customs, ideas and social behavior collectively. It encompasses various facets such as food, religious beliefs, art, clothing etc. Adkins & Caldwell (2004) argued that culture is the distinguishing and unique characteristic of every society, hence is of great significance. Different researchers have studied the impact of culture on individual as well as organizational behavior. Nevertheless, the widely used study is that of Hofstede (1983), who presented different cultural dimensions upon which societies can be categorized. These include power distance, uncertainty avoidance, masculine vs. feminine and individualism vs. collectivism. A brief explanation of these factors has been presented in figure 1.

Figure 1: A brief explanation of Hofstede’s (1983) cultural dimensions

Another classification regarding how culture impacts cross cultural communication and interaction was done by Hall (1977). The theorist argued that there are high context cultures and low context cultures. In high context cultures nonverbal communication is emphasized, uncertainty is avoided; culture of hierarchy exists, problem solving is preferred in groups. On the other hand, low context cultures have low power distance with clarity in verbal communication.

The aforementioned cultural dimensions significantly influence the daily lives of individuals. Likewise, the interaction of people with each other at work place is also significantly influenced by culture (Dong & Liu, 2010). People belonging to high context cultural societies are better at taking non-verbal cues whereas people from low context culture would require having clear directions (Aycan, Al-Hamadi, Davis & Budhwar, 2007). Furthermore, the individuals coming from high context culture are more inclined towards forming interpersonal relationship with other team members and would not mind physical proximity however the low context culture prefer formal interactions amongst the team members and with a distance (Gunia et al., 2011).

Different Management Styles

Adkins & Caldwell (2004) argued that an appropriate management style is the one which is aligned with the culture of workplace. In literature, there are broadly four principal styles of management. The first kind is autocratic style of management in which the top management does not involve employees in the process of decision making. The employees working in such organizations only abide by the decisions without giving any kind of input (Jarnagin & Slocum, 2007). The management and employees belonging to countries with high power distance are more comfortable with democratic form of management. The second kind of management style is democratic style which involves employees in decision making process. Feedback from employees is encouraged and there is open communication, hence it is more prevalent in low context culture societies (Xenikou & Simosi, 2006). A contemporary management style is laissez-faire management style in which employees are given complete autonomy to make decisions and to resolve problems on their own. This management style is successful in societies with highly individualistic orientation and low uncertainty avoidance. The fourth type is paternalistic style of management whereby a dominant figure of authority acts as a patriarch or a head and treats employees as his family and in return expects obedience, loyalty and trust from his subordinates (Tsui, Wang & Xin, 2006). Paternalistic style of management is evident in high context cultures like Turkey, Mexico and China (Liberman, 2014). Due to paternalistic style of management, there is considerable power distance which is particularly evident in public sector organizations. They are highly formal and bureaucratic with centralized decision making and no employee autonomy (Tu and Yuan, 2010).

Key and Key (2008) carried out a study on managers of USA and Indonesia.to evaluate cross-cultural variances in managerial style. The results revealed that managers in Indonesia are more autocratic in comparison to the managers in USA and have more collectivist approach whereas U.S. managers endorse individualism more in comparison to the managers in Indonesia. Moreover, a positive association was found between democratic style of management and individualism.

To cut it short, managerial styles should be tailored to the culture of employees to reap maximum efficiency.

The Importance of Training Management to be Inter-Culturally Competent

When managers are not aware of cultures of other countries, then they undervalue cultural differences. This leads to misinterpretations and misunderstandings among people from various cultures in workplace (Jackson & Michie, 2017). Hence, cultural intelligence is required to resolve challenge faced by management in recruiting, developing and retaining culturally diverse talent. It is estimated that 99% of managers who are sent on foreign assignments get termination before completion of their tenures due to cross cultural adaptation issues (Gorodnichenko and Roland, 2012). Therefore, it is highly critical to train managers to be inter-culturally competent.

Though cross-cultural training cannot entirely alter an individual’s beliefs altogether, yet it has ability to impart knowledge and awareness (Zander, Mockaitis and Butler, 2012). Hence, it is evident that diversity training helps an organisation in preventing civil rights violations, enhances the inclusion of varied cultural groups and encourages teamwork. An inter-culturally competent management will be better able to motivate diverse workforce which would lead to enhanced productivity and increased workforce motivation.

Conclusion

The world has transformed into a global village where people from various cultures are working together. This has given rise to the challenge of managing cross-cultural workforce. There are primarily four styles of management which include autocratic style of management, democratic style, laissez-faire management style and paternalistic style. The management style in high context cultures is more centralized and management style in low context culture is more democratic. Individuals from societies with low power distance and uncertainty avoidance, masculine traits and individualism are more autonomous. On the contrary, individuals from societies with high power distance and uncertainty avoidance, feminine traits and collectivism are more collaborative. Hence, managing cross cultural teams is the biggest challenge faced by management of international organisations. Without the necessary intercultural training and support, the management will face difficulties in inculcating cohesion and managing culturally heterogeneous teams.

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Recommendations

It can be established from the report that training managers for inter cultural competence is the need of the hour. Therefore, organisations should adopt pertinent strategies to train their managers. The diversity training can be broadly categorized into awareness based training and skill based training (Lindsey et al., 2017). The awareness based trainings are designed to bring awareness regarding the prejudice and biases that exist in the minds of people about other cultures. This type of training primarily involves imparting knowledge among the management regarding the cultural differences and how to effectively communicate with multicultural workforce. The effective tools for awareness based training include experiential exercises and structured training activities for exploring various stereotypes and prejudices by making individual experience and Case studies (Xenikou and Simosi, 2006). Similarly, skill based diversity trainings are targeted on developing managers ability to handle diversity. It also sensitizes management as well as workforce in recognizing and tolerating differences among co-workers. The various tools for skill based training include conducting lectures, learning courses, seminars, role plays, interactive games on cultural diversity (Lindsey et al., 2017).

Figure 2: Diversity Training Management

Based on the analysis carried out in the report, following suggestions can be made for making mangers more inter-culturally competent:

  • Organizations can use long term periodic awareness based training programs with a combination of experiential experience and case study methods to impart knowledge about cultural differences in management. For instance, an activity can be arranged on speaking about all the biases towards a certain culture and one individual pretending to be from that culture and later discussing about those stereotypes. Moreover, case studies regarding effective management of cultural diversity can be taught to managers.
  • Regular seminars, workshops, role plays and interactive sessions can be arranged to impart skill based training in management regarding inter-cultural competence.

References

Adkins, B. and Caldwell, D., (2004). Firm or subgroup culture: where does fitting in matter most?. Journal of Organizational Behavior 25, pp. 969-78.

Aycan, Z., Al-Hamadi, B., Davis, A. and Budhwar, P., (2007). Cultural orientations and preferences for HRM policies and practices: The case of Oman. The International Journal of Human Resource Management, 18(1), pp. 11–32.

Chua, R., Roth, Y. and Lemoine, J., (2015). The impact of culture on creativity: How Cultural tightness and cultural distance affect global innovation crowdsourcing work. Administrative Sciences Quarterly 60, pp. 189-227, doi: http://dx.doi.org/10.1177/0001839214563595

Dong, K. and Liu, Y., (2010). Cross-cultural management in China, Cross Cultural Management. An International Journal 17(3), pp. 223 – 243, doi: https://10.1108/13527601011068333

Gorodnichenko, Y. and Roland, G., (2012). Understanding the individualism-collectivism cleavage and its effects: lessons from cultural psychology. Institutions and Comparative Economic Development, p. 213.

Gunia, C., Brett, M., Nandkeolyar, A. and Kamdar, D., (2011). Paying a price: Culture, trust, and negotiation consequences. Journal of Applied Psychology, 96, pp. 774-789.

Hall, E., 1977, ‘Beyond Culture’, Anchor Books, 1977, pp. 91-131, doi: http://dx.doi.org/10.1037/a0021986

Hofstede, G., (1983). The Cultural Relativity of Organizational Practices and Theories. Journal of International Business Studies, 14(2), pp. 75-89.

Jackson, W. and Michie, J., (2017). Culture and Business Operations: How the Gulf Arab Leadership Style Impacts a Contingent Human Resource Management. Palgrave Studies in Governance, Leadership and Responsibility, pp. 31-47.

Jarnagin, C. and Slocum, J., (2007). Creating corporate cultures through mythopoetic leadership. Organizational Dynamics, 36(3), pp. 288-302.

Key, S. and Key, S., (2000). The Effect of Culture on Management Style. Journal of Transnational Management Development 5(2), pp. 23-46, DOI: https://doi.org/10.1300/J130v05n03_03

Liberman, L., 2014. The impact of a Paternalistic Style of Management and Delegation of Authority on Job Satisfaction and Organizational Commitment in Chile and the US. Innovar 24, pp. 187–196. Doi: 10.15446/innovar.v24n53.43944

Lindsey, A., King, E., Membere, A. and Cheung, H., (2017). Two Types of Diversity Training That Really Work [Online]. Harvard Business Review. Retrieved from https://hbr.org/2017/07/two-types-of-diversity-training-that-really-work (Accessed 14th October, 2018)

Tsui, S., Wang, H. and Xin, R. (2006). Organizational Culture in China: An Analysis of Culture Dimensions and Culture Types. Management and Organization Review, 2(3), pp. 345–376

Tu, H. and Yuan, X., (2010). Chinese culture, Chinese corporation culture and innovation: How does a corporation implement innovation properly?, Department of Technology and Built Environment, 5(1), DOI: http://dx.doi.org/10.5430/jms.v5n1p88

Xenikou, A. Simosi, M., (2006). Organizational culture and transformational leadership as predictors of business unit performance. Journal of Managerial Psychology, 21(6), 566-577.

Zander, L., Mockaitis, A. and Butler, L., (2012). Leading global teams. Journal of World Business, 47, pp. 592–603.

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