The challenge of managing across cultures in the

The challenge of managing across cultures in the future

1. The changing environment of business Globalization is characterized by growing worldwide connections between organizations and their various constituencies. Organization are open systems, managers must adapt structures and procedures to this environment.

Introduction Future managers must deal with the many additional layers of complexity that the changing environment of business brings to their jobs Managers must learn to operate within the complex interplay between the various trends in the cultures of the world and the process of globalization

1. 2. 3. 4. There are 4 trends that set the stage of cross -cultural management in the future, that are : The uneven development in the world. The increased influence of economies in transition The continued influence of information and communication technology The growing pressure of the natural environment

The uneven development in the world Evidenced by the range in gross domestic product per capita and the Human Development Index has numerous implications for policy makers. The uncertainty in the business environment such as the differences in development from a cross-cultural management perspective has to do with the impact of the labor pool. Economic development within nations affects the availability of wage-earning jobs.

In developing countries, working hours are longer, part-time employment is high and many people work several part-time jobs because of limited fulltime employment. Few developing countries provide the type of social safety net enjoyed in the industrialized world and workers are subject to a variety of abuses on the job including discrimination.

MNCs create many of the jobs which based on the economies development of the countries and therefore influence work lives in these countries. Worldwide migration Economics migrants crossing boundaries between developing and developed countries. Immigrants increase the diversity of workforce and add to managerial complexity of the firms that employ them. Raise the issues of brain drain from less developed countries. Although the majority of economic migrants are men, there is a trend toward more women migrants.

There is trend toward the migration of service and medium skilled jobs. (previously more to low-skilled manufacturing jobs). Job migration concern with the need for knowledge workers will increase the numbers of women in the workplace particularly in developing countries, increase the average of workers in developed countries and increase demand for people with higher level of education worldwide.

Cost of labor Differences between developed and developing countries are a major factor influencing the migration of jobs to countries where labor is cheap and abundant. Global competition for jobs results in lowwage jobs being replaced by even lower-wage jobs, downward pressure is put on labor standards and hiring cheap labor globally disrupts social contract and cultural norms in the host country.

2. Influence of transition economies Fundamental to economic transition is the replacement of one set of institutions that govern economic activity by another. Today we can see the decline in centrally planned economies in favor of market-based approaches. As economic transition grow, MNCs and manager will need to understand the legacy of state socialism that influences both organizations and managers. Managers in transition economics are influenced by external influences of the market – must establish new institution that are acceptable in their society.

Read more on pg. 243 about the differences between central planned and market practices. In transition economic, managers have been exposure to formal management training and highly educated. Managers in transition economies are often sensitive to being treated as inferior by foreigners.

3. Information and communication technology Involves 2 main activities – processing information and transmitting it from one location to another. The processing and delivery of information have grown exponentially with the widespread use of computer technology with more than 90% of the information produced in 1999 in digital format. Today there are millions of internet users and billions of Web. Pages and business conducted over the internet totals in the trillions of dollars. The work environment relies on knowledge and the ability to take advantage of knowledge can be a strategic advantage for organizations.

The advent of language translation capacity which already beginning to appear on the Internet, has the potential for an even greater exchange of ideas.

4. Pressure on the natural environment Because of globalization, activities in one part of the world affect organizations and individuals in other regions. National government are ill equipped to address global environmental issues alone. Sometimes large MNCs are more powerful than some governments and this will increase pressure on international manager of the future to be environmentally responsible.

The developing and developed worlds face different population challenges and when we combine the world’s population growth with global economic development is placing increasing demands on the resources we all share and some author call it the global commons (water, air and natural resources) The industrialization that accompanies economic development increase the world’s prosperity but also increase the potential for ecological disruption. There are 4 trends toward more sustainable development that suggested by Parker (2005) –refer textbook pg. 248.

Bird and Smucker (2007) has suggested the 3 principles of the role of international managers that managers must take into account when addressing the responsibility of international organizations in developing countries – refer pg 248.

The MNO context 1. 2. 3. Cross cultural management involves the interaction of culturally different people in the context of organizations – occur in MNOs (multinational organizations) MNO provides a context that can have a unique effect on 3 ways : Frequency of occurrence Functional relationship Unique constructs **** read pg. 249 -251.

The future of the organization of work The issues related to the organization of work are : 1. Widespread use of global virtual teams. 2. The extend to which cultural differences influence individuals’ perceived status within a work group or team and the status of the team in the organization. 3. The changing nature of overseas assignments 4. The widespread difficulties in reconciling work and family. ***read pg 251 -253