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 Христина Соколова

CROSS-CULTURAL MANAGEMENT:

THEORIES AND PRACTICES

Учебно пособие по теории и практики в междукултурния

мениджмънт

АКАДЕМИЧНО ИЗДАТЕЛСТВО “РУСЕНСКИ УНИВЕРСИТЕТ”

Русе, 2022 година

УДК: 316.77:338.24(075.8)(076)+65.012/.015:316.72(075.8)(076)

Анотация: Учебникът представя основни теоретични и емпирични приноси в

областта на междукултурния мениджмънт. Предмет на внимание са осем основни
теми, фокусирани върху съвременните тенденции в проблематиката на
междукултурния мениджмънт. Те са разпределени в лекционни единици и
практически упражнения към тях. Учебникът е предназначен за студенти,
обучаващи се по дисциплините Междукултурен мениджмънт, Междукултурна
комуникация и други дисциплини, интерпретиращи влиянието на културата
върху индивидуалното, груповото и организационното поведение.
Разработването на пособието на английски език го прави изключително
подходящо за дисциплини в специалности на английски език, както и за Еразъм
студенти, обучаващи се в Русенския университет.

© Христина Соколова, автор

© Юлиана Попова, рецензент

© Академично издателство „Русенски университет“

ISBN 978-954-712-878-1
- Заглавие Междукултурен мениджмънт: теории и практики (англ. ез.)
(пълно, без съкращения)

- Автор (автори) гл.ас. д-р Христина Емилиянова (акад. длъжн., научна

Соколова
степен, име, презиме и
- Стилов редактор проф. д-р Юлиана Пенчева фамилия)
Попова

- Рецензент проф. д-р Юлиана Пенчева Попова

- Издание първо (поредност, преработено или непреработено)

- Пореден №... от издателския план на Русенския университет за 2022г.

- Формат A5

- Тираж 20 (посочва се също и ако е допечатка към основния тираж)

- Издателство Академично издателство „Русенски университет“ (посочва се името)

 CROSS-CULTURAL MANAGEMENT: THEORIES AND PRACTICES

Table of Contents

WHAT IS CROSS-CULTURAL MANAGEMENT? ...................................................... 5

CRITICAL CONCEPTS IN CROSS-CULTURAL MANAGEMENT ..................... 8
LEADING THEORIES IN CROSS-CULTURAL MANAGEMENT .............. Error!
Bookmark not defined.
DEVELOPMENT OF ORGANIZATIONS IN THE GLOBALIZED
WORLD ................................................................................ Error! Bookmark not defined.
LEADERSHIP OF MULTICULTURAL TEAMS ... Error! Bookmark not defined.
BUSINESS CULTURES ACROSS THE GLOBE ... Error! Bookmark not defined.
CROSS-CULTURAL NEGOTIATIONS ................... Error! Bookmark not defined.
REFERENCES ......................................................................................................................... 23
 WHAT IS CROSS-CULTURAL MANAGEMENT?

Cross-cultural management is an interdisciplinary field that combines

elements from communication studies, cultural anthropology and
management theories. The main task of the discipline is to solve the issues
in communication and team management that result from cross-
cultural interactions in organizations. Cross-cultural management
approaches are used in a variety of business and education organizations.
One example is facilitating the adaptation of foreign workers in subsidiary
firms. Another typical case is the inauguration of foreign students in
universities.

The increasing number of contacts of personnel and customers from

diverse cultural backgrounds, lead to a growing demand for businesses to
understand and manage the diverse values, perceptions, business
worldviews and behaviour of organizations and their staff. It is estimated
that over three quarters of international acquisitions and alliances fail due
to cultural differences.

In some instances cross-cultural management has also been referred to as

business anthropology . Other definitions represent cross-cultural
management as the management of intercultural diversity or cultural
diversity management. The organizations that succeed in managing
cultural differences properly usually result in completing more efficient
business processes that lead to higher job satisfaction. Therefore,
managers’ competences in cross-cultural management are critical for an
organization’s success.

According to Nancy Adler (2002: 11)1 cross-cultural management is

characterized as “… the behavior of people in organizations around the

1
Adler, N.J. (2002) International Dimensions of Organizational Behavior, 4th edition, Ohio:
SouthWestern, Thomson Learning.
world and shows people how to work in organizations with employees and
client populations from many different cultures.” Adler adds that “Cross-
cultural management describes organizational behavior within countries
and cultures; compares organizational behavior across countries and
cultures; and, perhaps most important, seeks to understand and improve
the interaction of co-workers, managers, executives, clients, suppliers, and
alliance partners from countries and cultures around the world.”

Therefore, cross-cultural management facilitates a number of tasks in

organizations:

Organizations need cross-culturally competent experts to solve the

following tasks: expanding the company to new markets, investing in
company premises or facilities in cross-border locations, planning
international marketing strategies, merging or integrating with other
companies across borders, conducting major international negotiations
and many others. Components of cross-cultural management training
include developing a number of skills and competences necessary to
develop cultural sensitivity among the middle management, the
marketing, advertising and product development, as well as the
international departments of organizations. This book introduces some of
the major theories in the field and provides a variety of tasks to improve
the cultural sensitivity of the reader.

Figure 1. The leading cross-cultural management skills.

 CRITICAL CONCEPTS IN CROSS-CULTURAL
MANAGEMENT

The origins of cross-cultural management root back to the first

developments in the field of intercultural communication. We cannot
introduce this discipline without firstly delving into the essence of
communicating between representatives of different cultures.

Intercultural (or, interchangeably, cross-cultural) communication

involves communication between people from different cultures. Cross-
cultural communication focuses on the interpersonal interaction in cross-
cultural contacts. The unit of analysis is the so called interpersonal dyad.
Intercultural communication is different from, but relates to cultural
anthropology, which typically investigates phenomena in a single culture.
Another field of research is cross-cultural studies which compare the
characteristics of two or more cultures using a variety of methods.

Some authors prefer the term communication with strangers. Interactions

with people who are different
and unknown to us, and are
unfamiliar with our
environment, are considered
communicating with strangers
(Gudykunst and Kim, 2003).

Figure 2. The Stranger by Georg

Simmel (1908).
 THE STRANGER, DEFINED BY SIMMEL

The German sociologist Georg Simmel defines the stranger as an

individual who is a member of a system but who is not strongly attached to that
system, i.e. the stranger is not completely accepted by other members of a
system.

In this sense, according to cross-cultural management, strangers are all

members of organizations that are not quite like us. A stranger could be an
Indian team member working as an expat in an IT-company in Sofia,
Bulgaria, or a Brazilian representative of a multinational company
negotiating with their American partners. In both cases the stranger is a
part of the organizational system because they work in/with an
organization and are knowledgable of the routine and culture in
organizations. On the other hand, each “stranger” differs from the
majority in some instances – their national culture in comparison to the
host country, or their perceived role in context of their actual role at work.
The stranger is unlike others in organizations and they live on the margin
between different groups. The stranger is IN and OUT of the
organizational system at the same time.

SOCIAL DISTANCE BY
ROBERT PARK

Social distance is the degree to

which an individual perceives a
lack of intimacy with individuals
different in ethnicity, race, religion,
occupation or other variables (Park,
1924).

Culture specifies how close or

socially distant 2 individuals
should be in a given situation. For example, North Americans often use
first names with someone they have just met. This is very surprising to
most Europeans, who are much more formal in their relationships. They
only use first names with very close friends and family.

THE CONCEPTS
“HETEROPHILY/HOMOPHILY”,
DEFINED BY GEORG SIMMEL

Heterophily is the degree to which

two or more individuals who
communicate are dissimilar while
homophily is the degree to which two
or more individuals who
communicate are similar.

1. Most communication occurs

between homophilous individuals.

2. Homophilous communication is more effective than heterophilous

communication.

3. Effective communication between individuals leads to their greater

homophily in knowledge, attitudes and overt behaviour.

4. Maximally effective communication occurs between individuals who are

homophilous on certain variables and heterophilous on other variables
that are relevant to the communication situation.

5. A heterophilous source/channel is perceived by a communication receiver

as having expertness credibility, while the homophilous source/channel is
perceived as being trustworthy.

IN-GROUP AND OUT-GROUP

An ingroup is a collectivity with which an individual identifies. For

example, our in-group could include our nation, family, close friends,
classmates, colleagues at work, individuals who share the same hobbies
with us and many others. In organizations the in-group is the organization
itself.

An outgroup is a collectivity with which the individual does not identify.

Individuals in an in-group may refer to persons in outgroups in a
pejorative (negative) manner. For organizations the out-group is
everything else outside of the organization. Each in-group to which an
individual belongs automatically defines certain outgroups.

In-group vs out-group conflict lies at the root of defining the concept of

otherness and the other. The Other, as being a representative of a
different culture, is one of the most important topics in cross-cultural
studies. For the cross-culturally competent leader, it is critical to be
sensitive to otherness. This means that the leader should have developed
enough cultural sensitivity to accept representatives of different cultures
as equally valuable and important to the organization.

ETHNOCENTRISM

Ethnocentrism is the degree to which people see other cultures as inferior

to their own. The term refers to being preoccupied with one's cultural
group and consequently evaluating other cultures based on one's cultural
ideals. The problem with ethnocentrism stems not from a sense of pride
in one's own culture, but from the unwarranted conclusion that other
civilizations are inferior. Ethnocentrism stops people from
comprehending those who are not like them.

To overcome our ethnocentrism, we must cultivate cultural relativism.

This is the extent to which a person assesses another culture based on its
context, i.e. it analyses acts in a culture based on its premises - its
assumptions about society, the environment, technology, religion, and
science.

PERCEPTION AND STEREOTYPES

Stereotypes are those overgeneralized and oversimplified beliefs we use

to categorize a group of people. The formation of stereotypes is based on
the process of perception. Individuals who lack close interpersonal
communication with a particular culture are more prejudiced toward
individuals from this culture.

Stereotypes are formed in three ways. First, we may classify persons or o

bjects based on their most visible features. For example, one's initial impr
ession of the United States may be that "everything is large here," or that "
Americans move extremely fast."
Second, we may apply a set of traits to a group of individuals as a whole.
Americans,for example, consume hotdogs. Third, we can treat each mem
ber of the group the same way. Americans, for example, are wealthy, and
they drive large automobiles.

Stereotypes are formed through the process of perception.

Perception is the process through which we transform what we detect into

a meaningful experience by choosing, classifying, and interpreting
internal and external inputs to build our worldview. Our neurological
system, wants, interests, and motivations are examples of internal stimuli.
External stimuli are experiences caused by how we see, smell, touch, hear,
and taste.
Perception is distinguished by three stages that operate synchronously
and holistically.

1. Selection. Every day, we are exposed to a wide range of stimuli, yet we

can only perceive a portion of them due to a selection process. Our
perception's partiality is the source of misunderstanding in encounters,
especially when people come from various cultural backgrounds and have
distinct perception systems.

Selective perception is accomplished through three steps: selective

exposure, selective attention, and selective retention. To begin, we often
expose ourselves to information that will reinforce the conclusion we are
making. For example, when we want to buy a car, we read the automobile
section of the morning newspaper. Second, selective attention states that
we can only focus on one aspect of our surroundings at a time. For
example, if we prefer German-made automobiles, we do not consider
automobiles manufactured in Russia or Japan. Our needs, training,
expectations, and attitudes all impact our selective exposure and attention.
A hungry individual, for example, will seek exposure and pay attention
primarily to food-related information. Third, we can only recall part of
the stimuli we receive due to selective retention. Messages that are pleasant
and beneficial to our own image, consistent with our views and values, and
likely to be employed in the future are the ones we remember.

2. Categorization

When we selectively perceive external stimuli, we must arrange them into

meaningful patterns. The social and physical events or things we
experience at this level of perception contain shape, colour, size, and so
on. At this point, two aspects of human perception arise. For starters,
categorisation provides structure to human experience. We always
convert raw impulses from the outside world into organised experience.
Second, human perception is consistent. When we arrange stimuli into
patterns, they become more enduring.
3. Interpretation

Giving meanings to the ordered and consistent patterns is called

interpretation. This stage is crucial in intercultural encounters. In the
West, a public kiss might just be a means of saying "hello," but in Sri Lanka,
it's considered "lovemaking."

It is critical to understand that, while we regard the three stages of

perception individually, they are actually an interconnected process with
no obvious boundary between them.

PREJUDICE AND DISCRIMINATION

The terms "prejudice" and "discrimination" were coined by Kurt Lewin and
Gordon Allport. Prejudice is defined as an unjustified negative attitude
toward an out-group based on a comparison with one's in-group.
Prejudgment is based solely on preconceived notions about the out-
groups that someone is assumed to represent, rather than knowledge or
assessment of the relevant evidence. It can lead to avoidance and
interpersonal conflict. Prejudice is a learned proclivity in which we
consistently /usually negatively/ respond to a specific group of people or
event.

When a negative attitude toward an outgroup manifests itself in action, the

resulting behaviour is referred to as discrimination — the process of
treating someone unequally based on their ethnicity, gender, age, sexual
orientation, and other characteristics. Prejudice is a mental state, whereas
discrimination is a behavioural act.

CULTURE

Our society has trained us to do what we do and to be who we are. Culture

is the human mind's software that offers an operating environment for
human behaviour. All members in the same operational environment
have fundamental cultural features.
Culture is a collection of essential ideas, behaviours, and experiences
shared by a group of people that are symbolically passed down from
generation to generation via a learning process.

a. Culture is a substitute for instinct. It provides us with a “map of

meanings” which makes the things around us comprehensible. For
example, if one interprets being late as being impolite, one apologizes
automatically for being late.

b. Culture is holistic- it can be broken down into several subsystems: a

kinship system, an educational system, a religious system, a political
system, etc. The various aspects of culture are closely interrelated. In other
words, any change in a subsystem will affect the whole system.

c. Culture is learned. The only way to integrate into, reinforce and co-
create this shared symbolic system is through a learning process.

d. Culture is shared. Culture is always associated with a group of people.

e. Culture gives us a sense of identity.

f. Dynamics and openness. Cultures are dynamic and are subject to

constant change. Four major factors account for the change of culture:
technological inventions, disasters, cultural contacts and environmental
factors.

g. Pervasiveness. Culture penetrates into every aspect of our life and

influences the way we think, the way we talk and the way we behave.
Figure 1. Characteristics of Culture.

ELEMENTS OF CULTURE

Culture, according to cross-cultural management theory, is a collection of

values, assumptions, practises, and symbolic representations used to
transfer a group's cultural identity. Some theories divide cultures into
elements, allowing for the conceptualization of various cultural models.
For example, Geert Hofstede coined the term "cultural onion", which
refers to the idea that culture, like an onion, has clearly defined layers that
must be "peeled" in order to be understood. Values (the core layer), beliefs
and attitudes, norms and behaviours, and symbols (on the surface) make
up culture (the visible layer of culture).

Figure 2. Models of culture

The cultural iceberg is a metaphor for the visible and invisible aspects of
a culture.Language, music, art, literature, national costume, food,
architecture, and many other symbols are all part of the visible aspect of
culture. Values,assumptions, behavioral models, attitudes, beliefs, norms,
notions of time,space, good or bad, family attitudes and perceptions are
all represented by the invisible part. The visible part, unlike the invisible,
is what we see, hear, touch, smell, taste, feel and experience.

The cultural backpack symbolises the idea that we carry our cultural
identity around with us like an invisible backpack wherever we go. We
have the tools we need to function in our cultural group, but our tools don't
help us deal with day-to-day life when we're away from home. To adapt
to the new environment, we need to provide a new set of tools.
Beliefs, values, and worldviews, as well as learned behaviours and norms,
all contribute to our cultural baggage. The symbolic aspect of culture is
represented by our language and all other tangible elements of our daily
lives. Beliefs are a person's interpretations of the world around them.
Beliefs serve as a repository for the content of our previous experiences,
such as thoughts, memories, and interpretations of events. The
individual's culture shapes his or her beliefs.We rarely demand proof or
question our beliefs because they are so deeply ingrained in our culture.
We simply accept them because we are confident that they are correct. In
most cultures, there is agreement on how to dress, speak to our elders, eat,
and so on.

Figure 3. The cultural iceberg.

Values a learned set of rules for making decisions. Values are what people
who share a culture strongly regard as good or bad, reasonable or
unreasonable, and so on. There is an evaluative component to values. They
frequently concern desired goals as well as behaviours that lead to these
goals. The cognitive structure of an individual is made up of many values
that are arranged in a highly organised hierarchical order. There are three
types of values: primary, secondary, and tertiary.

A given cultural group's cultural orientation is formed by the combination

of values. Cultural orientations refer to the conditions that influence how
a people perceive and think about the world, as well as how they live in
that world. Cultural orientations are beneficial in cross-cultural research
because they are easy to understand and are applicable to the needs of
culturally competent managers.

EXERCISES

Task 1. Brainstorm the main cultural values of your cultural group.

Which are priority values and which are secondary or tertiary? Explain
your choice.

Task 2. Drawing the Other! Make a drawing of the cultural other to your
ability. What do they look like? How would you feel if you met them?

Task 3. Let’s play “Introduce yourself”! An interactive game for 10-12

people.

Instructions:

- Write your name on a piece of paper and draw what you like to do the
most next to it. Explain your choice.

- Group yourselves based on your interests. Introduce yourself to each

other and share why you love what you do. Make a list of the 5 most
important things for your cultural group.

- Share how you felt together in a group. Introduce your cultural group
to other cultural groups.
- Every activity symbolizes a stereotype. What is the stereotype for you as
a cultural group? Can the others make stereotypes about our group?

- Take pictures together. Name yourself as a cultural group.

Summary

How was your group identity formed? How did you feel before and after?
Summarize how important your group identity is in the perception of others.

Task 4. True or False? An interactive quiz for 10-12 people.

Make a questionnaire with 5 statements about your cultural group, based

on the 5 most important things about your culture that you identified in
the first game. Determine which statement is true and which is false,
without telling other cultural groups. Give the questionnaire to another
cultural group of your choice and check their knowledge of your culture.

Summary

What was the end result? Does the other culture know you well enough? How did
you feel? How did the "tested" cultural group feel? What has changed in your
perception of each other?

Task 5. Visualize, verbalize, explore! Teaching your co-worker about

your culture. Work in pairs.

Brainstorm the most important qualities of the typical representative of

your cultural group. You can list any words and phrases, draw illustrations,
charts or other schematic visualizations. Show them to your co-worker
and ask them what they see. Do you see the same thing? Do you use the
same words to describe it? Explain how your perceptions of the same
drawing are similar or different.

Task 6. Put these cross-cultural encounters in the right zone for you.
A. Ordering food at a local restaurant where the menu is not translated
into a language you speak.

B. Asking a local resident who doesn’t speak your language to give you
directions to your hotel.

C. Buying a ticket for the public transport in a distant area of a foreign city.

D. Reporting to the local police that your wallet has been stolen.

E. Working in the same room with a colleague whose religion requires to

practice religious acts at work.

Task 7. The Five Basic Cultural Needs. Make a list of the basic needs
according to your culture. Which need is the most important? Why?

Social Needs 1…………………………………………………………………

2…………………………………………………………………

3. ………………………………………………………………

4…………………………………………………………………

Physical Needs 1…………………………………………………………………

2…………………………………………………………………
 3…………………………………………………………………

4…………………………………………………………………

Intellectual 1…………………………………………………………………
Needs 2…………………………………………………………………

3…………………………………………………………………

4…………………………………………………………………

Emotional Needs 1…………………………………………………………………

2…………………………………………………………………

3…………………………………………………………………

4…………………………………………………………………

Spiritual Needs 1…………………………………………………………………

2…………………………………………………………………

3…………………………………………………………………

4…………………………………………………………………

Based on Holistic learning Facilitator handbook #2, MitOst Editions 2016, pp.
28-29.
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