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Cross-cultural management is increasingly becoming one of the most popular topics. Many organizations are expanding globally, which is making people of diverse cultures come and work together through learning to be culturally sensitive. There are strongly emerging markets in the international economy that are increasingly forcing businesses to internationalize (Herman, 2002; Gopalan & Thomson, 2003). This has led to cross cultural management since the new entrants find new cultures that they have to adapt to; thus, they can thrive on those markets. The internationalization of companies has resulted to IT management or virtual teams, which is more complex than managing the traditionally aligned teams. There are different cross-cultural issues that have arisen by means of IT management in organizations (Chen et al., 2000; Chang, Duck & Bordia, 2006). Some of them are the advantages and disadvantages of cross-cultural management besides challenges associated with the same. There are some claims from different scholars that miscommunication is the main cause of cross-cultural issues in teams, however, in many cases it seems that communication is the main enabler. Thus, this shows clearly that there are controversies in the topic that will be considered in this literature review.
This literature review will include research, scholarly opinions and writings regarding cross-cultural issues in IT management. This will provide a strong theoretical background on the issue since it is one of the most popular topics. This will begin by defining culture and its role in cross culture management. This will consider studies that have been carried out and published in different sources.
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Culture and Cross-Cultural Management
In the recent decades, cross-national migration around the globe has increased phenomenally. Traditionally, the United States, Australia, and Canada were the nations that were marked to welcome many foreigners; however, expansion of the European Union has seen many countries in the region experiencing extensive immigration. In the Asian continent, economic boom, particularly in China and India has seen expansion of immigration from both Western countries and developing economies in Africa. Generally, foreign business has become a common practice in our modern world. Since people migrate from their country to foreign countries, they will either manage or be managed (Herman, 2002; Gopalan & Thomson, 2003). This has made cultural diversity and multicultural work groups and organizations to be no longer an option, but a core feature in organizations.
Although cross-cultural issues have been there, the field is relatively new in management literature. The earliest studies on cross-cultural management were carried in the 1970s with a few articles on the topic being published in the 1980s (Weaver, 2000). However, as many companies decided to go international, this became a popular topic to study.
One of the factors that have seen to rise in research of cross-cultural issues, in management, is the traditional belief that Western way of management was the best when working with individuals from different corners of the globe. This was challenged by many scholars who went further to explore literature on cross-cultural issues in management (Seglin, 2003; Pfeffer & Fong, 2004).
Another factor that has seen to increased research in cross-cultural issues in management is the global wave of hot countries. This is particularly with economies whereby the economy of a country grows rapidly for some time making it recognizable globally. For instance, the growth of the Japanese economy was a global topic within the companies in the country doing much business in North America. This made scholars develop interest in studying the cross-cultural issues that were evident considering that the Japanese and Americans have different ethnic and business cultures. Currently, the discussion has been expanded to the Asian continent more thus in China many international companies have set their operations. China is currently the world’s biggest economy that big wave of interest in cross-cultural studies has been shifted to the economy.
The nature and implication of culture is a topic with a long history on debate. It is one of the sociological, anthropological, and historical debates about the relation between an individual and the society. The earliest definition of culture is by Taylor who defined is “the complex whole which includes law, knowledge, custom, belief, art, morals, and other capabilities acquired and observed by an individual as a member of a society” (Sosik & Jung, 2002). Another definition is by Hofstede (1980) who defined culture “the collective programming of mind that distinguishes the members of one human group from another.”
Culture is passed from one generation to another with each of them learning through heritage. A certain group will have a different culture from another group with the differences seeing in different ways. The differences can be seen in the shared ideas within a group or their reaction towards a given scenario. In the modern world, culture is one of the barriers to communication since no culture is specific. A research carried out by Sosik & Jung (2002) showed culture to be contradicting within a country. The results of their study showed that not all citizens in a country are alike. Also, they observed that differences within a country are larger than assumed by many. Lastly, in their study they found that similar values unite people from different countries. Their conclusion from the study was that culture is posing a big challenge to international managers.
According to Hofstede (1980), culture is more of a source of conflict rather than synergy. He further adds that cultural differences are often disasters and challenges rather than windows of opportunity to internationalize.
International managers treat culture as a success factor for performance in their economic systems. When planning to venture foreign markets, employers will select employees whose capabilities will make them fit into the new societies (Adler, 2002; Chen et al., 2000; Chang, Duck & Bordia, 2006). The employees will need to interact with people of different cultures, which may be a decisive factor for business issues. The message communicated to people on the new market may not be captured; thus, there are risks associated with cross-culture management.
Enterprise IT Management
In the modern world of business, international organizations have to make wide use of information technologies. This is specifically aimed at transmitting information useful in data management, resource allocation, staffing and other related activities in organizations. The IT department is responsible for IT management in an organization (Hollensen, 2004). The duties of the department in the global context have been diversified to include managing to emerge technologies, end user computing, education and training, data management, and corporate structure. Other responsibilities of the IT department include strategic planning, strategic systems, and vendor relationships. The department is embodied with the overall responsibility of corporate transformation (Sosik & Jung, 2002). This is achieved through resource management, network management, e-commerce, business integration, and risk management. Currently, the concept of IT management is being used to refer to all the management activities in an organization since they all have to make use of technology at one point or other. IT management differs from one organization to other considering that each organization is in a certain industry segment. For instance, an organization in the media and broadcast industry segment will tend to have different IT management from an organization in the retail and consumer industry segment.
The business drivers and strategies in a business are crucial in determining the nature of IT management coverage in the organization (Seglin, 2003; Pfeffer & Fong, 2004). Considering the case of developed and underdeveloped countries, the two tend to have different business drivers. This results to cultural differences between them.
IT management coverage in an organization is also influenced by the technologies and the available solutions. Costs of IT management tend to be high in cases where organizations make use of technologies that are not in line with their operations (Herman, 2002; Gopalan & Thomson, 2003; Brett, 2007). This becomes a challenge thus in multinational companies operating in developed economies were the IT technologies are very competitive.
IT management is expected to focus on business development. Leaders in organizations expect that the IT department will optimize opportunities for the business besides supporting its specific needs. For internationalizing businesses, it becomes difficult to adapt to the new environment due to cultural differences and such. For instance, a business used to operate in the U.S. will find it challenging to begin its operations in India because of the different cultures that exist between the two societies (Nichols, 2003; Kwak, 2003). Therefore, the leaders in the organization assume that the IT department will make the business adapt to trends on the new market. The IT department has effectively to use its resources to understand the new environment and develop strategies for survival. It is also assumed that the IT department will mobilize strategies in order to ensure that the business achieves its goals on the new market.
Management is aimed at making effective use of a company’s resources with an objective to achieve set goals. In IT management, there are some crucial aspects that cannot be ignored since they play a role in solving problems within the organization. As a form of leadership, IT management has to focus on making connections (Chen et al., 2000; Chang, Duck & Bordia, 2006). This means informing employees on all what is happening in the organization. The leaders have to ensure that avoid putting employees in a situation of dilemma. The employees have to be taught on how to work together towards a common goal. This becomes challenging in the organization because of different cultures in the global context as it will later be discussed.
Through the IT department, communication has to be fostered as a crucial in cross-cultural management. Communication has to be improved and an environment where communication is built. However, there are barriers to this with the major in international organizations being cultural differences. This will be discussed later in the paper.
Building relationship is another attribute of management that cannot be ignored by the IT department. The best model for building strong relationships is via face to face communication. In project teams, IT managers have a role to play in ensuring that the involved parties have a strong bonding and some unifying factors are playing a role towards that. Therefore, in virtual teams, it becomes challenging to build the strong relationships (Weaver, 2000; Sosik & Jung, 2002). This is a case more common in multinational corporations; thus it will also be considered in this study.
Multinational corporations are faced by a number of risks. The worst are the ones that are brought by cultural differences. However, a risk may be an opportunity, threat, hazard or uncertainty to the organization. Therefore, for effective risk management in multinational corporations, financial risks, security risks, technology risks, information risks, people risks, business process risks and external risks have all to be considered.
An organization has also to have an IT department that is flexible to change. However, change is difficult in some cases because of a company’s vision, type, mode, and wide structure (Shah, Thomas & Gorham, 2008; Triandis, 2003). Technology is expected to play a crucial role in mobilizing positive change in an organization. Subcultures are very dangerous for change in a multinational organization; thus, the right IT management tools and teams have to be mobilized to handle the situation.
Geert Hofstede Cross-Cultural Dimensions
Hofstede, a professor in the University of Maastricht carried a comprehensive study on how values in the workplace differ because of cultural influence. He developed the study between 1967 and 1973 when working in a big multinational corporation covering the opinion of more than employees from 70 countries. From the study, Hofstede created a model that included four dimensions to aid in differentiating cultures. The four dimensions are power distance (PDI), individualism (IDV), masculinity (MAS) and uncertainty avoidance (UAI). Later through the influence of Confucian theory, Hofstede introduced the fifth dimension termed as long-term orientation (LTO) (Hofstede, 1980).
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Power distance refers to the extent to subjects of power or employees in an organization agree or disagree that power is grated unequally. This is an indicator of how employees prefer to interact with their employers, peers, and subordinates. There is overwhelming evidence that employees will have high performance when the power exercised fits their preferences. For international companies, this will mean leveraging the host country into their system. This dimension simply describes the relationship between bosses and their subjects. When the power distance is high, little communication between the bosses and the subordinates is evident (Chen et al., 2000; Chang, Duck & Bordia, 2006; Brett, 2007; Adler, 2002). On the other hand, when the power distance is low subordinates will prefer consultations about the decision-making process.
Individualism vs. Collectivism
This dimension represents a society where the ties between individuals are loose. The term individualism is used to describe human independence, social outlook, individual self-reliance and liberty. Individualism promotes personal goals and desires. On the other hand, collectivism contradicts individualism (Hofstede, 1980; Herman, 2002; Gopalan & Thomson, 2003). Collectivism means that people being focused more on the goals and desires of a group or family. This is used to refer to people are strongly bonded, united and in cohesive groups.
This is in most cases termed as the assertive pole. It promotes competitiveness assertiveness. On the other hand, femininity promotes the quality of love through the caring pole. There are masculine and feminine countries differentiated by their modest (Hofstede, 1980; Hollensen, 2004). In some cases, both masculinity and femininity come to play.
This dimension is concerned with the extent to which people will do or not do to mitigate or avoid risk or ambiguous future. In foreign countries, people will tend to develop tolerant opinions that differ from what they are used to.
This was the fifth and last dimension that was added by Hofstede after carrying another study on students from 23 countries through a questionnaire designed by Chinese scholars. This dimension measures commitment to a future with the aim of conveying a thrift and perseverance message to the society. It also sticks to the norm that positive rewards are as a result of today’s sacrifice (Hofstede, 1980; Adler, 2002). Change may create the away to a bright future, however, traditions and commitments to change often becomes barriers to success.
Types of Cross-Cultural Groups
Cross-cultural groups have different dynamics, which are mainly brought about by the composition and the goals of the group. Based on team composition there are various types of diverse workgroups that are recognized. These types are discussed below.
Cross-Cultural Groups with a Single Representative From a Different Culture
In this kind of groups, there is a single representative from a foreign country who is in most cases termed as a token. For instance, an American based company with operations in China and a manager from the U.S. manning the operations in China will show this kind of groups. The manager will be from a different culture than that of the current society (Hollensen, 2004; Kwon et al., 2003). In some cases, the token may turn to be invisible by the other group members or in other cases can play a key role as seen in the case of a Western expatriate in a third world economy.