The challenge of managing across cultures in the future

Globalization is characterized by growing
worldwide connections between
organizations and their various
Organization are open systems, managers
must adapt structures and procedures to this
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
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
The continued influence of information and
communication technology
The growing pressure of the natural
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
full-time 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
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 age of workers in
developed countries and increase demand
for people with higher level of education
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 lowerwage jobs, downward pressure is put on
labor standards and hiring cheap labor
globally disrupts social contract and cultural
norms in the host country.
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
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
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
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 WebPages 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.
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
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.
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.
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 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