Cross-Cultural Management Issues. A comparative study of Finland and Great Britain
Contents
1.0 Introduction ................................................................................................... 2
1.1 Benefits to the Hogshead .......................................................................... 2
2.0 Typologies ..................................................................................................... 3
2.1 Hofstede...................................................................................................... 3
2.1.0. Power Distance ................................................................................... 3
2.1.1 Individualism Vs Collectivism ............................................................. 4
2.1.2 Masculinity vs. Femininity................................................................... 4
2.1.3 Uncertainty avoidance ......................................................................... 5
2.2 Trompenaars .............................................................................................. 6
2.2.0 Universalism vs. Particularism ........................................................... 6
2.2.1 Neutral Vs. Emotional .......................................................................... 7
2.2.2 Specific Vs. Diffuse .............................................................................. 7
2.2.3 Achievement Vs. Ascription ................................................................ 7
3.0 Motivation ...................................................................................................... 8
4.0 Gender Roles................................................................................................. 9
5.0 Time and Culture......................................................................................... 10
6.0 Human Resource Management.................................................................. 10
7.0 Organisational Control, Structure and Strategy ....................................... 11
8.0 Conclusion .................................................................................................. 13
8.1 Recommendations ...................................................................................... 13
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Cross-Cultural Management Issues. A comparative study of Finland and Great Britain
1.0 Introduction
Opening up a subsidiary in another country has to be planned extensively. There
are many aspects that the management have to take into consideration before
deciding on the feasibility of the operation. People’s natural tendency is to try and
transplant the skills that work in their home country into the new environment.
(Berger, 1998) The problem is that the management techniques that work in the
home country are not always effective in another country. (Rodrigues, 1998) He
also believed that this was due to managerial attitudes and values being linked to
a societies culture. Therefore, as cultural values mirror how people are raised,
they are deeply held and unlikely to change. (Berger, 1998) This view is
supported by many other theorists in the cross-cultural management area
(Hofstede, 1991; Trompenaars & Hampden Turner, 2000, 2002)
1.1 Benefits to the Hogshead
As knowledge of the value systems and other cultural aspects is a prerequisite
for any company intending on penetrating a new market or country (Morden,
1995) The Hogshead needs to know about all these factors in order to help them
establish a suitable organisational structure and systems. It is also important for
any managers that are placed in Finland, to aid in the development of the
subsidiary, to be aware of how to manage the staff effectively.
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Cross-Cultural Management Issues. A comparative study of Finland and Great Britain
2.0 Typologies
In order to compare the differences in culture between Great Britain and the host
country, Finland, a number of Typologies are looked at. Geert Hofstede and Fons
Trompenaars both carried out extensive research over many countries in order to
try and measure the characteristics of culture.
2.1 Hofstede
Hofstede (1980) developed a typology that measured cultural differences on five
dimensions; Power distance, Individualism/collectivism, masculinity/femininity
uncertainty avoidance and long-term orientation. Finland was not included in the
countries measured for the latter dimension so it has not been included. This was
based on studies throughout 50 countries.
Hofstedes Dimensions
Great Britain
Finland
Power Distance
Low
Low
Individualism/Collectivism
High
High
Masculinity/Femininity
Masc
Fem
Uncertainty Avoidance
Low
Med-High
Taken from Hofstede (1991)
2.1.0. Power Distance
The first dimension power distance looks at the degree of inequality in a society.
In the workplace this is measured by the levels of dependence between a
subordinate and their boss. Looking at the scores of Finland and Great Britain on
this scale it shows that they are relatively low power distance countries. This
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Cross-Cultural Management Issues. A comparative study of Finland and Great Britain
means that the management style of the manager should be transferable
between the two countries. In the Hogsheads case if a manager is sent out to
Finland, their style should be more readily accepted. However Hofstede (1991)
did find that even in the low power distance countries that the lower manual and
unskilled jobs did require more authority from their supervisors. And it was only
when you moved up the scale that the power distance was more applicable.
2.1.1 Individualism Vs Collectivism
Hofstede (1991) found that nations tend more towards an individualistic nature or
collectivism. This dimension measures the extent to which people are expected
to look after themselves and their ties with others are loose, rather than being
part of a cohesive group. The work goals associated with the more individualist
pole are personal time, freedom and challenge. This dimension correlates with
the power distance; low power distance countries usually are less dependent not
only from their superiors but also from others. (Hofstede, 1991) Both Finland and
Britain are classified as Individualistic societies. However Garrisson & Rees
(1994) found that while individualism is high on a personal level for Finns, there
tends to be a consensus at the social level. In the workplace, the current
practices of the Hogshead should work effectively regarding this dimension.
2.1.2 Masculinity vs. Femininity
The Masculinity/Femininity dimension is where Finland and Great Britain differ
the greatest. Great Britain is considered a masculine society in which factors
such as earnings, recognition, advancement and challenge have great
importance attached to them. Finland on the other hand is a more nurturing
feminine country where co-operation, living area and employment security are
deemed more desirable. This reflects on the workplace with a number of issues.
In Finland there is a preference for resolving conflicts by compromise and
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Cross-Cultural Management Issues. A comparative study of Finland and Great Britain
negotiation, which reflects the high level of unionisation in the country. (Suutari &
Brewster, 2001) Britain does not rely on the unions as much as they have in the
past, especially in the hospitality sector. Some managers may feel that it is
interference, yet stronger union influence amongst this group (expatriates from
other countries rarely being unionised) has led to a greater degree of awareness
and learning about what makes for success. (Suutari & Brewster, 2001)
The Hogshead should not necessarily look at the fact that Finland is a feminine
country as a downside. Morden (1995) found that Feminine cultures excel at
service industries. This is due to their nurturing nature; needed when dealing so
closely with people and making them feel wanted and welcome to the
establishment. There is also a strong case for synergy between innovating and
implementing cultures. The first supplying the idea, the second implementing it.
Hofstede (1991) also believes that some cultures work together on a
complimentary basis. If the other dimensions are similar then the Masculine
achievement orientation of the British complements the people-oriented Finnish.
(Morden, 1995)
2.1.3 Uncertainty avoidance
The fourth dimension relates to how tolerant a society is of the unpredictable or in
other words ‘the extent to which the members of a culture feel threatened by
uncertain or unknown situations. (Hofstede, 1991) Britain is lower on the scale
and generally less formal rules are made and needed. In fact among Europeans,
the managers most at ease with risk and uncertainty are the British. (Tixier, 1994)
Finland on the other hand was just above the middle range for this. Therefore an
authoritative decision-making and leadership style would be effective as
uncertainty is reduced when someone else assumes decision-making.
(Rodrigues, 1997)
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Cross-Cultural Management Issues. A comparative study of Finland and Great Britain
2.2 Trompenaars
Trompenaars research measures culture against seven dimensions. In this
section the following five will be looked at apart from Individualism, which is
similar to Hofstedes
Trompenaars Dimensions
Great Britain
Finland
Universal/Particularism
Med-High
High
Individualism
High
High
Neutral/Emotional
Med
Med
Specific/Diffuse
High
High
Achievement/Ascription
Med-High
Med-High
Taken from Trompenaars & Hampden-Turner (2002)
2.2.0 Universalism vs. Particularism
Universalism is the scope of rules, codes and laws that apply to everyone. This
dimension measures how people react to certain dilemmas- does one live by the
universal law or attach more importance to standing by a relationship or friend. In
the workplace this is important as in relationship to how people react towards the
rules and distinguish the morally right. (Trompenaars & Hampden Turner, 2002)
There is considerable evidence that Universalists are more common in Protestant
societies which correlates with Finland in which the main church is the Lutheran
church. (Hampden-Turner, 2000) (Tixier, 1996)
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Cross-Cultural Management Issues. A comparative study of Finland and Great Britain
2.2.1 Neutral Vs. Emotional
In relationships everyone shows emotion to a different degree. In trompenaars
study it was found that 41% of Finnish would not openly show emotion compared
to 45% of British. “For Finns, it is not done to be expressive, assertive or
emotional” (Mole, 2001; 125) The British also suppress the direct display of
feelings and tend to be polite and reserved. (Mole 2001)
2.2.2 Specific Vs. Diffuse
Specific versus diffusism relates to how someone’s status in one area of their life
is carried over to the others. Again British and Finnish workers score similarly on
this dimension and tend towards the specific pole. In the workplace, this means
that private and business agendas are kept separate. (Trompenaars & Hampden
Turner, 2002) In Finland especially, it is unusual for work colleagues to socialise
together outside the office (Mole, 2001) While in Britain it is more common yet
this factor is unlikely to affect the success of the foreign subsidiary.
2.2.3 Achievement Vs. Ascription
This dimension is measured by how status is accorded. Some cultures get status
through achievement while others get it through who they are and what
background they originate from. In the workplace achievement oriented cultures
will have respect for managers whose position is based on their knowledge and
skills. (Trompenaars & Hampden Turner, 2002) Achievement based rewards will
work with most employees in this society. The actual reward given will differ
depending on the other characteristics of the culture.
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Cross-Cultural Management Issues. A comparative study of Finland and Great Britain
3.0 Motivation
Motivation of employees is a critical success factor for any company. In the
United Kingdom, motivational theories such as Maslow’s hierarchy of needs,
Herzbergs etc can be applied. They are based on the increased achievement of
the individual. Morden (1995) that there is no guarantee that these theories will fit
into all cultures. Buchanan and Huczynski (1997) feel that this is due to it being
based on middle-class American values which may well transfer to the United
Kingdom but are very different to other cultures. In Maslows Hierarchy, he places
Self-Actualisation,
Maslows
Hierarchy
Of Needs
(Buchanan &
Huczynski,
1997)
Knowing
and
Understanding and Esteem as the three
SelfActualisation
highest
motivators.
(Buchanan
&
Huczynski, 1997) In the United Kingdom
Knowing and
Understanding
things such as promotion, prestigious job
Esteem
titles accompanied by large salaries and
Affiliation
Safety
Biological Requirements
people strive for.
performance
needs.
This
appraisals,
is
what
satisfy
is
these
seen
as
achievement and the goals most British
Finland, while reasonably individualistic, has more interest in
the quality of work, safety and affiliation, which stems from a feminine
characteristic that stresses interpersonal cooperation. Therefore Maslows
Hierarchy of needs might need to be
Adapted from
Maslows
Hierarchy
Of Needs
(Buchanan &
Huczynski,
1997)
adapted as the motivators used in the
Safety
Affiliation
SelfActualisation
United Kingdom are not considered vital
and are sometimes even frowned upon.
Tixier (1996) found that Finland differs
Knowing and
Understanding
from the United Kingdom in such that the
Esteem
Finnish manager maintains a low profile
Biological Requirements
and it is the project that succeeds while
a British manager will be motivated be
the status they will receive by success. The Finnish employee will be more
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Cross-Cultural Management Issues. A comparative study of Finland and Great Britain
concerned with the security of the job and the relationships formed, the sense of
belongingness. In the Hogshead, incentive schemes are used to motivate
employees. When taking this to Finland a different approach might need to be
taken.
4.0 Gender Roles
While Britain prides itself on becoming a more equal country regarding gender
there is much evidence to suggest that it still has a way to go. In a survey of pay
rates, male bartenders are found to be still on higher pay than their female
counterparts. (Caterer and Hotelkeeper, 2002) In the British society it is still seen
as the father who is the dominant figure and the mother is the housewife and
carer for the children. (Hofstede, 1991) Only recently did the Government publish
its employment bill to give both parents more rights. (Bowers, 2001) Finland has
much greater gender equality where both parents are considered equally
responsible for provision and care of their offspring so it is no surprise that the
Finnish language has no gender distinctions. (Mole, 2002) Hofstede (1991)
backed up this gender equality as he found that the societal norm in family values
in Finland is to have two equally dominant parents. These factors are important
for the Human Resource Department to consider. When preparing contracts for
the future employees it will be even more imperative that pay is equal and that
leave for caring for children is allowed for both sexes.
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Cross-Cultural Management Issues. A comparative study of Finland and Great Britain
5.0 Time and Culture
Kluckhorn and Strodtbeck identified three types of cultures; present-oriented,
past-oriented, and future oriented. The way these cultures view time can have an
effect on the business in a number of ways. Time is a factor in many
management issues such as planning, motivating, promotions as well as product
delivery. Great Britain and Finland both look at time in the short-term. Another
aspect of time is whether it is sequential or synchronic. Britain is a sequential
society where time is thought of in a straight line and everything is done in
sequence. This translates into the business environment through factors such as
meeting scheduling and punctuality. Finland functions in a similar way to this.
Mole (2001) says that for Finns punctuality is important and a precise and
systematic approach is taken. (Trompenaars & Hampden Turner, 2002)
6.0 Human Resource Management
From the HRM point of view it is important that Nordic countries represent
feminine cultures where relationships are highly valued (Hofstede, 1984), and
managers are employee-oriented, stressing factors such as decision participation
and team work (Suutari & Brewster, 2001). Expectations of managers are
another facet. The masculine manager is expected to be assertive, decisive and
aggressive while the feminine manager is less visible, intuitive and accustomed
to seeking consensus. This was supported by Mole (2001) who found that British
managers are expected to be effective, decisive and tough.
Although Britain rates high on the masculine end of the scale they have a good
reputation for internal communication and managing human resources; they are
much sought after for personnel positions, including those as Euro managers. In
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Cross-Cultural Management Issues. A comparative study of Finland and Great Britain
multicultural teams, British executives are often the leaders who co-ordinate
group efforts or who liase between the group and the surrounding environment.
(Suutari & Brewster, 2001).
7.0 Organisational Control, Structure and Strategy
Deciding on the type of control exercised by the headquarters over its foreign
subsidiary also needs to take culture into consideration. Rodrigues (1995)
developed a conceptual framework to aid headquarters in this matter.
The
framework consists of three relationships. Centralisation, Formalisation and
normative integration. Comparing the Hogshead with the country characteristics
it is recommended that a low formalisation/ centralised approach is taken.
Rodrigues &Kaplan (1998) found that Britain as a whole tended towards a low
degree of formalisation, while businesses in Finland take a more medium
approach. This factor also depends on the size of the organisation. As the Laurel
Pub Company owns hundreds of pubs they have many more written-rules and
regulations than some smaller British organisations would, in order to provide
stability throughout their brands. Mole (2001) found that Finnish work best in a
stable environment
The strategy chosen by the Hogshead will also affect the formalisation. It is likely
that a multi-domestic strategy will be used due to the nature of the business. The
Hogshead will be competing with local competitors on a market-by–market basis.
Organisations such as these tend to use moderate formalisation structures.
(Rodrigues &Kaplan, 1998)
In the development of a subsidiary overseas most companies use an expatriate
manager at first then employ locals when it is established. Franka 1973 cited by
Rodrigues, 1998) The problem with this is the language. It may be difficult to find
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Cross-Cultural Management Issues. A comparative study of Finland and Great Britain
a Finnish-speaking manager in the company so hiring an English speaking Finn
to work alongside a representative of the company could be more viable.
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Cross-Cultural Management Issues. A comparative study of Finland and Great Britain
8.0 Conclusion
Looking at all the evidence the cultural differences between Finland and Great
Britain are not that great. There are a number of differences, which will need to
be considered. If the Hogshead is flexible enough to respond to the different
environment no major problems should occur. There are many more factors that
do not need as much importance attached to them in regard to management
issues yet would aide any British employee sent out to the subsidiary for a length
of time. While the typologies give a fairly accurate assessment of each culture’s
values and beliefs there are a number of problems with the framework. In reality
each situation must be individually assessed as for example not every Finn will
adhere to the feminine culture view nor will every British member of staff conform
to the masculine ideals. Also the researchers and research methods are all
culturally bias to a degree therefore it is only from a certain mindset that the
results are valid.
8.1 Recommendations
 Instead of an English Manager being sent out to Finland an English
speaking Finnish manager should be hired. This would enable them to
ensure effective communication with the staff.
 Motivational tools should be designed with consultation of the Finish
workers.
 Contracts are designed taking into consideration the higher level of gender
equality and family roles.
 As a medium formalisation is required, operating procedures are more
defined.
 A study of Finnish Human Resource methods could complement and
possibly improve the home countries systems.
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Cross-Cultural Management Issues. A comparative study of Finland and Great Britain
 All employees should be assessed individually as well. It should not be
assumed that everyone’s values are exactly the same as their culture.
 Any English employees sent out to the subsidiary should take part in a
cultural awareness course.
 Further research into cultural aspects of consumer behaviour, advertising
methods and business transactions is needed.
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