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Term paper on

“Cultural Barriers in International Management”

Course Title: Advanced Management


Course Code: EM-517
MBA(Evening)

This Term-paper is

Prepared for

Ms. Dr. Sabnam Jahan


Associate Professor
Department of Management
University of Dhaka

Prepared by:

Group No: 06 (Six)


Md. A. A. Mamun Miazi (3-17-37-035)
Md. Minhazul Haque (3-17-37-038)
Sharif Md. Saddam (3-17-37-062)
M. Wasif Rahman (3-17-37-069)

MBA (Evening), FBS, DU

Department of Management
Faculty of Business Studies (FBS)
University of Dhaka
___, November, 2018

To

Ms. Dr. Sabnam Jahan


Associate Professor

Department of Management,
Faculty of Business Studies (FBS),
University of Dhaka.

Subject: Term paper Submission.

Dear Madam,

Assalamu A’laikum Wbt. Wrt.

This is our immense pleasure submitting Term-paper based on the topic of


“Cultural Barriers in International Management”. We would like to express
our profound gratitude for your kind and conscious mind for reading our
assignment.

We beg your kind excuse for unintentional errors, if any, in preparing the term
paper despite us best effort. We hope that you would be kind enough to receive
this term paper and oblige us thereby.

Sincerely yours,

Md. A. A. Mamun Miazi


ID: 3-17-37-035
Summary
The three important environmental challenges of international management include economic,
political/legal, and cultural challenges. The impact of culture on business is hard to overstate: 82 percent
of the respondents to our 2016 Global Human Capital Trends survey believe that culture is a potential
competitive advantage.

International management requires knowledge and skills above and beyond normal business expertise,
such as familiarity with the business regulations of the nations in which the organization operates,
understanding of local customs and laws, and the capability to conduct transactions that may involve
multiple currencies.

On the other hand, Culture describes “the way things work around here.” Specifically, it includes the
values, beliefs, behaviors, artifacts, and reward systems that influence people’s behavior on a day-to-
day basis.

Wherever we live, we are going to be influenced by the attitudes, customs and practices of the people
around us. Those basic elements are the definition of culture. When a person of one culture encounters
the beliefs and resulting actions of another culture, a clash can occur, which can be a barrier to success.
Such barriers can have significant implications at work, school or in the wider community.

Literature on cultural diversity in teams provides some positive effect of interactions of multicultural
workforce, suggesting their beneficial impact on creativity, productivity, quality, learning and vitality
and positive organizational change

Different studies suggest that cross-culture interactions may foster creativity, learning and knowledge
sharing, contributing to better problem-solving and innovation. They can also bring about improved
adaptability, communication and job satisfaction. Correspondingly, MNC may benefit from building of
social capital. However, to achieve the positives outcomes, there is a necessary for understanding and
overcoming cultural barriers.

Most importantly “Cultural-Barriers” itself negative things for the MNC and management. So, if
management body of an organization fail to overcome it there will be obvious negative effects waiting
for the organization. The primary negative supposed to be decreasing effectiveness and efficiency. It
will automatically lead to poor control over employees by the manager. Beside there are many general
negatives effects such as: low productivity, internal – external politics, communication problem, job
dissatisfaction, stress, workplace etiquette problem, hierarchy complexity etc.
Table of Contents

No Topic Name Page

Summary : (I)
01 Introduction : 01
02 International Management & Culture : 01-03
03 The Difference Between an International and : 04-06
Domestic Manager
04 Reason Behind Cultural Barriers : 07-08
05 Understanding the importance of cultural difference : 09-10
in International Management
06 How to Manage or Overcome Cultural Barriers in : 11-12
International Management
07 Positive and Negative Effect of Cultural Barriers in : 13-15
International Management
Introduction

T
-----------------------------------------------------------------------------

he management of business operations for an organization that conducts business in


more than one country is International Management. International management
requires knowledge and skills above and beyond normal business expertise, such as
familiarity with the business regulations of the nations in which the organization operates,
understanding of local customs and laws, and the capability to conduct transactions that may
involve multiple currencies.

The three important environmental challenges of international management include


economic, political/legal, and cultural challenges. The impact of culture on business is hard
to overstate: 82 percent of the respondents to our 2016 Global Human Capital Trends survey
believe that culture is a potential competitive advantage.

So, Cultural barriers are things that there is no scope to avoid it. Here in this report we will
discuss about Cultural Barriers in International Management.

International Management & Culture:


The management of business operations for an organization that conducts business in more
than one country. International management requires knowledge and skills above and beyond
normal business expertise, such as familiarity with the business regulations of the nations in
which the organization operates, understanding of local customs and laws, and the capability
to conduct transactions that may involve multiple currencies.

On the other hand, Culture describes “the way things work around here.” Specifically, it
includes the values, beliefs, behaviors, artifacts, and reward systems that influence people’s
behavior on a day-to-day basis. It is driven by top leadership and becomes deeply embedded
in the company through a myriad of processes, reward systems, and behaviors. Culture includes
all the behaviors that may or may not improve business performance. Today, culture is a CEO-
level issue and something that can be measured and improved to drive strategy.

Types of IM:

Organizational culture
Organizational culture encompasses values and behaviors that "contribute to the unique social
and psychological environment of a business. The organizational culture influences the way
people interact, the context within which knowledge is created, the resistance they will have
towards certain changes, and ultimately the way they share (or the way they do not share)
knowledge. Organizational culture represents the collective values, beliefs and principles of
organizational members and is a product of factors such as history, product, market,
technology, strategy, type of employees, management style, and national culture; culture
includes the organization's vision, values, norms, systems, symbols, language, assumptions,
environment, location, beliefs and habits.

7 Elements of Culture
1. Social Organization 5. Religion
2. Customs and Traditions 6. Forms of Government
3. Language 7. Economic Systems
4. Arts & Literature

Advanced Management -01


Every organization has its distinct culture; managers should ideally have good understanding
of organizational culture to develop meaningful strategies. According to Barney (1986)
organizations that give due consideration to culture are able to increase their efficiency and
competitive position.

According to Schein (1990), organizational culture is developed at three different levels, i.e.
observable artifacts, Values and Underlying assumptions. Observable artifacts mostly consist
of tangible and observable things like dress code, success stories, value statements, rituals and
ceremonies etc. Values can only be observed overtime in order to understand why certain things
are done in certain distinct ways. Underlying assumptions are the dos and don’ts that lie in
subconscious mind of individuals. Organizational culture is manifested through a combination
of these three features.

It should be noted that the visible aspects of a culture can have different meanings in different
cultures e.g. identical hand gestures could mean different meaning in different cultures. So the
visible part of the culture i.e. artifacts etc. can be understood if their interpretation is based on
the culture in which they exist.

Every culture undergoes gradual changes, this is known as cultural diffusion, and cultural
values which have proven beneficial are adopted and incorporated into different cultures
through intelligent selection. A fine example is that of Ouchy theory Z, which took the best
features of Japanese culture and American culture of management. International organizations
also look to adopt and unify culture so that there is less friction between different business
units.

Analysis of impact of culture on international businesses is made in the following text in order
ascertain the level of cultural understanding manager should possess in order to perform
successfully.

International Business
International business encompasses all commercial activities that take place to promote the
transfer of goods, services, resources, people, ideas, and technologies across national
boundaries.
International business occurs in many different formats:
 The movement of goods from country to another (exporting, importing, trade)
 Contractual agreements that allow foreign firms to use products, services, and processes
from other nations (licensing, franchising)
 The formation and operations of sales, manufacturing, research and development, and
distribution facilities in foreign markets

Cultural Barriers
Wherever we live, we are going to be influenced by the attitudes, customs and practices of the
people around us. Those basic elements are the definition of culture. When a person of one
culture encounters the beliefs and resulting actions of another culture, a clash can occur, which
can be a barrier to success. Such barriers can have significant implications at work, school or
in the wider community.

Advanced Management -02


i. Communication Differences
In the United States, people tend to look each other in the eye when speaking and use direct
language to express their needs. In Hispanic culture, however, looking someone in the eye can
be construed as threatening or even sexual. While many cultures view the "thumbs up" sign as
a positive expression of approval, people in Bangladesh would take it as an insult. If you don't
know enough about the communication style of another person's culture, you might
misconstrue gestures or body language, which could result in a breakdown in communication.

ii. Group vs. Individual


In American culture, people tend to value individual freedom and independence. Some other
cultures foster more of a group mentality, and people tend to make decisions based on the good
of the whole and to submit to authority more readily. This difference can be a cultural barrier,
especially in the workplace. An Asian person working in the United States and taught to
consider the good of the overall group might not ask directly for a promotion or toot his own
horn about good things he's done at work -- which might mean he loses out to the co-worker
who is continually showing her boss the progress she's made. Workers from cultures that focus
on collaboration rather than competition in the workplace are less likely to succeed in a
workforce that praises individual success like the United States.

iii. Effects of Religion


Religion can be a cultural barrier as well. A person's religion may dictate what she wears or
eats as well as the types of medications and medical interventions she can access. Juxtaposed
against a more dominant culture, the person's religion can lead to discrimination or
stereotyping. For example, workers may make false assumptions about Muslim co-workers
who fast during Ramadan and take time away from work several times a day to pray. On the
flip side, a Christian in an Islamic country might be viewed as promiscuous or too open in the
way she dresses or acts, which could result in fewer promotions or even discrimination in
hiring. Living or working in any place where another culture dominates typically gives rise to
these potentially negative impacts.

iv. Gender Roles


Women's roles in the home and workplace have changed significantly in recent decades in the
United States. Americans tend to consider women and men equal in intelligence and general
aptitude. In some other cultures, however, that's not always the case. Men from cultures where
women have not yet gained consideration as equals might find it difficult to work under a
female boss, for example. Women in the Middle East or North African regions still face
considerable cultural and social stigma about their presence in the workplace. In most
countries, women might find it difficult to gain a promotion or to work their way up the
corporate ladder because masculinity is typically associated with leadership whereas femininity
is seen as less compatible with leadership. Women seeking promotion usually have to prove
themselves through performance while men are more commonly promoted based on potential
rather than performance.

Advanced Management -03


The Difference Between an International and Domestic Manager
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Domestic manager
A domestic manager’s work concerns the country in which he/she works in. Depending on the
nature of the business, a domestic manager’s work will depend on the culture of the state. There
won’t be a language barrier as your business will operate in the state’s main language(s).
Though there is always a need for market research in all organizations, a domestic manager
may find this easier to do as it’s likely you’re familiar with the language of your country and
its general trends.

Compared to the work of an international manager, it could be argued that the role of a domestic
manager involves less complications. Usually, a business owner’s first market is their own
country, therefore, there are less associated risks.

However, if an organization’s competitors have gone global, a national firm may wish to do
the same.

International manager
An international manager’s focus is on business targets within a particular country or an entire
region. This means you could be dealing with a new culture, multiple languages, and new rules
and regulations. The restrictions on multi-nationals are greater, and so the work of an
international manager can be more varied and complex than that of a national/domestic
manager.

In fact, a corporation may have to completely re-think the way it manages in order to suit
different working models around the world. Your business strategy must comply with what’s
considered legal in your new country of operation.

The marketing strategy will be very different to the home strategy as targeting a whole new
population. An international manager will have to spend more time on market research in order
to understand the different trends in your new international market and to learn how well your
product/service will do and also have to get used to pricing products/services in different
currencies.

In an international market, it pays to keep up with what competitors in the same region are
doing.

Impact of culture on international business:


A business cannot simply rely on its current method of conducting business when it decides to
take its business at international level. Every country has a set of different variables which can
be new for an offshore company e.g. rules and regulation, taxation, different currency, different
holiday periods etc. Most important consideration in this regards is the difference in culture.

In a study on international negotiations between organizations, Korobkin, R. (2000) maintains


that successful negotiations not only require technical proficiency i.e. communication
technique, but also needs to understand the context in which those negotiations are being done
in order to secure profitable contracts.

Business expansion into international territories can be either through internal growth or by
mergers and acquisitions. There can be a cultural mismatch in the case of internal growth and

Advanced Management -04


the decision to set up a base in a new country from scratch because it takes time learn the
culture and adopt its traits. A merger or an acquisition of an already established company is
more beneficial method of growth internationally as the parent company can gradually learn
the norms and beliefs of the target company through the acquired unit which is being operated
according to the local cultural preferences. (Morosini, 1998)

Lee et al. (2011) studied the impact of culture in international organizations in the context of
expansion into newer regions with different prevailing cultures and concluded that it is vital
for any such organization with the intention to move into new areas that the cultural differences
are understood and mapped in order to bridge the gap between business units performing in
multiple cultures. The study further proves that a multinational company with presence in many
different cultures will have a smaller cultural gap than an organization which is operating in a
few different cultures; the reason of this abridged gap is the learning factor from working in
different cultures. The results of Lee et al. (2011) study are not similar to Morisini (1998) as it
is shown in the study that multinational organizations prefer to have new business
establishments than acquisitions or mergers.

There can be many similarities in two cultures along with the obvious differences. The levels
of similarities between cultures vary for different countries. According to international business
theory, multinational organizations try to expand into countries which have more similarities
and fewer differences in two cultures so that cultural mismatch can be avoided. (Bilkey &
Tesar, 1977)

It is hard to make an outright assumption that expansion into territories with higher cultural
differences will adversely affect the performance. There is no conclusive evidence in this
regard. In fact, some researches have shown positive performance as a result of moving into
countries with greater cultural differences. (Pothukuchi, et al., 2002)

Knowledge of organizational culture is vital for managers and should be considered in the
process of feedback, intrinsic and extrinsic rewards etc. E.g. the relation between level of pay
and job satisfaction is strong in the US but weak in Japan, so an international manager will find
it hard to motivate staff through increments in Japan. (Money & Graham, 1999).

The importance of cultural understanding in successful international companies is reflected


from their marketing strategies which are grounded in the cultures of the target industries.
Alternatively, a company with weak understanding of the target company’s local culture can
commit disastrous mistakes in developing the marketing strategy through designing
advertisements which offend people because of culturally unacceptable content.
Companies which do not completely understand the culture of target region’s culture often
devise marketing strategies which do not attract consumer’s attraction and fail right from the
start. There are many past examples of culturally incompatible marketing content e.g. using an
owl in an advertisement in India where it is thought to be a bad luck symbol and animals
wearing prescription and sun glasses in an advertisement designed for Thailand market where
animals are thought to be lower forms of life. (Win Translation, 2014)

Greater cultural distance in international companies can have negative effects which hurt the
reputation of company and overall business in the long run. A cultural blunder can result in
loss of customers as they shy away; it can create problems for a company through pressure
groups and general public outrage, attracting negative feedback in the process. Loss of
customers means lesser revenues and eventually lesser profits; people offended by cultural

Advanced Management -05


mistakes committed by companies can file lawsuits which can result in fines or settlement pay-
outs.

In a study about the cultural sensitivity and how it affects business relationship with special
reference to exports (Alteren, G. 2007) it was confirmed that having an adaptive business
model with an open minded approach is crucial for success in the case of operating in different
cultural territories, these traits facilitate flow of information to and from customers.

The importance of understanding different cultural values and the methods to operate
effectively and efficiently in the bounds of those cultural values can be gauged from a student
survey which resulted in a lot of students demanding more learning material on different
cultures, most students maintained that they only learn about different cultures and how to cope
with the problems of new cultures through student exchange and internship programs. (Calvert,
2007)

Advanced Management -06


Reason Behind Cultural Barriers
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Cultural barriers are when people of different cultures are unable to understand each other’s
customs, resulting in inconveniences and difficulties.

An example would be a Chinese living in Canada. The most significant cultural barrier would
be language — if the Chinese doesn’t know how to speak English or French, it’d be almost
impossible to communicate with anyone. International management trying to overcome this
problem but first we have to identify the reason behind it.

Language
Language is one cultural barrier that is observed in people coming from different parts of the
world. Many of us hesitate to communicate with a foreigner because we are unable to
understand his language or accent. For example, An Asian may not feel comfortable talking to
an Australian, owing to his/her heavy English accent.

Behavior and human nature


People with an inferiority complex may find it difficult to communicate freely. Also, a
difference in personalities can lead to a communication gap in people. Extroverts can initiate
communicate with no difficulty while introverts cannot. Good communication is possible only
if both parties are ready to communicate, are able to understand the differences in their
personalities and keep their personal differences aside. Similarly, culture influences one's
personality and the persona in turn impacts the way one thinks, behaves and communicates.
For example, egoistic people may keep themselves away from communicating with the others
around.

Religion
Sometimes, a person may feel uncomfortable communicating with people from other religions.
This is mainly because of the difference in the beliefs they share. Religious views impact the
way one thinks and can lead to differences of opinion. But one must understand the reasons
behind these differences and tackle them carefully. If this is done, religion would no longer
remain a cultural barrier to communication. However, due to globalization and spread of
education, the negative impact of this kind of barrier seems to be decreasing.

Negotiation
Communication in negotiation is the means by which negotiators can achieve objectives, build
relationships, and resolve disputes. Most negotiators know that it is the most important tool
you can have for successful negotiations. When negotiating with foreign suppliers, anyone can
face a variety of obstacles, such as unfamiliar laws, ideologies, and governments, that are
usually absent in both.

Individualism, versus its Opposite, Collectivism


This is the degree to which individuals are supposed to look after themselves or remain
integrated into groups, usually around the family. “Individualism stands for a society in which
the ties between individuals are loose: Everyone is expected to look after him/herself and
her/his immediate family only. Collectivism stands for a society in which people from birth
onward are integrated into strong, cohesive in-groups, which throughout people's lifetimes
continue to protect them in exchange for unquestioning loyalty”

Advanced Management -07


Relations with Nature
Every culture has developed an attitude towards the natural environment. Survival has meant
acting with or against nature. The way we relate to our environment is linked to the way we
seek to have control over our own lives and over our destiny or fate.

Internalistic people have a mechanistic view of nature. They see nature as a complex machine
and machines can be controlled if you have the right expertise. Internalistic people do not
believe in luck or predestination. They are ‘inner-directed’ - one's personal resolution is the
starting point for every action. You can live the life you want to live if you take advantage of
the opportunities. Man can dominate nature - if he makes the effort.

Externalistic people have a more organic view of nature. Mankind is one of nature's forces, so
should operate in harmony with the environment. Man should subjugate to nature and go along
with its forces. Externalistic people do not believe that they can shape their own destiny.
‘Nature moves in mysterious ways’, and therefore you never know what will happen to you.
The actions of externalistic people are ‘outer-directed’ - adapted to external circumstances.

Masculinity versus its Opposite, Femininity


This refers to the distribution of work roles between the genders. Masculinity stands for a
society in which gender roles are clearly distinct. Men are supposed to be assertive, tough, and
focused on material success. Women are supposed to be more modest, tender, and concerned
with the quality of life. Femininity stands for a society in which gender roles overlap. Both
men and women are supposed to be modest, tender, and concerned with the quality of life.

Time orientation
Sequential vs. Synchronic cultures have different point of view about time response. Time can
be structured in two ways. In one approach time moves forward, second by second, minute by
minute, hour by hour in a straight line. This is called sequentialism. In another approach time
moves round in cycles: of minutes, hours, days, years. We call this synchronism.

People structuring time sequentially tend to do one thing at a time. They view time as a narrow
line of distinct, consecutive segments. Sequential people view time as tangible and divisible.
They strongly prefer planning and keeping to plans once they have been made. Time
commitments are taken seriously. Staying on schedule is a must. People structuring time
synchronically usually do several things at a time. To them, time is a wide ribbon, allowing
many things to take place simultaneously. Time is flexible and intangible. Time commitments
are desirable rather than absolute. Plans are easily changed.

Power Distance
This describes the extent to which the less powerful members of organizations and institutions
accept and expect that power is distributed unequally. The basic problem involved is the degree
of human inequality that underlies the functioning of each particular society.

Advanced Management -08


Understanding the importance of cultural difference in International
Management
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The transformations in the world’s economy, whose start dates back to the middle of the 20th
century, have forced enterprises to expand their activities and management by adding the
international dimension. A vast majority of enterprises operates in the international
environment, where the cultural factor is of tremendous importance, exerting a major influence
on the success of transactions and maintenance of good relations between counterparties or
employees of different cultural background employed in one enterprise. Multinational and
cross cultural teams are likewise becoming ever more common, meaning businesses can benefit
from an increasingly diverse knowledge base and new, insightful approaches to business
problems.

While there are a number of ways to define culture, put simply it is a set of common and
accepted norms shared by a society. But in an international business context, what is common
and accepted for a professional from one country could be very different for another person
from overseas. Recognizing and understanding how culture affects international business can
help to avoid misunderstandings with colleagues and clients from abroad and excel in a
globalized business environment.

Better Communication

Etiquette in Workplace

Better Communication
Effective communication is essential to the success of any business venture, but it is
particularly critical when there is a real risk of message getting ‘lost in translation’. In many
international companies, English may be the primary language of business. It is more than just
the language a person speaks, how the person conveys the message is more important.

For instance, what might be commonplace in a culture - be it a firm handshake, making direct
eye contact, could be unusual or even offensive to a foreign colleague or client. Where possible,
it’s always best to do research in advance of professional interactions with individuals from a
different culture. While navigating cross-cultural communication can be a challenge,
approaching cultural differences with sensitivity, openness, and curiosity can help to put
everyone at ease.

Advanced Management -09


Etiquette in Workplace
Different approaches to professional communication are just one of the innumerable
differences in workplace norms from around the world.

For instance, the formality of address is a big consideration when dealing with colleagues and
business partners from different countries. Do they prefer titles and surnames or is being on the
first-name basis acceptable? While it can vary across organizations, Asian countries such as
South Korea, China, and Singapore tend to use formal “Mr./Ms. Surname,” while Americans
and Canadians tend to use first names. Along with differences in etiquette, come differences in
attitude, particularly towards things like workplace confrontation, rules and regulations, and
assumed working hours.

Advanced Management -10


How to Manage or Overcome Cultural Barriers in International
Management
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Nowadays, diversity is typical in most workplaces. While this may be the new norm, the
possible challenges of diversity cannot be ignored. With the advancement of technology, it’s
not uncommon to deal with clients and customers from all over the world.

Language barriers may make it difficult to communicate effectively, or cultural differences


may inhibit internal and external customers from being comfortable enough to open up,
socialize or bond. These potential issues may hinder relationships in the workplace for doing
business on a global level and its best to find a solution to such problems.

Learn about other Cultures

Translate all Information or use Interpreter

Provide cross-cultural classes for Employees

Learn about other cultures

The best way to become an expert multicultural employee is by educating oneself. Taking the
time to research or inquire about another’s culture can go a long way to make clients and
subordinates feel comfortable. When in a new place, the person is going to experience many
things before understanding the culture of other people. There are numerous excellent books
and articles on cultural diversity in any local bookstore or library and the internet is a valuable
tool for unlimited resources explaining the differences in cultures. Coworkers will appreciate
the effort to learn about other culture and many people find it disrespectful to not care about
other different cultural norms.

Translate all information or use Interpreter

Communication is of the utmost importance in any business. The language barrier is something
that can stunt growth when working internationally. Translate information into the primary
language of employees using widely used translators. However, when doing so, one must be
careful since the translation is not always in the exact same dialect as that of people. Also,
sometimes the meaning of a word used in written translation does not always correspond to the
meaning the person who wish to convey in their work documents. Maybe hiring an interpreter

Advanced Management -11


who can speak for multiple languages can also help when dealing with clients, giving
instructions or providing feedback to employees

Provide cross-cultural classes for employees

Training employees on the basic culture and language requirements for business is crucial.
Consider a form of foreign language or cross-cultural training for employees who deal with
foreign clients of a specific culture. Teaching them to work words, phrases, warnings, and other
critical communication elements that are necessary for the employees to perform according to
performance standards. Training should be simple and easy to understand by using visual
methods of communication more than audio as to show more than tell. Studies show that using
pictures in instruction manuals rather than words is more understanding as it gives employees
signs, cue cards, or other methods to help them learn

Advanced Management -12


Positive and Negative Effect of Cultural Barriers in
International Management -

Culture is a business issue, not merely an HR issue. The CEO and management / executive
team should take responsibility for an organization’s culture, with HR supporting that
responsibility through measurement, process, and infrastructure.
Culture can determine success or failure during times of change: Mergers, acquisitions, growth,
and product cycles can either succeed or fail depending on the alignment of culture with the
business’s direction.
Following figure is showing the percentage of respondent ratings the trend “Culture” as
important / very important in their life is published in Global Human Trends 2016 by
DELOITTE University Press. Lowest is 80% whereas highest is 94%. That means there is
almost every place in the world, Culture is important for the people. That means, for an
International Manager facing cultural barriers is obvious matter. So, manager cannot skip it,
but to find out positive thing from odd situation. Now question is “Is there any positive impact
or effect of cultural barriers in IM?”. We will find out.

Advanced Management -13


Literature on cultural diversity in teams provides some positive effect of interactions of
multicultural workforce, suggesting their beneficial impact on creativity, productivity,
quality, learning and vitality and positive organizational change (Watson et al., 1993; Ely
& Thomas, 2001; Davidson & James, 2006; Stevens et al., 2008) posited that so-called all-
inclusive multiculturalism is necessary approach to managing diversity and therefore
establishing fruitful interaction among diversified employees within an organization. Similarly,
Stahl et al., (2010a) founded that contextual factors determine whether cross-cultural
interactions bring about increased creativity and satisfaction posing at the same time a risk of
process losses due to a task conflict and problems in social integration.

Different studies suggest that cross-culture interactions may foster creativity, learning and
knowledge sharing, contributing to better problem-solving and innovation. They can also
bring about improved adaptability, communication and job satisfaction. Correspondingly,
MNC may benefit from building of social capital. However, to achieve the positives outcomes,
there is a necessary for understanding and overcoming cultural barriers.

And from different research, researcher has identified three main broad categories of cultural barriers
that must be overcome to get positive effect from cross cultural interactions, 3 categories are given here:

1. National Cultural Bond Barriers


2. Organizational Barriers;
3. Individual Rooted Barriers.

Advanced Management -14


Most importantly “Cultural-Barriers” itself negative things for the MNC and management. So, if
management body of an organization fail to overcome it there will be obvious negative effects waiting
for the organization. The primary negative supposed to be decreasing effectiveness and efficiency. It
will automatically lead to poor control over employees by the manager. Beside there are many general
negatives effects such as: low productivity, internal – external politics, communication problem, job
dissatisfaction, stress, workplace etiquette problem, hierarchy complexity etc.

Advanced Management -15


Conclusion
Culture is “the way things work around here.” Specifically, it includes the values, beliefs,
behaviors, artifacts, and reward systems that influence people’s behavior on a day-to-day basis.
It is driven by top leadership and becomes deeply embedded in the company through a myriad
of processes, reward systems, and behaviors. Culture includes all the behaviors that may or
may not improve business performance. Today, culture is a CEO-level issue and something
that can be measured and improved to drive strategy.

Most importantly “Cultural-Barriers” itself negative things for the MNC and management. So,
if management body of an organization fail to overcome it there will be obvious negative
effects waiting for the organization. The primary negative supposed to be decreasing
effectiveness and efficiency. It will automatically lead to poor control over employees by the
manager. Beside there are many general negatives effects such as: low productivity, internal –
external politics, communication problem, job dissatisfaction, stress, workplace etiquette
problem, hierarchy complexity etc.

Different studies suggest that cross-culture interactions may foster creativity, learning and
knowledge sharing, contributing to better problem-solving and innovation. They can also bring
about improved adaptability, communication and job satisfaction. Correspondingly, MNC may
benefit from building of social capital. However, to achieve the positives outcomes, there is a
necessary for understanding and overcoming cultural barriers.

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