Cross-Cultural Group Management:

A Review of Research Development in the Field

Vas Taras*
University of Calgary
Haskayne School of Business
Human Resources and Organizational Development
441 Scurfield Hall, 2500 University Drive N.W.
Calgary, Alberta, Canada T2N 1N4
(403) 220-6074
taras@ucalgary.ca

Julie Rowney
University of Calgary
Haskayne School of Business
Human Resources and Organizational Development
441 Scurfield Hall, 2500 University Drive N.W.
Calgary, Alberta, Canada T2N 1N4
(403) 220-6592
julie.rowney@haskayne.ucalgary.ca

Keywords: Cross-Cultural Teams, Diversity, Team Management, Literature Review

*All correspondence should be directed to Vasyl Taras

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 Cross-Cultural Group Management:

A Review of Research Development in the Field

Abstract

The rapid ethnic and cultural diversification of the labor force and the expansion of

businesses overseas in the recent decades have been reflected by an increasing interest to

cross-cultural issues in management. Several papers have offered general overviews of the

literature in the field of cross-cultural management. This study specifically focuses on

research developments in the area of cross-cultural group management and offers an overview

of the general tendencies, most popular research topics, and commonly used empirical

methods in this subfield. The paper also provides a discussion of the typical limitations of

studies on cross-cultural group management and offers directions for future research.

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 Cross-Cultural Group Management:

A Review of Research Development in the Field

Recent decades were signified by unprecedented cross-national migration around the

world. Traditionally, the United States, Canada, and Australia have been welcoming the

largest numbers of newcomers. However, with the expansion of the European Union, most of

the Western European countries have also been experiencing extensive waves of immigration.

On the other hand, the economic boom in many Asian countries and in China in particular has

been associated with an unprecedented migration of expatriates from Western countries, as

well as Japan and South Korea, into the region. Likewise, the fall of the “iron curtain”

following the collapse of the Soviet Union opened up the markets of the former Socialist-

Block countries to foreign businesses leading to an immense migration of Western expatriates

to the new independent states in Eastern Europe.

The annual migration flow in Europe is estimated at about half a million people

(Fassmann & Münz, 2002) and the number is growing due to the expansion of the EU. The

US immigrant population grew by 11.3 million during the 1990’s - faster than at any other

time in the country’s history (Camarota & McArdle, 2003). Based on the figures from the

Annual Report on Immigration prepared by the Canadian Minister of Citizenship and

Immigration, Canada has been welcoming almost a quarter million immigrants annually for

the last 20 years (CIC, 2006). Immigration to Australia reached its 15 year high at 123,450 in

2005 (StatAustralia, 2006). The data reported above does not include hundreds of thousands

expatriates, international students, and illegal immigrants.

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 To put the statistics into plain words, every day millions of people born outside

countries of their current residence come to their offices, workshops, construction sites, or

classrooms. They interact with locals and with each other. They manage and are managed.

Cultural diversity and multicultural workgroups are no longer an option for the workplace but

a core characteristic of the contemporary organization.

Although extremely popular in recent decades, cross-cultural management is a

relatively new topic in the management literature. It was almost completely neglected up to

the 1970’s. In the early eighties, less than five percent of organizational behavior articles

published in world’s leading management journals were discussing cross-cultural issues

(Adler, 1983). However, as more companies around the globe were deciding to go

international and as the composition of the labor force in Western countries was getting more

diverse, it became obvious that one size does not fit all. A growing body of evidence

suggested that the Western way of human resource management in general, and team

management in particular, was not the best one when working with individuals from other

parts of the world. This led to an explosion of interest in cross-cultural issues in management

literature.

There have been a number of articles offering overviews of the literature in the field of

international management; however, their focus has been rather broad (e.g. Adler, 1983,

Clark, Gospel, & Montgomery, 1999, Ricks, Toyne, & Martinez, 1990, Werner, 2002). This

paper refines the focus and concentrates on reviewing a specific subfield of international

management - multicultural group management. First, we summarize the general trends in the

literature on cross-cultural group management and overview of the major waves of interest

and the evolution stages of research in the subfield. Then, we provide a typology of the types

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of groups that are most frequently analyzed in literature. Next, we outline the most popular

research topics in studies on cross-cultural groups and explore what statistical analysis tools

are most commonly used in the subfield. Finally, we discuss typical limitations of the studies

in the field and provide directions for future research.

Major Waves of General Interest in Cross-Cultural Research

Most of the early cross-cultural studies were anthropological by their nature. The

research was usually driven by pure scientific interest in new cultures and most of the studies

simply described traditions, customs, protocols and ways of doing business in different parts

of the world. Although there were some earlier publications in the business literature, only in

the seventies did issues of cultural diversity become truly popular in management. With

booming globalization, entertaining stories about new cultures were no longer good enough.

The practitioner managers wanted to know how to optimize operating of their business and

make profits in the global arena.

Talking about early research on cross-cultural groups, most of the prominent studies of

the seventies were conducted in the United States. Reflecting the tensions between the

African American and Anglo-Saxon groups, the main focus was placed on management of

racial diversity (e.g., Becker, 1975, Ruhe & Eatman, 1977). Later in the seventies, gender

diversity became a popular topic (e.g., Odiorne, 1975, Simpson, 1975, Wolf & Fligstein,

1979).

The research in the field of cross-cultural management can also be characterized by

waves of interest in certain “hot” countries during certain periods. With the rise of the

Japanese economy and the expansion of Japanese companies into North America in the late

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seventies and eighties, the primary focus of the scholars interested in cross-cultural issues was

shifted to the studies of differences between American and Japanese ethnic and business

cultures (e.g., Ishida, 1986, Negandhi, Eshghi, & Yuen, 1985). Slightly later, the discussion

was expanded to the other South-East Asian “tigers”: Taiwan, Hong Kong, and South Korea

(e.g., Bond, 1986, Bond & Hofstede, 1989, Earley, 1987, Evans, Hau, & Sculli, 1989).

Gorbachev’s era of the late eighties and early nineties signified the fall of the iron

curtain between the Soviet block and the rest of the world. After the collapse of the regime in

1991, virtually all post-Soviet states abandoned central planning and declared their free

market orientation. The new independent countries emerged as potential markets and possible

sources of well-qualified and relatively cheap labor. This was reflected in the literature on

cultural diversity by an increased level of attention to Russia and its satellites (e.g., Ardichvili,

2001, Elenkov, 1998, Luthans, Welsh, & Rosenkrantz, 1993, Puffer & Shekshnia, 1996).

Finally, the booming development of China and its emerging potential to become the

world’s biggest economy initiated the latest wave of interest in cross-cultural studies. Since

the nineties, China has enjoyed considerable attention from scholars around the globe (e.g.,

Baird, Lyles, & Wharton, 1990., Björkman & Lu, 1999, Butter & Leung, 1998, Fan &

Zigang, 2004, Huo & Randall, 1991).

Leading Countries in the Research on Cultural Diversity

Despite the expectation that the United States, as one of the most culturally diverse

countries with economic and political ties all over the world, would produce the largest

number of studies on cross-cultural team management, it is not so. Most of the world’s

leading scholars in the field are not American. The most influential studies in the field of

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cross-cultural management have been published by Geert Hofstede from the University of

Limburg at Maastricht in the Netherlands, Anne-Wil Harzing from the University of

Melbourne in Australia, Nancy Adler from McGill University in Canada, Kwok Leung from

the City University of Hong Kong, Jan Selmer from Hong Kong Baptist University, C. Harry

Hui from the University of Hong Kong, Shalom Schwartz from the Hebrew University of

Jerusalem in Israel, Joseph J. DiStefano and Martha Maznevski (Canadians by origin) from

the International Institute for Management Development in Switzerland, P. Christopher

Earley from London Business School in the UK, and Fons Trompenaars, managing director of

the Centre for International Business in the Netherlands. Theodore M. Singelis from

California State University and Harry Triandis from the University of Illinois are leading

scholars from the United States.

Theoretical Foundation for Research on Cross-Cultural Group Management

One of the most popular frameworks for analysis of cross-cultural issues in human

resource management was that offered by Geert Hofstede (1980a). The model was based on

five bipolar dimensions along which cultural differences could be analyzed: high/low power

distance, individualism/collectivism, masculinity/femininity, high/low uncertainty avoidance,

and long/short time orientation. Later, alternative models of cross-cultural analysis were

developed and tested by other scholars (House, et al., 2004, Maznevski & DiStefano, 1995,

Schwartz, 1994, Trompenaars, 1993).

Whereas Hofstede’s original study was descriptive and its main outcome was a concise

set of cultural scores describing national cultures, it was followed by numerous papers which

applied Hofstede’s model for studying the effects of cultural diversity on various aspects of

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workplace-related behaviors and processes. For example, cultural differences have been

studied in relation to culture-specific perceptions of justice and their effects on team dynamics

(Leung & Morris, 2000, Mueller & Clarke, 1998), leadership styles (Ardichvili, 2001, Ensari

& Murphy, 2003), group decision making behavior (Chung & Adams, 1997), motivation

(Fisher & Yuan, 1998), negotiation styles (Butter & Leung, 1998), cognitive processes

(Abramson, Keating, & Lane, 1996), cross-cultural perceptions of ethics (Armstrong, 1996,

Beekun, et al., 2003, Christie, et al., 2003), trust (Kiffin-Petersen & Cordery, 2003),

satisfaction and commitment (Schippers, M. C., Den Hartog, D. N., Koopman, P. L., &

Wienk, J. A., 2003) and sexual harassment (Luthar & Luthar, 2002). Later, models of cultural

differences offered by Schwartz, Trompenaars and Maznevski were used for similar types of

analysis (Gopalan & Thomson, 2003, Singelis, et al., 1999, Steenkamp, 2001, Watkins, et al.,

1998).

Of note, despite the huge popularity and extensive use of Hofstede’s model and the later

alternative models, it has been suggested that they be used with caution (Baskerville, 2003,

McSweeney, 2002, Yeh, 1988). Due to significant within-country variations in cultural

values, there is a major concern regarding the use of one’s nationality to make assumptions

about one’s cultural values (Coon & Kemmelmeier, 2001, Gastil, 1975, Lenartowicz,

Johnson, & White, 2003, Lenartowicz & Roth, 2001). For example, although the Unites States

is one nation, it should not be assumed that people native to New York City will share the

same set of values as those living in a traditionally Mormon town in Utah. Similarly,

representatives of the highest caste in India are quite different from members of the lowest

caste (McFarlin & Sweeney, 2000). In addition, personal cultural values are affected by age,

level of education, socioeconomic status, religion, and other factors (Taras & Steel, 2005) .

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 Evolution of the Research on Cross-Cultural Groups: Description, Inquiry,

Prescription

Up until the seventies, the labor force in North American and Europe was relatively

homogeneous with white males comprising the major portion of the labor force. The diverse

workgroups were seen as an option and the question practitioner managers were asking was

simply, “Should we use homogeneous or heterogeneous teams?” As a result, the early

research papers on diverse group behavior were mainly focusing on whether homogeneous or

heterogeneous workgroups generally perform better and there seemed to be no differentiation

between the types of groups, tasks, and work settings (Anderson, 1966, 1983, Hoffman &

Maier, 1961). Later research became more inquisitive. Questions like “Why?”, “How?” and

“Under which circumstances?” became more frequent (Cox, 1993, Swierczek, 1991).

By the end of the nineties, it had become obvious that diverse workgroups were no

longer an option, but a necessity. Consequently, the question became “Given the need to deal

with diverse workgroups, how do we improve their performance?” In the literature, this was

reflected by an increasing number of papers providing more detailed analyses and guidelines

for optimizing the work of culturally diverse groups (e.g., Berger, 1996, Davison & Ward,

1999, Trent, 2003).

It has been found that learning and performance curve of heterogeneous groups differ

substantially from that of homogeneous ones. Specifically, heterogeneous workgroups tend to

experience more difficulties and display lower levels of performance in the initial stages of

team life. However, once past the adjustment period, diverse teams tend to outperform

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homogeneous teams, especially on tasks involving problem solving and creative thinking

(Adler, 2002, Earley & Mosakowski, 2000, Hambrick, et al., 1998).

Several other findings on cross-cultural team behavior are also of interest. For instance,

culturally diverse groups are less likely to be affected by groupthink and are thus are capable

of generating more high quality ideas and performing better on creative assignments

(Kirchmeyer & Cohen, 1992, McLeod & Lobe, 1992). It seems that a competitive

organizational culture negatively affects the performance of diverse groups (Kwak, 2003).

Compared to homogeneous groups, diverse groups tend to be more reluctant to make risky

decisions (Watson & Kumar, 1992). Diverse groups perform better when lead by a minority

representative (Kwak, 2003). Finally, cross-cultural training is essential for the success of

culturally heterogeneous workgroups (Davison, 1994, Earley, 1987).

Types of Cross-Cultural Groups

Not all cross-cultural groups are alike. Two factors that greatly affect the team’s

dynamics are the composition and the purpose of the team. Based on the team composition,

the following types of diverse workgroups have been recognized and addressed in the

literature:

Groups with a single representative from a different culture. The role of a single foreigner,

sometimes called a “token”, has been found to depend on his or her actual or perceived status.

A token can be an extreme instance of minority, in which case he or she tends to be treated as

“invisible” by the rest of the team (Davison & Ward, 1999), or can play a major role, as in the

case of a Western expatriate in a developing country (Björkman & Schaap, 1994, Chen, Choi,

& Chi, 2002, Selmer, 1996).

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Groups with a majority/minority split. This type of cross-cultural groups is usually associated

with stereotypes and a somewhat ignorant behavior of the majority towards the minority. This

usually results in mistrust and dislike among the team members (Adler, 2002). Due to

dominance of the majority, the minority members are frequently deprived of a chance to fully

contribute to the team’s work (Blau, 1977). Stereotypes and power misbalance typical for

workgroups with majority/minority split were found to lead to lower satisfaction with

communication in the group and possible withdrawal from interaction (Goto, 1997).

Bicultural groups with approximately equal numbers of representatives from each culture.

Although usually described as the optimal composition, workgroups of this type may also

experience communication and cooperation problems. It has been found that in cross-cultural

settings people often find themselves more attracted to those from their own culture (Triandis,

Hall, & Ewen, 1965). As a result, team members tend to interact more frequently with

colleagues from their own culture, which may lead to insufficient communication between the

team subgroups.

Groups with representatives from multiple cultures with no obvious majority. These are

frequently referred as global teams and have been mainly discussed in relation to increased

levels of complexity in cross-cultural communication (e.g. Berger, 1996). On the other hand,

if managed properly, teams of this type are least likely to experience groupthink (Janis, 1982)

and are most likely to achieve diversity-based synergy (Adler, 2002).

Further, based on the mission and purpose, the following types of cross-cultural workgroups

have been recognized and studied:

Single event teams. For example, teams representing their companies in a single negotiation

episode. In the literature, the issues of cross-cultural communication and differences in

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traditions and protocols are usually discussed in relation to single event teams (Butter &

Leung, 1998, Chang, 2003, Ingham, 1991). Because the team members spend only a short

period together, they frequently have no time or interest to learn more about each other. As a

result, the team members may misinterpret behavior of their counterparts and experience

misunderstandings and difficulties achieving agreement.

Short-term project teams. For example, a team of technical experts installing equipment for a

foreign partner. Short-project teams are usually described as the least likely to experience

serious problems caused by cross-cultural differences. First, project teams usually have a clear

goal – project completion – that unites the team. Second, working together for only a short

period of time, the team members may never reach the point where conflict becomes

unbearable. Nevertheless, project teams still need to deal with different work styles and the

difficulties of cross-cultural communication to achieve maximum effectiveness (Sarin &

Mahajan, 2001, Sethi, Smith, & Park, 2001).

Permanent workgroups. Typically associated with stable, full-time membership, permanents

workgroups usually produce goods or provide services. In most cases, permanent workteams

are assumed to consist of grassroots employees. Cross-cultural work teams may include

international team members, or consist of residents of one same country who came from

different parts of the world. Because members of work teams assume lower positions in

organizational hierarchies, they frequently experience little attention from the top

management and receive no cross-cultural training and guidance as to how optimize their in-

group communication (Anderson, 1983, Earley, 1993, Granrose & Oskamp, 1997, Meyer,

1993).

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Management or executive teams. These are responsible for providing direction and

coordination of subunits. Although executive teams are typically created to work together

over an extended period of time, the team members usually meet only periodically for

problem-solving or improvement-oriented projects. Partly due to the high importance of the

results of work of executive teams and partly because such teams include representatives from

the highest levels of organizational hierarchies, teams of this type enjoy the most attention of

top management and scholars (Johnson, Korsgaard, & Sapienza, 2002, Li, et al., 2002,

Sanders & Carpenter, 1998).

Popular Topics in the Field of Cross-Cultural Group Management

Certain subtopics within the field of cross-cultural management have generated

particular interest. The earlier years produced a large number of descriptive studies on cross-

cultural teams facing difficulties due to differences in customs and business event protocols

across cultures (e.g. Ingham, 1991). More recently, such topics as stereotypes and pre-justice

(Bond, 2002), cross-cultural communication (Berger, 1996, Orasanu, Fischer, & Davison,

1997), and negotiations have been frequently addressed in the literature (Chang, 2003,

Graham, Mintu, & Rodgers, 1994).

One area in which a great number of studies have been conducted is cross-cultural

differences in perceptions of justice and fairness. The focus is on perceptions of justice in

relation to rewards and pay (Murphy-Berman & Berman, 2002), workload distribution (Leung

& Stephan, 1998), conflict resolution procedures (Brockner, et al., 2000), ability to voice

opinions (Au, Hui, & Leung, 2001), and recruitment and exit (Johnson, et al., 2002).

13
 Another area of interests is the interaction of corporate and national cultures. For some

time, these appeared to be separate topics. However, with the growing number of trans-

national companies, it became evident that the two do intersect, and their interaction creates

new and unexpected challenges (Adler & Jelinek, 1986, Lau & Ngo, 1996, Schneider, 1988).

Further, staffing at foreign subsidiaries has been a very important issue for multinational

companies. It has been approached in the literature from the perspective of three different

questions. First, what staffing policy is preferable for a multinational company: expatriates or

host country locals? (Harvey, Speier, & Novicevic, 2001, Harzing, 2001). Second, if the

company decides to use expatriates, what would be the best way to select, train and introduce

them to their new working environment? (Björkman & Gertset, 1992, Caligiuri, 2000). On the

other hand, if the company chooses to rely upon locals, what would be the best way to

introduce them to the new corporate culture (Tung, 2001)? Finally, if the company chooses to

rely upon expatriates, what challenges should it be aware of (Black & Gregersen, 1999,

Brewster, 1991, Selmer & Leung, 2003)?

Empirical Research: Sampling Techniques and Statistical Analysis Tools

Review of the literature in the field of cross-cultural group management revealed that

the most common methods of data collection were mail surveys (e.g. Gibson, Zellmer-Bruhn,

& Schwab, 2003), experiments (e.g. Gelfand, 1996), observations (e.g. Workman, 2001), and

interviews (e. g. Workman, 2001). Unfortunately, most of the scholars did not have the luxury

of big data sets. Virtually every empirical paper was based on the data specifically gathered

for the study. Too frequently, response rates in mail surveys were less than desirable

(Harzing, 2000). Moreover, most of the quantitative studies were based on convenience

14
samples. For example, the majority of observations and experiments were conducted using

students as subjects (e.g. Abramson, et al., 1996, Coon & Kemmelmeier, 2001, McLeod &

Lobe, 1992) thus making generalization to the “real business world” questionable. Also, data

gathered through business organizations were frequently drawn from a single organization.

Simple correlation analysis was usually applied to the relationship between cultural

heterogeneity and different types of performance (e.g., Anderson, 1966). Variations of factor

analysis were typically used for exploration of the cultural dimensions (e.g., Hofstede, 1980,

Schwartz, 1994). ANOVAs and MANOVAs have been the most popular tools for testing

differences between cross-cultural teams (Abramson, et al., 1996, Watson & Kumar, 1992).

The review of the literature revealed that advanced statistical analysis techniques such as

structural equation and hierarchical linear modeling, time-series analysis and even simple

regression analysis were used very rarely.

Limitations and Directions for Future Research

The analysis of the large body of literature on cross-cultural group management revealed

that certain limitations have been typical for a substantial portion of the studies. As

mentioned, most of the studies have been based on relatively small datasets. Cross-cultural

comparisons of team processes and behaviors have been mainly studied using only two and,

less frequently, three to four nations. Typically, Americans were compared to Asians.

“Overstudying” of some cultures and lack of attention to others has led to the formation of

certain stereotypes. Due to a significant number of studies on the USA and China, Americans

have become a symbol of a masculine, low power distance, low uncertainty avoidance, and

individualistic culture. Conversely, China has become a synonym for collectivism, high

15
power distance, and high uncertainty avoidance. Nevertheless, according to Hofstede (1980),

the USA is certainly not the “most” masculine (rank 15/50), low power distance (rank 38/50),

and low uncertainty avoidance (rank 43/50) nation, although its culture is highly

individualistic. Similarly, Chinese culture is not the most collectivist, feminine, and high-

power distance, as it is usually presented in the studies. This finding has also been confirmed

by more recent research (e.g., House, et al., 2004, Taras & Steel, 2005).

Furthermore, very little attention has been given to subcultures. As discussed earlier,

depending on region, social status, religion or age, representatives of the same nation may

have opposing sets of values (Coon & Kemmelmeier, 2001, Taras & Steel, 2005). Despite

this, numerous instances of ecological fallacy, i.e. making assumptions about one’s cultural

values based on one’s nationality, have been observed. Such phrases as “cultural background

was measured by the current citizenship (passport status) of each of the managers”

(Offermann & Hellmann, 1997: 346), “individualism-collectivism was operationalized by the

respondent’s native culture” (Trubisky, Ting-Toomey, & Lin, 1991: 73), “participants were

divided into high and low power distance groups by county-of-origin” (Eylon & Au, 1999:

378), “subjects were assigned to one of three groups based upon Hofstede’s national cultural

rankings along the masculinity index” (Crotts & Erdmann, 2000: 412), or “on the basis of

their Hofstede country index, the subjects were divided into high and low PD and IND

groups” (Bochner & Hesketh, 1994: 233) have been commonplace. The fallacy of this

approach is obvious as this is equivalent to assigning height by sex, because on average

women are shorter than men.

Whereas a large number of studies in the area of cross-cultural team management have

been conducted on executive and expert teams, very little, if any, attention has been given to

16
grassroots employees. Also, common assumption that a cross-cultural team includes members

from different countries has made local multicultural groups, consisting of recent immigrants,

almost invisible. This can be partly justified by the fact that it is usually the employees

working in professional and managerial positions that receive global assignments. Yet,

millions of workers with diverse cultural backgrounds share their workplace with each other

and experience unique challenges every day, as does the organization with such diversity.

Finally, very little differentiation has been made between cross-cultural teams and

groups. A team is defined as a collection of individuals who are interdependent in their tasks,

who share responsibility for outcomes, and who see themselves and are seen by others as an

intact social entity (Cohen & Bailey, 1997). Their processes may be quite different from those

in a group, which is characterized by a lesser degree of interdependence.

Conclusions

Based on the review of the literature on cross-cultural group management, the following

conclusions can be made. First, it is apparent that the countries playing a more significant role

on the international business arena have enjoyed greater attention of cross-cultural scholars.

The vast majority of the studies have been conducted with the focus on the USA. Also, a great

number of publications produced in the eighties and the early nineties were concerned with

the Japanese business culture and starting from the nineties the main focus has been places on

China.

Second, although the USA is playing the key role in the globalization processes, the leading

scholars in the field of cross-cultural management are not Americans. The most influential

works have been written by scholars from Western Europe, Canada, Hong Kong, and

17
Australia. Third, over the last three decades, the focus of the research has been shifted from a

simple description of cross-cultural team behaviour towards explanation of the team

dynamics, as well as development of guidelines for optimizing the work of cross-cultural

teams. Fourth, most of the researchers have used Hofstede’s (1980) model as a theoretical

framework for their analysis. Hofstede’s national average cultural indexes have also been

frequently used for further analyses. Finally, most of the studies in the field of cross-cultural

team management were conducted using expert and executive global teams, while diverse

teams consisting of grassroots employees have been given little attention.

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