Managing a multicultural company

ESEUNE Business School Weekly Article

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Enrique de la Rica

Enrique de la Rica has a Bachelor degree in Information Science from the University of the Basque Country ( Spain), where he studied the Ph.D. courses in Communication Studies. Enrique got a MBA from Eseune Business School (Bilbao, Spain). He has done postgraduate courses and specialization in different institutions, such as the Executive Business Program at Georgetown University (Washington DC, USA).

The internationalization of the economy is a phenomenon that affects to all kinds of organizations, and nowadays the multicultural organizations are growing a lot derived from the globalization.

More and more companies are expanding their markets, or offshore the whole or part of their productive activity in other countries. All this bears a multicultural diversification of their human resource.

For all this, it is necessary to promote between the managers the development of a intercultural capacity. The behavior of a culturally diversified organization it is necessary to be understood. So that people with diverse cultural origins could demonstrate all their potential without being limited.

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We need managers that promote the cultural sensibility, because, the cultural diversity of the staff could be a competitive advantage for a company. But it is not easy at all to manage multicultural organizations.

The first step is to promote the value of the cultural sensibility. A person with cultural sensibility recognizes certain differences in the everyday habits that will help him to construct better relations with people of different cultural precedents from him.

The second step consists of implanting a methodology that allows to analyze the multicultural values of the organization.

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One of the person with long experience in this field, Doctor Geert Hofstede, after 18 years investigation including more than 160.000 people of 60 different countries, identified five dimensions of values to be considered in any multicultural relation:

1.-Individualism versus collectivism

The individualism refers to the level in which a person acts thinking about himself, over the interests of the group. People of a society who values the individualism (United States or United Kingdom, for example) worry about their professional development more than the future of the company.

If we incorporate to our organization more individualistic people we have to foresee behaviors when problems appear in the group and, of course, to understand the reasons of the mentioned behaviors.

2.- Distance to the power

This dimension explain us the measurement in which the employees accepts the existence of different hierarchic levels. In a culture with big distance to the power the CEO takes many decisions without consulting his “subordinates". On the other hand, in a culture with short distance to the power the employees are going to ask oftenly about any ítem. In Europe for example, countries as Spain and France have big distance to the power compared to countries like Germany or Norway.

For example, in Germany, managers are usually non authoritarians. But in a nearby countries like France, managers of big corporations who have studied in the most prestigious business schools, they show an authoritarian behavior based on their superiority.

3.-Masculine versus feminine

The way of understand the masculine and the feminine is different in each culture. Hofstede said that a “masculine“ society is where it is considered that the man is a step over the woman and in a “feminine“ society encourages the equality. Japan is considered by Hofstede like the most "masculine" culture and Sweden like the most "feminine" (where there are more women engineers that men, for example).

4.-Avoiding the uncertainty

It shows us the grade in which a society accepts the uncertainty and assumes risks. The cultures which avoid to take risks are Spain and other Mediterranean countries.

If a team is formed by two Spanish, an Italian and French for the development of a new product, the process will be slower and will have a less innovative result than the same project with a team formed by an American, a Canadian, one Swedish and a Finn.

5.-Short versus long term vision

It refers to the importance that exist in a culture to the planning of the long-term life in contrast to the immediate worries. In North America, for example, they prefer to plan shortly while other cultures, like the Japanese, prefers the long term. These values have to be taken in account when the strategy of the company is done.

Finally, the leader who has to manage diversity cultural teams has to realize the existence of different customs that affect to the relations.

Are you able to manage a multicultural organization ?

Undoubtedly in multicultural teams is easier to get a conflict than synergy. But we have to begin to work and understand the multicultural organizations. The companies and managers that successfully manage this teams, will be constructing important differential elements and even important competitive advantages.