Business and Management
Submitted By uns9
Cross Cultural Managment
MGT 3146 Mr. Kiren Ross
Usman Habib M00429797
Table of Contents PART 1: 4 1) INTRODUCTION: 4 2) Country Macro Level Fact Sheet 5 Socio-Economic Comparison (CIA, 2015) 5 3) Hofstede Model : Comparing Lebanon and Netherlands 8 PART B : Cultural Intelligence 10 1) Cultural Intelligence: Globalization 10 2) Decision Making: 11 3) Negotiation & Communication: 12 4 )Leadership: 14 Section C: Advice and Recommendation 15
The term globalization has been defined as the process in which different countries interconnect because of the dependence that the buyers, sellers, producers and governments (Parker, 2005). During the course of the last decade the world has seen globalization increase in such a magnituite that the world as a whole is seen as a single market place. Due to the adaptation of this concept, different cultures have to come together to work for a single goal their organizations provide them with, which normally is ‘success’. Culture is defined as a set of values, traditions, mind set, and norms that a set of people follow in that geographical location, these are the things passed on from generation to generation (Hofstede, 1980). For a business to be successful outside their home country, they need to understand the culture they are going into as well as understand the differences it holds from their originating country. Successful businesses creates a work force with enough multi-cultural training while making sure they acquire the necessary skills needed for dealing with different problems. These are the skills that develop an understanding of the culture, along with creating a cultural intelligence (Inkeles & Levinson, 1969).
Due to Globalization the need of developing these skills are almost necessities as companies keep fulfilling their needs by hiring internally for a different country. During the course of this report, cultural differences between Netherlands and Lebanon will be evaluated, discussed and analyzed, and advice and recommendation would be given to the employee on how to adjust to a different environment as well as succeed professionally in it. Like any other service industry, financial industry needs two important aspects to deal with the demands of globalization; 1) Understanding the customer needs and 2) Providing customer service tailor made for the customer needs and demands (Investopedia, 2008).
2) Country Macro Level Fact Sheet
Socio-Economic Comparison (CIA, 2015)
| Netherlands | Lebanon | Population | 16,947,904 (July 2015 est.) | 6,184,701 (July 2015 est.) | Ethnic Groups | Dutch 80.7%, EU 5%, Indonesian 2.4%, Turkish 2.2%, Surinamese 2%, Moroccan 2%, Caribbean 0.8%, other 4.8% (2008 est.) | Arab 95%, Armenian 4%, other 1% | Languages | Dutch (official) | Arabic (official), French, English, Armenian | Religion | Roman Catholic 28%, Protestant 19% (includes Dutch Reformed 9%, Protestant Church of The Netherlands, 7%, Calvinist 3%), other 11% (includes about 5% Muslim and lesser numbers of Hindu, Buddhist, Jehovah's Witness, and Orthodox), none 42% (2009 est.) | Muslim 54% (27% Sunni, 27% Shia), Christian 40.5% (includes 21% Maronite Catholic, 8% Greek Orthodox, 5% Greek Catholic, 6.5% other Christian), Druze 5.6%, very small numbers of Jews, Baha'is, Buddhists, Hindus, and Mormons | Climate | Temperate; marine; cool summers and mild winters | Mediterranean; mild to cool, wet winters with hot, dry summers; the Lebanon Mountains experience heavy winter snows | Natural Hazards | flooding | dust storms, sandstorms | GDP (PPP) | $808.8 billion (2014 est.) | $81.42 billion (2014 est.) | Type of Government | constitutional monarchy | republic | Legal System | civil law system based on the French system; constitution does not permit judicial review of acts of the States General | mixed legal system of civil law based on the French civil code, Ottoman legal tradition, and religious laws covering personal status, marriage, divorce, and other family relations of the Jewish, Islamic, and Christian communities | Industries Available | agroindustries, metal and engineering products, electrical machinery and equipment, chemicals, petroleum, construction, microelectronics, fishing | banking, tourism, food processing, wine, jewelry, cement, textiles, mineral and chemical products, wood and furniture products, oil refining, metal fabricating | Import Partners | Germany 14.5%, China 13%, Belgium 8.4%, US 6.5%, UK 6.1%, Russia 5.7%, Norway 4.1% (2014) | China 11.8%, Italy 7.7%, US 6.8%, France 6.2%, Germany 5.4%, Russia 4.5%, Greece 4.1% (2014) | Export Partners | Germany 25.3%, Belgium 12.9%, UK 8.9%, France 8.6%, Italy 4.3% (2014) | Saudi Arabia 10.8%, UAE 9.7%, Syria 8.7%, Iraq 7.6%, South Africa 7%, Switzerland 4% (2014) | Commodities Imported | machinery and transport equipment, chemicals, fuels, foodstuffs, clothing | petroleum products, cars, medicinal products, clothing, meat and live animals, consumer goods, paper, textile fabrics, tobacco, electrical machinery and equipment, chemicals |
The people originating from Netherlands are regarded as The Dutch; the total population of the country is 16.88 Million. Around 80% of the people living in Holland are Dutch, while there is a low amount of Arabs present in the country. While the majority of the people, classify themselves as free from religion, but there is a small amount of 5% Muslims present in the country. The Government in place, has a Queen or a King as the head of the state, but the power to pass bills lie with the Parliament. Literacy rate of Netherlands is high which makes it an important location for financial industry to set into as the people normally demand a sophisticated, upto date, and ease of technology banking system for them (Deyoung, 2006)
3) Hofstede Model : Comparing Lebanon and Netherlands
Figure 2 (The Hofstede Centre, 2015)
The power distance in Lebanon is high , which means people in the society are treated according to the position they hold and the majority of the people in the country has accepted that power is distributed unequally. The line of command is based in a Hierarchical order. While on the other hand, it is low for Netherlands, which means power is distributed more equally, and a person is not what his job tittle states. Although Lebanon, because of its arab culture is a Collective society, the same can not be said about The Dutch; who are more individualistic with a score of 80. This means, people in this country are supposed to look after them selves or their close family to the maximum, and business decisions are made on a mutual advantage as well as only on merit.
With a low score in Masculinity (14), in comparison to Lebanon (65); it shows that people in Netherlands, like to keep a balance between life and work and are more motivated by liking their jobs, rather than the concept of being the best. With a low score in Power Distance and Masculinity, this comes in handy for a manager to treat their employees with respect and lead as a democratic leader instead of autocrat. Being a Pragmatic society rather than a normative one (Lebanon), it shows that the Dutch have the tendency to mold according to the needs of the situation and not care too much about stating the absolute truth. The can adapt their traditions and norms according to the need of that moment. Finally, being on the other side of the scale from Lebanon again, the Dutch has a high score of 68 when it comes to indulgence, which shows that as a culture, these people time out for their leisure, and enjoy life as it comes.
PART B : Cultural Intelligence
1) Cultural Intelligence: Globalization
The emergence of Globalization in the last two decades has left managers with a more complexed, dynamic, competitive and tougher job than ever before. A manager working in a multinational has to deal with different cultures at work place, along with different needs of the country they are working in as well as have the ability to face political, economics and cultural challenges they have to solve. Nonetheless, a managers job is distinguished into two categories, one being their management role, the other being the work they have to execute. Although, the job description varies from job to job for a manager, there are a lot of common aspects a manager has to face, these aspects are; Leadership, Communication & Negotiation, Decision Making and Person-Organization Fit. Although the skill set required to do this job is the same but demands might vary from different culture to culture. (Hotsfede, 1993)
International Managers work in an environment where they come across strange induiduals, outdated theories, customs and organizational structure, which seem outdated to the manager because it has been super seeded, but in this culture, these things apply perfectly fine. Hofstede (19993), defined these manager as being in Alice in the wonderland because of all these reasons. Hofstede further argue that working in such an environment helps the managers, through a proper training to acquire the skill of cultural intelligence.
2) Decision Making:
Manager undertaking tasks of international management face problems that they are not used to before, varying from looking after the international joint venture, to hiring new employees for the organization to providing and understanding what motivates their work force. The main aim of a financial industry to provide the company with deeconmies of scale, and growing revenue while lowering the cost of transaction (Investopedia, 2009). Although, manager tend to take decisions according to their own personal experience/culture, it is more suitable for the leader to act according to the culture, the social norms of that specific place rather than just do what they were doing. A manager from the U.K being from a problem solving society, tends to see every problem as a problem to be solved (Kluckhohn & Strodtbeck, 1961). In this case, our manager comes from problem solving country, willing to state the absolute truth, but needs to adapt to a culture where decisions are made after through proper research; and take a rounded approach towards making decisions (choi, dalal, kim-prieto & park. 2003).
Dutch being an Individualistic and Feminist society, scoring 80 and 40, they tend to think that every problem is there to be solved and will be acting swiftly to solve it (Kim & Drolet, 2003). Being a feminist society, the dutch prefer the decisions to be made through consensus, while giving them an opportunity for betterment of their lives, and the manager making everyone feeling as a part of the group
3) Negotiation & Communication:
A part of an international managers job description is to be a successful and good negotiator, as it is a everyday part of his job. Communication is a vital part of the job as the as managers have to negotiate on a regular bases. A good negotiator understands what are the norms on the other side of the table, weather the culture they are dealing with is high context or low context (Hall, 1976) and deal with It in a precise and be able to communicate his message across clearly to the other party (Berlo, 1960). The biggest issue to face is that on the negotiation table both sides have very little in common so to find the actual common ground to talk onto is fairly more difficult. (Ronnan, 1986).
According to some studies, there is a link between Hofstede dimensional theory and Hall’s theory of High context and low context communicators. According to Hall, the countries with a high score in individualism are more likely to be blunt, and straight in communication and hope for the same in return. (Tamas, 2010)
Sometimes a manager has to look out for a BATNA (fisher and Uri, 1981) and find a solution, which comes out as a win win for both parties involved. In the world today, Cultural Intelligence (CQ) holds the key for managers to negotiate and come out with a solution acceptable to all parties. In todays world, although the opportunities are large for an organization to go global but the risk of conflict is as high as ever before, a manager needs to be trained with cross cultural intelligence in order to avoid issues and have a nice and peaceful negotiation (Imai & Gelfand, 2010).
The Dutch being an induvidulistic society, mark on the low context of Halls scale, which means they like their communication to be direct, without beating around the bushing and tend to get on with the job rather than communicating about a problem, longer than necessary. This is opposite for Lebanon.
It is also noted that power distance plays an important role in negotiations, as countries with lower power distance tend to look for a win-win solution to a problem as opposed to a country with a higher power distance looking for a win-loose solution. The Financial Industy, has to go through a lot of negotiations each day
Different things motivate every set of people from a different culture,, they are motivated through different things. A leader is someone who brings the best out of their work force, who tends to lead from the front, but it varies from culture to culture, as the Arabs are likely to worship their boss, as long as they are in power while the Dutch on the other hand are speckticle about the value of the leadership (Aycan, 2007). Although there is not a general definition for a leader, it is normally someone who makes their workforce work at the best of their abilities and make decisions which are accepted and need by the situation. Even though, people opinions can be changed according to every decision that an individual takes, for example, Obama was seen as a light skin when agree and a black when not.
Although, the definition of a leader varies from culture to culture, there are some common things a leader needs to have to be successful, the first being the trait of leadership, sacrificing himself for the betterment of the organization, while having the confidence, intelligence, energy and commands respect of his peers (Kirkpatrick and Locke, 1991). According to the Path Goal Model, the type of leadership changes according to the situation, there is not a perfect way of leadership other than what the situation demands.
For the Dutch, a leader is someone who takes the blame for his responsibility while treating every individual with respect and integrity and allowing them to work in Individualistic terms to convey with the culture over there. As there is a low power distance in the society, the employees prefer a leader who asks for advice and keeps it’s work force in the loop and make everyone feel important. This is important in this culture, as people like to be appreciated for their good and held responsible for their mistakes.
Section C: Advice and Recommendation
Business are there for a sole reason, which is to be successful so when they hire a manager for a place, they expect them to do the same, for manager, in this case a women needs to recognize that Holland is an open society which is in a way different than what she is used to Lebanon. During the course of this report it was evaluated how the manager can work in the business environment provided to her. The Hotsfede Theory is used to determine the main socio differences between different cultures by organizations. The Market Place, which is now seen as the world as a whole. The differences in opinions, cultural values and a lot of other stuff open up the window for cultural intelligence to come and play a vital role. This report looked at the cultural differences between Lebanon and Netherlands with more focus on the dutch, however this report was just an over view about what the Manager should expect in their new country of work. In order to be successful your manager would need to be different than she was in her home country, having to adjust to live in a new face.
In light of the Research done, 3 points of advices should be given to your manager on her new task
* Keep in touch with your employees more than you were used to back in Lebanon, ask for their opinions and make them feel as a part of the team. Be direct with them, don’t try to get on a personal terms with them * Undertake the fully certified Cultural Intelligence Training provided to her by our organization * While Negotiating, be direct, be on point and tell the other side of the table what exactly you need, and expect the same in return.
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