Cross-cultural Management

In the era of globalization organizations are operating in an increasingly global context. Multinational enterprises are becoming more and more common, which leads to a clearly diverse workforce. It is widely accepted, that organizations can use this diversity as a strategic advantage to cope with the demands of the rapidly changing environment. This paper focuses on how these tasks are accomplished. The aim is to explore the fields of cross-cultural management, such as the process of knowledge management, the functioning of crossnational project teams, and the characteristics of the leaders of multicultural teams that foster these activities.

1. Cross-cultural management

Lately, due to the above mentioned changes, cross-cultural topics have received increased attention in management journals. Much has been written on organizational behaviour in global work environment and these topics concern the field of cross-cultural management. Cross-cultural management is a branch of international management which focuses on the transfer of knowledge, values and experiences in multicultural environment. It is „also the study of creation, evolution, and management of fusions of diversity in relation to organizations’ policies, goals, strategies and achievements, which emerged in the 1960s as an academic discipline” (Holden, 2002). In addition, it includes global networking, teamworking and organizational learning. Networking in organizational context refers to the creation of pathways to key resources, such as knowledge, competencies, sources of finance, which are essential for an organization to remain competitive. It has also been defined as a cross-cultural knowledge sharing activity and a practice which faciliates organizational learning. Holden (2002) argues that the core task of cross-cultural management is the faciliation and direction of synergistic actions and learning interfaces in order to transfer knowledge, values and experience in multicultural context. He defines six tasks which cover the domain of cross cultural management: • • • • • • Cross-cultural transfer of knowledge Collaborative cross-cultural learning Cross-cultural networking Interactive translation Development of participative competence Creation of collaborative atmosphere


or in some cases it cannot be transferred at all. In practice. companies need to manage the knowledge accumulated in the heads the employees and use it to create more. Knowledge management It has been widely recognized that in order to survive. If it can be codified easily. Burton-Jones (as cited in Holden. pg. it is the resource that can be used to eliminate the uncertainty which stems from the continuously changing conditions. Based on this interpretation the next section will summarize the characteristics of knowledge management. 2002. create and protect it. attitudes and organisational strategies are required. Knowledge management is „the systematic management of the knowledge process by which knowledge is identified. But if knowledge cannot be made explicit. shared and applied” (Holden. Davenport and Prusak (as cited in Holden. that refers to the „know-what”. organizations need to learn. 2. pg. p. The codification of knowledge is inevitable in order to make it available for others whenever it is needed. Based on the assumption that tacit knowledge is the one which is in the heads of the employees. It is a multilevel process. One of the most important divisions is developed by Nonaka and Takeuchi (1995. therefore. 2006). It cannot be emphasized enough that if they want to remain viable and competitive. For the effective knowledge transfer special atmosphere. explicit knowledge can be articulated in formal language. it can be seen as a form of knowledge management. 68) who made distinction between tacit and explicit knowledge. 2002. Tacit knowledge is personal. as the aim of every international collaboration is to create something brand new from the already existing knowledge of the partners. gathered. 80) point out seven of them: 2 . Accordingly. as cited in Holden. the aim of knowledge management is to recognize the valuable capabilities that are created in one place but could be used elsewhere. it is extremely difficult to transfer. The aim of knowledge management is to attain then develop tacit knowledge with the purpose of adding values to the company and increasing its competitive advantage. On the other hand. The capability to renew and develop is essential to respond to the challanges of the environment. There are several factors that hinder this activity. groups and/or organizations (Adenfelt & Lagerström.If we look at cross-cultural management in this way. Organizations have realized that their ultimate weapon in this never-ending fight is their knowledge. 2002. concerning individuals. it remains tacit. What is more. companies need to acquire. Knowledge can be categorized in many ways. is based on facts therefore it can be transferred formally and easily.) argued that the crucial difference between tacit and explicit knowledge is to what extent is it easy to codify or express knowledge in order to make it accessible for others. 2002). context specific and thus it is hard to formalize or communicate which refers to the „know-how”. The key element of this activity is the continuous learning from experiences. it can be made explicit and transferable. 68. therefore it is hard for the rivals to copy.

This latter kind of team is virtual. It can promoted by prior knowledg of a certain knowledge domain. These teams are often temporary structures created to reach a specific organizational goal. not-invented-herese syndrome Intolerance for mistakes or need for help In addition. vocabularies. 2002). 2004): 1) Project teams that consist of members from different countries working in the same one. It refers to the problems of separating knowledge from its context and transferring it without losing its crucial properties (Holden. It is important to highlight that knowledge transfer is a dyadic process therefor the success of it depends on the ability of the source to transfer knowledge and on the motivation of the recipient to acquire and use it. 3. and lack of shared cognitive ground can intensify stickiness. Ethnocentrism. stickiness also slows down the transfer of knowledge. 2006). This part of the paper focuses on the functioning of these formats. 3) Project teams with members from different countries who have never met each other and work together only by way of electronic communication. language problems. The members usually come from different subsidiaries of a multinational corporation for a pre-specified time period (Adenfelt & Lagerström. frames of reference Lack of time and meeting places Status and rewards go to knowledge owners Lack of absorptive capacity in recipients Belief that knowldege is prerogative of particular groups. 2) Project teams that are separated to some extent or entirely in various countries but the members engage in ’face-to-face meetings’.• • • • • • • Lack of trust Different cultures. Three basic forms can be distinguished (Makilouko. as it has no ’face-to-face’ meetings. Multicultural project teams have become common in international enterprises. The opposite of stickiness is absorptive capacity which shows how easily can the recipient comprehend knowledge. Multicultural project teams The previous section has described the process of knowledge management and emphasized the importance of this activity that is generally carried out in multicultural project teams. The popularity of these teams stems from the recognition that the already existing knowledge in the subsidiaries can be 3 .

The leaders of multicultural project groups According to Holden (2002). or create knowledge then exploit it somewhere else. In addition. 389) have identified some common factors of the successfull managers like cognitive complexity. have a learning perspective and develop strong team identity. electronic communication. collaborative learning. „Anyone who regardless of his or her formal function. . thus it will not become dependent on its environment. 2004.shared and combined building new knowledge. It is argued that cultural differences. 389) found some common characteristics of multicultural leaders such as social responsibility of the personnel. participative competence and the creation of collaborative atmosphere for these activities. the task of the managers is to faciliate the following core activities (Holden. he or she needs to be aware of the strategies and goals of the enterprise and apply cross-cultural management with the purpose of enhancing them. develop norms for the effective participation. emotional energy and psychological maturity. Therefore. What is more. becomes engaged in situations involving some kind of professional cross-cultural activity. 296). attempts to manage international diversity. Aycan. However. and lack of face-to-face meetings can reduce the sense of team identity which can lead to in-group biases. Wills and Barham (as cited in Makilouko. The successful functioning of such teams can be inhibited by those factors which are mentioned in the case of knowledge managament. cross-cultural management is becoming the management of knowledge in cross-cultural project teams. interactive translation. The project manager plays a critical part in this process as efficient crosscultural management can make or break the forming project. However. It was argued that in the ’Knowledge Era’ cross-organizational and crosscultural teaming are becoming more and more common and the purpose of these activities is to transfer knowledge from one place to another. pg. The mechanism is perceieved as a strategy which enhances the competitiveness of the organization. One of the main advantages of multinational project teams is the creativity in problem solving which emerges from the different worldviews of the members. networking. 4. For a fully functioning multicultural project team it is crucial to avoid communication breakdowns. These formats are believed to represent strategic 4 . 2002): transfer of knowledge. there are numerous circumstances that influence the operation of multicultural project groups. 2002. faciliate the recognition of hidden shared knowledge between the team members. (as cited in Makilouko. effort-witholding behaviour. 2007). The following part of the paper is aimed at the description of the effective leadership techniques and cross-cultural manager. pg. endeavour to manage between extremes and to find a consensus in the multicultural environment. In addition. pg. 2004. Erez. Bloom et al. it has been argued that there are some core competencies which are required for every leader who manages cross-cultural teams. there is no such title as ’cross-cultural manager’ in organizations. Conclusions and discussion The aim of the paper was to define cross-cultural management and reveal how it works in practice. experience and values. as the enterprise employs its own workers. becomes a de facto cross-cultural manager (Holden. 5. their work is based on a larger knowledge pool as every subsidiary developes its own methods that can contribute to the common work. and task conflict (Gelflan. Based on the above mentioned competencies. it is not required to purchase external knowledge.

advantage and continuous innovation. The successful functioning of such teams depends on the cooperation of the members and the effective leadership. It cannot be emphasized enough that knowledge is the main value of the company therefore it must be protected and managed. From my point of view the interpretation of cross-cultural management as knowledge management is quite fruitful as it captures the main purpose of the multicultural collaborations: the creation and utilization of knowledge in order to develop and survive. I believe that this area of management research can provide useful solutions to real life problems and for this reason it would be beneficial to investigate further individual and organizational factors that contribute to efficient knowledge transfer. 5 .

(2004) Coping with multicultural projects: the leaderships styles of Finnish project managers.35 Holden. M. 381-400 Gelflan. The Annual Review of Psychology 58. (2006) Knowledge development and sharing in multinational corporations: The case of a centre of excellence and a transnational team. M. M. International Business Review. Lagerström. Z. Great Britain: Prentice Hall Makilouko. 15.. N. International Journal of Project Management 22. J. M.J.References Adenfelt. 387-396 6 . Aycan. 20.. A Knowledge Management Perspective.. Dorset.1–20. (2007) Cross-Cultural Organizational Behavior. Erez. (2002) Cross-Cultural Management. K.

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