Navigating boundaries: Cross-Cultural Management in the hand of HRM

Cross-Cultural Management 

Figure 1: Key Elements of a Diverse Workforce

 

In the modern business era where the common concept is 'A Global Village', predicted by Marshall McLuhan, HRM has a crucial part to play on balancing the globalization and managing geographic, linguistic & cultural differences amongst a workforce. Therefore, Cross Cultural Management is a vital aspect of managing a diverse workforce across different cultures. It involves understanding and effectively managing the cultural differences and similarities among employees from various backgrounds, to create a harmonious and productive work environment and to achieve maximum productivity & engagement.  

(McLuhan M. 1962) 

Why is Cross Cultural Management important?

 Leaders tend to concentrate more on the profits, margins and the bottom lines naturally. However, in the haste of this the strength of diversity is mostly overseen. The diversity of a workforce brings a lot of potential to the table. Especially in the current global society it is inevitable to be working together with many stakeholders from different cultures, nationalities, ethnicities and backgrounds. The contribution from these individuals has a major impact on the organization they work for as they bring their own individual styles, point of views and approach to the performance of the organization. For any organization to thrive it is critical that these individuals are managed with great sensitivity and with a cosmopolitan leadership approach. It is critical that leaders recognize and acknowledge the power and benefits of cross cultural management. More significantly, HRM should dynamically strategize the functions of the business to enable the concept of Cross Culture Management within an organization to ensure myriad positive benefits are reaped within. 

By effectively managing cross-cultural differences in HRM, organizations can leverage the diverse perspectives and talents of their employees to drive innovation, creativity, and competitive advantage in the global marketplace. Prominent management theories such as Handy theory by Charles Handy; where he identifies four main types of organizational cultures or structures goes hand in hand with cross culture management on a global scale. It is of utmost importance that organizations combine a solid theoretical foundation with practical cross-cultural management skills to navigate challenges and opportunities presented by cultural diversity, leading to more inclusive and successful global collaborations. HRM should play a key role in understanding & respecting different cultural norms, values and communication styles within their workforce in order to effectively work with a diverse team; leading  to improved team work, innovation & overall organizational performance.

Key elements in Cross-Cultural Management in HRM include:

Figure 2 : Cross Cultural Management Key Elements, created by author

Figure 3 : Cross cultural management HRM strategies, created by author

Why HRM should be culturally intellectual? 

Till the recent past most organizations or companies were operating locally. Their majority of the workforce shared similar backgrounds, linguistics, cultural norms and outlooks. However, with the globalization, companies are having their workforces geographically dispersed as well as the usual cultural norms, now have become diverse due to the mass employment.  Communication, organizational structure, culture conflicts are common barriers faced within organizations nowadays which has a major impact on the working environment. 

HRM of any organization must ensure that these barriers are strategically managed & employees' working environment is secured as a positive one for excellent work to be delivered. Failure on having a cross culture management approach can consequently result in major impacts on the business reputation, performance and overall structure. A good example of such similar case, where lack of cultural management strategies impacting businesses would be:

IKEA India - 2015

Figure 4 : IKEA India announces 26 weeks parental leave 

IKEA who is the largest furniture manufacturer and retailer in the world, faced an issue with its female employees in India. In 2015 25% of Indian women left their jobs to become stay at home moms, so IKEA offered 26 weeks of paid maternal leave following the success of this measure in Sweden (Li, 2020). However, the strategy failed, as most female employees in IKEA India were temporary workers and did not qualify for the conditions of the maternity leave. Since the conditions required a full-time employee status, many Indian women had to quit their jobs at IKEA, causing a labor shortage. Thus, the problem was caused by inefficient cross-cultural management that did not account for the cultural specifics of the local workforce. As a multinational company, IKEA should have been flexible with its management strategies and promote leaders’ understanding of cultural differences. Since Jesper Brodin (CEO Ingka Holding) emphasizes the role of IKEA’s human resources for business success, cross-cultural management should focus on the needs of the company’s employees in each particular country. Subsequently, IKEA India had a major policy change in 2017 and announced 26 weeks paid paternal leave for both parents with a further comprehensive HR policy to adhere to the business needs. The policy was a reaffirmation of the company's commitment to empower co-workers and provide equal opportunities.

(Business Today, 2017)

 Conclusion: Balancing the Cross-Cultural Management with HRM strategy

Figure 5 : Balancing cross cultural management through HRM strategies.

Leaders of an organization should be capable of finding the middle ground to balance the cultural perspectives and practices within the organization, in order to integrate different outlooks, values and perspective for the greater good. Creating a safe, ethical & positive atmosphere at a workplace where the workforce may thrive with the leaders strategical approach; especially through HR aspects, the organization can create a more inclusive and productive work environment. 

References:

1. Handy, C. (1990). Understanding Organizations. London, Penguin Books.

2. Meyer, E. (2015). Globalization: When Culture Doesn't Translate. Harvard Business Review, October.

3. Thomas, D. C., & Inkson, K. (2009). Cultural Intelligence: People Skills for Global Business. Berrett-Koehler Publishers.

4. Li. Y. (2020). Business insight: Leadership and human resource management analysis for IKEA. International Journal of Multidisciplinary Research and Publications, 3(1), 74-81.

5. Business Today. (2017). IKEA announces 26-week parental leave for both men, women. [Online] https://www.businesstoday.in/latest/corporate/story/ikea-announces-26-week-parental-leave-for-both-men-women-70407-2017-03-14  (Accessed:02-04-2024)