Managing Cultural Differences

5.2.1 – Explore the External environmental forces at the global level

For global leaders and managers the necessity to manage the cultural differences that exist is of significance and they need to participate effectively in the global environment. Cultural differences and managerial differences exist within the people in different parts of the world. The leaders of today need to engage the human resources of the specific country they are operating in, understand them and also ensure that they are able to negotiate with them. They must have an understanding of their culture, society, religion and political differences.

For example:

1. Japanese culture promotes a sense of group identity. Creates ambiguity and leads foreigners to draw false

Leaders are able to use their power in a positive way to influence people through role modelling which is the reason many researchers emphasise that the leaders must possess a strong character to survive within the organisation. For a leader to be considered ethical he must:

1. Establish high standards of ethical communication.

2. Establish quality standards and quality delivery of service.

3. Ethical leaders collaborate to reduce risks at every level and ensure best practices

4. Ethical leaders enable others to develop their leadership skills and exercise them.

2. Political systems: The political systems of a country shapes its economic and legal systems. The political systems could be either democratic or totalitarian. A democratic system elects their representatives and these representatives form a government and make decisions on behalf of the people of the country. In a democratic system, the representatives of the people are accountable to the nation and in a totalitarian regime, the freedom to express , free media and a choice of leaders is denied to the

Cultural diversity: leaders must be aware of the cultural diversity and be able to accelerate change and understand the differences that exist between the countries. The cultural influences and management practices developed in one culture may not be easily transferable to another country. Leaders must create cultural synergy by collaborating and emphasising on the differences that exist and by integrating those differences to enrich human activities and systems.

One of the most important problems of global leadership is the possibility that the leaders may be ill-informed about the cultural, social, political and religious norms which operate in the country of interest.

For example : For an American employee operating in Germany , the practice of calling the seniormost of managers by their first name may be considered rude and unacceptable as Germans take time to get people on first-name basis and they may find it uncomfortable when an employee addresses the managers by their first name.

The Global leaders need to adapt and conform to the value systems that exist in the country of operation. The way in which the ideas and policies are communicated, deals are negotiated, the incentive systems that exist, the structure of the organisation, the name of the product, the relationship between management and labour, the customer reaction are some of the aspects which are sensitive to cultural