Management Cross-Cultural Management
by
David C. Thomas
  • LAST REVIEWED: 10 November 2018
  • LAST MODIFIED: 29 September 2014
  • DOI: 10.1093/obo/9780199846740-0074

Introduction

Cross-cultural management is the study of management in a cross-cultural context. It includes the study of the influence of societal culture on managers and management practice as well as the study of the cultural orientations of individual managers and organization members. At the individual level, individuals' values as well as their understanding of and reactions to their cultural context and experience figure prominently. Contributing disciplines include cross-cultural psychology, sociology, and anthropology as well as the broader disciplines of management and organizational behavior and the related area of international human resource management. General topic areas include the cultural context in which management must take place, the various roles of the international manager, the influence of culture on organizational structure and processes, and management across nations and cultures.

Textbooks

Until recently there were very few texts devoted solely to cross-cultural management. Instead the topic was often subsumed in texts on international management that included strategic management or added in some form such as text boxes to more mainstream texts in management or organizational behavior. Numerous texts have appeared in the past few years that focus specifically on the cross-cultural context of management. Because of the newness of the field, the content of these volumes is variable but often includes a discussion of culture and its determinants, dimensions of cultural variation, processes of cultural influence on behavior, and then an application of these concepts to managerial roles and activities such as decision making, leadership, negotiation, multicultural teams, and so on. Alternatively, some volumes are organized around managing in particular country or cultural contexts. Among the numerous new entrants, three texts that have broad acceptance are Thomas and Peterson 2014, Lane and Maznevski 2014, and Deresky 2013. Adler 2007 also continues to be popular as a supplement that examines organizational behavior in international settings.

  • Adler, Nancy J., with Allison Gundersen. International Dimensions of Organizational Behavior. 5th ed. Mason, OH: Thomson Learning, 2007.

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    Perhaps the first text (first edition, 1991) to address cross-cultural management, it continues to be popular as a supplement in more traditional organizational behavior and management courses.

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  • Deresky, Helen. International Management: Managing across Borders and Cultures, Text and Cases. 8th ed. Upper Saddle River, NJ: Prentice Hall, 2013.

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    Covers political, legal, and technological environments of international management, so not strictly focused on cultural aspects, but with good coverage. Widely used in undergraduate classes.

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  • Lane, Henry W., and Martha Maznevski. International Management Behavior: Global and Sustainable Leadership. 7th ed. Chichester, UK: Wiley, 2014.

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    Unlike previous editions, this volume does not contain business cases. In this new edition, the text has been refocused around leadership to appeal to practicing managers. However, it maintains a strong cross-cultural focus.

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  • Thomas, David C., and Mark F. Peterson. Cross-Cultural Management. 3d ed. Thousand Oaks, CA: SAGE, 2014.

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    This text is perhaps the most systematic treatment of management in a cross-cultural context available. The previous edition was the winner of the R. Wayne Pace Human Resource Development Book of the Year for 2008. A companion readings and cases book is also available from SAGE.

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Reference Resources

Because the field of cross-cultural management is multidisciplinary, the sources of new information tend to be found mainly across a wide range of journals, discussed in Journals. However, the recognition of the importance of managing across cultures and the resultant popularity of this field of study have resulted in several relevant reference volumes. These include Advances in International Management, which sometimes has volumes dedicated to cross-cultural management, as well as several handbooks including Gannon and Newman 2001; Smith, et al. 2008; and Bhagat and Steers 2009. Research in cross-cultural organizational behavior is also reviewed in the Annual Review of Psychology.

  • Advances in International Management (AIM).

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    A research annual devoted to advancing the cross-border study of organizations and management practices from a global, regional, or comparative perspective, with emphasis on interdisciplinary inquiry that integrates ideas from multiple academic disciplines. Edited by Timothy Devinney, Torben Pederson, and Laszlo Tihanyi, it is published by the Emerald Group (Bingley, UK).

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  • Annual Review of Psychology. 1950–.

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    The Annual Review of Psychology, in publication since 1950, covers the significant developments in the field of psychology and regularly commissions a chapter on cross-cultural organization behavior.

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  • Bhagat, Rabi S., and Richard M. Steers, eds. Cambridge Handbook of Culture, Organizations, and Work. Cambridge, UK, and New York: Cambridge University Press, 2009.

    DOI: 10.1017/CBO9780511581151Save Citation »Export Citation »E-mail Citation »

    With contributions from an international team of scholars, this handbook reviews, analyzes, and integrates available theory and research concerning the role of culture and cultural differences in organizational dynamics.

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  • Gannon, Martin J., and Karen Newman, eds. The Blackwell Handbook of Cross-Cultural Management. Oxford and Malden, MA: Wiley Blackwell, 2001.

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    This was the first handbook to provide an overview of the major theoretical perspectives in cross-cultural management and to look at how they can be applied to real-world situations.

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  • Smith, Peter B., Mark F. Peterson, and David C. Thomas, eds. The Handbook of Cross-Cultural Management Research. Thousand Oaks, CA: SAGE, 2008.

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    Scholars in the field of international management from around the world contribute twenty-six chapters in this innovative and comprehensive volume.

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Journals

Because the field of cross-cultural management is so new and dynamic, the latest thinking is typically presented in journals. The interdisciplinary nature of the field means that articles on cross-cultural management appear in a wide range of discipline-based journals including The Academy of Management journals (Academy of Management Review and Academy of Management Journal), Journal of Management, and Journal of Organizational Behavior. Management journals with a more international focus include the Journal of International Business Studies, Management International Review, Journal of World Business, and The International Journal of Cross-Cultural Management. Cross-cultural management articles also appear in The Journal of Cross-Cultural Psychology.

History and Trends

The study of cross-cultural management has its basis in anthropology, psychology, sociology, and economics. All of these base disciplines evolved a comparative dimension that comprises the heritage of cross-cultural management as a field of study. Major early cross-cultural management projects included McClelland 1961, a comparative study of achievement motivation; England and Lee 1971, a comparative study of managerial goals; Haire, et al. 1966, on culture and managerial roles; and Child 1981, a cross-national study of organizations. Roberts 1970 is a critique of the cross-cultural management literature of the time. A significant focus on cultural value dimensions as explanations for managerial phenomenon followed Hofstede 1980, a now-classic study of managerial values. These and other foundations of the field of cross-cultural management are well covered in a four-volume reference set, Peterson and Søndergaard 2008. Recently, the field may have experienced a shift away from dimensions of cultural variation and large-scale multi-country surveys to a more cognitive process model to explain cultural variation in management behavior, as outlined in Earley 2007.

Cultural Context of Management

When management scholars became interested in understanding the influence of national differences on management, some followed the traditions of anthropology, but most adopted approaches from sociology or psychology. Of particular importance is the adoption of the psychological concept of values as a means of conceptualizing and representing cultural groups. Defining culture in terms of value orientations or dimensions allowed the systematic mapping of national differences. More recently, cultural variation built around dimensions has been complimented by theories of cognitive structures and processes.

Dimensions of Culture

Many dimensional maps of culture have been developed. Despite being developed at different times and with different methods, some very similar sets of cultural dimensions have been identified. The major frameworks that have been influential in management studies include Kluckhohn and Strodtbeck 1961; Hofstede 1980; Schwartz 1992; and House, et al. 2004. Triandis 1995 provides an in-depth description of the meta-dimensions of individualism and collectivism, and Gelfand, et al. 2006 introduces the new dimensional aspect of tightness and looseness. Increasingly influential is work based on the World Values Survey and European Values Studies, for example Inglehart and Basanez 2010.

  • Gelfand, Michele J., Lisa H. Nishii, and Jana L. Raver. “On the Nature and Importance of Cultural Tightness and Looseness.” Journal of Applied Psychology 84 (2006): 721–736.

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    Outlines an important new dimensional aspect of culture not captured in previous frameworks.

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  • Hofstede, Geert. Culture’s Consequences: International Differences in Work-Related Values. Thousand Oaks, CA: SAGE, 1980.

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    A very influential framework of managerial value orientations based on attitude surveys of 117,000 IBM employees. This work has formed the basis of innumerable cross-cultural management studies. Updated in a 2nd edition in 2001.

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  • House, Robert J., Paul J. Hanges, Mansour Javidan, Peter W. Dorfman, and Ram N. Aitya. Culture, Leadership and Organizations: The GLOBE Study of 62 Societies. Thousand Oaks, CA: SAGE, 2004.

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    The most recent large-scale study of cultural differences in value orientations. An extension and complimentary approach to Hofstede’s original study.

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  • Inglehart, Ronald, and Miguel Basanez. Changing Human Values, 1981–2007: A Cross-Cultural Sourcebook Based on the World Values Survey and the European Values Studies. Mexico City: Siglo XXI, 2010.

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    A recent example of one of the many books based on the World Values Survey (WVS) and European Values Studies. The WVS is a global research project that explores people’s values and beliefs, their stability or change over time, and their impact on social and political development of the societies in different countries of the world. The WVS database is available online.

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  • Kluckhohn, Clyde, and Fred Strodtbeck. Variations in Value Orientations. Westport, CT: Greenwood, 1961.

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    Reports a framework based on early work on comparative anthropology. Has had limited influence in management studies because of measurements issues.

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  • Schwartz, Shalom. “Universals in the Content and Structure of Values: Theoretical Advances and Empirical Tests in 20 Countries.” In Advances in Experimental Social Psychology. Edited by M. P. Zanna, 1–65. San Diego, CA: Academic Press, 1992.

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    Possibly the most sophisticated mapping of cultural values to date. Based on solid theoretical grounds.

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  • Triandis, Harry D. Individualism and Collectivism. Boulder, CO: Westview, 1995.

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    An important book that outlines perhaps the most important cultural dimensions in explaining a diverse array of social behavior.

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Cognitive Structures and Processes

Concepts of cognitive structure and process have entered the management literature as a way of explaining how individuals in different societies think about themselves, their work, their relationship to organizations, and their identification with organizations, as exemplified in Erez and Earley 1993. This approach was motivated by the desire to explain the psychological implications of culture and is based in work on social cognition, a key example of which is found in Tajfel and Turner 1986. The idea that individuals from different cultures would have different conceptions of self is introduced in Markus and Kitayama 1991, the cognitive underpinnings of stereotyping are examined in Taylor 1981, and cultural variation in attribution is discussed in Schuster, et al. 1989. Nisbett 2003 identifies different cognitive processing patterns across cultures, and Peterson and Wood 2008 provides an overview of how cognitive theory applies to cross-cultural management.

Managerial Roles Across Cultures

One way of framing cross-cultural management is to focus on the roles that managers take on in a global context as opposed to the functions of management, such as planning, organizing, controlling, and leading. This approach leads to the consideration of what mangers do. Thus, cross-cultural management can be seen to include decision making across cultures, communicating and negotiating with culturally different others, and motivating and leading others in a cross-cultural context. All of these areas have been the subject of a significant amount of scientific inquiry.

Cross-Cultural Motivation and Leadership

The study of work motivation, the willingness of individuals to exert effort toward a goal, has typically been framed in terms of content and process theories. Both of these have been examined with regard to their applicability across cultures. Content theories explain motivation in terms of need satisfaction, while process theories of motivation explain the choices that people make about their behavior. An example of a cross-cultural examination of a content theory is the comparison of achievement motivations in Sagie, et al. 1996. Steers and Sanchez-Runde 2002 summarizes research on content theories across cultures. Cross-cultural studies of process theories include Dubinsky, et al. 1994 on expectancy theory, and Erez and Earley 1987 on goal setting. Related to work motivation is the extent to which individuals in different cultures see work as important as shown in the Meaning of Work International Research Team 1987 study. Leadership, as the ability to influence others toward goal achievement, also varies across cultures in terms of both its meaning and its perceived importance. One of the few models of cross-cultural leadership is found in Dorfman 1996. House, et al. 2004, in the GLOBE study, reports a large-scale study of leadership across cultures and Ayçan 2006 outlines an important indigenous concept of leadership found in some cultures, called paternalism.

Cross-Cultural Negotiation

Research on cross-cultural negotiation began with descriptions of negotiator behavior in different countries such as the treatment of Chinese negotiations in Pye 1982 and the description of Japanese practices in Tung 1984. Studies then progressed to cross-cultural comparisons such as Graham 1985. Currently, research on negotiating across cultures typically takes one of two forms. The first involves using dimensions of cultural variation to explain negotiator behavior, as in Gelfand and Realo 1999 and Adair, et al. 2007. The second involves understanding the way in which culture interacts with the negotiation context and individual differences to influence the cognitive structures that influence negotiator behavior, as in Morris and Gelfand 2004 and Gelfand and Cai 2004. Much of what is known about negotiating across cultures is summarized in Brett 2014.

Decision Making Across Cultures

Managerial decision making is typically divided into prescriptive approaches (what managers should do) and descriptive approaches (what managers actually do). All decisions involve choices among alternatives. However, how individuals construct these alternatives and make choices is framed by their culture. Cultural variation in decision making has been studied in terms of examining cultural constraints on the rational model such as in Radford, et al. 1989, both in terms of cognitive biases and heuristics as in Yates, et al. 1989 and Greer and Stephens 2001, and with regard to motivational biases as in Bontempo, et al. 1990. Recent research has focused on differences in holistic versus analytic cognitive processing across cultures, as exemplified by Choi and Nisbett 2000 and Nisbett, et al. 2001.

  • Bontempo, Robert, Sharon Lobel, and Harry Triandis. “Compliance and Value Internalization in Brazil and the US: Effects of Allocentrism and Anonymity.” Journal of Cross-Cultural Psychology 21 (1990): 200–213.

    DOI: 10.1177/0022022190212004Save Citation »Export Citation »E-mail Citation »

    Example of culturally guided motivational bias in which Brazilians were more likely than Americans to perform and enjoy performing behavior costly to themselves

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  • Choi, Incheol, and Richard E. Nisbett. “Cultural Psychology and Surprise: Holistic Theories and Recognition of Contradiction.” Journal of Personality and Cross-Cultural Psychology 79 (2000): 890–905.

    DOI: 10.1037/0022-3514.79.6.890Save Citation »Export Citation »E-mail Citation »

    Tested the proposition that East Asians (in comparison to Americans), because of their more holistic reasoning, take contradiction and inconsistency for granted.

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  • Greer, Charles R., and Gregory K. Stephens. “Escalation of Commitment: A Comparison of Differences between Mexican and US Decision-Makers.” Journal of Management 27 (2001): 51–78.

    DOI: 10.1177/014920630102700104Save Citation »Export Citation »E-mail Citation »

    Comparative study showing that Mexicans (collectivists) were more likely to escalate commitment (throw good money after bad) than Americans.

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  • Heine, Steven J., and Darrin R. Lehman. “The Cultural Construction of Self-Enhancement: An Examination of Group-Serving Biases.” Journal of Personality and Social Psychology 72 (1997): 1268–1283.

    DOI: 10.1037/0022-3514.72.6.1268Save Citation »Export Citation »E-mail Citation »

    Examined the cultural construction of self versus group enhancement. Results suggest that cultural differences in enhancement biases are robust, generalizing to individuals’ evaluations of their groups.

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  • Nisbett, Richard E., Incheol Choi, Kaipeng Peng, and Ara Norenzayan. “Culture and Systems of Thought: Holistic versus Analytic Cognition.” Psychological Review 108 (2001): 291–310.

    DOI: 10.1037/0033-295X.108.2.291Save Citation »Export Citation »E-mail Citation »

    The authors describe how holistic versus analytic cognitive processing is traceable to different social systems, which calls into question long-held beliefs about basic cognitive processes.

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  • Radford, Mark H. B., Leon Mann, Yasuyuki Ohta, and Yoshibumi Nakane. “Individual Decision Making Behavior and Personality: A Preliminary Study Using a Japanese University Sample.” International Journal of Psychology 26 (1989): 284–297.

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    Study contrasting Japanese decision making emphasizing impression of others, feelings and emotions, and intuition with a Western-style systematic decision-making process.

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  • Yates, J. Frank, Ying Zhu, David L. Ronis, Deng Feng Wang, Hiromi Shinotsuka, and Masanao Toda. “Probability Judgement Accuracy: China, Japan and the United States.” Organizational Behaviour and Human Decision Process 43 (1989): 147–171.

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    An important study showing that once collectivists make a decision they have greater confidence in it than do individualists.

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Culture and Organizational Structures and Processes

The trend toward examining cross-cultural interactions among individuals and their organization by examining how the organization is represented in their thoughts is one way of understanding the link between people from different cultures and their organization. This approach is represented, for example, in studies of the psychological contract. Complementing this approach are theories of social structure. These theories involve the characteristics of collectives such as found in many studies of multicultural teams. However, they also involve the position of individuals within the collective. These two approaches are often combined to understand a particular cross-cultural phenomenon such as the effects of culture in mergers and acquisitions.

Psychological Contracts Across Cultures

The psychological contract consists of individual beliefs or perceptions concerning the terms of the exchange agreement between the individual and the organization. As a result of the globalization of firms and migration trends which are influencing the cultural composition of workforces around the globe, organizations increasingly need to consider variation in the manner in which employees with different cultural orientations engage with them and they engage with employees. The psychological contract provides a broad platform with which to understand these relationships as it is fundamentally concerned with the perceptions that individuals have about their employers’ promises. Two large-scale studies have examined the psychological contract across societies: Rousseau and Schalk 2000 and European Commission 2007. Thomas, et al. 2003 proposes a theory of the cognitive and motivational mechanisms influencing cultural differences in psychological contract formation. Much research has focused on the results of psychological contract breach, as in Kickul, et al. 2004.

Multicultural Teams

Work groups and teams are a part of almost every organization, and getting the most out of these groups is an important managerial challenge. The cultural composition of work groups affects the way they function because of the norms for group function that individuals from different cultures bring to the group, the cultural diversity represented in the group, and the extent to which group members are culturally different from each other. Studies have evaluated cultural differences in process losses, as in Earley 1989; evaluated the performance of culturally diverse versus homogenous teams, as in Watson, et al. 1993; and looked at the influence of culture on self-management, as in Kirkman and Shapiro 1997. Lau and Murnighan 1998 introduced the concept of faultlines to explain the effect of cultural diversity, and Gibson and Zellmer-Bruhn 2001 uses culturally based metaphors to understanding variation in teams. Many organizations are now dealing with the challenges of a global operating environment by forming work groups with geographically distributed structures, also called global virtual teams. This has been the object of considerable recent study as in Maznevski and Chudoba 2000; Mortensen and Hinds 2001; and Shapiro, et al. 2002.

  • Earley, P. Christopher. “Social Loafing and Collectivism: A Comparison of the US and the People’s Republic of China.” Administrative Science Quarterly 34 (1989): 565–581.

    DOI: 10.2307/2393567Save Citation »Export Citation »E-mail Citation »

    One of the first studies to focus on culture in work groups. Found differences in “social loafing,” a group process loss, between collectivists and individualists.

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  • Gibson, Cristina B., and Mary E. Zellmer-Bruhn. “Metaphors and Meaning: An Intercultural Analysis of the Concept of Teamwork.” Administrative Science Quarterly 46 (2001): 274–303.

    DOI: 10.2307/2667088Save Citation »Export Citation »E-mail Citation »

    Develops a conceptual framework to explain different understandings of teamwork across cultures. Five different metaphors (military, sports, community, family, and associates) were derived from studying teams in six multinational organizations.

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  • Kirkman, Bradley L., and Debra L. Shapiro. “The Impact of Cultural Values on Employee Resistance to Teams: Toward a Model of Globalized Self-Managing Work Team Effectiveness.” Academy of Management Review 22 (1997): 730–757.

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    Identified cultural values that affect the tendency of employees to resist self-management of work teams.

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  • Lau, Dora C., and J. Keith Murnighan. “Demographic Diversity and Faultlines: The Compositional Dynamics of Organizational Groups.” Academy of Management Review 23 (1998): 325–340.

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    Introduces the new concept of “faultlines” to the literature on groups.

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  • Maznevski, Martha M., and Katherine M. Chudoba. “Bridging Space over Time: Global Virtual Team Dynamics and Effectiveness.” Organization Science 11 (2000): 473–492.

    DOI: 10.1287/orsc.11.5.473.15200Save Citation »Export Citation »E-mail Citation »

    Reports one of the first intensive studies of virtual teams. Infers from the qualitative data the criteria for effectiveness of these types of teams.

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  • Mortensen, Mark, and Pamela J. Hinds. “Conflict and Shared Identity in Geographically Distributed Teams.” International Journal of Conflict Management 12 (2001): 212–238.

    DOI: 10.1108/eb022856Save Citation »Export Citation »E-mail Citation »

    Compared the amount of task and affective conflict in collocated versus geographically distributed teams. Found that collective identity influenced conflict in distributed but not collocated teams.

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  • Shapiro, Debra l., Stacie A. Furts, Gretchen M. Spreitzer, and Mary Ann von Glinow. “Transnational Teams in the Electronic Age: Are Team Identity and High Performance at Risk.” Journal of Organizational Behavior 23 (2002): 455–467.

    DOI: 10.1002/job.149Save Citation »Export Citation »E-mail Citation »

    Identifies elements that are likely to reduce transnational team identity which is proposed to influence individuals’ propensity to withhold effort. Highlights the importance of identity in virtual teams.

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  • Watson, Warren E., Kamalesh Kumar, and Larry K. Michaelson. “Cultural Diversity’s Impact on Interaction Processes and Performance: Comparing Homogeneous and Diverse Task Groups.” Academy of Management Journal 36 (1993): 590–602.

    DOI: 10.2307/256593Save Citation »Export Citation »E-mail Citation »

    Examined the processes and performance of homogeneous and heterogeneous task groups over time. Overtime between group differences of the two group types converged.

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Global Organizations

All organizations create structure to coordinate activities and control the actions of their members. One line of inquiry in cross-cultural management is the influence of culture on the form that organizations take around the world. This includes what has been called the “culture-free” perspective found in Hickson, et al. 1974 and in descriptions of cultural variation in structure as in Tayeb 1987, Chen 1995, and Lazerson 1995. The informal organization or organizational culture of organizations has also been compared across cultures as in Trompenaars and Hampden-Turner 1998. In addition, global organizations are geographically dispersed, operating in a variety of cultural environments. Therefore, a second area of research involves the effect of operating in multiple cultural contexts on the global organization, as exemplified in Westney 1997 and Rosenzweig and Singh 1991. An interesting new perspective is the homogenizing effect of globalization, as presented in Erez and Shokef 2008.

  • Chen, Min. Asian Management Systems: Chinese, Japanese, and Korean Styles of Business. New York: Routledge, 1995.

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    The text examines the four main management systems in the East Asian region, Japanese, mainland Chinese, overseas Chinese, and Korean, and compares and contrasts the management styles within Asia and with the western world.

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  • Erez, Miriam, and Efrat Shokef. “The Culture of Global Organizations.” In The Handbook of Cross-Cultural Management Research. Edited by Peter B. Smith, Mark F. Peterson, and David C. Thomas, 285–300. Thousand Oaks, CA: SAGE, 2008.

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    Chapter introducing the idea that the forces of globalization shape the cultures of global organizations to be similar around the world, at least in certain dimensions.

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  • Hickson, David J., Christopher R. Hinings, Charles J. McMillan, and J. P. Schwitter. “The Culture-Free Context of Organization Structure: A Tri-nation Comparison.” Sociology 8 (1974): 59–80.

    DOI: 10.1177/003803857400800104Save Citation »Export Citation »E-mail Citation »

    Reports an early study of seventy manufacturing firms in three countries, in which the structural response of firms to contingency variables was consistent across societies.

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  • Lazerson, Mark. “A New Phoenix? Modern Putting-out in the Modena Knitwear Industry.” Administrative Science Quarterly 40 (1995): 34–59.

    DOI: 10.2307/2393699Save Citation »Export Citation »E-mail Citation »

    This article describes a system of organization that traditional theories of economic development would say are backward and organizationally inefficient, but which works because it is consistent with the societal culture in which it is embedded.

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  • Rosenzweig, Philip M., and Jitendra V. Singh. “Organizational Environments and the Multinational Enterprise.” Academy of Management Review 16 (1991):340–361.

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    Key article outlining the dual pressures of internal consistency and local adaptation, which influence the structure and processes of global organizations.

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  • Tayeb, Monir H. “Contingency Theory and Culture: A Study of Matched English and Indian Manufacturing Firms.” Organizations Studies 8 (1987): 241–261.

    DOI: 10.1177/017084068700800303Save Citation »Export Citation »E-mail Citation »

    A comparative study showing that while firms responded similarly to contingency variables, the means by which they did so differed in a manner consistent with the cultural characteristics of the country.

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  • Trompenaars, Fons, and Charles Hampden-Turner. Riding the Waves of Culture: Understanding Diversity in Global Business. Upper Saddle River, NJ: Prentice-Hall, 1998.

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    Provides a categorization of the informal structures of organizations (organizational culture) into four types that correspond to national culture.

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  • Westney, D. Eleanor. “Organization Theory Perspectives in International Business.” In International Business: An Emerging Vision. Edited by Brian Toyne and Doug Nigh. Columbia: University of South Carolina Press, 1997.

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    Provides an institutional theory perspective on the social nature of organizations and their tendency to reflect the values, norms, and accepted practices of the societies in which they operate.

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Knowledge Transfer Across Cultures

Multinational organizations increasingly need to mobilize and integrate knowledge from multiple locations in order to be competitive. Thus, issues regarding knowledge transfer across cultural contexts are currently spawning a very active field of research. Cross-cultural research is this area addresses three main topics. First is the barrier to knowledge transfer presented by cultural distance or cultural congruence of the parties, introduced by Johanson and Vahlne 1977 and further represented in Kogut and Singh 1988 and Newman and Nollen 1996. Second are cultural differences with regard to sharing and the ability to absorb knowledge, as in Michailova and Hutchings 2006 and Bhagat, et al. 2002. Third are the changes that occur when knowledge moves from one cultural context to another, as exemplified in Brannen 2004. These cultural mechanisms are often integrated with institutional forces to explain knowledge transfer.

Culture and Mergers and Acquisitions

Trying to understand and explain the extremely poor track record of cross-border mergers and acquisitions (M&As) such as the Daimler Chrysler merger, as reported in Epstein 2004, has generated a significant amount of cross-cultural management research. While research into M&As traditionally focused on financial and strategic factors, the inability of decades of this research to explain M&A performance has resulted in a shift toward understanding the cultural dynamics and cultural differences in the post-merger integration process. Some research has been based on the underlying notion of cultural fit, as in Cartwright and Cooper 1996. Other research has documented culturally based differences in the approach to mergers, such as Child, et al. 2001. More recently, research has focused on cultural aspects of both the acquirer and the target of the merger, as in Goulet and Schweiger 2006. Stahl and Voigt 2008 proposes an integrative model through which culture has its influence in M&As.

  • Cartwright, Sue, and Cary L. Cooper. Managing Mergers, Acquisitions, and Strategic Alliances: Integrating People and Cultures. Oxford and Boston: Butterworth-Heinemann, 1996.

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    Based on the cultural fit idea, this influential book suggests the conditions under which culture compatibility will have positive or negative effects on integration outcomes.

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  • Child, John, David Faulkner, and Robert Pitkethly. The Management of International Acquisitions. Oxford and New York: Oxford University Press, 2001.

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    Influential book suggesting, based on a comparative study of US, Japanese, German, French, and British acquirers of British targets, that acquirers with different countries of origin took different approaches to post-merger integration.

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  • Epstein, Marc J. “The Drivers of Success in Post-merger Integration.” Organizational Dynamics 33 (2004): 174–189.

    DOI: 10.1016/j.orgdyn.2004.01.005Save Citation »Export Citation »E-mail Citation »

    Reports the cultural clash that occurred in the Daimler Chrysler merger, which was one of the most highly publicized integration failures.

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  • Goulet, Phillip K., and David M. Schweiger. “Managing Culture and Human Resources in Mergers and Acquisitions.” In Handbook of Research in International Human Resource Management. Edited by G. K. Stahl and I. Björkman, 228–249. Cheltingham, UK: Edward Elgar, 2006.

    DOI: 10.4337/9781845428235Save Citation »Export Citation »E-mail Citation »

    Outlines a wide range of people issues affecting M&As. Highlights the cultural biases influencing the way in which acquirers approach post-merger integration and also the way in which targets respond to particular integration approaches.

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  • Stahl, Günter K., and Andreas Voigt. “Do Cultural Differences Matter in Mergers and Acquisitions? A Tentative Model and a Meta-analytic Examination.” Organization Science 19 (2008): 160–176.

    DOI: 10.1287/orsc.1070.0270Save Citation »Export Citation »E-mail Citation »

    Based on a meta-analysis, this article proposes an integrative model of the process through which cultural differences affect M&A performance.

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Managing a Multicultural/Multinational Workforce

In addition to examining the structures and process that cross national and cultural boundaries, cross-cultural management is concerned with a variety of people-centered issues that emerge as a result of conducting business across nations and cultures. Many of these issues are related to the sub discipline of international human resource management, which often has a cross-cultural component.

International Human Resource Management

Human resource management (HRM) consists of the activities, policies, and practices of attracting, engaging, developing, and retaining the employees that an organization needs to accomplish its goals. It involves all of the management decisions that affect the relationship between employees and the organization. International HRM (IHRM) means conducting these activities across countries, cultures, and contexts. Research in this area has tended to focus either on the management of human resources in the multinational enterprise or on the comparison of human resource practices across cultural and national contexts. Much of the current thinking in the area has been captured in edited volumes such as Stahl and Björkman 2008 and Harzing and Pinnington 2011 or in advanced texts such as Evans, et al. 2006.

Cross-Cultural Skills and Abilities

The skills and abilities that are associated with effective cross-cultural interactions are an important topic in internal management because they often affect organizational performance. The foundations of examining the skills and abilities associated with cross-cultural effectiveness can be traced to anthropologists who have long contended that knowledge of culture was valuable to managers. A behavioral approach to the antecedents of cross-cultural effectiveness took hold with studies of cross-cultural communication, represented in the more current work Ting-Toomey 1999, and sojourner adjustment reviewed by Church 1982, especially in the studies emanating from work with the selection of Peace Corps volunteers in the 1960s. Numerous models of skills were developed, such as Bennett 1986 and as reviewed by Hannigan 1990. In the wake of the post-WWII expansion of international firms, the focus of this research shifted to understanding the skills and abilities associated with effectiveness of expatriates on assignment, such as presented in Mendenhall and Oddou 1985. The most recent development has been the introduction of meta-cognitive skills associated the idea of cultural intelligence introduced by Earley 2002.

Cross-Cultural Training

Cross-cultural training involves formal efforts to prepare individuals to interact effectively with people who have been socialized in other cultures. Research on cross-cultural training began with efforts to improve educational exchange with a focus on the reduction of culture shock, as in Oberg 1960. A history of intercultural training is provided by Pusch 2004. The creation of the Peace Corps in the United Sates in the 1960s accelerated the interest in the topic, and a number of approaches were developed including the cultural assimilator described in Cushner and Brislin 1996. The field has matured through the study of the effects of cross-cultural training on the adjustment and performance of expatriates as in Black and Mendenhall 1989 and Black and Mendenhall 1990. The extent to which cross-cultural training is effective has been much debated and is the subject of several meta-analyses including Deshpande and Viswesvaran 1992 and Morris and Robie 2001.

  • Black, J. Stewart, and Mark Mendenhall. “A Practical but Theory-Based Framework for Selecting Cross-Cultural Training Methods.” Human Resource Management 28 (1989): 511–539.

    DOI: 10.1002/hrm.3930280406Save Citation »Export Citation »E-mail Citation »

    Presents a model showing that the degree of cross-cultural training required for a situation can be determined by referring to the degree of cultural novelty in the situation, the requirements for intercultural interaction, and the degree of novelty in the job.

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  • Black, J. Stewart, and Mark Mendenhall. “Cross-Cultural Training Effectiveness: A Review and a Theoretical Treatment for Future Research.” Academy of Management Review 15 (1990): 113–136.

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    A report of more than thirty studies that find support for the effectiveness of cross-cultural training.

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  • Cushner, Kenneth, and Richard W. Brislin. Intercultural Interactions: A Practical Guide. 2d ed. Thousand Oaks, CA: SAGE, 1996.

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    Introduces the cultural assimilator approach to cross-cultural training, in which critical incidents are followed by alternative explanations, which are later discussed as to their likelihood of being accurate.

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  • Deshpande, Satish P., and Chockalingam Viswesvaran. “Is Cross-Cultural Training of Expatriate Managers Effective? A Meta-analysis.” International Journal of Intercultural Relations 16 (1992): 295–310.

    DOI: 10.1016/0147-1767(92)90054-XSave Citation »Export Citation »E-mail Citation »

    A much-cited meta-analysis generally showing the effectiveness of cross-cultural training.

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  • Morris, Mark A., and Chet Robie. “A Meta-analysis of the Effects of Cross-Cultural Training on Expatriate Performance and Adjustment.” International Journal of Training and Development 5 (2001): 112–125.

    DOI: 10.1111/1468-2419.00126Save Citation »Export Citation »E-mail Citation »

    This meta-analysis identified sixteen studies for expatriate adjustment and twenty-five studies for expatriate performance. Mean effect sizes were much lower than in a previously published meta-analysis, but were significantly different from zero for both performance and adjustment.

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  • Oberg, Kalervo. “Culture Shock: Adjustment to New Cultural Environments.” Practical Anthropology 7 (1960): 177–182.

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    Introduced the concept of culture shock to describe the sense of confusion and anxiety that results from losing the familiar signs and symbols of our own culture. This work set the stage for much work on cross-cultural training.

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  • Pusch, Margaret. “Intercultural Training in Historical Perspective.” In Handbook of Intercultural Training. Edited by D. Landis, J. M. Bennett, and M. J. Bennett. Thousand Oaks, CA: SAGE, 2004.

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    Provides a comprehensive history of the development of cross-cultural training.

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Work-Family Issues Across Cultures

The composition and characteristics of families around the world combined with the increased pressures of demanding work environments have created difficulties in balancing work and family demands. This phenomenon has spawned a new and growing area of research on work-family issues, as exemplified by the influence of a model from Frone, et al. 1992. With regard to the cross-national and cross-cultural contexts, there are three foci of work in this area. The first deals with the influence of work-family issues on expatriate adjustment and performance, as reviewed by Bhaskar-Shrinivas et al. 2005. The second involves work-family issues as they exist in various national contexts, as in Aryee, et al. 1999 and Hill, et al. 2004, while the third involves comparative studies explicitly examining the role of culture, as reviewed in Poelmans, et al. 2005.

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