Journal of Exclusive Management Science May 2016 - Vol 5 Issue 5 ISSN 2277-5684

Managing Cultural differences for Competitive Advantage

*Dr. A K Shukla
**Dr. Rubina Verma
*Assistant Professor, Invertis University, Bareilly
**Assistant Professor, Invertis University Bareilly
Abstract
Present paper Managing Cultural differences throws light on the specific issue of national
Cultural conflicts across borders and concludes that a proactive strategy seeking to benefit
from cultural differences is the key to success. Cultural differences mean that acceptable
business practices in one region can be ineffective or even insulting in another. Cultural
differences can be used competitively. In an environment where markets and competition
are globalizing, organizations increasingly have to interact, manage, negotiate and
compromise with people from different cultures. When cultural differences are successfully
managed, they can lead to effective and sustainable sources of competitive advantage. Even
among internationally knowledgeable companies that successfully adapt marketing and
sales techniques across cultures, there is often great difficulty recognizing that the things
that motivate, inspire and generate commitment depend on the culture one comes from.
Culture is difficult to measure and to discuss because it involves shared ways of perceiving
the world that members of a group take for granted. Culture is learned, and can be
considered only relative to other cultures. Culture influences both the ways in which
organizations understand and practice career development, and also the career goals and
expectations of individuals from different cultures.
Paper describes simply and concisely what culture is and how it drives behavior, especially
in business context. Different cultures work together to best effect not simply by resolving
differences through tolerance and compromise. Managing across cultures is in fact a
strategic process of integration that leads to a solution which also generates competitive
advantage. Translating abstract cultural issues into concrete business consideration, helps
mangers to formulate strategy and manage their business across borders to best effect. This
present research will help strategic thinkers in international organizations come to terms
with the importance of national cultural differences in their organization and to provide
some practical insights and frameworks in order to manage more successfully across
cultures.
Key Words: Culture, Competitive, integration, Differences, Managing and Strategy.
Concept of Culture:
Culture refers to the cumulative deposit of knowledge, experience, beliefs, values,
attitudes, meanings, hierarchies, religion, notions of time, roles, spatial relations, concepts
of the universe, and material objects and possessions acquired by a group of people in the
course of generations through individual and group striving. A shared system of meanings:
Culture dictates what groups of people pay attention to. It guides how the world is
perceived, how the self is experienced & how the life itself is organized. Individuals of a
group share patterns that enable them to see the same things and this holds them
together1.Each person carries within them learned ways of finding meaning in their
experiences .In order for effective, stable and meaningful interaction to occur, people must
have a shared system of meaning. For example a wink of an eye could be interpreted as
twitch, an acknowledgement of having been understood, and a reaction to dust or flirtatious
gesture2.
Author and Scholar Geert Hofstede describe culture as the Collective programming of the
mind and explain that it lies between human nature on one side and individual personality
on the other3.

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Journal of Exclusive Management Science May 2016 - Vol 5 Issue 5 ISSN 2277-5684
Culture is related to beliefs and values on the basis of which people interpret experiences
and behave, individually and in groups. "Culture" refers to a group or community with
which you share common experiences that shape the way you understand the world.
Concepts of culture by some of the Great researchers:
A.L. Kroeber& C. Kluckhohn (1952)

Transmitted Patterns of values,ideas and

other
symbolic
systems
that
shape
behaviour

Becker & Geer (1970)

Set of common understandings expressed in

language

J.van Maanen & E.H. Schein (1979)

Values ,beliefs and expectations

members come to share

M.C Swartz & D.K Jordon (1980)

Pattern of beliefs and expectations shared by

members that produce norms shaping
behaviour

M.R. Louis (1983)

Three aspects: 1 some content (meaning and

interpretation)2 peculiar to 3 a group

E.T. Hall & M.R.Hall (1987)

Primarily a system for creating, sending,

storing and processing information.

P.R.Harris &R.T Moran (1987)

A distinctly human capacity for adapting to

circumstances and transmitting this coping
skill
and
knowledge
to
subsequent
generations

that

The most widely known research in the field is the pioneering work of Greet Hostede 4. His
research with a very large sample of employees from 53 countries within a single
organization, IBM, led to the conclusion that there are four work related dimensions on
which cultures differ. The dimensions were labeled as follows:
Power distance- distribution of power in society
Uncertainty Avoidance- Relative comfort with uncertainty about the future
Individualism Collectivism relationship between the individual and collectivity.
Masculinity- Femininity-societies endorsement of masculine or feminine qualities.
Another compelling description of how cultures differ has been developed by a dutch
economist and consultant, Fons trompenaars,. Building primarily from the work of
Strodtbeck and Kluckholn on value orientations 5.and Charles Hampden Turners dilemma
theory6. Trompenaars research revealed seven dimensions of Culture. They provide the
most practical way for Managers to consider how differences influence their organization,
functional area or specific project.
Cultural diversity in the workplace:
Different cultures embrace different perspectives on important workplace issues, like time
management, respect for authority, teamwork and responsibility. Conflicting interpretations
of transparency and ethics, methods of communication and reluctance to give and receive
feedback may also arise. When clients and co-workers operate based on diverse belief
systems with conflicting attitudes, it creates barriers to on the job bonding. These barriers
need to be broken down in order for an organization to run efficiently and harmoniously.

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Journal of Exclusive Management Science May 2016 - Vol 5 Issue 5 ISSN 2277-5684
The responsibility falls on the organization's leadership, and particularly HR professionals,
to ensure that these issues are addressed and managed. To goal is to make each worker feel
valuedand that their needs are being addressed and considered. 7
From our increasingly diverse domestic workforce to the globalization of business, cultural
competence is arguably the most important skill for effective work performance in the 21st
century.
Culture refers to the values, norms, and traditions that affect the way a member of a group
typically perceives, thinks, interacts, behaves, and makes judgments. It even affects
perceptions of time, which can impact day-to-day scheduling and deadlines. A diversity
calendar is a helpful tool to ensure meetings are successful, and deadlines are met.
Cultural competence, in brief, is the ability to interact effectively with people from different
cultures. This ability depends on awareness of ones own cultural worldview, knowledge of
other cultural practices and worldviews, tolerant attitudes towards cultural differences, and
cross-cultural skills.
In an environment where markets and competition are globalizing, organizations
increasingly have to interact, manage, negotiate and compromise with people from different
cultures. Working with people whose values and beliefs, not to mention languages and
customs are different from ones own can make for costly misunderstandings and even
business failures. At stake are not simply relationships with customers but also an
organizations potential success with alliance partners ,suppliers and its own employees
and its ability to create the international network so critical on the path to globalization .If
ignored or mismanaged cultural differences can lead to great frustration and ineffectiveness
internationally for otherwise successful mangers and organizations . When successfully
managed, however, differences in culture can lead to effective and sustainable sources of
competitive advantage.
Changing Competitive requirements:
Emerging along with increasingly global markets and global competition are new
organizational forms and competitive requirements which absolutely demand that
managers pay attention to differences in national culture. The transnational organization,
the organizational form many internationally operating companies are moving towards,
offers important strategic capabilities, but also creates a host of new managerial
requirements. One of the most important of these requirements is legitimizing diverse
perspectives and capabilities8. i.e managing cultural diversity. Other strategic developments
similarly depend on the ability to manage culture: developing more sustainable competitive
advantages from softer effectiveness sources rather than harder efficiency sources;
taking advantage of particular strengths of the nations; and holding the new organizational
network together by sharing a common set of values worldwide 9.
Culture Shock
Cultural differences mean that acceptable business practices in one region can be in
effective or even insulting in another. Failure to identify cultural issues and take action can
lead to a culture shock. In order of priority, the most often found symptoms of culture
shock are feeling isolated, anxiety and worry, reduction in job performance, high nervous
energy, Helplessness. Not coping with culture shock symptoms when they appear can lead
to a very negative situation.
Respecting Differences and Working Together
Anthropologists discovered that, when faced by interaction that we do not understand,
people tend to interpret the others involved as "abnormal", "weird" or "wrong"11. Awareness
of cultural differences and recognizing where cultural differences are at work is the first
step toward understanding each other and establishing a positive working environment.
Use these differences to challenge your own assumptions about the "right" way of doing
things and as a chance to learn new ways to solve problems.

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Journal of Exclusive Management Science May 2016 - Vol 5 Issue 5 ISSN 2277-5684
Managing Cultural Differences for Competitive Advantage
In an environment where markets and competition are globalizing, organizations
increasingly have to interact, manage, negotiate and compromise with people from different
cultures. Working with people whose values and beliefs, not to mention languages and
customs are different from ones own can make for costly misunderstandings and even
business failures. At stake are not simply relationships with customers but also an
organizations potential success with alliance partners ,suppliers and its own employees
and its ability to create the international network so critical on the path to globalization .If
ignored or mismanaged cultural differences can lead to great frustration and ineffectiveness
internationally for otherwise successful mangers and organizations . When successfully
managed, however, differences in culture can lead to effective and sustainable sources of
competitive advantage.
The more different cultures work together, the more cultural competency training is
essential to avoid problems. Cultural problems can range from miscommunication to
actual conflict, all endangering effective worker productivity and performance.
Managing Cultural Diversity in the Workplace

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Developing cultural competence results in an ability to understand, communicate with, and

effectively interact with people across cultures, and work with varying cultural beliefs and
schedules. While there are myriad cultural variations, here are some essential to the
workplace:
Communication: Providing information accurately and promptly is critical to effective work
and team performance. This is particularly important when a project is troubled and needs
immediate corrective actions. However, people from different cultures vary in how, for
example, they relate to bad news. People from some Asian cultures are reluctant to give
supervisors bad news while those from other cultures may exaggerate it.
Team-building: Some cultures like the United States are individualistic, and people
want to go it alone. Other cultures value cooperation within or among other teams. Teambuilding issues can become more problematic as teams are comprised of people from a mix
of these cultural
types. Effective cross-cultural team-building is essential to benefiting from the potential
advantages of cultural diversity in the workplace
Time: Cultures differ in how they view time. For example, they differ in the balance between
work and family life, and the workplace mix between work and social behavior. Other
differences include the perception of overtime, or even the exact meaning of a deadline.
Different perceptions of time can cause a great misunderstanding and mishap in the
workplace, especially with scheduling and deadlines. Perceptions of time underscore the
importance of cultural diversity in the workplace, and how it can impact everyday work.
Calendars: The business world generally runs on the western secular year, beginning with
January 1 and ending with December 31. However, many cultures use other calendars to
determine holidays such as New Years or specific holy days. For example, Eastern
Orthodox Christians celebrate Christmas on a different day from western Christians. For
Muslims, Friday is a day for prayer. Jews observe holidays ranging from Rosh Hashanah to
Yom Kippur. These variations affect the workplace as people require time off to observe
their holidays.
Managing Cultural Diversity in Business world:
In the business world, communication is imperative for the successful execution of daily
operations. Understanding cultural differences and overcoming language barriers are some
of the considerations people should have when dealing with business with people of various
cultures. Often business deals are lost because the parties involved did not take the time to
learn about their each others' cultures prior to interacting.

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Journal of Exclusive Management Science May 2016 - Vol 5 Issue 5 ISSN 2277-5684
Customs
When doing business with an affiliate from another country, consider the cultural
differences that may be presented. This includes basic customs, mannerisms and gestures.
For example, If a salesperson approaches a meeting with knowledge of a customers cultural
background, then his words, body language and actions can all be adapted to better suit
those of the customers. This in turn may lead to being better liked by the customer,
ultimately increasing the salesperson's opportunity to close the deal.
Language Barriers
In some countries, like the United States and Germany, it is common for people to speak
loudly and be more assertive or aggressive when sharing ideas or giving direction. In
countries like Japan, people typically speak softly and are more passive about sharing ideas
or making suggestions. When interacting with people from different cultures, speaking in a
neutral tone and making a conscious effort to be considerate of others' input, even if it is
given in a manner to which you are not accustomed, can help foster effective business
communication.
Target Audience
When launching a marketing campaign or advertising to members of a different culture,
always research the target market prior to beginning the campaign. Levels of conservatism,
gender views and ideologies can vary greatly between cultures. Presenting a campaign that
is not in line with specific cultural norms can insult the target audience and greatly hinder
the campaign. Being aware of cultural norms can also help your company narrow down the
target audience. For instance, in Japan and Austria, men usually are in control of decision
making, but women make the majority of purchasing decisions in Sweden.
Technology
Due to globalization, people from various cultures and countries increasing conduct
business with each other. Technology enables people to easily connect with people around
the world in a moment's notice, but there are a few rules to remember before doing so. If
making an international phone or video conferencing call, be conscious of the time zone
differences and make sure to set a reasonable time for all involved parties to interact. It is
important to remember that cultural differences can also affect availability. For instance,
just because you schedule a conference call for the middle of the business day does not
mean that the time will be favorable for the people you are conducting business with. Many
Spanish cultures have longer lunch breaks than Americans are accustomed to, which
means there may be a two- to three-hour time period during the day in which the person
you would like to meet with is unavailable. Asking for availability prior to making the call is
the best way to avoid any confusion. Once you are able to connect, speak clearly and
slowly.
Politics
Political influences, both past and present, can potentially affect the way a person or
company does business. Some cultures have a very strong sense of nationalism and
government pride, and therefore, are more comfortable and willing to purchase from
companies with some sort of government backing. Conducting business with those of
differing cultures can also impact negotiations if there are on-going political disputes
between the involved parties' countries of origin. To avoid conflict, it is best to avoid
discussing any political matter that does not directly pertain to the business at hand. This
is also true for inter-office interactions.
Developing Cultural competence;
Dr. Richard T.Alpert has focused on four essential skills to develop cultural competence 13:
To develop cultural competence, training should focus on the following areas:

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Journal of Exclusive Management Science May 2016 - Vol 5 Issue 5 ISSN 2277-5684
1. Awareness. This is the skill to understand one's reactions to people who are different,
and how our behavior might interfere with effective working relationships. We need to learn
to overcome stereotypes? We need to see people as individuals and focus on actual
behavior, rather than our preconceived and often biased notions.
2. Attitude. This is the companion skill to awareness. Attitude enables people to
examination their values and beliefs about cultural differences, and understand their
origins. It is important that to focus on facts, rather than judgment. Also, note that
suggesting that some people are more biased and prejudiced than others can quickly
sabotage cultural training. The goal is managing cultural diversity in the workplace, and
creating effective working relationships - not to make converts.
3. Knowledge. Social science research indicates that our values and beliefs about equality
may be inconsistent with behavior. Ironically, we are often unaware of this. Knowledge
about our own behavior - and how it relates to fairness and workforce effectiveness is an
essential skill. It's also essential to be knowledgeable about other cultures, from
communication styles to holidays and religious events in multicultural calendars. The
minimum objective is tolerance, which is essential for effective teamwork. Differences are
what make tolerance necessary, and tolerance is what makes differences possible.
4. Skills. The goal of training - in awareness, attitude, and knowledge - should be skills that
allow organizational leaders and employees to make cultural competence a seamless part of
the workplace. The new work environment is defined by understanding, communicating,
cooperating, and providing leadership across cultures. Managing cultural diversity in the
workplace is also the challenge for organizations that want to profit from a competitive
advantage in the 21st century economy10
Conclusion:
Culture is difficult to measure and to discuss because it involves shared ways of perceiving
the world that members of a group take for granted14. Culture is learned, and can be
considered only relative to other cultures. In other words, there is no absolute right or
wrong in cultural preferences.
Although there are different levels of cultural programming, national culture gives people
their basic assumptions and values.ie their ways of viewing the world. Other levels of
programming are more about practices or ways of doing things. Because these are learned
at such an early age and are taken for granted, national cultural values are more difficult to
change than other levels of culture.
In order to understand the impact of culture on the international business, a few
researchers have come up with ways of describing categories of differences in national
cultures. The present paper help to clarify some of the most important ways in which
cultures differ and how these differences affect organizations generally.
It also provides a useful framework for managers to understand some of the differences they
encounter in doing business and managing across cultures.
It becomes clear in the present paper that managers can more successfully manage
differences in culture if they understand their own cultural biases and assumptions;
consider the reasons that different cultures ways of doing things make sense in the light of
their cultural assumptions; and view cultural assumptions and ways of doing things not as
irreconcilable differences, but rather as different starting points that can be integrated to
develop uniquely competitive solutions.
14. Lisa Adent Hoecklin., Managing Cultural Differences for Competitive Advantage,
Universities Press, 2000. Pp.27

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