Part - 01 & 02 Managing Across Cultures - BUS5001D

Arden University

BA (Hons) Business (Marketing)

Managing Across Cultures – Part - 01 and 02

BUS5001D

STU80709

Paulette Wisdom

3,990 (Starting from part 1 till ending of part 2)

Part - 01 & 02 Managing Across Cultures - BUS5001D

Table of Contents

PART - 01 .................................................................................................................. 1
PART - 02 .................................................................................................................. 7
REFERENCES. ........................................................................................................ 14
Part - 01 & 02 Managing Across Cultures - BUS5001D

PART - 01

To evaluate, cross-cultural management in today’s global business arena. First, let’s

find an answer to a question, why do businesses need cross-cultural management?
and answer to this question is to manage people from diverse cultures, different
geographies, and successful running of a globalized integrated world to achieve
business goals and growth of business globally. After the evaluation of cross-cultural
importance in the global world, the discussion will move on to the importance of culture
for any organization’s management and organizational behaviour.

According to Gasper (2016), the purpose of Globalization is to increase economic

growth by removing cultural, trade, information technology, and political barriers that
allow integration among countries.

Globalization is an instrument to overcome challenges of economic development

across the globe. By this, less developed countries can well benefit out of it by
acquiring the latest technology, attracting foreign investors in-country, and necessary
training to compete. Now in the process of globalization, businesses need to travel
across borders to conduct business activities, and to conduct those business activities,
there is a need to understand different cultures. That’s where, all elements attached
to globalization, becomes active to make globalization successful. It does not
guarantee success if any multinational company is going to adopt a global strategy to
conduct its activities in different geography or geographies. it all depends, on how the
company deals with cross-culture. This is a reason the training and development
sector is continuously busy conducting an in-depth analysis of the criteria to develop
competent global business managers.

Global Red Cross Network, for example, due to globalization, Red Cross can reach
more quickly to fiascos around the globe as they have an extensive system, more
workplaces at various locations, and workforce who are willing to travel or even
relocate in the wake of catastrophic events. So, how can organizations find a
competent global business manager or management?

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Steers et al, (2010) explain that an idea is to develop multicultural skills in global
managers so they can analyze things beyond domestic borders to implement business
strategy in a global or international business environment, which demands
organizations to pay special attention to cultural differences, that’s why it’s important
for managers to develop skills in managing across cultures activities and human
resources but first, they need to understand the organization's environment and in
particular the global influences on it.

Chibba (2013, pp. 61-70) says, while considering business internationally, it’s important
to understand the business environment and also find out its connection with culture.
The business environment can be analyzed by studying economic, political, and
governance factors. Now, here it’s more critical to handle those factors when they
international because it involves stakeholders and this is a responsibility of an
international manager to handle them with care.

Arden University describes, the global impacts on the business environment always
concern about the consequences of globalization, which bring proponents and
opponents of globalization simultaneously. A new US policy, after the election victory
of Donald Trump, acted as an opponent of globalization. So, businesses started
panicking, if globalization is going to be reversed. But the fact is that we already live
in a globalized integrated world which cannot be dismantled anymore. Businesses are
becoming globally integrated to be competitive. Industries are being transformed into
global competitive structures, those companies are integrated and operate in the
global market, this concept is called global integration. The globally integrated
organization requires strong cross-cultural management which is key to achieving
competitive advantage. There are many areas, however, three main areas of global
integration need to be adopted by any multinational organization:
❖ Global Organizational Structure refers to building an environment where
diversity is valued and acknowledge that the best solutions are possible with
the emergence of diverse perspectives from different cultures and geographies
are pulled together.
❖ Global Production refers to specialized production centers in areas of low-cost
centers or expertise to gain cost advantages. China, India, Thailand, Taiwan,

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Vietnam, Bangladesh, The Philippines are examples of low-cost centers.

Germany can be considered as the house of expertise.
❖ Global Marketing is developed on the basis of coordinated marketing input from
all of the geographies, sending the same marketing messages across the
board. Organizations do it to establish a centralized marketing management
process across the geographies to save cost and gained consistency and
uniformity across the globe.

Now moving onto, why culture matters for any organization’s management and
behaviour. Let’s first, understand the organization’s management and organization’s
behaviour. People are involved in both organization’s management and organizational
behaviour. Mullins (2016) explains that people who are related to organization’s
management are responsible to run co.’s operations by coordinating and managing
people to ensure the right person is at the right place to complete the job, whereas
organization behaviour is about an understanding of individuals and groups of people
working in any organization, the main purpose is to run business’s operation’s more
efficiently. In the context of cross-culture, to run any workplace efficiently, there is a
need for competent managers who can understand diverse work, who belongs to
different cultures, different geographies, different religions, different beliefs, and who
speak a different language and the way they behave completely different from each
other. That’s why it’s important to understand the diverse workplaces and for this
competent management is required and the third thing is the culture which is a reason
for a diverse workplace.

Steers et al, (2010) explain that cultural variations have a big impact on organization,
norms, behaviour, work environment, and business transactions, all are influenced by
national culture. Now international managers make mistake to ignore these differences
and that’s the beginning of their problems. To fully understand cultural variations, the
theory of Hofstede (discussed in Part-2) is extremely useful for organizations. This
theory provides a guideline to global organizations to train their expatriates for a
foreign assignment. However, Allianz Care (2019) says HRM, play it’s a role here to
find and match applicants for international assignments to the competencies required
to be effective in that role, who is good at fluency in a foreign language, the capability

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of working across cultures and approach to learning things in the new environment,
ability to integrate tacit knowledge.

According to PwC (2020), there is a 25% increase in international assignments since

2000 and there will be 50% further growth through 2020, the reason behind noticeable
development is the strategic value of role international managers play. Let’s see now
from the employee’s or expat’s point of view. Competitive advantage is possible
through global mobility, however, before any achievement, challenges need to be
faced. With regard, to the mobility of human resources, organizations are facing a hard
time.

According to KPMG (2015), 32% of employees had declined to go on international

assignments and reason is their families. In the case of dual-career couples, 58% of
employees are less likely to put their names forward for an assignment. 34% showed
fear of failure of an international assignment.

Kumar and Murthy (2013) described phases of adjustments on foreign assignment

and it varies from person to person. They can have different reactions of excitement
to anxiety to elation. Living and working in a different country with a different culture
that could shock the manager and his/her family as well, cultural adjustments when
start living, and finally adjusted to living and working in the host country and is ready
to perform the managerial function effectively. It’s important for international managers
to go through cultural competency training.

According to the research conducted by Brookfield (2015), 83% of companies showed

interest in the training of expatriates on cultural competency to increase the chances
of making international assignments successful. It Improves productivity, helps
assignees & their families to study cultural behaviour, supports the family in process
of settlement abroad, reduces the chances of failure of assignments, team members
can adopt global mindset skills to develop strategies to fill cultural gaps to achieve
organizational goals. In the global business arena, performance is heavily dependent
on how the organization is coping with cross-culture. If the organization fails to
understand culture then it cannot create a healthy and innovative environment that
comes if the organization embraces cross-culture in pursue of finding the best
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solutions from diverse cultures at the workplace. Culture has many layers, it’s hard to
find what is above and underneath the surface. The organization’s performance can
be determined by the collective approach of what is done? and How it’s done? and
this is how high-performing companies distinguish themselves from others.

Dewar (2018) stated culture correlates with the performance of the business.
Research results shows, over 1,000 organizations with 3 million individuals, shows the
incredible growth of those in the upper quarter, cultures deliver a return to
shareholders 60% and 200% better than mid-level and bottom quarters companies
respectively.

Dewar (2018) A healthy culture can maintain a competitive edge, by adopting changes
that occurred due to technological advancement or threat of replication. The business
failed or succeed due to culture-related problems and those issues due to an
unhealthy culture can lead to the underperformance of business failure. Therefore, it
is important and necessary for organizations working across different geographies to
completely understand cultural differences to achieve organizational goals.

Arden University, explains that in theory, having leadership qualities are the part and
requirement of cross-cultural management in rapidly increasing globalization. Based
on geography, national culture, and corporate strategy, managers can pick either of
leadership styles, however, this option is for someone without sufficient experience as
leadership style develops after years and years of experience working in different
geographies with different cultures and people with diverse backgrounds. Hanna
(2012) explains the characteristics of a successful global leader.
❖ The global leader should have intuitive awareness about the complexity of
working in different geographies and he should be fully prepared to deal with
those situations and challenges.
❖ The global leader must have the capacity to understand both local and
international perspectives simultaneously.
❖ The global leader should have a knack to indulge in cross-border alliances,
show intrust, and believe in the empowerment of those diverse teams.
❖ The global leader should be self-conscious and self-are of one’s beliefs.
However, show flexibility to learn from others and empower them.
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❖ The global leader should avail all opportunities to build internal and external
networks within the organization and start shifting towards horizontal
collaboration, it’s far more important, to give importance of business and things
to be done there, than one’s title.

Globalization is becoming a necessity for big organizations even medium or small-

sized firms, they have to conduct business activities abroad, not only business
activities but businesses are also noticing the expansion of their customer base.
Around the world, workplaces are becoming more diverse as it brings innovation and
creativity to business but at the same time, it causes conflicts, to deal with cross-
cultural issues, organizations need to have competent management and leadership
skills to achieve business goals.

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PART - 02

Arden University, explains, that the diverse culture has a strong influence on the
business environment but it is often the cause of conflicts in organizations due to
operating across very diverse cultural settings across the globe. All geographies have
significant cultural variations. Due to globalization, there is a need to understand
cultural variations for effective management of the team, communication, leadership,
motivation, negotiations, decision making, and organizational relationships.

Greet Hofstede Model, which is one of the most widely used cross-cultural theory
explains by Hofstede Insights, this works as guidelines or identifying tool to find cultural
differences:
1. Power distance, where power distribution is unequal and power is tolerated.
China's comes among high-power distance countries. Whereas, management
style in Israel or Norway is participative and consultative.
2. Uncertainty Avoidance considers the degree to which uncertainty is endured.
This dimension reflects on dealing with unforeseen events.
3. Individualism vs Collectivism considers the degree to which cultures are joined
into groups. Individualism gives importance to personal achievements. On the
other hand, collectivism is the concept of people’s welfare. (Hofstede Insights)
explains, Masculinity / Femininity as toughness and vs tenderness. Masculinity
refers to distinct gender roles and materialistic approach. On the other hand,
femininity refers to modesty, and quality of life has more importance.
4. In Long-term orientation, concentrations are on achieving long-term growth,
where the future gets more importance. On the other hand, short-term
orientation talks about the present, where importance is given to swift results.
5. Indulgence refers to the freedom of speech and comparatively free gratification.
Whereas, restraint refers to suppress the fulfillment of needs.

Arden University, describes the management of a cross-cultural team, as a group of

people from diverse backgrounds and cultures, working together towards a common
outcome or goal. They may be spread across a number of geographies or one
geography but more than cultures. When they are working in different countries, shall
be called Virtual Teams. Organizations that fail to understand and consider these
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fundamental cultural variations or differences within a team, lead to conflicts at the

workplace which means practicing unhealthy culture. However, those conflicts can be
thwarted by gaining an understanding of individuals from diverse backgrounds in a
team. For example, an employee in one country might be willing to do extra hours. On
the other hand, another employee in different countries might not consider working
beyond the agreed hours.

(Arden University; Katzenbach and Smith 2005) has identified the necessary
characteristics of an effective team in cross-culture to achieve business goals:
❖ Effective teams are small in number should consist of six to twelve people from
the point of view of optimal communication.
❖ Complementary skills bring together diverse disciplinary skills, different areas
of knowledge, how problems are being looked after, and different style of
getting things done, which always vary from culture to culture.
❖ A common goal sets the right tone and goal for a diverse team to achieve. When
people are focused on working towards a common goal then all cross-cultural
problems can be resolved without much effort.
❖ Mutual accountability is a trust-based relationship where loyalty is considered
to be essential to work in a cross-cultural environment. Due to diversity at the
workplace, the organization can expect tensions, however, competent
leadership and management can work toward developing trust-based
relationships.

Lorenzo, et al. (2018) discussed the results of high innovation revenue reported by
companies where leadership teams had diversity. It shows the effectiveness of diverse
leadership.
❖ Below-average diverse teams achieved a 26% average score.
❖ Above-average diverse teams achieved a 45% average score.

Arden University, describes, working with global or diverse people is not an easy task
and the international managers always face challenges while managing culturally
diverse teams with regard to their work motivation. At the workplace, people think
differently because they have different abilities and skills, different age groups and
genders, different educational levels, and so forth. In the case, of a global organization,
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it becomes more difficult because of the involvement of the multicultural environment.

A question of work motivation arises, even the company is national or international.
So, the presence of diverse leadership can manage cross-cultural more efficiently and
help find answers to the following questions:
❖ What influence or motivate individuals to make them work hard?
❖ Whether they want to contribute the expertise, they have?
❖ If they do contribute, should they continue contributing or not?

Management needs to empathize with their behaviour towards work as this is

important for the success of any global organization, once they empathize with their
work behaviour, it will lead the organization to ultimate competitiveness. The
organization cannot imagine or achieve a competitive advantage without a motivated
workforce. There are many ways to find out their work behaviour, for example, low
energy and lack of enthusiasm are indicators of a demotivated workforce. Analysis of
cultural drivers would be a good starting point, which generates internal opportunities
and threats. So, various incentives and reward systems shall be a good effort as a
starting point to motivate employees, however, it varies from culture to culture.

Steers et al, (2010) describe that different geographies and cultures have different
opinions about incentive systems (extrinsic & intrinsic), if the company is working on
different geographies, it cannot adopt a standard incentive or reward system across
the board. People from one geography might give more importance to money as a
motivator and simultaneously, an employee from the different regions might consider
having more involvement in the workplace. Managers must be competent to
understand that cultural differences reflect on the work environment and they need to
respond to them. In any organization, leadership plays its role at all levels, at the
executive levels, in a rapidly increasing global business environment. Here, it’s
important to emphasize global leadership as we are taking in the context of a cross-
culture business environment. It is worth mentioning, leadership styles influence the
workplace.

Steers et al, (2010) explain the types and characteristics of the GLOBE leadership
dimension.

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❖ Autonomous Leadership: it has an individualistic and independent approach.

These groups will be found in Eastern European & Germanic countries, on the
other hand, its less in Latin America groups.
❖ Charismatic / Value-based Leadership: This leader is visionary and
performance-oriented. This style is recognized in all regions.
❖ Humane Leadership: This leader is sensitive and moderate and cares about
humanity. No endorsement except for Anglo, Asian & Sub-Saharan African
groups.
❖ Participative Leadership: This leader is a flexible and active listener. All regions
practice this style except for Arab and Latin American groups.
❖ Self-protective Leadership: This leader follows procedures with a self-centred
and status-conscious approach. Recognized in wide variations across all
regions.
❖ Team-oriented Leadership: This leader has a diplomatic approach and believes
in integration. Recognized this style in all regions mainly, Anglo, Asian & Latif
American but very less in the Arab group.

Groysberg and Connolly (2013) explain the businesses around the world have
acknowledged that due to the globalization customer base is becoming
heterogeneous more than ever before which requires a diverse workforce and
leadership.

‘’Ajay Banga, CEO of Mastercard

My passion for diversity comes from the fact that I myself am diverse. There have
been a hundred times when I have felt different from other people in the room or in
the business. I have a turban and a full beard, and I run a global company—that’s
not common.’’ (Groysberg and Connolly 2013)

For effective management of diverse teams and methods concerning their motivation
requires competent management and leadership who should not only have a good
understanding of cross-culture but also good at communication in a cross-culture
environment. If management and employees are not connecting well, then running
business operations will be difficult and it will be a compromise on business goals and
objectives. Working in a highly diverse workplace is quite challenging, everyone
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speaks different languages, even the same language can have different accents,
interpretation is different than others. Making eye contact, giving gestures, hands
movement, facial expressions of individuals all these are the ways to communicate
non-verbally and every culture interprets it differently. For example, Eye contact during
job interviews in the US is considered as a sign of confidence whereas, in Ghana, the
same eye contact is considered disrespectful. Due to cultural differences, there are
high chances of misconceptions at the workplace due to wrong interpretation of verbal,
non-verbal communications, assumptions of similarities, preconceptions, and
stereotypes, tendency to evaluate, high anxiety. These are the challenges of a diverse
workplace. That’s why global managers need to have an excellent at cross-culture
communication skills to run the workplace efficiently without any conflicts.

Communication plays a vital role in business particularly, negotiations in the context

of the international organization. Cardenas, L., 2020 describes, communication as a
way that leads negotiator to achieve organization desirable objectives, build strong
and long-term relationships, and resolve future disputes. Clear and effective
communication is important in cross-culture negotiations. The following are the
challenges that negotiators can expect during cross-cultural business negotiations.
❖ Communications problems seem to be the major one since it involves cross-
culture. Both parties will interpret differently based on their own culture, if the
counterpart’s culture has not taken into consideration them it might end up
creating misunderstanding in the future. For example, In Japanese culture.
That’s difficult, means flat NO, however, by mistake you thought there is still a
room for discussion.
❖ Cultural barriers are most difficult to handle because you are dealing with a
person from diverse backgrounds but you also have to understand what’s
different about his/her background and this is a key to break cultural barriers.
❖ Cultural consideration is a third challenge that can influence the procedure and
element of the deal.
❖ The negotiator must always do his/her homework about the counterpart’s
culture.
❖ If you show respect and take interest to learn about counterparts’ cultural
differences that will help you know them better. This can always help you to

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build constructive conversations that can definitely help in solving problems in

the future.
❖ Always be a good observer, how your counterpart sees from your cultural point
of view. You can make adjustments to your approach during negotiations to get
positive and desirable results.
❖ You should look for ways that can help you bridge the culture gap. Both parties
need to share their experience which can show something in common.

Steers et al, (2010) discuss a long-standing model known as ‘’Normative Decision

Model’’ it was initially established by Victor Vroom and Phillip Yetton (1973). This is
related to the actual allowance of participation in decision-making to subordinates get.
This model distinguished between three levels of engagement in the workplace
enabling differences across.
❖ Centralized Decisions: Decisions are unilateral in this process; however,
management takes the final decision after brief discussions and actively seeks
advice from subordinates. For example, African societies, due to centralized
power with top management and employee’s participation is very low. They
demand unquestioning subordinate compliance. In the context of cross-culture,
it does not fit as it is reluctant to involve subordinates that are there are very
fewer chances of innovation.
❖ Consultative Decisions: In this process decisions are unilateral; however,
management takes final decision after brief discussions with Subordinates and
often works closely with them. In any global organization, it has more chances
of innovation.
❖ Collaborative Decisions: Where management works closely with subordinates
and takes a mutual decision in which everyone gets the opportunity to
contribute, this decision-making process is practicing more organizations due
to its transparency, openness to involve others, and better accountability. This
decision-making process found in German, Dutch and Scandinavian countries.

Organizations portray good relationships with employees by encouraging their

participation in the decision-making process which is important to create a healthy and
innovative environment. However, organizations cannot ignore relationships with other
stakeholders because business success depends not only on building strong
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relationships with the employee but also with stakeholders. Arden University explains
that business success, the entire business environment needs to be looked after which
consists of its internal environment, and its external environment, an external
environment that can be broken into the microenvironment and the macro
environment. How to operate a in conducive work environment, and obtain the best
performance, cultural awareness, and knowledge of cultural differences is essential.
In an international environment, primary stakeholders also, certainly include local
communities and non-governmental organizations are precious and credible. A good
example is the media that is a second. For effective management of stakeholders,
strong cross-culture skilled, experienced, and competent management and leadership
is required.

Therefore, understanding of cultural differences is important in a globalized world. By

using tools to identify cross-culture the organizations can effectively run their
operation, it can develop motivated diverse team under efficient leadership where the
flow of communication is smooth across the board which can also guarantee
successful international negotiations, a better understanding can always encourage
employees to participate in business affairs and give liberty to employees to take all
necessary actions for business and organizational relationship is made up of all these
factors.

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REFERENCES.

Groysberg, B., and Connolly, K., 2013. Great Leaders Who Makes The Mix Work
[online]. September 2013. Available from: https://hbr.org/2013/09/great-leaders-who-
make-the-mix-work [Accessed 10 July 2020].

Allianz Care 2019. How to prepare expats for foreign assignments [online]. Alianz
Care. Available from: https://www.allianzcare.com/en/employers/employer-
blogs/2019/08/preparing-expatriates-for-foreign-assignment.html [Accessed 7 July
2020].

Arden University, The Global Business Environment: Globalization & Organization’s

Environment. Available from:
https://moodle.bl.rdi.co.uk//pluginfile.php/331134/mod_resource/content/5/MCA_01_
003.html [Accessed 7 July 2020].

Brookfield Global Mobility Trends Survey, 2015

Chibba, M., 2013. Expanding the Perspective on Global Business. [online]. Global
Business & Organizational Excellence. 32, 2, pp. 61-70. Business Source Complete,
EBSCOhost. Available
from: http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=84500157&si
te=eds-live [Accessed: 25 April 2017].

Dewar, C., 2018. Culture: 4 keys to why it matters. www.mckinsey.com [online]. 27

March 2018. Available from: https://www.mckinsey.com/business-
functions/organization/our-insights/the-organization-blog/culture-4-keys-to-why-it-
matters [Accessed 7 July 2020].

Laurie J. Mullins, L, J., 2016. Management and Organisational Behaviour, 11th Edition:
Pearson Education Limited.

Gasper, J., 2016. Introduction to Global Business: Understanding the International

Environment & Global Business Functions [online]. 2nd Edition. Cengage Learning.

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Global Red cross Network. About Us [online]. The American National Red Cross.
Available from: https://www.redcross.org/about-us.html [Accessed 7 July 2020].

Hofstede Insights. Compare Countries [online]. Hofstede Insights. Available from:

https://www.hofstede-insights.com/product/compare-countries/ [Accessed 7 July
2020].

KPMG, 2015. Global Assignment Polices & Policies Survey 2015 [online]. KPMG
International. Available from:
https://assets.kpmg/content/dam/kpmg/pdf/2015/04/gapp-survey-2015.pdf [Accessed
7 July 2020].

Kumar, A., and Murthy, R, P, T., 2013. A Conceptual Framework of International

Human Resource Management Practices. International Journal of Management &
Business Studies [online]. Available from:
https://pdfs.semanticscholar.org/1a43/8061841fd906282f58595e6e17d2aaf99fe6.pdf
[Accessed 7 July 2020].

PwC, 2020. Talent Mobility 2020 [online]. PricewaterhouseCoopers. Available from:

https://www.pwc.com/gx/en/managing-tomorrows-people/future-of-work/pdf/talent-
mobility-2020.pdf [Accessed 7 July 2020].

Steers, R, M., Sanchez-Rude C, J., Narvon, L., 2010. Management across Cultures -
Challenges and Strategies. Cambridge University Press.

Victor Vroom and Philip Yetton, Leadership and Decision-making. New York, NY:
Wiley, 1973.

Katzenbach, J., and Smith, D., 2005. The Wisdom of Teams. McGraw-Hill Education.

Arden University, Managing Cross- Cultural Teams: The Power of team working
[online]. Available from:
https://moodle.bl.rdi.co.uk//pluginfile.php/331134/mod_resource/content/5/MCA_08_
002.html [Accessed 8 July 2020].
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Lorenzo, R., Voigt, N., Tsusaka, M., Krentz, M., Abouzahr, K., 2018. How Diverse
Leadership Teams Boosts Innovation [online]. Boston Consulting Group. Available
from: https://www.bcg.com/en-us/publications/2018/how-diverse-leadership-teams-
boost-innovation.aspx [Accessed 8 July 2020].

Cardenas, L., 2020. www.pon.harvard.edu/ [online]. 14 May 2020. Available from:

https://www.pon.harvard.edu/daily/international-negotiation-daily/bridging-the-
cultural-divide-in-international-business-negotiations/ [Accessed 8 July 2020].

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