Clever Clogs: International Management and Ethics

Introduction

This paper offers a cross-cultural briefing report to a new female Muslim manager who was transferred from Lebanon by Clever Clogs International in her mid-thirties to work in Amsterdam, Netherlands. The company, which operates in the finance industry, intends to change its banking system in the Netherlands through the new manager to reduce any likelihood of an economic crash. Due to the globalization of the finance industry, it is felt that the problems affecting financial institutions in some Western countries may negatively impact Clever Clogs operations in the Netherlands as a direct result of the widening, deepening, and speeding up of global interconnectedness in all facets of modern social life. Although the manager has proved valuable to the success of Clever Clogs International over four years, the performance of her new international assignment requires her to have the capacity to deal with cross-cultural issues in the Netherlands as the country has a different cultural orientation from Lebanon. As such, the manager needs to have core skills in cross-cultural management (e.g., self-knowledge, global thinking, cultural curiosity, flexibility, inclusivity, and managing diversity) to be able to adapt to the new culture and also to eliminate potential cultural conflict with employees (Wood 2007).

Norms, values, and ways of thinking define culture. Hofstede (1993, p. 93) defines culture as a “collective programming of the mind, which distinguishes one group or category of people to another.” Cross-cultural management provides “(a) the description of organizational behaviour within countries and cultures, (b) the comparison of organisational behaviour across countries and cultures, and (c) the interaction between co-workers and other people from different countries and cultures” (von Egnach 2007, p. 32). Globalization influences any organization that engages in international business such as Clever Clogs International.

Through globalization, it becomes unavoidable to accept multiculturalism in running organizations. In this process, the cross-cultural management theory remains important. From Hofstede’s (1993) definition of culture, the new manager needs to have the capacity to clarify the cultural mindsets of Clever Clog International’s workers and build or re-program a new culture. Such culture should not be influenced by the individual background differences, but rather the organizational values, norms, and beliefs that enable it to work in a multi-cultural environment.

Comparisons of Important Indicators in Netherlands and Lebanon (Finance Industry)

Indicator Netherlands Lebanon
Language Most employees and customers communicate in Dutch Most employees and customers communicate in Arabic
Trading Partners Need for managers to learn how to transact business with French, Spanish, Brazilian, and United States nationals Most of the major trading partners speak Arabic
Labour Force Large pool of human resources (8.214 million) Small pool of human resources (1.628 million)
Religion Most people (42%) do not subscribe to any religion; a sizeable number of people are Roman Catholics Most people (54%) are Muslims
Government Type Constitutional monarchy Republic
Gross National Savings Most people and businesses subscribe to a saving culture, which is 29% of GDP Most people and businesses do not subscribe to a saving culture, which is 2% of GDP
Management Structure Most Dutch financial institutions use a horizontal structure, where senior management and employees are all considered as co-workers and executives usually do not display their power as they are considered part of the group Most Lebanese financial institutions use a vertical/hierarchical structure, where senior managers are tasked with the role of decision making
Employee Perceptions Most Dutch employees view managers as problem solvers and facilitators, rather than experts in their own right The management is viewed as the “optimum boss” and most employees expect favours from senior managers
Meetings Meetings are largely informal but with fixed times and protocols; all members in a meeting are required to contribute irrespective of their position in the company Meetings are largely formal and the ultimate decision is reserved for the most senior person in the company
Negotiations Negotiations often proceed at a rapid pace; honesty and reliability are perceived as vitally important in negotiations; Dutch negotiators are known to be forceful, stubborn, and tough Negotiations often proceed at a slow pace, with most negotiators reinforcing the importance of agreed-upon deadlines rather than strict time schedules
Sources (Intercultural Management2014; Business Culture2015; CIA Factbook2015).

From the table above, the manager needs to learn how to interact with Dutch employees and customers. Additionally, the manager needs to expand her flexibility and global thinking capabilities to be able to transact business with global organisations as most trading partners come from France, Spain, Brazil, and the United States. It is also important for the manager to refresh her skills on inclusivity and managing a diverse workforce as most employees and customers in the new country are not Muslims and a significant proportion of employees believe that the manager should serve as a problem solver or facilitator, rather than an expert or boss. The manager should learn how to include employees in the decision-making process and also how to respect their contributions during meetings. Lastly, the manager should equip herself with the skills necessary to adapt to a tough negotiating environment where honesty and reliability are perceived as fundamentally important.

Hofstede’s Model

The Hofstede dimensional model of national culture distinguishes cultures according to five aspects, namely “power distance, individualism/collectivism, masculinity/femininity, uncertainty avoidance, and long-/short-term orientation” (de Mooij & Hofstede 2010, p. 88). In brief, the power distance aspect can be defined as the degree to which less powerful members of a society accept and expect that power is distributed unequally, while the contrast of individualism/collectivism can be defined in terms of individuals looking after themselves and their immediate members of the family versus individuals belonging to in-groups that take care of them in exchange for loyalty. The contrast of masculinity and feminity in the model is often used to define the dominant values in a masculine society (achievement and success) versus the dominant values in a feminine society (caring for others and quality of life), while the dimension of uncertainty avoidance is defined as the extent or degree to which individuals feel intimidated by uncertainty and ambiguity and attempt to avoid these situations. Lastly, the contrast of long-term and short-term orientation in Hofstede’s model is defined as “the extent to which a society exhibits a pragmatic future-oriented perspective rather than a conventional historic or short-term point of view” (de Mooij & Hofstede 2010, p. 90).

Comparison of Lebanon and Netherlands
Chart 1: Comparison of Lebanon and Netherlands (Source: Hofstede Centre 2015)

The chart above notes major value differences between the Netherlands and Lebanon in the components of indulgence, long-term orientation, masculinity, individualism, and power distance. Drawing from these variations, it is clear that the manager must change her management style to fit into a country with a small power distance culture and an individualistic orientation. The manager must realize that employees in the Netherlands may demonstrate self-actualization and low-context communication culture that is benchmarked by explicit verbal communication (de Mooij & Hofstede 2010). As such, she must be more open to accommodating the diverse views of employees as demonstrated by the individualism component. Additionally, the manager must shift her orientation to accommodate the perspectives of people who exhibit a pragmatic future-oriented perspective. Unlike in Lebanon which uses a short-term orientation, employees and customers in the Netherlands are likely to structure their relationships by status and also to show perseverance, thrift, and sense of shame. Lastly, the manager needs to know that people in the Netherlands gravitate more towards a feminine culture, therefore role differentiation between men and women duties is expected to be minimal.

Analysis of Cultures

Culture implies people’s beliefs, behaviors, social norms, ideas, and traditions that influence their decision-making process or shape their socialization. It is transferred from one person to another through language and performance in terms of behavior modelling. Therefore, it can demonstrate or discourage certain behaviors within a society and in workplaces such as Clever Clogs International. This process, leads to the dedication of the desirable and the undesirable behaviors among different people within a society. The new manager at Clever Clogs International needs to understand and develop strategies for dealing with challenges such as value differences, person-organization fit, decision-making, leadership, and negotiation and communication in an environment of mixed culture. Considering her background information, she should also have the ability to address social challenges such as religious differences and stereotypical perceptions of her way of leading the financial organization successfully.

Value Differences

Different societies have different value differences. The female Muslim manager will lead an organization that has people from diverse religious backgrounds. Thus, she needs to understand that religion comprises one of the value systems that may influence her success. Religion defines a set of beliefs, perceptions, and cultural systems concerning the understanding of society’s existence. It is characterized by various symbols, sacred histories, and stories about the purpose of life and the origin of the universe. Religious beliefs shape morality and ethics. They also prescribe a certain lifestyle through a set of codes of acceptable behaviors within the doctrines of a given religion (Strayer 2011).

The new manager needs to study aspects of the value systems of the Dutch people before changing any value systems that Clever Clog International follows. A possible way to proceed is by studying value systems of colonial rules in the new work environment because value systems adopted by a given nation have a colonial link. Value differences may also occur from different traditions, perceptions of gender roles, and other ways of doing things in society. Therefore, the secret of success while working in the Netherlands rests on combining the manager’s value differences and systems into those that have been adopted by the Dutch people to get rid of any likely conflict.

Person-Organization Fit

According to Coldwell et al. (2008), the person-organization fit is important to ensuring the retention of productive employees. The new leader has received success that has earned her two promotions in four years. Thus, it is desirable that despite exposing her to an international work environment with diverse cultural differences, Clever Clog International holds on to her. Retention refers to the maintenance of a work environment that supports the current employees to continue working for an organization. Any organization that operates in a multicultural and globalized business environment while retaining its employees observes good person-organization-fit policies. One of such policies is Work-Life Balance (WLB).

In research that wanted to relate WLB and variables of job characteristics, Hayman (2009) found out that flexible work schedules had a direct relationship with individual life balance. The study analyzed that providing flexible work schedules played a central role in integrating individual life with work and family life. The applicability of Hayman’s (2009) findings to all organizations in the western nations has limitations. The study only drew 56 percent of its participants from the administrative staff in a single university. The variables used in the study were also not exhaustive. Therefore, some essential variables that may contribute to the found relationships may have not been reflected in the results of the empirical study. However, despite these drawbacks, Hausknecht, Hiller, and Vance (2008) build a strong case for the merit of ensuring a good person-organization fit through WLB strategies.

Hausknecht, Hiller, and Vance (2008) claim that employees are unhappy with an organization when their work-life is not balanced. The researchers further emphasize the importance of ensuring that employees are happy since WLB can be an essential tool for enhancing employee satisfaction (Hausknecht, Hiller, & Vance 2008). Therefore, unsatisfied employees are not capable of delivering their tasks within an organization effectively and efficiently. This situation makes the organization experience have poor performance. Confirming this position, Hausknecht, Hiller, and Vance (2008) suggest that an organization that encounters problems in the application of WLB experiences a vicious cycle of organizational crises, including unbalanced employee work-life fit. Being unhappy leads to poor employee performance, which results in organizational crisis in terms of productivity (Coldwell et al. 2008). Comfort is one’s work is an important aspect for improving job satisfaction. Such fulfillment can only occur if the work does not conflict with the new manager’s personal life.

Decision-making

Various factors influence employees’ decisions to remain in an organization. However, different factors may have various effects depending on the industry in which an organization operates. For example, in the healthcare industry, Jones (2009) claims that recruitment and subsequent retention of nurses are influenced by factors such as salary, reputation of the health facility, the nature and status of unions, and job sovereignty (Earley 2006). From the examples of the factors that may influence the decisions of a given nurse to stay within a given facility, several factors may influence nurse retention. Such factors include recognition and involvement of an individual nurse in the decision-making process of a health facility, the nature of workload, and the agreements of a nurse with fellow workers within the department and even the entire organization (Jones 2009). This position suggests that in the healthcare setting, the participation of employees in the decision-making process is critical for ensuring success of an organization that redistributes people as the source of its competitive advantage.

Besides presenting the importance of employee engagement in decision-making from the context of healthcare settings, even in the finance industry, employees are in close contact with customers. This means that clients deliver services. Therefore, customer satisfaction is also improved through quality of service delivery via the employees. Therefore, the new manager who is expected to lead and manage people from different cultures has to observe any strategy that ensures their full engagement in an organization, including their participation in decision-making processes. However, although engaging people in decision-making may be crucial in improving policy implementation, such involvement should be limited to certain people, depending on the evaluation of their motivating factors. In this context, Hausknecht, Hiller, and Vance (2008) assert that highly skilled and knowledgeable people are motivated by their engagement in the decision-making processes, which helps them encourage organizational commitment. However, for this involvement to occur, cultural agreement is critical to eliminating cultural difference conflicts at Clever Clog International.

Negotiation and Communication

Culture is learnt. The process of learning involves communication. Leading the business of any organization, including Clever Clogs International, requires negotiations with stakeholders such as the employees. Aginis, Joo, and Gottfredson (2012) present the impact of cultural differences on the way performance management systems are planned and executed. According to the researchers, communication has to be considered in this process. The main language in the Netherlands is Dutch while that of Lebanon is Arabic. Therefore, the new manager should crack any gaps in negotiations and day-to-day organizational communication.

Such gaps are attributed to language differences. She may be the only one or among few Arabic native speakers who work for Clever Clog International in the Netherlands. Language competence as an important aspect of cross-cultural management indicates the understanding of processes such as decoding and encoding of different symbols that are used in a given language (Kawar 2012). She needs to understand the new cultural language communication through symbols such as gestures, postures, and facial expressions among others. This strategy may help the manager to know when to change negotiation approaches.

Different nations have different approaches to negotiation. However, seeking to do business with business partners in the Netherlands or striking an agreement for mutual benefit such as successful relationships in the financial industry requires engagement in negotiations with various parties. Such parties have different cultural and ethical approaches to negotiation compared to those that are accepted in a company’s nation of origin. Regardless of the norms and cultural differences between people who engage in the negotiation, adopting a five-stage negotiation model can help the manager to arrive at good decisions. The five stages include the examination phase, BATNA best practices stage, presentation period, bargaining stage, and conclusion (Ghauri & Fang 2008). Through the five stages, intercultural business communication competence is supported. Such communication is important in business organizations such as Clever Clogs International, which have employees drawn from different cultures.

Leadership

Leadership functions to inspire followers to work collectively to achieve specific goals within an organization. Leadership is an organizational practice that not only influences the followers (employees) but also the leaders in a manner that ensures that organizational objectives are achieved through change. It integrates followers and leaders while influencing organizational objectives, missions, and other organizational stakeholders (Sakiru & D’silva 2013). Therefore, in an international business arena such as the case of Clever Clogs International, managers and leaders should adopt appropriate leadership styles and approaches to ensure that employees remain committed to the organization’s goals and objectives.

Different cultures have different bearings towards the concept of egalitarianism. Siegel, Licht, and Schwartz (2011, p. 622) define egalitarianism as ‘The belief that all people are equal worth and should be treated equally in society. In a globalized world, cultural differences may provide potential ways of social stratification of people. For example, people in an organization may be divided into religious parts. In such a work environment, leaders have the main role of deconstructing any value system that prevents cultural value system integration. Therefore, while working for Clever Clog International in Amsterdam, the primary role of the new manager over the two years should encompass addressing the employee needs to preserve their social-cultural fabrics to ensure they are induced to manage effectively unavoidable interdependences (Siegel, Licht, & Schwartz 2011).

Conclusion

The reason why Clever Clog International wants to transfer the female Muslim manager is to ensure that she leads its Netherlands operations in manner that guarantees success through people to avoid a financial crisis. To accomplish this goal, issues such as cultural intelligence training and having an organization that fits the employee are necessary. The training needs to focus on areas that may slow down her success in an international assignment due to cultural differences effects of the international community. The areas include procedures for negotiation and communication, leadership styles, and decision-making. Most importantly, training is necessary to prepare the manager to fit well in the financial industry of the Netherlands through developing the appropriate WLB practices. Without a good person-organization fit, she may fail to achieve her authorizations in Netherlands cross-cultural work environment, despite having a good track of performance.

Reference List

Aguinis, H, Joo, H & Gottfredson, R 2012, ‘Performance management universals: Think globally and act locally’, Business Horizons, vol. 55 no. 1, pp. 385-392.

Aycan, Z, Schyns, B, Sun, JM, Felfe, J & Saher, N 2013, ‘Convergence and divergence of paternalistic leadership: A cross-cultural investigation of prototypes’, Journal of International Business Studies, vol. 44 no. 1, pp. 962-969.

Business culture in the Netherlands 2015, Web.

CIAO factbook 2015, Web.

CIA factbook 2015, Web.

Coldwell, D, Billsberry, J, van Meurs, V & Marsh, P 2008, ‘The effects of person-organization ethical fit on employee attraction and retention: Towards a testable explanatory model’, Journal of Business Ethics, vol. 78, no. 1, pp. 611-622.

Competing across borders: How cultural and communication barriers affect business 2012, Web.

Earley, C 2006, ‘Leading Cultural research in the future, a matter of paradigms and taste’, Journal of International Business Studies, vol. 37 no. 6, pp. 922-931.

de Mooij, M & Hofstede, G 2010, ‘The Hofstede Model: Applications to global branding and advertising strategy and research’, International Journal of Advertising Research, vol. 29 no. 1, pp. 85-110.

Gelfand, MJ, Leslie, LM, Keller, K & de Dreu, C, ‘Conflict cultures in organizations: How leaders shape conflict cultures and their organizational-level consequences’, Journal of Applied Psychology, vol. 97 no. 6, pp. 1131-1147

Ghauri, P & Fang, T 2008, ‘Negotiating with Chinese: A social-cultural analysis’, Journal of World Business, vol. 36 no. 3, pp. 303-325.

Hausknecht, P, Hiller, J & Vance, J 2008, ‘Work-unit absenteeism: Effects of satisfaction, commitment, labour market conditions, and time’, Academy of Management Journal, vol. 51 no. 6, pp. 1223–1245.

Hayman, J 2009, ‘Flexible work arrangements: Exploring the linkages between perceived usability of flexible work schedules and work/life balance’, Community, Work & Family, vol.12 no. 3, pp. 327-338.

Hofstede, G 1993, ‘Cultural constraints in management theories’, Academy of Management Executive, vol. 7 no. 1, pp. 81-94.

Hofstede Centre 2015, Web.

Imai, L & Gelfand, MJ 2010, ‘The culturally intelligent negotiator: The impact of cultural intelligence (CQ) on negotiation sequences and outcomes’, Organizational Behaviour and Human Decision Processes, vol. 112 no. 1, pp. 83-98.

Intercultural management – Lebanon 2014, Web.

Jones, B 2009, ‘The cost of nurse turnover’, Journal of Nursing Administration, vol.35 no.1, pp. 41-49.

Kawar, T 2012, ‘Cross-cultural difference in management’, International Journal of Business and Social Science, vol. 3 no. 6, pp. 105-111.

Sakiru, K & D’silva, L 2013, ‘Leadership styles and job satisfaction among employees in small and medium enterprises’, International Journal of Business and Management, vol.8 no.13, pp. 34-41.

Siegel, J, Licht, A & Schwartz, S 2011, ‘Egalitarianism and international investment’, Journal of Financial Economics, vol. 102 no.1, pp. 621-642.

Strayer, R 2011, Ways of the world: A brief global history with sources, Bedford/St. Martins, Boston, MA.

Udobong, E 2009, ‘How to deal with cross-cultural problems in international business negotiation’, CAR, vol. 13 no. 1, pp. 1-19.

von Egnach, BS 2007, Cross-cultural management within Switzerland: An in-depth case study of a Swiss financial services company, Web.

Woods, PR 2007, Cross-cultural management performance evaluation in the expatriate context, Web.