Navigating the complexities of cross-cultural management

By fostering cultural intelligence, encouraging reflection, and seeking continuous learning opportunities, leaders can bridge cultural gaps and drive organisational success in new markets, says Ron Duerksen of the IMPM programme

For several decades the term “globalisation” had a very Western or North American connotation. Meaning that globalisation somehow meant “homogenisation” or the export of a “Western” way of doing business into a non-western market. It has only been in the past decade that companies have embraced the notion of internationalisation rather than globalisation, meaning that the cultural norms and influences of a new market are important to the eventual success of a foreign company looking to secure a solid foothold there.

Part of this shift may be the result of seeing the categoric failures of major companies to make inroads in some international markets. For instance, Walmart failed in its attempts to penetrate the German and South Korean markets, unable to compete with local retailers who had a better understanding of consumer culture and shopping habits. The smiling greetings expected and welcomed by US shoppers clashed with German consumer habits, who place more value on efficiency. Similarly, Starbucks faced strong competition from Australia’s well-established coffee culture, which favoured independent cafes with high-quality coffee and a local feel. Starbucks’ standardised offerings and rapid expansion strategy did not resonate with Australian consumers, and only last year in 2023 did they make their first national profit, 23 years after opening their first store in Australia.

To succeed in new markets and take internationalisation seriously, leaders and managers must navigate diverse cultural norms, practices, and expectations, it’s clear sticking to the same old management approaches will no longer work. Effective management in such a dynamic environment requires leaders to be willing to push the boundaries of their own practices and learn new skills. Understanding and addressing key local challenges is inherent to successful cross-cultural interactions.

Breaking down communication barriers

Communication is the cornerstone of any successful team, yet it remains one of the most significant challenges in cross-cultural management. Language differences, distinct communication styles, and non-verbal cues can easily lead to misunderstandings and conflicts, stymieing collaboration and efficiency.

Overcoming this issue involves leaders developing the ability to foster an environment of mutual learning and respect, encouraging open dialogue and creating platforms for team members to share their experiences and perspectives. Cross-cultural training programmes can also help by providing tools and techniques for effective communication across diverse teams. For instance, in Japan, indirect communication is prevalent, making it essential for managers to be able to interpret subtle cues and non-verbal signals.

Harmonising management styles

Management styles are often deeply rooted in cultural backgrounds. A hierarchical culture might prefer a top-down approach, while more egalitarian societies favour participative management. For example, In Brazil, a more personal and flexible management style is common. Leaders often engage closely with their teams and adapt plans on the fly. But these differing styles can create friction in multinational teams.

Leaders can reconcile these differences by developing a keen awareness of the cultural underpinnings of various management styles. This allows them to adapt their approach to suit the team’s diverse needs, builds understanding amongst team members for why certain approaches are used, and fosters a more cohesive and adaptable environment for all. Cross-cultural leadership training, and exposure to global management practices are essential in achieving this balance. Managers can benefit from workshops that focus on relationship-building and flexibility, helping them to better integrate into local business culture and effectively lead their teams.

Motivational differences

What drives employees to perform at their best can vary widely across cultures. Some make individual achievements and personal recognition paramount, while in others, collective success and team cohesion take precedence. Understanding and aligning these motivational drivers is critical for maintaining high levels of engagement and productivity. Leaders must take the time to understand what motivates their team members individually and culturally, and tailor their strategies accordingly. This might involve personalised recognition programmes or team-based incentives, depending on the cultural context.

In India, the diverse cultural landscape means that motivational drivers can vary significantly even within the same organisation. Managers can use team-building exercises and cultural sensitivity training to understand and address these varying motivations, creating a more inclusive and supportive work environment.

Navigating conflict resolution

Cultural differences extend to conflict resolution styles as well. Some cultures prefer confrontation and quick resolution, while others lean towards a more indirect and harmonious approach. This divergence can complicate conflict management within international teams.

A good example is found in British Airways, which, in the early 2000s experienced significant conflict with its cabin crew over changes to working conditions and pay structures. The situation was exacerbated by cultural differences between the airline’s management and its diverse, international workforce, all of whom expected different approaches to conflict resolution from management.

Effective conflict resolution in a cross-cultural context requires leaders to firstly be aware of, and secondly be adaptable to these differing preferences. Practicing active listening, reflection and even mediation techniques that respect cultural nuances, can be highly beneficial in enabling leaders to create a team culture that values diverse perspectives, and staff that better understand each other’s perspectives, alongside more standard training on cross-cultural conflict resolution.

For British Airways, it took recognising that its standard, top-down approach to conflict resolution was not effective in this multicultural context. The airline needed to adapt its strategy.

Adapting to local contexts

Global managers can often find further challenges in adapting their strategies to best fit with local contexts without compromising overall organisational goals. Finding the right balance between local and global needs requires a nuanced understanding of local customs, regulations, and market conditions.

Managers should engage with local stakeholders, seek local insights and be willing to adapt their strategies based on their discoveries. This approach not only ensures compliance and relevance but also fosters a deeper connection with local markets and teams who feel they have been better invested in. Sometimes simple steps can make the biggest impact. For example, Tim Hortons (a coffee chain from Canada) in recognising that American consumers had different tastes and preferences compared to Canadian customers, adjusted its menu to include items that appealed to the US market and catered to American eating habits.

Building a global network

Networking is a cornerstone of effective cross-cultural management. Building relationships with peers, mentors, and industry leaders from diverse backgrounds provides a wealth of insights and support for navigating cross-cultural challenges, providing ongoing advice and collaboration opportunities.

This is why global management education programmes are such valuable training grounds for the managers of the future. The International Masters Programme for Managers, for example, offers modules in five countries, with learning led by local faculty and practitioners. Not only does this build greater awareness of local methods, values and motivators, but also enables executives to develop an international network to work with and learn from. In a world where businesses increasingly operate across borders, the ability to manage cross-cultural teams is a critical skill. By fostering cultural intelligence, encouraging reflective practice, and seeking continuous learning opportunities such as international executive programmes, leaders can bridge cultural gaps and drive organisational success in new markets.

And who knows, such a broadening of management mindsets can be the driving force for innovation in the future too.