The cultural issue associated with the development of globalisation seems to become more and more outstanding in business field, especially in an international context, which makes the management and development of people require considerations of culture diversity and related challenges. A company that is able to deal with culture diversity functionally may obtain the intangible cultural competitive advantages in the industry field it belongs to; vice versa, it may lose such important advantages because of its poor management of potential cultural conflicts. In this article, the relationship between cultural issue, management style and performance, which mainly focuses on the potential problems and the possible strategies that may help depress them in International Joint Venture Corporations, will be discussed based on Hofstede’s five cultural dimensions theory. More specifically, to manage a cross-cultural company effectively for the purpose of maximising its productivity, following three issues will be proposed in the text: the first one is about how to clearly identify the nature and implications of national culture diversities within an international working team; the second one refers to how to establish a basis for building knowledge and awareness on culture diversities and an example of explaining and managing the expatriation issues will be given in more details; and the third one is concerning how to set a framework for developing a high performing team, where the cultural issues will be thought over.
2 Three Issues Referring to Managing the Relationship between Cultural Issue, Management Style and Performance 2.1 Identifying and discussing the nature and implications of culture diversities Before embarking on any other activities, it should be essential and important to get a clear understanding of the nature and implication of culture diversity because national culture is reflected in the designs of a company as culture influences a person’s relation to authority, conception of self, and ways of dealing with conflict (Inkeles et al, 1969). Different kinds of frameworks about this have been developed by many researchers so far, but among them, a famous and widely accepted one is Hofstede’s five dimensions theory. Four dimensions which are Power Distance, Uncertainty Avoidance, Individualism and Masculinity, were found based on factor analysis and theoretical reasoning. Later, it was found by the Chinese Value Survey (CVS) that there was not so much relation between the Confucian work dynamism and any of Hofstede's four dimensions (Hofstede et al, 1988), which is the main reason why this dimension renamed formally as Long-term Orientation finally, was recognised as another dimension (i.e. the fifth one) in Hofstede's study (Hofstede, 1991).Although the five dimensions are listed separately, in some occasion, some or all of them may have effect on one aspect shoulder to shoulder. For instance, power distance and individualism/collectivism are two main dimensions that have effect on management style; power distance and uncertainty avoidance are two main dimensions that have effect on organisation structure; but all of them can together affect the motivation system (Bi Pengcheng et al, 2002). Also, uncertainty avoidance can affect a company’s entry mode to a foreign market (holding high avoidance culture, French companies prefer to adopt joint venture as their entry mode to a foreign market (Paul Evans et al, 2002a).
To some extent, this framework can illustrate the delicate relationship between managers and their subordinates, which represents either the managers’ response to their underlings’ working styles or the subordinates’ response to their managers’ management styles. Following is one example of explanation for this. Assuming three other dimensions are equal, the difference of power distance and individualism can have different (either positive or negative) effect on management style....
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