Deresky (2011) defines international management as “the process of planning, organizing, leading, and controlling in a multinational or cross-cultural environment” (p. 458). Miroshnik (2002) suggests that although the economic and physical environments certainly are important issues in multinational business, the cultural environment has a special importance in multinational business. Therefore, it is essential for international managers to understand the notion of national culture, as it influences how managers and employees of a particular nation make decisions and interpret their roles. As a result, differences between national cultures not only can create important opportunities for growth and development, but also are capable of creating serious problems if they are not well understood (Morden, 1995). Therefore, the challenges posed by the differences in national cultures will subsequently change the necessary skills and competencies that managers should possess in order to effectively manage any particular host country environment on a contingency basis. The first part of the essay will briefly describe the external environment components surrounding a business in any given host country, with an increased emphasize on the cultural variable, and how it affects various managerial functions. Next, the challenges presented across different national cultures will be identified, using Hofstede’s (1984, 1991, 2001) value dimensions as an underlying framework. The final part of the essay will conclude the discussion through an analysis of what skills and competencies should international managers have in order to cope with these challenges, and what factors they need to keep in mind when utilizing such approaches.
The Environment of Multinational Business
It is very important for international managers to fully understand how the internal and external environment of a given country affects their business operations (Miroshnik, 2002). As environmental variables vary from one country to another, not only that international managers will face customers with different purchasing power and perception or governments with different priorities and regulations, but also large and small dissimilarities in the behavior of those within the organization itself. Harris and Moran (2000) developed a framework to justify how environmental variables can affect managerial functions (See Figure 1). The framework pins down how cultural variables, shaped by nationality and socio-cultural structure, can influence differences in work values, beliefs, and orientations of organizations across different countries. National Variables
Individual and Group Employee Job Behavior
Figure 1 Environmental Variables Affecting Management Functions
Referring to the framework, dissimilarities within the organization resulted from the socio-cultural variables, in addition to existing national variables, such as economic, legal, and political (Harris & Moran, 2000; Phatak, 1986, as cited in Miroshnik, 2002). The context of cultural variable is therefore developed and perpetuated from the national and socio-cultural variables, which eventually determine basic attitudes toward work, time, materialism, individualism, and change (Harris & Moran, 2000; Bhaskaran & Sukumaran, 2007; Deresky; 2011). Ultimately, these attitudes will affect the outcome that can be expected from an individual or a group within the organization in the end. Following the understanding of how national culture is able to shape individual and group behavior and attitudes, the question now is which organizational processes are most affected by national cultures, and how this fact presents challenges for international managers in successfully...