An investigative study into the adoption of cross-cultural management practices in selected public and private sector organisations - a grounded theory approach
Creators: name: Reyes, Teodora
Publisher: name: RMIT University
Year: 2024

description: There are three major factors that contributed to cross-cultural management's prominence: the growing cultural diversity of the population, globalisation (Adler 2002; Morrison 1996) and fairness legislation (Gross-Schaefer, Florsheim &amp; Pannetier 2003). From the Australian perspective, the multicultural experiences of the U.S. and Canada are relevant. The U.S. was the seedbed in which cultural pluralism was first sown and cross-cultural management pioneered while Canada provided Australia with the policy model of multiculturalism (Salins 1997; Addison 1993).<br><br>The American and Canadian multicultural experiences also provided Australia with the key policy lesson that adopting multiculturalism was not enough, nor was legislating fairness sufficient in addressing the continually growing population diversity and globalisation. Cross-cultural management (CCM) emerged as another key strategy. However, while the literature shows that CCM needs to be integral to diversity management (DM), Australian workplace diversity management hardly goes beyond fairness (EEO) legislation compliance. As a result of this, the Australian workplace still fails to mirror the population profile even after thirty-three years of introducing multiculturalism to public policy making.<br><br>The reason is simple and easy to comprehend; CEOs of organisations do not have a good appreciation of not only the benefits that can be derived from a culturally diverse workplace (Nicolas 2000) but also more basically the reality that the changing demographics of the population dictate the workforce and customer profiles. While Nicholas (ibid.) found that only 29 per cent of the organisations surveyed in his study were diverse in terms of ethnicity and that only 18 per cent of CEOs ranked successful diversity management as highly important to Australia's growth, Bertone et al's (1998) findings in their study two years earlier found an almost unanimous support among managers to providing equal opportunity to employees regardless of differences. Despite the contradiction between the CEOs and managers' perceptions of the importance of workplace cultural diversity, however, only 22 per cent of the organisations surveyed by Bertone et al(ibid.) had a cross-cultural policy, which is closely similar to Nicholas' finding.<br><br>Karpin (1995) reports that the major cause of the failure to harness cultural diversity benefits is the slow improvement in Australian managers' education and skill levels. Several studies reveal a negative impact on the economy of this management deficiency (Cobb-Clark 1999; NMAC 1999; Karpin 1995; Masanauskas 1992).<br><br>Hinged on the above background, this research was therefore conducted to develop a process (system) theory on cross-cultural management, which utilised data gathered from selected public and private sector organisations using the Grounded Theory method. Besides generating a grounded theory, the research also aimed at investigating the critical mechanisms and social processes at work during the implementation of cross-cultural management in the participant organisations.<br><br>This research found lack or absence of knowledge to be at the centre of the occurrence and non-occurrence of attitude change, almost nine years after Karpin's study and spending of at least $24.8 million to upgrade the Australian managers' education and skill levels (Innovate Australia 2004). According to the respondents, the presence or lack of certain leadership and management attributes resulted in occurrence or non-occurrence of attitude change, which facilitated and/or stifled cross-cultural management implementation. Knowledge is the main attribute because of its growing depth, explanatory power and encompassing effect on other attributes.<br><br>The grounded theory of facilitating adoption of cross-cultural management from this study consists of emergent leadership and management attributes collectively and continually interacting with all the complementary system attributes. In addition to knowledge, the other leadership and management attributes identified are passion and commitment, decisiveness, role modelling, trust and credibility, communicating interactively, consensus and team building and resource provision. The complementary system attributes are organisational structure, integration of CCM to all business plans, system completeness and clarity, language barrier elimination, continual consultation with and participation from managers and employees, responsiveness, inclusiveness, productive diversity, cross-cultural training, accountability, evaluation and improvement, reward for performance/"punishment" for non-performance and integrity and credibility.<br><br>Also, during the continual action/interaction, a multidisciplinary general system theory approach was found capable of facilitating comprehensive adoption of cross-cultural management in view of the complementarity of attributes. This aspect of the emergent theory in this study appears unique compared to other grounded theory studies in the sense that the emergent theory is elevated from being a process to a system to better address the respondents' most basic concern. Thus, this study applied von Bertallanfy's (1968) general system or holistic approach because it reveals interrelationships between subsystems and that the behaviour of one subsystem constitutes the behaviour of the entire system. The application of this principle combined with the finding of this research that complementarities exist between leadership, management and systems attributes necessitates a holistic approach in the comprehensive adoption of cross-cultural management.<br><br>Additionally, this study applied Shelly et al's (1995) concept of a system as a set of policies and sequentially ordered steps to accomplish a specific goal or objective. Facilitating comprehensive adoption of cross-cultural management necessitated this context of system because it captures the attributes and interdependencies through policies and procedures.<br><br>Recent events involving Enron, Parmalat and National Australia Bank proved that the need for cross-cultural management does not only arise from a culturally diverse population. Equally important, it arises from the need for leaders and managers to mould an organisational culture that is conducive to continually upholding ethical values among employees that maintain organisational well-being. That organisational culture evolves from national culture is strongly supported by literature.<br>