RMIT Cross Cultural Management Assignment 2 - Group Report PDF

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Assessment Task 2 - Team ConsultancyProject Written ReportSubject Code: BUSMSubject Name: Cross-Cultural ManagementLocation & Campus RMIT Vietnam, Hanoi CampusStudents: Nguyen Huu Phuong Nhi - sTran Quynh Ngoc - s Pham Hai Yen - s Nguyen Phuong Hong Yen - sLecture: Dr. Abel AlonsoWord Count: 300...

Description

Assessment Task 2 - Team Consultancy Project Written Report

Subject Code:

BUSM4699

Subject Name:

Cross-Cultural Management

Location & Campus

RMIT Vietnam, Hanoi Campus

Students:

Nguyen Huu Phuong Nhi - s3764731 Tran Quynh Ngoc - s3636101 Pham Hai Yen - s3776356 Nguyen Phuong Hong Yen - s3695645

Lecture:

Dr. Abel Alonso

Word Count:

3000

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Executive Summary Each person from various different cultures and backgrounds will have to interact with each other more frequently in an increasingly globalized and growing economy. Regardless of whether everybody will work and attempt together decently well, diversification will in any case happen and cause furious struggles and clashes because of an absence of comprehension of colleagues. Diverse reasoning or methods of working are consistently a difficulty that each organization or business will have. The most clear examples can be found in worldwide multinational organizations. Moreover, in an increasingly technologically advanced world, virtual communication between countries is a big step forward to help multinational groups communicate with each other quickly and economically. However, global virtual teams (GVT) also hides many cross-cultural challenges. To relieve this issue, individuals in particular and businesses in general, should know about the fundamental drivers that have an immediate impact. The objective of this report is to analyze several issues related to GVT of multinational corporations with the use of academic theories and real cases of an international company in Vietnam. The case of an multinational insurance company, Generali will be applied to evaluate their practices in solving common cultural challenges. Besides, a supporting article about GVT challenges perceived by millenials, is also reviewed. As a result, in such a broad community, problems with communication and collaboration may often unintentionally offend each other. Moreover, the interview conducted with Mr. Nguyen Tung Lam, regional director in Hanoi of Generali, delivered a more in-depth perspective at the workplace from the viewpoint of a manager. People communicate in their own unique manners, which may lead to misunderstandings when they do not have the same level of understanding. In detail, difficulties of Generali in cross-cultural virtual management could

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be divided into 4 categories: leadership, communication, time issue and trust issue. Lastly, recommendations are proposed for improvement in the workplace of Generali. The ability to empathize with each other's cultural differences through training and preparation demonstrates one's effort when attempting to collaborate with an international partner. It is important for a large multicultural corporation to create its own management structure in order to retain overall performance.

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Table of contents Executive Summary

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Table of contents

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1. Introduction

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2. Overview of issues 2.1 Communication problems within multicultural teams or across subsidiaries 2.2 Leadership in multicultural organizations or between subsidiaries 2.3 Trust in multicultural groups or between subsidiaries within an organisation 2.4 Time issues within multicultural societies or between subsidiaries

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3. Case studies 3.1. Description of case study and research article 3.2. Analysis of the case study and article

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4. Recommendations 4.1. Training 4.2. Time comfort zone and preparation for virtual meetings

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Conclusion

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Appendices

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References

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1. Introduction Many businesses are looking to expand their operations internationally. By moving to emerging markets, they will benefit from lower costs, as a result, contribute to the economic development of countries. Generali, a big Italian insurance company is not exceptional when it operates branches in Vietnam. However, doing business overseas presents several challenges in terms of different human behaviors and a lack of knowledge, especially when there is a significant difference in business concepts between Western and Eastern. These difficulties become even more challenging in the virtual working context. The theory of cross-cultural management was developed to help businesses submit, control, and operate their business successfully on a global scale.

2. Overview of issues The global economy is increasingly developing and expanding these days, with trade value accounting for 60.4% of world GDP (World Bank n.d). Globalization is an ongoing process, and understanding cultural differences has become a key factor for multinationals to expand into emerging markets. Hence, as businesses evolve in the international context and especially in the current covid outbreak then all companies have to use virtual communication tools to support the work process, there is a question that top managers and company insiders need to consider: how to communicate well between cultures, to operate the business effectively, and how leaders need to give direction to find the best solution. Therefore, there are four main problems that most businesses face in the context of international business.

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2.1 Communication problems within multicultural teams or across subsidiaries Understanding a country's culture is about showing respect and ensuring effective communication among members of an organization. Communication is the key to all problems that need solving, expressing their thoughts and direct intercultural communication can sometimes lead to confusion because of different ways of presenting messages. Especially during Covid pandemic, it is even more difficult to transmit information or communicate in language when everyone has to switch to virtual communication tools. There is research about low context communication terms (LCC) and high contextual communication (HCC) and how they affect understanding and interactions among people (Nam K.A 2015). When a group comprises multinational members, communication conflicts between people from LCC culture and people from HCC culture will easily lead to communication conflicts. It is more common in LCC cultures in individualist cultures such as Western countries (Canada, Germany). They tend to express themselves through direct verbal communication, speaking straight to the point. Verbal agreements are respected in HCC when doing business, written contracts and signed agreements are essential while in LCC (William D 2015). This may cause conflict between enterprises when the business from LCC requires the enterprise from HCC to write a signed contract may be perceived as disrespectful, and a lack of trust can damage a relationship. While the culture of contextual communication is high as in some Asian countries, the use of nonverbal communication involves paralinguistic signals (voice, pitch, volume) and non-verbal signals (eye contact, smile, touch, silence). They often speak through a message that they want others to ponder and understand. Currently, to achieve high performance in a multinational environment, most companies adopt a Western working environment. This will help employees be able to frankly express their individual opinions to make it easier to understand, collaborate and save time.

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2.2 Leadership in multicultural organizations or between subsidiaries Leadership and culture have similar relationships. Different cultures will have different images of a good leader. A survey of employees’ IBM from multiple locations worldwide and four dimensions that different cultures were identified (Hofstede 2001). While collectivistic culture is more team-oriented. Individualistic cultures tend to prefer independent and different leaders (the GLOBE framework n.d). In the Certainty Avoidance dimension, countries with a high degree of uncertainty avoidance often favor more controlled regulators. Besides, the Power Distance also contributes to an excellent leader in different cultures. Employees from cultures with low power gaps cultures prefer active and participatory leadership. In contrast, those from cultures with a high power gap tend to work better in a more directing style of leadership.

2.3 Trust in multicultural groups or between subsidiaries within an organisation Every branch of Multinational Corporations faces challenges related to different cultures as they resemble parent group operations in the local context (He R and Liu J, 2010). Administrative personnel play a vital role in the failure or success of a Multinational Corporation, they must deal with fundamental challenges like strategic and cultural differences. Nationalism has created friction within a group that can cause trust between members or governance between the parent company and its subsidiaries. Differences between cultures and languages can lead to misinformation, distrust, as the story of Japanese and Americans working together has been likened to mixing hamburgers with sushi (Hausmann R , Tyson D, Zahidi S, 2012). Because the Japanese and the Americans have a long history before, and some Japanese still keep that hatred against their partner and vice versa. Alternatively, the Vietnamese are still skeptical of China; requests for trust from the Vietnamese towards their neighboring partners may be hard to accomplish. Moreover, due to

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the centralized decision-making power at the headquarters, promotion opportunities for the executive position of the host country nationals are limited. This creates communication barriers, leading to misinformation and misunderstanding between host country nationals and top managers of the headquarters. Hence, headquarters will have limited understanding and interaction with the local staff to assess the performance of local ability for future advancement (Ando N, Rhee D and Park N, 2007)

2.4 Time issues within multicultural societies or between subsidiaries The virtual aspects of communication also have an impact on aspects of the management tasks of MNCs. The most significant reported impacts include time zone differences, response delays, and time limits for virtual communication (Kimble, 2001). Around the world, we have different time zones, it can be challenging to get everyone in the right group. It could be midnight in one part of the world, and it could be rush hour in another. This is a problem because everyone needs to be on the same page and doing the same thing. Team members must start work early and work very late to communicate with each other, for instance, calling until 10pm or holding a three-way conference at 1 am Swiss time (Oertig M & Buergi T, 2006). Besides, response delays and time limits for virtual communication are also factors that create obstacles in an international environment (See M 2018); in online meetings, they often bring up some new issues in meetings off the agenda. It prolongs the meeting time and reduces the quality of the meeting. Furthermore, when a subsidiary needs assistance from a qualified person, they cannot be present. However, that day falls during the host countries' public holiday time, which leads to a delay in reply while the subsidiaries need an immediate response.

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3. Case studies 3.1. Description of case study and research article 3.1.1. Generali Group Generali is a multinational insurance corporation based in Italy. The company currently has 8 overseas headquarters and more than 60 branches in 50 countries. Vietnam is one of the subsidiaries of Generali Group. The offices in Vietnam had about 2000 employees out of 72.000 employees worldwide. The Generali teams in Vietnam are mainly responsible for sales, marketing and customer services for the local market. As R&D and Operation management mainly take place at headquarters, branches in Vietnam receive allocation targets from the head office in Milan or receive targets directly from Asia Regional Office in Hong Kong. Regional meetings with the Asia Regional Office in Hong Kong and its headquarters in Italy will take place monthly, or when the company undertakes important projects. Meetings are usually in the form of an online conference. In addition, other forms of virtual communication are applied such as emails, calls or messages. Virtual communication is expected to help the company save costs and time for travel, accommodation and human resources.

Figure 1. Workflow of Generali Vietnam 3.1.2. The article “When technological savviness overcomes cultural differences: 9

millennials in global virtual teams” (Velez-Calle et al. 2020) We selected the research paper on the topic of virtual group challenges under the perceived experience of millennials because this is one of the large demographic groups of countries around the world (Deloitte 2020), and is expected to hold the senior positions of employment in the next 5-10 years (Tilford 2018). The paper focuses on two major issues: evidence to contradict previous international business literature which argues that cultural differences are the main problem of GVT and how millennials work in GVT to deal with the challenges of virtual teamwork and ensure effective team performance. The study analysed 503 journals of undergraduate students from all over the world submitted to the GEE competition in 2012.

3.2. Analysis of the case study and article Our study analyzes the case of Generali and the findings in the article of Velez-Calle et al. (2020), to uncover the key challenges companies face when working in multicultural virtual teams. This study adopts the input-process-outcome (IPO) framework which was adapted by Dulebohn and Hoch (2017) to align the context of the GVT 1. According to Hoch & Kozlowski (2014), the IPO is the most widely used framework which is a tool to categorize and incorporate theories on GVT. 3.2.1. Inputs This study focuses on two input categories, which are team leadership and team composition. Leadership plays an important role in virtual team performance. The leadership style and management skills of team leaders significantly affect the working attitude and work efficiency of the members (Serban-et-al.,2015). Unlike face-to-face team leadership, virtual team leaders require a higher level of communication skills and cross-cultural 1 Appendix 1 10

understanding, since virtual communication is limited in space and time, as well as lacks nonverbal signals (Tenzer & Pudelko 2016). In particular, the study of Hoch and Kozlowski (2014) shows the importance of Cultural Intelligence (CQ) in virtual leadership. Leaders with a high level of CQ have a positive effect on the team's performance, strengthen team cohesion and encourage engagement of team members. Velez-Calle et al. (2020) also agrees with the importance of leadership in virtual teams. Leaders in the analyzed cases are said to be the “rescuers” for the whole team when facing a crisis, and the one who provides the leading solution for the team's challenges. However, the virtual team leaders at Generali, in general, have not paid attention to this aspect. When asked in the interview what strategies the company has in place to improve the understanding of diverse cultures of managers, it seemed to be a new concept to the interviewee. There was a lack of proper -training on how managers can solve problems related to multinational virtual teams. The second input is team composition. At Generali, the most visible difference on the surface of diversity is language differences. English is used as the common language for the three countries to communicate with each other. However, because this is the second language of all three countries, virtual team members have encountered many difficulties in expressing and understanding the message. The barriers in verbal communication can be overcome more or less by non-verbal communication (DiStefano & Maznevski 2000). For example, when you are unable to express your ideas with words, gestures and facial expressions can assist in conveying your ideas. However, when teams work virtually together, communicating from long distances through the middle technology platform limits nonverbal communication (Jimenez et al.2017). This limitation also makes it difficult to build close relationships between colleagues in different countries, which also limits the level of trust and team cohesion of multicultural teams (Ford, Piccolo & Ford 2017). The next component of team composition is the level of KSAs (knowledge, skills, and abilities) of

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members. In the case of Generali, the level of CQ once again needs emphasis. For a multinational company, understanding and adaptability to diverse cultures are the minimum requirements for employees. One of the important elements in cross-cultural communication is the cultural context, including low context and high context (Hall 1959). High context cultures like Vietnam emphasize implicit messages that cannot be expressed in words. In contrast, low-context cultures such as Italy emphasize direct verbal communication 2. According to the interview, when working virtually, the lack of understanding of cultural differences has made some Vietnamese employees feel uncomfortable when receiving too frank opinions from the Italian manager. The limitation of the virtual working environment further hinders mutual understanding. 3.2.2 Moderators This study focuses on virtuality as the main moderator in the case of the Generali company. Virtuality factor is a broad concept, which includes geographical dispersion, spatial distance, temporal differences and configurational differences (Dulebohn & Hoch 2017). The time difference is a key challenge that is associated with other cross-cultural difficulties in Generali. In the article by Velez-Calle et-al. (2020), time difference is a frequently mentioned issue in students' journals. However, the authors argued that the time difference problem does not belong to the concepts of cross-culture issues, including values, beliefs and social systems (Hofstede 1991). The article also cites one of the student journals in the study, where the time issue is mentioned as a solvable problem and less significant than the other challenges. However, according to Dulebohn-and-Hoch-(2017), temporal difference is one of the factors that affects the inputs and outputs of teamwork, because it changes and connects relationships within the framework. This is true in the case of Generali, where the time management problem, although not a culture issue, indirectly affects cross-culture challenges. Firstly, the 2 Appendix 2 12

time zone in Italy is 5 hours behind Vietnam, so the ideal time for the two countries to work together is 9am - 12pm in Italy, equivalent to 2pm - 5pm in Vietnam. However, 3 hours of collaboration is not enough time for the two teams to express the problem they are facing through virtual meetings. As analyzed earlier, since both countries are non-native English speakers, it usually takes a longer amount of time for the sender of the message to express their ideas and to fully understand the opinion of the others. Besides, the next time management problem is the different holidays of Vietnam and Italy. If a team reports a problem to another country during these days, they have to wait until the end of the holiday to get an answer. In this case, although the time difference is not a cultural concept, it does add to the challenges associated with communication difficulties. Moreover, this degree of influence increases as task interdependence and task complexity increases.

4. Recommendations People can not be forced to be changed, therefore, it is recommended to encourage people to adapt and be aware of culture intelligence through training leaders and employees, time comfort zone arrangement and virtual meetings preparation.

4.1. Training 4.1.1. Building and training team ...