Essay on Intercultural Competence in Business

Abstract

Businesses are quickly moving their operations to the international market. Despite the successes that most of these businesses attain while in this space, challenges still prevail. Culture is amongst the many issues that affect business in the international market. More importantly, understanding culture and how it affects business processes such as hiring employees is paramount to a business’s success. This paper is critical as it studies intercultural competence in business. To be useful in analyzing the effects culture has on business, the report uses Frank’s case. The paper is divided into separate sections. The introduction provides a general outline of the article. The findings section studies what Frank did wrong while hiring people for business. Hofstede’s Six Dimensions of Culture proves useful in analyzing this case. Other theories, including the structural-functional theory and conflict theory, are included in the findings section. The conclusion summarizes the paper, and the recommendation section offers suggestions on how Frank should handle future recruitment processes while considering people’s cultural preferences.

Intercultural Competence in Business

Introduction

Globalization creates an opportunity for expansion and growth. Moreover, and as much as it creates an opportunity for growth, the international environment presents challenges and is often problematic (Leidner, 2010, p. 73). One of the main factors that make globalization and the overall global business challenging is the conflicting cultures among different countries. Culture shapes how people think; it shapes their interaction and directs people’s communication (Erthal and Marques, 2018, p.671). Understanding these aspects and the influence culture has on different life components is critical for business progress. Therefore, to understand more on this topic, this paper looks at Frank McDougal’s case. The report studies the cultural issues that deterred Frank from hiring Korean consultants. Finally, it suggests how he could have handled his hiring processes in order to attain positive results.

Findings

What Frack Did Wrong

From the case study, it is evident that Frank’s company is expanding, and South Korea offers a suitable expansion environment. Moreover, to exploit the advantages that South Korea presents, Frank would have to employ local employees. To be effective in hiring local people, Frank offers an excellent salary and a generous benefits package. However, and despite his generosity, Frank fails in hiring new employees, and all the prospective employees he found preferred to stay with their current employer.

Many reasons could have made these employees deny Frank’s request but culture is one of the most significant reasons. Frank did not consider the South Korean culture while on his search for employees; otherwise if he did, he would have found that South Koreans share responsibilities. In other words, South Korea is a collectivistic society. According to scholars, South Korea, which has a score of 18 in the six-dimensional Model (6-D Model), is considered a collectivist society (Zhou and Shin, 2017, p.1041). Collectivism is a cultural idea emphasized by Gerard Hendrik Hofstede (Under Hofstede’s Six Dimensions of Culture). Under Hofstede’s Six Dimensions of Culture, collectivist societies emphasize the needs and goals of groups over the needs and desires of individuals (Zhou and Shin, 2017, p.1041). This aspect can also be seen in how South Koreans commit to long-term commitments with family, extended families, extended relationships, and in most cases with companies (Kim and Kim, 2010, p.490). In such cultures, people value loyalty and relationships with others, and more importantly, the interconnectedness between people plays a critical role in each individual’s identity. This is perhaps one of the many reasons why these employees choose to remain with their current employer; they valued the loyalty of individual benefits.

The idea of loyalty and the emphasis on society working together for common benefits is reemphasized in the structural-functional theory. The structural-functional theory is also known as functionalism. Scholars who align with this theory agree that societies are structures with interrelated parts that work together to meet the people’s social needs in that society (Joy and Poonamallee, 2013, p. 403). In such societies, cultural norms exist to support fluid operation within a society, and cultural values act as guides. For instance, South Koreans value relationships, and this aspect is crucial in attaining business and personal success (Kim and Kim, 2010, p.490). Koreans make friends first and clients or employees second. Frank’s hiring process was faulty as he disregarded this aspect. After getting the leads from the Rotary Club, he could have proceeded to befriend his prospective candidates. This way, the candidate would feel like they are dealing with an acquaintance rather than a stranger. Also, Frank would have appeared trustworthy, honorable, and respectable in his candidates’ perspectives by acting in this fashion. South Korean businesses are founded on the principle of relationship (Kim and Kim, 2010, p.490). Even the most renowned corporates are often family managed, with members still acting in executive positions.

Frank would have also considered the degree at which his prospects considered and wanted change. South Koreans are known to be reluctant to change; in fact, in this region, people are comfortable with inequality, and as Kim and Kim (2010, p.490) put it, “people understand their place” in the system. This idea is expressed in Hofstede’s power distance dimension. According to Kim and Kim (2010, p.490), this dimension deals with the fact that all people in a given society are not equal; it emphasizes people’s attitude towards inequalities. South Korea has a score of 60 in the 6-D Model, which means that the country is hierarchical (Cho and Kim, 2017, p.313). People in such societies accept and appreciate gaps in compensation, and rather than offering employees higher wages and excellent benefits package Frack could have studied the market’s standard pay. There are many differences between high power distance societies and low power distance societies. One of the most critical differences is whether or not subordinates can directly confront their employees about employment issues (Cruz, Hamilton, and Jack, 2012, p.156). In low power distance cultures, employees are allowed and expected to ask questions and confront their employers with something that does not seem to be okay (Cho and Kim, 2017, p.313). This may also mean that employees in these societies are allowed to negotiate their salaries. On the other hand, employees in high power distance societies such as South Korea do not ask questions, and they do not point out apparent errors made by their employers. In other words, this means that Frank’s prospective employees could have felt insulted by increased wages and benefits, but culture could not allow them to confront.

Hofstede’s power distance dimension is well expressed in conflict theory. Conflict theory was first proposed by Karl Marx, who believed that societies are in a constant state of conflict because of competition triggered by limited resources (Omer and Jabeen, 2016, p.197). He also agreed that social order is maintained by domination and power as opposed to conformity and consensus. In most cases, people with wealth and power work hard to hold on to it by any means possible, primarily by subduing the powerless and the poor. Women, according to the conflict theory, strive for equality in a male-dominated society (Omer and Jabeen, 2016, p.197). Senior citizens struggle to protect their rights, health, and independence. These are instances prevalent in the West where individuals fight to be equal in all areas of society, including education, employment promotions, and politics. However, this is not the case in East Asian countries, particularly South Korea. People here are contented with inequality; in fact, South Korea is one of the world’s known countries with the highest inequality rates. For instance, the gender pay gap in South Korea as of 2010 stood at 34.6 percent (Cooke, 2010, p.2251). The Korean gender pay gap is the worst amongst industrialized countries. Understanding this aspect could have helped Frack make well established hiring decisions.

The move to establish a branch office in Seoul, South Korea, is well-defined, but the business’s success in this environment depends on understanding the local’s values and culture. Hiring employees was the first step in the road to success, but Frank failed in this process. However, to progress forward and attain success in the future, Frank will need to study and understand cross-cultural problems that threaten the company (Whelan, 2017, p.114). To better understand South Korean culture Frank would have first understood that different countries have their values and cultures; he should have learned the other side’s culture. Noting the differences in culture would have allowed him to build trust, which is paramount in developing a well-established hiring process. Understanding others’ cultures would have allowed him to establish relationships and, more importantly, friendship, which is a critical aspect of any business.

In addition to understanding the Korean people’s culture and values, he would have sought different ways to bridge the cultural gap. Huge cultural diversity creates room for major disagreements. For instance, when it comes to greetings, South Koreans bow while Western societies do not bow in greetings. Also, western societies are very time conscious; time is money, and punctuality is crucial (Whelan, 2017, p.114). This is also the case with Koreans, and being late would be viewed as an insult. Finding ways to bridge the differences across cultures is critical as it would lead to more understandings. Finally, Frank would have employed different communication styles when negotiating with his prospective candidates. Beliefs, customs, attitudes, and traditions are embedded in culture, and this affects how people communicate and negotiate. To overcome communication and negotiation challenges, Frank would have at least learned some Korean terms and phrases (Whelan, 2017, p.114). This would have created a notion that he cares enough for the people to learn their language. Also, being accommodating would have at least allowed Frank to relate with his prospective candidates. Frank was not accommodative and was not open-minded in his hiring process.

Conclusion

Cultural preferences are essential as they help in understanding people. Despite this importance, culture and people’s values can act as barriers to progress, especially when not adequately addressed. This is the case with Frank. South Koreans’ cultural preferences acted as a barrier and were problematic in Frank’s hiring process. Importantly, Frank did not consider his prospective employees’ cultures. This was a critical step, and it greatly mattered. If Frank considered their cultures, he would have found that South Koreans live in a collectivist society. Long-term relationships and commitments are valued in Korean. People here also value loyalty and associations with others, and, more significantly, the interconnectedness between individuals plays a critical role in each individual’s identity. These cultural values are perhaps the main reasons why Frank’s prospective candidates choose to remain in their current jobs. In addition to understanding these values, Frank should have considered the degree to which his prospects considered improvements and how much they desired it. Koreans are reluctant to change, and they perceive inequality as a good thing. South Koreans embrace and appreciate wage disparities, and Frack should have researched the labor market and offer market-based wages and benefits. Understanding people’s culture is a sign of respect, and when done accordingly, it fosters an environment of trust.

Recommendations: What Would Be Your Advice to Frank

From the case, it is evident that Frank failed in recruiting local employees due to the cultural barriers prevalent between his culture and the Korean culture. It would have been helpful if Frank understood that things that worked for him while in the United States were either insult or were not appreciated in South Korea. By understanding this, he would have embraced unique hiring processes that are acceptable in the region (Whelan, 2017, p.114). But to avoid such instances in the future, Frank should work hard to ensure clear and polite communication as this reduces the possibility of surprise, crises, and confrontation. Frank should have taken diversity and cultural differences into account while planning his hiring process. Although significant benefits are appreciated in the United States, Koreans value friendship and commitment above benefits and wages. Frank’s approach should have created a space for developing appropriate relationships before anything else.

Rather than assuming that his prospective employees would accept excellent salaries and benefits, he would have sought to understand their perspectives. Frank should work hard to always communicate with his prospective employees; he should seek to understand what they need. Seeking and understanding what makes employees happy would have allowed him to structure a well-defined employment package. He should not assume that all employees need standards things such as increased salaries, paid leaves, and great benefits to be happy; instead, he should ask. Ensuring clear and polite communication and, more importantly, seeking to understand prospective employees’ needs would ensure that Frank avoids confusion caused by cultural preferences in the future. These aspects would allow him to attain success despite the competitive and complex global business atmosphere.

References List

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Whelan, C., 2017. Security networks and occupational culture: understanding culture within and between organisations. Policing and society, 27(2), pp.113-135.

Zhou, L. and Shin, J.H., 2017. Does stealing thunder always work? A content analysis of crisis communication practice under different cultural settings. Public Relations Review, 43(5), pp.1036-1047.