(TIỂU LUẬN) EXECUTIVE SUMMARY 2 PART a ISSUES IN CROSS CULTURAL MANAGEMENT

RMIT University Vietnam Subject Code: Subject Name: Title of Assignment: Team Name: Group Number: Student Name & ID: Teacher's Name: BUSM4699 Cross-Cultural Management Team Consultancy Project Written Report Pui Pui Pui SGS Group Le Duc Phu - s3759546 Le Phuoc Duc - s3694795 Nguyen Viet Long - s3713043 Nguyen Quang Dat - s3695518 Pham Nguyen Quynh Anh - s3759034 Nguyen Doan Nhat Quang - s3713027 Nguyen Mai Ngan Assignment due date: 10 January 2021 Date of submission: 10 January 2021 Number of pages: Word count: 15 2714 TABLE OF CONTENTS: EXECUTIVE SUMMARY: PART A: ISSUES IN CROSS-CULTURAL MANAGEMENT Language barrier Power Distance and its related problems PART B: CASE STUDIES Communication Barrier Power Distancing at Tung Ho Online Case Study Language Barrier: Tel-Aviv and Boston Power Distancing: Nokia PART C: RECOMMENDATIONS Overcoming language barriers Reducing power distance 10 CONCLUSION: 11 REFERENCE LIST: 12 EXECUTIVE SUMMARY: The report provides the readers the information when people work in a cross-cultural workplace environment, such as what are the problems they have to face and the solutions for those issues In this report, there are two real-life case studies of Tung Ho company (language barrier and power distance) and two online case studies (Tel-Aviv, Boston, and Nokia) to clearly identify the problem this company is facing with related-theories In the interview report, Tung Ho shows that the work between two cultures Vietnam and Taiwan have significantly different causes of discord in the office and that hinders the development of the company Additionally, Tung Ho also faces the power distance problem, which can cause a disagreement in the company management between the employees and the director – Mr Hsu Yi-Chih Besides the problems, the report also presents three specific recommendations for those challenges The first two solutions are for language barriers, which are allowing the managers to learn through the translation classes and providing the workers the foreign language classes Those two solutions are the benefits for the employees to overcome the language barrier and also avoid the misunderstanding in the workplace The third solution is reducing the power distance by having skip-level meetings Based on this recommendation, the lower-level employees can easily exchange their ideas, contribute their work to the higher-level employees and the company This action will make employees feel respected and they will promote themselves to the company INTRODUCTION: In the age of development, many organizations want to expand their business across the country, therefore, most big companies presently adapt to the cross-cultural concept The cross-cultural business helps the firms expand different marketplaces globally as well as seek the resources in many countries (Hummel 2012) With diversity, the employees sometimes misunderstand others when they have high potential in work, which is one of the big problems when many cultures work together The difficult part is how the leader can manage the multinational team works smoothly to encourage employees to thrive in a modern workplace (Reynolds 2017) This report will clearly present the problems in the multinational workplace with the real national business and how to resolve it for the company to operate effectively To be more specific, this report will analyse two main issues when working in a cross-cultural environment, then discuss two real-life case studies of Tung Ho company and two online case studies with many theories to help the readers understand the challenges in the business Finally, the report will provide some positive recommendations to resolve the cases PART A: ISSUES IN CROSS-CULTURAL MANAGEMENT Language barrier Language challenges are considered as remarkable problems of multilingual organizations at the surface stage Generally, society and its environment have a tendency to determine figures of speech, idioms or certain sentences in one’s vocabulary (Kaplan 1954) As a result, it is not an easy method to articulate oneself in a way that equivalence can be obtained from one language to another (Case 2015) The possible doubts and uncertainty because of language barriers could interrupt the smooth interactions of a firm and delay the execution of that firm If businesses apply a dominant language or follow a lingua franca, people can feel endangered or excluded if they cannot rapidly acquire fluency and language skills (Kroon, Cornelissen & Vaara 2015) In the face of these language ambiguities, economic results, and difficult events, a loss of confidence can emerge and affect how people think and respond to each other Power Distance and its related problems Cultural misunderstandings and cultural conflicts could result from a combination of cultural similarities and differences As this issue is held deep within the cultural values, especially in Asian countries, it is not an easy challenge to deal with High power distance employees tend to establish a love-hate relationship with their managers on how they treat and their leadership style Considered as the natural order, lower power employees tend to comply with the orders from higher-level ones, or else they will meet their consequences (Sweetman 2012) This is in contrast to the employees in the low power distance environment as they are less appreciate and respect their superiors due to the more freedom of speech and engagement at work A research by Wei et al (2017) found out that the employees in high power distance environments tend to keep a good relationship with their managers to gain the access to the resources that they want, or just interest in what benefits them from that relationship In contrast, employees in low power distance environments work with their superiors or subordinates as partners As far as the freedom of speech is concerned, they believe that the distribution of power and equalities should be established and maintained Power, in this case, is a competition to acquire expert power rather than declare a social status, which is true for the high power distance group Kim (1999) stated that connection within a high-power distance community such as Korea shows a vertical pattern Formal correspondence is mostly top-down, running through the nominated pyramidal chain of handling Optional response from the bottom is not so much In a representative meeting between a senior and an inferior, a senior usually does much of the communicating while the inferior only shows his or her agreement Khare (1999) manifests that, owing to the organization’s geographical structure of Indian groups (India is considered as a high-power distance country), the connection between superiors and inferiors is restricted to ceremonial networks Furthermore, thorough and in-depth job descriptions for each employee originate the compartmentalization of tasks As a result, there are a few casual interconnections between superiors and inferiors Hofstede (2001) further suggests that organizations and societies identified by high power distance not have many informal contacts between upper and lower levels of the organization and advocate the consolidation of power and decision-making in a few hands of superiors Cultures gaining high points on the UAI or cultures with a high degree of uncertainty avoidance are usually less relaxed with uncertainty and effort through legislation, policies, laws, restrictions and behavioral standards to minimize or handle uncertainty and vagueness It is significantly clear that high UAI societies aim to handle improper, uncertain circumstances not only through ceremonial, obvious rules and regulations but also through tacit, implied rules On the opposite, low uncertainty avoidance societies are familiar with uncertainty, and are secure when facing doubt or disorganized circumstances These societies not depend as stiffly on rule-oriented frameworks for uncertainty reduction, are usually more unprejudiced of risk-taking, and easily adapt to reform (Smith 2016) PART B: CASE STUDIES Communication Barrier First, the language barrier is one of Tung Ho’s serious problems According to Mr Hsu, he pointed out that in the company, the difference of languages between Taiwan and Vietnam causes difficulty in communication In particular, Taiwanese cannot speak Vietnamese well and local employees cannot interact with the Taiwan language Consequently, this has caused delays in implementing ideas and projects because managers and employees in Tung Ho are often confused and not understand each other Even though the company has more than 50 translators, it is considered an effective solution since it cannot approach all the communication and interpretation demands in the operation and innovation of the business processes In addition, Mr Hsu has come up with a solution using a common language for easier communication at the company, which is English However, speaking English is a challenge for the old generation, which interferes with experienced employees at Tung Ho To explain, in their generation, learning English was not popular and practical, therefore, people did not concern themselves and spend time on language development Another reason to explain their bad ability of English communication is a financial crisis before 1990 in the Vietnam context Specifically, they did not have the conditions to receive a good education quality and infrastructure in learning English However, they still play an important role in the company due to their experience in the steel industry Hence, this becomes a big problem in the company when the experienced employees are old generation and have poor English flexibility Applying Schein’s Cultural Iceberg (Appendix 1), language plays an essential role in organizational culture In this case, miscommunication in Tung Ho has affected significantly the individual behavior and business operation Besides, based on Karen’s theory (1954), Tung Ho has confronted creating an attractive working environment due to shared ideas barriers Last but not least, according to Case (2015) argument on Part A, it is a huge challenge for Tung Ho to achieve an optimal performance since the express ability of employees is hindered Power Distancing at Tung Ho As a steel manufacturer, Tung Ho was expected to be a company that would have a decent power distancing at the workplace However, as this company has gone international, its power distancing culture is considered to be old-fashioned and unsuitable for this type of business Tung Ho’s hierarchy is indeed a reflection of a typical power distancing structure This is the social/cultural norm in the two countries According to Hofstede, both Taiwan and Vietnam rather have high power distance within the company and the society This issue is a “doubleedged sword” as it benefits while also causes damages to the firm As the employees only follow the order from their superiors, the company has no problem with its operations throughout its growth However, this “benefit” is also a real issue for the firm in the future as it blocks the voices and the opportunities of the newcomers, or the new generations, to further develop Tung Ho In addition to the issue, the top positions in this structure are all Taiwanese This reality caused a problem in teamwork and communication between members and cultures as besides being power distanced, there is no cultural diversity within the company’s structure The company’s decision for this non-diversity structure is understandable, as according to a research by Dr Carol Kovach (FCSIDHARTA 2016, Appendix 2), a multicultural team could result in a highly effective performance or just highly ineffective while a single cultural team should have their effective average throughout their performance, which is related to the already-mentioned UAI However, as stated by Mr Hsu, he concerned that the young generations would be more open to ideas and changes, which is against the cultural norms that he is familiar with, and thus will affect the company tradition and furthermore, the performance of the company Therefore, this statement has somewhat illustrated the current problem of Tung Ho and also in the future Online Case Study Language Barrier: Tel-Aviv and Boston The case “Tel-Aviv and Boston” is a typical realistic example of the language barrier aspect Particularly, Tel-Aviv is an Israeli company with many local employees, while Boston is headquartered in England In this case, the managers of both two countries had a meeting call to discuss the transformation of cloud-computing products In the online conference, the Israeli manager of Tel-Aviv had a miscommunication and used the wrong words “Don’t care” instead of “Don’t worry” This made Boston’s manager become very aggressive and the conference was terminated immediately after representative Tel-Aviv’s unintentional statement Consequently, both two companies are also delayed in implementing their development strategy and negatively affects sales and business relationships (Lautman, 2017) Power Distancing: Nokia Nokia is a perfect example of how power distance will ruin a company’s development in the long run The company was once worth $150 billion, with huge successful achievements back in the day Nokia’s loss was rumoured to be not having enough potential and resources to keep up with Apple, a newcomer with breakthrough-innovations in the smartphone industry However, the problem with Nokia is that its leaders were not taking Apple seriously as their competitor Furthermore, mid-level managers and employees were not in the discussion with their bosses about this rivalry The distance in power was just too big (Approachable Leadership n.d.) PART C: RECOMMENDATIONS Overcoming language barriers The language barrier is the biggest challenge to create an effective communication environment to achieve the highest productivity inside and outside the organization, as communication is the key to bringing about effective management of the workforce (Habas 2020) Therefore, it is essential to smooth the communication activities within the Tungho company as well as diplomacy and cooperation with other companies to avoid the Tel-Aviv & Boston case above To improve the connection between factory workers, office workers, managers and upper levels of the operating department to achieve maximum understanding to bring the highest efficiency in the workplace as well as relationships with other companies These two solutions are proposed to limit language barriers for organizations Firstly, training courses on translating skills for managers, associates across corporate departments, factory workers, employees, and executive managers, as well as translators or diplomatic staff, finding and connecting customers with the company According to the director of Tungho, employees and workers will work according to a predetermined procedure by the management board, so technical terms frequently used in the working process need to be explained in a variety of languages that employees can understand clearly In addition, cultural knowledge such as customs, norms and social standards of different countries should also be added to improve the quality of translation and avoid conflicts in communication for internal working boards as well as avoid misunderstandings when communicating with customers or international partners of the company to avoid mistakes in the cooperation process Secondly, providing foreign language classes for office workers and factory workers can also participate With the goal of retaining the old generation of human resources with more work experience but limited language communication, foreign language training for them is necessary to create a normal working environment At work, avoid silence that leads to depression and misunderstanding when working together By providing staff with weekly basic to advanced English classes along with cultural experiences when communicating with other native speakers, learners can learn faster and more confident in communication The combination of learning a new language with culture is indisputable because culture and language are two inseparable things Because the two are intricately intertwined Foreign language teachers should know the position of cultural studies in the classroom and strive to increase the cultural awareness of students and improve their communication skills (Zhou 2017) Depending on the communication conditions and needs of the company, the company can choose one of the two ways above or both to maximize productivity when most jobs require teamwork and cooperation with outside companies during integration Reducing power distance It is crucial to reduce power distance because it can have an influence on the creativity of employees (Yuan & Zhou 2015) Creativity plays a significant role in the thriving of businesses (Davis 2010) It is defined as the creation of new and useful ideas in any domain that make social acceptance (Hennessey & Amabile 2010; McShane et al 2017) The creative process will create new ideas and turn them into practices As a consequence, it can preserve the competitiveness and profitability of the enterprises, create enormous value for consumers and enhance the welfare of society (Volkova & Jākobsone 2016) In other words, the growth of companies relying heavily on creativity Due to the above reason, Mr Hsu should reduce power distance To clarify, in a low power distance context, staff considers themselves as being equal to their managers As a result, they are more willing to participate in decision-making, generating, and implementing creative ideas (Xie & Paik 2019) It is suggested that Tung Ho have skip-level meetings, which are face-to-face meetings and conversations between higher-level employees and lower-level employees in a safe and productive environment These meetings create a sense of closeness between the supervisor and the staff and also create a comfortable work environment where everyone feels heard (Inguagiato 1994) Nonetheless, at the moment, the language barrier is still a major corporate issue Therefore, in order for these meetings to be effective, the company needs to arrange interpreters to fully convey everyone's information In the long-term, the young generations will be trained not only in expertise but also in soft skills such as communication skills, language skills, and so on Besides that, the booming development of technology will help the company have more feasible solutions to communicate closely with employees For example, Tung Ho can create forums through Microsoft Teams and other applications to create a space that connects employees together When it comes to the benefit of having skip-level meetings and opening forums, there are four main points Firstly, these are chances for all staff to share the problems and look for solutions to address them Secondly, the meetings provide opportunities to share goals and ideas and suggest how to achieve them Moreover, it is a place to review and evaluate 10 according to set general standards Next, it is a golden opportunity for company management to interact with employees to share knowledge, experience, and motivation with them (Flowers & Hughes 1973) Lastly, celebrating personal successes and creating fun activities to increase corporate solidarity CONCLUSION: To conclude, cross-cultural management seems to make it difficult for employees who not approach the new environment The main issue in every national business is the language barrier, which prevents the employees from communicating with others, can lead to misunderstanding, and have a conflict in the workplace Moreover, the power distance is also a challenge for Vietnamese employees to have a Taiwanese boss These two problems have been analyzed and clarified with clear theories and evidence throughout this report In addition, positive solutions have been added in order to help the operation work efficiently and effectively With globalization, not only does the business catch up with the concept, increase the profit, but also support the employees evaluate their skills 11 REFERENCE LIST: Approachable Leadership n.d., ‘Power Distance Killed Nokia (Plus Tips To Discover Your Gaps)’, Approachable Leadership, viewed on January 2021, Davis, B 2010, ‘Creativity & Innovation in Business 2010 Teaching the Application of Design Thinking to Business’, Procedia - Social and Behavioral Sciences, vol 2, no 4, pp 6532-6538, RMIT Library database FCSIDHARTA 2016, ‘Promoting innovation in foreign policy sector through diversity and inclusion’, FCSIDHARTA, viewed on January 2021, Flowers, V & Hughes, C 1973, ‘Why Employees Stay’, The Magazine (1973), Harvard Business Review, viewed January 2020, Habas, C 2020, ‘Cultural & Language Barriers in the Workforce’, Chron, Hearst Newspapers LLC, viewed January 2021, Hennessey, B & Amabile, T 2010, ‘Creativity’, Annual Review of Psychology, vol 61, pp 569-598, RMIT Library database Hofstede, G 2001, ‘Culture s Consequences: Comparing Values’, Behaviours, Institutions and Organisations across Nations, Thousand Oaks, CA 12 Hummel, D 2012, ‘Understanding the Importance of Culture in Global Business’, Oracle, viewed 05 January 2021, Inguagiato, R J 1994, ‘Skip-level meetings can ease restructuring’, HRMagazine, vol 39, no 6, pp 99 Khare, A 1999, ‘Japanese and Indian Work Patterns: A Study of Contrast’, Management and Cultural Values, The Indigenisation of Organisations in Asia, pp 121 - 136, Sage Publication, New Delhi Kim, S.U 1999, ‘Determinants and Characteristics of the Corporate Culture of Korean Enterprises’, Management and Cultural Values, The Indigenisation of Organisations in Asia, pp 86 - 101, Sage Publication, New Delhi Lautman, O 2017, Case Study: ‘Language Barriers in Cross-Cultural Communication’, OLM Consulting, viewed January 2020, McShane, S, Olekalns, M, Newman, A & Travaglione, T 2017, ‘Organizational Behavior’, 5th edn, McGraw-Hill Education, Australia Reynolds, K 2017, ‘How cultural differences impact international business in 2017’, Hult International Business School, viewed 05 January 2021, 13 Smith, C 2016, ‘What is Uncertainty Avoidance’, Culture Matters, viewed January 2021, Volkova, T, & Jākobsone, I 2016, ‘Design thinking as a business tool to ensure continuous value generation’, Intellectual Economic, vol 10, no 1, pp 63-69, RMIT Library database Wei, C Sun, X, Liu, J, Zhou, C, Xue, G 2017, ‘High Power Distance Enhances Employees’ Preference for Likable Managers: A Resource Dependency Perspective’, Frontiers in Psychology, viewed on January 2021, Xie, G & Paik, Y 2019, ‘Cultural differences in creativity and innovation: are Asian employees truly less creative than western employees?’, Asia Pacific Business Review, vol 25, no 1, pp 123–147 Yuan, F & Zhou, J 2015, ‘Effects of cultural power distance on group creativity and individual group member creativity’, Journal of Organizational Behavior, vol 36, no 7, pp 990–1007 Zhou, Z 2017, ‘Cross-cultural Training and Second Language Learning’, Asian Education Studies, vol 2, no 3, July Press, viewed January 2021, 14 APPENDIX: Appendix 1: Schein’s Cultural Iceberg Appendix 2: Graph conducted based on the result of Dr Carol Kovach’s research 15 ...TABLE OF CONTENTS: EXECUTIVE SUMMARY: PART A: ISSUES IN CROSS- CULTURAL MANAGEMENT Language barrier Power Distance and its related problems PART B: CASE STUDIES Communication Barrier Power... communication The combination of learning a new language with culture is indisputable because culture and language are two inseparable things Because the two are intricately intertwined Foreign language... & Innovation in Business 20 10 Teaching the Application of Design Thinking to Business’, Procedia - Social and Behavioral Sciences, vol 2, no 4, pp 65 32- 6538, RMIT Library database FCSIDHARTA 20 16,