Conflict entails rivalry by groups or people over incompatible objectives, scarce resources, or the sources of power required to gain them. This rivalry is also determined by one’s perception of aims, resources, and power, and such perceptions canvary significantly among people. One determinant when it comes to perception is culture, the socially acquired, shared and learned ways of living owned by individuals owing to their membership to a certain social group. Conflict might occur across cultural boundaries hence is also occurring across intellectual and perceptual boundaries, and is more so prone to problems of intercultural miscommunication and misunderstanding.
These problems increases the conflict, irrespective of what the root causes are. In this sense culture is a crucial aspectvarious sorts of conflicts which initiallymight seems to be entirely about material resources/negotiable interests. This difference also affect how global business is done. In cross-border business, business people step into a different cultural environments which are characterized by foreign/alien languages and distinct value systems, beliefs, and behaviors. One tends to come across clients and business partners who exhibit various lifestyles, norms, and consumption behavior. These differences influences/affects every aspect of international business. Cross-cultural risk comes about routinely in global business due to diverse cultural heritage. This paper will focus on culture and cross-cultural risks and culture’s effect on international business. It will also give an example of how cultural values have been affected by international business in the Kingdom of Saudi Arabia.
Culture and cross-cultural risks
Executivesin the 21st century multicultural global business community usually come face to face with cultural variations and which mayinfluence the success or the failure of the firm. Two leading researches on cross-cultural management have been carried out by Geert Hofstede and Fons Trompenaars. Some of the cross cultural risks include;
Efficient communication is crucial to the success of any firm, but it’s more so essential when there is a real risk ones message getting “lost in translation.”In most global firms, English is usually the de facto language of business. But more than just the language one speaks, how one conveys their message is vital (Romanova, 2008). A case in point, the Finns prefer directness and brevity, professionals from India are usually indirect and nuanced when it comes to their communication. Failing to understand the communication style of a different culture may result to a communication breakdown/risks since either of the two might be going against each other’s societal norms and beliefs.
The other cross cultural risk relates to workplace etiquette. The idea of punctuality might differ between more so when it comes to international business environment. Notions of what entails being “on time” might lead to misunderstanding or negative cultural perceptions. A case in point, whereas an American can arrive for a meeting a few minutes early, an Italian or even a Mexican can arrive several minutes or more after the scheduled start-time & they might still be regarded to be “on time”. This varying perception about punctuality poses some risks in that it might lead to conflicts and frustrations.
Organizational hierarchy and attitudes towards management roles does vary among cultures. For example, a nation like Japan, which historicallycherishes social hierarchy, relative status, and respect for authority, brings style within the workplace. This hierarchy assists in definingduties and responsibilities within the company(Romanova, 2008). This refer to also that those in senior positions are accorded respect and requireparticular levels of formality and deference from junior staffs. However, within the Scandinavian nations like Norway, it puts a lot of emphasize of societal equality hence they have a relatively flat organizational hierarchy(Romanova, 2008). In turn, this might include informal communication and an emphasis on cooperation across the company.Someof the cross cultural issues that might be grouped into the following dimensions and which were coined by Geert Hofstede.
Power distance the degree to which the less powerful members of organization and institution accept and expect that power is not distributedequally. The primary issue involved is the extent of people inequality which underlies the functioning of everycommunity.
Uncertainty avoidance entail the degreeto which a culture programs people to feel uncomfortable or comfortable in unstructured circumstances. Unstructured circumstances are not known and are surprising. The primary issue involved is the extent to which the communityattempts to regulate the uncontrollable.
Individualism, versus its opposite, collectivism, the extent to which people are expected to care for themselves or be integrated into groups/families. Positioning itself between these poles is a primary issues all communities face.
Masculinity versus its opposite, femininity, entails distribution of emotional roles between the sexes, which is another crucial issuesin the community. This variationis against “tough” masculine and “tender” communities. The duality of the sexes is a crucial fact with which various communities cope in various ways(Romanova, 2008).
Long-term versus short-term orientation entails the extent to which a culture programs its members to accept post ponding gratification of their material, and emotional requirements.
Culture’s effect on international business
Top executives and CEOs in Saudi Arabia are faced with an enormous task/challenge when it comes to their quest to enhance the performance of companies. The greatest issuerelates tocultural issues and work practices which limitsthe performance levels of the staffs when compared totheir counterparts in the Western global firms (Idris, 2007). Maintaining and increasing a broad base of Saudi technical and skilled employees is a challengeowing to the fact that the Saudis are more inspired by status and position. Majority of the young Saudis have been brought up in luxury, seeing their parents receiving high incomes, high-status positions (Bell, 2005). One study that was carried out back in 1986 discovered that Saudi labor ranked the when it comes todue to abundance of job opportunities. Besides this, the Saudi employeesare not motivated to work in lowly-ranked.A recent research established thata quarter of Saudi staffs who are working in the private sector don’t regularly report to work, hence leading to high employee turnover rate.
Based on the findings by Beer et al. (1985), supervisors in many rarely provideaccurate and honest performance appraisalssince they do not want to adversely affect the self-esteem of the staff (Beer et al., 1985). In Saudi Arabia, honest feedback when it comes to performance can be perceived by the staffs as unkind and hostile. Within the Arab culture, it’s customary to offer feedback via an intermediary so as to minimize any conflictsor sending the wrong message. This is aggravated when the performance of the Saudi staffs is related to their expatriate counterparts, comparisons which are at onceviewed as favoring the foreigners and not promoting Saudization, a word coined for nationalizing the jobs.
The fact that Saudi Arabia’s collective culture appreciate group work, the pay-for-performance system whichidentifiesstaffs is looked down upon when management attempts to ignore it via writing comforting statements on the appraisal documents to compensate for minimal salary increases for poor performers. The existing culture favors life employment, hence managers are prohibited from sacking poor performing employees and replacing them with the high performing staffs. Unless the difference in compensation of the high performers and low performers is great, companies risk demotivating the high performers while encouraging the low performers to remain unproductive (Beer et al., 1985).
Variations when it comes to communication styles might oftenly be a cultural challenge and as a result, international companies doing business in Saudi Arabia and who do not have sufficient knowledge/can often find themselves feeling confused and frustrated. The communication style used in Saudi Arabia in most cases tends to be quite indirect and high context. In short, this refers to that communication styles in Saudi Arabia tends to depend more heavily on body language and other non-verbal signals like the tone of voice and the use of silence. When doing business in Saudi Arabia, it’s prudent for one to remember that information is hardly explicitly stated, silence is oftenly used for scrutiny and a direct “no” is rarely used. This is contrary to the communication style used in the western style whereby communication is direct to the point. In the western nation, they tell it like it easy regardless of if ones feelings might be hurt in the process(Idris, 2007). The variation might affect international business in that there would be a lot of frustrations and misunderstandings since on one hand one is expecting a more direct approach while on the hand, one might be communicated to using an indirect approach (body language).
Despite the fact that the prevailing circumstance is different from the 80s and job opportunities are not numerous, effect on the culture of the accumulated wealth in the 70s still persists, and about everylike to work in managerial positions. Labor-kind jobs are viewed to be unattractive and not honorable (Idris, 2007). Such situations is firmly rooted to the degree that families and the government guards and support those who pass up the socially unaccepted jobs.
Technical Saudi professionals are forced to look for managerial positions as most firms’ systems aren’t structured to support interesting and rewarding technical and labor career paths. The kingdom is significantly dependent on foreign labor. As a result of this, it has hindered the development of a skilled workforce to such an extent that the private sector isn’t in a position totake in new Saudi entrants and are unable to give attractive salaries (Al-Kibsi et al., 2007).
Saudi Arabia has a lot of expatriates working there and who come from different parts of the world. Among them are women. Saudi Arabia is regarded to be a male dominant nation, hence western female might find it challengingto make a decision to move towards Saudi Arabia. Females aren’t allowed to drive hence it would be problematic for western freedom lover lady. Moreover, Saudi woman are required to cover themselves using an abaya (Salman, 2016). Muslim women are required to put onan abaya and their face. For the non-Muslims women,an abaya is a must but one is allowed not to cover their face. Saudi Arabia has different shopping malls, restaurants, and banks for females but no gyms, cinemas or concerts for women in Saudi Arabia. Adjusting from a free culture to a restricted culture can be quite challenging for women expatriates wishing to work in Saudi Arabia.
Example from Saudi Arabia where cultural values have been affected by international business.
As earlier noted, Saudi Arabia is a male dominated nation and women were not allowed to drive. However, the leader of Saudi Arabia, King Salman has given a special decree which grants women permission to drive. This move was meant to ease restrictions on women and which had a significant effect for the Saudi economy and women’s capacity to work. This change was based on the fact that the laws prohibited women from driving was demeaning to women and it hindered them from been actively involved in their work. Moreover, the nation was trying to keep up with what other nations in terms of the rights of women and ensure their active participation in nation building. According to bin Salman, “We are attempting to increase the number of women participation in the workforce,” (Gaouette and Labott, 2017). He went on to add that so as to change women’s participation in the labor force, they need to be allowed to drive to work. He concluded by saying that the nation needs them (women) to move forward, so that they can help to improve the economy.
Al-Kibsi, G, Benkert, C., and Schubert, J. (2007). Getting labor policy to work in the Gulf. The McKinney Quarterly, 19-29. , from http://www.mckinseyquarterly.com/home.aspx
Beer, M., Spector, B., Lawrence, P., Mills, D., and Walton, R. (1985). Human resource management: A general manager’s perspective. New York: The Free Press.
Idris, Abdallah M. (2007). “Cultural barriers to improved organizational performance in Saudi Arabia.” SAM Advanced Management Journal. Society for the Advancement of Management. Retrieved February 05, 2018 from High Beam Research: https://www.highbeam.com/doc/1G1-166537561.html
Nicole Gaouette and Elise Labott. (2017). Saudi Arabia to let women drive at last. Retrieved from CNN: https://edition.cnn.com/2017/09/26/politics/saudi-arabia-woman-drive/index.html
Romanova, F. T. (2008). Cross Cultutraldifferencesandtheir implications for Retrieved from The George Washington University: https://www2.gwu.edu/~umpleby/recent_papers/2003_cross_cultural_differences_managin_international_projects_anbari_khilkhanova_romanova_umpleby.htm
Salman, Y. a. (2016). Female Expatriates and Cross Cultural Adjustment: A Study of Saudi Arabia. Pakistan Journal of Women’s Studies, Vol 23 No 2.