USING HOFSTEDE'S MODEL TO IMPROVE

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USING HOFSTEDE’S MODEL TO IMPROVE MULTICULTURAL MANAGEMENT IN THE EUROPEAN UNION David L. Barkley, Keiser University, Fort Lauderdale, Florida, USA Matthias Eggertsson, Keiser University, Fort Lauderdale, Florida, USA ABSTRACT This paper discusses and synthesizes two concepts related to a multicultural-firm’s economic performance, EU management techniques and Hofstede’s six cultural dimensions. Additionally, it argues that for nations operating across national borders within and beyond the EU, a management strategy focused upon cultural awareness and adaptation enhances corporate economic performance. Such a strategy improves communication effectiveness between managers and their employees in the presence of cultural diversity between the two groups, aligning incentives and goals. Empirical studies referenced within this paper demonstrate a high degree of cultural diversity among EU member nations as well as non-member nations with which the EU conducts business. Such diversity serves as a hurdle to effective multicultural management absent the acknowledgement of, and response to, differences in Hofstede’s cultural dimensions. Keywords: European Union, Multinational Corporation, Hofstede’s Cultural Dimensions, Cultural Diversity, Management Technique 1. INTRODUCTION This paper contains two overarching themes, cultural diversity in the EU and management techniques, synthesized for a clearer understanding of effective management strategy. Cultural diversity, categorized into six cultural dimensions by Geert Hofstede (2011), performs a major role in determining both a person’s style of management and the way in which employees respond to that style of management. The ability of business managers to accurately assess the cultural background of their employees, then adapt their management technique to effectively respond to that background, can enhance their team’s performance. Enhancing team performance typically leads to greater economic results for business units and corporations. Managers who understand their employees’ cultural background are more capable of adjusting their management style to increase employee performance and firm economic performance. The following section of this paper, with the heading Cultural Differences Between Nations, contains a description of cultural differences existing between EU member nations and defines key terms. The next section, with the heading Hofstede’s Cultural Dimensions and EU Management Technique, contains an analysis of Hofstede’s model, describing each of the six dimensions and their relationship to effective multicultural management. The conclusion to this paper contains an argument and recommendation related to multicultural management within and beyond EU borders. 2. CULTURAL DIFFERENCES BETWEEN NATIONS Culture and traditions tend to vary from one country to another. The concept of culture was defined by Newman and Nollen (1996) as “the values, beliefs and assumptions learned in early childhood that distinguish one group of people from another” (p. 754). Groups of people can be generally defined by national borders such as those delimiting the United States and China. From there, culture can also be generalized. For example, the United States maintains an elected government founded in Christian tradition that promotes free-market trade. U.S. citizens denounce absolute rule by monarchs because of their struggle for independence from the British crown in 1776. At the other end of the spectrum, China’s oppressive Communist government denies its citizens free access to the internet and controls capital flows. China’s official religious position is atheism while many of its citizens practice Taoism and Buddhism. Despite the stark contrast in culture between Americans and Chinese, regular occurrence of workplace conflict is uncommon where citizens of both nations work in a common space (Andersen, Aasland, Fridner, & Lövseth, 2010). The reason is, although Chinese and American expatriates exist,

they represent outliers in their respective workforce typically managing foreign business units at high levels in their organization (Selmer, 2002). Conversely, many employees from significantly different cultures work with one another in the EU. British culture differs from German culture because of geography, wars, and political leadership. Britons maintain the trappings of monarchy on their island nation whereas Germans have rejected socialism and autocracy, popular in countries with which they share a border. Italy’s cultural development was heavily influenced by surrounding nation states and continues to reflect those influences today. Where differences exist so too do similarities; German and English culture lends itself to progressive economic development while Portuguese and Spanish culture does not (Tabellini, 2010). Nordic countries, including Sweden and Finland, developed cultures based on a similar religion and sea-faring industry. While Nordic countries all share a similarly low rank per Hofstede’s masculinity/femininity category, many Eastern European countries rank at the opposite end of the same scale with high masculinity bias (Clearly Cultural, 2016). Due to the large number of sovereign countries that share land borders or are near one another on the European continent, employees are commonly sourced from foreign nations. The establishment of the EU, which eliminated border checkpoints and country-based labor restrictions, magnified this effect. These markedly heterogeneous cultures exist within the EU’s homogenously governed economic trading bloc. This incongruity presents challenges to EU-based managers, particularly given the high mobility of labor post-EU integration (Georgiana & Andrei, 2016). Before the EU existed, a French citizen who wished to work in Germany was required to apply for a work permit and display a French passport to cross Germany’s border and secure gainful employment. These restrictions are no longer in place, allowing any EU citizen to travel and work in any other EU country with much less documentation or delay. Cultural diversity in the workplace increased for many EU countries as a result of economic integration, especially for those countries with strong economies and demand for labor like Germany and Britain (Sahib, 2015). EU cultural integration presents corporations with management complexities related to diversity. At the same time, it represents social and economic progress and benefits. The concept of a united Europe developed out of the two world wars that occurred during the first half of the 20th century. Upon the conclusion of World War II, European leaders took steps to minimize the chances of future internecine conflict. Those steps put organizations and processes in place which culminated in what is now known as the European Union (EU). Member countries have reaped both social and economic benefits in the form of reduced conflict and the expansion of economic opportunities to a larger number of countries and people (Euzéby, 2010). These results suggest that the cost of overcoming management challenges related to cultural differences within the EU is outweighed by the benefits accrued to member nations. 2.1 Culture Impact on Management Technique The history of cultural development within a nation’s boundaries shapes behavioral traits prevalent among that nation’s citizenry. To dispute claims counter to and provide support for this concept, Horak (2015) conducted an empirical test of different cultural groups and their response in terms of behavioral decisionmaking to a panel of economic offers. His study results demonstrated a significant and consistent correlation between culture and economic behavior, confirming the influence culture exerts on behavioral development. Corporations consisting of multicultural teams benefit from an understanding of behavioral patterns related to specific cultural groups; their managers develop techniques which resonate with specific cultures, producing higher levels of motivation and enhanced economic results (Elenkov, 1998). Management techniques employed by corporations changed significantly over the past 30 years. Prior to the globalizing effect of advancements in communications and computer technology in the 1980s, corporate managers adopted protectionist techniques which looked inward and focused on optimizing existing corporate competencies (Chang & Lee, 2007). The technological revolution provided a focus on global competition and external competencies as these became easier to study and understand. Managers began encouraging their employees to branch out beyond corporate borders and acquire knowledge from sources like suppliers, distributors, and even competitors. The shift from an internal to

an external focus reflects an understanding for the need to adjust management technique to encompass a greater variety of cultures by searching outside the firm. 3. HOFSTEDE’S CULTURAL DIMENSIONS AND EU MANAGEMENT TECHNIQUE Prior to 1984, a generally accepted classification of national cultural traits did not exist despite knowledge of the fact that differences between national culture did exist and the call for a classification system years earlier by Kluckhohn (1953). The necessity of such a classification for business management purposes, and the system’s development, was forwarded by Hofstede (1984) in a journal article that stated, “management technique…that is appropriate in one national culture is not necessarily appropriate in another” (p. 81). Through his research assignment at IBM, Hofstede recognized an opportunity to group the seemingly scattered characteristics associated with national culture into categories. Further, he realized the impact such a classification could have for managers attempting to develop leadership technique for use with foreign employees: without knowing behavioral patterns specific to a nation’s culture, managers had no basis for the development of technique. Hofstede gave the management profession a model with which to categorize culturally-based behavior and, for this contribution, is known as the Sigmund Freud of multicultural studies (Granered, 2006). His model included the following six dimensions: (a) individualism-collectivism, (b) power distance, (c) uncertainty avoidance, (d) masculinityfemininity, (e) long-short term orientation, and (f) indulgence (Hofstede, 2011). The remaining subsections of this paper contain descriptions of each dimension and its relationship to multicultural management in the EU. Examples are used to demonstrate the ability of each dimension to impact management effectiveness. 3.1 Individualism-Collectivism The first cultural category developed by Hofstede (1984) was labeled individualism-collectivism. This dimension categorizes people per their relative level of group integration: individualists self-promote their accomplishments while collectivists promote the accomplishments of a larger group to which they belong (Hofstede, 2011). Cultures characterized by individualism place value on high levels of self-achievement such as educational-degree attainment and the accumulation of financial wealth. To clarify, defining individualists as a self-promoting population is not meant to imply an inappropriate method of goal achievement. Rather, motivated self-interest is simply a tenet, and an outcome, of capitalism in that individualists derive motivation from the potential to increase their status in society and benefit financially from their efforts. In such nations, higher levels of education and hard work are generally associated with higher financial reward. For this reason, individualist societies are typically Western nations like the United States, Canada, and Western European countries (Brewer & Chen, 2007). While collectivists also engage in activities aimed at the accomplishment of predefined goals, these goals are aligned not solely with personal advancement but the advancement of a larger group of people. Hofstede (2011) found that collectivist societies produce ingroups of people looking out for each other’s best interest from birth to death, inclusive not just of immediate family members but even those biologically unrelated. Members of ingroups demonstrate fierce loyalty to all other members, promoting harmony within the group and avoiding use of the word I instead preferring the word we (Hofstede, 2011). Characteristics of collectivist societies stand in stark contrast to those of individualist societies from a political, social, and economic standpoint. Collectivists thrive under socialist and communist policies, both of which discourage extreme concentrations of individual wealth and power in favor of relative equality (Kelly, 2009). Eastern cultures, such as Russia, China, and many Eastern European states, correlate with collectivist societies in that people are dependent upon ingroup-members and are deeply embedded within those groups (Brewer & Chen, 2007). These countries share a history of either communism or socialism, shunning democratic and capitalistic policies typical of Western nations. Beyond simply categorizing culture per individualism-collectivism, Hofstede’s (1984) great insight was the predictability of behavioral patterns exhibited by people from a certain culture. As demonstrated by recent research, individualist and collectivist behavioral patterns lend themselves to the development of effective management techniques. For example, Goncalo and Staw (2006) began with known patterns of opportunism and uniqueness characteristic of individualists, and patterns of cooperation and conformity characteristic of collectivists, and studied each group’s ability to enhance creativity in the workplace.

Creativity is related to innovation, and innovation is associated with a firm’s potential to capture new customer bases through product development. Management technique that promotes creativity, therefore, holds the potential to increase a firm’s customer base, leading to increased revenue potential. Based upon this premise, and in contrast to conventional wisdom which stated individualist behavior stifled workplace creativity, Goncalo and Staw’s research (2006) provided evidence that individualists increase workplace creativity due to their nonconforming, unique behavior. The authors found the conventional wisdom to be true, that cooperation amongst group members enhances creativity due to the axiom that many minds are better than one. Further, their research linked Western-style culture to individualist patterns of uniqueness and Eastern-style culture to patterns of conformity. Results from this study suggest that both Western and Eastern national cultures contain behavioral traits with the ability to enhance corporate innovation. The EU, which exposes multinational corporations (MNCs) operating within its borders to both Western and Eastern culture, necessarily exposes those MNCs to employees who exhibit both individualistic and cooperative workplace behavior, respectively. MNCs operating in the EU, therefore, should tailor management technique to the culture: leverage unique behavior and develop cooperative behavior in Western employees while leveraging cooperative behavior and developing uniqueness in Eastern employees. Following this approach increases the potential for MNCs operating in the EU to enhance creativity thus enhancing innovation and revenue growth. Results from an empirical study conducted by Parrenin, Rau, and Zhong (2015) confirmed management complexities in Sino-French business interactions due to general differences in individualism-collectivism, however, presented evidence that young Chinese employees are becoming more individualistic. As predicted by Hofstede (2011), Eastern-cultured Chinese employees who participated in their study exhibited highly collectivist workplace behavior while Western-cultured French employees exhibited individualistic workplace behavior. Most Chinese employees surveyed showed a greater commitment to help members of their ingroup relative to French employees who focused upon completing their work independently. The panel of Chinese employees under 30 years of age, however, exhibited signs of independent work completion. Regardless of the varying levels of collectivism, Parrenin, et al. (2015) concluded that patterns of conflict avoidance and indirect communication continue to typify Chinese employees, and that individualist managers must adapt their management style accordingly to maximize employee performance. Zhang, Lowry, Zhou, and Fu (2007) conducted a study that analyzed group decision-making outcomes by multicultural teams when those teams were either majority individualist or majority collectivist. The researchers sought to understand the extent to which each group impacted decision outcomes when the group represented a majority and when it represented a minority. Western cultures exhibit patterns of nonconforming behavior which, when acted out in a group setting, function as a natural disruptor to groupthink. The uniqueness of individualist thought, when it exists in opposition to a collectivist’s theory, could alter decision outcomes. Collectivist thought, however, is always represented by more than one person as collectivists exist in groups, and those group members strive for harmony and cooperation with each other (Brewer & Chen, 2007). The results of Zhang et al.’s (2007) study provided an important insight into proper management technique when dealing with a multicultural team consisting of a collectivist minority and individualist majority. They found that when collectivists represent a minority within a multicultural team, the collectivist decision is less likely to be represented in the outcome. Zhang et al. (2007) recommended that managers engage in mediation techniques to increase the impact collectivists exert upon decisionmaking outcomes when they represent a minority. MNCs operating within the EU may construct multicultural teams consisting of collectivist minorities for which such mediation techniques should be employed. 3.2 Power Distance The dimension Hofstede (1984) termed power distance refers to the degree of power inequality between people who hold different positions within an organization: high power distance cultures are characterized by a greater inequality of decision-making power between superiors and subordinates. Cultures that rank both high and low on the scale have some degree of power distance between organizational positions so

neither type represents an absolute lack of nor absolute control of power. The ubiquity of power distance as a worldwide social norm acts to legitimize the ability of superiors to execute decisions and delegate tasks to subordinates (Brockner et al., 2001; Hauff & Richter, 2015). In this manner power distance serves a useful purpose for the necessary concentration of power in decision makers. While the general phenomenon is ubiquitous, degrees of power distance vary significantly between cultures. The United States and Western European nations such as Germany exhibit low levels of power distance while countries like China and many Eastern European nations exhibit high levels of power distance (Brockner et al., 2001). Due to the impact of power distance on decision-making abilities and the concentration of executional power, efficacy managing a multicultural team relies upon recognizing potential conflicts between managers and subordinates accustomed to different levels of power distance. Variances in power distance levels exist within the EU, especially between Western and Eastern European nations. For MNCs managing EU teams with members from both low and high power distance cultures, instructions for job completion from management to subordinates could either cause confusion or go unheeded, as the following examples demonstrate. Brockner et al. (2001) studied the effect that variances in power distance levels between managers and employees exerted upon work performance and job satisfaction. Both job performance and satisfaction represent factors linked directly to enhanced firm financial performance through a variety of metrics such as unit sales and revenue (Brown & Peterson, 1994). Significant workplace conflict due to power distance variance, therefore, can increase or decrease firm economic performance and should be managed accordingly. To this end, two findings stand out from Brockner et al.’s (2001) study, both relating to management technique. First, they pointed out a root cause for power distance conflict, the perception of unfairness: low power distance subordinates, when receiving direction from high power distance managers, felt as though they were handled unfairly. This feeling of injustice stemmed from a desire for involvement in the decision-making process of which high power-distance managers do not grant subordinates. For the reverse scenario, in which low power distance managers issue indirect instructions to high power distance subordinates, those subordinates feel confused and misguided as they are accustomed to direct orders with little to no decision-making involvement. Second, their results suggested the potential for successful workplace relationships between managers and subordinates from two different power distance cultures in the presence of proper management technique. Recent empirical support exists for these findings, stressing the leverage that job characteristics exert on job satisfaction, contingent upon the manager-employee culture dynamic. For example, Hauff and Richter (2015) studied a panel of 16 countries ranging from high to low levels of power distance, both within and outside of the EU, focusing on management style and resulting levels of employee satisfaction and motivation. One result from their study included a significant correlation between low power distance culture and the consultative management approach: high levels of job satisfaction resulted from low power-distance employees managed per consultative managers who permitted empowerment and autonomy. Another result from their study demonstrated a significant correlation between high power distance employees and opportunities for job advancement: due to limited social mobility, employees from high power distance cultures seek professional mobility. MNC managers based in a low power distance country like the UK who manage employees from a high power distance country like Portugal should establish an environment with relatively higher levels of potential for professional advancement. MNCs operating in the EU can take steps to assuage conflict due to feelings of unfairness between managers and subordinates from mismatched power distance cultures. Understanding the degree to which power distance is accepted by all members of an organization’s team permits a manager to tailor leadership technique to each team member. Low power distance managers such as those from Westerncultured EU nations who lead high power distance employees should develop a more direct style of message delivery and issue clear orders. This technique will reduce the confusion associated with flexible task parameters typical of low power distance management. High power distance managers such as those from Eastern European countries should include low power distance team members in the decision-making process. This technique will reduce the feeling of inequality and unfairness experienced by those subordinates unaccustomed to command-style management. Both techniques improve channels of communication between managers and their subordinates.

An important factor that differentiates low power distance subordinates from high power distance subordinates is their behavior and attitude toward people in management. Hiller, Day, and Vance (2006), citing studies by Bochner and Hesketh (1994) and Clugston, Howell, and Dorfman (2000), indicated that high power distance employees have a propensity to accept their hierarchical position within organizations, follow the lead of superiors, and behave as though they are inferior to management. Low power distance managers accustomed to leading low power distance subordinates expect independentminded employees capable of taking control of their job responsibilities and executing decisions using their own judgement. Low power distance employees require less oversight as those people are trusted to make relatively more independent decisions at work than high power distance employees. Scenarios in which low power distance managers attempt to lead high power distance employees, such as when a Western-EU nation manager leads a team consisting of Eastern EU nation employees, require managers to adjust their leadership technique. Hofstede (1980) explained that managers who found themselves in this situation initially experienced an increased workload due to the additional leadership required for high power distance employees. He recommended that such managers adjust their technique to include more direct orders and attempt to condition employees for greater job responsibility and decision-making flexibility. 3.3 Uncertainty Avoidance Hofstede (2011) included a dimension labeled uncertainty avoidance based upon research conducted by Lynn and Hampson (1975) which found differences in extraversion and introversion between people from different cultures. The authors measured average levels of extraversion for many Western and Eastern countries, finding that the United States and Western European countries demonstrated high levels of extraversion while Japan and Eastern European nations demonstrated high levels of introversion. The two concepts are related in that extraverted cultures embrace the unknown and engage with others in a quest for knowledge, leading them to exhibit low levels of uncertainty avoidance and high levels of risk taking. Introverted cultures are not interested in engaging with the unknown as it presents risk, to which they are averse. Introverts, therefore, are associated with high levels of uncertainty avoidance and accept relatively lower levels of risk than extraverts. Hofstede (2011) further defined culture-specific uncertainty avoidance by pointing to stress levels experienced by members of a culture in the presence of ambiguity. He recorded reactions to unknown scenarios by people in many different countries, concluding that nations with high levels of uncertainty avoidance also registered high levels of stress when confronted with an unknown future. Hofstede (2011) stated that societies characterized by uncertainty avoidance are that way due to strict codes of conduct that induce a feeling of stress and discomfort for people experiencing novel situations. For these people, culture acts as a barrier to innovation; they are encouraged to closely follow cultural norms without questioning why those norms are in place or what function they perform. MNCs operating in the EU will likely employ people from both ends of the uncertainty avoidance spectrum. Employees from Western European nations generally exhibit low levels of uncertainty avoidance, embracing change and atypical work assignments. Eastern European employees generally exhibit high levels of uncertainty avoidance. Their cultures, deeply rooted in socialistic policies, promote consistency in the workplace. Romanian culture, for example, promotes high levels of uncertainty avoidance due to abusive and dominant political leadership which has translated into a history of rigid work environments characterized by strict procedural rules (Marinescu, 2014). This stands in contrast to the UK which exhibits low levels of uncertainty avoidance, encouraging employees to engage in calculated risks (Kaasa, Vadi, & Varblane, 2014). Management technique tailored to both cultures will result in greater management effectiveness and better economic results for the MNC. The need for management technique tailored to uncertainty avoidance levels, and the financial results it produces, was empirically demonstrated by Tsai and Chi (2009). Their study found correlation between construction workers displaying Eastern-culture uncertainty avoidance and the conflict they experienced under Western-culture managers. As expected, the construction workers exhibited high levels of uncertainty avoidance while at worksites. A construction worksite is more complex than an assembly line

for a basic product like textiles. More steps are involved in constructing a high-rise building, and lives are at risk if mistakes are committed. This scenario causes stress for workers with high levels of uncertainty avoidance. Managers from Western backgrounds who exhibit low levels of uncertainty avoidance embrace the complexities and ambiguity associated with construction of large buildings. Tsai and Chi (2009) found that low uncertainty avoidance managers pushed high uncertainty avoidance employees to work under conditions that caused them to experience high stress levels. These employees, instead of vocalizing their concerns to management, filed claims against the MNCs which cost time and money via the litigation process. MNCs could reduce workplace conflict and the costs associate with it by enabling management to understand employee culture and tailor their technique accordingly. MNCs that employ Western-culture managers in the EU should implement a technique that reassures Eastern-culture employees of working condition safety and train those employees on project procedures. Bredillet, Yatim, and Ruiz (2010), recognizing cultural effects on management technique in different countries, studied national uncertainty avoidance levels in conjunction with management technique prevalent within those countries. They hypothesized that the technique used to manage projects within a country would correlate to levels of uncertainty avoidance, based upon Hofstede’s (1984) assertion that uncertainty avoidance is consistent with a nation’s culture. The research conducted was predicated upon the concept that nations with high levels of uncertainty avoidance reject projects containing ambiguity while nations with low levels of uncertainty avoidance show an eagerness to take on risky projects. An uncertainty avoidance index (UAI) provided consistent measurement of uncertainty avoidance levels across their panel of countries, and a project management framework provided a consistent way to track methods used by managers within each country. Study results demonstrated a positive correlation between national culture in the form of uncertainty avoidance and project management style (Bredillet et al., 2010). Taken together, the results from Bredillet et al.’s (2010) and Tsai and Chi’s (2009) research indicate two key points: (a) Western- and Eastern-European cultures differ in levels of uncertainty avoidance and (b) management technique can positively or negatively affect workplace conduct for MNCs operating with multicultural teams. Managers from low uncertainty avoidance cultures, such as Western-European countries, who lead employees from high uncertainty avoidance cultures, should tailor their approach to management in a way that reduces workplace stress associated with fear of the unknown. If management technique is not adjusted appropriately the firm could suffer negative economic consequences. 3.4 Masculinity-Femininity Hofstede’s (2011) cultural category labeled masculinity-femininity varies widely among EU member nations, not following the traditional Western-Eastern pattern of cultural similarity. He explained that this category related closely to the internal, self-perception of a nation’s citizens derived from many external factors, not simply political or economic history. For this reason, MNCs operating within the EU should identify employees on a nation-to-nation basis when studying their association with this category. For example, UK employees - masculine - differ significantly from Nordic employees – feminine - where, for the other cultural dimensions, the two groups are closely related (Clearly Cultural, 2016). The Netherlands are categorized as feminine, with employees exhibiting higher levels of cooperation, whereas German employees compete with each other for status (Plijter, van der Voordt, & Rocco, 2014). Assertiveness, competitiveness, and extroverted personalities characterize nations labeled as masculine while modesty, caring, and nurturing personalities characterize nations identified as feminine (Muenjohn & Armstrong, 2015). De Mooij and Hofstede (2011) defined masculine cultures as those focused upon achievement and success and feminine cultures as those focused upon caring for others and maximizing quality of life. All characteristics used in the preceding definitions are generally mutually exclusive; those who compete against others typically do not care for or nurture the other party. This dynamic of mutual exclusivity causes this cultural category to excel at delineating the behavior of individual nations. It also creates friction between managers and employees who represent opposite ends of the spectrum. An empirical study conducted by Ogbonna and Harris (2010) examined expatriate leadership technique within the EU, analyzing employee response due to change in management technique under the

presence of both masculine and feminine culture. Their use of the term expatriate managers, defined by Peiperl, Levy, and Sorell (2014) as domestic managers working in foreign markets, highlighted two key points. First, their study confirmed the complexities MNC managers face when operating in the EU in terms of multicultural teams: team members are likely to represent a variety of cultural backgrounds and this presents a management challenge. Each cultural segment requires a tailored management approach to achieve maximum corporate results. Second, Ogbonna and Harris (2010) focused upon the masculinity-femininity category of Hofstede’s (1984) model as a cultural indicator for behavioral patterns. They agreed that this category is particularly polarizing in its ability to distinguish one culture from another and recognized its impact upon both MNC approaches to management and employee response to various management technique. Ogbonna and Harris (2010) used a value survey module (VSM) to analyze masculinity-femininity as the independent variable in relation to three types of management-technique dependent variables: (a) transformational, (b) transactional, and (c) non-leadership behavior. Results confirmed that each dependent variable relied upon the degree to which a nation was either masculine or feminine. Additionally, the results suggested that transformational leadership technique was directly correlated to femininity while the other two leadership styles were correlated with masculinity. Applying this information to management technique in EU multicultural teams enhances the ability of those managers to lead team members to higher levels of economic performance. MNCs operating in the EU that are interested in managing low levels of corruption benefit from an analysis of masculinity-femininity as a culture-based behavioral pattern. As the EU expanded its membership base eastward, an increasing number of formerly communist nations were admitted. While EU membership has forced ten such post-communist nations to adopt democratic-style reforms, those reforms exist de jure not de facto, leading to significant differences in corruption levels amongst EU member nations (Vachudova, 2009). In general, corruption levels remain higher in Eastern-EU nations and include violations like transparency of financial reporting and the role performed by state institutions in public life (Kwok and Tadesse 2006; Vachudova, 2009). Research conducted by Vachudova (2009) confirmed the continued existence of corruption within select EU member nations despite government pledges to minimize such behavior. She found that countries with high levels of masculinity showed a propensity for corruption and that this was ingrained into a nation’s populous due to long-standing cultural and political tradition. Conversely, countries associated with femininity exhibited low levels of corruption. MNCs managing multicultural EU teams that analyze employees per masculinity-femininity enable their managers to structure training and leadership technique to minimize corruption. Bulgaria and Romania, for example, are potential EU members that demonstrate high levels of corruption (Vachudova, 2009). This research suggests that MNCs should analyze multicultural teams to highlight potential corruption practices and implement measures to reduce corrupt behavior. Another key behavioral pattern for which managers should account is the propensity for workplace harassment, especially of women and minority employees within masculine cultures (Berdahl & Moore, 2006; Quinn, 2002). Not surprisingly, workplace harassment in positively correlated with increased levels of employee turnover and with declining firm economic performance (Raver & Nishii, 2010). MNCs that implement management technique aimed at reducing workplace harassment may benefit from employee loyalty in the form of longer tenures and happier, more productive employees. Reviewing the cultural background of team members to reveal which employees come from masculine cultures allows MNCs to efficiently guide those individuals toward proper workplace conduct. While such training is appropriate for managers and employees from any cultural background, the effectiveness of training is maximized with a cultural review. 3.5 Long-Short Term Orientation Hofstede (2007) further distinguished behavioral patterns by a nation’s tendency to orient themselves per long- or short-term goals. Credit for discovering this cultural category identifier is attributed to Michael Harris Bond. A psychological and cultural comparison study he conducted of students in the Asia Pacific region, released after Hofstede’s original study, caused Bond to develop the category (Hofstede &

Minkov, 2010). This dimension, like the others, represents a spectrum whereby a nation’s culture is not labeled as strictly long- or short-term but might fall in between the two nodes. Nations exhibiting shortterm orientation correlate with those who focus on stability and tradition, living in the past and present, whereas those exhibiting long-term orientation demonstrate persistence and thrift, focusing on the future (Hofstede & Minkov, 2010). The GLOBE organization added sub-dimensions to Hofstede’s definition of the long-short term orientation dimension to include humane and performance orientation, however, these sub-dimensions have not been extensively tested (Hofstede, 2011). The benefit of these subdimensions, when studied, include a clearer way to conceptualize a nation’s future orientation and the ability to categorize within-nation groups. Per Hofstede and Minkov’s (2010) analysis, major countries were grouped into the following four categories: (a) China and East Asian countries exhibit long-term orientation, (b) certain European countries that occupy a central range including the middle point between the two nodes, (c) the UK, United States, New Zealand, and other Anglo partners represent short-term oriented countries, and (d) African countries like Zimbabwe as well as the Philippines and Pakistan exhibit extremely short-term goal orientation. Through their research, they uncovered many examples of family- and work-life phenomena that validated each country’s category. For example, families in countries labeled as long-term oriented treated members in a practical manner, showing affection for small children but teaching thriftiness, delayed gratification, tenacity, and humility, particularly toward elders. Families in short-term oriented countries embed social codes within their children at an early age which reinforces individual stability while encouraging spending and immediate gratification of desires. Workplace behaviors associated with long-term oriented culture include learning, adaptability, and discipline as employees strive for the firm’s success and reject the notion of leisure time. Short-term oriented workplaces exhibit markedly different employee behavior like individual achievement, rights, and personal freedom. Kivenzor (2015) referenced an article by Michaels (2003) to bring attention to the difficulties managing economic relationships between people from long- and short-term oriented cultures. This article involved a negotiation between a French-German airplane manufacturer and a Spanish airline company. The French-German company represented short-term oriented cultures anxious to close on the sale of an airplane and dropped the price of the airplane multiple times to stimulate a quick sale. The Spanish company represented a long-term oriented culture, typified by a leisurely decision-making process. This airline benefited financially by drawing out the negotiation, ultimately enjoying a highly competitive purchase price for the aircraft. MNC managers aware of this dynamic will adjust their style to construct appropriate deadlines for employees of differing term-oriented cultures. Hofstede and Minkov (2010) explained a potential conflict that results when employees from both ends of the spectrum work on the same team: short-term oriented employees place value on decisions that benefit themselves or only their team while long-term oriented employees place value on decisions that benefit the overall firm. MNCs operating within the EU are likely to manage teams consisting of both long- and short-term oriented employees due to the spectrum of culture mentioned previously. Long-term oriented team members will concentrate their time and effort on achieving success for the firm while short-term oriented team members will focus on achieving personal success, possibly at the expense of their team or firm. This division in priorities between long- and short-term oriented employees holds the potential to create conflict in project choice and completion methods for multicultural teams within the EU. Rather than view this as a conflict, Schuler and Jackson (1987) saw such scenarios as opportunities. Their study found that multicultural teams consisting of both long- and short-term oriented employees led companies to higher rates of growth than mono-cultural teams consisting of only short-term oriented employees. The above-average growth they measured was, however, conditional upon the implementation of proper leadership that leveraged management technique to develop cohesiveness between culturally-different group members. 3.6 Indulgence-Restraint Hofstede’s (2011) cultural dimension labeled indulgence-restraint relates to the previous dimension, longand short-term orientation, because it involves a person’s ability to consider the future consequences of actions made in the present. Indulgent cultures, like those of the Netherlands and Poland, consist of people who demand immediate gratification of their desires; a restrained culture, like that of Turkey,

consists of people who exercise control over their basic human desires, delaying gratification to enhance their future well-being (Hennekam & Tahssain-Gay, 2015; Zbierowski, 2015). Parallels in behavior exist between indulgent and short-term oriented cultures in that both operate in the present to accomplish goals considered immediately necessary. Cultures characterized by restraint and long-term orientation share parallels in that both look to the future and consider how delaying the accomplishment of today’s goals could result in the achievement of superior goals later. Although restraint rather than indulgence may appear to be a better method of goal attainment, both cultures have benefits and drawbacks. Hofstede (2011) explained that indulgent cultures take proactive steps to complete tasks and efficiently solve problems while restraint cultures take longer to finish tasks and may not even begin to work on problems that indulgent cultures engage immediately. This could either cause benefit or harm to the firm as engagement in many futile tasks expends company resources with no financial gain. In some cases, however, repeated trial-and-error not engaged in by restraint cultures could result in a large financial payoff with the development of new technology for indulgent cultures. Empirical research by Griffith and Rubera (2014) provided evidence of this effect: technologicaland design-innovation rates for new products increased with the addition of indulgent-culture members to product design teams. They asserted that the addition of members from indulgent cultures, and greater overall diversity within multicultural product design teams, correlated not only with higher levels of innovation but greater market share for a corporation’s products. Rubera and Droge (2013) attributed this effect to MNC managers feeling pressured to make decisions on innovative ideas. Design teams characterized by restraint, less affected by time pressure, could lose their technological edge to competitors who bring the new technology to market first, thereby gaining an early market share advantage. Zhou, Jin, Fang, and Vogel (2015) presented another perspective of high- and low-indulgence cultures with similarities to Hofstede’s (2011) perspective, however, with a more polarizing view of behavior between the two labels. They claimed that high-indulgence cultures represent people who shun work in favor of leisure, passing their time performing non-work activities. Low-indulgence cultures, which they seem to champion, represent people who place little value on leisurely activities, preferring to spend their time engaged in their work. While some truth exists in this description, it oversimplifies the cultural category and fails to recognize the work ethic, albeit it different from low-indulgence cultures, that exists among high-indulgence cultures. High-indulgence cultures place value upon their work, however, seek to balance time between social and professional activities (Zhou et al., 2015). MNC managers who find themselves leading multicultural teams within the EU consisting of members from high- and low-indulgence cultures must create an environment in which both types of individuals cooperate and perform well. Team members from low-indulgence cultures might take insult to the alacrity with which high-indulgence members execute decisions and to their propensity for ending the workday relatively early. High-indulgence team members might become impatient with the length of time lowindulgence members spend deliberating over decisions. Managers who create a cooperative environment benefit from a multicultural team’s ability to capitalize on new technology, gain early market share, and thoughtfully process the implications of the team’s decisions. 4. CONCLUSION This paper reviewed and synthesized two interrelated concepts: EU management techniques and Hofstede’s six cultural dimensions. A review of MNC operations within and outside of the EU revealed the ubiquity of multicultural teams and the necessity for those who manage such teams to lead against a backdrop of multiculturalism. Differences in culture, particularly between manager and employee, often create an inefficient working environment because managers do not understand their employees’ culture and employ ineffective management technique. Poor communication resulting from this mismatched technique can lead to misaligned goals between the MNC and its employees producing suboptimal operating performance. Hofstede’s cultural dimensions provide a system of categorization for understanding manager and employee behavior and addressing the differences through the development of a multicultural management strategy.

Despite the potential for conflict within multicultural teams, MNC managers who develop a cooperative environment to leverage the strengths of members from each end of the cultural spectrum will enhance employee and corporate performance. To accomplish high levels of team performance, managers should study Hofstede’s cultural dimensions, then use this knowledge to create a cohesive, high-performing multicultural team.

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