Intercultural Management Guide: What Is It and Why Is It Important?

Organizations of all sizes can benefit from implementing intercultural management initiatives, yet many vastly underestimate just how vital these skills are.

There is much more involved in expanding into a global market or embracing a diverse workforce than considerations of logistics, international economics and trade, and taxation. Understanding how to relate, negotiate, communicate, and work effectively with the other cultures your employees, partners, or colleagues belong to is just as important.

Many organizations believe that learning about intercultural management skills isn't necessary in today's increasingly interconnected and global world, but nothing could be further from the truth. In this guide, we will closely examine what intercultural management is, why it is important, and how it can benefit your business.

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What Is Intercultural Management?

Intercultural management is an interdisciplinary human resources field focused on the relationship between culture and management. This is an essential tool in organizations composed of people from a wide variety of cultural and ethnic groups or that operate on a global scale.

Effective intercultural management involves helping managers and employees alike move from unconscious and instinctive behavior to a more mindful, self-aware, conscious, and strategic way of being. Through this process, relationships are enhanced, trust is built, and new business opportunities are presented.

Why Is Intercultural Management Important?

In an increasingly global world, intercultural management is more important now than ever before. We all know how important effective communication and information sharing are in business. Still, it's easy to underestimate the extent to which cultural barriers and misunderstandings can disrupt the flow of this communication.

For this reason, intercultural management skills are among the most sought-after skills in the business world today.

Here are just some of the reasons that this is such an important field in the contemporary landscape:

• International acquisitions and mergers bring together people from different cultures. With intercultural management, information sharing and communication can be significantly improved, and the transition period can be much more fluid.
• The global expansion of a business requires that its managers have a deep understanding of the cultures and cultural differences of the new markets they are expanding into. Otherwise, the experience of attempting to break into new markets will be rife with obstacles and miscommunication. For this reason, intercultural management is essential for international marketing and communication.
• International travel is an increasingly common phenomenon, and the prevalence of virtual communication technology makes it possible for individuals at all levels of an organization to interact cross-culturally. Intercultural management can, therefore, benefit employees throughout an organization.
• Students can benefit from intercultural management in their forays abroad to help them glean as much from the experience as possible, lending to their future abilities in any global business or organization.
• Improved team performance, better project results, and organizational success can result from the application of intercultural management tools and skills, as they can facilitate successful marketing and business efforts around the globe. 

What Is the Cost of Neglecting Intercultural Management?

Applying intercultural management tools and skills to any organization can be beneficial, and failing to do so can be costly.

It's common for organizations to send individuals abroad that have strong business or technical skills but that are not necessarily developed in their intercultural management and leadership skills. For example, an organization is likely to send some of their best engineers to manage production plants abroad, who are highly skilled in a technical sense but not in these more interpersonal realms. Local employee motivation and productivity can be eroded when the same management style is applied abroad as at home.

If a business neglects intercultural competence, there are numerous negative results that can occur:

• Reduced employee productivity, motivation, and morale in the host country
• Reduced employee retention in the host country
• Necessitating a lengthy trial-and-error process regarding management abroad, which is costly for the business and creates tension with the local culture
• Missing the mark on marketing efforts due to a lack of understanding of the local culture
• Poor collaboration between teams from different cultures or within diverse teams
• Never-ending negotiations, unexplainable delays, and the failure of high-investment projects

In fact, it is estimated that somewhere between 60% and 80% of international mergers and acquisitions fail due to the organization not considering cultural differences. That is the case both before the merger or acquisition as well as during the process of integration. When mergers and acquisitions aren't managed properly, it wreaks havoc on shareholder value.

At the same time, some of the best employees will grow increasingly skeptical of the transition and begin to look for work elsewhere, leaving the organization hemorrhaging its strongest talent. Beyond that, the whole experience can lead to disastrous stagnation in innovation.

It is all too common for individuals to interact with people from different cultures without an awareness of the invisible conflicts and communication breakdowns they unintentionally create. They are entirely blind to the reality of unspoken contracts that exist within these other cultures while at the same time adhering to the invisible codes that they know to be valid within their own culture.

The reality is that most difficulties resulting from intercultural communication and business dealings do not result from bad intentions or purposeful insensitivity. Instead, it comes from a lack of awareness, knowledge, and self-reflection.

When intercultural business dealings or marketing efforts go awry, it is quite common for the home culture to blame "the other," coming up with reasons that the individuals from the other culture are the cause of things going wrong. The inability of individuals to grasp how people in other parts of the world might see the same scenario from an entirely different angle can ultimately lead to the failure of high-investment projects.

Even if your company isn't expanding into global markets, that doesn't mean your management team and employees can't benefit from greater cultural awareness. Workplaces are becoming increasingly more diverse, and a thriving company must learn how to embrace the changing landscape of today's landscape. To ensure that your organization is on the right track when it comes to embracing a diverse workforce, take a look at the diversity training programs offered by HRDQ.

Intercultural Management Skills to Hone

Increasing one's intercultural communication, collaboration, and management skills can benefit the whole organization and allow organizations to fulfill their global initiatives and goals.

Let's look at some examples of intercultural management skills to help you better understand the various tools you can use to boost intercultural communication and collaboration.

Recognizing One's Own Cultural Conditioning

It is all too common for individuals to be shaped by their own culture in their thoughts, beliefs, and actions without any self-awareness that this is occurring. Rather than understanding that they, in part, result from the culture they live in, they instead see themselves as a person that is simply viewing reality as it is.

The more we learn about other cultures, the more we recognize that we all see the world through our cultural lens. When we gain a greater understanding of how we are shaped by our culture, it helps to better understand that our perspective is just one of the many that exist in the global landscape. 

Developing Cultural Awareness

When managers are working with people from a variety of different backgrounds, they must familiarize themselves with different cultures from around the world. The same is true of anyone that travels for business or communicates with colleagues, clients, or customers from different countries or cultural regions.

Each culture has its own values, norms, and expectations, and the more individuals within an organization understand and respect these, the greater the business's success in its global endeavors.

Establishing Intercultural Communication

Of course, expanding to a global market can require that members of your organization can speak a variety of languages to communicate. There is more to communication, though, than the spoken word, and managers must understand how to effectively communicate with individuals from various cultural backgrounds.

Even if two people speak the same language, they can have different expectations and understandings when it comes to body language and non-verbal communication, for example. It is all too possible for one individual to gesture or interact in a way, for example, that is intended to be polite but is read by the other individual as insulting.

Communication is a complex field, and strong communication skills are vital if a company is going to perform at its best. To help you and your team better understand your communication strengths and weaknesses, you can utilize our What's My Communication Style course.

Honing the Ability to Adapt Behavior

The more we understand our own culture and the cultures of others, the better we can adapt our behavior to help find common ground with the people we are collaborating with.

On the other hand, communication will be rife with misunderstanding when we cannot perceive our own cultural setting and how it differs from others we are working with that are entrenched in other cultural perspectives.

Cultural differences are only one of the many reasons that managers, employees, and customers can have trouble seeing eye-to-eye. Another major factor in differing worldviews in the workplace results from the fact that there are five generations that are represented in today's workforce– The Silent Generation, Baby Boomers, Generation X, Millennials, and Generation Z. With each of these own generations commonly possessing different values and generational norms, it's essential to understand generational differences in the workplace to promote teamwork and ensure your company thrives in an ever-changing landscape.

Creating a Welcoming and Inclusive Environment

Building an environment where employees feel accepted and comfortable is essential in the modern workplace. No matter how well-intentioned a manager is, any attempts to create such a culture and environment will likely fall flat if they are not well-versed in different cultural norms and values.

Managers can provide resources for their employees to help them better understand different cultures. 

Promoting Cultural Awareness and Competency

The more the employees of an organization know about other cultures, the better abilities they will have to understand where their colleagues, clients, and customers are coming from.

Taking the time and expending the resources necessary to help promote cultural awareness and competency can be well worth the effort to ensure you don't suffer from the many potential negative effects of a lack of intercultural management.

Managing Change

When an organization makes big moves and begins a significant transition, it is both exciting and nerve-wracking. Managing change is a skill set in its own right, and change that involves expanding to new global markets can be challenging for everyone involved.

Taking a proactive approach to increasing cultural competency when your company is transitioning from a largely uni-cultural setting to a multicultural one can mean the difference between success and failure.

Are you searching for more resources to boost cultural competence within your organization? Make sure you take a look at our guide to improving cultural competence in the workplace.

The Best Tool For Intercultural Management

The first step to being more effective interculturally amongst our colleagues and peers is to gain a greater awareness of our own cultural identities. We all have areas of low cultural understanding that can be improved upon, and HRDQ's Cross-Cultural Adaptability Inventory (CCAI) is a powerful tool that helps participants identify where there is room for growth.

During this workshop, participants can identify their strengths and weaknesses in four essential categories– emotional resilience, flexibility and openness, perceptual acuity, and personal autonomy. Mastery in these areas is necessary for successful cross-cultural communication.

There are countless benefits that can result from participating in this workshop– not only will it help your team be more successful in cross-cultural interactions, but it will also present opportunities to select and train global leaders, improve productivity among intercultural teams, and help develop readiness for travel or relocation abroad.

Is it time for your team to hone their intercultural communication and collaboration skills? If so, take a look at our Cross-Cultural Adaptability Inventory workshop today.

After reading this article, do you have any questions about intercultural management? If you do, be sure to leave those in the comments section down below, and we'll do our best to get back to you within a day or two! We make it a point to reply to every comment we receive, and we'd be more than happy to assist you however we possibly can.

Recommended Assessment

Appreciating Diversity Course

• Understand How Bias Occurs
• Identify Subconscious Behaviors
• Foster a Culture of Inclusion

Learn more