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Intercultural Management

What you need to know

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In order to do well in an increasingly globalised world, managers need to be able to navigate different cultural waters. But what does that mean, exactly? What are the key things you need to know about intercultural management? This article seeks to answer those questions and provide a basic foundation for those looking to improve their skills in this area. 

1. What do we mean by "Culture"?

When it comes to understanding and managing culture in the workplace, there's a lot of confusion about what we're even talking about. Is cultural diversity something different from culture? How do beliefs and behaviours play into this? In this article, we take a closer look at culture and discuss some of the key concepts around it. By comprehending what culture is and how it works, we can better understand why it's so important for workplace dynamics and how best  manage it.

Culture is often described through Professor Geert Hofstede's definition: The programming of the human mind by which one group of people distinguishes itself from another group - the set of shared beliefs, values, and norms that distinguish one group of people from another. As global organisations become increasingly diverse, understanding and managing cultural differences has become a critical competency for business leaders.

When it comes to managing cultural differences in the workplace, it can be helpful to think of culture as an onion, with various layers.

On the outer layer of the onion, you'll have symbols, such as food, logos, colours or monuments. The next layer consists of heroes, and can include  public figures, like statesmen, athletes or company founders, or pop-culture figures such as Superman. On the third layer, closest to the core, you'll find rituals, such as sauna, karaoke or meetings.

2. What is Intercultural Management

When most people think about management, they think about things like productivity, efficiency, and goal-setting. And while those are all important aspects of effective management, a growing body of research suggests that cultural competency is just as critical

Furthermore, understanding culture, and cultural differences, can affect all those other areas. For instance, you can't assess the productivity of two teams if they are located in two different countries and if they understand the goal you gave them in a fundamentally different way.

In other words, in order to be an effective manager today, you need to be able to navigate the unique cultural challenges and complexities that can come with working with people from different backgrounds or teams located in different countries.

Intercultural management is the process of managing people from different cultures in a way that minimises misunderstanding and conflict, while maximising communication and collaboration. In today's increasingly globalised world, organisations of all sizes are increasingly likely to have employees from a wide range of cultural backgrounds. While this can bring many benefits, it can also create challenges if the diversity is not managed effectively. Without proper management, cultural differences can lead to miscommunication, conflict and even outright hostility. Conversely, with effective intercultural management, these same differences can be used to create a more innovative and productive workforce. Intercultural management is therefore essential for any organisation that wants to make the most of The Culture Factor.

3. What is National Culture and how does it differ from Organisational Culture?

Culture is often seen as an intangible and nebulous concept, but it is one of the most important factors in determining organisational success. Culture can be described as the shared values and behaviours that exist within a group of people, and it plays a huge role in shaping how an organisation functions. 

In order to properly manage intercultural relationships within organisations, it is important to be able to distinguish between National Culture and Organisational Culture. 

National Culture is the overarching culture that exists within a country, while Organisational Culture can be described as "the way we do things around here" within an organisation, and how that differs from other organisations. While National Culture is based on values, Organisational Culture is based on practices. 

For management purposes perhaps most notably, National Culture is largely determined by historical factors, whereas Organisational Culture can be shaped by the leadership team to reflect the organisation's values and goals.

Intercultural Management must take both into account in order to be effective. Promoting diversity and cultural awareness is great, but it has little effect if organisational practices - what actually happens in every day life of the company - don't do anything to address them. 


4. How to Implement Intercultural Management in your Business 

Intercultural management is essential for today's businesses, which are increasingly working with customers and employees from all over the world. This Mars success story makes an excellent example of an already diverse organisation genuinely trying to do their best, but still (at first) struggling to get it right.

With employees from 18 different nationalities, speaking 25 languages, and working in 10 different locations, they were already a diverse group of people. They had already been celebrating their diversity but found they still weren't making diversity their competitive advantage.

While we whole-heartedly recommend reading the article in full, below you will find some key findings on how this project became an excellent example of Intercultural Management in practice, a perfect mix of Organisational Culture practices supporting the goal of leveraging their diversity.

  • Bas Bredenoord, the HR Director at Mars International Travel Retail at the time, joined the Certification programme in Intercultural Management in order to get a more comprehensive understanding of culture, and how it works.

  • Together with The Culture Factor Group (at the time known as Hofstede Insights), Mars conducted an Organisational Culture Scan to find out how the strong Mars culture could support their transformation project.

  • Mars Cultural Ambassador programme was launched to start implementing the changes Mars wanted to make into practice.

  • Mars created a cultural onboarding training for all associates that would join the business. 

  • Trainings were used as well but, instead of one-off workshops, they were designed specifically with a follow-up refresher. 

  • They did bias training to raise awareness of the unconscious biases everyone has. 

  • One example of a practical approach was effective meetings. They realised that in order to have successful meetings, it is important to prepare for them in advance, also from the point of view of understanding the culture of the people who will be attending the meeting. The team would look at the goal of the meeting, the nationalities and the titles of the participants and identify the common factors among the participants. 

  • Advances in the project were constantly communicated, tools and case studies were made available not only for the internal team of 60 people but all of Mars.

Intercultural management is essential for businesses today, which are increasingly working with customers and employees from all over the world. As Mars International Travel Retail can attest to, implementing Intercultural Management practices can be a challenge but it's well worth the effort.

5. Benefits of Intercultural Management

When people from different cultures work together, they can create incredible synergies. However, when cultural clashes occur, they can lead to communication breakdowns and conflict. Intercultural management is the process of understanding and managing the dynamics between people from different cultures in order to achieve the positive outcomes. It is a crucial element of leveraging The Culture Factor.

A key part of Intercultural management is understanding and valuing diversity. When managed appropriately, diversity brings different perspectives, experiences, and skills to the workplace, which can lead to increased innovation and creativity. 

A number of studies have found that companies successfully leveraging their diversity tend to be more profitable for a number of reasons (outside the academic field, see for example Forbes or HBR).

Diversity can also help create a better customer experience by allowing businesses to better understand and serve customers from different cultural backgrounds.

However these are the benefits of diversity itself. What about Intercultural Management? Successful diversity doesn't just happen on its own. As mentioned in the opening, in order to leverage Your Culture Factor, it is absolutely essential to manage your cultural diversity.

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6. Challenges of Intercultural Management

As the world becomes increasingly interconnected, businesses are finding that they must operate in an increasingly multicultural environment. This can present a number of challenges, from communicating with a diverse workforce to understanding the customs and values of customers in other countries. In order to be successful in Intercultural Management, businesses need to be aware of these challenges and know how to overcome them. Never forget that diversity can be your competitive advantage, but if left unmanaged it can also result in a lot of challenges and misunderstandings. 

One of the challenges of Intercultural Management is communication. When employees come from different cultures, they usually have different ways of communicating. For example, some cultures can be very direct while others almost never say directly what they mean or want. This can obviously lead to huge misunderstandings. 

Different cultures also have different values and customs. For instance, some cultures value success and competition almost above everything else whereas others prioritize leisure time and emotional well-being.  Obviously, it can be difficult for people from these two different types of cultures to work together if they don't understand and respect each other's values, especially if it is the manager that comes from one of these cultures and the employees that come from the other.

However, these are all challenges one can overcome, just like any other challenges in management. It simply requires special care, appropriate training and organisational practices that support your goals.

7. What is the Hofstede model of National Culture?

If you're a manager who oversees employees in different countries, runs a multicultural team or if you're simply interested in Intercultural Management, then you've likely heard of the Hofstede model. But what is it? 

The Hofstede model, or the  6-D Model of National Culture, is a way of understanding the culture of a country based on its cultural values. Developed by Professor Geert Hofstede, the model has been used to help organisations improve communication and cooperation between people from different cultures. The model can provide a useful framework for understanding how cultural differences can affect business dealings.

The model consists of six dimensions:

Power Distance (PDI)

This dimension expresses the degree to which the less powerful members of a society accept and expect that power is distributed unequally.

Individualism (IDV)

The high side of this dimension, called Individualism, can be defined as a preference for a loosely-knit social framework in which individuals are expected to take care of only themselves and their immediate families.

Masculinity vs Femininity (MAS)

The Masculinity side of this dimension represents a preference in society for achievement, heroism, assertiveness, and material rewards for success. Society at large is more competitive. Its opposite, Femininity, stands for a preference for cooperation, modesty, caring for the weak and quality of life. Society at large is more consensus-oriented.

The Culture Factor Group now refers to this dimension as Motivation towards Achievement and Success.

Uncertainty Avoidance (UAI)

The Uncertainty Avoidance dimension expresses the degree to which the members of a society feel uncomfortable with uncertainty and ambiguity. The fundamental issue here is how a society deals with the fact that the future can never be known: should we try to control the future or just let it happen?

Long Term Orientation (LTO)

Every society has to maintain some links with its own past while dealing with the challenges of the present and the future. Societies prioritise these two existential goals differently.

Societies that score low on this dimension, for example, prefer to maintain time-honoured traditions and norms while viewing societal change with suspicion.

Those with a culture which scores high, on the other hand, take a more pragmatic approach: they encourage thrift and efforts in modern education as a way to prepare for the future.

Indulgence (IVR)

Indulgence stands for a society that allows relatively free gratification of basic and natural human drives related to enjoying life and having fun. Restraint stands for a society that suppresses gratification of needs and regulates it by means of strict social norms.

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