They depend on a number of factors, for example, whether the organisation is public or private, what its management style is. If authoritarian leadership styles are practised, command and control methods flourish, apathy and servility of subordinates are present, and another type of subculture emerges, it’s the bureaucratic subculture. It develops in professional groups engaged in management and work performance activities conducted by the government authorities, regional executive authorities and local self-government bodies. Characteristics of the bureaucratic subculture include corruption, red tapism, excessive reporting, indifference to public and civic problems, contempt for people, uncontrolled use of resources and levers of power.

The corporate culture is outlined and developed by the corporate leader. Its development depends on his / her personal features and attitudes, the values he / she cultivates in an organisation to control the behaviour of its members. The presence or absence of subcultural conflicts in an organisation, including the presence of countercultures, depends on the leader.

5.4. Features of leadership in a multicultural environment

Many organisations are multicultural. Multiculturalism is a concept that assumes that there is a close connection between all the ethnicities and ethnic groups that live in the same society.

The role of the leader in a multicultural organisation is very important. He has to introduce people to each other, to observe the relationships among the employees. He also talks about the specifics of working in a multicultural environment. A leader should develop the following characteristics and abilities: charismatic qualities; openness to change; interest in the social, economic and political life of other countries; ability to establish good relations with representatives of other cultures; good non-verbal communication skills; interest in and understanding of how cultural differences influence people’s work; readiness to listen and try to understand different opinions; fluency in foreign languages (and general interest in them); desire to travel, to learn new things.

It is important for the leader to understand the cross-cultural differences in the organisation. For example, in an individualistic culture there may be difficulties in establishing shared norms of behaviour and building company cohesion. In a collectivist culture, cohesion can form in the natural course of events. In cultures where respect for authority is important, group members must belong to the same hierarchical organisational level. In cultures with a tolerance for power it is not too much of a problem to put together a team from different levels of the organisational structure. If employees are given a vague task and tend to be averse to uncertainty, they will find it difficult to accomplish the task.

Cross-cultural management can be seen as a set of methods, principles, ways, means and organisational forms of managing business relations arising at the intersection of different cultures, including:

–creation of tolerant interaction and communication, working and business conditions at the intersection of different business cultures;

–regulation of intercultural conflicts in the business environment;

–development of cross-cultural competence of business owners, managers and staff.

Creation of tolerant interaction starts with reduction of cross-cultural barriers. Such barriers are defined as problems arising in the process of interaction, hindering it or reducing its effectiveness. Six barriers are identified in cross-cultural communication:

–assumption of similarity (people think they are all the same);

–linguistic differences (people think that words and phrases have only the meaning they want to convey);

–misinterpretations of non-verbal actions;

–the influence of stereotypes and prejudices;

–unconscious tendency to evaluate all unfamiliar cultural phenomena;

–anxiety and tension due to uncertainty in the behaviour of intercultural partners.

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Stereotyping can be seen as a kind of derivative of inadequate perception. By labelling representatives of another nation or culture, one refuses to objectively perceive and analyse information, replacing it all with a kind of national cliché. Here is an example of religious prejudice. After 9 / 11 and the wars in Iraq and Afghanistan, Americans with a strong national identity expressed the greatest contempt for Arab immigrants. If a jobseeker is told they are Muslim, many managers are not inclined to hire or pay them well. In Europe, most non-Muslims expressed concerns about “Islamic extremism” and unfavourable attitudes towards Muslims increased between 2014 and 2016.

There are several approaches to dealing with cross-cultural conflict.

1.The strategy of adaptation and the development of tolerance. This strategy teaches how to find compromises, solutions that suit both sides. It teaches how to be tolerant of dissent and behavioural patterns that are different from those that are familiar and customary. This strategy is often the most appropriate in practice. Schematically, the communication model in this case can be described as: “Giving what is important to you in exchange for what is important to me”. However, such a quality as adaptability is rarely innate. These competences need to be developed in the team through cross-cultural management training, brainstorming sessions, various corporate events, etc.

2.Cultural intervention or mixing strategy. This involves mixing the composition of international teams and moving people between units. Often when a professional enters a foreign language and cultural environment, he or she is deliberately not made to feel comfortable in order to “get out of his or her comfort zone”. They create conditions for “culture shock” in order to increase their adaptability index and expand their mental and behavioural stereotypes. The same applies to the deliberate formation of cross-cultural teams when dealing with complex and non-standard tasks. Very often truly innovative products are born in such situations.

A leader needs to make certain efforts to develop cross-cultural sensitivity and cross-cultural competence. Intercultural competence is an individual’s general internal ability to manage the key complexities of intercultural communication, namely cultural differences, intergroup attitudes and the accompanying experience of stress. Intercultural competence refers to the ability to think and behave appropriately in a multicultural environment. Cross-cultural community competence refers to the ability to distinguish and feel cultural differences. The concept of cultural sensitivity is based on a set of skills that enable a person to learn and understand people from another culture, thus facilitating more effective interaction between people from different cultures in the same social system.

The main factors necessary for the development of intercultural communicative competence can be distinguished, such as cultural knowledge and awareness, communication skills and tolerance for uncertainty. Effective intercultural communication requires cognitive, affective and behavioural adaptation, which can be difficult for participants in intergroup interactions. To achieve successful intercultural understanding, individuals must overcome language barriers, unfamiliar customs and practices, and cultural differences in verbal and non-verbal communication styles.

The most problematic are multicultural organisations that are differentiated along denominational lines. In many modern organisations communication between Muslim and non-Muslim workers is difficult.

The negative effects of the development of multicultural organisations are quite obvious. They are associated with potential conflicts in the workforce, high staff turnover and, consequently, lower productivity levels. Positive effects of the development of multicultural organisations include a relatively higher level of innovative activity, the development of a higher adaptability potential of many employees, etc.

5.5. Cultural dimension theory

One of the best ways to understand cultural differences is the cultural dimensions theory of Dutch researcher Geert Hofstede. While working as a human resources manager for the multinational corporation IBM, which had subsidiaries in 66 countries, he discovered that cultures differ most in six factors. He called them the “cultural dimensions”. The cultural dimension is a set of values, attitudes, beliefs, norms and behaviours that distinguish one culture from another. By placing a culture on a

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particular scale, we can predict the behaviour of its members. Based on the cultural factors identified in Hofstede’s theory, a number of important conclusions can be drawn for the leaders of international companies.

Attitude towards power is a factor directly related to situational leadership. In cultures where power is respected, employees expect the leader to take control, to take responsibility for decision making and to direct their actions. In such a cultural context the leader needs to adopt a resultsoriented line of behaviour (direct, structured, goal-oriented behaviour) and avoid being subordinateoriented (i.e. helping, caring and forming personal relationships with subordinates) without being too concerned about the degree of subordinate participation in decision making.

However, if a culture values tolerance of power more highly, the leader should pay less attention to the actual process of achieving goals. In such a case, effectiveness can be improved by orienting behaviour toward interaction with subordinates and their involvement in decision making and other processes related to the management of the company.

Conversely, when power distance is large, the boss has to demonstrate superiority: by motorcade with blinking lights, rich residence and addressing employees “from the top down”. Without these attributes a boss is no boss.

Individualism or collectivism. When the individualism index is high, people are focused on achieving personal goals. When it is low, people are more concerned with the goals of their group: department, company, family, home, country.

In individualistic cultures, it makes sense for leaders to direct their behavior toward individual workers rather than toward the collective as a whole. In contrast, in collectivist cultures, leaders should focus on the collective rather than on individual members. In a group-oriented culture (such as that of Japan), an effective leader is expected to direct subordinates while ensuring harmony among team members. At Sony, for example, managers are expected to allow subordinates to move to more interesting jobs at will, because such transfers, according to the company’s management, would benefit the entire company.

Masculinity — femininity, i.e. masculinity and femininity. The index shows which qualities of character are more valued in a society. Masculine societies are characterised by typically masculine qualities: assertiveness, striving for success, responsibility, competition and ambition. In societies with low masculinities, feminine qualities are valued: concern for quality of life, maintaining relationships.

Femininity is also an indicator of people’s modesty. In countries with a predominantly feminine character, it is shameful to be better than others. In Russia, modesty is taught from childhood.

Think back to how you give tasks to your colleagues. It often happens that you ask them to do something and they say: “Sorry, I have a report to finish today, no time to do it at all”. You think that you should not overburden the person and remind him / her tomorrow. Tomorrow they will have even more things to do and will not have time for your task. This is a manifestation of femininity.

Uncertainty avoidance. This index shows the extent to which members of society fear the unknown and try to insulate themselves from ambiguous events. Another important situational factor is attitudes to uncertainty. In organisations which seek to avoid uncertainty, employees prefer orderly behaviour when they are given concrete goals and objectives.

In these environments, results-oriented behaviour is more effective and subordinate-oriented behaviour may be less productive. For example, German managers are characterised by autocratic and task-oriented decision making within existing corporate rules and procedures. In contrast, employees of firms whose behaviour is characterised by acceptance of uncertainty may respond favourably to opportunities to participate in corporate processes. Management actions to involve employees in running the firm can be endorsed in cultures with high levels of acceptance of uncertainty.

In countries with a high rate of uncertainty avoidance, people perceive change as a threat. Usually in such cultures, religion and strict social norms have a lot of power, and the laws are prescribed in detail. These cultures are intolerant of those who differ from them.

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In uncertainty avoidance cultures: initiative in work is discouraged; conflict is seen as a threat to relationships rather than a solution to problems; risk taking is unacceptable carelessness; laws are specified; deviant behaviour is seen as dangerous or indecent.

A low level of uncertainty avoidance looks much more optimistic: with it the society is ready to change, easily accepts new trends, tends to take risks, is open to change, and is active in expressing its position. Russia has one of the highest indices of uncertainty avoidance. The lowest is found in Singapore.

Future orientation or strategic thinking. The indicator assesses how far the members of society look into the future. The long-term orientation determines the setting of goals for years to come, the persistence. Leader behaviour also depends on goal orientation. Representatives of cultures with an active goal orientation prefer money and other types of material rewards. Actions of the leader that are oriented to obtaining results or increasing participation of employees in management can be approved by representatives of such cultures if they perceive that these actions could result in increasing their earnings as a result.

A leader’s actions that focus on building relationships with subordinates can be effective in cultures with an active or passive goal orientation to the extent that these actions can make employees feel satisfied with their work and the organisation as a whole. A high degree of long-term orientation is characteristic of Oriental peoples and a low degree is characteristic of Western peoples. The most long-term oriented country is China. It is followed by Hong Kong, Taiwan, Japan and South Korea. The US has a very low index.

Indulgence of desires. This index reflects the willingness of members of society to satisfy their immediate needs. The opposite of indulgence is restraint. Those cultures, that recognise restraint as a positive quality are characterised by strict social rules and restrictions. Modesty is considered one of the most important virtues. Temperance cultures are usually cynical and pessimistic. They pay little attention to leisure and relaxation, are constrained by social norms and consider the fulfillment of their desires as something wrong. With a high level of indulgence of desires, society pushes people towards what they want and love. If desires are not granted, they will not blame society for their unhappy fate, but understand that it is they themselves who have not made the effort to do so. In Russia the indulgence of desires is low. The highest is in Australia.

Summary

1.Multicultural professional groups are a global trend shaping corporate governance.

2.Subcultures are diverse and numerous; they tend to be closed, but not isolated from each other and the general culture, and they enter into complex relationships with each other.

3.Subcultures of the supervisor and the subordinate, subcultures of different generations and professions are most vivid in professional groups.

4.Cross-cultural management includes: creation of tolerant interaction and communication, working and business conditions at the intersection of different business cultures; regulation of cross-cultural conflicts in the business environment; development of cross-cultural competence of business owners, managers and staff.

5.Familiarity with G. Hofstede’s methodology allows the leader to increase the level of intercultural competence and stimulate a deeper acquaintance with cultures on six factors.

Think about and answer these questions

1.Which subcultures are most prominent in your environment?

2.What advantages and disadvantages of a multicultural environment can you identify?

3.What qualities will help a leader to work in a multicultural environment?

4.What are the positive and negative aspects of multiculturalism?

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