Knowledge management implications for the development of multicultural competencies in Slovak enterprises

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1 Knowledge management implications for the development of multicultural competencies in Slovak enterprises Woolliscroft Paul, Cagáňová Dagmar, Šujanová Jana, Čambál Miloš, Szilva Ivan, Jakábová Martina Abstract The phenomenon of globalisation has been prevalent throughout the last decade of 20th century and is still a significant factor influencing both organisations today. Despite globalisation being a defining feature of international business for decades, it is a recent development in Slovakia, since the accession of the country as a member of the EU. As workplaces in Slovakia become more culturally diverse, the challenge of managing a multicultural workgroup has become imperative to ensure success. To utilise multicultural management competencies effectively, it is crucial to establish a clear understanding of the competency approach and develop a model of knowledge management as a means of competitive advantage. This research paper builds upon previous research developing a model for knowledge management of multicultural management competencies. It assesses the impact of management styles upon the knowledge management process by means of a comparative analysis of the management approaches Slovakia and the United Kingdom. Keywords Human Resource Management, Knowledge Management, Intercultural Management, National Culture, Multicultural Competencies. I. INTRODUCTION he phenomenon of globalization has been prevalent since T the last decade of 20th century and remains a significant factor influencing the effective management of organizations. As workplaces have become more diverse, multicultural management and the development of intercultural management competencies have gained increased prominence. This importance stems from the fact that the world is not a homogenous monoculture and organisations increasingly face two simultaneously evolving issues of the challenges presented when companies move to new, often culturally different locations; and increased labour mobility resulting in diverse workplaces where people from different cultural backgrounds share their work experience. Despite the longestablished worldwide trend towards globalisation, the development of multicultural practices in Slovakia is a This paper has been published as a part of submitted VEGA project no. 1/0787/12 The identification of sustainable performance key parameters in industrial enterprises within multicultural environment. This article was created with the support of ESF project: Quality improvement and rationalization of the study programme Industrial Management oriented on the career consulting - ITMS relatively new phenomenon accelerated by foreign direct investment (FDI) by MNCs and entry into the EU in The recent growth of internationalisation in Slovakia has subsequently led to a considerable amount of interest amongst business enterprises and academics. This research paper investigates the necessity to develop a robust model of knowledge management as a means of understanding and effectively utilising multicultural management competencies. Secondly the paper will also explore the extent to which it is necessary to integrate a specific understanding of national and corporate management styles into existing frameworks for the development of management competencies. The paper aims to do so by assessing the approach to management in the United Kingdom compared with the Slovak Republic. Multicultural competencies will also be assessed at an international level to draw more generalised conclusions. As a result, the aim of this paper is to develop a more clear and coherent model for the effective management of multicultural workgroups within Slovak enterprises. The empirical basis for the study took the form of a structured survey of 97 managers working both within Slovak enterprises and global enterprises. The survey findings are supported by the authors own experience over a number of years working for organisations in the United Kingdom and Slovakia combined with observational research conducted within UK and Slovak enterprises.. II. MULTICULTURALISM AND THE DEVELOPMENT OF INTERCULTURAL MANAGERIAL COMPETENCIES Multiculturalism refers to a situation in which three or more different ethnic cultures exist and where subcultures may exist, rather than just two cultures [1]. Reference [2] stated that being able to manage a multicultural workforce refers to the ability to manage, communicate and lead people from across a range of cultures simultaneously. A large body of existing literature deals with defining multiculturalism and identifies management competencies within the workplace [3],[4],[5]. As workplaces in Slovakia become more culturally diverse, ISBN:

2 the issue of managing a multicultural workgroup has become important for those involved in the management of human resources. With a culturally diverse group of workers participating in the workforce, managers increasingly need to take into account the impact of different cultures within their work teams. It is evident there is a genuine need to train and develop managers to become competent in managing a multicultural team. Reference [6] in their review of research on diversity in organisational groups suggested that diversity in workgroups (including multicultural workgroups) may affect outcomes such as turnover and performance through its impact on communication processes. For the managers of multicultural workgroups, [7] suggested that the manager s competencies in dealing with diversity issues may have an impact on affective outcomes such as how people feel about their employers and their jobs. Reference [8] indicated that despite the frequency of multicultural groups in the workforce, little research evidence exists on the nature of the competencies needed for managing a multicultural workgroup, beyond a list of skills. It is therefore important to assess what constitutes effective competencies for managing a multicultural group workforce. Although it is widely agreed that multicultural/global competencies are required for business success, however determining which competencies are most important is a highly subjective and complex challenge. For leaders to be successful in multicultural interactions abroad and domestically, they must be globally literate. To be globally literate means seeing, thinking, acting, and mobilising in culturally mindful ways. It s the sum of the attitudes, beliefs, knowledge, skills, and behaviours needed for success in today s multicultural, global economy [9]. Many authors have attempted to define what is meant by multicultural competencies, [10] described multicultural competencies as a cultural consciousness, openness to a way of thinking and cultural empathy. In contrast [11] and [12] argue the role of effective communication and developing new routes of communication, whereas, [4] and [5] emphasise the importance of tolerance, openness and understanding cultural ambiguity. Based upon the body of existing literature and the findings from the past study conducted by [3] amongst 124 professionals in Slovakia, a list of 20 key competencies were comprised for effective intercultural management [13]: Communicative competency Openness towards other ways of thinking Language competency Social competency Culture consciousness (sensitivity, adaptability) Ethics Ability to manage diversity Culture empathy Tolerance towards ambiguity Flexibility Ability to collaborate with and lead individuals Honour, truthfulness and integrity Managing unpredictable situations Professional excellence General managerial skills Life-long learning Resourcefulness Self-confidence/independence Critical thinking Managing stereotypes If the above competencies are compared with the findings of the study conducted by [5] who used a sample of German expatriates to suggest important intercultural competencies, the 4 competencies of communication skills, empathy, tolerance towards ambiguity and flexibility can be identified as identical to the four most important competencies identified by [3]. As a further comparison the competency list developed by [4], based on a survey of more than 100 global leaders from 16 companies in 36 countries, illustrated the competencies needed for success in international business, two of the competencies, culture sensitivity and flexibility are also identified. Following analysis of the findings from the existing literature, [3] compiled a concise list of the ten key competencies for effective multicultural management: Communicative competency Openness of mind (towards other way of thinking) Flexibility Language competency Cultural empathy Culture consciousness (sensitivity, adaptability) Tolerance towards ambiguity Ability to collaborate with and lead individuals (leadership) Resourcefulness Self-confidence III. KNOWLEDGE MANAGEMENT OF MULTICULTURAL COMPETENCIES The area of knowledge management defined as any process or practice of creating, acquiring, capturing, sharing and using knowledge, wherever it resides, to enhance learning and performance in organizations [14], represents a significant challenge and great opportunity for any organisation operating in a competitive globalised marketplace. The challenge for management and the HRM function is to understand clearly the competency of management and implement organisational learning in order to support the development of these firm specific skills. ISBN:

3 Reference [15] elaborated further and stated that the development of multicultural competencies is dependent upon the role of internal firm issues relating to people, processes and structures. Reference [3] has developed a systematic approach to the knowledge management of competencies by integrated the internal firm attributes into a model for the development of intercultural competencies. The aim of doing so was to create a new model to enable enterprises to implement the development of the identified multicultural management competencies, depicted in Figure 1. The model is based upon integrating six global environment influences; business and industries, the natural environment, economic, political and legal, technology and culture as addressed by [15]. These are combined with inputs comprised of state, organisational and individual factors, subsequently resulting in the development of the intercultural competencies through the increased knowledge, skills and abilities of management. As a result the effective development of multicultural competencies fosters a multiculturally friendly environment, which leads to significant benefits for the organisation with regards to increase knowledge and innovations, competitiveness, sustainable development and added-value. knowledge. Furthermore it is necessary to consider the cultural differences of managers and the role within the sharing of multicultural knowledge. Hofstede s cultural dimensions is the most widely applied model of categorising national cultures based upon the five dimensions of individualism, power distance, masculinity, uncertainty avoidance and long-term orientation [17]. The comparison of Hofstede s cultural dimensions for both Slovakia and the UK is indicated in Table 1. It is evident from the scores that disparities exist between Slovak and UK managers, as Slovakia exhibit a large Power Distance (PDI) score of 104, compared to a very low PDI score of 35 for the UK. Similarly managers in the UK can be expected to adopt a far more individualistic approach, with a higher score of 89, compared to only 52 for Slovak managers. In contrast, Slovakia ranks higher than the UK with regards to Masculinity, scoring 110, compared to 66 (UK) and also Uncertainty Avoidance, scoring 51 (Slovakia) compared to 35 (UK). Table I Hofstede s cultural dimensions scores for Slovakia and the United Kingdom Country Slovakia United Kingdom Power Distance Individualism Masculinity Uncertainty Avoidance Long-term Orientation Fig. 1 a model of intercultural competency development V. CORPORATE CULTURE WITHIN MANAGEMENT COMPETENCY DEVELOPMENT IV. THE IMPACT OF NATIONAL AND CORPORATE CULTURE UPON THE DEVELOPMENT OF MANAGEMENT COMPETENCIES Culture can be applied to both nations and organisations which is why the distinction between national and corporate culture is made, as a result cultural stereotypes can refer to a national with each organisation possessing its own cultural variation [16]. The successful implementation of a multicultural competencies model approach within an enterprise is dependent upon the attitude and aptitude of the managers within the enterprise and their ability to disseminate information throughout the organisation. Therefore the intercultural management style also becomes of critical importance to the implementation and sharing of multicultural Hofstede s study assumed that the corporate culture variable was consistent through all IBM subsidiaries world, thus concluding differences were the result of national culture [17]. However, in contrast numerous other authors have argued the importance of corporate culture and devised a model of corporate culture. Four different types of corporate culture are proposed categorised as power-orientated, people orientated, task-orientated and role-orientated [18], [13]. Reference [18] proposed four definitions of corporate culture types depicted in Table 2. ISBN:

4 Table II Handy s four types of corporate culture Power- orientation Roleorientation Peopleorientation Taskorientation The power-orientation is a culture with a central power source that exercises control. There are few rules or procedures and the atmosphere is competitive, power-orientated and political. The role-orientation is a culture in which work is controlled by procedures and rules and the role, or job description, is more important than the person who fills it. Power is associated with positions, not people. The people-orientation is a culture in which the individual is the central point. The organisation exists only to serve and assist the individuals in it. The task-orientation is a culture in which the aim is to bring together the right people and let them get on with it. Influence is based more on expert power than on position or personal power. The culture is adaptable and teamwork is important. VI. RESEARCH METHODOLOGY The research was conducted by means of a structured questionnaire of 124 employees working within industrial enterprises, research institutions and universities in Slovakia. The research was carried out during summer and autumn 2010 and the finding were supported by literature and the authors own experience working in organisations in the UK and Slovakia. A high proportion of respondents were employed in the public sector with 38 employed (30.65 per cent) by universities. There was a large mix in respondents and there was a wide spread, although the largest number of respondents reported they were at the bottom in terms of job position. 16 respondents (12.90 per cent) reported they were in top management, 33 respondents (26.61 per cent) in middle management, 20 respondents (16.13 per cent) in lower management and 34 respondents (27.42 per cent) reported to be common employees and 21 respondents (16.94 per cent) responded to be other. In order to determine the significance of Hofstede s dimensions in the context of multicultural workplaces respondents were asked to rate their line manager based upon whether the style of management could be categorised as active, friendly, distant or authoritarian. Results were compiled for both Slovak and foreign line managers and then direct comparisons were drawn between the UK and Slovakia based upon depth interviews. VII. RESEARCH FINDINGS It is evident from the findings of both the questionnaires and depth interviews that significant differences exist regarding the styles of management adopted by Slovak and managers of other nationalities. The findings from the survey question What management style does your immediate line manager use, shown in Table 3 below, indicates that 18.2% of Slovak managers adopt an authoritarian approach, compared to only 11.9% of managers from another nationality. Furthermore, the results indicate that Slovak managers typically adopt a more friendly (29.1%) style compared to other nationalities (21.4%) and are less distant (7.3%) compared to other nationalities (16.7%). Table III classification of management approach by nationality part 1 No.of respondents Active Table IV classification of management approach by nationality part 2 Distant Authoritarian Slovakia 7.3% 18.2% Foreign Country 16.7% 11.9% Friendly Slovakia % 29.1% Foreign Country % 21.4% If the traits of Slovak managers are compared with that of UK managers, based upon findings from the depth interviews it is reported that managers in the UK typically adopt a functional goal orientated approach, focusing upon collaborating together to complete the task. This is supported by the responses from several UK employees that their ISBN:

5 immediate manager checked upon their progress infrequently and it was their responsibility to keep their superior updated regarding progress. This supports the questionnaire findings that Slovak managers typically adopt a more friendly management approach and are less distant with their subordinates than their comparable peers from other nationalities. If the research findings are assessed in the context of Hofstede s cultural dimensions, it can be concluded that a large number of Slovak respondents classified their manager s style as authoritarian. This directly reflects the extremely high power distance score of 104 underlining that authority is clearly defined in the Slovak workplace and those occupying positions of seniority are highly respected by their subordinates. In contrast the UK scores very low in terms of power distance (35), this can also be reflected by the less authoritarian approach of UK managers, who typically exhibit a preference for delegating responsibility as a means of empowering employees. Therefore although formally layers of responsibility exist within UK enterprises, in practice a more pragmatic and flexible approach is adopted when compared to Slovak enterprises. The research findings also depict the Slovak management style as based upon friendship with less distant relationships than the approach adopted by foreign managers. This can also be confirmed by the interviews with UK employees who report that management is friendly but typically goal orientated. The findings can be supported by Hofstede s cultural dimension of individualism whereby the UK scores highly (89), in comparison with the Slovakia score of 52. This can be explained by the historically collective nature of Slovak society which today remains a significant factor in defining the approach of Slovak managers. In contrast the more individualistic nature of UK culture places a greater emphasis upon the empowerment of subordinates as a means of personal development and advancement. If the survey findings are analysed based upon the respondents managerial level, illustrated in Table 4, it is evident that the more senior an employee is in the organisation, the more distant, less friendly and more authoritarian the relationship is with their immediate manager. Table V classification of management approach by employee level part 1 No.of respondents Table VI classification of management approach by employee level part 2 Distant As a result it can be concluded that alongside national factors playing a significant, it can also be stated that the role of corporate culture and organisational structure determines the style of management. The findings are further supported by the management approach classification by enterprise type, shown in table 5 below. Table VII classification of management approach by enterprise type part1 No.of respondents Active Authoritarian Employee and low 10.0% 12.5% manager Middle and top manager 14.0% 20.9% Other 7.1% 7.1% Active Friendly Employee and low % 30.0% manager Middle and top manager % 18.6% Other % 35.7% Friendly SME or other % 12.5% Big Enterprise % 32.6% University % 26.7% ISBN:

6 Table VIII classification of management approach by enterprise type part 2 Distant Authoritarian SME or other 16.7% 25.0% Big Enterprise 7.0% 9.3% University 13.3% 16.7% The findings indicate that within Small and Medium Enterprises (SME s) the relationship is less friendly than within big enterprise and university environments. This indicates the impact of working in larger teams with greater opportunities to build social relationships. This could be interpreted that a stronger people orientated approach exists within larger enterprises, as people are regarded as the greatest resource of an organisation. Furthermore larger enterprises have the necessary time and financial resources to invest in the development of human capital, fostering stronger working relationships than in SMEs. The management styles within SME s is also reported as more authoritarian with 25% of responses compared to 9.3% of responses for the same category in big enterprises. The results can be accounted for by a greater emphasis upon the task-orientated approach within larger organisations whereby due to the larger size and complex structures, management prefer to delegate responsibility and allow subordinates to get on with the task [18]. VIII. CONCLUSIONS It is evident from the research that there are significant differences between the management approaches adopted by Slovak managers when compared with those of enterprises in foreign countries and specifically within the UK. Moreover, it is clearly evident that the management styles adopted closely mirror the national cultural characteristics as depicted by Hofstede s dimensions., As a result the UK management style tends to represent goal orientated with fewer personal relationships when compared with Slovak management which places a greater emphasis upon a collectivist approach and building close business relationships. In contrast upon analysis of the management approach by enterprise size and employee level, it is evident that the differences can also be accounted for by structural and corporate cultural factors relating to the organisation. As a result it can be concluded that the managerial style is determine on both a national and corporate level. Furthermore, it is of crucial importance to take account of managerial approach differences when developing a structure model of knowledge management within an organisation. As a result the model previously developed by [3], can be elaborated upon to place greater emphasis upon national and corporate management traits and attributes, alongside those knowledge, skills and abilities of the individual manager. As Slovak enterprises continue to internationalise and develop increasingly multicultural work environments; it will become an even greater priority to understand the impact of multicultural management styles, therefore placing greater importance upon the practical application of an actionable model of multicultural management competencies. Following this research additional scope has been identified to further analyse and categorise multicultural management styles. Within the remit of the study the four management styles of active, friendly, distant and authoritarian were assessed to accurately reflect Hofstede s cultural dimensions. However it is necessary to conduct further studies to test the appropriateness of the categorisation to enable conclusions to be drawn of global management styles. REFERENCES [1] R.M. Hodgetts and F. Lufthans, International management: Culture, Strategy and Behaviour, New York: McGraw-Hill, [2] B. 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