Academic journal article Human Resource Planning

Cross-Cultural Performance Feedback in Multinational Enterprises: Opportunity for Organizational Learning

Academic journal article Human Resource Planning

Cross-Cultural Performance Feedback in Multinational Enterprises: Opportunity for Organizational Learning

Article excerpt

This article focuses on the challenges a multinational enterprise (MNE) faces in implementing an important management practice -- performance feedback -- across its different business units and cross-cultural teams. Two critical incidents are presented that involve miscommunication between managers working on a virtual project in the United States and Malaysia.

Special attention is devoted to describing how an MNE can use an organizational learning process to diagnose and develop solutions to cross-cultural conflicts. Specific suggestions are outlined for resolving the incidents, and organizational learning steps are presented to extend this knowledge throughout the MNE, resulting in organizational competitive advantage.

Multinational enterprises are increasingly using cross-cultural virtual teams and project task forces to increase speed in launching products to market and in bringing together employees from different locations, functional areas, and cultural perspectives. While such virtual processes offer many advantages to MNEs, they also involve many challenges (Cunha & Cunha, 2001), and require the deeper application of many traditional management practices (Cascio, 2000). Unfortunately, the potential of such virtual teams is often not realized, in large part because of the difficulties inherent in these cross-cultural encounters.

In this article we focus on the challenges that an MNE faces in how to implement one important management and communication practice, performance feedback, across its different business units and virtual cross-cultural teams. Performance feedback is seen as one important way in which MNEs can more fully tap and develop the talents of their diverse employees as well as provide some sense of the organization's direction and objectives (Schuler, et al., 1991). There can, however, be significant differences in how individuals in different cultures provide and seek performance feedback (De Luque & Sommer, 2000). This is true even though performance feedback in many countries involves the similar premises of how to control and motivate employees (Nakane, 1972; Ouchi, 1981; Staw, 1980) through developing performance norms, monitoring employees on those norms, and assigning responsibility for action based on these norms (Sullivan, et al, 1986).

This article illustrates how a multinational enterprise can develop a competitive advantage from its management practices, such as performance feedback, by using organizational learning to understand the impact of national culture on employee behaviors and then develop more effective management systems throughout the organization. First we present two critical incidents of performance feedback between managers from two different countries in an MNE. Second, we show how an MNE can apply an organizational learning approach to diagnosing the problems involved in such incidents and develop new performance feedback processes that are sensitive to the culture in its foreign global units. Finally, we describe how an organizational learning approach can be utilized to spread the learning from these incidents to other virtual teams and business units throughout the MNE, ultimately resulting in an organizational competitive advantage.

In presenting these incidents, we acknowledge that the analytical framework focuses on how to improve one important element of the exchange, cross-cultural communication. In reality, many different elements contribute to the difficulties in cross-cultural interactions and teams (Earley & Mosakowski, 2000), such as the team members' functional work backgrounds, the corporate structure and organizational culture, and the quality of the technology and resources available (Cunha & Cunha, 2001). For the sake of parsimony and because the objective of our study is to provide clear, practical illustrations, we focus specifically on cultural communication in these incidents. …

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