On global market, there is a straight impact of Culture. Guiso, Sapienza and Zingales (2005) found from their research that, in European Union’s case, differences of culture impel faith among people and based on this trust, trade and investment patterns take shapes within this region. They also stated that more differences of culture cause lower trust and lower trust reduces the trade volumes amongst local organizations first and finally global organizations. In the United States, at the firm level, there is an adverse effect of differences of culture on overseas
50 investors (Grosse and Trevino 1996). Another study based on service providing multinational companies which are operating in Asia Pacific region shows that there is a negative outcome of cultural differences on the investment decisions of those multinational companies (Li, 1994). Lee’s research found in 1998 that cultural distance is a key influence in importers' opportunistic behaviour in respect to their partners’ behaviour in the host countries. Boyacigiller (1990) argues that when individuals from different cultural background are working together, then they
experience higher levels of confusion and subsequent difficulties. So, cross-cultural approach should take in to management’s account in order to achieve the prospective advantages in terms of performances of the organizations. Scheinder and Barsoux (2003) showed their positive views on cross cultural studies and they stated that organizational and cultural features of different countries of the world are also different, “which can provide sources of competitive advantage at one point, only to become liabilities when the environment changes” (Scheinder and Barsoux
2003, p. 9). For that reason, they also recommended that, managers need to consider about the national culture as it will help them to make their companies’ strategic decisions at present as well as in the future.
In multinational situation leaders when experience another different culture from their own culture then they have intention to adjust their intense sense of national culture norms and values with the new organization’s culture. Leaders adopt a multicultural attitude which has been provided by Fernandez and Underwood (2006). They indicated that this attitude must have “a willingness to recognize the limitations of one’s own cultural norms and to accept and adapt to the culture of the host country” (Fernandez and Underwood, 2006, p.10). However, some
scholars such as Brewster and Hegewisch (1993) expressed different opinion that culture has no effect on organizational management. Because they see there is a permanent nature of
combinations of functions and perform autonomously of the country’s culture when it comes to management. At the same time, other scholars state that the cross-cultural approach refers, in any geographical area there is a relation between culture and organizational management. The reason they found is the differences in HR management of different countries initiate differences among cultural societies. Brewster and Hegewisch (1993) also added and Fernandez and Underwood (2006) later agreed that the effect of cultural differences is very noticeable when individuals with one cultural background are moved from one organization to another one which is observing different principles from the former one. An example can make this clearer to understand. Around forty years ago, a vast number of workers from various parts of the world were
employed by the Federal Republic of Germany. Among those foreign workers there were some workers from Greece and Turkey. The workers found that their German colleagues and
supervisors were not accepting them friendly as they were from different cultural background and their knowledge and learnings were unsuitable with the German organizational culture. The human resource department of the organization never experienced this sort of conflict before which resulted from cultural diversity. Previously they have handled any conflicts amongst German employees, but any issue with the workers from another country was first time
51 they identified that an HR-staff who is friendly with the employees will be able to resolve this problem. Then they selected few workers from them, promoted them as HR staff and each of them were representing their cultural group. Presumably the outcome was outstanding. Staff were happy with their work environment, they could share their disappointments, learnings and ideas, and they were performing better day by day. From this experience Germany changed their business strategy in international trade. Nowadays in the US their companies appoint US experts and managers for their HR-management. This makes employees friendly with their HR-staff who is from same cultural background consequently, this will be more supportive for them to share their needs and expectations in the workplace. And this will increase the possibility of managers to manage the company successfully (Ståhl and Viklund, 2006).
From the discussion above, this is apparent that national culture and organizational culture have close relations to each other and they have effects on organizational performance and leadership behaviour in national and multinational situation. In chapter 5 and 6 through the empirical evidences we will see the relationship of culture and leadership behaviour in RMG industry of Bangladesh and UK. On the other hand, leadership behaviour also can affect national and organizational culture and organizational performances. Therefore, it is important to describe organizational leaders’ leadership styles and behaviour as well as ethical leadership which will lead to investigate the effect of culture and leadership behaviour on ethical labour management in RMG industry of Bangladesh and UK. We will consider managerial and leaders’ leadership behaviour. So, the thesis now turns to examine leadership elaborately.