Currently, most businesses are increasingly becoming globalized, unlike in the past. This diversification offers managers many opportunities, but it also has its challenges. One of these challenges is how leaders should deal with multicultural differences to keep the business profitable and competitive in different parts of the world. In a cross-cultural environment, management involves managing teams and companies to promote best practices, values, and culture. This essay will take a look at a popular organization called Alibaba, look at how multicultural issues are handled and offer recommendations.
Developmental Model of Intercultural Sensitivity in Alibaba
Unlike other conventional start-up gurus, the founder of Alibaba, Jack ma, was an English teacher. The former CEO is an exceptional speaker and has modeled the Development Model of Intercultural Sensitivity (DMIS) by Dr Milton Bennett into the company culture (Alqassimi & Upadhayay, 2018). This communication style discourages ethnocentrism which views one’s culture as central to reality and encourages ethnorelativism which views one’s culture as relative to the context. In general, this method discourages Alibaba’s employees from avoiding cultural differences and encourages them to seek the differences and accept them. By following this model, Alibaba can build a solid organizational culture based on the value of all employees regardless of where they come from.
The Development Model of Intercultural Sensitivity has six stages, from denial to integration. The first is the denial stage, where individuals in an organization do not recognize the difference between cultures, and if they do, they ignore them (Sieck, 2021). An individual in this stage will likely negatively label an individual of a different culture. Because of their difference, a person in the denial stage will view others as weak, uneducated, less intelligent and other innate traits because they don’t follow the same culture. Despite Alibaba being a company based in China, where people in the denial stage are, many Alibaba employees and stakeholders seem not to be stereotypical.
The second stage in moving from ethnocentrism to ethnorelativism is the defense stage. This stage can occur when people see another culture as an assault on their own. Most Chinese employees belong to this stage whereby they view immigrants as people who have come to take away their jobs. The citizens are also defensive against visitors they view as people who have eroded their morals, according to Sieck (2021). This is not the case with Alibaba Group holding limited when it seems to be ready to be the first to accept new foreign ideals. This non-defensiveness perhaps is why the company has been able to dominate the international market and the home base.
According to Milton Bennett, the third stage of the shift is the minimization phase. Despite being better than the previous stage, it is based on assumptions. Individuals in this phase falsely view their cultural values to be the same as those of others. The leaders here don’t address cultural issues as they view them as non-issue (Sieck, 2021). The ignorance method could leave some team members demotivated and the business enterprise at a loss. An example of a minimization statement is gender-based violence, which is a response to women-based violence. Jack ma has long fostered clear and honest communication at Alibaba.
After this minimization stage of shifting towards ethnorelativism, the fourth stage is acceptance. In this phase, people in an organization like Alibaba recognize that they have different beliefs and are shaped by the culture and environment they stay in. Agreeing with different cultures makes people realize how their mates must be and seek multi-cultural relationships (Sieck, 2021). In an organization like Alibaba, this is demonstrated by employees of different cultures being taught how others live and relate to others. Acceptance has helped Alibaba penetrate international markets by offering products and services that fit every particular region and its culture.
After accepting the other’s culture is achieved, Alibaba then seeks to ensure that its employees and other staff adapt to other people’s different cultures. This stage is the fifth in the transition from ethnocentrism to ethnorelativism, and people in this stage can be emphatic to others cultures. A group in this stage is often reproductive even if the employees are of different cultures because the multi-cultural interactions are respectful. Alibaba encourages its team members to ensure adaption is achieved without assimilating, which is shifting one’s culture. Alibaba leaders are quick to adapt to the cultures of others, and that can be argued as the reason for its international growth.
The last stage where ethnorelativism can be said to have been achieved is the integration of cultures. A person in this stage can view things from different cultural points of view (Sieck, 2021). A person in this stage can survive in all cultural settings without creating conflict. This is a very high level of ethnorelativism, and even the well lead Alibaba employees can ethnorelate to this level. People who manage to reach this stage of DMIS live in cultures where they are the minority.
Alibaba’s adoption of the Development Model of Intercultural Sensitivity (DMIS) as its mode of communication has left less to improve. However, the group is yet to achieve full ethnorelatism as the last stage of integration is yet to be completed. To achieve integration, the company leaders encourage training settings where an employee is sent to a region where they will be the minority. Employees in this training should be well guided, and an open mind should be taught and encouraged before the exercise. This will help them view things from other people’s points of view.
High and Low Context Cultures in Alibaba
Anthropologist Edward T. Hall proposed the high and low context across cultures in 1976. Hall said that in some cultures, high-context communication means are used, meaning that the tone is more important than what is displayed. Alibaba has ensured that high-context communication is used rightly, preferably oral communication. The group also operates a high-level communication style in the proper countries. Countries in which Alibaba deploys this strategy include Japan, China, Brazil, and Spain. The group also organizes and uses the technique when appropriate, for example, when it is essential to correct a persistent wrong behavior.
On the other hand, Hall said that words are more important than their underlying tones in low-context communications. The group favoring this communication style says that words need to be communicated clearly and have explicit meaning, just as in high-level communication, Alibaba uses low context culture of communication when appropriate. Low-context communication is more favorable for written communication (Alizadeh, 2021). The group uses this form of communication in cultures that fit and include most western cultures.
Alibaba makes the mistake of categorizing cultures into either high context or low context. The majority of the population belongs between the two contexts of Hall’s proposed levels. The group’s leadership should also notice how to use the two methods interchangeably to reach the goal they are aiming for. With increased technology, the company can study feedback using algorithms and use that to determine the context to use and to which level. The group should also be careful with other factors like age, race and gender in the international business forum.
Geert Hofstede’s Cultural Dimensions Theory in Alibaba
Geert Hofstede developed the cultural dimensions in theory in 1973, which grouped cultural dimensions into different categories. The categories were first analyzed into individualism-collectivism, uncertainty avoidance, power distance and masculinity-femininity. The original paradigm did long include some value, so later, a long-term orientation dimension was included. Hofstede further modified the model by adding another dimension he called self-restraint. His work is quoted by 45 new writers every day (Beugelsdijk & Welzel, 2018). This theory is used by many organizations, especially those that deal with multicultural communications and relations, like Alibaba.
The first category of Hofstede’s cultural dimension is the power distance index. This refers to the degree of inequality between the more powerful and the less powerful. The two extremes in this dimension are those that embrace hierarchy and egalitarians. Western countries are likely to have low power distance, while Asian and developing countries have a downward power distance. Alibaba has been successful in a multicultural environment because of its diverse tactics in different regions. It also uses other power indexes in different branches hence fitting the culture of most of its settings.
The second categorization is that of Individualism vs. collectivism. As the name suggests, individualists put personal goals before group goals. Collectivist individuals tend to place group goals above personal goals on the flip side. In societies where capitalism is embraced, Individualism is likely to be placed above socialism. On the other hand, institutions that embrace socialism place group goals above individual glories. Alibaba, a Chinese company, has adopted these different cultural dimensions well and encourages Individualism in foreign markets like the US while maintaining collectivism at home.
Some cultures have a very high tolerance for risk, others have a moderate risk tolerance, while others still have a low tolerance. This uncertainty avoidance index is the third category of Hofstede’s cultural dimensions theory. The uncomfortable with uncertainty group tend to minimize their risk by setting rules and regulations, including laws. The comfortable group with certainty tends not to follow many rules and uses intuition in its decision-making (Beugelsdijk & Welzel, 2018). Alibaba knows these two extremes set less strict conditions on cultures that embrace low uncertainty avoidance while restricting those who prefer high uncertainty avoidance.
The fourth dimension in Hofstede’s Cultural Dimensions Theory is referred to as masculinity vs. femininity. The masculinity role, also called “tough”, sees men be distich from women, with each playing specific gender roles. Masculinity advocates and followers view power as more critical, while their counterparts consider nurture more important. The femininity approach views all genders as equal; the most vital aspect is seeing a quality life. In its international business, Alibaba Group tends first to understand the characteristics of that culture then integrate them with the group’s values to meet its goals.
Some cultures consider long-term goals to be more important than short-term goals. Other cultures, though, seek immediate gratification and love to see their effort paid off in the shortest time possible. This dimension was not added to Hofstede’s Cultural Dimension theory by Hofstede but by scholars who saw the shortcoming of the idea (Beugelsdijk & Welzel, 2018). In dealing with people and businesses across cultures, Alibaba puts them into two separate categories and communicates and serves them in a manner that fits their orientation. For instance, some goods supplied by Alibaba are cheap but serve a short time, while others are expensive and serve long. Using its expertise, Alibaba establishes the different categories different cultures belong to and helps them accordingly.
The last dimension added by Hofstede in 2010 is the Indulgence vs. Restraint category. This category is based on the ability of individuals to control their desires, with those with high control being referred to as restraint and their counterparts being categorized as indulgent (Beugelsdijk & Welzel, 2018). Indulgent people are likely to be found in western societies where restrictions are lifted in many aspects of life, and people act according to their will as long as it does not hurt others. The Middle East is more restrained, where cultural beliefs and religion limit people. Alibaba, a company founded in a restrained cultural environment, has changed some norms practiced in Asia to more Indulgence based practices in western countries.
Adopting Geert Hofstede’s Cultural Dimensions Theory in Alibaba is likely to be flowed by assuming that people in a specific region follow a particular culture. There may be minorities in that area due to different outliers with an extra cultural dimension. Thus, the company leadership should carefully study the demographics of small communities to avoid cross-cultural conflicts. It would also be necessary for Alibaba group to determine the level at which opposing dimensions vary. Also, as noted previously, this theory is constantly improved; hence Alibaba should always seek ways to improve the model.
Alibaba has continued to group, especially in the international market, because it deploys good leadership models to deal with cross-cultural issues. The models are adopted in all areas but are normally ignored where they don’t have conclusive solutions. The group uses a variety of leadership models in dealing with these issues. One of the models uses the DMIS model which all stakeholders are moved from the denial stage of cultural differences to the integration stage. This process, according to the founder of the model, is referred to as a shift from ethnocentrism to ethnorelativism.
Another model used by Alibaba’s leadership to deal with cross-cultural issues is the High and Low Context of Cultures advocated by Anthropologist Edward T. Hall. The groups here study demographics in different parts of the world and choose the best mode of communication to be used in each region. In using the high-low context, the company has to be careful not to avoid categorizing people on the extremes. The last model used by Alibaba to manage multicultural diversity is Geert Hofstede’s Cultural Dimensions Theory developed in 1973. This method places cultural dimensions into extremes and lets a person choose the extreme they wish as it best befits their personal or group culture.
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