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Knowledge Management > Book Reviews > Cross-Cultural Management: A Knowledge Management Perspective >

Cross-Cultural Management: A Knowledge Management Perspective

By Nigel Holden

2002 FT/Prentice-Hall, Pearson Education, London

328 pages

Review by Madanmohan Rao madan@inomy.com

“Cross-cultural management can no longer be seen as the management of cultural differences in popular interpretation. It must be related to managerial activity in the new geo-economy with its emphasis on global networking, organisational learning and knowledge management,” according to management educator Nigel Holden.

The book provides valuable contributions to both disciplines: KM as well as cross-cultural management. The material is thoroughly referenced, and divided into 12 chapters covering issues like anthropological influences on culture studies, corporate learning histories, cross-lingual communication, international management and business strategy.

Nigel Holden is visiting professor at the Vienna School of Economics, Leiden Unviersity and Kessel International Management School. He has extensive experience as a management educator, researcher and consultant.

Culture is a form of organisational knowledge, and should not be viewed as a source of difference and antagonism, according to Holden. Culture should be treated as an object of knowledge management.

Much of the material in the book revolves around four case studies which highlight the different ways in which culture is being perceived and managed in knowledge-intensive industries. Multinational corporations are mediators of knowledge, values and experience.

“It is the very embeddedness of cross-culturally relevant knowledge in specific situations that firms need, but misjudge, simply miss, or generally lack access to,” observes Holden. Progressive global businesses try to get the best ideas from everywhere, but are not always adept at translating new knowledge into new ways of behaving. Numerous cases reflect these shortcomings with respect to understanding the complexity of embedded cross-cultural knowledge, notions of trust, dealing with uncertainties, lack of personal connectedness or relationships, and geographical as well as cultural distance.

For instance, the early years of the DaimlerChrysler merger were marred by engineer defections, clashes of management styles, and serious differences of opinion about mutual project involvement. GM’s early adoption of Japanese just-in-time production schemes, which did not fully appreciate the embeddedness of tacit knowledge, led to confusion, disputes, strikes, closures and colossal losses. The first wave of Western consultants in Russia were perceived as arrogant, ignorant of local conditions, and almost seen as spies. During post-communist operations in Poland, ABB was viewed with suspicion for some time due to its prior involvement with the government. Western companies and local Chinese managers can fail to come to agreement over issues regarding business relationships and negotiations.

On the other hand, companies like Nokia appreciate the inputs of knowledgeable outsiders to help it discern future trends, and it has made English its official language.

Knowledge work in multicultural contexts needs a style of management that is more magnanimous, and focuses more on coaching and encouraging than ordering and directing. Learning and unlearning behaviours are both important.

Biotech Company Novo Nordisk (from Denmark) has created an internally appointed multinational team to facilitate conformity with company values and transfer of best practices. The 14 special facilitators function as cross-cultural change agents, aimed at overcoming the communication gap between corporate headquarters and local units. Their task is to assess how well corporate vision is understood worldwide, ensure compliance, respect HR policy, and help concepts be understood in different cultural and linguistic contexts. Assessment methods include surveys, audits and organisational diagrams. Challenges have arisen in dealing with cultural differences like dress code and hierarchical communication, but the facilitators have eventually become experts about good practices across all country offices.

The corporate culture of Matsushita Electric is profoundly influenced by its founder, Knosuke Matsushita. While the company was globalising, the core national culture led many non-Japanese managers to feel a sense of frustration about the “rice paper ceiling” in terms of career advancement and about the company’s “tunnel vision” regarding globalisation.


In contrast, a striking feature of LEGO’s international strategy is to play down, if not suppress, its national origins, as it began to globalise in the 1990s. It expanded from toys to amusement parks, media products, lifestyle products and even software. LEGO has a Brand Board and a Culture Board, who stress company values and identity in terms of creativity, imagination, development, quality and consumer confidence.

Local employees from the parent company travel to or work with other country offices to transfer knowledge and values. At the same time, the company has been thoughtful and flexible enough to accommodate new cultural elements like the notion of fun in children’s computer games, a notion which was contributed by its UK operations.

Construction services company Sulzer Infra leveraged the role of headquarters in creating a team-based performance culture by forming the Sulzer Infra Academy in 1998 to enable cross-border exchange of experience, sharing of information and continuous renewal with specific aims like assisted bidding for big contracts. The Academcy acted as a “highway for bringing operational excellence and best practice to all employees.”

Regular exercises are carried out during Academy workshops to strengthen the corporate notion of “one winning team” across employees from different cultures, who constitute over 40 “P-Teams” (performance, processes, profiles). A team called the “Know-how Ring” develops best practices, innovative ideas and assignments for the P-Teams. Key knowledge transfer learnings include the importance of proper briefings about the objectives of seminars and workshops, leadership support from the top, feedback channels from participants, and the value of mixing different kinds of activities ranging from music to paintings so as to reduce cultural unease.

Overall recommendations from these four case studies, according to Holden, include the need to build participative competence in knowledge workers, create appropriate cross-cultural interfaces (eg. facilitators, local managers, corporate universities), encourage networking, create common cognitive ground (via appropriate culture-sensitive translations), overcome ethnocentrism, transfer knowledge in such a manner as to overcome ambiguity, interference (with prior perceptions), and equivalence (with respect to prior concepts).

It is of utmost importance to nurture conducive atmospheres in knowledge networking events. “Atmosphere is the balm which allows cultures to intersect smoothly, and allows pools of knowledge to overlap freely,” advises Holden.

In sum, it is important to treat cross-cultural managers as knowledge workers – and collaborative knowledge workers in global organisations need to harness the power of national and organisational culture as knowledge objects and carriers.


As global competition intensifies, cross-cultural knowledge will become more and more important. “Cultures are better conceived as intersecting zones of collaborative learning and pools of common knowledge,” Holden concludes.

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Madanmohan Rao is Editor-at-large of DestinationKM.com and editor of two book series, “The Asia-Pacific Internet Handbook” and “The KM Chronicles”

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