“International management involves a number of issues not present when the activities of the firm are confined to one country”, - Armstrong says (2006, p.100). These issues comprise the variety of international organisational models, the problems of managing in different cultures and environments, the extent to which management policy and practice should vary in different countries, and the approaches used to manage these practices and processes. International management policies are considered taking into account there should be convergence or divergence in the management practice adopted in overseas companies. As Rowley and Benson (2000) assert: “Globalisation and international trade and finance may place substantial pressure on companies to force them to standardise practices and polices. … [However], local customs, institutions, and labour forces do provide serious constraints on the degree of convergence and may lead to increasing levels of divergence (p.2).
In this paper we will compare and contrast the management schools of Global Convergence and Global Divergence so that to make a conclusion as to which school offers the most convincing explanation of the likely challenges faced by managers in international organisations in the future.
In order to follow the Convergence versus Divergence debate it is necessary to understand a role of cultural diversity, which is a key issue in international business management. Armstrong (2006) emphasises that “managers in each country operate within a national institutional context and share a set of cultural assumptions. Neither institutions nor cultures change quickly and rarely in ways that are the same as other countries. …It follows that managers in one country behave in a way that is noticeably different from managers in other countries” (p102). Hofstede (1980) identifies five dimensions of culture, which has been adapted by Bento and Ferreira (1992) to