The culture as a factor influencing the key processes of the management of the company

- Platforms - an infrastructure and, moreover, standards that allow teams to share data

- Program - building a firm's collaborative capabilities

Sometimes the members of international teams interact with each other from a distance which leads to a 24-hour communication between them. Culture affects how members understand and conceptualize teams, including their roles, scope of responsibilities, and objectives (Gibson & Zellmer-Bruhn, 2001, 2002) Gibson, C. B., & Zellmer-Bruhn, M. E. 2002. Minding your metaphors: Applying the concept of teamwork metaphors to the management of teams in multicultural contexts. Organizational Dynamics, 31, 101-116. Some studies also suggest that they can outperform monocultural teams in some situations, for example, through the development of creative and innovative activities and enhance the educational process (Bouncken & Winkler, 2010; Mitchell, Boyle, & Nicholas, 2011; Piccoli, Powell, & Ives, 2004; Slater, Weigand, & Zwirlein, 2008; Stahl, Maznevski, Voigt, & Jonsen, 2010) because of cognitive diversity. Stahl, G. K., Maznevski, M. L., Voigt, A., & Jonsen, K. 2010. Unraveling the effects of cultural diversity in teams: A meta-analysis of research on multicultural work groups. Journal of International Business Studies, 41(4), 690-709.

However, these benefits sometimes lead to problems related to cultural differences, which can seriously impair the effectiveness of a group or even lead the team to a deadlock. In the scientific literature is the concept of "Intra-national diversity". The authors referred to the increasing multi-ethnic composition of employees within the geographic region. All these factors lead to the question: how managers can better cope with these challenges caused by the culture? A big role in multicultural teams play expatriates. Expatriates in international business are considered workers who leave their country for long-term work abroad. Expatriates are divided into citizens of the country of origin (citizens, where the "parent" is firm or its headquarters) and of citizens of third countries (or all countries other than the native and the hosting branch).

1.8 Interaction processes in a multicultural team and possible conflicts

Authors Halverson and Tirmizi (2008) created a model which represents the factors that influence the effectiveness, thus innovativeness of teamwork in a multicultural environment Halverson, C. B., Tirmizi S. A. 2008. Effective multicultural teams: Theory and practice. Brattleboro, VT: Springer Science and Business Media.. Furthermore, the model assumes that all these factors can influence each other.

Model Tirmizi and Halverson (2008) shows that the commands rooted in one or more organization, and this affects their performance in one or another way. In their model authors are decomposed groups into components: the design and structure of the team, characteristics of team members (class, race, gender, ethnicity), and processes within the teams (trust, efficacy and commitment). The model also tries to explain what are the criteria for the team to be efficient, hence to be more innovative.

Figure: 1

Multicultural Team Effectiveness Model

Source: Halverson & Tirmizi, 2008

The authors pointed out that growth of effective, hence innovative multicultural teams has a significant role. This is a result of the repeatedly changing of some factors as culture, demography and some social factors. Due to these issues the model that Halverson and Tirmizi (2008) have proposed appears to be auspicious while providing a framework by which we can examine the effects of multicultural team work on process of innovation in a multinational context.

The formation of a team in a cross-cultural environment demands careful and culturally thoughtful ways to integrate employees from different backgrounds. Authors Samnani, Boekhortst, and Harrison (2013) unified data from social identity theory, cross - cultural differences, and identity formation/change. In their research they developed a compound theoretical model used to explain effective strategies to maximize organizational performance Samnani, A.K., Boekhortst, J., & Harrison, J. 2013. The acculturation process: Antecedents, strategies, and outcomes. Journal of Occupational and Organizational Psychology, 86, 166-183.. Throughout their research, the authors argues how strategies of adapting cultural perceptions can straight impact on a newcomers` behavior or make an influence on social networks within the organizations. However, they pointed out some positive outcomes as economic benefits, economic and career advancement. Samnani (2013) argues that "based on employees' potential acculturation strategy, training development, and induction processes should identify ways in which employees can effectively utilize their diverse backgrounds to complement existing skills in the organization" Ibid.

In addition, other authors pointed out multicultural teams sometimes are the solution, which can be unique for us to understand and respond to current business challenges. However, with forming multicultural teams, MNCs may miss some benefits that can occur in monocultural ones. Some researchers mentioned examples that showed multicultural teams can, for instance, delay in the process of Team building, due to the increased difficulty in creating trust and understanding, thus there is an increase a stress and the possibility of the of conflict situations Friedemann, M., Pagan-Coss, H., & Mayorga, C. 2008. The workings of a multicultural research team. Journal of Transcultural Nursing, 19(3), 266-273. doi:10.1177/1043659608317094 (Friedemann et al. 2008; Govindarajan & Gupta, 2001; Keller, 2001; Scholz & Stein;).

The study of Bouncken & Winker attracted attention to some factor, connected to multicultural team work. Culturally diversified teams are more sensitive to conflicts and showed up less cohesion than monocultural groups Bouncken, R. B., & Winkler, V. A. 2010. National and cultural diversity in transnational innovation teams. Technology Analysis and Strategic Management,22(2), 133-151. doi:http://www.tandf.co.uk/journals/titles/09537325.asp (Bouncken & Winkler, 2010). These sorts of conflict and the lack of cohesion, can result as difficulty with establishing trust. Sims & Gioia Sims, H.P. Jr. & Gioia, D.A. 1986, The thinking organization. San Francisco: Jossey-Bass Publishers., (1986) argues that team members from different cultures usually possess differing views on the problem. Moreover they have different opinions on that how they should solve the problem.

According to Karen Jane (1999), a for creating a successfully working team, managers and the team members will face some challenges and have to decide how to overcome them through four options: "adaptation (acknowledging cultural differences openly and working in the multicultural sphere), structural intervention (changing the shape and composition of the team), managerial intervention (setting standards), and exit (exit of a team member in case other options have failed)" Jehn, K.A., N. G. 1999. Why differences make a difference: A field study of diversity, conflict, and performance in workgroups. Administrative Science Quarterly, 44, 741-763..

In her research Karen Jane (1999) showed how different types of diversity affect team performance. After research of different models it has been found that the diversity values of the team is becoming more important for team performance, and most importantly, the social diversity is not so important anymore.

Cheung and Chuah, (1999) found out the existence of thirteen sources of conflict and because of their relations to the culture, they can affect the teamwork with a negative outcome Cheung, C. & Chuah, K. 1999. Conflict management styles in Hong Kong industries, International Journal of Project Management Vol. 17, No. 6, pp. 393-399. As a first source of conflict in multicultural teams they pointed out the process of scheduling. In their opinion a potential conflict can arise between the people with different values regarding the time (Hall, 1973) and internal and external control. Another one can arise in a leadership style. In this case, the index of power distance (Hofstede, House) can play an important role. Moreover we can include and the index of uncertainty avoidance (Hofstede, House).

Furthermore, communication between managers the members of their teams can be difficult. The authors argue this is possible in cases where the team is composed of representatives of context of the Hall. In this case, there is a necessity - members should distinguish the purpose and priorities. Such kind of dimensions as masculinity- feminity, short-term and long-term orientation (Hofstede) individualism and collectivism play big role here. There is a possibility of the conflict situation connected to the access to resources. The authors believe that there is a great possibility of conflict, if team members are representatives of individualistic and collectivist culture (Hofstede). The evaluation matrixes of team members are also pointed out as an important factor. The significant role plays the difference in personalities between the members in the team and what are their prejudice. The possible conflict can occur between the representatives of the individualistic and collectivist culture (Hofstede).

For the positive results the MNCs consider the cost of the project. Therefore, the authors stressed on a potential conflict, between the representatives of cultures with different indexes of power distance (Hofstede). A significant role plays the opinion of the members connected to the technical issues. Usually a conflict arises between members with different indexes of uncertainty avoidance (Hofstede). An important part of the organization within the team is a determination of the members` responsibilities. Therefore, a conflict may occur between members with different indexes of power distance (Hofstede).

Table:2

Sources of conflict and cultural dimensions

Sources: Cheung and Chuah, (1999)

To sum up, we can make an inference that in order to determine how effective this multicultural team is, a great role-plays communication as a factor. The ability of the team`s leader to identify and effectively convey the team's goals, as well as the rules of conduct and roles in the team has a significant contribution. Moreover, it is required to consider preferable for representatives of different cultures and the role of "context" language of Edward Hall, which we discussed above.

Williams and O'reilly (1998) Williams, K. Y., O'Reilly, C. A. 1998. Demography and diversity in organizations. In B.M. Staw Sc R. M. Sutton. (Eds.), Research in Organizational Behavior (pagepage). Stanford, CT: JAI Press identified three theoretical positions that help us to understand how much the cultural diversity can harm or not when we are talking about the processes within the teamwork and its performance. First, they put the social categorization perspective. By this, they meant that people usually identify themselves as members of a group and at the same time consider the other members as non-members belonging to other groups (Tajfel, 1982) Tajfel, H. 1982. Social psychology of intergroup relations. Annual Review of Psychology, 3 3 ,1-39. In this sense, support of insiders and judgement of the outsiders can be seen as a complex social processes and, therefore, would have had a negative impact on the team (Suwannarat et al., 2012) Suwannarat, P., & Mumi, A. 2012. Examining the effects of cultural diversity on team performance and ijv performance. International Journal Of Business Strategy, 12(3), 120-132. Secondly, the similarity/attraction paradigm means that a team, in which members are similar (or members of which, at least, perceive themselves to be similar to each other) will be more productive than teams with different from each other members. In other words, people with relevant values, beliefs and attitudes, tend to cooperate more with each other (Williams & O'reilly,1998).

Last, they have identified the information/decision-making perspective. This factor suggests that multicultural teams are more likely to have access to a wider range of resources that could contribute to problem solving and can promote creativity of the team.

Although cultural diversity enhances teamwork, there are some harmful processes. For instance, in the beginning of projects, teams face conflicts that can slow down the innovation process and increase the effort that is needed for some improvements in the project.

We have analyzed the problems related to cross-cultural teams that are frequently mentioned in the literature and divided them into three categories: communication, leadership, and the processes within the team.

Communication

The author Triandis, (2003) Triandis, H.C. 2003, Forty-Five Years of Researching the Culture and Behavior Link, Chapter 1 of Tjosvold and Leung, Cross-Cultural Management: Foundations and Future. Ashgate Publishing Limited draws attention to the fact that in heterogeneous groups, it is more likely for the people to form a subgroups with people who have some similarities to them, for instance - age, professional orientation, social status, nationality and other differences. The possible consequences of such behaviour is a positional division in a multicultural team into several groups and as a result - bad connection between the separate groups. Bad contacts between subgroups will lead, respectively, to bad understanding the conflicts and as a result - to a decrease in performance (Triandis, 2003, p.65).

In the work of Brett, Behfar and Kern (2009), one of the key parameters, influencing the effectiveness of multicultural teams is communication Brett, J., Behfar, K., & Kern, M. C. 2009. Managing multicultural team, Eight Unique Perspectives on Becoming a Stronger Leader, Harvard Business Review, 85 - 96. The article highlights a number of issues that arise in communication between native speakers of Western and Eastern cultural traditions. In particular, they described the explicit and implicit ways of conveying information. Thus, in the process of cross-cultural groups inadequate communication can lead to serious negative consequences. In particular, the article highlighted the negative effects such as decrease in efficiency of information exchange, as well as the occurrence of interpersonal conflicts. Other authors pointed out communication as a factor that predisposes to a bad team effectiveness. In their work, Ochieng and Price (2009) Ochieng, E., & Price A.D. 2009. Framework for managing multicultural project teams, Engineering, Construction and Architectural Management, Vol. 16 Issue: 6, mentioned the importance of effective intra-group communication for the formation of organizational culture and organizational climate within multicultural teams.

Hinds & Bailey, (2003) pointed out the fact that good relations in multicultural teams are supported by good communication, whether verbal or nonverbal, but lack of understanding on the other hand, promotes conflict Hinds, P. J., & Bailey, D. E. 2003. Out of sight, out of sync: Understanding conflict in distributed teams. Organization Science, 14(6), 615-632..

Here, we should point out the cultural differences connected to the context (Hall, 1976). There is a negative influence on the innovation in the project caused by the context differences (Hoegl and Gemuenden, 2001). Mention the differences between high and low context cultures: high context cultures pay attention to unverbal cues and situational factor and low context cultures prefer direct and clear messages.

Leadership

This category applies mainly to the differences in leadership styles, which for their part depend on cultural differences. These differences were described in one of the Hofstede cultural dimensions, named power distance index (Hofstede, 2001). If the Manager and employee have different cultural roots, it is likely their opinions of what a good manager mean to differ vastly does.

For example, a low index of power distance can be described as an active manager, i.e. it is expected for the subordinate of this type of management to work mainly independently and to show initiative continuously, without involving a particular Manager into decision-making process. However, in countries with a high index of power distance, the subordinate expects to receive detailed instructions, regarding the tasks, transferring most of the decisions on the manager`s shoulders. If a manager possess a low PDI index and his subordinate possess the index of high PDI, while they are working together without realizing these cultural differences, the Manager may treat the employee who is afraid to make decisions on their own professionally incompetent, unable to cope with the tasks Laroche L. 2003. Managing Cultural Diversity in Technical Professions, Butterworth-Heinemann..

Our theoretical review allows us to make the statement that culture according to Hofstede possess a great importance when it comes to the relations in multicultural team.

Conclusions Chapter 1

In this chapter, first of all, we discussed the main directions of cross-cultural researches. We can make a conclusion that the influence of culture is often based on specific parameters of Hofstede or Hall or any other specific factors. Researches showed us that when we start comparing different cultures there is possibility to start from the differences or conversely to look for common features. MNCs can resolve any conflicts by finding common values and allay the negative effect of discrepancy between different cultures for reaching the synergy effect.

Second, we made a classification of cultural dimensions is based on Hall, Hofstede and the GLOBE project. We analyzed what are differences and similarities between different dimensions.

Third, we introduced the main processes of management in MNCs - leadership, process of motivation, process of problem solving decision making, negotiations. As a last part we left out the object of this research - multicultural teams. We discussed how culture influence multicultural team work and potential conflicts that can occurs as a result of working in multicultural teams.

In addition we composed our first main RQ: What is the impact of culture for the multicultural teamwork?

2. Process of innovation in MNCs working in consulting a field

Globalization and internationalization represent the growing interdependence of countries and regions, forming a world community, their progressive integration into a single system with shared rules and norms of economic, political and cultural behavior.

After making a theoretical review of the term internationalization, I found out there are two terms: Downstream & Upstream Internationalization.

Downstream internationalization can be defined as the internationalization of the sales part of the value chain, which can be characterized, for instance, international sales, foreign representative offices, and foreign customers, whereas Upstream internationalization means (supply) - from resources to knowledge, innovation and labor force. This kind of internationalization could be carried out by creating a company, which is located abroad Bozarth, C., Handfield, R., & Das, A. 1998. Stages of global sourcing strategy evolution: an exploratory study, Journal of Operations Management, 16, pp. 241-255.. The author Rao (2004) believes that culture has a major influence on relations between people (teams) in a time of internationalization. Rao, M.T. 2004. Key issues for global IT sourcing: Country and individual factors, Information Systems Management, 32(4), pp.1-11

The combination of these two processes has led to the fact that at the forefront of the global business scene are global companies, in which there are many multicultural teams.

One practical consequence of the difficulties of working with people from different cultures is their involvement in international alliances or an international mergers & acquisitions. Organizations for many reasons are expanding, and seeking a global presence. (Schraeder & Self, 2003) Schraeder, M., & Self, D. R. 2003. Enhancing the success of merger and acquisitions: An organizational culture perspective. Management Decision, 41(5/6), 511-522 . All this is happening for reasons connected to the achievement of financial goals, such as achieving greater efficiency, by using a synergy (Singh, Mathur, & Gleason, 2002) Singh, M., Mathur, I., & Gleason, K. C. 2002. Evidence on the complementary nature of product an international diversification. Corporate Finance Review, 7(3), 27-37. , taxation issues (tax shield) and risk diversification (Mukherjee, Kiymaz, & Baker, 2004) Mukherjee, T. K., Kiymaz, H., & Baker, H. K. 2004. Merger motives and target valuation: A survey of evidence from CFOs. Journal of Applied Finance, 14(2), 7-24.

2.1 Consulting business in a context of globalization

In this research we are concentrating our attention on MNCs, working in a global environment. As an important part of MNCs, consulting companies are playing a main role in the global business.

One of first researches devoted consulting business is Turner`s research (1982). He describes eight main characteristics of consulting business: 1) providing an information, so the client can be well informed about the problem; 2) consulting firms are solving clients` problems; 3) providing diagnosis; 4) making recommendations, based on diagnosis; 5) consulting firms are assisting in the process of implementation of solutions; 6) building a consensus when it is necessary; 7) teaching the client how to solve similar problems; 8) making improvements on organizational effectiveness. Turner, A. N. 1982. Consulting is more than giving advice. Harvard Business Review, 120-128.

It is not surprising that authors consider consulting firms as professional service firms (PSF). von Nordenflycht (2010) argues that professional service firms possess three main characteristics von Nordenflycht, A. 2010. What is a professional service firm? Toward a theory and taxonomy of knowledge-intensive firms. Academy of Management Review, 35, 155e174: knowledge intensity, which means that there is a body of knowledge connected to the people, who work in the organization. Second, low capital intensity, which means the firm's output does not depend on material assets. Third, professionalized workforce make the identification of the employees. It is characterized by a specific knowledge base, significant regulation and control, an ideology that governs its members, and non-price competition Thakor, M. V., & Kumar, A. 2000. What is a professional service? Conceptual review and bi-national integration. Journal of Services Marketing, 14(1), 63e82. (Thakor & Kumar, 2000; von Nordenflycht, 2010).

Fincham, Mohe, and Seidl (2013) argued there are three main characteristics of consulting firms: first, firms in consulting field are providing support in such kind of activities as diagnostics and solving problems. Second, consultants are external objects with no responsibilities. Third, such support is considered as a temporary Fincham, R., Mohe, M., & Seidl, D. 2013. Management consulting and uncertainty: mapping the territory (Guest editors' introduction) International Studies of Management and Organization, 43(3), 3-10..

Overall, there are three types of challenges that multicultural consulting companies are facing today: As a first one we can point one competition and differentiation. This means that the competition is more intensive with the entering of heterogeneous players in different markets. Moreover there is an enormous need for consulting firms to show their customers their uniqueness, thus to differentiate themselves from the other consulting firms. Second, it is important to develop an organizational design of the firm. The traditional so called professional partnership organization is in danger because of the globalization of consulting companies as well as their company - clients. This means consulting firms should adopt a new form of organization, which can best fit to their identity. Third, the consulting firms should work on internal organization of knowledge flows, thus to serve their clients` needs. Especially this is valid for the tacit organizational knowledge which is flowing through the firms departments. Efficient leverage of organizational knowledge is essential for creating and maintaining the balance between exploitation of existing knowledge and creating new knowledge.

Table: 3

Literature revive of the key issues, connected to the consulting business

2.2 Types of innovation in MNCs

The main aim of the innovation activities is to achieve the strategic goals of the company. This has an effect on the formation and implementation of innovation strategies and the current plans of innovation. Consequently, innovative strategies must be developed based on the goals and opportunities that define the features and capabilities of the company (or individual business) and its corporate and business strategies.

The MNCs need innovative and technological strategies because of two reasons:

- to establish priorities, to ensure the financing of investments in research projects and to allocate resources (sometime tacit) between individual innovation projects

- to improve technologies, product and services, or to create and develop new products, technologies and services, thus to meet future needs of its customers.

Innovation is referred to the introduction and application of processes, products, or procedures new to the relevant unit of adoption Anderson, N., & West, M. 1996. The team climate inventory: Development of the TCI and its applications in teambuilding for innovativeness. European Journal of Work and Organizational Psychology, 5, 53-66. (Anderson and West, 1996; Bouncken and Kraus, 2013). For innovations, in particular in global markets, creativity is regarded as a prime success factor Spector, P., Cooper C., Poelmans S., Allen T., O'Driscoll, M., Sanchez, L., Siu, L., Dewe, P., Hart, P., Lu, L., Moreas, L., Ostrognay, G., Sparks, K., Wong, P., & and Yu, S. 2004. A cross-national comparative study of work-family stressors, working hours, and well-being: China and Latin America versus the Anglo world. Personnel Psychology, 57, 119-142. (Spector et al., 2004; Cummings and Oldham, 1997). As firms increasingly extend their global operations and market presence, they are facing diverse customer expectations that have to be fulfill with creative products and services through a rich understanding of their national backgrounds and desires Kraus, S, Meier, F., Eggers, F., Bouncken, R., & Schuessler, F. 2014. Standardization vs. adaption: A conjoint experiment on the influence of psychic, cultural, and geographical distance on international marketing mix decisions. European Journal of International Management (Kraus et al., 2014).

Scholars in the field of innovation have traditionally view innovation as an information processing activity (Allen, T.J.,1985, Clark, K.B. and Fujimoto, T., 1991., Dougherty, D., 1992, De Meyer, A., 1985, Zaltman, G., Duncan, R. and Holbek, J., 1973) Lievens, A. 2000. Communication Flows in International Product Innovation Teams, Journal of Product Innovation Management. The innovation team obtains information on markets, technologies, competitors, and resources Souder, W.E. and Moenaert, R.K. 1992. An information uncertainty model for integrating marketing and R&D personnel in new product development projects, Journal of Management Studies, vol. 29 (4):485- 512 , and translates this information into a product design and a product strategy, or to overall company`s strategy.

Table: 4

From the position of the strategic management, the innovation is considered as a result. On the other hand, innovational process is considered as a process of creation, commercialization and diffusion. The basis of innovative activity is the use of scientific-technical, technological, organizational, economic and managerial innovations. Moreover, for the innovational process within the company it is important the diversity in knowledge and expertise.

Usually a marketing team supports the core innovation team, and it is responsible for driving the product launch process worldwide. This requires a global framework and methodology, international project management and communication tools, and cross-functional and cross-cultural team collaboration. Moreover, the global team is formatted into two levels:

- Cross-functional: the operational team in headquarters responsible for product design, management, and marketing on a global level

- Regional and local: the planning and implementation teams responsible for marketing and sales at the regional and local levels.

Finally, the high level of management provides the authority and influence for decision-making and approval of key planning and execution phases for the innovation.

These three groups play an integral role in the success of the global product launch initiative. Consequently, it is important how the knowledge, possessed by different people from different cultures, is transferred within the company. The concept of knowledge management has evolved as a critical element in the success of an organization's business objectives.

There are three types of innovations according to many authors, which are product, process and service innovations. According to Greenhalgh product innovations may be tangible manufactured goods, intangible services, or a combination of the two (Greenhalgh 2010) Greenhalgh C., Rogers M. 2010. Innovation, Intellectual Property, and Economic Growth. OCDE defines process innovation as the implementation of a new or significantly improved production or delivery method. - Product design, research and development, and new product development (NPD). Another type of innovation widely studied over the last decade, the service innovation. This type of innovation is a new or some kind of a changed service concept, client interaction channel, service delivery system. The service innovation could be more complex because it can involve many factors and actors at the same time.

New product development:

There appeared to be three distinct strategies applied for the introduction of new products:

1. a global strategy where the new concept is conceived at HQ as a universal solution with minimal adaptation made for local markets

2. a transnational strategy where the product is developed as a basic concept with consideration for local adaptations where needed

3. a local strategy where new concepts are created at the local level and then shared at the global level. In reviewing the responses, potential issues were identified for cross-cultural collaboration between teams in HQ and subsidiaries due to strategies that were more global and focused on standardization rather than localization

Moreover, there are different stages of the level of the innovation. Incremental or continuous innovation is related to an existing product which performance has been significantly enhanced or upgraded (OCDE 2001). The incremental innovation either improves something that already exists or accommodate an existing system or technology to a specific work.

A radical, revolutionary and discontinuous innovations are basically synonyms (HBS, 2003) Harvard Business Press. 2003. Harvard Business Essentials: Managing Creativity and Innovation. Available at: URL:

http://books.google.co.uk/books?id=IMDvP5NtITYC&source=gbs_navlinks_s . Discontinuous innovation refers to change that attracts much of a firm's existing investment in technical skills and knowledge, designs, production technique, plant and equipment (Utterback, 1996) Utterback J. 1996. Mastering the Dynamics of Innovation, Harvard Business School Press. As a result, for the company there is something new, but the market is existed. This novelty could be either a new product to the market or a new process for the company.

A disruptive or breakthrough innovation is that which tends to change the business model of the company and most of the times creates a new market (Christensen, 2003) Christensen C., Raynor M. 2003. The Innovator's Solution: Creating and Sustaining Successful Growth, Harvard Business School Press. Most of the cases the innovations are radical and might begin in a small scale, high prices and with few early adopters nevertheless its probability to grow a market is high (HBS, 2003) Harvard Business Press. 2003. Harvard Business Essentials: Managing Creativity and Innovation. Available at: URL: http://books.google.co.uk/books?id=IMDvP5NtITYC&source=gbs_navlinks_s .

During any innovation types there are a lot of factors to be considered. For instance, it is really important for the team members to boost their creativity, and at the same time to create a trustful atmosphere.

Service innovations, the main innovation in consulting business

As we can see from a Table 5, there are some suggestions about service innovation stated by authors. Some researchers have a oriented view to the modernism (Quintane, 2011; European Commission, 2012), while others consider service innovation as a result of knowledge (Salunke, 2011) or a service system (Vargo & Lusch,2004; IfM & IBM, 2007; Maglio & Spohrer, 2008). There is also a relational approach emphasizing the role of customers and a network of actors as co?creators of service innovation (Chae 2014; Hidalgo & D'Alvano 2014).

Table: 5

Different suggestions concerning service innovations

Service innovation can be define by different ways. There are many key factors that helping us to review service innovation since it incorporates knowledge and offerings co?created by connected resources such as customers, suppliers and employees which impacts sales and costs enhancing competitive advantage. We can measure in consulting projects some of these factors: the degree of the improvement (radical or incremental innovation) and the novelty of the innovation from a client's and consultant's perspective. The results from the Mandel`s research showed that almost 50% of consulting projects were considered to add significant improvement and 25% had solutions different form the existing ones (Mandel 2009). From this point of view, consulting projects are good source to generate innovation in businesses Mandel, C.A. 2009. Innovation in Consulting. A quantitative Approach. , pp.12-14.. Service innovation demand is increasing due to current global trends including demographic shifts, off?shoring, web?based and self?service technologies, and knowledge?intensive.

2.3 How does the culture influence the innovation processes

Many authors argue culture do matter in the context of developing innovations in MNCs. Gurkov (2016) pointed out that "the diversity of people in the team -- age, experience, education, culture -- making the work interesting, increasing the company`s adaptation and its ability to innovation Гурков, И., Моргунов Е. 2016. Коварное сходство, Harvard Business Review 64-69
Gurkov, I., Morgunov E. 2016 Insidious similarity, Harvard Business Review 64-69.

Hofstede (2001) described that the most important differences between cultures occur to the extent to which cultures differ Hofstede, G. 2001. Culture's Consequences, Comparing Values, Behaviors, Institutions, and Organizations Across Nations, Thousand Oaks CA: Sage Publications.

When we describe a large power distance, we probably will find out the sharing of information can be constrained by the hierarchy (van Evergingen and Waarts, 2003) van Everdingen, Y. M., Waarts, E. 2003. The Effect of National Culture on the Adoption of Innovations. Marketing Letters 14(3): 217-232.. In cultures with less power distance, communication across functional or hierarchical levels is more common (Williams and McQuire, 2005 Williams, L. K., McGuire, S. J. J. 2005. Effects of National Culture on Economic Creativity and Innovation Implementation. The Institutions of Market Exchange. Conference Proceedings. Barcelona. International Society for the New Institutional Economics.; Shane, 1993 Shane, S. 1993. Cultural Influences on National Rates of Innovation. Journal of Business Venturing 8: 59-73.), making it possible to connect different creative ideas and thoughts, which can then lead to unusual combinations and even radical breakthroughs. These arguments were investigated by several previous studies about the relationship between innovation initiation and power distance. Shane's (1992) analysis showed a negative correlation between the innovation processes and power distance Shane, S. 1992. Why do some societies invent more than others? Journal of Business Venturing 7: 29-46.

Usually innovations are associated with some kind of change and uncertainty. Cultures with strong uncertainty avoidance are more likely to avoid innovations Shane, S. 1993. Cultural Influences on National Rates of Innovation. Journal of Business Venturing 8: 59-73. (Shane, 1993; Waarts and van Everdingen, 2005). This means they are less motivated to think creatively. To avoid uncertainty, these cultures adopt rules to minimize indeterminateness. Rules and reliance on them, in turn, constrain the opportunities to develop new solutions.

Individualistic cultures value freedom more than collectivistic cultures (Waarts and van Everdingen, 2005) Waarts, E., van Everdingen, Y. 2005. The Influence of National Culture on the Adoption Status of Innovations: An Empirical Study of Firms Across Europe. European Management Journal 23(6): 601-610.. In addition, in individualistic cultures have more opportunities to try something new. Another important aspect is that in collectivistic societies, the contribution of an individual rather belongs to the organization. Shane (1992) found out a positive correlation between the innovation processes and individualism.

Also findings in the field of creativity and innovations can be connected to the cultural dimensions. Shane (1993) found that high power distance inhibits innovativeness and creativity through control systems based on rules rather than trust. Shane, S. 1993. Cultural influences on national rates of innovation. Journal of Business Venturing, 59-73. Moreover, Oldham and Cummings (1996) identified a "supportive and non-controlling" leadership style, which describes a low power distant leader, enhancing creativity Oldham, G. & Cummings, A. 1996. Employee creativity: Personal and contextual factors at work. Academy of Management Journal, 39, 607-634. Individualism on the contrary facilitates innovativeness and creativity through valuing freedom that is necessary for creativity (Shane, 1992) Shane, S. 1992. Why do some societies invent more than others? Journal of Business Venturing, 7, 29-46.. Low uncertainty avoidance fosters innovation (Shane, 1993). To sum up, these findings support the assumption that there is a link between cultural dimensions and creativity and innovation.

On the other hand, it has been proposed that masculinity has no effect on economic creativity (Williams and McQuire, 2005). Nevertheless, there are some possible influences that have to be taken into account. In feminine societies the focus is on people and a more supportive climate can be found. A warm climate, low conflict, trust and socio-emotional support help employees to cope with the uncertainty related to new ideas (Nakata and Sivakumar, 1996) Nakata, C., Sivakumar, K. 1996. National Culture and New Product Development: An Integrative Review. Journal of Marketing 60(1): 61-72..

2.4 Process of knowledge-sharing as a factor influencing multicultural teamwork

The interaction between national and organizational culture is described by Pauleen Pauleen, D.J. 2007. Cross-Cultural Perspectives on Knowledge Management. Green Publishing Group, Westport (Figure 2), who found out the impact of culture is closely aligning with organizational knowledge. The model illustrates that organizational knowledge emanates from a combination of national culture influences, which subsequently feeds into the organizational culture and then forms part of the knowledge sharing behavior. The organizational culture and knowledge sharing behavior subsequently combine to create organizational knowledge management.

In addition, diversity in nationality will lead to a larger diversity in knowledge and

expertise. Woodman (1993) Woodman, R., Sawyer, J., & Griffin, R. 1993. Toward a theory of organizational creativity. Academy of Management Review, 18, 293. argues knowledge is an important factor for

creative solutions. Through the access of different knowledge backgrounds within

the team, but also to different products while traveling to other countries, individual knowledge will be enlarged and, hence, creativity will be enforced. That is why Organizations should therefore leverage cultural diversity rather than manage cultural differences, because denying cultural diversity would have a negative effect on innovation performance and project performance (Bouncken, Ratzman, and Winkler 2008) Bouncken, R., Ratzman, M., & Winkler, V. 2008. Cross-cultural Innovation Teams: Effects of Four Types of Attitudes Towards Diversity. Journal of International Business Strategy.8-2: 26-36.

Cultural diversity actually becomes a core resource in developing global learning organizations. MNCs are increasingly facing with the need to leverage cultural diversity in facilitating and accelerating innovation within the organization. A valuable framework in the context of this study is the framework proposed by Nonaka and Takeuchi Nonaka, I., Takeuchi, H. 1995. The Knowledge Creating Company: How Japanese Companies Create the Dynamics of Innovation. Oxford University Press, Oxford , which conceptualizes the process of knowledge, transition through the proposed "Spiral of Knowledge Creation" (SECI model), (see Appendix C) and explains knowledge creation in innovating companies. The model is comprised of four modes of knowledge conversion Nonaka, I. 1994. A Dynamic Theory of Organizational Knowledge Creation, 14 - 37 - 20328:

1. Tacit knowledge to tacit knowledge transfer (Socialization)

2. Tacit knowledge to explicit knowledge conversion and transfer (Externalization)

3. Explicit knowledge to explicit knowledge transfer (Combination)

4. Explicit knowledge to tacit knowledge transfer and conversion (Internalization)

The authors explained a theory in which knowledge held by individuals, organizations, and society can be expanded through a joint creation of knowledge. This dissertation is focused on knowledge-sharing since it addresses the transformation of individual and team knowledge into organizational knowledge. Moreover, knowledge-sharing is a continuous form of interaction in organizations that is essential to team and project processes. On one hand, knowledge-creating process is considered as a conversion from tacit knowledge into explicit knowledge, while on the other hand the process becomes an ongoing social process through the synthesis of different views held by people (Nonaka, I., Takeuchi, H). The global innovation process requires a strong ability to balance tacit and explicit knowledge conversion.

Organizational knowledge creation, as distinct from individual knowledge creation, takes place when all four modes of knowledge creation are "organizationally" managed to form a continual cycle. This cycle is shaped by a series of shifts between different modes of knowledge conversion. There are various "triggers" that induce these shifts between different modes of knowledge conversion Ibid. First, the socialization mode usually starts with the building of a "team" or "field" of interaction. This field facilitates the sharing of members' experiences and perspectives. Second, the externalization mode is triggered by successive rounds of meaningful "dialogue." In this dialogue, the sophisticated use of "metaphors" can be used to enable team members to articulate their own perspectives, and thereby reveal hidden tacit knowledge that is otherwise hard to communicate. Concepts formed by teams can be combined with existing data and external knowledge in a search of more concrete and sharable specifications. This combination mode is facilitated by such triggers as "coordination" between team members and other sections of the organization and the "documentation" of existing knowledge. Through an iterative process of trial and error, concepts are articulated and developed until they emerge in a concrete form. This ''experimentation" can trigger internalization through a process of "learning by doing." Participants in a "field" of action share explicit knowledge that is gradually translated, through interaction and a process of trial-and-error, into different aspects of tacit knowledge. While tacit knowledge held by individuals may lie at the heart of the knowledge creating process, realizing the practical benefits of that knowledge centers on its externalization and amplification through dynamic interactions between all four modes of knowledge conversion. Tacit knowledge is thus mobilized through a dynamic "entangling" of the different modes of knowledge conversion in a process which will be referred to as a "spiral" model of knowledge creation. The interactions between tacit knowledge and explicit knowledge will tend to become larger in scale and faster in speed as more actors in and around the organization become involved. Thus, organizational knowledge creation can be viewed as an upward spiral process, starting at the individual level moving up to the collective (group) level, and then to the organizational level, sometimes reaching out to the interorganizational level.

Bartol and Srivastava (2002) argue that the knowledge in organizations is including information, ideas, and expertise relevant for tasks performed by individuals, teams, work units, and the organization as a whole Bartol, K. M., & Srivastava, A. 2002. Encouraging knowledge sharing: The role of organizational reward systems. Journal of Leadership and Organization Studies, 9, 64-76..