Book Notes: Managing Cultural Differences

These are my notes from reading the book “Managing Cultural Differences: Global Leadership Strategies for Cross-Cultural Business Success” by Moran et al.

CULTURAL IMPACTS ON GLOBAL MANAGEMENT

Business strategy needs mindfulness of worldwide complexity.

Culture hides much more than it reveals. – Edward Hall

1. GLOBAL LEADERS AND CULTURE

Culture: Distinctively human means of adapting to circumstances and transmitting this coping skill and knowledge to subsequent generations.

It influences behavior, morale, work, attitudes and actions. It changes slowly.

FRAMEWORK FOR UNDERSTANDING CULTURE

– Sense of self and space: interpersonal distance, formality.
Communication and language: non-verbals, specific terminology.
Dress and appearance: distinctive clothing, decorations, uniforms
Food and feeding habits: dishes and utensils
Time and time consciousness: exact time or relative to hierarchy
Relationships: family size, authority.
Values and norms: behavioral priorities and expectations, rituals.
Beliefs and attitudes: death, the supernatural
Mental process and learning: logic v. abstract thinking.
Work habits and process: worthiness of an activity, status, rewards.

A SYSTEM’S APPROACH TO CULTURE

This approach describes cultures as interrelated systems with inputs and outputs.

– Kinship system: family size and influence
Educational system: level of formality to teach skills to the young
Economic system: micro and macroeconomics.
Political system: means of governance
Religious system: importance and influence of religion
Association system: social networking, clans, associations
Health system: methods, approach to preventive care, coverage
Recreational system: arts, communication, socialization

SOURCES OF POWER

– Legitimate power: position or status
– Persuasive: ability in winning others’ cooperation
– Contact/network: connections
– Information: information and knowledge of how organizations work
– Expertise: knowledge
– Referent: our reputation in an organization
– Coercive: ability to punish
– Reward: ability to reward

Cultural differences can be a resource or a cost.

2. GLOBAL LEADERS AND COMMUNICATIONS

Organizations spend >70% of their time communicating. Cross-cultural communication requires flexible approaches in listening, observing, and speaking according to each situation.

Useful things to know about a new country are: historical figures the country is proud of, basic history, greetings, religion, gender roles, food, humor and int’l relation between your country and the new country. Also, business customs, negotiation skills, prejudices.

AXIOMS OF COMMUNICATION

– Every generation perceives life differently
– Communication is at the heart of all organizational operations and int’l relations
– Every person is a versatile communicator
– Every person operates within his own private world or perceptual field
– Every person projects himself into human communication
– Every person is a medium of communication

COMMUNICATION GUIDELINES

– Communication always happens
– Communication != understanding
– It’s irreversible
– Occurs in a context
– It’s dynamic

EFFECTIVE BEHAVIORS

– demonstrate respect: verbal and non verbal
– respond non-judgmentally, non-evaluative
– recognize your knowledge/values/perceptions are unique to only yourself
– show empathy
– tolerance for ambiguity
– actively manage interactions
– show willingness to adopt roles and behaviors

Attribution: The tendency to attribute motives to the ‘offender’ of a cultural construct.

3. NEGOTIATING LONG TERM FOR MUTUAL BENEFITS

Globalization requires non-zero sum negotiations and trust-building for mutual long-term benefit

Discover what is persuasive to the other culture and use it

Agreements could have different weights. A signed agreement may not equal a closed contract

COMMON PROBLEMS IN INT’L NEGOTIATIONS

– language
– non-verbal behavior
– values
– thinking and decision-making: westerns negotiate linearly task by task. In the East all issues are discussed, concessions occur at the end.

FRAMEWORK FOR INT’L BUSINESS NEGOTIATIONS

– conception of the negotiation process: strategic (limited resources to be competed for) and synergistic (unlimited resources to be cooperated for)
– negotiator selector criteria: experience, seniority, political affiliation, kinship, loyalty, etc
– significance of type of issue: resources or relationship-based
 concern with protocol
– 
complexity of language: high or low context communication
 nature of persuasive arguments: emotion or logic
 roles of individual’s aspirations: personal v. corporate goals
 bases of trust: laws, friendship, respect
 risk-taking propensity: risk v. reward
 value of time: strictness of agenda or value of relationships regardless of time
 decision-making system: authoritative or consensual
 form of satisfactory agreement: written with contingencies or oral agreement based on relationships

These are a few countries studied according to the framework above by Moran et al.

Country Negotiation Negotiator Issue Significance Protocol
India conversations/ rapport/ "facilitation paymnt"/ manners tech-expert/ status/ manager decides price bargain/ reliable/ credit/ local service/ work rapport formal friendly
China gather intel/ state friendship/ hard-bargain tech-expert/ politically reliable in trouble relationships/ connections-guanxi high-etiquette/ adv of home court
Brazil long/ trust-needed seniority/ eloquent/ connections/ educated early trust-building formal/ hierarchical/ well-dressed
South Korea keep harmony & feeling kibun status/ knowledge/ expertise relationship/ haggling ok exchange rules/ ack title position
Germany direct/ explicit/ analytical/ logical tech-expert/ educated straightforward/ down-to-business serious/ disciplined
Russia competitive win-lose specialized hard-bargaining followed rules
Country Language Complexity Persuasion Indiv. Aspirations Trust
India keep harmony/ no problem not literal maturity/ wisdom/ self-control no stand-out/ higher decides to-be earned
China high context/ understated desires and approach no-compromise signals $$ value ↑/ stand out unusual past record
Brazil high-context/ indirect inference/ indirection/ sensible individual outshining builds slowly
South Korea high-context/ indirect keep harmony group>indiv good behavior leads to trust
Germany low-context/ frank/ realistic well-researched/ ordered sense-of-duty/ company-loyalty competence/ facts/ actions
Russia low-context/ direct stall & wear down the other indiv caution important
Country Risk Time Decisions Agreements
India many are fatalists risk-willing punctuality/ required patience centralized detailed agreements
China risk-adverse/ meticulous tough negotiation & strategy long-view/ stalling authoritative appearing participative wordy contracts little legal infrastructure
Brazil low-risk not hurried bureaucratic/ hierarchical handshake formalized by lawyers
South Korea avoid risk punctual highest levels written contract flexible clauses
Germany stick to the known be on-time top-down written/ binding
Russia high-risk/ corruption long/ demanding hierarchical clever contract omitted details

CONFLICT RESOLUTION AND NEGOTIATORS

Conflict begins when one party perceives that the other is frustrating a concern.

In places where kinship and mediators are important, older kinsmen are often willing to resolve conflict to prevent danger to family honor, modifying one’s position can be a source of honor of kin.

CONFLICT MANAGEMENT IN JAPAN

Conflict management in Japan includes institutional conflict management structures and behavioral conflict management techniques.

CONFLICT HANDLING STYLES IN JAPAN

– avoidance: triad management with external respected party. Third could be humiliated if conflict continues. Avoid conflict to prevent offense.
– compromising: convey anger or resentment through third party
– acceptance: rooted in Buddhism
– integrating: express grievance by exaggerated compliance.
– dominating: not used, contrary to Japanese character

THE INTERPRETER DURING NEGOTIATIONS

Interpreters should be briefed ahead of time. They should explain major points in two or three ways to ensure points get across clearly. Confirm in writing what has been agreed. Use their advise.

SUCCESSFUL NEGOTIATIONS

– be aware of your culture’s negotiation style
– learn counterpart’s negotiation style
– consider relationship and context. adjust if needed
– predict counterpart’s approach/strategy
– choose your strategy

Successful negotiators are considered effective by both sides, have a good track record, and low incidence of implementation failures.

SKILLED NEGOTIATORS MEET THIS CRITERIA

DURING PLANNING

– explore wide range of options
– pay close attention to common ground
– extend beyond the short-term. comment often on factors beyond the immediate
– set upper and lower limits in a range instead of one value
– issue planning. critical path analysis. flexibility.

FACE-TO-FACE

They avoid:

– irritator words (e.g. generous offer)
– immediate counter-proposals
– fewer reasons to back-up arguments
– review lessons-learned post-game

4. GLOBAL LEADERS LEARNING FROM OTHERS AND CHANGE

Leaders must be perennial learners.

THE FIVE C’s IN ASIA

– continuity, tradition
– commitment, to organization growth
– connections
– compassion
– cultural sensitive, others’ ways

THE FIVE E’s IN THE WEST

– expertise
– ethos, practical experience
– eagerness
– espirit de corps, common identity
– endorsement, seek unusual opportunities

CULTURAL CHANGES CHALLENGES PERCEPTION

– market globalization, consumerism and workforce
– hierarchy transforms into participative collaboration
– work fragmentation and global markets
– knowledge becomes a global product

MAXIMIZING COMMITMENT TO ORGANIZATIONAL CHANGE

– mobilize/involve people behind shared mission
– empower by defining roles and delegating
– recognize individual contributions
– develop people
– seek input, knowledge
– review stated values, translate norms and expectations
– create culture change. diagnose, train, target
– promote understanding of events
– facilitate moving on from mistakes
– enable transitions

5. TRANSCENDING CULTURE— WOMEN LEADERS IN GLOBAL BUSINESS

Women are not necessarily culturally distinct. But there is a gap in female representation and compensation in upper management.

Men and women do not necessarily respond equally to cultural behavior expectations.

GLOBAL STEREOTYPES ABOUT WOMEN LEADERS

– too soft for tough decisions. not aggressive enough & without competitive drive.
– when acting aggressive, they overcompensate. too masculine alienating employees, alarming clients.
– in China after the cultural revolution, women are expected to be aggressive.
– lack quantitative skills, no apt for technical jobs
– not as dedicated as males
– mothers can’t be relied on
– not interested in int’l career, can’t handle cultural differences
– women reps are less credible
– men don’t take women managers seriously
– all interaction with women can be suspect of sexual harassment
– they are looking for love in the workplace
– aren’t qualified to be promoted

BREAKING THE GLASS CEILING

Several companies have programs to help break down barriers. These include audits, statistics tracking and mentoring.

WOMEN ON OVERSEAS ASSIGNMENTS

17% of the expatriate population is female

In multinational corporations, a foreign posting a step in the ladder to higher management positions.

Strategies for women include: being proactive about career pre-assignment, find a mentor, become a mentor

Expat women are not expected to behave according to local social guidelines because they are seen as foreigners first. Women often emphasize sensitivity, communication skills, community and relationships.

ADVICE FOR EXPAT WOMEN

– establish credibility with support from higher management
– have a higher-ranking person who knows locals talk about your credentials
– present yourself as sincere and confident
– act reserved and formal with colleagues
– dress conservatively especially in male hierarchical cultures
– express opinions politely and diplomatically
– survive difficult working conditions
– dare to do things differently
– have your own leadership style

6. MOTIVATING THE GLOBAL WORKFORCE— THE CASE FOR DIVERSITY AND INCLUSION

Management of a multicultural workforce allows maximum utilization of employee talent.

Causes of migration include: war, conflict, economic crisis, instability, human rights violations, lack of education. Causes of immigration include: market, family reunions, safety, opportunity, educations, access to technology.

There are three approaches to global diversity management. First, global organizations have local offices who deal with local management. Second, a universal approach seeks to standardize cross-network relationships. Third, local subsidiaries inform their global policies with local culture. The critical point is the amount of local influence over global negotiations.

DIVERSITY FROM A MACRO PERSPECTIVE

Cultivating a high level of productivity through diversity incorporate employees suggestions. be willing to rethink processes, etc. High standards are set, employees feel valued and the mission is well-defined.

DIVERSITY FROM A MICRO PERSPECTIVE

International competition is a powerful force behind diverse workforce. Firms are encouraged to hire talent regardless of demographics, create a work community for free exchange of ideas and share collective knowledge to keep ahead of the competition.

ATTITUDES TO CULTIVATE

– to be at ease with the unfamiliar
– to think like those different to oneself
– to learn continuously
– to cultivate meaningful relationships
– to manage stress
– to be self-aware

EMPOWERING WORKERS

– give people control, allow for self-leadership
– provide choice in day-to-day operations
– develop their competences
– assign critical tasks
– offer visible support

People want to be valued. They are the most important assets of an organization. Diversity initiatives should be flexible to allow for regional differences.

7. EFFECTIVE PERFORMANCE IN THE GLOBAL MARKETPLACE

Conflicts can arise when others’ views are not considered. The Carter Center recommends:

– strive for an international community and agree to use military force as a last resort
– study history and causes of dispute
– seek help from respected mediators
– be prepared to be an intermediary between parties that won’t talk to each other
– be willing to deal with key players regardless of history
– insist in human rights and international law
– tell the truth
– never despair

GLOBAL COMPETENCY MODEL

In airline, high-tech, telecommunications and consumer goods

– understand the business from global perspective
– assimilate and act for large amounts of complex ambiguous information
– drive change based on global strategy
– committed to learning
– effective cross-cultural communications
– establish personal connections across intercultural boundaries

GLOBAL MINDSET

How they approach the world:

– look at the big picture for multiple possibilities and scenarios
– understand rapidly changing, interdependent world. strategic planning, team building, good communications
– process-oriented – how > what
– consider diversity as a resource. collaborate> compete
– comfortable with change and ambiguity
– open to new experiences

TRANSFER OF KNOWLEDGE IN A MULTICULTURAL ENVIRONMENT

– show respect
– tolerate ambiguity
– relate to others
– be non-judgmental
– your perceptions are yours
– empathy
– persistence

8. MANAGING GLOBAL TRANSITIONS AND RELOCATIONS

RELOCATIONS CHALLENGES

– excitement before the experience
– honeymoon after arrival
– learning through participation in everyday life
– irritability at difficulties
– adjustment/belonging
– reentry shock

FOSTERING ACCULTURATION

– be culturally prepared
– learn communications complexities
– interact with nationals
– experiment
– be culturally sensitive
– recognize complexities
– be aware of being a culture bearer
– accept, understand
– have realistic expectations
– accept the challenge

MANAGING RELOCATIONS

  1. Personnel and Program Assessments. Identify and assess individuals for foreign deployment. Continually review performance on site.
  2. Orientation and Training. Culture and language orientation. Job orientation.
  3. On-site Support and Monitoring. Encourage morale and development.
  4. Reentry support

BUSINESS PROTOCOL ABROAD

– remember and pronounce names correctly
– use rank and titles as required
– know time and punctuality expectations
– suitable dress
– good local manners
– gift-exchange as appropriate
– culturally-aware communications
– social events, food and drink

9. LEADERSHIP IN CREATING CULTURAL SYNERGY

Cultural synergy forms multifaceted strategic alliances across cultures.

It’s dynamic, it adapts, works jointly, creates integrated solutions, develops potential and does not necessarily imply compromise or ‘giving up’

Promote planned change that:

– emphasize quality of life
– promote interdependence and cooperation
– encourage harmony with nature
– socially responsible
– restate traditional values
– encourage capacity for intuition, creativity, openness.
– build upon, transcend cultural organizational past

COMPETENCIES

– recognize and reward others’ participation
– avoid unnecessary conflict
– integrate others’ skills
– negotiate acceptable work arrangements with others
– be tactful
– provide suggestions and feedback
– gain acceptance with empathy
– anticipate difficulties
– coordinate transitions
– think in multiple dimensions
– deal well with organizational policies
– manage stress

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