Cross Culture and its impact on Organization

Objective of the presentation 
To understand some aspects of the

international business environment and the impact of cross culture in an Organizations 
To describe a model for understanding

cultural differences and to build awareness of the effects that culture has on language

Present World Situation 
Emergence of the Digital Age  (e.g., revolution of computer technology,

digitization, fiber optics, satellite communications, the Internet)  Ease and speed of international travel  Formation and expansion of regional trade alliances  Growth of international professional associations

Iceberg Analogy of Culture 
Culture is like an Iceberg 

The largest part is

under the water

Iceberg Analogy of Culture BEHAVIOUR BELIEFS VALUES AND THOUGHTS .

.

perpetuate myths and stories.  Failure to understand the influence that culture and language has on business has led to misunderstandings. and use specialized vocabularies.Business Culture  Domestic business organizations can be viewed as mini-cultures (composed of different people with different roles. miscommunications.  Businesses are both differentiated and socially stratified in that specific roles and statuses can be identified. lawsuits. and value systems) that operate within the wider national context. statuses. symbols and behavioral expectations. costly marketing blunders. adhere to norms. .  Individuals engage in corporate rituals. and a general undermining of corporate goals.

as compared to 3% for Western European and 14% for Japanese companies. then they will be successful in an international environment. expatriates (individuals on foreign assignments) is significantly higher than for other countries.  One of the biggest reasons for failure is the assumption that if someone is successful in their home environment. companies experience failure rates over 10%.Language in Business  The failure rates of U.S. . 76% of U.S.

Language in Business  Research has shown that failures in international business most often result from the individual s inability to understand and adapt to the local country s ways of doing things. . such as flexibility and accommodation.  Companies are beginning to realize that the single most important criterion for success in international business is communication skills.and the expatriate s family situation.  Important for successful communication skills are: competency in the local language. motivation to learn. individual motivation. This is followed by personality traits. and willingness to use it.

manners. and knowledge. dress. expression. beliefs. as in the arts. The total of the inherited ideas.  3. The total range of activities and ideas of a group of people with shared traditions. values. etc. which are transmitted and reinforced by members of the group tastes valued by a society or class. The artistic and social pursuits.  2. and .What is Culture?  1. which constitute the shared bases of social action.

and the perception of control over one s own destiny . and authority are associated with gender. including gestures Hierarchy perception of rank in relationship to others and ways of interacting Status Attainment importance of personal achievement and sense of wellbeing Space/Proxemics the amount of space needed for comfort in business and personal environments Group Dependence importance of the individual versus the group in social and business situations Diversity Receptivity how roles. and country of origin Change Tolerance responses to change. power. the need for rules. race. religion. the ability to take risks.Nine Dimensions of Culture          Relationships importance of building relationships versus completing a job Time importance of personal relationships versus adherence to schedules Communication ways the society communicates.

Strategy. Entry modes S t r a t e g y subsidiary Material/Products subsidiary Knowledge & practices Subsidiary roles subsidiary Expatriate Staffing policies Role of expats people Selection Training Adjustment Compensation . HQ-subsidiary relationships. Distance Flows Financial Host country Culture Language Institutions. Comparative HRM and IR MNC HQ MNC config. etc. cross-cultural management Home country Culture Language Country-oforigin effects Institutions. etc.

The language barrier .

Jos et kuitenkaan halua tai osaa vastata johonkin kysymykseen. . Jokaiseen osaan vastaamiseen on omat ohjeensa.Can anyone make any sense out of this?  ALOITA TÄSTÄ!  Tämä kyselylomake koostuu useista kysymyssarjoista. että yrität vastata kaikkiin kysymyksiin. On erittäin tärkeää. jätä se mieluummin tyhjäksi kuin että annat minkä tahansa vastauksen.

especially in services  Between headquarters and subsidiaries or branch offices in multinational corporations Many multinationals use a corporate language. it is important to speak the language of the customer.The language barrier: Where does it occur?  With customers and suppliers An increasing number of companies will need to interact with customers and suppliers in other countries Although English might be the language of business.is English The use of English/a corporate language can have important implications in terms of communication barriers. identity and power relations . which often .but not always .

but sometimes poorly  In that case be careful not to equate English language fluency with intelligence  My IQ has suddenly dropped 50 points .But doesn t everyone speak English?  Well maybe.

Anne-Wil Harzing .But doesn t everyone speak English?  Well maybe. but not fluently  Managers may pretend to understand to save face  The resulting confusion can lead to suspicion and blaming the non-native speaker for being fickle and unreliable Dr.

but near fluency doesn t mean someone is culturally similar  Speaking your language fluently doesn t mean your counterpart shares your norms and values .But doesn t everyone speak English?  Yes .

Language is: a source of power  Parallel information network or shadow organisation structure Informal communication channels based on language skills rather than position in the company Possession of language skills leads individuals to have more power than their formal position would indicate .

Language is: a source of power  Speaking the corporate language or language of HQ is important for your power and influence in this MNC 85% agreed .

every day behaviors. Explain the history. geography. including customs. and other general information about the host country and region.Cross-Cultural Training Methods  Cultural Briefings Explain the major aspects of the host country culture. traditions. Portray a real-life situation in business or personal life to illustrate some aspect of living or working in the host culture. politics. economy.  Area Briefings  Cases .

Trainee selects one from a set of responses to the situation and is given feedback as to whether it is appropriate and why. Provides a written set of situations that the trainee might encounter in living or working in the host country.Cross-Cultural Training Methods  Role Playing Allows the trainee to act out a situation that he or she might face in living or working in the host country.  Culture Assimilator  Field Experiences . Provide an opportunity for the trainee to go to the host country or another unfamiliar culture to experience living and working for a short time.

358.000.000.000.000 77.000 125.000.262.000 341.000.000.000 167.000 366.000 207.000 358.Top Ten Languages Spoken in the World Language Mandarin Hindi Spanish English Bengali Portuguese Russian Japanese German French Primary Country China India Spain UK/USA Bangladesh Portugal/Brazil Russia Japan Germany France No of Speakers 1.000 .000.000.000 100.000.000 176.

Brazilians. Chinese. A fundamental tenet of any business encounter is effective communication.Language in International Business English is just one of the world s major business languages. While many cultures sincerely appreciate a foreigners attempt to speak their language (e.g.g. and German. unless the speaker is very good (e.. Individuals who have to rely on translators and are not skilled in the cultural and linguistic aspects of the foreign country are at a serious disadvantage. it is the mother tongue of only about 5% of the world s population. . Germans). Other major languages in international business include: Spanish. French.. French). others do not.

According to Benjamin Lee Whorf. so it s not worth it.Second Language Learning Commonly stated reasons for not learning a second language:     I m not very talented in learning foreign languages. The company can hire local nationals in the country to run the business. Learning a second language helps with a deeper understand of one s own language. . the only way to really understand the worldview (a system of categories for organizing the world) of a culture is through its language. Learning a second language is helpful in learning a third and fourth language. It could hinder my advancement at home if I m too closely associated with them. Reasons for learning a foreign language:     Being able to speak about the art. literature and culture of a country greatly enhances the business encounter by earning the respect of the local people. I ll only be there for a short period of time.

Elements of Verbal Communication           Intonation Turn-taking Greetings Terms of Address Directness/Indirectness Agreement/Disagreement Individualism/Collectivism Explicit/Implicit Communication Lexical Humor .

Anglo-Saxon Japanese Italian .Intonation  Variation in the fundamental frequency of a speaker s voice.

the rules that govern turn-taking are highly culture-dependent. Native American. the speaker is obliged to continue to fill up the awkward silence . a variety of other cultures tolerate large gaps between speakers (e. demonstrate high frequency of cooperative overlap the process of the next speaker starting before the current speaker has finished. Finnish)..    .g. American middle class speakers exhibit a pattern of no gap. Otherwise.Turn-Taking  The social convention governing who speaks when in a discourse involving multiple participants. Japanese. The highest order rule is that the current speaker can select the next speaker. Other English speakers. In contrast. the first person who starts talking gets the floor. no overlap and maintain strong sense of who speaks next in the conversation. which to many Westerners invoke a strong feeling of awkwardness. If no one starts talking.

Turn-Taking  Middle-class American  New York A B A B A B Jewish  Japanese .

handholding while talking/walking . lower status person bows lower than higher status person China: Have you eaten rice today? => How are you? Native American: Silence until the two people become comfortable with each other West African: Handshake with a snap of the fingers. four in Brittany Russia: Both men and women kiss each other Japan: Bowing.Greetings Around the World         Brazil: Women kiss and are kissed. one kiss for the woman France/Belgium: Two kisses in Paris. men embrace men Germany: Handshake between men. three in Belgium.

Lexical Differences Lexical Item homely rubber knock up table something American English plain or ugly condom get pregnant defer indefinitely British English warm and friendly eraser stop by the house give prominent place .

duration. For example. In France. meetings rarely include scheduled breaks (except lunch). agenda. decisions are generally made in the hallway after the meeting has been concluded. low in German and Japanese cultures) . In Germany. follow a defined agenda. such as the South. and are a followed up by printed minutes from the meeting. meetings typically start 15-30 minutes late.. meetings start on time. in France. leading to such colloquialisms as hora brasilera or hora mexicana . In Latin cultures.g. notes.Conducting Meetings       Meeting style varies significantly across cultures. high in Arab cultures and in some American local cultures. etiquette. Use of small talk and asking personal/family-related questions varies tremendously across culture (e. People get up and leave whenever they need to take a break. including such factors as timing. Meeting purpose and decision-making strategies also vary across cultures. breaks. facilitation. etc.

trusting business relationships .Style and Culture in Meetings American Direct Drive to be explicit: Give / get the facts State a clear position and rationale Decide on the merits or rely on position of authority Giving and taking negative feedback is a sign of strength Confront when necessary with logic and persuasion skills Indirect Japan Drive to reach consensus: Explore interest of all parties Reserve stating a firm position Achieve consensus Protect the dignity and self esteem of yourself and others Avoid confrontation Strive to develop harmonious.

between people. then it will work well for anyone anywhere highly accommodating encourages adaptation to differences. businesses. both real and imagined. and/or nations promotes assimilation of values and attitudes to local country/culture Ethnocentric Self-Affirmers Global Mindset Model Polycentric Assimilators .Global Mindset Model developing multiple identities integrates on the interaction between things that are alike and things that are different so-called cosmopolitans seeks commonalities and promotes universal ideas and values Geocentric Integrators minimally accommodating holds that the values and practices of one s own company and home country are superior to those of others if it s proven successful here.

inspiring emulation Risks: ‡Tries to fit all situations into one and only way of doing things ‡Promotes not-invented-here syndrome ‡Inhibits adaptation and absorption of new ideas Benefits: ‡Bridges differences by being an empathetic facilitator ‡Accelerates market entry. positioning ‡Attuned to various customers. but not much about anything ‡Difficult to develop and retain while preserving who you are ‡Can erode clarity and common purpose. product adaptation. and institutions Risks: ‡Can have limited territorial scope ‡Champions idealized foreign markets / going native ‡Tendency to generalize small experiences to larger domain POLYCENTRIC Benefits: ‡Supports diversity and sensitivity to local practices ‡Thinks of individuals as part of the global community ‡Pushes managers to seek new ways of doing things Risks: ‡Knowing a little about everything.Global Mindset Model ETHNOCENTRIC Benefits: ‡Safeguards proprietary technology and business design ‡Poses cognitive challenges. markets. lost in hodge-podge GEOCENTRIC .

a motion of the hands. or body to emphasize an idea or emotion. something said or done as a formality or as an indication of intention: a political gesture. Au Poil! Perfect! OK! Zéro! Worthless! Du menu fretin! Rubbish! Watch out: This gesture can mean asshole in parts of Latin America! . head.  2.Gestures  Gestures:  1.

Gestures Around the World  Western: Do you have a telephone?  USA: sign for the Texas long horns  Brazil: Cuckold! (meaning your wife is cheating on you) .

Gestures knowledge. Around the World  Never under estimate the importance of local .

Owners and Department heads and Directors . education and nonprofit/ trade association) .Company revenue: $1billion or more . A total of 200 VP and higher-level executives from large ($1 billion+) companies were interviewed between May 12th and May 21st 2008 ‡ Sample 200 respondents from companies who use low-cost offshore service providers .Industries: Multiple industries (excluding business consulting/professional services.Online Survey  Methodology Sandy Radoff Assciates conducted an online survey about cross-cultural issues that occur when working with low-cost offshore service providers.Job Titles: C-suite. VPs.

Issues with offshore providers Respondents report that by far the biggest issue in working with offshore providers is miscommunication. None of the above Missed deadlines Tense working Having to redo the 24% 19% Low morale Miscommunication ISSUES 24% 33% 36% 66% .

Companies Offers Cross-Cultural Training Vs Companies doesn t offer Training None of the above Tense working Low Morale Missed deadlines Having to redo the work Miscommunication 0% 23% 25% 20% 19% 23% 25% 37% 29% 41% 32% 72% 60% 20% 40% 60% 80% Companies Doesn t Offer Training Companies Offers Training .

Causes of problems Different communication styles stand out as the most common cultural issue that causes problems between onshore and offshore workers. have not had any problems Other Different decision-making styles Different attitudes towards conflict 5% 8% Causes of problems 44% 44% 53% 76% . None.

Value of Cross Cultural Training Cross Cultural Training Very Valuable 47% Somewhat Valuable 52% Not at all valuable 1% Cross Cultural Training .

Only two percent of respondents thought that training would not Very Much Somewhat increases 69% Not at all Increases 29% 2% Productivity .Impact of training on productivity Over one-quarter (29 percent) believe that cross-cultural training would increase offshore worker productivity a great deal. An additional 69% percent believe such training would somewhat help.

92% India Singapore Brazil Chile China Malaysia Canada Others Philippines Czech Republic Thailand 29% 18% 14%13% 10% 9% 8% 12% 6% 5% Countries .Top countries for low-cost outsourcing India is the most popular country for low-cost outsourcing.

The End! Any questions or comments? .

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