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Opening Your Business to the World:Increasing Competitive Capacity through Improved Global Communications

In The Work of Nations, University of California at Berkeley professor and former Secretary of Labor Robert Reich sums up the essence of "globalization" stating:

"We are living through a transformation that will rearrange the politics and economics of the coming century. There will be no national products or technologies, no national corporations, no national industries. There will no longer be national economies ... all that will remain rooted within national boundaries are the people who comprise a nation."

Simply stated—the global marketplace is changing. Today we live in a business climate that is characterized by overwhelming ambiguity, paradox, shifting definitions of value and the need for rapid, transformative change in a multicultural context. This affects business conduct as well as how we interact with different cultures on a personal level.

In order to participate in the global marketplace, individuals and organizations must confront complex cultural issues. The challenge is not only for top-tier business leaders; rather, issues are found within all levels of an organization and in routine day-to-day activities such as team meetings, email exchanges and one-on-one communication between peers and superiors. If not handled effectively, misunderstood communications, misinterpreted expectations and inappropriately defined roles may cause loss of productivity, increased opportunity costs and eroded competitive advantage.

Snapshot in Time

We live in a time of exciting—and challenging—marketplace transformation. The concept of doing business on a national level is no longer the norm; our corporate landscape extends beyond confined borders, reaching into a global pool of colleagues and competitors. While opportunities are available to all businesses, sustainable success comes to companies that are prepared to conquer the ever-evolving challenges of both technical ability and interpersonal acumen. This expertise demands more from employees than simply speaking and understanding languages.

In the global marketplace, an organization's success at achieving its strategic goals, operating at peak performance and creating competitive advantage all rely on one source: its ability to effectively appreciate, understand, value, trust, engage and employ the multiple perspectives and learning abilities of the world's cultures. Indeed, how effectively an organization can harness its collective global thinking abilities, global learning capacities and global creativity is literally all that separates it from every other organization.

How effectively an organization can
harness its collective global thinking
abilities, global learning capacities and
global creativity is all that separates it from
every other organization.

Communication in a Global Marketplace

There's no disputing we live and work in a global age where advances in technology bring people of different cultures together—both in our personal lives and in the workplace. While this is an interesting and intriguing dynamic, the experience can be frustrating when communicating with those from another culture.

How do you start a conversation or discussion? What cultural "offenses" might be inadvertently committed? How can you motivate the global workforce, structure a project or communicate a business strategy? Are we destined to only learn from our mistakes to understand cultural differences?

The answer is a resounding "no".

How Culture Impacts Business: The Research

Culture has long been studied by anthropologists and sociologists, and much of what we know comes from these academic disciplines.

Indeed, some of the most important of these studies have been the work of Mildred and Edward T. Hall, who focused specifically on identifying how different cultures understand and manage time as well as the degree to which context contributes to meaning in communications. In addition, social psychologist Harry Triandis has extensively studied individualism and collectivism and their impacts on productivity and relationships.

In terms of studies about the direct impacts of culture in business, from 1967 to 1973 Dr. Geert Hofstede, an IBM psychologist, conducted what is considered the most comprehensive study of how values in the workplace are influenced by culture. Hofstede collected and analyzed data gathered from more than 100,000 people in 40 countries. His results generated the basis for developing a model that identifies five primary dimensions to differentiate cultures and has since become an internationally recognized standard. Hofstede’s dimensions analysis assists individuals and businesses alike in understanding the intercultural differences within regions and between countries, paving the way for heightened understanding, enhanced performance and improved productivity.

Language vs. Understanding

Language ability is not the same as cross-cultural or business/management competence, and "common vision" does not always mean shared understanding. Miscommunications can significantly reduce productivity and increase organizational costs by creating unnecessary delays and obstacles in meeting business objectives.

Consider:

  • How much time passes between the time you send an email to an international colleague and the time you receive a response?
  • Do you ask a question and get an answer to a different question—or don't get an answer at all?
  • How many clarifying emails do you send before receiving the correct or complete information you need to do your job?
  • You hear your international colleague say "yes," but you find out it doesn't mean "yes, I'll do it," it means "yes, I heard you."
  • How much time is lost—potentially delaying a project—while waiting for information from international colleagues?
  • How many sales are lost in the international market due to misinterpreted client needs?
  • How many misunderstandings happen because you don't know what your customer actually values?

From the executive level and planning stages to day-to-day operations, clear communications are a non-negotiable requirement for moving a company forward through the global marketplace.

Global Literacies: Lessons on Business Leadership and National Cultures

A 2000 survey by Patricia Digh and Dr. Robert Rosen asked CEOs of the world’s 1500 largest companies what the one key skill they felt leaders needed to be successful in the global economy. In response, more than 70% of those surveyed said that the ability to work effectively across cultures was the single most important attribute leaders need in today’s global marketplace. Indeed, contrary to conventional wisdom, this study made quite clear that in a borderless economy, culture matters more—not less.

Establishing a Global Mindset

A foundation of basic cultural concepts and the development of a global mindset contribute to effectively engaging in intercultural interactions in a global marketplace/workplace. But just how does one go about establishing such a mindset? It begins with culture.

Culture reflects a way of life for a group of people: the arts, beliefs, laws, morals, customs, habits, symbols, institutions, and transmitted behavior patterns—including styles of communication—of a community or population. Culture is determined by history, geography and climate and influences how people feel, look, think and act. Culture helps determine our beliefs, and thus affects our behavior. Embedded in our culture are specific cultural values.

Cultural values often determine how we each think about and approach our own behavior and interaction with others. Cultural groups tend to hold beliefs and display behaviors that coincide with their values. Understanding what these values are, and how they operate and drive behavior, can help you interact with different cultural groups more effectively. When we attempt to understand other cultures, we are broadening our mindset as well.

Mindset is a mental attitude or disposition that predetermines a person's responses to and interpretations of situations. Our mindsets open the more we are exposed to cultures different from our own. A global mindset is based on global knowledge and understanding of cultures and appropriate ways of interacting with members from varying cultures. We further develop global mindset through personal experiences with other cultures and interaction with global markets and businesses. Acquiring a global mindset at a foundational level has broad application.

Stereotypes vs. Generalizations

Establishing a global mindset does not happen quickly. At times, our experiences, knowledge and understanding limit us. As a result, we fall back on stereotyping.

A stereotype is a standardized mental picture that is commonly held by members of a group and represents an oversimplified opinion, prejudiced attitude or judgment about other groups. People tend to use stereotypes when they have limited knowledge about or lack firsthand experience with other cultures. While intent may be positive, stereotypes are not the best shorthand way to understand other cultural groups.

Generalizations are an acceptable shorthand method for understanding others. They are based on research about global cultures and values. Knowledge and understanding can be gained from multicultural interactions and from a variety of media outlets. Generalizations can be a helpful starting point in getting to know your coworkers and customers so you can recognize their preferences.

While stereotyping is not acceptable,
having some kind of shorthand way—such
as generalizations—to understand other
cultural groups can be very useful.

Differences between stereotypes and generalizations
  STEREOTYPES GENERALIZATIONS
How shorthand understanding is created: Based on incorrect and/or unproven assumptions Based on correct and proven assumptions
Who creates and promotes shorthand understanding: Persons who wish to emphasize insiders'/outsiders' distinctions Persons who wish to minimize insiders'/outsiders' distinctions
The result of using shorthand understanding: Exclusion and abuse of other groups Better understanding and harmony regarding other groups
How shorthand understanding is regarded: Incorrectly regarded as fact Based on research about cultural tendencies

Foundation for Improved Multicultural Communications

Understanding and Recognizing Cultural Continuums

Intercultural research shows us that there are behavioral tendencies within cultures/regions of the globe based on the common values people share. These values tend to fall somewhere between two opposite ends of the cultural continuums and impact both individual and team abilities to solve problems and make decisions.

Five Cultural Continuums

Task Orientation ◄_|_|_|_|_|_|_|_|_|_► Relationship Orientation
The degree to which people prefer to begin an interaction with the
initial focus on task or the initial focus on the relationship.

Hierarchy ◄_|_|_|_|_|_|_|_|_|_► Equality
The degree to which members of organizations view power as distributed equally
or accept that power is distributed unequally (a.k.a. Power Distance Indicator).

Self Motivated ◄_|_|_|_|_|_|_|_|_|_► Group Motivated
The degree to which a society reinforces individual or collective
achievement and interpersonal relationships.

Risk Tolerance ◄_|_|_|_|_|_|_|_|_|_► Risk Avoidance
The extent to which the members of a culture feel threatened by
uncertain or unknown situations (a.k.a. uncertainty avoidance).

Direct Communication ◄_|_|_|_|_|_|_|_|_|_► Indirect Communication
The extent to which an individual or group uses direct and explicit or
indirect and implicit communication to deliver critical information.

It should be noted that although these dimensions are presented separately to enhance their understanding, in practice they are intended to be considered together in order to "paint a picture." While the continuums are certainly valid individually, their power in terms of application is recognizing how each continuum directly impacts the larger picture. Each of these five cultural continuums have a direct business application.

Continuum   Business Application
Task/Relationship Orientation Time Management/Interpersonal Relationship Strategies/Assertiveness/Conflict Resolution/Disclosure
Power Distance Indicator Management Styles/Assertiveness/Conflict Resolution
Individualism/Collectivism Team Orientation/Rewards & Recognition/Motivation/Feedback
Uncertainty Avoidance Decision-Making Practices/Conflict Resolution
Context Communication Communication Style/Nonverbal/Saying "No"

The O.P.E.N. Process

With a global economy, the potential for ineffective interactions due to cultural misunderstanding is real and has an immediate impact on global business. The best way to improve cross-cultural interactions and avoid misunderstandings is the application of the O.P.E.N model.

The O.P.E.N. model involves four basic steps:

Using the O.P.E.N. model improves cross-cultural interactions and boosts productivity.

O - Observe the behavior; observe and identify global and cultural tendencies that impact individual and business effectiveness.

P - Prepare a response; prepare responses to common cultural interactions using specific skills and strategies.

E - Engage in communication; engage in effective communication in a global/multicultural setting.

N - Notice the results; notice the results of global communication strategies and revise and adapt as necessary.

Improved Multicultural Communications in Action!

Consider this situation: A large U.S.-based division of a multinational corporation was unable to get payment from a subsidiary in China. Everyone involved was highly- educated and experienced in global markets. In an effort to communicate clearly, the U.S. team got increasingly stern in email communication and referenced documentation, legalities and late fees. In response, they received communication from their Chinese counterpart stressing the message was understood and that it would be discussed with their team. After months of unresponsiveness, the U.S. team resorted to hostile threats.

What went wrong?

First, direct and threatening communication was eroding trust. Second, the key decision maker in China was not appropriately involved; the more direct the communication became, the worse the situation. What was needed was a personal trip, extended time in meetings to build relationships and acknowledgement of appropriate decision channels.

The rest of the story:

After working with a global communications consultant, the U.S. team did make a personal trip, toured the facility and spent time with the team. They met the key decision maker and did not discuss money. In the end, the U.S. team was rewarded with a payment of the full amount as they boarded the plane. Indeed, a happy ending to a real story.

Global Business is not a Choice, it is a Reality

It is imperative for organizations to bridge cultural and language barriers to be able to achieve more effective cross-cultural business relationships and improve global performance. Today's workforce requires knowledge of the ways in which culture impacts and influences work-related outcomes on a day-to-day basis, and organizational leaders at any level must become more globally productive using a cross-cultural mindset.

By gaining an understanding of and appreciation for the value that can be created or captured through effective cross-cultural interactions, organizations enhance their reputations as a globally-competitive business, communicate with customers and colleagues in a culturally-sensitive manner, expand effectiveness in the global marketplace and demonstrate flexibility and agility as an organization through effective cultural interactions.

The bottom line: When you open your mind, you open your world.

Quick Reference Guide
Communication and Behavioral Strategies for Effective Global Interactions

a task-oriented person

has to see that you're serious about the business at hand

  • Begin with the business at hand, so they know you are serious and credible
  • Be clear about the contract (cost, timelines, roles) and the details of the work (product, services)
  • Meet or beat schedules and timelines

a relationship-oriented person

has to know, like and trust you before they'll do business with you

  • Plan your business trip, meeting, phone call with time for more than "just" business; allow time for visiting cultural sites, business sites and business socializing
  • Start to build relationships—and trust—before jumping straight into business
  • Don't assume informality; earn the right to be invited into their business/social circle

a person who prefers direct communication

respects you for saying what you mean

  • Be as precise, to the point and focused on the business issue
  • Provide details as needed; don't assume the person has much background on the topic being discussed
  • Say what you mean (respectfully, of course); it's okay to disagree

a person who prefers indirect communication

respects you for saving face and understanding nonverbal communication

  • Look for nonverbal cues
  • Be patient; expect talk on tangent subjects before getting to the point
  • Don't agree to anything that might not be followed up with a contract; they will accept your word and consider it a breach of trust if you cannot keep your word

a person who values hierarchy

expects to be treated with the respect their position/status is due

  • Defer to the person who is the leader first, even if that person isn't the expert
  • Expect to meet with a person at your equivalent status level; it could be a sign of disrespect if a supervisor meets with their department head or VP
  • Avoid open confrontation

a person who values equality

expects to be treated as an equal human being in most situations

  • Treat everyone as equal partners, with everyone's ideas taken into account
  • Be informal in the use of titles, greetings and dress
  • Expect this person to be open to confrontation and admitting problems

a person who focuses more on the individual than the group

expects to hear how their needs are being met and does not mind being singled out for praise

  • Recognize and acknowledge the person's individual attributes and achievements
  • Refer to benefits for the individual
  • Respect the person's privacy

a person who focuses more on the group than the individual

expects to hear how the group's needs are being met and does not want to be singled out for praise

  • Recognize and acknowledge the group's attributes and achievements
  • Refer to benefits for the group as a whole
  • Be sure teamwork is a valuable part of your proposal/activity

a person who fears uncertainty or has a low tolerance for risk

is uncomfortable with "gray areas", ambiguity, deviant ideas and change; wants and likes rules

  • Provide very specific details—regardless of the topic
  • Provide contingency plans
  • Outline agendas with as much content and timing as possible
  • Expect vague responses or protracted silences
  • Expect "ready, aim, aim, aim, aim, aim..." behavior
  • Recognize that what's new is potentially dangerous and adoption will be slow
  • Avoid matrix teaming structures

a person who has little fear of uncertainty or has a higher tolerance for risk

is comfortable in un- or ill-defined circumstances, appreciates novel or innovative ideas and behavior; prefers few rules

  • Expect gaps in information
  • Expect "ready, fire, aim" behavior
  • Expects to take the initiative
  • Set your own milestones—don't wait for risk-oriented colleagues to do so
  • Expect quick responses followed by adjustments or corrections
  • Recognize that what's new is interesting and exciting

About the Authors

Amy S. Tolbert, Ph.D., CSP, is an internationally-recognized speaker and author in the areas of diversity and multicultural issues, cross-cultural training and managing a diverse workforce. Dr. Tolbert has researched multicultural competencies needed for today’s global organization and works to develop global competency in Fortune 500 organizations. She is the principal of ECCO International (Effecting Creative Change in Organizations), which specializes in increasing individuals’ productivity and organizations’ profitability through eLearning, technology and facilitated learning. Dr. Tolbert has authored the book, Reversing the Ostrich Approach to Diversity: Pulling your head out of the sand, and co-authored The Princess Principle: Women Helping Women Discover Their Royal Spirit and the self-assessment tool, “Discovering Diversity Profile.” As a Fellow, Carlson Executive Education Center, Carlson School of Management, University of Minnesota, Dr. Tolbert earned her doctorate in Human Resource Development, focusing on international/cross-cultural and diversity education/training. She also serves as adjunct faculty at Carlson Executive Education.

Peter J. Stark, Ph.D., is recognized internationally as a passionate educator as well as a culturally-sensitive and accomplished strategist/“change master” with specific expertise in cross-cultural organizational effectiveness/culture change initiatives and cross-cultural leadership. Honored as “Professor of the Year” in 2007 at the University of Minnesota, he currently teaches strategy and global business in Augsburg College’s MBA program as well as cross-cultural leadership and change in Visiting Professorships at both the Helsinki School of Economics and the Berlin Institute of Management. In addition to teaching, Dr. Stark consults worldwide on cross-cultural change, transformational leadership, organizational effectiveness, strategy and systems thinking. His background also includes more than 20 years of senior executive experience in the global transportation industry. Dr. Stark holds a Doctorate in Organization Change and an MBA, both from Pepperdine University (Malibu), as well a B.S. from Northwestern University (Evanston).

Laura E. Bernstein is an acknowledged master trainer and innovative business executive. Her contributions to the training industry are reflected in the development of award-winning training programs, her tenure on the board of ISA (Instructional Systems Association) and prior leadership experience at The Dow Chemical Company, Delta College Corporate Services, AchieveGlobal and American Media. Ms. Bernstein is the author of several perspective papers and reference guides including “Target Results, Not Delivery Methods: Technology’s Role in Training for High Performance”; “Generations: Harnessing the Potential of the Multigenerational Workforce”; “Training at the Point-of-Change: Strategies of a Change-Responsive Workforce” and “Peer Today Boss Tomorrow: Navigating Your Changing Role.”

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