The ever-expanding advances in the technology industry has made it significantly easier for businesses of all kinds to expand globally. But are they ready to? For a business to go global and stay global, it needs to learn how to traverse the dense waters of cultural differences. Many companies jump into this water without the skills to keep them afloat, and these cultural mistakes or gaffes can be very costly to them. Therefore, it is extremely important for the leaders of businesses which are going global to be global themselves. Being a global person is defined as being aware that other cultures live their lives and have views that are different from our own and are interested in worldly issues (Managing Cultural differences, 2014). Without recognizing that other cultures may act and think differently from your own you are very likely to accidentally miscommunicate a message or offend a business counterpart who comes from a different culture than your own.
The successful globalization of a business can be due to multiple complicated reasons, but every successful venture has an important starting point. “The first Step in managing cultural differences effectively is increasing one’s general cultural awareness” (Managing Cultural differences, 2014). Just becoming educated on the fact that there are many different cultures who do things differently can put your business on the path to success. According to Fortune, “Companies will need to put in place the cultures, platforms, and processes to make collaboration easier and equip people with the right skills to foster effective cooperation” (Royal & Stark, 2015). The businesses that succeed in globalization know that they need to ensure proper verbal and non-verbal communication between people of different cultures. But is it enough to just learn how to communicate? Fortune thinks the success of a business is more than just that. “To succeed amid Globalization 2.0, it won’t be enough to merely operate internationally. Instead, companies will need to be truly global in all that they do” (Royal & Stark, 2015).
Unfortunately, not all businesses who make an attempt at globalization are able to keep up with the culture differences in this changing world. Going global and being a global leader with the skills to successfully interact and conduct business with people from other cultures is necessary in this always developing world. If an organization is unable to do this, it is likely they won’t be in business for very long. Commisceo Global describes many instances where big brand businesses have failed to show cultural sensitivity or knowledge, and such cultural mistake or gaffes lead them to fail in their business venture. For example, “US supermarket giant Walmart completely failed in its effort to break into the German market. Analysts saw the transplanting of US corporate management and retail culture onto an alien environment as the main cause for the massive failure” (Global, 2016). Walmart refused to integrate the German culture into its business inside of Germany. Instead, it insisted on using the vastly different US culture, which resulted in its failure to conduct business within Germany. Another example, shows what seems to be a much lower level decision, and yet, this cultural gaffe was also very costly. “When colouring in 800,000 pixels on a map of India, Microsoft coloured eight of them a different shade of green to represent the disputed Kashmiri territory. The difference in greens meant Kashmir was shown as non-Indian, and the product was promptly banned in India” (Global, 2016). It was certainly surprising for me to learn that such big corporate giants as Walmart and Microsoft would be victim to their own cultural ignorance.
Avoiding cultural mistakes or gaffes is essential for leaders because for people to successfully work together, they need to not only communicate efficiently and appropriately, but receive training for how to conduct business with foreign cultures. “Cultural understanding may minimize the impact of culture shock and maximize intercultural experiences, as well as increase professional development and organizational effectiveness” (Managing Cultural differences, 2014). If a business counterpart feels as though they are being offended it is more than likely that they won’t want to conduct business with you. “Many international businesses are now investing heavily in providing staff with language lessons in order to be able to crack foreign markets as well as providing cultural sensitivity training to address issues such as etiquette, protocol, communication styles and negotiation approaches” (Global, 2016). The YouTube video, Cultural Gaffes Beyond Your Borders, explains many ways in which people in general can avoid cultural mistakes. They include; researching the cultures everyday behaviors and practices, talking to people who grew up in that culture, becoming aware of your own behaviors, and watching for signals that you may have made a gaffe. If you think that you did make a mistake, you should ask about it (Corps, 2010). This is a great opportunity for people to learn more about other cultures, and to show others that you are respectful of their culture and did not purposely try to offend or confuse them. However, it is always best to try and avoid these mistakes in the first place.
References
(2014). In R. T. Moran, N. R. Abramson, & S. V. Moran, Managing Cultural differences (pp. 1-33). Routledge.
Corps, P. (2010, October 15). Cultural Gaffes Beyond Your Borders. Retrieved from Youtube: https://www.youtube.com/watch?v=haohj1sVnyk&feature=youtu.be
Global, C. (2016, November 14). How Lack of Cultural Awareness Can Cost A Business Big. Retrieved from Commisceo Global: https://www.commisceo-global.com/blog/cultural-sensitivity-in-business-1
Royal, M., & Stark, M. (2015, February 19). The Most Admired Companies are More Global Than Ever. Here’s Why. Retrieved from Fortune: http://fortune.com/2015/02/19/wmac-globalization2-0/
As noted, understanding specific cultures in which large companies are wishing to expand is paramount to the success of that organization on a global platform. Furthermore, Triandis (1993) highlighted the “need for leadership and organizational theories that transcend cultures to understand what works and what does not work in different cultural settings” (as cited in House, Hanges, Javidan, Dorfman, & Gupta (Eds.), 2004, p. 3). This working cultural philosophy is often commonly comprised of inquiries as to “customs, courtesies, and business protocols” of the corresponding nations. However, global leaders must also be aware and “understand the national character, management philosophies, and mindsets of the people” of the global culture (Moran, Abramson, & Moran, 2014, p. 19). Thus, much research has been done on this subject. However, with all the studies conducted, there are two main studies of note that should be considered when contemplating expansion to another culture. Hofstede’s Dimensions of Culture and Global Leadership and Organizational Behavior Effectiveness Research Project (GLOBE) are similar in that they are performed based on surveys that require a ranking of the importance of specific cultural elements to each nation. However, they differ slightly with the number and description of the elements and the concept of “clustering” individual countries into similar cultural groups conducted by the GLOBE study. This can be reviewed in past surveys in GLOBE STUDY RESULTS.
The 6 dimensional elements considered by the Hofstede’s Dimensions of Culture are “Power Distance” (influence of hierarchical structure); “Uncertainty Avoidance” (degree of uneasiness caused by ambiguity); “Individualism/Collectivism” (extent of societal focus on self vs. team/family); “Masculinity/Femininity” (prevailing values focus on male traits such as power and aggressiveness vs. feminine traits such as empathy and kindness); “Long-term/Short-term Orientation” (development of qualities focusing on future vs. past/present ); and “Indulgence/Restraint” (desire for instant fulfillment vs. willpower) (Moran, et al., 2014, p. 19; PSU, 2018, p. 6). While the 9 dimensional elements considered by the Global Leadership and Organizational Behavior Effectiveness study (GLOBE) are “Uncertainty Avoidance” (degree of uneasiness caused by ambiguity); “Power Distance” (influence of hierarchical structure); “Collectivism I: Societal” (extent of societal focus on team/family); “Collectivism II: In-Group” (extent to which individuals show satisfaction, trustworthiness and camaraderie within the team/family); “Gender Egalitarianism” (extent to which equality of the sexes is promoted and disparities are downplayed); “Assertiveness” (level of confidence and forcefulness shown); “Future Orientation” (development of qualities focusing on future events) ; Performance Orientation” (extent to which society promotes and compensates individuals for successes); and “Humane Orientation” (extent to which society promotes and compensates individuals for kindness and compassion) (House, et al., 2004, pp. 5-6).
Based on the failures of many organizations to successfully expand worldwide and specifically in the cases of Walmart and Microsoft, these companies often fall prey to a sense of egocentrism and/or ethnocentrism. Drever (1952) identifies ethnocentrism as an “exaggerated tendency to think the characteristics of one’s own group or race is superior to those of other groups or races” (p. 86 as cited in PSU, 2018, p. 5). This sense of arrogance in refusing to consider Germany’s culture instead of the US was the ultimate downfall of Walmart. However, Microsoft appeared to show ignorance of the Indian culture and thus succumbed to the “inability to see the world from another point of view” known as egocentrism (Faucheaux, 1976). No matter the reason, if either company had dedicated some time and effort to understand the cultures of Germany and India by referencing one or both studies, the chance of success would have been greatly improved.
References:
House, R. J., Hanges, P. J., Javidan, M., Dorfman, P. W., & Gupta, V. (Eds.). (2004). Culture, leadership, and organizations: The GLOBE study of 62 societies. Thousand Oaks, CA: SAGE.
Moran, R. T., Abramson, N. R., & Moran, S. V. (2014). Managing cultural differences (9th ed.). Oxford,UK: Routledge. ISBN: 978-0-415-71735-9
Pennsylvania State University (2018). OLEAD 410 Lesson 02: Introduction to Culture. Retrieved August 26, 2018 from https://psu.instructure.com/courses/1942644/modules/items/24935350
Triandis, H. C. (1993). The contingency model in cross-cultural perspective. In M. M. Chemers, & R. Ayman (Eds.). Leadership theory and research: Perspectives and directions (pp. 167-188). San Diego, CA: Academic Press.