All too often, business leaders find themselves between a rock and a hard place. Globalization has, once again, placed them in this familiar predicament.
On one side, they are pressured by tight deadlines, reduced budgets, and greater demands from their customers. On the other, they are also being urged to integrate cultural awareness and other cross-cultural considerations into their managerial decisions — decisions that are supposed to affect operations on the other side of the globe.
When setting priorities, the pragmatic concerns of budgets and deadlines often win out over the development of cross-cultural management systems, which are often not considered relevant to business operations. In the mind of the in-a-hurry type of leader is one economic reality: bottom-line results. Leaders often claim that they cannot afford to worry about anything but “I just need to get the job done!”
Globalization has disrupted the daily routine of the way that we conduct business. Business leaders are surrounded by books providing recipes on how to manage diverse mindsets and cultural differences. So we learn how to bow to introduce ourselves and give our business cards in Asia. We become familiar with prayer times in the Middle East and the mandatory breaks during Ramadan. While attempts are made to integrate cultural awareness, we still have a long way to go. Some leaders may not have seen how cultural awareness will benefit their organization.
To become truly global, a successful organization will directly link the impact of culture to essential business outcomes and initiate cultural development programs for their leaders. Companies routinely train their people to learn a new IT system, new procedures, new processes and new methods. They should also be able to provide specific development programs to their staff that help identify and react to important change-effecting parameters in their environment.
This new system of thinking is more challenging and the difficulty may explain why organizations are so reluctant to take that direction. However, learning how to handle this type of complexity is the key to greater success in the global arena.
The importance of cultural awareness
So how can we measure and communicate the impact of cultural awareness on the bottom line? In 1998, Wal-Mart opened stores in Germany according to established processes that succeeded in the U.S. However, the company failed to take into account cultural considerations.
First, they approached their relations with unions in an adversarial mode. German unions are part of the management of enterprises. They are part of negotiations on compensation or major decisions that affect the present and future of an organization. Wal-Mart instead considered them opponents and suspicious partners, causing tension with employees. Wal-Mart also did not correctly forecast the preferred customer experience of Germans, who wished to bag their own goods and were irked at smiling, superficial customer service interactions1. After a decade, Wal-Mart packed up and retreated after a loss of over $1 billion.
For the military, a cultural mistake can cost lives and endanger national security. Recent accounts of U.S. military personnel burning the Quran on a base added to regional tensions and casualties. The increase of green-on-blue violence in Afghanistan has largely been attributed to cultural errors on the part of U.S. military members.
Numerous accounts demonstrate that when managers take the time to inform themselves and develop the ability to navigate throughout different cultures, there are positive economic and operational benefits. The time spent in training and dedicated to developing new skills appropriate to the environment is easily offset by the monetary results and mistakes avoided in the future. But what could these skills be?
A new system of cultural awareness
Management articles now highlight concepts such as global mindset, flexibility, cultural awareness, emotional intelligence and empathy. While the terminology may vary, the underlying notion of an expanded system of thinking is a common thread. All of these terms refer to a system of thinking that will allow one to control stereotypes, emotions and behavior, as well as to adjust and adapt to the environment without losing oneself and identity. This is the heart of global behavioral management.
For the purpose of this article, we have defined global behavioral management as the ability to implement contextual managerial solutions. This means that leaders adjusts their responses by integrating multiple variables (culture, business, finance, systems, people, etc.) in their approach to affect the bottom line in the most efficient way. The solution cannot be monolithic; instead, it must be applied to specific parts of the organization and integrated into the whole. It is a matrix approach encompassing the cultural, regional and geographical dimensions of business decisions. These factors each affect and influence the type, nature, essence and pace of solutions implementation.
Considering the global environment as a new system should lead us to acquire new skills, cognitive processes and emotions. Instead of approaching a different culture in a dominant mode (my way or no way), managers must be able to assess the environment, create understanding and integrate foreign values and habits into the decision process.
For instance, not all locales can have a bonus system for sales staff based on individual performance. In Japan, the culture does not allow it because success and achievement are considered a team effort. In this case, it would be wise for headquarters to embrace the idea of reaching the same results with a different approach. A team-oriented bonus system is much more likely to affect performance and improve the company’s bottom line in Japan.
There is no single approach to reach the comfortable goals that we have set in the corners of our minds. The challenge of globalization offers an opportunity to become creative and re-invent the dynamics that lead an organization. But it will require a new system of thought to capitalize on it.
The relevance of a kaleidoscopic thought-process
We adopt new systems at an alarming rate. New technologies constantly require us to change operating systems, hardware, and infrastructure. Most business adapt to these transitions with relative ease and efficiency. We believe that transitioning to global behavior management and culturally appropriate practices can also be accomplished easily once a company focuses on embracing globalization as a new system of thought.
Global behavioral management is a prism with different geometries: a core identity with a kaleidoscope of external manifestations of the very same idea. It makes us remember that, at the end of the day and underneath all this cultural variety, wherever we live and whomever we work with, we all have the same needs and dreams. And while the prism of more global thinking may present complex geometries, the consequences of being a part of the global business community could not be simpler: an increased palette of business solutions for greater efficiency.
Richard Griffith, Ph.D., is a professor in the industrial organizational psychology program and the director of the Institute for Cross Cultural Management at the Florida Institute of Technology. He is the author of more than 75 publications and presentations in the area of personnel selection and is the editor and author of several books, chapters, and journals on the topic.
Muriel Joseph-Williams heads BrainCorp Inc., a consulting firm specialized in business development. The company guides organizations in their expansion of projects overseas. Joseph-Williams is a sought-out keynote speaker on numerous topics, is fluent in French, Spanish and English. She has published several books in France and has initiated several symposiums in regards to women empowerment in business.