IN this era of the globalised economy, it pays for businesses, especially those with international concerns, to know about cross-cultural management.
When you make a mistake in social etiquette, chances are you will be forgiven for your faux pas because you are a foreigner and your hosts understand that you might have made the error inadvertently, says Sheida Hodge, a consultant in cross-cultural and international business management.
But when you commit an error in cross-cultural management, she warns, you could create havoc in your business because such mistakes are usually more damaging.
“Business has to do with a country’s basic daily living. The conduct of business is not separate from any other part of our life in a country. Business tends to be culturally driven in any country,'' says Hodge, 58, a 20-year veteran in international and cross-cultural business and who visited Malaysia recently to give a talk on her book Global Smarts: The Art Of Communicating And Deal Making Anywhere In The World.
“Basically, cross-cultural training and consulting is helping companies succeed internationally in the business arena,’’ says Hodge. “This includes inter-cultural management issues which I believe is a very important element in business and also social etiquette.”
While it has always been relevant in global business, cross-cultural management is becoming increasingly vital now as the business world becomes more competitive and companies are more cost conscious, Hodge points out.
Companies now value cross-cultural training because they want to avoid making mistakes that would cost them quite a bit financially, she says.
“In fact, a large number of international businesses across borders, alliances and joint ventures fall apart even though they have prepared the financing and marketing and identified the strengths and weaknesses of the company.
“When failure occurs, they don’t understand why it happened because they hadn’t taken into consideration the deep rooted values that motivate people’s outlook and behaviour.”
There are differences in values between people of different cultures and these values affect the way they do business, she stresses. Taking Japan as an example, Hodge says when the Japanese are in the negotiating process, they want a lot of information to be passed down to them. They also make decisions by consensus, which means the first meeting will not lead to a decision. Instead there will be others involved in the process of decision-making.
Cross-cultural training is an effective way of gaining a deeper understanding of the values of the people you are doing business with, Hodge says.
“Cultural understanding does not happen by osmosis. Close proximity does not create understanding. Sometimes the closer we are to somebody, the more irritated we get.’’ she says.
Knowledge, which can be gained from cross-cultural training, about the perspectives of leadership and management in countries where one is operating is also important, Hodge says.
For example, a manager must understand the roles of his employees and what is expected of them. If a manager is only interested in results, he may not understand the process of achieving that aim.
”Then you could be unclear about the instructions and think that you are going to get A, B, C, D. When each side is unclear about their expectation, there will be a loss of effectiveness, efficiency and a slight irritation on both sides,’’ Hodge explains.
Talking about conducting business negotiations at the international level, Hodge says when people travel to other countries to negotiate and form an alliance, they need to know how to create understanding and acceptance on the part of the people they are dealing with.
“If you understand how the people in the country make decisions, it will help you to succeed in your meetings,” she says. “Some countries are very compartmentalised in their information dissemination while others are more participative negotiators.
“So you would have to know how the decision-making process is done and how to influence it. This means that you would have to be aware at which stage of the negotiation to disseminate information to influence the decision.”
When the negotiation process is over, the most important point is a summarisation of similar expectations from the alliance by both parties, followed by a clarification of the process of working together down the line, and understanding the decision-making process of the country.
“Acknowledging there is more than one way to approach a business deal will help you plan a good strategy and establish a good understanding and knowledge of the other,’’ says Hodge who gained her expertise through experience.
She started her career with General Electric (GE) Company, and used to travel and negotiate deals in counter trade offset. “I learnt about cross-cultural influences by trial and error. I made my own mistakes and my co-workers also taught me through their mistakes,’’ she says.
“Having my own import and export international company, which was a joint venture with a Brazilian company, also gave me more experience about cross-cultural business.”
When she became a consultant and director at Worldwide Cross-Culture Service for Berlitz International Inc, Hodge was given more opportunities to enhance her knowledge through research activities.
Previously, she was also president of Professional Training Worldwide, a management consulting and training organisation, which helps executives to become more productive when doing business cross-culturally in both international and domestic markets.
Academically qualified with a Masters in Business Administration and bachelor’s degree in mathematics, Hodge develops courses on cross-cultural studies and teaches at major universities in the United States, such as UCLA and Thunderbird. She has also produced a video entitled Secrets of Successful Cross-Cultural Marketing.
The hands-on approach to learning about cross-cultural business may not be the ideal way to understand the intricacies of the inter-cultural management process, she says.
“You need a road map (guide) to lead you in the right direction. The map will show you the lay of the land to allow you an easier grasp of the areas that you need to look for in order to make the correct adaptations to that culture.”
Hodge says many multi-national companies are now providing inter-cultural management consulting for their employees, adding that this is an indication of the success rate of this type of training.
“So, if your competition is doing it and you are not doing it, then you are at a disadvantage. Plus the success rate is there, otherwise major multi-national companies would not do it because it is not a cheap investment.” she says
“My own personal perspective is that when we do this kind of programme, we open people’s eyes to things they never knew,’’ she says.
But, she cautions, cross-cultural training and studies should be used as the beginning of a general orientation to the destination and not an original replica. You would have to figure out the rest using the training as a guideline.
“This is considered an organising principle to help you form a coherent picture in your mind of dealing with people internationally, globally or even within that specific culture.”
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