The Answer: Cultural Adaptation

Management of Diversity

The objective of culture is survival and eventual prosperity . If their cultures have brought them so far, no major nations will embrace rapid change in their way of life. The European Union, NAFTA, ASEAN, and multinational corporations need to learn how to manage cultural diversity, not hope to eradicate it.

Micro- and Macrolevel Cultural Adaptation

The management of cultural diversity, in terms of sensible adaptation to others and efforts to establish common ground, faces many challenges at the practical level. The above diagram illustrates some of these.

It is tempting for huge multinational and transnational companies to seek universal management solutions that would prove acceptable and feasible in their branches and subsidiaries. Corporate policy would be strengthened , training procedures would be simplified, and standardization of many processes would decrease cost. Unfortunately (or perhaps fortunately) multinational firms cannot submerge the uniqueness of different cultures. Although the corporate culture that is imposed may be strong, local staff are reluctant to give up their background or preferred ways of doing things. They may be willing to adapt, but in moments of uncertainty they will dig in their heels and revert to their own core beliefs and cultural values.

When it comes to supranational organizations such as the EU, NAFTA, ASEAN, MERCOSUR, and so forth, there is a general willingness to accept regulation and standardization of conventions when they are clearly to our benefit. Examples of such instances are the Schengen Agreement on border controls, the substitution of identity cards for passports between certain countries , waivers of visa restrictions, lowering of tariffs, the European and International courts, the extra protection against crime afforded by Interpol, the GATT rounds, and so on. The success of numerous international student exchanges and scholarships abroad as well as the universal welcome of clubs such as Rotary and Lions in every land are further examples of people’s willingness to join international activities in certain fields. Yet there is a certain reticence about supranational control in other areas. Standardize European taxes? Ask Britons to carry identity cards at all times? Allow foreign police to chase criminals across your frontier in hot pursuit? Abandon the pound , dollar, Swiss franc? These are all questions that may well be settled sensibly in due course as Europe continues to integrate. Would Asian countries integrate likewise? And all the Americas?

Of more immediate import to the globalization of business is the extent to which large multinationals (and with the many mergers at the present time, they are getting ever larger) can effect economies of scale and ease of management through sensible standardization and the establishment of universally acceptable business models. As I have stated elsewhere, business models for the twenty-first century are not going to be national ones. Companies functioning across borders and cultures, if they wish to be successful, will have to sculpt or fashion business models that take into account the problems of macrolevel cultural divergence (see again the diagram on page 237). They will have to accept that there are contemporaneous processes of convergence and divergence in the development and restructuring of their over- seas subsidiaries. Standardization of production techniques, reporting systems, general accounting, and even R&D and IT departments pose few major hurdles. When it comes, however, to sales and marketing methods , advertising, personnel policies, pay and compensation packages, leadership initiatives, staff training, legal disputes, and relations with local authorities and government, to name but a few, cultural divergences will seriously hamper standardization, and firms will have to make unfamiliar judgments on a case-by-case basis. It is not only a matter of refraining from making drastic changes in the normal business procedures of the local company that is required but, more importantly, a matter of entering into the cultural world of the partner, with all its inherited complexity of ethics, morals, core beliefs, taboos, religious tenets, age-old philosophies, and deeply embedded concepts of time, space, truth, status, prestige, face, honor , revenge —in all, a particular worldview .

This represents an enormous challenge to chief executives and managers at policy-making and decision-making levels. The fashioning of workable multicultural models is by no means impossible and has been achieved on numerous occasions. Companies such as Unilever, ABB, Nokia, Ericsson, Hewlett-Packard, Sonera, Deutsche Telekom, Nestl, and Motorola have been both greatly concerned with and successful in international structuring and in training their managers diligently in cross-cultural issues.

Clearly, companies that are globalizing often wish to apply their worthy corporate policies and efficient business models; to them, simply “going with the flow” is neither acceptable nor advisable when entering a foreign business environment. Every model has its faults, but the local culture will have its deficiencies, too. Clearly, there must be a compromise—a harmonizing of methods and intent. Companies would do well to observe, however, that the positive qualities of head office culture may not be seen as entirely beneficial by the local society and may in fact have many negative connotations of which the head office is not aware.

Management of Cultural Values? A Different Story

People’s adaptation to an alien cultures’ concepts is deceptive. At the microlevel, for example, fashion, new styles can be adopted with ease, even enthusiasm . The same certainly applies to food, as the proliferation of French, Italian, Chinese, Indian, and Thai restaurants in London and New York demonstrates . The media influences our tastes and appetites continually, and at the microlevel we enjoy cultural diversity.

At the macrolevel, however, culture is far from being standardized. Americans, particularly, are doomed to disappointment if they think their core values, ethics, morals, and so on are being—or will be—adopted by other national cultures (see again the diagram on page 237).

The chart on the next page indicates how some American qualities (surely positive in American eyes) may be viewed quite differently in other lands; it illustrates why at the macrolevel cultural standardization is still a long way off.

The chart below shows how the Germans—serious, well-meaning and worthy people—can be frequently misunderstood by other cultures!

The last chart in this chapter is meant to bring home to you the inherent difficulty of one’s being diametrically opposed to the core beliefs of certain cultures. Try convincing these people about the following: