Chapter 2: Communication and Intercultural Management


Case Study: Nestl

Pierre Listard-Vogt, a former managing director of Nestl , is quoted by John Daniels and Lee Radebaugh (1998) as having said, 'perhaps we are the only real multinational company existing'. As much as 98 per cent of Nestl 's sales revenue is generated from outside Switzerland, where its headquarters is based. UNCTAD's composite index on transnationality credits Nestl with being the most international of the world's 100 largest manufacturers. Nestl prides itself on having an intercultural top management team working at its headquarters. The Swiss are a minority in the top management team. The topmost echelon, called Group Management, has nine members . Of these, two are Austrian, one is Spanish, one is Swiss, one is Mexican, two are from the United States, one is British, and one is Swedish. This Group Management is indeed the apex, and comprises the CEO, the executive vice-president for Europe, the executive vice-president for the Americas, the executive vice-president for Africa/ Asia, the executive vice-president marketing, the executive vice-president finance, the executive vice-president HR & corporate, the executive vice-president global programmes, and the executive vice-president, productions .

An important milestone in the global growth and development of the company was the establishment of the Nestl International Training and Conference Centre near its headquarters in Vevey. This centre was given the responsibility of ensuring that the 'Nestl spirit', along with Nestl strategies, and the Nestl way of doing things, is disseminated throughout the company. The company has, after all, 220,000 people spread over more than 100 countries . With such a wide geographic spread of operations, Nestl has to ensure that communication is a tie that binds.

In 1997, Nestl headquarters formulated a paradigm for functioning that had to be communicated to all countries where they had operations. This paradigm was called the Basic Nestl Management and Leadership Principles, and articulated the 'Nestl spirit and culture'. The Basic Nestl Management and Leadership Principles were conceived and formulated by Nestl 's top managers at its headquarters. They carried the stamp of approval of Helmut Maucher, the outgoing CEO, and Peter Brabeck, the incoming CEO. The collaboration of both CEOs in this effort is also a testimonial of the Nestl spirit. After the Basic Nestl Management and Leadership Principles were formulated and laid down, they had to be communicated to every employee in every country. The Principles were to be made the credo of every branch, and then applied continuously by all employees. The documents were then despatched to the Nestl main branch of every country where it had operations. The human resources department (HRD) at the main branch was entrusted with the responsibility of disseminating the Principles to all the Nestl employees of that country. The HRD in each country had the mandate to decide the manner and method of dissemination . The modus operandi did in fact vary from country to country. Each country adopted a modus operandi that fitted in with the culture of that country.

Headquarters at Vevey however remained connected with all the country branches. It received communication from these branches at specified dates, reporting on the nature and extent of progress. A year after the launch, the head of the International Training Centre, Vevey, was asked to collect material and note the extent of progress achieved. It was observed that a variety of culture-specific methods had been adopted to disseminate the Basic Management and Leadership Principles. Nestl Italy had prepared an elaborate and riveting educational video to drive home the Principles. Nestl Switzerland chose first to assess where the branch already stood with regard to the Principles. All the managers then agreed, by consensus, how they would move forward. Nestl Korea mobilized its entire workforce to attend workshops on how the Principles could be imbibed and fostered.

The successes, failures, and general experiences of the socialization programmes in one country were then passed on to others to facilitate vicarious learning. In fact, the dissemination process that has been employed in different countries is discussed at all international training programmes conducted on a continuous basis, at the International Training and Conference Centre. This enables participants to appreciate how the process of communication can vary from culture to culture, even when the content remains the same. Participants can particularly take note of how a company relates to its internal customers, and how the way it communicates to these stakeholders will impact on its position in the global market. The autonomy given to local Nestl branches to communicate using processes relevant to local cultures is also aligned with the corporate philosophy of encouraging adaptation to local conditions and consumer habits.

A senior manager from Nestl explained:

Although the Training Centre is in charge of the differentiation of the Nestl spirit, it is not alone in this task. The dissemination process was achieved as follows :

  1. The document was produced by top management and then despatched to all country branches by Headquarters.

  2. Each market (branch) was asked to disseminate the Principles on its own.

  3. The Training Centre was asked to develop a presentation of the Principles. This presentation was made available to the markets that wanted it. They were not forced to use this presentation. The Training Centre was also asked to make a report after a year on the achievements of the markets vis-  -vis the dissemination and institutionalization of the Principles. The centre was also detailed to collect and keep the markets' documents pertaining to their achievements.

  4. The Training Centre also committed itself to discuss the communication of the Principles at every course they conduct. During the discussion sessions devoted for this purpose, the participants from the various markets represented there would explain what they did for the success of the communication effort in their terrain. This would contribute to what we call a cross-fertilization of ideas.

  5. Finally, the Training Centre was charged with the responsibility of working with the heads of training worldwide, to integrate the key elements of the Principles in each training activity and have the Principles suffuse these training activities. The general management in the markets continuously constitute study groups to review the application process of the Principles. Both in the markets and at the centre, at each Cadre Meeting, the status regarding the application of specific Principles is always discussed. Thus, at each level, whatever can be done to push the Principles throughout Nestl is done.

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EXTRACTS FROM THE BASIC NESTL ‰ MANAGEMENT AND LEADERSHIP PRINCIPLES

1. General principles

  • Nestl is more people and product oriented than systems oriented. Systems are necessary and useful but should never be an end in themselves .

  • Nestl is committed to create value for its shareholders. However, Nestl does not favour short-term profit and shareholder value maximization at the expense of long- term successful business development. But Nestl remains conscious of the need to generate a reasonable profit each year.

  • Nestl is as decentralized as possible, within the limits imposed by basic policy and strategy decisions, as well as the group-wide need for coordination and management development.

  • Nestl is committed to the concept of continuous improvement of its activities, thus avoiding more dramatic one-time changes as much as possible.

4. Qualities and characteristics of a Nestl manager

The higher the level of the position and the responsibility of a Nestl Manager, the more he/she should be selected on the basis of the following criteria (in addition to professional education, skills and practical experience):

  1. courage, solid nerves and composure ; capacity to handle stress;

  2. ability to learn, open -mindedness and perceptiveness;

  3. ability to communicate, to motivate and to develop people;

  4. ability to create a climate of innovation;

  5. thinking in context;

  6. credibility: in other words 'practise what you preach';

  7. willingness to accept change and ability to manage change;

  8. international experience and understanding of other cultures.

In addition: broad interests, a good general education, responsible attitude and behaviour and sound health.

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Despite the centralized directives described in the box, Nestl 's country managers and country HRD departments have communicated and institutionalized these Principles using their discretion. In the Philippines, for example, three features of the dissemination process adopted by the local branch reflected the Filipino culture. The first feature is that the Basic Nestl Management and Leadership Principles were cascaded throughout the organization in top-down fashion. This is in keeping with the Filipino tradition of people wanting to emulate their seniors and superiors. Hence, the uppermost echelon was educated about the Principles first. This effort was made by the President of Nestl Philippines, JB Santos.

The second feature is that Nestl Philippines' dissemination process followed the formal organizational structure in managing the downward cascading of the Principles. And finally, the execution of the Principles were integrated into the branch's operational plans. To quote JB Santos, 'the execution of the Principles could then be understood as commitments, and therefore, subject to performance measures'. Further, every manager was assessed to ascertain the extent to which he/she had developed the Principles.

The process by which the Basic Nestl Management and Leadership Principles were communicated to employees by Nestl New Zealand was quite different. At this branch an assessment questionnaire was developed, to ascertain the extent to which Nestl New Zealand managers demonstrated Item Four (qualities and characteristics of a Nestl manager) of the Principles.

Unlike the case of Nestl Philippines, however, Nestl New Zealand's assessment questionnaire was developed entirely as a self-assessment exercise. Managers were requested to assess themselves a priori , just before the intervention to communicate the Basic Nestl Management and Leadership Principles was undertaken. The Principles were then communicated to branch employees via workshops.

Part II: Assessment of leadership competencies

The organization seeks to develop in each and every member of the management team a set of leadership competencies that would reinforce effective performance on the job. These competencies are aligned with "The Basic Nestl Management and Leadership Principles", and specific behavioural indicators are listed below.

For each of these competencies, please :

  1. Encircle the statements that are deemed relevant to the responsibilities of the jobholder.

  2. Check in the appropriate box your best assessment of the jobholder's performance in that area.

 

Needs improvement

Proficient

  1. Ability to create a climate of innovation. Thinking in context:

   
  1. Able to generate and encourage creative solutions to work situations. Open to trying different and novel ways to deal with organizational problems and opportunities.

   
  1. Established goals that are challenging and realistic and applies the appropriate tools to achieve short-term and long-term objectives.

   
  1. Is able to see the big picture. Takes into account issues that are broader and longer range than those immediately apparent. Considers the impact of one's actions on other parts of the organization.

   

Comments___________________________________________________________

 

Needs improvement

Proficient

  1. Ability to communicate, motivate, and develop people:

   
  1. Effectively expresses ideas in individual and group situations. Encourages and elicits ideas and suggestions from his people.

   
  1. Utilizes appropriate interpersonal and leadership styles and methods in guiding others towards goal achievement. Modifies behaviour according to tasks and individuals involved.

   
  1. Develops people to their full potential by planning effective developmental activities related to current and future jobs. Delegates responsibilities and authority effectively.

   

Comments___________________________________________________________

 

Needs improvement

Proficient

  1. Willingness to accept and ability to manage change:

   
  1. Remains effective in a changing environment and in different situations and modifies approach and style to achieve goal. Anticipates and accepts changes.

   

Comments_______________________________________________________________

 

Needs improvement

Proficient

  1. Courage, solid nerves and composure, capacity to handle stress:

   
  1. Acts decisively. Displays tenacity in defending and retaining key points. Commits oneself to taking action once a decision has been made.

   
  1. Takes responsibility and ownership of the problem until it is solved . Makes clear recommendations.

   
  1. Is confident and emotionally stable. Realistically evaluates own strengths and limitations.

   
  1. Maintains stable performance under stress and/or opposition . Engenders trust.

   

Comments_____________________________________________________________

 

Needs improvement

Proficient

  1. Credibility:

   
  1. Maintains social, ethical and organizational norms in conducting internal and external business activities. Consistently demonstrates the qualities and competencies of an effective leader, thus setting a good example for emulation.

   
  1. Maintains and applies technical and professional knowledge and expertise in performing job functions to support business objectives.

   
  1. Keeps himself abreast with relevant and latest technical and functional developments and trends in his area of expertise. Looks for the opportunity to apply his new knowledge and skills.

   

Comments____________________________________________________________


Figure 2.1: Extract from the internal communication effort of Nestl Philippines to disseminate the Basic Nestl Management and Leadership Principles
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Team Nestl in action!

Is it happening, everywhere, all the time?

Use this sheet to assess the Nestl Manager who has asked for your feedback. Use a scale of:

  1. Still at the start line;

  2. Has made progress in this area;

  3. Demonstrates this action/attribute more often than not;

  4. Typically demonstrates this action/attribute.

As a Nestl Manager, this person

Directs:

  1. ... has a clear sense of Nestl 's direction and formulates a carefully calculated position;

  2. ... interprets direction concisely and plans action to achieve budgets and targets;

  3. ... has a strong sense of what can be achieved to meet a goal/task;

  4. ... is highly focused in accordance with economic objectives and targets of the big picture;

  5. ... is a risk taker, a visionary who thinks outside the 9 dots;

  6. ... uses strategic, forward thinking;

  7. ... believes in quality in everything we do.

Involves:

  1. ... seeks ownership by other to ensure quick implementation;

  2. ... encourages cross-fertilization of ideas throughout;

  3. ... shares all relevant information, briefing people fully in plenty of time;

  4. ... establishes a monitored environment of self-control, personal responsibility and frequent feedback;

  5. ... stimulates a great sense of pride , belonging and commitment to the Nestl team;

  6. ... fosters an open, frank, approachable climate;

  7. ... is positive and supportive of Nestl and what we stand for;

  8. ... is proud to work for Nestl .

Communicates:

  1. ... shows openness to others' views, displaying willingness and ability to listen and manage divergent views;

  2. ... listens fully to others' viewpoints, understanding their issues and concerns, yet responding with frank feedback;

  3. ... diffuses anger and tension by listening without interruption;

  4. ... listens openly, participates in all meetings;

  5. ... actively listens, showing supportive gestures during meetings;

  6. ... demonstrates good listening, showing understanding and empathy with team and peers;

  7. ... uses face-to-face direct dealings;

  8. ... communicates through talking, listening, responding and acting.

Leads:

  1. ... identifies performance weaknesses and knows how to close the gap;

  2. ... delegates work and supports self-direction rather than steering;

  3. ... considers him/herself fully accountable for his/her sphere of responsibility;

  4. ... develops people through praise and encourages creativity;

  5. ... recognizes performance and coaches to maximize potential;

  6. ... develops people through effective appraisals and relevant training;

  7. ... demonstrates constructive openness during performance appraisals;

  8. ... acknowledges and praises team members' contributions;

  9. ... encourages dynamic teamwork characterized by mutual respect and empathy;

  10. ... encourages innovation and new ideas;

  11. ... fosters outward looking, to encourage new ideas;

  12. ... has a strong sense of teamwork.

Learns:

  1. ... is always looking for a better way;

  2. ... distils and analyses the relevant information, using own and others' experience or knowledge to make rational decisions;

  3. ... has an ability to analyse data accurately and methodically;

  4. ... has an ability to tune into information that few others notice;

  5. ... is sensitive to cultural differences including politics, customs , habits, etiquette and food preferences;

  6. ... is able to relate to different people and situations from around the world;

  7. ... is able to overcome cultural barriers including language and different thinking patterns.

Changes:

  1. ... is always ready to push the boundaries to test responsiveness to new initiatives (internal or external);

  2. ... is responsive to new ideas and technology;

  3. ... will give something a go ... a risk taker;

  4. ... has the awareness and knowledge to foresee change;

  5. ... has a balanced view, and drives change positively;

  6. ... is willing and ready to adapt, and has a high tolerance of new ideas.

Knowledge & experience (international & local):

  1. ... has international knowledge and skills providing a broad experience base;

  2. ... has knowledge of reference manuals and guidelines and how these affect the issue under discussion;

  3. ... understands the industry and competitive environments;

  4. ... is fully informed on details and relevant information;

  5. ... has the background, experience, knowledge and skills to make appropriate decisions, and knows when to get help.

Personal strength:

  1. ... uses emotional strength to make sound decisions;

  2. ... has a high level of common sense, respected by others;

  3. ... is quietly confident, being self assured and demonstrating self esteem;

  4. ... has a high degree of personal responsibility that means total dependability ;

  5. ... is ethical, fair and trustworthy in all dealings;

  6. ... owns up to mistakes;

  7. ... is intrinsically honest, displaying courage and openness in all interactions, in a way that supports and adds value;

  8. ... sets and maintains high personal standards of quality and reliability;

  9. ... can be described with the word integrity, as a typical way he/she speaks and acts;

  10. ... visibly supports others' viewpoints, or right to express these, maintaining eye contact, and patiently listening;

  11. ... has broad interests and a well-rounded character;

  12. ... uses honesty and openness, leaving no place for hidden agendas ; or fears that threaten the communication and/or flow of information;

  13. ... always talks directly to people, and not about them, to others;

  14. ... is looked to for ideas;

  15. ... stays calm and composed , not overreacting in difficult situations;

  16. ... is fit, healthy and professional in appearance;

  17. ... can be relied upon to carry out decisions made;

  18. ... 'walks the talk' - not paying lipservice;

  19. ... is disciplined, demonstating self-control and restraint;

  20. ... is able to fully accept and support a situation, if required;

  21. ... confidently challenges others' viewpoints or agenda to ensure a balanced, considered decision;

  22. ... has a sense of style.

Examples:

Can you give some examples?

This is valuable feedback. Especially if you've allocated a 1 or 4 to an attribute or action, give a 'for instance' that led to your view, using the item numbers .

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Figure 2.2: Extract from the internal communication effort of Nestl New Zealand to disseminate the Basic Nestl Management and Leadership Principles

These workshops comprised groups of people occupying different positions in the Nestl New Zealand hierarchy. Managers used the self-assessment exercise to determine where they stood as Nestl managers. They then used the workshops to gauge how they could strengthen their competencies, so that they could evolve into the kind of manager Nestl (global) hoped they could become.

Only part of the dissemination process adopted by Nestl New Zealand reflected the individualistic nature of New Zealand's culture. The other part took cognizance of the fact that there already existed a corporate culture at Nestl New Zealand, and Nestl New Zealand managers mostly felt part of this corporate culture. Hence, the managers assessed immediately before the dissemination intervention knew how they stood collectively. The workshops were then used to chalk out the direction in which the managers collectively were to move.

In this part of the case study, we are chronicling in some detail the dissemination effort of Nestl New Zealand. While the emphasis of this case study is on the variety of approaches adopted by Nestl branches, we are also reporting more extensively the route followed by this one branch.

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Jot down your thoughts in response to these questions:

  1. When you read the Document, what were your immediate thoughts?

  2. If you had to choose one of the General Principles as our greatest strength, in New Zealand, which would it be?

  3. Which of the Organizational Principles is the greatest challenge, and why?

  4. Which of the 'qualities and characterisitics of a Nestl manager' is most prevalent , and which absent, when considering a typical Nestl New Zealand Manager?

  5. What aspects of the Nestl Culture, and traditional roots, will come under greatest threat, in the years ahead?

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Figure 2.3: Extract from the internal communication effort of Nestl New Zealand to disseminate the Basic Nestl Management and Leadership Principles

The preliminary workshops conducted at Nestl New Zealand were intended to communicate the Principles to all employees. First of all the workshops made the employees aware of the Principles. Second, employees had to understand what these Principles signified and represented. All employees had to share a common understanding of the Principles. Further, this understanding had to be an accurate interpretation of what the authors of the Principles had intended.

The next step was to operationalize these Principles at Nestl New Zealand. There were two facets to this operationalization process. One facet pertained to macro-level reengineering, so that the branch as a collective entity moved in the direction indicated by the Principles. For instance, operationalization of the principles called 'Organizational Principles' stipulated in the Basic Nestl Management and Leadership Principles called for macro-level reengineering. A sample 'Organizational Principle' reads as follows:

Nestl is in favour of flat organizations with few levels of management and broad spans of control, including project team and task forces. Networking and horizontal communication are encouraged without blurring the authority of the managers in the decision-making process. These principles aim to make the organizational structure and working methods more flexible and efficient, without undermining the basic hierarchy (the basic concept being as much hierarchy as necessary, as little as possible).

The other facet of the operationalization process at Nestl New Zealand referred to micro-level improvement. In other words, changes had to be effected at the level of individual employees. That is why all the employees assessed themselves both before the preliminary workshops and at the conclusion of the workshops. They then had to devise action plans for themselves, so they could become aligned with the style of management outlined in the Principles document.

Employees committed themselves after the preliminary workshops to individual change programmes. To ensure that the change programmes were grounded in reality, emphasis was placed on making them completely actionable . All managers were therefore expected to translate their change programme into practical, everyday actions.

Nestl New Zealand appointed a project team representative of their managers to consider the practical, real-life application of the Principles document. This project team translated the Principles into 75 everyday actions. All managers had to design a change programme for themselves keeping in mind these 75 actions. These actions were reference points against which they could benchmark themselves. Additionally, they could generate further actions to strive for, which suited their personality and designation, but were also aligned to the Principles.

At the end of the preliminary workshops, the managers of Nestl New Zealand agreed that the acronym KASH described the components of the change effort. KASH stood for Knowledge, Attitudes, Skills and Habits. They also averred that 'performance is a mixture of skills multiplied by attitude'. Their philosophy about the change effort was based on the premise that skills could be taught and learnt in the short run more efficaciously than attitudes.

Hence the prime initiative for the change effort had to emanate from the individual managers themselves. It was in view of this that managers had to engage in self-assessment. Managers were expected to be so comfortable with the actions they had selected that with time these actions would become habitual.

To ensure that motivation for the change programmes did not wane, arrangements were made to monitor progress. Additionally, it was decided to organize periodic follow-up workshops to support the change efforts made by the managers. The workshops would provide opportunities to the managers to review what they had achieved and commit themselves anew to the change programmes.

Nestl New Zealand worked at creating an environment conducive to change. Hence, at the preliminary workshops, likely obstacles to managers taking appropriate actions were identified. The workshops also identified what senior managers should do to facilitate their subordinates ' change programmes. They were entrusted with the responsibility of setting the example by 'living the principles'.

Linking the micro-level efforts with the macro efforts were team change programmes. Managers were divided into teams of people who actually worked together at Nestl as teams. The teams also developed strategic plans of action. The objective thus was to achieve a cohesive change effort for the whole of Nestl New Zealand.

All the dissemination efforts at Nestl 's various locations worldwide have required adaptation to local employee orientation. Nestl India's first step was to present the Basic Nestl Management and Leadership Principles to their managers at training programmes. Each of the Principles was supported by illustrations and examples relevant to the local context. This was necessary to strike a responsive chord with the Indian managers from the start. Indian managers are generally sceptical of training programmes where valid principles and tenets are espoused, but the supportive cases and illustrations are western. Thus, Nestl 's country branches have often incorporated features into their dissemination process that have made possible the speedy operationalization of the Principles. Nestl Nigeria made it a point to present the Principles to workers and other non-management staff at management/union meetings. This reflects the industrial climate of Nigeria. Workers often belong to powerful unions. While they should not kowtow to unreasonable union demands, it is important for workers corporations to ensure that workers do not feel alienated. In the case of Nestl Brazil, the first step was to have senior managers discuss the Principles, and then prepare a document delineating how the Principles could be enacted in practice. Two groups of senior managers engaged in the discussions in separate workshops. One workshop comprised the 10 members of the topmost echelons. The second workshop involved some 50 managers from the next most senior echelon. The two echelons were separated to ensure that both groups would be highly participative at their workshops, and they were. Otherwise, the managers from the less senior echelon would have felt constrained by the presence of their superiors.

The need for common core values to bind Nestl together worldwide caused it to articulate its Principles. These Principles then had to be communicated to all its branches. The process of communication has varied from culture to culture. What was actually communicated remained the same. This has helped Nestl develop its managers regardless of where they are, to espouse a commonly held set of values or beliefs.

Inferences

What can be said about how communication should be facilitated within the context of intercultural management? Based on existing academic research and the actual corporate experience of Nestl , we would like to suggest the following.

Learning through the cross-fertilization of ideas: the importance of exchanging learning experiences through cross-cultural programmes

Hans Johr, a vice-president at Nestl , acknowledges that an important aspect of communication across cultures is 'bringing together managers from different markets, and getting them to exchange their professional experiences, and share their success stories'. Nestl has been doing this continually and consistently at its International Training and Conference Centre. Managers of comparable competencies, but from different cultures, assemble here to learn from each other. It was only natural that the effort of dissemination of the Principles was also used as a source of learning for Nestl 's managers. Here what they learned was how communication can be modified to reflect cultural sensibilities. A Brazilian manager from Nestl Brazil commented that he had learnt a great deal about communication in different cultures after attending a seminar where the dissemination effort was presented and discussed. To begin with, he learnt that Swiss managers prefer to be addressed by their surname , while US managers expect to be on a first name basis from the moment they are introduced.

In the new world of global corporations, managers are increasingly finding that there is no substitute for the intercultural learning that comes from direct contact with people from different parts of the world. An executive advisor of 3Com notes that in her experience, actual first-hand personal experience accelerates intercultural learning as nothing else can (Solomon, 1998).

Daniels and Radebaugh (1998) have observed, 'People in all cultures have culturally ingrained responses to given situations.' When the cultural indoctrination is very strong, they expect that people from other cultures should communicate in the same fashion as people from their own culture. International experience and exposure moderate such expectations. Such exposure also sensitizes managers to the wide variation in communication processes across cultures. Seasoned global managers have no rigid expectations about how communication should be effected. They appreciate that the purpose of communication is to make a connection between individuals or groups of people.

Like Nestl , other corporations have constituted programmes to facilitate cross-cultural communication. The US-based Mobil Corporation, for instance, which has operations in more than 140 countries, has a Speed Pass Program, designed to bring together representative managers from all its locations. What Nestl has always emphasized , however, is the importance of communication in its global programmes. Appropriate communication is the tie that binds. Inadequate attention accorded to the process and content of communication by other global companies has created problems when they constituted global teams.

Another important advantage has accrued to Nestl from engaging in a cross-fertilization of ideas through its communication experience: the ability to take best practices from one culture, and transplant them to another culture. What is remarkable about the Nestl effort is that Nestl headquarters does not impose the dissemination of best practices. Local branches decide for themselves whether they want to adopt a best practice from another branch. The concept of taking best practices and applying them across cultures is considered desirable by Nestl . However, the company believes that the local market should have a felt need for doing so. Otherwise the best practice will not meet with the local acceptance necessary to ensure its successful execution. The managers of local branches are the best qualified to ascertain whether a practice effective elsewhere would find acceptance within the context of their own culture.

According to the managers interviewed for this book, even if a global company decides that a particular practice developed in one location is so good it merits being made a standard practice at all its locations, it is preferable for local managers to implement it. The method of implementation is also to be left to the local manager's discretion.

Having a lingua franca

Most transnational organizations have a lingua franca that enables all their managers, irrespective of cultural origin, to communicate with each other. More often than not, this lingua franca is English. The largest number of countries use English as a prevalent language. It is a predominant language in 44 countries. It is the unofficial lingua franca of several Asian and African countries, especially the former colonies of the United Kingdom. English is gaining in importance in several emerging-market countries. Vietnam, for instance, has switched to English studies. Newman (1995) observes that globalization is leading to more young people in Europe learning English today than ever in the past.

Sweden is an example of a European country that does not share a common language with other countries. However, Swedes have a very high level of foreign language skills; almost all of them speak English, as Reihlen has noted (2001).

Thus it is that the lingua franca for global management purposes at Nestl is English. The executive board conducts its business in English. The corporate headquarters management communicates primarily in English, even if such communication is supported by exchanges in French, German or Spanish. The international training programmes are in English. The official document, the Basic Nestl Management and Leadership Principles, is in English, although it has been translated into the languages of most of the countries where Nestl has operations. This is despite the fact that Nestl is a Swiss company and English is not one of the four recognized national languages of Switzerland. However, Nestl has always managed its headquarters as a centre overseeing international operations, and primed itself accordingly . English is the principal language of communication of all the other companies about which case studies have been written in this book.

That English is the unofficial lingua franca of the corporate world is reflected in the fact that business schools that have an intercultural orientation are offering their programmes in English. Business schools in Europe are increasingly offering MBA and EMBA programmes in English, to supplement the programmes being offered in the local language. The Vlerick Leuven Gent Management School, Belgium, is an example. The executive MBA programmes offered by this business school in English are now oversubscribed, and even have aspiring students on their waiting list. Meanwhile, there are no students shelved to waiting lists for the EMBA programmes offered in Flemish (Anderson, 2001). In spite of the efforts of Belgian business schools like Vlerick Leuven Gent, Belgium's students continue to go overseas to obtain MBA degrees taught in English. Belgium's experience is echoed in several other European countries as well. The Reims Management School, France, is currently offering MBA programmes in both French and English. Didier Develey, the present Dean of the Reims Management School, expects to discontinue its French MBA programme by 2003 “4, and be able then to focus entirely on its English MBA, for which the demand is greater. The international ratings of the IESE Business School, Barcelona, Spain, accrue to it partly on account of it offering both an MBA and an EMBA in English.

Having an intercultural workforce of managers who are fluent in English certainly enables a global corporation to get these managers to connect by communicating. However, during face to face communication, managers may find that English is spoken with differing accents, pronunciation, and intonation , which in turn is an outcome of culture.

Communicating common principles to all branches worldwide

Nestl has found that it is a worthwhile business investment to communicate a set of the Basic Nestl Management and Leadership Principles to all its branches across the globe. The principles were formulated, and then articulated as a document, as recently as 1997. There were two main reasons the Principles were formulated. First, as operations worldwide increased in scale and volume, 'there was an increasing number of people joining Nestl and working throughout the globe' (Basic Nestl Management and Leadership Principles, 1997). Second, Peter Brabeck, an Austrian who had worked for Nestl in Latin America, was replacing Helmut Maucher, a German, as CEO. The new top management felt it necessary to unite all Nestl managers with a set of common principles. These principles would then be the superordinate attitudes, approaches, and reference points that guided the professional behaviour of Nestl managers. The principles were designed to link managers from different cultures. They superseded all other considerations. The corporate culture was expected to have greater paramountcy than other cultures of which a manager may be a part.

What is noteworthy about the Principles is that some of them pertain to attitudes and mind-sets . (See Part 4, of the Principles, Qualities and characteristics of a Nestl manager, in the box on page 56.) It is obviously a Nestl belief that these attitudes are not culturespecific. It is noteworthy that one of the qualities and characteristics recommended for a Nestl manager is 'international experience and understanding of other cultures'. It is the Nestl credo that intercultural competencies can be learnt.

Appreciating that the process of communication can vary across cultures

Tenets such as the Nestl Principles can be communicated in more ways than one. Attitudes can be built up and nurtured in diverse manners. The desired attitudes can be fostered more efficiently and speedily, if done in a manner that strikes a responsive chord with the target group. That has been the experience of Nestl , and that is why the company gave total autonomy to their branches to disseminate the Nestl Principles using whatever approach they deemed appropriate. More often than not, the approach employed reflected local cultural preferences. Nestl has comprehensively documented the different processes adopted by all its different branches. It is adding this to its database on intercultural management.

Sometimes, however, the approach used may have reflected the orientations of the particular Nestl group of managers at the branch. That group of managers may not be representative of the culture of the entire country. After all, not everyone in a country is alike. Additionally, variations within some countries, especially Asian countries, are considerable. Becoming aware of this itself comprises a lesson about intercultural management.

As global managers become more homogeneous, the process of communication may also become more similar. However, allowances and adjustments will still have to be made to accommodate cultural differences. The sheer diversity of the communication processes resorted to by Nestl branches is testimony to this.

Being cautious about translations

Translations from one language into another may not always convey the intended meaning. Erroneous translations have even resulted in fatalities. As Nicholson observed in the Financial Times (1996), faulty translations have led to airplane crashes. This calls for absolute circumspection in the business world, in translations of contracts, advertisements, negotiations and important documents.

As already mentioned, Nestl had its document containing the Principles translated into several languages. Considerable attention was given to ensuring that the spirit of the document was neither lost nor contaminated by translation.

Communicating continuously

Nestl encourages a continuous flow of business communication from its branches to headquarters. More importantly, the business experiences of one country, both successes and failures, are passed to others almost routinely. Managers from headquarters constantly visit branches on fact-finding and data collection forays. And people from branches are posted to headquarters on time-bound assignments. Of course, the international training programmes assemble together at Vevey large groups of managers from all over the world. The trainers at these programmes are themselves global Nestl managers. In 2000, 1718 participants attended a total of 81 courses and programmes at Vevey. Dr Huesler, the head till 2001 of International Training for Nestl , commented, 'these international programs are an essential contribution to the building and upkeep of a worldwide network of contacts across the whole hierarchy'.

Another application of the notion of continuous communication as practised at Nestl is that the Principles are constantly being reaffirmed and reinforced, so they become part of the ethos and culture of all branches. In this effort as well, the message remains the same, but the reinforcement process varies from branch to branch.

CASE DISCUSSION QUESTIONS
start example
  1. What lessons can be derived from the case about organizational communications and intercultural management?

  2. Can organizational core values be considered as being superordinate to ethnic cultures?

  3. Is the approach adopted by Nestl generalizable? If so, why is it so? If not, why not?

  4. Why does Nestl believe that the Basic Nestl Management and Leadership Principles will facilitate intercultural management?

  5. What should an intercultural group keep in mind when trying to achieve effective communication?

  6. What recommendations would you give to Rainer Gut, the chairman of Nestl ?

end example
 



Intercultural Management
Intercultural Management: MBA Masterclass (MBA Masterclass Series)
ISBN: 0749435828
EAN: 2147483647
Year: 2002
Pages: 98
Authors: Nina Jacob

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