Intercultural communication in global business

Abstract

Once separated by vast oceans, our world's population is now more mobile and connected than ever in its history. Multi-national companies expanded to the ends of the earth and a transparent worldwide labour pool is no longer a distant vision on the horizon. Despite these waves of global change, world events demonstrate we can still fail to understand and be understood in intercultural communication.

As project managers it is inevitable we will be managing teams of people globally, springing from many diverse cultures, incorporating different languages, backgrounds, world views, beliefs, values, lifestyles, customs and working habits. We believe that deep down all people are the same—but there are important differences. The more dissimilar two cultures are, the greater the degree of influence culture has on intercultural communication. Historically, we think of culture as a source of conflict. But can it be a source of synergy?

Since the 1980s, corporate diversity programs emphasized tolerance, but in the new intercultural workplace, we need to do more. We need to use our cultural differences to create a competitive advantage for our projects and companies. For the project managers of the future, it will not be the technical management that will be our greatest challenge but the intercultural communication skills we must truly master to become effective global project managers.

Culture is a pattern for living. It is complex and abstract. It is the dominant shaping force on an individual. As the fish in the water is unaware of the water, we are unaware of the cultural rules that dictate our own patterns of interaction. Cross-cultural understanding then requires that the rules of culture be made explicit. Learn frameworks for understanding cultures, and yourself.

Introduction

Intercultural Communication in Global Business presents foundational concepts for communicating between cultures and a framework for understanding any culture, including your own. Understanding and applying the concepts presented here will help you to enhance your intercultural competence, critical to success as a global project manager in our borderless world.

Areas of Focus and Approach

The topic of intercultural communication is understandably a broad topic. With the globalisation of business, there has been an increasing interest in intercultural communication. Unfortunately, much of the interest is not in the scientific body of knowledge related to intercultural communications but instead is focused on learning cultural tips and etiquette for particular countries. While there is value in understanding the customs of specific cultures, it is more efficient and effective to establish a baseline understanding of intercultural communication, which can then be applied in a variety of cultures.

Our approach is first to understand and determine the need for knowledge—in other words, to understand the underlying problem in the environment facing the global project manager. The next step is to establish a common vocabulary and concepts from which to discuss the topic of intercultural communication. The final step is to establish a model, or approach, which can be applied to intercultural communication regardless of situation, culture or country.

Our Learning Objectives

The key learning objectives for the global project manager are as follows:

  • To understand the elements of culture and intercultural communication that impact your business interactions and ultimately your success as a global project manager.
  • To learn how to apply a model to understand any culture, including your own.
  • To enhance your skills in the dimensions of intercultural competence.

The Impact on the Global Business Environment

To understand the need to learn more about intercultural communication, we need to examine the impact of intercultural communication on the global business environment and its implications for success or failure for the global enterprise. However, the impact of intercultural communication on global business has seldom, if ever, been successfully measured. Unsuccessful joint ventures, marketing gaffes due to inaccurate translations and failed forays into new markets are rarely attributed solely to ineffective cultural understanding and communications. It is unrealistic to expect that a single aspect of a global business environment could be isolated and measured to any degree of accuracy. For this to happen, research and business case history would need to intersect in a systematic manner, using a pre-determined scorecard.

Applicability to the Global Project Manager

Much of the expansion within the global business environment takes the form of projects, for example, an acquisition, an outsourcing of a product or service, or the testing of a new market. After the initial project, the outcome of the project may be the permanent implementation of the product, service, organisation or new market into the enterprise's ongoing operations. These initial temporary endeavours—i.e., projects—are most often managed by project managers, referred to here as global project managers.

For the global project manager, the importance of the ability to successfully interact with others outside his/her own culture is critical to the overall success of the project. The project manager achieves results by coordinating the efforts of others within a team structure. The team structure that the project manager crystallizes becomes its own culture, with a common identity. For the global project manager, the team typically comprises individuals representing different national cultures. Intercultural competence then becomes a key competency for the global project manager and can be directly assessed using a variety of assessment tools.

The Borderless World and its Impact on Diversity in Global Business

World Events and Intercultural Communication

Current world events lead us to believe that our collective ability to communicate interculturally is insufficient. Sadly, with warfare still a modern reality, we cannot underestimate the importance of understanding and communicating with cultures different from our own. The greater the (psychological) distance between two cultures, the more difficultly there will be in intercultural understanding. Will it in fact be the impact of successful global enterprises that contribute to economic development, bringing increased prosperity and subsequently cultural understanding?

Influences and Trends on Global Business

Changes in even the past –25 years have surprisingly accelerated global business. The impact of the Internet on business, political, and social factors is significant. Changes in immigration patterns, such as the workforce mobility within the EU, impact on more than national levels. While telecommunications advances have contributed to the transparency of a global workforce, the trend towards outsourcing to lower-cost countries have created new international organizational structures within business enterprises.

Moving from Corporate Diversity Programs to Intercultural Communication

It is important to understand that the topic of intercultural communication differs from the corporate diversity initiatives begun in the 1980s. Many of these initiatives are still in place today within major corporations. The purpose of diversity initiatives is related to inclusion of different groups, such as those not represented by the majority culture. While there is a general understanding that diversity brings favourable business results, it is not focused on actively involving divergent cultures for competitive advantage, which we will discuss here.

Understanding Intercultural Communication

Intercultural Communication in the Communication Process

The Link between Culture and Communication

The link between culture and communication is important to understand because it is through the influence of culture that people learn to communicate. Children learn to communicate in the same way others in their national culture do, not just in language but also in meaning. Culture cannot be isolated from the communication process, because it impacts both the communicator and the receiver of the message.

There are many different definitions and basic concepts in the field of cultural study that are referenced in the body of knowledge. For example, culture is referred to as an onion or as the impact of gravity upon an individual or likened to the experience of a fish in water. The focus of this paper is to introduce and share some of the most significant concepts, including culture as a private world, culture as a pattern for living, culture as mental programming, culture as a shared mindset and the concept of world view.

The Layers of Culture

In a model of culture that is simple to understand, there are three layers represented in a circular ring:

  • The outer layer - explicit products
  • The middle layer - norms and values
  • The core - Implicit – basic assumptions about existence (Trompenaars, 1994, p. 24).

In this model, the explicit culture is what can first be observed about a culture—for example the language, the food, the way people live, how the cities appear. It is probably because it is the most obvious that much of the literature related to cultural interaction focuses on this immediate layer. Prejudices mostly start on this symbolic and observable level (Trompenaars, 1994, p. 24). In the middle layer, norms refer to what a group (culture) treats as right and wrong, such as written laws. This is in contrast to values that are the definition of good and bad. Values help individuals to make choices. Implicit culture, or basic assumptions about existence, is not visible and is therefore the most difficult to identify and understand.

Culture as a Private World

While our concept of culture tends to gravitate towards the idea of a group, or in business a team, it is important to also understand that for each individual, culture is a private world. The world each person creates for him/herself is a distinctive world, not the same world others occupy (Samovar, 1991, p. 26). Individuals assign meaning to events and experiences based upon their own values and arrive at their own conclusions. It is these biases which constitute what has been called the “assumptive world of the individual” (Samovar & Porter, 1991, p. 26). This refers to the world inside each person's head, a symbolic world, which is the only world he/she knows. While some definitions of culture require the presence of two persons to create a culture, in this definition, each individual has his/her own unique culture, not fully accessible to others.

Culture as a Pattern for Living

Another important definition of culture is that culture is an all-encompassing form or pattern for living including perception, verbal processes and nonverbal processes (Samovar & Porter, 1991, p. 14). Another way of understanding culture and its influence on intercultural communication is that culture influences patterns of thought. In fact, one of the definitions of culture is that it is a group's common response to solving problems. In concrete terms for the global project manager, this means that he/she will need to understand that many patterns of thought exist and learn to accommodate them or leverage them for problem solving.

The Concept of Mental Programs and Mindsets

In terms of organizational behaviour, culture can unknowingly influence individuals through mental programming and mindsets. Culture is a shared system of meanings that dictate what we pay attention to, how we act and what we value, organizing meanings into mental programs (Trompenaars, 1994, p. 14). Within communication, and in organizations, how people behave is an enactment of their mental programs. This approach is described as phenomenological, which means that the way people perceive phenomena around them is coherent, orderly and makes sense to them (Trompenaars, 1994, p. 14).

Another classic term in this field includes the concept of “mindsets”—set ways of perceiving, reasoning and viewing the world that govern how events are evaluated and how decisions are made (Fisher, 1997, p. 2). (NOTE TO AUTHOR: PLEASE COMPARE THIS DATE TO THE ONE LISTED IN REFERENCES.)

The Concept of World View

One of the most important concepts in the field is the concept of worldview. Worldview deals with a culture's orientation toward such philosophical issues as God, humanity, nature, the universe and the concept of being (Samovar & Porter, 1991, p. 16). Worldview issues are timeless and represent the most fundamental basis of a culture (Samovar & Porter, 1991, p. 16). The reason that the concept of worldview is so significant is that it influences beliefs, values, norms, attitudes, uses of time and many other aspects of culture. Individuals in a culture are not necessarily aware of their own worldview, because it is so deeply imbedded, and there can be a tendency to assume that others view the world as he/she does.

Learning and Applying Frameworks to Understand Cultures

Models for Understanding Cultures

There have been a number of models developed to facilitate the analysis, characterization and understanding of cultures. While there is a significant amount of research available, none of the experts exactly agree, and some of them dispute each other's conclusions. For this reason it is important for the global project manager to understand the foundations and select a model that is most useful to his/her own needs and business environment. Significant researchers and writers in this area of study include E.C. Stewart and J.M. Bennett, Clyde Kluckhohn and F. Strodtbeck, Edward T. Hall, Geert Hofstede, Charles Hampden-Turner and Fons Trompenaars. Brief explanations of two models of interest for the global project manager are introduced here.

Cultural Dimensions by Geert Hofstede

Geert Hofstede is one of the most important and prolific authors on the subject of national cultures. Hofstede's studies identified and validated five independent dimensions of national culture differences:

  • Power distance (PDI)
  • Individualism (IDV)
  • Masculinity (MAS)
  • Uncertainty avoidance (UAI)
  • Long-term versus short-term orientation (LTO) (Hofstede, 2007a).

Controversially, Hofstede also statistically correlated the country scores on the five dimensions with data about the countries. For example, Hofstede correlated Individualism (IDV) with the national wealth of Per Capita Gross National Product.

The Cultural Orientations Model

Another model, which is more general and perhaps easier to understand, is the Cultural Orientations Model. It has 10 dimensions:

  • Environment: How individuals view and relate to the people, objects and issues in their sphere of influence
  • Time: How individuals perceive the nature of time and its use
  • Action: How individuals view actions and interactions
  • Communication: How individuals express themselves
  • Space: How individuals demarcate their physical and psychological space
  • Power: How individuals view differential power relationships
  • Individualism: How individuals define their identity
  • Competitiveness: How individuals are motivated
  • Structure: How individuals approach change, risk, ambiguity and uncertainty
  • Thinking: How individuals conceptualize (Walker, 2003, p. 57).

The Cultures in the World vs. the Cultures in Business

For the purpose of this paper, we will distinguish between national cultures (cultures in the world) and organizational cultures, or business cultures. There is even another cultural level in business, often referred to as functional or departmental cultures, such as marketing. Just as the experts in the field may not agree on a model for understanding national cultures, there is even less agreement in the application of cultural models to business cultures. This could be because business cultural models are constantly evolving as businesses themselves evolve. Another reason could be because business cultures cross national boundaries. What is most important for the global project manager to understand is that a company is itself a culture; however, the company (or organizational culture) will have different meanings to individuals based on their national culture(s). In addition, the actual company culture may be difficult to identify because it may differ from the documented company values. Documented company values typically reflect the idealized culture, rather than the actual operating culture, for decision-making.

According to Hofstede (2007b), his five dimensions of national cultures, which are based on values, are not suitable for comparing organizations within the same country. Hofstede (2007b) considers these two different fields of study, with national cultures belonging to anthropology and organizational cultures to sociology. Hofstede (2007b), in fact, creates a new approach for organizational cultural differences along six dimensions:

  • Process-oriented versus results-oriented
  • Job-oriented versus employee-oriented
  • Professional versus parochial
  • Open systems versus closed systems
  • Tightly controlled versus loosely controlled
  • Pragmatic versus normative.

Practical Application of Models in Global Business—Individual Level

It is the opinion of this author that the application of intercultural communications concepts and processes can be applied at two levels, a macro level and a micro level. The macro level is the incorporation of intercultural understanding into large business processes such as buying, selling, negotiating, entering new markets, opening new facilities, acquiring companies, etc. The macro level is discussed in more detail further in this paper in the context of using culture as a source of competitive advantage.

On a micro, or individual level, intercultural communication concepts are especially relevant to the global project manager. While once again the experts disagree, we can learn from the variety of conceptual understandings, processes and tools they expound upon. There are four myths in cultural orientations in communication that are valuable to understand:

  • Myth: We're Really All the Same: Although we share a common human nature and need for survival, due to culture, individuals have fundamentally different ways of perceiving themselves, the world and their actions within it.
  • Myth: I Just Need to Be Myself in Order to Really Connect: Although having good intentions can assist, simply retaining your own sense of identity does not guarantee success in intercultural understanding or communications.
  • Myth: I Have to Adopt the Practices of the Other Culture in Order to Succeed: Individuals will need to adapt to other cultures' practices rather than necessarily adopt them and change their own fundamental perspective.
  • Myth: It's Really All about Personality: Aspects of an individual's personality, such as whether or not an individual is an introvert or extrovert, can be attributed different meanings in different cultures. Therefore, personality alone does not guarantee success in intercultural interactions (Walker, 2003, p. 203).

Communication Process

A key to success is awareness of the intercultural communication process. While global project managers understand the simple process of communications (sender, message, receiver, feedback), the process when two communicators are from different cultures can be more problematic. Potential barriers to effective communication in the intercultural communication process include the following:

  • Cultural frames: Using the window through which an individual defines him/herself, others and the world
  • Ethnocentrism: Evaluating another culture according to our own
  • False attributions: Attributing our own meanings to behaviours in other cultures, which may not be correct
  • Stereotypes: Using generalizations that do not allow for exceptions
  • Etiquette and nonverbal behaviours: Understanding the meanings of gestures, facial expressions and body positions requiring specific knowledge of a culture
  • Other elements: Including time and place, topic, status and power, and style
  • Language: Knowing this can be a barrier even if individuals speak the same language (Walker, 2003, p. 207).

The Role of the Global Project Manager

In global business, the challenges of the role of the global project manager cannot be minimized. First, the global project manager is implementing new initiatives, which result in changes in the sphere of the business environment. This is essentially a change management project, which can be more challenging than simply maintaining existing operations. Second, the global project manager will often not be in a line management role, that is, an established organizational framework or hierarchy, since the nature of projects are temporary. This can make it difficult for the global project manager to have the appropriate authority, given some of the cultural dimensions previously discussed. Third, due to the temporary nature of projects, the global project manager may not have the long–term, established relationships within a subsidiary necessary in a particular country. It can even be argued that the concept or understanding of the role of the project manager will have different meanings according to national culture. These are just a few of the challenges the global project manager faces within the context of intercultural communications.

Using Culture as Source of Competitive Advantage

Culture as a Source of Synergy or Conflict?

Culture is referred to as the soft side of business. When individuals set up companies, they build them according to concepts and structures they are familiar with. However, employees will interpret the (company) organization in a way that is familiar to them. This interpretation then will vary according to the employee's culture. Since organizations need individuals to carry out the organization's mission and vision, organizations are successful only to the extent that the collection of individuals, together, synergistically achieve the organization's objectives.

If culture is understood to mean the way a group of individuals together solve problems in order to survive, then the culture of the company indeed would significantly influence the success of the overall enterprise. It could therefore be a source of competitive advantage (or disadvantage) how the various cultures within an organization are structured, managed and rewarded to achieve the organization's objectives.

Impact on the P&L: The Cost of Intercultural Conflict

When we look at business failures, such as an unsuccessful product launch in a new country, the reasons for failure are complex and not necessarily publicized. Unsuccessful mergers and acquisitions are perhaps the most evident examples of cultural clashes that resulted in a negative impact to a company's profit and loss statement. Not easily measurable are events like the cost of a home country officer who is unsuccessful in a host country office. Problematic implementations of global ERP systems in some companies have not been a failure of technology but rather of management of the cultural change necessary to adapt to uniform business procedures.

The Challenge: Using Cultural Differences to Create a Competitive Advantage

In any consideration of a company's success, it is the bottom line, or the impact on the profit and loss, that is the final measuring stick. However, the impact of successful management or integration of disparate cultures within an overall enterprise is not able to be isolated numerically. It may not even be able to be discussed openly in a corporate environment. If we look at the business process areas contributing to global business within an enterprise, we can identify a significant list:

  • The success of global projects and initiatives
  • Success of mergers and acquisitions
  • Opening plants/facilities in a new country
  • Expanding products and services into new markets
  • Developing marketing campaigns in new countries
  • Performance measurement and reward systems
  • Employee retention
  • Understanding and defining the meaning of branding within a country
  • Defining and comparing successful strategies for global growth/expansion.

For businesses to be successful on a global scale, innovation of products and services will not be sufficient. Innovation in the understanding and use of cultures and successful intercultural communication practices will be the ultimate competitive advantage in the global environment.

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This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI or any listed author.

© 2008, Anastasia Dzenowagis
Originally published as a part of 2008 PMI Global Congress Proceedings – Sydney, Australia

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