Human Resource Management and Culture Evaluating business risk caused by cultural differences Michael Segalla Groupe HEC
Cultural Risk Framework z
Language z
z
Social Preferences z
z
Habits, attitudes, preferences
Social and Individual Values z
z
Understanding what to communicate
Deeply held values that do not change
Cultural Infrastructure z
Institutional and physical elements of a society
© 2000-2007 Michael Segalla
Cultural Risk - Examples z
z
z
z
From Language and Communication Errors z Translation Errors , z MR2, Pajero, z Pictographs, z Recruitment Advertising From Changeable Cultural Preferences z Customer Service z Recruitment and Selection From Deeply Held Cultural Values z Sexual Harassment, Racial/Religious Sensitivity z Korean companies in France (Fast Track Approval) z American companies in Italy (Vous tu Vous) z Local control of human resource management (Ford, Hilti) From Slow Changing Cultural Infrastructure z Career Management Expectations z Labour Legislation
© 2000-2007 Michael Segalla
The Cultural Risk Framework The Cultural Risk Framework (CRFW) was conceived by Professor Segalla after working with large French companies experiencing management problems caused by a variety of cultural misunderstandings in their international networks. Originally the CRFW was used as an organising tool to assist a series of task forces to systematically think about what problems existed, what their origins were, and what possible responses could be adopted. The framework can be effective since it offers a non-judgemental organising structure to encourage managers to view their projects (whether an international marketing plan, new product development, organisational restructuring, or new direct foreign investments, for example) from the cultural perspective of the target environment. Therefore culture, whether it is national , regional, or even organisational becomes one of several risk factors to consider during the planning phase of a business project. The Cultural Risk Framework builds on the work of Edgar Schein, who was the leading guru of corporate culture during the 1980s in the USA. Professor Schein, who teaches at the Business School of MIT in Boston, argues that there are several levels of culture and that as one proceeds into the deeper levels they become more difficult to understand and document. The CRFW adopts this perspective by suggesting that there are four levels in a cultural which managers should examine as sources of risk. © 2000-2007 Michael Segalla
Communication What is being communicated in the management discourse, advertisement, or product catalogue? This is a very simple but overlooked question. Sources of misunderstanding are numerous but all can lead to the failure of the business project. Included here are translations, images, style of presentation, marketing campaigns and many other communication-depended business processes. One of my favourite examples is the mistranslation of a common caution based on an old proverb, 'Out of sight - Out of mind', which is often used to remind expatriates that they should stay in constant contact with their headquarters to guard the potential for upward career mobility. Evidently, a foreign manager not certain what this expression signified turned to one of the internet translation services. He was quite confused when the service translated this proverb as, 'Mindless Idiot'! A tragic example was a tourist in China accompanied by her pet poodle. She entered a restaurant and asked in poor Chinese for some food for her dog. The waiter took the dog supposedly to feed it but came back some time later with a dish of noodles and “roasted poodle”!
© 2000-2007 Michael Segalla
Habits and Preferences People develop habits and preferences over the course of their lives. Sometimes these are conscious decisions motivated by deep motivations but at other times they are acquired unconsciously from family, friends, teachers, even advertising. Many academic researchers, international managers, and even casual tourists have remarked that things are often done differently in other cultures. This is often simply interesting and refreshing for tourists, an insight into the basic social questions of the day for academics, and a constant source of frustration for managers. In marketing for example personal care, luxury, and food companies enjoy an association with the French or Italian cultures since their good reputation in these areas attract consumers from other countries. But the habit of the two hour lunch, frequent holidays, and long drawn out negotiations are often frowned upon by foreign managers. What is important to note however is that a French or Italian manager working in China, Australia, or the US will often adapt (maybe with regret) to the local habits.
© 2000-2007 Michael Segalla
Deeply Held Values Deeply held values go far beyond habits or preferences. Once established in a person's life they rarely change. They are often used to make sense of our environment and act as a lens, through which we see and interpret the events around us. Like the Indian legend about the five blind men and the elephant depending where the were in relation to the elephant they found variously a wall, a spear, a snake, a tree, or a rope - our values help us 'see' the world around us. If a business process, product, or policy is interpreted as violating the deeply held values, it is unlikely to be accepted. An Italian manager once remarked that American firms in Italy often enforce informal relationship among the personnel in their firms. The use of formal pronouns (something that no longer exists in English but can still be read in old books where people spoke to each as thou or thy) is forbidden. So many of the Italians use the informal pronouns while at work but then, as soon as the exit the office, return to using the formal salutations and language that fit their relationships. Although their behaviour changes in the office, their values in fact remain the same. They call this being 'formally informal'. In most cases, companies are not so lucky to even have a temporary behaviour change - their foreign employees, customers, or suppliers simply refuse to change at all.
© 2000-2007 Michael Segalla
Cultural Infrastructure The cultural infrastructure of a country is paradoxically both the most visible and invisible source of cross-cultural risk companies face. A country's cultural infrastructure includes many things like its educational system (too focused on rote memorization in Japan, too authoritarian in France, too lax in the United States, to repeat a few common criticisms often made), its legal system (too haphazardness in Russia, too divisive in the United States, too brutal in some parts of the world, or too lax in others), its political system, its communication and transportation systems, its social services, and many other similar aspects inherently woven into the fabric of a country. Siemens, the giant German electronics company, marketed one their advance wireless telephones in the United States but met with near failure because as one reviewer wrote, 'they're nice to look at but way too complex and have awful range'. What happened? This same phone was very popular in Germany. The president of Siemens in the US explained American homes were often much larger than German homes so the telephone's range is important Americans. Germans like more complicated features while Americans preferred convenience. Property or home size is part of the cultural infrastructure, while consumer preference for convenience is more likely a habit. In this case the Siemens product engineers were forced to do a quick redesign of their product because cross-cultural risk came at them from two sides. Oh and by the way, thinking back to communication risk, what colour should indicate that the integrated answering machine in the telephone is turn on? If you are thinking green, you may want to read the instructions carefully because the Siemens engineers selected red. © 2000-2007 Michael Segalla
© 2000-2007 Michael Segalla
