Globalization of business is not a new phenomenon, nor is working with multi cultural teams. However more than ever before, global way of doing business has become an economic necessity to attract the right talent for the right job and to be financially viable. The 2008 US Stock Market Crash revealed an unprecedented implication on the financial markets worldwide. The global economy is bearing the brunt of the slump in the US economy where Europe and Asia stock markets and economy are reeling under the ripple effect. We are finding ourselves in a new global order/ phenomena that is irreversible. Outsourcing arrangement and global operations are transcending commoditized services to become value added services and knowledge management services.
In stark contrast:
· Over 60% of all cross border ventures do not work out as planned (1).
· About 35% of expatriates pre maturely return to their home countries without completing their assignment (1). With average cost to send an employee and their family on a 3 year overseas assignment around $1M, inability to overcome the cultural shock and adapt to local culture is cited as the primary reason for pre mature returns.
· Over 1/3 rd of initiatives involving global teams failing to produce expected results2, inability to establish lasting relationships is cited as one of the key factors limiting success on the global landscape.
· Over 70% of mergers do not deliver to plan – Execution Errors; 22% of failures attributed to cultural differences 3.
A conscious approach to developing cultural competence among global leaders and multi cultural teams is becoming a compelling argument to transcend / manage business across barriers to culture, time and space.
What ‘Cultural Implications’ do you see in your line of business? What seems to be your most pressing challenge on this subject? Share your thoughts & insights…Welcome to the Culture Competence Think Tank!
1 Globalization Trend Report
22007 research conducted by Dynamic Markets on behalf of Tata Consultancy Services (TCS)
3 2007 Deloitte Consulting Mergers & Acquisitions Survey
Cultural Competence Think Tank 
November 3, 2008 at 2:21 am |
Whether it is a small business or a multinational corporation, globalization has a direct and immediate impact in today’s world. In fact, small businesses are embracing the globalization trend much faster than the large companies. Awareness and realization of the importance of culture in terms of language, social habits and structure, time, and education focus by the global businesses using multicultural teams will go a long way in maximizing the ROI and creating a positive impact. Congratulations for the new initiative!
November 3, 2008 at 6:34 am |
It would be interesting to see the breakout for these statistics. For example were there more failures between certain countries. As an example one would expect to relatively close European countries to achieve a relatively higher chance of success vs. two countries residing on different continents. This would be interesting to see specifically the difference in the success between the United States and other countries relative to any other combination and then to start to understand why any correlation might be there that is there or is absent for those projects.
– Michael H.
November 3, 2008 at 7:32 pm |
This is a huge subject and I could write a book on it, however, I think there is one thing you have to consider when managing cultural differences that is absolutely key: Flexibility.
If you have a service or something in your home country and it is something very obvious and simple to you, it still may not be simple and obvious in your new country. Don’t get frustrated that it is not in your new location, work with the system not against it. Everywhere in the world things are done differently, you need to adapt to their ways, they won’t adapt to you.
Besides red tape being one of the biggest challenges in many Asian, Latin American and African countries the other big differentiator I have found, and one of the hardest to deal with is work ethic. I have worked in all continents of the world and lived in all but Asia, and to my mind there are only 3 countries where the work ethic can be compared: The UK, The US and Hong Kong. In my experience I would say that you need two people to do the job of one American in many developing nations.
And finally, very few nations have the sense of urgency that the UK or the US does, and so that would be why things do not move as fast, or get done as quickly or efficiently as they do in the UK or US.
November 10, 2008 at 11:58 am |
An element of cultural compatibility I believe is as crucial as geographical or national differences is that of company culture. Of course companies derive much of their culture from their headquarter country, but even there regional variances can have a great impact on how a company functions. In the US, take for example the difference between a New York firm and another company, even in the same industry, based in Ft. Worth, Texas or the Bay area of California. It’s a given those businesses will look, feel and operate differently. Likewise, companies can also function very differently depending on the style and personality of their management team. This is as true if they are across the country from each other or just on different floors of the same building.
Companies considering an alliance, partnership or outsourcing relationship with an outside firm must pay close attention to understanding and anticipating the impact of national culture on the relationship, but just as critical is the culture of the company itself. Be observant of those unique qualities too when forging a new relationship.
February 23, 2009 at 7:55 am |
Kalpana
Bangalore
To work with a global mindset can be a very big challenge . Every day we face relationship challenges at home and at our work place which we try to over come using many techniques figuring out what will work at what point in time and how to apply the same with individuals and teams .
So to have a global mind set can be a process and not a destination .
As we are evolving in our office place , we constantly are experimenting with different known competencies which have been successful in producing desired results .
So the crux is how we need to scale up our flexibility and tolerant quotients in our relationships .When we enter into a marriage we are faced with several challenges , our pain areas become obvious over a period of time .The same may be the case because initially we do try to factor all the competencies , but once we are deep down the grind we understand that these challenges do not have any solutions , but we just need to deal with them appropriately to ensure work relationships are balanced .
To that extent we can develop a cultural competency in the minds of the people who need to work with people from different cultures . The need to factor the biggest quotient of tolerance and be prepared to deal with the challenges . It can be a e process and definitely there are not set formulas which will work .
Constant awareness and exposure to different cultural practices can help us deal with this challenge and help us develop a global mind set .