Gift giving vs. Grease payments – A slippery slope

Gift giving is an intrinsic part of investing into the emotional bank accounts/ relationships when you work with your Asian counterparts. For example, you may have heard of the term ‘guanxi’ from the Chinese cultural context, as an act of reciprocation or returning a favor. Understanding the role of Guanxi in business is fundamental to building relationships in China. Giving gifts and returning a favor is a matter of maintaining equilibrium in business relationships.

As business operations expand across cultural boundaries, it is important for leaders to understand the boundaries of culturally acceptable practices vs. landing in border line ethical issues (i.e. making grease payments/ bribery for any improper advantage). This is all the more pertinent when working with government officials in foreign countries.

There are several U.S. laws that address the manner in which U.S. firms operate internationally, two of which are Foreign Corrupt Practices Act (FCPA) and the Alien Tort Claims Act (ATCA) ¹. You may find the interpretation of some of these interesting:

·         Paying a government official to expedite a safety inspection does not violate the FCPA¹

·         Reimbursing his or her travel expenses for the site visit does not violate the FCPA¹

·         Offering the inspector money to ignore hazardous findings does violate the FCPA¹

It is important to understand that cultural differences exist with respect to gift giving and grease payments. This will allow businesses to navigate through the interesting challenges of work with diverse national cultures.

Note:

‘Cultural Imperialism’ is the belief that one’s culture is right and others are wrong.

‘Cultural Relativism’ the belief that right or wrong is determined by one’s culture and there are no universal principles of right or wrong (or good or bad) across cultures.

Neither approach is ideal. While global firms must understand that practices in other countries are often different rather than unethical, they must also ensure that certain minimum standards are upheld. Cultural Competence is a subject that allows you to recognize, respect and reconcile on value differences between nations and avoid making judgments of right and wrong.

 

¹ SHRM- International Employee Relations and Regulations

Do you or don’t you ? Simple expressions with cultural connotation

Let’s be practical here, in America we have seen it all. We are a melting pot of all cultures, don’t we know how to get the job done! Anyway, they are from an English speaking nation and we should be all set right?

I hitched a ride with my friend this week end to the airport to catch my flight from Atlanta to Detroit, and got caught up in a conversation about Cultural Competence. Reflecting back on a workplace incident that occurred a few years ago…I was in a regular management meeting where we discuss issues, projects and priorities. The discussion revolved around a technology project that most of my colleagues seemed very interested in. I said something that I thought was pretty normal and proceeded to discuss the subject further.

I kind of got a strange reaction from my colleagues, who all of a sudden disengaged from the subject abruptly and then started rolling their eye balls and seemed a little confused as I discussed the subject further. The same kind of dynamics happened one other time and I thought is this something that I said that is causing this strange reaction?

Well, the pretty normal something I said was ‘Let’s table the discussion’. In some cultures (in this case the culture that I come from), ‘Let’s table the discussion’ means let us get it on the table for discussion and get it done! No wonder my colleagues who come from the American cultural background all of sudden disengaged abruptly…started rolling their eye…seemed a little confused. In the American culture, the very same ‘Let’s table the discussion’ means let us park it for later. Imagine this little dynamics playing itself out in a global team/ virtual team environment and if and how this may impact communication, understanding of each other’s goals & priorities.

In speaking events, my audiences quite often ask me how Cultural Competence is different from Diversity.  I believe that Diversity tends to be ‘what meets the eye’ i.e. observable behaviors of different cultural groups…following the classic cliché expression – tip of the iceberg. Cultural Competence takes a deeper perspective on the customs, beliefs, values and assumptions of different cultural groups that has a direct impact on how they show up for the game every day. To succeed in this global economy and to effectively manage global teams, it is imperative to develop a global mindset that has a reciprocal familiarity of cultural values and beliefs. The example above, although does not specifically delve into beliefs or values, but at a surface level highlights the cultural variations to normal English expressions.

Do you have a similar story to share? Has something like this caught you by surprise at your workplace? Share your thoughts…..

Cultural Competencies for Global Success

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