Developing Cultural Understanding in Foreign Investments

How can international managers develop cultural self-awareness and thereby transcend ethnocentric perceptions, beliefs, feelings, and behavior in communicating with foreign nationals? As earlier observed, cultural self- awareness ultimately depends on experiential learning that is gained by interacting with persons of other cultures. It can be described as a cumula­tive process of learning to understand the behavior of other peoples by learning to understand one’s own cultural behavior. Cultural understanding for the manager (or any other person) starts, therefore, with a sensitivity to cultural differences and a willingness to learn more about the cultures of host nationals. Understanding a foreign culture, of course, is not the same as understanding one’s own culture, for there is no way to match the experience of growing up in a culture.

The international manager cannot undertake a thorough study of every culture in which he conducts business. If he tried to do so, he would have little time for his business affairs. But he can obtain insights into a new culture through a preparation before his visit. This is sure to enhance his learning experience after arrival.

1. Learning a Foreign Language

Probably the single best way to gain some sensitivity to cultural differences, short of actually living in a host country, is to learn its language. Unfortu­nately, American managers are generally reluctant to do so, a reluctance that is rationalized by the argument that they have a better use for their time and, anyway, the international business language is English. Let the foreigners learn English! But this attitude misses the point. Apart from the ability to communicate with host nationals in their own tongue (which is ordinarily pleasing to them), knowledge of the host language is a “window” for perceiving the host culture and, therefore, for perceiving one’s own.

Undoubtedly, it is best to learn a foreign language when one is young, for it is hard work with much rote repetition of words and phrases that easily bores a mature person. Most important for international managers is the ability to speak a host language. Learning how to speak a foreign language is facilitated by a willingness to make mistakes and laugh at them, an openness to new experience, and persistence. The more cosmopolitan a person, the better he will do, which is one reason why learning one foreign language makes it easier to learn a second. For the manager assigned to a host country for two years or more, learning to speak the local language is important for both professional and social reasons. A manager who spends a lengthy time in a host country without learning the language is telling host nationals: “I’m not really interested in you or your country.”

2. Approaching a New Culture

International managers need to know how to approach cultures new to them in order to accomplish their missions with a minimum of cultural misunderstanding and conflict.

Minimizing Culture Shock. When a manager first arrives in a new culture, he is likely to experience a sense of disorientation that is called culture shock. Culture shock is the traumatic experience of having to cope with a bewildering array of new cultural cues and situations that differ in many overt and covert ways from those in one’s own culture. It can range from mild anxiety and discomfort to severe anxiety that renders a manager unable to carry on his business. Not understanding the local language or nonverbal behavior, the manager has no cues on which to base his own behavior. In trying to communicate with host nationals, he experiences frustration, irritation, anger, helplessness, and the strains of heightened attention. In short, the manager lacks a cultural map that can help him predict the behavior and expectations of others and thereby guide his own behavior and expectations.

Culture shock is most notable in the case of expatriate managers, who must live and work in a new culture for a prolonged period. Indeed, the most common explanation of expatriate failure is the inability to adapt to the host culture and society. But even the manager who spends only a few days in a strange culture can experience culture shock, a persistent anxiety about the unknown, although he is unlikely to develop “separation anxi­ety,” because of the shortness of his stay. Learning how to approach a new culture, then, is also learning how to minimize culture shock.

Learning from Cultural Situations. The quicker a manager learns the verbal and nonverbal behavior of host nationals, the quicker he can overcome his culture shock. How should he go about learning that behavior? The best approach is to focus on cultural situations, especially those that frequently occur in the course of conducting business affairs.

The rules governing behavior in a host culture can be discovered only in real-life situations. Situations are the building blocks of a culture: greet­ings and farewells, working, eating, negotiating, governing, fighting, mak­ing love, going to school, raising children, playing, and so on. The manager should start by learning the basic verbal language to handle the situations most relevant to his mission and by observing the nonverbal behavior associated with them. Host nationals will appreciate the manager’s efforts to speak their language even when it is confined to stock phrases. More important, the manager is on the way to cultural understanding.

The accompanying checklist offers some guidelines for approaching new cultures.

Before visiting a new culture, the manager can profit by asking himself the following questions: (1) What do I know about the behavior and, particularly, the business customs of this culture? (2) What are my beliefs about, and attitudes toward, host nationals? Are they based on knowledge, or are they stereotypes? (3) How do these beliefs and attitudes relate to my own cultural assumptions? (4) What understanding and skills do I need to communicate successfully with host nationals? It is the intent of the first guideline to enable the manager to get answers to these questions that will support his mission in the host country.

Cultural preparation for a visit to a foreign country should be more intensive for a prolonged stay than for a short trip. But in both instances preparation should lessen cultural shock and improve the chances of com­municating successfully with host nationals. Preparation includes language instruction (ranging from “immersion training” to instruction in stock words and phrases), knowledge of the social and cultural history of the host country (at the very least, the names of prominent statesmen, artists, and heroes), some acquaintance with business and social customs, and, if there is time, a study of the culture as a whole. Preparation should also include knowledge of the manager’s own culture and how it relates to the host culture.

The remaining guidelines are pointers on the manager’s behavior in the host country. They are specific implications of our earlier discussion of culture and cross-cultural communication. Cultural blunders are inevitable, but if the manager is perceived as a sympathetic person by host nationals, they are likely to attribute his blunders to simple ignorance, which can be forgiven in a foreigner. Conversely, blunders can cause serious problems when the manager’s behavior is interpreted as uncaring of the host culture and its people.

Cultural differences surely complicate the lives of international man­agers. But they also enrich those lives with new experiences. And by build­ing bridges of understanding across cultures, international managers form a “third culture” that makes its own contribution to a better world.” In any event, the manager has no choice: he must learn to design, execute, and control international market entry strategies across cultural differences if his company is to survive in a harshly competitive global economy. As high- growth market opportunities increasingly shift from industrial to develop­ing countries, the management of cultural differences will become ever more critical to success in international business. No company can afford ethnocentric managers.

We come now to the end of this book on international market entry strategies. It may strike some readers as surprising that I conclude by stressing the importance of cultural understanding. But I believe that to be the most fitting conclusion. When all is said and done, it is the task of international managers to communicate with foreign markets. And those markets are foreign peoples.

Source: Root Franklin R. (1998), Entry Strategies for International Markets, Jossey-Bass; 2nd edition.