International communication and coordination of human resources

Communicating across geographical, ethnic and national boundaries is a major chal­lenge for HR people. Brandt and Hulbert (1976) studied organisational feedback in a number of multinational companies that had their headquarters in Europe, Japan and the United States. They found that the American organisations had many more feedback reports and meetings between headquarters and subsidiaries than their European or Japanese counterparts. In contrast, Pascale (1978) found that Japanese managers in Japan used face-to-face contacts more than American managers as well as more upwards and lateral communication. Japanese managers in America used communication in the same way as Americans.

1. Some barriers to effective international communication

There are various ways in which expectation determines communication content and all can impair the accuracy of message transmission. Several of these – the frame of reference, stereotyping and cognitive dissonance – are explained in the Part 1 Focus on skills. Such problems are compounded by geographical distance, cultural differences and subtleties of language.

The clearest example of contrasted frames of reference is when international expan­sion is by the route of acquisition. Employees in the acquired company will feel a greater sense of community with each other than with those who have acquired them. They will see corporate affairs from their own standpoint and will tend to be cautious in their

behaviour and suspicious in their interpretation of what they hear from their new owners. Every acquisition has this problem, but international acquisition is beset by particular problems.

Despite all attempts to forge a common identity, companies in different countries will take pride in their own accomplishments and informally disparage the accomplishments of other national groups. As long as this stimulates healthy competition, rivalry can benefit the business, but it quickly becomes destructive, like the situation of the car assembly plant in Britain which constantly rejected and returned gear boxes made by the same company in Germany. National boundaries produce distorted ideas about the ‘other’ people, whose achievements are underestimated and undervalued in comparison with the achievements of your own group, which may be overestimated.

Among the stereotypes allegedly held by Anglo-Saxons are that Germans are thorough and unimaginative, the French are romantic and obsessed with status, the Chinese all look the same, Americans are loud and brash, the English are reserved and aloof, Arabs are fatalists, Spaniards are haughty, and so on.

Our review of culture was partly an account of national stereotypes and exemplifies the problem: we need to understand general differences in behaviour and attitude that are rooted in cultural diversity, otherwise we will be misunderstood in what we say and will misinterpret what we hear, but we must avoid the trap of assuming that all nationals conform precisely to a single model. Not all the Irish are talkative and not all the Scots are mean.

In dealing with foreigners, some well-informed stereotyping can avoid initial offence and misunderstanding, but it must give way to more sensitive behaviour as the other person is evaluated and better understood.

Cognitive dissonance does more than lead to misunderstanding; it can also distort or inhibit action. Not only do recipients of information find it difficult to understand, remember and take action, they will also grapple with the dissonance that the problem­atical new information presents. One of the ways in which they do this is to distort the message so that what they actually hear is what they expect to hear and can easily under­stand rather than the difficult, challenging information that is being put to them.

There are frequent problems with language. In Shell International there used to be a term to describe the purpose of certain types of meeting as ‘flocking’, which is a wonder­fully precise term to express the nature and purpose of those particular gatherings that take place, yet French and German people have great difficulty in understanding the nuances of the term, because neither language has an equivalent that distinguishes between, for example, flocking and herding.

The problem of jargon is where a word or a phrase has a specialised meaning that is immediately understandable by those in the know, but meaningless or misleading to those who do not share the specialised knowledge. The Maslow hierarchy of human needs is by now quite well known in management circles. On one occasion a lecturer was describing the ideas that were implicit in this notion and was surprised some months later in an examination script to see that one of the students had heard not ‘hier­archy’ but ‘high Iraqui’. The unfamiliarity of the word ‘hierarchy’ had been completely misinterpreted by that particular student, who had imposed her own meaning on the words because of the need to make sense of what she heard. Professor Eugene McKinna relates how he was lecturing on the same subject of motivation, describing job enlarge­ment and job enrichment. After the lecture a puzzled student asked him, ‘what exactly was the job in Richmond?’

The value of jargon in international management is that the jargon quickly becomes universally understood by the experts, no matter what their nationality. Botany, Medicine and Chemistry are fields where a specialist can probably understand a technical paper no matter what the language may be. Sheet music is covered in Italian words that have no neat translation and no need for translation as they are universally understood by musicians. Management is moving in that direction, with PC, salaryman, JIT, QWL, TQM, WLB and all the new language of computing.

A quite different aspect of communication for HR people in international business is disseminating information and other messages within the organisation to help develop corporate culture, a sense of collaboration across national boundaries in order to integ­rate the business, with members of the different units in the business understanding, for instance, why a company has been acquired in South America, even though it seems to threaten the livelihood of some parts of the parent organisation. Comprehensive communication can raise awareness of the wider market and the opportunities that are waiting to be grasped.

There is a need for constant communication throughout the business to disseminate information and to sustain changing values. The organisation must operate holistically. It is not the sum of its parts: the whole exists in every part, like the human body. If you are ill a doctor can obtain information about your illness from any part of you. A sample of your blood or the taking of your temperature is just as good wherever it comes from. If you are to be protected against cholera, which attacks the intestines, you have an injection in your arm. If you are about to be shot in the chest, your entire body will shiver in fear.

When a company is operating internationally, one logical main channel for commun­ication could be the workflow pattern. If a washing machine is produced by manu­facturing electronic components in California, sub-assemblies and wiring harnesses in Korea and final assembly in Scotland, there is an easy sequence to follow. Job instruc­tions, guidance notes, queries, telephone calls, specifications, requisitions, authorisa­tions, order forms are some of the many ways in which groups of people communicate with those before and after them in the workflow, or critically adjacent to the process, like the HR people. Among the most effective international communicators are airlines, as their entire business is moving not only customers but also staff constantly across national boundaries to different organisational outposts of the business: the business activity creates the communications. All international businesses require centralised, coordinated communications to create a common purpose and to share ideas and benefits, but those that do not have a natural workflow link across national boundaries will have this need more highly developed.

The communications management challenge for international human resource man­agement is at two extremes. At one is the personal behaviour and skill of individual people in making themselves understood, persuading others to do things, negotiating agreements with people from different cultural backgrounds, overcoming language barriers, appreciating different frames of reference and developing heightened sensit­ivity to varying behavioural norms and conventions. Communication is an individual activity, reflecting personal style and the HRM requirement is for cultural awareness and perhaps language training. In this type of communication the manager is a skilled solo performer.

The other extreme is impersonal and systemic, more concerned with channels of communication than with individual behaviour, and more concerned with systematic distribution of carefully chosen information and the organisation of communications opportunities. In this type of communication the manager metaphorically writes the score and then conducts the orchestra.

Although the forms of communication are so different, they are also linked. Organ­isational communication is only as good as the quality of interpersonal communication that is taking place.

consistent patterns of interaction begin to develop when a group of individuals, in response to certain characteristics and needs of the environment, create a system of patterned activities for the accomplishment of a specific task. The process by which these relationships are formed and maintained is interpersonal communication. (Baskin and Aronoff 1980, p. 7)

It is not practicable for employees to develop confidence in a communications system; they can only acquire confidence in what the system produces and in those other members of the organisation with whom they interact. That confidence is built by the substance of what people say and do, but also by a climate in which people feel encouraged to express ideas, make suggestions and question decisions they cannot understand. Communications and behaviour are so closely interlinked that everything influencing behaviour also influences communication.

2. Coordination

Managers working internationally give themselves major problems of coordination by adopting measures that they see as necessary for business success. On the one hand they have to encourage diversity of local action, so that what is done fits local circumstances. On the other hand their global thinking requires careful coordination as the way to synergy, so that the global business does more and better together than it could possibly achieve as a number of independent units.

Bartlett and Ghoshal (1989) described three conventional approaches to coordination that were used, stemming from the nationality of the parent company, the Japanese, the American and the European.

2.1. Japanese centralisation

The typical Japanese approach is for a strong headquarters group to keep for themselves all major decisions and frequently to intervene in the affairs of overseas subsidiaries. This appears to stem from their difficulty in dealing with foreigners:

a major strategic challenge for Japanese firms is to accept that non-Japanese must somehow be given more direct responsibility and opportunity for promotion within the company at local level . . . there has to be letting-go from the centre. But this is no easy thing. For companies must overcome severe impediments associated with wariness, distrust and lack of knowledge about the world beyond Japan. (Holden 1994, p. 127)

2.2. American formalisation

The American approach is described as formalisation. Power is vested not in head­quarters or in the managers of local companies, but in formal systems, policies and standards, so that it is the systems that drive the business. Many American businesses went international at the time that the use of control systems was being rapidly devel­oped to cope with the large size of the businesses. The idea of delegation and holding others accountable by means of extensive computerised information systems seemed eminently suitable for operating the increasing number of overseas units, especially when one remembers the apparent unpopularity of overseas postings among American managers (e.g. Tung and Miller 1990).

2.3. European socialisation

In European companies the approach to coordination is described as socialisation. There has been a reliance on key, highly skilled and trusted individuals. These people were carefully selected and developed a detailed understanding of the company’s objec­tives and methods. Their personal development included the establishment of close working relationships and mutual understanding with colleagues. Once groomed these key decision-makers were despatched to manage the subsidiaries, so that the head­quarters and the subsidiaries were both strengthened.

because it relies on shared values and objectives, it represents a more robust and flexible means of co-ordination. Decisions reached by negotiations between knowledgeable groups with common objectives should be much better than those made by superior authority or by standard policy. (Bartlett and Ghoshal 1989, p. 163)

These three different approaches worked best for companies headquartered in those three regions of the globe. As the world becomes smaller and companies become more diverse, with subsidiaries that are fully mature, more sophisticated methods are needed: companies are not international, but global. The influence of the parent company’s national culture remains strong, but there is a cosmopolitan tendency gradually blurring some of the traditional boundaries. Before getting too excited about this we should remember the post-Hofstede research of Laurent (1989) that differences in values and beliefs tend to survive the growing homogeneity of business practices. He showed that French and American managers working in the same division of a large US oil company expressed more diverse views about the role of managers than French and American managers from different companies.

3. Increasing the range of coordination methods

Any management will benefit from considering additional methods of coordination. Some of our suggestions will fit well with their current practice, adding to their strength; others will not yet seem suitable, others will not seem suitable at all.

The first suggestion is summed up by using the word evangelisation, to describe winning the acceptance throughout the business of a common mission and a shared purpose. The need to win hearts and minds has been a thread in management thinking for many years, but it is particularly significant in the international or global business because of the number of barriers to be overcome in coordination, especially the barriers of language, culture, national boundaries and parochial self-interest. It is a remarkable management team who, for instance, will be able to commit themselves with enthusiasm to closing down their local operation on the grounds that the business as a whole will benefit if an operation in another country is developed instead.

Coordination by evangelisation works through shared belief. The beliefs may be interpreted in different ways and may produce varied behaviours, but there is the attempt to spread relatively simple doctrines to which members of the business subscribe and through which they are energised. Some readers of this book will have learned their catechism as children, or will know the Gettysburg Address by heart. Although this may seem inappropriate to the business world, in the 1970s a British company, Vitafoam, was established by a man who required his senior executives to copy out his annual policy statement by hand, three times, before handing it back to him. It is now common­place for companies to have mission statements, which come close to being unifying articles of faith.

Evangelisation also works through parables. We all love a good story and we learn from the message that the stories convey. Ed Schein (2004, pp. 237-42) identified ‘stories and legends’ as one of the key mechanisms for articulating and reinforcing the organ­isation’s culture. The company house magazine partly serves the purpose of circulating the good news about heroic deeds in all parts of the company network. Better are the word of mouth exchanges and accounts of personal experience. Those who visit another country have to be fully exploited when they return. Returning expatriates have stories to tell to all members of the company to which they are coming back, not just to the senior managers conducting the debriefing. There are many problems in repatriation, but one of the best ways of getting re-established is to share one’s overseas experience widely, with as many people as possible, covering the full range of their experiences. Occasional visitors to other branches of the business also need to be encouraged to tell their stories. They return with important technical understandings that need to be shared, but they also return with an awareness of the visited company which can contribute to the bonding between units. On a tedious flight between Istanbul and Singapore, an Australian businesswoman spent over an hour sorting through a large number of holiday snaps, explaining that she regarded them as the most important pre­sent she could bring back. Her male colleagues brought back photographs of machine parts, warehouse layout, operational equipment and production processes. These were used at important debriefing sessions with fellow managers. She brought back pictures of people and places, of food and mealtimes, of cluttered offices and what was put up on the office walls. These were handed round and explained in casual encounters over coffee, on the way to and from meetings and at dinner parties.

Evangelisation can use apostles, ambassadors sent out to preach the faith. These are those management role holders who are constantly on the move. Because of their frequent movement they know the worldwide organisation well and can describe one component to another, explaining company policy, justifying particular decisions and countering parochial thinking. They can also move ideas around (‘In Seoul they are wondering about . . . what do think?’) and help in the development of individual networks (‘Try getting in touch with Oscar Jennings in Pittsburgh … he had similar problems a few weeks ago’).

At times of crisis, apostles are likely to be especially busy, countering rumour and strengthening resolve. In mature companies apostles will have home bases in different regions, just as expatriates will move in various directions and not simply from the centre out, but before the business reaches maturity it will probably be important that most of the apostles come from headquarters and have personally met, and can tell stories about, the founder.

Coordination can be improved by the development and promulgation of standards and norms. Many British companies have sought the accreditation of BS 5750, the British Standard for quality, others claim to be equal opportunity employers. Global companies will wish to set standards for many aspects of their operation. Cynthia Haddock (1992) describes how Shell develop and maintain standards relating to alcohol and drug abuse. If standards are adopted throughout a global company, they become a form of coordina­tion. Furthermore it is not necessary for all of them to be developed at the centre. Decentralised standard formulation can enable different parts of the global business to take a lead as a preliminary to universal adoption of the standard they have formulated: an excellent method of integration.

Few businesses will be able to develop universally applicable standards in all aspects of human resource management. Many manufacturing developments in Asia have occurred for the explicit reason that the area enables organisations to enjoy the bene­fits of low labour costs. It is most unlikely that the American/European/Japanese parent company would develop a company-wide standard on the level of pay rates in manufacturing. In contrast a company-wide standard set of terms and conditions for expatriate assignment would be much more feasible.

There is obvious scope for coordination through systems. Many global businesses are dominated by a single system, which reaches every part of the business. Any international airline has a ticketing and booking system which links thousands of computer terminals in order to operate the airline. The system is only useful if it provides the global link, and provision of the systems link constantly reinforces with all personnel the interrelationship of the airline’s activities in all countries where it operates. Although that is a specialised example, all businesses have systems and they can be developed to avoid duplication and overlap, so that in one country a team develops a spare part retrieval system that is quickly adopted for use throughout the business, while in another country they concentrate on an aspect of accounting procedures or systematic advice on training opportunities.

A similar approach is to concentrate capability by encouraging the development of particular expertise in different locations, but for group-wide application and exploita­tion. Bartlett and Ghoshal (1989, p. 106) offer the intriguing example of how Teletext was developed by Philips. Because of an interest from the BBC, the British Philips sub­sidiary began work on the possibility of transmitting text and simple diagrams through a domestic television set. Within Philips generally it was regarded as ‘a typical British toy – quite fancy but not very useful’. Despite little encouragement and sales that were

initially disappointing, the British persisted. Ten years after starting work, there were three million Teletext receivers in use in Britain and Philips had established a world lead in a product for which there was initially only a British market.

Source: Torrington Derek, Hall Laura, Taylor Stephen (2008), Human Resource Management, Ft Pr; 7th edition.