Managing in a Global Environment

Managers working in foreign countries often face tremendous personal difficulties. In addi- tion, they must be sensitive to cultural subtleties and understand that the ways to provide proper leadership, decision making, motivation,  and control vary in different cultures. A clue to the complexity of working internationally  comes from a study  of the factors that contribute to failures by global managers. Based on extensive interviews  with global manag- ers, researchers found  that personal traits,  the specific cultural context,  or management mis- takes by the organization  all could contribute to failure in an international  assignment.61

1. DEVELOPING CULTURAL INTELLIGENCE

When managing in a foreign country, the need for personal learning and growth is crucial. The managers who will be most successful in foreign assignments are culturally flexible and able to adapt readily to new situations and ways of doing things. Managers working inter- nationally must have cultural  intelligence  (CQ), the ability to use reasoning  and observation skills to interpret unfamiliar gestures and situations and devise appropriate behavioral  responses.62 A manager working in a foreign country must study the language and learn as much  as possible about local norms,  customs, beliefs, and taboos.

That information alone, however, cannot prepare the manager for every conceivable sit- uation. Developing  a high level of CQ enables a person to interpret unfamiliar situations and adapt quickly. Rather than a list of global “do’s and don’ts,” CQ is a practical  learning approach that enables a person to ferret out clues to a culture’s shared understandings  and respond to new situations in culturally appropriate ways.

Cultural intelligence  consists of three components that work together: cognitive, emo- tional,  and physical.63  The cognitive component  involves a person’s observational and learn- ing skills and the ability  to pick up on clues to understanding. The emotional aspect concerns one’s self-confidence and self-motivation.  A manager has to believe in his or her ability to understand and assimilate into a different  culture. Difficulties and setbacks are triggers to work harder, not a cause to give up. Working in a foreign  environment  is stressful, and most managers in foreign  assignments face a period of homesickness, loneliness, and cul- ture shock from being immersed suddenly in a culture with completely different languages, foods, values, beliefs, and ways of doing things.

Culture  shock is the term referring to the frustration and anxiety that result from constantly being subjected to strange and unfamiliar  cues about what to do and how to do it. A person with high CQ is able to move quickly through this initial period of culture shock.

The third component of CQ, the physical, refers to a person’s  ability to shift his or her speech patterns, expressions, and body language to be in tune with people from a different culture. Most managers aren’t equally strong in all three areas, but maximizing cultural in- telligence requires that they draw upon all three facets. In a sense, CQ requires that the head, heart, and body work in concert.

High CQ also requires that a manager be open and receptive  to new ideas and ap- proaches. One study found that people who adapt to global management most readily are those who have grown  up learning how to understand, empathize, and work with others who are different  from themselves. For example, Singaporeans consistently hear English  and Chinese spoken side by side. The Dutch have to learn English, German, and French,  as well as Dutch, to interact and trade with their economically dominant neighbors. English Canadians must be well-versed in American culture and politics and also have to consider the views and ideas of French Canadians, who, in turn, must learn to think like North Americans, member of a global French community, Canadians, and Quebecois.64 People in the United States who have grown up without this kind of lan- guage and cultural diversity typically  have more difficulties with foreign assignments, but willing managers from any country  can learn to open their minds and appreciate other viewpoints.

2. MANAGING   CROSS-CULTURALLY

Which two of the following three items go together: a panda, a banana, and a monkey?  If you said a monkey  and a banana, you answered like a majority of Asians. If you said a panda and a monkey,  you answered like a majority  of people in Western Europe and the United States. Where Westerners see distinct  categories (animals), Asians see relationships (mon- keys eat bananas).65 Although this test is not definitive, it illustrates an important reality for managers: The cultural differences in how people think and see the world affect working relationships. To be effective on an international  level, managers have to interpret the cul- ture of the country and organization in which they are working  and acquire the sensitivity required to avoid making costly cultural blunders.66

In addition to developing cultural intelligence,  managers can prepare for foreign assign- ments by understanding how the country differs in terms of the Hofstede and GLOBE social values discussed earlier in this chapter. These values greatly influence  how a manager should interact with subordinates and colleagues in the new assignment. For example, the United States scores extremely high on individualism,  and, to be successful, a U.S. manager working in a country  such as Japan, which  scores high on collectivism, will have to modify his or her approach to leading and controlling.

Leading. In relationship-oriented  societies that rank high on collectivism,   such as those in Asia, the Arab world, and Latin America, leaders typically take a warm, personalized approach with employees. One of the greatest difficulties U.S. leaders encounter in doing business in China, for example, is failing to recognize that to the Chinese, any relationship is a personal relationship.67  Managers are expected to have periodic social visits with work- ers, inquiring about their morale and health. Sometimes the socializing can be excessive, as shown in the Benchmarking feature. Leaders should be especially careful about how and in what context they criticize others. To Asians, Africans, Arabs, and Latin Americans, the loss of self-respect brings dishonor to themselves and their families. The principle of saving face is highly important in some cultures.

Decision Making.  In the United States, on the one hand, mid-level  managers may discuss a problem  and give the boss a recommendation. On the other hand, managers in Iran, which reflects South Asian cultural  values, expect the boss to make a decision  and issue specific instructions.68 In Mexico,  employees often don’t understand participatory de- cision making. Mexico ranks extremely high on power distance, and many workers expect managers to exercise their  power in making decisions and issuing orders. American  manag- ers working  in Mexico  have been advised to explain a decision rarely lest workers perceive this  as a sign of weakness.69

In contrast, managers in many Arab and African nations are expected to use consultative decision making in the extreme.

Motivating.  Motivation must fit the incentives within the culture. One study, for ex- ample, confirmed that intrinsic  factors such as challenge, recognition, and the work itself are less effective  in countries that value high power distance. Possibly workers in these cul- tures perceive manager recognition and support as manipulative and, therefore, demotivat- ing.70 In places such as the United States and the United Kingdom, by contrast, intrinsic factors can be highly motivating.  In Japan, which  values collectivism,  employees are moti- vated to satisfy the company. A financial bonus for star performance would be humiliating to employees from Japan, China,  or Ecuador.

An American  executive in Japan offered  a holiday  trip to the top salesperson, but the employees weren’t interested. After he realized  that  the Japanese are motivated in groups, he changed the reward to a trip for everyone if together they would achieve the sales target. They did. Managers in Latin America, Africa, and the Middle East improve employees’ motivation by showing respect for them  as individuals with needs and inter-ests outside of work.71

Controlling.  When things go wrong, managers in foreign countries often are unable to get rid of employees who do not work out. Consider the following research finding: When asked what to do about an employee whose work had been sub par for a year after

15 years of exemplary performance, 75 percent of Americans and Canadians said “fire her”; only 20 percent of Singaporeans and Koreans chose that solution.72 In Europe, Mexico, and Indonesia, as well,  to hire and fire based on performance  seems unnaturally brutal. In addi- tion, workers in some countries are protected by strong labor laws and union rules.

In foreign cultures, managers also should not control the wrong things. A Sears man- ager in Hong Kong insisted that employees come to work on time instead of 15 minutes late. The employees did exactly  as they were told, but they also left on time instead of working into the evening as they had previously.  As a result,  a lot of work was left unfin- ished. The manager eventually told the employees to go back to their old ways. His attempt at control  had a negative effect.

Source: Daft Richard L., Marcic Dorothy (2009), Understanding Management, South-Western College Pub; 8th edition.