While this presents opportunity, there are also challenges and risks!
Performing effectively in multicultural environments requires business leaders who are culturally diverse. This need poses a serious risk, as our own cultural ‘programming’ and ‘conditioning’ is, regrettably, often grossly underestimated.
It can be a very costly error to assume that executives or leaders who are successful in one country or culture will be successful in another.
Global vs Domestic Leadership
Contrary to what many business executives believe, global leadership is not a case of simply applying general management and leadership principles in the global context. This is because the roles and environments global leaders encounter are different from those of domestic leaders.
Global leaders work with cross-border and cross-cultural responsibilities. As a result, they need to: understand business from a worldwide rather than a countrywide perspective; balance potentially contradictory demands in a global environment; work harmoniously with multiple cultures at any given time; and find balance between global integration and national responsiveness.
Conversely, expatriate managers traditionally focus on a single country and the relationship with headquarters.
Key requirements for global leaders
Global leaders face a number of greater leadership demands than domestic leaders, including:
- a broader knowledge to span functional and national boundaries;
- wider and more frequent boundary spanning in terms of travel and logistics;
- understanding a wider range of stakeholders;
- wide-ranging cultural understanding;
- more challenging and competing tensions, both on and off the job;
- ambiguity surrounding decisions and related outcomes and consequences; and
- far more challenging ethical dilemmas.
To competently manage these specific challenges, global managers must have greater aptitude than their domestic counterparts in these areas:
- emotional stability;
- negotiation; and
- ability to learn more.
Not surprisingly, as organisations increasingly operate on an international scale, their ability to attract and develop leaders who can perform at a global level provides them with a distinct competitive advantage.
Managing Cultural Differences
Business success relies largely on effective relationship management; leading people, influencing key stakeholders, communicating and negotiating with others. When working interculturally, global leaders must be aware of certain elements specific to each culture, in addition to organisational differences.
In his landmark research across cultures, Dutch social psychologist, Geert Hofstede, described culture as ‘the collective programming of the mind that distinguishes the members of one group or category of people from another’.
Culture is what determines the way ‘we do things around here’; the ‘unwritten rules of the social game’; and what we consider ‘normal’ in any given society. Ultimately it’s the ‘glue that holds societies together’.
Culture is learned behaviour centred on values and beliefs. It is also dynamic and changing. And, most of the time, it goes unnoticed until the unexpected happens or something goes wrong.
Cultural Risk: Three Common Sources
A good place to begin when entering the global leadership domain is by examining the most contrasting differences between the main cultural regions around the world.
Global leaders should be fully aware of three of the most common cultural dimensions that can lead to miscommunication, potential conflicts and reduced performance:
Individualism vs collectivism
This refers to the relationship between an individual and a group.
Individualistic cultures (such as the USA, Australia, UK and Canada) emphasise the ‘I’ over the ‘we’, and the sense of identity is based on the individual. In these societies, people are encouraged to rely on themselves, and everyone has the right to a private life and opinions.
In collectivist cultures (such as Central America and most Asian countries, including Malaysia, Indonesia, Thailand, Singapore, Hong Kong, Japan and Philippines), the interest of the group prevails over individuals, and the sense of identity stems from group affiliation. In these societies: rules promote unity, brotherhood, and selflessness; harmony is highly valued; and decisions are made according to what is best for the group.
Low context (direct) and high context (indirect) communication styles
Individualistic societies use low-context communication. Messages are direct, clear and highly explicit. Individualistic cultures consider a lack of assertiveness and personal skills as a communication barrier, due to their support for greater individual initiative.
Collectivist societies use high-context communication. In this case, messages are often highly coded and implicit. Information is ‘hidden’ in the text and the situation carries most of the information and meaning. In such cultures, you’re expected to ‘pick up the cues’.
This cultural dimension explains why the Japanese (for example) may perceive Westerners as offensively blunt or uncouth. Conversely, Westerners may perceive Japanese to be aloof, diffident, secretive and indirect with information.
Power distance and hierarchy
This refers to distribution of power and how members of a culture or society expect, or accept, such distribution. Therefore, understanding the cultural significance of power distance has strong implications for leaders and the leadership style they use.
In low power distance societies (such as Sweden, Netherlands, USA, Canada, Australia, Denmark and UK), power is expected to be distributed more equally. Status and formal position have limited influence. In these cultures, group participation is expected; individual autonomy is encouraged; work relations are more flexible; managers/leaders are more consultative; and subordinates work collaboratively with their bosses.
In high power distance societies (such as Malaysia, Indonesia, Philippines, India, China, South Korea, Arab countries, Panama and Mexico), people are willing to accept a less equal distribution of power. Hierarchy and authority levels are strictly marked, and in these societies: more autocratic or paternalistic attitudes are adopted; planning and organisational structures are more tightly controlled; employees accept being closely supervised and prefer the personal control of superiors; and subordinates expect bosses to take initiatives.
In closing, I would like to highlight that the cultural dimensions outlined above are also relevant to managers and leaders working within a multicultural environment in their own society. Therefore it’s important to understand their relevance when managing and leveraging from cultural diversity. poker oyna
Sebastian Salicru is a Global/Intercultural Strategic Leadership Advisor & Development, Facilitator and Executive Coach (Business Psychologist). He takes leaders and their teams to new levels in a globalised world where hyper-complexity is the new normal. Contact Sebastian on: firstname.lastname@example.org or 61+413 777 591.