SoftSkills
Competing in the Global Market:
The Influence of Culture
Tim Walker, Chief Operating Officer, Training Management Corp.
The pace of globalization, despite its critics around the world, continues unabated.
This reality raises increasingly pressing
management issues for multinationals
engaged in today’s complex and rapidly
changing environment.
A key challenge within this context emergWalker
es from doing business across regions and
national boundaries. To prepare for continued success and growth internationally, companies need to equip
their managers with an awareness and knowledge about differences
between national cultures. Despite an increasingly cross-border
business world, the emergence of “culture-free” business practices
has yet to materialize; in fact, the complexities associated with differing beliefs and practices remain distinct challenges in spite of the
growing interdependence among countries.
One feature of today’s global business environment is clear:
Cultural differences persist and influence business outcomes.
Therefore, as organizations extend their geographical reach, several
key questions can help initiate the journey of exploring and developing intercultural cooperation in a business context.
• How do multinational companies develop cultural competency
and acknowledge cultural values as a factor in creating a synergy
between individual insight, regional needs, and the different
parts of the company to support strategic business imperatives?
• When does the process of building the culturally competent
organization begin?
• What steps compose an effective cultural-orientations approach
that encompasses building the skills, tools, and support mechanisms that organizations/managers need to succeed?
Decoding the Cultural Dimension
The scope and impact of culture on international management
practice are broad and bring to the forefront a number of critical
issues that face many global organizations. From a cultural-differences perspective, today’s effective global manager must be
able to deal with
• Defusing the strain between a strong corporate-headquarters
mindset and the realities of the local marketplace.
Tim Walker, Chief Operating Officer of Training Management Corp.
(TMC), brings more than 25 years of international experience in
working and living across cultures. He is the author of Doing Business
Internationally: The Guide to Cross-Cultural Success and Sales and
Marketing across Cultures. Information about TMC is available at
www.tmcorp.com.
• Sensitizing managers to cultural differences when interacting
across national boundaries in a virtual matrix structure.
• Leveraging the leadership and organizational-change potential
of managing diversity and inclusion within a global workforce.
• Capturing creativity and innovation from the cross-fertilization
of ideas across national boundaries.
• Managing learning about how cultural differences impact the
shifting of major organizational processes offshore, such as
outsourcing.
These and many similar issues elevate the importance of building
cultural competence. As a culturally competent organization, companies can be responsive, agile, and adaptable in recognizing and
responding to these issues while controlling more proactively their
ability to compete globally on several crucial levels:
• Individual level—enabling individual employees, managers, and
leaders to operate effectively in the ambiguity, uncertainty, and
complexity of a culturally diverse employee, customer, and supplier base and geographically dispersed matrix relationships.
• Team level—enabling a team or work group to integrate new
talent; leverage knowledge and skill resources effectively;
engage its stakeholders; develop and sustain effective and
inclusive operating practices; and adapt to change.
• Business-unit/functional level—enabling the bridging of cultural
gaps and the effective exchange of knowledge, creating compatible
business processes and practices and developing synergies between
functional business cultures as well as customers and suppliers.
• Organization level—enabling the organization to adapt and
develop its culture strategically to the changing performance
and talent requirements of the global marketplace.
Appreciating the Impact of Culture
Cultural Boundaries Are Not National Boundaries. The concept
of cultural boundaries is often used interchangeably with those
of geographical and political boundaries (i.e., the nation). This
notion has served well those businesses that divided the world
into neat geographic regions and serviced them with a multinational organizational structure—a perspective no longer attuned
to the realities of the global workplace.
Culture Is a Shared Pattern of Ideas, Emotions, and Behaviors.
Culture operates on both a conscious and subconscious level; at
both a group and individual level. It is useful to think of culture
as an iceberg (Fig. 1). The tip of the iceberg symbolizes the level
of behavior and other observables/tangibles (i.e., the world of
manifestations). Beneath the level of our daily awareness, this
behavior is linked to a world of values that is shared by a group.
This internal world, which consists of ideas and their emotional
value, is symbolically expressed as the bottom of the iceberg.
In this issue of TWA, which highlights India and China, we are pleased to include an article on the influence of culture on competing in the global market. The article
provides tips on how to build a culturally competent organization. It describes how culture affects the way in which companies do business in today’s global market and
also presents insight into the similarities and differences in the values, culture, and management practices of India and China compared to other regions. Armed with
the knowledge gained from reading this article, you will be well on your way to building a high-performance team that is part of a culturally competent organization.
Natalie Pestana, TWA Interim Soft Skills Editor
18
SOCIETY OF PETROLEUM ENGINEERS
Fig. 1—The iceberg of culture.
• Cultural due diligence—the practice of assessing and preparing
for the possible impact of culture.
• Style switching—the ability to use a broad and flexible behavioral repertoire in order to accomplish one’s goals.
• Cultural dialogue—the ability to elicit cultural information
through conversation, and thereby clarify cultural underpinnings of behavior and performance, close cultural gaps, and
create cultural synergy.
• Cultural mentoring—the ability to facilitate cultural understanding and integration to a new and different cultural environment.
Building Cultural Competence
Cultural competence is, therefore, an increasingly important
characteristic defining a successful global manager. Whether one
is relocating to a different country, on a temporary assignment,
part of a regional or global team, or leading a regional or global
project, the ability to transcend cultural differences in the pursuit
of business objectives is a critical skill set.
How Do Cultural Differences Affect Work and Management
Practices? It is difficult to provide a succinct overview of all the
aspects of culture that affect work and management practices.
Generally, individual value orientations and social norms do influence the behaviors of leaders, managers, and employees. TMC has
developed the Cultural Orientations Model, composed of 10 dimensions that exert an influence on work behavior and management
practice: environment, time, action, communication, space, power,
individualism, competitiveness, structure, and thinking (Fig. 2).
The model is embedded in a five-step skill-building process that
begins critically with open-mindedness to differences, a willingness
to change, and a desire to enhance one’s skills and abilities (Fig. 3).
Through this learning process, global managers can acquire and
deploy a cultural skills set, as an essential part of their managerial
toolkit, composed of four key skills.
Doing Business in India and China
The degree to which culture can impact managerial effectiveness
is best illustrated by highlighting the challenges of working with
colleagues and partners from specific countries, such as India
and China, two of the world’s fastest-burgeoning economies. As
each country is undergoing momentous change, it is important
to remember that their cultures seek continuity, underscoring
the need to be patient in developing and nurturing links and
relationships in India and China.
As these countries turn their attention to strengthening their
ability to compete in the global economy, they face a new challenge—developing international expertise and gaining exposure to
the developed world. In particular, they must acquire the skills and
tools to lead and manage people in order to interact effectively with
their counterparts from around the world. Similar challenges face all
that aspire, in turn, to do business with India and China (i.e., getting firsthand knowledge about the cultures and business contexts
of these countries).
The contrasts of culture are no better shown than in the interactions that American or Northern European managers have with
their counterparts in these two countries. Critical insights can be
gained by reviewing the core cultural values of these countries and
the impact these values have on interpersonal interactions and
management practice.
To avoid stereotypes, a starting point may be to access the Cultural
Navigator, a TMC Web-based learning resource, to review general
country information as well as evaluate the cultural norms of India
and China. To build on this background and create an appreciation
of the complexity for cultural differences that influence the conduct
of business across national boundaries, consider four perspectives
that expose how our mindset needs to change while revealing the
intricacies facing us (Fig. 4).
Gap Analysis. By comparing country-to-country background
data, we can discover where there may be gaps or “social distance”
Fig. 2—The Culture Orientations model.
Fig. 3—The five-step skill-building process.
In simplistic terms, the shared linkage between a behavioral
expression (a handshake or a bow) and an idea or notion constitutes a norm. If we observe, for example, that a particular group of
people tends to shake hands upon meeting, we may call this behavior the social norm for this group. The shared linkage between an
idea/notion and an emotion can be considered a value.
The connection between norms and values is recognized by
defining culture as the complex pattern of ideas, emotions,
and observable/symbolic manifestations (including behaviors,
practices, institutions, and artifacts) that tends to be expected,
reinforced, and rewarded by and within a particular group.
THEWAYAHEAD
19
Conducting
gap analyses
Appreciating
value
differences
Revealing
differences
in management
practice
Analyzing
culture
clashes
Fig. 4—Four perspectives that reveal possibilities for change.
among national cultural norms. Cultural gaps are important in that
they may represent barriers preventing the trust and confidence
essential to relationship building.
By applying the skills of cultural due diligence and style switching
from the managerial toolkit described above, we can begin to effectively close the gaps between differences in cultural orientations. Opening
one’s mindset to new possibilities (i.e., viewing the world differently or
adjusting management practice on the basis of differences in cultural
values) is a critical choice in building cultural competence.
Using the gap-analysis tool can reveal potential differences along
the dimensions of the Cultural Orientations Model and stimulate
critical awareness. For example, the contrast between fixed and fluid
orientations to time, if not acknowledged, can lead to frustration,
impatience, and organizational ineffectiveness. In the case of India
and China, consider what the cultural differences are, what potential
conflicts might arise, and how we can use cultural knowledge to
resolve these gaps or differences.
United States—Fixed
• Time is defined precisely.
• View good time management as a critical professional attribute.
• Make frequent reference to time and time constraints.
China—Fluid
• Must balance demands of deadlines against the importance of
building strong relationships.
India—Fluid
• Define time loosely and generously.
• Know foreigners are punctual; make concerted efforts to be
on time.
Potential Conflict (from a U.S. perspective)
One’s preference may lead to frustration and lower productivity.
You may
• Be perceived as rigid and inflexible.
• Reject tasks that would change your plans, and thus appear
uncommitted to overall goals.
• Become irritated when plans and tasks take longer than
expected.
Resolution (from a U.S. perspective)
It is critical to bridge this gap and adapt one’s style.
• Try to see time as relative rather than absolute.
• Develop patience for business situations that are dictated by a
fluid time orientation.
• Build in flexibility when scheduling and establishing timelines.
Value Differences
An equally critical step is to consider the fundamental differences in
cultural values and mindsets from an Indian and Chinese perspective as well as how these differences can impact business interactions. It is evident that Chinese and Indian business networks are
noticeably sustained by cultural values and tradition. When these
values disappear, the networks collapse and successful business
relationships can be seriously, if not irreparably, compromised.
As within any culture, values vary across national boundaries,
and their interpretation on the local scene can be complex and
nuanced. To illustrate the significance of values, two key cultural
20
values have been identified as representations of the Chinese and
Indian cultures.
• Relations, connections [Guangxi (Mandarin) in China;
Rishtaa (Hindi) in India]. A person is defined not so much as
an individual, but rather as members of families and social networks. Family members have primary relationship status, friends
and close colleagues have secondary status, and business associates and acquaintances rank third. In Indian society, for example,
the value of self-identity and community membership, shared
with a partner or colleague, remains a central life experience.
Implications for western managers: Social networks are the
basis on which trust is established, reciprocated, and developed.
Trust is an essential characteristic of social networks and therefore
must be established before any serious business relationship can be
cemented. Business relationships based on personal trust will endure
greater stress and demonstrate greater adaptability. Developing relationships built on connections among counterparts may take more
time to mature than in the West and require considerable patience
and flexibility.
Mindset Change: Focus on developing relationships and building trust before and during business transactions and interactions.
Tasks are accomplished once trust is established.
• Face, honor [mianzi/lian (Mandarin) in China; Izat (Hindi)
in India]. A sense of dignity and honor that is maintained in their
social networks. Instead of “saving face” or rescuing others from
embarrassment, one tends to think in terms of giving and getting
face. There are a myriad of ways to give “face,” such as accepting
business cards properly, addressing people by their surnames and
titles, and hosting meals for others. Losing face occurs through
the actions of others, i.e., when one is criticized, reprimanded,
or made fun of.
Implications for western managers: “Face” is a concept of central importance because of its universal influence in interpersonal
relations for Chinese and Indians. “Loss of face” makes it impossible
for the individual to function properly within the business or social
community of which they are a part; colleagues or partners will no
longer have confidence in the persons or companies concerned.
Mindset Change: “Saving face” and protecting one’s “honor” are
guidelines affecting all successful professional and personal interactions in China and India. The key is to “save” the other person’s
“face” and “honor” at least as much as one’s own, if not more.
While these values may have their counterpart in Western societies, the significance of the differences is important, and there need to
be fully understood when working closely with Indians and Chinese.
Value differences influence the way we behave, think, manage, and
work with others from different cultural backgrounds.
Management Practice Differences
Understanding value differences leads to a better appreciation
for the nuance and influence of culture on business interaction.
Taking our exploration a step further, consider the impact that
culture exerts on managerial practice. This can be illustrated by
comparing a representative list of six managerial competencies
selected from more than 20 commonly recognized managerial
competencies (Table 1).
Through comparisons of this kind, the implication of values gaps/
differences or social distance becomes clearer in terms of the potential impact on business interactions. In turn, an in-depth awareness
and knowledge of each national culture and its cultural values can
SOCIETY OF PETROLEUM ENGINEERS
enhance the individual’s and organization’s ability to build stronger
interpersonal relationships when dealing across national boundaries.
Analyzing Culture Clashes. Drawing upon country-specific
knowledge, a variety of comparative-analyses data sets, and one’s
cultural skill set, a manager is now better equipped to approach a
specific country cultural circumstance with heightened understanding and confidence. In the scenarios that follow, one can apply one’s
cultural toolkit to resolve day-to-day intercultural work situations
for increased efficiency and productivity. How do you think you
would address these cases?
India
You receive a call from one of the Indian Alphacorp managers who
was involved in contract negotiations several months ago. She indicated her dissatisfaction, but she did not elaborate on any specific
concerns. Although you have moved to a different position and new
responsibilities, you checked with the technical experts and the
implementation team. You find out that everything was delivered
and installed according to Alphacorp’s specifications. Recent testing
indicated superior systems performance. How can you resolve this
issue? (Fig. 5).
Solution: The best approach to resolving this situation would be
to schedule a visit with your successor at Alphacorp, to explore the
source of the client’s dissatisfaction.
Analysis: This scenario demonstrates a gap between being
and doing orientations in the context of a project. Alphacorp is a
being-oriented, or relationship-centered, organization. As such, it is
important for its managers to establish strong, trusting relationships
between employees as the foundation for business transactions. It is
very likely that the source of dissatisfaction is that you have moved
into a different position, and a trusting relationship has not yet been
established with your successor. Sending a technical expert cannot
adequately substitute for this loss. Rather, transferring the relation-
ship to your successor through a joint visit to Alphacorp will give
this being-oriented customer needed assurance.
China
On the basis of your success at the U.S. headquarters as a sales
manager, you are sent to China to oversee the creation of a new
department. You are fluent in both Mandarin and Cantonese, so
verbal and written communication is not a problem. During your
first meeting with the new department, you discuss in detail and in
Mandarin your motivation and interest in making this department
one of your organization’s top business units. You tell them about
an incentive program you have created that will allow each member to excel and be rewarded for individual contributions. You make
decisions and implement changes you feel will help you achieve
this goal. After a few days, it becomes apparent that your Chinese
subordinates are not enthusiastic about your plans. Why are they
upset? (Fig 6).
Solution: The Chinese would prefer to be treated as a group and
not receive individual recognition for contributions.
Analysis: It is inaccurately assumed that the competitiveness used
as motivation and incentives for sales forces in the U.S. will have
the same impact with members of a Chinese sales force. Such an
approach will be unpopular with the Chinese for at least two reasons:
The culture is much more cooperative in nature than in the U.S.,
using established networks to accomplish goals, and the Chinese
would prefer group recognition to having individuals excel.
As these two scenarios show, cultural awareness and understanding differences in cultural norms and values are crucial elements of
a global manager’s skill set. Cultural competence enables both the
organization on a strategic level and a manager or team on a tactical
level to resolve issues and compete in today’s complex cross-border
marketplace. Without cultural competence, what are the implications of remaining unaware of the impact social distance or gaps
TABLE 1
Value
India
United States/ Northern Europe
Motivation
Indians are motivated by both group and individual achievements.
Personal achievement; motivated by own accomplishments and recognition; highly competitive.
Motivation through group rather than individual achievement.
Decision
Making
While decision making may appear to involve
group consensus, the final decision ultimately
falls on a single top decision maker.
Authority and responsibility within a given area;
brainstorming in meetings common; individual
decisions and solutions sought.
Strong centralization of decision making
and decentralization of responsibility. Topdown and strongly hierarchical.
Source of
Authority
Caste, title, age, and position.
Title, position, expertise, and experience.
Title, position, expertise, and connections.
Timelines
Deadlines are fairly open. Unless it is
specified that the deadline is critical, Indians
assume that the deadline is flexible.
Strict timelines on work assignments; schedules
are taken seriously. Punctuality is important.
Targets and goals are set; however,
deadlines are generally flexible when
external forces intervene.
Conflict
Management
Indians prefer to avoid conflict, and they usually engage in intellectual debate, using emotion to emphasize a point.
Constructive confrontation is positive. Brainstorming and playing the “devil’s advocate”
leads to the best solution. Direct approaches
are preferred over indirect ones.
Use of less overt methods to signal disagreement. Deference to hierarchy and power.
Saving face results in indirect communication.
Organizational
Structure
Indian corporations are rigidly organized and
hierarchical, and they maintain a highly centralized power structure.
Centralized, especially in larger companies.
As the Chinese economy grows more
diverse and new private and foreign-run firms
become more common, the organizational
structure of all firms is likely to become more
flexible and decentralized.
THEWAYAHEAD
China
21
Fig. 5—Assessing problem
through a cultural lens.
Fig. 6—Using the wheel for
doing business in China.
might have in these situations? What repercussions may result if the
gaps between managers andteams persist?
Cultures in Transition—The Challenge Going
Forward
Building cultural competence is a multifaceted process accelerated by the day-to-day reality of working across national boundaries. Indian and Chinese management culture is in a time of
transition—on a local level, cultural values and norms continue
to exert a strong influence, while on an international level, the
influences of globalization, technology, and Western management practices have increased over the past decades. While
China and India push to acquire knowledge of, exposure to, and
experience in Western management practices, their counterparts
around the world seek market penetration and business growth
in these countries.
The degree to which Indian and Chinese management systems
change, and the speed of that change, are at the crux of the debate
about transition. Regardless of the pace of change, it is important
to appreciate that traditional cultural values, such as the concept of
hierarchy, the nature of social and community networks, the implication of continuity and stability, and a prevalence for flexibility
and ambiguity, continue to impact managerial practice and remain
influential features of the cross-cultural management landscape.
For managers and organizations doing business in India and
China, a clear appreciation of individual and national cultural values
and norms is essential—be it for the Western expatriate manager in
India/China or his/her country counterpart engaged in outsourcing
or offshoring activities with the West or as a leader of a multicultural virtual team. While work circumstances do not always reflect
cultural differences, evidence shows that issues of this nature are an
inevitable thread in the fabric of management practice and personal
interaction.
While intimidating and frustrating at times, the good news is that
cultural challenges are manageable by acknowledging cultural gaps
openly and resolving them cooperatively by using available cultural
knowledge, country information, and personal dialogue to develop
core cultural competence skills to sharpen one’s mindset for the
global marketplace.
TWA
TechnicalLeaderInterview Continued from page 8
to support enhancement of the website. Several companies have
made contributions to get younger SPE members involved in SPE.
Halliburton pays the dues for SPE student members, and BJ Services
pays for an eLibrary subscription for universities that have an SPE
student chapter. Schlumberger and Saudi Aramco sponsor The Way
Ahead. Companies like this understand the tremendous value SPE
offers, and they take advantage of that value.
On the other hand, many companies do not understand the value
of SPE. They want employees to be working on issues that will
impact their bottom line and do not encourage much involvement
in SPE. As an employee, you need to be sensitive to this issue and try
and work your SPE activities into your schedule without interfering
with your normal workload.
Finally, because you have had a varied career
working for a service company and operators,
what would you say if you had to give a brief
speech to young E&P professionals about the
attractions of the industry, and specifically the
technical challenges of working for an operator
vs. a service company?
When I quit Dowell, Ken Nolte (pioneer of the famous paper on the
Nolte/Smith analysis techniques we use today), who had worked for
22
Amoco and then Dowell Schlumberger, wrote me a long letter telling me that it was a mistake to quit and go to work for an operator.
In essence, he told me that the really great thing about working for
a service company is the very wide variety of problems and reservoirs you get to work on. However, I was struggling some because I
never saw the results of my work (except, of course, when the work
failed). I wanted to see what happened to the wells I worked on,
to see the benefits of a good completion and to have more control
over what was being done on a particular well. I was somewhat
naive in this view because, after working for an operator for some
time, I found that in many cases the operator just turned the well
over to the service company and did what the service company told
them to do. Service companies have put “desk engineers” into the
operators’ offices, and they have a lot of say in what is to be done
in a particular well. The really great thing about this is that it keeps
me in a job. By having experience on both sides, I know how the
service company thinks, and I also know what is best for the wells
that are now mine.
TWA
Do you want to know more about this topic or comment on this article?
Visit the Young Professionals Network at www.spe.org.
SOCIETY OF PETROLEUM ENGINEERS