2015 intercultural services | culture in organizations odnetwork presentation september 22 nd 2014...
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2015 Intercultural Services | Culture in Organizations
ODnetwork Presentation
September 22nd 2014
Culture in Organizations
CONSULTING • TRAINING • PROJECTS
2015 Intercultural Services | Culture in Organizations
• How important do you think intercultural topics and competencies are
in the future?
• How well are organizations integrating and managing cross-cultural
issues?
Questions
• Have you personally worked on any cross-cultural projects?Can you give any examples?
-2 2+0-1 1+
-2 2+0-1 1+
2015 Intercultural Services | Culture in Organizations
Agile Thinking Skills
Interpersonal and Communication
Skills
Global Operating Skills
Digital Skills
Managing multiple Scenarios
54.8%
Co-creativity and Brainstorming
54.8%
Ability to Manage diverse Employees
49.1%
Digital BusinessSkills 50.6%
Innovation46.0%
Relationship Building (across cultures)
47.4%
Understanding international Markets
45.7%
Ability to WorkVirtually
44.9%
Dealing with Complexity and Ambiguity
42.9%
Teaming (across cultures and virtually)
44.9%
Ability to work in Overseas Locations
37.5%
Understanding Corporate IT
40.1%
Managing Paradoxes, opposing Views
40.9%
Collaboration(across Cultures)
30.4%
Foreign LanguageSkills36.1%
Digital DesignSkills35.2%
Ability to see the “Big Picture”
15.3%
Oral and written Communication
29.0%
Cultural Sensitivity31.5%
Ability to useweb 2.0
29.3%
Skills for 2021
adapted from Oxford Economics Global Talent 2012
2015 Intercultural Services | Culture in Organizations
Future Topics – Readiness
adapted from Global Human Capital Trends, Deloitte 2014
Retention and Engagement
Global Leadership
Global HR and Talent Management
Reskilling the HR Function
Talen and HR Analytics
27%
28%
20%
36%
41%
38%
40%
45%
48%
54%
Business Leader HR Leaders
Top Five Trends In organizations with more than 100,000 employees
Company not Ready
2015 Intercultural Services | Culture in Organizations
Relevance of Culture
Reasons for Failure
Language and Culture
Inadequate due Diligence and Cultural RespectKüng, OSEC 2010
KPMG 1999
Harbir Singh, Wharton School, University of Pennsylvania 2013
Mergers & Acquisitions failure rate is as high as 90%
Mergers & Acquisitions
75% of companies involved in M&A regard culture as
key component in creating value. The impact of culture on M&A, Mercer 2009
2015 Intercultural Services | Culture in Organizations
Internal factors
External factors
Trends
Factors Influencing Companies
adapted from Braker & Walker 1995 / Stuber 2008
Productivity
Sales
CompanyImage
DemographyValues
Relationships
Markets
Customers
Politics
LawsTechnology
2015 Intercultural Services | Culture in Organizations
Internal factors
External factors
Trends
Factors influencing Companies
adapted from Braker & Walker 1995 / Stuber 2008
Currentand futureWorkforce
Attitudes
Preferencesand
Necessities
Employee Relations
Life Domain Balance
Productivity
Clients
Contracts
FinancialMarkets
ConsumersPreferences
Talent Pool
Ranking/Ratings
Customer Relationships
CompanyImage
Sales
CompanyImage
DemographyValues
Relationships
Markets
Customers
Politics
LawsTechnology
2015 Intercultural Services | Culture in Organizations
1970 1975 1980 1985 1990 1995 2000 2005 2007 201030
35
40
45
50
55
60
65
globalization.kof.ethz.ch / Konjunkturforschungsstelle, ETHZ 2010
KO
F I
nde
xGlobalization Worldwide
KOF Index measures 3 main Dimensions of Globalization:• Economic• Social• Political
2015 Intercultural Services | Culture in Organizations
2021 Talent Pool Worldwide
Oxford Economics Global Talent 2012
Talent Surplus Talent Deficit
2015 Intercultural Services | Culture in Organizations
Culture Definition
adapted from Selfridge and Sokolik 1975 / Brake & Waler 1995 / E. Schein 2010
General Culture
A system of rules, codes and symbols for the
interpretation of objects, incidents and human activities.
Culture determines how we view ourselves and others, how we behave,
and how we perceive the world around us.
Organizational Culture
A pattern of shared basic assumptions learned by a group
as it solved its problems of external adaptation and
internal integration (…) A product of joint learning.
Prerogative: The ‘chosen’ framework is the best and only valid one
2015 Intercultural Services | Culture in Organizations
National Culture(s) / Other Culture(s)
Unfamiliar Culture(s)
Culture Layers
adapted from Gardenswartz & Rowe 2006 / van den Bergh Thiagi 2006
Organizational and Professional Culture
FunctionLevel
UnionAffiliation
Work Content and Field
Seniority
LaborConditions
Work Place
ManagementStatus
WorkMotivation
Networks
Distanceto Work
Social Environment / Culture
FamilyStatus
Professional Experience
Educational Background
Religion and Convictions
IncomeLevel
RecreationalBehavior
HabitsDemeanor
Place of ResidenceFamily Culture
Nationality
Core Dimensions
Age
Gender
SexualOrientationPhysical
Abilities
Race
Ethnicity
PersonalityCulturally
focused / adapted
Main Focus
of Diversity
Initiatives
2015 Intercultural Services | Culture in Organizations
Culture in Business
Domestic OrganizationWithin one Country, only domestic cultures have an impact.
Some Products and Services might need to be localized.
adapted from Brake & Walker 1995
Import / Export / International OrganizationAbility to negotiate and do business with foreign distributors becomes necessary.
Negotiations, Products and Services adapt to local cultures.
Multinational OrganizationLocalized structure limits the need for cross-cultural awareness.
Localized Products and Services.
Global / Transnational OrganizationMultinational Matrix Company and Staff. Integrated Network, cross-cultural TD. All levels
need cross-cultural skills for maximum flexibility and productivity. Localized Products and Services.
2015 Intercultural Services | Culture in Organizations
Organizational Culture is impacted by National Culture
Assessing Organizational Culture against Local Culture is inthe best Interest of any Organization
National Culture outweighs Corporate Culture(when working for multinational Companies Employees tend to become more nationalistic)
To avoid internal Conflict Organizations need to find a Balance between Local and Corporate Culture
Corporate Culture needs to adapt further when working withforeign Employees
Culture Impact
adapted from Denison, Haaland, and Goelzer 2004 / Katz 2005 / Nancy Adler 2007
2015 Intercultural Services | Culture in Organizations
Examples
Unsuccessful Culture Adaptation
Home Depot China Do It Yourself not a cultural norm
No storage spaces available
Walmart Japan Low prices are associated with poor quality
Germany Lower prices available at local stores
Employee Policies not seen as equitable
Korea Preference for smaller Packages
Starbucks Australia Local hospitality style preferred
Boutique qualities appreciation
2015 Intercultural Services | Culture in Organizations
Examples
Successful Culture Adaptation
MacDonald’s Indonesia Rice instead of French Fries
Korea Pork instead of Beef
Germany Beer is served
Egypt McFalafel
Mattel’s Barbie USA and Africa Black Barbie
India Traditional Sari
Ford Europe Smaller Cars
2015 Intercultural Services | Culture in Organizations
Critical Balance
Company Culture Workforce Culture(s)
GlobalizationLocalization
StandardizationCustomization
2015 Intercultural Services | Culture in Organizations
Culture in Organizations
LanguageIt’s about the Meaning in Context (Localization instead of Translation)
ProductsProduct, Packaging and Instructions have to adapt to Culture
MarketingCreativity, Images, Greetings, and Humor must meet local Culture
OperationsWork Schedules, Incentives and Motivations vary with Culture
OrganizationStructures, Policies, Procedures, Leadership Styles vary with Culture
adapted from B. Markgraf 2013
2015 Intercultural Services | Culture in Organizations
Germany
Japan
China
USA
0% 20% 40% 60% 80% 100%
4%
5%
8%
3%
12%
52%
27%
22%
46%
20%
34%
44%
37%
23%
31%
31%
Autoritarian Mentoring Consultative Team oriented
Example
adapted from Wolff in Persorama 2008
Preferred Leadership Style
2015 Intercultural Services | Culture in Organizations
The American company VegiMist wants to bring their best selling supermarket vegetable sprinkler to the German market.
The assigned American Country Manager gets business started by leasing a sales office in Munich, and by having all marketing materials, product packaging and contracts (reviewed by a German lawyer) translated into German. He also hires (with some difficulties) 3 sales people and 1 technician. The salespeople are promised a base salary, sales commissions, and compensation per mileage for the usage of their cars. The technician has a contractor agreement.
Unfortunately, 6 months later only few units have been sold, and the country manager has increasingly difficulties with the team.
What are potential issues?
Business Case
2015 Intercultural Services | Culture in Organizations
Alan Richardson is assigned to head up the marketing department in Mexico City.
Upon arrival, Alan calls his first meeting on a Friday afternoon, with all the
employees who had been handling prior marketing efforts. Once everyone is
seated, he greets the team briefly and promptly begins the meeting.
The first item on his agenda is to ask for suggestions about how to increase sales
by using promotional campaigns. After a short discussion, Alan suggests that the
two primary marketing researchers, Eduardo and Miguel, look each into a
marketing research system. He then concludes the meeting by thanking the group
for their time and saying that they would meet again in a week. The group sits
silently until Alan says in the fluent Spanish he has been speaking all day, “That’s
all for now, guys. Have a good weekend.”
At the follow-up meeting, Alan is surprised to find that no one in the group has
anything to suggest or report.
Business Case
2015 Intercultural Services | Culture in Organizations The business case for diversity, European Commission 2005
GROUPO VIPS (Restaurant / Retail)
Groupo VIPS Solution:
• Active recruiting of people from foreign countries and abroad(2500 people from 7 countries)
• Increased staff loyalty and motivation (turnover rate 1.4% among foreign employees)
Project Elements:
• Agreements with labor departments of 7 countries
• Offered same contracts as Spaniards
• Spanish language Training even before hiring/relocation
• Intercultural Training to all employees
2015 Intercultural Services | Culture in Organizations
Culture Integration Process
The impact of culture on M&A, Mercer 2009
1. Build a clear view of the context and rationale, of the outcome to
be achieved
2. Determine the extent of culture integration necessary to achieve
those outcomes
3. Clarify the specific behaviors required
4. Propose the culture change concept, the changes that are expected
5. Identify the drivers (personal, social, organizational, models) needed
to influence behaviors
6. Design the drivers
7. Implement drivers through an effective change management process
8. Develop appropriate measurements / reinforcement of culture change
2015 Intercultural Services | Culture in Organizations
Warning Signs
adapted from Gieselmann & Krell 2004
Organizational Culture Check yes
Difficulties working with foreign language speaking Staff, Clients, or Business Partners? ☐
High Number of difficult or rather inefficient International Negotiations, Assignments? ☐
High Absenteeism Rates show a Correlation to specific cultural Groups? ☐
Inappropriate Content circulating within the Company (e.g. ethnic slurs / jokes)? ☐
Insufficient Development of new Ideas or marketing Strategies by heterogeneous Teams? ☐
Insufficient Integration / Participation of Employees from unfamiliar Cultures? ☐
Low upward Mobility Rates show a Correlation to specific cultural Groups? ☐
Number of (internal or external) Grievances high for specific cultural Groups? ☐
Personnel Recruitment / Turnover Rates correlate to specific cultural Groups? ☐
Rate of discrimination complaints high in employee groups from unfamiliar cultures? ☐
Unfavorable Company Image in specific cultural Markets? ☐
Unsatisfactory Penetration of culturally unfamiliar Market Segments and Channels? ☐
Unsatisfactory Productivity in Teams with heterogeneous Employee Mix? ☐
2015 Intercultural Services | Culture in Organizations
Cultural Intelligence is
at the heart of business
success and managing
culturally diverse people
successfully
Thank You
adapted from Martin & Vaughan 2010