Managing the pitfalls and challenges of intercultural communication.

The ever-increasing internationalisation of companies makes cultural factors a key dimension of success

Developing intercultural management skills is becoming a must as managers are confronted more than ever with international realities.

"With 15 percent growth, we had no problems with cultural differences. With minus four, in the heart of recession, we met with absolute horror! The Americans revealed their true nature and acted as total brutes, the French went into useless resistance, and the British betrayed everyone...." was the bitter comment of an international manager after four years of crisis, with all illusions lost on multinational fraternity.

In other words, when all is well, growth smoothes away problems, conflicts and differences. But when things get bad, an inevitable process sets itself into motion. It goes something like this:

Step 1: We have a problem, a bad problem;

Step 2: Someone must be responsible;

Step 3: It can't be me of course, so it must be the "other;"

Step 4: The best "other" has to be the one with a different passport;

Step 5: Ah, we have our culprit: It's the English, Americans, Koreans, Germans...

...and back come the old stereotypes. In the face of crisis, organisations crumble and natural communities spontaneously reappear opposing each other in an irrational fashion.

"In 1991, our Group had to reduce its headcount by 20 percent. We were profitable in Europe but had to follow suit with the U.S. where the group was losing all it had... So, don't talk to me about the Americans and their values... Many of my friends are still unemployed..."

In fact, company projects and value charters often cover up a devastating truth: Individuals have become but a means to the economic finality of the organisation. Haven't we replaced the word "personnel" with the words "human resources?" As if transforming a person into a resource - like money or raw material - was remarkable progress for the individual. Those words meant nothing to us, until the economic crisis gave them back their true meaning.

However, it remains true that a crisis is better overcome in close ranks than in division, and that a concentrated and homogeneous company resists better and reacts faster than a dispersed one. Also true, companies who prepare their management for international life have greater chances of success than the ones who only rely on on-the-job experience.

Mergers and Acquisitions: Managing Integration

In our 15 years' experience in the field of cultural differences, never have cultural issues appeared so critical. In response to the economic crisis and internationalisation, headcounts have shrunk, and managers have had to take on greater and wider responsibilities. Greater because they have to do more with less, and wider because new global organizations confront them daily with international realities.

It's no secret that post merger and acquisition performance often falls well below expectations. However carefully planned, allowances are rarely made for the seemingly irrational human responses that follow such decisions. Yet, post-merger and acquisition "blues" are a well-documented fact: Production drops, key people leave, performance and results sink, along with morale. "When we merged with this other pharmaceutical laboratory, both our companies were euphoric. Too euphoric maybe. Now, two years later, we are still suffering from disappointment..."

Integrating two companies sets into motion a massive change process. We already know how difficult it is to implement change, even in a single company. But in a merger or acquisition, the traumas of change are enhanced by the meeting of two different corporate cultures and practices. Even when companies share the same national culture, it is very tempting to blame the "other" when things go wrong or become uncomfortable. When the other company is foreign, the culture clash is two-fold, and before long, precious energy that should be used in pursuing company goals is wasted on nourishing internal conflicts or trying to solve them. In 1993, Business International published a study on the reasons for failure in international mergers and acquisitions: Cultural issues were at the top of the list.

Making International Remote Teams Work

International companies are geographically and culturally dispersed. In some cases, the importance of a company's original zone of activity has been economically outweighed. Powerful sub-groups have emerged, their results heavily influencing strategic decisions. Using their difference as an advantage, these groups often deeply altered the internal balance of power. This evolution, a consequence of internationalisation, has in turn generated the structural evolutions we have been experiencing since the mid-eighties: Creation of lines of products, of divisions by activity, all international.

Brutally, the mono-cultural, ethnocentric logic that prevailed within the zones is shattered. Confused managers now have to find their ways through the complexities of three interacting and potentially conflicting cultural levels - national, corporate and functional. They have to deal directly with distant, unknown and different counterparts who are also desperately trying to survive the torments of such complex structures.

Gradually, the way in which power was exercised changed from giving direct orders to engaging in permanent negotiation, where the different parties within the group have to seek mutual agreement and draw up internal contracts to satisfy everyone. Forcing the way doesn't stand a chance any more. Therefore, knowing the other person and understanding his or her culture, values and behaviours, becomes a considerable advantage.

Why Communication is Essential

Everyone must know where the enlarged company is going so they can help get it there. Changes in structure, procedures and methods should be communicated at every stage of implementation. But this isn't enough. Consultation across the company is also essential. When planning change at high levels, it is worth listening to what middle, junior and supervisory management have to say, as they are not only closest to the customer, but also to the internal workings of the company. But this still isn't enough. Communication and consultation processes also must be adapted to the particular characteristics of corporate and international cultures. Doing an internal culture audit of each company in the early stages will highlight the differences in attitudes and expectations, and give a realistic picture of what those characteristics are.

In cases of integrating cultures, three fundamental conditions are required:

1) Clarifying the objective

First of all, it must be made clear what the objective and philosophy of the new situation is. Organized around trades, lines of products or world markets, the new dimensions of the organization go right across the group's traditional geographic structure. Poorly defined in terms of responsibility or decision making, they immediately trigger strong political reactions within national or regional structures.

2) Negotiating its implementation

To successfully introduce and implement a complex structure, it is recommended that some of the systems not be imposed, but rather designed and negotiated in part by those who will be applying them. In regard to non-negotiable principles, these should be implemented according to a calendar or modalities that best suit the particular cultural environment.

3) Accompanying change

This means assisting the implementation process by preparing managers for their new international exposure. Cultural aspects are at the very heart of this process. Giving orders, negotiating, communicating, controlling, delegating, deciding: These are the manager's daily lot. From one day to the next, the manager suddenly finds him- or herself having to do all these things with, and for, faraway collaborators for whom these words may convey totally different meanings and behaviours. Where, for example, an American or British manager will expect direct feedback and suggestions from his collaborators, a Chinese or Indian manager will feel insulted and take them as an affront.

Here are a few avenues that managers who want to promote international spirit within their troops may wish to explore:

Improve and Internationalize Communication in the Early Stages

Media communication also needs to be adapted. "We were about to make an alliance with a Japanese engineering firm and decided to exchange our presentation brochures by fax. We were totally astonished to discover that they presented their mission as '...committing to contribute to the well-being and development of humanity.' Convincing our president that such ideas could be expressed in Japan without being members of a sect was quite a feat!"

Only by building a truly multicultural communication team will such pitfalls be avoided.

Companies now have to answer calls for tender everywhere on the planet. Presenting a project on the other side of the world, before an audience of local leaders, international sponsors and international consulting firms, is a complete communication exercise where price, and the elegance of the technical solution, are not sufficient. Different people need to be convinced differently. It is not a matter of using the arguments we think are good, but rather of using the ones they are prepared to listen to. And this cannot be improvised. Many groups now substantially prepare their presentation teams with the help of intercultural communication specialists and natives of the countries concerned.

Coach International Project Teams

An almost systematic consequence of complex international organizations is the appearance of transverse projects, gathering people from various cultures around one mission. International project management integrates nearly all management dimensions: Goal setting, resource allocation, time management, role clarification, leadership, defining procedures (or operating modes), result assessment - all are affected by cultural differences.

"We launched into transverse projects with great enthusiasm," remembers the head of a chemical group, "but we were totally unprepared, and cultural issues literally killed these projects in the egg."

Increase Negotiation Skills at all Levels

Whether commercial, political, internal or external, negotiation has become the key word of international business. However, negotiation is a notion that seldom holds the same meaning within different cultural groups. Is negotiating defending a position and sticking to it (a traditional French view); is it looking for an agreement, even if sometimes detrimental to content (a more British attitude); or is it getting to know one another and aiming for harmony in execution (Japan)? In any case, it is certain that two groups who negotiate without agreeing on the finality of what is bringing them together have very little chance of reaching a satisfactory agreement.

Intercultural Management Training - A Start

Many international organizations are already including specific intercultural modules in their training plans. Business schools also have come to understand the importance of cultural issues and include specific courses on the subject.

This approach remains insufficient. Many of these courses are too general and do not meet the needs of managers who want answers to their particular expectations. Therefore, courses must be tailored, their designs based on audits that reveal the true situation and the real problems faced by management.

Maintaining Balance

The manager of a multinational computer firm told us recently: "I'm Italian. But when I go with my Swedish colleague to sell systems to the Italian administration, I feel much closer to him than to the civil servants of my own country. That being said, back in our company, I do feel better with Italians!" A balance to be maintained.

Acceptance of methods and practices at a worldwide level, and the progressive development of truly international company cultures are the challenges for groups if they want to survive and win globally. Specific corporate culture still remains the best communication platform for these new multinational towers of Babel.

Charles Gancel is managing partner, and Chilina Hills is senior consultant at Inter Cultural Management Associates in Paris.