SUCCESSFUL STRATEGIES FOR MANAGING THE BUSINESS AND CULTURAL CHALLENGES OF MULTINATIONAL TEAMS, IN AN ECONOMY WHERE ALL BUSINESS IS GLOBAL.

BY ROCHELLE BRODER-SINGER

If you’re an American who’s ever tried to exchange business cards in Japan, give a presentation in Germany or understand the discussion at a business lunch in Italy, you’ve come face-to-face with the challenge of bridging cultural divides. In today’s global business environment, it’s not uncommon for high-performing managers to oversee people of diverse nationalities and cultural backgrounds. Whether managing a multinational team locally or remotely, or working overseas as an expatriate, managing across cultures presents challenges that go far beyond simple language barriers. “Diversity itself … can bring increased efficiencies because you get a variety of ideas you wouldn’t have had otherwise,” says John Daniels, a professor of management at the School of Business who has worked in nearly 40 different countries during his career. “But it comes with a cost, in that people are coming with very separate agendas, [and there are] communication problems that go beyond the language, into such things as how people go about solving problems, for example.”

Even the most successful managers can falter when dealing with other cultures. “All these cultural quirks that make you less efficient than you were before can be very frustrating,” Daniels says.

Francia Baez, head of global diversity and inclusion for Visa and a former mentor at the School, recalls working with a manager who had been promoted from a post in Argentina to one in Ecuador. His strong personality and Argentina-centric Spanish didn’t mesh well with the culture in Ecuador, and the disconnect showed in the business unit’s results. “This was a high-performing, top-talent person coming with his own style and thinking that it was going to be OK because this had made him successful everywhere he had been,” says Baez, who co-authored a book on Latino culture in the workplace (Latino Culture: A Dynamic Force in the Changing American Workplace). Baez did an exercise with all of the manager’s direct reports to identify what wasn’t successful, then worked with him to help him make changes.

Being willing to learn from and about other cultures is one of the keys to successful multicultural management. People make mistakes, Baez says, when they “pretend that those differences don’t exist or that they know enough to get around. They think that they have it covered and can just wing it.”

Additional tips from alumni on managing across cultures

Be Humble

Among faculty, alumni and others who have worked both around the world and in the U.S. with people from other cultures, the most common piece of advice is to be humble. Assume that there is a lot you don’t know, ask questions, and realize that you will make some mistakes.

That can be a tall order for some students coming out of American business schools, according to Joseph Ganitsky, research professor of management and director of the School’s Center for International Business Research (CIBER). “At business schools, we encourage students to be strong, powerful and confident in themselves, but I don’t know if we teach enough about humbleness,” he says.

But it’s crucial, says William Werther, a professor of management who has taught and consulted in places like Portugal, Honduras, Chile, Germany and Switzerland over the past three decades. “A person has to be willing to be an observer, to be a student, and the first step is to really observe what it is people do,” he says.

Werther adds that it’s important to understand that other cultures approach business relationships, processes and rituals differently from the way you do — and that isn’t necessarily bad. “Accept that they’re different, and treat that more as a learning opportunity than a value judgment or criticism,” he says.

In his own international experience, Werther says one of the things that helped him the most was to assume that people were being rational, even when their behavior seemed irrational. “It’s often that they’re operating from a rational set — but a different set — of assumptions,” he says.

Werther recommends asking yourself which assumptions would make the behavior rational, then using those as a stepping stone to greater understanding.

That technique worked for Baez when she was training employees in Asia. She found that they weren’t actively contributing in training sessions. An Asian colleague pointed out to her that Asians tend to be very respectful of hierarchy and may feel it’s disrespectful to just speak their minds. Baez began calling on specific employees by name, and it turned out they had a lot to say — but only when directly asked.

Respect Differences

“The common thread to developing relationships with diverse cultures is to approach other cultures with a deep respect for their knowledge, even though it is different than ours,” says Marta Alfonso (BBA ’83, JD ’98), a partner at the Miami accounting firm Morrison Brown, Argiz & Farra who works with intercultural teams around the world. Focus on the shared result, she says, and be more flexible about the tactics and means of getting there. “You realize that while business values may be approached differently, the end result is the same,” she says.

Jose Armario (MSPM ’03), McDonald’s group president for Canada and Latin America, takes a similar approach: he tries to keep in mind that, whether he’s dealing with an employee, a McDonald’s franchisee or a joint venture partner, the goal is to understand the local issues and challenges they are going through, while at the same time sharing McDonald’s best practices, he explains. It’s one of McDonald’s core philosophies of “Freedom within a framework,” which it applies to management practices and to the food, décor and service at its restaurants. The company never strays from its core mission and values, but it considers local laws, cultures and habits in all of its decisions, trying to provide as much flexibility as possible within the company’s overall framework. “Understand the culture, make some changes, but don’t lose your identity,” Armario says.

Ganitsky agrees that a set of common core values is particularly important when trying to bind people across cultures; it gives employees a common reference element and guiding principles. Ian Thurston (MBA ’02), marketing communications manager for Symrise North America, points out that managers need to make an extra effort to communicate company culture and those core values to employees in other countries, and take the time to hear from employees to make sure they understand the corporate values and culture clearly.

But what happens when the corporate culture is in conflict with the national culture — for instance as it relates to bribery and corruption? What a U.S. company might consider unacceptable may be a normal way of doing business elsewhere. In that situation, says Armario, you need to be especially aware of your own values and the company’s values and stick to them. “When you’re opening a business, establish what you stand for and what your business practices are,” he says. In countries where such cultural conflicts exist, he adds, managers must invest extra time getting to know the people they are hiring and dealing with, to form strong relationships and be certain that those people share the company’s values.

Managing cross-cultural relationships often does take more time and effort than managing ones where individuals come from similar backgrounds. Thomasina Tafur (MBA ’01) found as much during the 20 years she spent working for FedEx. Tafur, who now runs a consulting company, recalls that in her last position, as Fed-Ex’s senior manager, market council, one of her employees was Nigerian. She
learned that he was used to a culture where women are treated as secondclass citizens, which she felt made it difficult for him to work for her and to accept when she made decisions that were not in his favor. She spent a lot of time talking with him, explaining her thinking, positioning her response. “It is extremely time-consuming,” Tafur says. “You have to negotiate with your employees sometimes in order to maintain a relationship.” While her American instincts pushed her to be direct, Tafur recognized that in order to help this employee perform — and thus improve the group’s performance — she had to “be a little creative in the way you explain things or … position things,” she says.

Misunderstandings happen more easily in cross-cultural management situations, whether the parties both speak the same language or not. It is extremely important to clearly and explicitly communicate objectives to employees, then check to make sure they understand those objectives the same way that you do, Thurston says. “Actively listen to those to whom you are giving direction,” he adds. “Make sure they understand by having a twoway dialogue — not in a condescending manner, but in a way that both parties have the opportunity to ask questions.”

Easing the Way

Managing across cultures isn’t only fraught with perils. An expat manager, for example, brings his or her own views and ways of doing business to the table. Implemented carefully and sensitively, they can convey their own business advantage. “If you do everything the way the local company does things, you have no advantage over the local company,” Daniels points out.

But, Daniels cautions, “there’s a danger of being what we would call too polycentric or too ethnocentric. You have to deal somewhere in between those extremes.” Look for a middle ground between the polycentric view — thinking that everything is different when you are someplace else — and the ethnocentric view — believing that whatever works at home will work elsewhere. Studies on cultural differences are based on averages, he notes, and “nobody really fits the average.” Instead, do the probing to understand the individuals you’re working with.

There are also certain universals that apply to most workplaces. Chris Colbert (BBA ’93, MBA ’97), global head of recruitment programs at Nokia Siemens, has found that no matter where his employees are from, they generally all want to feel supported and inspired by management, to be recognized for doing good work and to have a sense that principles of fairness apply at the company. “Ensure that those basic elements that we all look for are there,” he says. “The other stuff becomes subtleties. You can work through that.”

Armario points to another universal desire he has seen in his work around the world: a hunger to learn. Representing a respected brand like McDonald’s, he says, he’s found that people expect to learn about best practices and how the company does business. Be prepared to share that, he advises: “Coming armed with some great thinking, some practical advice, some lifelong experience, always goes a long way.”

But even the most experienced managers make mistakes. Ron Schneider (BBA ’65), an entertainment industry consultant who traveled the world managing the Rolling Stones’ tours in the 1960s, recalls working in Japan to film the movie The Silent Stranger. The film crew was Italian and the rest of his crew was Japanese. The Japanese were in charge of meals, and one day it appeared they had made fried chicken for lunch. As Schneider bit into the seemingly perfectly fried chicken, he found himself with a mouthful of raw poultry. The Japanese cooks had flash-fried it, tempura style. Before Schneider could even complain, his Italian film crew came marching over and demanded, “You can work us like dogs, but you must feed us!”

“There was a big rebellion over that,” Schneider says. “They actually wanted to beat up the cooks.” He
made sure the Italians were well fed after that. While it was a subtle thing, he learned a lesson: “In Italy, food is very important,” he says. “A bad meal can incur employee rebellion.”

The Rewards

Whatever challenges managers face in dealing with employees in diverse cultures, there are plenty of rewards too. Both companies and managers benefit from the variety of perspectives and the learned ability to look at problems and opportunities in new ways. They can enjoy greater understanding of customers, open new markets and have a chance to bring the best talent in the world onboard. And there are personal benefits, too.

Armario, for instance, has had the opportunity to help McDonald’s partners and franchisees around the world grow. He is proud that he and McDonald’s have been able to set an example on matters like gender equality in the workplace. And his experiences have been personally valuable. “One of the most rewarding things about having worked around the world is that I can literally pick up the phone and call
someone in perhaps 25, 30, maybe even 40 different countries,” he says. “You can learn something new every day.”

MULTIPLE MENTORS AFIELD

Expatriates working overseas face unique challenges in terms of adjusting to a new culture and workplace, which contributes to high failure rates. in fact, studies show that as many as 25 percent of expatriate assign-ments end early, usually because adjustment proves to challenging for expatriates and/or their families. Mentoring relationships, though, may increase the likelihood of a successful assignment.

Terri A. Scandura, dean of the graduate school at the University of Miami and professor of management, and John Mezias, an associate professor of management, have been studying mentoring and expatriates, specifi-cally the idea of having multiple mentors work with an expatriate, even before the cross-border assignment begins.

“Expatriates need multiple mentors more than most managers because the skills and experience that can help them adjust to challenges in each of the three stages of an expatriate assignment — pre-departure training, cross-border assignment and repatriation — are likely beyond the scope of one person,” Mezias says.

Such mentoring relationships can be formal or informal, and mentors can work for the same company as the expatriate or be employed by a different company. Mezias says that “the reality and complexities of life in organizations these days, particularly for expatriates … really requires that they get help from different people with different skills.” He and Scandura are conducting further cross-cultural mentoring research to identify best practices.

— R.B.

MERGING TWO NATIONS’ CULTURES: STRIKING A BALANCE

In 2007, Chris Colbert (BBA ’93, MBA ’97) had a front row seat as two giants of european industry spun off a joint venture to form a new company. Nokia Siemens networks combined units from the German conglomerate Siemens and the Finnish mobile communications giant Nokia. Successful integration required combining two unique cultures.

Siemens valued structure, process, control and hierarchy, explains Colbert, now Nokia Siemens’ global head of recruitment programs, based in Boca raton, Fla. Nokia employees tended to have more autonomy, a flatter organization and “a little more free spirit.” In seminars and through online forms, they all worked together to come up with a shared set of corporate values and ways of doing business they could each find comfort in. “It’s still something, three years down the road, that we’re struggling to work through,” he says.

Colbert believes the most important part of managing people from multiple cultures is recognizing that there’s more than one way to solve a problem. A German employee, for example, might tackle an assignment by making a flow chart, mapping out its stages and creating a formal project management scenario. A Finn, on the other hand, might jump straight to execution and build a network of people to help on the fly. “As a manager, you have to find a way to balance that and respect both opinions,” Colbert says. In this case, he explains, that means giving the German enough structure to operate comfortably, but ensuring the Finn doesn’t feel overburdened by too much methodology.

At the same time, “cultural stereotypes are both useful and dangerous,” he says. they can help if you use them to understand the reaction you’re getting, but “you have to be careful on a one-on-one basis not to let the stereotype control your attitudes and approach.”

— R.B.

DON’T GET LOST IN TRANSLATION

Growing up in the United States during the Cold War, Adam Goldstein imagined workers in communist China to be pliant and conformist. But as Ceo of Royal Caribbean International, he’s found staff in the cruise line’s three China offices today to be among the most aggressive and capitalistic.

Our employees there are so intensely competitive that we have to teach them to be collegial,” Goldstein said at an April 20 forum at the School of Business titled “Managing across Cultures.” The school hosted the panel discussion with INSEAD, the European international graduate business school known as a pioneer in international business education.

Goldstein and executives from McDonald’s, Cartier and Fedex all reached the same conclusion: it’s no longer a nicety but a necessity to manage well across borders, ethnicities and even diverse interests within a corporation, as business goes increasingly global.

Doing so is neither easy nor static, however, panelists stressed. McDonald’s approaches the challenge largely by deferring to local people in each market. Headquarters sets standards for products and service systems, but locals handle the rest, from finding ways to motivate employees to choosing ads, explained Raul Alvarez (BBA ’76), a former president of the restaurant chain that derives more than 65 percent of revenues from outside the U.S. “To think you can compete in Europe without Europeans running your business is impossible,” Alvarez said. Innovations that cater to local market needs have made France McDonald’s most successful market internationally, followed by Australia and Russia.

But things still get lost in translation. Francisco X. Santeiro (MA ’04), a managing director for Fedex, recalled a meeting in Mexico where a local manager raised in Mexico’s more dramatic and hierarchal culture gushed repeatedly about how honored he was to have a top boss visiting from the U.S.: The female chief, or “jefa” in Spanish. The honored executive misunderstood. “If he’s calling me a heifer, I’m going to fire him,” she confided to Santeiro, who quickly clarified.

Economic differences also can weigh in building a brand image worldwide. Christophe Maincourt, now Cartier’s president for Latin America and the Caribbean, recalled starting up boutiques for the French luxury goods maker in China in the early 1980s. The Chinese sales staff were not used to testing samples of expensive perfumes or offering samples. “For them, spraying a provincial customer was probably like pouring gold into a basket,” Maincourt said.

As business becomes more global, corporations must nurture talent worldwide. Gone are the days when headquarters could rely heavily on expatriates or “expats” from their home country to run operations overseas. Foreign experience is vital for American managers, but now, many companies also bring in foreign nationals or “impats” to headquarters to build multi-cultural skills for the group. “Cross-pollination is very important,” said goldstein.“It’s all about getting the best talent from wherever it’s at,” Alvarez said, “ to produce the best results.”

— Doreen Hemlock

More on the Managing Across Cultures Forum with INSEAD