2015 intercultural services | culture in organizations odnetwork presentation september 22 nd 2014...

2015 Intercultural Services | Culture in Organizations

ODnetwork Presentation

September 22nd 2014

Culture in Organizations

CONSULTING • TRAINING • PROJECTS


• 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+


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


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


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


Internal factors

External factors

Trends

Factors Influencing Companies

adapted from Braker & Walker 1995 / Stuber 2008

Productivity

Sales

CompanyImage

DemographyValues

Relationships

Markets

Customers

Politics

LawsTechnology


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


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


2021 Talent Pool Worldwide

Oxford Economics Global Talent 2012

Talent Surplus Talent Deficit


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


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


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.


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


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


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


Critical Balance

Company Culture Workforce Culture(s)

GlobalizationLocalization

StandardizationCustomization


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


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


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


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


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


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? ☐


Cultural Intelligence is

at the heart of business

success and managing

culturally diverse people

successfully

Thank You

adapted from Martin & Vaughan 2010

2015 intercultural services | culture in organizations odnetwork presentation september 22 nd 2014...

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