Multinational Training For Multinational Corporations/International Organizations

Multinational Training for Multinational Corporations/International Organizations

By Mel Schnapper, Ph.D. American Society for Training and Development (ASTD) Monograph, 1980 TO: Members of the ASTD International Division:

This monograph by Melvin Schnapper, titled "Multinational Training for Multinational Corporations/International Organizations" is another benefit offered to members of the ASTD International Division. This is a follow-up to previous monographs and papers titled:

A. "Coping With Problems in Meeting Training Needs for cross-cultural International Training" by Milton J. Feldman

B. "Learning Strategies and Culture" by Leonard Nadler

C. "'Packaged' Programs for the Use of Training Divisions in Preparing Personnel for Overseas Assignments" by Alison R. Lanier

D. "Industrial Democracy" by Archibald A. Evans.

The ASTD International Division has plans for the future release of additional monographs, articles, cassette tapes, and books. The Division invites members to submit materials which can be shared with other Division members. These materials can be sent to:

Editor, International Newsletter American Society for Training and Development P. 0. Box 5307 Madison, Wisconsin 53705 Vincent A. Miller, Director ASTD International Division

MELVIN SCHNAPPER is Director of Development and Training at G. D. Searle & Company, a multinational corporation specializing in pharmaceuticals and healthcare delivery systems. He also serves as a consultant to organizations in the public and private sectors and is a faculty member of the Advanced Management Institute at Lake Forest (Illinois) College. Dr. Schnapper's major interests are helping multinational corporations and international organizations cope effectively with diversity and change. Of prime interest to him are training international trainers, training international managers, and preparing people (families) for working and living overseas. MULTINATIONAL TRAINING FOR MULTINATIONAL CORPORATIONS/INTERNATIONAL ORGA14IZATIONS

I. Need for Multinational Training 2

A. Examples of Waste 2

B. Growth of Multinationals 4

II. Unique Challenges to the Multinational Trainer 5

A. Defining the Multinational 5

B. Complexity of the Multinational

C. Cultural Stereotyping,

III. Goals of Multinational Training

A. What Multinational Training Must Accomplish

B. Experiential Training

IV. A Ten Step Multinational Training Model

A. Ten Steps

B. Paradoxes of Multinational Training

V. Resistances to Multinational Training

A. Structure of the Multinational

B. Assumptions of Key Decision-Makers

VI. Conclusions

I MULTINATIONAL TRAINING FOR MULTINATIONAL -1 CORPORATIONS/ INTERNATIONAL ORGANIZATIONS*

by Mel Schnapper, Ph.D.

Many trainers, both neophyte and experienced, are discovering that their notions of how to design, implement and evaluate effective training for their normal client populations are not always effective when applied to multicultural or multinational trainee groups. They are discovering that hitherto valid assumptions, approaches and techniques create vastly different reactions and dynamics when applied to culturally different or heterogeneous populations.

The literature is rich with examples of wasted effort, money and time because of intercultural misunderstanding. The expanding size and impact of multinational companies and international transactions will increase the potential and magnitude of such waste. After identifying some of the unique challenges facing the multinational trainer, this monograph will explain some general goals of training as proposed by the experiential/cognitive approach and why this approach is uniquely appropriate for training people to cope more effectively with cultural diversity.

It is this monograph's intent to highlight some of the intercultural dimensions of a basic ten step training model and to suggest some cross-culturally relevant concerns the trainer should consider before implementing each step in his/her usual way.

In spite of the data to support the increased need for such training this monograph will explain why such training, though increasing in credibility, is still not as pervasively utilized as the need might indicate.

Multinational training is intended for the multinational manager who must be knowledgeable and skillful in a number of areas. Therefore, multinational training must include an appropriate blend of training areas which are typically mutually exclusive:

1. Managerial training typically focuses upon the managerial functions of leading, controlling, planning, and directing regardless of the language, cultural differences and the business;

2. Intercultural training typically focuses upon cultural differences such as values, perceptions, assumptions, style regardless of the language, managerial role and the business; ______*The terms multinational corporations/international organizations are used generally to apply to organizations in the public and private sectors such as profit oriented businesses, international development agencies, bi- or multilateral military forces, international exchange programs, educational institutions and even multicultural, multiracial or multiethnic organizations which are domestic in staffing and focus. The common feature of all of these being that the trainer and trainee populations include a heterogeneous cultural background. 2-2 3. International business training typically focuses upon business practices/ functions across national boundaries such as production, marketing, financing while international agencies will focus upon the technical expertise supporting this particular purpose or goal. Both will typically give less than adequate attention to the managerial role, language or preparation for cultural differences and, 4. Language training typically focuses upon developing language fluency in the social and technical areas regardless of the managerial role, or the business/ purpose though some attention may be given to culture. All of these areas, as parts of a total comprehensive development program, are necessary for-adequately preparing the multinational manager. The comprehensive foci of multinational training is summarized in the chart below,.(Figure 1), where "yes" indicates that the area is focused upon and "No" indicates typical neglect.

Figure I FOCUS TRAIN 1. Managerial 2. Intercultural 3. International/ Business 4. Language 5. Multinational MULTINATIONAL TRAINING FOCI MA14AGERIAL CULTURAL ROLE DIFFERE14CES FY-e-sl No FY-es-1 NEED FOR MULTINATIO14AL TRAINING No Fy-e-si No No Yes TECHNICAL/ BUSINESS PURPOSE OF ORGA14IZATION No No Yes No Yes] LANGUAGE No No No Fe-Yes Yes-e-s]

I. NEED FOR MULTINATIONAL TRAINING

The literature is replete with case after case of wasted effort, time and huge amounts of money due to cross-cultural misunderstanding. Businesses and governments at all levels have suffered because of waste.

A. EXAMPLES OF WASTE

0 A Venezuelan vice-president of marketing for an American owned multinational is fired by the president because he refuses a promotion, which would mean abandoning his parents in Caracas and moving to Boston. In Venezuela where children are expected to take care of their parents, "abandoning them" would be shameful. The American president of the company is angered and confused by the Latin American's "lack of appreciation and loyalty".

A. EXAMPLES OF WASTE 0 A Venezuelan vice-president of marketing for an American owned multinational is fired by the president because he refuses a promotion, which would mean abandoning his parents in Caracas and moving to Boston. In Venezuela where children are expected to take care of their parents, "abandoning them" would be shameful. The American president of the company is angered and confused by the Latin American's "lack of appreciation and loyalty". I A German engineer, thinking he has successfully negotiated a joint venture with a Japanese firm returns home to await the Japanese signatures on the contract, and discovers several weeks later, that the Japanese have not agreed to over half of the contractual conditions. While in Tokyo the Japanese smiled and nodded approvingly all during his presentations. They also wined and dined him very graciously, and never hinted at being resistant to his proposal. He had no idea that during the brief time of their acquaintance, they were not yet ready to disclose their serious reservations.

A sale of millions of tons of wheat to the Soviet government results in severe price increases for bread in the U.S. The U.S. businessmen, in their eagerness to close a profitable deal, assumed that once the major agreement was finished, they and their Soviet counterparts would work out the fine details quickly and with little difficulty. Later on, the Americans found themselves yielding on many minor aspects of the total agreement because the Russian negotiators went over the contract with painstaking thoroughness, and were ready to cancel the whole contract, based on an impasse over any one of these fine points.

A British supervisor of a bridge-building project in Nigeria was shocked when his team of Nigerian workers refused to continue the project after he had encouraged them to pick their own team leader. He knew that his Nigerian work team was a mixture of several tribes, but he did not expect that tribal rivalry would be so significant that competition for a leader role would bring work to a halt.

Crucial business/international development mistakes like these occur daily in some parts of the world, be it Caracas, Tokyo, Moscow or Lagos. These misunderstandings result in needless wastes of time, effort and money that one or both sides of an international transaction must bear. The examples cited above are but a few of the thousands of anecdotal stories of otherwise successful multinational corporate/international development executives/managers/employees who daily commit disastrous or near disastrous mistakes in dealing with counterparts from different cultures.

Very often entire business/development projects/exchange program get wrecked on the shoals of the intercultural misunderstandings which occur in the multinational/international world. Careers are often ended abruptly because managers interpret cultural differences as personal and attitudinal manifestations of "disloyalty", "lack of proper leadership" or 11poor judgment". Contracts are often concluded based on faulty assumptions and on misinterpretations of the legal, personal and cultural aspects of the negotiation process.

All of these factors contribute to multinational managers becoming frustrated, angry, and even racist, because they have little appreciation of how cross-cultural differences affect managerial style. Frequently these feelings result in an early return for the manager and his/her family, causing a waste of managerial talent and money to the company/organization. B. GROWTH OF MULTINATIONALS-4

Another reason for the growing need of multinational training is the accelerated pace of growth of the multinational. It is becoming increasingly critical that m ' multinational managers get the kind of training and development that will enable them to manage the complex and ever-expanding entities. The last several decades have shown an impressive growth of the multinational corporation and international institutions.

"Multinational conglomerates are absorbing domestic companies and corporations with such rapidity that even business leaders in our country have expressed alarm lest the anonymity and transnationalism afforded by multinationals allow potential political adversaries to gain economic influence which might be translated into social and political influence. Multinational corporations have recently been the target of political attacks and investigators. Each year billions of dollars, pounds, deutsche mark, yen are being invested abroad. The international or multinational exists and continues to grow." (Vansina)

The following statistics are but a few of the many which demonstrate how much of an impact this contemporary business form is having upon national and international economic life.

Of the 120 largest industrial corporations of Belgium, 48 are controlled partly or wholly from abroad. And it is forecast that in a few years one of every five Belgian manufacturing workers will work for a foreign . . . company.

German corporations now have more capital invested in South Carolina (U.S.A.) than anywhere else in the world except Germany.

Some 90% of Europe's production of microcircuits is controlled by American companies.

Switzerland's largest corporation, Nestle Alimentana S.A., does 98% of its business outside Switzerland. (Fest)

For all of the growth of the multinational, its size and complexity are often bewildering to those who must manage it. Even conceptual frameworks about the nature, scope and functions of the multinational do not have wide acceptance. Similarly in the public sector the growing interdependence of nation-states is creating a greater need for global cooperation if the world is to avoid disasters inherent in the nationalistic use of food, energy, money, markets, political and military power.

It is in this context that the multinational trainer must face the unique and often pioneering efforts of developing effective and credible training for the multinational manager who must try as best as he/she can not to drown in a sea of ambiguity. 5 II. UNIQUE CHALLENGES FOR THE MULTINATIONAL TRAINER

Along with the usual challenges of the training process., the multinational trainer faces some unique variables. Some of these have resisted resolution and solutions, yet they must be faced. These relate to A. Defining the multinational B. Complexities of the multinational and C. Cultural stereotyping.

A. DEFINING THE MULTINATIONAL

Unfortunately there is no widely shared conceptual notion of a multinational enterprise.

Furthermore, it is very difficult to group the total system. The mere size, the geographic distances between operating companies and headquarters make it difficult to gain intellectual and psychological understanding of the functioning of the total system. The environment of the international organization is a complex pattern of nation states and state nations, which affect differentially the various parts of the organization... (Many) try to manage the international firm as if it were a large national enterprise, applying old solutions to new or different problems. (Vansina)

Thus, within the context of conceptual ambiguity about the nature of the multinational, the trainer's task is to evolve a clear and precise notion of appropriate training. What a task indeed!

For purposes of identifying an appropriate training model, multinational is defined as a business entity whose main operational functions, (such as production, marketing, selling, and purchasing), embrace at least two nation states whose managers and employees differ in cultural orientation. It is also assumed that these differences will translate into differences of business and managerial style, such as work norms, interpersonal and intergroup relations, communication and decision-making. Because subsidiary organizations may have a nearly peer relationship to the headquarters, managers of various national and cultural backgrounds have a significant input into decisions, with great impact upon the organization.

The multinational is distinguished from the 1) national enterprise within one country, though not excluding the possibility of great internal cultural diversity 2) the international enterprise where the home office exercises extreme authority over its branch offices, licensees, sales office or wholly owned foreign subsidiaries, and 3) the transnational enterprise where "the distinction between the home office and subsidiaries is obliterated so that the organization entities transcend national boundaries ... In a transnational organization managers are developed in such a way that they could serve in any or all of the locations."* (Nath)

*Analogies to this can be found in other international organizations where differing degrees of internationalism are demonstrated. B. COMPLEXITY OF THE MULTINATIONAL

Since the trainer's main function is to help managers and employees gain better knowledge, skills and understanding of their multinational corporate environment, he/she is faced with the challenging task of selecting training priorities from an infinity of choices. The graphic illustration (see Figure 2) of how four systems (technical, cultural, economic, political) influence managerial practices in any one country is impressive. Consider how these variables may be multiplied as manyfold as there are significantly different "intermeshing systems" which impact upon corporate norms, policies, and procedures. This presents a staggering array of variables for the trainer to integrate.

Figure 2 Four Intermeshing Systems Which Influence Managerial Philosophy and Practice" r_"~ TECHNICAL SYSTE P00OUCT, P 1QUIOMINT. QUA INVISTMINT. CONTROLS OF PAO 114Y NY Ity, PW RME iT. OF GOVIRAM04t ONTROLS C. LEGAL REQUIREMENT% I~SINUS gy~ rHA SYSTEM OF JUSTICL NTE Ri F CIVIL SERVANTS GOVERNMENTAL ATTIT ~&Akp MINOS, COVIRMENYAOLI SAT TITUCES 0 LASOR TNI LOCUS OF IR, FOR4IGN POLICt FOREIGN INV LE'51SLATfVf THI EX64;u I CULTURAL VSTEM ACTORS, STATUS S POLITCAL SYST FM lNsTly4TrONUiCSUOSCTOALMM'0$041CLIIAILY, IDUCATIT?t&ASSIS -CASTES. ACY FRIAOF LAICA LS IA0 CAFITAL- EQUIPMENT ' AVAILABIUry ` OF C" TAI rY INFLA 12r~r=f TT ,,y nT10K SYSTEM, [A FOR ICATIONS C SYSTEM *From C. Wickham Skinnor, ",Management of International Production," Harvard Business Review, September, October, 1964, p. 132. (D 1964 by the President and Fellows of Harvard College; all rights reserved.

There have been many different attempts to understand and operate the multinational. Among these are thousands of studies of the values, beliefs and espoused behavior patterns of managers in almost every country in the world. There are thousands of studies identifying the training needs of various nationals going overseas to work in a foreign country. In addition there are hundreds of lists on how to cope with general and specific cultural differences for managers and businesspersons. And there are many, many theories about how to improve the multinationals' effectiveness. However, for all of the work in these areas, there is very little about a pragmatic multinational training approach! Hopefully, the model presented here will make a useful contribution toward this end.

C. CULTURAL STEREOTYPING

The folk wisdom of most multinational training is to prepare managers to cope with the "German", "French", "Arab" or "Nigerian" personality, and, there are many studies which show that managers in different countries will exhibit common responses to questions concerning their values, motivations and style.

However, the more sophisticated trainer should be skeptical about these studies and their often simplistic conclusions about managerial practices in any given country. Even though these studies may have a common approach and methodology and have research instruments which have been translated appropriately from one language to another, the research instruments may not have used exactly equivalent terms.

This inescapable cross-cultural research dilemma of being certain about "functional equivalents" (Fest) is even more crucial for the multinational corporation where conclusions based upon such research must have operational validity.

These cross-cultural management studies which conclude with generalizations may have some validity, but only as lightly and briefly heeded guidelines. In addition to managing effectively where normative behavior may be different, multinational training must prepare managers for the unique personality and unique sets of variables they will encounter.

Very often these studies describe the differences between cultural groups while minimizing the vast differences within cultural groups.

In the business context, two persons from very different countries and cultures may communicate with each other better about a professionally related problem or task than they can with their respective bosses within the same culture. This is because the same professional group has been exposed to much of the same education, training, and even, social acquaintances. All of these factors contribute to their becoming a .?perceptual group, - a number o ' f individuals who perceive some aspect of the external world more or less similarly." (Singer)

This understanding of cultural stereotyping and shared perceptions of professionals in the same or related fields will help the trainer design appropriately balanced multinational training, and give him/her a general model for anticipating trainee responses to the training content/process and to each other.

Within a national company, tremendous gaps may exist between headquarters and subsidiaries and even between functional units within the same operational 8 branch. The knowledge of "perceptual groups" will help the trainer be aware of the even greater gap within his/her client population that is inevitable when professional backgrounds, national backgrounds and cultural backgrounds are different!

III. GOALS OF MULTINATIONAL TRAINING

From the previous discussion about the enormous task of understanding the multinational organization, it should be obvious that there are too many variables to allow any one training approach to be valid across different nations, cultures, organizations and departments. The trainer must hold lightly to models, techniques and philosophies of training and select the appropriate blend of each to fit the needs of the organization, trainees, and training staff. Nevertheless there are certain basic goals which must be achieved. What and how will be discussed in the remaining of the chapter.

A. WHAT MULTINATIONAL TRAINING MUST ACCOMPLISH

Perhaps a brief aphorism will establish a framework for the multinational training model.

Telling is helping to know. Teaching is helping to know and to grow. Training is helping to know, to grow and do and inevitably becoming a different person.

Thus, training must have an element of doing and "inevitably becoming a different person." These "becoming" processes are not occurring very much in programs that are largely didactic in nature. The nature of effective training demands that the person not only:

(a) know - about the cross-cultural management differences, intercultural communication skills both verbal and nonverbal, and business - markets, laws, economics, etc.

(b) grow - have awareness of self and others in the environment, knowing how managerial behavior affects others, and

(c) do - effectively fulfilling the job mission, making friends and satisfying personal needs; but the manager must also

(d) "utilize different behavior" - as a result of intercultural adaptation, the manager learns to internalize and/or accept new values, assumptions, perceptions, and to risk different and more appropriate behaviors. All of these processes will in some way help the trainee cope more effectively than the person who first entered the program.

These necessary personal change processes are often ignored by programs intended to help prepare the multinational manager for the intercultural encounter. Such programs often present a great deal of necessary and useful information about the laws, business practices, employee expectations, government regulations, taxes and profit issues as well as important data for almost any business function. These seminars may also include detailed discussions about history, customs, and cultural data about working and living successfully in the multinational /multicultural environment. Most companies will give the employee an adequate orientation related to the terms and conditions of the assignment including compensations, travel and shipping arrangements, special allowances and employment conditions, overseas and upon return home.

All of this information is necessary but not sufficient. In almost all cases, this information is presented in a traditionally academic manner. This approach will not enhance the manager's personal/cultural self awareness, will not give him/her specific interpersonal/intercultural skills and will not help to initiate and/or facilitate the personally profound insights, awareness and dynamics that will change a domestic manager into a truly competent participant in the multinational management world. This kind of preparation has marginal utility and does not meet the previously identified criteria of effective training.

B. EXPERIENTIAL TRAINING

There is growing evidence (Schnapper, 1972, Noer) to support the contention that in the hands of skilled, interculturally sensitive and empathic trainers, the experiential or laboratory method of training will accomplish these personal change processes which were identified as so critical for effective multinational management.

"A new form of interpersonal training is emerging. Its technology is borrowed from organizational development efforts, and many of its tools are taken from the laboratory techniques of the behavioral scientist. it is possible to expose the future expatriate to training sessions on relating authentically to people in different cultures, the value of candor and interpersonal feedback in cross-cultural communications, and how to understand what your foreign counterpart is really saying." (Noer)

However, the trainer must be very cautious about which techniques to use and how to make them appropriate for a specific or multicultural group of managers. The next section which explains the ten step multinational training model, will suggest how to make this happen.

IV. A TEN STEP MULTINATIONAL TRAINING MODEL

A. TEN STEPS

As has been discussed, there are a variety of training approaches that span the continuum from purely academic to purely experiential. Preferably the training is an appropriate balance of the two. Whatever the approach, this ten step multinational training model will help insure an effective program. Unique considerations for the multinational context will be posed for each step. 10