Cross-Cultural Communication and Negotiation

Lut12575_ch07_192-231.indd Page 192 1/19/11 8:32 AM user-f494 /203/MHBR222/Lut12575_disk1of1/0078112575/Lut12575_pagefiles Chapter 7 CROSS-CULTURAL COMMUNICATION AND NEGOTIATION Communication takes on special importance in interna- The World of International tional management because of the difficulties in convey- ing meanings between parties from different cultures. The Management problems of misinterpretation and error are compounded in the international context. Chapter 7 examines how the Offshoring Culture communication process in general works, and it looks at the downward and upward communication flows that and Communication commonly are used in international communication. Then ffshore call-center agents for a North American the chapter examines the major barriers to effective inter- airline had difficulty relating to customers stranded national communication and reviews ways of dealing with O at airports because of a snowstorm. The reason? These these communication problems. Finally, one important agents had never seen snow or been to an airport. The dimension of international communication, international solution? The airline set up TVs broadcasting CNN in the negotiation, is examined, with particular attention to how break rooms so that agents could be exposed to snow, negotiation approaches and strategies must be adapted to airports, and flight delays. different cultural environments. The specific objectives of Offshoring, or the practice of a company moving cer- this chapter are: tain services overseas, has highlighted cultural differ- 1. DEFINE the term communication, examine some ences between employees around the world. Yet, if off- examples of verbal communication styles, and explain shoring is managed correctly, companies can save money the importance of message interpretation. and increase productivity. By offshoring, Mamas and Papas, a U.K.-based baby stroller company, has benefited 2. ANALYZE the common downward and from the decreased labor and material costs and the abil- upward communication flows used in international ity to send work to places in the world best equipped to communication. complete each piece of the manufacturing process. An 3. EXAMINE the language, perception, and culture employee of the company, Gill Kingston-Warren, told the of communication and nonverbal barriers to effective Financial Times: “The U.K. is known for design and intel- international communications. lectual property and other countries have skills we are OBJECTIVES OF THE CHAPTER OF OBJECTIVES not known for any more. Some countries have strong tra- 4. PRESENT the steps that can be taken to over- ditions of craftsmanship, while others are focused on come international communication problems. technology.” Offshoring enables companies to capitalize 5. DEVELOP approaches to international negotia- on other countries’ cultural advantages. By the same tions that respond to differences in culture. token, however, these cultural differences can create challenges for firms that engage in offshoring. 6. REVIEW different negotiating and bargaining be- haviors that may improve negotiations and outcomes. Cultural Challenges According to the global management consultants A.T. Kearney, when companies offshore certain operations, they face four main cultural challenges: communication, context, relationships, and working norms. First, employees may encounter communication difficulties. In the “The Offshore Cultural Clash,” A.T. Kearney consultants wrote: An American financial services manager e-mailed a 192 counterpart in India laying out a project and asking for a Lut12575_ch07_192-231.indd Page 193 1/19/11 8:32 AM user-f494 /203/MHBR222/Lut12575_disk1of1/0078112575/Lut12575_pagefiles work plan. Her counterpart’s reply: “I will do the need- Fourth, managers must be aware of different cultural ful.” The meaning, clear to people in India, is “I will do working norms. Indeed, by fostering collaboration what’s necessary to accomplish what we’ve been talking between employees with cultural strengths, managers can about.” Most Westerners in Europe and North America increase productivity. One executive told A.T. Kearney that have probably never heard the phrase and don’t under- his company was very consensus-driven, but it lacked stand it. They prefer to convey their views directly and discipline. He found an offshore service provider that had clarify the details of their contracts and intentions. In India, where e-mails are far less specific, such detail a culture of discipline. Offshoring can be an opportunity seems not only unnecessary, but also distrustful. The for a company to find employees with different strengths two cultures hold different expectations of what is said, to handle work that is best suited for them. what needs to be said, and what can remain unsaid but Tips for Managing Offshoring understood. The following are a few tips for managing the cultural Understanding the communication style of different challenges of offshore operations. cultures is key to managing employees in different regions of the world. In addition, it is essential to prevent commu- Avoid an “us vs. them” mentality. Instead, insist on nication lapses. For instance, an American bank had off- mutual respect. Companies that have a strong hier- shore service providers that it had worked with for the archical and “clan” culture often resent their off- past five years, yet their relationships remained strained. shore colleagues. One manager compared this situ- The bank eventually discovered that U.S.-based IT teams ation to a transplant patient rejecting a new organ. received important updates for changing business require- To prevent this problem, A.T. Kearney recom- ments, but the offshore partners never received these mended: “All parties to the offshoring arrangement updates. As a result, the bank had to re-do much of its should understand that mutual respect for cultures, work at significant cost. Companies can avoid this prob- both national and corporate, is not negotiable. One lem by having a dedicated liaison between the “home way to demonstrate mutual respect is to send a country” and offshore employees to verify that every team healthy mix of rote and ‘intelligent’ activities to the has clear information and work expectations. offshore location. Delegating complex activities to Second, managers must be aware of offshore workers’ the offshore team also requires a close working “context.” Do these workers possess a cultural context relationship, which can build trust.” Also, personal necessary to understand the product or service? One face-to-face interactions can help managers work credit card company executive told A.T. Kearney that his through cultural differences so that offshore coun- employees in India struggled to apply their accounting terparts can be true partners. knowledge to credit card payment processing because Provide training to managers to meet new expecta- “Consumer credit markets are not as pervasive in India as tions. When companies move certain operations they are in the United States, where it’s hard to find any- offshore, managers are often expected to be able to one who doesn’t have an intuitive understanding of credit- manage offshore employees without any additional card transactions. For our offshore agents, we had to training. Companies need to provide training oppor- develop that foundation.” tunities to managers to fulfill their new roles, such Third, companies need to understand how offshore as teaching them to use metrics to manage people agents perceive relationships. According to A.T. Kearney, rather than supervising by line of sight. one manager noticed that offshore agents are very defer- Foster collaboration between “home country” and ential to their superiors. He said that if a manager is in offshore employees. Based on their study of 130 the room, offshore agents “will not answer questions or offshore operations in India, Kannan Srikanth and make comments without specific invitations to do so.” Phanish Puranam found that the operations that 193 Lut12575_ch07_192-231.indd Page 194 1/19/11 8:32 AM user-f494 /203/MHBR222/Lut12575_disk1of1/0078112575/Lut12575_pagefiles 194 Part 2 The Role of Culture “paid close attention to managing coordination per- decisions of their onshore counterparts without the formed almost four times as well as their less- need for extensive discussion.” Companies can successful counterparts.” Furthermore, Srikanth and develop common ground in two ways. Managers Puranam indicated that by focusing on teamwork can train employees together so they become famil- between offshore and “home country” employees, iar with others’ work habits and adopt the same companies could expand their offshore operations business vocabulary. Also, firms can utilize technol- beyond merely call-centers and IT support. They ogy that allows employees to see work across loca- noted that “if Western companies focused more on tions as it is being performed. fostering collaboration between workers separated As A.T. Kearney consultants point out, “Cultural issues by geography and culture, and less on forcing off- are not insurmountable, but they must be purposely and shore workers to perform tasks in very specific diligently addressed.” In A.T. Kearney’s 2007 study of ways, the range of work they could source offshore offshoring performance, A.T. Kearney found that cross- would be significantly expanded.” How do manag- border culture and communications issues were a ers achieve this collaboration? Srikanth and significant

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