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July 10, 2008


Karen Beaman

Going Global Survey Results

Jeitosa has just completed the preliminary analysis of Global Readiness Survey results. Some of the key findings include:

  • Survey participants were asked what top three challenges they encountered in going global in the HR/HRIT function. The majority of respondents indicated cultural differences (53%) as the top external challenge they faced, followed by compliance with data privacy regulations (42%).

The good news is that there are solutions available for these challenges: leadership development, cultural awareness training, change management programs, and global communication plans can help individuals understand and appreciate cultural differences and provide tools and techniques for improving cross-cultural collaboration. Formalized strategies for dealing with data privacy challenges, particularly in dealing with the European Data Privacy Directive, can be developed and include approaches such as Safe Harbor, Model Contracts, and Corporate Binding Rules.

  • The top internal challenges companies are facing in going global fall into two major categories: lack of technology and systems to support global initiatives (51%) and lack of experienced and culturally adept resources to work effectively in a global environment – both a lack of global leadership (47%) and a lack of sufficient other global resources (45%). Going global is a relatively new initiative for many companies, so it is not surprising that many would still be immature in these areas.

Solutions to these challenges are readily available, but organizations need to step up and realize that building a global infrastructure with global systems and global people takes effort, resources, budget, and time. More and more vendors are globalizing their product and service offerings making it now possible to source a global solution for HR systems. With the increased mobility and globalization of the workforce, it is also now possible to find experienced resources who understand first-hand the issues and challenges in designing and deploying a global solution.

  • Working globally, companies are also experiencing some successes. By far, the greatest success they are finding is in developing and appreciating global diversity (68%). While this is a challenge for some, it is also a success for others. Generally, the more familiar one culture is with another, the greater the understanding and acceptance of the differences that exist.

You can download a copy of the preliminary research report by clicking here. The participate in the survey and receive a free, personalized copy of the full report, benchmarking your organization to others who have taken the survey, please click here.

May 21, 2008


Karen Beaman

Multi-Cultural Talentforce - Global Mindset

Much previous research has shown that success in international work is a function of an individual’s’ “Global Mindset” (Guy & Beaman 2003, 2005). Peter Senge describes global mindset as “deeply ingrained assumptions, generalizations, or even pictures or images that influence how we understand the world and how we take action” (The Fifth Discipline, 2006). An individual’s global mindset governs how they perceive things in the world and take action.

The Global Mindset model distinguishes three broad categories of mindset:

  • Ethnocentric Mindsets take the home country as the basis for beliefs and evaluations, holding that their own culture and values are intrinsically superior to those of others, to the point even of assuming national superiority. It might be characterized by the expression: “the sun never sets on the British empire.” This type of mindset is effective when there is a need to standardize operations around the world or to protect the company’s intellectual property.
  • Polycentric Mindsets are ones that adapt well to cultural differences and are effective at bridging the gap between home and host culture and company objectives. The polycentric mindset entails accommodation or assimilation with the foreign culture, sometimes even to the extent of “going native”. It might be characterized by the expression: “when in Rome do as the Romans.” This type of mindset is appropriate when there is a need for intense focus on the local market or regulatory situation.
  • Geocentric Mindsets are ones that seek universals and commonalities across cultures and are effective at tying diverse groups together toward a common goal. A geocentric orientation implicitly assumes that a universal set of values govern human interaction, downplaying the importance of cultural differences. This mentality can best be summed up by the famous words of John Lennon, “Imagine all the people sharing all the world.” This type of mindset is appropriate for individuals who work at a global level, responsible for integrating the ideas and practices of different businesses and functions into a unified approach.

Different types of mindsets are best suited for different types of international assignments. With respect to international work, Paula Caligiuri and others have claimed that an individual’s global mindset is directly related to his or her effectiveness depending on the nature of the job. In his view, ethnocentric individuals tend to excel in environments that call for significant standardization of methodology or technology, while polycentric individuals thrive in situations that require considerable sensitivity to local conditions, and geocentric individuals excel in positions that require identifying commonalities and integrating different approaches. Hence, the role or job the individual is to perform is vital in determining the type of individual needed for the assignment.

A key role for Global HR is to understand the type of mindset required for each international assignment and to assess individuals to find the best fit based on the person and the job. Nothing can be surer of failure than to select the wrong mindset for the job. Imagine assigning an ethnocentric individual to an intensely local situation. The individual will be frustrated due to a lack of understanding of the environment, and the local team will be irritated at what they see as the arrogance of home office to have sent such a narrow-minded person. Similarly a polycentric individual sent to standardize and protect the interests of home office may be unable to achieve the objectives because of a deep empathy for the local people.

What type of mindset do you have? Do you know what type of mindset each of your international workers and expatriates have? Are you actively managing this aspect of your business?

May 20, 2008


Karen Beaman

Multi-Cultural Talentforce - Language Translations

One of the biggest challenges in working across cultures is clearly language. It never ceases to amaze me that, in the effort to save some money, companies often choose to do translations of corporate documents in-house using local staff. But translation is a discipline of its own and just because someone speaks the language doesn’t make them a good translator. In fact, often the opposite is true!

Consider these anecdotes from Gary Ferraro, The Cultural Dimensions of International Business (2005):

  • An American airline offering service to Brazil advertised its “rendezvous lounges” in its business class section. They failed to realize that the word rendezvous in Portuguese refers to a room for illicit sexual encounters.
  • The American Dairy Association’s successful ad “Got Milk?” was unfortunately translated in Mexico as “Are you lactating?”
  • An American ink manufacturer attempted to sell bottled ink in Mexico through their advertisement that they could “avoid embarrassment” (from stains) through their brand of ink. However, the Spanish word used for “embarrassed” was “embarazar” (a “false friend”) which means to become pregnant. People thought the company was selling a contraceptive device.

These very embarrassing situations can easily be avoided through good translation services using native speakers, not someone who learned the language in school. It is only a native speaker who can understand the subtle messages that are being conveyed by the use of one word or phrase over another. And forget automated translation tools, such as Babelfish. While it’s a theoretically interesting concept, and many people have been busy for many years in the field of artificial intelligence trying to figure this out, the field of machine translation is still in its infancy.

HR should help the business identify the types of skills needed for different types of activities. For example, the ability to speak the language is clearly important for sales and marketing activities, whereas it is less important for a highly technical positions where the individual will be working with internal staff. Tying competencies and abilities to individual assignments (project-based on regular) — not just to specific job roles — is fundamental to working successfully internationally.

May 18, 2008


Karen Beaman

Multi-Cultural Talentforce - Trompenaars’ Dimensions

Filed under: General, Global, Culture, Workforce

Fons Trompenaars and Charles Hampden-Turner have become very popular in the business world for their cultural model and Culture Compass — a tool that evaluates the aspects of an individual’s cultural profile and preferences and compares them to another national culture. The goal is to uncover differences so that individuals can learn and be coached in the different ways of working before starting a new assignment in a foreign environment.

Trompenaars’ model distinguishes culture along seven dimensions:

  • Universalism versus Particularism describes the differences between rule-oriented cultures and relationship-oriented cultures. Universalistic cultures feel that rules and obligations are paramount and set the bar for how all people should act. In contrast, particularistic cultures are those who believe that individual circumstances and relationships are more important than general rules. They tend to see themselves as pragmatic and flexible, often arguing “it all depends.” Particularistic individuals often seen universalistic people as rigid and overly disciplined. Universalistic people tend to see particularists as inconsistent, arbitrary, and “playing favorites.” Clearly the opportunities for cross-cultural conflict and misunderstandings are ripe in this domain.
  • Individualism versus Collectivism, like Hofstede, highlights the differences between individual-oriented cultures and group-oriented cultures. Individualistic cultures are those that prize personal achievement and recognition over those that favorite teamwork and group recognition. One has only to look at American culture, which is highly individualistic and competitive, in comparison to the group-oriented Japanese culture to see the strong cultural differences in this domain. In fact the Japanese have a saying, “the nail that sticks up gets hammered,” demonstrating the importance of not sticking out in group.
  • Neutral versus Affective describes cultures that are very affective/expressive versus those that are more neutral in displaying their emotions. While there are clearly strong personality characteristics along this dimension, there are also significant tendencies between cultures. The Latins (in particular, Italians and Spaniards) are known for their expressive passionate behaviors in comparison to the British and Japanese who are much more reserved in their reactions. We also see considerable variation within national cultures, such as the expressive New Yorkers and the reserved Mid-Westerners in the United States.
  • Specific versus Diffuse covers cultures where the assignment of responsibilities is specifically designated and accepted by individuals versus those cultures that take a more varied approach in determining who is responsible for what. Clearly the challenges for the global project manager are fierce in this domain. The German manager who has laid out a project plan with specific assignments for his/her French team members is often surprised and confused at the perhaps protracted and verbose approach that may be taken in completing their assigned activities.
  • Achievement versus Ascription refers to the situation in which individuals are granted status based on their own individual achievements (compare the views of Gen X and the New Mils discussed in an earlier post) or based on the role that they have been given in the group, such as the father or mother in a family or the president or director in an organization. Highly individualistic cultures tend to also be achievement-oriented cultures, such as the United Status; likewise strong collectivist societies are also often ascription-oriented cultures, achieving their status based on their role, such as the Japanese.
  • Sequential versus Syncronic describes cultural tendencies to do things in a sequential fashion, one thing after the other, or synchronic, working on multiple things simultaneously. Anyone with children these days recognizes that this domain is one in which we see not only differences across national cultures but also across generations. The New Mils (or Gen Y) are a good example, with their focus on the integration of information and technology, with 20 windows open on their computer, chatting with 10 different friends, while twittering and sending SMS text messages to several others.
  • Internal versus External Control refers to what cultures believe about the amount of control they have over their environment. Do the individuals control the environment themselves or are they controlled by it? The differing perceptions cultures have in this dimension can affect what we often think of as “work ethic.” If an individual feels they are truly controlled by the environment, then they are less likely to exert themselves and try to change things as a opposed to an individual who believes they can change the environment and circumstances through smarter and harder work.

What sort of cultural differences have you experienced either nationally or internationally and how do you feel such differences impact the workplace? What can HR and company leaders do to help avoid cultural conflict and misunderstanding?

May 15, 2008


Karen Beaman

Multi-Cultural Talentforce - Hofstede’s Dimensions

Filed under: General, Global, Culture, Workforce

Another very effective model for understanding cultural differences in the workplace is in the pioneering work done by Geert Hofstede. Based on extensive empirical surveys and statistical analyses, Hofstede calculates scores for different cultures and classifies them along five major dimensions:

  • Power Distance Index (PDI) defines the extent to which less powerful members of the group accept that power is distributed unequally (such as in the family, in business, in political institutions). In the family, the level of power distance in a culture begins with whether children are raised to be “obedient followers” or to demonstrate “individual initiative.” In business, levels of inequality determine such things who reserves the conference room, who presents the problem, who leads the discussion, and who takes the minutes in the meetings.

  • Uncertainty Avoidance defines a group’s tolerance for ambiguity and the extent to which people feel comfortable or uncomfortable in unstructured situations. Uncertainty-avoiding cultures tend to be more emotional, believe in one absolute “Truth,” and attempt to control their environment by implementing strict laws, rules, and safety measures. Some European companies, such as as France and Germany, demonstrate a high degree of uncertainty-avoidance which can be seen in the strict employment laws and termination conditions you see in those countries, as compared to Denmark and the UK, for example.

  • Individualism versus Collectivism defines the extent to which individuals are inte­grated into groups. In collectivist societies people are integrated into strong, cohesive groups, often extended families. In individualist societies, the ties between individuals are loose, and people are expected to look after themselves and their own immediate families. According to Hofstede’s evaluations, China has the lowest score overall for individualism which demonstrates their strong group orientation — a phenomenon which may also have been influenced partially by the years of communist rule.

  • Masculinity versus Femininity refers to the distribution of emotional roles between the sexes from very assertive and competitive, typical male values, to modest and caring, typical female values. “The women in feminine countries have the same modest, caring values as the men; in masculine countries they are somewhat assertive and competitive, but not as much as the men, so that these countries show a gap between men’s values and women’s values.” The Scandinavian countries show the lowest overall rating for masculinity demonstrating a strong equality between the sexes these countries.

  • Long-Term versus Short-Term Orientation defines the extent to which a culture tends to take a shorter or longer term view of the world. The values associated with a long-term orientation are thrift and perseverance, whereas those associated with a short-term orientation are respect for tradition, fulfilling social obligations, and saving face. The Asian countries overall demonstrate the highest long-term orientation scores, with China and Japan at the highest. Clearly, the difference between these countries and Wall Street’s focus on quarter-on-quarter earnings is a source of potential conflict.

Hofstede’s work on intercultural interaction strongly suggests that success working internationally is largely influenced by the degree and types of cultural differences between the individual’s country of origin and their country of destination. Evaluating the scores of individual countries on each of these dimensions and comparing them to an individual’s home country can point out key differences and hence potential areas of conflict and adjustment for individuals working internationally. HR can better support the development of the global workforce by facilitating these types of analyses and identifying appropriate intervention and development strategies to ensure more successful international work.

May 14, 2008


Karen Beaman

Multi-Cultural Talentforce - Hall’s Contexts

Filed under: General, Global, Culture, Workforce

Edward Hall’s contextual model provides an effective approach for explaining many of the differences between cultures. The issue of context is certainly one area where much communication goes awry, creating surprise and confusion over where the miscommunication occurred and why. Hall distinguishes cultures along two axes:

  • A high-context culture is one that is highly dependent on the context — that is, many aspects of the culture are only understood by those living within that culture — the “in-group” so to speak. In a high-context culture, people have had similar experiences and so many things are left unsaid. These “implicit” assumptions have grown out of the group’s homogeneous roots, common history, and many shared traditions, and are slow to change. High-context cultures are more common in the eastern and middle eastern countries (e.g., Japan, China, Eqypt, Saudi Arabia) and in countries with historically low racial diversity (e.g., France, Italy, Spain). Many native societies (e.g., American Indians) are also high-context cultures.
  • In contract, in a low-context culture many more things are “explicit” in the environment because members of the culture come from a wide variety of backgrounds and traditions. In low-context cultures, people tend to have many loose connections of a shorter duration. Because of its heterogeneity, such cultures can change significantly from one generation to the next. Some examples of low-context cultures are the US, UK, Canada, Denmark, and Norway.

In general, individuals moving from one type of culture to another have to adapt and be more flexible in learning new ways of working than individuals moving to a different culture, but with the same type of context. For example, language issues aside, workers moving among France, Italy, and Spain (all high-context cultures) have an easier time adapting than individuals moving from the US to China (low- to high-context cultures) or from Italy to Canada (high- to low-context cultures). Individuals from high-context cultures expect there to be underlying differences between cultures and so tend to be more attuned and ready to see and work with the subtleties that lie beneath the surface.

In contrast individuals from low-context cultures moving to high-context cultures often can’t believe that there are so many unwritten rules of conduct and ways of interacting. In this situation, low-context culture individuals need to hone their intuition and learn how to look for differences that may catch them by surprise and create that embarrassing “foot-in-mouth” situation. Individuals from low-context cultures must learn to listen and ask questions, rather than attempt to work out a solution independently.

The following chart attempts to lay out some of the major differences between low-context and high-context cultures that affect the business environment:

Low-Context
High-Context
Countries
US, UK, Canada, Germany,
Denmark, Norway
Japan, China, Egypt, Saudi
Arabia, France, Italy, Spain
Business Outlook
Competitive
Cooperative
Work Approach
Task-oriented
Relationship-oriented
Work Style
Individualistic
Team-oriented
Employee Desires
Individual achievement
Team achievement
Relationships
Many, looser, short-term
Fewer, tighter, long-term
Decision Process
Logical, linear, rule-oriented
Intuitive, relational
Communication
Verbal over Non-verbal
Non-verbal over Verbal
Planning Horizons
More explicit, written, formal
More implicit, oral, informal
Sense of Time
Present/Future-oriented
Deep respect for the past
View of change
Change over tradition
Tradition over change
Knowledge
Explicit, conscious
Implicit, not fully conscious
Learning
Knowledge is transferable
(above the waterline)
Knowledge is situational
(below the waterline)

It should be obvious what areas are ripe for cultural conflict when individuals from high- and low-context cultures come into contact. One area in particular is the decision-making process. The logical, linear thinkers quickly become frustrated by the intuitive, relational thinkers and neither ends up valuing the perspective that the other individual brings.  Another area where I’ve often seen a lack of understanding between cultures is in work approach and style: individuals from low-context, individualistic cultures who are very task and results-oriented versus those individuals from high-context, collectivist cultures who are focused on building relationships and “saving face” in group settings. Add to these, language differences, geographical distances, timezone changes, and organizational barriers, and it’s no surprise that cultures come into conflict and progress suffers because of misunderstandings.
Understanding, accepting, and learning to work with these differences is fundamental to being successful in a global environment. HR needs to broaden its focus on diversity beyond the traditional focus on gender, ethnicity, and generational issues. HR needs to fully embrace global diversity, fostering understanding, acceptance, inclusion, and leveraging of cultural differences to enhance team productivity, organizational effectiveness, and overall business performance.

May 13, 2008


Karen Beaman

Multi-Cultural Talentforce - Cultural Models

Filed under: General, Global, Culture, Workforce

Many different cultural models have been developed over the years — all with the goal of more effectively explaining and understanding cultural differences between groups of people. The three most well-known models are those of Edward Hall, Geert Hofstede, and Fons Trompenaars.

  • Edward Hall, an American anthropologist, is most known for his research on the cultural perceptions of space or proxemics — the study of the human use of space within the context of culture (e.g., how close or far way people stand or sit from one another). While serving in Europe and the Philippines during World War II, Hall observed that the way different cultures define and organize space can lead to serious failures of communication in cross-cultural settings. His book, Beyond Culture, published in 1977, talked about the “unconscious culture” that shapes our thoughts and feelings. His concepts of high-context and low-context cultures describe the amount of information either implicit (high-context) or explicit (low-context) in the culture.
  • Geert Hofstede’s landmark book Culture’s Consequences, originally published in 1981 and completely updated in 2001, analyzed cultural differences across 50 countries, synthesizng these differences into five major dimensions: power distance, uncertainty avoidance, individualism versus collectivism, masculinity versus femininity, and long-term versus short-term orientation.
  • Fons Trompenaars‘ best-selling book Riding the Waves of Culture published in 1998 took a similar approach to Hofstede, evaluating how different cultures respond to different management approaches. He synthesizes cultural differences into seven dimensions: universalism versus particularism, individualism versus collectivism, neutral versus affective, specific versus diffuse, achievement versus ascription, sequential versus synchronic, and internal versus external control.

It doesn’t really matter which cultural model you ascribe to, but it is important to understand the differing dimensions of culture in order to appreciate how they play out in the workplace. Failure to understand the influence that culture has on business can lead to miscommunications, misunderstandings, costly marketing blunders, lawsuits, and a general undermining of corporate goals.

Clearly an important role for HR is in helping the business to understand the various aspects of culture and how they affect day-to-day business and the productivity and effectiveness of our interactions. Focusing on the different dimensions of culture can help to target training and development opportunities in areas where they are more likely needed. For example, an American project manager, assigned to manage a global project with team members in Japan, needs to learn about indirect styles of communication, the importance status and hierarchy in group dynamics, and the role of the group in day-to-day interactions. The German sales executive working on a big deal with a large French financial institution must understand the importance of building relationships and coalitions and getting everyone on board “before the big meeting” if he hopes to close the deal sometime in this century. Being aware that these differences exist, and then targeting specific training and coaching activities can ensure that individuals working across cultures will have greater success in reaching their goals.

In subsequent posts, I’ll talk more about the specific skills that individuals need to be successful in a global context, as well as individual business processes that need to be localized for global success.

May 12, 2008


Karen Beaman

Multi-Cultural Talentforce

Filed under: General, Global, Culture, Workforce

Last week I introduced the four dimensions of the Evolving Multi-Dimensional Talentforce and talked about the first dimension: multi-generational differences. This week I’d like to talk about the second dimension: multi-cultural differences. There are significant cultural aspects that influence how people interpret and respond to events, define and act in the workplace, and in general determine how we do business. These cultural aspects include such things as differing styles of communication, multiple ways of making decisions, and various approaches to engagement, commitment, diversity, ethics, and so on.

Culture (from the Latin cultura stemming from colere, meaning “to cultivate,”) is defined in Wikipedia as:

[1] patterns of human activity and the symbolic structures that give such activities significance and importance; systems of symbols and meanings that lack fixed boundaries, that are constantly in flux, and that interact and compete with one another.

[2] Different definitions reflect different theoretical bases for understanding and evaluating human activity; manifested in music, literature, lifestyle, painting, sculpture, theater, film, etc.

Geert Hofstede defines culture as “the collective programming of the mind that distinguishes one group or category of people from another. This stresses that culture is (1) a collective, not an individual attribute, (2) not directly visible but manifested in behaviors, and (3) common to some, but not all people”.

Analogies used to understand cultural differences have brought such images as “peeling an onion” — carefully removing layer after layer until getting to the core — or “the iceberg” — because many cultural aspects are below the surface and hence not readily seen. The first and most obvious layer of culture that we can see above the surface involves language, food, buildings, monuments, dress, fashions, art, etc. These artifacts are symbols with meanings from a much deeper level. The next layer of culture entails the norms and values that the culture holds, the mutual sense of “right/wrong”, “good/bad” that individuals share. Some of these are written and formally codified in the laws and social controls of a culture, while others are informal, learned early in childhood, and passed down through the generations. Finally, at the deepest, innermost level of culture, invisible and unconscious to human perception, are those aspects of basic human nature that control how we interpret and respond to various situations. For example, our sense of time and space, our focus on family and relationships, our view of status and hierarchy. These sometimes subtle aspects of culture are more difficult to understand and appreciate, making them ripe for misunderstanding.

ŸSome of the domains in which cultures can radically differ from one another include:
  • Extent to which individuals are independent versus interdependent
  • Expression of individualistic intentions versus more collectivist, group behaviors
  • Belief in a more egalitarian versus hierarchical status
  • Degree of aggressiveness versus accommodation to others
  • More direct versus indirect styles of communicating
  • Feelings of neutral versus more affective relationships
  • Specific and closed relationships versus multiple and diffuse relationships
  • Orientation toward tasks and getting things done versus building relationships and rapport
  • Appreciation of universalism versus particularism
  • Degree of risk tolerance versus more conservative approaches
  • Short-term versus long-term planning horizons
  • Mono-chronic versus poly-chronic sense of time
  • Differences in sense of personal space (called proxemics)
  • Tolerance for and acceptance of versus resistance to change
  • Receptivity versus resistance to diversity
  • Acceptance versus resistance to new ideas

If this seems like a lot to absorb, it is! Understanding and working effectively with cultural differences is one of the greatest challenges we have. So much is invisible, not obvious, and very different from our own way of thinking and acting that we find it hard to fathom, believe, and work with.

In their fascinating book, Developing Global Executives, McCall and Hollenbeck (2002) contend that working globally is difficult because it combines complexity from two different dimensions: business complexity with cultural complexity. As business complexity increases, managerial abilities must also increase. Naturally, it requires much greater leadership skills to manage a large number of diverse functions, products, suppliers, business units, locations, etc. Likewise, as cultural complexity increases, facility in dealing across cultures must also increase. The greater the difference between geographies, languages, customs, values, habits, etc., the greater the skills the individual must possess to effectively work across cultures. Combining these two dimensions – an increase in business complexity with an increase in cultural complexity – creates an intensely complex global environment, requiring more highly developed global management abilities.

Hence, we see the importance of HR’s role in developing global executives. We have tended to focus our managerial development activities around more concrete skills such as business acumen, professional speaking skills, financial management, etc. In the increasingly global world we live in, we must spend as much if not more development effort on understanding cultural differences and learning how to work with them. In subsequent posts, we will explore this important multi-cultural dimension of the modern talentforce and how HR can help improve the productivity and effectiveness of cross-cultural work.

January 13, 2008


Karen Beaman

Pondering Globalization

Filed under: General, Musings, Strategy, Global

Few would argue that we live in a global world. Yet, exactly what we mean by “global” varies widely depending on whom you are talking to and what you are talking about. Globalization can mean simply that a company has offices outside their home country and sells their products and services in other countries. There may be little communication or sharing across these offices, but the company is operating globally nonetheless. On the other hand, globalization can mean that a company offers one global service or product to the world, and each of the country offices serve as conduits to the local market. And, of course, global can also mean anything along the continuum between these two extremes.

Likewise, few would argue against the assertion that the world is becoming increasingly more global. Yet there is a growing awareness of greater instability and uncertainty in the world than ever before. The current financial crises with subprime interests rates in the U.S., the political instability in the Middle East and Asia, the growing imbalances between the rich and poor, and global warming are some of the factors affecting our world and causing some retrenchment – some people might even say breakdown – in globalization.

According to Pankaj Ghemawat, global strategist, Harvard professor, speaker, and author, too many people are spouting off about the flattening of the world, the death of distance and the disappearance of differences across countries. These rantings are what Ghemawat calls “globaloney” – the illusion of a borderless, flat world and hence the tendency to overestimate the extent of and process of globalization. The fact is that most economic activity – including direct investment, tourism, and communication – happens locally, not internationally. In addition, the differences across countries and cultures are larger than many people realize. Ghemawat goes on to explain that in our “semi-globalized” world, one-size-fits-all strategies don’t stand a chance. Instead, companies must expect cross-border differences and be able to reconcile the discrepancies in a way that makes sense for them based on their culture, business goals, and current state of international development.

The problem is that globalization isn’t easy – in fact it’s downright complicated. Cross-border integration, various languages, multi-cultural communication, diverse people, organizations, and business practices make understanding and managing the process of globalization a difficult task – difficult, but not insurmountable. To be successful we have to think about globalization as a process – a journey to a final destination of complete cross-border integration that we may never reach, or not reach within this century. So the questions we should be asking ourselves is how global should we be? What are the important areas of the HR function to make global and what areas should be left local or regional? How do we reconcile the seemingly paradoxical differences across countries and businesses?

Ghemawat offers an approach he calls the AAA Triangle which focuses on strategies optimized for adaptation (adjusting to differences), aggregation (overcoming differences), and arbitrage (exploiting differences). The three A’s represent three distinct types of global strategy that companies can pursue. Adaptation seeks to improve performance by maximizing the company’s local presence. Aggregation is a way for companies to expand beyond their home country, delivering economies of scale by emphasizing regional and global operations; this involves standardizing product and service offerings and grouping together development and production processes. Finally, Arbitrage is the exploitation of differences between national and regional markets, often by shifting separate parts of the operations in different places, for example, call centers in India, manufacturing plants in China, and research and development offices in Poland.

What is your company’s global strategy? What are you doing in HR to support it?

January 6, 2008


Karen Beaman

Building a Collaborative Transnational Organization

Filed under: General, Global, Organization

In one of my previous posts*, I talked about the emerging Collaborative Transnational Organization as the organization of the future. To help you get started with building such an organization, I offer the six C’s of collaboration: competency, capacity, connection, convergence, culture, and collective.

Competency

The first step is to assess, understand, and then build the necessary skills and competencies for working effectively in the collaborative, transnational age. Some of the most obvious skills and competencies needed include agility, adaptability, business acumen, technical savvy, customer focus, teamwork, and a global mindset. The HR/HRIT professional also needs to develop competencies around Service-Oriented Architecture (SOA), Web Services, Software-as-a-Service, collaboration and publishing tools (e.g., wikis, blogs), and social networking software (e.g., Facebook, Linked-In).

Capacity

Second, we need to build organizational and human resource capacity by making effective use of alternative delivery models, such as shared services, outsourcing, offshoring, and on-demand infrastructures. For HR and HRIT we need to have a global enterprise architecture built on a flexible SOA platform to provide a solid technology foundation that supports the delivery of both centralized and decentralized services, both onsite (physical) and remote (virtual) services, based on business needs and organizational competency and capacity.

Connection

Third, we need to provide an infrastructure that connects individuals across the organization in an ever more mobile, global, virtual, digitized world: voice-over-internet-protocol (VOIP), social networking software, and new modes of communication, such as wikis, blogs, and RSS feeds. For HR and HRIT this means embracing and integrating connectivity in the way we provide services, such as with dynamic workflows, automated approvals, real-time calendaring, online documentation, just-in-time training, ongoing assessments – services that cross organizational, geographic, and system boundaries.

Convergence

Fourth, we must manage the convergence in the workplace of myriad, disparate technologies from telephones to computers to handheld devices. Free, open technologies, such as Skype and Facebook, allow organizations to easily operate across borders without having to build costly centralized infrastructures. Mashups – a lightweight method for integrating web applications – provide a seamless user experience, allowing us to link and deliver services globally or locally, centralized or decentralized, depending on business needs.

Culture

We need to promote a culture of openness, transparency, sharing, trust, accountability, and respect for global diversity. The HR/HRIT professional must understand the global regulatory environment and the differences in business practices in cultures around the world in order to put in place a global governance framework – one that meets both corporate and local business needs and that holds individual business units accountable for local regulatory compliance along with global organizational performance.

Collective

Finally, we must hold every worker individually accountable for the collective success of the organization by developing metrics that connect local activities to global success. This can happen only by first “thinking locally” and then “acting globally” and implementing organizational metrics that focus each individual on their role in the collective performance and success of the global organization. Accountability at the local individual level is the source of success at the global enterprise level.

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*The full text for this article can be found in the current issue of the IHRIM.link magazine.

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