In international business, conflicts and misunderstandings will inevitably occur from time to time. You can probably list a half dozen examples from your own experience -- The Dutch Marketing team complain that their new American Director does not involve them sufficiently in decisions. The Manufacturing manager from Singapore appears reluctant to co-operate with his British colleague in Quality Assurance Management. The Germans and Brazilians are deadlocked in their negotiations over the structure of their new joint venture. With increasing international business activity, cross-border acquisitions, and the growth of multinational enterprises, these clashes of different perspectives will be more frequent, and in some cases serious.

So how do we deal with them? These days in order to display our global awareness and to avoid appearing to blame each other, we often attribute these divergent perspectives to “cultural differences.”

But who says we’re right?

As one of those Dutch marketing managers once asked me, “Does he (the new director) act like an idiot because he’s American, or because he’s an idiot?” He smiled when he said it, but he was frustrated.

We need to be able to answer this sort of question, or at least to help the Dutch manager think it through. Whether we’re line managers or human resources people, we are immediately tempted to address these sorts of difficulties with training designed to increase “cross-cultural awareness” or knowledge. Cross-cultural training used to be a rarity; now it so popular that we resort to it anytime there appears to be some international misunderstanding.

But are we wasting our (employer’s) money?

The problem is that the behavior of people cannot be described, understood or predicted from just one point of view. Not every difference is a cultural difference of “power distance,” “uncertainty avoidance” or any other generalized characteristic. Cross-cultural training is not a panacea for organizational and interpersonal difficulties at an international level in business. We will gain nothing if we slap such labels on the different perspectives that people in international business bring to their dealings with each other. All we’re doing in that case is creating new stereotypes.

If we are to have healthy organizations – and this is my main point here -- then we have to recognize that there are multiple factors involved in any situation – interpersonal, organizational, and cultural. For any of us – management, consultants, HR, coaches, participants – to take effective action we first have to be able to look at these situations from these three perspectives.

The Interpersonal Perspective: People want different things.

We are trying to understand why people behave the way they do in international business. Any analysis of conflicts or misunderstandings at this level must recognize that national, regional or ethnic culture is not necessarily the most significant factor in explaining people’s day-to-day behavior. What those explanatory factors are is still up for debate among psychologists, anthropologists, sociologists, biologists and others. But the mere fact that the people involved are of different nationalities or races does not mean that conflicts between them are explained by these cultural differences.

After all, we are dealing with the behavior of independent human beings, not theoretical models. People have habits, customs, and comfort zones, but they are also flexible and adaptable. They behave in ways that enable them to achieve certain objectives in certain situations. They act differently according to the demands of those situations. It is how the people involved view a particular situation and how their purposes and priorities differ that we need to look at first.

Our Dutch friend and his boss may have very different ideas as to how to run a Marketing team that originate in the professional experience – not in the culture – of each of them. To automatically treat these different views as somehow “typically American” or as indicative of “Dutch-ness” is to demean the individual points of view of the people involved. It’s a divisive cop-out, an avoidance of responsibility. We need to treat people first as individuals before we start thinking of them as stand-ins for a group.

The Organizational/Functional Perspective: What kind of culture?

There is another set of factors that influence international business expectations and practices. Many conflicts and misunderstandings have their origin in the assumptions, values, and norms that characterise people of different organizations and different professions. We call this organizational culture, a concept we all know well. It is a powerful and immediate influence on day-to-day behavior in business, and on group identity. Those who have participated in mergers and acquisitions – international or domestic -- can attest to its relevance.

Whatever their backgrounds, people adapt to the prevailing habits and styles of their organization, whether it concerns how they dress, the communication practices and jargon they use, the ways decisions are made, or the management styles they prefer. That adaptation is one of the requirements of membership in the organizational group, whether company, profession, business unit, or labor union.

Differences between groups at this level are readily apparent. We observe this every day when we complain that marketing and finance “don’t speak the same language.” If you’ve changed careers between the public and private sectors in this (or any) country, you’ve probably seen a great difference in “culture”; or within the private sector between start-up entrepreneurial enterprises and larger more established companies.

Much of the supposed “cultural” tension within organizations is in reality a reflection of the normal tension we find between different business units who happen to be located in different countries -- Headquarters and Branch; R&D and Finance, and so on.

This applies to professions, or functions, as well. Think about it: Would an Singaporean engineer find it easier to work with a British engineer than with an Singaporean accountant? If your answer is, “It depends,” then you understand how complex and dynamic “cultural differences” can be. The answer may not be clear, but we have to ask the question.

So when we talk about cultural differences, we need to take into account the organizational and professional “cultures” involved.

The Cultural Perspective 1: Perception matters.

We would be wrong, therefore, to overrate the impact of “national” or societal culture on people’s behavior in business. But we would be just as wrong to deny it. Our culture, as many have pointed out, is a lens through which we view people’s actions, on which we base our perceptions of sameness and difference, and, crucially, our judgements of others’ behavior and competence. It is also a kind of mirror in which we view ourselves and our identity.

The key word here is perceptions. The impact of culture on people’s actions in international business is based as much on perceived differences and similarities as on actual ones. This shows up in the workplace in a number of ways:

Through stereotyping. This is a normal and necessary, but often misleading, response to group differences. We say that someone is a “typical Frenchman,” or “typically Japanese” in his/her behavior, management style, and so on. The danger in this is that these stereotypes are often activated as part of negative judgements, rather than positive attributions. While we express admiration for someone’s personal qualities in referring to them as an individual, for negative characterisations and criticisms we often resort to national or cultural stereotypes – “She’s a typical ----------- [Fill in the blank with your own preferred stereotype!] boss – cold, humourless, unapproachable.”

This is equally true at a group level. Intergroup frustration often evokes such comments as, “The **** Americans never listen to our point of view” or “Why can’t the Japanese ever give us a straight answer?” When you hear remarks like those around your organization, you know that you do not have an intercultural problem; you have the more fundamental problem of a breakdown of trust between groups.

Through differences in perspective between “insiders” and “outsiders.” This is a part of stereotyping. Members of a particular group (“insiders”) are more sensitive to differences amongst themselves, than are non-members (“outsiders”). An East Asian may often see Europeans and North Americans as similar in important aspects of their business behavior, while these same “Westerners” are sensitive to differences between Americans and Canadians, or between Italians and Germans. To take it even further, while a Frenchman may have a certain view of the “British,” a British person is very mindful of perceived differences between Welsh, Scottish, northern English, southern English, and so on.

Through our own need to be seen as different. As people working in international business, we have much in common regardless of background; we work toward commercial objectives, agree contracts, organize teams, communicate business information. If cultural differences outweighed these common elements, business on an international level would be impossible.

At the same time, however, we want our particular approaches to business to be respected as ours, even if our international similarities may outweigh differences. And so we are very sensitive to having policies and practices seemingly imposed on us by, for example, headquarters in another country, even if our own local approach would be very similar. “They never listen to us…”

They key to addressing these perceived group differences is not more cultural information and cultural training. It is a willingness to see ourselves as others see us, to exchange views on how we see each other. It is these perceptions, after all, upon which our “inter-cultural” business behavior is based.

The Cultural Perspective 2: Anticipate, but don’t predict.

Cultural differences in business practices, at the national or societal level do exist. We have seen that they may not necessarily, be the most important factor in explaining behavior, and that they may be exaggerated or distorted in our perceptions. But people from different parts of the world, through their collective experience, have evolved different responses to the common questions of business relationships, practices and communication. An understanding of these questions, which every culture attempts to answer in its own way, helps us to anticipate possible cultural differences in international business.

So what are those questions?

I offer the following seven questions as a practical framework for identifying possible cultural differences in international business, from both the societal and organizational perspectives. (The answers may not be the same in each case!) We’re not looking at questions of specific custom or practice, such as what time one should show up when invited for dinner, or what how many steps there are in the budget approval process. These things flow from answers to more fundamental questions. Anticipating possible differences in these areas will not enable us to predict behavior. It will, however, enable us to adjust our expectations of others so as to be less surprised or antagonized when they behave or respond in a way that is different from our own.

How do people go about establishing relationships of trust with each other?

This is an area of obvious and fundamental importance to business – Does a group prefer (personal) relationship-based arrangements, or contract- rule-based arrangements? People who do not share a common view of this may end up distrusting each other. Recognizing differences in this area helps us understand people’s use of time, approach to negotiations, social agenda, communication style, and other factors.

What is the basis of people’s identity and motivation?

With this we begin to understand people’s view of themselves, their responsibilities, their loyalties and obligations. This insight is essential if we are to see things from another’s perspective and understand their motivation.

How are authority, status, rank and role determined and regarded?

This is a reflection of the group’s designation of a legitimate leader, and expectations of the role. In connecting with and influencing people in another group, we need to understand who is in charge. To establish good teamwork, we also need to understand what people expect of a manger/leader.

How are decisions made in the group?

People in business make decisions, and groups of people differ in whether this is done exclusively by those in authority, with or without the participation of others, collectively, or individually.

How do people establish order among themselves?

This brings up the question of the role of rules, schedules and systems in a group; not merely what form they take, but how important they are, how closely they are followed, and on what basis they are applied/enforced. Asking this question enables us to learn about another group’s ethics practices, and attitudes toward agreements, contracts, and plans.

Style of Expression and Politeness: What forms of language are appropriate for maintaining good relationships?

This is all about how people show respect, the right amount of social distance (or intimacy), non-verbal signals, attitude, humor, and emotion. Here we learn that different forms of expression and politeness are just that, and are not indicators of dislike or rudeness. People in another group may not get our jokes, but that doesn’t mean they lack a sense of humor.

Purposes of Communication: How do people get their point across?

This is not a matter of native language, and goes beyond the previous question of “forms of language.” This question compels us to recognize that even when people speak the same language, they have different norms for dealing with conflict, giving feedback, being persuasive. This is a much more subtle area of difference that we may overlook because we take it so much for granted.

If we are prepared to accept that there are differences here, then we avoid rushing to judge others as evasive, unsure, or aggressive because they use a different communication style.

These seven questions may have a familiar ring, and they may be linked to any number of “models” of culture. But that’s not the point – they are not intended as classifications of values for some theoretical typology of cultures. They are designed to help us identify how people may differ from one another in their approach to business. They are a practical way of indicating areas where cultural differences – at any level – might appear. They can just as well be applied to organizational culture as to societal culture.

If we regard culture as a matter of how different people solve these basic problems of society and business, rather than as a cocktail of pre-determined categories of “Masculinity/Femininity,” “Individualism”, or “context,” we start from an open-minded position of respect, rather than from a new set of stereotypes.

So What?

So – We won’t be wasting our time and money on training, coaching, and team-building to help our organizations deal with conflicts and misunderstandings that arise at an international level, if we ensure that these are directed toward –

• Enabling all participants to comprehend (1) the fluid and dynamic nature of relationships in international business and (2) the need to understand the goals and priorities of others as individuals, and their organizational and professional points of view.
• Helping members of the organization see themselves as other see them, in other words, providing an opportunity for an exchange of perceptions -- even of stereotypes (positive and negative) -- between people of different national backgrounds. In this way, people come to a better understanding their co-workers’ point of view, an outcome that will do far more for “team building” and international co-operation than simple presentations of cultural information.
• Equipping people with a framework for identifying cultural differences, such as that described above, so that they are better prepared to anticipate possible differences in fresh situations of cross-cultural contact. In this way, they are able to prevent mismatches in cultural expectations from turning into interpersonal conflicts.
• Developing people’ abilities to discuss and negotiate these differences – interpersonal, organizational/function, or cultural -- with each other. While cross-cultural knowledge may help people modify their behavior in order to co-operate more easily with others, people can and will go only so far. At some point they say, “Why aren’t they trying to adapt to our way?” Hence the need for negotiation.
• Finally, treating the presence of cultural differences in your organization as a means of enriching it. Once you have enabled people to talk openly about their differing expectations of and approaches to business activities, you have tapped a source of new ideas, of alternative ways of reaching common objectives. These can help everyone in your organization to improve, for example, the quality of its relationships with customers, or how it conducts meetings, or puts together a multi-national team to negotiate a contract. The Dutchman may even decide that his American colleague is not such an “idiot” after all.