International Organisations and The Problem With “Business Culture”

Studies conducted over the course of several years (such as the Globe Project) found that national culture has a significant impact on corporate culture: beliefs, values, group- and power dynamics are bound to affect communication styles, driving factors, personal expectations and standards.

What challenges do global organisations face with regard to business culture? Whose values and attitudes are most likely to be globally promoted and, to some extent, adopted by others?

In their book “Communicating With Strangers: An Approach to Intercultural Communication”, authors William Gudykunst and Young Yun Kim suggest that “we communicate the way we do because we are raised in a particular culture and learn its language, rules, and norms. Because we learn the language, rules, and norms of our culture by a very early age (between five and ten years of age), however, we generally are unaware of how culture influences our behaviour in general and our communication in particular. ”

That’s exactly the problem with global organisations: poor (or lacking altogether) awareness of the fact that there’s no universal understanding of what constitutes “right” or “wrong”, for national culture has a heavy influence on our personal approach to life and we often consider such an approach as either the only or the best possible way to do things.

This tendency to believe that one’s own culture is the correct way of living is known as ethnocentrism, defined by social scientist William G. Sumner as “[the] technical name for this view of things in which one’s own group is the center of everything, and all others are scaled and rated with reference to it.”

What are the consequences of ethnocentrism in a multicultural workplace? Imbalanced communication, micro-aggressions, in-group favouritism, exclusion, just to name a few.

An ethnocentric company “going international” is unlikely to respect and appreciate different local customs and norms and to consider local workers as capable as those employed by the headquarter:

– a phenomenon known as Ethnocentric Attribution Bias suggests internal attributions for the positive behaviour of in-group members (“they’re competent”, “they’re clever”, etc.) and external attributions for their negative behaviour (eg, if they fail to perform well in a test, the fault may lie with “tricky questions” rather than with a lack of personal preparation), while the opposite happens when the behaviour of out-group members is under scrutiny;

– the Similarity-Attraction theory suggests that we are naturally attracted to people who remind us of ourselves because they validate our own beliefs about ourselves, while dissimilarity triggers negative feelings toward the other party.

A particular area of concern is represented by the communication occurring between managers and subordinates, especially when subsidiaries in developing countries are involved: ethnocentric managers, as previously mentioned, may perceive out-group (*those people who do not belong to a specific in-group) subordinates as lacking either important skills or the credibility to succeed in their role, while ethnocentric subordinates may not trust or be able to relate to the out-group manager.

As a result, hiring decisions and performance appraisals are likely to be unfair and heavily affected by biased perceptions.

From a business perspective, how’s ethnocentrism going to affect the ability of a company to thrive in a global workplace scenario?

Ethnocentrism may, and will:

– result in high organisational costs (for instance, in a scenario where the relocation of HQ employees abroad is preferred to the option of hiring local workforce);

– hinder growth (“foreign” ideas and business practices are met with resistance regardless of their actual validity);

– lead to tense and dysfunctional professional relationships in which the dominant party degrades the other and is not able or willing to appreciate its inputs.

– affect the communication process as a whole, since research suggests that source credibility and attractiveness are two key components of interpersonal communication dynamics.

So, what can organisations do to minimise the impact of ethnocentrism on business decisions?

As previously hinted, the first step towards building a truly global, international culture is self-awareness: understanding that each and every society around the world functions according to certain social codes and that our own criteria and standards are neither universal, nor easily understandable by people raised in a different environment.

With regard to this last point, it’s worth mentioning that “A recent analysis of the top journals in six sub‐disciplines of Psychology from 2003‐2007 revealed that 68% of subjects came from the US, and a full 96% of subjects were from Western industrialized countries, specifically North America, Europe, Australia, and Israel (Arnett, 2008). The make‐up of these samples appears to largely reflect the country of residence of the authors, as 73% of first authors were at American universities, and 99% were at universities in Western countries. This means that 96% of psychological samples come from countries with only 12% of the world’s population” (research available here).

Further insight on the practical implication of the Globe Project with regard to leadership and people management will be provided in future posts. Keep an eye on our blog for updates!

SOURCES/RECOMMENDED READING MATERIAL:

–The Globe Project, Online

– Sumner, W. G., & In Keller, A. G. (1906). ”Folkways: A study of the sociological importance of usages, manners, customs, mores, and morals”. Boston : Ginn and Company

– Gudykunst, W. B., & Kim, Y. Y. (1984). ”Communicating with strangers: An approach to intercultural communication”. New York: Random House

– Hofstede, Geert H. (1997). “Cultures and Organizations: Software of the Mind (second ed.)”. New York: McGraw-Hill

– Begley, T.M., & Boyd, D.P. (2003). “Why don’t they like us Overseas? Organizing U.S. business practices to management culture clash”. Organizational Dynamics, 32, 357- 371. DOI

– Byrne, D. (1971). “The attraction paradigm”. New York: Academic Press

– Taylor, D. M., & Jaggi, V. (1974). ”Ethnocentrism and causal attribution in a south Indian context”. Journal of Cross-Cultural Psychology, 5(2), 162–171

– Kluckhohn, F. and Strodtbeck, F. (1961). “Variations in value orientation”. New York: Harper Collins

Guest blog post by: Maria Antonietta Marino, Interculturalist: cross-cultural business adviser and self-appointed psychographic segmentation genius.

You can read about what Maria does and about the reasons why international operations keep facing costly challenges