CHAPTER - 1

INTRODUCTION TO CROSS CULTURAL MANAGEMENT

Learning objectives

Introduction – Concept of Culture for a Business Context; Brief wrap up of organizational

culture & its dimensions; Cultural Background of business stakeholders [managers,
employees, shareholders, suppliers, customers and others] – An Analytical framework.

INTRODUCTION

Cross-cultural management is the study of the behavior of people in organizations located in

cultures and nations around the world. It focuses on the description of organizational
behavior within countries and cultures, and, perhaps most importantly, on the interaction of
peoples from different countries working within the same organization or within the same
work environment.” (Adler 1983, p. 266).

In today’s global village, companies increasingly hire employees who are located in
different countries. And immigration has made it more common for employees to work
side by side with people from other parts of the world. As a result, many workplaces are
comprised of a multitude of cultures, which also means they are filled with different
traditions, languages and mannerisms. In order for a multicultural workplace to succeed, it
requires management that understands how to effectively guide and relate to people
from around the globe.

CROSS-CULTURE MANAGEMENT DEFINITION

Cross-culture management happens when a manager oversees employees from a culture

other than her own or when employees on a team are from different countries, as well.
There are a number of ways a multicultural team might be set up. Organizations have
offices in different countries which are managed by people in the head office. At other
times, remote employees around the world are managed by someone in yet another
country. Another scenario is when people have immigrated from different countries and
work alongside others who have also traveled from elsewhere.
For cross-culture management to be effective, the manager must identify and
acknowledge the differences in cultures, practices and preferences of the team members.
Managers also need to be able to modify or adapt certain business processes or systems,
such as the way information is communicated or the how decisions are made, in order to
improve the efficacy of the workforce

WHY CROSS-CULTURE MANAGEMENT IS IMPORTANT

Imagine working in an environment where your manager was oblivious to the issues you
had with him or with your team members. Whether those issues were related directly to
cross-cultural differences or to another issue, working under someone who is blind to
them doesn’t create a welcoming or effective workplace. A strong leader isn’t only
responsible for ensuring his team produces excellent work, he is also tasked with creating
an environment where good work can actually take place. Cross-cultural managers must
be aware of any issues their team is facing, or may face in the future, and then develop
strategies to overcome them. Effective cross-culture management contributes directly to
the overall success of the organization.
When things are going smoothly, having people from different countries on a team
broadens the scope of understanding. People from India may have more familiarity with
the Southeast Asian market, for example, while someone from Brazil may know more
about what consumers are looking for in South America. An employee from Germany
obviously can speak German with their customers from that country, leading to better
customer service and engagement. This all contributes directly to the bottom line.
On the other hand, having a cross-cultural team can also cause disruptions to the
workplace, such as slowing down day-to-day processes. Different styles of communication,
a common issue in cross-cultural business environments, can be frustrating to deal with
and can hinder team members from getting their ideas across. Some cultures thrive on flat
organizational structures, while others prefer a top-down hierarchy. This mismatch can
lead to distress or confusion for some employees. Cross-cultural teams require managers
that are trained and experienced in dealing with cultural issues and who can develop
strategies to mitigate them.

COMMON CROSS-CULTURE BARRIERS

Communication is a major barrier between different cultures. This can come in the form of
a language barrier, where some team members aren’t fluent in the language in which
business is conducted. It may take them longer to communicate their ideas. They may also
be unable to get their message across correctly, or team members may not take their
ideas seriously because of their lower level of language skills.
Communication barriers can be related to the styles of communication, too. For example,
many Western cultures value direct, to-the-point speech, where Eastern cultures are used
to more indirect speech patterns. This mismatch of communication styles can lead to
confusion, where team members don't understand what is being said. If you're used to
speaking directly, for example, and your coworker is from an Eastern culture and speaks
indirectly, you may not recognize what he is trying to say, even if you both are speaking
the same language. This could be detrimental, especially if he is trying to give you
instructions on how to do something critical to your role in the organization. Different
styles of communication can also lead employees to take offense. If you speak in a more
direct manner, someone who is not used to that kind of language might be upset or
insulted by something you say, even if that is not what you intended.
The way an organization is structured can also be a barrier for cross-culture teams.
Organizational structures vary from company to company. They include horizontal
organizations where there is no official hierarchy and companies with several levels of
management, where the word of the superior is law and not following directives is seen as
a sign of disrespect. When working with cultures that view authority differently, the way
the organization is structured can cause problems. Some employees may not feel
comfortable bringing up ideas that don't agree with the manager's, while others may do
so, but make a grave cultural mistake.
One’s culture can also affect decision-making style. Conflicts between the manager and an
employee, or between two employees, can arise if one makes decisions analytically and
the other instinctively. Similarly, some employees may make decisions quickly, while
others take their time. This can cause friction between team members. If the barriers
between cultures are not dealt with effectively by management, they can slow down daily
tasks, affect team relationships and derail larger business initiatives.

STRATEGIES FOR CROSS-CULTURE MANAGEMENT

In order to successfully perform as a cross-culture manager, a number of strategies to

dealing with issues that arise as a result of cultural differences should be employed. One
of the most important strategies is adaptation. Ignoring cultural differences or not
understanding their importance can be harmful. Instead, it’s imperative to acknowledge
cultural gaps that may exist on the team and figure out ways to work around them. A
manager needs to be able to think of creative solutions to cultural barriers. For example, if
an employee is facing a language barrier, instead of requiring the employee to take formal
language lessons, which can be costly and time-consuming, the manager may spend some
time one-on-one with the employee to get him up to speed on specific business terms
used every day in the office.
Another strategy some managers use is structural intervention. This enables them to
reassign tasks or move employees around on the team in order to improve efficiency,
increase learning opportunities and reduce confusion. To do this effectively, the manager
must be in tune to each team member’s skills and experience, and understand their
strengths and weaknesses. When trying to navigate a language barrier, it may seem like an
obvious choice to pair employees together who speak the same language. While this may
work in some cases, it may not be effective in the long run because it doesn’t tackle the
core issue of language fluency. Instead, the manager might pair the employee with the
language barrier with another employee who excels in teaching and communication and
has endless amounts of patience.
Some cross-culture leaders choose to use managerial intervention as a strategy to deal
with culture-related barriers. This involves setting specific ground rules for the team and
stepping in when an authoritative role is required. In the case of the language barrier, for
example, the manager may ask that employee to see how much he can learn and
communicate on his own. If that plan doesn’t work, the manager may assign someone on
the team to review his work to ensure it meets company standards. Or, she may step in
herself and review the employee’s work, going over specific communication-related issues
in detail with him.
Depending on the severity of the cultural barrier, a manager may choose to completely
remove an employee from the team. This is a costly strategy, as the company invests a lot
of money and time in hiring and training an employee. However, if the cultural differences
are too drastic to overcome, removing the employee from the team may be the only
solution. This is likely not the first strategy a manager will try. Instead, an effective cross-
culture manager will first spend time figuring out other ways to solve the cultural issue
without resorting to termination. In the case of the language barrier, if the employee
either doesn’t want to put in the effort to improve his skills in the language of the
business or simply doesn’t have the skills to learn the language, then removal from the
team may be the only option to salvage the rest of the group. By removing the employee
in question, the manager can then focus efforts and energy on the other team members
and help them continue to meet organizational objectives, instead of spending a large
amount of time trying to resolve a situation that may not have any quick fixes.

HOW TO TRAIN FOR CROSS-CULTURE MANAGEMENT

Many universities offer courses on cross-culture management as part of a business degree

or MBA. The focus is generally on applying established business principles to help solve
cross-culture issues in the workplace. These courses establish what culture is and how it
affects how employees in the workplace make business decisions and deal with authority
figures. Some courses also provide strategies for dealing with common cross-culture
problems a manager may face, in addition to negotiation skills that managers can use in
the workplace. These courses help managers deal with cross-culture teams they work
with, as well as clients and prospects of other cultures.
In addition to getting a formal education in cross-culture management, some leaders may
choose to learn on the job by delving in to the day-to-day aspects. Others may try a course
from an organization that specifically deals with cross-cultural education for professionals,
such as Global Integration, which provides practical tips and tools leaders can apply in the
workplace to better deal with cultural differences within the company.

CROSS-CULTURE MANAGEMENT EXAMPLES

With the help of global communication tools, such as the internet and mobile phones, it’s
easy for companies big and small to operate on an international level. Multinational giants
such as Google or Apple operate in several countries all over the world, and it’s a given
that their leadership team deals with people from a variety of cultures. However, you
don’t have to be Google or Apple to be part of a cross-culture team. Small- and medium-
sized businesses also employ people in other countries or people who have recently
moved from other countries. With the proliferation of video conferencing systems and
teamwork organizational apps, it’s fairly easy for many organizations to collaborate with
their counterparts all over the world. Similarly, virtual assistant services are a growing
industry, and many organizations outsource these tasks to people that live in other
countries, like India or the Philippines.
In any case, whether you’re working with an international corporation or for a mom and
pop setup with a virtual assistant oversees, it’s common to run into scenarios where
you’re dealing with people from other cultures on a professional level. In a management
position, it’s especially important to be aware of the differences so you can mitigate any
cultural barriers and lead your organization to success.

CONCEPT OF CULTURE FOR A BUSINESS CONTEXT

Business culture refers to the beliefs and behaviors that determine how a company's
employees and management interact and handle outside business transactions. Often,
corporate culture is implied, not expressly defined, and develops organically over time
from the cumulative traits of the people the company hires. A company's culture will be
reflected in its dress code, business hours, office setup, employee benefits, turnover,
hiring decisions, and treatment of clients, client satisfaction, and every other aspect
of operations.
ORGANIZATIONAL CULTURE & ITS DIMENSIONS

An organization’s culture is the systematic way employees, leaders, and work groups behave
and interact with each other. Company culture is collectively composed of values, beliefs,
norms, language, symbols, and habits.
Knowing and understanding your company’s culture (or another company’s culture) can be
quite useful. A fit between your personality and your company’s culture is of critical
importance to both your happiness and your success. If you don’t feel like you are welcome
and you belong, it will impact your professional relationships and drive and desire to excel.

FIVE MAJOR DIMENSIONS OF ORGANIZATIONAL CULTURE,

1. Dominant Culture and Subcultures,

2. Strong Culture and Weak Culture,
3. Mechanistic and Organic Cultures,
4. Authoritarian and Participative Cultures,
5. National Culture vs. Organisational Culture.

1. Dominant Culture and Subcultures:

A dominant culture is a set of core values shared by a majority of the organization’s

members. When we talk about organizational culture, we generally, mean dominant culture
only. The dominant culture is a macro view, that helps guide the day to day, behavior of
employees.

A sub-culture is a set of values shared by a small minority of organization’s members. Sub-

cultures arise as a result of problems or experiences that are shared by members of a
department or unit of the organization. In the subculture, the core values of the dominant
culture are retained but modified to reflect the individuals unit’s distinct situation. For
example, the marketing department may have its own sub-culture; the purchase
department may have its own sub-culture depending upon the additional values which are
unique to these departments only.

It is necessary for every organization to have a dominant culture because if there are only
numerous sub-cultures, the value of organizational culture as an independent variable will
lessen and the concept of Shared Behaviour will no longer be effective. Moreover, if sub-
cultures come into conflict with the dominant culture, these will weaken and undermine the
organization. But, many successful firms have found that most sub-cultures help the
members of a particular group deal with the specific day to day problems with which they
are confronted. These members may also support many, if not all, of the core values of the
dominant culture.

2. Strong Culture and Weak Culture:

Organisational culture can be strong or weak.

A strong culture will have the following features:
1. Strong values and strong leadership.
2. A strong culture is always widely shared. Sharedness refers to the degree to which
the organizational members have the same core values.
3. A strong culture is intensely held. Intensity refers to the degree of commitment of
the organization’s members to the core values.

A strong culture will have a great influence on the behavior of its members because high
degree of Sharedness and intensity create an internal climate of high behavioral control. A
weak culture is just the reverse of strong culture in every aspect.

The benefits of strong culture are reduced turnover and positive employee attitude. A
strong culture demonstrates high agreement among members about what the organization
stands for. Such unanimity of purpose builds cohesiveness, loyalty and organizational
commitment. As a result turnover is low and employees have a positive attitude towards
the organization the opposite will happen if the culture is weak. The limitations of strong
culture are that it will lead to “group think”, collective blind spots and resistance to change
and innovation.

3. Mechanistic and Organic Cultures:

In the mechanistic type of culture, the values of bureaucracy and feudalism are exhibited.
People restrict their careers to their own specializations only and organizational work is
concerned as a system of narrow specialism. It comprises of a traditional form of
organization where the authority flows from the top level of the organization to the lower
levels. Communication channels are also well defined and prescribed.

The main limitation of this method is that though the people are loyal to their departments
but interdepartmental rivalry and animosity is always there. This sort of culture resists any
type of change as well as innovations.

Organic culture is just the contrast of mechanistic culture. There are no prescribed
communication channels, departmental boundaries, hierarchies of authority or formal rules
and regulations. In this form of culture more stress is on flexibility, consultation, change and
innovation. There is free flow of communication-both formal and informal. Much emphasis
is laid on team work and task accomplishment. There are no rigid departmental boundaries
and the whole staff understands the problems, threats and opportunities faced by the
organization. The whole staff as a team is willing and prepared to take appropriate roles to
solve the problems.

4. Authoritarian and Participative Cultures:

In authoritarian culture, power is centralized in the leader and all the subordinates are
expected to obey the orders strictly. Discipline is stressed and any disobedience of orders is
severely punished to set an example for the others. This culture is based on the basic
assumption that the leader knows what is good for the organization and he or she always
acts in the organizational interests. This type of culture discourages professionalization
because professionals consider themselves as equals.

The participative culture is based on the assumption that when all the people working in the
organization participate in the decision making, they are likely to be more committed to the
decisions rather than to those decisions which are imposed on them by one authoritarian
leader. Group problem solving always leads to better decisions because several minds
working together are considered better than one mind working alone. If we discuss
something new, points and information emerge, which help in the decision making.

5. National Culture vs. Organisational Culture:

Organisational culture is always influenced by the culture of the land, irrespective of the
origin of the company. Or in other words, if there is a clash between the organizational
culture and the national culture, the organizational culture generally prevails. For example,
any company operating in India, whether Indian or foreign, observes the local culture.

They declare the same holidays, celebrate the same festivals and organize the same
functions and cultural activities as reflected by the Indian ethos. But research also indicates
that though organizational culture is important in understanding the behavior of people at
work, national culture is even more so.

CULTURAL BACKGROUND OF BUSINESS STAKEHOLDERS

STAKEHOLDER THEORY
Organizational management is largely influenced by the opinions and perspectives of
internal and external stakeholders. A stakeholder is any group, individual, or community
that is impacted by the operations of the organization, and therefore must be granted a
voice in how the organization functions. External stakeholders have no financial stake in the
organization, but are indirectly influenced by the organization’s operations.

INTERNAL
STAKEHOLDERS
Internal
stakeholders are
individuals or
groups who are
directly and/or
financially involved
in the operational
process. This
includes employees,
owners, and
managers. Each of
these groups is
potentially rewarded directly for the success of the firm.
Employees
Employees are primary internal stakeholders. Employees have significant financial and time
investments in the organization, and play a defining role in the strategy, tactics, and
operations the organization carries out. Well run organizations take into account employee
opinions, concerns, and values in shaping the strategy, vision, and mission of the firm.
Managers
Managers play a substantial role in determining the strategy of the organization, and a
significant voice in operational decisions. Managers are also accountable for the decisions
made, and act as a point of contact between shareholders, the board of directors, and the
organization itself.
Owners
Owners (who in publicly traded organizations can include shareholders) are the individuals
who hold significant shares of the firm. Owners are liable for the impacts the organization
has, and have a significant role in strategy. Owners often make substantial decisions
regarding both internal and external stakeholders.

EXTERNAL STAKEHOLDERS
Integrating businesses into society results in a wide variety of interactions with a number of
different external stakeholder groups.
Business are complex pieces in the social ecosystem, both impacted by and impacting a
wide variety of groups in the external environment. As a leader or manager at an
organization, understanding both internal and external stakeholder needs is a central
responsibility. Decisions should be made in a way that ensures all stakeholders are
considered.
External Stakeholders
There are quite a few external stakeholders for businesses to keep in mind when making
decisions and carrying out operations. These include but are not limited to customers,
suppliers, creditors, communities, governments, and society at large:
Customers
The primary purpose of providing goods and services is to fill needs. Understanding the
needs of an organization’s core customer base, and optimizing operations to best fill those
needs, is therefore a significant part of managing a business. Interacting with customers
through social media, emails, storefronts, user testing groups, and the delivery of services
and goods is an important aspect of maintaining a strong community (and a strong sense of
what customers want from the organization).
Nowadays, big data plays a significant role in determining what users want. By
understanding trends, habits, and trajectories in user data, organizations can anticipate the
needs of users and refine their value proposition.
Suppliers
Suppliers and other strategic alliances are interdependent, where the success of one will
impact the success of another. As a result, suppliers are closely related to organizations as
key external stakeholders. Timely payments, shipments, communication, and operational
processes are key to maintaining a strong relationship with this stakeholder group.
Local community
A business can be a great benefit to a community, providing tax money, local access to
unique goods and services, jobs, and community development programs. However, a
business can also be a drain on a community by increasing traffic, creating pollution, hurting
small businesses, and altering real estate prices. As a result, businesses must look at the
needs of the community, and ensure that negative repercussions are minimized while
community engagement is maximized.
Government
Governments tax businesses, and therefore have a firm stake in their success. Governments
can in fact be considered primary stakeholders, considering the profit motive involved.
Governments also provide regulatory oversight, ensuring that accounting procedures,
ethical practices, and legal concerns are being handled responsibly by business
representatives.
Broader Society
As a result of the digital and global economy, a business can have a significant impact on
society at large. Companies such as Airbnb and Uber have transformed entire industries,
creating dynamically different economies with a wider variety of participants than ever.
Walmart has substantially impacted the viability of small businesses in many regions. The
food that is sold at fast food chains has huge impacts on global health. Manufacturing
facilities in developing nations are transforming entire ecosystems. Social networks are
collecting vast amounts of data. All of these concepts aren’t intrinsically good or bad, but
managing them to ensure outcomes are positive for society as a whole is a critical
responsibility.
Other
While other stakeholder groups could be discussed at length, these are a few of the key
pillars in stakeholder theory.
 CHAPTER - II
CULTURE AND GLOBAL MANAGEMENT

Learning objectives

Culture and Global Management – Global Business Scenario and Role of Culture.
Framework for Analysis; Elements & Processes of Communication across Cultures;
Communication Strategy for/ of an Indian MNC and Foreign MNC & High-Performance
Winning Teams and Cultures; Culture Implications for Team Building.

INTRODUCTION TO CULTURE AND GLOBAL MANAGEMENT

Culture involves the manner in which individuals imagine sense and do. It changes from one
country, industry and organization to the other. From a business point off view, it is helpful
to consider of culture as comprising of four different levels. These levels are of nation,
business, industry and organization. Every one of these levels of culture relates with and
supports to develop the others. Although globalization can denote that a number of
features of culture have united across international frontiers there are even now massive
dissimilarities that can influence the methods to management and consumer behavior.

A globalized strategy has to be founded on an understanding that included both cultural

resemblances and differences. Culture is imperative to global organizations in different
aspects especially consumer behavior and management.

Culture has major impact on consumer behavior, spending pattern, primary choice of buying
and expense nature. Vital cultural differences influencing the suitability and attractiveness
of products in various regions of the world are still remaining. Culture has a comparable
impact on the attraction and tolerability of different sorts of commercials in various regions.
As an outcome of this the global business has to provide cautious consideration to culture in
designing and marketing and promoting any product or service that is provided.

CULTURE MANAGEMENT

Management in a global business will unavoidably have to take care of differences in culture
such the significance given to time, the requirement for regulations in job associations and
the magnitude of capacity against experience. In addition culture will have a major influence
on the outlook to job of workers, facets of encouragement, devotion to the company,
individual inventiveness and group dependability. While the achievement in Western
organization is frequently ascribed to individual enterprise and innovation, the
accomplishment in business in Asian nations is more related to a sound work ethic and
organizational faithfulness.

In a global organization the top management can assume different methods to handle
cultural differences. It is critical to emphasize that cultural diversity has to be seen as a basis
of prospective positive force for an organization. At the same time it cam be a likely cause
for conflict. Cultural differences can result in hostility in groups. But if managed properly it
can be a major supply of the essential inventiveness needed by businesses in the swiftly
transforming business environment to sustain competitive advantage. Cultural diversity is
thus a feature of global organizations which needs a large amount management care.
Management will look for making the culture of an organization into a character that
successfully assists its objectives, strategies and functions. The fact that culture cannot be
described completely will make that it will be a challenge for the management to
understand the notion and handle the differences existing.

GLOBAL BUSINESS SCENARIO AND ROLE OF CULTURE.

More businesses are entering the global market. It is vital for businesses to understand that
cultural differences can affect how they perform in the local markets they are targeting. One
of the first things to consider is communication because bridging the language gap is
extremely important in business talks.

Cross-cultural challenges

As you learn more about cultural differences, you will encounter several more concepts,
such as low-context and high-context cultures. In low-context cultures like the United
Kingdom, the United States and Canada, communication is explicit and clear while in a high-
context culture like Russia, communication is nuanced and implicit and there is more shared
content. However, the opposite happens when negative feedback is to be given. Russia
becomes direct, while low-context cultures tend to be indirect when negative feedback is
called for.

Building trust is another challenge for businesses. The concept may be relationship-based or
task-based. When doing business in China, for example, one of the ways to build good
relationships involves spending time together at the dining table (drinking and eating). It is
akin to building a strong network where gaining trust opens a path to success as cultural
differences are set aside. The Chinese call this type of relationship 'guanxi.' In the United
States, however, people tend not to have drinks with potential business partners often,
unless necessary, so they can avoid embarrassing situations.

Another factor that affects trust building is the comfort of silence. In some countries, a few
seconds of silence make the conversation uncomfortable. This happens in countries where
the comfort of silence is low, such as in France, Italy and the United States. In Asian
countries like Korea, Indonesia and Japan, however, the comfort of silence is high, which
often results in Asians not being able to speak often during business meetings with people
from Western countries. Asians are not likely to feel uncomfortable if the conversation
stops for as long as 30 seconds.

Business executives should learn that cultural sensitivity is essential when engaging in cross-
cultural business. Never look at cultural differences as weaknesses. Instead, respect cultural
differences to gain success.
Gaining benefits from cultural differences

Accepting cultural differences provides you with a wide range of business expertise and
gives you novel business insights to overcome business-related problems. It's your way to
cope with potential barriers regarding international business and culture.
It is vital for a global company to understand that there is a difference in the definition of
culture per se and culture in relation to the context of international business. Culture is
typically defined as a group of common and accepted standards shared by a specific society.
When you put it in international business context, what one society considers as
professional may be different for another foreign society.

You have to understand that cultural differences affect global business in three primary
areas – organizational hierarchy, etiquette, and communication. Understanding them and
recognizing their effects on your business will prevent you from creating misunderstandings
with foreign clients and colleagues.

1. Communication
Effective communication is vital to business success, whether you are a start-up or a big
corporation. Although it is common to hear that English is the language of business, do not
ever assume that you will be able to come across your foreign counterparts by using or
speaking English.
When you venture into the international business arena, one way of bridging the cultural
differences is through language. Understand the language your target market speaks and
know how you use it to convey your message. In India for example, business professionals
typically communicate in nuanced and indirect ways. This is opposite to the Finns who tend
to be direct and brief in their communication.
Aside from the verbal communication, it is essential to learn that non-verbal communication
is also extremely important when dealing with international businesses.
2. Interactions
Gestures that are commonplace in your own country, like kissing people you meet on the
cheek, making eye to eye contact and shaking hands firmly, may be taken as offensive or
unusual by your foreign clients or business partners. As many business coaches will tell you,
it is critical for you to remember the proper professional interactions when dealing with
different cultures. Doing research on accepted and proper business etiquette is important.
In some cases, you need to be extra observant of body language and at times, it is better to
ask than commit a cultural faux pas.
3. Etiquette in the workplace
When you are working for a multinational company, you are likely to encounter many
differences, which prompt you to learn international business etiquette.
Put high importance on the formality of address when dealing with foreign business
partners and colleagues. In some cultures, it is all right to address a person you've recently
met by their first name, while in other countries, they would rather that you address them
by their surname or their title. Canadians and Americans often use first names, even when
dealing with new acquaintances. But in many Asian countries, such as Singapore, China and
South Korea, you should always address a person formally by adding Mr. or Ms. before their
surname. If you are in doubt, use the formal way of address.
Punctuality is something that is relative. When you deal with business partners, clients or
colleagues from the United States, South Korea, Japan and Russia, you are expected to be
on time. In Germany, you are even expected to be at least 10 minutes early for your
appointment. In Greece, they expect foreigners to arrive on time but just like in Russia, you
may expect your counterpart to arrive slightly late. Brazil is ambivalent. They could either be
late by a few or several minutes unless you indicate that they follow the English time,
meaning they should arrive at the agreed time.
In Malaysia, expect to wait up to an hour if your counterpart will be about five minutes late.
They are not required to give an explanation, either. In China, it is acceptable to be at least
10 minutes late while in Mexico, it is quite normal for people to be late by 30 minutes for a
business meeting. When doing business in Nigeria or Ghana, the appointed hour for the
meeting may be one hour late or within the day. In Morocco, personal meetings could be
delayed by an hour and in some cases, a day. When scheduling meetings in India,
understand that being punctual is not one of their ways.
4. Hierarchy in the organization
Cultural norms dictate how attitudes towards management and organizational hierarchy are
perceived. In some cultures, junior staff and people in middle management may or may not
be allowed to speak up during meetings. In some countries, it is difficult to question
decisions by senior officers or express opinions that are different from the rest.
Attitudes are dependent on social equality or the societal values of a country. In some
countries such as Japan and South Korea where respect for elders and people in positions of
authority is deeply ingrained in the members of society, the concept is applied to the
workplace as well. It helps in defining responsibilities and roles in the company and those
holding positions in senior management expect deference from junior staff and a higher
level of formality and respect.
However, the situation is different in Scandinavian countries. In Norway for example,
societal equality is emphasized so the organizational hierarchy tends to be flat. The
workplace environment calls for cooperation across all departments and informal
communication is prevalent.

Differences in negotiating styles

Negotiation is a principal component of international business. Culture influences the way

people behave, communicate and think. These characteristics are reflected in the way they
negotiate. It is crucial for businesses to understand cultural differences during business
transactions and find ways to hurdle the barriers these differences present.
Spanish speakers view negotiation as the means to have a contract, while in some Asian
countries, negotiations are taken as the way to build stronger and firmer business
relationships. The Japanese regard negotiation as a win-win process while the Spanish look
at it as a win-lose process.

The way one communicates during negotiations should be carefully considered. Israelis and
Americas are very direct, so you immediately know if the transaction is approved or not. The
Japanese, however, tend to be indirect. You have to read and carefully interpret vague signs
to know if they rejected or accepted your proposal.
Some cultures are very emotional like the Latin Americans. Most Asians, on the other hand,
have a tendency to suppress their emotions and keep things formal.
Even the way different cultures handle contracts vary. Americans like to have every detail
included in the contract because they want to anticipate possible eventualities and
circumstances. The deal equates to a contract, therefore everything that was discussed and
accepted during the negotiation should be specified in the contract. The Chinese, on the
other hand, prefer a contract to have the general principles only, because for them, sealing
a deal means forming a relationship with the business partner.

Remain competitive and successful in the global market

Cultural differences are sensitive issues and those who take the time to address these
differences will have a better chance of remaining competitive and successful in the
international business environment.

Businesses preparing to enter the global market have to diligently learn how cultural
differences can affect their conduct of business in different markets. Their performance
depends on understanding cultural diversity and that different markets have their own set
of priorities, preferences and expectations. Day Translations, Inc. can help you navigate the
complexities of cultural differences through localization.

FRAMEWORK FOR ANALYSIS COMMUNICATION ACROSS CULTURES

Cross-cultural communication (also frequently referred to as intercultural communication,
which is also used in a different sense, though) is a field of study that looks at how people
from differing cultural backgrounds communicate, in similar and different ways among
themselves, and how they endeavor to communicate across cultures.

The Cold War, the United States economy was largely self-contained because the world was
polarized into two separate and competing powers: the east and west. However, changes
and advancements in economic relationships, political systems, and technological options
began to break down old cultural barriers.

Business transformed from individual-country capitalism to global capitalism. Thus, the

study of cross-cultural communication was originally found within businesses and the
government both seeking to expand globally. Businesses began to offer language training to
their employees. Businesses found that their employees were ill equipped for overseas work
in the globalizing market.

Programs were developed to train employees to understand how to act when abroad. With
this also came the development of the Foreign Service Institute, or FSI, through the Foreign
Service Act of 1946, where government employees received trainings and prepared for
overseas posts. There began also implementation of a “world view”perspective in the
curriculum of higher education.

In 1974, the International Progress Organization, with the support of UNESCO and under the
auspices of Senegalese President Leopold Sedar Senghor, held an international conference
on “The Cultural Self-comprehension of Nations” (Innsbruck. Austria. 27-29 July 1974) which
called upon United Nations member states “to organize systematic and global comparative
research on the different cultures of the world” and “to make all possible efforts for a
more intensive training of diplomats in the field of international cultural co-operation …
and to develop the cultural aspects of their foreign policy.”

In the past decade, there has become an increasing pressure for universities across the
world to incorporate intercultural and international understanding and knowledge into the
education of their students. International literacy and cross-cultural understanding have
become critical to a country’s cultural, technological, economic, and political health.
It has become essential for universities to educate, or more importantly, “transform”, to
function effectively and comfortably in a world characterized by close; multi-faceted
relationships and permeable borders.

Students must possess a certain level of global competence to understand the world they
live in and how they fit into this world. This level of global competence starts at ground
level-the university and its faculty- with how they generate and transmit cross-cultural
knowledge and information to students.

2. Interdisciplinary Orientation of Cross Cultural Communication:

Cross-cultural communication tries to bring together such relatively unrelated areas as
cultural anthropology and established areas of communication. Its core is to establish and
understand how people from different cultures communicate with each other. Its charge is
to also produce some guidelines with which people from different cultures can better
communicate with each other.

Cross-cultural communication, as in many scholarly fields, is a combination of many other

fields. These fields include anthropology, cultural studies, psychology and communication.
The field has also moved both toward the treatment of inter-ethnic relations, and toward
the study of communication strategies used by co-cultural populations, i.e., communication
strategies used to deal with majority or mainstream populations.

The study of languages other than one’s own cannot only serve to help us understand what
we as human beings have in common, but also assist us in understanding the diversity which
underlies not only our languages, but also our ways of constructing and organizing
knowledge, and the many different realities in which we all live and interact.

Such understanding has profound implications with respect to developing a critical

awareness of social relationships. Understanding social relationships and the way other
cultures work is the groundwork of successful globalization business efforts.

Language socialization can be broadly defined as “an investigation of how language both
presupposes and creates anew, social relations in cultural context”. It is imperative that the
speaker understands the grammar of a language, as well as how elements of language are
socially situated in order to reach communicative competence.

Human experience is culturally relevant, so elements of language are also culturally

relevant. One must carefully consider semiotics and the evaluation of sign systems to
compare cross-cultural norms of communication. There are several potential problems that
come with language socialization, however. Sometimes people can over-generalize or label
cultures with stereotypical and subjective characterizations.

Another primary concern with documenting alternative cultural norms revolves around the
fact that no social actor uses language in ways that perfectly match normative
characterizations.
A methodology for investigating how an individual uses language and other semiotic activity
to create and use new models of conduct and how this varies from the cultural norm should
be incorporated into the study of language socialization.

3. Global Rise of Cross Cultural Communication:

Effective communication with people of different cultures is especially challenging. Cultures
provide people with ways of thinking-ways of seeing, hearing, and interpreting the world.
Thus, the same words can mean different things to people from different cultures, even
when they talk the “same” language. When the languages are different, and translation has
to be used to communicate, the potential for misunderstandings increases.
The study of cross-cultural communication is fast becoming a global research area. As a
result, cultural differences in the study of cross-cultural communication can already be
found. For example, cross-cultural communication is generally considered to fall within the
larger field of communication studies in the US, but it is emerging as a sub-field of applied
linguistics in the UK.
As the application of cross-cultural communication theory to foreign language education is
increasingly appreciated around the world, cross-cultural communication classes can be
found within foreign language departments of some universities, while other schools are
placing cross-cultural communication programs in their departments of education.

4. Incorporation of Cross Cultural Communication into College Programs:

With the increasing pressures and opportunities of globalization, the incorporation of

international networking alliances has become an “essential mechanism for the
internationalization of higher education”. Many universities from around the world have
taken great strides to increase intercultural understanding through processes of
organizational change and innovations.
In general, university processes revolve around four major dimensions which include:
organizational change, curriculum innovation, staff development, and student mobility.
Ellingboe emphasizes these four major dimensions with his own specifications for the
internationalization process.

His specifications include:

(a) College leadership;

(b) Faculty members’ international involvement in activities with colleagues, research sites,
and institutions worldwide
(c) The availability, affordability accessibility, and transferability of study abroad programs
for students
(d) The presence and integration of international students, scholars, and visiting faculty into
campus life and
(e) International co-curricular units (residence halls, conference planning centers, student
unions, career centers, cultural immersion and language houses, student activities, and
student organizations).

Above all, universities need to make sure that they are open and responsive to changes in
the outside environment. In order for internationalization to be fully effective, the university
(including all staff, students, curriculum, and activities) needs to be current with cultural
changes, and willing to adapt to these changes.

As stated by Ellingboe, internationalization “is an ongoing, future-oriented,

multidimensional, interdisciplinary, leadership-driven vision that involves many stakeholders
working to change the internal dynamics of an institution to respond and adapt
appropriately to an increasingly diverse, globally focused, ever-changing external
environment”.

New distance learning technologies, such as interactive teleconferencing, enable students

located thousands of miles apart to communicate and interact in a virtual classroom.
The main theories for cross-cultural communication are based on the work done looking at
value differences between different cultures, especially the works of Edward T. Hall, Richard
D. Lewis, Geert Hofstede, and Fons Trompenaars. Clifford Geertz was also a contributor to
this field. Also Jussi V. Koivisto’s model on cultural crossing in internationally operating
organisations elaborates from this base of research.

These theories have been applied to a variety of different communication theories and
settings, including general business and management (Fons Trompenaars and Charles
Hampden-Turner) and marketing (Marieke de Mooij, Stephan Dahl). There have also been
several successful educational projects which concentrate on the practical applications of
these theories in cross-cultural situations.

These theories have also been criticised mainly by management scholars (e.g., Nigel Holden)
for being based on the culture concept derived from 19th century cultural anthropology and
emphasizing on culture-as-difference and culture-as-essence. Another criticism has been the
uncritical way Hofstede’s dimensions are served up in textbooks as facts (Peter W. Cardon).
There is a move to focus on ‘cross-cultural interdependence’ instead of the traditional views
of comparative differences and similarities between cultures. Cross-cultural management is
increasingly seen as a form of knowledge management. Cross cultural communication gives
opportunities to share ideas, experiences, and different perspectives and perception by
interacting with local people.

5. Aspects of Cross Cultural Communication:

There are several parameters that may be perceived differently by people of different
cultures.
These may include:
i. Perception of Time:
In some countries like China and Japan, punctuality is considered important and being late
would be considered as an insult. However, in countries such as those of South America and
the Middle East, being on time does not carry the same sense of urgency.
ii. Perception of Space:
The concept of “personal space” also varies from country to country. In certain countries it
is considered respectful to maintain a distance while interacting. However, in other
countries, this is not so important.
iii. Non-verbal Communication:
Cultures may be either Low-context or High-context: Low-context cultures rely more on
content rather than on context. They give value to the written word rather than oral
statements. High-context cultures infer information from message context, rather than from
content. They rely heavily on nonverbal signs and prefer indirectness, politeness &
ambiguity.

All communication is cultural – It draws on ways we have learned to speak and give
nonverbal messages. We do not always communicate the same way from day to day, since
factors like context, individual personality, and mood interact with the variety of cultural
influences we have internalized that influence our choices.

Communication is interactive, so an important influence on its effectiveness is our

relationship with others. Do they hear and understand what we are trying to say? Are they
listening well? Are we listening well in response? Do their responses show that they
understand the words and the meanings behind the words we have chosen? Is the mood
positive and receptive?

Is there trust between them and us? Are there differences that relate to ineffective
communication, divergent goals or interests, or fundamentally different ways of seeing the
world? The answers to these questions will give us some clues about the effectiveness of
our communication and the ease with which we may be able to move through conflict.

The challenge is that even with all the good will in the world, miscommunication is likely to
happen, especially when there are significant cultural differences between communicators.
Miscommunication may lead to conflict, or aggravate conflict that already exists.
We make — whether it is clear to us or not – quite different meaning of the world, our
places in it, and our relationships with others.

ELEMENTS & PROCESSES OF COMMUNICATION ACROSS CULTURES

When we visit, work and/or move into another country, it requires attention to
communicate clearly with the culture and the people you are relating with. For clear
communication, we cannot only take in consideration which language we speak, but also
the culture, education, environment and community we live in and travel to.
As an entrepreneur and business owner with the experience of working and living on
different continents, I had the opportunity to develop skills in cross-cultural communication.
Every culture has taught me new ways to think, to relate and to live. I consider that the
most important is to stay true to my values, to be selective and to consider what helps
improve the well-being of everyone. Learning to observe, to be mindful of my environment
and the circumstances and culture I live in helps me communicate clearly. Yet it has always
been important for me to have a clear intention and inner awareness to stay true to my
values, to my self while exploring other ways. Clarity in your intention, values, and
selectivity are fundamental for mindful cross-cultural experiences.
Sometimes we can stay trapped in our belief system and engraved perspective of what life is
and should be. Then we may resist the opportunity to explore new ways. It is only when we
release attachments and expectations that we can fully experience a culture and find a way
to communicate with clarity. A mindful communication takes into consideration the space
and perspective of everyone. Here are five key elements to support cross-cultural
communication:
Ether – Intention
Whenever I enter into a new space, a land, a culture, I enter with gratitude and respect; the
way I would like others to do if they would come into my own country and culture. I
consider that every culture and everyone deserves respect, compassion, and
acknowledgment. When you have a positive intention, your perspective and approach will
come from a healthy perspective. This can lead to clarity in your choices and in the direction
you choose to direct your attention.
Air – Mindfulness
You have to be mindful and take in consideration the culture you visit or you live in. There
are now many ways to learn about a culture and to prepare ourselves psychologically before
the entrance into a new environment. It is insightful to open our mind to different cultures
and perspectives. This step requires the release of judgment and the detachment from core
beliefs that have been ingrained through our own education and life experiences.
Every culture and perspective has some truth and gives us the opportunity to learn, to
clarify what we will take and what we let go. A word can have many different meanings. It is
not only about the different language, but rather about the culture and perception of the
word itself in some countries or areas.
Fire – Leadership
Charge with your heart and take leadership with positive intention. All cultures have
different forms of expressions. A kind gesture from your own culture and country can be
interpreted in a negative way in another culture and environment. You can become familiar
with their expression by learning about their culture and traditions. When you interact with
the people you will observe a space of respect and heartfulness.
In this element, we take into consideration the feelings along the experience.
When you enter into a new community, it requires a sense of leadership with positive
intention. You are the one who is going there and make a step into a new world. The people
in the other culture may be welcoming, yet it is not always sure they will. Remember
that they are in their own space and culture. If you can enter with an open heart and do it in
a harmonious rhythm and intensity, there is more probability for them to open as well. This
requires you to be aware of the way you act and the intensity of your expression.
Water – Relationships
Interpersonal relationships and honoring healthy values are necessary. You can study the
culture and try to comprehend it the best possible way through rational understanding and
study. Yet, the subtleties can be integrated with life experience only. In this element, we
take into consideration the emotional intelligence. When we travel and experience
relationships in different ways, we cannot attach too much emotionally. It requires to be in
flow and to navigate life transitions with compassion and clarity. The diversity can awaken
many emotions and it takes dedication to channel them creatively with a positive intention.
Nurturing healthy relationships is a key aspect of cross-cultural communication.
Earth – Resources
Be present, respectful of space and resources. In every culture, they have a different notion
of time. When I am in Switzerland the time is very specific and the resources are managed in
a clearly organized way. When we arrive a few minutes late, it can trigger a stress and sense
of chaos. When I am in Argentina, I have to honor a 30-minute extension. This means that it
will be polite to arrive 30 minutes late at a party. If not they may feel stressed and
overwhelmed.
The way the people organize their activities and resources is quite unique to every culture. It
requires a certain flexibility in the way we manage our resources, yet it is key to still respect
your own time and energy in a way that will be beneficial for everyone. You can learn to use
their resources with respect and consideration. Setting healthy boundaries and finding the
way to clearly communicate them with the people you meet is a key aspect of the
intercultural communication. You will be fully present, in the moment, in the place you are
at.

COMMUNICATION STRATEGY FOR/ OF AN INDIAN MNC AND FOREIGN MNC

In today’s diverse workplace, communication issues can take on an added dimension of

complexity. Every culture has its own set of tacit assumptions and tendencies when it comes
to face-to-face interactions, and trying to get your point across effectively can sometimes be
difficult. Even when a language barrier doesn’t exist, cross-cultural communication can be
challenging. Here are our top ten tips for effective cross-cultural communication:
1. Maintain etiquette
Many cultures have specific etiquette around the way they communicate. Before you meet,
research the target culture, or if time allows, do some cross cultural training. For example,
many cultures expect a degree of formality at the beginning of communication between
individuals. Every culture has its own specific way of indicating this formality: ‘Herr’ and
‘Frau’ in Germany, reversing family and given names in China and the use of ‘san’ in Japan
for men and women etc. Be aware of these familiarity tokens and don’t jump straight to first
name terms until you receive a cue from the other person to do so.
2. Avoid slang
Not even the most educated non-native English speaker will have a comprehensive
understanding of English slang, idioms and sayings. They may understand the individual
words you have said, but not the context or the meaning. As a result you could end up
confusing them or at worst, offending them.
3. Speak slowly
Even if English is the common language in a cross cultural situation it’s not a good idea to
speak at your normal conversational speed. Modulating your pace will help, as will speaking
clearly and pronouncing your words properly. Break your sentences into short, definable
sections and give your listener time to translate and digest your words as you go. But don’t
slow down too much as it might seem patronising. If the person you’re speaking to is talking
too quickly or their accent is making it difficult for you to understand them, don’t be afraid
to politely ask them to slow down too.
4. Keep it simple
In a cross cultural conversation there’s no need to make it harder for both of you by using
big words. Just keep it simple. Two syllable words are much easier to understand than three
syllable words, and one syllable words are better than two syllable words. Say “Please do
this quickly” rather than “Please do this in an efficacious manner.”
5. Practice active listening
Active listening is a very effective strategy for improving cross cultural communication.
Restate or summarise what the other person has said, to ensure that you have understood
them correctly, and ask frequent questions. This helps build rapport and ensures that
important information doesn’t get missed or misunderstood.
6. Take turns to talk
Make the conversation flow more freely by taking it in turns to speak. Make a point and
then listen to the other person respond. Particularly when people are speaking English as
their second language it’s better to talk to them in short exchanges rather than delivering a
long monologue that might be difficult for them to follow.
7. Write things down
If you’re not sure whether the other person has understood you properly, write it down to
make sure. This can be particularly helpful when discussing large figures. For example, in the
UK we write a billion as 1,000,000,000 but in the USA, it’s written as 1,000,000,000,000.
8. Avoid closed questions
Don’t phrase a question that needs a ‘yes’ or ‘no’ answer. In many cultures it is difficult or
embarrassing to answer in the negative, so you will always get a ‘yes’ even if the real answer
is ‘no’. Ask open-ended questions that require information as a response instead.
9. Be careful with humour
Many cultures take business very seriously and believe in behaving professionally and
following protocol at all times. Consequently they don’t appreciate the use of humour and
jokes in a business context. If you do decide to use humour make sure it will be understood
and appreciated in the other culture and not cause offence. Be aware that British sarcasm
usually has a negative effect abroad.
10. Be supportive
Effective cross cultural communication is about all parties feeling comfortable. In any
conversation with a non-native English speaker, treat them with respect, do your best to
communicate clearly and give them encouragement when they respond. This will help build
their confidence and trust in you.

HIGH-PERFORMANCE WINNING TEAMS AND CULTURES

Work teams are the backbone of contemporary work life. Executive teams run corporations.
Project teams create new products and services. Matrix teams help develop everything from
pharmaceuticals to the delivery of services in consulting firms and charitable agencies.
Marketing and sales teams deliver products and services to customers. High-performance
work teams are essential to the way most organizations organize and carry out their work,
resulting in superior performance, which translates into a significant competitive advantage.
A team is a group of people who work together to accomplish something beyond their
individual self-interests; however, not all groups are teams. A simple but effective
description of what is meant by "a team" comes from Jon R. Katzenbach and Douglas K.
Smith's book, The Wisdom of Teams: Creating the High-Performance Organization: "A team
is a small number of people with complementary skills who are committed in a common
purpose, performance goals, and approach for which they hold themselves mutually
accountable."1
What distinguishes high-performance teams from other groups is that a team is more than a
collection of people simply following orders. To function effectively, a high-performance
team also needs:
 A deep sense of purpose and commitment to the team's members and to the
mission.
 Relatively more ambitious performance goals than average teams.
 Mutual accountability and a clear understanding of members' responsibilities to the
team and individual obligations.
 A diverse range of expertise that complements other team members' abilities.
 Interdependence and trust between members.
The use of work teams is widespread in all types of organizations throughout the world—
with good reason. High-performance work teams have an advantage over the work of
individuals because each member can offer new ideas, talent and viewpoints. In addition,
high-performance work teams predictably execute strategy, meet goals and need little
management oversight because they are empowered and responsible for their functional
activity and accountable for performance. Compensation and incentives are usually tied to
the achievement of team and individual goals, respectively, with a heavier emphasis on
collective team performance. Because superior team performance is so highly valued, these
teams do not tolerate marginal and underperforming individual contributors.
Business Case
The use of teams has expanded dramatically in response to competitive challenges and
technological changes. Team structures allow for the application of multiple skills,
judgments and experiences that are most appropriate for projects requiring diverse
expertise and problem-solving skills. Teams can execute more quickly, make better
decisions, solve more complex problems, and do more to enhance creativity and build skills
than an individual can. Their use also increases productivity and morale; well-functioning
teams can outperform individuals and even other types of working groups.
There are four key reasons why teams work:
 A group of individuals brings complementary skills and experience that exceed the
abilities of a single individual.
 Teams support real-time problem-solving and are more flexible and responsive to
changing demands.
 Teams provide a unique social dimension that enhances the economic and
administrative aspects of work.
 High-performance teams generally have more fun at work than low-achieving teams
or individuals.
Characteristics of High-Performance Work Teams
Although there is no simple measure of performance effectiveness for groups, and no team
is identical, there seems to be a shared understanding of what makes an effective group
work. High-performance work teams are generally composed of a combination of purpose
and goals, talent, skills, performance ethics, incentives and motivation, efficacy, leadership,
conflict, communication, power and empowerment, and norms and standards.
Team purpose, goals and roles
High-performing teams are synergistic social entities that work toward the achievement of a
common goal or goals—short term and long term. They often exemplify a total commitment
to the work and to each other. Team members do better work when their roles are clear:
They know how to do their jobs and why they are doing them. Each member must
understand and support the meaning and value of the team's mission and vision. Clarifying
the purpose and tying it to each person's role and responsibilities enhances team potential,
as does the inclusion of "stretch" goals that increase the challenge necessary to motivate
team members.
Talent, skills and work ethic
High-performance teams begin by recruiting and retaining their best talent while quickly
helping low-performing members find other places to work. Morale typically increases as
performance increases. After selecting for talent, it is critical to ensure that the team
members possess complementary skills (e.g., technical, problem-solving, decision-making
and interpersonal skills). Team members must exhibit a sustained commitment to
performance excellence, exercise candor and mutual respect, and hold themselves and their
organizations accountable at both the individual and team levels.
Incentives, motivation and efficacy
Both monetary and nonmonetary systems that encourage high performance have a positive
impact on tactical implementation of the team's goals. Over the long term, intrinsic
motivators such as personal satisfaction at work and working on interesting projects provide
the greatest impact on performance. In addition, a belief in one's self and abilities
encourages people to take more strategic risks to achieve team goals.
Leadership
High-performing leaders generally accompany high-performance work teams. Essential
leadership qualities include the ability to a) keep the purpose, goals and approach relevant
and meaningful; b) build commitment and confidence; c) ensure that team members
constantly enhance their skills; d) manage relationships from the outside with a focus on the
removal of obstacles that might hinder group performance; e) provide opportunities for
others without seeking credit; and f) get in the trenches and do the real work required.
There is widespread agreement that effective team leaders focus on purpose, goals,
relationships and an unwavering commitment to results that benefit the organization and
each individual.
Conflict and communication
Conflict management is an essential part of becoming a high-performance team. Open
communication in such teams means a focus on coaching instead of on directing and a focus
on the ability to immediately address issues openly and candidly. The key to team
performance is open lines of communication at all times to provide motivation, maintain
interest and promote cooperation.
Power and empowerment
Empowered work teams increase ownership, provide an opportunity to develop new skills,
boost interest in the project and facilitate decision-making. Researchers refer to the ideal
situation as being "loose-tight," such that specific decision-making boundaries are
constructed with enough room for individuals to make empowered choices.
Norms and standards
Like rules that govern group behavior, norms can be helpful in improving team development
and performance. Norms for high-performance teams include open lines of communication,
early resolution of conflict, regular evaluation of both individual and team performance,
high levels of respect among members, a cohesive and supportive team environment, a
strong work ethic that focuses on results, and shared recognition of team successes. The key
is that high-performing teams actually discuss and agree to their operating rules—standards
that each team member agrees to uphold and for which they hold each other accountable.

Stages of Team Development

Dr. Bruce Tuckman, an early psychology researcher focused on group dynamics, developed a
four-phase model of team development that included forming, storming, norming and
performing. Refinement by other researchers has resulted in a well-known team
development process that provides a useful framework for leaders and team members
seeking to understand the nature of group dynamics and their evolution.
The four typically recognized stages of the process include:
1. Forming. Individuals are trying to get to know each other and the organization and
have not formed a commitment to the team. In consult with HR, project leaders
provide direction and outline expectations. In addition, HR might use DISC or Myers-
Briggs assessments and then facilitate a discussion about the results to help the
group understand each other's differences and operating styles.
2. Storming. In this typically rocky stage, team members may challenge the leader and
each other. The leader coaches members on how to manage conflict and focus on
goals and may ask the HR team to help facilitate related training.
3. Norming. After individuals have worked through conflicts, the team begins to
develop. People begin to appreciate their differences and start to work together. The
leader begins to serve as a facilitator, offering encouragement and guidance. HR
serves as a continuing support and can facilitate discussions or offer training as
needed.
4. Performing. At this stage, the team is fully functional, and members are able to
manage their relationships and work toward shared goals. Team members feel
accepted and communicate openly with the leader. The leader focuses on delegating
responsibilities and must identify when the team is moving into a different stage.
Other researchers have described a similar process yet attributed different names to the
phases (e.g., working group, pseudo team, potential team, real team and ending with a
high-performance team). Regardless of the identifiers used, high-performance work teams
develop over time in roughly similar ways. As a result, this four-phase model serves general
organizational purposes well, although some researchers have suggested that a fifth stage
occurs when the group is disbanding: adjourning or mourning, the feeling of sadness and
loss as a successful team separates.

Common Types of High-Performance Work Teams

Though they vary in duration, purpose and ultimate goals, organizations commonly establish
five types of teams to achieve work goals.
Work teams
Work teams are continuing units responsible for producing goods or providing services.
Their membership is typically stable, usually full time and well-defined. Work teams are
found in both manufacturing and service settings and are traditionally directed by
supervisors who make most of the decisions about what is done, how it is done and who
does it. Self-managing teams involving employees making decisions that were formerly
made by supervisors are gaining favor.
Parallel teams
Parallel teams pull together people from different work units or jobs to perform functions
the organization is not equipped to perform well. They exist in parallel with the formal
organizational structure, have limited authority and can only make recommendations.
Parallel teams are used for problem-solving and improvement-oriented activities (e.g.,
quality improvement teams, employee involvement groups, quality circles or task forces).
Project teams
Project teams are typically time-limited and produce a one-time output (e.g., a new product
or service, information system or plant). Project-team tasks are not repetitive and involve
considerable application of knowledge, judgment and expertise. As a result, membership is
usually diverse, drawing from different disciplines and functional units, so specialized
expertise can be applied to the project.
Management teams
Management teams coordinate and provide direction to their subunits and are responsible
for the overall performance of a business unit. The management team's authority stems
from the hierarchal rank of its members. At the top of the organization, the executive
management team establishes strategic direction and manages the company's performance
by applying its collective expertise and sharing responsibility for the overall success.
Virtual teams
A virtual team is a group of individuals who work together in pursuit of common goals
across time, space and organizational boundaries. They are linked electronically by webs of
communication technology (e.g., the Internet, Skype, WebEx, internal networks). Members
of a virtual team coordinate their work predominantly with electronic information and
communication technologies to accomplish specific organizational tasks and may never
meet face to face. Virtual teams allow companies to obtain the best talent possible for a
specific project without geographical restrictions. They are also generally viewed as more
efficient in expenditures of time and related travel costs. See How to Manage Remote
Teams Effectively.

Common Barriers Faced by High-Performance Work Teams

Given the importance of team-based work in today's economy, experts have focused on
using evidence-based organizational research to pinpoint the defining attributes of high-
performance teams.
Despite varying approaches to describing high-performance teams, some common
characteristics seem to be strong indicators of a team that is not functioning at its peak or
that needs intervention:
 Nonparticipating leadership. Team members fail to use a democratic leadership
style that involves and engages team members.
 Poor decision-making. Team members make decisions too quickly without a blend
of rational and intuitive decision-making methods.
  Infrequent communication. Lines of communication are closed and infrequent.
 Diversity not valued. Team members do not value the diversity of experience and
backgrounds of their fellow team members, resulting in a lack of diverse viewpoints
and less successful decision-making and solutions.
 Lack of mutual trust. Team members do not fully trust each other or the team as an
entity.
 Inability to manage conflict. Not dealing with conflict openly and transparently and
allowing grudges to build up can destroy team morale.
 Lack of goal clarity. Team members are unsure about their roles and the ultimate
team goals, resulting in a lack of commitment and engagement.
 Poorly defined roles and responsibilities. Team members are not clear about what
they must do (and what they must not do) to demonstrate their commitment to the
team and to support team success.
 Relationship issues. The bonds between the team members are weak, which affects
their efficiency and effectiveness.
 Negative atmosphere. An overall team culture that is not open, transparent, positive
and future-focused results in a failure to perform at high levels.
See How Rudeness Stops People from Working Together and How to Improve Teamwork.
HR's Role
As a chief resource to any organizational team effort, HR can support managers most
effectively through a focus on several critical elements. See 11 Ways to Build Stronger
Teams.

Selection of team members and support of team cohesiveness

Organizations can be strengthened by leveraging differences that mirror the diversity of
their employees. Surveys have demonstrated a positive impact on high performance by
teams with a diversity of ages, ethnicity and gender. A diverse workforce can also improve
organizational productivity and creativity. Managing a diverse workforce can be a challenge,
though. When people from different backgrounds come together, there is potential for both
great accomplishment and great conflict. Managing diversity requires creating an
environment in which differences in perspective can be valued and allowed to positively
influence and contribute to the organization's work.
The HR team can support new team development by helping to select the right mix of
individuals with the requisite skills and expertise to complement the knowledge, skills and
abilities of other team members. See 3 Essential Virtues of the Ideal Team Player.
Communication
Communication within high-performing teams requires the free flow of information, a
shared agreement that no topic is off-limits, and frequent and respectful interactions among
team members and other individuals in the organization. The HR team can work with team
members to provide communication skills training to help members stay in close contact
with each other through transparent transactions.
Conflict resolution
One of the central differences between an average team and a high-performance work
team is the capability to handle conflict in a constructive way. Any conflicts that surface
must be depersonalized and dealt with early, either between individuals or among the
collective team. Instead of viewing conflict as a negative, a high-performance team views it
as a strength of the collective group. Diverse views help improve thinking, learning and
overall performance.
Task conflicts can actually improve team performance if managed collaboratively. Such
conflict fosters a deeper understanding of task issues and an exchange of information that
facilitates problem-solving, decision-making and generating ideas.
Conflict arises from differences, and when individuals come together in teams, their
differences in power, values and attitudes contribute to the creation of conflict. To avoid the
negative consequences that can result from frequent disagreements, most methods of
resolving conflict stress the importance of dealing with disputes quickly and openly. Conflict
is not necessarily destructive; when managed properly, conflict can result in significant
benefits for a team. SeeViewpoint: The Art and Science of Conflict Management.
To support effectiveness within high-performance teams, an understanding of individual
working styles is important. HR can assist with this by using the DISC assessment, the Myers-
Briggs Type Indicator and the Herrmann Brain Dominance Instrument (or similar
assessments for which they are qualified), so each individual better understands the
behavior, personalities and thinking styles of his or her fellow team members.
Collaboration
Collaboration is the basis for bringing together the knowledge, experience and skills of
multiple team members to contribute to the development of a new service or product more
effectively than individual team members could. It involves a commitment to a shared goal
and an interdependence that comes from understanding that what is accomplished
together is greater than what can be accomplished individually.
Collaboration is a discipline that requires an understanding of the practices that make it
successful. HR can help facilitate discussions about positive ways to collaborate in a group
setting to achieve maximum effectiveness. See Clarify the 'What,' 'Who' and 'Why' of
Collaboration.
Team member training
To maximize the individual contributions of employees to a team, HR must provide advance
training on effective teams, the typical stages of team dynamics, role expectations, conflict
resolution, communication and similar issues. This training can help team members better
understand issues that may occur and how they can best respond to those inevitable
problems.
Assisting new and departing team members
HR can help integrate new team members as they are selected. This process is especially
valuable if someone joins the team late, which can disrupt the group dynamics. Helping new
members understand the group norms and expectations will help them acclimate more
quickly.See Viewpoint: 5 Key Steps to Effective Manager Onboarding.
HR can also help manage the departure of high-performing team members and the
disbanding of a team. Sensitively managing departures is vital. Recognition of members'
contributions and achievements is a fitting end to their team service.
Creation of Appropriate Compensation and Rewards
A significant role for HR is to design both individual and team rewards to support
performance excellence based on a solid performance management system.
HR Business Planning
As business leaders, HR professionals can also add value by understanding, communicating
and influencing the manner in which teams are deployed in the organization.
Advising management when to use teams
HR can help the organization determine when the use of teams would be advantageous.
Examples of situations in which teams can be beneficial include building a product or
service, organizing rituals or ceremonies, increasing sales and marketing performance,
enhancing profitability, and improving a product or service.
Advising management at team startup
HR can help management structure and source the right personnel for membership in a
team based on personality profiles and expertise (knowledge, skills and experience) when
the team is first organized, as well as after the team's objectives have been established.
Development of a team project plan
Business planning builds from an organizational or departmental strategic planning process.
It provides clarification of shorter-term actions necessary to achieve goals. With the
assistance of HR, a newly formed team can develop a clear business or work plan to help it
focus on the appropriate goals and objectives and think about how to best achieve those
goals.
Team building and motivation
Team building is an ongoing process that helps a workgroup become a cohesive unit. The
team members not only share expectations for accomplishing group tasks, but they also
trust and support each other and respect individual differences. HR's role as a team builder
is to help the team become more cohesive and productive. Teams often lose their
motivation or focus midway through a project, so HR must nurture and support members
along the way. HR can assist in planning a team-building event to help members clarify their
focus and renew their energies to complete the project successfully. See Don't Wing It with
Team-Building Activities.

Technology
Virtual teams coordinate their work predominantly with electronic information and
communication technologies and may never meet face to face, so having the right
technological resources and support is essential. Other teams also rely on technology, but
none as much as those working in a virtual team environment. See How to Use Technology
to Support Remote Teams.
Metrics
Teams need a clear understanding of where they want to end up and how to find the most
efficient way to reach their goals. Most teams will require a measurement system that
enables every member to understand what is expected of him or her and also provides a
way for members to assess their progress.
As a result, the measurement system used to determine relative team success will need to
include:
 A statement of the results the team wants to achieve with measures and
performance standards for each result.
 Statements of each individual's results, with measures and performance standards
for each result.
 A clear picture of the priorities and relative importance of team and individual
results.
 A plan for collecting and summarizing performance data so the team and individuals
will know how they are performing.
Global Issues
Increasingly, organizations operate in a global competitive environment, and members of
high-performance work teams live and work in numerous countries. Employers must take
this into account and determine appropriate strategies (e.g., communication, technology,
pay, recruiting) based on the culture, laws and customs of each region. See Viewpoint: How
to Empower a Diverse International Team.

CULTURE IMPLICATION FOR TEAM BUILDING.

To fully understand the implications of this statement, we need to understand what we

mean by Corporate Culture. Only then can we explore how and why or even IF team
building is important.
“Corporate culture” is in fact a microcosm of national culture: the beliefs, behavior, dress,
environment, habits, traditions, and personal traits reflected either on a national level or
within an enterprise or organization of whatever size.

In a business sense, it determines how a company’s employees and management interact

and handle outside business transactions. A company’s culture is reflected in its dress code,
business hours, office setup, employee benefits, turnover, hiring decisions, treatment of
clients, client satisfaction, management strategies, employee communication and relations,
work environment, attitude, and even company origin myths, as well as visual symbols such
as logos and trademarks…and in fact every single aspect of its operations.

“Culture guides discretionary behavior and it… tells us how to respond to an unprecedented
service request. It tells us whether to risk telling our bosses about our new ideas, and
whether to surface or hide problems. Employees make hundreds of decisions on their own
every day, and culture is our guide…”

It will come as no surprise then when we state that a company can only operate successfully
if all its members see themselves as part of a team, or many teams making up the whole.
And the success of the team contributes to the success of the enterprise, building pride and
involvement, in much the same way as a winning team in the Olympics builds national pride.
Team-building events, therefore, can help co-workers better understand one another,
coalesce, learn to be more effective at working together, and trust each other. Team-
building exercises help employees work on serious issues, such as learning problem-solving
techniques and improving communication skills.

Cohesive employee teams are the building blocks for the success of a company and the
development of its culture. Regular team building activities are therefore vital for
developing the team spirit and cooperation between employees. There are a number of
objectives at which management can aim to ensure that any team building exercises can
contribute towards company culture:
Building Trust: Trust is a critical factor. Mutual trust nurtured by team-building activities
allow employees to depend more on one another and be more productive and efficient as a
result.

Conflict Resolution: Employees are individuals. They have different personalities and
attitudes resulting in disputes and differences of opinions. This is all legitimate and even
healthy for the creative development of the enterprise. But such differences should be
resolved in a non-violent and cooperative way, and team building activities can play a vital
role in helping resolve conflicts.

Increased Collaboration: Establishing a strong bond between the team members to ensure
they all buy into the shared objectives of a particular project or solving a problem, and in
fact work at it with a high level of “esprit de corps” – team spirit.

Improving Communication Skills: Employees learn how to better communicate with one
another as they face the challenges of activities in team building events. Such improved
communication can lead to more productive and efficient daily work, particularly in a group
environment.

Other benefits include:

1. More co-operation between senior and junior staff

2. Getting to acknowledge individual strengths and weaknesses
3. Improved team leaderships skills
4. Increased commitment to your organization
5. Enriched problem solving skills
6. More effective decision making
7. Enhanced sense of ownership and responsibility
8. Corporate pride

Remember, however, that one of the main objectives of a team building event is to have
fun: with that fun being converted in appreciation and loyalty to the enterprise or
organization itself.

Team building may turn out to be the most important investment you can make for your
people and your organization. Effective team building means more engaged employees, to
support a stronger, more cohesive culture and eventually an improved bottom line.
 CHAPTER – III
CROSS CULTURE – NEGOTIATION & DECISION MAKING

Learning objectives

Cross Culture – Negotiation & Decision Making – Process of Negotiation and Needed Skills
& Knowledge Base – Overview with two illustrations from multicultural contexts [India –
Europe/ India – US settings, for instance]; International and Global Business Operations-
Strategy Formulation & Implementation; Aligning Strategy, Structure & Culture in an
organizational Context.

CROSS CULTURE – NEGOTIATION & DECISION MAKING

Negotiation Management’s ability to negotiate productively effects their ability to implement

strategies Negotiation is the process of discussion by which two or more parties aim to reach a
mutually acceptable agreement Negotiating across borders is more complex because of the
number of stakeholders involved In the global arena, cultural differences produce great
difficulties in the negotiation process. Ignorance of native bargaining rituals, more than any
other single factor, accounts for unimpressive sales efforts. Important differences in the
negotiation process from country to country include
1. the amount and type of preparation for a negotiation,
2. the relative emphasis on tasks versus interpersonal relationships,
3. the reliance on general principles rather than specific issues, and
4. the number of people present and the extent of their influence.
In every instance, managers must familiarize themselves with the cultural background and
underlying motivations of the negotiators—and the tactics and procedures they use—to control
the process, make progress, and therefore maximize company goals.

The Negotiation Process

The negotiation process comprises five stages, the ordering of which may vary according to the
cultural norms; for most people, relationship building is part of a continuous process in any
event:
1. preparation,
2. relationship building,
3. the exchange of task related information,
4. persuasion, and
5. concessions and agreement.

Stage One – Preparation

Negotiator must familiarize themselves withThe entire context and background of their
counterpartsTo the specific subjects to be negotiatedDifferences in culture, language, and
environmentManagers must have an understanding of their own negotiating style
Managers should find out as much as possible aboutThe kinds of demands that might be
madeThe composition of the opposing teamThe relative authority that the members
possessDevelop a profile of their counterpartsThey consider different variables during this
process as well

MULTICULTURAL CONTEXTS (INDIA – EUROPE/ INDIA – US) SETTINGS FOR INTERNATIONAL

AND GLOBAL BUSINESS OPERATIONS.

Profile of an American Negotiator

Knows when to compromiseTakes a firm stand at the beginning of the negotiationRefuses to

make concessions beforehandKeeps his or her cards close to his or her chestAccepts
compromises only when the negotiation is deadlockedSets up the general principles and
delegates the detail work to associatesKeeps a maximum of options open before
negotiationOperates in good faith

position as clearly as possibleKnows when he or she wishes a negotiation to move onIs fully
briefed about the negotiated issuesHas a good sense of timing and is consistentMakes the
other party reveal his or her position while keeping his or her own position hidden as long as
possibleLets the other negotiator come forward first and looks for the best deal
Profile of an Indian Negotiator

Looks for and says the truthIs not afraid of speaking up and has no fearsExercises self-
controlSeeks solutions that will please all the parties involvedRespects the other partyNeither
uses violence nor insultsIs ready to change his or her mind and differ with himself or herself at
the risk of being seen as inconsistent and unpredictable

Puts things into perspective and switches easily from the small picture to the big oneIs humble
and trusts the opponentIs able to withdraw, use silence, and learn from withinRelies on himself
or herself, his or her own resources and strengthsAppeals to the other party’s spiritual
identityIs tenacious, patient, and persistentLearns from the opponent and avoids the use of
secretsGoes beyond logical reasoning and trusts his or her instinct as well as faith

Profile of an Arab Negotiator

Protects all the parties’ honor, self-respect, and dignityAvoids direct confrontation between
opponentsIs respected and trusted by allDoes not put the parties involved in a situation where
they have to show weakness or admit defeatHas the necessary prestige to be listened toIs
creative enough to come up with honorable solutions for all partiesIs impartial and can
understand the positions of the various parties without leaning toward one or the other

Is able to resist any kind of pressure that the opponents could try to exercise on himUses
references to people who are highly respected by the opponents to persuade them to change
their minds on some issuesCan keep secrets and in so doing gains the confidence of the
negotiating partiesControls his temper and emotionsCan use conference as mediating
devicesKnows that the opponent will have problems in carrying out the decisions made during
the negotiationIs able to cope with the Arab disregard for time
Managing Negotiation

This slide illustrates the relationships among the factors of cross-cultural negotiation.
Managing NegotiationSuccessful management of intercultural negotiations requires the
managerTo gain specific knowledge of the parties in the upcoming meetingTo prepare
accordingly to adjust to and control the situationTo be innovativeA problem solving approach is
essential to successful cross-cultural negotiationsTreat everyone with respect, avoid making
anyone feel uncomfortable, don’t criticize or blame others in a personal way such that they lose
faceSkillful global managers must assess many factors when managing negotiations. They must
understand the position of the other parties in regard to their goals—whether national or
corporate—and whether these goals are represented by principles or specific details. They
should have the ability to recognize the relative importance attached to completing the task
versus developing interpersonal relationships. Managers also must know the composition of
the teams involved, the power allotted to the members, and the extent of the teams’
preparation. In addition, they must grasp the significance of personal trust in the relationship.
Using the Web to Support Negotiations

Negotiation Support Systems (NSS) can provide support for the negotiation process
by:Increasing the likelihood that an agreement is reached when a zone of agreement exists
(solutions that both parties would accept)Decreasing the direct and indirect costs of
negotiations, such as costs caused by time delays (strikes, violence), and attorneys’ fees, among
othersMaximizing the chances for optimal outcomes

Comparative Management in Focus: Negotiating with the Chinese

The Chinese think in terms of process that has no culmination. Americans think in terms of
concrete solutions to specific problems The Chinese approach is impersonal, patient and aloof .
. .To Americans, Chinese leaders seem polite but aloof and condescending. To the Chinese,
Americans appear erratic and somewhat frivolous.—Henry Kissinger,Newsweek, May, 2001
Business people have two major areas of conflict when negotiating with the ChineseAmount of
detail about product characteristicsApparent insincerity about reaching an agreementChinese
negotiation process is affected by three cultural normsPoliteness and emotional
restraintEmphasis on social obligationsBelief in the interconnection of work, family, and
friendship

Comparative Management in Focus: Negotiating with the Chinese

Tips to foreigners conducting business in China Practice patience Accept prolonged periods of
stalemate Refrain from exaggerated expectations Discount Chinese rhetoric about future
prospects Expect the Chinese to try to manipulate by shaming Resist the temptation to believe
that difficulties are your fault Try to understand Chinese cultural traits The Chinese are among
the toughest negotiators in the world. American managers must anticipate various tactics, such
as their delaying techniques and their avoidance of direct, specific answers: Both ploys are used
to exploit the known impatience of Americans. The Chinese frequently try to put pressure on
Americans by “shaming” them, thereby implying that the Americans are trying to renege on the
friendship—the basis of the implicit contract. Whereas Westerners come to negotiations with
specific and segmented goals and find it easy to compromise, the Chinese are reluctant to
negotiate details. They find it difficult to compromise and trade because they have entered
negotiations with a broader vision of achieving development goals for China, and they are
offended when Westerners don’t internalize those goals.

Managing Conflict

Much of the negotiation process is fraught with conflict—explicit or implicit—and such conflict
can often lead to a standoff, or a lose–lose situation. This is regrettable, not only because of the
situation at hand, but also because it probably will shut off future opportunities for deals
between the parties. Much of the cause of such conflict can be found in cultural differences
between the parties—in their expectations, in their behaviors, and particularly in their
communication styles.

Decision Making Stages in the Rational Decision Making Model

Defining the problem Gathering and analyzing relevant data Considering alternative solutions
Deciding on the best solution Implementing the decision Negotiation actually represents the
outcome of a series of small and large decisions. The decisions include those made by each
party before actual negotiations start. The decisions include incremental decisions, made
during the negotiation process, on how to react and proceed, when to concede, and on what to
agree or disagree. Negotiation can thus be seen as a series of explicit and implicit decisions, and
the subjects of negotiation and decision making become interdependent. Generally these
decisions are made by using the rational decision making model.
Cultural Variables Affecting Decision Making

Objective (basing decisions on rationality) versus subjective (basing decisions on emotions)

approach Risk tolerance Locus of control – internal (managers in control of events), or external
(managers have little control over events)

Comparative Management in Focus: Decision Making in Japan

Having an understanding of the Japanese decision making process is vital for any manager that
will be working within this country. This understanding will come from having an understanding
that the Japan’s national culture is one that is based on relationships, and team work. It is this
culture of collectivism and shared responsibility that underlies the Japanese ringi system of
decision making. In the ringi system, the process works from the bottom up. Americans are
used to a centralized system, where major decisions are made by upper-level managers in a
top-down approach typical of individualistic societies. The Japanese process, however, is
dispersed throughout the organization, relying on group consensus. The ringi system is
cumbersome and very time-consuming prior to the implementation stage, although
implementation is facilitated because of the widespread awareness of and support for the
proposal already gained throughout the organization. However, its slow progress is problematic
when decisions are time-sensitive. This process is the opposite of the Americans’ top-down
decisions, which are made quite rapidly and without consultation, but which then take some
time to implement because unforeseen practical or support problems often arise. Ringi system:
time to decide vs. time to implement

NEGOTIATION AND NEEDED SKILLS

Negotiation skills are required to secure better agreements in our personal and business lives.
Negotiating skills include methods of:
1. Communicating
2. Persuading and influencing
3. Planning
4. Strategizing
5. Employing tactics, techniques, tools, systems, processes, and teamwork
Negotiation skills can be learned. Meaning, “born negotiators” are a myth. Successful
negotiators need to develop a variety of skills. These are drawn from various disciplines.

PROCESS OF NEGOTIATION

Relationship building – taking time to build mutual trust before starting business
discussionsMay require go-betweensBe prepared to wait for the other party to start business
negotiationsExchanging task related information – during this stage each side makes a
presentation and states its position, normally followed by a question-and-answer sessionRole
reversal: showing an understanding of the other party’s viewpoint and needsThis slide
highlights steps two and three in the negotiation process. During relationship building many
non-task events (social events, tours, and ceremonies) take place so that the parties can get to
know one another.Once stage three begins the parties begin to present their positions and
discussion follow so that a mutually beneficial solution can be found. Negotiators should focus
not only on presenting their situation and needs but also on showing an understanding of their
opponents’ viewpoint. Focusing on the entire situation confronting each party encourages the
negotiators to assess a wider range of alternatives for resolution, rather than limiting
themselves to their preconceived, static positions. Researchers suggest that to be most
effective, negotiators should prepare for meetings by practicing role reversal.

Persuasion – during this stage both parties try to persuade the other to accept more of their
position while giving up some of their own; there are recognizable tactics for this stageStressful
tacticsConcessions and Agreements – at this point each side will make various concessions so
that an agreement can be reached and signedThis slide highlights the final two stages in the
negotiation process. Follow the hyperlink to the persuasion tactics.Well-prepared negotiators
are aware of various concession strategies and have decided ahead of time what their own
concession strategy will be. Familiar with the typical initial positions that various parties are
likely to take, they know that the Russians and the Chinese generally open their bargaining with
extreme positions, asking for more than they hope to gain, whereas the Swedes usually start
with what they are prepared to accept. Research in the United States indicates that better end
results are attained by starting with extreme positions. With this approach, the process of
reaching an agreement involves careful timing of the disclosure information and of concessions.
Most people who have studied negotiations believe that negotiators should disclose only the
information that is necessary at a given point and that they should try to obtain information
piece by piece to get the whole picture gradually without giving away their goals or concession
strategy.

Understanding Negotiation Styles

Global managers can benefit from studying differences in negotiating behaviors (and
theunderlying reasons for them), which can help them recognize what is happening in
thenegotiating process

For North Americans, negotiations are businesslike; their factual appeals are based on what
they believe is objective information, presented with the assumption that it is understood by
the other side on a logical basis.Arabs use affective appeals based on emotions and subjective
feelings.Russians employ axiomatic appeals – that is, their appeals are based on the ideals
generally accepted in their society.
KNOWLEDGE BASE SYSTEM
A knowledge-based system (KBS) is a form of artificial intelligence (AI) that aims to capture the
knowledge of human experts to support decision-making. Examples of knowledge-based
systems include expert systems, which are so called because of their reliance on human
expertise.
The typical architecture of a knowledge-based system, which informs its problem-solving
method, includes a knowledge base and an inference engine. The knowledge base contains a
collection of information in a given field -- medical diagnosis, for example. The inference engine
deduces insights from the information housed in the knowledge base. Knowledge-based
systems also include an interface through which users query the system and interact with it.
A knowledge-based system may vary with respect to its problem-solving method or approach.
Some systems encode expert knowledge as rules and are therefore referred to as rule-based
systems. Another approach, case-based reasoning, substitutes cases for rules. Cases are
essentially solutions to existing problems that a case-based system will attempt to apply to a
new problem.
 Knowledge-based
systems represent a
rules-based or case-
based approach to
AI

Where knowledge-based systems are used

Over the years, knowledge-based systems have been developed for a number of applications.
MYCIN, for example, was an early knowledge-based system created to help doctors diagnose
diseases. Healthcare has remained an important market for knowledge-based systems, which
are now referred to as clinical decision-support systems in the health sciences context.
Knowledge-based systems have also been employed in applications as diverse as avalanche
path analysis, industrial equipment fault diagnosis and cash management.
Knowledge-based systems and artificial intelligence
While a subset of artificial intelligence, classical knowledge-based systems differ in approach to
some of the newer developments in AI.
Daniel Dennett, a philosopher and cognitive scientist, in his 2017 book, From Bacteria to Bach
and Back, cited a strategy shift from early AI, characterized by "top-down-organized,
bureaucratically efficient know-it-all" systems to systems that harness Big Data and "statistical
pattern-finding techniques" such as data-mining and deep learning in a more bottom-up
approach.
Examples of AI following the latter approach include neural network systems, a type of deep-
learning technology that concentrates on signal processing and pattern recognition problems
such as facial recognition.

STRATEGY FORMULATION

Strategy Formulation is an analytical process of selection of the best suitable course of action
to meet the organizational objectives and vision. It is one of the steps of the strategic
management process. The strategic plan allows an organization to examine its resources,
provides a financial plan and establishes the most appropriate action plan for increasing profits.
It is examined through SWOT analysis. SWOT is an acronym for strength, weakness, opportunity
and threat. The strategic plan should be informed to all the employees so that they know the
company’s objectives, mission and vision. It provides direction and focus to the employees.
 STEPSOF STRATEGY FORMULATION

The steps of strategy formulation include the following:

1. Establishing Organizational Objectives: This involves establishing long-term goals of
an organization. Strategic decisions can be taken once the
organizational objectives are determined.
2. Analysis of Organizational Environment: This involves SWOT
analysis, meaning identifying the company’s strengths and
weaknesses and keeping vigilance over competitors’ actions to
understand opportunities and threats.
Strengths and weaknesses are internal factors which the company
has control over. Opportunities and threats, on the other hand,
are external factors over which the company has no control. A
successful organization builds on its strengths, overcomes its
weakness, identifies new opportunities and protects against
external threats.
3. Forming quantitative goals: Defining targets so as to meet the
company’s short-term and long-term objectives. Example, 30%
increase in revenue this year of a company.
4. Objectives in context with divisional plans: This involves setting
up targets for every department so that they work in coherence
with the organization as a whole.
5. Performance Analysis: This is done to estimate the degree of
variation between the actual and the standard performance of an
organization.
6. Selection of Strategy: This is the final step of strategy
formulation. It involves evaluation of the alternatives and selection of the
best strategy amongst them to be the strategy of the organization.
Strategy formulation process is an integral part of strategic management, as it helps in framing
effective strategies for the organization, to survive and grow in the dynamic business
environment.

LEVELSOF STRATEGY FORMULATION

There are three levels of strategy formulation used in
an organization:
1. Corporate level strategy: This level outlines what
you want to achieve: growth, stability, acquisition or
retrenchment. It focuses on what business you are
going to enter the market.
2. Business level strategy: This level answers the
question of how you are going to compete. It plays a
role in those organizations which have smaller units of business and each is considered as the
strategic business unit (SBU).
3. Functional level strategy: This level concentrates on how an organization is going to grow. It
defines daily actions including allocation of resources to deliver corporate and business level
strategies.
Hence, all organizations have competitors, and it is the strategy that enables one business to
become more successful and established than the other.

STRATEGY IMPLEMENTATION

Strategy Implementation refers to the execution of the plans and strategies, so as to

accomplish the long-term goals of the organization. It converts the opted strategy into the
moves and actions of the organisation to achieve the objectives.
Simply put, strategy implementation is the technique through which the firm develops, utilises
and integrates its structure, culture, resources, people and control system to follow the
strategies to have the edge over other competitors in the market.

Strategy Implementation is the fourth stage of the Strategic Management process, the other
three being a determination of strategic mission, vision and objectives, environmental and
organisational analysis, and formulating the strategy. It is followed by Strategic Evaluation and
Control.

Processof Strategy Implementation

1. Building an organization, that possess the capability to put the strategies into action
successfully.
2. Supplying resources, in sufficient quantity, to strategy-essential activities.
3. Developing policies which encourage strategy.
4. Such policies and programs are employed which helps in continuous improvement.
5. Combining the reward structure, for achieving the results.
6. Using strategic leadership.
 The process of strategy implementation has an important role to play in the company’s success.
The process takes places after environmental scanning, SWOT analyses and ascertaining the
strategic issues.
Prerequisites of Strategy Implementation
1. Institutionalization of Strategy: First of all the strategy is to be institutionalized, in the sense
that the one who framed it should promote or defend it in front of the members, because it
may be undermined.
2. Developing proper organizational climate: Organizational climate implies the components of
the internal environment, which includes the cooperation, development of personnel, the
degree of commitment and determination, efficiency, etc., which converts the purpose into
results.
3. Formulation of operating plans: Operating plans refers to the action plans, decisions and the
programs, that take place regularly, in different parts of the company. If they are framed to
indicate the proposed strategic results, they assist in attaining the objectives of the
organization by concentrating on the factors which are significant.
4. Developing proper organisational structure: Organization structure implies the way in which
different parts of the organisation are linked together. It highlights the relationships between
various designations, positions and roles. To implement a strategy, the structure is to be
designed as per the requirements of the strategy.
5. Periodic Review of Strategy: Review of the strategy is to be taken at regular intervals so as to
identify whether the strategy so implemented is relevant to the purpose of the organisation. As
the organization operates in a dynamic environment, which may change anytime, so it is
essential to take a review, to know if it can fulfil the needs of the organization.
Even the best-formulated strategies fail if they are not implemented in an appropriate manner.
Further, it should be kept in mind that, if there is an alignment between strategy and other
elements like resource allocation, organizational structure, work climate, culture, process and
reward structure, then only the effective implementation is possible.
Aspects of Strategy Implementation
 Creating budgets which provide sufficient resources to those activities which are relevant to the
strategic success of the business.
 Supplying the organization with skilled and experienced staff.
 Conforming that the policies and procedures of the organisation assist in the successful
execution of the strategies.
 Leading practices are to be employed for carrying out key business functions.
 Setting up an information and communication system, that facilitate the workforce of the
organisation, to perform their roles effectively.
 Developing a favourable work climate and culture, for proper implementation of the strategy.
Strategy implementation is the time-taking part of the overall process, as it puts the formulated
plans into actions and desired results.

ALIGNING STRATEGY

Aligning the entire business around competitive strategy and growth plans is a sure method of
achieving sustainable competitive advantage. Firms that are able to fully align their business
around their strategy maximize their competitive advantage period and achieve
greater profitability. Strategy is about creating “fit” among a firms’ unique set of activities that
the competition finds difficult to replicate. Aligning strategy, organisation and people creates
high performance organizations that competitors find difficult to compete with
Achieving this alignment requires 3 key elements with direct linkages that reinforce each other.
1. Strategy and growth plans specifying the unique and distinctive activities a firm
will pursue to create dictate the optimal organizational and work design
2. Organisational and Work Design that ensures the right number of levels, the
definition of core business processes and the key roles required for business
success
3. Organisational design that links directly with the key roles and accountabilities
for leadership at each level combined with a complete integrated system of
people practices

Aligning Strategy, Organisation and People Creates Trust

1. Trust is built on the back of perceived fairness, equity and consistency. Aligning strategy
and organisation and people creates trust when an effective system of people practices
is part of the integration. Higher levels of trust translate into higher levels of employee
engagement with the organization, the strategy, and the work. This has the effect of
increasing discretionary effort and ultimately talent retention.
2. The exciting news is that strategically aligned organisations with sound people practices
are rare.
3. This is exciting news because it presents a unique opportunity for most businesses to
build a high performance organizations that create long term value without the need for
“employee engagement programs” or expensive technology. It simply requires leaders
who want to maximise the potential of their organizations and have the courage to do
something about it.

STRUCTURE & CULTURE IN AN ORGANIZATIONAL CONTEXT.

The definition of organizational structure and culture is important to the success of a business.
It is necessary that a business owner or operator understands the difference between the
organizational structure and the culture of the business.
The best organizational structure will depend on the company and its employees. There is no
one best method to apply for guaranteed business success. It will also depend on the goals of
the business. If a business wants to be effective, it needs to have a strong organizational
structure and culture. You can often tell when a business has an effective organizational
structure or culture in place.

Understanding Organizational Culture

Organizational culture is the expectations of the business. These are unwritten rules that
dictate the attire, work ethic, and overall structure of the business. A new employee will often
have to learn and follow these rules to fit into a business and its culture. Consider it the
personality of the business. This culture sets the standards for the workplace and affects how
the employees are expected to act.
Organizational culture might include the following:
 Commonly shared beliefs.
 Values that dictate the employees' behaviors.
 Agreed upon assumptions.
Most organizations have a unique culture that sets them apart from other businesses. These
unspoken culture rules affect the employees, managers, and owners of the business.

Understanding Organizational Structure

Organizational structure, on the other hand, is the legal structure of the business. The
organizational structure might include the following:
 The method in which you register your business.
 The formal system of roles and authority within the business.
 The organizational chart.
 The policies and methods used to assign manager tasks.
 The hierarchy structure.

The Structural Characteristics of the Hierarchy

The hierarchy structure consists of the organizational chart, which includes who reports to
whom and who is assigned individual roles within the business. The hierarchy structure includes
the following elements:
 Characteristics: the specific policies and regulations used to manage the behaviors of
management.
 Height: the number of levels within the hierarchy.
 Control span: how many employees are beneath each manager.
 Departments: the specific groups of employees and available resources within each
department.
 Centralization: the upholding of policies and regulations throughout all levels of the
hierarchy.
 Standardization: the standard of rules and regulations.
 Formalization: the formality of documenting rules and procedures.
 Specialization: the level of special skills within each department.

Things That Affect Organizational Structure

There are a few things that can affect the organizational structure of a business. Business
owners have a direct effect on corporate strategy. This is the standard of approach that will be
used to grow and structure the business. Growth can also affect the organizational structure.
As a business grows, it will need additional managers and employees, which can change the
current organizational structure. Diversification can also be an influential factor as the number
of products or services within the business expands.
Concerns of environmental uncertainty can also affect the organizational structure of the
business. When a business has a high level of environmental uncertainty, its managers and
employees are more likely to be organic with their practices. On the other hand, when a
business has very little environmental uncertainty, they are less likely to be organic with their
daily business practices.

Flexible Organizational Structures

Many business owners believe that a flexible organizational structure is the most empowering
type. A flexible organizational structure includes fewer managers, less centralization, and less
formal rules and regulations. A flexible structure is set at the department level of the hierarchy.
This type of flexible structure can encourage employees to think for themselves and to
experiment with new ideas. It gives freedom to all employees in the hierarchy, regardless of
their level in the organization. A flexible schedule may not work for every type of business, so it
is important for a business owner to consider if a flexible structure would work for their
organization or not.
Organizational culture and structure each require their own strategy. Understanding the
difference between the two is necessary to create a strategy that works best for the business
based on its specific needs.
 CHAPTER– IV
GLOBAL HUMAN RESOURCES MANAGEMENT
Learning Objectives
Global Human Resources Management – Staffing and Training for Global Operations –
Expatriate – Developing a Global Management Cadre.. Motivating and Leading;
Developing the values and behaviors’ necessary to build high-performance organization
personnel [individuals and teams included] – Retention strategies.

GLOBAL HUMAN RESOURCES MANAGEMENT

Global human resource management, sometimes referred to as global HRM, is an umbrella

term that includes all aspects of an organization’s HR, payroll, and talent management
processes operating on a global scale.

As technological innovations make it easier for organizations to conduct business across the
world, global expansion has become an increasing reality—if not a necessity. Likewise, it’s
essential for these multinational organizations to have the right HRM software in place
that’s capable of serving employees working around the globe.

Globalization, the process of integrating a business's operations and strategies across a wide
array of cultures, products and ideas, is having an impact on the role of human resource
managers. Once concerned with local issues, HR must now consider the effects of workforce
diversity, legal restrictions and the interdependence between training and professional
development on the organization.

Global human resources managers are responsible for recruitment of new employees,
training, professional development, benefits and legal compliance just like any other HR
team, but they do so on a global scale.
Recruitment and on-boarding Process
Attracting, hiring and retaining a skilled workforce is perhaps the most basic of the human
resources functions. There are several elements to this task including developing a job
description, interviewing candidates, making offers and negotiating salaries and benefits.
Although a complex task for any business, it is made more complex in the international
arena due to differences in educational systems from one country to the next and, of
course, difference in languages.

Companies that recognize the value of their people place a significant amount of stock in
the recruitment function of HR, no matter where in the world hiring takes place. There is
good reason for this – having a solid team of employees can raise the company's profile,
help it to achieve profitability and keep it running effectively and efficiently.
On-the-Job Training
Even when an organization hires skilled employees, there is normally some level of on-the-
job training that the human resources department is responsible for providing. This is
because every organization performs tasks in a slightly different way. One company might
use computer software differently from another, or it may have a different timekeeping
method. Whatever the specific processes of the organization, human resources has a main
function in providing this training to the staff.
The training function is amplified when the organization is running global operations in a
number of different locations. Multiple sessions in numerous international locations may be
called for, although online webinars and training tools can sometimes effectively reach
anywhere on the globe. Having streamlined processes across all locations makes
communication and the sharing of resources a much more manageable task.
Continuing Professional Development
Closely related to training is HR's function in professional development. But whereas
training needs are centered around the organization's processes and procedures,
professional development is about providing employees with opportunities for growth and
education on an individual basis. Development often entails moving an employee between
departments so that he or she gains skills in multiple areas. For an international operation,
this may also mean moving employees across boundaries.
Many human resource departments also offer professional development opportunities to
their employees by sponsoring them to visit conferences, external skills training days or
trade shows. The result is a win-win: it helps the employee feel like she is a vital and cared-
for part of the team and the organization benefits from the employee's added skill set and
motivation.
Benefits and Compensation
While the management of benefits and compensation is a given for human resources, the
globalization of companies in the twenty-first century has meant that HR must now adapt to
new ways of providing benefits to an organization's employees. Non-traditional benefits
such as flexible working hours, paternity leave, extended vacation time and telecommuting
are ways to motivate existing employees and to attract and retain new skilled employees.
Balancing compensation and benefits for the organization's workforce is an important HR
function because it requires sensitivity to the wants and needs of a diverse group of people.
Ensuring Legal Compliance
The final function of human resource management is perhaps the least glamorous but
arguably of utmost importance. Ensuring legal compliance with labor and tax law is a vital
part of ensuring the organization's continued existence. The federal government as well as
the state and local government where the business operates impose mandates on
companies regarding the working hours of employees, tax allowances, required break times
and working hours, minimum wage amounts and policies on discrimination.
This task becomes very much more complex when different laws in different countries need
to be taken into account as well. Being aware of these laws and policies and working to keep
the organization completely legal at all times is an essential role of human resources.

STAFFING AND TRAINING FOR GLOBAL OPERATIONS

Staffing for global operations is quite a complex affair. It involves activities on a global
basis, including candidate selection, assignment terms and documentation, relocation
processing and vendor management, immigration processing, cultural and language
orientation and training, compensation administration and payroll processing, tax
administration, career planning and development, and handling of spouse and dependent
matters. In global staffing, companies need to choose from various types of global staff
members and need to have specific approaches and strategies to global staffing. Global staff
members are selected from among three different types: expatriates, host-country people
and third-country nationals. Expatriate is a person who belongs to the country in which the
 organization is headquartered and not a citizen of the country in which the company
operates. A host-country national is a citizen of the country in which the subsidiary company
is located. A third-country national is a citizen of a country, but works in another country
and employed by an organization headquartered in a third country.

Expatriates still represent a minority of multinationals managers. Yet there are also reasons
for using expatriates-either home-country or third country nationals- for staffing
subsidiaries. The major reason is usually technical competence. Multinational also view a
successful stint abroad as a required step in developing top managers.
An international human resource manager must proceed with the job of hiring the right
number of people of the right type. The international human resource manager must not
only select people with skills, but also employees who can cope with the organization’s
culture. MNCs tries to staff its operations with local persons under the assumption that local
people are better equipped to do business at their home locations. However, expatriates
are needed in the system for a specific set of skills that might not exist at a particular
location.
Values and International Staffing Policy
Experts sometimes classify top executives values as ethnocentric, polycentric, or geocentric,
and these values translate into corresponding corporate behaviors and policies. These
values translate into three broad international staffing policies. The vital factors that
affect Multinational enterprises (MNEs) staffing include strategy, organizational structure,
and subsidiary – specific factors such as its duration of operations, technology, production
and marketing technologies, and host country characteristics such as level of economic and
technology development, political stability, regulations and culture. Thus the philosophies of
staffing abroad are ethnocentric, polycentric, regiocentric and geocentric.
1. Ethnocentric Staffing: In ethnocentric staffing, Parent Country Nationals (PCNs) are selected
for key position regardless of location. Japanese, European, U.S and Korean firms utilise
ethnocentric staffing. With an ethnocentric staffing policy, the firm fills key management
jobs with parent country nationals. Reasons given for ethnocentric staffing policies include
lack of qualified host-country senior-management talent, a desire to maintain a unified
corporate culture and tighter control, and the desire to transfer the parent firm’s core
competencies to a foreign subsidiary more expeditiously.
2. Polycentric Staffing: The polycentric staffing policy requires host-country nationals to be
hired to manage subsidiaries, while parent-country nationals occupy key positions at
corporate headquarters. Although home-country personnel fill top management positions,
this is not always the case. For example, many US MNCs use home-country managers to get
the operations started, and then hand it over to the host-country managers. Hindustan
Lever Ltd, (HLL), the Indian subsidiary of Unilever, has local as its chiefs. Preference for
home-country citizens for key positions does not fit into a pattern, unless government
interventions dictate selection processes. In Brazil, for example, two-thirds of the
employees in any foreign subsidiary traditionally had to be Brazilians. In additions, many
countries exert real and subtle pressures to staff the upper management ranks with
nationals. The polycentric approach to staffing has both merits as well as demerits. Hiring
host country nationals eliminates language barriers, expensive training periods and cross-
cultural adjustment problems of managers and their families. The disadvantages of the
polycentric approach are equally strong. Local managers may have difficulty bridging the
gap between the subsidiary and the parent company, because the experience and exposure
 they posses may not have prepared them to work as part of global enterprises. Language
barriers, national loyalties, and a range of cultural differences may isolate the corporate
headquarters staff from the various foreign subsidiaries. Finally, consideration of only home
and host-country nationals may result in the exclusion of competent executives.
3. Regiocentric Staffing: With regiocentric approach, a firm’s recruitment for its international
operation is done on a regional basis and the managers are selected on the basis of ‘the best
in the region’ with international transfers that are restricted to regions. Regiocentric
approach takes a somewhat larger operational view than that of polycentric approach as it
covers a trade region like European Union and allowing managers to move between
business units in various countries of the same region. In this staffing approach, a mix of
Parent-country nationals, host-country nationals and third-country nationals can be used
depending on the specific needs of the company. The regiocentric approach has recently
become more popular as many multinational companies are choosing to organize in
regional basis. One of the main advantages of this approach is that it reduces the need for
costly duplication of support services. Most multinational companies regiocentric rather
than truly international and majority of their sales and operations are concentrated on the
region. When it comes to the corporate level, the regiocentric approach is may be limiting as
ethnocentric approach as multinational companies are failing to understand the features of
the regions outside of their home-region. The regional structure may also lead to the
mergence of silo-mentalities as regional managers will be trying to hold and protect their
top talent within the region rather than allowing them to develop outside their region.
4. Geocentric Staffing: This staffing philosophy seeks the best people for key jobs throughout
the organization regardless of nationality. Seeking the best person for the job, irrespective
of nationally is most consistent with the underline philosophy of a global corporation.
Colgate-Palmolive is an example of a company that follows the geocentric approach. A
geocentric policy is based on assumptions that, highly competent employees are available
not only at headquarters, but also in the subsidiaries; international experience is a condition
for success in top position; managers with high potential and ambition for promotion are
always ready to be transferred from one country to another; competent and mobile
managers have an open disposition and high adaptability to different conditions in their
various assignments; and those not blessed initially with an open disposition and high
adaptability can acquire these qualities as their experience abroad accumulates. The
geocentric approach has merits and demerits. Among its advantages is the possibility of
making the best use of its human resources and it enables the firm to build a cadre of
international executives who feel at home working in a number of cultures. In addition, the
multinational composition of the management team that results from geocentric staffing
tends to reduce cultural myopia and to enhance local responsiveness. Thus, other things
being equal, a geocentric policy seems to be the most attractive. Among the disadvantages,
the restrictions imposed on staffing by host governments that a high number of their
citizens are to be employed in subsidiaries, the increased training and relocation costs and a
remuneration structure with standardized international base pay are the prominent.
The four global staffing approaches having been described, it may be stated that based on
top management attitude, an international business can pursue one of the three
philosophies. Each staffing modes present different and unique HR management challenges
as well as opportunities. More specifically, when an organization uses citizens of different
countries for its staffing, different tax laws and other significant HR-related factors may
apply and therefore it highly recommended that HR professionals need to be of
knowledgeable about the laws and customs each country that its workforce belong to.

EXPATRIATE
An expatriate is someone who has chosen to live and work in a country other than the one
in which he or she legally resides. Most often, an expatriate is a citizen of a Western nation
who has chosen to live in a non-Western country, such as one in South America, Asia, or
Africa.

Expatriates are often known simply as expats, and they often form their own communities
in their new host countries. In areas popular with expatriates, such as parts of Africa and
South-East Asia, there are often services such as hotels and cafes that cater specifically to
the needs of the local expatriate community. In addition to salary, companies give their
expatriate employees benefits such as relocation assistance, housing allowance company
car, school fees, medical insurance, etc. Relationships between companies (mainly
multinationals corporations) an their expatriate employees are governed through a Model
of Expatriate Contract of Employment.
DEVELOPING A GLOBAL MANAGEMENT CADRE

Global management of business is increasingly important to almost all business firms today
as they extent their business operations globally. As the international business of a firm
increases, the firms must be managed globally. This confronts managers with many new
challenges, including coordinating production, sales, and financial operations on a
worldwide basis. As a result, companies today have pressing international HR needs with
respect to selecting, training, paying and repatriating global employees. Inter-country
differences affect a company’s HR management processes. Cultural factors suggest
differences in values, attitudes, and therefore behaviors and reactions of people from
country to country also change. Differences in economic and labor cost among countries are
also important and will help to determine whether human resources emphasis should be on
efficiency, commitment, or some other factors. Industrial relations between the worker, the
union, and the employer influence the nature of a company’s specific HR policies from
country to country.
A global manager must learn how to design and implement global strategies to conduct
effective cross-national interactions and to manage daily operations in foreign subsidiaries.
To cope with the challenges in the 21st century, modern managers must be able to address
actual management functions and behaviors necessary to develop global vision
and management skills at both organizational and interpersonal level. New generation
leaders need to understand the complexities of operating in a global business environment,
and the critical success factors for the organization and themselves as global leaders.
Developing global mindsets and improved leadership skills will increase the effectiveness of
global teams and hence, high potential managers are needed to develop global business.
There is the need to identify and use critical skills for effective management of people and
processes in a global context. It is necessary to understand the actual management
functions and behaviors essential to develop a global vision. A global manager must
understand the role of a manager across nationalities, to deal with dynamic management
issues in both foreign and diverse host environments. He must be able to exercise
competitive strategy in the context of global changes. The global manager must outline the
ways in which companies can cross borders to do business with other countries, and the
corresponding advantages and disadvantages of each. He must have an understanding of
the techniques to effectively manage people and processes in a global context. Lack of
understanding of the management techniques may result in the failure of managers abroad-
, which is called expatriate failure. The Multinational corporations may react to this and the
core reaction to expatriate failure is to use short assignments for most expatriates while
downsizing long-term expatriate staff in favor of host country managers. Another reaction
by international businesses is to create a separate group of managers who specialize in
international assignments. These international specialists are called the international cadre
or global management cadre.
International Cadre
The managers of international cadre will have permanent international assignments and
they will give a global perspective to the company. These managers are recruited from any
country and are sent to worldwide locations to develop cross-cultural skills. Their main job is
to promote sharing and learning in all locations and by employees of all nationalities. The
global management cadre spends their carriers moving from one overseas assignment to
another. They develop their own international organizational culture, differing from their
firm’s main culture. The use of the international cadre is more common in European firms
than in US MNCs. Along with using the global management cadre, many European firms also
seek to give more global experience to managers at all levels and at a much earlier age.

MOTIVATING AND LEADING GLOBAL MANAGEMENT CADRE

The life of modern-day leaders is more demanding than ever. Inside their organisations,
they need to motivate a diverse group of women and men, work across organisational
boundaries, improve efficiency and achieve growth. Externally, they face a complex and
globalised environment. They have to manage the requirements of government, keep ahead
of competitors, and exceed the expectations of other stakeholders. And within this global
environment, there are many cultural considerations leaders must navigate to be effective.
They must work across cultural boundaries and alongside others who, at times, are very
different from them and have different ways of getting work done.
These are difficult challenges, developing leaders who can face these challenges requires a
comprehensive response. Of course, some training needs and content can be derived from
organisational strategy and planned change initiatives. Yet other needs and challenges arise
that strategy or change initiatives do not anticipate. So how can a company ensure that
training actually is designed to meet the development needs of a specific leader?

According to a survey conducted at the Center for Creative Leadership, involving 763
leaders, there are six leadership challenges across seven countries that we studied - India,
China/Hong Kong, Egypt, Singapore, Spain, United Kingdom and United States:
 Developing managerial effectiveness: The challenge of developing the relevant skills -
such as time management, prioritisation, strategic thinking, decision-making, and
getting up to speed with the job - to be more effective at work.
 Inspiring Others: The challenge of inspiring or motivating others to ensure they are
satisfied with their jobs and motivated to work smarter.
 Developing Employees: The challenge of developing others, especially through
mentoring and coaching.
 Leading a team: The challenge of team-building, team development, and
teammanagement.
 Guiding change: The challenge of managing, mobilising, understanding, and leading
change, including mitigating the impact of change, overcoming resistance to it, and
dealing with employees' reaction to change.
 Managing internal stakeholders and politics: The challenge of managing
relationships, politics, and image, such as gaining managerial support and managing
up and getting buy-in
from other
departments, groups,
or individuals.

For Indian leaders,

developing managerial
effectiveness tops the
challenges list with 23
per cent, followed by developing employees (19 per cent), guiding change (17 per cent),
managing retention and leading vision (14 per cent), leading a team and managing internal
stakeholders and politics (13 per cent).
Challenges for world leaders
The most frequently mentioned challenge for India, China and the United States is
developing managerial effectiveness, which requires a focus on very specific skills such as
prioritisation, time management, and decision-making.
So what can a leader do to nurture this skill? Goal-setting is important- be proactive in
setting goals, and with setting the timelines and deadlines required to meet those goals. It is
also crucial to delegate more. Delegating can, in fact, make you more productive by
empowering the people to whom you have given work.
The other three challenges - inspiring others (top challenge in Singapore), developing
employees (top challenge in Egypt), and leading a team (top challenge in Spain) - are all
related to the relationship-oriented part of leadership. This is more important in today's
context of work, where organisations are encouraging leaders to pursue and participate in
relationships that develop their direct reports and team members. The tension between
task and relationship-oriented leadership has existed for decades. Leaders must focus on
production as well as demonstrate interpersonal skill.
Organisations exist in a VUCA world (volatile, uncertain, complex, and ambiguous). Their
leaders need to be adept at managing, mobilising, leading, and dealing with change.
Incorporating change management and enhancing resourcefulness should be at the
forefront of leadership development initiatives.
Many times people are uncomfortable with change. Leaders can model a positive response
by transforming their own thinking and by being more open to fresh ideas. It is also critical
to embrace emotional reactions to change. Human cognition and emotion are integrated
systems. When convincing people that change is needed and desirable, it's not enough to
use rational arguments. Leaders also need to be sensitive to employees' emotions and show
empathy.
Nobody can tell others what the future will be, but you definitely can tell others about the
present and what you're doing to reach the desired future state. If you reduce ambiguity,
control over the situation increases, enabling people to become proactive change agents.
Grooming top leaders
Business and public service leaders who are fully prepared to run global organisations are in
short supply and in demand as never before. Strategies to prepare today's managers for
future leadership roles must be crafted carefully and cannot be left to chance. Coursework
and training are important but not entirely sufficient. Organisations must also create
systems and processes that enable managers to enhance their leadership skills through
experience. This work involves offering a clear sense of what needs to be learned, providing
colleagues who support their development efforts, and promoting effective developmental
practices, such as reflection, dialogue, intentional goal setting and feedback.
Organisations are pursuing fast-paced, global growth to improve their profitability. They are
aided by breakthroughs in telecommunication technologies that enable interconnectivity
and make it easier to create a global footprint. To succeed on a continually evolving, volatile
and complex global stage, however, organisations must complement their ambitious
business growth strategies with sensible leadership development strategies that ensure
they have the talent ready to implement their plans.
Need for more and better
It is misguided to believe that some individuals are born with superior leadership talent and
that we simply need to identify and rank-order them to fill our talent pipelines. Nor is it
fruitful to rely on past selection and development practices. The context for business is
changing so fast that new, carefully crafted strategies are needed based on the best
knowledge available. Leadership development cannot be left to chance.
CCL's research shows that the challenges leaders face around the world are more similar
than different. Even though they may feel alone in facing their challenges, it is likely that
one leader's challenge is the same as others several time zones away. So take solace in the
fact that you are not alone. Help others who are facing similar challenges by offering peer
feedback if you are asked for it.
For those who work in training and development, knowing the challenges leaders face can
be the catalyst for developmental initiatives aimed at strengthening their skills.
Developmental initiatives are more effective if they are in line with the challenges leaders
face. So, it is possible that much of the content could be the same no matter where the
training is taking place or who is going through it.
At the same time, we also recognise that there is often a cultural appropriateness or
awareness of how to do certain things in select cultures that must always be considered
carefully as well. In creating training and development initiatives aimed at helping leaders
with these challenges, it is essential to be aware of the cultural nuances. When that
understanding is blended with a robust leadership curriculum, organisations will see their
leadership capacity accelerate rapidly.

DEVELOPING THE VALUES AND BEHAVIOURS HIGH-PERFORMANCE ORGANIZATION

PERSONNEL, NECESSARY TO BUILD HIGH-PERFORMANCE ORGANIZATION PERSONNEL
[INDIVIDUALS AND TEAMS INCLUDED]

We have noticed an increasing emphasis on company culture for a host of reasons.

Employees look forward to going to their jobs. They are more likely to enjoy when they are
in the workplace. They are not waiting for the day to end. The company culture is the major
point when people are job hunting. It is becoming important with the evolution of the
modern workplace. Employees dig in to know what the culture of the company is like. It is a
decision-making factor when evaluating prospective employers.
Qualities of a high-performance culture
A healthy company culture has certain qualities more than a standard set of attributes. Let’s
dive in.
1. Embrace a change mindset
It all starts with a shift in mindset. An organization should be willing to change their mindset
and behavior that defines the culture. To lead successfully, the CEO and c-level team leaders
should transform their mindset that is central to growth and innovation. They should think
big and be ready to be pushed outside of their comfort zone. Because the culture will be
defined by the ability of the individuals (company) to change and grow.
2. Low employee turnover
If you are witnessing many resignations in less time then you probably have a bad company
culture. A positive company culture usually has employees with no intentions of leaving the
company because they are probably comfortable, enjoying and having a good salary. The
employees are around for an unexpectedly long period of time and are often not searching
for another job. Employees do not leave the company as they are excited for work every
morning.
3. Team Backup
The right tone for the company starts with having a team backed up always. Everyone is
actively standing together to back each other up. In case problems arise, they speak up
together, they work together when they have backlogs and they value each other’s inputs.
4. Empower people to make decisions
As a leader, to foster good company culture, you should employ your employees to
empower themselves. Companies with high performing cultures motivate employees to
make decisions and act upon their choices. They assume that they are witty enough to take
their responsibilities. You have to trust their decision-making abilities to solve problems.
5. Sense of accountability
Leaders should ingrain a sense of accountability to hold everyone accountable. Those
companies with a high-performing culture create a system where employees are given
ownership of their roles and goals. When everyone is accountable it ensures a built-in sense
of appreciation for the contribution of every person.
6. Strategy to improve continuously
High performing companies have to keep in mind to make sure people constantly strive to
improve their performance, work better and eliminate overload. Also, focus on measuring
progress and always work to be better.
7. Empowered leadership at all levels
Richard Branson of The Virgin Group said, “Take care of your employees and they’ll take care
of your business.” And how would you take care of your employees? The big part lies in
allowing them to be in control of their life at the company. To let them have control over
their experience at the company. And those who support his have a good culture.

How to create a high-performance culture

1. Clarify values and communicate them every day

Value added to your activities makes a company a better place to work and more profitable.
Your values will drive your behavior day in and day out. The values you define for your
company actually contribute to the overall success of your company.
2. Reinforce positive behavior
Pushing those negative thoughts out of their mind will add value to your company. Develop
a positive can-do attitude in your team. Leaders should reward individuals who represent
the values of the organization because it increases the likelihood of them doing the job well
again. The success of your business relies on the shoulder of your employee. To reinforce
successfully, you should motivate them to work more productively thereby increasing the
self-esteem of employees.

3. Encourage open communications

The organizations encouraging open communication in workplace results in a vibrant
atmosphere. There should be a fluid line of communication with an unbiased and open
conversation no matter what the topic of discussion is. Make sure the flow of information is
smooth from the top level to entry-level employee. Start today to be a better
communicator.
4. Employee empowerment
As a leader, your employees will trust in your decisions to positively impact them. But at
times they expect to feel empowered to make those important decisions that are directly or
indirectly related to them. The most successful leaders work towards enabling employees to
reach their full potential. Here’s how you can foster growth among them:
1. Show them your trust
2. Provide the required training
3. Communicate the vision clearly
4. Don’t avoid small talk
5. Allow freedom within the limit
5. Collect Feedback
A feedback-rich culture is a key ingredient for a positive culture. Give them a chance to give
feedback while they are working and not just when they are gone like employees turn to
handles like Glassdoor to provide their opinion. Transparent feedback will help you find out
how employees are feeling about your culture and if there is anything that needs improving.
How to create a feedback culture:
1. Motivate your employees to give feedback correctly
2. Give the chance to come up whenever they want
3. Take their feedback seriously, do not ignore
You need to know if you are supporting your employees in the right way so that together
you can achieve the results.
6. Focus on what matters
Do you have an idea of what sort of things matter for your culture? The culture of usually
confused with perks and incentives. Though they are important being a great complement
to your culture but a lot more things matter, like:
1. Room for growth
2. Appreciation for a job well done
3. High level of transparency
4. No favoritism
5. Sense of purpose
6. Supportive leadership
Are you investing in your company’s culture?
As you look to build a high-performance culture, keep in mind the high-performance culture
characteristics, to make sure you don’t miss on anything because it all comes down to
company culture!

RETENTION STRATEGIES.

Retention Strategy is the systematic effort to develop an environment that encourages and
motivates employees to remain employed in the organization.

Employee Reward Program

You can make a provision of Monthly or Quarterly Award (depending upon the budget) for
the best employee, Awarding 2 or 3 best workers each month. The award can be in terms of
gifts or money.
Sensing the need to retain talent in a tough market, companies across sectors are tying the
performance and fortunes of employees with their own, and are attracting mid to-senior-
level employees with a substantial hike in variable pay in comparison to fixed pay, without
taking a hit on immediate costs.
A successful reward and recognition program does not have to be complicated or expensive
to be effective. Graham Weston, co-founder and CEO of Rackspace Managed Hosting, gives
the keys to his BMW M3 convertible to his employees for a week. This creative way to
reward employees has a bigger impact than cash. He says, "If you gave somebody a $200
bonus, it wouldn't mean very much. When someone gets to drive my car for a week, they
never forget it."If it is money then it should be divided into two parts, first part to be given
with the next month salary and the remaining after 6 months. In this way he/she can be
retained for 6 more months. These rewards shall be considered at the time of appraisal.

Flexible working hours

You have to realize the importance of having a work-life balance. You might be a workaholic
who needs to work 24 hours a day, 7 days a week for you to be productive, leaving little
time for your personal life. While that might work for you, you cannot expect the same from
your employees. If needed, you have to let them take some time off for a well-deserved
vacation or other situations which needs a little understanding on your part. Do not
begrudge your best employees of the time they need for themselves. This would help solve
unease and stress in the workplace.

Retaining working mothers to fight talent crunch works: Survey

A large section of women employees, especially working mothers, feel more engaged and
productive in a supportive and flexible work environment says a survey conducted by
TJinsite, research and knowledge arm of TimesJobs.com. In view of HR managers, it is
essential to have a focused strategy to engage and retain women employees to drive better
productivity for the business, particularly in high-pressure industries such as IT/ITeS, where
their attrition rate is much higher.
According to Natasha Singh, Head-Recruitment of Steria India, capturing post-motherhood
talent can help IT/ITeS industry to fight looming talent crunch. Referring to her company's
strategy, she mentioned, "We have created kids creche within our office complex at Noida
and Pune centres, to take care of the infants, toddlers and school going kids of Steria
mothers. The objective is to create a working environment where mothers can work
peacefully with focus and stay stress-free relative to their kid's physical, emotional and
psychological and hygiene related needs."

Timely Promotions

Employee promotions given within time or given in-time after gaining certain experience or
given without any delay, makes employee feel belongingness towards organisation. In many
cases and in many reports emphasised about in-time promotions make positive influence
on retention of employees in the organisation. Employee promotions plays a key role,
especially in the public sector and government organisations. As a corrective measure to
stop flow of resignations and for employee retention in Defence Research and Development
Organisation (DRDO) in India planned for fast track promotions through performance
appraisal of its employees.
Timely increments

Timely Increments in salary makes talented employees to stick to the organisation for long
time. Many researches have found that the salary and increments were the core reasons
behind leaving of employees to other organisations and competitor organisations attracts
talent by showing sole monetary benefits, indeed most of the talent is getting attracted for
this reason. It is universal fact and one has to accept that the monetary benefit is the core
reason for an employee decision-making on retention in the organisation.

Employee Engagement

People may show up for work, but are they engaged and productive? People are more
committed and engaged when they can contribute their ideas and suggestions. This gives
them a sense of ownership.

The Sony Corporation is known for its ability to create and manufacture new and innovative
products. In order to foster the exchange of ideas within departments, they sponsor an
annual Idea Exposition. During the exposition, scientists and engineers display projects and
ideas they are working on. Open only to Sony's employees, this process creates a healthy
climate of innovation and engages all those who participate.

TD Industries in Dallas, TX has a unique way of making its employees feel valued and
involved. One wall within the company contains the photographs of all employees who have
worked there more than five years. Their "equality" program goes beyond the typical
slogans, posters, and HR policies. There are no reserved parking spaces or other perks just
for executives -- everyone is an equal. This is one reason why TD Industries was listed by
Fortune magazine as one of the "Top 100 Best Places to Work."

Career Development Program

Every individual is worried about his/her career. You can provide them conditional
assistance for certain courses which are beneficial from your business point of view.
Conditional assistance means the company will bear the expenses only if he/she gets an
aggregate of certain percentage of marks. And entrance to that course should be on the
basis of a Test and the number of seats to be limited. For getting admitted to such program,
You can propose them to sign a bond with the company, like they cannot leave the company
for 2 years or something after the successful completion of the course.
35% of women left former employee due to lack of opportunities for career progression:
PwC report

A report by PwC suggests that 35% of women respondents who had recently changed
employers left their former employee cited lack of opportunities for career progression as
the primary reason. PwC surveyed 4,792 professionals (3,934 women, 845 men) with recent
experience of the jobs market from 70 countries to find out about their career aspirations
and employer diversity experiences and expectations.
The report named – Winning the fight for female talent: How to gain the diversity edge
through inclusive recruitment –looks at what employers can do to attract and retain female
talent.

Female and male respondents ranked opportunities for career progression among the top
three employer traits, along with competitive wages and flexible work arrangements.
Female career starters and female millennials identified this as the most attractive employer
trait, as did women overall in Brazil, China, France, Hong Kong, India, Ireland, Luxembourg,
Poland, New Zealand, Russia, South Africa and the UAE, according to a release.

Organisations are using innovative programmes to attract key female talent, the release
stated. For example, returnship programmes are proving to be a successful bridge for
talented professionals to return to work after an extended career break. Over a quarter
(28%) of employers have already adopted a formal returner programme, and a further 25%
are currently exploring this opportunity, suggesting employers are recognising the potential
of these programmes

Performance based Bonus

The employee always comes to know about the profit of the company which is of course
based on the strategic planning of the top management and the productivity of the
employee. To get more work out of the employee, You can make a provision of Bonus. By
this employee will be able to relate himself with the company’s profit and hence will work
hard. This bonus should be productivity based. You can make sure that this bonus is not
adding extra-pressure on the budget of Your Company and you can arrange this by cutting a
part of the salary hikes and presenting it to the employees in the form of bonus.

Employee Referral Plan

You can introduce Employee Referral Plan. This will reduce your cost (charges of external
consultants and searching agencies) of hiring a new employee and up to an extent you can
rely on this new resource. On every successful referral, employee can be given a referral
bonus after 6 or 9 months of continuous working of the new employee as well as the
existing employee. By this you can get a new employee at a reduced cost as well as are
retaining the existing one for a longer period of time.
Loyalty Bonus
You can introduce a Loyalty Bonus Program in which you can reward your employee after a
successful completion of a specified period of time. This can be in the form of Money or
Position. This will encourage the fellow employees as well whether they are interested in
money or position, they will feel fascinated.
Employee Recreation
You should also let your employees enjoy in a light mood. You can take your employees to a
trip or for an outing every year or bi-yearly. You can make use of this trip as well. You can
start this trip with an opening note about the management views and plans, strategies etc.
At the same time you can involve your top management into some of the fun activities as
this will make feel the employees that they are very close to the management and
everybody is same.
Gifts at some Occasions
You can give some gifts at the time of one or two festivals to the employees making them
feel good and understand that the management is concerned about them.
Accountability- You should make each employee accountable so that he can also feel that he
is as important as his manager. If he/she will be filled with this sense, he/she will seldom
think of leaving the company.

Making the management effective and easily accessible

You should make the management easily accessible so that the employee expectations can
be clearly communicated to the top management, as it is impossible for the top
management to reach each employee frequently.

Surveys for feedbacks from employee

You should conduct regular surveys for feedbacks from employee about their superiors as
well as other issues like food, development plans and other suggestions. This will make
them feel of their importance and the caring nature of the company. Some of the
suggestions might be of real good use for the company.
Employee referral program
according to the recent survey it is found that employees within organisation feel motivated
if references of them given importance while recruitment of employees. Employee referral
program surprisingly raising employee retention level of organisation, which also became a
human resource strategy for employee retention.

Employee surveys valuable to enhance business productivity: Survey

Nearly 32% HR managers voted employee surveys as a useful tool to examine employee
perception about the organization across levels in a survey conducted by TJinsite, research
and knowledge arm of TimesJobs.com. "An employee survey can be one of the most
powerful tools for management in assessing the effectiveness of its strategy and maximizing
the potential in its human capital", alleged Sakshi Khera, HR-Head, Da Milano.

HR managers are switching to employee surveys to address issues such as work location,
gauge employee desire, and capture employee aspirations related to career. And, these
surveys also help employers to understand what employee feels about the company's
culture, practices, supervisor, development opportunities and working conditions.Any
companies are including survey results on their "dashboard," recognizing how important
employee perceptions are in making the company's vision a reality. When properly
designed, implemented and analyzed, employee surveys help management take action to
align operations with its strategy, values and goals, states Khera.

Apart from studying the effectiveness of the current measures, surveys help the
management in understanding the internal image of the organization amongst employees.
This helps the HR team to develop programs to change the employee perception if needed
and frame policies that will address issues that arise out of the change.

During a Skills Dialogue session, a series of high powered panel discussions by

TimesJobs.com, industry experts have pointed that employee surveys are beneficial for
organizations to identify and bridge gaps in employee expectations from the company. It is
apparent that businesses are progressively using the results from surveys of employee
teams and business units as predictive tools for customer satisfaction and business
performance. Results are used to make appropriate adjustments in leadership practices,
training initiatives and business processes. It's simple, "if you don't take care of your
employee's, somebody else will".

Different retention strategies adopted in corporate (Rekindle (Amazon)

Amazon has launched "rekindle", an initiative to encourage women on a professional break

to resume their corporate career. As part of this initiative, the company will provide
structured on-boarding, focused mentoring, flexible work options and on the job learning to
the candidates.

rekindle aims to provide a launch pad to women who have had an extended absence from
work in their career due to any circumstances and encourage them to come to Amazon and
pursue their career goals.

This program is open to any candidate who has prior experience that matches the job
requirements for the identified positions. The release further stated, "Candidates will go
through a structured assessment process comprising of a telephonic interview and multiple
in-person interviews. Basis the performance during these interviews, final hiring decision
will be made for the position."

Zero attrition among maternity-leave women; P&G retains ‘returning’ mothers with unique
solutions

NEW DELHI,2012: Procter & Gamble India has earned a unique distinction - for the third
year in a row, it has reported zero attrition among returning mothers. The company has
managed to retain all the women who went on maternity leave, a crucial talent pool,
through sustained solutions.Only a few years ago, an alarmed business leadership was
staring at the dwindling pipeline of woman talent in the company - up to 30% of women on
maternity leave were not returning to work. The uncomfortable gaps were visible when
women in late 20s got married and moved if the spouse was located in a different city or
when they had their first child.

Lack of support system at the workplace and at home triggered the exodus. The solutions
P&G came up with, were built around flexible timing, working from home, reduced work
schedules, parental leave, six months' paid maternity leave and location-free roles, among
others.

Maruti Suzuki, Indian car manufacturer uses stay interviews to keep flock together
Exit interviews, when employees quit, are common practice in many companies. But
automobile major Maruti Suzuki India Ltd(MSIL) is using 'stay interviews' to cement a long-
term tie with its employees. For the past three years, MSIL has regularly reached out to its
employees to understand their aspirations, problems and expectations. It has subsequently
come up with several changes in the performance ratings scale, career progression policy
and employee referrals.
"It makes sense to probe employee minds while they are still working in the company and
take their feedback for changes rather than asking for it after losing them to competition.
Then you have the time to implement these," says SY Siddiqui, MSIL managing executive
officer, administration (HR, finance, IT) (Dt.2012). Senior employees, from the post of DGM
and above, are specially trained to conduct such interviews. The idea is to make candidates
comfortable and draw their views in an informal conversation. Based on their feedback, the
company has brought in several changes in its HR policies.

How employers can retain top talent ?

As the economy recovers, majority of employees will most likely look for better
opportunities outside their firms, experts have warned. This critical situation demands
employers to hold on to their top performers.

According to Joyce E. A. Russell, director of the Executive Coaching and Leadership

Development Program at the University of Maryland's Robert H. Smith School of Business,
most firms have depended on exit interviews to learn why their employees decide to leave
as they seek acquiring honest information about the company that can be used to tackle the
reasons why some leave.

But to do this, employers need to ask the right questions, the Washington Post reported.
Mostly, exit interviews are poorly conducted by ill-trained individuals who are not really
aware about why or how should they use the information they collect. Or, employees do
not divulge the real reasons they are leaving the firm, as they are scared of burning bridges.

Companies like NetApp, Samsung, iGate, Aegis walk

the extra mile to retain top talents

However, Russell has suggested that all firms including

the smaller ones should make it a point to meet with
employees before they give voluntary resignation.
Russell suggested that while conducting an exit
interview, the interviewer must ensure that the
information is treated confidentially (i.e., using the
date in aggregate form only and not revealing who
made what comments).

Interviewers are required to be well trained in active

listening and be sure not to go over the top to any
venting done by the employee. Using structured
questions, interviewers can enquire about topics like
the work itself, pay and benefits, training and
mentoring, performance reviews, career growth
opportunities, management issues and the culture and
environment.
Or they can make the employees complete a survey and mail it in after they have left.

Using an outside person can also be efficient in providing a neutral party that an employee
may feel more comfortable openly talking with. Although exit interviews can give way to
valuable information, they only offer a partial picture of how employees feel.

At a recent Society for Human Resource Management conference, presenter Dick Finnegan
talked about using "stay interviews" to gather insights. He asserted that exit interviews are
"autopsies that seldom lead to improvements."

Instead with stay interviews, managers allow employees to know they want them to stick
around, and ask them what they can do to keep them at the firm. This sends a powerful
signal to current employees that the employer values them and wants to meet their needs.

Another idea for keeping hold of top talent is for the company to reward its managers for
holding onto their stars. This would persuade them to be more proactive about gathering
feedback to find out how their employees feel about working at the firm.
 CHAPTER– V
CORPORATE CULTURE
Learning objectives
Corporate Culture – The Nature of Organizational Cultures Diagnosing the As is
Condition; Designing the Strategy for a Culture Change Building; Successful
Implementation of Culture Change Phase; Measurement of ongoing Improvement.

CORPORATE CULTURE

Corporate culture starts with the company’s vision. Normally, a vision is a single phrase that
communicates exactly what the purpose of the company is. Then, corporate culture dictates
how people should behave when at work, what values should drive their performance, and
what practices should be implemented to achieve the vision.
Behaviors are directly related to what customers and co-workers see, and they include dress
codes, the physical environment of the company, do’s and don’ts as well as organizational
rituals.
Values pertain to the unwritten laws of behavior when at the workplace. For instance,
workers should not gossip about each other; or they should all work for the good of the
company, etc. Values are manifested through behaviors but are not directly detectable.

EXAMPLE

Google is one of the companies that are renowned for their corporate culture. The company
has evolved into a mega corporation; however, it maintains a very friendly culture reflected
in its extremely clear vision and mission. By hiring the best of the best candidates in a
meticulous manner, Google fosters creativity and maximizes employee performance. People
know what they should do and why, and this motivates them to work harder and achieve
the organizational goals.
Open-door policies allow the involvement of all levels of the workforce in the decision
making of the company, but more importantly they instill trust and commitment. In
addition, employee benefits, employee recognition, and democratic leadership make
Google one of the best companies to work for.
Today, Google employs about 70,000 full-time employees. Although there has been a lot of
criticism regarding the company’s employee turnover, the truth of the matter is that Google
employs too many people on the same day. This means that, if 200 employees were hired
last week, and one calculates employee tenure today, the tenure for these people will be
one week, but this doesn’t mean that they stay at the company for one week.

NATURE OF ORGANIZATIONAL CULTURES

As individuals come into contact with organizations, they come into contact with dress
norms, stories people tell about what goes on, the organization’s formal rules and
procedures, its formal codes of behavior, rituals, tasks, pay systems, jargon, and jokes only
understood by insiders and so on.
Organizational culture is composed of seven characteristics that range in priority from high
to low. Every organization has a distinct value for each of these characteristics.
Members of organizations make judgments on the value their organization places on these
characteristics, and then adjust their behavior to match this perceived set of values.
Characteristics of organizational culture are;
1. Innovation (Risk Orientation).
2. Attention to Detail (Precision Orientation).
3. Emphasis on Outcome (Achievement Orientation).
4. Emphasis on People (Fairness Orientation).
5. Teamwork (Collaboration Orientation).
6. Aggressiveness (Competitive Orientation).
7. Stability (Rule Orientation).
Let’s examine each of these seven characteristics.
Innovation (Risk Orientation)
Companies with cultures that place a high value on innovation encourage their employees
to take risks and innovate in the performance of their jobs.
Companies with cultures that place a low value on innovation expect their employees to do
their jobs the same way that they have been trained to do them, without looking for ways
to improve their performance.
Attention to Detail (Precision Orientation)
This characteristic of organizational culture dictates the degree to which employees are
expected to be accurate in their work.
A culture that places a high value on attention to detail expects its employees to perform
their work with precision. A culture that places a low value on this characteristic does not.
Emphasis on Outcome (Achievement Orientation)
Companies that focus on results, but not on how the results are achieved, place a high
emphasis on this value of organizational culture.
A company that instructs its sales force to do whatever it takes to get sales orders has a
culture that places a high value on the emphasis on outcome characteristics.
Emphasis on People (Fairness Orientation)
Companies that place a high value on this characteristic of organizational culture place a
great deal of importance on how their decisions will affect the people in their organizations.
For these companies, it is important to treat their employees with respect and dignity.’
Teamwork (Collaboration Orientation)
Companies that organize work activities around teams instead of individuals place a high
value on this characteristic of the organizational culture.
People who work for these types of companies tend to have a positive relationship with
their coworkers and managers.
Aggressiveness (Competitive Orientation)
This characteristic of organizational culture dictates whether group members are expected
to be assertive or easygoing when dealing with companies they compete within the
marketplace.
Companies with an aggressive culture place a high value on competitiveness and
outperforming the competition at all costs.
Stability (Rule Orientation)
A company whose culture places a high value on stability is rule-oriented, predictable, and
bureaucratic in nature. These types of companies typically provide consistent and
predictable levels of output and operate best in non-changing market conditions.
These are the seven characteristics that are common in the context of organizational
culture.
Of course, it is true that the characteristics are not the same in all times and spheres.

DESIGNING THE STRATEGY FOR A CULTURE CHANGE BUILDING

Former GE CEO Jack Welch once famously said, “The soft stuff is the hard stuff.” The
business adage rings true for HR professionals trying to initiate culture change in their
organizations.
“I know a lot of people think culture is a mushy, fuzzy concept,” says Norm Sabapathy,
executive vice president of people at Cadillac Fairview Corp., an owner and operator of
commercial real estate in Toronto. “But, increasingly, research is showing that people really
do care about culture.”
So much so, in fact, that senior executives are finally starting to pay attention—which
presents a tremendous leadership opportunity for HR, Sabapathy says. The notion of
“culture,” loosely defined as the beliefs and behaviors that govern how people act in an
organization, emerged in the 1980s and is now believed to be a major determinant of a
company’s success or failure. Companies on Fortune’s list of the best places to work—
known for their strong cultures—have stock performance that is double that of other
organizations.
Culture is considered a potential competitive advantage by 82 percent of more than 7,000
CEOs and HR leaders from 130 countries, according to the Deloitte Global Human Capital
Trends 2016 report. Yet only 28 percent of the Deloitte survey respondents believe they
understand their culture well, and only 19 percent believe they have the “right culture.”

To help, Sabapathy provides 10 tips for driving a culture change:

1. Define desired values and behaviors. Do people understand them and how they
relate to day-to-day behavior? Come up with behavioral descriptors for each value
you define and articulate how those would translate into actionable behaviors at all
levels—from secretaries to middle managers to executives, Sabapathy advises.
2. Align culture with strategy and processes. Do your mission, vision and values line
up with your HR processes, including hiring, performance management,
compensation, benefits and the promotion of talent?
3. Connect culture and accountability. It is easy, particularly in difficult times, to forget
the values you set in place to define your company, he says, citing Enron and
WorldCom as examples. However, companies have a better chance at weathering
disaster if they take responsibility for their actions, Sabapathy says.
4. Have visible proponents. For culture change to stick, it must be a priority of the CEO
and board of directors. “Show the board a framework for understanding
organizational culture and its impact on performance,” Sabapathy says. Work with
the board to create a standing performance objective for the CEO that evaluates
culture.
5. Define the non-negotiables. When contemplating a culture change, look at your
current culture and call out which aspects you want to retain. Determining what’s
not up for debate is particularly important during mergers and acquisitions, when
leaders of two or more organizations must figure out how to blend identities.
 6. Align your culture with your brand. Culture must resonate with both employees and
the marketplace. To accomplish this, HR increasingly is partnering with marketing, he
says. This is especially relevant in our current online world, where today’s bad
customer experience can become tomorrow’s viral sensation.
7. Measure your efforts. Help demonstrate the effectiveness of your efforts by
implementing employee surveys and analyzing gaps between desired and actual
behavior.
8. Don’t rush it. Changing a culture can take anywhere from months to several years.
Start by making sure there’s a clear rationale for why the company should change,
he advises.
9. Invest now. Don’t wait for staff and resources that may never come. “It takes years
of investment to get to that point where [your culture] just automatically becomes
part of how you behave and act,” so begin whatever way you can.
10. Be bold and lead. You don’t have to be in a position of influence to have influence.
“When we step up, it encourages others to step up as well,” he says.

SUCCESSFUL IMPLEMENTATION OF CULTURE CHANGE PHASE

A Define/Align/Manage framework for building a strong culture foundation is outlined in the

new book Build the Culture Advantage, Deliver Sustainable Performance with Clarity and
Speed. Initial effort is focused on a couple of key behaviors, as Booz suggests in their study
and info graphic, but broader team effort is must be focused on only 1-2 critical
performance priorities so progress and momentum can build.
Here’s an abbreviated explanation of the first improvement phase, Build the Foundation:

DEFINE

Begin with the end in mind – Stephen Covey

 Step 1 – Evaluate your current culture and performance: 1) Define your 1-3 critical
performance priorities – e.g. growth, profitability, customer satisfaction, etc.; 2) identify
your 3-5 value/behavior strengths and 3) identify no more than 1-3 value/behavior
weaknesses that are holding back your organization from achieving its full potential with the
performance priorities you defined.
 Step 2 – Clarify your initial vision: Define your vision for improving results with only one or
two of the performance priorities from step No. 1 and how you will build a culture
advantage by leveraging the value/behavior strengths and improving the weaknesses.
Clearly communicate how you will work together to improve the weak areas since they are
holding your organization back from supporting your purpose and stakeholders.
 Step 3 – Clarify values and expected behaviors: Define supporting expected behaviors for
the 1-3 weaknesses that you identified in step #1. These behaviors would be consistently
exhibited in your organization if you were “living your values.” People interpret values from
their own perspective so define expected behaviors like Zappos, The Container Store, and
others
 ALIGN

Teamwork is the ability to work together toward a common vision – Andrew Carnegie
 Step 4 – Clarify strategic priorities: Define and clearly share the 3-5 actionable strategic
priorities that your organization will focus on to support the 1-2 performance priorities
included in your initial vision from the Define steps. If the performance priority is growth,
will it be achieved through new products or services, revised sales strategies, growth with
current customers, or other strategies. Employees want and need to understand the big
picture.
 Step 5 – Engage your team in defining SMART goals: Engage your organization and utilize
extensive feedback and prioritization to define the objectives that support each strategic
priority. These goals need defined in a way to support the expected behaviors for the 1-2
 weaknesses you identified from the Define steps. For example, if accountability is a
weakness, goals should include more disciplined plans, measures, reviews, recognition, and
other approaches to support the behavior you need. Goals also need translated to all levels
in larger organizations so people understand how work on their goals and measures impacts
the broader organization.
 Step 6 – Clarify and track key measures: Identify a small number of overall measures that
support the one or two top performance priorities from the Define steps. It may help to
have one highly visible “unifying metric” even if some employees don’t directly influence it.

MANAGE

A culture of discipline is not a principle of business, it is a principle of greatness – Jim Collins

 Step 7 – Maintain a management system for priorities and goals: Most organizations have
a system to track or monitor the status of priorities and goals. These reviews need adjusted
to focus additional time and attention on the top performance priorities and value/behavior
shifts identified in the Define steps. The focus must be on results and supporting the
behavior shift through recognition, coaching, removing barriers, etc.
 Step 8 – Manage communication habits and routines: Transparent, genuine and consistent
communication is needed about your performance improvement journey and the role of
culture so all employees feel part of the process. Regularly scheduled sessions with two-way
communication and extensive informal approaches are needed to emphasize expected
behaviors and results. Use these sessions to clarify plans, answer questions, expose rumors
and reduce drama.
 Step 9 – Build motivation throughout the process: Feedback and recognition are critical to
the process. Share and celebrate progress in a transparent manner as a standard part of
regular communication activities. Confront reality when improvements don’t go as planned
and re-engage your team to prioritize adjustments.

MOST ORGANIZATIONS NEGLECT THEIR CULTURE FOUNDATION

Nearly all organizations struggle with these foundation areas. Just ask their employees.
Gallup reports that 70 percent of employees are not engaged and inspired at work.
Hundreds of organizations have completed our one page culture alignment road map and
there hasn’t been a single one that said they were effectively managing all of these
Define/Align/Manage steps in the eyes of their employees – not one! Many of them manage
more progressive approaches that don’t deliver the results they hope due to their weak
culture foundation.

What are they hiring, developing, and engaging people around if there isn’t a strong and
clear culture foundation?

Yes, culture is important, most organizations struggle managing it, but don’t think a few
“levers” and “keys” come anywhere close to supporting sustainable change. Manage your
own culture journey, build clarity and alignment, and stop wasting energy on implementing
tips, keys, and levers unless they fit with your unique culture foundation.
What approach do you have to manage culture that goes beyond tips, keys and levers? Do
you think organizations waste time on programs and silver bullets instead of building a
strong culture foundation?

MEASUREMENT OF ONGOING IMPROVEMENT

Every company, no matter if it has just started on their CI journey or has a mature and
strong improvement culture, wants to measure the effectiveness of their CI programme. In
other words, companies want to know: What is going well? What can be done better to
identify improvement opportunities in their CI programme? What is their return on
investment on CI activities? How can they extract more value from their CI initiatives?
Companies use a variety of performance measures such as hard financial benefits, non-
financial benefits, number of improvement projects, rapid improvement/kaizen events,
problem-solving sessions completed, and CI training sessions delivered etc. They also track
and set the targets for building their CI infrastructure in terms of the number of CI
practitioners, Green Belts (GBs), and Black Belts (BBs). In addition to these quantitative
metrics, many companies use employee/customer surveys and CI assessment tools to
measure the success and maturity of their CI practices.

However, as Albert Einstein once said, “Not everything that can be counted counts, and not
everything that counts can be counted”. While we all agree that “what gets measured gets
managed”, it is also true that too much focus on one or two performance measures drive
wrong behaviours. As Eli Goldratt said, “Tell me how you measure me, and I will tell you
how I will behave”. Let’s look at the following two examples:

Hard financial benefits:

Too much focus on financial benefits, particularly at the start of CI journey from the senior
management, can derail the entire CI programme. It impels the CI teams to spend too much
time on quantifying the benefits rather than actually doing CI. It also sends a wrong signal –
the company seems to be more interested in cost savings rather than building a truly
customer-focussed problem solving culture. In some situations, it is also seen that the
projects with short term financial benefits are prioritised over the other projects with long
term sustainable benefits. Continuous improvement is not just a one off cost-cutting
exercise rather it is a multi-year journey aimed to bring about the cultural change by
embedding right mindset and behaviours in the organisation.

CI Assessment Tools:
Many companies use qualitative assessment tools to measure the maturity of their CI
practices. Typically, these assessments score businesses or a part of the business on several
CI criteria such as problem solving culture, understanding of customer requirements,
managerial support, closure rate of CI projects, number of certified Green and Black Belts
etc. Again, if the companies are not careful, these tools can quickly become a tick-box
exercise. I have seen that many teams “managing” their maturity score really well but in
reality there has been hardly any tangible improvement experienced by the customers
and/or the business.
In the end, all metrics have faults and if not carefully selected, and thoughtfully applied,
they do more harm than good to CI initiatives. Therefore, the fundamental questions for the
companies are: what they should measure and how they should set about developing the
metrics. The following 4-step approach will help you in developing robust performance
measures for your CI programme:

1. Align CI measures to business objectives:

Any CI programme must play a crucial role in delivering company’s short term and long
term objectives. The measures of CI programme should reflect how effective CI activities
have been in meeting organisation’s objectives. For example, if a company has identified
customer responsiveness, on time delivery and improving quality of its products as key
success factors in the market, the performance measures of CI activities at business,
department and team levels should mirror these priorities. Without this clear link,
companies end up trivialising their CI programmes and risk losing the support of senior
management and the front line people. In one of the CI deployments, I have seen how
this missing link led to the CI programme becoming mere a low value 5S (workplace
organisation) programme with no tangible benefits to the business and its employees.

2. Establish a balanced set of CI measures:

Having a balanced scorecard for CI programme helps the company to achieve a trade-off
between conflicting priorities of customer satisfaction, cost, quality and delivery. CI
activities must be aligned to improve performance of the metrics defined within each of
these categories. If we take an example of on time delivery (OTD), some of the CI measures
include:

A. Number of DMAIC/A3s/Just Do It activities completed linked to OTD metric

B. % improvement in OTD performance through CI activities
Similarly, we can define the CI measures for Customer, Quality and Cost. In addition to
measuring the impact of CI programme on business objectives, it is also essential to
measure the organisational CI capability in terms of the number of GBs/BBs, number of
newly certified belts, number of people trained on CI, CI practices maturity etc. The
scorecard should have a good mix of the CI impact and capability measures.
A balanced scorecard gives us deeper insights into what is going well and where the major
gaps are in the CI programme. For example, if a business has strong CI capability but is not
able to move the needle on key business metrics, the scorecard can help you in asking very
pertinent questions such as: why are we not seeing the desired benefits? Are we prioritising
right CI projects? Are we closing the projects on time? If not, why do we have low project
closure rates? Are the right CI resources working on the right projects?

3. Set SMART targets for the CI measures:

One of the key factors for setting the targets is at what stage your CI journey is in. If a
company has just launched their CI programme, the focus should be on how quickly to build
the CI foundation and the required infrastructure. Therefore, in early stages the emphasis
should be more on the CI capability measures rather than on the impact measures. As the
programme matures, the focus can gradually be moved to measuring the impact of CI
initiatives on business performance. As CI becomes business as usual, additional metrics
such as the number of active GBs/BBs (e.g. Certified BBs/GBs who have completed at least
one improvement project in the past one year), number of projects successfully replicated
across the sites/businesses etc. can be introduced to maximise the value from CI
programmes

4. Regularly assess and refine the CI measures:

Setting up CI measures is not a one-time activity but is a continuous learning process. As
George Bernard Shaw said, “The only man who behaves sensibly is my tailor; he takes my
measurements anew every time he sees me, while all the rest go on with their old
measurements and expect me to fit them”. Companies need to evaluate the relevance of
their CI measures in light of their changing business priorities, and customer expectations.
Moreover, they need to assess the intended and unintended consequences of performance
metrics. This is particularly important because many companies hardwire performance
measures to the incentives such as pay rise or bonus. This creates a target-chasing culture in
the organisation. I have seen in many companies how their CI practice maturity scores or
financial savings jump up suddenly towards the end of the year to ensure the individuals in
the business receive their incentives. Despite all the good intentions behind the
performance measures, people inevitably become more focussed on hitting the numbers
rather than doing what really matters to the customers and the business. Therefore, it is
essential to review and refine the metrics regularly to encourage the right behaviours.
In summary, no one metric rules! Successful companies use a balanced set of metrics and
they tie in their CI measures to the desired business outcomes. If the measures don’t work,
they learn from their experience, and press the reset button!