4 compelling examples how global management decisions can fail
Why management decisions like shorter product-development cycles or open office space can quickly fall apart when not translating well from one business culture to another.
Doing business globally always means things are done differently. This is what crossculture2go.com is all about. More than once people have been asking us if cultural differences can’t be overcome easily if only everybody was a bit more aware and careful in what they are saying and doing?
That certainly would be a good start. What people often don’t consider though is that partners, employees or colleagues from different cultural backgrounds tend to perceive things completely differently. Therefore, our best intentions just aren’t enough if we don’t understand their cultural background and their way of thinking and acting a bit better.
Usually, we try to keep things simple at crossculture2go. But this time I’d like to dig a bit deeper and share with you some research that so very clearly shows how business decisions can easily fail if they don’t translate well from one cultural context to another. Have a look at these 4 examples:
Example 1 – Different reactions to shorter product development cycles
Pamela Hinds, a professor in management science and engineering at Stanford University, has contributed to several studies on how global business practices can fall apart due to culture. In one study at a large global high-tech company, Hinds demonstrated that shorter product development cycles were understood by US-American employees to be analogous to a start-up culture where one has more freedom to experiment and failure is promoting learning.
In China, however, employees equated a speedy product development cycle entirely with efficiency. They focused on tighter schedules and less product functionality. And the Indian colleagues used the shorter cycles mainly to align their processes. So the implementation of shorter product development cycles lead to quite different outcomes at the company’s sites around the world.
Example 2 – Culture clash with user-centered design
Another culture clash was experienced by the same company when introducing user-centered software design. In the US, the new practice was seen as customer-oriented by involving the customer more into the development process.
In China, however, talking to customers was seen as an imposition on both sides, the software developers and the customers, who were considered uninterested in articulating product requirements. Above all, incorporating customer input was seen as contrary to good engineering practice.
By contrast, the Indian software developers welcomed the user-centered design since they were already engaging their personal networks to get input throughout a development process.
Example 3 – Unexpected behaviour in open-plan offices
More cultural differences were experienced with the introduction of open office space. In the US, managers believed that open, flexible workspaces fostered collaboration and innovation.
In China, open office layouts were perceived as uncomfortable and employees continued to work quietly at their desks with only little interaction. They chatted or brainstormed during meetings or over lunch though. The Indian colleagues felt equally uncomfortable in the wide-open spaces and eventually reverted to using meeting rooms in which they collaborated intensely.
Example 4 – Enjoying autonomy or hungry for feedback?
Another study focused on different management styles. For example, when workers were given minimal supervision, the Germans and US-Americans appreciated the new autonomy while the Indian employees missed a more frequent feedback. In some cases, the Indian workers left for companies where managers were more “hands-on”. Also, the rather flat hierarchies common in German and US companies were met with disappointment by Indian employees who generally think that a steeper hierarchy offers more opportunities for quick promotions and personal career growth. In the end, the office in India introduced project lead roles to ease the dissatisfaction.
These 4 examples clearly show that different cultural patterns can be responsible for unexpected reactions in global business. So no matter if you are currently implementing far-reaching management decisions around the globe or are simply trying to negotiate a contract with a foreign business partner: be prepared to deal with the unexpected – or even better, develop your global business skills and know what is to be expected where.
Katrin Koll Prakoonwit
Värlander, Sara & Hinds, Pamela & Thomason, Bobbi & Pearce, Brandi & Altman, Heather. (2015). Enacting a Constellation of Logics: How Transferred Practices Are Recontextualized in a Global Organization. Academy of Management Discoveries. 10.5465/amd.2015.0020.
Durnell Cramton, Catherine, Hinds, Pamela. (2014). An Embedded Model of Cultural Adaptation in Global Teams. Organization Science.