1.11. CULTURAL COSTS

Not understanding cultural difference—or remaining stuck in one of the ethnocentric stages of the DMIS model—can lead to disastrous results, and not just for corporations.

When the 2002 Miss World contest was slated to take place in the Nigerian capital of Abuja, protests from Muslim extremists and a newspaper article indicating that the prophet Muhammad would have approved of the pageant triggered four days of violence between Christians and Muslims in the Nigerian city of Kaduna, leading to the deaths of more than two hundred people, injuries to more than five hundred people, and forty-five hundred people left homeless.

When a Korean Airlines jet crashed in Guam in 1997, killing 228 people, it was widely reported that culture might have played a role in the crash. The junior officer on board hesitated to provide the senior officer with information that might have averted the crash because of cultural traditions of respecting seniority and saving face.

Corporate cultural faux pas are widely reported in management and business literature. One such incident recently involved British Cadbury-Schweppes. In India, Cadbury marketers tried to be relevant by referencing the biggest issue facing India—Kashmir, which threatens to plunge India and Pakistan into a nuclear war. Their ad, with a map highlighting the boundaries of India's Jammu-Kashmir state and the tagline: "I'm good. I'm tempting. I'm too good to share. What am I? Cadbury's Temptations or Kashmir?" The gimmick incited the ire of the local community, which accused the company of trivializing the Kashmir issue.

Each instance of cultural failure—and its related costs, both financial and in terms of reputation costs—helps shore up the business case for addressing global diversity inside our organizations.

But our business case for managing global diversity cannot be based only on the potential costs of mismanaging diversity. Instead, it must also include the potential benefits and opportunities that accrue to our organizations when we manage well the global diversity both inside and outside our companies.