INTRODUCTION
Globalization has become one of the business world's hottest topics as we begin the new millennium. From news about protests at World Trade Organization meetings to the agendas of conferences of world leaders, globalization and its economic and political implications hit both a nerve and the bottom line. However, beneath the debates and philosophizing lies the complex and demanding reality of managing a multicultural, geographically dispersed, polyglot workforce.
As organizations face stiffer global competition, the need to internationalize continues to increase. Penetrating new markets, accessing cheaper raw materials, reducing wage costs, bringing in specialized skills, and improving technology push organizations to cross borders, continents, and civilizations. A tenfold increase in foreign ventures even in the 1980s, which accelerated further in the 1990s, attests to this evolution in the United States alone.[] While the increased cultural diversity brought about by global expansion brings the potential for greater creativity, better decision making, and enhanced marketing, it also brings challenges. Conflict, misunderstanding, and diminished performance can also result when organizations attempt to grow and thrive with the diversity that a geographically dispersed, multinational, and multilingual workforce brings.
Success in global business depends on how that diversity is managed, and not managing the global workforce effectively has severe consequences to one's reputation and the bottom line. Organizations can ill afford the negative business impact of incidents such as that experienced by Coca-Cola, an organization that had already faced domestic diversity issues. This time the image blow had global repercussions, as described below.
Two senior managers of Coca-Cola in Malaysia, both Australian expatriates, have been criticized by the Malaysian Human Resources Minister Lim Ah Lek for showing disrespect to their employees. They have been accused of changing collective agreements with workers, ordering a 10 percent pay cut, altering public holidays, and extending working hours to compensate for the time lost due to Friday prayers. Lek described the actions as "belittling" Malaysia, showing disrespect and demonstrating that "Australians are not fit to work here." Senator Zalnal Rampak, president of the Malaysian Trades Union Congress, has requested that the work permits be withdrawn as the managers showed "no respect whatsoever for local customs, manners, traditions, and religious sensitivities."[]
Individual companies suffer when their managers are not adept at negotiating the challenging dynamics of global business. In addition, national economies feel the compounded impact. Research by the Australian Industry Task Force on Leadership and Management Skills found that Australian managers were ranked behind managers from competitor countries by Asian managers polled,[] creating a significant hurdle for Australia to overcome in dealing with its closest trading partners.
Practitioners helping organizations manage these challenges see an increasing need for practical tools, concrete suggestions, and pragmatic methods to help global organizations realize the tremendous potential of an international workforce. Since the Society for Human Resource Management (SHRM), the world's largest human resource organization, established a division of International and Diversity Programs in 1993, it has been inundated with questions such as:
"We need to roll out our organizational audit process in several countries in Europe—do we need to change the survey instruments?"
"We have a diversity training process that all headquarters staff in Louisville has completed. The next phase is to conduct the training in Kobe, Japan, at our site there. What should I change or alter in the training?"
"Our global employees complain that our open resourcing system does not work equitably for many overseas staff. How can we make it more accessible and fair to all?"
While organizations are expanding their reach, the workforce around the world is changing as well. According to a year 2000 survey and report, "In a world in which companies generate 43 percent of revenues outside their home countries, technologically enhanced communications spread both business concepts and the message of globalization. Consequently, it is no surprise that we are beginning to see worldwide consistency in employee expectations and demands as a result of the global dissemination of human resource policies, practices, concepts, and solutions."[] In Japan, for example, the harmony-disrupting, counter-culture behavior of whistle blowing is slowly growing in acceptance as the population reacts to defective products and tainted food that resulted from unquestioning loyalty. In a nation that has traditionally revered loyalty and seen betrayal as a crime punishable by Mura Hachibu, exile from the village, a 2000 Consumer Research Institute poll found that 45.1 percent of people surveyed supported whistle blowing in the public interest.[]
International operations in the past may have been handled by a few select home-country expatriates. Now the number and mix of employees is growing, as can be seen from a few verbatim comments from a recent global survey.[]
"We're sending more families, females, and third-country nationals."
"We have been sending more lower-level managers than in the past, where we sent only VPs."
"There are fewer U.S. expats and more third-country nationals."
"I've seen more reliance on local talent for leadership."
In addition, companies are now intentionally increasing the mix. Mobil Oil, for example, has increased the use of third-country nationals by placing managing directors in regions different from their own nationalities. An Australian man heads up operations in Japan, a U.S.-American woman leads in Singapore, an English woman does so in New Zealand, and a Singaporean man is in charge in Australia.[]
This mix of nationalities, genders, headquarters-based, and locals creates fruitful ground for innovation, growth, and leadership. However, without intentional management, it can also create costly mishaps and counterproductive conditions.
Organizations suffer direct financial loss when they do not prepare employees adequately for international assignments. One major global aerospace firm found that, on average, placing an employee in a three-year international assignment costs the company one million dollars, with a third of that amount covering the cost of moving the employee and family in and out. Each time an individual does not succeed in one of these assignments and needs to be replaced, a third of a million dollars is lost, attesting to the high cost of what one global professional terms the "Roman coliseum school of management."
However, global diversity does not merely have significance for expatriates and headquarters-based executives. Employees in India, Brazil, Thailand, and Korea who may never work outside their home countries are also part of the global workforce. Their issues and barriers need to be addressed, their cultures, perspectives, and input taken into consideration, and their potential contributions realized for the benefit of the organization.
HELP IN MANAGING GLOBAL DIVERSITY
Managing global diversity is a proactive, strategic approach that leads to business success. This approach is best defined as the capability of an organization and the individuals within it to effectively manage or be managed, using and maximizing the total workforce potential by having the knowledge, attitude, and skills to identify and use alternative cultural styles and behaviors to achieve the business objective with respect to the national culture(s) and the multiple locations in which they operate.
This book provides neither a template nor a list of dos and don'ts for global diversity management. What it does offer is practical information to deal with the complexities of working with a globally diverse workforce. First, it presents conceptual models that provide both insight into the issues and a framework on which to build an effective approach. Second, this book provides tools for increasing effectiveness in managing diversity at three levels—the individual, interpersonal, and organizational. Building individual awareness, knowledge, and skill in managing global diversity is an essential first step for any leader in international organizations. Functioning productively with employees, colleagues, and managers whose global diversity profile is very different is a second area of competence. Finally, creating and aligning organizational systems, policies, and practices with the requirements of an international workforce is critical for success.
As shown in the Managing Global Diversity diagram, information, activities, and tools are focused on (1) increasing your awareness about global diversity issues, challenges, and opportunities; (2) giving you knowledge to understand the issues, dynamics, and factors at play; (3) helping you enlist the cooperation of others in creating options so that you can (4) take beneficial action that reconciles differences and leads your organization to success.
The concepts and tools found in this book rest on a fundamental orientation regarding managing global diversity that is best described in the diagram.
Each of the chapters presents information and activities that build awareness, increase knowledge, enhance the ability to create options, and give guidance in selecting suitable actions that lead to a process of ongoing improvement.
Awareness
A U.S. presentation team left Korea thinking they had been successful in working with a group of employees from six countries. Only later did they receive feedback that told them they'd ignored cues and failed in achieving their objectives. Rather than being blissful, ignorance is dangerous. What we do not know often hurts us, and lack of knowledge prevents us from taking action that can help. Awareness of obstacles or exclusions is essential to dealing with them. Likewise, recognition of opportunities presented by diversity is necessary in order to take advantage of them. The first step in dealing effectively with global diversity is becoming aware of the challenges and opportunities it offers. Interpreting your Chinese colleagues' smiling, helpful, and gracious hospitality for acceptance, rather than the dutiful behavior as your hosts that it is, probably would be a mistake. On the other hand, showing understanding of the irritation that might be felt by local staff at headquarters-based control and the frequent preference given to expatriates could be helpful in approaching colleagues and staff in those offices with empathy and humility. Each chapter provides tools and activities that raise awareness of differences and recognition of situations that need to be addressed.
Knowledge
However, awareness alone is not enough. Beyond noticing that differences exist, we need information about the situation or issue. Gaining knowledge is a critical next step. What are the different norms of the cultures in the workforce? How does each civilization involved look at the situation? What are the particular sensitivities in each country? How do the national differences involved play out? How do employees understand their roles in the workplace due to differences in race, gender, and age? What factors may lead to conflict? What potential opportunities are presented? Finding ways to gain information about the individual, organizational, national, and civilizational cultural differences as well as the internal and external dimensions of diversity is essential at this stage. Chapters 1 and 2 present detailed information about these differences.
Options
Such knowledge then helps in the next stage, that of generating options for actions to take. What range of actions would help deal with these differences? How can you get help from cultural informants about how different civilizations or national cultures might approach this issue? What steps need to be taken to meet the needs of all parties and accomplish goals? What mutual adjustments and adaptations could be made to reconcile differences? At this point, generating multiple options and avoiding polarized thinking in an either/or trap is critical. Reconciliation requires a sensitivity to others' values, perspectives, and needs on the one hand and a willingness to adapt to the needs and preferences of others on the other. Options that are generated need to take into account the perspectives of the multiple cultures involved, those of the individual, nation, organization, and civilization. Chapters 3, 4, 5, 6, 7, 8, and 9 present a myriad of guidelines and activities that provide options for dealing with these differences and activities that engage others in developing them.
Actions
Finally, action must be taken, and that requires deciding which combination of options will be implemented. Here, too, one must take into account the objectives of the organization and the different cultural and individual perspectives involved so that a mutually acceptable resolution results. The aim at this stage is a reconciliation and utilization of differences that maximizes the diverse contributions of employees and leads to business success. Chapters 3 through 9 offer guidance in selecting the most effective actions for your organization.
ASSUMPTIONS UNDERLYING DIVERSITY WORK
All work is value-based, influenced by the priorities, experiences, and orientations of the individuals, national cultures, and civilizations involved. In addressing diversity in global organizations, it is important to examine this value base and consciously recognize the assumptions that form the foundation of one's approach, the platform from which individuals and organizations leverage diversity.
It has been our experience that there are a few shared, although rarely articulated, assumptions that exist as underpinnings of diversity work:
Diversity has the capacity to add value.
While diversity brings the potential for both creativity and conflict, the driver underlying the attention to diversity is a business imperative, because diversity brings the possibility of enhancing and enriching organizations. Differences in perspective, approach, skill, and background can stimulate innovation that leads to progress and improvement. Employees from cultures that value conformity and homogeneity in their own national contexts may find it difficult to embrace global diversity within the corporate structure.
For diversity to add value it must be managed.
Many individuals dislike the term "manage," as for some it connotes control and harnessing rather than capitalizing on and using. However, most would agree that diversity does not automatically benefit an organization. To reap diversity's potential rewards, organizations must address barriers, create ways to include a wider range of perspectives, and intentionally focus energy and resources on making use of diversity as a strategic business advantage.
Diversity is ultimately about inclusion and exclusion.
At the most basic level, diversity involves the fundamental issue of who is included and who is not, the dimensions of differences around which we include and exclude others. These differences may be visible and obvious, such as gender, race, and nationality. However, they may also be more subtle, involving aspects such as personality and thinking styles, education level, and civilizational orientations.
In all organizations both formal and informal parameters exist regarding inclusion and exclusion in decision making, problem solving, and information gathering. In addressing global diversity, these patterns of inclusion and exclusion need to be examined and managed to get the best from a worldwide workforce to serve the needs of the company.
Perception is reality.
Diversity work needs to take into account the perceived realities of a wide range of individuals in any organization. Each individual is the expert on his or her own perceived reality, and work needs to focus on helping people understand their own and others' realities as well. Dealing with these different perceived realities in constructive ways is an important step to achieving cross-cultural reconciliation.
People find comfort and safety in commonality.
It is natural for people to gravitate toward others they perceive to be similar to them, whether in ethnicity, language, values, education level, or recreational activities. This natural grouping is a given. Fighting this aspect of human nature is counterproductive. Part of the job of diversity work is to help employees develop commonalities with people different from themselves so that new connections, comfort, and trust can be built.
People support change that has clear benefit to them.
Just as organizations need to find strategic business advantage in any action they take, so do individual human beings. For employees, employers, and corporate stakeholders to support the changes involved in any diversity initiative, they need to see that these actions will be beneficial to them.
Dealing with diversity involves culture change.
Making the best use of differences in an organization requires more than just global recruitment, an international mentoring process, pre-departure preparation, or cross-cultural awareness training. It involves an organization development approach, focusing on individual, managerial, and organizational levels that ultimately deal with local, national, and global systemic change. This view may not be shared by those from more traditional organizational and national cultures who see change as disruptive to order and a threat to the security derived from depending on the way things have always been done.
All conditions exist for a reason.
Before embarking on a change process, it is critical to understand the dynamics of the existing situation. Identifying how current conditions serve the organization and the individuals in it is a crucial first step in delineating the formal and informal power structures that support the status quo and resist change.
Consider which of these basic tenets are part of your philosophy about dealing with diversity. Perhaps there are others that underlie your approach. Understanding your own beliefs is a critical step in dealing with others different from you in your global interactions. It is also important to understand the beliefs and tenets of colleagues, employees, and clients with whom you do business.
The four authors make no pretence at being culture-free. While we have made every attempt to be sensitive to different perspectives and orientations, we come out of a U.S.-American cultural context that has shaped our approach. With over one hundred collective years of experience consulting with global organizations in both domestic and international settings, we have worked with employees from all parts of the world and have seen the challenges organizations face in creating systems, procedures, and methods that are effective in working with a globally diverse workforce. The enormity of the topic and complexity of the issues involved in global diversity can be overwhelming. For that reason this book provides a structure in which the reader can find the pertinent information for particular needs and adapt them to a specific reality.
OVERVIEW OF CHAPTERS
The Global Diversity Desk Reference is designed to serve as a practical reference resource at the strategic and tactical levels, for senior leaders, managers, and human resource professionals engaged in directing and managing a global workforce. Each of the tools provided is accompanied by directions for its use in face-to-face, and electronic interactions where possible, with appropriate groups within the organization as a management, staff development, training, and/or organizational change intervention. In order to help you use the tools and activities, a matrix, found in the Appendix, presents a cross-reference of tools and activities showing their potential use with various groups and for various purposes. Following this matrix are a number of sample agendas demonstrating examples of the sequencing of activities and concepts for training and for stimulating strategic discussions regarding systems and policy changes.
Part One: Foundations of Global Diversity
This first section presents the platform that forms the conceptual base for global diversity. The models provided explain the what and why to help leaders and managers understand the complexities of global diversity.
Chapter 1: Beyond Diversity: What Is Culture?
Because understanding our own culture and that of others is a critical underpinning of our ability to leverage diversity on a global scale, this chapter presents a necessary primer on concepts of culture: what it is and how in influences behavior. Various models of culture are used to address the process of cross-cultural adaptation and applied to the globally diverse workplace. The Three Culture Model™ is explained, and tools for reconciling and learning from cultural difference are provided. In addition, the chapter presents the business case for managing global diversity and the distinction between domestic and global diversity.
Chapter 2: What Is Global Diversity?
A first step in leveraging the power of a global workforce is an understanding of the multiple dimensions involved. This chapter provides models that serve as conceptual foundations for helping your organization manage and leverage global diversity. The Six Spheres of Inclusion™ (SSI) model presents a manageable way to understand and communicate the complexities of global diversity.
Part Two: Managing a Global Workforce
The second section moves on to the "how" of global diversity management, providing information and tools to engage others in increasing organizational and individual effectiveness in managing a global workforce.
Chapter 3: Communicating Effectively Across Cultures
Culture, language, time, and distance present daunting challenges to the exchange of information and development of effective interpersonal connections necessary in global organizations. This chapter provides frameworks, guidelines, methods, and tools for overcoming barriers and building relationships across lines of nationality, language, education, and field of work, among other dimensions of global diversity. It focuses on techniques and approaches for improving results when dealing with specific kinds of communication issues, such as using interpreters, making presentations, using technology, and conducting meetings in global settings.
Chapter 4: Maximizing Global Teams and Work Groups for Higher Performance
Teamwork is severely tested when virtual or global work groups confront dilemmas around lack of face time, multiple languages, cultural differences, technology, and time restrictions. This chapter presents information about the "must have" ingredients for high-performing global teams and the cultural differences influencing teamwork. It goes on to provide a number of assessments, activities, and tools for use in both face-to-face and virtual settings to build cohesion, improve communication, foster creativity, and bridge time and distance.
Chapter 5: Managing Conflict in an International Environment
The same differences that bring the potential for creativity can also result in conflict when methods, preferences, and values clash. This chapter provides a deeper understanding of the dynamics of conflict in global organizations and methods and tools to deal with it in productive ways.
Chapter 6: Problem Solving in Global Organizations
While business cultures may vary around the world, the need to solve problems remains constant. This chapter presents information about the ways culture influences the methodologies for expressing and solving problems. It goes on to provide tools and activities for maximizing the creativity and problem-solving capability of global work groups.
Part Three: Developing Your Organization's Global Competence
The third section continues the focus on the "how" of global diversity management, providing guidelines and tools for improving systems to support global diversity management.
Chapter 7: Systems for Using People Effectively in Global Organizations
Developing human resource systems and management practices that are appropriate and effective in global organizations is the focus of this chapter on people management. Specific guidelines and tools regarding interviewing, hiring, training, development, compensation, and benefits are provided.
Chapter 8: Managing Performance in an International Workforce
International and global organizations have continuously struggled to create performance management systems ranging from a uniform "one size fits all" model to a potpourri of location-specific models that have little value outside their national borders. This chapter gives guidance in developing and implementing global performance management systems that allow for local cultural integrity, yet identify performers who bring value to the ongoing development of the company.
Chapter 9: You as a Tool: Leader as a Change Agent
Being an effective global leader means being a change agent in order to advocate for the culture transformation required to manage the complexities of global diversity. This chapter helps leaders assess and develop the flexibility and competencies necessary for effectiveness in shepherding global diversity implementation.
Part Four: Resources and Appendix
Resources for Managing Global Diversity
While this book provides a wealth of useful information and practical tools, additional resources will be required from time to time. This chapter anticipates this need and provides an extensive listing of resources that serve as a "go-to" guide for answers to specific questions, additional in-depth information, or help in developing the skills of others. Books, articles, videos, CD-ROM resources, and websites relevant to global diversity are listed.
Additional resources in the form of a cross-referenced matrix guide to using the tools and activities in the book as well as sample agendas demonstrating the sequencing of models and activities for training and strategic planning discussions are provided in this section.
As you continue your journey through the uncharted territory of global diversity, our goal is to give you concepts and tools that provide a roadmap to guide you.
Notes
[] Palich, Leslie E., and Luis R. Gomez-Mejia. "A Theory of Global Strategy and Firm Efficiencies: Considering the Effects of Cultural Diversity," Journal of Management, July 1999, V25, N4, p. 587.
[] HR World, March/April 2000, p. 9.
[] Enterprising Nation. Report of the Industry Task Force on Leadership and Management Skills, Commonwealth of Australia, 1995.
[] Global Relocation Trends: 2000 Survey Report. GMAC GRS/Windham International, NFTC and SHRM Global Forum, October 2002.
[] Maguier, Mark. "Speaking Out Has High Cost," Los Angeles Times, August 12, 2002, pp. A1 and A6.
[] Global Relocation Trends:? 2000 Survey Report. GMAC GRS/Windham International, NFTC and SHRM Global Forum, October 2002.
[] Smith, Duncan. "The Business Case for Diversity," Monash Mt. Eliza Business Review, November 1998, pp. 72–81.