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Intercultural Management, the often unrecognized Challenge within transnational Organizations

Interview with Silvia Lawrence, Owner, Business Language Support, and Dr. Kazuyuki Marukawa, Senior Executive Vice President, CS Energy Materials Ltd.

This article was first published in DJW News 2/2016.

So 17.07.2016, 12:01 Uhr

 

Many DJW members are involved in transnational business activities. The demand for intercultural competences is constantly increasing, aiming to prevent the failure of projects and joint ventures. This subject is sometimes underestimated or even considered not to be important. Therefore, it is often neglected in the daily working routine of international management staff. The impact of this negligence within transnational organizations can lead to failure. To reflect on this important business aspect, DJW was asked to support a working group within DJW, inviting all interested and experienced members to participate and contribute their experiences for the benefit of all our members. To introduce this topic, we have invited Dr. Kazuyuki Marukawa, Senior Executive Vice President of CS Energy Materials Ltd., and Ms. Silvia Lawrence, Counselor as well as Personnel and Business Coach, to talk about the importance of intercultural management and share their experiences.

Dr. Kazuyuki Marukawa holds a degree in Economics from Keio University, MBA from London Business School and earned his Doctor of Business Administration at Manchester Business School. He gained international experience working for Mitsubishi Heavy Industries and A.T. Kearney in Bangladesh, Japan and Korea. Dr. Marukawa started to work for H.C. Starck Ltd. in Tokyo in 2008 where he set up the first business development department of H.C. Starck in Asia. He moved to Germany in 2010 to set up the first corporate strategy department within H.C.Starck GmbH in Munich. He has been Senior Executive Vice President of CS Energy Materials Ltd. and managing the lithium-ion batteries cathode materials Joint Venture since 2011.

Ms. Silvia Lawrence holds a degree in Counseling from the University of Applied Sciences in Hamburg. She has worked for Philips Lighting in Aachen (Germany) for more than 10 years and has developed and managed the Communication and Language Improvement Program for three subsidiaries. She has accompanied the introduction of BEST Excellence, the Philips Quality Management System, and is certified by the German Society of Quality (DGQ). In 2008, she transferred to a High Technology joint venture of a Dutch and Japanese company.

 

DJW: What is your understanding of intercultural management?

Silvia Lawrence: Intercultural management is defined as a partial aspect of international management and refers to the productive use of cultural heterogeneity. It concerns itself with the concrete design of functional, structural and personnel management processes in different countries or cultures. It focuses mainly on culture-related management problems by using the different value systems, personality characteristics and cultural backgrounds of employees. It focuses furthermore on the implementation of inter­cultural thinking and acting in the everyday work of multinational enterprises.

Kazuyuki Marukawa: As for me, the key purpose of intercultural management is to maximize synergies by facing and digesting the different ideas from the various kinds of people from different cultural backgrounds. This is surely a crucial point for the survival and healthy development of any multinational enterprise (MNE) around the world. Many academics also state that one of the key factors of MNE success is how they can use their global internal resources effectively – one of the key resources being the people.

Often, intercultural management is seen as a fancy issue and a difficult task to accomplish. I have a some-what different view on this. Intercultural management is not rocket science. When we can develop trust in each other and when we can start to enjoy encountering different cultures, the intercultural experience gives us greater joy than just dealing with the monocultural business. However, this is not always easy as the  key  challenge  of  intercultural  management  is that all of us need to be prepared to get out of our comfort zone at least at the initial point. 

DJW: Why is the awareness of intercultural management of such immense importance within a transnational cor­porate environment? 

Lawrence: Intercultural management is essential to op­timize competitiveness in both international and inter­cultural business activities. Key success factors of intercultural management activities are strong intercultural competencies, which include respect for different cultures, good communication skills and the ability to see the individually inherent cultural strengths of each employee.

Marukawa: Professor Ghoshal (Professor of Insead & London Business School) came up with a basic concept of a ‘transnational model’. In this transnational model, HQ and subsidiaries are both acting as a sort of centers of excellence. Take the example of strategic consultancy firms such as McKinsey: The offices in London and New York are both centers of excellence. Nobody cares where McKinsey HQ is located. This trend is starting to influence other sectors as well.

I would also like to mention the Nissan & Renault alliance. There are several causes for the success of this alliance, but I think the successful intercultural management to bridge France and Japan is one of the most important factors. Without Mr. Carlos Ghosn (Current CEO of Renault & Nissan) who has lived in Lebanon, Brazil, the US, France, and Japan, I think this kind of successful intercultural management was not possible.

It is also interesting to see how German and Japanese MNEs have developed their expatriate policies. German and Japanese MNEs used to send their own nationals as the top management of their foreign subsidiaries. This trend is still visible. However, some of the companies are starting to assign their local staff to top management positions in these foreign subsidiaries. This case also clearly shows that intercultural management is becoming substantially more important within the transnational cor­porate environment.

DJW: What are these intercultural management com­petencies in more detail?

Lawrence: On the personal level it means to have an: open awareness (e.g. to ask questions, to listen,  to monitor, to learn); an intelligent flexibility (e.g. to react with intelligence in unexpected situations without getting uncertain); respectful friendliness (e.g. to show em­pathy, tolerance and patience) and psychological understanding. (e.g. in personal or professional conflict situations).

As recognized intercultural management dimensions, we are actually able to find them in different key busi­ness processes contexts such as:

  • intercultural strategic management (e.g. market entrance)
  • intercultural personnel management (e.g. development, expatiates, diversity management)
  • intercultural marketing management (e.g. marke­ting mix, considering cultural specifics)
  • intercultural corporation management (e.g. part­nering, pre and-post merger, executive level  relationship)
  • intercultural network management (e.g. design of corporate communication and culture)

intercultural team and project management (e.g. considering intercultural related different training and educational backgrounds)

Marukawa: I would like to focus especially on the above mentioned personal aspects. I call the people who become the cornerstone of intercultural manage­ment the “catalyst people” – I regard the following elements as especially important:

  • Empathy: try to understand and feel the counter­parts’ situation.
  • Fairness & trust: try not to focus only on your own advantages. An attitude of “give and take” leads to the biggest synergies in the end.
  • Skills for constant and open minded com­mu­ni­cation: having more communications will never harm our relationship.
  • Language skills: we cannot underestimate the im­portance of key tools for our communication.
  • Constructive optimism: enjoy the difference and do not become overly pessimistic.

Intercultural experiences: the best way to gain an intercultural management competence basis is to expose oneself to the different cultures.

For the initial stage of a career path, I think it is important for the companies to give the opportunities to the young people to go abroad and work there to gain some ex­periences. However, after the middle management stage, I think people need to explore the intercultural opportunities by their own initiatives rather than to rely on the companies and institutional supports.

DJW: What do you consider as basic knowledge for management staff in transnational assignments regarding intercultural management?

Lawrence: In difficult business situations I personally find it helpful to refer to the “cultural dimensions” defined by Geert Hofsteede, Fons Trompenaar and Charles Hampden Turner to create an understanding of the parties involved. An awareness and training for my above mentioned points would be advisable, too. Besides the above mentioned, I find it important that managers understand nonverbal communication. Next to the nonverbal signals we all understand, like the meaning of a smile, each culture has different nonverbal dimensions, like privacy, respecting distances, facial expressions, i.e. the degree of expressing positive or negative emotions and gestures, (e.g. inviting or rejecting gestures). This is a very important part of com­munication and very often disregarded. A basic understanding of psychology would be useful, e.g. how to solve conflicts in an intercultural environment.

Of course, different cultures have different ways of dea­ling with problems and conflicts. For example, I have made the experience that Mexican managers tend to solve conflicts more emotionally driven, with more tem­perament and temper, in comparison to a German or a Japanese manager, which might be very offensive to someone of a different background. Therefore, knowledge that communication is not done only verbally, but involves much more, is – to my mind – essential for smooth and effective business and should not be treated, as often done, with disregard.

Marukawa: From my experience, the high performers in Germany will do well in Japan and vice versa. Rather than just to have the knowledge, the people need to have the experiences. We can’t advise people how to swim when we don’t know how to swim. Thus, I think it is important for us to give opportunities to the young people to survive in the different cultures. I strongly believe that experience is more important than the knowledge itself for intercultural management. Therefore, I suppose it is important especially for the young students in Germany and in Japan to have more opportunities to expose themselves to the different cultures. For me, the ideal example is the gap year system in the UK. Before getting into their college the students spend a year as they wish such as studying, volunteering, travelling around the world etc. One of the key aspects of intercultural management is to design the things by our own initiative rather than just to follow the established standard.

DJW: What are the important aspects of intercultural communication?

Lawrence: My last project involved 11 different nations on my employer´s side and 86 on the side of my com­pany´s business partner. It goes without saying that in such a situation it is mandatory to develop an intercultural corporate communication. As mentioned above, human communication and interaction is very complex and multidimensional. During contact between those manifold cultures, it is obvious that problems and misunderstandings occur, due to the communication habits of the respective counterparts that are often unknown, seem strange or can be even frightening and disturbing. Many things we perceive during interaction work unconsciously. For instance, we do not think about the fact that leaning back in a chair during a meeting might be seen as offensive: A British counterpart might feel offended, because he interprets this posture as a sign for not paying attention, whereas the person leaning back might just wanted to signal “I need time to think”. Also, for instance, loud and harsh voice modulation can be seen as very offensive. Good intercultural communication needs to be clearly struc­tured, should have an agreed communication level and sufficient foreign language skills that all parties involved can understand and utilize. Moreover, it should be non-offensive (verbally and physically), yet respectful, friendly and polite.

Marukawa: From my experience, when we are speaking with people coming from different backgrounds, we are already risking that we might be having a misunderstanding. Once, when my German and Japanese colleagues were discussing about basic engineering, I  discovered  that  there  was  a difference in  the  definition of basic engineering in Germany and in Japan. When we continue such miscommunication without the opportunity for clarification, this will undermine our trust. Thus, for intercultural communication, I think overdoing clarification to each other will never harm us at least until we can establish trust between each other.

DJW: What is your personal experience with intercultural management?

Lawrence: I have been working for Philips, a well-known and well-structured transnational corporation. “Communication training” was and is a must do on all levels. On CEO level, where clear, precise and constructive coaching of communication skills (e.g. in psychology and strategy) is essential in order to achieve job related set targets around the world, it is taken very seriously. We often had to consider and discuss aspects of cultures as part of management and also business strategy.

The company invested very early in the development and introduction of a corporate culture and intercultural language level, to ensure that employees around the world would speak and understand this corporate language. I have coached many upper management employees and CEOs from around the world and found it very helpful to be able to fall back on a corporate language culture. For me, it was difficult to change over to a project involving many different nations and thus encountering the inherent problems, where training of such kind was not given the importance it needed. In such companies daily business always had priority, overlooking the fact that all areas of activities – such as business negotiation, meeting culture, interfaces, conflict management, knowledge transfer and  management, logistics , supplier  management,  employee relationships, executive communication internal, external, international – depend on how clear, structured, commonly understandable and accepted a corporate communication system is. That is if such a system is given!

Business success starts with excellence in communication, and commonly understood intercultural communication standards within a corporation. This vital point needs to be understood, supported and pushed on all management levels. Unfortunately, if this is not done, many businesses risk failing, losing capital and causing hardship, not least for its employees.

Marukawa: My intercultural experience) started when I went to the UK in 1983 as a primary school student. I could not speak any English. However, my school teacher found I was good at mathematics, thus she organized a mathematics contest in the school for me. I could be No.1 then and I could win the respect. I still feel this is the perfect example of intercultural management, and how to empower people coming from different backgrounds. I am now taking care of a German & Japanese joint venture. We are surely facing several challenges, but I feel our intercultural management is going quite well. Our representative on the Japanese side has lived in the US for a long time and I feel he is very open to the different ideas and cultures. I represent the German side. I feel two of us are the good catalyst people for this joint venture. When we can form a bridge between two catalyst people like this, it will make the intercultural management far easier and more successful.

DJW: As mentioned above, DJW was asked to support a working group for intercultural management. What should be, in your opinion, the purpose of such a working-group?

Lawrence: We have many highly professional members within the DJW network. In my opinion, it is important to collect as much input and experiences of these competent members as possible to create a reflection matrix regarding the needs and requirements within global companies in order to enable them to be successful in an ever challenging transnational business environment.

Marukawa: When the Japanese people in Germany and the German people in Japan can interact more with the people in the local society there, this would be a very interesting thing for lots of people. As Germany is one of the key manufacturing centers in Europe and Japan is also the key manufacturing center in Asia, just from this perspective alone we have lots to share. I feel DJW is the perfect platform for us to connect to each other in order to formulate our synergy. Actually, I believe this is the key outcome what we expect from intercultural management.

 

© Pressfoto / Freepik © Pressfoto / Freepik
Silvia Lawrence, Owner
Business Language Support
contact@bls-ac.com
www.bls-ac.com

Dr. Kazuyuki Marukawa
Senior Executive Vice President, CS Energy Materials Ltd.
Kazuyuki.Marukawa@hcstarck.com
www.hcstarck.com/de/home.html
Silvia Lawrence, Owner
Business Language Support
contact@bls-ac.com
www.bls-ac.com

Dr. Kazuyuki Marukawa
Senior Executive Vice President, CS Energy Materials Ltd.
Kazuyuki.Marukawa@hcstarck.com
www.hcstarck.com/de/home.html

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