Sep 27

The ability to understand group behaviour and manage potential culture clashes is an essential skill for anyone interacting on a global scale. What may be considered acceptable behaviour by some national cultures may be seen as misbehaviour by others, so it’s important to have a strong cultural awareness in order to effectively anticipate, interpret and manage any cultural clashes that may occur.

Olympic Rings jokerproproduction i When National Teams “Muck About” at an Olympics Medal Ceremony

© istockphoto.com/jokerproproduction

With 205 national teams being brought together during the London 2012 Olympics, there were plenty of occasions for spectators to practise their cultural awareness on the occasional clashes of behaviours they witnessed during the events. Looking at the medal ceremonies, for instance, it’s interesting to compare the different behaviours of the winning national teams in the men’s handball event.

Well Behaved, or ‘Mucking About’ – Contrasting Cultures

The men’s handball medal ceremony brought together teams from France, Sweden and Croatia – gold, silver and bronze medal winners, respectively. The way in which these collective units displayed their cultural affinities would have engaged any culturally intelligent onlooker.

First the Croatians came onto the podium. Before stepping on, they collectively went down into a press-up position and completed a repetition as one. Moving together, they then stood up onto the podium and raised a clenched fist to the crowd. They smiled, as if to underline the playfulness of their gesture.

Next came the Swedish team, who simply stood together, linked with their arms around each other’s backs, exchanging quiet words, remaining so throughout the presentation both on and off the podium, only breaking up to applaud the other medalists and while the winners’ anthem was played.

Then the French team stepped up to receive their gold medals. They casually struck a ‘Lighting Bolt’ pose in unison , imitating Usain Bolt’s now renowned winner’s celebration. In contrast to the other teams, the French shifted among each other, chatted openly, waved at the crowd and stood casually by while the bronze and silver medals were being awarded.

Gaining a Cultural Advantage

Each team behaved completely differently, and although this did not make a significant difference to how the medal ceremony was played out, there were different interpretations and comments of the behaviour going on around the world as people watched.

Looking at the Croatian team, who in the opinions of many commentators had come into the competition as favourites, you could argue that their collective gesture may have been motivated by a need to save face after failing to achieve gold. The Croatian team’s parading may not only have been construed by some as humorous but also as defiant in the face of what some others may have considered to be a failure.

There are parallels that you can draw from observing this scene and what may happen in business teams. In a business context it’s increasingly common to have team members from distinctive cultures who behave differently as a result of diverse cultural values. Leaders and team members alike can struggle to work effectively together without an understanding of how their behaviours are perceived and interpreted.

Reading the Cultural Cues

So what cultural clues might enable an executive to quickly assess a group in terms of their sensitivities to power and hierarchy, for instance? To what extent might these team members value respect for certain rules and formalities? How acceptable would it be for a French delegation to be “mucking about” when their Swedish partners might expect a degree of dignity and discretion? What perception would it create if certain team members banded together about the success of a project in a similar way to how the Croatians did?

Because there are so many other variables to consider in addition to the cultural values at play, such as context and individual personalities, being culturally aware should not imply cultural stereotyping. The rules that govern behaviour are never hard and fast, but cultural awareness can give you the know-how to observe and recognise certain cultural signs that another person displays.

Communicaid’s cultural awareness training courses are specifically designed to help global leaders and international team members to understand cultural difference and learn how to adapt to their counterparts while at the same time keeping their own “corporate” and core values intact. As important as it is to cater for the needs of our increasingly globalised business circles, it is also vital for people to learn to adapt themselves to their new surroundings as much as possible. This will ensure a much better experience for all involved without risking offence for either party.

So whether it’s a medals ceremony in the Olympics or the launch of a new international project team, understanding how people will behave to attain the desired results or what they do to celebrate success will be vital to the performance of everyone involved.

© Communicaid Group Ltd. 2012

Jul 16

360° feedback is one of the most widely used performance management strategies in global organisations today.  In fact, research shows that approximately 90% of all Fortune500 companies use some kind of 360° feedback technique.  One of the fundamental objectives of any 360° feedback is to improve the individual performance of employees in line with the organisation’s global priorities and requirements.

The principle of running an evaluation process to review and improve an employee’s performance is an important one, however the way this process is carried out may or may not be effective depending on where and how it is implemented.  Organisations looking to harness the benefits of effective global leadership and management must consider the cultural factors that can negatively influence a performance management process of this kind.

Business Writing Viorika Prikhodko i Implementing a Global 360° Feedback Process across Cultures: Will it Really Work?

© istockphoto.com/Viorika Prikhodko

So what is a 360° feedback process?

Before we explore what may or may not work across cultures, let’s first make sure we understand what a 360° feedback process is.  The process of using 360° feedback consists of providing an employee with feedback from different internal and external perspectives, in other words, it looks at feedback from a full 360° circle.  Each individual is objectively evaluated by colleagues both above and below their level as well as external counterparts to ensure a complete picture of their performance.

Once a combination of quantitative and qualitative feedback is collected, individuals will go through a series of review meetings to discuss the feedback and identify areas for improvement or reward.  During these 360° feedback review meetings the employee and their manager will share feedback, both positive and constructive, in order to highlight specific short and long-term actions to improve their performance.

What are the potential problems?

So what makes the implementation of a global 360° feedback process so difficult in a multicultural environment?

In many individual, task-oriented and egalitarian cultures like the US, UK, Finland or Germany, 360° feedback processes such as this can be very well received and effective.  In more collective, relationship-oriented and hierarchical cultures, this evaluation system is often extremely ineffective.  Although people from cultures like India, Spain and China will go through the process if required, the feedback collected and results of the meetings will not always be an accurate representation of the individual in question.

The assumption that feedback is welcomed and viewed as constructive is sometimes a one sided cultural perception.  In fact, people from collective cultures like those in Asia will often avoid criticism and refrain from negatively assessing an individual’s performances for fear of hurting the group harmony and causing loss of face.  This is particularly the case if the feedback is being requested by someone more senior than them, especially in cultures where hierarchy plays a key role in business and social interactions.

Asking for feedback from direct reports and superiors is just one cultural challenge of the 360° feedback process.  Sharing the feedback with the individual can be equally, if not more, challenging.  People from collective cultures like China may perceive the information as negative and embarrassing and may as a result feel isolated and depreciated in the workplace.  People from individually-oriented cultures like the US value honesty and since they believe that they have considerable control over their own behaviours and outcomes, they value direct feedback which will help them to improve their performance.

Cross-cultural challenges of 360° feedback

When you combine the potential cultural challenges of requesting and giving feedback with certain cultural attitudes without adapting the approach, you may waste considerable time and effort on a process that will not give you the desired results.

Here are two specific examples of how a 360° feedback process can be challenging across cultures:

  • Where the process is implemented directly from a culture like the US to a hierarchical and relationship oriented culture like India, you may have problems collecting valid feedback which is truly reflective of employee performance in that location.
  • Where the process is implemented between two people of opposing cultural approaches, such as in the case of a British manager and Thai subordinate, there is a risk of not only failing to collect legitimate feedback but also of causing offence and damaging the relationship.

How can we improve 360° feedback across cultures?

With the right cultural understanding and effective global leadership skills, there are many things that global managers can do to ensure the successful use of this evaluation system.  Here are a few simple ideas:

  • Amend the process so the upwards feedback is guaranteed to be anonymous
  • Make sure that you know what to ask for and be specific and clear in your requests
  • Clarify what kind of information you want to get and explain how you expect the feedback to be received or acted upon
  • Define the different grades on the scale to avoid initial misunderstandings and diverse interpretations
  • Ask your employees how they interpreted the feedback to check the accuracy of the assessment and whether the action plan correctly addresses the issue
  • Be a live example of how feedback should be shared and used

Despite the challenges that a 360° feedback process may present across cultures, organisations that take into consideration the cultural factors will see a significant difference.  Not only will they get the information they want but they will develop a pool of talented employees with a high level of performance and enhance positive interpersonal relationships among employees.  Considering how this process is impacted in a different cultural context will also help organisations to reduce confusion around expectations, motivate their employees’ professional and personal growth and improve everyone’s job performance.

Implementing a 360° feedback process can offer great results around the world, but only when culture is taken into account right from the outset.

© Communicaid Group Ltd. 2012

Aug 24

Have you ever thought of multicultural teams as a distraction? Do differences in approaches and opinions always get in the way of the decision making process? Some people think that cultural difference is something that must be enjoyed but should not get in the way of achieving goals. How could that be an effective perspective at work?

Business People 8 Sean Locke i1 Managing International Teams   Reduce the Risk and Reap the Benefits

© istockphoto.com/ Sean Locke

Prioritising goals over relations can be considered a culturally specific trait. Team members may, depending on their cultural background, place more importance on completing tasks over relationship building. People who place tasks before relationships may also value assertiveness and antagonism as opposed to compromise and cooperative achievement. But how could it be possible to enjoy an international environment and the differences that exist if you think that culture is an obstacle to achieving targets?

You can’t fully enjoy and appreciate something that you do not know very well, and the same applies for cultural differences. Either through extensive international experience or by attending a cross cultural awareness training course such as Managing International Teams or Working Effectively across Cultures, you will be able to understand how culture influences the way people communicate and, in particular, how they approach business relations.

The way people talk to each other, their working standards and the ability to adapt constitutes challenges in an international environment. Hence, it is crucial to acquire the right skills to acknowledge with an open mind the cultural gaps in order to pursue effectively your team’s goals without letting them be in the way of your operations.

Managers should make sure that members of international teams have appropriate cross cultural training to make them aware of the different styles of communication and approaches that their international colleagues or customers might display. Harnessing the many cultural perspectives and opportunities of cross-cultural teams requires the ability to motivate each team member no matter their culture by creating a sense of trust between employees.

Through an understanding of culture and its impact on business and cross cultural teams, intercultural traininghelps global organisations remove any potential of conflict and risk and gives them the knowledge they need to reap the benefits of a culturally diverse team without taking the focus off the targets.

© Communicaid Group Ltd. 2010

Jul 26

 

Many anthropologists and intercultural specialists like Geert Hofstede and Fons Trompenaars have developed cross-cultural comparative models showing the main cultural differences between cultures. Their contributions as well as those of many other interculturalists such as Edward T. Hall are recognised as foundation models in the field of intercultural communication.

Although comprehensive, most of the work in the field to date is comparative, country-specific and focuses on elements of interaction and communication. Only of few cultural studies have focused specifically on how culture affects leaders and managers around the world. Even fewer studies have analysed the required set of skills and leadership capabilities managers need when working in a cross cultural environment.

Business People 4 Neustockimages i Global Leadership: What Makes the Perfect Leader?

© istockphoto.com/ Neustockimages

The GLOBE project is one research programme that looks to determine what qualities and characteristics the ideal leader should have in different cultures and what impact these cultural values and qualities have on global leadership, organisational culture and processes. Initiated by Robert J. House in 1991 and managed at Thunderbird University in Glendale California, the GLOBE project involves about 170 scholars from 61 countries.

By reviewing expected leadership qualities across these cultures, the GLOBE model shows what leaders should be aware of when operating in that country. For example, the research suggests that Americans look for leaders who will give them power and autonomy and lead the way with bold and clever ideas. Chinese on the other hand typically want their leaders to be able to give precise directions and orders but also inspirational and someone to look up to.

To find and isolate the most relevant cultural features, researchers working on the GLOBE project wrote and translated two questionnaires which focused on working styles within companies as well as the society as a whole. Through the analysis of the completed questionnaires nine cultural orientations were identified that relate to the characteristics of the perfect leader.  These nine cultural orientations are described briefly below.

Uncertainty Avoidance: the extent to which person or organisation tries to avoid unknown or unexpected situations and controls future events. In a management context this can be illustrated by the number of processes companies implement, the use of social rituals or the importance of bureaucracy.

Power Distance: how the power is shared within society or an organisation. The power distance value directly impacts organisational charts, the way decisions are made or even how people interact.

Individual Collectivism: how organisations and society incite people to share or undertake collective actions. In the business world, this value impacts the way people work, for instance alone or within groups.

Societal Collectivism: the level of pride and loyalty displayed by individuals toward their family, social group or company.

Gender Egalitarianism: how power is shared between men and women and how differences between genders are perceived. In organisations, this value is illustrated by the presence (or not) of women within the decision making sphere.

Assertiveness: the accepted degree of directness and aggressiveness within social and work relationships between individuals.

Future Orientation: the extent to which persons and organisations are ready to plan for the future. In organisations this value is illustrated in the confidence displayed in the future, the will of investing or the entrepreneurial spirit expected from the employees.

Performance Orientation: how performance and striving for excellence is rewarded by society or organisations. Organisations in strong performance oriented cultures will emphasise professional success before personal development.

Humane Orientation: the degree of reward individuals can get through kind, generous and altruistic behaviour.

The research conducted to date has been presented in the following two books:

  • Culture, Leadership and Organisation – an overview of the methodology and an analysis of 62 countries
  • Culture and Leadership across the World – an in-depth analysis of 25 countries

Cross cultural awareness training courses like Effective Global Leadership or Building International Teams can increase your understanding of cultural models such as the GLOBE project and how you can use them in your working context. Being aware of cultural differences and leadership expectations around the world will help you to motivate, inspire and manage counterparts more effectively while minimising the risks of critical incidents or misunderstanding.

© Communicaid Group Ltd. 2010

Jul 08

UNESCO is the United Nations’ organisation charged with the task of building ‘the defences of peace in the minds of men’ by developing international cooperation in its fields of competence such as education, sciences, culture and communication. It is fitting, therefore, that UNESCO has been asked to lead the initiative of the United Nations’ ‘International Year for the Rapprochement of Cultures’ during 2010.

Globe Kasia i1 Intercultural Communication in Action   UNESCO’S ‘International Year for the Rapprochement of Cultures’

© istockphoto.com/ Kasia

 

The goal of this International Year is to increase the extent to which the rapprochement of cultures is involved in policy-making at local, national, regional and international levels and to involve as many stakeholders in this as possible. Their policy document explains that this will ‘involve integrating the principles of dialogue and mutual knowledge in all policies, particularly education, science, culture and communication policies, in the hope of correcting flawed cultural representations, values and stereotypes.’

When launching the International Year programme, Ban Ki-Moon, the Secretary-General of the United Nations, emphasised how essential intercultural dialogue and understanding are for a peaceful world and for international development. This point was reinforced by Irina Bokova, UNESCO’s Director-General who said ‘No culture can afford to live in isolation. It is through dialogue and creativity in all its forms, through exploring new opportunities for creating connections between people, that we can prove that diversity is our strength.’

In response to this, hundreds of international activities are planned throughout 2010. These include a Euro-Arab Dialogue Task Force, a Round Table to involve publishing and new technologies in the programme and regional meetings in Central Asia and the Asia-Pacific regions.

While UNESCO is planning many activities throughout 2010, they are also inviting individuals and organisations to contribute in their own ways. Many companies now have a global reach and an international, multicultural staff. ‘Correcting flawed cultural representations, values and stereotypes’, as Ban Ki-moon expressed it, can help companies with a multicultural workforce to improve intercultural communication and enable colleagues to work more successfully with each other and with clients.

Undertaking cultural awareness training courses such as Communicaid’s Working Effectively across Cultures or Managing International Teams programmes is one way organisations can bring together employees from different cultures and improve their cross-cultural communication skills. Intercultural training has proven to be an effective way of increasinge understanding between employees from different cultures by dispelling cultural stereotypes and enabling people involved to create valuable connections.

Offering these intercultural training opportunities to your employees can increase the ability of your organisation to benefit from the cultural differences within it and, as Irina Bokova, Secretary General of UNESCO said, make diversity your strength.

© Communicaid Group Ltd. 2010

Jun 23

Fabio Capello has been under constant criticism ever since England started their World Cup campaign with a draw against the USA. At the time, people acknowledged that this poor start was not helped by the horrendous mistake made by the goalkeeper, Robert Green. But sceptics pointed out that England did not capitalise on the goal scoring opportunities that would have eclipsed Green’s mistake.

The second match saw things go from bad to worse with an abject draw against the Algerians who gave an excellent performance. The end of the match saw Rooney castigating the England supporters for booing and talk of dissent and unrest surfaced in the England camp. Suddenly, stories started to appear about communication problems between Capello and his team, and the different points of view that were threatening to send England back home embarrassingly early, shredding a nation’s hopes to pieces once again.

To think that only a few weeks ago the media could not be more positive about Capello makes matters worse. His strict upbringing in Italy, another traditionally strong football nation, seemed to be just what the England team so desperately needed to reach the top of world football.

England flags Joe Gough1 Managing International Teams – Can Fabio Capello Harness the Bulldog Spirit?

© istockphoto.com/ Joe Gough

 

After a disastrous Euro 2008 campaign, with manager Steve McClaren, which saw England failing to qualify, they thought that a strong character and foreign influence like Capello at the helm of the English team would help change players’ mentality for the better. Unlike lenient McClaren, who as an Englishman was perhaps more star-struck by his players, Capello, a disciplinarian with strict rules on and off the pitch, would not allow misbehaving and would certainly not treat his players with kid gloves. Indeed, his stint as England manager up until the World Cup had been quite successful and he led the team to nine victories in ten qualifying games, losing only to the Ukraine, albeit only after qualification to the World Cup had been secured.

But as with many high-profile and high-pressure appointments, there were a few things that were ignored when Capello was appointed England manager. Despite his previous successes as manager in his native Italy and in Spain, Capello’s poor English language skills were brushed aside by the FA. His strict disciplinarian approach was also thought to be good for the team, however since English players are pampered throughout the year by their respective clubs, it was perhaps too hard a transition for players in the much-higher pressure environment of a World Cup. Indeed, only after England’s draw against Algeria did it become known that the team had apparently just drank their very first beer since the start of the tournament and that a few players had voiced their dissent against Capello’s tough-love approach.

Cultural, language and communication differences are well-known challenges faced in the business world, and football is no exception. Yet because football players and managers are sometimes perceived as ball-kicking athletes with no intellectual aspirations, their cultural and language differences go largely ignored.

The problem then is when football teams are immersed in high pressure on the world stage. All their differences are magnified and the façade starts to crack. How could an Italian manager ignore the fact that the British need to wind down sometimes with a beer and that they need directions in simple, plain English?

England is facing Slovenia in a must-win match later today, so the time has finally come to deliver results despite the many differences between manager and squad. Only time will tell whether Capello should have undertaken some sort of cultural awareness training course such as Communicaid’s Managing International Teams.

There is no doubt that Capello has done remarkably well and managed to gain a good level of English. Most people at Capello’s age are retired and so his performance and passion is all the more remarkable. Managing an international team, however, requires the Manager of England or indeed any business to harness the qualities of the team and culture(s) that it is made of. In the case of the English team, they have always been renowned for their passion, bulldog spirit and the desire to keep fighting to the end – often to lose on penalties!

Today we need to see that bulldog spirit once more. We don’t care if England lose today as long as they show that they care passionately and deliver a performance to make the fans back home and those that have travelled all the way to South Africa proud. Come on England!

© Communicaid Group Ltd.2010

Jun 03
Business Woman on laptop 2 quavondo i Working across Cultures: the Challenges of Virtual Communication

© istockphoto.com/ Quavondo

Virtual communication is a vital asset for international business. It allows business people to hold international business meetings without having to move from their offices. It also eliminates the need to spend time and money on travel and reduces the frustration that can result from it. Virtual communication is also an excellent way of bringing together people from a variety of cultural backgrounds who offer a number of diverse perspectives and opinions that can help international organisations harness skill and knowledge from around the world.

  

Although virtual communication has a huge number of advantages, it also presents an array of challenges for a wide group of people around the world. Many people recognise that virtual communication prevents us from sharing any non-verbal communication such as gestures or facial expressions. However what they do not realise is that for many cultures, the non-verbal part of the message is actually one of the most important aspects of communication.

Virtual communication can present challenges for a vast majority of people, but it can be even more difficult for individuals in cultures that strongly emphasise relationships. When doing business with counterparts in southern Europe or South America, for instance, you may find they experience difficulties when using virtual communication. You may also find that they feel frustrated by not having the possibility to socialise directly with their international counterparts. The lack of physical contact like a pat on the shoulder or a firm handshake can also make them feel that there is definitely something missing in the message they are sending to their counterparts.

Virtual communication can also be difficult when it involves people with a different communication style. Low context communicators who rely a lot on the meaning of words, such as North Americans, are likely to find it difficult to communicate virtually with high context communicators, like Indians, who will tend to deliver part of their message with silence or non-verbal signs. In this particular case, the virtual method of communication itself becomes an obstacle.

 

Chinese businessman with cellphone i 425x283 Working across Cultures: the Challenges of Virtual Communication

© istockphoto.com/ Hfng

How can virtual teams overcome these difficulties? Meeting face-to-face every now and then seems to be one of the most appropriate solutions however it can be impractical and expensive. Team members are often located on different continents and moving every member for the sole purpose of having a face-to-face meeting where they can socialise and build relationships is usually unrealistic for international organisations with an eye on the bottom line.

The use of ‘friendly’ means of communication can be a good alternative to help your teams to socialise. For example, using video conferencing helps to put a face to the name and allows people to see non-verbal communication. Creating special channels of ‘small talk’ for the team such as a dedicated virtual chat room on the corporate intranet can give people the opportunity to have more informal conversations.

Effective remote working or management of virtual teams can be challenging, but intercultural training can help you develop strategies and skills to more effectively communicate with international counterparts. Communicaid’s cross cultural awareness training courses like Managing Virtual Teams or Effective Virtual Working can help you identify the most appropriate solutions and develop skills to effectively manage the virtual element.

Providing cross cultural training to a virtual team will make them aware of the potential difficulties of virtual working and ensure they find ways of making the most of their communication. It’s also a perfect opportunity to bring the team together in a face-to-face context, or they can do a virtual training session which will truly help them identify and deal with virtual challenges they face.

© Communicaid Group Ltd. 2010

Mar 17
Brazil 2 bkindler i1 God is Brazilian! The International Rush for Brazilian Oil

© istockphoto.com/bkindler

 

‘God is Brazilian!’ – Those were the patriotic words of Brazil’s president Lula da Silva, upon hearing of the recent discovery of new oil fields off the coast of Brazil which – if current estimates prove to be correct – could place Brazilian oil reserves level with those of Russia and Saudi Arabia.

The blocks are 170 miles off the coast, under both deep water and thick layers of salt, so drilling them promises to be technically very challenging. Yet the potential profit is so great that Brazil has become the focus of all major international oil companies searching for new reserves, including British-based BP.

While it has a strong presence in the Gulf of Mexico, BP was one of the few international companies with no assets in Brazil, at least until this week when it announced the beginning of a joint venture with US based Devon Energy. As part of the joint venture agreement BP has bought the American firm’s precious oil fields off the Brazilian coast, and has secured the future development of its oil sands in Canada.

The challenges posed by an international business venture of the size and importance BP is embarking on are many. Establishing new operations in foreign countries, or taking over the management of pre-existing ones require both technical know-how and a sound awareness of the cultural differences in business practices new and existing employees are likely to encounter.  Communicaid has worked alongside a number of international oil and gas companies providing tailored cross cultural training programmes to ensure employees have the right level of cultural knowledge and skills required to be successful when doing business in other cultures.

Cross cultural training programmes have included pre-assignment training for existing staff and their families prior to relocation. Programmes like Living and Working in Saudi Arabia provide employees and their families with the necessary input to live and work successfully in the target destination.

Communicaid has also delivered a number of tailored cross cultural training programmes for business and management to a number of large oil companies.  These programmes are designed ad-hoc with each organisation’s specific needs in mind and therefore vary in both nature and content.

One of the most common requirements international oil companies have identified is the need to train key decision makers to successfully Manage International Teams. The nature of the energy industry means that teams will most likely be composed of highly qualified and experienced individuals from a variety of cultural backgrounds. Creating a successful team spirit and working environment, bridging any possible cultural difference, therefore becomes key for the team’s success, and ultimately for that of the whole organisation.

Communicaid’s cross cultural training programmes are delivered by trainers with vast experience of the country of destination so they bring first hand experience and understanding of the potential problems that can occur both in the workplace and in ever-day situations in another culture. Training is highly interactive, allowing delegates to develop a concrete awareness of the cultural differences they will encounter and personalised ways of dealing with them.

While the race for Brazil’s black gold is most definitely on, unlike most races the first one to get there is not necessarily the winner. Many international joint ventures are known to have failed with the passing of time, often due to a lack of cross cultural awareness by all parties involved.

Communicaidhas long recognised the risks to global organisations of ignoring cross cultural differences in international operations and has developed a vast network of trainers and a rich database of materials to provide international companies the training they need to avoid lost money and time and give them the competitive edge.

© Communicaid Group Ltd. 2010

Mar 03

Russia is by far the largest country in the world. The country covers an area all the way from Europe in the West to North America in the East and bordering with Asia in the South, and boasts a vast geography that spans eleven time zones.

Russian building 2 Dmitry Mordvintsev i 425x283 Benefits of Doing Business in Russia

© istockphoto.com/Dmitry-Mordvintsev

 

Emerging as a diverse nation after a long and eventful history, Russia’s growing and strengthening consumer economy, with a market of over 140 million people, is evolving into a prime location for investment. Business opportunities can be found in many sectors of Russia’s economy and strong support exists for investors from both the government and the Foreign Investment Advisory Council (FIAC).

Doing business in Russia offers the following key benefits:

Stable and Growing Russian Economy
According to Invest in Russia, Russia boasts one of the most dynamically developing and attractive economies in the world. Since 1999, GDP growth has averaged 6.8% per year and reached 8.1% in 2007 (compared to 4-5% average world economic growth). Thanks to the strengthening rouble, in dollar terms the 1999-2007 GDP growth was an astounding 26% per year, far outstripping international growth rates.

Egalitarian Attitude
Russians generally subscribe to attitudes that promote equality, reciprocity and mutual advantage in business and a “deal” is often regarded as an opportunity for equally shared benefit. Personal relationships are also of great importance in Russia. When doing business in Russia it is worth investing time initially in creating strong bonds, as these are likely to form a solid basis for future business negotiations.

Large, Educated Consumer Market
There is untapped potential in Russia’s captive market of over 140 million people whose incomes are steadily improving. Additionally, Russia’s strong educational system has a good reputation for producing a highly skilled workforce and discerning consumers. The talent of the Russian people is starkly evident in the achievements of Russian art, music, literature and architecture.

Unique Geographical Location
Russia’s massive geographical presence spans a distance unmatched by any other single country. Linking Europe with Asia and bordering the North American continent, Russia has excellent access to sea, road and rail routes and is home to several major airports. Russia’s location is further supplemented by its vast natural resources of mineral reserves, coal mines, natural gas and timber.

Unified employees
Russia is a predominantly collective society, with a communal spirit perhaps stemming from its history and climate. Russia’s severe winters and geographical conditions have meant that collaborating, rather than competing has been necessary for survival. This sense of co-operation and togetherness must be considered when doing business in Russia, especially when communicating with Russian counterparts. For example, it is important to remember to address the group rather than the individual.

International organisations can profit immensely from the above benefits of doing business in Russia. Utilising these benefits comes with the necessity to create effective strategies for navigating the geographic, political and cultural diversity of Russian society. This requires a comprehensive understanding of Russian business and social culture on all levels.

International organisations employing people in Russia or doing business with Russia on a regular basis should therefore participate in cross-cultural training programmes for business and management such as Doing Business in Russia to ensure they develop the skills to successfully deal with the many cultural differences in working preferences, values and communication styles.

© Communicaid Group Ltd. 2010

Feb 12

The concepts of high context and low context refer to how people communicate in different cultures.  Differences can be derived from the extent to which meaning is transmitted through actual words used or implied by the context.

High context implies that a lot of unspoken information is implicitly transferred during communication.  People in a high context culture such as Saudi Arabia tend to place a larger importance on long-term relationships and loyalty and have fewer rules and structure implemented.

Low context implies that a lot of information is exchanged explicitly through the message itself and rarely is anything implicit or hidden.  People in low context cultures such as the UK tend to have short-term relationships, follow rules and standards closely and are generally very task-oriented.

Understanding whether your international colleagues are high context or low context will help you to adapt your communication style and build stronger relationships with them.  These concepts are covered during cross-cultural training programmes such as Communicating across Cultures and Managing International Teams.  Cultural awareness training which focuses on one or more specific cultures like Doing Business in India or Living and Working in China will also address these concepts.

When doing business in a high context culture such as Mexico, Japan or the Middle East, you might encounter the following:

  • Misunderstanding when exchanging information
  • Impression of a lack of information
  • Large amount of information is provided in a non-verbal manner, e.g. gestures, pauses, facial expressions
  • Emphasis on long term relationships and loyalty
  • ‘Unwritten’ rules that are taken for granted but can easily be missed by strangers
  • Shorter contracts since less information is required

When doing business in a low context culture such as Germany, Switzerland or the US, on the other hand, you might find the following:

  • All meaning is explicitly provided in the message itself
  • Extensive background information and explanations are provided verbally to avoid misunderstandings
  • People tend to have short-term relationships
  • People follow rules and standards closely
  • Contracts tend to be longer and very detailed

High and low context cultures usually correspond with polychronic and monochronic cultures respectively.  The table below shows some general preferences of people from high context and low context cultures.

High Context Low Context
Indirect and implicit messages Direct, simple and clear messages
Polycrhonic Monochronic
High use of non-verbal communication Low use of non-verbal communication
Low reliance on written communication High reliance on written communication
Use intuition and feelings to make decisions Rely on facts and evidence for decisions
Long-term relationships Short-term relationships
Relationships are more important than schedules Schedules are more important than relationships
Strong distinction between in-group and out-group Flexible and open

Participating in a cross-cultural training programme such as Doing Business with India and Doing Business in the UK, you will gain a comprehensive understanding of the high or low context preferences in the country or countries where you are working and the impact these preferences have on doing business with them.

© Communicaid Group Ltd. 2010

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