Intercultural competency a key to global business success

Recent weeks have seen an enormous amount of public debate about Australian values and multiculturalism. Unfortunately much of the focus has neglected the opportunities, for society and for business, that come with diversity.

Recent research analysing the performance of diverse teams points to two general outcomes: poorer than average or better than average results. The difference lies in how that team is managed. Teams where there is a high level of intercultural competence are more effective working in a global or culturally diverse environment. Intercultural competencies include personal and organisational abilities such as being flexible, empathy, willingness to engage with difference, willingness to learn, an awareness of other cultural viewpoints, the ability to communicate with global English, and a high tolerance for ambiguity.

Diverse teams can initially take more time to build relationships and find strategies to accommodate differences. However, once new processes are established, these teams can be more effective than an homogenous one, utilising each member’s strengths more effectively. The time factor is often the one that causes most concern for managers in the Australian workplace, and when transnational managers do invest time in training it is often invested in the off-shore team. This is only half the solution, as Australian business methods can be as mysterious to someone from Asia or Europe, or even the United States, as their way of working is to us.

While the global corporate sector is generally time poor it is worth investing time in developing intercultural competencies, and there are companies taking the lead in adopting a range of strategies: building diversity management into key employee’s KPIs, for example; ongoing training for local and global teams; incorporating ‘soft skills’ such as the intercultural competencies noted above in the selection of international staff; or using a program of expatriation and inpatriation to familiarise off shore staff with the Australian office and vice versa.

These programs mitigate against the risk of ‘poorer than average’ outcomes from a diverse or global team, and encourage instead better than average performance, not to mention other value added outcomes such as more likelihood of higher staff retention, and cost savings (such as the cost of replacing expatriates or the cost of business failure through simple misunderstandings of workplace practices in another cultural context).

As the centre of global business shifts to the Asia region, and with Australia situated between what will be two of the world’s largest economies, China and India, there is no better time than now to begin thinking about how ready Australian business is for working with colleagues from different cultures. And these intercultural skills are not only useful in the global context, but vital for managing a culturally diverse workforce and client base back home.

Author: Melissa Butcher, Honorary Research Fellow, The Research Institute for Asia and the Pacific, University of Sydney. Visit Melissa’s website: Transnational Corporate Culture

Comments

[darkfall gold]

This is only half the solution, as Australian business methods can be as mysterious to someone from Asia or Europe, or even the United States, as their way of working is to us.

[William Dereck]

We should start teaching these skills to our business students in the USA to prepare them to take over the world economy once again.