Managing globally: managing a diverse, global environment is critical today—how you do it depends on where you are

HR Magazine, August, 2005 by Dianne Nilsen, Brenda Kowske, Kshanika Anthony

Today's global business environment makes the job of the manager more complex and difficult. Few businesses are immune from globalization's influence as they expand into new markets, outsource across borders and encounter foreign competitors. Even if your company operates stateside, hiring domestically from a diverse array of nationalities is commonplace.

Because business decisions have gone global, so have the duties of many managers, making their job rife with cultural adaptation issues.

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Managers must respond to nuances in communication styles and the expectations that employees have of their leaders across cultures. Whether by globe-trotting, telephoning, e-mailing and videoconferencing across far-flung time zones, or by managing face-to-face or one-on-one, the manager's job has to get done. A global environment puts greater pressure on managers to recognize and adapt to cultural differences in ways of doing business.

Managing employees with dissimilar backgrounds and cultures means the burden is on managers to produce results while adapting to these differences among those they manage. Personnel Decisions International (PDI) conducted extensive research on cultural differences with the use of its PROFILOR tool, a widely use multi-rater managerial performance feedback instrument. The research drew on data collected from bosses around the world. Across nearly 250 companies--many of these members of the Fortune 500--more than 3,600 bosses ranked 24 managerial competencies by level of importance.

When comparing the competencies that are rated as most important for managers to have across cultures, the data suggest some striking similarities. Consistently, bosses worldwide rated the ability to "drive for results" and "analyze issues" as the most critically important competencies in mid-level managers. Most bosses worldwide also consistently rated the following managerial competencies as extremely important: "act with integrity," "sound judgment" and "manage execution."

Think Globally and Adapt

However, other managerial skills are not so universally valued. The findings suggest that the old chestnut "think globally, act locally" calls for a new paradigm: one that moves away from the geographic concept of where you do business or merely honoring local customs and moves toward how you do business and how you manage. Thus, in the quest to drive for results, when it comes to managing globally, managers must adjust how they manage.

How a manager gets results, wins respect and leads employees varies tremendously among countries, cultures and individuals. Adjustments don't come easily. Inherent differences among people based on their heritage as well as the historical and social lens of their culture make managing interesting.

Tensions between the culture of an organization and the culture of the local country and its management style can certainly exist. One potential arena for culture clash in business is when East meets West. Take the scenario of Western managers working in Japan. Interestingly, the PROFILOR data on bosses' ratings of managerial competencies shows that bosses in Japan rated the importance of "championing change" considerably higher than managers from other cultures.

This finding may be indicative of the high-context, collectivistic culture of Japan, where communication tends to be more subtle and indirect. In Japan, managers often use consensus-building techniques to internalize change within the individual before anything is executed or acted on. Surely, this cultural environment is ripe for conflict with the authoritative, do-it-now leadership style so common to Western managers.

Culture Clashes

In the case of a Fortune 500 retailer that manages with typical U.S. flair, upper management became frustrated when its Japan operation delayed implementation of a new computerized system. When the unit finally implemented the system, however, the effort was overwhelmingly more effective than the average 65 percent success rate the retailer achieved elsewhere. U.S. management learned that although the Japan operation was slow to "pull the trigger," it was striving to internalize ownership of the project before executing it. The result was a quick and well-executed change.

PDI's research indicates that this management style is common in Japan: Bosses in Japan rated the importance of "establishing plans" and "providing direction" among the top five managerial competencies. Although these competencies are rated highly elsewhere as well, bosses in Japan gave them greater importance than bosses in other countries did.

In another case, a Japanese unit of a high-tech multinational company nearly missed getting a new product to market by failing to alter its project management style. Project managers in Japan found their e-mails went unanswered by European managers who didn't understand the product design changes they needed to make. Similarly, the managers in Japan couldn't spur on colleagues at U.S. corporate headquarters to assist in getting their needs addressed.