Overcoming Ethnocentrism

When doing business overseas, forming accurate, non-judgmental cross-cultural perspectives is a critical key to success. Without this, foreign companies and individuals may enter host cultures insisting on doing business ‘their way’, thinking that doing business is the same everywhere.

Nothing, however, could be farther from the truth. The infamous DaimlerChrysler merger illustrates this beautifully. Language, protocol, business etiquette and a host of other cross-cultural barriers contributed to this merger’s demise. In fact, I would be surprised if you didn’t see some of the same barriers popping up occasionally in your international business.

Why do these cross-cultural barriers present themselves and, more importantly, how can they be overcome?

The root cause of cross-cultural barriers in business is ethnocentrism. Basically, this is the belief that your culture is the 'right' one. The further a foreign culture is from your own, the more barbaric, absurd and backward it may seem to be. We all use our own culture as a reference when making comparisons, so a degree of ethnocentrism is natural when you begin doing business in a new culture.

Ethnocentrism is strengthened by social factors such as a strong central authority, kinship and clannishness, self-sufficient markets and in-group favoritism. The more homogeneous and insulated the culture, the more inflexible the sense of ethnocentrism. In business, however, if ethnocentrism is not managed, companies and individuals can maintain a sense of cultural superiority, thinking ‘our way will work anywhere.’ Cultural conflicts begin here.

Fortunately, ethnocentrism can be overcome and along with it fall a series of cross-cultural barriers. The most obvious way to achieve this is through exposure. Learning a second language, for example, opens windows into how other cultures think and communicate. Exposure abroad through travel and study and communication with overseas friends or relatives challenges your ethnocentric perspectives and enables you to view foreign cultures less judgmentally. Even small steps, like learning to appreciate a new culture’s art or music, can give you new insights as to what the culture is really about.

If your company is thinking about making the move overseas, thorough research into the host culture’s perspectives on doing business is critical. And if you’ve received a short-term expatriate assignment in your company’s foreign branch, cross-cultural training is essential to help you adapt.

All cultures share similarities, but no two cultures are exactly the same. International businesses and individuals need to move from ethnocentric to multicultural mindsets.

The key for international business is to find ways for people who think differently to work together.

SIAP - Forming Cross-cultural Perceptions

DaimlerChrysler, one of the largest international corporate mergers in history, fell apart in just nine years largely due to cultural differences. Why? How did this happen? Is culture so huge a barrier that it prevents companies and individuals from doing business together? Well, yes and no. Culture can certainly be a barrier, but with proper training and skills, you can overcome any barrier.

DaimlerChrysler executives agreed that cross-cultural training was one of their weak points. What they received focused mostly on behaviors and stereotypes rather than on the reasons behind the behaviors. Participants were told, for example, that Germans can be stiff and formal while Americans can be superficial. The resulting cross-cultural perceptions conflicted with reality, and executives were confused when the Germans were actually relaxed and friendly and the Americans were sincere.

Whether you are working locally with expatriates or working overseas in a multinational company, ensuring accuracy in your cross-cultural perceptions is a key component of conducting international business successfully. You can develop a systematic understanding of other cultures once you know how your cross-cultural perceptions are formed. So, let’s examine this four-phase process.

Phase One is called Selection. Imagine you’ve been given a two-year assignment in your company’s Paris office. You’ve never been to Europe and you speak no French other than ‘bonjour’ and ‘merci’. When you step off the plane at Charles de Gaul International, you are overwhelmed with new sensations so you try to control the amount of cross-cultural input. You may isolate yourself from the host culture and seek out people who are ‘like you’. Comparisons with your culture may be negative. At the Selection phase, you’re feeling some of the symptoms of culture shock.

Phase Two is called Interpretation. As you observe behavior in your host culture, you learn the meaning behind it. You can explain, for example, why the French seem to disagree with everything you say. As a result, you accept that diverse perspectives exist and appreciate similarities even more.

Phase Three is called Application. At this stage, your perspectives lead you to behave appropriately in French culture. Some of your perspectives, in fact, may shift towards the French world view. Now, when comparing French culture with your own, some aspects of yours may actually appear negative. You have adapted some host culture behavior, and you live it.

Phase Four is called Prediction. Now you understand what to expect from your host culture. You know that some of your own behavior will result in specific consequences. If I do this, then the French will do that. As a result, you know how to build bridges between two cultures. Both your frame of reference and your identity has become multicultural.

Selection, Interpretation, Application and Prediction. Monitor this four-phase process as your own cross-cultural perspectives develop. If you do, then S-I-A-P, siap! You’re prepared.

A Corporate Culture Crisis

Let me tell you a story. Remember this one?

Once upon a time, specifically May, 1998, Daimler-Benz and Chrysler Corporation announced the first megamerger of two large international companies, creating the fifth-largest maker of automobiles in the world. Floated high on expectations, stock prices rose to US$108.00 a share.

Unfortunately, reports of cultural clashes between the two companies soon surfaced. Although English was the chosen business language, American executives felt marginalized when the Germans spoke together after meetings. The Germans, familiar with more formal business protocol, were uncomfortable with Americans calling them by their first names. German executives had lunch with the workers; American executives ate separately.

Disagreements in conducting international business resulted in differences over how to compensate expatriates. For the Germans, international assignments were a prerequisite to advancement and merited nothing extraordinary. For the Americans, being sent overseas was uncommon and deserved lavish reward. Top managers at Daimler had international experience; few of those at Chrysler even had a passport.

Cultural practices were in conflict even at the highest levels. American engineers responded to consumers and crafted automobiles based on market demands. The Germans focused on technical quality and decided for consumers what their cars would look like.

It was a cultural mismatch from the start. Just two years after the merger, stocks were selling for as low as US$26.00. By 2007, the merger was dissolved.

Not all cross-cultural misunderstandings results in corporate crisis. They do, however, lead to strained relationships, negative stereotyping, and seemingly insurmountable communication barriers – all undesirables in your business.

That’s why your perceptions about other cultures need to be accurate and nonjudgmental. In today’s globalized economy, you might just hire a German engineer to work for your company. Maybe you’re teaming with an American marketing consultant on a new strategy for a Taiwanese manufacturer. Or maybe your company is sending you to Johannesburg for two years.

If you can maximize your synergies and appreciate your differences, your cross-cultural business relationships will be fair and mutually beneficial.

Break Through Deadlock with Information Exchange

As you probe for information while negotiating, listen intelligently to what your counterpart says. What they disclose to you are the conditions for your deal. They’re revealing their interests and the reasons behind their positions. They’re explaining what they have for you and what they want from you.

To obtain as much information as possible, remember to give a little back. Information exchange is a negotiation taking place within the negotiation. You probe to get what you want, and your counterpart gives something up. You probe to get more, and this time your counterpart hesitates. Why? Because now it’s your turn. Remember, your counterpart will only keep talking if you offer something back. Share something. Give them what you’d like them to know. Then ask them another question.

Probing only works if negotiation is two-sided. Your ability to offer a little and probe some more keeps the discussion moving.

But now, let’s imagine a worst-case negotiating scenario. You’ve already exhausted your questions and your silence is met with equal silence from your counterpart. Information is not forthcoming; no one is negotiating. You have reached a deadlock.

Deadlock seems to happen when you cannot agree, but this is not true. Deadlock happens because you cannot reach an agreement. Note the difference, you can agree. But, how can you reach an agreement if you aren’t discussing anything? To keep negotiations moving, you’ve got to jumpstart the talk.

So, what to do? Simply this. Use your imagination. Create a scenario. Deploy the most powerful two-letter word in your negotiating vocabulary. It’s not “NO”, it’s “IF”.

IF helps you test the waters in a negotiation without either side making a commitment. IF creates a hypothetical situation that you and your counterpart can imagine and evaluate without actually having to do anything.

Here’s how it works. Suppose you’re deadlocked. Create a scenario that your counterpart may respond to, like this: “Let’s just suppose. If I do allow you 60 days credit on the balance, would you raise your deposit to 25%?” And your counterpart might reply saying, “Well, no. If I give you 25%, I want 90 days.” Evaluate their counteroffer, then proceed, either with a probe or with another offer. Information is exchanged, positions are revealed. IF gets negotiations moving again.

And there’s no need for you to be IFfy all the time. Phrases like “let’s pretend”, “just suppose” and “let’s imagine” will work just as well. Being hypothetical will help you break deadlock and propel negotiations forward.