Bridging gaps between corporate and local business cultures

This is what former management consultant (and newly appointed Chairman of The Thai-Swedish Chamber of Commerce) Leif Thomas Olsen believes could happen – with the right conditions in place. Insights about how to pave the way for increased performance will be part of new courses aimed at the corporate sector, in the start-up phase at Burapha University in Chonburi, Thailand. Local staff will be able to learn about foreign corporate culture in short non-degree programmes.
     “What we are focusing on is providing the platform for people to fully understand why Westerners, or rather Europeans, I would say, are the way they are and why the work they way they do.”
     With the potential for better results and synergy this could gradually become a successful method supplementing or replacing the standard Western methods of training the expats only, which often fails to meet companies’ overall need for cross-cultural communication skills.
     Leif Olsen, in his role of being responsible for this training programme, aims at building bridges between the corporate and local business culture. Recently he presented his ideas during a seminar: How and why Thai managers could – and should – become in-house experts in bridging the gap between the non-Thai corporate culture and the Thai market culture.
     “All companies claim that they have a corporate culture that they often aim to spread hoping it will rub off on others. But it is very important for the leaders in a company to understand that the culture at their foreign office always will contain a large element of local culture. There is no platform for a Swedish company to run the business with Swedish methods and dialogue in Thailand. The subsidiary company here must have a large component of Thai cultural attitudes, so subsidiaries will always be a mix of the intended corporate culture, and the local culture on the other side, that is unique for each country. It must be a combination if it is to work.”
     Leif Olsen mentions ABB Thailand and Ericsson Thailand as examples that happen to operate in a market completely different from that of the head office. Even if they wanted to isolate certain ideas considered very important, the local environment will influence everything they do. So the local entity culture will be a mix of the corporate and the local market culture. This is why I believe it is important for the locals to be given the same cultural training as the managers receive.”
     ‘Culture’ is a key word for Leif Olsen, who came here a couple of years ago to continue his research. He looks at how culture as a phenomenon within society affects our ways of dealing with problems and opportunities in our lives. “It is very obvious that culture does affect the way we respond to everyday tasks just as well as more problematic situations.”
     Leif Olsen himself, with 15 years of management consulting, has had some really hands-on experience involving serious problems based on cultural differences. And it was back in the early 1990’s in Vietnam where the background to his ideas and research started.
     As a consultant, Leif Olsen was involved in a World Bank development project financed by SIDA to develop the Vietnamese banking system. After 5 years they had not, as regards certain aspects, fulfilled any of the initially expected objectives. 9 months into the project, for example, nothing at all had been achieved.
     Later on, another study of the Vietnamese bank industry’s strengths and weaknesses was almost a carbon copy of the problems that the World Bank project had identified in its pre-study 10 years earlier. “The same structural, personal and operational problems that we had identified were still there in 1999, albeit on a slightly smaller scale, so the project therefore had not succeeded in achieving its goals. We spent around 250 million Baht of tax payers’ money and we would have hoped for at least a footprint in the sand,” says Leif Olsen.
     When he looked back at the project, reasons could be found why the Westerners and their Vietnamese counterparts had not been able to agree. “One was a direct cultural conflict between the Confucian society with a communistic superstructure on one side and the western idea of talking openly and confiding about problems on the other.” In Vietnam, with its hierarchical system, the official view is that the higher position you have the more you know, so it is not possible to question someone in a higher position.
     One of the consultants openly told the vice-president of the Central Bank that he was wrong. Result: The project for implementation of credit cards was wrecked. “It all had to do with how he gave his advice, assuming that the counterpart had the same frames of reference as he did. Afterwards, I was told that the reason this part of the project was halted was due to the way he behaved in Vietnam, not his ideas as such” explains Leif Olsen.
     “We from the West often have a feeling that we can survey the situation and understand what steps are suitable to follow in a process. But the premises are very different so another approach could have succeeded. With a different assumption, the same thing could have been achieved: accept all propositions from the Central Bank, and in the process, change the thinking. This is another pattern of behaviour which could achieve the same result.”
     Another problem had to do with an institution’s role in society: By suggesting to remove all the political literature (Marx, Lenin etc.) at the “Banking University”, that the Westerners thought had nothing to do with what they wanted to do within the university, all the professors and teachers would totally lose face. It was not possible to suggest they refrain from their basic teachings before also senior professors had been given another but equally important role within the new curricula.
     “When I went through the documentation, I could see that they made the same observations and on basis of this a statement that would function as some kind of conclusion, that often had parallels. They said basically the same thing, but if you look at what they said in detail and what premises they built their statements on, they were totally different,” concludes Leif Olsen.
     For example, the documentation shows that the banks had no right to decide upon granting credits. The project taught them to be able to take better decisions. But nothing changed because they didn’t take any decisions at all. The Westerners’ premise was that it was the bank’s role to clear up the credits issue, but for the Vietnamese it was the responsibility of the government to make sure the companies didn’t go bankrupt.
     This led Leif Olsen to review his thinking and the conclusion was: “We have to profoundly analyse the premises. It is useless to fight about the conclusions.” All cultures develop their own logic and we tend to apply logic by making an observation. Then we add to it premises (the same as assumptions) and finally make our conclusion, according to this formula.
     “It is possible to make exactly the same observation, but as many premises are culturally derived – premises are what we bring with us from the past, basically from our upbringing and own experiences – they differ from one culture to another. We add the two, and if a Thai person and a Danish person sit together and discuss the observation, they draw conclusions that may be completely different. But unless they discuss the premise upon which they have made their conclusion, it will be impossible to understand or agree on a conclusion if they happen to be different,” says Leif Olsen.
     He has seen various types of training for expatriate managers being sent to work in new cultures – crash courses to learn about the destination – but finds that this is just a small component of the cultural issues or problems that tend to develop. And Europeans have realised the need of being able to communicate with other cultures anyway.
     “In the case of Thailand I think it will be normal to assume that the local employee’s experience and education has given the premise that you shouldn’t question unnecessarily and therefore the dialogue will easily become a one-way communication.”
     “I want to emphasise with my research and education idea, that we must give the ones we invite to collaborate with us the same opportunity to understand us as we give ourselves to understand them to achieve an effective collaboration locally. Only when you know the foreign party’s culture can you participate on the same terms.”
     “The majority of employees are of course locals and it is unfair that they don’t have the same issues to consider in terms of cross-cultural activities as their managers have,” says Leif Olsen.
     So Burapha University’s International School of Professional Development intends to educate them in understanding why their employing organisation thinks and operates the way it does.
     The idea is that local staff, wherever they are employed, has a role to build bridges between the corporate culture and the local business culture in that country where they operate. After all, they make up the majority in the company and are the ones that know how to finally interpret signals from the market and can assist to solve conflicts locally. According to Leif Olsen, it is not the role of the expatriate managers to come and decide how to run that market.
     By learning to understand that premises are different and must be discussed to be able to understand each other’s viewpoints and avoid misunderstandings, all people involved can fully collaborate.
     Then there is no reason why middle-level managers can not communicate directly with the equivalent manager of the parent company. Nor, with proper communication, will a change of the foreign manager disturb the flow of business.
     “The local staff should prepare themselves for a managerial career by learning more about the corporate culture and by doing so, actually becoming far better at what they are doing, than any expatriate could possibly be. The expatriate can at the very most represent the corporate culture but understand the local culture much less than the locals,” Leif Olsen believes.
     “When the domestic partner’s staff understand their foreign partner they can actually contribute even more and also benefit personally from this in terms of promotion and better salaries and what have you.”
     “One has to understand the interplay and make space for it, but also educate your counterpart in how to make it work. I would like to claim that most of the subsidiary companies’ executives main tasks when they are operating in a market like this in Thailand, is to communicate to the head office what the market really thinks – to form a link between the parent company and their own organisation’s behaviour on the local market,” says Leif Olsen.
     And he emphasises: “Not until you have accepted a culture, can you collaborate in harmony with it. It is not about telling them that it is like this or that, it is about selling your culture and making them say: ‘Yes! That is how we want to do it.’ Give incentives.”
     “It is only about clarifying what I consider the abyss regarding the premises. When this is understood people can find their own solution. You only need to understand that there is a river between us. All we have to do is build a bridge across it, give your employees the task and they will do it,” says Leif Olsen.
     Working partly for a Thai organisation, Leif Olsen says he has to try and understand how Thai culture works and use information from other sources outside his working environment to be able to get anything done at all. “I can verify that the business cards you exchange will not tell anything about the people you will work with.”
     “In the West we have a common view that an organisation can be reproduced schematically and that you thereby can limit the individual’s area of responsibility in all dimensions. The typical Asian organisation does not work like that, but is based upon personal relationships.”
     “The first thing to understand is that we do have different backgrounds. We will always find questions where we think differently so don’t interpret things as right or wrong. Let us start by accepting that we are both right,” Leif Olsen recommends as point of departure.
     “You must allow yourself to be a stranger in these different cultures and accept that you can’t do everything correctly all the time. We have a word for this: humbleness.”

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