It’s one thing to have a decentralised team spread across the world. However how do you best go about building culture (of the positive kind) if you’re both managing global teams and working across borders?
This interview was originally published as part of the Business Beyond Borders Event in Q4 2020.
Dr. Alexander Assouad is an Assistant Professor in the Massey College of Business at Belmont University in Nashville, Tennessee, USA, where he teaches international business and strategy. Dr. Assouad is also interested in research, having published in the HBR, European Journal Of International Management and other scholarly and practitioner outlets.
Dr. Assouad has been deeply engaged in X-Culture for 10 years. This is an organisation for pairing interns and companies who have projects that they might need help with in order to give interesting projects and also good practice for students. Dr. Assouad regularly uses the X-Culture curriculum in his classes. He more recently took on the role of iCEO of X-Culture with the aim of creating a sustainable and robust platform for X-Culture to continue growing and expanding.
What makes Dr. Assouad a global citizen & led him into the field of international business?
You can look at international business from two angles; there’s the practitioner angle, and then there’s academic from practitioner angle. His perspective is we’re all an international business. We all engage in it and some of us very directly and overtly and those of us who don’t realise that we are because the connection is indirect. So it could be by buying supplies, or by just working with one of your suppliers. eg your internet, or your servers are supported in the Ukraine, or supported in Australia or something like that. If you’re a little coffee shop in your local town then the coffee is coming from Nicaragua and Colombia. An awareness of these international aspects is just a matter of thinking & mindset.
Dr Assouad believes his multicultural background puts him in a place where he considers himself a global citizen rather than a specific national. And so it’s all natural flow. In his professional life and industry, everything had an international element by nature. When he then transitioned to academia, coaches and mentors strongly influenced him and pushed him to use that professional experience to develop an academic career.
Take a Strategic Approach to Building Culture in your Company
Before you even start to think about taking your company into the international arena you need to consider the company culture. It doesn’t matter whether you are doing 100% domestic business, have in office teams or if you are managing global virtual teams dispersed across several countries – if you don’t take the time to get the fundamentals right, then you will be building your “house” on sand and will lack the necessary foundation for a successful international expansion.
You need to take a strategic approach to this question as a culture which develops purely by chance is not going to be a sustainable option.
It’s important to establish that common language before you start looking at other activities for the business. This common language of an established culture will provide a basis for you to communicate with other companies whether they are in your locality or across the world.
Don’t let company culture happen by chance
Simply going with the flow to see what happens will result also in a company culture. It will be however a culture of whoever shouted the loudest – the company will take on the personality and culture of whichever person (or group of people) have dominated the internal conversations. That might be OK, it might be a disaster but it’s down to chance.
This isn’t an option you should consider if you want to have a sustainably successful future as a company.
What should you do if you fear you’ve left too much to chance?
You have to be very active in creating a culture and promoting it. Take an active enough creative role in “what should be our company culture?”
The good news is the approach is not too difficult. Maybe the implementation will be but there’re plenty of tools out there and people who specialise in helping companies with their strategic cultural work.
- actions and projects, little projects you can do to first try and work out what your culture is.
- Then second to see who really supports and exemplifies the culture of the organisation.
- And then third, how to disseminate it and spread it further
It starts with an effective vision statement and mission statement. Many people think that sort of stuff is whimsical and fluffy but the big corporations that are sustainable, work on these things constantly.
How can you go about working out your culture?
One of the suggested practices is you have everyone in the organisation list anonymously the top three or the three people in the organisation who exemplifies what they think (without priming anyone) the culture is, together with the words associated with WHY.
Then you get these words and names and you put all that together. You can see how many of these words showed up and with how many different people. It’s a very important thing to do to get your culture right first and then come back to international business. Managing global teams as an international leader is a tricky enough job however you approach it, but without the right foundation almost impossible to do well.
It’s communication and one of the most fundamental things in international business is communication. It’s just just as if you were a tourist going to another country, if you can communicate with the people there. Even in broken language, your chances are, you’re going to have a much better time & they’re going to enjoy interacting with you more than if you can’t communicate or talk.
So what you’re doing by creating a cohesive culture in your organisation is you’re creating that language that you can now translate. If you don’t have that culture, you’ve got nothing to translate, or you’re translating piecemeal, and that’s where it can fall apart. But culture is the language that you need to translate.
The further you get from the headquarters, the harder it becomes to maintain the company culture
The further you get away from the company headquarters, (that doesn’t necessarily mean the further geographically that you get away from the company headquarters, but in terms of the organisational structure), then it can happen that that culture becomes weakened or it becomes changed. It’s a little bit like playing Chinese whispers as for every link in the interface, it gets changed or interpreted a little bit differently simply because different people have a different take on what it means.
eg Somebody who might be in a branch office somewhere, they realise they’ve been asked to fulfil the task, but they don’t realise that the reason they’ve been asked to fulfil it in that particular way is because it’s an integral part of the company culture. Then you have a situation where, firstly, you have a lack of communication that’s leading to a problem. But secondly, you then have somebody thinking well, I can make an exception for for this and suddenly within a very short space of time, you can be a long way away from your original intention. Then that will play out in business practices.
You’re building a culture because that is the basis that all your business relationships will be built on.
Don’t assume that culture is the same everywhere, especially when you are managing global teams
Just because you have a common corporate language, doesn’t mean that everyone will understand each other. Let’s be realistic you get linguistic misunderstandings between American and British English, or German and Austrian German speakers, so assuming that culture is the same everywhere is equally futile.
Western companies often have a better than thou perspective. “We’re the best and we go to these countries expecting them to be desperate to take our products and services.” Whilst that may be the case, it shouldn’t be a leverage point. They might be desperate for the product, but it doesn’t mean that it’s because a German or US company or a UK based company is a better company. It simply means that you have something that they want.
Apply the same standards globally where possible
Business has a moral obligation to deliver things in ethical way. Just because you COULD compromise on quality or increase the price for a certain market doesn’t mean that you should be doing it. You can mess clients around with delivery dates, because they’re so desperate but you shouldn’t be doing that either.
There have been a lot of cases in the past few years in the EU with brands delivering “second tier quality” to the more eastern regions of the EU and maybe third tier quality to countries like the Ukraine and Russia. The EU takes a very dim view of that. So they have done quite a lot of controls. There’ve been a lot of companies who’ve had their knuckles wrapped for not behaving ethically with the product quality. But with service quality and all those other kinds of factors that are maybe not so easy to measure it makes it harder to control. That’s brings you more to your international human resources policy.
What are the options if you’re managing global teams?
You have 3 basic structural options available.
- I’m based in my home country of the company that I’m working in, and I work with a partner in the target market. My role is to get them to do as I want for the company.
- The company sends me as a manager to the target market to manage or to build a team.
- The company appoints a local head of office to manage the team.
What does each one of those mean for the company? And for the individuals involved because it’s quite different from a cultural perspective, and from a management perspective. When should I do this? And at which point in my development, is it maybe better to think about a different option?
It comes down to cultural gain
If we’ve already established who we are as a company and what we do, we can start to think about how integral that cultural element is in what we deliver the customers.
eg. If you are selling a phone or computer (aside from the topic of warranties or guarantees) then it is a simple transactional relationship. So it might not be necessary to go to the expense and complication of sending over staff from the head office if all you need is an agent and a marketplace of some kind where your products can be sold.
On the other hand, a company such as Starbucks has a very specific culture that you can see in the stores and all their marketing. You can’t just send a package of coffee overseas and expect it all to end in a perfect Starbucks experience. There’s going to be a period of time where you need to send a contingent of locals from the home market, employees or staff to train and equip the country and their employees.
The third stage is potentially where you’ve had overseas staff in for a period for training & now you can hand it off to a local staff, or maybe a completely different example where you need the true knowhow of the local staff and their engagement with the culture there to be able to disseminate product.
You need to weigh up which of these options will work best for you at each stage of your internationalisation journey.
As a Company you need to decide how much global and how much local you need
Where is the line as to how much global do we need and how much local do we want? How much local would make sense if we continue with the example of Starbucks?
eg in Asia, they often have a much bigger tea offering than they probably would have if you go to Starbucks in Seattle. If you go to Starbucks in the US, then they will have a different offering to what you see when you go to Starbucks in China, which is offering you a huge range of tea options. In the US the chrysanthemum tea probably wouldn’t be the greatest of sales items.
This is where the localisation strategy needs the local staff knowledge to get things right.
There are also questions you need to answer which are related to magnitude. A company like Starbucks has to be able to enter at scale in order to be able to get fast traction and that also has other additional implications for the human resources side of the project. If you’re not in a position to manage the project that your company would like to execute then you might need to consider that the market you’re contemplating isn’t right for you at the present time.
Company culture overrides national culture in international business
Basic decisions such as which international market to enter, may be decided at least in part by corporate culture.
Right now (summer 2022) many companies have pulled out of Russia to demonstrate their opposition to the invasion of the Ukraine. Whilst many US or European countries have encouraged their corporations to take similar steps, in the end it comes down to company culture as to whether they actually go ahead with it.
It’s a huge financial burden to pull out of markets for ethical reasons linked to political, human rights or legal requirement issues, but if you are a company who places great worth on authentic ethical decisions then it won’t always be easy to decide.
It’s a similar situation for many “western” skin care brands who would like to enter China. In the past (it’s changing now but slowly) it was necessary to allow the authorities to carry out animal testing in order to register your products for regular import. That doesn’t fit with the ethics of many brands.
Success Factors for Companies sending Expats to their overseas offices
Sending people around the world is very expensive. It’s also not as quick and simple as many companies believe.
Most overseas postings fail
From research, we find that seven out of 10 expats usually fail. Then those seven, they take down eight out of 10 of their companies as they fail. So as the individual fails, that will result a year or two later with the company because they they sent the wrong people from the beginning. They didn’t do their due diligence.
Going to live in another country is stressful. As an individual, you’re on that sort of first date high for a few weeks and then you get into the normality which you enjoy. You go through many sorts of emotional waves as an expat. There’re some places in that journey where there’re breaking points. So for example as you move to having been in the country for two or three years, moving now from expat to almost local. There’s a breaking point.
Returning home is also hard
Then coming back is even more difficult. People forget the cultural shock they get when they move back home. This results in major expenses, major considerations and major break points for returning staff. Companies should be very rigorous in who they choose, where they send them and when and how many attachments do they have? Family, kids and so forth. Because the more people that are attached to them, the more the equation becomes exponentially more complicated. Yes, you’re employing Lydia, but you’re taking her husband also into that foreign environment and he’ll take it out on her if he’s not happy and that could take your company down. So once you once you have send staff abroad as foreign expats, understand you should be looking after them as family units not as individuals because their welfare is going to be totally dependent on on what you provide the employee as a package.
Be strategic about the career path for former expats
I’ve seen a lot of people who’ve gone back to their home markets and then they’ve had that feeling that they’ve been sidelined a little bit maybe simply because the company didn’t think about what they were going to do with them when they came back.
If a staff member has been a major driver of your success in Italy and had the title of country manager, it’s hard to bring them back to head office and expect them to be satisfied with a middle management position in an insignificant department. You have to think about what you can offer them which will be intellectually stimulating and satisfying, whilst also capitalising on their in depth knowledge of your overseas operations.
Many expats choose to become almost professional expats, moving up the career ladder overseas (perhaps also from one company to the next). However there comes a time when choices have to be made (eg because of kids’ schooling or retirement) and at that point the reentry can be almost impossible if not carefully thought through and planned.
Companies serious about their overseas obligations should also build approapriate networks in the markets where they are working. If you are looking to later appoint a local “head of office” then you probably should be building partnerships locally both within the business and academic communities.
If you can’t find the right staff for whatever reasons, you might need to consider not entering the market in the first place.
Think about how to include your overseas staff whatever their nationality
As we now start to move beyond the pandemic it’s becoming easier once again for teams to physically meet. However to some extent from the perspective of a head office then anyone who isn’t in country counts as part of the various global virtual teams.
Companies need to consciously consider how team members based across the world can be included in company updates, team building and also in exercises for building culture. Online tools are considerably more developed than 3 years ago and there will be huge developments expected also in years to come. We saw during the Beijing Winter Olympics 2022 that holograms are helping to make virtual meetings already more realistic and it can be expected that this technology will make massive advances in coming years. That will allow the virtual expereince to feel more “physical” within a relatively short time span.
Where possible, bringing staff members for training and other events to physically meet together remains one of the best ways of building team culture, but also building company culture.
Communication is a key to the success of inclusivity activities
Remember that building relationships in a virtual online environment takes longer & requires more conscious planning to be effective.
You’re not just looking to build relationships but also to help all of your staff learn about different cultures and the way they work best.
Whether relationships are built through factory visits or online meetings clear and frequent communication will be vital to progress.
Corruption…the elephant in the room
Many markets have the reputation for corruption. And a lot of markets have the reputation that it’s impossible to get anything done if you don’t play along with that. If you don’t pay the bakshish, if you don’t hand over the red envelope with cash inside. In markets like Russia, Turkey, China, they all have those kinds of reputations as well as many other places worldwide.
What should companies do who are concerned about corruption and what it can do to their reputation if they go into those kinds of markets?
Corruption is pervasive
We already live in corruption. Your company already exists in that system. But there are levels of corruption and Europe and the US are perhaps less corrupt and maybe more institutionalised in a way. So you don’t quite see it. But the first thing is to understand that corruption exists everywhere and not to be ignorant of your own position.
You might be surprised at where your home country comes on the list. eg the US is only ranked 27th (behind countries like Uruguay, Chile or Taiwan). The top positions go to New Zealand, Scandinavia and Singapore.
You need to understand that corruption is a scale rather than an absolute and that your perception (& your company’s) of what constitutes “corrupt” will vary according to your home market.
Plenty of data available
If you are expanding into a new market, then you need to consider which points are you prepared to compromise on. eg in a market such as Egypt then you’ll be making various small payments to be able to open a company, register employees for tax or obtain the necessary permits to run your business. There is a wealth of data available about which kind of payments off the books you may be asked for.
You as a company have to decide if you are prepared to compromise on certain points and to decide where is the boundary at which it becomes a clash with your ethics or company culture. Also, how will you manage such costs in the company accounts?
Many companies decide not to enter into the markets at the bottom of the list for transparency (eg. Somalia, South Sudan, Afghanistan, Venezuela or Syria) as they feel that it’s not possible to do business there in a way that is congruent with their principles. (It has to also be said that extremely high levels of corruption often go hand in hand with other political, social and economic problems in a market, so corruption is likely not the only reason to decide not to try and do business there).
Brief staff well
It’s important that if a company is sending staff overseas in a business development manager role where they’re just visiting the country or whether it’s somebody who’s going abroad as an expat, they should be well briefed on those topics. They should know what to expect and what the company is prepared to do – where is the line.
It’s possible to work in those markets without massively compromising your ethics but you have to be very sure in advance where you stand and what you can or can’t do. You have to also understand the difference between giving someone a gift to get something done a little bit more quickly (Instead of in two years, maybe two days.) and bribing them. The question is always at which point does it stop, at which point does it become too much?
Focus on Building Culture before moving onto Leading global Teams
Step 1 of the internationalisation journey should really be to “know thyself”. If you don’t have a clear definition of your company culture and values then you will not be able to clearly communicate your positioning to an international market where you are dealing with various different national cultures. So it’s essential to really work through that process in advance of beginning with your exports.
Think about which markets are a good fit for you from a cultural perspective. If you are extremely focused on for example clean vegan products, you probably are not a good cultural fit for a market just coming out of a war where most people are purely subsisting and their culture sees affording meat as something they must be aiming for. Not every country is going to be the right cultural fit or market for you now.
Also consider how much “chaperoning” your core competence or service needs in order for you to transfer that successfully to your chosen overseas destination.
Thinking about these points will help you make better decisions on your international expansion journey and help prevent unnecessary expense and disappointment.
Original Interview in Full
You can find the interview here:
You can find more information about Dr. Assouad either via the X Culture homepage https://x-culture.org or via the Belmont university homepage.
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You can find some of the other interviews from the Business Beyond Borders Event also here on the blog:
- Maria Iacob: International Money Transfers
- Kate Isichei: Internal Communication Strategies Across Borders
- Lorenzo Fornaroli: Managing International Logistics & Supply Chain Management when starting out in Export
- Joanne Chan: Localisation and Translation Management. Be multi market ready
- Wael Masri: Building International Business Relationships to Drive Growth
- Kathrin Bussmann: Starting to Build your Brand in International Markets
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- Business Etiquette in Vietnam
- A review of The Culture Map by Erin Meyer
- China Challenges: Understanding Chinese Business culture
- Israeli Business Culture
- How to Succeed as an Expat
- Time is Time, Right? Here’s why that isn’t true