Cultural differences can make or break global business. Starbucks and IKEA creatively figured it out.
“Take off your shoes and ask for slippers.” – Anne Tsui[2]
In W.P. Carey’s 2006 article, “Take Off Your Shoes and Ask for Slippers”,[3] he describes the work of two scholars, Anne Tsu and Xiao-Ping Chen who explore the dichotomy faced by Western businesses who desire to establish operations in culturally different societies and maintain their own corporate values. Similarly, in the article “Culture Shock: Integrating Indian immigrants in the IT Workplace”, Suman Bolar points out that “IT workers from India have been enormously successful, but many Indian workers…new to the US still experience culture shock”.[4] Additionally, the web site WorldBusinessCulture.com offers detailed advice covering 39 countries about the impact of cultural differences in global commerce dealings. [5] All three highlight the question facing multi-national organizations: How to understand cultural differences in order to integrate workers into a successful cross cultural business model. This sticky subject established the need for an undertaking such as the GLOBE study, as well as Hofstede’s and Trompenaar’s Value Dimensions.
The GLOBE cultural dimension rankings demonstrate multiple areas for cultural misunderstanding and misinterpretation. Excerpts from the sources cited above reveal some interesting case studies and creative solutions companies used to overcome cultural barriers in successful global operations (as cited by GLOBE).
The Carey article cites the example of Starbuck’s challenges when attempting to integrate their core values of teamwork, equal participation and diversity into the moderate to high power distance[6] culture of South Korea. Starbucks’ practice of using first names in a business setting was a potential source of cultural conflict. In order to preserve its core values, Starbucks came up with a creative solution: all the Korean employees would choose an English first name. Everyone working at Starbucks was referred to by that English first name only, eliminating the Korean’s need for a title and last name, showing position and status in a work setting. This solution preserved their cultural deference to hierarchy and authority (labeled uncertainty avoidance in the GLOBE taxonomy), and was considered a win-win solution.[7]
Starbucks was also faced with conflicts regarding their corporate value of teamwork and equality, meaning; all employees share all tasks, including washing dishes and cleaning toilets. This meant that male employees would have to engage in these tasks, typically performed only by women. To overcome this cultural barrier, Starbucks capitalized on the Korean affinity for “role-modeling and imitating behaviors of top leaders.”[8] According to Carey’s sources, role modeling is effective in changing behaviors in high power distance cultures. “Starbucks had the international director for the company’s headquarters do all these activities and even hung a picture of himself cleaning the toilet.”[9] This helped the male employees overcome the “psychological barrier” and at the same time, preserved Starbucks core business values.
Similarly, the Swedish company, IKEA needed to find a solution to the high turnover rate they faced with US employees. “IKEA values equality even more than the average US company.”[10] Without job titles or clear job descriptions, the gap between IKEA and the typical cultural orientations and expectations of US employees caused much dissatisfaction.[11] Considering a standard cultural Masculinity scale, [12]one could extrapolate the type of conflict, as Sweden ranks low on the scale and the US ranks moderate to high. The typical masculine qualities of assertiveness, materialism, etc, could cause cultural conflict in a more “feminine” business setting. It is interesting to note that Sweden ranks moderate in power distance as reported in the GLOBE slide presentation, as does the US. However, Sweden ranks high on Uncertainty Avoidance, while the US ranks moderate. The characteristic of “low aggressiveness” among employees with high uncertainty avoidance seems to conflict with the American work value of getting ahead and high job mobility. Additionally, in the US, the Hofstede value of individualism is highly valued, and the relationship to the corporation is one of “independence”. Achievement and individual initiative would seemingly conflict with IKEA’s value statements as stated below.
“Simplicity, humility, thrift and responsibility” and “Togetherness, Cost-Consciousness, Respect” are core IKEA values, and they also reflect Institutional Collectivism traits. For many Americans, this philosophy may present the exact opposite of their expectations of a large multi-national corporation. A quote from GlassDoor.com sums it up: “I feel that it can be difficult to advance unless you want to put yourself in any random position in the store. For example, if you spend 5 years as a kitchen designer, and that’s your specialty, to move up you may have to stock plants or sell bed sheets if a management position opens in one of those areas…”[13]
Since the US has a diverse population with large variability in individual values, [14]IKEA’s solution was to sort through job applicants not for the best candidates, but for those candidates who best suited IKEA’s core values. Job previews were provided as well, which led to candidates self-selecting out.[15] According to Carey, the result was low turnover rates and successful business operations in the US.
However, another quote from GlassDoor.com seems to contradict Carey’s report. “A bit like elementary school…..no one leaves at the end of the night until EVERYONE leaves….you often have to stay for several hours AFTER the store is closed. Clean and Restock…Clean and Restock…Clean and Restock….that is what you do when working at IKEA….regardless of your “title”.[16] (Makes me glad I work for a strictly US controlled company.) Although IKEA has many successful US stores, one has to wonder if they have really fully solved their cultural issues.
Culture shock also presents itself with the introduction of Indian software designers into the US IT workforce. According to the GLOBE presentation, India has high “In-group collectivism”, contrasting with the US values of individual initiative and achievement.[17] The Bolar article discusses the cultural conflicts which arise when introducing people from a culture which values group decisions, saving face, and fear of humiliation into American IT society. According to Bolar, newly immigrated Indian employees have great difficulty in the simple act of interaction with fellow employees.[18] Unable to respond to a greeting, for instance, caused American co-workers to regard a new Indian immigrant as “rude and standoffish” when the response was a simple miscommunication.[19] Additionally Bolar notes, “Historically, Indians have lived with thousands and thousands of years of subservience. Obedience is a deeply ingrained trait. Many Indian professionals will carry out orders to perfection but will rarely take the bull by the horns and make an independent decision. As a people, we are not used to the aggressive ‘just do it’ attitude that today’s IT industry requires. Initiative is something that has to be [learned].”[20] Bolar’s sources indicate that if an Indian is to be placed in any manner of authority, the extent of that authority has to be clearly delineated. The role must be explicitly defined, or the Indian worker will believe that the authority has not been given…[21] This scenario supports the GLOBE finding that Indians rank as moderate in Institutional Collectivism, while Americans rank low, clearly suggestive of conflict when placing an Indian in a position with decision-making power.
Additionally, the existence of WorldBusinessCulture.com underlines the need for broader cultural understanding in global business dealings. For a novice in international commerce, the website offers numerous solutions to preventing some obvious cultural mistakes. Each country listed is examined for a number of traits: Business Structure, Management Style, Meetings, Teams, Communication Styles, Women in Business, Dress, and Successful Entertaining. For instance, in Nigerian Business Structures, we learn that “All native Nigerian companies will display massive hierarchical tendencies. In South Africa, “Ethnic and racial divisions can make it difficult to build teams which cross these boundaries”. Also the website advises that , “Finns are more individualist than collectivist and therefore the Finnish idea of team-working would tend to be that of a group of capable individuals being given the opportunity to complete well-defined tasks which, when put together, will enable the team to reach its goals.” [22] Just these three bits of information alone could save a novice business person from wrong assumptions and gaffes in dealing with these countries. I found the site fascinating and spent a bit too much time browsing the various countries’ cultural traditions and customs.
These studies and others provide great insight into the cultural soul of the various societies examined by GLOBE and others. This information so valuable, it’s worthy to be passed along to others who are dealing with various cultures in Saudi, the UAE, Japan, and Australia.
mary@encoreexecutivecoaching.com
www.encoreexecutivecoaching.com
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Mary T. O’Sullivan, Master of Science Organizational Leadership, International Coaching Federation Professional Certified Coach (ICF-PCC), Society of Human Resource Management Senior Certified Professional (SHRM-SCP). Graduate Certificate in Executive and Professional Coaching, University of Texas at Dallas. Member Beta Gamma Sigma, the International Honor Society. Advanced Studies in Education from Montclair University, SUNY Oswego and Syracuse University. Mary is also a certified Six Sigma Specialist, Contract Specialist, IPT Leader and holds a Certificate in Essentials of Human Resource Management from SHRM. Mary is also an ICF certified Appreciative Inquiry Practitioner, and a Certified EQi-2.0 and EQ360 Practitioner.
Mary O’Sullivan has over 30 years experience in the aerospace and defense industry. In each of her roles, she acted as a change agent, moving teams and individuals from status quo to new ways of thinking, through offering solutions focused on changing behaviors and fostering growth. In additional, Mary holds a permanent teaching certificate in the State of New York for secondary education and taught high school English for 10 years in the Syracuse, NY area. Today, Mary dedicates herself to helping good leaders get even better through positive behavior change.
[2] Carey. W.P. “Take Off Your Shoes and Ask for Slippers: Integrating Corporate Culture in Global Business”. Knowledge. June 2006.
[3] Ibid
[4] Bolar, Suman. “Culture Shock: Integrating Indian immigrants in the IT Workplace”. Tech Republic. June 20, 2000.
[5] http://worldbusinessculture.com/
[6] Deresky, Helen. International Management. Pearson Prentice Hall. Upper Saddle River, NJ. 2008 p113.
[7] Carey. W.P. “Take Off Your Shoes and Ask for Slippers: Integrating Corporate Culture in Global Business”. Knowledge. June 2006.
[8] Ibid
[9] Ibid
[10] Ibid
[11] Deresky, Helen. International Management. Pearson Prentice Hall. Upper Saddle River, NJ. 2008 p103.
[12] Deresky, Helen. International Management. Pearson Prentice Hall. Upper Saddle River, NJ. 2008 p103.
[13] http://www.glassdoor.com/Reviews/IKEA-Company-Reviews-E3957_P2.htm
[14] Carey. W.P. “Take Off Your Shoes and Ask for Slippers: Integrating Corporate Culture in Global Business”. Knowledge. June 2006.
[15] Carey. W.P. “Take Off Your Shoes and Ask for Slippers: Integrating Corporate Culture in Global Business”. Knowledge. June 2006.
[16] http://www.glassdoor.com/Reviews/IKEA-Company-Reviews-E3957_P2.htm
[17] Deresky, Helen. International Management. Pearson Prentice Hall. Upper Saddle River, NJ. 2008 p103.
[18] Bolar, Suman. “Culture Shock: Integrating Indian immigrants in the IT Workplace”. Tech Republic. June 20, 2000
[19] Ibid
[20] Ibid
[21] Bolar, Suman. “Culture Shock: Integrating Indian immigrants in the IT Workplace”. Tech Republic. June 20, 2000
[22] http://www.worldbusinessculture.com/
