October 14 to 27, 2013

`30RNI No.35850/80; Reg. No. MH/MR/South-82/2012-14 TN/CH(C)250/2012-14; Published on: Every alternate Monday; Posted at Patrika Channel Sorting office, Mumbai-400001 on every alternate Monday-Tuesday Su

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Hinterland Express

Aditya PuriMD

With tried and tested products in place, HDFC Bank is spreading into rural India. Its challenge is execution

HDFC Bank

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busi n e ss i n di a u the m aga zi n e Of the cOr pOr ate wOr ldColumn

towards cross-cultural competencyDeveloping cultural competence must be given the focus of a key competency

the current crises in the indian economy and the huge impact of the rupee devalu-ation bring home the critical importance

of globalising indian business corporations. a globalised company can weather the storm with a more balanced top and bottom line, provid-ing significant revenue and profit from overseas operations. in the context of consistent devalu-ation of the rupee, it and pharma companies in india that have successfully globalised are likely to report better relative performance. Of the six competencies required for successful globali-sation of an organisation. ‘cross-cultural com-petence’ is the second of the six competencies, following ‘global mindset’ covered in our previ-ous column. it is critical in initiating and estab-lishing successful global business as acquisitions, joint ventures or greenfield subsidiaries.

culture is values in action. cross-cultural competence for an individual is the capability to function effectively across national, ethnic and organisational culture. for an organisation, in a globalisation context, it is the capability to suc-cessfully navigate and conduct business in cul-tural environs that are different than the home country. a set of historical behaviour patterns, mindsets, beliefs, lifestyles and value systems often define the culture in a country. an amer-ican executive normally comes directly to the point and looks for a ‘yes’ or ‘no’, which may not be the best way in dealing with business issues in asian cultures. On the other hand, the indian trait of a ‘know-it-all’ attitude in inter-actions can upset businessmen from other cul-tures. then, there is the Japanese businessman, who is low-key and likely to take a long time to respond to a business proposal and remain non-committal sending wrong signals. Japanese cul-ture is consensus-based and requires internal deliberations involving various levels in the organisation before a commitment is made.

india is a microcosm of cultures that can facil-itate conceptualising of cross-cultural issues. consider the languages, food, festivals, religious beliefs, customs, behavioral traits and lifestyles in north, south, west and east india. consider the differences that exist between maharashtra, guja-rat and goa, though in the same region. the good news is that over time, and post 1947, india has come a long way in adjusting and evolving cross-cultural competence. indian business is, there-fore, more adept at cross-cultural competence in

a global context than some other nations.consider some of the positive contributors to

the development of cross-cultural competence in india. mobility from opportunities arising through transfers and recruitment in govern-ment and business organisations; inter-caste and interstate marriages; national institutes like iits and iims; central services like ias, csir, drdo and armed forces; media including tv and bollywood movies. also, consider the continuing hindrances of regional politics and narrow parochial vested interests including caste, religion, corruption and fear of loss of heritage. india has been on a learn-ing curve to appreciate different cultures through understanding, compromise and integration, progressively leading to more unity in diversity. surely, the attitude of openness and assimilation of new ideas that has existed throughout indian history can be the right way to leverage the large population and demography to higher levels of national prosperity.

cross-cultural competence of some success-ful economies have ‘globalised’. consider

the top four economies of the world the us, china, Japan and germany. the us, despite being a melting pot of cultures, is not the leader of cultural competency. education, vast nat-ural resources and a relatively low population, enlightened immigration policies attracting the cream of the world and an enlightened system of government that has built in ‘checks and bal-ances’ are primarily responsible for their polar position. now that large contributions from overseas business exist, americans are focus-sing on a fast learning curve of cross-cultural competence. stints in countries like india and china are a significant plus for ceo aspirants of large us multinational corporations because of exposure to cultural and business diversities.

the trait of not attempting to understand the underlying issues that may require compromise seems to persist possibly due to the american ethos to ‘get the job done’. the american dna had an arrogant component, in line with their preeminent economy, but it is now in transgres-sion, given the interdependence of the us econ-omy following increasing globalisation. chinese culture, in a business context, derived from their ancient past and more recent communist pres-ent is akin to the Japanese in terms of building trust over time, conservative and bureaucratic

Dinesh Chandra,

Avish Dahiya are

co-founders and

Vibhay Sinha

is the Senior

Consulting Partner

of DNA Global

Network (www.

dnaglobalnetwork.

com), a

Management

Consulting Firm

specialising in

globalisation

based in San Jose,

CA, USA

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V i b h a y s i n h a

a V i s h d a h i y a

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relationships, but does not get the job done on time. not enough homework is done by indian business leaders resulting in a lack of knowl-edge of the culture of the other country. there is a need first to understand indian cultural traits and then to integrate with cultures of the countries where business is sought to be done.

any amount of cultural competence will not lead to a lasting globalisation success unless

there is mutual trust and a learning process that encourages adoption of principles and pol-icies from each other that are good for all the stakeholders. it follows that respect, inquisitive-ness, tolerance and adjustments for another cul-ture is a prerequisite of success in cross-cultural competence. Our recommendations for indian business corporations wanting to globalise successfully are: u facilitate understanding of the indian cultural traits within your own company by organising in-house meetings of groups of employees from different regions and encourage an open dia-logue. this will bring about better communica-tion and listening capabilities. Outside experts can be a catalyst to guide development of cultural competence within the company. u there must be an organised effort to under-stand the prevailing business and cultural prac-tices of the countries where you want to set up business or partnerships. courses and webinars are available about a particular country’s culture from educational and consulting organisations. u consider the personalities of managers charged with initiating dialogue, conducting negotia-tions and continuing involvement in the over-seas business. are they capable of transcending their cultural beliefs and can they empathise with other cultures? when working in saudi arabia, how would they regard the sharia law of cutting off hands of a thief, or for instance in the us, calling elders by their first names? personal transformation may be required to have an open mind and willingness to tolerate, understand and respect characteristics and ambiguities of another culture. give your employees an oppor-tunity to spend some time to visit the country you want to do business in and experience their cultural mix. u if you have decided to start a business activ-ity in a country, recruit executives of appro-priate seniority from that country and bring them to your organisation in india first. this will facilitate mutual cultural understanding by interaction and proximity.

in conclusion, developing cultural compe-tence must not be underrated and must be given the focus of a key competency by companies that are globalising. u

and is also strategic. the chinese consider that china was number one in the world and want to get there again. their cross-cultural compe-tence is also cultivated by this national interest. they are dealing with other countries taking a long-term view and making compromises as necessary. the state directed policy is designed to attract foreigners, students and businessmen, while concurrently maintaining chinese cul-tural and strategic requirements. their push for the english language and on education to build cross-cultural competency is exemplary.

Japanese are fierce patriots. respect for senior-ity and elders and patience is a protocol they

practice similar to indian culture. the quality movement though originating in the us found its home in Japan. the extraordinary cultural trait of teamwork and consensus building is all Japanese. the implementation of Customer is king enunciated by mahatma gandhi was in fact implemented in letter and spirit by Japan. the transformation of toyota was in part made pos-sible by deep inquiry into the requirements of their us customers by opening design and mar-ket survey offices in the us. their success partic-ularly in the 1970s was exemplified by Japanese businessmen living abroad for extended peri-ods at personal sacrifice. however, traditionally, Japan has been wary of foreigners and apprehen-sive that their culture will get polluted. it seems their policy of limiting interaction with foreign-ers and strict immigration laws are hurting their capability to innovate and negatively impacting their economy.

the german cross-cultural competence is exemplified by discipline, well-planned rules of engagement, a conservative attitude, fact orien-tation, hard work, desire for quality, world domi-nating excellence in products and a no-nonsense attitude in business dealings. relationships are honest and long lasting, once tested over time.

indian adaptability helped maintain its her-itage and identity despite many invasions throughout history. indian businessmen have shown cultural understanding and indian organ-isations have many success stories to share. how-ever, indian businesses must recognise that there is a lot to learn to elevate cross-cultural compe-tency to a higher level when establishing an over-seas business. Of the four levels of training, most indian companies train for levels one and two.

india continues to be a country of ‘disem-powered’ people as demonstrated by its history. not taking responsibility and blaming others for the ill of the country is widely practiced in india. ‘what can i do’ is uttered with a sense of helplessness; more often than ‘i can make a difference’. the circular concept of time builds