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Global Operations Demand That HR Rethinks Diversity

July 1, 1994
Related Topics: Expatriate Management, Global Business Issues, Diversity, Featured Article
Ron Martin will be the first one to tell you that global cultural diversity is similar to a two-way street—one with very complicated traffic patterns. As director of global employee relations at New York-based Colgate-Palmolive Company, he works with a broad mixture of people from around the world. Among them are women managers in Latin America, Asia and Europe, Latin-American managers in Eastern Europe and a black South African as the head of human resources for Colgate-Palmolive in Johannesburg. Martin, along with Colgate colleagues and executives in a few other companies, represents a pool of international pioneers who are tackling the daunting task of overseeing their organization's global, cross-cultural vision.

"The first challenge is to define what cultural diversity means in global terms, not just in Western terms," says Martin. "It's taking a look at all people and everything that makes them different from each other as well as the things that make them similar."

But how does the American agenda of valuing diversity—a concept that encompasses race, gender, sexual orientation, age, disability—translate into the homogeneous boardrooms of Japan and the hierarchical enclaves of Saudi Arabia? What happens when America's best-and- brightest happen to be of African, Asian or Hispanic descent, female or gay? And, how do Euro-American males fare when they're in societies in which they're the minority for the first time?

Furthermore, how does the fact that we're Americans play into all of it? And, underlying all of these considerations are the cultural assumptions we bring. How much can we expect other cultures to understand our assumptions? In other words, shouldn't HR be moving toward a globally focused vision of diversity that includes international expats and employees of all origins as well as differing values?

Martin grapples with these tough questions every day. He'll tell you what it means in a company that operates in more than 170 countries and receives about 70% of its $7 billion revenues from overseas markets.

He uses the word respect often.

Colgate-Palmolive Company frames its perspective by talking about respect for all of its workers. The company addresses this mission in a program called "Valuing Colgate People," in which all managers participate. "We're trying to get the message out that we're people of all backgrounds able to work productively together," says Martin.

Through a combination of individual and team exercises, role playing, videos and other educational material, employees work through a variety of diversity issues that lead to valuing differences because they contribute to organizational goals. The first day of the program is the global section. It focuses on themes and values of Colgate: caring, global teamwork and continuous improvement. These values are corporatewide and give Colgate employees shared goals. The second day focuses on issues within a particular country. In the United States, the focus is on race, gender, age, sexual harassment and individuals with disabilities. Other countries will concentrate on the key issues that prevent their people from treating each other with respect, such as gender bias and discrimination based on class or religion.

"The cross-cultural issues that come into play in business have to do with different styles of managing, communicating and negotiating."
Rita Bennett,
Bennett and Associates, Inc.

The next piece is to ensure that all the systems tie in with the underlying premise of respect. Colgate's performance-evaluation systems, for instance, measure managers for exemplifying and reinforcing respect, says Martin. The systems and culture work together to form a cohesive unit to encourage the way the company is going to be managed now and in the future.

"We realize it's a bit of a journey," says Martin, "but that's where we want to go." The CEO and his team have already been through the program. The objective is to put 600 managers through the course in 1994 and an additional 800 to 900 more next year. In 1994, the company will probably use a lead-country approach where at least one country in each region—Latin America, Europe, Asia—will develop specific curricula for the second day of the program. Managers will be the first trained because they set the tone for their worksites and reinforce values. Then, the company will train its non-managers.

The difficulty when doing this, says Martin, is to keep out Western biases. "We want people to understand the Western piece, but we have to maintain objectivity and say just because we do something a certain way doesn't mean that it's the only way it can be done, nor that it's the right way to do it."

Instead of exporting the American approach, the company examines what kind of training is needed in that country. It attempts to blend the two cultures. For instance, Colgate ran a pilot survey in Brazil, which was sent out in translation. One of the questions was, "Do you feel you receive equal opportunity in the organization?" The term "equal opportunity" was unknown. Colgate had to rewrite the question and ask, "Do you feel you're treated fairly?"

However, there are two companywide policies that won't be adapted to individual cultures: sexual harassment and apartheid. While the latter is no longer the same issue it once was, Colgate has a worldwide policy that opposes sexual harassment in the workplace, regardless of the cultural mores of the country in which it's operating. "That, too, is a matter of respect. If you're harassing someone for sexual or other reasons, it's showing total disrespect for the individual," says Martin. "While you may not have a local law, our code of conduct states it won't be tolerated."

Sexual harassment charges are investigated by the in-country human resources department. Findings are communicated to the senior person at the location and appropriate action is taken, which could range from a reprimand to termination.

Colgate's global HR policies are strategic, not simply programmatic. The company not only moves Americans around the world, but people from all its countries.

Martin attributes some of the company's success to selection and preparation. "People who are asked to go on an international assignment have the maturity to be able to assess the issues they'll be facing. They realize they're not going abroad to impose American ethics on anyone; they're going primarily because they have certain expertise they want to impart in the organization."

And people are tough. For instance, he recalls when an African-American female first headed up marketing in Costa Rica. She was expected to prove herself. According to Martin, it wasn't a position that had ever been filled by a woman, and in addition, she didn't speak Spanish when she first arrived. Many of the employees weren't used to African-American women in positions of authority. But after managing day-to-day operations with a high degree of competency, she was able to win her colleagues' respect.

While the company has a welcoming process for incoming expats, the individual is expected to become more independent after understanding the system. Otherwise, the expat might be perceived as protected. "People will resent that," explains Martin.

Furthermore, one of the ideas behind "Valuing Colgate People" is to transmit general principles regarding multiculturalism. "We hope people would understand each other better and be able to work together better. The point is to educate both the individual [who's going abroad] as well as some of the work force as to differences and similarities," says Martin. "Where there might be differences of skin and language, there are similarities in that they work for the same company, have the same values and goals, and that if they succeed [in attaining business objectives], they all succeed. If they fail, they all fail."

People who go to another country, he stresses, have to learn the culture there, and the people who are there have to learn the culture of the individual who has just arrived. They come up with a mix. Basically, it's a two-way street.

Companies must move toward a multicultural mindset.
Americans are obsessed with diversity—with valuing differences. And it's no wonder. We're a nation of immigrants. We think about concepts like the melting pot and mosaics, about acculturation and retaining ties to culture-of-origin. The diversity movement in the United States has an economic base, but it's still grounded on valuing equality, recognizing differences and accepting them as good, says Michael Tucker, president of Tucker International, an international management consulting firm based in Boulder, Colorado. "Other nations may not place the same value on equality that we do," he says. They may be motivated by other factors such as relationships and hierarchies. "That's the challenge U.S. companies face."

Hence, it falls to human resources professionals to pilot through the morass of questions and figure out how to approach global diversity. Two facts emerge. First, all Americans become culturally diverse once we leave the United States. Thus, we all need assistance to handle cultural differences when we're overseas. And second, some Americans—typically women and certain American ethnic minorities—often face initial prejudice abroad and need more support to help smooth out a potentially bumpy road. Business has a lot to gain if it addresses the cultural diversity issue in a meaningful way. Whether a company simply exports Americans, transfers third-country nationals or brings individuals of other nationalities into the United States, people have to work together despite cultural differences.

"In the international environment, so-called soft skills become very, very hard," says Barbara R. Deane, editor-in-chief of Cultural Diversity at Work, a Seattle-based newsletter. "They can make or break the situation."

Clearly, the responsibility of human resources doesn't end once the expat boards the plane. HR must develop effective in-country support that goes beyond finding homes and opening checking accounts. It's HR's job to create a commitment to new values, to help handle resistance to new ways of thinking, to get others to participate in a new sense of community.

HR must figure out ways to ease the transition for Americans and to assist managers and employees in the host country. Americans—especially if they're of a minority status in the United States—need to be properly introduced and coached. Finally, we must acknowledge that we can't export our agenda intact. If we expect the rest of the world to accept our ways, we run enormous risks and are doomed to a collision anyway. On the other hand, global business is multi-dimensional, and other cultures need to understand our ideas, too.

For American companies, the business stakes are high. In Global Human Resource Development by Michael J. Marquardt and Dean W. Engel, the authors say that since the beginning of the decade, U.S. corporations have invested $400 billion abroad and employ more than 60 million overseas workers; also, more than 100,000 U.S. firms hare engaged in global ventures valued at more than $1 trillion. And according to the 1993 International Relocation Trends Survey report by New York-based Windham International, a global management consulting firm, and the National Foreign Trade Council (NFTC), 61% of surveyed companies increased their expatriate population over the last five years, and 85% expect continued or increased expat activity. The survey shows that 90% of expatriates are males, which represents an increase in female expatriates from 5% to 10% in the United States and 11% in Europe. Experts believe this is a trend.

Although comparable figures on ethnicity aren't yet available, diversity and international consultants concur that American minorities constitute only a handful of expats today, but will grow in the future. Gary Wederspahn of Boulder, Colorado-based Prudential Relocation Intercultural Services, says that of the approximately 1,000 people they trained in 1993, about 20 were American minorities. However, he believes this will change as we move toward Workforce 2000 and continuing heterogeneity in our work force. Furthermore, he points out that the enormous cost of one failed assignment means that no matter how few the numbers, cultural diversity should be considered an important business goal.

This is how the issue affected AT&T: Between 1986 and the end of 1992, AT&T grew from 50 people in 10 countries to 52,000 overseas employees in 105 countries after its alliance with NCR. Because the telecommunications giant continues to grow exponentially, it faces enormous human resources challenges, including cultural diversity.

AT&T has two major programs that affect its global objectives. One of them is called "Common Bond"; the other is a code of conduct regarding personal responsibility. "Within the context of these two frameworks, we address integrity, trust, respect and ethical business standards," says Lynn Edwards, AT&T human resources director for Latin America and the Caribbean. The "Common Bond" describes the way AT&T is going to do business, treat its customers, act in the marketplace and treat its employees.

AT&T makes cultural diversity part of its business goals. "When you understand people better, the better you deal with business issues," says Edwards. For example, if a client is explaining an issue and you don't understand the culture, you might miss an opportunity. Doing your homework shortens the time frame in which you can become successful.

Edwards, who lived in Mexico for four years, often would provide diversity training in-country. Once she perceived that issues needed to be worked on, she hired outside consultants. They conducted independent interviews with key leaders, managers and employees and provided her with a report of the findings. As a result of the assessment, she could build programs to address key issues.

AT&T, she says, also is trying to build its human resources community within a country and region. At least three times a year, the company's overseas human resources professionals in Latin America and Europe, for example, will meet in their respective regions to discuss different human resources policies, standards and issues.

Again, some of the diversity issues illustrate that tricky cultural differences need not be related to race or gender. For example, one of the most common problems is the different ways Americans and Mexicans conduct business meetings. Americans go to a meeting, someone makes an introduction, people work vigorously on the agenda concluded and the meeting is over. Business is expected to resume at another time, if necessary. That's not the case in Mexico (as in many other parts of the world), where key customers must feel comfortable with you as an individual before they want to conduct business. It may take several breakfasts or lunches before they learn enough about your background and feel they're on solid ground before they'll address business issues. Moreover, sometimes a key executive in Mexico will keep others waiting for an hour or two, to the chagrin of an American.

These kinds of cultural misunderstandings can lead to business disasters. "One of our HR jobs is to monitor the work force for teamwork. When you marry all those units together, you need a diverse work force that can pull together and work out differences," says Edwards.

Expatriates are viewed as Americans first.
Some companies, such as Encyclopedia Britannica's international product-development division, send expats who have a very strong connection to the host culture. Typically, they're Americans who've already lived in or studied the country for years or Americans of that cultural heritage, i.e. Korean Americans, Russian Americans or Chinese Americans.

Fukiko Ogisu, project coordinator for Japanese products, has worked with Chicago-based Encyclopedia Britannica for five years. She is a sansei (third-generation Japanese American) who grew up bilingual, speaking Japanese from birth with her parents and grandparents. Her parents maintained strict Japanese traditions, giving her intimate knowledge of the culture as it's still practiced. Her language skills and cultural adeptness made her a valued, fully accepted member of the Tokyo offices. In fact, she felt honored at times because she was brought into meetings to help bridge the cultural and language gaps.

But even her level of cultural fluency didn't always protect her from difficulties outside the office. She would sometimes encounter hostile, blank stares from Tokyoites when she asked directions in the subway; she would overhear groups of students gossiping behind her back that she was showing off her English.

And she recalls one incident that was very disturbing to her. One day, she was having an animated, in-depth conversation—in Japanese—with a waitress in a coffee shop. Ogisu then turned to a Canadian friend who was with her and asked a question in English. The waitress was so aghast and flustered by the unexpected, she raced from the table and refused to come back. A few minutes later, the manager approached them to take the order in broken English.

"I didn't know how to take it. I could've deemed the whole thing as her being intolerant of me," says Ogisu. "I look Japanese; my Japanese is unaccented; yet I'm a strange kind of animal."

Ogisu's incident was minor, but imagine if it had occurred in a business setting. What it points out is that even Americans of the same ethnic background as in country nationals face cultural misunderstandings.

Many businesses are going this route, however. According to Dale Hoiberg, vice president of the international product-development department, Britannica has had great success with its approach. But Tucker says that while this approach is gaining popularity, it can cause trouble, too. "It opens up identity problems—are you one of us, are you one of them and are you really representative of the company we want to do business with?" Furthermore, ethnic expat employees may or may not have the background in terms of history, politics and economics of the country. They also may bring with them class distinctions that are part of the unspoken social context and may have to overcome discrimination because of their ancestors' class background.

That's not to say that ethnic employees can't be successful in their countries of origin, because they certainly are in many cases. However, the match must be brokered sensitively.

"People who are asked to go on an international assignment have the maturity to be able to assess the issues that they'll be facing."
Ron Martin,
Colgate Palmolive Company

It's important to be aware of these differences and keep them in mind during business dealings. Developing cross-cultural fluency, as with language fluency, means that Americans will be better able to understand what's happening in its cultural context.

"Generally, the cross-cultural issues that come into play in business have to do with different styles of managing, communicating, giving feedback and negotiating," says Rita Bennett, managing partner of Chicago-based Bennett and Associates, Inc., an international training and consulting firm. Overlay ethnic background, gender issues and sexual orientation, and the situation becomes even more complex. That's why human resources professionals are relying more on individuals such as Clifford Clarke of Clarke Consulting Group, a Northern California-based consulting firm that helps culturally diverse groups work together. They consult with businesses to strategically manage cultural differences.

Clarke believes that one of the most shocking revelations comes when white males discover they're in the minority. The next surprise is dealing with the fact that all Americans are seen as Americans, first—in Europe as well as Latin America and Asia. In fact, Americans who expect English-speaking London to be an easier assignment than Beijing are in for a surprise. Visiting Great Britain as a tourist is different than living there. "The Brits are so fundamentally different from Americans. They're reserved, shy and formal. Americans are more open, friendly and share their life history easily," says Karen Deane, managing director of London-based Karen Deane Relocations. While change is slow, some British companies are beginning to realize that everyone, including Americans, need assistance as they adjust to work in Great Britain. "Multinationals are looking more closely at cultural issues, and they're making plans in the beginning," she says.

From country to country, the list of differences goes on: how we view time, how we share information, how we view relationships. It becomes especially complicated when trying to work as teams across cultures. Obviously, human resources first course of action is extensive training. Then, consultants such as Clarke work with individuals in "process consulting" to develop a team player approach.

For example, he may devote three days to strategic planning sessions and training for a joint venture partnership in Japan. Then, he'll organize a meeting of the Americans going to Japan, in which consultants observe and focus on process and behavior. It's their job to periodically stop the flow of content and focus on the process. For example, when Americans cut each other off in conversation and argue, the consultant will explain how that will be interpreted—that they aren't a team, they aren't prepared. If the Americans say they want to hear from the Japanese, but play tag conversations for 30 minutes, the consultants point out that they haven't been listening and that their words and actions don't agree.

This kind of attention to the details of behavior that are culturally motivated is one extremely successful way to overcome some of the big hurdles that come from cultural misunderstandings. "Being successful in another culture requires the ability to adapt; to be able to shift frames of reference. You have to be able to set aside the whole view of the world that you've grown up with and say, 'What are the dynamics here? What do I need to pay attention to?'" concurs Barbara Deane.

Cultural diversity perspectives vary from nation to nation.
Americans can't assume that our views are universal. "There are major differences in the way we approach diversity issues," says Martin Bennett, partner and director of training for Bennett and Associates, Inc.

"The basic cultural orientation of the U.S. is of individual human rights and equality as opposed to societies that are structured around collectivity, role definition and reciprocal roles."

The People's Republic of China is a good example. Both Martin and Rita Bennett have dealt with ever-burgeoning cross-cultural issues regarding China. In fact, their company's training programs for China have increased from 1% of the total cross-cultural training in 1992 to 27% of it in 1994.

The rules are so very different. "Americans love to talk about empowerment," says Martin Bennett, "but it's impossible to translate the word in Chinese without it sounding like a revolution. When we look at Confucian society, everyone is in a reciprocal relationship to everyone else. There's father-son, sovereign-subject, husband-wife. Superimpose onto that the system of communism in the People's Republic of China, and you have two systems operating at the same time."

Think of the complexities that arise when Americans attempt to do business in that cultural milieu without understanding the background. It becomes especially tricky in situations where Americans are transferring technology and management skills and attempting to create organizations with the Chinese. At that point, it's very valuable to work with both sides of the equation. Bennett & Associates trains Americans to work effectively with the Chinese and also work with the Chinese to become capable learners in the transfer. They use role playing and other traditional forms of training and then bring together the two groups at the onset of projects. They talk about the differences and similarities and discuss what they'll all have to work on as the project ensues.

"The work is aimed at enabling participants to develop skills for analyzing culture and adapting behavior appropriate to that culture as well as neutralizing stereotypes that aren't useful," says Martin Bennett. "The ultimate goal in a work situation is to move to a third culture that's neither Chinese nor American but the most effective synthesis of both."

Training isn't enough—managers must lead by example.
There's no way around it. Stereotypes and prejudices do exist. They may have complex origins and be completely rationalized in their societies, but they must be acknowledged and addressed. "Racism exists all over the world, not just here," says Barbara Deane. "You just have to recognize it as part of the landscape to pay attention to it, to know it and to make the best placement possible."

For several decades, American companies wouldn't send women or ethnic minorities overseas, particularly to Japan, says Paige Cottingham, director of the U.S.-Japan Project at the Washington, D.C.-based Joint Center for Political and Economic Studies, a think tank on African-American issues dedicated to forging better U.S.-Japan ties. There was the perception that women and African Americans couldn't be effective representatives of their company and wouldn't be taken very seriously.

"One of the first things that's begun to change is the recognition that if we're to promote diversity, we want to lead by example," says Cottingham. "The first step is to include African Americans and women and other minority group members in the work force that goes overseas. The second step is to prepare the American to deal with the different environment so he or she has a sense of what to expect. That will reduce some of the tension and likelihood of making faux pas. Finally, we have to prepare the people in the foreign office [in this case, the Japanese office] to receive these individuals."

One of the most important, and frequently overlooked, aspects of ensuring the credibility of women or people of color is their introduction to the new work environment. "The way in which someone is introduced is crucial," says Marian Stoltz-Loike, director of program design and development at Windham International. "Having someone who has power in the company introduce you to others or take you to the clubs that are important and introduce you to the key people is essential." This tells others that senior management supports the individual.

In addition, a lot of business is conducted outside the office. Letters of recommendation to clients can go a long way to building confidence so that business partners respect the individual as well, says Stoltz-Loike. If an adequate stamp of approval and recognition of authority is communicated, individuals may even make their uniqueness work for them as a business advantage, because people immediately recognize who they are.

She believes that international team building is key. And she believes it should continue in the host country. Using role playing, case studies and cultural-sensitivity exercises highlighting interaction, the process would focus on how preconceived stereotypes negatively impact the business environment.

Furthermore, Stoltz-Loike thinks that it's important to know whether there are different ground rules for women when establishing relationships and building trust with male colleagues. If there are few other women of influence in the company, she suggests it's important to consider how to help female employees establish a level of equality with males.

"Cultural training ahead of time also helps individuals know where the obstacles might be and facilitates their developing a strategy as to how to hurdle those obstacles," says Rita Bennett.

One of those strategies is to find a mentor who can talk about his or her experiences and help the expat learn where to find the best support and how to develop a maintenance strategy. "This is really where HR can work with management to make sure there's at least one mentor for the individual," she says. Ideally, there's a host mentor and an expatriate mentor. She believes that formal mentoring systems, established through the human resources department, are most effective. The companies that have the greatest success with their mentor programs include their mentorship as part of the manager's performance evaluation. "From a cultural diversity aspect, having a mentor is invaluable, and anything human resources can do to facilitate that is laying the groundwork to support the success of the individual," she says.

Interestingly, when handled well, minorities and women don't always have a more difficult time initially. Some people suggest that they may have some advantages overseas. For one, women demonstrate higher use of relationships in business, which is vital to work in Asia. For another, there's evidence that the cultural experiences of American minorities in the United States may make them more able to cope with being outside the mainstream culture when they go abroad.

"There's some research to support the idea that those who come from subcultures have a greater ability to adapt to other cultures," says Rita Bennett. "They may be more capable in dealing with the sense of isolation because they've already had to identify their own racial characteristics in a multiracial society."

Cultural fluency—the ability to conduct business in a diverse, global environment—stands the greatest chance of success when it's part of an overall plan. "It's important to very carefully develop global careers," says Tucker. "If you know a few years in advance that an individual is going on assignment, you can thoroughly prepare. You can train them well, set up a whole series of developmental activities with an international career-development specialist and help the family."

The organization—with help from human resources—can work toward intercultural team building. "When we think about global business, we shouldn't be thinking about Americans doing American business in an American way in another country," says Clarke. "That's what was meant by the old term internationalization.

Going global isn't simply taking your business abroad and using the resources. It's learning how to do business in a global way that supports, energizes and empowers people of all different cultures, including yourself.

Personnel Journal, July 1994, Vol.73, No. 7, pp.40-50.

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