Global Business Culture works with a large number of major global corporations and as they become more and more engaged in business activities outside their home bases in North America and Western Europe, they seem to be asking increasingly difficult questions about the difference between cultural sensitivity and ethical correctness. I suppose the question boils down to a simple one – should we always play by the rules of the country we find ourselves operating in or should we always apply the rules that work in our home country? Those of a culturally understanding nature, as well as those who place the commercial imperative before all else tend to argue that ‘when in Rome do as the Romans.’ But is it really that simple? Should local norms always trump home country beliefs?
One of my North American clients placed a female employee as the project lead on a project with a certain Asian client. They received an email from the client in Asia saying they would prefer a man as the project lead. What should the North American company do? Should they acquiesce to the demands of the client even though that would contradict both the law in their own country and their strong corporate policy of being a gender blind employer? When I pose this question to clients around the world, responses vary enormously and not just, as might be expected, along gender lines. I’ve had female managers in the US saying that the client is always right but then being argued with by male colleagues who say that corporate policies should be adhered to regardless of the commercial consequences.
I spend a lot of time explaining the impact of differing attitudes to meetings, decision-making styles etc. on global business and my usual advice is to adapt to the expectations of the client as this can help you meet your goals on time and on budget. Nobody objects to the idea of adapting to a different meeting style – but condoning gender bias or bribery is a whole different ball game!
These issues are really complex and there is no simple answer to them. However, I strongly believe that a global company needs to address these difficulties rather than sweep them under the carpet. Organisations need a clear policy on all of these issues which is then effectively communicated and they also need to be strong enough to apply that policy in all situations – no matter how commercially uncomfortable that might be. It just not fair to say ‘we don’t pay bribes’ but then to punish a sales guy for losing a contract because they were competing with someone who did. It sounds bizarre but it happens.
If you’d like to discuss how increased cultural fluency can help you develop and implement effect global compliance policies, please contact me at firstname.lastname@example.org
‘International Business Attitudes to Corruption’ a report published by Control Risks, highlighted some of the extreme challenges faced by Compliance Officers within global organisations. As regulators increasingly extend their global reach whilst anti-corruption laws become ever more comprehensive, Global Compliance comes face-to-face often with uncomfortable on-the ground reality of culturally differing norms around the world.
The report points out that an over reliance on a belief that centrally driven compliance programmes will be understood and actively implemented in all parts of the globe can produce a dangerous disconnect between the perceived effectiveness of any programme and the actual reality on the ground. The danger is that the process looks comprehensive and watertight at HQ but leaks like a sieve when it lands in different geographies. This can actually lead to an increase in non-compliance rather than a reduction – thereby unwittingly exacerbating the problems.
Why might this disconnect occur and is it a process or a people problem?
I think the answer comes in one particular sentence in the Control Risks report which says that ‘you need to really know who you are dealing with at every stage of your value chain, what motivates them, how they behave and how to forge compliant and collaborative working relationships’.
In reality this sentence is saying that you need to have a comprehensive understanding of the cultural drivers and expectations of the people you are interfacing with around the world and how those things will impact on the way in which your compliance programme lands. That’s a tall order and requires a huge degree of global cultural fluency – a degree of cultural fluency that is possibly quite rare in global compliance departments. In my experience some compliance professionals shy away from looking at the cultural nuances of all of this because it simply makes their jobs more difficult. It may indeed make their jobs more difficult but without the requisite amount of global cultural knowledge, their jobs are actually impossible!
If, for example, your cultural background is one where corruption is so endemic it is as much a part of life as buying bread and where it is considered very bad behaviour if you don’t try to manipulate the system for the benefit of your family, friends or tribe or where it is an insult not to lavish extravagant entertainment on a potential client, then being presented a new programme or process from a faraway head office is unlikely to change your perception of what the world looks like.
How do we address the difficulty of trying to shoehorn a benchmark set of compliance principles into a world in which vast swathes of people simply ‘don’t get it’ or are just not interested?
We want to be ‘glocal’ but rail against it when the local comes through more strongly than the global. We want people to be fully integrated into the local market place so we can compete effectively but complain when people act as the locals act. We want people to be able to compete against the local competition who do not have to conform to the policies of an alien Head Office which might be counter-cultural in that location.
The answer to this has to be education – both at Head Office and throughout the international network – but this education has to go way, way beyond the typical compliance e-learning programme – which is often seen as a backside covering exercise anyway. The education has to be designed to help people develop a global mindset where all parts of a global organisation can see where the other parts are coming from. Globalisation is a mindset, not a word. Compliance is also a mindset, not a word (and certainly not a set of processes).
As Control Risks put it ‘you need to really know who you are dealing with at every stage of your value chain, what motivates them, how they behave and how to forge compliant and collaborative working relationships’.
We can help your organisation develop a global mindset and in so doing we can challenge the way in which you view and address the world. We can help make your compliance programmes meaningful in different territories.
If you would like to discuss these issues contact me at email@example.com