We live in a very global world where borders no longer hinder how far you can reach. Today, companies are expanding across the oceans, making it a task for leaders in this global landscape to learn how to manage a diverse environment. In this People Strategy Forum episode, we are joined by Dr. Rajesh Kumar—an international business consultant who, having lived in many parts of the globe, has developed a deep appreciation and awareness of the importance of the cross-cultural dimension and how it impacts strategy implementation. He shares with us how to do business globally, work through cultural differences, and develop cross-cultural skills as a leader. Follow along to this exciting conversation as Dr. Kumar shares tips on building lasting relationships, onboarding in different locations, resolving conflicts, and providing feedback.
For those that don’t know, we are here to engage, energize, and elevate your employees and company. We do that by bringing a guest speaker. We have the wonderful Dr. Rajesh Kumar with us. We’re going to be talking about how to do business globally, how to work through cultural differences because the world and companies are expanding across the oceans. It’s important to understand how to work with cultural differences so that you can be successful.
I don’t do this alone. I have a lovely panel of hosts here with wonderful expertise in HR, talent management, compensation, and many other areas as well. I’ll get started with Char. Char has an entrepreneurial spirit. She has a lot of experience being a small business owner. She runs many of her own companies and teams up with CompTeam as well.
We also have Howard, who has many years of experience working in compensation. He’s a compensation advisor with CompTeam and a strategic HR consultant as well. Sumit and Wendy aren’t able to join us. I’m not sure if Wendy’s hopping on, but I know Sumit can’t join us. They’re usually here as well. It’s one big panel. We also have Sam, who is the Founder and CEO of CompTeam. He is a talent management and pay professional expert. He is the person behind the Forum. We’ve been running this for quite some time. Sam’s the man behind the action here. We have a guest speaker each and every episode.
We have Dr. Rajesh Kumar. He is an International Business Consultant. He’s originally from India, but he has lived and taught all around the world. He’s lived in Denmark, New Zealand, Finland, France, and the US. He’s based in the US, but he advises companies on how to do business on a global scale. Not only has he lived around the world, but he’s also taught around the world. He’s been a professor at many prestigious universities, including Penn State. We’re excited with this discussion with him. Welcome, Dr. Kumar.
Thank you. It’s lovely to be here.
Dr. Kumar, I love to start off hearing a little bit more about how you got started. I know you’ve been all across the world and so forth and you’ve talked at many universities. Tell us a little bit about your journey. What got you started and your interest in international business and helping companies?
There were multiple forces at play. One was when I was doing my Doctoral thesis at New York University. I was looking at Japanese companies entering the US. In particular, the way that they negotiated with the Americans. That was a big topic of interest and discussion for American managers and Japanese managers. I had the chance at that point in time to interact with a number of people, both Japanese and Americans.
That gave me insights into how relevant and how important and how culture is something that is often underplayed. It is something that most companies don’t pay attention to unless there is a problem. It became clear to me that it was something that we needed to consider. If I juxtaposed this with my journey, which is I came from India, I went to London for a year. The Indian and the British cultures are different.Culture is often underplayed and is something that most companies don't pay attention to unless there is a problem. Click To Tweet
I was coming more from a collectivistic society, moving more to an individualistic society. Personally, I faced a lot of challenges. I moved again from England to the United States. Again, a difference. I recognized that to be successful and to adapt at the individual level. You needed to come to terms with culture, understand, adapt, and get the other individuals to take you seriously. For that to happen, some level of adaptation is necessary. I’m basing it on my own personal experience, my own Doctoral thesis and the work that I did, and a lot of what I read in those days. I also realized certainly in the mid- ‘80s that was true, which is America was insulate.
At that point in time, in particular, the ratio of experts to GDP was little. Although outsourcing had begun a little bit, it certainly did not expand until the ‘90s and thereabouts. When you live in an insular culture where you’re not dependent on other countries, then, of course, you don’t need to pay attention to culture. This is different for Europe because the countries are much more interdependent. Historically, they’ve been trading for a long time. They cannot afford to be that close. Also, you have languages. A lot of people speak multiple languages, French, German. The cultural context of the United States at that point in time was somewhat insular. Yet as companies were expanding globally, it was essential for them to learn to master the intricacies of cultural competence. That’s how my journey began.
I imagine as you first moved out of India, there was a bit of that culture shock in dealing with the differences. My wife is French. Being here in the United States, we just went through Thanksgiving, an important holiday for a lot of us. My first Thanksgiving with my wife, who was French, she knew that Thanksgiving was a special meal. When we finally had Thanksgiving come along, we ended up having a ham and some vegetables and maybe a cake for dinner, which is not the traditional Thanksgiving meal. I was like, “What is this?” That’s part of the shock that I had coming into these different cultures. I imagine you probably have a similar story,
The challenge I faced when I first moved to England was, for example, communication. There was the issue of accents. Could they understand me? Could I understand them? Was there the issue of communication? People in the West are direct. They say what they mean, which is not the case in a lot of Asian cultures, including India. It took a little bit of patience, time, and effort to be able to be more direct. If you’re not direct in the Western cultural context, you can be misunderstood. This is one of the challenges that Chinese, Japanese, or other Asian companies have when they’re negotiating a contract in the United States. You have those differences. I’ll share a story with you. This is a story related to me by an American consultant about a Japanese company and dealing with Americans.
The Americans were selling a particular product to the Japanese. The gentleman made a presentation, talked about the product, and he quoted a price at the end. They were still too silent in the room. The Japanese didn’t say anything. The silence went on. The American manager became a little uncomfortable. He assumed that the Japanese probably wanted a lower price, which is why they were being silent. He lowered the price. He completely misunderstood the role of silence in the Japanese cultural context. The Japanese got a bargain, but the silence was not intended to elicit that concession from the Americans. He misinterpreted the silence and thought that the way to close the deal would be to lower the price.
It was an expensive mistake.
Here you have an example of miscommunication, a lack of understanding of the other person’s real intentions. When you don’t understand a particular country’s cultural proclivities, you can make that mistake.
I also had an isolated upbringing as well. Although I lived in all these different states growing up in the United States, my predominant time was along the front range of Colorado. I would hear stories. I love the story about the Japanese and Chinese cultures because I had some friends that did a lot of international business. It also suffered some of those adaptions, handshakes, and various nonverbal cues and protocols. I found that interesting. I do appreciate your point about not understanding a different culture until you’re immersed in that culture. Many have heard that I’ve spent a lot of time now in Mexico, near Port of Arta in Mexico.
It wasn’t until I truly started spending time working and living for six months in a different country, and appreciating the perspectives of Americans and the language barriers and having an eye-opening experience. I find that invaluable as far as my personal perspective in my midlife. I’m curious from your perspective. I personally had, and Sam as well, and others here on the panel, had time in other countries and working from other countries. I love that story in your coaching consulting, but how do you immerse a professional in understanding and appreciating a different culture and civilization? How do you do that with your coaching and consulting so that people appreciate and understand that? In addition to your stories, what is your process for doing that?
What I do is run interactive workshops. One of the challenges is that 1 or 2 workshops may not necessarily do the trick, but then companies have their own budgets. They have their own time and resource constraints. I cannot give them full immersion in the sense that I would ideally like them to do. Given that constraint, I at least try to make them aware of the potential pitfalls and challenges they might face in doing business in India, Japan, or China. If you as a manager are motivated to build a relationship with your counterpart and demonstrate sincerity, then it’ll go a long way.
You also have to recognize that doing business in many of these countries requires a longer-term orientation. It’s not a short-term deal. I’m working with a company that is trying to find channel partners in different countries. They want to go into Asia. As my Asian partner told me, “You have to tell them that they have to be in here for the long-term. Without the long-term intention and trust you have, it’ll be difficult to build an enduring relationship over time.” To stop, because these workshops are only 1- or 2-day affairs, but genuine immersion requires in-depth emotion in the way that you were able to do when you lived in Mexico for 5 or 6 months. That’s not realistic. I try to do the best that I can.Without long-term intention and trust, it will be very difficult to build an enduring relationship over time. Click To Tweet
I assume some of these businesses have leadership relationships where many leaders will also have employees from other countries. Sumit was awesome and to bring to our attention that in his culture, it’s not often that an employee would bring forward information or feedback to the supervisor and also keep their mouth shut, whereas perhaps in the American culture, we tend to be vocal with our leaders about our opinions about our workplace and dislikes. What’s your thought about a leadership perspective in those cultural dynamics?
In the hierarchical culture of India, you never criticize a boss. You never say no. Even if you don’t agree, you don’t do that. That can create a problem. For a multinational that has employees in a number of different cultures, they have got to create a culture where people feel comfortable in terms of doing that. It’s not easy because it does not come naturally, but it is essential because otherwise, things will get delayed. There will be misunderstandings and misinterpretations. Things will not go ahead as you expected it to. I’ll give you an example of an Indian company I worked for many years ago. This was the converse situation. This was a company that had great global ambitions, and wanted to expand globally.
They bought factories in a number of different European countries. The problem was that this was a family-owned firm in India, as many companies are. They did not want to delegate control, which meant that a lot of subsidiary managers in different countries felt frustrated. They felt that their voice was not being heard. They felt that the entire decision-making was coming from the corporate office in India without necessarily their views being given due consideration. From an Indian perspective, there was no need to decentralize.
I tell them to do what’s to be done in a hierarchical set. What the Indian company missed was the fact that their company’s operating in a global environment. What might work, for example, in India will not work in England, France, Switzerland, or Denmark, where you have managers with different cultural expectations and norms and value a different kind of relationship with the superior. It proved to be a huge problem. There was a great amount of mistrust within the organization because there were people who felt that they were not being heard.
I also think that many Americans, and not to stereotype here, are not bilingual, whereas in many other countries, some people can know 5, 6, 7 languages. What I’m hearing from you, it’s not just about communication and the language, it’s culturally about, for example, the top-down attitude of the authoritarian type of mindset where we cascade information and everybody needs to execute with not using positive psychology to build those relationships.
The Indian team found it difficult, given the ingrained built cultural hierarchy, to be able to decentralize to local managers, give autonomy to Swedish, Danish or French managers, and make decisions with certain parameters. What happened was the decision-making got clogged because everything went up the hierarchy, which, apart from demotivating the European managers, it also slowed the decision-making down. For a company that is operating in the global area where you have strict contractual deadlines, that’s a problem.
We’re talking about some of the specific cultures here, but in the context of how a lot of companies out of the United States are doing business now, is there the greatest amount of misunderstanding or conflict that you find nowadays?
I would say that the distance between the American culture in Asia is greater than that between America and Europe because of cultural similarity. I would not want to identify or isolate a particular country, except make this broad categorization. When they share the cultural distance is greater, obviously, there will be greater problems or challenges. This is not to say that they’re not going to be problems in Europe. Even there, we’ve run into issues American companies have. One of the issues that remain unaddressed is the question of who is going to do the adaptation.
That becomes a tricky question for two reasons. One is, which party is more culturally able to adapt? That’s one aspect of it. The other issue is looking at the issue of power because in any interaction between two companies, sometimes they may be equal, but in some cases, one company may have the greater bargaining part. They’re inclined to say, “We’ll do it my way.” That can also create a challenge. One of the things in any negotiations is the first thing you have to decide is where will the meetings take place.
For an American company negotiating a contract, they would like the meetings to be held in the US. It gives them the home country advantage. A Japanese company dealing with the Americans would like the meetings to be held in Japan, giving them the home country advantage. Typically, companies work this out, but at least in the initial stages, these are some subtle issues that also come into place. You have the cultural difference, but then you also have the power imbalance.
That’s an interesting thing to consider. If you’re a company in the United States and you’re looking to build a partnership in Asia and it’s somewhat of a shared a shared power arrangement, should we consider the location of that first physical meeting to be perhaps in neither country? What’s the best way of handling something like that?
It depends on the situation. Typically, when you have an American and Asian company coming together, they will often enough be an introduction from a third party that will bring the two companies together. Depending on that, it is variable. It depends on the unique circumstance of that situation. It would be difficult to make a general categorization depending on their experience in terms of doing business with other countries, in terms of which has the greater power, the flexibility or the capability of the other company to adapt. A number of different variables come into play.
If language is an issue where either party is fluent, how do you go about doing business? Do you work with a translator?
Yeah, with a translator. Sometimes that can be used to advantage by one of the parties. They may say that they don’t understand English, but they do, but they still use a translator because it then gives them greater time to respond. Ultimately, all of this will fade away if there is a strong relationship between the parties because if there is a certain level of trust and if the parties come to know, like and respect each other, then some of the issues may go to the foreground. That becomes critical and important in terms of shaping international business interaction.
Through the years, have you created a list of here are things not to do and not to say when you’re working with other parties overseas?
In a broader sense. A lot of people have done that as well. Every situation is unique. You have to look at that situation, the players, their level of cultural competence, and what they have done in their previous interactions with other cultures, and then decide what would be the best in certain situations. In some cases, companies have removed certain individuals from negotiation because their personality is too abrasive. If they were there in that room, that would ruin the relationship. Some companies have had to do that because you don’t want to start off on a bad note. Those cross-cultural skills become important. It would also be fair to say that not every individual will be equally skilled in dealing with cross-cultural issues. You need certain specific traits to be able to function well in a global environment.Not every individual will be equally skilled in dealing with cross-cultural issues. You need specific traits to be able to function well in a global environment. Click To Tweet
It’s interesting because, having grown up in the US and spent most of my time here, our educational system is probably at fault, too, because we take a very insular look at the world. We don’t get educated deeply about other cultures.
To a large extent, it’s also because America has been the preeminent economy in the world. They have been dominant both economically, politically, and even culturally. That was the reason for it. Now with the rise of the East, especially China, you’re seeing a different situation emerge. It is challenging. You’re right. People should learn multiple languages. That will certainly be beneficial.
You mentioned China. Part of the conflict that Americans have had with China in the past is not just in a power orientation and political differences and so forth, but also the different social standards and ethical standards that we believe. Knowing that, how do we bring ourselves closer to understanding each other?
It’s a tough one because, obviously, there’s a complete variance certainly in terms of intellectual property and all of it. The Chinese and other countries may have slightly different view. In some cases, you’ve got to push firm, which is the other aspect of cultural adaptation. The fact that you have to adapt does not necessarily mean that you’ve got to adapt to everything because there are certain dimensions or certain aspects of certain cultures that may be very much a variance with your own personal views, beliefs, and all of it. You have to navigate it, but it doesn’t mean that adaptation has to act on each and every level. That is something that one needs to be careful about.
We’re talking about some ethical differences. I know this is something that a lot of American companies run into because something that we call such as a bribe, for instance, would be labeled a bribe in the US and may be considered a social contribution in a different country.
The Foreign Corrupt Practice Act lays out what is a bribe and what is not a bribe. I’m not an expert on it, but certain payments for routine services are probably acceptable, but paying large sums of money for getting a contract, bribing foreign government officials, and all of it is not acceptable. There have been a number of years companies that the Justice Department has fined for doing exactly that. This is a tough one, but it is better to let go of a deal than to get yourself embroiled in a contract that may bring you down and many other individuals in the company. There are many American executives who’ve gone to jail for that or others.
The real importance of what you bring as a consultant. If an American company thinks about reaching out and having an engagement elsewhere, we don’t know what we don’t know. We don’t know the social norms and so forth. Having an expert like you would help understand what is expected, what is traditional, and what is appropriate.
To identify the potential pitfalls and certainly give them ideas or give them lessons in terms of what not to do and what to do. There are some gray areas. Above all, it’s about developing the relationship within the broader parameters. Most importantly, if you’re trying to find a partner in different cultures or countries, it is important that you find the right part. That is critical. It is critical even in the United States. When you’re going overseas and have cultural barriers, you have a lot of noise. How do you know which particular partner to partner with?
Many will make extravagant claims. You need some insider knowledge to be able to figure out what should be done, what should not be done, who should I ally with, and who should I not ally with. To some extent, the US Foreign Commercial Service helps some of the US exporters in terms of doing that and in terms of providing them some guidance on that. I provide a broader perspective in terms of how you build relationships, how you resolve conflicts, and how you build a productive workforce globally.
A lot of our audience here on the forum is leaders and CEOs and senior HR professionals that are establishing footholds in different countries for business and so forth. One of the main challenges that they initially face is hiring leaders in those areas to run the organization and bring on people. Are there some things we should be aware of when hiring that from a cultural perspective, hiring people in different locations, and understanding that there might be differences in onboarding people?
What you need to do is go through a fairly rigorous selection process in terms of identifying the right kind of people. You also need to work with the local partner in that particular country because they have insider knowledge of what other agencies you can work with, in terms of recruiting locally, and the kind of pitfalls you need to avoid. That’s important. At the same time, they’ve got to choose a person who’s both ethical and culturally competent and who can blend in with the local culture.
Identifying that person might take some time, but it’s essential. For example, in India, having a manager in the American mode is great and all of it, but in the Western work context, the emphasis is not necessarily on building relationships with the employees. In the Indian context, people are accustomed to what some have called a nurturing leadership style. In other words, you need to look after the subordinates. That might prove to be a little bit of a challenge for a vested leader, but maybe somebody who is more local can figure out how to deal with them. You need someone who can be both locally responsive as well as globally aware.
To extrapolate on that point, in some situations, it may not be effective to have, for instance, an American manager overseeing subordinates that are in India.
Unless he or she has not developed that awareness of the local Indian cultural constraint and is able to work within that limitation.
There should be some training and development that takes place. What about other issues such as giving critical feedback on performance? This is something that’s changed in the United States as well. We give feedback to employees. If we don’t do it on a regular basis and develop that relationship, giving feedback can be pretty harsh if it’s done, for instance, once a year. You might lose that employee. How are things different in different cultures that you’ve seen?
In more collectivistic cultures, there’s a lot of focus in terms of face. Face means maintaining harmony. The problem here is that when you give negative feedback, it disrupts that harmony. That can cause the employee to lose faith. You can say what you want to, but you have to do it in a way and in a manner that is least disruptive in terms of causing the person to lose face.
I’ve heard of stories of business contracts have been lost because one of the partners has insulted the other by causing them to lose their face. That becomes critical. A long time ago, when Walt Disney made a film on Tibet, and Tibet is a sensitive subject for China, they froze all Disney projects. They were frozen for many years until Henry Kissinger intervened and got them back on track. In a similar mode as why as individuals are concerned, the question of face is important.
We all misstep. There’s a time when we’ve gone in and maybe damaged a relationship. In different cultures, what are the best steps that you can take to reconcile in situations where something’s been damaged?
It will vary from country to country. In Japan and all, an apology might be one step to begin that. In other countries, there has to be sincerity in the expression that you feel that you made a mistake. A lot of people can say they’re sorry and all of it, but you have to genuinely demonstrate that. Even then, it’s going to take some time, but that is going to be the first building block in terms of trying to repair the relationship. Repairing the relationship will always take time, which is why in an ideal case, it is better not to be in a situation where you cause someone offense because then tensions can escalate.
We’re talking about damaged relationships and what happens when things go off track. Would you not recommend that we do proactive approaches before we get into those situations where we offend? Also, would you recommend utilizing perhaps some various assessment tools or team building tools to identify different competencies or behaviors of our team members to foster those relationships in a proactive way and have that as part of our strategy as you discuss?
There are certain skills that are relevant in the cross-cultural domain. There needs to be a high tolerance for ambiguity. There needs to be a certain kind of strategic resilience that you don’t respond to any unexpected event in a dramatic way. There needs to be a certain level of emotional intelligence among these individuals. There needs to be that self-awareness. There needs to be some degree of patience. Th
ere are some cross-cultural skills that are essential and vital, which is why when I said earlier that sometimes companies remove individuals from certain roles. They do that because they have certain attributes that damage the relationship rather than bring the relationship back together. If you’re a confrontative person, abrasive, that will not work in a cultural context that values harmony.
I love that you say that. All those words that you utilized around emotional intelligence and patience and ability to for tolerance, we do have a way of measuring. I can see a beautiful relationship with what you’re talking about to be able to utilize a tool. It doesn’t have to be the tool we tend to use or discuss in our forums, but any of those tools would be helpful. It’s not necessarily removing an individual from an organization, but aligning the leadership competencies and skillsets that would best foster that integration.
I didn’t mean removing the individual from the organization I meant from that situation.
As we become more global and our customers are more global and those we serve and support and then we have cross-functional teams, I do believe even those organizations that think they’re very much just United States-based may need to be more open to the idea of taking a look at their talent and analyzing their talent for the best fits of those types of integrated roles.
The one thing I would add to those skills is the ability to manage emotion. That’s critical either because it’s easy in a cross-cultural context where you don’t understand things and don’t know what’s going on. You think the locals are taking advantage of you. You can easily get frustrated, angry, and tense. Maybe, Char, you had some of those experiences in Mexico.
I was living in Mexico and I had about 30 employees here. Even my leadership style changed, and my tolerance for assertive and aggressive behaviors towards my staff began to transform because I had a deeper awareness of how employees should always be treated with compassion, dignity, and respect. I call HR with the heart always. Even I modified my approach to my teams and my employees. I had a director. Sometimes she would call me up in tears because she was frustrated with some of the behaviors that were starting to come out in the organization.
You need to have that capability to overcome that.
Also, my awareness and how I led as an owner of a company began to modify. It helped being immersed in a different culture and seeing a different way of managing from a different cultural perspective. I don’t think I would’ve had that awareness before. I find that insightful.
At this point, what Char was mentioning earlier, Dr. Kumar, was the TMA Method. This is a tool that we use at CompTeam. This is an assessment. It’s a conversational tool. It uses a psychometric approach in different countries. They do an analysis whether it’s in India or in the Middle East or whatever, because people think differently in those particular areas.
It doesn’t at all replace the skillset of what you would provide, but it does give managers a way to have a conversation around specific competencies of what they might share and understand a person a little bit more closely in other areas. This is a difficult conversation because I know that it might be uncomfortable for you to answer, but there are certain things that Americans need to know about themselves that would be quite helpful, and how different countries perceive us.
For example, I was working with a gentleman out of Ukraine who got displaced. Americans, we have a saying that we wear our hearts on our sleeves a lot of times. We can be cordial with our conversations. Other cultures are expecting business to be a little bit more structured and in developing relationships. Sometimes, we can come off as an American to perhaps Eastern Europeans may come off as cordial. We think it is a part of being a nice person. They may think that, “This person wants to be my friend.” They’re thinking about it a little bit more. What do Americans need to know about themselves in order to have better relationships around the globe?
A couple of things because we cannot discuss this without also looking at the role of history and politics. Often, Americans are perceived not just on the basis of the cultural dimension but also on the basis of how they perceive the US. That comes into play as well. At an individual level, they’re perceived as being aggressive. Sometimes they’re aggressive, sometimes a little bullish, sometimes as being impatient. You saw that in the example that I gave about the American manager who lowered the price who could not deal with silence. Sometimes also as people who are looking for short-term wins rather than building a long-term relationship.
These are some of the things that certainly the Europeans or the Asians would consider. At the same time, you have to also look at the Americans’ positive traits, which are sociable, agreeable, innovative, entrepreneurial, open to new ideas to new people more than in many other countries, and more receptive. We have to look at the balance. There are lots of positive traits. Clearly, there are good reasons for them.
The high-tech revolution has only come about in Silicon Valley. I don’t think there’s any other country in the world that can match the US in terms of that. The innovative spirit, the entrepreneurial spirit, all the great high-tech companies in the US were built from scratch and were built by entrepreneurs, which is a big plus. The negative, if anything, is more on politics. Less the individual level of some aspects of it.
Thank you, Dr. Kumar. I know this has been a wonderful conversation. I want to thank you for sharing your expertise here.
Thank you, Sam. I enjoyed being on your show and sharing my thoughts on this particular topic.
If some of our readers would like to reach out and learn more about you and your services, how do they go about doing that?
They can contact me through my website or through my LinkedIn page.
Thank you so much for joining us, Dr. Kumar.
Thank you, Sam.
We appreciate your time.
Thank you, everyone. See you next episode.
Dr. Rajesh Kumar is an international business consultant, originally from India, Dr. Kumar has lived in the United States, U.K. Denmark, France, Finland, Netherlands, and New Zealand. He has developed a deep appreciation and awareness of the importance of the cross-cultural dimension and how it impacts strategy implementation. He has a Ph.D., a degree in International Business from New York University, an MBA from Rutgers University, and a Master’s degree in Economics from the University of Delhi.
He has published numerous research papers in academic journals. He has also published two coauthored books Doing Business in India and International Negotiations in India and China: A comparison of the emerging giants which were published by Macmillan and two coedited books Indian Business: Understanding a rapidly emerging economy published by Routledge and Institutional Dynamics and the evolution of the Indian economy published by Macmillan.