PBW3163: Multinational Corporations and Global Communication PDF

PBW3163: Multinational Corporations and Global Communication Lecture 8 – Differences causing Communication Barriers in MNCs Professor Dr Ting Su Hie ([email protected]) (082-58 1760)  Revision: MNCs and Globalisatio...

PBW3163: Multinational Corporations and Global Communication Lecture 8 – Differences causing Communication Barriers in MNCs Professor Dr Ting Su Hie ([email protected]) (082-58 1760)  Revision: MNCs and Globalisation MNCs Globalisation 1. Jobs and There is some mobility expands increases 2. Better and globalisation globally further varied Extract raw materials products and commodities + Role of More interdependence 3. Cost savings and sell elsewhere international of WHAT? due to better for businesses International institutions flow of WHAT? 4. New markets investment + Improved 1. Goods 5. More capital Manufacturing transportation flow services and 2. T 6. Reduced tax Local and foreign communication 3. I 7. Similarity of investment technologies 4. P cultures 5. I Globalisation is the word used to describe the growing interdependence [interconnectedness] of the world’s economies, cultures, and populations, brought about by cross-border trade in goods and services [products], technology, and flows of investment, people [jobs], and information. Learning Outcomes At the end of this lecture, you should be able to: 1. Describe the 4 dimensions of Hofstede’s (1980) differences that affects communication in MNCs in 1,000 words; 2. Compare the differences in working style of Baby Boomer, Gen X, Gen Y and Gen Z. 3. Compare behaviour-, identity-, and value-based strategies to manage intergenerational conflicts in the workplace. Explanation on 4 types of differences  MNC teams have trouble communicating In MNCs, team members often have to communicate information to colleagues across the globe. But they don’t share their information and their knowledge enough with one another or as much as they could. Why is that? MNC teams are diverse! 4 dimensions of differences because people are: From different geographic locations National Culture difference (more than time zone difference) From different nationalities Language difference From different business units/ functional areas in Structural difference their organisation From different demographic groups Demographic difference https://knowledge.wharton.upenn.edu/article/the-real-reason-your-multinational-team-has-trouble-communicating/ (1) Geographic Differences and National Cultures (Hofstede, 1980) Power distance Avoidance of uncertainty (tolerance for ambiguity) (authority vs social inequality) National cultures Individualism vs collectivism Masculinity vs femininity (personal freedom and (competition vs care for achievement vs Cohesion and others) loyalty to group) Sakapurnama, E. (2013). Cross-cultural communication in multinational companies: Problems and suggestions. Innovation, Communication and Engineering, 71, 1-6.  (A) Power distance This is the way people in a society relate to each other on a Power hierarchical scale. Distance High Power distance: A culture that gives great deference to a person of authority. Low Power distance: A culture that values the equal treatment of everyone. https://www.jmu.edu/global/isss/resources/global-campus- toolkit/files/hofstede-power.pdf  (A) Power distance Low Power Distance High Power Distance Power, status, and wealth do not Status consistency: power brings need to go together. status and wealth. Prevailing religions and Prevailing religions and philosophical systems stress philosophical systems stress equality. hierarchy and stratification (different groupings). Decisions based on use of majority Autocratic decisions, does not take vote. Use of force reveals failure of account of other people’s opinions. power. Use of force is the essence of power. Adapted from Hofstede, Hofstede, and Minkow (2010, p. 116). Hofstede, G., Hofstede, G. J., & Minkow, M. (2010). Cultures and organizations: Software of the mind (3rd ed.). McGraw-Hill.  (B) Individualism vs Collectivism The degree to which societies are integrated into groups and their perceived obligations and dependence on groups Individualism – Rely on words to carry Individualism meaning, explicit (West) vs Collectivism – Use indirect message Collectivism and nonverbal signs (Asian) Sakapurnama, E. (2013). Cross-cultural communication in multinational Sakapurnama (2013) states that in Thailand: companies: Problems and suggestions. Innovation, Communication and Engineering, 71, 1-6. Say “yes” to please boss although you feel “no”/it’s wrong. This youtube shows the collectivist culture clearly. Team leader cannot take open and frank https://www.youtube.com/watch?v=VMwjscSCcf0 feedback; they think it is criticism.  (C) Masculinity vs Femininity The degree of assertiveness in society Masculinity – social gender roles are clearly distinct. A preference for achievement, heroism, assertiveness, and material rewards for success. Masculinity (Japan) Vs Femininity – social gender roles overlap. Femininity A preference for cooperation, modesty, caring for the weak and quality of life. (Norway & Sweden) https://www.hofstede-insights.com/intercultural- management#:~:text=The%20Masculinity%20side%20of%20this,weak%20and%20quality%20of%20life.  (C) Masculinity vs Femininity Masculinity social norms Femininity social norms Ego oriented. Relationship oriented. Money and things are important. Quality of life and people are Live in order to work. important. Work in order to live. Masculinity work cultures Femininity work cultures Larger gender wage gap. Smaller gender wage gap. Fewer women in management. More women in management. Preference for higher pay. Preference for shorter working hours. https://www.andrews.edu/~tidwell/bsad560/HofstedeMasculinity.html#:~:text=Masculinity%20is%20seen%20to%20be,and %20more%20fluid%20gender%20roles.  (D) Avoidance of uncertainty Avoidance of The extent to which members of a uncertainty society attempt to cope with anxiety by minimising uncertainty. 3 coping mechanisms: technology, law, and religion High level of uncertainty avoidance – Rely on set rules and ways of doing things to control uncertainty as much as possible. “Company rules should not be broken – even when it is in the company’s best interests”. Low level of anxiety for the future – More relaxed about how things are done. https://www.jmu.edu/global/isss/resources/global-campus-toolkit/files/hofstede-uncertainty.pdf  (D) Avoidance of uncertainty High uncertainty avoidance Low uncertainty avoidance Students expect structured Students expect open-ended learning situations and seek “right learning and discussions (No one answers”. answer). Teachers are supposed to have all Teachers may say “I don’t know”. the answers. Students attribute achievements Students attribute achievements to own ability. to effort, context, and luck. Independence for female students. Traditional role models for female students. Adapted from Hofstede, Hofstede, and Minkow (2010, p. 169). Hofstede, G., Hofstede, G. J., & Minkow, M. (2010). Cultures and organizations: Software of the mind (3rd ed.). McGraw-Hill. https://www.jmu.edu/global/isss/resources/global-campus-toolkit/files/hofstede-uncertainty.pdf (2) People of different nationalities (“language” difference)  (2) People of different nationalities (“language” difference) Breakdown in meaning of communication Message received has different meaning from message that is sent Verbal: vocabulary, grammar, idioms, volume, accent, pronunciation and emphasis in sentence Nonverbal: tone of voice, eye contact, body language, gestures, emotions, clothes, proximity (how close you stand/sit) Solution: Pay attention and learn to adapt. Not everyone thinks and behaves like you, and you are not always right or always the best. (3) Differences in how different business units communicate (structural differences) People in different fields have their own terminology with their own meanings. This leads to communication breakdown. What is “coke” to you? Ordinary talk Research talk Random anyhow/simply take Systematic selection of anybody convenient samples Introduction Say something general Argue the research problem about the topic using past findings Discussion Share opinions on topic Seriously compare own results with other researchers’ with good knowledge of their study  (3) Differences in how different business units communicate (structural differences) FBK clerk to me: Not enough money in Vote J700 to buy voice recorder. You My Dayak chair grant wrongly put it on Bidayuh language under J1000. Need to do virement. I to RIEC deputy director who FBK clerk to me after Nothing happened for 2 weeks. advise me to write talking with memo to DRC chair Kewangan clerk: No, I went to RIEC office. RIEC clerk to me: – for virement. write to pengarah Bukan virement, Cuma salah coding. RIEC for virement Buat memo baharu!  (4) Differences due to demographic differences (To me, this boils down to generational differences) I share with you a part of my talk  Intergenerational Differences People born within the same historical and socio-cultural environment experience common events and context. These external influences shape people’s views of the world.  Age Cohorts Age cohorts Years of birth Age in 2022 Gen Z & Alpha 1997-now 25 y.o. and below Gen Y 1981-1996 26-41 y.o. Gen X 1965-1980 42-57 y.o. Baby Boomers 1946-1964 58-76 y.o. There are slight variations in classifications used by researchers  Different Takes on Family Life Baby Boomers Gen X Gen Y Gen Z Family Mum stayed Latchkey kids Treat parents as Like being alone experience home (parents not at friends at home Children are home) Sheltered & Solve problems treated as Pampered by controlled by themselves special parents helicopter parentsthem Attitude to Buy now, pay Save, save, save Earn to spend Want to earn money later money earlier in life Ethnic relations Became aware 50% feel that Comfortable Highly inclusive of racial ethnic diversity with diverse worldview discrimination is a good thing ethnic groups  Different Takes on Family Life Baby Boomers Gen X Gen Y Gen Z Family Mum stayed Latchkey kids Treat parents as Like being alone experience home (parents not at friends at home Children are home) - Sheltered & Solve problems treated as independent controlled by themselves special Pampered & helicopter criticised by parentsthem parents Attitude to Buy now, pay Save, save, save Earn to spend Want to earn money later money earlier in life Ethnic relations Became aware 50% feel that Comfortable Highly inclusive of racial ethnic diversity with diverse worldview discrimination is a good thing ethnic groups  Different Takes on Family Life Baby Boomers Gen X Gen Y Gen Z Family Mum stayed Latchkey kids Treat parents as Like being alone experience home (parents not at friends at home Children are home) - Sheltered & Solve problems treated as independent controlled by themselves special Pampered & helicopter criticised by parents parents Attitude to Buy now, pay Save, save, save Earn to spend Want to earn money later money earlier in life Ethnic relations Became aware 50% feel that Comfortable Highly inclusive of racial ethnic diversity with diverse worldview discrimination is a good thing ethnic groups  Different Takes on Family Life Baby Boomers Gen X Gen Y Gen Z Family Mum stayed Latchkey kids Treat parents as Like being alone experience home (parents not at friends at home Children are home) - Sheltered & Solve problems treated as independent controlled by themselves special Pampered & helicopter criticised by parents parents Attitude to Buy now, pay Save, save, save Earn to spend Want to earn money later money earlier in life Ethnic relations Became aware 50% feel that Comfortable Highly inclusive of racial ethnic diversity with diverse worldview discrimination is a good thing ethnic groups Work Spaces  Work Life Gen Y Gen Z 1. I like clear rules. 2. I like to get encouragement/praise from people around me. 3. I like to talk with people face-to-face. 4. I like people to listen to my opinions. 5. When we do projects, I usually want to know what the members think. 6. I like to work in groups. 7. When I communicate online, I like to use visuals to share my ideas. I can analyse information that I find from I like to get feedback on my work in the the Internet well. Like interactions, I can handle a lot of work at one time. same day. I talk more than I listen (assertiveness). Value When I prepare everyone’s powerpoint slides, I focus on the information I want to present (as opinions opposed to audience-focus). (Raslie & Ting, 2020)  Work Life Gen Y Gen Z 1. I like clear rules. 2. I like to get encouragement/praise from people around me. 3. I like to talk with people face-to-face. 4. I like people to listen to my opinions. 5. When we do projects, I usually want to know what the members think. 6. I like to work in groups. 7. When I communicate online, I like to use visuals to share my ideas. I can analyse information that I find from I like to get feedback on my work in the the Internet well. same day. I can handle a lot of work at one time. Info-savvy I talk more than I listen (assertiveness). When I prepare powerpoint slides, I focus on the information I want to present (as Multitask opposed to audience-focus). (Raslie & Ting, 2020)  Work Life Gen Y Gen Z 1. I like clear rules. 2. I like to get encouragement/praise from people around me. 3. I like to talk with people face-to-face. 4. I like people to listen to my opinions. 5. When we do projects, I usually want to know what the members think. 6. I like to work in groups. 7. When I communicate online, I like to use visuals to share my ideas. I can analyse information that I find from I like to get feedback on my work in the the Internet well. same day. I can handle a lot of work at one time. I talk more than I listen (assertiveness). When I prepare powerpoint slides, I focus on the information I want to present (as Competitive (Raslie & Ting, 2020) opposed to audience-focus). Want to be heard  Work Conflicts VALUES-BASED: BEHAVIOUR-BASED IDENTITY-BASED: Status quo vs. Me vs. we change 1) High tech vs. low tech Older: “how we’re Older: Maintain 2) Earned vs. entitled all going to be the status quo, Older: work hard to earn it successful” complying with Younger: seek work-life balance, entitled to same team approach company rewards to work policy considering Younger: Embrace 3) Skilled vs. unskilled communication others’ innovation, Older complain that younger cannot transmit or opinions diverse interpret messages effectively and have no tact define self in political and Younger complain that older cannot use media to work role religious communicate Younger: “how I’m beliefs going to be successful” Lead to frustration, lower performance and turnover (Urick et al., 2017)  Strategies to Manage Intergenerational Conflicts VALUES-BASED: BEHAVIOUR-BASED IDENTITY-BASED: Status quo vs. 1) Earned vs. 2) High-tech vs. 3) Skilled vs. Me vs. we change entitled low-tech unskilled communication Protect self by Speak lobbying support (to their get them to do what I Use communication channels others lingo want them to do) OR Dress and work Perform well – prefer (e.g., texting remove self if there professionally to show vs face-to-face/ are irreconcilable accomplishments project an image phone) differences (+ plans) to of a serious, hard increase trust worker Ego oriented Image oriented Achievement oriented strategies strategies strategies (Urick et al., 2017) Which difference cause the worst communication barrier? Professor Martine Haas (Wharton University of Pennsylvania) and Professor Jonathon Cummings (Duke University’s Fuqua School of Business) were curious to find out which type of difference causes the most barriers to MNC communication. They collected survey data from more than 2,000 members of around 289 teams in a very big MNC with over 100,000 employees. From different geographic locations National Culture difference From different nationalities Language difference From different business units/ functional areas in Structural difference their organisation From different demographic groups Demographic difference https://knowledge.wharton.upenn.edu/article/the-real-reason-your-multinational-team-has-trouble-communicating/ Haas, M. R., & Cummings, J. N. (2015). Barriers to knowledge seeking within MNC teams: Which differences matter most?. Journal of International Business Studies, 46, 36-62.  Which difference cause the worst communication barrier? From different geographic locations National Culture difference From different nationalities Language difference From different business units/ functional areas in Structural difference their organisation From different demographic groups Demographic difference These 2 differences created barriers to knowledge-seeking within the team. Don’t pay attention to the obvious differences. People were reluctant to ask each other for help or for info related to work. Haas and Cummings (2015) recommend MNC managers to create a team with people who know each other a little bit already. Learning Outcomes At the end of this lecture, you should be able to: 1. Describe the 4 dimensions of Hofstede’s (1980) differences that affects communication in MNCs in 1,000 words; 2. Compare the differences in working style of Baby Boomer, Gen X, Gen Y and Gen Z. 3. Compare behaviour-, identity-, and value-based strategies to manage intergenerational conflicts in the workplace.  Watch these videos and tell me which type of difference is shown here. https://youtu.be/x-7w1IZAazE https://youtu.be/-V2MfBoBiyw Four types of differences affecting MNCs 1. People from different geographic locations (time difference, national culture difference: individualistic vs collectivist culture) 2. People of different nationalities (language difference) 3. People who work in different parts of their organisations (different business units or functional areas, structural differences) 4. People are demographically different (some older than others, some worked longer than others) Finally, Work Value Today: Formal and Informal Communication Recognise power differences (boss-subordinates, lecturer- students) and communicate in a formal way 1. Be direct but still polite 2. Focus on the action/behaviour, not your feelings (even if you are angry and want to complain) 3. Use proper channels 4. Have other-awareness – use terms that they understand and think of their situation