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Developing multicultural competence

Article in European Business Review · January 2013

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 DEVELOPING MULTICULTURAL COMPETENCE1

Luciara Nardon, Richard M. Steers and Carlos Sanchez-Runde

Published at the European Business Review, May 9 2013

www.europeanbusinessreview.com

1
This paper is based on the recent book by the authors, Management Across Cultures:
Developing Global Competencies (Cambridge University Press, 2013).

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 DEVELOPING MULTICULTURAL COMPETENCE2

ABSTRACT

Given the amount of knowledge required to succeed in the global business environment and the
speed in which knowledge becomes obsolete, we argue that developing multicultural
competence, or an ability to work successfully with partners in different parts of the world, is the
best strategy available to managers that want to succeed. Building on the extant literature on
experiential learning, we propose that multicultural competence may be developed through a
process of informed sensemaking of experiences. We propose three strategies for managers
seeking to develop their multicultural competence: acquire foundational understanding, seek
multicultural experiences, and consolidate learning by developing action plans.

Introduction

IBM executive Michael Cannon-Brookes recently observed, “You get very different thinking if
you sit in Shanghai, Sao Paulo, or Dubai than if you sit in New York.” All too often, the essence
of this observation is lost on global managers—and would-be global managers—as they seek to
make their way in an increasingly complex and nuanced business environment. Many managers
working across borders fail to recognize that not everyone agrees with their perception of the
facts; not everyone agrees on the meaning of a contract; not everyone agrees on how to lead a
company; and, indeed, not everyone agrees on the proper role of supervisors and managers
themselves. Uncertainly—and, more importantly, ambiguity—faces managers at every turn. And
increasingly, managers realize that that much of what they believe they see around themselves is
often something entirely different. Why does this occur with alarming regularity? And what can
informed managers do to moderate or attenuate the impact of such contradictions?
We live in a turbulent and contradictory world, where there are few certainties and
change is constant. Over time, we increasingly come to realize that business cycles are becoming
more dynamic and unpredictable, and companies, institutions, and employees come and go with
increasingly regularity. Much of this uncertainty is the result of economic forces that are beyond
the control of individuals and major corporations. Much results from recent waves of
technological change that resist pressures for stability or predictability. And much results from
individual and corporate failures to understand the realities on the ground when they pit
themselves against local institutions, competitors, and cultures. Knowledge is power when it
comes to global business and, as our knowledge base becomes more uncertain, companies and
their managers need to seek help wherever they can find it.
Considering the amount of knowledge required to succeed in today’s global business
environment and the speed with which this knowledge becomes obsolete, developing an ability

2
This paper is based on the recent book by the authors, Management Across Cultures:
Developing Global Competencies (Cambridge University Press, 2013).

2
to work successfully with partners in different parts of the world is possibly the best strategy
available to managers and companies that want to succeed. Business and institutional knowledge
is transmitted through interpersonal interactions and, if managers are able to build mutually
beneficial interpersonal relationships with partners around the world, they may be able to
overcome their knowledge gaps.
We suggest that what often differentiates effective global managers from less effective
ones is not so much their managerial skills – although this is obviously important – but the
combination of these skills with additional multicultural competencies that allow people to apply
their managerial skills across a diverse spectrum of business environments.

What is multicultural competence?

Whether relocating to a foreign country as an expatriate, traveling around the world as a frequent
flyer, or dealing with foreigners in one’s home country, managers often face important cultural
challenges. Different cultures have different assumptions, behaviors, communication styles, as
well as expectations concerning management practices. The ability to deal with these differences
in ways that are both appropriate and effective goes by many names, but we refer to it simply as
multicultural competence (MCC).
MCC represents the capacity to work successfully across cultures. Being multiculturally
competent is more than just being polite or empathetic to people from other cultures; it is getting
things done through people by capitalizing on cultural diversity. It includes skills such as
identifying cultural rules, changing and creating group cultural norms, communicating across
cultures, dealing with conflict, developing trust based relationships, understanding the
constraints and opportunities imposed by the micro-context of an interaction, and manipulating
those when appropriate.

Developing multicultural competence

Developing global managers is no easy task. Indeed, a pivotal question facing both training
directors and managers themselves is exactly how global managers can be developed. As a
result, managers often turn for advice to those who specialize in cross-cultural training and
development for help in preparing for foreign assignments. But this over-reliance on others –
instead of on oneself – can carry risks. Much has been written on the topic of developing global
management skills, and much of what has been written is contradictory, simplistic, and
sometimes simply incorrect. Successful global managers tend to rely on themselves, including
their own perceptions and assessments of what is going on in the world. They often require
personal insight more than outside advice. Indeed, what often differentiates successful global
managers from unsuccessful ones is that they have developed a way of thinking about the world
that is flexible and inclusive and guides their behavior across cultures and national boundaries.

Google

Consider how Google is training its new generation of managers. Google is now sending its
young ‘brainiacs’ on a worldwide missioni. One recent group of trainees began their journey in a
small village outside of Bangalore, India. There were no computers in the tiny village, only
unpaved roads surrounded by open fields where elephants roamed and trampled local crops at

3
will. The visit was aimed at educating Google associate product managers about the humble,
unwired ways of life experienced by billions of people around the world. On their first day in
Bangalore, the visitors went to the Commercial Street shopping district for a bartering
competition. Each Google manager was given 500 rupees (about $13) to spend on ‘items that
don’t suck,’ with a prize given to the one who attained the highest discount on the purchase. For
most, it was the first time they had to bargain with street vendors. “I usually shop at Neiman
Marcus,” observed one manager, after she bargained the price of a necklace down from 375
rupees to 250. But one of her colleagues won the competition by purchasing a deep-burgundy
sherwani – a traditional Indian outfit – for one-third of the original asking price. The journey
continued, as did the learning.
The example of Google’s traveling managers illustrates how this and many other
companies search to find unique ways to educate their managers about both the global challenges
facing them and the strategies that can help them succeed. In the case of Google, managers were
intentionally placed in unfamiliar circumstances where they quickly had to seek understanding
and be aware of their first-hand experiences. They needed to reflect and make sense of these
experiences and identify important lessons for the future. At the same time, these managers had
to organize what they saw and develop theories-in-use for future actions that could be tried when
they returned to the field. Note that Google went to great lengths to allow their managers to fail
as well as succeed. Note, too, that there were few safety nets.

Experiential learning and informed sense-making

Google’s strategy is in line with research on experiential learning.ii This body of research
suggests that we learn through experience if we are able to reflect and make sense of those
experiences and transfer this understanding into new theories of action that will guide our future
behavior. As illustrated in exhibit 1 (two center circles), learning is a result of observing,
reflecting and making sense of experience. This “processed” experience can than be integrated
into learning that will guide future experiences and sensemaking efforts.

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Exhibit 1: Experiential learning

Experience alone does not guarantee learning; the world is full of repeated mistakes. In
order to learn from experience it is necessary to make sense of what happened, understand the
causes of problems, the strategies that worked and the ones that didn’t, and more importantly
understand why things turned out the way they did. We refer to this process of reflection and
understanding as informed sensemaking, to highlight the fact that a heightened level of self-
awareness and understanding of the processes surrounding the experience and the context of the
experience is necessary. Inexperienced managers engaging in a cross-cultural situation may be
able to notice symptoms, such as a difficulty to negotiate an agreement with a foreign partner,
but may not be able to understand the causes of that difficulty or identify possible solutions.
Multi-culturally competent managers are able to make sense of situations by seeking
answers to two main questions: “what is going on here?” and “what should I do?” “What is
going on here?” involves an understanding of the situation where the manager is – is this
interaction happening at home, at the business partner’s territory, or somewhere else? It also
involves an awareness of one’s own actions – how am I behaving? Is this behavior appropriate?
Is this behavior helping me to achieve my desired outcomes? It also requires a reflection on the
reasons behind what is happening. Why am I unable to reach an agreement? Is it a
communication problem, or is it the result of an incompatibility of goals?
With a deep understanding of what is happening, managers can than answer the question
“what should I do?” Here it is helpful to think of a simple model of managerial choice and action
originally introduced by Oxford University Professor Rosemary Stewart.iii Stewart makes a
cogent argument for rethinking our approach to management, global or otherwise. The model’s
central argument is that all managerial work is confined in varying degrees by existing demands
(what people must do) and constraints (what people must not do). However, within these
limitations, managers typically have choices about what is done and how it is done. This is where
managerial abilities and skills take center stage. The challenge for the manager is to understand
the constraints—cultural, organizational, and situational—within his or her environment and then
act within these limitations.
As illustrated in exhibit 2, informed sensemaking relies on observations and prior
knowledge as well as in an active search of information to understand what is going on. As

5
managers try to make sense of an ongoing situation they rely on their observation skills to
identify as many cues as possible regarding the current situation. They draw upon prior
knowledge and experience in order to look for similar situations that can provide insight into the
present, and they seek out the missing information through multiple means, including asking
questions when appropriate, consulting with more experienced individuals, or testing alternative
scenarios.
What differentiates multicultural competent managers from others is that they have
sophisticated models of culture and human behavior that are situationally dependent. They have
a deep understanding of how and when culture influences behavior and they continuously refine
their models as they engage in new cross-cultural situations. The challenge facing inexperienced
managers is to develop a foundation of understanding that will allow them to make sense of their
first cross-cultural experiences and use them as a platform for further learning.

Exhibit 3: Informed Sense-making

Strategies for developing multicultural competence

Multicultural competence is obviously not a have-or-have-not proposition; it is a matter of

degree. Most managers by their very education and experience understand how behaviors can
differ across cultures. The challenge, therefore, is to enhance this set of skills in ways that
managers can capitalize on when the find themselves “in the trenches.” To accomplish this, we
suggest three principal strategies, illustrated in exhibit 1 above (outer circle):
1. Acquire foundational understanding

As a starting point, global managers can work to enhance their knowledge and awareness of
human behavior and how it can be influenced by cultural and contextual variables. This
knowledge can be instrumental in facilitating sensemaking when a manager is exposed to novel
situations. This understanding may be acquired through seeking information about culture and
human behavior in general, as well as specific cultures of interest, and by reflecting upon their
own and others’ experiences, observations, and analyses. The goal here is to better understand

6
why other people did what they did, not necessarily to evaluate it. As managers progress in their
global career and are increasingly exposed to other cultures and contexts, this foundational
knowledge will expand and become more sophisticated.
Managers can also work to enhance their own self-awareness and understanding. Self-
learning may sound a little esoteric and disconnected from the business world, but it is probably
one of the most critical tools for a successful global career. Being self-aware means knowing
one’s own values, beliefs, styles, and patterns of behavior, and being able to explain these to
others. It also includes recognizing when they are not having the desired effect. For example, a
manager that is typically highly assertive or direct when communicating may need to adjust or
explain his or her style in a cross-cultural setting in which individuals from other cultures expect
more subtle and indirect ways of communicating. Given the innumerable situations facing global
managers on a daily basis, it is clearly not possible to learn about all individuals and situations a
priori, but knowing about oneself is already half of the work.
2. Seek multicultural experiences

People learn and develop based largely on their past experiences and past mistakes. 13th century
Middle Eastern Mullah Nasrudin, once observed “Good judgment comes from experience;
experience comes from bad judgment.” In our view, this is particularly noteworthy with regards
to global managers. People try, make mistakes, and learn from those mistakes. This is the
essence of experiential learning. Thankfully, multicultural experiences are easily available. In the
world we live today, it is no longer necessary to cross the world to have a multicultural
experience. With the high levels of global migration, many societies have multiple cultures
represented. Seeking out different cultures in our own neighborhood may go along way in
sharpening our understanding of culture and human behavior and developing a starting point for
the development of multicultural competence. In addition, increasing arrays of short-term foreign
experiences are available for aspiring global managers to hone their skills.
3.Consolidate learning: Develop theories in use or action plans

Once a manager has an understanding of what is required, the next step includes adjusting his or
her behavioral strategies and creating, and then experimenting with, new action plans in the field.
For example, the manager that has realized her tendency to direct and assertive communication,
now needs to develop the skill to communicate more indirectly. From a managerial standpoint,
the fundamental challenge is not just to learn but also to consolidate learning so it becomes an
integral part of people’s daily routines.

Conclusion

In this paper, we have argued that managers need both managerial and multicultural
competencies to succeed in today’s complex business environment. As noted above, global
managers must succeed equally in New York, Shanghai, or Buenos Aires, requiring enhanced
insight and understanding into environmental and situational differences, as well as sufficient
awareness and flexibility to adjust to unique situations on the run.
This required balance is both difficult to attain and sometimes even more difficult to
maintain. Situations facing managers are highly dynamic and variable. As a consequence, there

7
 is just so much that managers can learn in preparation to the difficulties of global work, and a
significant part of the learning must happen on the fly, as new situations emerge and evolve. The
success of any cross-cultural interaction (and mono-cultural interactions as well) is the result of
some type of interdependent learning in which the parties involved learn about each other’s
goals, preferences, styles, and limitations, and negotiate ways of working together. This learning
is a continuous and ongoing activity that overtime will shape the way a manager thinks and acts,
but also will shape the situation itself. Throughout this process, the manager as a critical thinker
becomes at least as important as the manager as an initiator.

References

i
Steven Levy, “Google goes globe-trotting,” Newsweek, November 12, 2007, pp. 62–64.
ii
Kolb, A. Y., and Kolb, D. A. 2005. Learning styles and learning spaces: Enhancing experiential
learning in higher education. Academy of Management Learning and Education, 4: 193-
212. Nardon, L., & Steers, R. M. (2008). The New Global Manager: Learning Cultures
on the Fly. Organizational Dynamics, 37(1), 47-59.
iii
Rosemary Stewart, (1982). Choices for the manager. Englewood Cliffs, NJ: Prentice-Hall

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