Invisible barriers are the most complex barriers

People's lives in a business or organization are deeply based on the mutual contact between members, and their behavior is also affected by the culture in their environment. Whether a business or organization is effective or not The achievement of goals is inseparable from the corporate culture.

The so-called cultural barriers usually bring difficulties to cross-cultural mergers and acquisitions or direct overseas business operations. There are also numerous failures of SMEs to enter overseas due to cultural barriers.

Leveraging cultural differences can also be a source of creative inspiration, enhancing the creativity and innovation of your company. When Chinese companies expand internationally, they should turn potential cultural shocks into the best opportunities to accelerate development and improve competitiveness.

A few weeks ago, I saw a huge advertisement for the Mercedes-Benz S series on the East Third Ring Road in Beijing: "Unprecedented, because it has been before." At the time, I thought I was too poor in Chinese to understand the advertisement. The essence of the punch line, and later, after consulting my Chinese colleagues, I found out that they were also quite confused about this punch line.

Personally, I believe that the internal communication problems of Mercedes-Benz China have been manifested in this "punch line", which has led to its poor communication with the Chinese public. The misinformation of this kind of information is likely to be Caused by cross-cultural misunderstandings.

What is Culture and Cultural Barriers

Speaking of which, we have to talk about "what is culture". Usually, in everyday language, the word culture is often associated with art.

In the discipline of history, we use the word culture more precisely. For example, we use "typical Tang Dynasty culture" to represent a way of doing things. From literary and artistic works to pottery, they all have the characteristics of that era, such as Tang Sancai in the Tang Dynasty.

So, how does the above relate to the culture of a country or company? The principle is exactly the same! The group culture as small as a football team and as large as a country is the result of how this group of people chooses to resolve conflicts and problems between them. Usually such a choice needs to go through an experimental process, and The process is often painful and full of errors. These issues are often related to their interactions with each other: relationships between people in different contexts, such as blessings, business exchanges, struggles, acceptance of rights, and relationships with the opposite sex; their daily behavior and Needs and responsibilities determine what they eat, how they eat, how to find happiness, what kind of art they like, etc. Ultimately, the behavior of individuals is profoundly and possibly comprehensively affected by the culture in which they live.

People's lives in a business or organization are deeply based on the interaction between members, their behavior is also affected by the culture in their environment, and whether a business or organization can effectively achieve its goals It is inseparable from the corporate culture, such as whether its culture promotes efficiency, speed, economy and innovation.

Think about, for example, how organizational conflicts are resolved. In American companies, conflict is resolved using a face-to-face approach. Everyone struggles with everyone else: colleagues and colleagues, bosses and subordinates, subordinates and bosses. All differences of opinion must be resolved in a sharp confrontation, and the outcome of the confrontation must be clear: one side wins, the other loses. The loser must admit defeat; the winner is complacent and thinks the other side has no "face".

Think about it, does the Chinese culture promote the practice of complacent winners and thinking that the other party (coworker, boss or subordinate) has lost face? In traditional Chinese culture, a good strategy is for the winner to give the other leeway so that they don't lose face too much.

From this perspective, you can probably imagine how a boss who does not understand Chinese culture to lead a Chinese business would affect efficiency and results. Internal confrontation will be intensified, and a large part of the staff's energy will be devoted to discussing, criticizing, and fighting against this foreign culture.

Under normal circumstances, this is not a single "foreigner" leading the entire organization, but one company (parent company) influencing and leading another company (subsidiary overseas), you may easily understand , in thousands of daily operations, cultural differences will easily lead to mutual misunderstandings, mistrust, and reduced work efficiency.

These so-called cultural barriers often make cross-cultural mergers and acquisitions or direct overseas business operations difficult. Take, for example, the merger of Mercedes-Benz in Germany and Chrysler in the United States. Today, years after the merger, the two parties are still struggling to reap the expected benefits of this high-risk merger.

Problems Caused by Cultural Barriers

In addition to this big case, there are countless failures of SMEs to enter overseas due to cultural barriers. In a long list of problems caused by cultural differences, we can see a variety of problems, such as: misunderstanding of the actual needs of customers, improper advertising information leading to miscommunication of core content, local employees' enthusiasm for work the lack of, mismanagement of the local sales force, etc.

Problem 1: Miscommunication with customers. Every company operating in an overseas culture will face risks due to lack of understanding of the local culture. Since the basic human structure is the same, we all have similar behaviors, only the specific details will vary. For example, red in China represents festivity and in Europe, blood and enthusiasm: any advertising agency that does not take into account such differences will lead to huge mistakes in their work. Color is one of thousands of cultural elements that make a difference from country to country. Among these cultural elements, understanding different values and beliefs is the most important. An extreme example of the importance of culture was recently published in a Danish newspaper mocking the protests and violence in the Islamic world sparked by a cartoon of Muhammad. In the multicultural environment of globalization, we should give enough attention to cultural differences, especially different beliefs. This problem is especially common in cross-cultural advertising.

Problem 2: Miscommunication within the enterprise. What happens in the outer world is also very easy to repeat in the inner system. In this case, due to the lack of sensitivity to cross-cultural matters, potential miscommunication can even affect employees' questioning of the company's mission. The gap between leaders' expectations and employee acceptance of a management-by-objective (MBO) system is an example of the importance of management localization.

As mentioned earlier, the Mercedes-Benz case may be due to insufficient communication between overseas art directors and local ad writers, which can lead to communication failures between the brand and the public .

Positive Effects of Cultural Differences

In the area of the impact of cultural differences on companies, there are the negative effects I just tried to explain, as well as their own unique positive effects.

The first positive effect is the use of a specific methodology to overcome cultural differences: cross-cultural management. This method can help managers and employees understand the different perspectives in their respective cultures and effectively use these cultural differences to improve the efficiency and effectiveness of operations.

The second positive effect, and the most important, is the use of cultural differences as a source of creative inspiration, enhancing the creativity and innovation of the company. Häagen-Dazs (the world's largest ice cream brand) has developed a new caramel-flavored ice cream from its Cuban operations. Häagen-Dazs has promoted this ice cream flavor, which has never existed outside of Brazil, to the global market, and has achieved very good benefits in the short term.

The above does not just represent the successful operation of bringing a product from one country to another; the more important advantage of cultural differences is in how to use different perspectives to solve different problems. Science has proven that multicultural teams can solve complex problems faster, better and more innovatively.

China has a long tradition of success in absorbing foreign cultures, especially in learning and developing outstanding differences. China's Yuan and Qing dynasties have a special cultural color and have left a deep imprint on the long river of Chinese history and culture. As Chinese companies embark on their international expansion, they should keep history in mind and turn potential cultural shocks into the best opportunity to accelerate development and increase competitiveness.

Paolo Borzatta is a senior partner at Ambrosetti European House. E-mail:paolo.borzatta@ambrosetti.it