/Sustainability_FT_PW_2010-Winter-IMQ

Intercultural Management Quarterly Integrating Culture and Management in Global Organizations

In This Issue...

Winter 2010 Vol. 11, No. 01

Managing Personal Space.......................................................3

by Richard Harris Re-Defining Sustainability for Long-Term Success..............................................................................................7

by Fons Trompenaars and Peter Woolliams Europe’s Call to Intolerance...................................................11

by Mona Eltahawy Students of Four Decades......................................................13 A Discussion with the Authors David J. Bachner and Ulrich Zeutschel Property Rights, Capital Accumulation and Economic Development: the Case of Ghana...............................................................................................17

by Samuel K. Andoh and Yilma Gebremariam

Re-Defining Sustainability for Long-Term Success

by Fons Trompenaars and Peter Woolliams

Securing the long-term success of the organization

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hilst organizations share similar problems during these difficult times, their initial approach to try to solve them is usually rooted in their culture and past behaviors. Over adherence to any one single established model ranging from ‘scientific management’, a ‘Theory Y’ human resource dimension basis, customer orientation, shareholder value or corporate social responsibility has been shown over time to be unduly restrictive when applied in isolation.

A new embracing framework is required that meets the dynamics and competing demands in modern (global) business. Our research and consulting reveals that longterm success needs to be based on a reconciliation of the dilemmas created between the competing demands arising from the fundamental components described in classic general system theory ~ namely those of internal business processes, employees, shareholders, society and customers. New solutions are required that are grounded in a strategy that is aligned with the organization’s values.

In other words, we need to link cultural differences to the bottom line.

Redefining sustainability We have found that ‘organizational sustainability’ is not limited to the fashionable environmental factors such as emissions, green energy, savings of scarce resources, corporate social responsibility etc. The future strength of an organization depends on the way leadership and management deal with the tensions between the five major entities facing any organization: Efficiency of Business

Processes, People, Clients, Shareholders and Society.

The manner in which these tensions are addressed and resolved determine the future strength and opportunities of an organization. And the task for today is to connect and integrate these drivers in ways that is more than just compromise.

We have collected and analyzed some 8,000 of these tensions from our web-based On-line surveys from across the globe from the top Fortune 500 global companies and familiar household names, through to more local or specialist companies. From this we have identified frequently recurring ‘10 Golden Dilemmas’, which exist between these five components.

Component

Sectional Interest

Business Processes

Corporate Effectiveness

Employees

Employee Development and Learning Shareholder Return, Financial Performance, and Growth

Shareholder

Client, customers, and suppliers Society at large

Satisfaction Contributions to society

These dilemmas are listed below with a relatively high level of abstraction but in practice we help clients restate them as to how they apply more specifically in their own organization.

Fons Trompenaars, PhD, is CEO of Trompenaars Hampden-Turner Consulting, a firm focused on intercultural management. He is the author of many books and related articles including Riding the Waves of Culture, Understanding Cultural Diversity in Business, Seven Cultures of Capitalism and Mastering the Infinite Game, Business Across Cultures. He will be a keynote speaker at the 11th Annual IMI Conference on Intercultural relations March 11-12, 2010.

Peter Woolliams, PhD, is emeritus professor of international management at Anglia Ruskin University, UK and is an owner/partner in Trompenaars Hampden-Turner Consulting. He is co-author with Trompenaars for Business Across Cultures and Marketing Across Cultures.

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Sustainability...

Golden Dilemma 1

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On the one hand

On the other hand

(B: Employees) We need to develop our people for their future roles

(A: Business Processes) We need to become more cost conscious and results oriented (C: Shareholder) We need to cut costs (A: Business Processes) We need wherever we can for the sake of our to invest for long-term shareholder’s return sustainability (A: Business Processes) We need to supply (D: Clients) We need to supply standard products/services as products/services that respond defined from HQ to local tastes and needs (A: Business Processes) We need to focus (E: Society) We need to serve the wider on Cash flow and Working Capital community in a sustainable and responsible way (B: Employees) We need to motivate and (C: Shareholder) We need to satisfy our reward our people shareholder (B: Employees) We need to educate clients/ (D: Clients) We need to keep the customers with new solutions we customer in focus ahead of our can offer own personal preference (B: Employees) We need to retain equal (E: Society) We need to apply some opportunities for all existing staff positive discrimination to increase diversity (D: Clients) We need to satisfy our clients/ (C: Shareholder) We need to generate customers needs both revenue and capital growth for our shareholders (C: Shareholder) We need to maximize (E: Society) We need to adapt to the shareholder return from our future as society evolves existing business (E: Society) We need to supply products (D: Clients) We need to supply and services that enhance our products which our clients and reputation in the wider community customers are asking for

The challenges for securing long-term success

Every organization seems to have different priorities when focusing on these dilemmas that need to be reconciled in order to achieve long-term success. It is not a matter of choosing between one extreme of side the dilemma, nor adopting a compromise (that will always be lose-lose). There are non-stop culture clashes and by culture we mean not simply the cultures of different nations, but those of different disciplines, functions, genders, classes, and so on.

Assessing corporate performance If we use conventional metrics solely based on linear models then these cannot adequately explain or diagnose how a given organization is responding to these dilemmas. In response, we have designed instruments that use combinations of questions that capture BOTH sides of the dilemma such as: • We are able to meet short-term demands without compromising our long-term vision.

• There is a strong culture within which we can be flexible.

• We learn from particular client needs to improve our general product/service portfolio.

• We have teams that consist of creative individuals.

• We integrate the products/services we develop with the evolving needs of the client/customer in mind.

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Intercultural Management Quarterly

We and also invite respondents to place their organization on two-dimensional grids to obtain the current versus ideal state of each dilemma.

local needs through high-tech manufacturing which can lower costs of small production runs.

And thus although different cultures share the same Golden Dilemmas, it is their starting point that is culturally determined ~ although they all seek an integration between the two extremes as their ideal.

We also assess the current status of the dilemma against an ideal state that would result when the business benefits had been realized so that we are now in a position to now evaluate the business benefits against the costs, time scales to realize benefits and the degree to which the dilemma solution in located in one profit center or involves co-operation across a number of business units as in the example at the bottom of the page.

We need to supply global (or standardized) products/services.

We need to supply products/services that respond to local tastes and needs

This type of analysis provides an objective evaluation of where the highest return on investment can be achieved in resolving cultural conflicts and thus secures the best benefits to the business.

And as expected, such measurements are culturally determined. A major US giant is likely to be currently more focused on exporting their standard product worldwide whereas a Chinese exporter may be more concerned to supply a multiplicity of products to meet

In this particular example, the most important cultural dilemma that needed to be addressed was the need for technology push (what the company can make from its own intellectual capital) versus what the different markets want (what the organization could sell). When

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Sustainability... faced with major decisions like these involving high levels of funding and human capital, such analytical approaches help leaders to validate their tacit insights by making them explicit and open them to debate.

Linking culture to business performance During the last twenty years, the fact that national and organization culture both need to be considered in modern business management has been increasingly recognized. And furthermore, a leader, even in a local company, will find they are leading and managing a workforce that is multi-cultural. Many of the conceptual frameworks for explicating culture are based around describing how different cultures give different meanings to relationships with other people, the meaning they give to their interaction with the environment and to time and by other similar cultural dimensions.

Similarly, much attention has been given to the recognition and respect for cultural differences. However, if we stop at only these first two stages, we run the risk of supporting only stereotypical views on cultures.

So our agenda follows the logic that in order to secure long-term success as an organization, the cultural dilemmas between the various stakeholders need to be reconciled. Since essentially innovation could be defined as combining values that are not easily joined essentially this process is created by and leads to innovation. It is the innovative capability of organizations, from process to product, from R&D to HR that will make an organization sustainable.

And it is far more than just Corporate Social Responsibility. i

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Intercultural Management Quarterly