1.6 Globalization

We have already discussed many global aspects of intercultural communication relating to technology, climate change, and migration. But perhaps the most globalized aspect of communication today is in business.

There is a misconception in some business quarters that the digital revolution has reduced the need to communicate on the micro-local level. Technology has amplified diversity—it has not eliminated it—and businesses that ignore this do so at their peril. The political and economic trend is for regions, provinces, and nations within nations to preserve and nurture their own culture. Decolonization, the fall of the Soviet Union, the breakup of Yugoslavia, the persistence of nationalist movements around the world, and the devolution of the United Kingdom’s powers to Scotland, Wales, and Northern Ireland show how localization is just as strong in the late twentieth and early twenty-first centuries as global integration. Just because we can all “talk” to one another now does not mean we all want to be exactly like one another. If anything, differences are more pronounced as we seek to maintain our unique identities even though we can all get the same Starbucks Grande Caffe or McDonald’s Big Mac in hundreds of countries.

The internet—the great globalizer—has done little to change the rituals whereby firms approach everyday communication. In so-called Eastern cultures, respect for hierarchy is critical. When a Westerner works in or with such cultures, they need to be careful not to insist everyone be more familiar—using first names, engaging in causal chitchat—or productivity and respect can plummet.1 Conversely, there are cultures that focus on developing a relationship first, such as in Japan, before a contract is signed. If you begin negotiations with the contract before taking the time to get to know the client or partner, you will likely have an intercultural failure on your hands.2

The ease of business communication with other countries has increased the need to gain an understanding of cultural differences within organizations, as well as externally among clients and suppliers.

Some infamous intercultural advertising blunders illustrate this point:

• In 2015 the Tesco department store in London advertised Smokey Bacon Flavour Pringles with the message Ramadan Mubarak, wishing Muslims a good Ramadan holiday.3 As you may know, it is against the Muslim faith to eat pork. The ad invited ridicule from customers and the general public.

• In 2013 Ford in India promoted sexually explicit, misogynistic ads showing female celebrities, such as Paris Hilton and Kim Kardashian, wearing risqué lingerie bound and gagged in a car trunk. Most of the blowback initially fell on the local ad agency, but it turned out that Ford employees had approved the ad long before it appeared.4 The scandal, which resulted in numerous staff firings, occurred as India was reckoning with a high sexual assault rate, including the brutal gang rape and murder of a 23-year-old student in New Delhi that gained worldwide attention.

There are many other examples of linguistic and cultural errors by companies, including the marketing of an Iranian razor, Tiz, in Qatar, where the product name translated as “buttocks”5 (tiz means “sharp” in Persian, the language of Iran). It could be argued that the most basic element of intercultural competence is understanding how language is perceived in different settings.

Does Globalization Improve Intercultural Competency in Business?

At least one study on globalization shows that it has the potential to help bring foreign cultures closer together. “Judging from the negative relationship between globalization and ethnocentrism, it seems that globalization renders individuals more accepting toward other cultures. In other words, deeper integration creates a favorable environment in which elements of foreign cultures can easily integrate into local cultures,” reports a 2012 article in the American Journal of Economics & Sociology.9

Globalization has been defined by scholars in many ways. When applied in an intercultural context, globalization means the integration of commercial, technological, political, economic, and sociological influence among countries. In business, globalization is “when technology, communications, trade, tariffs, migration, and labor markets open up across borders so that free trade and capital flow unhindered by national boundaries.”10 The internet is the ultimate globalizer, making it easier for businesses to expand beyond their country’s borders. But without the requisite expansion of cultural knowledge, communication can be fraught with mistakes. When working in globalized teams for instance, or with a manager from a different country, simply adapting to the customs of others is not sufficient for intercultural success.

Today’s aspiring leaders have a dual intercultural challenge thanks to globalization. They must navigate between the different subcultures of the United States, and also across borders where there are as many opportunities for misunderstanding as there are for success. To diminish the surprise of these differences, it is first important to understand what they are. It is then essential to learn how to use them advantageously, without causing harm or insult. We will discuss intercultural teamwork at greater length in Topic 11.

For companies that make a product for a global market, production, marketing, and sales require intercultural competence. For instance, when Ikea entered the US market, the firm had to understand that its couches, which had seemed a good size for Europeans, seemed too small for Americans. They had to tweak their furniture line.

The US retail industry has sometimes had a difficult time with intercultural communications. Consider Walmart, which failed in its efforts to expand to Germany, Brazil, and South Korea. If commerce is increasingly globalized, why isn’t their knowledge of these foreign markets too?

In 1998, after the purchases of existing mixed goods supermarkets (known as hypermarkets), Walmart became the fourth largest hypermarket retailer in Germany. “Wal-Mart was attempting to implement its US business model, characterized by low prices, location strategy, supply chain management, and a corporate culture that highly values hard work, conformism, and friendly customer service.”11 But it was only after the purchases of the stores that Walmart realized they were not in ideal locations. They struggled to expand due to Germany’s zoning laws, which were much stricter than they were accustomed to. There were battles with unions, which are much stronger in Germany than in the United States. Walmart also had poor supplier communications, and logistics caused major delivery delays.

But perhaps the most publicized aspect of the Walmart fiasco was its use of public greeters, a US custom that was a nonstarter with Germans. Like many Central Europeans, they were puzzled, and even repulsed, by what is viewed as fake commercial friendliness. For an American, try to imagine being chased by an aggressive clown. That is what a Walmart greeter might feel like for a German shopper. After years of struggling, Walmart eventually halted their German operations in 2006 at an estimated loss of $1 billion.

Sometimes the retailer either didn’t know the culture or thought they could change it. As Forbes notes: “When Home Depot closed up shop in China it was because of a miscalculation of Chinese cultural attitudes towards home improvement: the locals wanted somebody else to do the work and didn’t have a heritage to do-it-yourself.”12

As we will discuss in Topic 11, there are various scholarly theories about the level of global leadership needed to purge the type of ethnocentrism that can lead to miscommunication with customers and coworkers. This is particularly significant for Americans, who in contrast to many other developed nations, are instilled with an incomparable level of patriotism that can bleed into superiority. It is not a conscious or malevolent level of condescension but one based on decades of lessons in an America-first mentality. One possible challenge to this unconscious bias might be studying and working abroad, as well as learning other languages. Across Europe, 92 percent of children speak at least one second language fluently. In the US, that number is 20 percent.13

This has important ramifications for how much companies, schools, and education officials should be pushing towards greater intercultural competency from an earlier age.