The failure of international projects causes enormous costs for companies each year, in some cases even billions. The question of why is imminent. Are the causers actually, as often cited, bureaucratic hurdles and mismanagement or can the answer be found in the lack of recognition of cultural differences and thus lack of intercultural competence.
Challenge foreign investment
For German companies, foreign markets have the greatest growth potential in recent years. In 2016 47% of German industrial companies announced that they were investing abroad (see DIHK n.y: n.p.). In general, cross-border business activities can be seen as driving the unstoppable globalization process, resulting in the increasing internationalization of cultural and economic areas. This requires that global thinking and action increasingly become buzzwords in business and politics (see Thomas 2003: 15).
The success of cross-border projects depends to a great extent on the right personnel management. It is necessary to react to the dynamic developments in the work areas and the changing demands on the employees (see Ringwald 2011: 403). Corporations that want to be successful in the long term need capable staff alongside the right products. In addition to the professional, social, individual and strategic competence, the intercultural competence of the applicant should be discussed as early as when recruiting new employees (see Kinast / Thomas 2003: 245). Behavioral traits such as: openness, empathy, ambiguity tolerance and cultural sensitivity, which play a major role in the context of intercultural competence, can be studied and evaluated (see Kinast 2003: 168 f.). There are numbers that quantify the failure of international projects by 40 to 70 percent. With regard to the drop-out rate of skilled workers and executives posted abroad, 10 to 40 percent are spoken, in the case of developing countries much more. Accurate information is extremely difficult as companies tend to be overly concerned about these failures (see Kinast / Thomas 2003: 243). As mentioned earlier, there are often bureaucratic hurdles, natinal legislation and mismanagement that are cited as reasons for failure in international projects. However, there is a suspicion that not enough attention has been paid to one factor: culture and the lack of intercultural competence of internationally active players.
Intercultural Competence – Criterion for global success
Modern managers can be understood as network architects in an increasingly globalized business world. In addition to professional and social skills, intercultural competence is in demand. This term, which is often understood as a one-dimensional skill, is much more complex and profound than it appears at first glance. What characterizes an intercultural competent person? Language skills, culture-specific knowledge, these are things that are usually mentioned in this context, as well as the knowledge of the much-cited do´s and don´ts. Of course, these fundamentals are essential, but intercultural competence is actually much more complex and profound. The reflexive treatment of one´s own cultural background and the deep-rooted ethnocentric attitude towards other cultures is essential for successful intercultural action. However, this is usually not mentioned in the context of intercultural competence. In an intercultural training the participants will be able to recognize intercultural competence in their entirety and to work on their own cultural imprint. In the case of culture-specific training, of course, the pecularities of the target culture are also processed.
Taking foreign assignments as an example, it is very easy to see that many companies often succumb to a fallacy. Very often it is assumed that a successful employee in the home country can also build on these successes abroad. Above all, it is the professional competence that speaks as the basis for a secondment project. The costs can be estimated at about three times the annual salary of the expatriate (see Fischlmayr / Kopecek 2012: 28). Proper preparation and support of this employee and his or her relatives are of enormous importance, because posting always creates an emotional stress proper preparation and accompaniment can be significantly mitigated, as shown in the following diagram.
Fig.: 1 Cultural adjustment
(based on Novak 2014: n.p.)
Particularly with culturally similar imagined countries such as the USA, preparation and monitoring measures are often omitted. This can jeopardize the success of the whole project. Already banal seeming statements like: “The Americans lack the common sense”, are harmful. Such statements are based on a high degree of the already mentioned ethnocentrism. Of course, this exaggeration of one´s own culture is unconscious and not malicious. But it is proven that such attitudes damage any intercultural (work) relationship. Targeted intercultural trainings make these invisible traps clear and constructively develop ways to deal with them consciously.
The world of life and work is changing rapidly and intercultural teams and their leadership are of course no longer relevant only in the case of overseas assignments. Rather, the daily work environment is increasingly globalized. Culturally diverse teams shape the picture, and they face companies with great opportunities, but also challenges. Intercultural competence cannot and must not be neglected here as a factor in personnel decisions and also in the education and training of specialists and executives.
Intercultural training: tool for international success
Intercultural training is a proven way to enhance and improve intercultural skills. These programs must be tailored to the specific needs of the participants and the respective company (see Kinast / Thomas 2003: 250-253). First of all, the objectives for the training are clarified and determined with both sides. While there is already an incresing awareness in companies that intercultural competence is of great importance, intercultural seminars are still relatively rarely included in the portfolio of in-house training programs for various reasons. Arguments like missing time, too high costs, no need, the cultural differences are not serious (as in the case of Germany / USA) are stated. In many cases, as already mentioned, HR management simply starts from the instinctively correct and appropriate decisions of the employee (see Fischlmayr / Kopecek 2012: 172). However, as stated in this article, this is not necessarily the case and intercultural education and training of professionals and managers is essential. Intercultural training achieves a high cognitive learning effect through the right mix of methods, which can be applied practically in everyday working life. Various tools are used, such as: culture-specific assimilator, culture-specific training sessions with (everyday) historical content and the change of values of a cultural area, case study editing, self-assessment questionnaires, but also simulations and role-plays. Of course, the relationship to the working environment of the participants must always be established and maintained. Important topics are also leadership style and successful team building. Again, more in-depth cultural knowledge is needed. The knowledge, both about one´s own and the foreign cultural background, leads to more understanding, empathy, tolerance and thus to successful leadership and team building. The intercultural training also helps to reduce prejudices and stereotypes and develop ambiguity tolerance and culturally sensitive behavior.
The previous knowledge and experiences of the participants are always clarified in advance and a tailor-made program will be developed.
Many companies have tried to impose their own culture on foreign branches, employees, customers and cooperation partners. In most cases they have paid for this bitterly. As an example, one can cite a well-known US American retail chain, which has failed more than miserably in Germany. The withdrawal from the German market alone cost more than half a billion euros. The main reason for the failure is here, as in many other cases, the ignorance of the cultural characteristics of the clientele and the employees.
It is a fallacy that internationally acting managers are able to act interculturally competent and make appropriate decisions based solely on their experience. Rather, it is of enormous importance to specifically support and promote these employees through intercultural training. Only in this way can they operate successfully in their international work environment.
Global enterprise requires the overcoming of (cultural) borders. An intercultural training is a helpful tool. Each company should gain the relatively unrivaled competitive advantage of an interculturally competent staff. The right measure is intercultural training.
Amelie Kreiter, member of Lorenz-Seminare trainer team