Organisational Change Management Volume 2

3. Ethnic Differences

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. Different cultural/ethnic, etc groups

"...they don't hear the same messages, they don't talk the same way, they don't resolve conflict the same way, they don't move at the same speed, they don't make decisions the same way..."

Peter Barge as quoted by Fiona Smith, 2006g

Less than 4% of directors at a Australia SX 100 companies are Asian born (2014)

. The capacity to distinguish group from one another starts very early. Even as young infants, we prefer to look at faces that are familiar. By the time, children start school (ages 3 - 4 years old), they are able to make consequential distinctions between individuals, ie same skin colour, language, dress, style, etc. Furthermore, young children want to identify with individuals, as role models, who seem bigger, older, and/or all-powerful. By the age of 5, lines of friendship or hostility, good inclusion or exclusion, feelings such as love or hate are in place

"...based on what they observe, they have already began to adapt stances towards groups to which they belong, the groups from which they feel excluded, and/or the groups to which they do not wish to important issue is whether young people attach moral significance to group the time that young persons become adolescents or young adults, their attitude towards others is pretty well fixed; barring extremely unusual circumstances, one's stance towards other groups is unlikely to change fundamentally. It is not pleasant to learn of the enduring nature of prejudice and prejudices; yet, unless we recognize and acknowledge this persuasive tendency, we are unlikely to be able to surmount it..."

Howard Gardner, 2006a

. Currently in Australia

"...It's a challenge to get the right mix in the nation that remains overwhelmingly white in terms of power, politics and business culture. Obviously visual diversity is crucial and inevitable, given Australia's multicultural modern economies, it's increasingly argued that successful transactions depend on empathy and a sense of shared experience..."

Fiona Carruthers, 2006


"...Empathy is important: if a person is similar to you in terms of looks, racial background or cultural experiences, you draw the rational inference that this person is 'empathetic' and is more likely to give the service you's a non-conscious effect. If a person looks or sounds like us we switch to a empathetic state, predisposing us to be satisfied regardless of the objective quality of the service......sometimes we value the fact that someone is different from us. Their very difference from us is what we are looking for..."

Brian Gibbs as quoted by Fiona Carruthers, 2006

Generally, we prefer to deal with people who share our values, experience, history and culture

. There is increasing evidence of employing that more women and people of different cultural backgrounds are being employed in Australia organisations. The only group that seems to be lacking in representation is the Indigenous Australians. It is perceived that the Indigenous group lacks the buying power of the other groups so it is seen as less important to have them represented in organisations.

Statistics from Australian Post show the current situation, ie

"...38.6 percent of employees are women, compared with 28.8 percent of the senior managers; 21 percent of employees come from non-English speaking backgrounds, compared with 18.8 percent of management; 8.8 percent of employees have a disability, compared with 9.7 percent of management, and 1.8 percent are Indigenous with 0.5% of management..."

Fiona Carruthers, 2006

. Language is a reflection of the culture. For example, most Asian cultures have many ways of addressing each other to reflect the relationship, ie spouse, parent, child, boss, etc. The Eskimos have around 20 ways to express "snow". In some cultures, a dolphin is a fish, in others it is a mammal. If it is regarded as a fish, the main concern is how to cook it

. Linked with cultural situations is empathy. If a person looks similar in terms of looks, racial background or cultural experiences, etc, you feel that that person will understand your position better than someone from a different background, etc. Thus you are more likely to be empathetic to them

. Some sociological research has shown the impact of being a member of a minority group. In order to feel that you are not different, you need to have at least 15 % of a group to be similar to you at any level of the organisation. If you are less than that you will feel, and the group will treat you as, different, ie

" you are judged differently, you judge yourself differently, you expect that you will be treated differently..."

Laura Tyson as quoted by Geoff Kitney, 2005

On the other hand, if the level of representation is between 15 and 35 %, there is a need for continuing education and constant focus on the under-representation. Once the level of representation exceeds 35%, the difficulties encountered by the minority are significantly reduced as the organisational norms have started to change.

. Need to adapt technology so that it is simple, culturally-friendly and suit particular regions; some examples include

- making GPS-enabled phones for the Middle East to show the position of Mecca so users know where to face during prayer

- wireless technology does not work well in high-density buildings in Asia

- making lap-tops resistant to dust and insects for India

- locking computers into learning mode for Chinese parents concerned about their children are wasting time on the net or playing games

. Some cultural differences to be aware of include

- communication styles (direct vs. indirect)

- interaction (informal vs. formal)

- signals (high-context, ie implicit signals such as body language, or low-context, ie explicit conversations with precise language)

- attitude to time (time as scarce, ie always rushing around, time is money, etc or plentiful, ie slow down, more thoughtful, etc)

. If you want to update your knowledge on how to be culturally sensitive in any of 27 cities, visit website


"...the test of a first-rate intelligence is the ability to hold two opposed ideas in the mind at the same time and still retain the ability to function..."
F. Scott Fitzgerald as quoted by Will Glasgow, 2015

Bicultural worker is defined as those who have internalised two distinct cultures; they are well suited to today's global business world

A Framework for Understanding Different Ethnical Backgrounds

. Ethnicity is defined as

"...the collective programming of the mind which distinguishes the members of one human group from another..."

Geert Hofstede, 1991

. Furthermore, Hofstede uses 5 main dimensions to explain different ethnical backgrounds:

i) the degree of integration of individuals within groups/organisations, ie relationship between the individual and the group (collectivism vs. individualism) and how group members handle individual(s)/group(s) that are outside their own group (us vs. them, etc)

ii) the differences in the roles of women vs. men (femininity vs. masculinity) are, ie macho vs. caring, etc

iii) ways of dealing with inequality, including the relationship with authority (power distance), ie hierarchical, consensus, collaboration, co-operation, etc

iv) the degree of tolerance for the unknown, ie ways of dealing with the future and uncertainty, relating to the control of aggression and the expression of emotions (uncertainty avoidance), ie "It is God's will"vs "prove it to me", etc

v) the trade-off between long-term and short-term gratification of needs (long-term vs. short-term orientation), ie long-term view vs. short-term gain

. For example, based on the above dimensions, any organisation needs to understand that people from different ethnical backgrounds will work on different assumptions, beliefs, etc. For example, Western and Asian (including Japan) workers have striking differences in attitude to self, ie

"...Asians are less focused on differentiating from the group and therefore put less emphasis on self-actualisation at the core of the personality process, whereas Westerners have developed a strong concept of self as something potentially quite distinct from the group and something to be developed in its own right. In some cultures the self is compartmentalised, so that work, family, leisure involve different aspects of the self; in other cultures the self is more of a whole, and even the idea of separating work from family does not make any sense. The core question of identity and role is thus answered in very different ways in different cultures..."

Edgar Schein, 2004

. Different ethnical groups hold different values. For example, in the West there is a big emphasis on individualism and the ego. Society is seen as a structure which permits individuals the freedom to achieve their potential and to contribute to society. In societies like Japan, the emphasis is on the group: you fit into the group and its norms; you do not stand out. Achievement means fitting into the pattern of the group.

Saxon culture is conceptual while French is narrative


"...the key to understanding China is appreciating its historical and cultural differences with the West......Western civilisation is monotheistic and based on individualism. Judeo-Christianity declares that morality is absolute: whatever the circumstances, murder, theft and adultery are wrong. Moral absolutism.....the power to change our own and society's destiny. A willingness to change convention and expectations defines Western individualism. The Chinese worldview, however, sees history as cyclical and morality as relative. Every aspect of the universe, from the position of the stars in the heavens to a grain of sand on the ground, has its place. Life is a great wheel: Yin all following Yang; bad times will follow good times. Life is inherently dangerous and unstable: the best one can do is to manage it. So, Chinese religious, political and philosophical institutions are geared towards order. That which creates order is good: that which creates stability is sublime......the only absolute is that which creates chaos is evil......Daoism, the mainstream Chinese theology, is about stability, order and safety - moving forward by assuming the shape of that which surrounds you.......This explains why the Chinese are apolitical......Chinese people want their economic interests safeguarded, both for today and in the future......they like strong governments; they do not understand the link between human rights and economic development. They believe China will grow only through preserving order. Many Chinese......instinctively protect themselves against change. It explains why they will save 40 percent of their income and the common unwillingness to express a point of view......the key to successful marketing in China is in understanding this dilemma between bold protection and anxious protection......there is the tension between private indulgence and public display. In the Confucian world, social status is an investment. But global brands are to be seen, while local brands are used at home......the key in negotiating is face. Be careful to let the Chinese feel they have got a bargain by using their clever resourcefulness..."

Tom Doctoroff as quoted by Sheridan Winn, 2006
An example of stereotyping within China

Chinese stereotyping - many non-Chinese stereotype Chinese as all the same. While in China, different groups are stereo-typed by other Chinese like

- those from Xianjiang don't always brandish as nice are not all "nice"

- people from Henan, a province in central China, suffer a reputation for being untrustworthy

- anyone from Guizhou and Shaanxi is poor and backward

- not all Cantonese eat everything

- Sichuanese are not all addicted to mah-jong

- men from Dongbei ‐ an area that covers northeastern China ‐ are said to be gangsters who beat their wives

- some Shanhaiese are easy to get along with

- Beijingers are not all pompous

- Tibetans aren't always picking fights

- Uighurs, a Turkic-speaking Muslim people from China's western region of Xinjiang, are widely seen as cunning and violent

. Some cultural differences revolve around varying attitudes towards task and relationships (see the chart below). For example, Australians are task orientated as they want to get the job done; while Indians are more relationships focused and are more interested in the way they work with others, with the task in the background. In other words, Indians will invest in developing the relationship first. Thus the fly in, fly out approach to managing projects is not going to optimize the performance of Indian team members. Similarly, there is a difference in attitudes to hierarchy and equality. Australians expect the truth irrespective of status, while Indians prefer not to talk about a problem that might embarrass their boss.

. Need to be careful of bringing outsider experts to the culture as they have pre-conceived ideas on how a well-run organisation should look like based on their experiences, biases, etc. Thus outsiders need to

- appreciate that these concepts took time to develop in their own countries, ie didn't develop all at once

- understand that local context that will determine how organisations will develop

organisational development change management

Tim Verghese as quoted by Emma Connors, 2007

Some Idiosyncrasies of Different Cultures

NB need to be careful of stereotyping

. Australia's cultural orientation tends toward informality, spontaneity, equality and not taking yourself too seriously. We tend to speak our minds frankly. This can cause conflict with Asians who are more cautious about sharing their opinions. Furthermore, Westerners tend to believe that they can control their own destiny. This can cause problems with Muslims who value fate and humility more.

. Some Asians prefer face-to-face, one-on-one feedback with their managers rather than being vocal in meetings; while Australians are typically more direct and vocal in meetings; for Pacific Islanders remaining silent and letting others talk illustrates respect for elders. Europeans prefer to hear bad news first, furthermore, in Europe a "no"can mean "maybe"or "perhaps". In Argentina it is best not to criticize a person's work directly - a more indirect approach is appropriate. Some cultures, like the Chinese, prefer to develop good relationships as a basis for trust and confidence before doing business.

. In general, the European and Asian cultures treat failure as severely tarnishing reputations and causing significant embarrassment. These cultures are ill-equipped to handle chance, uncertainty and random events. Consequently, people from these backgrounds try to develop strategies, such as risk management, to control the situation, and instead of handling the uncertainty, etc they actually increase the chance of a major blow-up. In contrast, in America, people are encouraged to take risks, with failure and volatility being acceptable parts of the process. This helps explain America's disproportionate share of innovations.

. Language is an important part of cultures. For example

"...the Korean language has no fewer than six different levels of conversational address, depending on the relationship between the addressee and the addresser: formal deference, informal deference, blunt, familiar, intimate, and plain..."

Malcolm Gladwell, 2008

. English speakers have a 50% chance of remembering the following sequence perfectly (4, 8, 5, 3, 9, 7, 6). On the other hand, if you are Chinese you will almost certainly get the sequence right. The reason for this is that the digits are stored in a memory loop that operates for about 2 seconds, ie we most easily memorize whatever we say or read within a 2 second span. The Chinese language allows the above sequence to fit in the 2 second span; English does not.

" languages as diverse as Welsh, Arabic, Chinese, English and Hebrew, there is a reproducible correlation between the time required to announce numbers in a given language and the memory span of its speakers. In this domain, the prize for efficacy goes to Cantonese dialect of Chinese, whose brevity residents of Hong Kong a rotating memory span of about 10 digits..."

Stanislas Dehaene's as quoted by Malcolm Gladwell, 2008

. There is a big difference in now the number naming systems in Western and Asian languages are constructed. The Asians have a logical counting system where 11 is 10-one; 12 is 10-two; 24 is 2 tens - 4 and so on. As a result Asian children learn to count much faster than Anglo-Saxons; it has been suggested that American children are around 12 months behind their Asian counterparts in most fundamental of math skills.

It has been claimed (Narelle Hooper, 2008b) that Australians work well in the UK, USA, Ireland, Japan, Korea and China but not in Europe

. In India the concept of time is circular, as opposed to it being linear in Western thinking. Indians talk of birth, re-birth and things are cyclical; expectations are that things could come back to haunt you. There is some thought that one of the reasons Indians are good at IT is its similarities with Hindu ritual, ie both use coded language. Furthermore, Indians use more improvisation rather than the scientific western management approach of deliberation.

. Generally urban Asians pay more attention to the context of a visual scene and to relationships between foreground objects and background. In contrast, urban Americans tend to pay more attention to the foreground rather than the backgrounds, leaving perceptions of context much weaker.

Examples of Lack of Cultural Sensitivities

"...failure to scale cross-cultural barriers can lead to misunderstandings, delays, lost opportunities and misaligned business strategies..."

Ernest Gundling, as quoted by Emma Connors, 2007

. An example of how the unconscious assumptions can cause problems in different cultures is often illustrated when Western managers supervise locals in Asian countries. The pragmatic Western traditions assume that solving a problem has the highest priority, while in Asia the cultural traditions give a higher priority to maintaining good relationships, and especially not embarrassing a superior, ie potential loss of "face". Thus the Asian will remain silent rather than inform the Westerner that the proposed solution is wrong, as it will embarrass his boss. When things go wrong and the Asian reports that he would do it differently, the Western manager asks why the Asian did not speak out earlier. This puts the Asian in an even more difficult position, because his answer will be a further embarrassment to his boss. At this stage, the Asian may even lie and state that the Westerner was right and only bad luck or some uncontrollable circumstances prevented the solution from succeeding.

"...from the point of view of the subordinate, the boss's behaviour is incomprehensible because it shows lack of self pride, possibly causing the subordinate to lose respect for that boss. To the boss, the subordinate's behaviour is equally incomprehensible. He cannot see any sensible explanation for the subordinate's behaviour that is not cynically coloured by the assumption that the subordinate at some level just does not care about effective never occurs to the boss that another assumption - such as "one never embarrasses a superior"- is operating, and that, to the subordinate, that assumption is even more powerful than "one gets the job done..."

Edgar Schein, 2004

. Microsoft's entry into China is a classical case of how a successful Western business model did not work in another culture. After entering China in 1992, Microsoft's business was not successful and cost them billions of dollars in lost revenue over the 15 years until they learned how to optimise their operations for the Chinese context. Almost all of the basic concepts that has led to success in USA and Europe did not make work in China. In China, Microsoft had to modify its approach by

"...pricing at rock bottom instead of charging hundreds of dollars for its Windows operating system and office application; abandoning the centerpiece of its public policy approach elsewhere, the protection of its intellectual property at all costs; and closely partnering with government instead of fighting as it has in the USA..."

David Kirkpatrick, 2007

Microsoft is selling product in China for around $US7 compared with $US100 to 200 in developed countries. Also, Microsoft had to learn how to tolerate piracy of its intellectual property and change the perception of its "antipiracy and suing people"image. On the other hand, the Chinese government is gradually legalizing the software used by its state-owned enterprises

In addition to China lacking the basic institutions that have been taken for granted in the West, such as the rule of law, respect for property rights, an independent judiciary and government accountability, Microsoft had other issues that needed handling, such as

- initially and misguidedly sending junior executives to China (senior executives were subsequently sent; using VIPs like former Secretary of State Henry Kissinger to advise Microsoft; employing successful Chinese business people such as Tim Chen. This improved the perception of Microsoft status in the "eyes"of the Chinese)

- initially focusing on selling product rather than developing relationships. To handle this Microsoft started to collaborate with the Chinese government by matching its company's strategy to the government's development agenda, such as beginning extensive training programs for teachers and software entrepreneurs; working with the Ministry of Education to finance 100 model computer classrooms in rural areas; inviting Chinese officials to help decide in which local software and outsourcing organisations Microsoft should be invest in. As Microsoft's Tim Chen observed there was synergy between the need of the Chinese economy to have local software capability and Microsoft's need for an ecosystem of companies around Microsoft using their technology and platforms

- had to handle the Chinese government's suspicions that Microsoft software might be a secret tool of the U.S. government. Thus Microsoft allowed the Chinese to look at the fundamental source code of its Windows operating system and allowed the Chinese to substitute certain portions of their own software (installed its own cryptography) - something Microsoft had never allowed in the past.

- open a research center in Beijing (1998) that was pivotal as it accumulated an impressive record of academic publications, helped attract back smart emigre scientists and made significant contributions to globally-released products like the Vista operating system

- made Shanghai a global center for responding to customers' e-mails

. A similar story to Microsoft's initially misguided approach to entering the Chinese market is Rupert Murdoch's misadventures in an attempt to enter the Chinese media industry. Murdoch and his News Corporation continually made mistake after mistake as they followed an inappropriate mindset and business plan for understanding the way the Chinese do business. For example,

- Murdoch's public remarks upset the Chinese leadership and demonstrated his lack of understanding of the Chinese approach. Some examples

i) his rhetorical question at a casual dinner for foreign correspondents in Beijing (1997)- "Isn't the Chinese Communist Party really just the world's largest Chamber of Commerce?" This comment suggested that commercialism was the driving force of the Chinese Communist Party and ignored the powerful grip the Communist Party has on power. One way the party uses its power is to censor any international criticism of China in Chinese domestic media and to limit the access of the average Chinese to international media.

ii) his remarks made in London about the impact of advances of technology on telecommunications upset the Chinese leadership. He said,

"...Advances in the technology of telecommunications has proved an unambiguous threat to totalitarian regimes everywhere. Fax machines enable dissenters to bypass state-controlled print media. Direct-dial telephony makes it difficult for a state to control interpersonal voice communications. And satellite broadcasting makes it possible for information-hungry residents in many closed societies to bypass state-controlled television channels..."

Rupert Murdoch as quoted by Bruce Dover, 2007

- Murdoch's desire to repeat his success in the Western World and elsewhere by breaking into the Chinese media market in a substantial way. This desire failed to understand that the media in China is not regarded a business. For the Chinese Communist Party, the media is like a sacred jewel; it was excluded in the conditions for China's joining the World Trade Organisation (2001). The Chinese have allowed very limited media access to Westerners; for most part it is off-limits to foreigners.

- Murdoch's self belief that he could be different and prove the naysayers wrong, ie he could breach the wall of China. It became a personal obsession and blinded his approach for 2 decades.

- Murdoch failed to understand that China is not a western democracy. The Chinese Communist Party does not need a media owner's support to attract votes from the electorate. Furthermore, the Chinese leaders are already the media owners as all newspapers and television channels a state-owned.

- Murdoch was slow in recognizing the change in leadership from Deng Xiaoping to Jaing Zemin and how the power structure in the Chinese bureaucracy works (including introducing new regulations without warning that can destroy profit over night). For example, Murdoch incorrectly assumed that in relation to television media China Central Television was the ultimate authority; later on he learnt that it was the Communist Party itself via the State Council Information Office and the Propaganda Department

- News Limited made some inappropriate staff appointments, eg appointing overseas-born Chinese who did not understand how the Chinese Communists functioned

Over a 20 year period Rupert Murdoch tried to obtain broadcast rights in China through Star China TV but was never successful. This is despite pulping a book written by former Hong Kong governor Chris Patten, in which he was critical of the Chinese government. Standing in Murdoch's way were earlier mistakes in the approaches he adopted in handling the Chinese, included being critical of the Chinese government (see above). Also, he was continually frustrated by Chinese censorship and the limits on foreign investment. As a result, 21st century Fox sold its minority stake in Star China TV early in 2014.

Similar stories for Walmart and Tesco when they ventured into a different cultures/countries. Walmart, the largest worldwide retailer, whose home base is in USA, was not successful in Germany; Tesco failed in its attempt to get into USA market.
Another example occurred when an American company made some underground cables for its Japanese customer. The Americans carefully checked that the specifications were met before shipping. Thus they were surprised when the cables were rejected by the Japanese firm on the grounds of beauty, especially as the cables were to be buried underground and beauty was not in the specifications. But beauty is a symbol of quality and soul to the Japanese. To the Japanese the ugliness of the cables indicated how little soul the American firm had!!!!

(sources: Geert Hofstede, 1991; Geoff Kitney, 2005; Edward deBono, 2004; Edgar Schein, 2004; Sheridan Winn, 2006; Fiona Smith, 2006g; Dianne Coute, 2006; Fiona Carruthers, 2006; David Kirkpatrick, 2007; Emma Connors, 2007; Howard Gardner, 2006a; Geoff Kitney, 2005; Catherine Fox, 2008; Bruce Dover, 2007; Katrina Nicholas, 2008; Malcolm Gladwell, 2008; Narelle Hooper, 2008b; Rose-Anne Manns, 2008d;Brook Turner, 2010; Mathew Hutson, 2013)


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