The impact of company culture on IBP part IV: Geography 1

Globalization is pushing companies to plan and operate more and more across the borders of their country of origin. This will also have an impact on IBP processes. IBP stakeholders have to overcome an increasing set of social and cultural differences in their IBP meetings to handle different perspectives, disagreements and come to consensus. To handle this, IBP leaders have to be aware of cultural environments to drive effective IBP meetings with desired outcomes.

It is important to understand that most management theories, including IBP, have strong origins in American or English literature. This means the logic and principles used in these theories have a strong reference to how these cultures prefer to communicate and solve issues. In the end; ‘Cultures are facing the same issues; they just have a preferred way of dealing with issues relative to other cultures’.1 I’ll discuss three examples of geographical cultural preferences and show what impact it can have on IBP.

Example 1: George Palmatier, an Oliver Wight principle and board member, shares some great business management principles which can be viewed on his website http://georgepalmatier.com. The first principle is; “It has been my experience that when asked relatively straight forward questions, the individual that uses many words usually is unprepared, simply does not know the answer, or wishes to hid or shade the truth”

As I’m Dutch I agree with this principle. But if we view this from a cultural perspective, there are two ways cultures respond to questions or ask questions. The American culture as well as the author’s Dutch culture will go directly to the point, both in asking and in answering questions. This is what Trompenaars in his book ‘Riding the Waves of cultures’ calls specific or low context cultures. On the other part of the spectrum, cultures in southern Europe, Asia and Japan, will circle around the point, talk more about context, before actually ask or answer the question. These are diffuse or high context cultures. The specific culture wants to go straight to the point or business deal and might perceive the diffuse culture as not coming to the point and wasting time. The diffuse culture might perceive the specific approach as too direct, impersonal and pushy.

In a cross cultural IBP meeting where we ask and answer many questions to try to solve issues and make decisions, we have to keep in mind what the preferred cultural way of answering or asking questions is.

Example 2: As supply chain manager in a beverage company, I once received a letter from an American customer. Signed by the vice president of supply chain and a lawyer, this customer threatened legal action because of one late delivery. My first reaction was; ‘why didn’t this guy just call me?’ As I never had any issue before with this customer, my Dutch expectation was that I would get a call to discuss the issue, understand the issue and offer my help to resolve it.

This is what Hofstede calls masculinity versus femininity in his book on cultural drivers in work related behaviours; Culture’s Consequences. My Dutch feminine or nurturing expectation was to get a call to solve the dispute. The American approach was masculine and in my perception very aggressive. In masculine or assertive countries like America, it is acceptable to resolve conflicts through aggressive means and with a good fight: Let the best man win! In feminine countries like the Netherlands, Denmark or Sweden, the preference is to resolve conflicts through negotiation and compromise. Threatening with legal action is not part of the preferred business dialogue to solve issues.

In a monthly IBP cycle, we don’t always agree and we have to solve conflicts to come to consensus. If we do this in a cross cultural environment we have to keep in mind how different cultures prefer to solve conflict and adapt our behaviour to that.

Example 3: The author of this blog has a personal believe that providing feedback is an important part of IBP behaviour to continuously improve effectiveness of IBP meetings. In individualistic cultures like Australian, American and Dutch cultures this is no issue. In more collective cultures like Japanese, Asian and southern European cultures, there is no preference to give feedback in group form. These cultures don’t want to insult the group or loose face by making a critical comment in front of superiors. Feedback is preferred in person. There is no right or wrong in both approaches, we just have to keep in mind what the preferences in different cultures are.

Therefore, in cross cultural IBP we have to be cultural intelligent and apply the most effective approach on gathering feedback depending on the cultural environment we’re in.

On feedback, maybe Trompenaars gives the best example himself1: ‘I try to avoid asking a Dutch audience for criticism after one of my workshops; the experience is much the same as being machine-gunned. Afterwards, however, they tend to ask the corpse for the next date it will be available. In contrast English and French managers will make a few mild suggestions in a context of positive congratulation, never to be heard of again.’

These three examples show that we have to be cultural sensitive in a cross cultural environment. This is also valid for a cross cultural IBP environment, where we need to come to consensus every month again.

The aim of this blog was to show examples of different cultural preferences and relate that to preferred IBP behaviour. In a next blog on this topic, I will explore Hofstede’s cultural dimensions in more detail and identify if there are countries that have a natural cultural advantage in work related values to implement and sustain IBP.

1. Fons Trompenaars ‘Riding the Waves of cultures’, McGraw-Hill, 1997
2. G. Hofstede, ‘Culture’s Consequences’, Sage Publications, 2001

You can find these books here: Supply Chain Trend booklist

2 thoughts on “The impact of company culture on IBP part IV: Geography 1

  1. So true, having worked for American, European, British and Japanese organisations the “way we do things here” is wildly different. The only pleasure being the opportunity to see other (more masculine) culture representitives struggling worse than I was.

    Andrew

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