I recently had a discussion with my former supervisor at Starbucks Coffee Co. who is now working for Starbucks International in the Bahama's. He was commenting on how cultural differences make it difficult to run an effective business there. That particular manager was a mentor of mine when I was at the company, and I have no doubt in my mind that he is handling his assignment with stellar success. But our conversation did get me thinking about his predicament. Sadly, "people skills" are not on the syllabus at most business schools today, and in the age of globalization they are often what makes or breaks a global company.
The inability to communicate effectively across cultural lines is a common problem for western businesses that go global, and in my opinion is the cause of many business failures. In fact, this opinion was mirrored by Bao Steel's former chairman Sun Di Peng at one of our lectures at grad school. His advice to us as we left school was to "always strive to understand your foreign business partners. While contracts are important, relationships are what will make your joint venture successful".
Today, hard work, superior products or technical expertise no longer insure a businesses success or failure. Rather, the ability to forge cooperation across organizational lines is what sets a business apart from its competitors.
Too often western businesses globalize, expecting to duplicate their business model overseas. While I honestly believe business systems are imperative to insure the scalability of a business, local cultural values must be included in those expansion plans. Failure to consider culture at every level of a business' globalization plans could result in alienating partners overseas.