COS Round Table 2006
Ethnic communities and work ethos: how to create culturally
By Sameer Prasad
Ashridge, UK; November 4, 2006
Good Afternoon! I am going to attempt to share with you today some of my experiences in
South and South East Asia during the past 12 years.
Briefly – during this period I worked with Kaybee Corporation – a Company
engaged in the trading of textiles; sourcing products out of the Far East
and selling to a worldwide customer base. With them I worked at
Singapore, Korea, Taiwan and Indonesia.
Since the past seven years, I have been with a South East Asian Retail and
Distribution Company and managed their operations at Philippines and
The Necessity for Cultural Diversity and Cultural Competence
The ‗CUSTOMER‘ in no longer local. The primary need for cultural
competence stems from this basic fact of today‘s world.
Thomas Friedman puts it succinctly in his latest book ―The World is Flat‖.
He describes how with the laying of fibre-optic cables during the dot-com
bubble years, the world has become incredibly ‗flat‘ more so because the
cost of connectivity is nearly ZERO.
What Friedman means by "flat" is "connected". The lowering of trade and
political barriers and the exponential technical advances of the digital
revolution have made it possible to do business instantaneously with
millions of people across the planet.
An inter-connected world. A world where people traverse the globe in
pursuit of business or leisure. A world where there are people to people
exchanges on an amazing array of platforms – education, trade, business,
electronic (via the internet) and within organizations that are, compelled
by the necessity for growth, truly MULTI-national like never before. People,
worlds apart, are now interacting without even meeting each other.
Thanks to large scale migration…not only from the two most populous
countries in the world…the work-force has evolved and is probably as
diverse as it has ever been.
Further, due to legal and cost considerations, the bulk of the work-force
for any multi-national organsiation operating in a given country or region
has to be comprised of local staff.
Tesco, the United Kingdom‘s largest grocer (2002), finds the human
resource aspect of its global expansion strategies one of the most
According to David Reid, Tesco‘s Deputy Chairman - ―It‘s been quite difficult orienting our people to work internationally; people didn‘t join Tesco to get sent off to Thailand, say. We need our best people abroad,
people who are good with people and who can translate into the local
market Tesco values and the way we work with customers. So this has been a challenge but also a great opportunity to develop wider business
Tesco relies on relatively few expatriate employees and as a strategy tries
to build operating platforms that provide the systems and key processes to run the business. These expatriates work with local people who obviously
understand the local habits and customers much better than someone who has flown in from the UK. This is the only strategy that can really work in
an alien environment as it is impossible to employ a 40-50 person army of
Unlike TESCO, many retailers have failed to invest sufficiently in
intangibles and have attempted to expand across borders in the traditional
way—replicating domestic business systems and retaining full ownership,
an approach that tends to be costly and slow to yield value. But as TESCO,
Carrefour and Wal-Mart have shown, retailers can succeed in new markets
by investing in intangibles like IT, people, and unique skills and by
entering into partnerships to gain rapid access.
In my own experience – working initially with a trading company based out
of Indonesia, I used to sell textiles to a worldwide customer base –
ranging from Canada, USA, West Africa, South Africa, Brazil, Argentina,
U.K. and France…amongst others.
I had to know where each one (customer) was coming from and what
‗language‘ and ‗attitude‘ to adapt with each. The ‗I-need-everything-by-tomorrow-morning‘ needs of a New York based apparel manufacturer to
the intimate discussion about the entire family (his and mine) with the
customer from Brazil…without any reference mind you to the business-on-
hand. Meeting these people and blending in to their cultures, rather than
imposing my own on them was something that worked well during my
trading time…and this is a lesson I have carried through to my present job.
In Indonesia at the time…majority of our suppliers were of Chinese origin.
And they have their own ways of doing business. Relationships mean
more in the Indonesia business scenario than a win or lose on a deal.
Ippan Ippan…I often heard…or let‘s meet halfway. A good relationship
could mean the difference between a timely deliver by way of prioritizing
your orders over others or otherwise.
Negotiations in the Asian context are a special art and not as direct and
black and white as probably in the West. Vast cultural differences exist
between the way Westerners negotiate and how negotiations are carried
out in Asia. ‗Word‘ has more value than ‗contracts‘ and relationships are
all important in getting things done.
As an Indian…my negotiation used to border on extreme persuasion and
haggling. This worked okay in the Indian dominated textile trading
business but I realized I was causing affront when I changed jobs and
moved to the Retail and Distribution industry in the Philippines…where
incidentally negotiations are handled in an extremely courteous, delicate
and back-handed manner. My direct and hard negotiation attitude was
turning people off and luckily we had a local Filipino partner who pointed
me in the right direction.
So now I employ a healthy mix of both...subtlety the Philippine way and
persuasion…the Indian way.
Challenges in Managing multi-cultural and ethnically diverse
organizations The organisation I presently work with, P.T.Mitra Adiperkasa is a listed
Company on the Jakarta Stock Exchange. Its primary shareholders are
Indonesians of Chinese descent.
In my opinion ours is an organisation that harnesses the strengths of
cultural diversity in one of the best manners I have seen practiced
anywhere is South East Asia.
The group has been willing to invest in international expertise rather than
restrict itself to what is available locally in Indonesia. The top
management of the Company comprises of 9 different nationalities - from
U.K., New Zealand, India, Scotland, American, Singaporean, Indonesia,
Philippines and China. The focus being on relevant expertise, skills and
experience rather than on cost or nationality. The group hires the best
expertise it can get its hands on and creates a performance driven culture.
Indonesian managers are highly capable and operate on an equal footing
with an Expatriate Manager – making ours a truly diverse and challenging
work-place; one of the few such companies in Indonesia.
This strategy brings about an incredible diversity, a feeling of meritocracy (for there are a number of Indonesian Managers in the top management today who have risen through the ranks). The skills and experiences of individuals who have operated in various countries bring an amazing wealth of retail expertise and insights to the table. This helps us benchmark with the best globally, balanced with local insights from Indonesian Managers on the Indonesian market and its idiosyncrasies. I believe this is one of the key reasons why P.T.Mitra has emerged as the leading retailer/distributor of lifestyle products in Indonesia – within a
span of 14 years. The business has grown from a ONE store operation to over 500 including franchise/distribution rights for the leading lifestyle brands in the world such as Starbucks, Marks and Spencer, Next, Zara, Top Shop, Reebok, Wilson, Converse and Puma – amongst others. The
well knit mix of a Management team that has strong local and international flavour, gives such global, confidence in Mitra‘s ability to execute and deliver.
The diverse workforce helps us generate more ideas and these yield innovative solutions and a better understanding of an increasingly diverse customer.
I was in Indonesia in 1997-8 when the iron-fisted regime of Suharto was thrown out as a consequence of the krismon or monetary crisis that had
dealt a crippling blow to the regional economy; the currency in Indonesia devalued overnight from Rp1800-2000 to a US$ to as low as Rp17,000 to a US$. A time of deep economic and political crisis for the nation. And in Thailand 3 months ago I witnessed a coup d‘etat that overthrew the Thaksin led government. Not to say that I court or foment political trouble but I talk about these two historical events to highlight the amazing resilience I witnessed amongst the people of each one of these countries. In Indonesia, while there were politically instigated riots in Jakarta…generally the people went through this period of deep crisis and extreme economic hardship with a great degree of dignity and peace. The coup in Thailand was similarly peaceful and bloodless. The highly revered and loved, Thai King‘s endorsement was enough to calm any
nerves or quell any riots or protests that could have been expected. To me both instances demonstrate important traits in the South East Asian psyche.
The people are generally very accepting, polite, have a great respect for
authority and a …what the Thais call…mai pen rai…or ‗it-does-not -matter‘
attitude to life.
Kreng-jai (considerate / care for feeling of others) is a core value of Thais
and is perceived to be the core characteristic for civilised people. Kreng-jai
means you should not criticise someone if he says something wrong in
order to save face (hai kiat) for the speaker. You should be sam ruam
(self-controlled) when sitting in public.
On a more specific level – when working in the region:
- Language and Communication
Language difference is probably the first challenge one has to deal with.
In my experience working in the region, this is more pronounced in
Indonesia, Thailand, South Korea and Taiwan than in English speaking
countries like Philippines, India, Hong Kong and Singapore for instance.
There are no easy solutions to this really except to dig-in and familiarize
oneself with the basics such as numbers, days of the week, business lingo
relevant to ones organisation, key words for negotiation and such
functional words in the local vernacular.
At the work-place, a team of key local employees who speak English is
always useful. However, on a cautionary note – language abilities do not necessarily imply good work-skills. Expatriate managers often make the
mistake of hiring English speaking people mis-judging language skills for
capability to perform and the vice versa…when they sacrifice skills for
Language and communication are extremely important at another level
that is not so black and white. In the Asian context…very often the spoken
word is not the ‗real‘ meaning and expatriates will need to develop an
understanding of the subtle cultural and social nuances that come in to
play in Asia.
For instance in Indonesia, when someone says yes, does he or she mean yes or no? Indonesia is a gracious culture that is polite. Wanting to be
agreeable and never wanting to embarrass another, the native language
Bahasa Indonesia has 12 words that "say yes but really mean no. Unless
you are fluent in Bahasa Indonesia, using English or another language will
not convey the correct message. Even with a correct translation, though
the literal translation for these 12 words would be yes, the culture requires
a polite, agreeable response. Since saying no to someone is impolite, don't assume a positive response means you have agreement.
Similarly in Thailand – to keep face or Kreng jai – no one will say ‗no‘ to
your face…in order to save your face and their own. Consequently, tasks will not get accomplished yet there will be no acknowledgement or communication that there is a problem. That is left for you to figure out and conclude. At one time or another, all expatriates working in Thailand have learned this lesson and its folklore now.
Managers will do well to know that an instruction conveyed is not necessarily an instruction UNDERSTOOD. Handy tools to resolve this are asking staff to repeat instructions received and what they are expected to do.
Religious influences impact people‘s beliefs, behaviour and attitudes
Indonesia is a predominantly Muslim country with the largest population of Muslims in a single country, in the world. A typical office in Indonesia will have a ‗Mushola‘ or a prayer room and most workers pray five times a day.
In Thailand about 95% of the population is Buddhist and most Thais adhere to the dictates of Brahmanism and Animism. A lot of them do not differentiate among Buddhism and the other two beliefs.
One of the prides of Thais is the fact that their country has never been colonised. Even the name of the country reflects this. ``Thailand'' means the Land of the Free and demonstrates a Thai characteristic that emphasises liberty in both the personal and national levels…and Thais take great pride in their heritage and culture.
Thais welcome foreigners as their guests and peers. But foreigners might perceive that Thais, by the way they behave, feel they are inferior to foreigners. Actually, humility and modesty are inherent parts of the Thai culture. Thais show humble manners to their guests because they are taught that polite people should honour their guests.
The unique Thai language is the official language in education, business or government services. This explains why Thais are relatively less fluent in terms of English language skills compared to their neighbours.
Buddhists believe in the karma; what goes around will come around. The mai pen rai (it doesn't matter) attitude is influenced by this belief. It helps to calm down a situation with a lot of flexibility and forgiveness. However, foreigners might perceive that Thais lack ambition.
Such social and cultural practices impact the work-place in a significant and often complicated way.
- Personality Traits
Keeping a COOL demeanour in Asia …especially in Indonesia, Philippines and Thailand…pays rich dividends and a failure to do so could spell
problems for an expatriate manager.
Someone who loses his temper often and fails to smile, will not retain good
employees for very long as there is an overwhelming consideration for
My biggest ‗cultural‘ challenge was interestingly in the Philippines…where
there were no language barriers to speak of, no communication problems
as such. If I may say so myself..I adapted myself quite well with the staff
and working conditions in Indonesia, Singapore, Taiwan and South Korea
during my stints there.
So what was different about Philippines? As I look back and introspect
perhaps my main weakness was my ‗cultural‘ fit. I was trying too hard to
impose tough policies, negotiating too hard (with vendors and
employees...amongst others) and was being generally very suspicious
about everything. During this time, I lost good people and the general
motivation level in the office slipped drastically. Naturally this impacted
sales. I couldn‘t sleep nights. As I spent more time and learned about the people there….I realized the
problems with my initial approach. Filipinos are a fun-loving lot with a
manyana attitude to almost everything in life. I was being too serious and
needed to relax….and get a manayana attitude myself a little. I did and
things improved almost overnight.
Perhaps the most stressful period of my life taught me the most important
‗people‘ lesson I would ever learn….a cultural one.
- To manage and work with Indonesians and Thais, one needs to
understand their mind-set and behavioral traditions. All the successful
expatriates here have learned the art of ‗politeness‘, which is a culture
here. To address everyone as ‗khun‘ ‗phi‘ ‗nong‘ ‗ba‘ ‗pak‘ and ‗maas‘ is
inborn, as is saying ‗thank you‘( tehrima kasih or kahpunkrub) and ‗maaf‘
Women are very much and a dominant part of the work force. They are
highly capable, reliable and pro-active. Which is why some of the top
executive jobs go to women in this part of the world. While assigning
corporate responsibilities one must keep that in mind.
Teaching the sales-personnel customer-relationship can be challenging
because they don‘t want to maintain eye-contact. They are inherently shy
and love beating around the bush, and will not come straight to the point.
Cultural competence – a source of competitive advantage in the
A product without cultural relevance is not likely to succeed.
Understanding of the religious beliefs and dogma of the people of a
particular country is one of the most important aspects of the retail
The reason why the Mc Donalds BIG MAC version in India is christened
Chicken McMaharaja and why the Aalloo Tikki (potato patty) burger is the
top selling burger there…is that Mc Donald‘s wants to succeed in India
where beef is taboo and almost half the population is vegetarian. This is
I site to you an excerpt from an interview that Jean-Luc Chereau,
President of Carrefour China gave recently, sharing his ‗cultural
experiences‘ in China:
In response to the question: How has Carrefour had to adapt to Chinese
Jean-Luc responded: ―Take the example of fish. When I am in San Francisco and I visit a store, the fish is filleted and packed; its dead.
When I am in France, the fish is dead but its whole; its on ice. I can see its
eyes and see if its fresh or not. Each place has its own way of selling fish.
If you are in China, you have two ways of selling fish. The first is to
display live fish. When we entered Taiwan, we went to fresh markets in
Taipei and Kaohsiung to see what kind of products they had, how they
were displayed, and how customers bought those products. Carrefour
decided to adopt this fresh-market style and to display the same products
at lower prices in a better, cleaner environment. And we were very, very
successful. When customers are in the fresh area, they recognize the
fresh market they are accustomed to. And now most of our competitors
are following the Carrefour way.
But there is another method we neglected when we moved away from the
coast: frozen fish. Why would frozen fish be important in China? Because
the distance between the area where they have fresh fish and the stores in
middle and western China is so vast that customers are more confident of
frozen fish than of unfrozen dead fish, even if fresh. So we changed our
product offering and we saw a 30 to 40 percent increase in fish sales
Different strokes for different folks summarises it aptly.
Tastes of people in even the somewhat homogenous South East Asian
region are vastly different.
Thailand is majority Buddhist, Indonesia – majority Muslim and Philippines
– majority Catholic. The tastes, preferences, culturally and socially correct
clothing norms …just to name a few are bound to be vastly different. And
In the retail business – one of the important considerations for us are the peaks and valleys in the business…another way of saying…the seasonal
fluctuations. In Indonesia we need to stock-up for the peak during
Ramadan the traditional Muslim holiday, in the Philippines its Christmas
and in Thailand there is no Christmas (or one relevant to the retailers) and
January is the peak selling month.
On the personnel side it is important to be mindful of your sales staff‘s
capabilities and tailor training programmes to instill international best
practices…all the time being respecting local beliefs and traditions.
So is there any ONE solution or recommendation that fits all? I think not.
Every expatriate manager will learn her or his own lessons depending upon
the environment presented; the country one finds oneself working in and
to a large and important extent – the team of colleagues, their attitude
and prior experience in dealing with an expatriate.
There are some useful lessons I learnt though and these can be applied to
any working situation almost anywhere in the world where there is a
diverse mix of people from various cultural backgrounds:
Personal strategies for coping with cultural diversity
1. Learn more about the people and culture represented in the Country.
Speak with people who have experienced the culture as outsiders.
2. Understand your own subtle stereotyping: Assess and correct your
pattern of stereotyping. Surface differences don't make a difference in
3. Deal with people equitably: See people as individuals rather than
members of a group. Resist the mental exercise of putting people in
buckets. Understand without judging; be honest with yourself.
4. Balance people processes: Defeat unintentional inequalities. Drive
programming to provide equal information, challenging tasks, and skill-
building opportunities to everyone.
5. Diversify: Interact with people in your organization, neighborhood, or
place of worship who are different from you in some way. Visit ethnic
festivals; vacation in ethnically diverse areas; travel to areas where you
are in the minority or don't speak the language
Strategies for creating culturally competent firms
1. While making adjustments for cultural differences, there need not be
any compromise on the quality of performance that you can demand. I
find, in my experience, that people respect this in any ‗cultural
2. Provide equal opportunity: Realize that equal opportunity may mean
differential treatment. Make adjustments in order to level the playing
field for those who may be (or may have been) disadvantaged. I often
help translate the ‗meaning‘ of communication from overseas Principals
to one of my Thai Managers whose English skills are not very good.
However, I let her respond and take decisions…rather than decide for
her. Often I would even help articulate a response and guide her where
necessary but I let her take full ownership to the response and
3. Apply the same standards to everyone: After providing differential
treatment to balance a disadvantage, the playing field should be equal.
When given equal opportunity, equal performance is the desired result. 4. Minimize deference to differences: Diverse teams are generally more
creative and innovative. Statistically, however, differences (gender, age,
ethnicity, etc.) are not important to getting the job done. 5. Put diversity to the test: Attack problems with diverse task forces.
Assemble the most diverse team you can with the skills to do the task.
Spend more time around people who are different from you to gain a