TUNGHAI UNIVERSITYDepartment of International Business - Taichung

Critical Incident Analysis

Seminar In International Business

Assignment

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Critical I ncidence Analysis in Cross- Cultural Management

#4419 Take-Home Mid-Term, Professor Steve Varela Email to Svarela@thu.edu.tw before the next class meeting.

Most of us have experienced a situation where, in a cross-cultural setting, we f ound the behavior of a f oreign national hard to explain. We perceived this behavior to be odd, unusual, or perhaps improper. As a result, we may have felt anger, f rustration, or at least f elt uncomfortable and awkward. I t is likely that this state of aff airs interfered with our ability to interact eff ectively with the f oreign national, and maybe even led to a breakdown in communication. That we tend to view other cultures through our own is a well-accepted human trait. We accept our own culture and its ways as the norm—everything else may seem strange to us. Our acceptance of our own culture also tends to condition how we react to diff erent behavior, systems, or values. This sub-conscious ref erence to our own way of doing things is known as Self- Reference Criterion. Understanding this phenomenon is an eff ective fi rst step in avoiding cultural bias — to avoid ethnocentric reactions. Critical I ncidence Analysis encourages a more objective reaction to cultural diff erences by helping us develop empathy f or other points of view. I t may be attempted in a number of steps as f ollows:

1. First, identif y the situations where you need to be culturally aware to interact eff ectively with your business partners f rom another culture. These may include socializing, building trust, negotiations, arrival to meetings, legal agreements, f ormality, and so on.

2. When conf ronted with a “diff erent” behavior, discipline yourself not to make value judgments. I nstead, defi ne the situation or problem in terms of the f oreign culture traits, habits, and norms. Simply make observations and gather objective information. This way, you will be isolating the self -reference criterion infl uence in the problem.

3. Think about why they behave the way they do. By doing so, you will have reacted to the situation without your own self -ref erence criterion, and hopef ully reacted to their behavior positively.

4. Learn f rom this process, and improve continually. Remember also that cross-cultural empathy—and success in international business—can be greatly enhanced by acquiring f actual knowledge about your partners. This includes political and economic background of the country, the human prof ile (social norms, values, behavior, traditions, etc.), history as well as current national aff airs, and their perceptions of other cultures.

Assignment: Using the approach suggested by the Critical I ncidence Analysis, defi ne a

situation that you or someone else has experienced that led to a cross-cultural misunderstanding. Explain what actually happened, and how a more culturally-sensitive response may have been possible if Critical I ncidence Analysis were used. 2 page typed maximum - about 350 words.

Critical Incident Analysis

More than a simple “Cultural” story…

1. Identify Situations where we need to be culturally “aware”…

2. When confronted with a “Different” behavior, discipline yourself…..

3. Think about “why” they behave that way…

4. Learn from and improve continually…over a lifetime.

Some noteworthy examples from our class….

How it can impact our Business…

Profit consists of two things: (Sales – Costs = Profits)

Suggested Strategies:

• Understanding culture to Increase Sales– Embrace, appreciate, respect => opportunity

• Utilizing culture to Reduce Costs– Join in, take risks, adapt and become one with your local group.

My example: Motorola International Ventures Division

• Owners: of 26 Cellular Companies in Emerging Markets : (e.g. Mexico, Turkey, Brazil & the Dominican Republic)

• Mission: Go to emerging markets and start a new cellular company (to sell more phones & equipment eventually)

• Role: Business Development Director – South America

Task: Build a custom cellular billing system for a new service.

Custom Cellular Billing System

Traditional Corporate Way

• Conduct needs analysis• Identify existing

resources• Analyze Capabilities• Analyze Costs• Decide to Outsource

– World Class Consultants– E.g. Accenture, BAH, – Sema Group or similar firm.

South American Way (Brazil)

• Discuss project with IT staff

• Solicit feedback

• IT Manager and Staff create a in-house custom billing program for the new service– 3 months development– Virtually no cost

Motorola Billing System Case

• Use/pay Local Talent as they would be used by local firms (they are most efficient that way)

• Seek to optimize your use of local resources (HR, Expense Budget, Creativity, Risk Taking, Responsiveness)

• Always Consider the Main Equation:

$ PROFIT = REVENUE - EXPENSES

Comments??? Questions???