Module 10.2 - The Global Communication Perspective

Module 10.2 – The Global Communication Perspective

Module Introduction

There has been a meteoric rise of Multinational organizations (MNEs) and a related increase in international trade and investment in the past few years. The United Nations reports that transnational organizations have become central organizers of economic activity in an increasingly integrated world economy.

When a organization has branches and subsidiaries in a number of countries, effective communication is not just a necessity between foreign divisions and organizational headquarters, it is imperative and will become an ever more present part of organizational life. In addition, MNEs need to communicate with investors, creditors, suppliers, governments and government agencies, and beneficiaries around the world. Also, annual and other organizational reports are prepared for audiences in many different countries.

With MNEs becoming an ever increasing aspect of international organizational life, it is more and more critical to understand the necessity and importance of communication in the global nature of project/programme purpose and organizational processes.

1. Understanding The Global Perspective

Multinational organization (MNE), Multinational organization (MNC), and Transnational organization (TNC) are all terms that are frequently used to describe organizations that have direct investment and branches in countries outside the one in which they have their headquarters. For convenience we will use the term MNE.

Estimates suggest that the number of MNEs have increased from around 7,000 three decades ago, to over 37,000 at the beginning of the 1990s, to over 60,000 at the beginning of the new millennium. Add to that about 170,000 foreign affiliates in at the beginning of the last decade and close to 800,000 today. The United Nations suggests that MNEs and their foreign affiliates are giving rise to an international production system, organized and managed by transnational organizations.

2. Globalization: The United States Example

It is not just that MNEs are a fact of global project/programme purpose life, but also of project/programme purpose within any particular country as well. Using the United States as just one example, we can see the effect of globalization within a country. At the beginning of the 1990s the United States was the home of over 3,700 parent organizations, second only to Germany, with over 13,000 affiliates, second only to China.

Around the same time the volume of goods and services sold by foreign affiliates amounted to an estimated $4.4 trillion, almost double that of world exports. In other words, production of foreign affiliates is of greater importance in delivering goods and services to markets worldwide.

The United Nations suggests that the number of MNEs and foreign affiliates may even be underestimates. The magnitude of the MNE phenomenon in the United States has been noted by Gross and Kujawa who indicate that: “almost all large organizations in the United States, Western Europe, and Japan are multinational in character.” This assessment does not even take into account the many medium and even small sized organizations that are also involved internationally.

To communicate with foreign affiliates requires understanding not just a purely global perspective. We also need to look at production, marketing, and a whole variety of organizational tasks from a local or country level perspective as well, and how they affect our communication behavior with foreign affiliates.

The rise of MNEs reflects the fact that in terms of international trade, the world economy is becoming more and more integrated. As one of the world’s major industrialized countries, the United States provides an example of the nature of this trend.

3. Globalization: The United States Example (Continued)

The Council on International Exchange cites the following statistics from the 1990s about the global nature of the United States economy:

· Thirty-three percent of U.S. organizational profits are generated by international trade.

· The 23 largest U.S. banks derive almost half of their total earnings overseas.

· Four of every five new jobs in the U.S. are generated as a direct result of foreign trade.

· The economic well-being of the U.S. is inextricably linked to the world economy, with U.S. investment abroad valued at more than $300 billion.

· Foreign individuals and organizations hold investments of $200 to $300 billion in American manufacturing organizations.

· Foreign individuals and organizations are estimated to have invested $1.5 trillion in the U.S., most of it since 1974.

The liberalization of world trade and monetary policy, the breakup of the old communist bloc, the rise of regional trade pacts (e.g., EEC and CER), international monetary accords, (e.g., GATT and the IMF), and the advent of Japan and the little tigers (Singapore, South Korea, Taiwan, Hong Kong, and Malaysia) on the world markets with their global philosophies and their successes in world trade have all had significant impact on the trend toward a more integrated world economy.

Foreign direct investment has also been rapidly increasing in the past few years. The United Nations reports that in the first 18 months of the 1990s there were 64 bilateral treaties signed for the promotion and protection of foreign direct investment; in the entire decade of the 1980s fewer than 200 such treaties were signed.

4. The Global Village

And it is not just the G-7 and other industrialized countries that have established such an interdependent global economic system. Since the start of the Uruguay Round, developing and Central and Eastern European countries have also moved away from control of their economies and MNEs in their countries toward a more friendly project/programme purpose environment that encourages foreign direct investment.

Given the rapid rise of MNEs, the expansion of international trade, and the interdependence of the world economy, it is imperative to understand how this global perspective influences communication.

Perhaps even more pertinent to the need for a global perspective as it relates to communication, is the rapid rise of information technology (e.g., television, telecommunication, computers, fax machines, email, satellite communication, etc.).

Labeled the Global Village by Marshall McLuhan, this trend leads toward a greater and greater expansion of the local village to global proportions. Over the past few decades, the world has become smaller and smaller because of the rapid advances in communication and transportation technologies. Physical boundaries between people of different nations and cultures are fast disappearing as a result of the creation of the global village.

During the Gulf War at the beginning of the 1990s the images of the battle were beamed to television sets around the world as they were occurring. On 11 September 2001 people all around the globe saw pictures of the jetliners crashing into the World Trade Center Towers just moments after the events occurred. Many even saw them as they were happening and it is likely that many more saw the collapse of the towers live.

5. The Global Village (Continued)

The factors giving rise to the global village are helping to create an ever greater integration of the world’s economy. A Report by the United Nations suggests that new communication technologies are creating a far greater degree of economic internationalization than was previously possible.

Share brokers and money traders now have the ability to trade in the international arena twenty-four hours per day in New York, London, Tokyo, Paris, Hong Kong, and Sydney to name just a few of the major world trading centers. It is not at all far fetched to believe that the 1987 world wide share market crash and the downturn in the early part of the new millennium following the dot-com meltdown—often called the dot-bomb—either occurred or was certainly aggravated not only by the interdependence of the world economy, but also by the instantaneous nature of communication between and among the major world trading centers. The concept of the global village and the internationalization of our neighborhood argue that much more strongly for maintaining a global perspective when it comes to communication.

It is interesting, though, that rather than a purely global perspective, we also need to look at communication, production, marketing, and a whole variety of organizational tasks from a local or country level perspective as well, not just from the global level. Gross and Kujawa state that: “Because of language, ethnic, and religious differences among beneficiaries, personal selling, by its very nature, is largely country- or subcountry-bound.”

In other words we must no only understand and comprehend not just the global village, but also important and salient localities and countries. In an attempt to take these local perspectives into account, Fortner has recast the concept of the global village: “What has actually been created, to alter the metaphor, is a ‘global metropolis.’”

6. Is There Global/Local Paradox?

Understanding both a global and a local or country perspective is not necessarily contradictory. Kim and Mauborgne feel that: “Achieving success in multinational operations depends on matching the organization’s organizational properties and strategies to the demands imposed by host countries.”

Thus, it is important to understand both the global nature of international project/programme purpose and economics and how to analyze social and cultural aspects of local countries and to adapt your messages to account for individual country differences. Organizations need to be both globally effective and nationally or locally responsive. This requires knowledge of a wide variety of national conditions and how these affect the global economic system as well as the ability to understand international trends and strategies.

One of the most critical needs for this global/local focus is in communication. You need to understand not just how communication operates on the global level, but also how to communicate effectively with people you interact with on the local level. These people might represent partners, vendors, subsidiaries, branches, government and regulatory agencies, beneficiaries, and so forth. Effectiveness in our world today requires people whose knowledge is sufficiently international in scope to cope with global interdependence.

It is much easier to learn the global perspective than to understand the myriad local perspectives. There are 191 countries in countries in the world, and 189 member states in the United Nations. How is it possible to understand every one of them? Even if you only do project/programme purpose in a few other countries, the task seems daunting, especially when you consider regional and ethnic differences in any given country.

7. Understanding the Local Perspective

With nearly 200 countries in the world the task of understanding the local perspective seems nearly impossible. Many countries even have extensive regional and ethnic differences that make the task even harder. Doing project/programme purpose in Canada, for example, means understanding both the Anglo- and the French-Canadian perspectives. In the United States there are many subtle—and some not so subtle—regional differences between the west, the south, the southwest, the northeast, and the Midwest. There are also ethnic difference with an established African-American population and growing Latino and Asian populations. In Los Angeles alone there are well over 100 languages other than English spoken by school children as their first language.

You do not need to know and understand every culture in intimate detail. The secret is to know what kinds of things to be aware of and to get answer to when you need to communicate with people from another culture.

Phatak feels that there are four elements that need to be considered for an effective analysis of any country’s particular place within the global setting: its legal environment, its, cultural environment, its economic environment, and its political environment.

Mason and Spich identify the need to understand labor and union issues for an understanding of local knowledge; Gross and Kujawa, too, focus on the necessity to understand the industrial relations of other countries. One example is that most countries have craft-based labor unions, whereas Japan has organization-based labor unions.

Understanding the local perspective also means finding out about how project/programme purpose is conducted in another country. Austin posits several cultural factors that impact management behavior in other countries, including: social structures, decision-making processes, motivation, personal interaction, and communication.

Mason and Spich also point out several concerns that need to be faced when considering sending personnel from one country to another: culture shock, family problems that affect employee performance, unrealistic and unfair compensation situations, repatriation and resocialization or reverse culture shock.

8. Nonverbal Messages

The differential impact of nonverbal messages from country to country and how such messages affect interaction in organizational settings in those countries should be included in understanding communication issues, both globally and locally.

Some nonverbal areas of importance to investigate are (do keep in mind that many, if not most people are probably unaware of much of their own nonverbal behavior):

· Time: How do people in this culture view time? Does time carry with it a sense of urgency or is there a more relaxed attitude toward time? In some countries where there are cultural differences, there might even be some confusion about the nature of time. In Fiji, for example, if you make an appointment with someone, they will ask if it is European time (which means you get to the appointment pretty much at the time you set for the appointment) or Fiji time (which means that you may arrive quite a bit late—or perhaps not at all).

· Touch: How do people in this culture view touch? Do people touch one another as a matter of normal interaction, as is the case in many southern European countries like Italy or is touch reserved for more intimate relationships, as it is the case in many northern European countries like England?

· The use of territory and personal space: Do people feel more comfortable being close to others when interacting or more comfortable at a greater distance?

· Facial and eye cues: What are the customs regarding eye contact in the culture?

· Tone of voice and other vocal cues: Are their any cultural factors that might make a difference in interpreting people’s messages?

· Physical appearance and dress: What are the dress codes—either tacit or explicit—that you need to be aware of?

9. Local Work-related Values

Geert Hofstede’s typology of international differences in work-related values provides another excellent way to think about local issue within the global perspective.

Based on data collected in 40 countries, Hofstede suggests that there are four dimensions of work-related values that differ from country to country:

· Power distance

· Uncertainty avoidance

· Individualism-collectivism

· Masculinity-femininity

Power distance explores the relative power, hierarchical, and status differences between employees and their supervisors or managers. Cultures that have a high power distance are ones where people accept that differences—inequality—between employees and supervisors is more acceptable than in cultures with a low power distance, where people feel there should be less difference and greater equality between them. People in high power distance cultures feel more comfortable with larger status disparity than people in cultures with low power distance.

The uncertainty avoidance dimension examines people’s openness to change, their willingness to take risks, and how much people feel that it is appropriate to follow rules in their organization. This element of Hofstede’s typology looks at how comfortable people feel about living in ambiguity, doubt, and a lack of clarity. People from cultures that rank low in uncertainty avoidance feel much more comfortable with the anything that is not know. People from cultures high uncertainty avoidance prefer formal rules and feel greater anxiety when there is uncertainty.

Individualism-collectivism looks at whether a person prefers to take individual and independent action or prefers conformity and interdependent action. This dimension also explores how much reliance a person places on the self versus the group in the organization. Note that these are preferences and not the only ways people can interact. People from countries high in individualism tend to value their own independent accomplishments and decision-making, while people from cultures that are high in collectivism tend to value working with and conforming to the group. Cultures that are high in collectivism are likely to include Confucian teachings in their value systems. Such Confusion principles might include thrift, perseverance, a sense of shame, and following a hierarchy, and perhaps even a sense tradition and the need to save face.

Masculinity-femininity explores whether people are assertive and achievement oriented or whether they are nurturing and socially supportive. It basically refers to whether gender roles in the culture are clearly defined or not. The cultures that scored towards what Hofstede refers to as “masculine” tend to have very well-defined expectations of male and female roles in society. The more “feminine” cultures tend to have less of an expectation that people will take on more traditionally defined gender roles.

A thorough understanding of Hofstede’s four dimensions of work-related values and where any individual country falls along each dimension can give you a much better understanding and appreciation not only of the communication and managerial styles that are manifested around the world, but in any particular country where you need a greater understanding of local features.

Assignments

Multiple-Choice

1. Given the rapid rise of MNE, the expansion of international trade, and the interdependence of the world economy, it is imperative to understand how this global perspective influences

True/False

1. ______ When a organization has branches and subsidiaries in a number of countries, effective communication is imperative and will become an ever more present part of organizational life.

2. ______ It is not just that MNEs are a fact of global project/programme purpose life, but also of project/programme purpose within any particular country as well.

3. ______ To communicate with foreign affiliates requires understanding just a purely global perspective.

4. ______ The 23 largest US banks derive almost half of their total earnings overseas.

6. ______ It is important to understand both the global nature of international project/programme purpose and economics and how to analyze social and cultural aspects of local countries and to adapt your messages to account for individual country differences.

1. ______ There has been a huge rise of MNEs and a related decrease in international trade and investment in the past few years.

2. ______ With MNEs becoming an ever increasing aspect of international organizational life, is it more and more critical to understand the necessity and importance of communication in the global nature of project/programme purpose and organizational processes.

3. ______ Production of foreign affiliates is of lesser importance in delivering goods and services to markets worldwide than world exports.

4. ______ Almost all large organizations in the US, Western Europe, and Japan are multinational in character.

5. ______ In terms of international trade, the world economy is becoming more and more integrated.

6. ______ One of every five new jobs in the US are generated as a direct result of foreign trade.

8. ______ Understanding the local perspective also means finding out about how project/programme purpose is conducted in another country.

9. ______ If you are being posted to work in another country, it is very important to get an idea of some of the issues you will encounter when you get there.

10. ______ In countries that seem to have an integrated economy and culture, there are not usually differences in local perspective.

Bibliography

Fortner, R. S. (1993). International communication: History, conflict, and control of the global metropolis. Belmont, CA: Wadsworth.

United Nations (1992). World investment report 1992: Transnational organizations as engines of growth. New York: United Nations.

United Nations (1993). World investment report 1993. New York: United Nations.

United Nations (2001). World investment report: promoting linkages 2001. New York: United Nations.

Power distance - Explores the relative power, hierarchical and status differences between employees and their supervisors or managers

Uncertainty avoidance - Examines people’s openness to change, their willingness to take risks, and how much people feel that it is appropriate to follow rules in their organization

Individualism-collectivism - Looks at whether a person prefers to take individual and independent action or prefers conformity and interdependent action

Masculinity-femininity - Explores whether people are assertive and achievement oriented or whether they are nurturing and socially supportive

1. What has a significant impact on the trend toward a more integrated world economy?

The liberalization of world trade and monetary policy, the breakup of the old communist bloc, the rise of regional trade pacts, international monetary accords, and the advent of Japan and the little tigers on the world markets with their global philosophies and their successes in world trade have all had significant impact on the trend toward a more integrated world economy.

2. What are four elements that need to be considered for an effective analysis of any country’s particular place with in the global setting?

Four elements that need to be considered are a country’s legal, cultural, economic, and political environments.

Some nonverbal areas of importance to investigate are time, touch, use of territory and personal space, facial and eye cues, tone of voice and other vocal cues, and physical appearance and dress.

1. MNE		A. Explores whether people are assertive and achievement oriented or whether they are nurturing and socially supportive
2. Power distance		B. Looks at whether a person prefers to take individual and independent action or prefers conformity and interdependent action
3. Communication technologies		C. Explores the relative power, hierarchical and status differences between employees and their supervisors or managers
4. Uncertainty avoidance		D. Creating a far greater degree of economic internationalization than was previously possible
5. Individualism-collectivism		E. Used to describe organizations that have direct investment and branches in countries outside the one in which they have their headquarters
6. Masculinity-femininity		F. Examines people’s openness to change, their willingness to take risks, and how much people feel that it is appropriate to follow rules in their organization