Western Compliance NOT Culturally Compliant
I received my briefing from a regional level representative of a large blue-chip US based company that was under order to ‘get to the bottom of things’ after 4 ‘HiPo’ alerts were raised within the space of only a couple of months. What’s a HiPo and why is it disturbing to have one? In the Oil and Gas business:
“A high-potential incident is an incident or near-miss that, realistically, could have under other circumstances caused one or more fatalities.”
In a case like this, HiPo’s are extremely concerning to executive management back in the US, as not only is there the potential risk of loss of life, but such recorded incidents also have an impact on the ability to win tenders in the future, an also may incur some kind of financial penalty.
I am writing this article as a carry on from my original article “Cultural Landmines in Asia – How to Defuse them BEFORE Losing a Limb”. Where that original article dealt with case studies in Thailand and Laos, in this article I will be dealing with cross-cultural issues between western multinationals working in Singapore, with Chinese, Malay and Indian cultures.
To give you some of the back story of the situation that I was walking into, a certain US company that has a large part of its business in the Oil and Gas sector had bought an industrial manufacturing company in Singapore. The Singaporean company was run for many years as a traditional Singaporean Chinese company. The company while run by predominantly Hokkien speaking Singaporean Chinese, employed people that represented a rich cultural cross-section Singapore. There were Malays (‘Bumiputras’ – literally known as ‘sons of the soil’, the term used in Indonesian to refer to the indigenous population is ‘pribumi’.), Tamil speaking Singaporean Indians as well as ethnically Chinese Singaporeans that were from Cantonese, Mandarin, Hokkien and Teochew speaking backgrounds.
After several meetings with management, I flew to Singapore and spent two days conducting both formal and informal interviews there on site and also travelled across to a fabrication yard in Batam Indonesia just across the way to try and get some further perspective on what was going on. I conducted interviews in English, Mandarin, Cantonese, Malay, Indonesian and Hindi.
As with the previous article, the following information is an amalgamation of many of the key points that people shared with me during my time on site. While some of the issues are quite specific to that site and actual happenings at that company, the implications on approaches to business in East and Southeast Asia are many. As you read through the following section, if you are are a foreigner working in East or Southeast Asia for a multinational brand, or work for a multinational brand in the west that deals with East or Southeast Asia, you might like to start a dialogue with people on the ground in those Asia based offices to learn about any parallels that might exist. You may find some areas that can be addressed that you didn’t even realise existed, that should they be tweaked or changed could have a profound positive impact on your business.
Hungry Ghost Festival
In Singapore, aside from Chinese New Year, one of the most colourful and auspicious festivals especially for the ethnic Chinese population is the Hungry Ghost Festival. This festival is celebrated by Chinese communities right across Asia and is known by several names. It might be called ‘中元節 Zhōng yuán jié’ which indicates that it is the festival celebrated on the 15th day of the 7th lunar month, or ‘鬼節 Guǐ jié’ which means ‘Ghost Festival’ or ‘盂蘭盆節 Yúlánpénjié’ which is the ‘Feast of All Souls Festival’. In Japanese the festival is known as お中元 Ochūgen, in Vietnamese it is Tết Trung Nguyên and in Thai, it is especially celebrated in the southern provinces and is known as สารทไทย ‘Saht Thai’.
Just hearing all the different terms in all the different languages from around the region, you get the feeling that this is a big deal.
For this company in Singapore, I was told by many of the employees including Singaporean Malays and Singaporean Indians, that the one festival that everyone waited for each year was the Hungry Ghost Festival. Everyone from every level of the organisation used to put in around SGD$50 of their own money to help toward putting on a two day festival that they would all attend and bring their families along to. This was an important time for their relationships with their clients too. All of the customers and suppliers that were part of their success throughout the year were invited to join in the celebrations. Staff members would work in their own time outside of work hours to cook food, prepare singing, dancing and other performing acts, as well as build the stage that performances would be held on.
Many of the people interviewed spoke fondly of ‘those days’ and said that it was because of that warm, family culture that they had stayed so long and because of that culture that the customers and suppliers had such good relations with them over the years.
Chinese New Year is unarguably the most important date of the Chinese calendar and in countries like Singapore with a large ethnic Chinese population, it is this time of year that also brings on the greatest financial burden, especially for people who are in a position of being a ‘leader’ in one sense or another. A leader in this sense might be a father, the eldest patriarch of a family, the boss of a company or the head of a division. In a similar sense to the ‘Phradet / Phrakhun’ model, in my original article, where leaders will build up Bunkhun credits by ‘Lieng’ing’ (เลี้ยง) the people under them (being responsible for their physical, emotional, spiritual and financial sustenance), in Chinese culture part of that tradition of taking care of those under you means giving them 紅包 Hóngbāo or ‘red envelopes’ filled with money. Note that the pronunciation ‘Hóngbāo’ is the Mandarin Chinese pronunciation. If you live somewhere where other Chinese dialects are more common, you might hear this same thing called many different things – usually based on the words 紅包(Hóngbāo red envelope), 利是 (bring prosperity) or 利事 (bring prosperity to business) – both of these latter ones are pronounced the same in many Chinese Dialects (Mandarin – lìshì) :
紅包 (Red Envelope)
- Mandarin Hóng bāo
- Cantonese Hung baau
- Hokkien Âng pao
- Teochew Ang bao
- Hakka Fùng pâu
- Burmese An bao
- Thai ang pao อั่งเปา
- Vietnamese phong bao
利是 or 利事 (That which brings wealth or prosperity to business).
- Mandarin Lì shì
- Cantonese Lei si
- Hokkien Lé sê
- Teochew Li si
- Hakka Li si
- Vietnamese Lì xì
Japanese and Korean also have terms for the same concept, however they use other Chinese character origins:
Japanese: Otoshidama bukuro お年玉袋 (New year treasure packet) / Shūgi fukuro 祝儀袋 (Prosperity wish packet)
Korean: Sebaet don 세뱃돈(歲拜單) ‘Age Celebratory Slip’
Wherever you have a Chinese population, you will probably have a term entered into the national language(s) language of that country – usually based on the Chinese dialect that is predominant with the initial Chinese migrants in that place.
Where many western companies will give their year-end bonuses around Christmas / New Year time, traditionally, Chinese companies will give any bonuses just before Chinese New Year as this is the time of year that puts the greatest financial burden on breadwinners.
Compliance or Colonialism?
Getting back to the story of the company that hired me in to investigate whether or not there were any issues that they weren’t aware of that lead to four High Potential (HiPo) incidents within the space of only a few months – incidents that might cause them to lose millions of dollars in penalties as well as potentially billions of dollars in lost tenders in the future.
It turns out that since the large US based company bought the Singaporean company, they brought in many foreigners to take over many of the senior executive positions. Around 70% of the foreigners that came in were from the US, UK and other western European countries and Australia, while the majority of the others were from India.
Employees shared with me story after story – however most of them told the same ‘story’. Within the first year, it seemed that the compliance team from the US came over and did an audit on the current systems in place, looking at ‘how they did business’ and checking whether or not they complied to their global compliance policies.
Hungry Ghost Festival Cancelled
Without a second thought, the Hungry Ghost Festival activities were all cancelled as they were seen as irrelevant and could lead to compliance issues as they are inviting customers and suppliers to the event which could be construed as corruption. Other reasons for cancelling included that the Hungry Ghost Festival was a Chinese festival and wasn’t indicative of all the cultures and / or faiths that were represented in the organisation. Note that in the past, the event was fervently celebrated by all Chinese, Malays and Indians.
Westerners Introduce ‘Masquerade Ball’ as Annual Event
To add insult to injury, the western management thinking that they were doing a ‘good thing’ after having cancelled the Hungry Ghost Festival, decided that they would rather put on an annual Masquerade Ball for employees only.
Masquerade Balls while they might be a ‘thing’ for western cultures, are not traditionally a ‘thing’ for many cultures in Asia and not viewed as a desirable substitute. There isn’t the family atmosphere there, there are no fun performances on stage singing traditional songs in each others’ local languages and sharing in each others’ food and customs, there is no interaction with friends and clients – an important thing in the past for establishing and reinforcing ‘關係 guan xi’ or ‘relationships’ (see original article), and dressing up as medieval European characters and speaking predominantly in English during festivities almost had a colonial ring to it for many. While many attended, they described ‘enduring’ the event rather than enjoying it and looking forward to the next one next year.
Even employees at the janitorial level mentioned that in the past they would happily donate money and give their time to prepare for the Hungry Ghost Festival. Just the anticipation of it and the activities leading up to it served as team building exercises and did wonders for company morale. Now, even though they weren’t out of pocket for the Masquerade Ball, they felt that it was something that detracted from them rather than added to their lives.
‘Chinese New Year’ Bonuses Shifted to ‘Christmas’ Bonuses
Western management immediately changed the bonus policy, shifting the bonuses to become ‘pre-Christmas’ bonuses rather than being given at Chinese New Year. This caused financial hardship for many employees at all levels of the organisation as when Chinese New Year came about, they didn’t have enough cash to cover the costs that they were expected to cover by family and friends which resulted in them either going into debt or not giving as they were expected to which caused them to lose face and sometimes destroy relationships that were important to them.
This compounded with the eradication of the Hungry Ghost Festival was almost too much to bear.
Caste Away – Indians in Southeast Asia
There was one other recurrent thread of information that came from people of different ethnic backgrounds during the interviews.
The Indian population in Singapore is predominantly Tamil speaking. These Singaporeans are proud of their heritage and also proud of the fact that they are Singaporean. The Singaporean Indians working for this company for the most were well educated and might be categorised as centre to upper middle class in Singaporean society.
The Tamil speaking population in India come from Southern India and are usually darker skinned than many Indians from the North. There are traditional prejudices in India that go back hundreds and even thousands of years between different castes and different ethnicities. Very often, the shade of your skin, the language you speak and the way in which you speak your language will peg you on somebody else’s totem pole.
With many executives coming in from India – predominantly from Delhi and Mumbai, a situation arose where the Indian Indians would display behaviour that was construed as looking down on the Tamil speaking Singaporean Indians.
In Singapore, as in countries like Thailand, there are also schisms between the local indigenous populations, the local Chinese populations and people from the sub-continent. There is a derogatory saying that exists as part of popular culture for both Thais and Singaporeans that many are ashamed to mention when speaking with westerners, however it is something that is drilled into the subconscious from childhood (warning for those who are easily offended by things that don’t adhere to western PC, you might want to look away now):
“遇见蛇和印度人，应打印度人 Yùjiàn shé hé yìn dū rén, yīng dǎyìn duó rén”
“เจองูกับแขก ต้องตีแขกก่อน cə: ŋu kàp khæ̀:k tɔ̂ng ti: kæ̀:k kɔ̀:n”
“If you meet an Indian and a snake, hit the Indian (first)”
For those that might be skeptical as to whether this opinion really does exist, next time you are with a Singaporean Chinese friend or a Thai friend, say the first half of the above sentence – and I’m sure that those around you will complete it in chorus without a second thought. For a deeper understanding of this phenomena and why it might exist, I recommend viewing a short documentary made recently called ‘The House Guest’ where a Singaporean Indian who is yet to have any Chinese friends goes and spends 3 days with a Singaporean Chinese family. The conversations are eye opening.
A very interesting thing happened however given the new dynamics that had entered into this company. When the local Chinese and Malays saw that the Singaporean Indians were being treated (in their opinion) badly by the new Indian Indians that had been introduced to the company, all Singaporean Chinese, Malays and Indians banded together as one in their resentment against the new Indians in the company and these tensions started to affect the way they worked.
A Cocktail of Resentment
Let’s look at the situation now through the eyes of a long term employee of the company prior to the take over of the US company. A foreign entity has come in, and not only disrespected their traditions and cultural values, but described in official policies that these things that they culturally identified with were ‘wrong’. As a result, activities that used to bring all the ethnic groups, ranks and files throughout the organisation together as one was abolished and in its place was a sad colonial substitute where western ‘紅毛 Ang Mo’ (Red Hairy Ghosts aka Westerners) would revel in a trivial, pithy event they called a ‘Masquerade Ball’ that had lobotomised all of the ‘fun’ out of what they traditionally had in their Hungry Ghost Festival celebrations, using ‘compliance’ as their excuse for doing so.
To compound that, they were not only financially worse off due to the bonuses being moved from Chinese New Year to Christmas, but many of them also lost face and subsequently damaged relationships due to their inability to financially support activities that they had traditionally been expected to.
On top of that, a cold war was brewing between the local Singaporean staff and the newly introduced foreigners as they saw that elements like the new Indian Indians were adding insult to injury by discriminating against their Singaporean brothers and treating the Singaporean Indians like ‘coolies’.
The result of this was rather than employees focusing on their jobs – many of which required a high degree of focus to avoid physical injury that could be fatal.
I spoke to one operator of heavy machinery that said no matter how hard he tried, he was in his mind cursing the management and all the other people in the ‘new organisation’ that had done little things to build resentment up inside of him. He had financial problems at home due to getting into debt over Chinese new year and all he could think about was how to sabotage the careers of the people that ‘hurt’ him.
While this might not be a professional attitude, and many westerners might say that people with that kind of attitude have to ‘grow up or get out’, his attitude was a common one amongst people throughout all levels of the organisation.
New castes had been created and coming to work became an issue of defending your turf rather than being part of a productive and successful company that had a cohesive corporate culture.
Are there any Western Company Success Stories Working With Chinese and Or Singaporean Cultures?
One company that has embraced the local cultures and experienced remarkable success is Starbucks in China. In the article “Why Starbucks Succeeded in China”, we hear how Starbucks embraced three core principles:
Starbucks refers to all of its employees as 伙伴 Huǒbàn or ‘partners’ (in a commercial sense), and hold annual ‘Partner Family Days’ where they invite the families of all employees (partners) to come and join in activities as well as listen together as a team as to what the company’s goals and plans are for the coming year(s). This is very similar to the original ‘Hungry Ghost Festival’ that was described earlier that the company in my case study traditionally celebrated. Starbucks also understands the need of embracing the ‘community’ feel and lays its shops out in a way where large groups of people can sit together and let the energy flow between them. There is also status attached to the brand. We can draw a loose comparison between this and the ‘Phradet and Phrakhun’ model in my original article. Through taking care of the family, financial, emotional and physical needs of its people, Starbucks as a brand has built up enough social ‘merit’ that they can warrant charging more than most for their products. It has bought prestige for them.
Starbucks were smart enough to do their homework first before they started implementing blanket global policies. They listened to the local voices on the ground and crafted a corporate culture in China that while still complied with Starbucks’ international regulations, could still thrive with its own culture that was specific to that country. It continues to grow in China and now the experience in China is serving as a model to successfully adapt to other non-US markets.
What Can I Do?
If you are working for a multinational company that operates in East or Southeast Asia, the best thing that you could do after reading this article, no matter how good or bad you believe your business to be, is to sit down with some of your team in those countries as well as family and friends and ask them what some of these cultural principles mean to them? Opening such a dialogue alone will often lead to down a path of learning that will bring things out of the ‘blind to self’ quadrant of the Johari window. It is often these things that can have the most profound impact on the way businesses operate in the region.
Also take a quiet look at some of the compliance implementations in your organisation. Have they been implemented in a way that just blindly follows the western implementation of these policies? Is there a way that they could be done in a locally sensitive way that still ‘complied’? Have the policies been made by people that don’t fully understand the business context, dynamics and sensitivities of the countries that they are operating in? If so, is there any way to help raise the level of understanding with those people making and enforcing the policies?
If you do find that there is indeed learning to be had, it might be a good idea to take the next step and see if you can start to build new communication channels that create a threat free environment for people at all levels of the organisation to communicate with the leadership team in their mother tongue rather than just through English or other foreign language. This is something that I have been doing with companies across Asia for over 20 years and once the culture of communication is established, we often find a whole new world that has been bubbling about underneath the surface that had never had sufficient channels to vent through to the surface. The mere act of communicating will do wonders for your team. If you can take positive action on what they communicate with you, you will get bonus points – not to mention a much more functional and efficient team.