During a dinner meeting in Prague between Japanese marketing representative Hiroko Numata and her Czech host, Irena Novák, confusion quickly emerged when the Japanese guest went off to find the restroom. She began to open the door to the men's room when her host stopped her. “Don't you see the sign?” Novák asked. “Of course I do,” Numata responded, “but it is red. In our country, a red-colored sign means it's the ladies’ room. For men, it should be blue or black.” Novák returned to her table, remembering that she too had looked at the sign but had focused on what was written, not its color. She wondered how many other things she and her Japanese colleague had seen or discussed but interpreted very differently.

We live in a contradictory and turbulent world, in which there are few certainties and change is constant. Over time, we increasingly come to realise that much of what we think we see around us can, in reality, be something entirely different. We require greater perceptual insight just as the horizons become more and more cloudy. Business cycles are becoming more dynamic and unpredictable, and companies, institutions, and employees come and go with increasing regularity. Much of this uncertainty is the result of economic forces that are beyond the control of individuals and major corporations. Much results from recent waves of technological change that resist pressures for stability or predictability.

Sam Mitchell looked through the window and realised that she had to make a decision in five days on whether to accept an international assignment to Hong Kong. She had just finished a meeting with her boss, who proposed to transfer Sam to the subsidiary there. Her boss said that she would be able to climb the corporate ladder and become the regional vice president if she was successful in Hong Kong. At this moment, Sam was trying to assess how her job was going, the situation her family would face if she took the offer, and what her career could look like after completing the assignment. Of course, she also recalled her first international move, to Philadelphia.

Born in Sydney, Sam went into the IT industry after earning an IT bachelor degree. She started with a small internet services company and, three years later, she began to work with her current employer, a large American technology company with offices around the globe. Sam's career was flourishing – so much so that, within 12 months of commencing, she was promoted into an international program manager role and offered the opportunity to move to headquarters in Philadelphia. She accepted immediately and without hesitation. Although the US job was on local terms – no “expat package” – the company was willing to pay relocation expenses, a rent-free townhouse, and US salaries were much higher than those in Australia.

Sam sought out an expatriate community after arriving in “Philly”. At a weekend expat get-together Sam met her future husband, Chris, who worked in a global technology company and had moved from Melbourne to Philly at a similar time to Sam. They got married quite soon after they met and bought a house on the “main line” in leafy, middle-class Montgomery County, about a 30-minute drive from downtown Philly. To better adapt into the local community they joined the Philadelphia Country Club, where Sam made many American friends and became active in golf. They figured out that, though there were some differences between Australia and the United States in terms of living style and mentality, the cultures of the two nations shared many similarities.

International business today is characterised by global organisations seeking new markets and opportunities across national boundaries, setting up subsidiaries, and managing people, processes, and resources in foreign countries. Employees of such companies increasingly take on expatriate/inpatriate assignments in foreign climes, jetset around the world on business assignments as frequent flyers, or simply play host to foreign managers and business partners in parent companies. Another important phenomenon is the growing multicultural workforce within organisations, as employees from different cultural backgrounds migrate to foreign countries and seek employment there. In all these instances, employees inevitably come into contact with people with cultural values, customs, and practices foreign to their own way of life. In such environments one skill that comes in most handy is “cultural intelligence”.

Cultural intelligence refers to “a set of skills and traits that allow one to more effectively interact with novel cultural settings”. Cultural intelligence enables a person to “adapt effectively to new cultural contexts”. Given the increasing trend in the globalisation of business activities and interaction with a multitude of cultural groups, employees need cross-cultural training that develops their capacities and skills in “cultural knowledge, self-awareness and behavioural aspects”. This case study examines the cross-cultural training strategy of International Business Machines Corporation (IBM), a company that has penetrated national boundaries and established itself as a truly international company.

IBM: the international company

IBM is a well-liked household name that represents state-of-the-art computers and technology. Established in the early part of the 20th century in the United States, the company started as the Computing-Tabulating-Recording Company, producing commercial scales, time clocks, and a primitive assortment of punch card tabulators. However, it was in the 1950s under the judicious guidance of Thomas J. Watson Jr that the company moved on to its present business operations – that is, development and commercialisation of electronic computer technologies. Since then the company has progressed into a formidable global presence, spanning nine time zones in more than 170 countries and employing 412,000 employees worldwide. IBM was ranked at number 71 in Fortune's Global 500 list and at number 24 in its World's Most Admired Company list in 2014. Today the company specialises in technology and innovation, inventing and providing software and hardware, engaging in business consultation and the provision of technology services that enable people and organisations to solve complex problems.

Advice about motivating employees in the global workplace is readily available. In Thailand, for example, we are told that the use of individual merit bonus plans runs counter to societal norms about group cooperation and can actually lead to a decline rather than an increase in productivity from employees who refuse to openly compete with each other. In the Netherlands, you can't get the Dutch to compete with one another publicly. In Mexico, everything is a personal matter; but a lot of foreign managers don't get it. To get anything done, the manager has to be more of an instructor, teacher, or parental figure than a boss.

We are further told that to improve managerial performance in the United Kingdom managers should focus more on job content than on job context. British and Canadian companies also motivate their employees primarily through financial incentives, while German and Dutch companies focus on providing employment stability and employee benefits.

As Japan's third largest innovator pharmaceutical company, Daiichi Sankyo Co Ltd (Daiichi Sankyo), announced in June 2008 that it would acquire a majority stake (63.9 per cent) in India's largest generic drug company, Ranbaxy Laboratories Ltd (Ranbaxy), for US$4.15 billion. Daiichi Sankyo was formed in 2005 through a merger of Daiichi Pharmaceuticals and Sankyo Co Ltd, both established Japanese firms with more than a 100-year history and known for their strong research focus. With the acquisition of Ranbaxy, it became the first Japanese drug maker to be engaged in the four primary pharmaceutical fields – new prescription drugs, generics, over-the-counter drugs, and vaccines.

Ranbaxy was started in 1937 by Ranbir Singh and Gurbax Singh as an India-based distributor for a Japanese company, Shionogi. The name Ranbaxy originated from the combination of the names of its first owners, Ranbir and Gurbax. Bhai Mohan Singh bought the company from his cousins, Ranbir and Gurbax, in 1952 and Ranbaxy was incorporated in 1961. Shortly after, it started production of drugs in India and soon was known for producing cheap generic versions of branded drugs without compromising on quality. Bhai Mohan Singh's son, Parvinder Singh, joined the company in 1967 and launched an ambitious plan to transform Ranbaxy into a major generic drug manufacturer in India with the construction of a large manufacturing plant and the launch of the company's IPO in 1973 to tap public funds. Parvinder Singh then began building Ranbaxy's international distribution network by driving export sales of low-cost generic drugs to developing countries. His sons, Malvinder Mohan Singh and Shivinder Mohan Singh, further expanded the company's presence globally by undertaking foreign acquisitions, marketing generic versions of expensive drugs all over the world. The Singh family transformed a small, local company into a respectable multinational company that provided affordable and quality medicines to patients around the world.

Until 2000, both Daiichi and Sankyo had a focus on domestic markets. After 2000, the Japanese Ministry of Labour, Health and Welfare took a series of actions to control rising health costs of an ageing population, including issuing new guidelines on drug reimbursements, tightening approvals and cutting reimbursement amounts, which added pressure on Japanese innovator drug firms’ profit margins. The Japanese government had also set up a target for generic drug use of a 30 per cent market share by volume by 2012.

Merrill J. Fernando surveyed the tea industry in 1950s Sri Lanka and decided that it had to change. Although Sri Lankans grew the tea and processed it, they did not profit from what was a world-wide trade. At that time there were not even any Sri Lankan tea-tasters – the first step to professional recognition in the industry. Bulk tea was exported and value was added overseas, where the real profits were to be made.

The first step for Fernando was a personal one – an ambition to lead, but it was also an ambition to link the lowest steps of the tea production chain to an already globalised industry. Embedded in that industry were strong links with other diverse cultures, especially the major consumer markets in the British Commonwealth and the then USSR, where tea itself was a cultural institution. Sri Lanka had an established tea brand – Ceylon tea. Fernando saw that his country needed a new model of behaviour for its corporate producers.

The steps to achieve these goals seemed clear to Fernando, if challenging. First, he secured training and then a position as a taster, with an established firm, AF Jones & Co, a British company, in 1954. Through a single-minded pursuit of gaining professional recognition and skill, followed by employment, investment, corporate purchases and divestments, the building of his own firm, and implementation of new processes and products, his profile in the industry grew rapidly. By 1973 his then-firm, Merrill J. Fernando Co Ltd, was yielding the highest net profit per pound of tea sold in Sri Lanka. In 1985 the Russian market provided his company with an opportunity to sell pre-packed tea into a major world market. In 1988 Dilmah Tea was formally launched, to supply the Australian market with pre-packaged tea.

Dilmah from its earliest days repudiated the profit motive as its sole raison d’être; nevertheless, it also showed business acumen. It chose a more challenging path than its competitors within Sri Lanka in seeking to export pre-packaged teas, targeting specific markets and building new ones that had express preferences for a particular quality and for varieties of teas. In a market that seemed secure, with little impetus to change its fundamental structures and practices, Fernando's vision was as much revolution as innovation. Not unexpectedly, his quest attracted resistance.

Asia is often perceived as a region playing “catch-up” with the urbanised West, battling lower wages, longer working hours, and enjoying less leisure time. However, while this was true a decade ago, recent years have seen a significant development in the Asian market. The emergence of an affluent middle-class that is keen to enjoy its wealth has encouraged governments and international entertainment companies to invest heavily in Asia's leisure and attractions industry. In 2012, Asia accounted for one-third of the world's total theme park ticket sales (US$103.3 million), second only to North America (US$127 million). Attendance at Asia's top 20 parks rose 4.9 per cent to 122.5 million in 2014, compared with 2.2 per cent and 138.1 million for the 20 largest parks in the United States.

The evolution of the Asian region is also evident from Disney's recent expansion activities. Since its success with Tokyo Disneyland in the 1980s, Disney has realised the vast potential of the Asian market and started its expansion in Asia. In 2014, Disney announced plans to invest $4.6 billion to expand and improve the two theme parks in Japan over the next 10 years, which is the largest expansion in Tokyo Disney's history. Disney has been one of the major participants, opening Hong Kong Disneyland in 2005 and its $5.5 billion Shanghai Disney Resort in 2016, which may become Disney's most-visited park.

Disney in Japan

Tokyo Disney Resort, located next to Tokyo Bay in Urayasu, Chiba, Japan, started on 15 April 1983. It opened as a single theme park, Tokyo Disneyland, which was the first Disney theme park to be opened outside the United States. Much has changed around the resort, with several resort hotels and even a companion theme park, Tokyo DisneySea, operating from 4 September 2001 to satisfy the needs of the millions who visit each year. Now the resort has two theme parks, three Disney hotels, six non-Disney hotels and a shopping complex.

The Tokyo Disney Resort is fully owned and operated by the Oriental Land Company (OL), which licenses Disney's characters. In fact, Tokyo Disneyland and Tokyo DisneySea are the only Disney parks not wholly or partially owned by the Walt Disney Company (WD). The partnership between OL and WD floundered when differences in management philosophies and decision-making techniques created tensions.

Robert Brown, Senior Vice President of Business Development of an electronics manufacturing firm in Australia, and his associate Luke Thomson, Vice President of Manufacturing, have been tasked with finalising the negotiations of a five-year strategic alliance contract with a Japanese multinational firm based in Tokyo, wherein the Japanese firm will supply critical electronic component parts to the Australian firm. Robert has a nickname – “the finisher” – for his tough negotiation tactics and has developed a reputation for closing deals quickly. Both Robert and Luke have significant experience negotiating contracts with suppliers from several Asian countries and they are both fairly confident even though this is their first experience negotiating a deal with a Japanese firm. They even refused pre-departure training offered by their firm, given their vast experience in Asia.

The first day of negotiations in Tokyo go down well for Robert and Luke and before they finalise the terms and conditions of the strategic alliance, which has been scheduled for the next day, they are invited by their Japanese counterparts Takeshi Miyamoto and Yoshi Shimizu to continue their discussions over dinner at a popular Japanese restaurant in downtown Tokyo. Robert and Luke are given an hour's time to get back to the hotel, relax, and freshen up before the hosts will pick them up and take them to the restaurant.

Robert and Luke catch a taxi back to their hotel and decide to meet in the lobby five minutes before the scheduled pick-up time. Robert calls his wife in Melbourne from his hotel room and briefly chats with her about his experiences in Japan, freshens up, and comes down to the lobby in a suit and tie in order to make a good impression on the hosts. Luke, on the other hand, takes a shower in his room and decides to dress casually in a T-shirt, shorts, and flip-flops as he finds the summer heat in Tokyo unbearable. Takeshi, Yoshi, and Robert are discussing different types of Japanese sake (wine) in the lobby when Luke greets them in his casual attire.

Sinosteel, as a state-owned enterprise (SOE), is China's second-largest iron-ore importer. To date, Sinosteel has 86 controlled subsidiaries, among which 63 are in China and 23 foreign entities are located in Australia, South Africa, India, Singapore, Brazil, Germany, Gabon, Cambodia, Indonesia, Vietnam, Turkey, Hong Kong, and Macao. The company is mainly engaged in mining and processing of minerals, related trading and logistics, construction, engineering and technical services, and equipment manufacture.

Starting with the Channar joint venture in 1987, in which Rio Tinto has a 60 per cent share, with Sinosteel holding 40 per cent, Sinosteel has over 25 years’ history in investing in and running a business in Australia. Although the original Channar joint venture was one of the largest Chinese investments in the world and it was the first overseas mineral resource project entered into by a Chinese multinational enterprise (MNE), Sinosteel is best known for its internationalisation up to 2008 by winning a tough battle for control of an Australian iron-ore miner, Midwest Corporation. In December 2007, Sinosteel announced a $1.05 billion (or $.4.91 per share) bid for Midwest, which followed Australian iron-ore company Murchison Metal's bid of $710.2 million or $3.35 per share. Sinosteel was motivated to compete with Murchison because Sinosteel was already a shareholder of Midwest and was willing to further increase its controlling power over the company. With full ownership of Midwest, Sinosteel could secure an offtake agreement for Midwest ore production, rather than always finding itself in a negotiation process with Midwest. In early February 2008, Murchison abandoned its offer because of low acceptance. Despite Murchison's withdrawal, Midwest announced on 20 February 2008 that Sinosteel's offer was unsatisfactory because it undervalued the company and its prospects. In mid-March Sinosteel launched a hostile takeover bid, and offered $905 million for the 80.1 per cent of Midwest that it had not yet acquired, for a total valuation of the company at $1.13 billion or $5.28 per share. In the following months, Sinosteel continued to buy up shares in Midwest until on 11 July it announced that it had acquired a controlling 50.97 per cent stake. Finally, after American hedge fund Harbinger Capital gave up its 15.2 per cent stake, on 25 September Sinosteel announced that it held a 98.52 per cent stake.

With an initial dream to be “the destination of choice for Australian job seekers”, SEEK was founded in Melbourne, Australia in 1997 by brothers Paul and Andrew Bassat, together with co-founder Matthew Rockman. At the beginning, the entire business had a very simple purpose: “taking employment classified advertising online and away from the city's newspapers”. Since then, SEEK has established itself as one of Australia's fastest growing businesses, and one of the iconic start-up companies in Australia.

Today, SEEK Limited, as an ASX/S&P 200 indexed company (an index of the leading 200 listed companies in Australia), is a leading service provider in the online employment and training market in Australia and New Zealand. SEEK is best known by its leading job searching engine, seek.com, which has over 150,000 jobs online and is visited 14.7 million times each month. SEEK has expanded its global businesses by its rapid internationalisation process in the last 17 years. By observing the trajectory of this process, it is evident that the company has a clear strategy to focus on emerging markets. To date, SEEK has acquired interests in five online employment websites that operate in countries across South-East Asia, China, Brazil, and Mexico, with exposure to over 2 billion people and approximately 20 per cent of the global gross domestic product (GDP). Overall, SEEK has received over 375 million visits to its global products every month and has over 3 million job opportunities available at any given time and over 100 million jobseeker profiles.

Similar to many multinational enterprises (MNEs) in their early stage of international expansion, SEEK also experienced management crisis together with a mismatch between its rapid internationalisation and cross-culture management incompetence. Although in its organisational culture statement SEEK claims that it aims to promote a culture of excellence and acceptance in the workplace and celebrate the diversity of employees who contribute to the success of the organisation, the statement does not accord well with the story of how it managed its Chinese subsidiary.

In October 2006, SEEK acquired an initial 24 per cent interest in one of the three leading online employment sites in China, Zhaopin Ltd (Zhaopin, hereafter), whose website received a larger number of unique visitors each month than the number of people living in Australia. The Zhaopin investment represented SEEK's first investment in an online employment site outside Australia and New Zealand.