Saturday, September 3, 2011

Cross Cultural Strategy in International Business Competitive Intelligence (4)

The Processes of Developing a Cross Cultural CI Program

To beat the competition in today’s globalised economies, it is necessary for firms involved in international business to design and develop a cross cultural CI program. Such a program should reflect the needs of the firms, facilitate the information processes, and assist the strategic decision-making by the management. The structure and the scope of cross cultural CI program will depend on the individual firm and their needs. Based on previous research (Robertson 1998) and our own experiences we will suggest that in establishing a formal international CI program cross culturally, a firm needs to follow an eight-phase process (Table 2).

Table 2. The Eight-Phase Processes of Cross Cultural CI Program
Steps Major Issues
Phase One: Define Requirements To be aware of cultural, social, and economic differences between the home country and the potential host country
Phase Two: Identify the Main Competitors To analyze the characteristics of the firm's industry in the world, then identify the first few major competitors, and locate the positions of those competitors in the industry worldwide with an emphasis on cultural issues.
Phase Three: Assess Resources To determine the existing information residing internally. Make sure it should be completed prior to the collection and analysis of external resources.
Phase Four: Assign a Leader To select the individuals who are keen on cross cultural differences, fluent in more than one language and able to listen for content without being strictly bound by context.
Phase Five: Set-up CI Program To define the objectives of the program and to make the budget for the program. It is important to separate the direct objectives from the indirect objectives.
Phase Six: International CI Structures To staff the team with consideration to cultural backgrounds. To develop a common language and an ethical framework for the cross cultural CI project.
Phase Seven: Collect Data and Analyze Data To learn as many details of the industry in the foreign country as possible; to keep in mind the cultural challenges can occur at any times and thus should be culturally sensitive.
Phase Eight: Present the Findings To keep the final presentations available and accessible only to the decision makers; failure to do this may lead a great loss in terms of intelligence properties.


Phase One: Define Requirements At this stage, the co-ordinator has to be aware of cultural, social, and economic differences between the home country and the potential host country. The seven basic questions posed earlier provide a good guideline for the issues that need to be addressed, and thus suggest research/analysis areas. It is suggested that regulatory and legislative differences between the targeted country and the home culture, as well as all related changes that affect the competitive market are critical components to include while assessing new markets’ and competitors’ strengths and weaknesses. Contextual content, time prioritisation and sensitivity, as well as multi-tasking skills will deepen the analytical content and the effectiveness of the intelligence delivered (Robertson 1998).
Phase Two: Identify the Main Competitors For instance; a Canadian firm once hired one of the authors to conduct international competitive intelligence. According to the client’s needs, he first analyzed the characteristics of that company’s industry in the world, then identified five major competitors to the company, and finally located the positions of those five competitors in the industry worldwide with an emphasis on cultural issues. Based on the best information resources and his propounded analysis, he predicted what those five competitors were likely to do in the marketplace individually; and made some suggestions to the company as what actions should be taken to achieve a competitive advantage based on its cultural and social capitals. The result turned out to be excellent.
Phase Three: Assess Resources Company need to determine the existing information residing internally. An assessment of knowledge, expertise, foreign national employees, and on-site materials can prove beneficial in a gap analysis. Furthermore, expatriates who have returned from field trip can provide valuable sources of competitive intelligence. At this stage it is suggested that the strategies include interviewing experts who are familiar with the subject concerned and have lived, worked or studied in the country in question, as they can provide significant inputs in terms of cross cultural values. Evaluating internal resources should be completed prior to the collection and analysis of external resources (Robertson 1998).
Phase Four: Assign a Leader A person who is keen on cross cultural differences, fluent in more than one language and able to listen for content without being strictly bound by context should be the right candidate. In addition, the CI analyst needs to build an international network of professionals. This way, primary information can be readily obtained. Having analysed the information, the CI practitioner then has the duty to keep the organisation informed about the general state of their industry and competitors. Prescott and Gibbons (1993) suggest building a project-oriented approach, which means emphasising temporary involvement by different individuals “funded” by different interested managers.
Phase Five: Set-up CI Program Objectives and Budget are two dimensions needed to be addressed when defining the objectives. Separate direct objectives from the indirect objectives and distinguish the comprehensiveness of the assignments and the type of assignments for the CI program. According to Robertson (1998), the budget can sometimes dictate the number of trips that need to be made abroad. In addition to general administration expenses, the following needs to be considered: a) The acquisition of new physical sources (books, maps, periodicals); b) Additional part-time or full-time staff for collection and analysis; translation, and other aspects of the collection process; c) Potential or required training on cultural, trade or international business issues; d) Specialized conferences and/or association memberships; and e) Any on-site visits for collection of information.
Phase Six: International CI Structures In this stage, there needs to be an analysis of staff requirements for projects. If there are limited human resources, the CI analyst may need to cover the entire world. Robertson (1998) suggests that if the CI team is able to hire specifically for internationally-focused intelligence assignments, background and living experience in that culture may be preferable, but education and international orientation are the primary objectives. At the same time it is important to develop a common language for CI, an ethical framework for the collection of information including a code of conduct, skill-building workshops related to CI topics, and a vision of how CI fits with the mission of the firm (Prescott & Gibbons 1993). The code of ethics and conduct must be flexible and suitable to be used in different cultures and countries or it will be irrelevant. Moreover, the CI program needs to be able to counteract current threats and facilitate or establish a learning organisation. By so doing it will enable the firm to continue surviving even if the competitive conditions change.
Phase Seven: Collect Data and Analyze Data Prior to leaving for the international site a few things need to be arranged. Interviews with a variety of sources need to be set up to learn as many details of the industry in the foreign country as possible. Also, prepare information that can be exchanged when conducting interviews, as leaders recognise the value of trading facts. The CI analyst further needs to define the specific requirements and goals the visitation is designed to fulfil. While at the site, the CI practitioner needs to keep in mind the cultural challenges can occur at any times and thus should be culturally sensitive. The person should have an intimate knowledge of the effects of social, cultural, and political factors on market performance along with more traditional reliance on financial, business, and economic factors to gather relevant and worthy material. Failure to understand the social and political dynamics can lead to wasted time, resources, and money (Werther 1997).
Phase Eight: Present the Findings Having acquired, interpreted, analysed and transformed the information, the last remaining step is to distribute or disseminate the intelligence. The CI program needs to be designed to deliver proficient and complete solid analysis to people who can act on it. It has to assist in making timely, effective and competitive decisions. There might be different formats in terms of presentations but the fundamental content should be basically the same. It is up to individual CI professionals, according to management preferences, to decide what types of formats are the best for presenting the findings and recommendations. One important point for all the CI professionals to keep in mind is that the final presentation be available and accessible only to the decision makers; failure to do this may lead a great loss in terms of intelligence properties. We would also like to suggest that CI professionals should not over estimate the cultural sensitivity and awareness by the managers, as such to give them certain amount of education in terms of different meanings cross culturally.

Conclusion

In today’s highly competitive global village, knowledge and information have to be analysed and converted into intelligence to be effective and worthwhile. It is important for any company to know its competitors in terms of their products, their distribution channels, and their marketing strategies from a cross cultural perspective. This is particular crucial in these cases where companies produce similar goods and compete directly for the same market. Only with a competitive intelligence program to supplement its international marketing can a firm be assured success in the global market.
If competitive intelligence as a dynamic business function is a recent function, the global CI program cross culturally is just in its introduction stage. At this time both academic scholars and business practitioners are lacking theories and practices to consult; much more works need to be done to maturely develop the global competitive intelligence function. Our experiences and practices demonstrate that CI alone will not guarantee success in today’s highly competitive, global business environment. However, if CI program conducted cross culturally, in some form, is not a part of the decision-making process, sooner or later a company will lose a crucial marketplace battle to a competitor. We hope our research can be useful for all those who are interested in either research about or practice in the fields of global competitive intelligence.

2 comments:

  1. It is really important that you are being aware of what is going on in your company. Ignorance will not help you in the end.

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