Business Issue

The Third Culture


Figure 1. Third Culture

There are a handful of research papers published in this knowledge area – not because it is academically less challenging, but it is very difficult to set up the right platform for the design of experiment to arrive at a pragmatic conclusion. Nevertheless, the authors attempt to approach the third culture from a wholistic perspective and highlight the salient factors that impede the performance of an organization who does not understand and appreciate that the third culture exists. If manage well it will result in a high-performance culture and if handle organically can lead to disaster – internal politics, strike, insurmountable union problems, etc.

What is third culture in an organization?

Figure 1 reveals a vivid impression of when a foreign company invests in a host country, the company that is being setup for operations will be managing at least three kinds of culture. The national culture of the foreign company. The national culture of the host country. And the organizational culture which needs to be shaped and nurtured by the leaders of the newly established company until it reaches its maturity level of supreme performance.

Figure 2. Six National Culture Dimensions

For example, a Japanese company decided to establish a branch office in Singapore. The first culture is Japanese national culture. The second culture is Singaporean culture. The third culture is the Japanese branch office organizational culture which comprises of the people working there. If the people come from different countries then cultural diversity will hinders the speed of developing the third culture – which is unique to this organization. This third culture will be different from the ones that the same Japanese company setup in say, Indonesia. Figure 2 shows the six dimensions of national culture. It is apparent that there is a severe difference between the Japanese and Singaporean for uncertainty avoidance – the degree of tolerance for the unknown. Japanese has a high degree of uncertainty avoidance means that everything must be crystal clear before they will embark on a project/initiative – plan, plan, plan until all process ownership becomes one person who will be responsible for its execution. On the contrary, Singaporean has a low degree of uncertainty avoidance or extreme flexibility – means that though planning is still not meticulous yet, it is acceptable to embark on the project/initiative and with the flexibility mindset to accommodate changes along the way. The likelihood of do/undo/redo is very high – resulting in frustration of the Japanese counterpart or colleague.
If both parties do not understand and appreciate such inherent cultural characteristics, it will lead to unnecessary stress and strain in the long run – affecting working relationships and concurrently retarding the previous cordial cum conducive environment.

Figure 3. Wholistic Perspective of Third Culture Organization
Figure 4. De Bono’s Six Perspectives of Figure

What is professional culture?

The wholistic perspective of a third culture of an organization is captured in Figure 3.
So far, we have dealt with national culture. Next, we apply De Bono’s six thinking perspectives to professional culture – though the analysis may not cover every professional in the industry. See Figure 4. When different professionals background will evaluate the same issue – opportunity or threat, the outcome of the solutions/recommendations will be different. This is similar to the purpose of the brain storming technique – by assembling a cross-functional team resulting in synergy for creative and innovative solutions.

What is organizational culture?

The third culture of the newly established company will take time to nurture and mature. However, not every staff is recruited as fresh employee without previous experience. Hence, many employees have inherited certain attitude, habit, and behaviour from their previous employer/organization. The longer the person work in the previous company, he/she will be influenced to think and behave based on the former organizational values and culture. There is a strong possibility that this person will apply the previous organizational culture to the current one. The effect will be more significant if this person is holding a senior position in the newly established company. Figure 5 depicts the elements of an organizational culture which consists of three layers – artefacts (company’s uniform, plaque, slogan); beliefs, values, and attitudes (the way employee thinks and work); basic assumptions (company policy and standard operating procedure).

Figure 5. Organizational Culture

Therefore, the organizational culture of the newly established company can take as short as 5 years and can take as long as 20 years like GE (USA) to reach maturity. It really depends on the nature of business, size of the company and the type of organization structure – in addition to the transformational leadership skills of the senior management team – the master change agents. To be sure, transition change management must be a concerted endeavour and every key change agent must move in tandem to attain the desirable performance outcome. The authors have developed the 6As of transition change management – “design-develop-plan-test-roll out” until successful completion. The process flow is given in Figure 6.

Figure 6. The 6As of Transition Change Management

Insight and Hindsight

Many C-suite executives blame their people – middle and junior management for not performing to their key performance indicators (KPIs). However, if they will to look deeper and ascertain the root of the sluggishness of the organizational performance – it is due to its third culture which not only has been overlooked by senior management – but needs to be addressed through organizational development so that everyone is on the same page. This is especially true of organizations where the culture is ethnocentric (home country people are the best in running the company in a host country). For example, one of the authors was working for a Japanese company for 10 years – he was engaged as the country manager, designated as Group General Manager for ASEAN, by one of the leading machine tool company in Japan. He understood the importance of the third culture so it took him 10 years to accomplish the sales revenue that until today none of his Japanese counterparts have been able to superseded. The formula in handling the third culture with care (see Figure 7) is:

Figure 7. The 4Rs of Normalising Third Culture
  • Recognise there is a difference between national culture, professional culture, and organizational culture from the previous company which the employee has been cultivated – it will take longer time to influence and transform senior management who has worked in a previous world-class organization. Because, this person will benchmark the current one with the predecessor organizational behaviours
  • Respect each other national culture which includes religion, race, belief, language, gender, age, and education level
  • Reconcile by immersing into the host country culture for those who come from their respective home country culture from awareness to alignment to action to adoption (where everyone has to change to the third culture organizational values established with the consensus of the majority employees – because values drive behaviours and consistency in collective behaviours of the organizational culture drive business results) to assurance – revisit Figure 6.
  • Realise the supreme performance and root the third culture in anticipation of change to a higher level of performance – there is no best way, always an innovative way to be faster, better, and smarter than the competition.
  • In one of the largest Indonesia conglomerate that have numerous international talents to assist their global business, the six principles to adopt the third culture are their 6Ps and Qs. See Figure 8. No wonder they are able to turnaround the organizational culture from crisis to a super-efficient one.
Figure 8. The Principles of 6Ps & Qs as Third Cultureand
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Practice Professor KC Chan

Wholistic Chan is the President of TWAN Pte Ltd and an advisor to Pradita Institute of Science and Technology. He holds MSc (Industrial Engineering) and BSc (Production Management) degrees from the Cranfield University (England), an MBA (Strategic Management) and PhD (International Business) from the University of Strathclyde (Scotland). He also holds three doctorate degrees in project-based action learning. He is visiting professor to five leading universities in Asia. He has published 7 books, i.e. strategic project management, agile leadership, technopreneurship, design thinking in enterprise risk management, and disruptive thinking for Olympic innovation. He has also published over 100 articles in international journals and business magazines.

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