Executive Interviews: Interview with Arthur Yeung on Managing Complexity
August 2008 - By Dr. Nagendra V Chowdary

Prof.Arthur Yeung
Philips Chair Professor of Human Resource Management,
Director of Centre of Organization and People Excellence,
and Associate Dean at China Europe International Business School (CEIBS), Shanghai,
and People's Republic of China.

The dynamics of working with a homogenous team and multicultural team will be very different. In a multicultural team, team members can feel very uncomfortable about the way other team members behave, speak, and make decisions. One typical example is how decision is made. For example, in Asian setting, people are socialized to focus on harmony and to avoid direct confrontation which can be quite different from Anglo-Saxon cultures. As a result, when Asian team members disagree with a specific decision in a team meeting, they tend not to say anything to create conflict and confrontation. However, it doesn'tmean they agree. On the other hand, the Anglo-Saxon manager, after opening discussing the issues in a team meeting with no objection, s/he assumes everyone agrees and supports the decision. As s/he finds out that team members actually disagree with the decisions and speak against it, s/he will be very frustrated. As a result, people start to feel that they don't really understand what other members are really thinking. This can engender distrust among teammembers.

On the other hand, by bringing team members with different knowledge and perspectives together, the team should be able to generate more innovative and diverse options and result in higher quality decision making. The challenge is how to make the multicultural team work effectively so that we can leverage each other strengths rather than becoming frustrating to each other. At the company level, the ability to develop shared values and behavioral protocol is important. Companies need to clearly articulate what kind of behaviors are acceptable and should be encouraged and what are not so that teammembers feel comfortable to behave in specific ways for the sake of business performance (e.g., speak up and speak out). At the team level, managers need to invest more time in the team formation stage as we know that a team typically goes through the stages of "Forming, Stormimg, Norming, and Performing". While team members are generally nice to each other during Forming stage, multicultural teams need to invest more time and efforts in the Storming and Norming stages when differences and diversity surface and are openly discussed so that certain behavioral protocols become acceptable to all team members (e.g., how to communicate candidly, what is the best way to make decision that everyone is comfortable, etc.). If necessary, companies should seek the help of an external facilitator to accelerate the process of Storming and Norming so that themulticultural teamcan performbetter.

• What is the importance of networks and hierarchies in managing complexities in global corporations?
  Global corporations need both formal hierarchy and informal networks to ensure the effective operation of the organization. Formal hierarchy defines who is supposed to do what (roles and responsibilities), what authority or decision rights each person has, and how that person will be held accountable in terms of performance outcomes. Formal hierarchy provides a skeleton that guides the workflow and decision flow. It is important to avoid confusion. However, informal network scores as a lubricant to get things donemore smoothly in a given structure or skeleton, especially when team members are located in different countries and come from different cultures. If people enjoy working with each other or trust each other due to shared values, similar work style, years of cooperation, or non-work related activities, tasks and decisions can be done more efficiently and effectively. Crosscultural trust, respect and personal relationship are important ingredients to make informal network work.

• What is the role of business schools in preparing better managers for managing complexities?
  I think business schools can play several important roles in preparing managers to lead in complex organizational setting. First, it can help managers learn important concepts, tools, frameworks and cases in managing complex organization. The source of learning will not only come from professors but also from corporate speakers and other participants who are facing similar challenges. Second, business schools can design learning processes that expose participants to diverse business environments through more experiential learning like global action learning projects, benchmarking visits, internship arrangement, etc. For example, in the late 1980s when many American and European firms started to globalize their business operations aggressively, University of Michigan designed an innovative global leadership program that mixed senior executives from 30+ leading corporations to work in global action learning teams to examine exciting business opportunities in emerging markets like India, China, and Brazil. Throughout the program, they learned not only from cutting-edge professors and participants from other corporations, but also from business leaders and subject matter experts in different parts of the world. While American and European executives are now more well prepared to lead complex global operations, I think similar programs will be helpful to prepare senior executives from emerging countries like India, China, Russia and Brazil as their companies become more globalized.

1. Managing the Global Supply Chain Case Study
2. ICMR Case Collection
3. Case Study Volumes