locals – Success Across Cultures

You work for an international company that relocates you to Beijing, China.

Having never been to China and knowing little about the culture, you feel like a fish out of water.

Nothing is familiar to you; the lay of the land, the crowds, the language on street signs.

You think of home – your family/friends, your favorite haunts, your favorite foods – and you immediately feel homesick.

But you know your success in this foreign country depends on building your own home here, even if it’s temporary.

It depends on your ability to integrate.

And to aid that integration, you begin your friend-finding mission.

Expat Community

The first people you meet are, of course, your colleagues, some of whom are expats from your own country.

You join them for trivia night at a bar that caters to foreigners, and they introduce you to the broader expat community.

This community makes you feel immediately comfortable.

They laugh at your jokes, understand your references – they understand YOU.

The group is familiar. It’s home.

It’s easy to choose comfort and familiarity over differences that may generate potential conflict.

With people of your own culture, you’re not navigating a cross-cultural minefield; you generally know where the mines are and you avoid them.

But if you want to truly integrate into a foreign culture, you cannot self-segregate, sticking to your own flock.

You must migrate into unknown territories.

Cross-cultural Friendships Over Comfort

This is not to say you shouldn’t make expat friends.

In fact, these friendships often evolve into lifelong friendships and are also helpful to your cultural integration.

But when you avoid making local friends altogether, you’re losing out on an important part of living in a foreign culture: sharing.

Sharing culture not only allows you to better understand your employees and direct reports, as you better understand the culture you’re managing in; it also shows them that you care.

Without respect and a genuine interest in the culture and its people, you won’t connect with your local colleagues and employees.

They will note that you haven’t sought out any significant cultural experiences in your new home.

They will note that you don’t bother with the language, the customs, or anything else.

They will note that you stick to your own flock and don’t show interest in making friends or sharing culture with the locals.

As with anything, you’ll only get out of your experience abroad what you make of it.

You can choose to stay in your bubble and never expand your comfort zone.

Or you can choose to share in a new culture, meet new people, appreciate new ideas and traditions, and ultimately broaden your horizons.

Next week, we’ll talk about the three types of expatriates, and you can decide which category you want to fall into.

An anchor prevents a boat from straying from a set point.

When making decisions, managers are starting from their anchor – their initial set point, which is grounded in culturally-influenced values and norms.

A manager will drift from this point until the chain pulls taut.

There, he will reach a final decision, but inevitably, because he is anchored to a set point, that decision is influenced by anchoring bias.

We’ve talked about availability bias and representative bias in the last two blog posts and how each influences decision-making.

This week, let’s take a deep look at anchoring.

Anchoring in North African Souk

Let’s say you’re from a Western culture and travel to Northern Africa as a tourist. There, you head into a souk, and a seller zeroes in on you.

Knowing that your cultural norms and values are anchored in paying top prices for quality goods, the seller asks for a much higher price for a carpet than he might ask of locals.

Assuming your ignorance of the local pricing market, he starts astronomically high when haggling. That way, he can negotiate down to the highest amount you’re willing to pay.

He knows your anchoring bias allows for it.

If you never discover how much locals are paying for the same carpet, you’ll be none the wiser. You might even walk away thinking you scored a real bargain, when in reality, you paid ten times the local rate.

But if you later discover the seller gouged you on the price, you’ll likely feel scammed, which can often strain future negotiations.

This is one way in which markets use anchoring bias to their advantage in cross-cultural business.

Anchoring in Vancouver Housing Market

Sometimes, exploiting anchoring biases can backfire for local communities.

Let’s travel from North Africa to Vancouver.

The ‘90s saw a peak in Hong Kongers and mainland Chinese immigrants migrating to Canada. A large number settled in the Vancouver area.

Hong Kong real estate is notoriously pricey, so when Hong Kongers anchored in Vancouver, they were willing to pay top dollar for property.

The local real estate market exploited this anchoring bias and charged higher rents.

The result was that, like Hong Kong, Vancouver real estate now has a reputation of being exceptionally expensive.

According to MoneySense,

“Data collected by David Ley shows how, over the last few decades, metro Vancouver has become similar to other Pacific Rim ‘gateway’ cities, such as Hong Kong, Singapore, London and Sydney. Each of these gateway cities have rising housing costs that are fueled by high immigration-driven population growth and foreign investors.”

So, when exploiting anchoring biases in cross-cultural business goes South for local communities, how do they re-anchor?

In 2018, the British Columbia New Democratic Party was voted in primarily due to their platform on housing costs. Their goal was to increase the housing supply, slow demand, and dissuade overseas buyers by taxing empty homes and raising the foreign-buyer tax from 15 to 20 percent.

In this way, Vancouver is attempting to re-anchor their housing market to align with their own cultural norms and values.

Tag: locals

3 Mechanisms That Bias Our Decision-Making: Anchoring Bias