How To Lead Service Firms In An Increasingly Multicultural Global Marketplace

With a rapid rise in the globalization of the world economy in the last few decades, the number of people traveling to other countries for business, education, employment, migration and tourism has grown exponentially, notwithstanding the widespread disruption caused by the global pandemic during the global pandemic last two years. In fact, the number of international people worldwide is expected to bounce back to more than 272 million, accounting for 3.5 percent of the global population compared to 2.3 percent in 1980 and 2.8 percent in 2000, according to the United Nations.

At the same time, the number of international tourist arrivals that dropped to almost zero during the early stages of the pandemic has recovered to about 35% of the number in 2019 (1.5 billion), which generated more than US$1.5 trillion in revenues, employed directly or one in ten people around the world GDP, and contribute 10% of the world’s total exports, 7% of the world’s total exports and a 30% of total services exports. These figures clearly show that the global marketplace is becoming much more culturally and ethnically diverse.

Past research on intercultural interactions is generally focused on the challenges of cross-cultural adjustment for the international migrants and travelers, including barriers to cross-cultural adjustment and effective intercultural communications, such as psychological privilege and ethnocentrism. In addition, many studies explore the outcomes of intercultural interactions, such as their impact on workplace performance, cooperation and competition, formation of cultural identities, ethnocultural identity conflict, misattributions, communication gaps, stereotyping, ethnocentrism, prejudice and discrimination, intolerance, confrontation and even violence towards ethnic minorities.

Notwithstanding these negative associations, Professor Piyush Sharma and his co-authors’ research during the last fifteen years shows that intercultural interactions are now recognized as inevitably and almost ubiquitous features of a rapidly globalizing world and an increasingly diverse and multicultural global marketplace. As a result, there is a growing need to understand the challenges and opportunities offered by the cultural, ethnic, national and socio-economic differences between customers and service employees, which drive the differences in their expectations, perceptions and evaluations of intercultural service encounters ( ICSEs).

specifically, customers and employees from diverse cultures have significant different attitudes and expectations about their roles in service encounters, affecting how they interact and evaluate each other’s performance when they are in intercultural service encounters. Past research on intercultural service encounters has explored various variables, albeit mainly from the customers’ point of view, such as culture shock, perceived perceived comfort, cross-cultural interaction, consumer ethnocentrism, and ethnic/cultural dissimilarity. Others explore customer reactions to service failure and recovery, employees’ acculturation, ethnic accents, and attentiveness in intercultural service encounters. Customers indulge in cultural or ethnic stereotyping when choosing a service provider, showing a clear preference for those from similar cultural, ethnic or national backgrounds as theirs. In contrast, customers from minority cultures report being discriminated against by the service employees from the majority culture. These feelings negatively affect their service quality and overall customer satisfaction. However, other researchers suggest that some ethnic customers may be less experienced or may have communication difficulties in dealing with the service employees from other cultures, which may prompt them to blame their cultural differences with the service employee for poor service.

In contrast with such rich literature on the customers’ view of intercultural service encounters, only a few studies examine these from service employees’ perspectives. These show evidence for behavioral biases in the employees’ responses, challenges faced by service providers in terms of stress, emotion, and coping, and a need for more significant emotional labor and surface acting coupled with higher levels of intergroup anxiety for the frontline service people involved in intercultural service encounters. Thus, there is not enough knowledge about the employees’ point-of-view about intercultural service encounters. Therefore, managers in service businesses that cater to culturally diverse customers (such as hospitality, tourism, travel) may not even realize that some of their employees may not be prepared to deal with (or be capable of dealing with) customers who have significant different cultural background than them in terms of language, religion, values ​​and social norms, which in turn would drive the differences in their service expectations, perceptions and evaluations.

Sharma and his co-authors address these research gaps using diverse theoretical perspectives to explore the effects of perceived cultural distance interaction comfort and inter-role congruence on perceived service quality and satisfaction for both customers and employees. similarly, they provide valuable insights into the socio-psychological process underlying these intercultural service encounters via the mediating role of cultural attributions and the moderating roles of service outcomes (failure vs. success) and service roles (customers vs. employees), consumer ethnocentrism and intercultural competence, personal cultural orientations, and attributions.

Service firms therefore, need to identify, recruit, motivate, train, and retain frontline service employees with high intercultural competence and inter-role congruence who can regulate and adjust their actions and behaviors during intercultural service encounters and avoid undesirable behavioral biases towards customers with customers the different cultural background than their own. Service firms could use screening tools to identify applicants holding negative stereotypes and intolerant attitudes about people from other cultures.

Similar efforts could be made to identify and educate those customers who are relatively more ethnocentric and intolerant towards service employees from diverse cultural and linguistic backgrounds (such as call center reps from India, the Philippines, or Mexico) to help them understand the purpose of hiring them, such as cost savings from offshore call centers to be able to provide them high-quality services at an affordable cost.

These steps would help service firms build a more cohesive and productive multicultural workplace that may ensure greater customer and employee satisfaction, which is essential to making more robust, more loyal, profitable relationships with customers and employees. Managers can also anticipate and address any problems in intercultural service encounters by using customer education and employee training to minimize the possibility of such issues and to manage these effectively if and when they arise.


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