A FEW CULTURAL TIPS WHEN AUDITING OFFSHORE

Australian Universities Quality Agency

TNE Auditor Training Program

Stamford Plaza, 111 Little Collins St, Melbourne

Friday 28 October 2005

Professor Dean Forbes

Deputy Vice-Chancellor (International)

Flinders University

INTRODUCTION

What is my challenge?  It is to add something of value to the day, at the very end of the day. No easy task. You have been talked at, and workshopped, probably to within a centimetre of your life.  Moreover, as auditors you are doubtless well travelled, and therefore experienced in dealing with people in different cultural contexts.

I am not an auditor.  But I have been working continuously in the Asia-Pacific for nearly 34 years, with a significant commitment in four countries.  Indonesia, where I worked on my PhD, and have had subsequent research interests; Vietnam, where I managed a UNFPA/UNDP project for a number of years; China, designing aid projects and through Flinders established a number of offshore programs; and Papua New Guinea, where I taught at the University of Papua New Guinea.

I appreciate that auditors need to operate across a range of countries, but my comments are skewed towards the Asia Pacific.

WHERE DO WE START?

What have I learned?  In preparing for this presentation I asked myself what is it that I think about making sure I do as I enter a country?  In other words, what tips do I give myself?

•    To smile continuously in Indonesia

•    To remember that while Vietnamese names have a similar format to Chinese names, it is their given names that they use for everything

•    To not assume that everything in Singapore works well (the taxis, for instance)

•    To not rush meetings in China.  In other words to be prepared for long discussions and negotiations (and watch the alcohol at the banquets, especially if mao tai is involved)

•    To be very positive and never undersell what I have to say while in the USA

•    To be direct and serious, at least initially, in Norway

There are countless books and articles of tips for operating in different cultural environments.  They range from Chin-ning Chu’s The Asian Mind Game to Carolyn Blackman’s Negotiating China.  Most are designed for business people or for tourists.  Reading them can be helpful, but also intimidating.

There are relatively few geared towards the education sector, and universities in particular.  However, universities are increasingly active in enhancing the international skills of both staff and students.

NAFSA (the Association of International Educators) produces a World Citizen’s Guide for American students on study abroad programs.  It includes the following tip (p 21)

    “If you touch the top of someone’s head in Indonesia they will most likely be very insulted”

I do not know what auditors are to do, as I haven’t read the manual, but if you are required to touch anyone’s head in the course of an audit, don’t do it in Indonesia.

If you did transgress then I would direct you to read the essays in Burak and Hoffa’s Crisis Management in a Cross-Cultural Setting.

UNIVERSITIES OPERATING OFFSHORE

As auditors you are dealing with many different groups of people: offshore partners; offshore agents; offshore students; and offshore officials.  All are different, but the cultural context in which they operate is important to understanding them.

In many countries – China, Indonesia, Singapore - universities are more closely aligned with government, and that has an impact on the culture of the institution.  It also introduces complexities which are hard to get a grip on.  For example, universities in China might have, in effect, two Presidents.  The University President, and the Secretary of the Party.  That parallel structure might occur throughout the institution.  Understanding who is responsible for various activities can be difficult, and take some time to achieve.

Private companies, regardless of whether they are educational bodies or agents, in many Asian contexts are also very different kinds of entities.  The Chinese partners of an Australian university may have a less-than-transparent connection with the university in which they are located.  Are they publically owned, or privately-owned, or something in between? 

In several countries the success of a high profile education entity may well be as a result of political patronage at one or multiple levels of government.  How often do you hear that a certain mayor, or minister, or, occasionally Deputy Prime Minister, has an interest?  Again, both these situations require some understanding of the context in which activities occur.

SOME GENERAL INSIGHTS

For a number of years I have been supervising the PhD thesis of a woman by the name of Roberta Ren, who is interested in the interplay between business and culture, particularly in China and Vietnam.  She has built her thesis around the concepts of autopoesis and the institutionalisation of contradictions.  Autopoesis is a biological metaphor.

The specific focus of Roberta’s thesis is the contract, which we in the West, and in Asia, believe is of crucial importance in an agreement to do business.  Contracts are significant to TNE programs and our agents. But contracts are meaningful for different reasons.  The meaning of a contract is different in different cultures. 

In the West, it is a fundamental component of business, because it is something that is enforceable (generally speaking) through the Courts.  However, in many Asian contexts, China and Vietnam included, business is relationship-based.  Agreement is reached, and maintained, between the key individuals.  The relationship establishes a bond of trust.  In many circumstance Law Courts are not going to uphold the foreign side in a dispute over trade, if indeed the issue ever gets to Court. (Read Tim Clissold’s Mr China if you want some evidence of this)

We in the West are generally aware of this different cultural context, but we tend to take the view that globalisation, and its economic instruments such as the WTO, the GATS negotiations, Australia’s FTA agreements and so on, and, of course, the vast number of Asian students studying for western MBAs, is moving us steadily towards a universal business culture which gradually will eliminate the different interpretations of the instruments of trade such as contracts.

By contrast, the autopoiesis argument is that particular elements of culture are resilient, and though it may appear that western business principles have been adopted, this is generally not the case.  Thus the Chinese regard the contract as important precisely because westerners regard it as important, and they appreciate the need to keep their partners happy.  The content of the contract is meaningful more as we regard a letter of intent.  After it is signed, its content gradually loses its meaning, as business circumstances change.

This paraphrases an argument, which builds upon Willem Wertheim’s concept of the institutionalisation of contradictions.  It means that ultimately we don’t have, nor will we ever achieve, a seamless integration of business cultures and ways of thinking.  We simply come to expect and accept the differences between us and our foreign partners.  The real skill of operating in culturally diverse situations comes from knowing how to manage institutionalised contradictions.

I should note I have discussed this issue with individual AUQA auditors before.  And I am not saying that contracts are meaningless.  Rather that we need to understand the different meanings they have in different cultures.

If you accept the argument about contracts, what is the meaning of quality in other cultural contexts?  If we use ‘fitness for purpose’, what do others assume a quality audit means.  Most would assume it is a judgement. 

How do you go about describing the purpose of the quality audit in a way that is both comprehensible and convincing? The need, therefore, is openness to different meanings of quality (as it is to contract).

How do you establish truth in the time available to an auditor.  That is, in the absence of well-developed relationships.  If relationships and trust are the centre-point of meaningful understanding, how do you cope in a situation where you meet with a wide range of people in a very short time period.  Therein rests another critical skill for an auditor.

FACE, PLACE, SPACE AND LANGUAGE

Now I want to focus on four conventional tips.

The first is ‘face’.  The importance of not appearing to contradict, or openly challenge, the people with whom you are dealing, in a way that will cause them to lose face (respect).  This is particularly difficult in an audit situation.  It is critical to remain calm and polite in all situations.  The shows of exasperation, or the temper tantrums, which our colleagues in Australia occasionally use to achieve their ends is an absolute taboo in most of Asia.  In some cultural contexts this means indirectness.  Coming at issues in a less direct way – but it does not mean avoiding contentious issues.

The second is place.  Each is different.  And there are things that need to be understood.  The most important are how to address people using the correct names, and gender differences, particularly in Arab/Muslim cultures.

Space is the third. There are postcolonial sensitivities.  Westerners have been perceived as privileged in many different situations, but now the historical tide is turning.   We cannot take for granted that our way of doing things is best, even when we are primarily providing an Australian university education.  There has to be room for manoeuvre on both sides.  When we are working in a different cultural environment we are in a third space or third culture.  We create a new, transient, temporary culture in which to operate.  The need, therefore, is sensitivity and the ability to read a situation and adapt.  The most convincing cultural skills are built around having the ability to learn and modify behaviour to meet the circumstances. 

Finally, language.  This may seem an obvious issue.  But I have lost count of the number of times that meetings have become virtually meaningless, because of the failure to communicate skillfully.  Both when English is used, or when an interpreter is involved.

Communication must be in appropriate forms of English.  By this I mean using simple (ie not complex) sentences.  Using mainstream words, and avoiding jargon, acronyms and colloquial expressions.  Speaking at a pace which is suitable for the audience and not like the dialogue in an episode of West Wing.  And listening!!  I think more understandings arise from the lack of care in English expression than in any other aspect.  It is my No 1 cultural tip.

CONCLUSION

You do not have to agree with my comments on autopoiesis to know that culture will mean that when you talk about educational quality, or contracts etc, that there is an implicitly different understanding involved, and that building relationships, regardless of the time available, is central to finding out what people really think.

As for the tips: face, by which I mean respect; place, meaning having a grasp of the local situation (doing some homework); space, being sensitive and adapting to the needs of each situation; and language, meaning speak plain English.

I leave you with this take-home tip from the World Citizen’s Guide (p 19)

    “When you want to greet someone in Tibet, simply stick out your tongue”

Remember that, and you will be OK.

REFERENCES

Blackman, Carolyn 1997 Negotiating China: Case Studies and Strategies. Allen & Unwin, Sydney.

Burak, Patricia A. and William W. Hoffa (eds) 2001 Crisis Management in a Cross-Cultural Setting. NAFSA Association of International Educators, Washington DC.

Chu, Chin-ning 1995 The Asian Mind Game: A Westerner’s Survival Manual. Stealth Productions, Sydney.

Clissold, Tim 2004 Mr China. Robinson, London.

Flinders University’s Cultural Diversity and Inclusive Practice Toolkit.

NAFSA (the Association of International Educators) 2002 World Citizen’s Guide, Washington DC.