Managers' Faulty Cultural Preparation Hinders U.S. Banks Abroad, Study Says; Knowledge of Native Languages, Customs, Attitudes Called Inadequate

By Adams, Jerry | American Banker, June 26, 1984 | Go to article overview

Managers' Faulty Cultural Preparation Hinders U.S. Banks Abroad, Study Says; Knowledge of Native Languages, Customs, Attitudes Called Inadequate


Adams, Jerry, American Banker


ST. THOMAS, Virgin Islands -- Foreign environments can affect a bank's international operations in many ways, yet most banks are doing "a significantly inadequate" job of preparing their officers for foreign work, according to a study by a professor here.

All banks are affected by their environments, whether foreign or domestic, said Solomon T. Sentongo-Kabuka Jr., assistant professor of business administration at the College of the Virgin Islands. But conditions in foreign countries -- ranging from native employees notions about authority to the efficiency of the country's central bank in clearing transactions -- have a disproportionate effect.

And although some matters are beyond control, many can be anticipated through training aimed at increasing the effectiveness of leadership by U.S. managers, the study said.

"The degree to which a transnational bank can adjust to the sociological-psychological variables in its host environment has major implications for managerial performance in respect to staffing, directing, and organiztion functions," the study said.

Mr. Sentongo-Kabuka submitted questionnaires to 106 managers of U.S. bank branches abroad, representing 30 banks in 35 countries. The parent banks ranged in size and location from the Bank of America in San Francisco and Citibank in New York to Rainier Bank in Seattle and Wachovia Bank and Trust Co. of Winston-Salem, N.C.

The foreign countries and colonies involved encompassed an even wider range, from Australia to Yemen and from Switzerland to the Soviet Union. More Language Training

A principal conclusion was that U.S. banks should attend more to foreign-language preparation, not only for employees but for employees' spouses. Questionnaire responses indicated that lack of language training was a serious shortcoming.

Also as a basic preparation, Mr. Sentongo-Kabuka noted, American bankers must consier that they often stand out in a crowd.

"Americans differ sifnificantly from the people of some other countries in terms of behavior, religion, language, physical appearance, living conditions, political organizations, economic development, work practices, and many other ways," he said.

Calling managers "the dynamic, life-giving element" in their businesses, Mr. Sentongo-Kabuka pointed to the importance of preparation that anticipates conditions abroad.

"Presently, almost all formal education for bank managers comprises the traditional academic disciplines of finance, economics, banking, accounting, business administration, and so forth," he said.

"Although these courses may indeed be appropriate, they are nonetheless inadequate to meet the needs of a transnational manager. Generally, such education lacks critical content about the politics, laws, sociopsychology, economics, culture, and communication patterns of the host country." Four Areas of Influence

Respondents were asked to note whether certain factors affected managerial efficiency. For example, the questionnaire asked whether "class structure and individual mobility" hindered an employee's usefulness or enhanced it.

The respondents replied in terms of their U.S. environment and in terms of overseas conditions. All respondents had banking experience in the United States and in at least one other country.

Influence on management decisions was divided into four general areas: social-cultural, plitical-legal, educational, and economic.

Some influences were obvious both at home and abroad. Economic conditions, for instance, affect all banking decisions. …

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