How to promote knowledge flows within multinationals

Keeping communication going amongst team members with different backgrounds who are spread across multiple countries and time zones can be challenging.

During his 12 years at MasterCard, John Pagano, CPA, CGMA, encountered many of the factors that can impede the flow of knowledge within a multinational company. Pagano, who recently left the financial services company, was business financial officer of global human resources and in charge of global payroll at MasterCard. His team consisted of 15 to 20 people spread across the world. The employees worked with the human resources and finance departments as well as with a shared-services centre that contracted with local payroll service providers.

Different time zones. Different languages, nationalities, and cultures. Different business units that use different terminology. Different ages and educational levels. Communication challenges within multinational companies abound. Pagano’s team dealt with “all of the above and a few more,” he said.

But all potential communication barriers are not the same. Some have worse effects than others, according to research by the University of Pennsylvania’s Wharton School and Duke University’s Fuqua School of Business.

The study, which was published this year in the Journal of International Business Studies, looked at more than 13,000 interactions amongst members of 289 teams of a large multinational company and compared the challenges.

Establishing contact is six times more difficult amongst team members working in different countries, world regions, time zones, or business units than amongst team members of different nationalities who work in the same location, the study found. Also, the negative effects of geographic and structural differences are three times larger than communication barriers created by differences amongst team members in age, tenure, or education level.

Members of small teams in particular sought more knowledge from others when they worked in a developing country or outside the country where the company was based, the study found.

Team members who were based in different countries or time zones but knew each other from working together on a previous team had an easier time communicating. But familiarity did not make communication easier amongst team members who were from different nationalities, spoke different languages, or were different ages.

Pagano’s experiences at MasterCard were similar. “It’s much easier to communicate with somebody if you’ve met them face to face,” he said.

Many of the efforts Pagano took to facilitate the flow of knowledge on his team at MasterCard were based on team members becoming more familiar with each other:

• Once a year, the team would get together in a chosen location. Not just managersbut also team members working for them attended the annual team meetings.
• Monthly teleconferences with dedicated links and multiple screens were held, using virtual technology to give participants the feeling of sitting opposite team members in other countries.
• Weekly conference calls were scheduled at different times to accommodate multiple time zones and holidays in different countries. The calls were never held on Fridays to respect Asian team members’ weekend.
• Team members were encouraged to write emails that were simple and clear, so the likelihood of misunderstanding was reduced amongst team members whose first language was not English.
• All team members worldwide used the same unified technology platform for human relations functions, such as signing up for benefits or filling out time cards.

—Sabine Vollmer (svollmer@aicpa.org) is a CGMA Magazine senior editor.