Cultural Sensitivity And Awareness As A Part Of Risk Management

By Paul Mitchell.

History is full of examples where the wellbeing of companies, and those that represent them, have fallen prey to inadvertent or willful lack of cultural sensitivity that has resulted in both financial and personal disaster.

Probably the most catastrophic example of corporate loss as a result of cultural insensitivity was that of the East India Company in 1857. Formed 150 years beforehand, to trade with the Indian subcontinent, the East India Company was the most successful trading entity of its time. So successful, indeed, that it ran its own ‘private army’. A decision was made by the directors of the company to purchase cheap ammunition for distribution to its soldiers. In what turned out to be a most insensitive move, they purchased ammunition that was packed in animal fat. This offended both their Muslim and Hindu employees, as it was rumoured the fat was either that of a pig or cow. Its distribution started what became known as the “Sepoy Mutiny”. Just one year later, the East India Company went from being the most successful trading entity of its day to being dissolved by the British government. A prime example of how a lack of cultural awareness and sensitivity can create risk for a major corporation.

Of course, all this was a long time ago, and we are much more culturally sensitive than we were; or are we?

In 2008, a young Australian woman was employed to manage a major resort hotel in Dubai. Her Australian employers provided a minimum of pre-departure briefing. Three weeks into her deployment, she was brutally raped by three hotel employees. As most would do in her circumstance, she reported the rape to local police. Unaware of local UAE laws relating to sex crime, she found herself not the victim but the alleged perpetrator. She was arrested under the UAE’s Sharia law and charged with illicit consensual sex and alcohol use. She was sentenced to 11 months in prison for sex outside marriage and one year for alcohol consumption, despite the hotel in question being an “alcohol permitted zone”. She spent eight months in an UAE prison, which she described as a “nightmare”.

In July 2013, a young Norwegian businesswoman was raped and then jailed in Dubai for sex outside marriage. In December last year, a British businesswoman was kidnapped and gang raped, but then was fined for drinking the alcohol she said was spiked. Again, this happened in an “alcohol permitted zone”.

A young engineer from a major Western defence contractor, excited to be on his first overseas deployment, walked the streets of the city in Southeast Asia happily taking photographs to send home. His day quickly went from pleasure to disaster when he was arrested for photographing sensitive “government installations”. It took three months and in excess of US$500,000 to bring the 28-year-old married man back to his family.

Of course, the question has to be asked, whose responsibility it is to ensure that employees, who are sent out of country, are briefed on the niceties and possible pitfalls of the culture at their new posting.

Business today is global and our most valuable asset, the people we employ, is often sent, without adequate preparation, to represent us and our business interests. So, how can we make sure that our executive, manager, engineer or sales person, does not become a statistic on the register of the Australian Embassy in some exotic location.

Training and adequate briefing is the key.

Companies must accept that cultural briefing should be as thorough as a client/product briefing always is. The training and briefing should outline the issues both political and social that the employee is likely to find at the new posting.

Advanced Risk Mitigation Training Programs should include:

  • Threat Assessment
  • Observation Skill Development
  • Cultural awareness and sensitivity
  • Response to Threat
  • Situational Awareness Training
  • Conflict Resolution
  • Physical Confrontation Training
  • Crisis Management.

However, it is the scope of this article to discuss Cultural Sensitivity and Awareness and I will leave addressing the other aspects of risk mitigation training to a later article.

I would like to stress that, in my experience, online information is not only inadequate, but an inappropriate delivery format if there is a genuine ‘duty of care’ mentality in the company. Online information is a useful addendum to a face-to-face briefing and training, but is unlikely to have the impact necessary to trigger the behavioural changes that may be necessary to reduce risk. Equally, ‘information sheets’ are of limited value in driving a sense of reality and urgency to behaviour modification.

I always say to executives and diplomats that I am training in preparation for deployment to high-risk regions, “the thing that keeps you safe in your hometown is local knowledge and local cultural understanding. When deploying to high risk environs, your risk profile is reduced the more capable you are of assimilating local knowledge and cultural norms.” Whilst this sounds simplistic, it is probably the most valuable information I provide in two to four days of training.

The duration of deployment training/briefing is largely dictated by the degree of cultural divide between the home country and area of deployment.

To this end, a corporate briefing to the departing employee, and family if appropriate, should include the following cultural information specific to the area of deployment:

Society and culture

  • local family values
  • food and appropriate eating behavior
  • health issues
  • politics
  • sexuality and appropriate behaviours

Business etiquette and protocol

  • relationships and communication
  • business meeting etiquette
  • business negotiation protocols
  • business cards
  • cultural, emotional and intellectual aspects that may affect negotiation

Society etiquette and customs

  • meeting etiquette
  • gift giving etiquette
  • dining etiquette
  • table manners
  • dress etiquette.

In many regions where Australian companies do business, the corporate culture and legal requirement varies considerably from that we are used to working with. Many companies embark on doing business overseas in the mistaken belief that “the way we do business here should be and must be acceptable wherever I go”. And that is the beginning of a recipe for disaster built on cultural insensitivity.

The Australian or New Zealand business executive, wanting to be successful in a global market, must understand the cultural mores and values of the target customers and the operating environment in which they find themselves. This includes not only the local social and cultural values, but also local laws. What is legal in Australia may not be legal in the Middle East or parts of Southeast Asia. What is expected in the Middle East and Southeast Asia may not be legal in Australia. It is the executive that is responsible to make sure that their actions comply with this demand; but it falls to corporate duty of care to make sure that the executive has all the information necessary to make valued strategic judgements in relation to business opportunities in the new markets in which they find themselves.

Corporations and individuals need also remember that, in the event of a breach of local customs and laws, both individual and the corporation may find themselves having to defend their position in an unfamiliar legal jurisdiction. This exposes both to potentially massive costs. The time to familiarise yourself with the legalities of doing business in a new jurisdiction is before the first trip is made or contract is signed. Very careful due diligence is required before entering into contracts and again the time to understand the niceties of local custom is before the negotiations take place, not after the fact.

Training and the development of training programs within the corporation is useful not only to prepare the individual to represent you outside of the borders of Australia, but to also alert the corporation to the strategic thinking necessary in a totally new business environment. The development of cultural sensitivity within the corporation will prepare not only the individuals but the corporation itself to do good, honest business with our neighbours in the way that will minimise the risk to all.

Cultural awareness and sensitivity begins at the top of an organisation. The attitude of senior management toward security and prevention through cultural values training should permeate the entire organisation. Therefore, management’s support of cultural awareness can focus attention on good security and prevention techniques, and better prepare the organisation for the unwelcome and unwanted.

Cultural sensitivity and awareness is a critical component of risk management for the modern corporation and their executives. The cultural mistakes of the East India Company should not be the blueprint for the demise of your business in the opportunistic new markets around the world.

Paul Mitchell is Managing Director of GlobalEdge, an Australian and UK based Company providing State of the Art Training Programs relating to Executive Personal Safety, Security and Risk Assessment in hostile environments, either at home or abroad. GlobalEdge also provide high-level training programs for the military and police in highly specialised areas of training. Paul can be contacted on +61 433 349809 or by email at