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A study showed that if managers could choose between sourcing services in a country that has a culture similar to your own or one with a different culture, all else being equal, most of them opt for the ‘cultural proximity’ option. But data show that considerations should be made before taking the ’easier’ option. The influence of cultural differences on the success of service offshoring initiatives can be measured by two measures of success, namely, how fast companies achieve the expected service levels and whether they reach cost (savings) targets. Cultural difference is defined here as ‘differences in norms and values between domestic and offshore countries’.

The researchers found that first, the greater the cultural differences between home and offshore countries, the longer it takes to achieve expected service levels. More specifically, the likelihood that firms succeed in the transition to expected service levels in less than six months significantly decreases as cultural differences increases. This might be due to misunderstandings, coordination problems, and communication issues. But their second observation was that greater cultural differences are associated with a greater likelihood of reaching cost (savings) targets. It means that, on average, firms that opt for culturally more different countries, instead of going for the supposedly easier options, have better chances of achieving whatever cost targets they have in mind.


This conclusion is in line with the latest social psychology research on emotions in cross-cultural contexts. Social psychology scholars have indeed provided growing evidence that the mere presence of cultural differences in work relations generates “negative” emotions such as fear due to the anticipation of challenges. But these “negative” emotions would have the positive consequence of improving the information gathering and processing efforts of decision-makers, and hence lead to better decisions.

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Applied to the context of global sourcing, this suggests that when anticipating challenges due to working with an offshore country that is culturally different, decision makers are much more thorough and careful in collecting and interpreting data on the benefits but also costs and complexity of offshoring. That leads to more accurate cost estimation targets and reduces the risk of hidden costs. As a result, firms have better chances to remain within their cost estimates. In other words, the misleading perception that offshoring to culturally similar countries is easier than offshoring to culturally different countries leads managers to overlook the critical preparation phase of any offshoring initiative, and hence run into unanticipated costs. Hence, cultural differences would be best interpreted in terms of opportunity cost of time.

For a fast transition to expected service levels a culturally close offshore country may be preferred, provided sufficient effort is put in developing accurate cost estimates and controlling implementation costs. But if the manager failed to dedicate enough effort to collect and process the necessary information to anticipate the true cost of offshoring, service levels may be achieved on time, but unexpected costs might occur. If a longer transition time is acceptable, you may want to opt for a culturally more distant country that gives access to advantages not available otherwise.

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Moreover, the researchers found that the delay in transition time due to cultural differences is greater for firms that launch their own captive subsidiary in the offshore country, than for firms that work with an outsourcing service provider. The same is true for the positive effect of cultural differences on the realization of cost (savings) targets. This means that when opting for a culturally distant offshore country, firms may be better off working with an outsourcing provider instead of launching their own captive subsidiary. This is probably due service providers who usually have a better knowledge of the host country cultural environment and have developed capabilities to help clients deal with the challenges of cultural differences.

To make your offshore operations a success, you should understand the cultural differences as well as the similarities. Balinese, people of the island of Bali, Indonesia. Unlike most Indonesians, who practice Islam, the Balinese adhere to Hinduism, though their interpretation of it has been heavily influenced by the neighboring Javanese culture. Balinese life generally centers on religion, which is Hindu Shaivism fused with Buddhism, ancestor cults, and local spiritual beliefs.

we present to you Balinese cultural differences


traits that make them wonderful offshore employees.


Balinese people are friendly and warm people. The Balinese are known for their positive disposition. The Balinese generally go out of their way to avoid conflict. They are also very welcoming to foreigners, as Bali is one of the most sought-after travel destination in the world. Years of developing hospitable and welcoming traits have given Balinese the perfect culture for customer service roles.

Strong Family Bond

Extended families are more the rule than nuclear ones. A typical family, a husband, wife, children, patrilineal grandparents and unmarried siblings. All members of this family pay a role in child-rearing. These family ties make for loyal and dedicated workers. Once an employee has secured a rewarding and well-paying customer service role, they want to keep it long term, for the benefit of their family. By the same token, their whole family does their best to help support and maintain that employment.

Great Team Worker

A person in Bali cannot exist in solitude. Balinese society is very community oriented. Each village is a self-contained community, venerating common ancestors and usually subdivided into cooperative societies whose members assist each other in temple maintenance, festivals, and family rites. Much of the rituals require massive effort, which usually the village shoulder in cooperatively. Balinese were not able to develop and sustain their extremely complex agricultural economy for centuries without a very organized community structure. This proves that Balinese people are team workers in nature for centuries, and are accustomed to support each team members along the process.

Straightforward and Hardworking

Balinese are considered as direct.and rather straightforward. In business dealings, they come more quickly to the point. The Balinese also work hard, are easier to train, and complete their jobs in an efficient way. They make good waiters, porters, and drivers.

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