Differences in Culture

CHAPTER 3

What is Culture? “A system of values and norms that are

shared among a group of people and that when taken together constitute a design for living.” -Hofstede, Namenwirth and Weber

“Different countries, different customs.” -Peachy, The Man Who Would Be King.

The Cultural Iceberg Figure 3.2 Hodge, Sheila. Global

Smarts, New York: Wiley & Sons, 2000, page 32

COMPONENTS OF CULTURE Values: abstract ideas/assumptions about

what a group believes to be good, right, and desirable.

Norms: social rules and guidelines that prescribe appropriate behavior in particular situations.

DIFFERENT TYPES of NORMS Folkways: Routine conventions of everyday life.

Little moral significance General social conventions such as dress codes, manners, and

attitude towards time. Mores: serious standards of behavior, usually tending to

address appropriate behaviors in areas such as sex, religion, family, etc. norms central to the functioning of society and social life Greater significance than folkways Violation can bring serious retribution; negative mores are

“taboos” e.g. Theft, adultery, incest and cannibalism

Culture, society and nation states Society is a group of people who share a

common culture. No one-to-one correspondence between

society and a nation state. Nation states are political creations (“imaginary

lines drawn on the earth”) Many cultures can co-exist within one nation

state.

Determinants of culture Social structure Economic philosophy Political philosophy Religion Language Education

Fig. 3.1 p 93

Social Structure Two dimensions

Extent to which society is group or individually oriented

Degree of stratification into castes or classes Social mobility Significance to business

Social Structure:Individual vs. Group Orientation

Individual societies tend to view individual attributes and achievements as being more important than group membership.

Emphasis on individual performance can be both beneficial and harmful:

Encourages entrepreneurship Can lead to high degree of

managerial mobility

Group societies see groups as the primary unit of social organization

Group members Often form deep emotional

attachments See group membership as all

important Emphasis on the group can be both

beneficial and harmful: Strong group identification

creates pressure for mutual self-help and collective action

Discourages managers and workers from moving from company to company

Discourages entrepreneurship

Social Structure: Social Stratification Social stratification refers to the fact that all societies are stratified on

a hierarchical basis of social categories. Strata are typically defined on the basis of characteristics such as

family background, occupation, and income. Societies are all stratified to some degree but they differ in two

related ways: Social mobility refers to the extent to which individuals can

move out of the strata into which they are born Class consciousness refers to a condition where people

tend to perceive themselves in terms of their class background and this shapes their interaction and relationship with others.

Religious and Ethical Systems

Religion: a system of shared beliefs and rituals that are concerned with the realm of the sacred

Ethical systems: a set of moral principles, or values, that are used to guide and shape behavior

Most of the world’s ethical systems are the product of religions Christianity (1.7 billion)

Economic implications: Protestant “work ethic” considered one of the foundations of capitalism; emphasis on individual religious freedom a

possible force in development of concepts of individual economic and political freedom.

Islam (Inshallah-if God is willing) (1 billion) Economic implications: pro-free enterprise but it must be done in a righteous,

socially beneficial and prudent way. Special case: the riba (interest) not permitted; employ other techniques of

mudarabah (sharing ownership) or murabaha (the bank buys the product and sells it to the firm for a price having a mark-up).

Religious and Ethical Systems

Hinduism (750 million) Economic implications: focuses on importance of achieving spiritual

growth and development (progression to nirvana), so sources of motivation may be different. Residual ideas of caste concept may remain in older employees.

Buddhism (350 million) Economic implications: focuses on spiritual growth, following the

Noble Eightfold Path, and the afterlife, so sources of motivation may be different.

Confucianism (200 million) Economic implications: principles of loyalty, reciprocal obligations,

and honesty may lead to reduction of business costs in Confucian societies.

World ReligionsMap 3.1

p 99

Other components of Culture Other influences

Political philosophy: democracy vs. totalitarianism

Economic philosophy: Market economy vs. Command economy

Language Spoken – Written Unspoken Language structures one’s perception of the world

Hill, Charles. International Business, 5th edition

Language In some cultures, the

words convey most of the meaning of a message; in other cultures, language only partially convey the meaning.

Good communication is critical to success in international business

Cateora, Philip R. International Marketing. Homewood, Illinois: Richard Irwin, 1983, page 135.

Meaning less direct; Meaning less direct; subject to more subject to more interpretationinterpretation

Meaning more Meaning more direct; subject to direct; subject to

less interpretationless interpretation

SPOKEN LANGUAGE-Do you speak English?

Australian English New chum Yankee shout Dinkum Sink the slipper

British English Ring me up. Bonnet of the car Come down. Form “Fancy a cuppa and a

bit of a chin-wag?”

American English Newly arrived immigrant Dutch treat Genuine, honest To kick someone when they are

down Give me a call. Hood of the car Graduate. Grade level “ Would you like to have a cup

of tea and talk a bit?

Language Problems Spoken and Written Spoken: If you are not sure that you understand

or are being understood: Avoid slang Speak slowly Paraphrase Repeat Demonstrate Test understanding of other person

Language ProblemsSpoken and Written Written: Verify the quality of written

messages, especially in contracts and advertising. Use qualified translators Test the meaning of written communications

through: Back translations Parallel translations

Language Unspoken (“the silent language”)*

Body language: gestures, eye contact Space: Physical distance required to

maintain psychological distance public, social, personal spaces vary

considerably among different cultures.

*Concept pioneered by E.T. Hall

Language Unspoken

Time: Time is one concept that is highly culturally bound. Different cultures view time differently. Time is: 1) actual time

2) Timing (“right moment”) 3) Tempo (rate or pace)e.g. -U.S.: “Time is money.”

-Mexico:manana is “tomorrow, or sometime soon -Arabic speaking countries bukara is “tomorrow or some time in the future.” -Nigeria: “The clock did not invent man.” -France: “Before the time, it is not yet the time; after the

time, it’s too late.”

How a culture values time affects its business conduct. e.g. Punctuality in appointments, timeframes and deadlines for getting things done, delivery dates, etc.

Sequential vs. Synchronous Time Sequential time

perspective views time as a giant cosmic clock ticking away.

Synchronous views time as recurrent or cyclical time, good timing.

SOURCE: Charles Hampden-Tirner and Fons Trompenaars, BUILDING CROSS-CULTURAL COMPETENCE. New Haven, Conn: Yale University Press, 2000. page 316

Education

Education can be a source of competitive advantage if a country can offer skilled or training employees. e.g. India, Singapore, Malaysia

Schools are a part of the social structure of any society. Norms and Values are reinforced in formal education.

Education Formal education plays a key role in a society

Formal education: the medium through which individuals learn many of the language, conceptual, and mathematical skills that are indispensable in a modern society.

Also supplements the family’s role in socializing the young into the values and norms of a society.

Schools teach basic facts about the social and political nature of a

society, as well as focusing on the fundamental obligations of citizenship.

Cultural norms are also taught indirectly at school

Examples include: respect for others, obedience to authority, honesty, neatness, being on time

Part of the “hidden curriculum”

Adult Literacy Rates

Hill, Charles. International Business, 5th edition

CULTURE and the WORKPLACE

Study of the relationship between culture and the workplace: Geert Hofstede 1967-73 40 countries 100,000 individuals

HOFSTEDE’S: CULTURAL DIMENSION

Four dimensions of culture Power distance Individualism versus collectivism Uncertainty avoidance Masculinity versus femininity

Power DistanceIndividualism vs. collectivism

Cultures are ranked high or low on this dimensions based on that society’s ability to deal with inequalities, power, authority.

Cultures are ranked on their orientation towards intersocietal relationships: Individualistic societies: loose ties, individual

achievement and freedom Collectivist societies: tight ties, tend to be more

relationship-oriented

Individual Behaviors Across Cultures

SocialOrientation

Relative importanceof the interests ofthe individual vs.

the interests ofthe group

The interests ofthe individual takeprecedence

IndividualismThe interests ofthe group takeprecedence

Collectivism

PowerOrientation

The appropriatenessof power/authority

within organi-zations

Authority is inherentin one’s positionwithin a hierarchy

Power Respect Individuals assessauthority in view ofits perceived right-ness or their ownpersonal interests

Power Tolerance

Source: Adapted from R. W. Griffin,/M. Pustay, International Business, (figure 14.1, page 479) © 1996 Addison Wesley Longman. Reprinted by permission of Addison Wesley Longman. Figure 5.4

HIGH LOW

HIGHLOW

Uncertainty AvoidanceMasculinity vs. Femininity

Cultures are ranked on extent that they accept ambiguous situations and tolerate uncertainty: risk issues.

Cultures view relationship between gender and work role: goal orientation

Individual Behaviors Across Cultures (cont’d)

GoalOrientation

What motivatespeople to achieve

different goals

Value materialpossessions, money,and assertiveness

Masculine:Aggressive Goal

Value socialrelevance, qualityof life, and thewelfare of others

Feminine:Passive Goal

UncertaintyOrientation

An emotionalresponse to

uncertainty andchange

Positive responseto change and newopportunities

UncertaintyAcceptance

Prefer structureand a consistentroutine

UncertaintyAvoidance

Source: Adapted from R. W. Griffin,/M. Pustay, International Business, (figure 14.1, page 479) © 1996 Addison Wesley Longman. Reprinted by permission of Addison Wesley Longman. Figure 5.4

HIGHLOW

HIGH LOW

Work related values for twenty countries

P 113

Problems with Hofstede’s Findings Assumes one-to-one relationship between culture

and the nation-state. Research may have been culturally bound. Survey respondents were from a single industry

(company) and a single company (IBM) Hofstede eventually added a fifth dimension:

Confucian dynamism (short vs. long-term orientation).

CULTURE CHANGE Culture is not a constant; it evolves over

time.

Examples: role of women in U.S.

rise of individualism in Japan e.g. Matsushita’s changing employment policies

Effects of globalization: merging of cultures.

Changing valuesFig: 3.2

SHIFT TOWARDSSECULAR/RATIONAL VALUES AND MOVE FROM SURVIVAL VALUES TO WELL-BEING VALUES.

P 115

Managerial Implications Cross cultural literacy: understanding how the culture of a

country affects the way business is practiced in this country. Cross cultural literacy is required to counter ethnocentrism (belief in superiority of one’s own culture).

Relationship of Culture and Competitive Advantage: the values and norms of a country can influence the competitiveness of that country. Impacts attractiveness of a country Impacts potential costs of investment Culture is an important factor which influences the decisions

made by multinational businesses to conduct international trade and foreign direct investment.

Culture and business ethics

Cultural Issues affect Business Decisions

Cultural issues can cost money, time, and resources

Solutions may not always be complete; research and careful consideration are required to manage cultural issues.

San Jose Mercury News: Monday, May 23, 2005 3A

Culture Affects How You Conduct Business

M2 Reports In: How to prepare for a Business Trip