CULTURE. Developed by Cool Pictures and MultiMedia Presentations Copyright © 2004 by South-Western,...

CULTURE

Developed by Cool Pictures and MultiMedia Presentations Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved.

What is Culture?

Integrated system of learned behavior patterns that are characteristic of the members of any given society.

Context Orientation in Major Cultures

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Alan M Rugman and Simon Collinson, International Business, 5th Edition, © Pearson Education Limited 2009

Introduction

• Culture: “the sum total of the beliefs, rules, techniques, institutions and artifacts that characterize human populations” or “the collective programming of the mind”.

• Socialization Process: The process of enculturation or the adoption of the behaviour patterns of the surrounding culture.

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Table 5.1 World population percentages in terms of home region, language and religionSources: www.census.gov; www.adherents.com

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Language

• Language is critical to culture because it is the primary means used to transmit information and ideas.

• Knowledge of local language can:– permit a clearer understanding of a situation;– provide access to local people;– allows the person to pick up nuances, implied

meanings, and other information that is not stated outright.

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Religion

• Religions influence lifestyles, beliefs, values and attitudes and can have a dramatic effect on the way people in a society act toward each other and towards those in other societies.

• Religion also influences:– the work habits of people;– the work and social customs (from the days of the

week on which people work to their dietary habits);– politics and business.

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Values and attitudes

• Values: basic convictions that people have regarding what is right and wrong, good and bad, important and unimportant.

• Attitude: a persistent tendency to feel and behave in a particular way toward some object.

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Customs and manners

• Customs: common or established practices.• Manners: behaviour regarded as appropriate in a

particular society.

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The importance of culture in different business contexts

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Influences of culture on international management

Culture influences strategic management in a number of ways:• Work attitudes

–for example, work ethics, organization commitment, etc.

• Achievement motivation –the desire to accomplish objectives and achieve

success.• Time and future

–for example: punctuality, decision-making time constraints, time expectations on implementation of plans, etc.

• Ethics–standards of conduct and morality.

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Geert Hofstede’s four cultural dimensions

• Power distance: measures the degree to which less powerful members of organizations and institutions accept the fact that power is not distributed equally.

• Uncertainty avoidance: measures the extent to which people feel threatened by ambiguous situations and have created institutions and beliefs for minimizing or avoiding those uncertainties.

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• Individualism vs. collectivism– Individualism: the tendency of people to look after

themselves and their immediate family only. – Collectivism: the tendency of people to belong to

groups who look after each other in exchange for loyalty.

Geert Hofstede’s four cultural dimensions (Continued)

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• Masculinity vs. femininity– Masculinity: the degree to which the dominant

values of a society are success, money and material goods.

– Femininity: the degree to which the dominant values of a society are caring for others and the quality of life.

Geert Hofstede’s four cultural dimensions (Continued)

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Figure 5.2 Hofstede’s power distance against individualism for 20 countriesSource: Hofstede, G. (1983). The cultural relativity of organizational practices and theories, Journal of International Business Studies, Fall, p. 92. Copyright © Geert Hofstede


Elements of Culture

CONCRETE ELEMENTS

•LanguageVerbalNonverbal

•Infrastructure

•Education

•Social Institutions

ABSTRACT ELEMENTS

•Religion

•Values and attitudes

•Manners and customs

•Aesthetics


Understanding Cultural Differences

Four Dimensions of Culture

• Individualism

• Power distance

• Uncertainty avoidance

• Masculinity


Societal and Institutional Differences

Aspects China

United States

Ethnic Culture•Centered around "relationships"•"Reclusive", each minding his/her own business (especially with "strangers" and people outside of the relationship network)

•Centered around "individuals"•"Messianic": "let's save the world"

Source of Trust Trust those around you; don't "lose face" and credibility by failing to live up to written or oral agreements

Trust the contract; don't get into legal hassles by not fulfilling the agreement


Business Culture Quiet and reserved; clumsy communicators

Outspoken; eloquent; effective communicators

Negotiation Style Group decision; final say by the "boss"

More individual authority and distributed decision making

Dealing with Business Counterparts

Indirect; courteous; take things personally; long memory for both favors and humiliations

Direct; more matter-of-factly; memory for conflict superceded by business objective

Ability to Make Immediate Response

Weak Strong


Aspects China

United States

Interpersonal "Relationship" comes first "Economics" comes first

On "Humility" "Humility" viewed as a virtue "Humility" is a sign of weakness; there is every reason for the abled to be proud

Time Horizon Accountable by the generation (~30 years)

Accountable by the quarter (~3 months)

What Commands Respect Respect for seniority, wisdom, ability

Respect for success, achievement, wealth

On "Family" Children should learn to respect the elder, love the young, and rely on the "extended family"

Children should learn to be independent

On "the Strong" and "the Weak" It is not righteous to bully It is an honor to win; business is all a competition; it is only natural that the weak is preyed on by the strong

Discipline (in following procedures and schedules)

Strong Depends on the individual

Tolerance of Diversity / Openness to Alternative (possibly opposing) Ideas

Openly - very receptive; but actually, less so

More open

Shame or Humiliation Long memory; need and urge to exonerate

Tends to be superceded by business priorities

Priorities Mixed: business, individual, factional, nationalistic, and political

Almost strictly business

JAPAN

Culture and firms’ analysis

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Business characteristics

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Social and cultural characteristics

• Collectivism rather than individualism, dominates many aspects of Japanese life.

• Within companies certain characteristics have strong religious roots, including honour, respect, sincerity, loyalty (chu), duty, obligation or responsibility (giri), ritual and hierarchy.

• Parent–child relationships characterise the hierarchical nature of inter-organizational and interpersonal links, such as government–industry, large firm–small firm, manager–employee, etc.

• Respect for elders, ritualistic (highly-complex) language forms and behaviour, group activities and consensus decision making are all important elements.

• These contrast individualism and meritocratic forms of organization and tend overall to unify the Japanese in their response to gaijin (or outsiders).

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Hai ≠ Yes

• Hai can mean one of at least four levels of yes:– recognition, but not necessarily understanding; – understanding, but not necessarily acceptance and

agreement; – responsibility, understanding, but must consult with

others and secure their agreement before acceptance; and

– agreement, which means understanding, agreement and acceptance.

• The non-verbal signals from the speaker have to be understood to determine, which yes is being meant.

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Manufacturing strengths

• A variety of attributes underlie Japanese manufacturing competitiveness.– attention to quality;

quality circles (QC) and total quality management (TQM). – strong manufacturer–component supplier linkages;

just-in-time (JIT) and keiretsu relationships.– ability to cut production costs;

‘just-in-time’ and flexible and ‘lean’ manufacturing techniques etc.

– a high level of automation and use of robotics; – higher degree of credibility and responsibility given to

engineers and technical expertise;– kaizen or continuous improvement, and a focus at all

levels on incremental productivity improvement and customer-led product development.

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Strong applied R&D

• Japan has traditionally spent more than most other countries on R&D. In 2005, 3.18% of the nation’s GDP was spent on R&D, compared to 2.68% in the US and just 1.84% in the EU27.

• Around 78% comes from industry, the highest amongst OECD countries.

• Contrary to popular myth the Japanese Government has always spent relatively smaller amounts on R&D compared to other advanced countries (this is partly related to the low level of defence spending).

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Keiretsu

• The renowned Japanese corporate groupings or keiretsu, characterised by cross-shareholdings and regular meetings between executives, represent more or less closely tied groups of integrated businesses.

• There are broadly two types of keiretsu, the horizontal (kinyu) type and the vertical, manufacturing keiretsu.

• In the early 1980’s the top six keiretsu alone directly accounted for about 5% of the Japanese labour force and 16% of total Japanese corporate sales.

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Distribution, retailing and customer-orientation

• Associated with the keiretsu industry groupings are multi layered distribution and retail networks in Japan.

• This “tied” system of distribution, bound by strong face-to-face ties between sellers and buyers at each level, adds substantial costs to the final product.

• Many elements of this complex distribution system remain in Japan today. The multi tiered distribution hierarchy has become more simplified, however, driven by the growth in discount stores and cost-reduction measures.

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• We can distil some of the main characteristics of the generic Japanese management style as: – Effective communications internally and with

outside firms, and the use of cross-disciplinary, cross-business and cross-functional workshops.

– Less separation of R&D, design, manufacturing and marketing functions.

– Life-time employment, low labour mobility and substantial investments in training. There is also a strong emphasis on training on-the-job and job-rotation within the firm.

Characteristics of Japanese management

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– Strict formal hierarchy combined with strong underlying informal networks and a tendency towards consensus-based decision making (‘horizontal promotion’ for high-fliers and a lack of outsiders entering the firm at senior levels).

– General “long-termism” with a focus on growth and employment stability and market share rather than profits and shareholder dividends.

Characteristics of Japanese management (Continued)

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• Abegglen and Stalk (1985) sum up some of the distinctive characteristics of Japan as the ‘‘3 Ms’’. – marketing: direct links with consumers via

retailers and wholesalers and strong customer-led product development;

– money: cross-shareholding and the lack of outside pressure for short-term returns and stock price improvements;

– manpower strategy: worker involvement, loyalty, effective team-working, and devolvement of responsibility combined with hierarchy.

Kaisha (“company”)

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