Culture and Business

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Culture and Business

• J. N. Hooker
• Carnegie Mellon University
• February 2006

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A Popular View of Culture

• Culture is all about food, language, dress,
  customs, holidays, etc.

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• What if all Chinese ate Sauerbraten and Spätzle
  
• rather than jiao zi and bao zi?

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• It would be the same culture!!

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The Western View of Culture

• Cultures differ in language, cuisine, etiquette,
  etc.
• But we are all basically the same inside.
• Apparent differences are due to levels of
  development.
• There is a single path of development toward a
  rational lifestyle.
• The West is obviously ahead, whence the
  distinction of developed and developing
  countries.

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• I make no such assumptions.

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Cultural Iceberg

• Culture determines our deepest assumptions, most
  of which we not even aware.
• Like an iceberg, culture lies mostly beneath the
  surface.

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Language
Dress, hairstyle
Pop culture
Cuisine
Overt religion
Concepts of space and time
Guilt vs. shame
Concept of authority
Rule-based vs. relationship-based
Management of information
Apollonian vs. Dionysian
Universalizing rationality?
Covert religion
Stress management
Fundamental conception of reality
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Cultural Ecosystems

• Cultures are like ecosystems in several ways.
• They are systems of mutually supporting elements.
• One is not better than another.

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Cultural Ecosystems

• They have common elements, but differ
  nonetheless.
• Many can coexist on the same planet.
• Monoculture is a bad idea.

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The World is Westernizing?

• Capitalist market economies are spreading, and
  culture is profoundly shaped by how people make a
  living.

London
Shanghai
Riyadh
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The World is Westernizing?

• The historical wealth and power of the West
  attracts elites around the world.
• They speak English, adopt Western ways, send
  children to Western schools, cultivate Western
  connections, etc.

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The World is Westernizing?

• Global market and communications homogenize the
  world.

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The World is Westernizing?

• Youth culture is the same everywhere (movies,
  music, sneakers, etc.).

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The World is Westernizing?

• The world looks more and more Western
• Skyscrapers, traffic jams, high tech
• Surfeit of consumer goods
• Pollution, overconsumption of resources.

Teipei 101 Tower
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The World is Westernizing?

• People tend to exaggerate the extent to which the
  world is Westernizing.
• Westerners do it
• Because they are universalists and want to
  believe that everyone is basically the same
  inside.
• Others do it
• Because they what to emphasize the extent to
  which they are developed.

Petronas Towers,Kuala Lumpur
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Not so Western After All

• Non-Western cultures are resisting Western
  cultural hegemony (Samuel Huntington).
• China.
• Lee Kuan Yew of Singapore (Harry Lee at
  Cambridge).
• Islamic world.

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Not so Western After All

• People want the baubles and bangles of the West
  but may not want the culture.

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Not so Western After All

• The media and internet can actually strengthen
  regional differences.
• It is easy to tailor news, web sites to market
  segments.
• U.S. regional differences are greater now than
  ever.

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Not so Western After All

• Youth culture disappears at about age 26.
• Many of todays capitalists in China spent their
  youth in the Red Guard, the youth movement of the
  day.

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Business is Business?

• Must know rules of etiquette only to prevent
  irrelevant cultural feelings from intruding on an
  essential business matter.
• Business behavior is governed by universal laws
  of supply and demand, as described in
  neoclassical economics.

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Business Isnt Just Business

• But economic laws radically underdetermine
  economic behavior.
• It is like laws of chemistry in cooking, or laws
  of physics in traffic.
• Neoclassical economics is based on assumption of
  utility-maximizing, atomistic economic agents.

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Business Isnt Just Business

• Economics says little to explain
• demand (and therefore marketing),
• propensity to work,
• social definition of work (Indian coffee stand),
  
• class-defined roles,
• firm loyalty,
• flat vs. hierarchical organizations,
• status and renegotiability of contracts,
• conventions for negotiation.

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Just to clarify

• To describe a culture is not to stereotype the
  individuals in it.
• Every culture has the full range of personality
  types.
• They differ in how personalities fit into a
  system.
• Although most cultures are influenced by the
  West
• not as much as people say.
• and not in the ways most people think.
• I focus on what is indigenous about a culture,
  not what is Western about it.

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Just to clarify

• I make no judgments about which cultures are
  better.

• I talk frankly, in a clinical way, about how
  cultures work.
• As in a medical school course.
• This is not appropriate outside the classroom.

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Cultural Classification

• One introduction to cultural difference is
  through classification of cultures.
• There are at least 5000 cultures in the world.
• Each has a logic its own.
• Cultural classification doesnt capture this.
• But it is a start.

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Relationships vs. Rules

• Business meetings
• Business deals
• Personal trust vs. contracts law
• Traffic behavior
• Negtiation vs. regulation
• Dealing with stress
• Family friends vs. technology engineering

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Relationships vs. Rules

• Rule-based
• Northern Europe, USA, Canada, Australia
• Including Germany, Czech Republic
• Relationship-based
• Asia, Middle East, Africa, Latin America

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Power Distance

• High power distance hierarchy, authority are
  accepted
• Low power distance equality preferred
• Parents
• Authoritarian vs. lenient
• Protection vs. independent.
• Government
• Personal authority vs. legal authority.

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Power Distance

• Highest power distance (according to Hofstede)
• Malaysia, Central America (except Cost Rica),
  Philippines, Mexico, Venezuela, Arab countries,
  Indonesia, India, West Africa, Yugoslavia,
  Singapore, Brazil, Hong Kong
• Germany high by European standards

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Power Distance

• Lowest power distance
• Austria (?), Denmark, New Zealand, Ireland,
  Sweden, Norway, Finland, Switzerland, U.K.
  (business only), Germany, Australia (business
  only), Netherlands, Canada (business only), USA
  (business only)
• Czech Republic

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Shame vs. Guilt

• Shame-based behavior is regulated by personal
  supervision
• Guilt-based behavior is regulated by guilt.
• Employee supervision
• Constant vs. occasional
• Security
• Personal presence vs. laws

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Shame vs. Guilt

• Shame based
• Same as relationship-based.
• Guilt-based
• Same as rule-based
• Germany particularly extreme case

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Context

• High-context information about what to do is
  implicit
• Low-context information about what to do is
  spelled out
• Signs instructions.
• Personnel management
• Personal decision vs. company policy

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Context

• High context
• Japan, China, Mexico, etc.
• Low context
• USA, northern Europe, etc.
• Germany and Czech Republic

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Time

• Polychronic people do many things at once.
• Monochronic people do one thing at a time.
• Queues
• Appointments and punctuality
• Mobile phones

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Time

• Polychronic
• India, much of Africa, Latin America, southern
  Europe, Middle East
• Monochronic
• USA, Canada, northern Europe
• Germany (extreme case), Czech Republic (somewhat)

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Courtesy

• In a polite culture, people are courteous to
  associates and deferential to superiors.
• But rudeness to strangers may be tolerated.
• In a rude culture, people are more interested in
  being right than being nice.
• But courtesy to strangers may be required.
• Saving face vs. in-your-face.

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Courtesy

• Courteous
• Malaysia, Japan, Korea, Mexico
• Rude
• Israel, Australia, USA, much of Europe
• Germany, Czech Republic

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Corruption

• Corruption as bribery
• Short cut to relationship building.
• Corruption as cheating.
• Violation of rules.
• Business dealings and hiring
• Nepotism cronyism vs. transparency.

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Corruption

• Bribery in relationship-based countries
  (endemic)
• Much of Africa, east and south Asia, Middle East
• Bribery in rule-based countries (system
  breakdown)
• Russia, Eastern Europe (Czech Rep. less so)
• Cheating in rue-based countries (endemic)
• USA, southern Europe

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Masculine vs. Feminine

• Masculine
• Tough, aggressive, ambitious, martial values.
• Competitive.
• Men take charge.
• Feminine
• Cooperation, reluctance to excel.
• Men womens roles more similar.

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Masculine vs. Feminine

• Feminine (according to Hofstede)
• Scandinavia, western Slavic countries, Thailand,
  some Latin American countries
• Masculine
• Japan, Austria, Switzerland, Ireland, Jamaica,
  U.K., Germany, Philippines, India, Arab
  countries, some Latin American countries

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Uncertainty

• Uncertainty avoiding
• Prefer familiar, predictable surroundings.
• Dysfunctional bureaucracy serves as ritual.
• Risk-averse in business
• Uncertainty tolerant
• Willing to take risks.
• Entrepreneurial in business.

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Uncertainty

• Uncertainty avoiding (according to Hofstede)
• Greece, Portugal, Latin America, Belgium, Slavic
  countries, France
• Czech republic, Germany (to some extent)
• Uncertainty tolerant
• Singapore, Jamaica, Scandinavia (?), Hong Kong,
  Ireland, Malaysia (?), U.K., USA

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Frauenskirche and Rathaus in Munich (Münnchen)
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Marienplatz in Munich
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Clockwork in Rathaus
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Censored
English Garden, Munich
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Oktoberfest, Munich
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Schloß Neuschwanstein, Bavaria (Baiern)
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Medieval festival, Bavaria
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Königssee, Bavaria
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Zügspitze, near Garmisch-Partenkirchen
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Mala Strana, Prague (Praha)
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View from Prague Castle
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Prague Castle
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Charles Bridge, Prague
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Astronomical clock, Prague
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Franz Kafkas house, Prague