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Culture and Business

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Title: Culture and Business


1
Culture and Business
  • J. N. Hooker
  • Carnegie Mellon University
  • February 2006

2
A Popular View of Culture
  • Culture is all about food, language, dress,
    customs, holidays, etc.

3
  • What if all Chinese ate Sauerbraten and Spätzle
  • rather than jiao zi and bao zi?

4
  • It would be the same culture!!

5
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.

6
  • I make no such assumptions.

7
Cultural Iceberg
  • Culture determines our deepest assumptions, most
    of which we not even aware.
  • Like an iceberg, culture lies mostly beneath the
    surface.

8
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
9
Cultural Ecosystems
  • Cultures are like ecosystems in several ways.
  • They are systems of mutually supporting elements.
  • One is not better than another.

10
Cultural Ecosystems
  • They have common elements, but differ
    nonetheless.
  • Many can coexist on the same planet.
  • Monoculture is a bad idea.

11
The World is Westernizing?
  • Capitalist market economies are spreading, and
    culture is profoundly shaped by how people make a
    living.

London
Shanghai
Riyadh
12
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.

13
The World is Westernizing?
  • Global market and communications homogenize the
    world.

14
The World is Westernizing?
  • Youth culture is the same everywhere (movies,
    music, sneakers, etc.).

15
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
16
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
17
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.

18
Not so Western After All
  • People want the baubles and bangles of the West
    but may not want the culture.

19
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.

20
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.

21
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.

22
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.

23
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.

24
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.

25
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.

26
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.

27
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28
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

29
Relationships vs. Rules
  • Rule-based
  • Northern Europe, USA, Canada, Australia
  • Including Germany, Czech Republic
  • Relationship-based
  • Asia, Middle East, Africa, Latin America

30
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.

31
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

32
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

33
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

34
Shame vs. Guilt
  • Shame based
  • Same as relationship-based.
  • Guilt-based
  • Same as rule-based
  • Germany particularly extreme case

35
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

36
Context
  • High context
  • Japan, China, Mexico, etc.
  • Low context
  • USA, northern Europe, etc.
  • Germany and Czech Republic

37
Time
  • Polychronic people do many things at once.
  • Monochronic people do one thing at a time.
  • Queues
  • Appointments and punctuality
  • Mobile phones

38
Time
  • Polychronic
  • India, much of Africa, Latin America, southern
    Europe, Middle East
  • Monochronic
  • USA, Canada, northern Europe
  • Germany (extreme case), Czech Republic (somewhat)

39
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.

40
Courtesy
  • Courteous
  • Malaysia, Japan, Korea, Mexico
  • Rude
  • Israel, Australia, USA, much of Europe
  • Germany, Czech Republic

41
Corruption
  • Corruption as bribery
  • Short cut to relationship building.
  • Corruption as cheating.
  • Violation of rules.
  • Business dealings and hiring
  • Nepotism cronyism vs. transparency.

42
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

43
Masculine vs. Feminine
  • Masculine
  • Tough, aggressive, ambitious, martial values.
  • Competitive.
  • Men take charge.
  • Feminine
  • Cooperation, reluctance to excel.
  • Men womens roles more similar.

44
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

45
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.

46
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

47
Frauenskirche and Rathaus in Munich (Münnchen)
48
Marienplatz in Munich
49
Clockwork in Rathaus
50
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51
Censored
English Garden, Munich
52
Oktoberfest, Munich
53
Schloß Neuschwanstein, Bavaria (Baiern)
54
Medieval festival, Bavaria
55
Königssee, Bavaria
56
Zügspitze, near Garmisch-Partenkirchen
57
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58
Mala Strana, Prague (Praha)
59
View from Prague Castle
60
Prague Castle
61
Charles Bridge, Prague
62
Astronomical clock, Prague
63
Franz Kafkas house, Prague
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