Cultural Challenge To Business

Download as ppt, pdf, or txt
Download as ppt, pdf, or txt
You are on page 1of 14

Cultural challenge to business

• Globalisation increases contact between


cultures
• Firms need cultural sensitivity –without it,
misunderstandings, failed ventures, etc
What is culture?
• ‘a learned, shared compelling, inter-related
set of symbols whose meanings provide a
set of orientations for members of a
society’
Terpstra and David (1991)
• ‘the collective programming of the mind
which distinguishes the members of one
human group from another’
Geert Hofstede (1984)
Characteristics of culture
• Comprised of values and norms
– Values = ideas about what is good, right,
desirable and individual vs.. group
– Norms = social rules, guidelines, patterns of
behaviour
Characteristics of culture
• Culture is not innate but learned
• Culture is shared, communicated and
transmitted by members of the group (e.g.
family, school, peers, etc)
• Sense of belonging important
• Culture is not static
• Ethnocentrism – relating to the world only
in terms of one’s own culture

• Polycentrism – seeing the world through


other cultures
Determinants of culture

History
History
Language
Language Education
Education

Political
Political
Culture:
Culture: systems
systems and
and
Religion
Religion values
values philosophy
philosophy
&norms
&norms

Social
Social
Symbols
Symbols institutions
institutions
Economic
Economic
systems
systems
National and organisation culture
• National (country) culture – external to firm
• Corporate (organisation) culture – internal to firm

• Link between the two?


– National culture can help determine organisation culture
– One or more corporate cultures can exist within national
culture
– Several national cultures can exist within countries
– Individuals can have multiple cultural identities
– Corporate culture – a way of unifying multinational firms
or multi-cultures within same firm?
Why does culture matter?
• Modern business must be sensitive to cultural
differences
• Marketing – specificity vs globality of markets.
‘Glocalisation’ – products developed for a global or
international market customised to suit local laws/culture
– Language – Jif/Cif
– Tastes and religion – e.g. McDonald’s CrocMcDo (France);
McArabia Sandwich, Teriyaki Burger; Coca Cola
– Market characteristics – Wal-Mart in Japan
– Symbolism – e.g. colours
• Investment – M&As, joint ventures etc
– Euro Disney
– Mergers – marriage of two cultures (both national and
organisational)
• Daimler-Chrysler
• HRM
– Home vs. host country staff
– Transfer of organisation and management models
• Strategy development
– Strategies to take advantage of national strength
– Learn new ways of doing business
• Despite globalisation, ability to acknowledge and
respond to cultural diversity - a source of
competitiveness
High and low context cultures
(Edward Hall)
• Low context – communication clear, explicit and
unambiguous.
– E.g. US
• High context – important information conveyed
beyond words spoken – ability to read body
language and between the lines is important
– Many Asian countries
• Misunderstandings between the two – can lead
to unsatisfactory business relationships
Cultural differences between US and Japan

• Primacy of individuals; • Human-relations oriented and


individual work ethic and reliance on the group and
individual freedom more limited individual
• Low regard for rules freedom
• Open and transparent society • Respect for rules
• Multi-cultural society • Closed society, lacking
• Creative and versatile society transparency
• Individual decisions over • Mono-cultural society
consensus • Orderly and uniform society
• Society which pursues the • Dependence on consensus
ideal • Society which pursues
harmony

Adapted from Northiko Shinizu – Tokyo Business, February 1995


Japan vs Western culture
• One explanation of Japan’s internationalisation problems
– traditional culture of politeness and deference not
suitable for international success
• ‘In conversations between Japanese people, they talk in
a roundabout way and hope the others understand’
– Mr Yomada of Yokogawa (Japanese automation and control business) –
FT 10.10.05
• Above an example of high context culture
• Yokogawa engineers being trained to be more assertive
and to communicate more clearly and concisely
Hofstede’s cultural dimensions
• Power distance: hierarchy and acceptance of place within it vs.
flatter structures and respect for role rather than title

• Uncertainty avoidance: lack of tolerance for uncertainty and


ambiguity

• Individualism v. collectivism: group v. the individual

• Masculinity v. femininity: assertiveness and competitiveness


v. modesty and caring

• Short v. long term orientation


Problems with Hofstede
• Assumes every micro-location is typical of the
national
• Assumes there is no cultural variety within
organisations and countries
• Cultures are not static
– Change can be both gradual and sudden (e.g.
transformation of Soviet system)
– Europeanisation?
• Encourages stereotyping
• Work of Fons Trompenaars – similar lines to
Hofstede

You might also like