Cultural Environment Cross Cultural dimensions in cultural Environment

TYBMS / B

Akshata A. Jathar – 88

Prasad D. Mahajan - 92

Viral K. Momaya - 116

Presenting to:-

Prof. Harminder Singh Oberoi

Introduction

The world is being affected by the globalization of the economy. This

phenomenon is bringing intense movement of companies, assets, services, capital and

people. Analyzing globalization, Amboni and Meyer (1999) emphasize that this process

is taking the world to major changes in the economic, technologic and social areas, which

are having consequences in all organizations and societies that participate in this

globalized market. It is a process that does not bring equal benefits to all participants. The

globalization concentrates more of its actions in some sectors of economic activity and

some regions and countries, rather than acting everywhere.

The world is getting flatter—doing business anywhere in the world is easier today

because of major changes in technology, global politics and expanded educational

opportunities. But it is not only businesses that are affected. Governments, NGOs and

society itself is changing at a pace unseen before the internet, fiber optic cabling around

the world, the fall of the Berlin Wall, the embrace of free trade by China and the

investment in university-level education by India. When Bill Clinton was elected

President of the US in 1992, no one outside academia and government had e-mail or the

Internet. Since then millions of workers have entered the global market from China, India

and Russia. Just these two of several factors cites have changed the way the world

conducts its business forever. There is no going back. Going forward can only happen if

business leaders understand these factors and, perhaps more importantly, the cultural

factors that make business work. In the end, it is one

person making a business with another person a

deeply personal exchange based on at least two

cultures.

We see, therefore globalization, the

communication facilities based on technology, the

reduction on transportation costs and, consequently,

the increase in the interaction between countries is

boosting the number of organizations entering the

world of international business. As a consequence,

the organizations as they act commercially in several

countries, they see themselves obligated to adjust to the laws, the policies, the habits, the

tastes and the preferences of these countries, as a path to become more effective in a

different context.

All these elements are direct expressions of a country’s culture and this is

something that is not always visible to the eyes of foreigners interested in doing business

in a new country. One of the biggest challenges faced by organizations that operate in the

international market is the cultural differences.

Thus, there is a need for cross cultural understanding because of the significant

differences in attitudes, beliefs, motivations, perceptions and lifestyles between the

nations.

What is Culture?

There is no unanimous definition of culture. Several authors present different

concepts of culture. Hofstede (1984) defines culture as a collective programming of

minds that differentiates the members of a human group from another. Griffin and

Pustay (1999) present culture as a collection of values, beliefs, behaviors, habits and

attitudes that differentiate societies. In the same line, Kuazaqui (1999) argues that

culture is a sum of behaviors, beliefs, habits and symbols that are passed from generation

to generation. Culture for Schein (1992) can be analyzed as a phenomenon that surrounds

everyone all the time.

As we examine these concepts, one perceives that culture is something

impregnated in social groups with a very important role in the definition of the identity of

a group of people or country. For this reason, it is important to understand it, so that it

does not become a barrier to business in other countries.

All countries in the world have a culture that differentiates them from others.

Consequently, there is a specific culture in each region or country that makes each one of

them different as one examines looking at some factors. In this sense, people identify

themselves in cultural groups, such as tribes, ethnic groups, religious communities,

nations and, in a higher level, civilizations.

The large number of different cultures and the way they change as time passes,

make their understanding more complicated. Culture is something so difficult and

complex that it does not only expand in the geographical horizon, but also in the time

horizon, becoming for a foreigner, something virtually impossible to understand its

richness and its deepness. The complexity requires an analysis of its elements to facilitate

its understanding. It is disseminated through manifestations, such as language, habits and

customs, music, arts, literature, principles and values materialized in the behavior of

social groups. It is necessary to examine these elements that are part of a country’s

culture to understand how this culture influences the behavior of people and groups, as

well as its impact on the international business activities of an organization.

If national cultures provide serious challenges for globalized business efforts,

organizational culture complicates the effort even more. Distinctive organizational

cultures such as Microsoft and Apple Computer in the United States or Companhia Vale

do Rio Doce and Petrobrás in Brazil are easily noticed and somewhat understood in their

respective countries. It is a leap of faith to believe that the nuances of cultural differences

in the organization would be picked up by management in different national and business

cultures worldwide. Organizational culture will be addressed later on.

Whether it is working in the operational environment of MNCs or dealing with

customers abroad one cannot overlook cultural elements. The performance of a company

in the international arena depends partly on how well the strategic elements fit into the

culture of the host country. Culture may be described as the totality of the complex and

learned behaviors’ of members of a given society. Elements of culture include beliefs,

arts, morale, code of conduct and customs.

Culture has the following distinctive features.

a) Learned : culture is not inherited or biologically based ; it is acquired by

learning and experience

b) Shared : culture is not individual specific. People as members of a group,

organization and society share culture.

c) Trans-generation : culture and cultural values are passed on by one

generation to another

d) Symbolic : culture is symbolic in nature and distinguishes one group of

people from the other

e) Adaptive : culture is dynamic and adaptive. It changes with the change in

the society

There are three levels of culture:

National Culture

National Culture is the dominant culture that distinguishes people of one

political boundary from the other. National Culture exercises tremendous

influence on every individual and institution in the country.

Business Culture

Business practices are the extensions of national cultures. In management,

culture influences, and sometimes even determines policy, style and

structure of the organisation.

Organizational Culture

Organizational Culture refers to philosophies, ideologies, values,

assumptions, beliefs, expectations, attitudes and norms that knit on

organisation together and are shared by its employees.

Culture is perhaps one of the most important determinants of human behaviors.

Food habits, social class, the family system, community units and other cultural and sub

cultural elements influence the process of decision making in day to day dealings and the

buying habits of the customers.

For e.g., Branded products will move fast in Europe and America, but the

Africans perceive a branded as being very expensive.

International Management & Cross Cultural Dimensions

The role of manager is evolving in response to the needs of companies operating

worldwide. Recent globalization has engendered a heightened complexity of the

management role. The 21st century manager is now required to expand and adapt his/her

leadership and communication skills across cultures in order to be effective.

The majority of companies can no longer escape the need to buy, sell or work with

people from different cultures. Multinationals have offices spanning the globe;

manufacturers increasingly rely on foreign markets and distributors; services and

products are no longer solely marketed at native audiences and many industries rely on

immigrant labor. This necessitates an understanding of the issues relating to International

management cross cultural dimensions and their impact on leadership and

communication in the workplace. Much has been written theoretically about these

dimensions, but for practical purposes they affect management behavior in respect to

working practices such as:

• relationship styles

• centralized versus decentralized decision making

• adherence to time

• level of team work and delegation

• feedback

• management of conflict

• risk orientation

• openness to change

• preferred styles of communication

• problem-solving,

• status and hierarchy

As a result, companies are increasingly recognizing that in order to grow, diversify

and retain a competitive advantage, cross cultural management skills are critical.

Managers are required to communicate and deal effectively with people from different

cultures both internally and externally and a good understanding of these cross cultural

dimensions can influence success. The role of international manager entails acting as a

medium between senior personnel and staff; communicating clearly and effectively with

colleagues; building and nurturing efficient intercultural and transnational teams and

displaying strategic global thinking.

Today, International management entails ensuring that communication between

colleagues, clients and customers is clear, coherent and free from intercultural

misunderstandings. Ideally, the international manager possesses hands on experience of

living and/or working in different cultures, in order to understand how international

management and cross cultural dimensions manifest themselves in interpersonal

interactions.

Communication is strongly affected by culture. You can improve your cross cultural

international communication by recognizing cultural differences and then overcoming

your own ethnocentrism-the tendency to judge all other groups according to your own

group's standards, behaviors, and customs.

Culture is a shared system of symbols, beliefs, attitudes, values, expectations, and

norms for behavior. You belong to several cultures. The most obvious is the culture you

share with all the people who live in your own country. In addition, you also belong to

other cultural groups, including an ethnic group, probably a religious group, and perhaps

a profession or industry that has its own special language and customs. All members of a

culture have similar assumptions about how people should think, behave, and

communicate. Cultures differ widely from group to group.

The difference in cross cultural communication is not about pronunciation or even

language. The difference is in the mental software of the protagonists. They have

different filters, different perspectives. So do you and your colleagues when you work

internationally. This is how the process works.

• When you write to or speak with someone from another culture, you encode your

message using the assumptions of your own culture.

• The recipient decodes your message according to the assumptions of their culture,

• Meaning may be misunderstood.

• The greater the difference between cultures, the greater the chance for

misunderstanding.

Intercultural communication in the global workplace can be improved by recognizing

and accommodating four main types of cultural differences:

1. contextual,

2. ethical,

3. social, and

4. nonverbal

People assign meaning to a message according to cultural context: physical cues,

environmental stimuli, and implicit understanding that convey meaning between two

members of the same culture.

For example:

In a high-context culture, (Japan, India, Middle East etc), people rely less on verbal

communication and more on the context of nonverbal communication, actions and

environmental setting to convey meaning. In a low-context culture, (US, UK,

Germany) people rely more on verbal communication and less on contextual cues.

Some terminologies in cross cultural Communication:

Cross cultural understanding simply refers to the basic ability of people within

business to recognise, interpret and correctly react to people, incidences or situations that

are open to misunderstanding due to cultural differences. The fundamental intention of

cross cultural training is to equip the learner(s) with the appropriate skills to attain cross

cultural understanding.

Once the foundations of cross cultural understanding have been laid, the

learner(s), either through continued training or experiences within the workplace,

gradually attains a more acute appreciation of cultural differences. The different types of

appreciation are cross cultural knowledge, cross cultural awareness, cross cultural

sensitivity and cross cultural competence. Although all the terms may appear similar in

meaning, subtle differences exist between them.

'Cross Cultural Knowledge' is critical to basic cross cultural understanding.

Without it cross cultural appreciation cannot take place. It refers to a surface level

familiarization with cultural characteristics, values, beliefs and behaviours.

'Cross Cultural Awareness' develops from cross cultural knowledge as the learner

understands and appreciates a culture internally. This may also be accompanied by

changes within the learner's behaviour and attitudes such as a greater flexibility and

openness.

'Cross Cultural Sensitivity' is a natural by-product of awareness and refers to an

ability to read into situations, contexts and behaviours that are culturally rooted and be

able to react to them appropriately. A suitable response necessitates that the actor no

longer carries his/her own culturally determined interpretations of the situation or

behaviour (i.e. good/bad, right/wrong) which can only be nurtured through both cross

cultural knowledge and awareness.

'Cross Cultural Competence' is and should be the aim of all those dealing with

multicultural clients, customers or colleagues. 'Competence' is the final stage of cross

cultural understanding and signifies the actor's ability to work effectively across cultures.

Cross cultural competency is beyond knowledge, awareness and sensitivity in that it is

the digestion, integration and transformation of all the skills and information acquired

through them, applied to create cultural synergy within the workplace.

What are Cross Cultural Differences?

The way culture imprints itself on the manner a person thinks, acts, perceives the

environment and reacts to things around him/her is very strong and virtually indelible.

Culture determines every aspect of human behavior and gives rise to cultural identity in

addition to national and our own individual identity. Amazingly, nearly all this imprinting

is done before we reach the age of seven.

Regardless of the organization you join, you are likely to be dealing with people

who come from various national, religious, and ethnic backgrounds. Communicating

across language and cultural barriers at home will challenge your skills. Without leaving

your own country, you're likely to come into contact with people from a variety of

backgrounds who work in your company, industry, and community. Cross cultural

differences are all around us.

How then can we access cultural understanding to help us in our day-to-day

relationships?

• First, it is important to understand and identify aspects of culture that lead to

creating the way we think and behave. Also, we need to understand that the

cultural spectrum holds different shades for a person, a society and a nation,

helping each of them adapt to a common collective identity. In the process of

evolving this collective identity, culture transcends its traditional role of providing

a set of beliefs, customs, norms, values, ethics, traditions, moral, social and legal

codes, perceptions, and philosophy. It becomes the overall physical framework for

the society to function - it becomes the institutions that govern and the schools that

educate, for example. These are all manifestations of culture.

• In addition, culture is strongly related with geographical setting of a place,

religion, ethnicity and race, and explains why different countries have different

cultures and also why places on a sea coast share common elements of culture that

are quite different from the cultures of mountainous places.

• Cultural understanding derives from dovetailing all these cross cultural differences

and creating awareness about how these differences impact the way people think,

speak and behave. One of the biggest issues to affect relationships is that of not

understanding why one person has a particular viewpoint or approach. Their

approach may simply not make sense to you. And what is worse, you have no

language or framework with which to begin to discuss your differences. You

cannot have a discussion about it because you don't know where to start...

Cross cultural differences can be the cause of many underlying problems that most

people will not recognize stem from that. Often these differences are not brought to the

surface and slowly build in to resentment affecting people's performance at work. It's

important when you are working with multi-cultural staff to promote sensitivity to

diversity, respectfulness and good intercultural communication.

The Influence of Culture in International Business

The goal of this project is to analyze the influence of culture in international

business. The globalization of the world economy has intensified international

relationships, increasing the importance of cultural dimension. Literature has emphasized

various variables that have influence over the culture of a population or a region. Many

times these elements are invisible to the eyes of foreigners that travel around the world

searching for new business opportunities, resulting in conflicts, problems and failures.

Usually managers, who take over the prevailing norms in their country, assuming they

are equally valid in other contexts, may find difficulties in the performance of their

companies. In order to be successful it is necessary to read the cultural context and seek

the required adjustments to avoid problems may arise and affect the performance of our

business.

The utility value of a product may differ considerably from country to country

because of differences in beliefs, values and lifestyles. Fast food such as KFC, Mc

Donald’s hamburgers and pizza are more popular in modern societies than in traditional

societies. Similarly branding and packaging are very susceptible to cultural bias.

Product are launched in market on the basis either perceived or real utility value.

Products from certain parts of the world such as Western Europe, Japan, and United

States command premium prices in developing countries because it is felt that they are of

better quality than locally manufactured products and as such they have a higher value.

Culture is perhaps the most powerful influence in determining the acceptability of

advertising copy, designed and other elements in various countries. For example,

advertisements released in France may not be accepted in the United Kingdom, many

advertisements acceptable in the other parts of the world would not be accepted in

Southey Arabia. Advertisements about liquor and cigarettes are prohibited in many

countries.

Holidays in different countries vary due to different religious backgrounds. Friday

is the holiday in the entire gulf regions. In china offices and factories are closed for a

week for the New Year celebrations. For companies with firms in different countries it is

thus impossible to impose common business practices everywhere, as productive would

be very low during festive days. Any strict implementation of company policy will have

direct repercussions which may even lead to the closure of business in some countries.

Local norms and practices may affect certain distribution strategies. In Spain, mail

order shopping is very popular, whereas in the US and Europe, chain stores are preferred

and in many countries, door-to-door delivery is common. Shopping malls are coming up

in the urban India faster than in any other country in the world. Still small and traditional

shops are near one’s residence are perceived as trust worthy suppliers when customers

need groceries.

Cross cultural dimensions Asian v/s American

Cross Cultural

DimensionsAsian American

UniquenessThe Asians culture is unique and

has its own values.

culture of America is a mixture of

different cultures,

Family vs.

Individual

Asians are more committed to their

family. The family values are

given more prominence than the

individual values. Asians respect

family values

The Americans are more

committed to themselves only.

The Americans are individual

oriented in American culture the

individual values get prominence

than the family values.

Language

Not that complicated to the Asian.

Foreigners should have more

respect and learn the language.

English is the international

business language so everyone

should use it.

Contracts Asians do not consider contracts as

seriously as Americans. They think

that there will always be changes

and hence the contracts can be

reasonably modifies accordingly.

Americans place more stress on

contracts safeguards than the

Asians. They believe that

contracts can ensure that their

partners tendency to focus on

They tend to pay more attention to

the relationships than contracts

individual goals an appreciations

do not interfere with their own

individual goals and appreciation.

NatureAsians believe in the harmony with

nature.

The Americans believe in

dominating nature and controlling

the world around them.

Culture and

Value system

The Asians culture is more people

or family oriented. Asians may

even forsake their individual

wishes and also happiness for the

sake of families. Most Asians

believe that a sense of

belongingness to the group and

devotion to it are important they

hold the view that one’s success is

mainly based on group work so

one cannot claim the reward just

for oneself

American culture is

more goals oriented. In American

culture, great emphasis is placed

on individual achievements, and

they are expected to achieve

success only by their individual

efforts. They value competition,

achievements and personal goals,

and therefore desire to have plans

that recognize individual

contributions.

Independent

vs. Dependent

Asians are more dependent on

others

In American culture, one can see

that the individuals think of self-

reliance and independent.

Uncertainty

Avoiding

Risk Avoiding : Asians have

higher value for uncertainty

avoidance than the Americans

which shows that Asians are

relatively risk avoiding

Risk Taking: Americans are

relatively risk taking. USA have a

short term orientations while

Asians have a long term

orientation.Conflict

resolution

Asians will try to use indirect ways

to avoid direct and open conflict. Americans confront problems

directly and bring things out in

When they face conflicts, they

prefer to use authority to suppress

it, or settle things in private. They

prefer to resolve conflicts through

negotiation and compromise.

open. To resolve differences, they

prefers to use tactics that involve

directly confronting others with

rational arguments, factual

evidence and suggested solutions

Stability vs.

MobilityThe Asians love stability The Americans love mobility

Work Group

characteristics

Asians are relational – oriented i.e.

they place a great importance on

personal relationship. Living in a

collectivism society, the Asians

view people differently as “IN-

GROUP” and “OUT-GROUP”.

They have much higher confidence

in “IN-GROUP” members than

“OUT-GROUP” members. But

with the passage of time and the

development of relationship, the

out-group members may turn into

in-group members.

Americans are achievement

oriented i.e., “WORK FIRST”.

They believe that establishing

personal relationship is not

necessarily involved in the work.

Americans managers may

encourage their group members to

learn from each others to focus on

task rather than on social; and

inter-personal relations. They

place greater emphasis on the task

and the business deal rather than

personal relations.

Masculinity vs.

Femininity

Medium Femininity: Asian

mangers prefer indirect forms of

influence to deal with a difficult or

controversial request to avoid

losing face and damaging

relationship.

Medium Masculinity: Western

Partners may get totally confused

by the roundabout way the Asians

use to solve seemingly simple

problems

Globalization and Cultural Diversity in Today’s Marketplace

Within the current global business environment, company management is often

faced with alleviating multicultural misunderstandings and perceptions. The services or

products a company provides are often influenced by the culture from which they derive.

International business partners may overestimate their commonalities in their desire for a

profitable company outcome.

In the quest for clarity and continuity, businesses may overlook these cultural

differences as a potential resource or opportunity for growth. Understanding the cultural

context in which global business occurs sets the stage for truly relevant communication

and relationship building. In addition, a sensitive understanding of cultural differences

tends to lead to increased self-awareness and better business practices in general.

To fully exploit the importance of culture in your international business ventures try

incorporating the following simple 5-step program TODAY:

1. Think outside the box.

Your company culture may dictate some limitations of which you are unaware. By

training management to explore and appreciate internal cultural differences within

its own workforce, it will better recognize these differences when they occur on

the global stage. Juxtaposition of ideas often leads to innovation.

2. Open your eyes.

Doing business worldwide involves embracing globalization and cultural

diversity. In the international arena, communication is much more than words.

Learn to recognize your client's culturally based body language and facial

expressions. With training, these physical clues can become your business cue to

action.

3. Dovetail commonalities and differences.

It's a good start to be able to recognize cultural differences within a global

business setting. It's even better to communicate that you appreciate the

importance of culture, are aware of these differences, and offer common ground to

overcome them.

4. Allow for misunderstandings.

We may come from different parts of the world but we all make mistakes. Don't be

afraid to sum up your client's position in a more basic way and ask for

confirmation. A French managing director may use the English word "eventually"

when referring to future business plans. How unfortunate that "éventuellement" in

French means "possibly"!

5. Yes we can do business.

By learning about and appreciating cultural differences in an informed way, you

tell your clients that you can work together successfully. Whether working with an

international client, creating an overseas subsidiary or forming a joint venture with

a local business, appreciating cultural diversity is key to a successful outcome and

a sustainable business model.

It's important to be able to really look at a company's specific needs when it comes to

unleashing the potential of cultural understanding within your business. It takes a very

specific plan to develop cross cultural communication, the right communication structure

and skill-set.

Cultural Challenges in a Globalized World

More and more people are facing many challenges in the globalized world. Cultural

factors are one of the most frequent and difficult barriers to be overcome by anyone

doing business in an international arena. One viewpoint raised by critics of globalization

is the fact that this process would be establishing world patterns and therefore breaking

up a little of the local culture. Globalization has various dimensions, especially the

economical dimension the one that has been the aim of major debates and critics all over

the world.

Friedman (2005) provides a good example of how companies are taking advantage of

globalization by stating that in 2004 statuettes of Mexico’s patron saint, the Virgin of

Guadalupe, were being imported from China. Mexico, a low-wage manufacturing

country, discovered that China was able to make the statuettes and ship them half way

around the world more cheaply than Mexicans. Even Mexico, like the US and other

developed countries, is getting flattened by China.

Some of the Problems Caused by Cultural Differences

• You greet your Austrian client. This is the sixth time you have met over the last 4

months. He calls you Herr Smith. You think of him as a standoffish sort of guy

who doesn't want to get really friendly. That might be true in America, where

calling someone Mr. Smith after the 6th meeting would probably mean something

-- it is marked usage of language -- like "we're not hitting it off". But in Austria, it

is normal.

• A Canadian conducting business in Kuwait is surprised when his meeting with a

high-ranking official is not held in a closed office and is constantly interrupted. He

starts wondering if the official is as important as he had been led to believe, and he

starts to doubt how seriously his business is being taken

• A British boss asked a new, young American employee if he would like to have

an early lunch at 11 am each day. The employee said 'Yeah, that would be great!'

The boss immediately said "With that kind of attitude, you may as well forget

about lunch!" The employee and the boss were both baffled by what went wrong.

[In England, saying "yeah" in that context is seen as rude and disrespectful.]

• A Japanese businessman wants to tell his Norwegian client that he is uninterested

in a particular sale. So he says "That will be very difficult." The Norwegian

eagerly asks how he can help. The Japanese is mystified. To him, saying that

something is difficult is a polite way of saying "No way in hell!". Dave Barry tells

the story of being on a trip to Japan and working with a Japanese airline clerk on

taking a flight from one city to another. On being asked about it, the clerk said

"Perhaps you would prefer to take the train." So he said "NO, I want to fly." So

she said "There are many other ways to go." He said "yes, but I think it would be

best to fly." She said "It would very difficult". Eventually, it came out that there

were no flights between those cities.

Conclusion

Today’s world is represented by a large interaction among companies localized in

all parts of the planet and by an intense movement of people, merchandise and services.

In this context, the cultural dimension is constituted, in a crescent form, in a strategic

component in the international businesses. These businesses require from the companies,

contacts, trips and meetings among potential buyers, sellers and partners interested in

developing commercial relations, negotiations and alliances for business success. In these

activities, problems of a cultural nature emerge influencing, many times, the development

of the negotiations. It is important that people who represent companies abroad become

aware of the cultural differences and of the possible influences of these differences in the

success of their jobs. Culture is, many times, something invisible abroad or to the ill-

informed visitor, being spread in thin in individual and group behavior. Managers, when

crossing countries’ frontiers with the frequency which is observed today, need to pay

attention to the countries’ and organizations’ cultural dimension with which they relate

under the penalty of having their work compromised. Managers by taking over the

prevailing norms in their country, assumes they are equally valid in other contexts, may

find difficulties in the performance of their company. It is not sufficient for the

businessman to be aware of the cultural differences. To understand the cultural

differences and adjust to them is a requirement for the success of any manager who acts

in a globalized economy. Since 2000 because of the collapse of communism in the

Soviet empire, the shift to market capitalism in China and the development of India,

approximately 1.5 billion new workers have entered the global economy (Friedman,

2005, 182). There is no turning back. Moving forward must be built on cultural

understanding, one person and one business at a time.

Thank you…!!!!