Culture clusters and their characteristics

European cultures

•       Europe’s identity never clearly established culturally, politically or geographically.

•       Most recent development: creation of the European union (EU): common economic, socio-cultural and political bodies.

•       Council of Europe aims to promote fundamental values, e.g. human rights.

However, clear cultural differences in Europe still survive.

European culture clusters

Germanic Europe

–      Longer term perspective when managing uncertainty

–      Assertive behaviour, explicit communication

–      Emphasis on results rather than relationships

Latin Europe

–      Influence of Roman Empire

–      Highly developed bureaucracies

–      ‘Rule-bending’ through family and personal relationships

Nordic Europe

–      Viking heritage: self-sufficiency, fairness, egalitarianism and democracy

–      Face up to authority, question it and expect to be consulted

The Anglos

–      Relaxed approach to management

–      Organization seen as a market in which people negotiate what has to be done

–      Individualistic – as seen in prominence given to the individual in selection procedure

Anglosaxonization

–      Term used to show commitment to profits and free markets at expense of social responsibility

•       Eastern Europe

–      Transition from bureaucratic, centralised economy to market-oriented economies with more democratic features

–      Russia is the largest of the former Soviet Union republics, but is it a European nation geographically, politically and socially?

–      ‘Blat’ , a Soviet form of social networking, still flourishes to help cope with uncertainties of new society

Turkey

–      Turkey straddles the border between Europe and Asia

–      Candidate for membership of EU, but its right to be a member disputed:

–      Turkey seen by some as not being European culturally, socially or geographically. But what does ‘European’ mean?

–      Others see Turkey as European through its influential role in Europe over four centuries

American and Australian cultures

Areas where immigrants from British isles and Europe set up home and business concept examines

–      Anglo-Saxon approach to business

–      The strong values of the Latin cluster as reflected in Latin America

Anglo-America

Anglo-Canadians

–      More a ‘mosaic’ than a ‘melting-pot’ society

–      People less driven by individual goals, more aware of society as a whole

Anglo-Australians

–      Increasing cultural diversity, despite Anglo-Saxon foundations

–      More collaborative in business, distrust of authority

–      More direct and critical than British counterparts

Latin America

–      Strong belief in Catholic religion, reflecting importance of families and distinct male/female roles (values implanted by immigrants from Iberian peninsula)

–      Role of ‘patron’: authoritarian behaviour expected and respect shown

–      Rise of middle classes is causing tension with the underprivileged (especially the indigenous population) reducing authoritarian nature of society

Asian cultures

Two Asian clusters:

–                      Confucian Asia: countries that have undergone                 influence of Confucian ideology

–                      Southern Asia: countries with different religions and      ethnic groups living in peaceful co-existence.

Both clusters share similarities regarding the way relationships are managed: concern for respect and harmony.

Doing business therefore involves establishing a good relationship.

Confucian Asia: China

The Chinese and guanxi

–      Guanxi = building a strong network of relationships

–      Network provides information, expertise, enables new business partners and new deals

–      Mianzi = face: maintain your own dignity and that of others

–      Helping friends within a network is a moral and social obligation.

Confucian Asia: Japan

The Japanese and wa

–      Wa is the spirit of harmony, applied to all relationships, including those with nature

–      Seen in collaborative behaviour and consensus-building in an organization

–      Reflected in mutual commitment and loyalty between company and employee

–      Loyalty: individual>group>company>country.

Confucian Asia: Korea

The South Koreans and the chaebol

–      Focus on family life and enhancement of its fortunes has influenced the rapid development of the economy

–      The role of the extended family in developing a network of conglomerates (chaebols)

–      There are around 60 chaebols, held together by cross-ownership and cross-subsidies.

Southern Asia: India 

The Indians and family

Every company employee works for the family to maintain and enhance its fortunes

Loyalty to the (extended) family takes priority over loyalty to the company

Success in your profession will give your family added status.

Southern Asia: India 

The family business: material success is important more for the sake of maintaining the family’s honour and ensuring a sound future for the offspring.

Being successful involves not just working long hours but also being creative

Failure possible, but this is less to do with personal competence, more to do with fate, so stigma.

Southern Asia: India 

Indians accept social and business hierarchies, just as

hierarchy of gods in their religion. They not only show

considerable respect towards their seniors in all aspects

of their lives, but also expect these to fulfil the obligations that power bestows.

Ongoing changes in the nature of Indian society

–      weakening of the caste system

–      liberalization and restructuring of the economy.

Manager has to contend with both collectivist and individualist values within a formal system of management.

African and Middle East countries

Sub-Sahara Africa

According to Shepherd Shonhiwa, the fundamental African personality traits are:

–      Non-discriminatory, not promote prejudice, seeks reconciliation in politics and business

–      Inherent trust and belief in the fairness of humans

–      High standards of basic morality, based on historical precedent and bolstered by extended family system

–      A hierarchical political ideology, but based on an inclusive system of consultation

–      perpetual optimism, mainly due to strong religious beliefs.

Sub-Sahara Africa 

According to Mutabazi (2001), the culture base of Africa is characterized by its

–                      relationship to time

–                      (organized) work

–                      other people (family, hierarchy, colleagues,        subordinates, outsiders).

This applies to regions either geographically very distant from each other, or very different to each other in terms of climate, religion or language

Sub-Sahara Africa 

Example: Ivory Coast and Ruanda have similar attitudes as to

–      how decisions should be made, how managers should give orders

–      how employees behave towards the company (high absenteeism and lack of initiative).

                Majority of local companies reject interpersonal             competition among employees (no bonuses).

                Also reject contracts and other written directives,          preferring verbal commitments.

South Africa 

South Africa

Huge cultural diversity: indigenous black peoples, white Europeans, Indians, Chinese and other immigrants from various countries in Asia.

Since the dismantling of apartheid, the country has promoted its multicultural society, trying to draw the diverse groups into the social and economic development of the country.

Sharp urban/rural contrast: in rural areas, the head of the family determines how business is run. Important role of tribal/family connections.

The managers there face a dilemma, according to Booysen and Van Wyk (2008): should they choose an ‘Eurocentric’ or ‘Afrocentric’ approach?

                ‘Eurocentric’ approach: reflects high performance           orientation and high assertiveness.

                ‘Afrocentric’ approach reflects high collectivism,               humane orientation, below average assertiveness.

                The authors call for both approaches to be          embraced, conciliation rather than confrontation,            reflecting the need to maintain social harmony in a              multicultural environment.

Middle East and North Africa

The present Arab states were formed following the break-up of the Ottoman Empire during World War 1 (1914–18).

Language and culture are unifying factors; Islam religion providing an overarching body of belief and a strong sense of identity and community.

The broader notion of family – a kin group or clan involving several households and cousins on the father’s side – remains at the basis of Arab social structure.

Family welfare is of primary concern. Family ties not only bring security but also commitments.

The family is run by an authoritarian father and the family clan by the oldest, competent member..

Arabs are highly sensitive towards traders – they may turn down a lucrative business deal because they dislike the people they are dealing with, particularly if these people do not enhance their personal reputation.

Damage to one member of the family damages the whole family.

It is often argued that a family concern’s dealings with government is more like two family businesses coming to terms with each other. The members of the ruler’s family are most likely to hold all the main government posts; outsiders, however talented, are put in less important positions.

The face or image conveyed to others, especially in public, is given considerable attention, even when this involves dealing with relative strangers.

The Arabs are renowned for their generosity and hospitality, but these ‘duties’ may also be a prelude to seeking some kind of commitment or request.

Management paradox referred to by Hickson and Pugh (2001): Arabs handle authority centrally with high power distance, yet at the same time they aspire to an ‘open door’ for all comers, high or low.

Aspects of Western culture now in many Arab countries. But this process is being controlled to prevent abuse of civil/religious norms and values.

Arabic companies are facing a dilemma that brings the globalization of the economy into conflict with affection for cultural values of the past.

However, a growing middle class which is trying to reconcile the process of economic modernization with the development of new values, such as tolerance, individualism and concern for the future.

CASE: NIKE

Nike admits to employee children as young as 10 making shoes, clothing and footballs in Pakistan and Cambodia.

World standard labour age: 18 for footwear manufacturing, 16 for apparel and equipment.

 In some third countries (Bangladesh and Pakistan, for example) those standards are next to impossible to verify, when records of birth do not exist or can be easily forged.

Nike claimed it then re-examined the records of all 3,800 employees, can they stop hiring child labour???

Nike "not Just do it but Do it right."

Public-relations impact:

The basic truth about Nike is that its only real strength is its good name. Nike rules because of all the good things people associate with the company: sharp ads, Michael Jordan, Tiger Woods, little Penny. If "child labor" get added to that list, then Nike's greatest asset will be lost.

Short term profit maximisation and company's image lose in the long run

Ethics and
Social Responsibility

Ethics:

–      Study of morality and standards of conduct

–      Dilemmas arising from conflicts between ethical standards between countries most evident in employment practices

Inferring right vs. wrong in legal sense

Ethics and
Social Responsibility

–      Corporate Social Responsibility (CSR):

»      Closely related to ethics

»      Actions of a firm to benefit society beyond requirements of law and direct interests of firm

»      CSR involves taking voluntary action

»      CSR concerns include working conditions in factories and service centers as well as environmental impacts of corporate activities

Employment and business practices

–      Difficult to establish a universal foundation of employment practices

–      Difficult dilemmas in deciding working conditions, expected consecutive work hours, and labor regulations.

–      Offshoring due to differences in labor costs

Human Rights

–      Currently no universally adopted standard

–      A great deal of subjectivity and culturally biased viewpoints exist

–      Some basic rights: life, freedom from slavery or torture, freedom of opinion and expression, general ambiance of nondiscriminatory practices

–      Human rights violations still rampant globally

Corruption

–      Government corruption pervasive element in international business environment

–      Scandals in Russia, China, Pakistan, Lesotho, South Africa, Costa Rica, Egypt and elsewhere

Corporate Governance

The System by which business corporations are directed and controlled:

–      Distribution of rights and  responsibilities

–      Stakeholder management

–      Spells out rules and procedures

–      Makes decisions

•       Objective setting

•       Means of attaining objectives

•       Monitors performance

Many continental European countries are “insider” systems

–      Ownership more concentrated

–      Shares owned by holding companies, families or banks

Rules and regulations differ among countries and regions

–      U.K. and U.S. systems are “outsider” systems

•       Dispersed ownership of equity

•       Large number of outside investors

.

Discussion

If you are a marketing manager of an Australian wine company and send to China as expatriate. Your responsibility is to get access to big local supermarket and generate RMB 2 million sales revenue a year. You have good GUANXI with a local mayor, one time you and mayor have dinner together, the mayor tells you that he knows owner of the biggest local supermarket and he can help you to get a RMB 2 million business contract initially in the first year, and contract might be renewed every year. However, he demands you to pay his son a scholarship for his Master of Business study in Australia( it covers RMB100,000 tuition fees). Discuss