Major Determinants of Culture
Four major determinates of culture are: language, education, religion and aesthetics.
Language
Language is our main form of communication. Clear and effective communication is critical in successful international business transactions. Today there are approximately 6,900 living languages spoken.
The following map demonstrates the number of ethnolinguistic groups in a single country, China.
In addressing language, we need to consider both verbal and nonverbal communication. It is critical that translations are done correctly as numerous faux pas have resulted from poor translation. The following are a few such examples:
- Jolly Green Giant when translated word for word is “Intimidating Green Ogre” in Arabic.
- An American T-shirt maker in Miami printed shirts for the Spanish market that promoted the Pope's visit. Instead of "el Papa" ("I Saw the Pope"), the shirts read, "la Papa" ("I Saw the Potato.")
- Pepsi’s "Come Alive with the Pepsi Generation" in Chinese read, "Pepsi Brings your Ancestors Back from the Grave.”
Studies have proven that about 55% of communication is nonverbal. The reason it is essential to research and study nonverbal communication of other cultures is that the same form of nonverbal communication can be interpreted very differently from culture to culture.
Edward T. Hall, an anthropologist and author of The Silent Language, researched intercultural communication. His study resulted in mapping a given culture along certain dimensions with the most dominant dimension being communication, with a focus on communication across cultures. Hall concluded, “Culture is communication and communication is culture” (Hall, 1959, p. 186). A good portion of his work focused on nonverbal communication. Hall addresses three main areas: monochronic versus polychronic time (whether people perceive time as discrete and divided versus flowing and continuous), high and low context, and space. Regarding space, Hall studied the different personal talking distances between people of different cultures. For example, I initially had difficulty in business meetings with Asian distributors and customers due to the reduced distance between speakers in these countries. My initial response was to automatically step back to allow for additional space, which is considered rude. (Students are encouraged to do further research on E.T. Hall’s findings.)
There are many web sites that provide additional information on language. Students should research various sites such as “about World Languages” or the CIA World Factbook: research languages.
Education
Education is essential to the advancement of a nation. Increased education leads to increased understanding, knowledge and skill levels. This then leads to increased productivity, which has a major impact on international business. Educational levels of a country can be assessed through determining literacy rates, student enrollment and monies spent on education.
In this course we will address some terms such as the ethnocentricity, brain drain and reverse brain drain. Ethnocentricity involves a culture’s feeling of superiority over other cultures. This can be a detriment in international business as this false supposition results in managers’ not applying the proper focus on relationships and company strategy, resulting in their mismanaging the business and loss of income. Brain drain occurs when educated people leave their domestic country, depriving that country of their knowledge and skills thus reducing certain skill levels, which impacts the country’s economic development. The downside is that this mostly occurs in developing and Third-World countries, countries which are most in need of increased education. Reverse brain drain refers to these same people returning to their home countries.
Region
Religion focuses on shared beliefs and teachings that are considered revered. Organizations must be very cautious in their approach to addressing religious elements for fear of disrupting potential and current relationships. Religions greatly impact how business is conducted from country to country.
There are many religions as evidenced in the map below. The major religions are: Christianity, Islam, Hinduism, Buddhism, Confucianism, and Judaism. It is not the intent to identify each of these in this section as further information is available in your textbook as well as on many research sites.
What does need to be emphasized is a religion’s impact on international business, and companies need to be sure that they clearly understand this impact on work behavior. Case in point, the “Protestant work ethic” refers to a strong emphasis on work as a moral virtue; idleness is highly frowned upon.
(Students should refer to additional information on religion. One source is the CIA World Factbook: research religions.)
Aesthetics
Aesthetics focuses on different cultural factors involving our lifestyles. For example, aesthetics includes art, music, literature and food.
Art differs from culture to culture. For example, colors and symbols have different meaning in different countries. The color red symbolizes love in the United States as evidenced by the giving of red roses on Valentine's Day. However, in parts of Africa red represents death. A former coworker related a story involving her company sending its marketing brochures to Africa. The company’s logo was in red and black. The African company refused to accept the brochure due to its color, and the company had to redo the brochure eliminating the color red.
Music is a strong force in our daily lives and varies from culture to culture from the drums of Africa to the marimbas of Mexico to rap music in the United States. Each culture is highly devoted to its musical culture. Its long history has made it an integral part of the main events of our lives from birth, to marriage, to death.
Food is one of the most prominent examples of a culture as people’s tastes in food can be quite different, from fast food in the United States to the spicy foods of Asia to the blander, milder foods in Great Britain. Food is one of the main categories where businesses need to customize their products for a particular culture and country, and sensitivity to local customs is important, which is why McDonald’s added spice packets to its french fries in London, England as a large portion of this population consists of Indian immigrants. When people move or travel, they carry their culinary preferences with them. For example, while I was on a trip to England, my English friend was amazed at how quickly I was able to locate a can of Coke in the back of a store we were passing.
Literature refers to the written word. Literature represents the collected writings of a culture regarding ideas and philosophies, ideas which have proven to have universal and permanent significance. The written word has captured these ideas and passed them on to succeeding generations, in many cases for thousands of years, and their influence has spanned cultural boundaries. Literature encompasses all of the culture’s writings, from artistic productions to fiction. Literature is embedded in and flows from the culture, and culture in turn is influenced by literature. A culture’s writing expresses its hopes, passions, prejudices, taboos and adorations. For this reason, literature provides a cultural Rosetta Stone for business people to familiarize themselves with the customs and attitudes of another people.
Cultural Values in the Workplace
A number of studies have been done to determine cross-cultural differences in values and beliefs. We will briefly look at two of these.
Hofstede’s Classification of National Culture
One such model was developed by Geert Hofstede in 1980. Hofstede uses four dimensions to distinguish differences in cultural reaction. These four dimensions are: individualism and collectivism; uncertainty avoidance; power distance and masculinity and femininity (aka career success and quality-of-life). Below, each dimension will be briefly explained, followed by its impact on international business.
Individualism versus collectivism refers to certain cultures’ orientation focusing more on the actions of an individual versus group action. For example, in some places such as Italy, Australia and the United States, entrepreneurship is highly valued. Independence, aggressiveness and directness are valuable strengths in the business world. Relationships are more contractually-based, focusing on the give-and-take of negotiations where gains and losses are calculated even before the relationship is formed. However, in places such as Asia, caring more about group needs and working in groups to achieve consensus is more highly valued. Resources are shared and private interests are relinquished for the collective good. This approach also allows for less "finger-pointing" when errors do occur. The downside is that it can lead to too much conformity and hostility towards nongroup members.
Uncertainty avoidance refers to the degree of ambiguity certain cultures can tolerate. Some cultures, such as those in Great Britain and Sweden, can tolerate unstructured situations allowing for greater risk-taking, flexibility and increased acceptance of business changes whereas people in countries such as Argentina and France do not adjust well to uncertainty, which in a positive sense can lead to more stability and security but taken to the extreme can cause delayed decision making and lack of required changes needed for international business success.
Power distance denotes the degree to which people in a culture believe that power is distributed unequally, which can lead to great contrast in power and wealth. Cultures exhibiting a high degree of power distance such as Japan and Mexico generally practice centralized decision-making which requires many hierarchical levels and approval from the top, while cultures like Sweden and the Netherlands display low power distance and use a decentralized approach with widespread decision-making and workers questioning authority.
Masculinity and femininity (career success and quality-of-life) address gender differences; whereas masculinity is more self-focused and concerned with acquiring money, success and power, femininity is more outer-focused, exemplifying empathy, nurturing and establishing strong relationships. Countries such as Chile and Yugoslavia display the former while Sweden and Norway display the latter.
Schwartz’s 10 Cultural Values
Another value-oriented model is that of Shalom Swartz, called Schwartz’s 10 Cultural Values. “The theory identifies 10 motivationally distinct value orientations that people in all cultures recognize, and it specifies the dynamics of conflict and congruence among these values” (Swartz, 2006). The 10 values are: self-direction, universalism, benevolence, security, power, tradition, conformity, achievement, simulation and hedonism. These 10 elements can be subcategorized into four dimensions: “openness to change” which includes stimulation, self-direction; "self-enhancement" which includes achievement, power and hedonism. On the other side, "conservation" combines security, tradition and conformity while self- transcendence combines universalism and benevolence. Research indicated people exhibited shared values by culture. A culture with high scores for "security" as a value was also likely to have high scores for “tradition" and used these values as guiding principles.Clash of these values can account for difficulties in international business negotiations. For example, in the U.S. people are very individualistic and quick to establish relationships; they speak informally; and they like business to be conducted as quickly as possible. This is not acceptable to all cultures. In many regions, such as in Latin America and particularly in Asia, establishing relationships is a critical first step in conducting business as these relationships are expected to last for many years. Formality is also desired and respected.
Overall, it is very important for companies to be aware of and value cultural differences in conducting international business successfully. Although we acknowledge that there is a great difference in behavior among cultures, there is also a great difference in behavior within cultures as well. Thus, we must also remember that such models as the above are tools to steer us in the right direction but require critical thinking for application.
Cultural Risk
One of the major focal points for students to assess regarding the above studies and determinants of culture is the risk that companies and countries face due to cultural differences. Cultural risk can be defined as a company's failure to differentiate between home and host cultures. Cultural risk can be the fallout of miscommunication, misunderstanding, ignorance, lack of trust and poor relationships. Even major corporations have suffered losses due to insufficient or incorrect assessment of cultural differences. Examples: Coca-Cola misnamed its soda pop in Chinese, resulting in meaningless gibberish for its product name; Disney misjudged the type of food, number of hotels and employee needs for Disneyland Paris; and in Japan, Procter & Gamble used a European bar soap commercial of a husband entering the bathroom while his wife is bathing, which is socially unacceptable to the Japanese. Each of these blunders resulted in reduced demand, negative brand recognition, loss of revenue and a tarnished reputation.
The caste system is an example of a potential cultural risk for companies. A caste refers to a person's social position as indicated by birth. This position generally does not change throughout the person's lifetime. For example, in India there are various levels of social standing, and each level designates a person's occupation. These occupations might be landowner, merchant or the oppressed, the latter of whom perform tasks people in socially mobile societies seek higher education to avoid, such as making dung patties. One risk that a caste system might raise for businesses is whether or not castes can be intermixed given the need for different skill levels in the work environment.
Given these risks, what should companies do to mitigate cultural risk? The necessity for solid research in this area cannot be overstated. Assessing the cultural environment of a country to determine the nature, extent and importance of cultural differences that will impact the company's products and services is critical. Beyond research, some tactics companies might use include: training employees who will be involved in international communications on proper cultural etiquette, providing opportunities to learn foreign languages, hiring cultural advisors or employing local people where appropriate.
Once cultural differences are known, companies should also look ahead and strategically plan for changes in culture. For example, the recent trend for teenagers, whether from the United States, Europe, or Asia, to share common values and beliefs as to food, clothing and television programs has a great impact on a company’s ability to standardize its marketing efforts. Companies unaware of this change will needlessly spend a great deal of extra money. On the other hand, companies need to be aware that in many cases cultural needs trump standardization. Being locally responsive to a company’s current and potential customers is essential for international business success. Although standardization is desired by companies, customers’ needs and wants will dictate the level of product and service customization required. Noting cross-cultural changes can also decrease risks.