Executive Summary
This note makes a systematic approach to the discussion of culture. It starts
with an introduction to the presence of culture and the issues arising out of it
today's business which is being conducted across the globe.
It throws light upon the relationship between culture and management. Some
doubt whether culture has any impact on management at all, but fails to
recognize the differences amongst people. Some people exaggerate importance
of culture using it to explain everything that involves more than one country.
The major reason is cited as the lack of clarity about the concept of culture.
There is a misconception that members of a culture behave in an identical
fashion. Also the lack of systematic thinking about the ways that culture is a
manifested in business settings.
Later it begins by offering a working definition of culture. Culture is defined as - A
shared system of meaning, ideas and thought.
It goes on to explore the many levels at which cultures exist. Some being broad
in scope while some are small. From National to Pan National to Social to
Professional to Organizational.
The case study identifies how there are differences in the national cultures by
presenting findings of two researchers Edward Hall and Geert Hofstede. These
two studies are more helpful in showing the relationship between culture and
management.
Edward T Hall has conceived culture as a means of communication which takes
place through Silent Languages of Culture. This involves Language of Time,
Space, Material Goods, Friendship and Agreement.
Each nation has it own style of dealing with the above mentioned factors which
may lead to issues when dealing with another nation which has its own distinct
language for the above factors.
The case study throws light upon the distinction offered by Hall between High
Context and Low Context Cultures where High Context being Less Formalistic and
Low Context Cultures being more precise, specific.
Also nations being Monochronic where they think of time as linear and discrete,
whereas Polychronic where the people do many things at once, tolerate
interruptions, may change plans without notice.
Moving further we learn about Dutch Management scholar Geert Hofstede's
Indices of work related values .
Hofstede did a study at IBM where the employees answered questions about
their jobs and work settings.
From this he distilled four dimensions Indiviualism/Collectivism, Power Distance,
Uncertainty Avoidance and Masculinity/Femininity. The study also covers the
shortcomings in Hofstede's research.
It suggests how these cultural traits are manifested in business settings. Culture
manifesting in two places : Interaction between firms and Interaction within
firms.
It offers some implications for practicing managers informing that culture has a
bigger impact in social systems rather than technical systems where the human
interaction is less.
The goal of the case study is to offer a systematic way of thinking about culture
and to provide a benefit to practicing managers.
Key Concepts Discussed
Definition of culture -
A shared system of meaning, ideas and thought. A code through which patterns
of conduct are communicated and deciphered through use of words, gestures
and objects. How we make sense of the world.
Levels of Culture -
Broad in scope / Small in scope.
Broad level involves people in large numbers sharing a set of values and system
of meaning. Eg. Islamic and Buddhist Culture.
National to Pan National to Social to Professional to Organizational.
Distinct cultures within a Nation - India, composed of literally hundreds of distinct
cultural groups.
Pan National Cultures -Distinct cultural groups that span nations. Share certain
cultural traits but are diverged across the map. E.g. Hispanic Culture - People of
Spanish speaking countries.
Groups sharing specific codes of meaning that make them culturally distinct. E.g.
Artists, Armed Forces, Students etc.
Edward T Hall : The Silent Languages of Culture.
Language of Time - Some cultures conceive time as precise whereas some
conceive it as more fluid, elastic and circular fashion.
Language of space - Social Distance the distance at which people naturally stand
from each other. Spatial Positioning, positioning which denotes rank or power.
Language of Material Goods - Importance on material possessions and
accumulation of goods used to signal status and power.
Language of Friendship - Differences in cultures in ways that people develop and
maintain friendships. Emphasis on one's personal relationships.
Language of agreement - Variation in how people express agreement and
disagreement. Some cultures agreements tend to be explicit and spelled in
writing whereas in some agreements are based on trust and may be
consummated with only a brief statement.
Dissent being voiced readily whereas in some cultures confrontation is avoided
and subtle clues are provided to express disagreement.
High Context and Low Context Cultures by Edward and Mildred Hall.
High Context - Less Formalistic, Relies on trust and understanding.
Low Context Cultures - More precise, specific and requires explicit information in
order to communicate effectively.
Monochronic : Think of time as linear and discrete, tend to do one thing at a time
and adhere to schedules
Polychronic : Doing many things at once, tolerate interruptions, may change
plans without notice
Geert Hofstede : Indices of work related values
Indiviualism/Collectivism
Indiviualism - Tendency to people to see themselves as individuals rather than as
members of group
Collectivism - Tend to see themselves first and foremost as part of a group
Concerned more about the welfare of group than individual welfare .
Power Distance - Degree to which members accept an uneven distribution of
power.
Uncertainty Avoidance -The extent to which people seek to avoid or feel
threatened by ambigious or risky situations.
Masculinity/Femininity -
Masculinity - Represents a cultural preference for achievement, assertiveness
and material success.
Femininity - Greater importance placed on maintaining relationships, caring for
members and high quality of life.
Shortcomings in Hofstede's Research.
Sample drawn from employees of one company - IBM. They do not constitute
random sample of citizens and do not capture fully the traits of their
countrymen.
Whether the findings describe work related values in forty countries examined or
only of IBM employees in those countries.
Dimensions based on responses to few questions raising doubts on the
robustness. Adding or amending few questions might significantly alter the
results.
Some indices well grounded in theory but other are less clear.
Uncertainty avoidance - whether it is a single index or a composite of underlying
values.
Culture manifesting in two places : Interaction between firms and
Interaction within firms
Interaction between firms -
when interactions take place across national lines they are affected by cultural
behaviour of participants.
Business negotiations in many countries can only be broached after a basis of
trust and mutual respect has been developed
In many countries people tend to get down to business without investment and
efforts in relationship building.
Important to pay attention to silent languages of time and agreement.
To understand that reluctance of one party to word contract in explicit language
is not an indication of evasiveness or duplicity but a reflection of their cultural
norms.
Interaction within firms -
When managing people from multiple cultures within a single organization
different set of cross cultural issues arise.
Important issues are Power relationships and Individualistic/Collectivistic culture .
Cultures with low power distance are egalitarian whereas cultures with high
power distance observe greater distance in status. Approaching and initiating
discussions with seniors is easy in low power distance whereas the same is
difficult in high power distance.
Individualistic/Collectivistic culture
Employees are motivated by rewards may work in particularly individualistic
cultures whereas may be less effective in collectivistic culture.
In Collectivistic Culture emphasis on preserving group harmony is important than
rewarding the individual. Rewarding one person more than another may be a
source of embarrassment and chagrin.
Social Loafing - Notion that individuals in group settings are tempted to slack off
and let others carry the load. Collectivistic cultures may face this problem.
To avoid this work may be structured so that individuals are held accountable for
specific tasks but may not be effective in collectivistic cultures.
Social loafing seems to be universal but is very much related to cultural norms.
Technical System and Social Systems
Technical Systems - mechanical, mathematical, inanimate variables, financial
models and manufacturing systems and do not involve human behaviour or
interactions and are unaffected by cultural differences.
Social Systems - Leadership, Human resource Management and Negotiations are
inherently social and are strongly affected by culture.
National culture of little importance to technical systems and affects only social
systems.
Implications and Applications for Industries in India
******************
More and more business is being conducted with other countries. Working in a
multi and cross cultural environment is routine thing now.
Relation between culture and management still not clearly defined. Some doubt
whether culture has any impact on management at all, but fails to recognize the
differences amongst people. Some people exaggerate importance of culture
using it to explain everything that involves more than one country. If there is a
conflict involving firms from different countries doesn't mean that the problem is
cultural in nature, these frictions may arise in any negotiations domestic or
international.
Major reason is the lack of clarity about the concept of culture. Misconception
that members of a culture behave in an identical fashion.Lack of systematic
thinking about the ways that culture is a manifested in business settings.
Definition of culture - A shared system of meaning, ideas and thought. A code
through which patterns of conduct are communicated and deciphered through
use of words, gestures and objects. How we make sense of the world.
Levels of Culture -Some are broad in scope and some are small. National to Pan
National to Social to Professional to Ogranizational.
Broad level involves people in large numbers sharing a set of values and system
of meaning. Eg. Islamic and Buddhist Culture.
Pan National Cultures -Distinct cultural groups that span nations. Share certain
cultural traits but are diverged across the map. E.g. Hispanic Culture - People of
Spanish speaking countries.
Distinct cultures within a Nation - India, composed of literally hundreds of distinct
cultural groups.
Groups sharing specific codes of meaning that make them culturally distinct. E.g.
Artists, Armed Forces, Students etc.
Dimensions of National Culture - Two studies showing the relationship between
culture and management.
Edward T Hall : The Silent Languages of Culture.
Language of Time - Some cultures conceive time as precise whereas some
conceive it as more fluid, elastic and circular fashion.
Language of space - Social Distance the distance at which people naturally stand
from each other. Spatial Positioning, positioning which denotes rank or power.
Language of Material Goods - Importance on material possessions and
accumulation of goods used to signal status and power.
Language of Friendship - Differences in cultures in ways that people develop and
maintain friendships. Emphasis on one's personal relationships.
Language of agreement - Variation in how people express agreement and
disagreement. Some cultures agreements tend to be explicit and spelled in
writing whereas in some agreements are based on trust and may be
consummated with only a brief statement.
Dissent being voiced readily whereas in some cultures confrontation is avoided
and subtle clues are provided to express disagreement.
High Context and Low Context Cultures by Edward and Mildred Hall.
High Context - Less Formalistic, Relies on trust and understanding.
Low Context Cultures - More precise, specific and requires explicit information in
order to communicate effectively.
Monochronic : Think of time as linear and discrete, tend to do one thing at a time
and adhere to schedules
Polychronic : Doing many things at once, tolerate interruptions, may change
plans without notice
Geert Hofstede : Indices of work related values
Indiviualism/Collectivism
Indiviualism - Tendency to people to see themselves as individuals rather than as
members of group
Collectivism - Tend to see themselves first and foremost as part of a group
Concerned more about the welfare of group than individual welfare .
Power Distance - Degree to which members accept an uneven distribution of
power.
Uncertainty Avoidance -The extent to which people seek to avoid or feel
threatened by ambigious or risky situations.
Masculinity/Femininity -
Masculinity - Represents a cultural preference for achievement, assertiveness
and material success.
Femininity - Greater importance placed on maintaining relationships, caring for
members and high quality of life.
Shortcomings in Hofstede's Research.
Sample drawn from employees of one comany - IBM. They do not constitute
random sample of citizens and do not capture fully the traits of their
countrymen.
Whether the findings describe work related values in forty countries examined or
only of IBM employees in those countries.
Dimensions based on responses to few questions raising doubts on the
robustness.Adding or amending few questions might significantly alter the
results.
Some indices well grounded in theory but other are less clear.
Uncertainty avoidance - whether it is a single index or a composite of underlying
values.
Culture in Management Settings
Culture manifesting in two places : Interaction between firms and Interaction
within firms
Interaction between firms -
when interactions take place across national lines they are affected by cultural
behaviour of participants.
Business negotiations in many countries can only be broached after a basis of
trust and mutual respect has been developed
In many countries people tend to get down to business without investment and
efforts in relationship building.
Important to pay attention to silent languages of time and agreement.
To understand that reluctance of one party to word contract in explicit language
is not an indication of evasiveness or duplicity but a reflection of their cultural
norms.
Interaction within firms -
When managing people from multiple cultures within a single organization
different set of cross cultural issues arise.
Important issues are Power relationships and Individualistic/Collectivistic culture .
Cultures with low power distance are egalitarian whereas cultures with high
power distance observe greater distance in status. Approaching and initiating
discussions with seniors is easy in low power distance whereas the same is
difficult in high power distance.
Individualistic/Collectivistic culture
Employees are motivated by rewards may work in particularly individualistic
cultures whereas may be less effective in collectivistic culture.
In Collectivistic Culture emphasis on preserving group harmony is important than
rewarding the individual. Rewarding one person more than another may be a
source of embarrassment and chagrin.
Social Loafing - Notion that individuals in group settings are tempted to slack off
and let others carry the load. Collectivistic cultures may face this problem.
To avoid this work may be structured so that individuals are held accountable for
specific tasks but may not be effective in collectivistic cultures.
Social loafing seems to be universal but is very much related to cultural norms.
Importance of Culture
Importance of culture to a Manager - High/Low ? To answer this it is useful to
distinguish between two elements of management
Technical System and Social Systems
Technical Systems - mechanical, mathematical, inanimate variables, financial
models and manufacturing systems and do not involve human behaviour or
interactions and are unaffected by cultural differences.
Social Systems - Leadership, Human resource Management and Negotiations are
inherently social and are strongly affected by culture.
National culture of little importance to technical systems and affects only social
systems.
Common assumption that cultural differences are cause of poor performance
however some recent evidence suggests that it can also be a symptom of firm
performance.
It is important to attune cultural differences and to be sensitive to their potential
influence in business one should not make sweeping attributions wherever we
find problems or assume that any cross cultural situation inevitably leads to
difficulties.
Conclusion
Mangers need to develop better understanding of national culture and its role in
management.
Should be able to identify specific ways in which cultural groups may exhibit
distinctive behavior.
Should develop an awareness of their own cultural behavior.
