SMU BBA6- BB0027- CROSS CULTRUAL ASPECTS OF BUSINESS

1.     Write a note on specific Vs diffused Culture

Answer: Specific Vs Diffused Culture

A specific culture is one in which individuals have a large public space they readily let other enter and share and a small private space they guard closely and share with only close friends and associates. A diffuse culture is one in which both public and private space are similar in size and individuals guard their public space carefully, because entry into public space affords entry into private space as well. Austria, the United Kingdom, the United States, and Switzerland all are specific cultures, while Venezuela, China and Spain are diffuse cultures. In specific cultures, people often are invited into a person’s open, public space;

individuals in these cultures often are open and extroverted and there is a strong separation of work and private life. In diffuse cultures, people are not quickly invited into a person’s open, public space, because once they are in, there is easy entry into the private space as well. Individuals in these cultures often appear to be indirect and introverted and work and private life often are closely linked.

An example of these specific and diffuse cultural dimensions is provided by the nited States and Germany. A U.S. Professor, such as Robert Smith, Ph.D., generally would be called Dr. Smith by students when at his U.S. University. When shopping, however, he might be referred to by the store clerk as Bob and he might even ask the clerk’s advice regarding some of his intended purchases.

When golfing, Bob might just be one of the guys, even to a golf partner who happens to be a graduate student in his department. The reason for these changes in status is that, with the specific U.S. cultural values, people have large public spaces and often conduct themselves differently depending on their public role. At the same time, however, Bob has private space that is off-limits to the students who must call him Doctor in class. In high diffuse cultures, on the other hand, a person’s public and private life often are similar. Therefore, in Germany,

Herr Professor Doktor Schmidt would be referred to this way at the university, local market, and bowling alley and even his wife might address him formally in public. A great deal of formality is maintained, often giving the impression that Germans are stuffy or aloof. Trompenaars recommends that when those from specific cultures do business in diffuse cultures, they should respect a person’s title, age, and background connections, and they should not get impatient when people are being indirect or circuitous. Conversely, when individuals from diffuse cultures do business in specific cultures, they should try to get to the point and be efficient, learn to structure meetings with the judicious use of agendas and not use their titles or acknowledge achievements or skills.

2.     Explain Eiffel Tower Culture.

Answer: The family culture is characterized by a strong emphasis on hierarchic authority and orientation to the person. The Eiffel Tower culture is characterized by a strong emphasis on hierarchy and orientation to the task. The guided missile culture is characterized by a strong emphasis on equality in the workplace and orientation to the task. The incubator culture is characterized by a strong emphasis on equality and orientation to the person.

Eiffel Tower Culture:

Eiffel Tower Culture is characterized by a strong emphasis on the hierarchy and orientation to the task. Under this organizational cultural, jobs are well defined, employees know what they are supposed to do and everything is co-coordinated from the top. As a result, this culture is steep, narrow at the top and broad at the base, thus the term “Eiffel Tower,” which is constructed in this manner.

The person holding the top position in the Eiffel Tower culture could be replaced at any time and this would have no effect on the work that organization members are doing or on the organization’s reasons for existence. In this culture, relationships are specific and status remains with the job. Therefore, if the boss of an Eiffel Tower subsidiary were playing golf with a subordinate, the subordinate would not feel any pressure to let the boss win. In addition, these managers seldom create off-the-job relationships with their people, because they believe this could affect their rational judgement. In fact, this culture operates very much like a formal hierarchy – impersonal and efficient.

Eiffel Tower cultures most commonly are found in Northwest European countries. Examples include Denmark, Germany and the Netherlands. The way that people in this culture lear and change differs sharply from that in the family culture. When changes need to be made, however, the Eiffel Tower culture often is ill equipped to handle things. Manuals must be rewritten, procedures changed, job descriptions altered, promotions reconsidered and qualifications reassessed.

This same, methodic approach is used in motivating and rewarding people and in resolving conflict. Carefully designed rules and policies are relied on and things are done “by the book.” Conflicts are viewed as irrational and offences against efficiency; criticisms and complaints are handled through channels. 

3.     Discuss business strategy and implications of culture on business strategy.

Answer: Business Strategy

“Strategy” is a term that can be traced back to the Ancient Greeks who used to mean the Chief Magistrate or a Military Commander-in-Chief. If we wish to increase the yield of grain in certain field and on analysis it appears that the soil lacks potash, potash may be said to be the strategic (or limiting) factor.

Business Strategy can be defined as the basic long term goals and objectives of an enterprise and the adoption of courses of action and the allocation of resources necessary for carryin out those goals.

Implications of Culture on Business Strategy

While formulating various business strategies international manager is always influenced by cultural factors which may have long term and short-term perspective. People in countries such as China and Japan generally have longer time horizon than those in Canada and in U.S.A., whereas, Americans will emphasis short Towards term profits, the Japanese are known to be more patient in sacrificing short-term results in order to build for the future with investment, research and development and market share.

Managers who hail from uncertainty avoidance countries are more willing to take risk than their counterparts (i.e., high uncertainty avoidance countries). Managers from Latin American and African countries prefer to do business through non-equity entry mode in order to minimise exposure to risk.

There are also power distance countries such as Arab countries and Japan in which managers observe interpersonal inequality and hierarchy. The manager also has to keep in mind the legal compliance, creating positive culture for employees and creating economic value. Thus people who make decisions and the way they think, feel and act are based on their ingrained societal culture. They bring this context to work and it influences their propensity toward or against certain type of decisions.

4.     Explain Japanese leadership approaches.

Answer: Japan is well known for its paternalistic approach to leadership. Japanese culture promotes a high safety or security need, which is present among home country-based employees as well as MNC expatriates. For example, one study examined the cultural orientations of 522 employees of 28 Japanese-owned firms in the United States and found that the native Japanese employees were more likely to value paternalistic company behaviour than their U.S. counterparts.

Another study found that Koreans also value such paternalism. However, major differences appear in leadership approaches used by the Japanese and those in other locales. Japanese and U.S. managers have a basically different philosophy of managing people. Japanese leadership approach is heavily group oriented, paternalistic and concerned with the employee’s work and personal life. The U.S. leadership approach is almost the opposite. Japanese tend to be more ethnocentric than their U.S. counterparts. The Japanese think of themselves as Japanese managers who are operating overseas; most do not view themselves as international managers. As a result, even if they do adapt their leadership approach on the surface to that of the country in which they are operating, they still believe in the Japanese way of doing things and are reluctant to abandon it.

5.     Mr. Zeeshan is a consultant. One of his client wants to do business in UAE. What suggestions Mr Zeeshan shall give the client?

Answer: Doing Business in (UAE) Arab Countries :

The intense media attention given to continuing conflicts in the Middle East have pointed out that Arab cultures are distinctly different from Anglo cultures. Americans often find it extremely hard to do business in Arab countries and a number of Arab cultural characteristics can be cited for this difficulty. In the United States, it is common to use the cliché “time is money.” In Arab countries, a favourite expression is Bukra insha Allah, which means “tomorrow if God wills.” An expression that explains the Arabs’ fatalistic approach to time. Arabs believe that Allah controls time, in contrast to Westerners, who believe that they control their own time. As a result, if Arabs commit themselves to a date in the future and fail to show up, there is no guilt or concern on their part, because they have no control over time in the first place.

Another Arab cultural belief that generally holds is that destiny depends more on the will of a supreme being than on the behaviour of individuals. A higher power dictates the outcome of important events, so individual action is of little consequence. Another important cultural contrast between Arabs and Americans is that of emotion and logic. Arabs often act based on emotion; in contrast, those in an Anglo culture are taught to act on logic. Many Arabs live in unstable environments where things change constantly, so they do not develop trusting relationships with others. Americans, on the other hand, live in a much more predictable environment and develop trusting relationships with others. Business meetings typically conclude with an offer of coffee or tea. This is a sign that the meeting is over and that future meetings, if there are to be any, should now be arranged.

Other useful guidelines for doing business in Arab cultures include :

(1) It is important never to display feelings of superiority, because this makes the other party feel inferior.

(2) One should not take credit for joint efforts. A great deal of what is accomplished is a result of group work and to indicate that one accomplished something alone is a mistake.

(3) Much of what gets done is a result of going through administrative channels in the country. It often is difficult to sidestep a lot of this red tape and efforts to do so can be regarded as disrespect for legal and governmental institutions.

(4) Connections are extremely important in conducting business. Well-connected business people can get things done much faster than their counterparts who do not know the ins and outs of the system.

(5) Patience is critical to the success of business transactions.

(6) Important decisions usually are made in person, not by correspondence or telephone. This is why an MNC’s personal presence often is a prerequisite for success in the Arab World.

6.     Visit the site http://www.geert-hofstede.com / and have a look at the cultural dimensions of india. http://www.geert-hofstede.com/hofstede_india.shtml. Write a short note based on the observations.

Answer: If we explore the Indian culture through the lens of the 5-D Model, we can get a good overview of the deep drivers of Indian culture relative to other world cultures.

India scores high on this dimension, 77, indicating an appreciation for hierarchy and a Top – Down Structure in society and Organizations. If one were to encapsulate the Indian attitude, one could use the following words and phrases : dependent on the boss or the power holder for direction, acceptance of un-equal rights between the power-privileged and those who are lesser down in the pecking order, immediate superiors accessible but one layer above less so, paternalistic leader, management directs, gives reason / meaning to ones work life and rewards in exchange for loyalty from employees. Real Power is centralized even though it may not appear to be and managers count on the obedience of their team members. Employees expect to be directed clearly as to their functions and what is expected of them. Control is familiar, even a psychological security,  and attitude towards managers are formal even if one is on first name basis. Communication is top down and directive in its style and often feedback which is negative is never offered up the ladder.

India, with a score of 48 is a society with clear collectivistic traits. This means that there is a high preference for belonging to a larger social framework in which individuals are expected to act in accordance to the greater good of one’s defined in-group(s). In such situations, the actions of the individual are influenced by various concepts such as the opinion of one’s family, extended family, neighbors, work group and other such wider social networks that one has some affiliation toward. For a collectivist, to be rejected by one’s peers or to be thought lowly of by one’s extended and immediate in-groups, leaves him or her rudderless and with a sense of intense emptyness. The employer/employee relationship is one of expectations based on expectations – Loyalty by the employee and almost familial protection by the Employer. Hiring and promotion decisions are often made based on relationships which are the key to everything in a Collectivist society.

India scores 56 on this dimension and is thus considered a masculine society. Even though it is mildly above the mid range in score, India is actually very masculine in terms of visual display of success and power. The designer brand lable, the flash and bling that goes with advertising one’s success, is widely practiced. However, India is also a spiritual country with millions of deities and various religious philosophies. It is also an ancient country with one of the longest surviving cultures which gives it ample lessons in the value of humility and abstinence. This often reigns in people from indulging in Masculine displays to the extent that they might be naturally inclined to. In more Masculine countries the focus is on success and achievements, validated by material gains. Work is the center of one’s life and visible symbols of success in the work place are very important.

India scores 40 on this dimension and thus has a medium low preference for avoiding uncertainty. In India there is acceptance of imperfection; nothing has to be perfect nor has to go exactly as planned. India is traditionally a patient country where tolerance for the unexpected is high ; even welcomed as a break from monotony. People generally do not feel driven and compelled to take action-initiatives and comfortably settle into established rolls and routines without questioning. Rules are often in place just to be circumvented and one relies on innovative methods to “bypass the system”. A word used often is “adjust” and means a wide range of things, from turning a blind eye to rules being flouted to finding a unique and inventive solution to a seemingly insurmountable problem. It is this attitude that is both the cause of misery as well as the most empowering aspect of the country. There is a saying that “nothing is impossible” in India, so long as one knows how to “adjust”.

The Indians score 61, making it a long term, pragmatic culture. In India the concept of “karma” dominates religious and philosophical thought. Time is not linear, and thus not as important as to western societies which typically score low on this dimension. Countries like India have a great tolerance for religious views from all over the world – Hinduism is often considered a philosophy more than even a religion; an amalgamation of ideas, views, practices and esoteric beliefs. In India there is an acceptance that there are many truths and often depends on the seeker. Societies that have a high score on Long Term Orientation, typically forgive lack of punctuality, a changing game-plan based on changing reality and a general comfort with discovering the fated path as one goes along rather than playing to an exact plan.