Chapter 3 ' Understanding the Role of Culture

0pening Profile: Adjusting Business to Saudi Arabian Culture

For most outsiders, Saudi Arabia is a lancl of contrasts and paradoxes. (Map 3-1 shows its location.) It has

supermodem cities. but its strict Islamic religious convictions ancl ancient social customs, on which its laws

and customs depend, often clash with modem economic and lechnical realities. Saudi Arabians sometimes

employ latitucle in legal formation and enlbrcement to ease these clashes and sometimes accommodate

different behaviors from foreigners. Nevertheless, many foreigners rnisunderstand Saudi laws and customs

or find them contrary to their own value systems. Foreign companies have had mixed success in Saudi

Arabia due in large part to how well they unclerstood and adapted imaginativeiy to Saudi customs.

Companies from countries with sirict separation between state and religion or where few people

actively engage in religion find Saudi Arabia's pervasiveness of religion daunting. Religious decrees have

sometimes made companies rescind activities. For example, an itnporter halted sales of the children's

game pokdmon because the game might encourage the unlslamic pl?ctice of gambling, and a franchisor

ivas forced to remove the face under the crown in Starbucks' logo because Saudi authorities felt the pub-

lic display of a woman's face was religiously immoral. However, most companies know the requirements

in advance, For instance, Coty Beauty omits models' l'aces on point-of-purchase displays that it depicts in

other countries, Companies know that they must remove the heads and hands froln mannequins and musl

not display them scantily clad. Companies, such as McDonald's, dim their lights, close their doors, and

stop attending to customers during the five times per day that men are called to pray. Companies also

adjlst voluntarily to gain the good will of customers-for exarnple, by converting revenue-generating spice to prayer areas. (Saurii Arabian Airlines does this in the rear of its planes, and the U.K.'s Harvey

Ni.t otr does this in its department store.) During the holy period of Ramadan, people are less active

during the day because they fast, so many stores shift some opefating hours to the evenings rvhen peopie

prefer to shop.

In 2000, Saudi Arabia ratifiecJ an international agreement designed to eliminate the discrimination

of women; however, its prescribed behaviors for women appear paradoxical to outsiders. On the one

hand, rvomen now outnumber men in Saudi Arabian universities and own about 20 percent ofall Saudi businesses. (There are separate male and female universities, and female-owned businesses can sell only

to women.) Women also comprise a large portion of Saudi teachers and doctors. On the other hand,

women account for only about 7 percent of the workforce. They cannot have private law or architectut-

al firms, nor can they be engineers. They are not permitted tc drive, because this may lead to evil

behavior. They must wear abayas (robes) and cover their hair completely when in public. They cannot

work aiongsicle men except in the medical profession, and they cannot sell directly to male customers. If they are employetJ where men work, they must have separate work entrances and be separated from

maies by pafiitions. They must be accompanied by an adult male reiative when dealing with male clerks'

MAP 3-'l Saudi Arabia comprises most of the Arabian peninsula. All of the countries bordering Saudi Arabia are Arab countries (meaning that the first language is Arabic), and all are predominately lslamic.

91

92 Part2 ' The Cultural Context of Global Management

Thefema}eprescriptionshaveimplicationsforbusinessoperations.Forexample,theSaudi American Bank established branches fot and ti"n O ""tt

by women' Pizza Hut installed two dining

rooms-one for single men and one for ramiiies' i*omen do not eat there without their families') Both

Harvey Nichols unisuk, Fiith Avenue have created women-oniy floors in their department stores' On

iower levels, there is mixed shopping, all nrale saiespeople (even for products like cosmetics and bras)'

andnochangingroomsorplacestotrycosmetics'onupperfloor$,womencanchecktheirabayasand shop in jeans. spandex, o1. *hut.u"r. The stores trave also

created drivers' lounges for their chauffeurs'

Adownsideisthatmalestofemanagerscanvisitupperfloorsonlywhenthestofesareclosed,which limits their ou..*uiion, of *ltoutlon* that might i*proue

servjce and performance. similady, market

research companies cannot rely on discussio"ns witir family-focused groups to determine marketing

needs, Because men do much more of the household purchasing, companies target them more in their

marketing than in other countries'

why do high-;;d.;;menr stores and famous designers operate in Saudi Arabia where women

cover thenselv es in abayas and rnen typicallf weu thobis (long robes)? Simply' the many verY.rich

peopleinsaudiArabiaaresaidtokeepParis.ooru."alive'EventhoughsaudiArabiaprohibitsfashion magazines and movies. this clienteie knows what

is in fashion. (The govemment also prohibits satellite

dishes, but some estimates say that two-thircls of Saudi homes have them') Women buy items from

clesigners' collections. which they wear abroad or in saudi Arabia only in front of their husbands and

othefwomen.Underneaththekabayas,theyoltenwearveryexpensivejewelry,makeup,andclothing' Wealthymenalsowantthelatesthigh-endfashionswhentravelingabroad,

Another paradox is that about 6o percent oithe Saudi private workforce is foreign' even though the

unemployment rut"l, utout 30 perceni. Ct angint *.onomic conditions are at ieast partially responsible

for this situation. In the early 19g0s, saudi "oil*r"urno.*

caused per capita income to jump to about

$28'000, but this plummeted below $7'000 by the early 2000s. When incomes were high,

Saudis

brought in foreignlrs to do most of the work. it the same time, the govefnment liberally supported

univefsity training, including study abroad. saudis developed a mentality ofexpecting foreigners to

do

all the work, o, u, i.ur, sorie of ihe work, for thern' Ttre tttew Zealand head of National Biscuits &

Confectionery said that Saudis now want only to be supervisors and complain if they have to work at the

same level as people from Nepal, Bangladesh, ano tnoia' Although the govemment has taken steps

to

replace foreign *orter, *itr, iaudis, pievailing ;ork attitudes impede this transition' For exampie' the

acceptance by a Saudi of a bellboy job at the-"Hyatt Regency hotel in Jidda was so unusual that Saudi

newspapers put his picture on their ffont pag€s'

Saudi fuabian i"gJ.*.ti""t *"r* t ur*ttio many outsiders' Religious patrols may hit wornen if they

show ary hair i" p"Ufii. fnt government carries out b;headings and hand-sevefances in public and expects

passers-by to observe the punisbments, some of which are for crimes that would not be offenses in other

countfies. For example, the government putficfy Uetreaded three men in e arly 2ffi2 ior being homosexuals'

However, there are inconsisrcncies. For exampl, rellgious patrols ate more relaxed about women's dress

codes in some Red sea resorts, and they *. tior. i*j"nt toward the visiting female executives of MNEs

than toward Saudi women. whereas they don't allow Saudi women to be flight attendants on Saudi

ArabianAirlinesbecausetheywouldhavetoworkalongsidemen,theypermilrvomenfromotherArab countries to do so. Furrher, in foreign inu"rt**t "o*poJnds

where almost everyone is a foreigner' these

religiouspatrolsmakeexceptionstomostofthestrictreligiousprescriptions. Interesting situations ion."* the charging of interJst und th" purchase

of accident insurance' both

of which are disallowed under strict trtu*ic ittt"rpretations of the Koran' In the case of in6rest' the

Saudi government gives inrerest-free ioun* iol *o.tgug"*. This worked well when saudi Arabia was

awash with oil money, but borrowers must now *aiiuJ*t 10 years for a loan' In the case of accident

insurance (by strict triumi" doctrine, there are no accirlents, only preordained acts ofGod)' the govern-

ment eliminated prohibifons because businesses needed the insurance'

Personal interactions between cultures *" ttitty' and those between saudis and non-saudis are no

exception. u- " -*pi, i*is-Rogers tntemaiional GRI), a British publishing house' sent

two salesmen to

saudiArabiaandpaidthemonu.o**rr'onbusir.theyexpectedthatbymovingaggressivelSthetwo men could make the same number of calls * trr"v."rro iritrei-rdtea ringdom.

They were used to working

eight-hourouy*,tor.*ngtheundivicledattentionofpotentialciients,andtorestrictingconversationtothe business transaction. To &em, time wurlnon"" Ho*ever,

they found that appointments seldom began at the

scheduled time and most often took place at'caf€s where the Saudis would engage in what the salesmen

considered iOf, "t

ii"ftut. Wherher in a caf6 oiin 'i'"

office' drinking coffee or tea and talking to acquain-

tancesseeme'dtotakeprecedenceoverbusines'*u*'Thesaiesmenbeganshowingsomuchirritationat ,.irrelevant" conversations, delayr, *o intrmtfiion' r'o* ttitnOs tlat th:y

caus€d irrevocable damage to the

company,s objectives' The Saudi counterpafi; considered them rude and impatient'

whereas businesspersons from many countries invite counterpar; to social gatherings at theil

homes to honor them and use personal 1."tutio*t'ip' to cement business arrangements' Saudis view the

home as p.iuut" unJ "u"n.onrid".

questions aboui their families as rude and an invasion ofprivacy' In

Chapter 3 ' Understanding the Role of Culture

contfast, Saudi businessmen seldom regard business discussions as private; they thus welcome friends to

sit in. The opposite is true in many countries'

ln spite of contrasts and paradoxes, foreign cornpanies find rvays to be highly successtul in Saudi

Arabia. In some cases, iegal ba(iers to some products, such as alcohoiic beverages and pork products,

have created boons for otlier proclucts, such as soft drinks and turkey ham' In addition, some companies

have developed specific pru.i.., in response to Saudi conditions and have later benefited from them in

their home countries. For example, companies, such as Fuji and Kodak, created technology lbr while-

you-wait photo development f;r Saudi Arabia because customers wanted to retrieve photos without *yon" elie seeing them. They transferred this technology to the United States several years

later'

source'. John D. Daniels, Lee H. Radebaugh, and Daniel P. Sullivan, Intentational Business:

Enviranments and operations, 1Oth ed. o 2004. Reprinted by permission of Pearson Education, Inc"

Upper Saddle River, NJ.

This chapter's opening profile describes how an understanding of the local culture and business

environment can give managers an advantage in competitive industries. Foreign companies-no

matter how big-can ignore those aspects to their peril. Such differences in culture and the way

of life in othei countries necessitate that managers develop international expertise to manage on

a contingency basis according to the host-countty environment' Powerful, interdependent factors

in that environment-political, economic' legal, technological, and cultural-influence manage-

ment strategy, functions, and processes'

A critical skill for managing people and processes in other countries is cultural saYvy-

that is, a working knowledge oi thi cultural variables affecting management decisions' (More te-

cenrly, that skill has becom-e known as cultural intelligence, or cultural quotient (CQ))' Managers

have often seriously underestimated the significance of cultural t'actors. According to numerous

accounts, many blunders made in international operations can be attributed to a lack of cultural

sensitivity. I Examples abound. Scott Russell, senior vice president lbr human resources at

Cendant Mobility in Danbury, Connecticut, recounts the following:

An American colnpct,ty in Japan chargecl its Japctnese HR managet' with rcducing

the workforce. The Japanese manager stutlied the issue but couldn't find a solutian

withitr cttltural Japanese pararneters; so vvhen he carne back to tlrc Americans' he

recl,cerl the workjirce by resigning-which was not what they wanted'z

Cuttural sensitivity, or cultural empathy, is an awareness and an honest caring abouf another

individual's culture. Sush sensitivity requires the ability to understand the perspective of those living

in other (and very different) societies and the willingness to put oneselfin another's shoes'

International managers can benefit greatly from understanding the nature, dimensions'

and variables of a specific culture and how these affect work and organizational processes'

This cultural awareness enables them to develop appropriate policies and determine how to

plan, organize, lead, and control in a specific international setting. Such a pfocess of adap-

tation to the environment is necessary to successfully implement strategy' It also leads to

effective interaction in a workforce of increasing cultural diversity, in both the United States

and other countries' Company reports and management studies make it clear that a lack of cultural sensitivity

costs businesses money and oppoitunities. One study of U.S. multinational corporations found

that poor intercultural comrnunication skills still constitute a major management problem'

Managers' knowledge of other cultures lags far behind their understanding of other organization-

uL p.ol"rr"r.3 tn a Jynthesis of the research on cross-cultural training, Black and Mendenhall

found that up to 40 percent of expatriate managers leave their assignments early because of poor

performance or poor adiustment to the local environment. About half of those who remain

are considered only marginaily effective. Furthermore, they found that cross-cultural differences

are the cause of failed negotiations and interactions, resulting in losses to U'S' firms of over

$2 billion a year for failed expatriate assignments alone.4

Other evidence indicates, however, that cross-cultural training is efTective in developing

skills and enhancing adjustment and perfomance. In spite of such evidence, U'S' firms do little

to take advantage ol such important research and to incorporate it into their ongoing training programs, whose purpose is ostensibly to prepare managefs belbre sending them overseas'

93

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Chapter 3 ' Understanding the Role of Culture

Assertiveness This dimension ref-ers to how much people in a society are expected to be

tough, confrontational, and competitive r,ersus moclest and tender' Austria and Germany, for

example, are highly assertive societies that value competition and have-a "can-do" attitude' This

compares with Sweden and Japan, less assefiive societies, which tend to prefer warm and co-

operatiue relations and harmony. The GLOBE team concluded that those countfies have sym-

pathy for the weak and emphasize loyalty and solidarity'

Future orientation This dimension refers to the level of importance a society attaches to

future-oriented behaviors such as planning and investing in the future' Switzerland and

Singapore, high on this dimension, are inctined to save for the fufure and have a longer time

horizon for decisions. This perspective compares with societies such as Russia and Argentina'

which tend to plan more in tire shorter term and place more emphasis on instant gratification'

performance orient*tion This dimension measures the importance of performance

improvement and excellence in society and refers to whether or not people are encouraged to

strive for continued improvernent. Singapore, Hong Kong, and the united sbtes score high on

this dimension; typicaily, this means that people tend to take initiative and have a sense of

urgency and the "*nO"n""

to get things done. Countries iike Russia and Italy have low scores

on this dimension; they hotd oiher priorities ahead of performance, such as tradition, loyalty'

family, and background, and they associate competition with def'eat'

Humane Orientatien This dimension measures the extent to which a society encourages

and rewards people for being fair, altruistic, generous, caring, and kind' Highest on this dimen-

sion are the Philippines, Ireland, Malaysia, and Egypt, indicating a. focus on sympathy and

support for the **k. ln those societies paternalism and patronage are important, and people are usualiy friendly and tolerant and value harmony. This compares with Spain,

France'. and the

former West Germany, which scored low on this dimension; people in these countries give more

importance t0 power and materiai possessions, as well as self-enhancement.

Clearly, i'esearch results such as these are helpful to managers seeking to be successful in

cross-cultural interactions. Anticipating cultural similarities and diflerences allows managers to

develop the behaviors and skills necessary to act and decide in a manner appropriate to the local

societal norms and expectations'

Cultural Clusters

Gupta et al., fiom the GLOBE research team, also analyzed their data on the nine cultural dimen-

sions to deteruine where similarities cluster geographically. Their results support the existence

of ten cultural clusters: South Asia, Anglo, Arab, Germanic Europe, Latin Europe, Eastern

Europe, Confucian Asia, Latin America, Sub-sahara Africa, and Nordic Europe. They point out

the usefulness to managers of these clusters:

Mttltinational corporatiotts nmy find it less risky and ntorc proJitable to _expand itrto morc siftilqr cgltures rather thctn tltose't,*hich are fltasticqlly dffirent.r3

These clusters are shown in Exhibit 3-4. To compare two of their cluster findings, for

example, Gupta et al. describe the Germanic cluster as masculine, assertive, individualistic' and

result-oriented. This compares with the Latin Atnerican cluster, which they characterize as

practicing high power distance, low performance orientation, uncertainty avoidance, and collective:

Itttin American societies tencl. to eilact life as it conrcs, taking its tutprcdictcrbility as

a fact of tife, and trot overly wortying about results'r4

99

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Flofstede's Va *ue Finrensisns

Earlier reseat'c1-r resulted in a pathbreaking framework for understanding how basic values under-

iie organizational behavior; this liamework was developed by Hof'stede, based on his research on

over 1 16,000 people in 50 countries. He proposed four value dimensions: power distance' uncer-

tainty avoidan.", inOiuldualism, and masculinity.ls We should be cautious when interpreting

these results, however, because his research findings are based on a sample drawn from one

100 Part2 ' The Cultural Context of Clobal Management

EXFIIBIT 3-4 Geographic Culture Clusters

1Aup

ffi:ffillffil lffi: tffi']ffi ffilffilffilffil l**r llf*,;: llirii* llF#'" l@f lilffik.' l*---'lil:irr llrffib:|

'lGuotemolo llspmkine) llStow"a II Mexrco I --- I v"nu.u"lo

I

Source: Data {rom V. Gupta, P' J. Hanes, and P. Dorfman, Journal of World Business 37. no. 1 (2002): 13'

multinational firm, IBM, and because he does not account for within-country differences in

multicultur.al countries. Although we introduce these vaiue dimensions here to aid in the under-

standing of 6ifferent cultures, their relevance and application to management functions will be

discussed in later chaPlers. The first of these value dimensions, power distance, is the level of acceptance by a society

of the unequal distribution of power in institutions. In the workplace, inequalities in power are

normal, as evidenced in hierarchical boss-subordinate relationships. However, the extent to which

suborclinates accept unequal power is societally determined. In countries in which people display

high power distance (suc-h as -h4alaysia,

the Philippines, and Mexico), employees acknowledge the

bo-ss'i authority simply by respecting that individual's formal position in the hierarchy, and they

seldom bypass the ctain lf command. This respectful response tesults, predictably' in a centrai- ized structure and autocratic leadership. In countries where people display low power distance

(such as Austria, Denmark, anel Israel), superiors and subordinates are apt to regard one another as

equal in power, resulting in more harmony and cooperation. Clearly, an autocratic management

style is not likely to be well received in low power distance countries.

The second value dimension, uncertainty avoidance, refers to the extent to which people

in a society feel threatened by ambiguous situations. Cauntries with a high level of uncertainty

D

N

L}

\^" ,6f

v

Chapter 3 ' Understanding the Role ol Culture 101

High

jaa MAI ARA

A&4,&AA&AA:"j JPN SPA ARG US GER UK DEN ISR AUT

AA FRA ITA

AA MEX IND

Power Distonce*

Orienialion Toword AuthoritY Low !:iili:rl)':*r9;r'::1'trji4tpj:'_r:i i _

_:qFit?!i'i!:1

U ncertointy Avoidonce*

*Noi io scole-indicoles relolive mdgnitude'

l'l;e: ARA = Arob Counlries AUT = Ausiris

Saurce"BasedonG.Hofstede,"NationalCulturesinFourDimensions"' ,nternationat 5tudies of Managernent and Organization (Spring-summer 1983)'

avoidance (such as Japan, Porlugal, and Greece) tend to have strict laws and procedures to which

their people adhere closeiy, unoi ,i.ong sense of nationaiism prevails' In a business context' this

value results in formal rules and procedures clesignerl to provide more security and greater career

stability. Managers have a propensity for low-risk decisions, employees exhibit little aggressive-

ness, and lit-etime employmeni is common. In countries with lower levels of uncertainty avoid-

ance (such as Denmafk, Great Britain, and, to a lesser extent, the United States)' nationalism is

less pronounced, and protests ancl other such activities are tolerated' As a consequence' company

activities are less stl'ucturod and less formal, some managers take more risks' and high 'job

mobility is common.

High

.l,A A GRE JPN

Desire for StobilitY :j:r:r:: : rj, :.j.:ij i$ i ...: .. r::l']'r:;ri J:f :ir:;:';r:1

:irl

AAAAAA FRA KOR ARA GER AUL CAN

Low

A-A A A A r'1: U5 UK IND DEN SIN

t'l; ,.r

*Not lo scole-indicotes relotive mognilude'

Note: AUI = Auskolio

Source: Based on G. Hofstede, 1983'

The third of Hofstede's value dirnensions, individualism, refers to the tendency of peopie

to look after themselves and their immediate families only and to neglect the needs of society' In

countries that prize individualism (such as the united states, Great Britain, and Australia) dernoc-

racy, individual initiative, and achieverrent are htghly valued; the relationship ofthe individual to

ffiirations is one of independence on an emotional level, if not on an economic level'

In countries such as pakistan and panama, where iow individualisrn prevails-that is,

where collectivism predominates-one finds tight social frameworks, emotional dependence on

belonging to "the organization," ancl a strong belief in gl-oup decisions' People liom a collectivist

counrt, tte lapan, Uelieve in the witl of the group rather than that of the in6ividual' and their p".uuriu" collectivism exerts control over inclividual members through social pressure

and the

feat of humiliation. The society valorizes harmony and saving face, whereas individualistic

cultures generally emphasize sell--respect, autonomy' and independence' Hiring and promotion

practicesln collectiviit societies are based on pateinaiism rather than achievement or personal

capabilities, which are valued in indivi'dualistic societies. Other management practices (such as

the use of quality circles in Japanese factories) retlect the emphasis on group decision-making

processes in coilectivist societies. Hofstede's findings indicate that most countries scoring high on indivi{ualism

have both a

higher gross nationat pi.oduct and a freer political system than those countries scoring low on

indivictualism-that is, there is a strong relationship u*ong individualism' wealth, and a political

,f*"* with balanced power. Other studies have fbund that the output of individuals working in a group sening cliffers between individuatstic and collectivist societies. In the

United States, a highly

individualistic culture, social loafing is common-that is, people tend to perform less when working

as pafi of a group than when worklng a1one.l6 In a comparative study of the United States and the

People's Republic of China (a highly coilectivist society), Earley found that the Chinese did not

exhibit as much social ioaling as the Americunr.lT This result can be attributed to Chinese cultural

'alues, which subordinate peisonal interests to the greater goal ofhelping the group succeed'

1OZ Part 2 ' The Cultural Context of Giobal Management

;High

lndividuolism :-r;l$$jt:i?:r:rr!4-:;,ii4gi4i|4:ih$t j4*!!--Lli:! ri:d ie ;

'A A A A A A

AUL U5 UK CAN FRA GER *Nof lo sole*indicotes relolive mognilude.

Source: Based on G. Hofstede, 1983'

Colledivism ...:l

rgiii!,t!.:j:-iii:i#i|:.1tai!tr r:i:P{giiiiti}'itili!i'+u!+j|i:iii;::1"i i 4} :

A A l A A A+!;' SPA JPN MEX ITA KOR SIN

lndividuolism*

The fourth value dimension, masculinity, refers to the degree of traditionally "masculine"

values-assertiveness, materialism, and a lack of concem for others-that prevaii in a society' In

comparison, f'emininity emphasizes "t'eminine" values-a concern for others, fbr relationships,

and ior the quality of tife. tn trighty masculine societies (Japan and Austria, for example), wornen

are generally expected to stay irome and raise a family. In organizations, one finds considerable

job ltress, and organirational interests generally encroach on employees' private lives' In coun-

tries with low masculinity (such as Switzerland and New Zealand), one finds less conflict and

job stress, more women in high-ievel jobs, and a reduced need for assertiveness' The United

states iies somewhat in the middle, according to Hofstede's research. American women typical-

ly are encouraged to work, and families often are able to get some support lbr child care (through

day-care centers and maternity leaves).

.rHigh MosculinilY* Low

i bng'l'erm/ShorFlerm Orienlqlion*

High Low ...{.'. .A'A A A I i A A A A A $i&t fiR rin iIl viE BM Nb us cAN uK E/w AFR

*Not to role-indicoles relofive mognilude.

Source: Based on G. Hofstede,2001.

Assertive/Moteriolistic Reloiionol .r-: :

. .;*rtsio:*,"*,rri6i.**,*:1ig+1E:,:*:;ffia:!!tl1en;{*i'}1l.it:-ltitsiil$i:*:ldl*F;l:tt3:n1€**ti1q::v liF-

{ii*;"*{*-e- t 4'a.-"'^a e a -4 $.-ui'= JPN ruix cER uk us ARA FRA KoR PoR cHc DEN swE

*Not to scqle-indicoles relotive mognilude

Source: Based on G. Hofstede, 1983'

The four cultural value dimensions proposed by Hofstede do not operate in isolation;

rather, they are interdependent an<l interaCtive-and thus complex-in their effects on work

auitudes and behaviorr. po1' example, in a 2000 study of small to medium-sized firms in

Australia, Finland, Greece, Indonesia, Mexico, Norway' and Sweden' based on Hofstede's

dimensions, Steensma, Marino, and Weaver found that "entrepreneurs f'rom societies that are

masculine and individualistis have a lower appreciation for cooperative strategies as compared to

enirepreneurs from societies that are feminine and collectivist' Masculine cultures view co-

op"rution in general as a sign of weakness and individualistic societies place a high value on

inAependence and control."is In addition, they found that high levels of uncertainty avoidance

prompted more cooperation, such as developing alliances to share risk'

l-onE-term/Short-teIm Orientation Later research in 23 countries, using a Survey developed

by Bond and colleagues called the chinese value survey, led Hofstede to develop a fifth dimen-

sion called the conlucian work dynamism, which he labeled a long-tel'm/shorl-term dimension'

He detined long-term orientation as "the extent to which a culture program^s its members to

accept delayed gratifrcation of their material, social, and emotional needs'"19 In other words'

*unug"t, in moit Asian countries ate more future-oriented and so stride toward long-term goals;

Chapter 3 ' Understanding the Role of Culture 103

profits. Those coun-

value on short-termtheyvalueinvestmentinthefutureandarepreparedtosacril'rceshort-term tries such as Great nrltuin, Canuda' and the

United States place a higher

results and profitability, and evaluate their employees accordingly'

Trarnpenaars"s Value Dimensians

FonsTrompenaarsalsoresearchedvaluedimensions;hisworkwasspreadoveraten-year period, with 15,000 -u*g"r, i.o* 2g countries representing

47 nationa'l cultures' some of those

dimensions, such as inai"iJ"urr*, people's attituie toward time' and relative inner-versus

outer-

directedness, are simitar to those discussed elsewhere in this chapter and others' and

so are not

presentedhere;other,"l""t".lfindingst.o*r,o-p"naars'sresearchthataffectdailybusiness activities are explained next, along *,tr,, *'" ptacement

of some of the countries along those

dimensions, in uppro"irnu,?il1"1ijo,6;;.idir'*" view the placement of these countries along

a

range from personal to-*o"i"tut, basecl on each dimension, 'o*"

interesting patterns emerge'zl

one can see that the same countries tend to be at similar positions on all dimensions'

with the

exception of the emotional orientation'

Looking at rro*f"nuur*,s dimension of universalism versus particularism, we find that

rhe universaiisrtc apprPo"Jii';;il;;;'uno wt"*t objectively' without consideration for

individual circumstances, whereas the parricularistic approach-more common in Asia and in

Spain, for ""u*pt"-!"u,r'irr"-ii.rr ouligation on i"lutionrhips and is more subjective'

Trompenaars rouna, rur'"^u*fr", thut p"opl" in particularistic societies are more likely to

pass

on insider information to a friend thun ihoo in universalistic societies'

' r'-r:- Porliculoristic 's'"Universolistic " .. -.,..- ,. +-;,******X ._i_ i =, - ". f - "" -? i- ^*

.

US GER SWE UK ITA IRA JPN SPA CHI

*Not to smle-indicoles relotive mognitude'

Source:Data based on F Trompenaars' 1993'

Intheneutralversusaffectivedimension,thefocusisonthe.emotionai"ll"'11'^:T: relationships. rr," rturiun,, r,a"*i,un,, and Chinese,

tbr example, would openly express emotlons

even in a business ,ltuat"i'*, *rrereas the British and Japanese would consider such displays

unp.of"rtional; they, in turn would be regarded as "hatd to 'read""

,;High

. Hioh

Obligolion* low

Emotionol Orienlrot'ron in Relctionshipsi Low

' , Neutrol A$eciive ' 'Pi., r. *rlffj,[,*i]{r*srsr4*$#.Be}ss*!$i$*i*e.+'ar}:riiar$.5*:!*.*fi:;:ia+.sw*'A{r,*dt!ff#ry

ii.f:e

tA -""T**"-I'*;*.. a A a a Ai;r'

JPN UK OTN SWE UK FRA SPA ITA CHI

*Nol to scole-indiccl* retolive mognilude'

Source: Data based on F Trompenaars' 1993'

As far as involvement in relationships goes, people tend to be either specific 9" lijf."t:

(orsomewherealongthatdirnension).Managersinspecific-orientedcultures-theUnited States, United Kingdom, France-separate

*o'k un'l p""onul issues and relationships;

rhey compartmentalize their work andprivate lives, and they are more open and direct' In

diffuse-oriented cultures-Sweden, China-work spills over into personal relationships and

vice versa.

1O4 ParL 2 ' The Cultural Context of Globai Man:rgetnent

,, High Privocy in RelctionshiPs* Low

DiffuseSpeci{ic

A SWE

*Nol to scole*indicoles relqlive mognilude'

Source: Data based on F. Trompenaars, 'i993'

In tire achievement versus ascription dimension, the question that arises is "What is the

source ofpower and status in society?" ln an achievement society, the source ofstatus and influ-

ence is based on individual achievement-how well one performs the job and what level of edu-

cation and experience one has to offer. Therefore, women, rninorities, and young people usually

have equal opportunity to attain position based on theil achievements. In an ascription-oriented

society, peopl; ascribe status on the basis of class, age, gencler, and so onl one is more likely to

be boin into a position of influence. Hiring in Indonesia, for example, is more likely to be based

on who you are than is the case in Gennany or Australia'

l-lrgh

Personsl

Source of Power ond Slofus - Low

Society

*Nol lo scole-indicoles relotive mognilude'

Source: Data based on F. Trompenaars' 1993'

It is clear, then, that a lot of what goes on at work can be explained by differences in

people's innate value systems, as described by Hofstede' Trompenaars' and the GLOBE

feseal.chers. Awareness of suctr differences and how they influence work behavior can be vefy

uselul to you as a future international manager'

erEtiea! Sp*ratione! \JaEale Eiffsremces

After studying various tesearch results about cultural variables, it helps to identify some specific

culturally based variables that cause fiequent problems for Americans in international mana-

gement. i*portun, variables are those involving conflicting orientations toward time' change'

materiai factors, ancl individualism. We try to understand these operational value differences

because they strongly influence a person's attitudes and probable response to work situations'

T!nre Americans often experience much conflict and frustration because of differences in

ihe concept of time around the world-that is, difterences in temporal values' To Americans'

time is a valuable and limited resource; it is to be saved, scheduled, and spent with precision, lest

we waste it. The clock is always running-time is money' Therefore, deadlines and schedules

hal,e to be met. When others aie not on time for meetings, Americans may feel insulted; when

meetings digress from their purpose, Americans tend to become impatient' Similar attitudes

toward time are found in Westem Europe and elsewhere'

In many parts of the world, however, people view time from different and longer per-

spectives, often based on religious beliefs (suctr a* reincarnation, in which time does not end at

death), on a belief in destiny,lr on pervasive social attitudes. In Latin America' tbr example' a

comrnon attitude toward time is ttaiiana, a word that literally means "tomorrow"' A Latin

Arnerican pet'son using this word, however, usually means an indefinite titne in the nezu future'

Similarly, the word bgkra inAlabic can mean "tomorrow" or "some time in the future'" While

Americans usually regard a deadline as a firm commitment, Arabs often regard a deadline

imposed on them as an insult. They feel that important things take a long time and therefore

cannot be rushed. 'lb ask an Arab to rush something, then, is to imply that you have not given

him an important task or that he wouid not treat that task with respect. International managers

have to be caret'ul not to offend people-or iose contracts or empioyee cooperation-because

they rnisunderstand the local language of time'

A, ,fu ITA JPN

A&AA UK US FRA GER

t& SPA CHI

A&A&A US UK SWE GER FRA

AA" ITA SPA

A. A ,lr JPN CHI

Chapter 3 n Understancling the Role ol Cuiture 105

ehange Based largely on long-standing religious beliefs, values regarding the acceptance

of change and the pace of:"hange can vary immensely among cultures' Western people generally

believelhat an individual can exert some control over the future and can manipulate events,

particularly in a business context-that is, individuals feel they have some internal control' In

*uny non-W"stern societies, however, control is considered external; people generally believe in

destiny or the will of their God, and therefore adopt a passive attitude or even teel hostility

toward those introducing the "evil" of change. In societies that place great importance on tradi-

tion (sucli as Japan), one small area of change rnay threaten an entire way of lif'e' However, the

younger generations are becoming more exposed to change through globalization, technology,

and meOia exposure, International firms are agents of change throughout the world' Some

changes are more popular than others; for example, McDonald's hamburgers are apparently one

change the Japanese are willing to accept.

Material Faetors In large par1, Americans consume resources at a far greater rate than most

of the rest of the world. Their attitude toward nature-thal it is there to be used for their benefit-

differs from the attitudes of Indians and Koreans, for exampie, whose worship of nature is part of

their religious beliefs. Whereas Americans often value physical goods and status symbols, many

non-Westerners find these things unimportant; they value the aesthetic and the spiritual realm. Such

dift'erences in attitude have implications for management functions, such as motivation and reward

systems, because the proverbial can'ot must be appropriate to the employee's value system'

lndividualism In general, Americans tend to work and conduct their private lives indepen-

dently, valuing individual achievement, accomplishments, promotions, and wealth above any

group goals. In many other countries, individualism is not valued (as discussed previously in the

context of Hofttede's work). In China, for example, much more of a "we" consciousness prevails,

and the group is the basic building block of social life and work. For the Chinese, conformity and

,oop"1uiion take pleceden"" ou"i individual achievement, and the emphasis is on the strength of

the iamily or community-the predominant attitude being, "We all rise or fall together."

International *unig*rt often face conflicts in the workplace as a result of differences in these

four basic values of time, change, matedalism, and individualism. If these operational value differences

and their likely consequences are anticipated, managers can adjust expectations, communications,

work organization, schedules, incentive systems, and so forth to provide for more constructive out-

comes for the company and its employees. Some of these operational differences ale shown in

Exhibit 3-5, using Japan and Mexico as exarnples. Note in particular the factors of time, individualism, change (fatalism), and materialism (attitudes toward work) exprcssed in the exhibit.

EXHIS;T 3.5 Fundamental Differences Between Japanese and Mexican Culture that Affeqt Business Organizations22

::

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t * E tg ,ri#l g!

{, ,# '* )E ',t

Dimension Japanese Culture Mexican Culture

Hierarchical nature Rigid in rank and most communication; Rigid in all aspects blurred in authority and responsibility

Individualism vs. collectivism Highly collective culture; loyalty to Collective relative to family group; work group dominates; group harmony don't transfer loyalty to work group; very important individualistic outside family

Attitudes torvard work Work is sacred duty; acquiring skills, Work is means to support self workirg hard, thriftiness, patience, and family; leisure more important and perseverance are vir.tues than work

Time orientation Balanced perspective; future oriented; Present oriented; time is imprecise; monochronic in dealings with outside world time commitments become

desirable objectives

Approach to problem solving Holistic, reliance on intuition, pragmatic, Reliance on intuition and consensus important emotion, individual approach

Fatalism Fatalism leads to preparation Fatalism makes planning, disciplined rclutine unnatural

View of human nature Intrinsically good Mixture of good and evil

Chapter 4 . Conrmunicating Across Cultures 135

n

:li--

./i J ,Lil

:; : ,:,|:

ij,

*HFllBlT 4-3 Forms of Nonverbal Communication

. Facial expressions

. Body posture

. Gestures with hands, afins, head, etc.

. Interpersonal disiance (proxemics)

. Touching, body contact ' Eye contact . Clothing, cosmetics, hairstyles, jewelry . Paralanguage (voice pitch and inflections, rate of speech, and silence) . Color syrnbolism . Attitude toward time and the use of time in business and social interactions . Food symbolism and social use of meals

{crntext

East Asi1ns live in rclatively complex social netv,ot'ks tvith prescribed role relaliorts;

attention to context is, therefore, intportant fot' their effective ftutctionitg. In con' trctst, vtesterrters live in less constraining social worlds that strcss irtclependence and allorv tlzem to pay le'ts attentiott to coiltext.

.'"#::;");ffi;'l;

A major differentiating factor that is a primary cause of noise in the communication plocess is that of context-which actually incorporates many of the variables cliscussed eariier.

The context in which the communication takes place aff'ects the meaning and interpretation of

the interaction. Cultures are known to be high- or low-context cultures, with a relative range in

between.4l In high-context cultures (Asia, the Middle East, Africa, and the Meditenanean),

feelings and thoughts are not explicitly expressed; instead, one has to read between the lines

and interpret rneaning fiom one's ggneral understanding. Two such high-context cultures are

those of South Korea and Arab cultures. In such cultures, key information is embedded in the

context rather than rnade explicit. People make assumptions about what the message means

through their knowledge of the person or the surroundings. In these cultures, most communica-

tion takes place within a context of extensive information networks resulting fiorn close personal relationships. See the fbllowing Management Focus for further explanation of the

Asian communication style. In low-context cultures (Germany, Switzerlancl, Scandinavia, and North America),

where personal and business relationships are rlore compartmentalized, communication media have to be more explicit. Feeiings and thoughts are expressed in words, and infor- mation is more readily avaiiable. Westerners focus more on the individual, and therefore tend

to view events as the result of specific agents, while easterners view events in a broader and

ion g", -,"r,n c,',nt"*t.41 In cross-cultural communication between high- and iow-context peopie, a lack of under-

standing may preciude reaching a soiution, and conflict may arise. Germans, for example, will

expect considerable detailed information before rnaking a business decision, whereas Arabs

will base their decisions more on knowledge of the people involved-the information is present, but it is implicit. People in low-context cultures, such as those in Germany, Switzerland Austria, and the United States, convey their thoughts and pians in a direct, straightforward communication style, saying something iike "we have to make a decision on

this today." People in high-context cultures, such as in Asia, and, to a lesser extent, in England,

convey their thoughts in a more indirect, implicit mannerl this means that solneone from

Germany needs to have more patience and tact and be wiliing to listen for clues-verbal and nonverbal-as to their colleagues' wishes.

People in high-context cultures expect others to understand unafiiculated moods, subtle gestures, and environmental clues that people fiom iow-context cultures simply do not process. Misinterpretation and misunderstanding often result.43 People li'om high-context cultures

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Chaprer 4 ' Communicating Across Cultures 137

EKHlglT 4-4 Cultural Context and lts Eftects on Communicationa5

(high context/ i mplicitl

Middle Eost

Lolin Americo

Africo

Medilerroneon

Englond

Frsnce

North Americo

Scsndinovio

Germony

Low (l ow co nt exl / expli cil )

Explicitness of communico*ion

Switzerlond

HighLow

perceive those tiom low-context cultures as too talkative, too obvious, and redundant. Those

from low-context cultures perceive high-context people as nondisclosing' sneaky, and mysteri-

ous. Research indicates, for example, that Americans find talkative people more attractive,

whereas Koreans, high-context people, perceive less verbal people as more att!'active. Finding

the right balance between low- and high-context communications can be tricky. as Hall and Hall

pointlut: "Too much infbrmation leads people to feel thef are being talked down to; too little

intbrmation can mystify them or make them feel lett out:'44 Exhibit 4-4 shows the relative level

of context in various countries. The importance of undel'standing the role of context and nonverbal language to avoid mis-

interpretation is illustrated in the Comparative Management in Focus: Communicating with Arabs.

COMPARATIVE MANAGEMENT IN FOCUS

Communicating with Arabs

In rhe Mjddle East, the meaning of a communication is irnplicit and interwoven, and consequently much

harder for Americans, accustomed to explicit and specific meanings, to understand.

Arabs are warm, emotiollal, and quick to explode: "soun<ling off is regarded as a safety valve. In fact, the Arabic language aptly communicates the Arabic culture, one of etnotional extremes' The

language conrains the means for overexpression, many adjectives, words that allow for exaggeration,

und *.tupho.s to emphasize a position, What is said is often not as impo(tant as /eorr it is said. Eloquence anci flowery speech are aclmired for their own sake, regardless of the content. Loud speech is

used for dramatic effect. At the core of Middle Eastern culture are friendship, honor, religion, and traditional hospitaiity'

Family, friends, and connections are very important on all levels in the Middle East and will take pre-

ceclence over business ftansactions. Arabs do business with people' not companies, and they make

commitments to people, not contracts. A phone call to the right person can help to get al'ound seemingly

insurmountable obstacles. An Arab expects loyalty from friends, and it is understood that giving and

receiving tavors is an inherent part ofthe relationship; no one_says no to a request t'or a favor' A lack ol

follow-through is assumed to be beyond the friend's control.46 Because hospitality is a way of life and highly symtrolic, a visitor lnust be careful not to reject it

by declining refreshment or rushing into business discussions. Part of that hospitality is the elaborate

syste* of gieetings and the long period of getting acquainted, perhaps taking up the entire first meeting.

While the handshake may seem iimp, the rest of the greeting is not. Kissing on the cheeks is common

among men, as is hand-holding between male friends, However, any public display of intimacy betweeu

men and women is strictly forbidden by the Arab social code'

Women piay little or no roie in business or ente(ainment; ihe Middle East is a male-doniinated

society, and it ii impolite to inquire about women. Other nonverbal taboos include showing the soles of on.', L*t and using the lell (unclean) hand to eal or pass something. In discussions, slouching in a seat or leaning against a wall communicates a lack of respect.

138 Part2 " The Cultural Context of Global Management

Westerner Meeting with Arab Businessmen.

Sou rce: Getty lmages/Digital Vision

The Arab society also values honor. Hanis and Moran explain: 'Flonor, social prestige, and a secure place in society are brought about when conformity is achieved. When one fails to conform, this is considered to be damning and leads to a degree of shame."a7 Sharne results not just from doing something wrong but from having others find out about that wrongdoing. Establishing a climate of honesty and trust is part of the sense of honor. Therefbre, considerable tact is needed to avoid conveying any concern or doubt. Arabs tend to be quite introverted until a mutual trust is built, which takes a long time.as

In their nonverbai communication, most Arab countries are high-contact cultures. Arabs stand and sit closer and touch people of the same sex more than Westerners. They do not have the same con- cept of "public" and "private" space, or as Hall puts it. "Not only is the sheer noise level much higher. but the piercing look of the eyes, the touch of the hands, and the mutual bathing in the warm moist breath during conversation represent stepped-up sensory inputs to a level which many Europeans find unbearably intense. On the other hand, the distance prefened by North Americans may leave an Arab suspicious of intentions because of the lack of olfactory contact."49

The Muslim expression Bukra insha Allah-"'fomorrow if Allrih wills"----explains much about the Arab culture and its approach to business transactions. A cultural ctash typically occurs when an American kies to give an Arab a deadline. "I am going to Damascus romoruow morning and will have tcr have my car tonight," is a sure way to get the mechanic to stop work;'explains Hall, "because to give another person a deadiine in this part of the wodd is to be rude, pushy, and demanding."s0 In such instances, the attitude toward time communicates as loudly as words.

In verbal interactions, managers must be aware of dilferent patterns of Arab thought ancl communication. Compared to the direct, linear fashion of Anterican communication, Arabs tend to meander: They start with social talk, discuss business for a while, loop round to social and generai issues, then back to business, and so on.5l American impatience and insistence on sticking to the subject will "cut off their loops," triggering confusion and dysfunction. Instead, westerners should accept that there will be considerable time spent on "small talk" and sociaiizing, with tiequent intem:ptions, before getting down to business.

Exhibit 4-5 illustrates some of the sources of noise that are likely to interfere in the communi- cation process tletween Americans and Arabs.

For people doing business in the Middle East, the follorving are some useful guidelines for effective communication:

' Be patient. Recognize the Arab attitude toward time and hospitaiity-take time to develop friend- ship and trust, for these are prerequisites for any social or business transactions.

. Recognize that people and relationships matter more to Arabs than the job, company, or contract-conduct business personally, not by correspondence or telephone.

' Avoid expressing doubts dr criticism when others are present-recognize the irnportance of honor and dignity to Arabs.

' Adapt to the norms of body language, flowery speech, and circuitous verbal patterns in the Middle East, and don't be impatient to "get ro the point."

. Expect many intemtptions in meetings, delays in schedules, and changes in plans.5z

t s:

r#q

iiu

:,S":

3,

:i '$! t1

'$ ,{ :'.i

jtli 4 F.

fi :+ '{t

r *' _-- -- ; Physicol Dissononce in loVhigh contoct nntglY::,1-LAtt , distonce,/cold ond time,/logic; *-> ottended; lntenoect

, Culiurolvolues,expecllionsj:rm:J+/- Dispbf Rubs

i distonce/cold _.-.._-_.* ---,.*- - - ond lrme/logrc;, directness: *--

{riendship ond loyolty not

Chaprer 4 ' Communicating Across Cultures 139

EXFtlSlT 4-5 MisCOmmunication Between Americans and Arabs caused by cross-cultural Noise

Coniexl

,t 1\I *\ NOtSE *-.,

I Ti::f,i#v -' -.- *="*-* {,iunffi;,n,i,ld:lt noi """'*"-***

messose cui orr

; impolience; uttoUtltt'# I. ,t"l..ttr."t i1 lime system ti+

, Sender -- Encoding .--., Medium/messoge _- Decoding --* Receiver

ARAB ; AMERICAN 1 Receiver <-- Decoding --- Feedbock medium----

Encoding -'- Sender

l+* 1 Mlrrndurstood.*--------- verbol'/<--*-.*. Demonstrqtive <-^*--*-

Polychronic

, messese nonverbol Ilo*ery/llowerV time system; , A incongruence; and indire* longuoge; hospitolity;

i lmpotience; i:l;tl"X*ffi closeconioct open meetins

; irusholion; evJnt "if Alloh wills" dissononce

t honot misunderstood

I

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i

i

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Ccrnmunicatiein ehannels

In addition to the variables related Io the sender and receiver of a message, the variables linked to

the channel itself and the context of the message must be taken into consideration' These vari-

ables include fast or slow messages and intbrmation flows, as well as different types of media'

lnformation systems Communication in organizations varies according to where and how

it originates, the chinnels, and the speed at whichit flows, whether tl ts tbrmal or rnformai' and

so forth. The type of organizational structure, the staffing policies, and the leadership style will

aff'ect the nature of an organization's information system'

As an international*manager, it is useful to know where and how infonnation originates and

the speed at which it flows, both internally and extemally. In centralized organizational structutes, as

in south Amedca, most information origtnates from top managers. workers take less responsibility

ro keep managers informed than in a typical company in the United States, where delegation results

in information flowing from the staff to the managers. In a decision-making system in which many

people are involved, such as the ringi system of consensus decision making in Japan, the expatriate

needs to understand that {here is a systematic pattem for information flow.

Context also affects infbrmation flow. In high-context cultures (such as in the Middle

East), information spreads rapidly and freely because of the constant close contact and the

implicit ties among people andorganizations. Information flow is often informal. In low-context

cuiiures (such as Germany or the United States), information is controlled and focused, and thus

it does not flow so tieeiy.53 Compartmentalized roles and office layouts stifle information

channels; information sources tend to be more formal'

It is crucial for an expatriate managel to find out how to tap into a firm's infonnal sources

of information. In Japan, employees uruully have a drink together on the way honre from work'

and this becomes an essential source of information. However, such communication networks

are based on long-terrr relationships in Japan (and in other high-context cultures)' The same

information may not be readily available to "outsiders." A considerable barrier in Japan separates

strangers from familiar liiends, a situation that discourages communication'

PAGE

1