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Culture and Business J. N. Hooker Carnegie Mellon University February 2006 A Popular View of Culture Culture is all about food, language, dress, customs, holidays, etc. What if all Chinese ate Sauerbraten and Spätzle rather than jiăo zi and bāo zi? It would be the same culture!!

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culture and business

Culture and Business

J. N. Hooker

Carnegie Mellon University

February 2006

a popular view of culture
A Popular View of Culture
  • Culture is all about food, language, dress, customs, holidays, etc.
What if all Chinese ate Sauerbraten and Spätzle
  • rather than jiăo zi and bāo zi?
the western view of culture
The Western View of Culture
  • Cultures differ in language, cuisine, etiquette, etc.
  • But we are all basically the same inside.
  • Apparent differences are due to levels of development.
    • There is a single path of development toward a rational lifestyle.
    • The West is obviously ahead, whence the distinction of “developed” and “developing” countries.
cultural iceberg
Cultural Iceberg
  • Culture determines our deepest assumptions, most of which we not even aware.
    • Like an iceberg, culture lies mostly beneath the surface.


Dress, hairstyle

Pop culture


Overt religion

Concepts of space and time

Guilt vs. shame

Concept of authority

Rule-based vs. relationship-based

Management of information

Apollonian vs. Dionysian

Universalizing rationality?

Covert religion

Stress management

Fundamental conception of reality

cultural ecosystems
Cultural Ecosystems
  • Cultures are like ecosystems in several ways.
    • They are systems of mutually supporting elements.
    • One is not “better” than another.
cultural ecosystems10
Cultural Ecosystems
  • They have common elements, but differ nonetheless.
  • Many can coexist on the same planet.
  • Monoculture is a bad idea.
the world is westernizing
The World is Westernizing?
  • Capitalist market economies are spreading, and culture is profoundly shaped by how people make a living.




the world is westernizing12
The World is Westernizing?
  • The historical wealth and power of the West attracts elites around the world.
    • They speak English, adopt Western ways, send children to Western schools, cultivate Western connections, etc.
the world is westernizing13
The World is Westernizing?
  • Global market and communications homogenize the world.
the world is westernizing14
The World is Westernizing?
  • Youth culture is the same everywhere (movies, music, sneakers, etc.).
the world is westernizing15
The World is Westernizing?
  • The world looks more and more Western
    • Skyscrapers, traffic jams, high tech
    • Surfeit of consumer goods
    • Pollution, overconsumption of resources.

Teipei 101 Tower

the world is westernizing16
The World is Westernizing?
  • People tend to exaggerate the extent to which the world is Westernizing.
    • Westerners do it…
      • Because they are universalists and want to believe that everyone is basically the same inside.
    • Others do it…
      • Because they what to emphasize the extent to which they are “developed.”

Petronas Towers,Kuala Lumpur

not so western after all
Not so Western After All
  • Non-Western cultures are resisting Western cultural hegemony (Samuel Huntington).
    • China.
    • Lee Kuan Yew of Singapore (Harry Lee at Cambridge).
    • Islamic world.
not so western after all18
Not so Western After All
  • People want the baubles and bangles of the West but may not want the culture.
not so western after all19
Not so Western After All
  • The media and internet can actually strengthen regional differences.
    • It is easy to tailor news, web sites to market segments.
    • U.S. regional differences are greater now than ever.
not so western after all20
Not so Western After All
  • “Youth culture” disappears at about age 26.
    • Many of today’s capitalists in China spent their youth in the Red Guard, the youth movement of the day.
business is business
Business is Business?
  • Must know rules of etiquette only to prevent irrelevant cultural feelings from intruding on an essential business matter.
    • Business behavior is governed by universal laws of supply and demand, as described in neoclassical economics.
business isn t just business
Business Isn’t Just Business
  • But economic laws radically underdetermine economic behavior.
    • It is like laws of chemistry in cooking, or laws of physics in traffic.
    • Neoclassical economics is based on assumption of utility-maximizing, atomistic economic agents.
business isn t just business23
Business Isn’t Just Business
  • Economics says little to explain…
    • demand (and therefore marketing),
    • propensity to work,
    • social definition of work (Indian coffee stand),
    • class-defined roles,
    • firm loyalty,
    • flat vs. hierarchical organizations,
    • status and renegotiability of contracts,
    • conventions for negotiation.
just to clarify
Just to clarify…
  • To describe a culture is not to stereotype the individuals in it.
    • Every culture has the full range of personality types.
    • They differ in how personalities fit into a system.
  • Although most cultures are influenced by the West…
    • … not as much as people say.
    • … and not in the ways most people think.
    • I focus on what is indigenous about a culture, not what is Western about it.
just to clarify25
Just to clarify…
  • I make no judgments about which cultures are “better.”
  • I talk frankly, in a clinical way, about how cultures work.
    • As in a medical school course.
    • This is not appropriate outside the classroom.`
cultural classification
Cultural Classification
  • One introduction to cultural difference is through classificationof cultures.
    • There are at least 5000 cultures in the world.
    • Each has a logicits own.
    • Cultural classification doesn’t capture this.
    • But it is a start.
relationships vs rules
Relationships vs. Rules
  • Business meetings
  • Business deals
    • Personal trust vs. contracts & law
  • Traffic behavior
    • Negtiation vs. regulation
  • Dealing with stress
    • Family & friends vs. technology & engineering
relationships vs rules29
Relationships vs. Rules
  • Rule-based:
    • Northern Europe, USA, Canada, Australia
    • Including Germany, Czech Republic
  • Relationship-based:
    • Asia, Middle East, Africa, Latin America
power distance
Power Distance
  • High power distance = hierarchy, authority are accepted
  • Low power distance = equality preferred
  • Parents
    • Authoritarian vs. lenient
    • Protection vs. independent.
  • Government
    • Personal authority vs. legal authority.
power distance31
Power Distance
  • Highest power distance (according to Hofstede):
    • Malaysia, Central America (except Cost Rica), Philippines, Mexico, Venezuela, Arab countries, Indonesia, India, West Africa, Yugoslavia, Singapore, Brazil, Hong Kong
    • Germany: high by European standards
power distance32
Power Distance
  • Lowest power distance:
    • Austria (?), Denmark, New Zealand, Ireland, Sweden, Norway, Finland, Switzerland, U.K. (business only), Germany, Australia (business only), Netherlands, Canada (business only), USA (business only)
    • Czech Republic
shame vs guilt
Shame vs. Guilt
  • Shame-based = behavior is regulated by personal supervision
  • Guilt-based = behavior is regulated by guilt.
  • Employee supervision
    • Constant vs. occasional
  • Security
    • Personal presence vs. laws
shame vs guilt34
Shame vs. Guilt
  • Shame based:
    • Same as relationship-based.
  • Guilt-based:
    • Same as rule-based
    • Germany: particularly extreme case
  • High-context = information about what to do is implicit
  • Low-context = information about what to do is spelled out
  • Signs & instructions.
  • Personnel management
    • Personal decision vs. company policy
  • High context:
    • Japan, China, Mexico, etc.
  • Low context:
    • USA, northern Europe, etc.
    • Germany and Czech Republic
  • Polychronic = people do many things at once.
  • Monochronic = people do one thing at a time.
  • Queues
  • Appointments and punctuality
  • Mobile phones
  • Polychronic
    • India, much of Africa, Latin America, southern Europe, Middle East
  • Monochronic
    • USA, Canada, northern Europe
    • Germany (extreme case), Czech Republic (somewhat)
  • In a polite culture, people are courteous to associates and deferential to superiors.
    • But rudeness to strangers may be tolerated.
  • In a rude culture, people are more interested in being right than being nice.
    • But courtesy to strangers may be required.
  • Saving face vs. in-your-face.
  • Courteous:
    • Malaysia, Japan, Korea, Mexico
  • Rude:
    • Israel, Australia, USA, much of Europe
    • Germany, Czech Republic
  • Corruption as bribery
    • Short cut to relationship building.
  • Corruption as cheating.
    • Violation of rules.
  • Business dealings and hiring
    • Nepotism & cronyism vs. transparency.
  • Bribery in relationship-based countries (endemic):
    • Much of Africa, east and south Asia, Middle East
  • Bribery in rule-based countries (system breakdown):
    • Russia, Eastern Europe (Czech Rep. less so)
  • Cheating in rue-based countries (endemic):
    • USA, southern Europe
masculine vs feminine
Masculine vs. Feminine
  • Masculine:
    • Tough, aggressive, ambitious, martial values.
    • Competitive.
    • Men take charge.
  • Feminine:
    • Cooperation, reluctance to excel.
    • Men & women’s roles more similar.
masculine vs feminine44
Masculine vs. Feminine
  • Feminine (according to Hofstede):
    • Scandinavia, western Slavic countries, Thailand, some Latin American countries
  • Masculine:
    • Japan, Austria, Switzerland, Ireland, Jamaica, U.K., Germany, Philippines, India, Arab countries, some Latin American countries
  • Uncertainty avoiding:
    • Prefer familiar, predictable surroundings.
    • Dysfunctional bureaucracy serves as ritual.
    • Risk-averse in business
  • Uncertainty tolerant:
    • Willing to take risks.
    • Entrepreneurial in business.
  • Uncertainty avoiding (according to Hofstede):
    • Greece, Portugal, Latin America, Belgium, Slavic countries, France
    • Czech republic, Germany (to some extent)
  • Uncertainty tolerant:
    • Singapore, Jamaica, Scandinavia (?), Hong Kong, Ireland, Malaysia (?), U.K., USA


English Garden, Munich