Assignment and Coaching by lonyoo


									                    Business and culture

             Monday, July 2nd

              Morning session

What are the implications of “culture” for the
  success or failure of our business efforts?

       What is “culture”, by the way?

1.   Case examples to illustrate the importance of culture
     in business

2.   General introduction to Culture

3.   Gersteland’s approach

4.   Hoffstede’s approach

5.   Group work

6.   Debate in class
                                Business and culture

Cultural misunderstandings are one of the key barriers to successful
     trade and investment

True case: A successful partnership in Bolivia in the tourist sector
     with great potential was developing. But one day from a clear
     blue sky came an email:

•    “It is very unfortunate what you have caused the
     last month and your non ethical behaviour, but it is
     your problem”
•    “may I express my profound disappointment to you
     both and your non professional action”
•    “do not try to steal money from me”
•    “I am tired of your informality and to be blamed for
     your mistakes among other things”
                             Business and culture
True case: A promising (thinks at least the Danish
    company) partnership in Bolivia in the IT sector with
    great potential is coming to a desperate end:

Dear Mr. xx,
I have not received any communication from you since 8th May,
     is this correct?
Please recognize that besides missing valuable time, we are
     also missing opportunities (read: cannot proceed with
     opportunities/potential customers) as we do not know
     where we stand.
I my view (the Bolivian IT company) has really nothing to loose
     in entering a joint venture as suggested by us and a lot to
     gain “not if” but when we get it on the road. We have all the
     needed support here in Denmark and from the Danish
     embassy, let’s get it on the road….
Which ever way you and David look at it, I kindly draw your
     attention to the fact that we need some kind of conclusion.
                                  Business and culture

True case: A promising investment in the asphalt industry in Bolivia
      was on the brink of failing because the partner did not show up
      to the investors meeting in Denmark as promised.
I was very surprised that you didn't arrive in Copenhagen on the 19th
      of May.I had made reservations at a hotel and had made a lot of
      plans for the week.
I had made plans for you to visit the laboratory I Copenhagen. Where
      you, among other things, could see and have demonstrated the
      many items in the laboratory equipment that Mrs. xx has
      procured, and that are packed in the container. It was very
      unfortunate that I had to cancel that visit. I cannot, and I will not,
      make another appointment with the laboratory.
Please send the equipment to Bolivia:
(name of Bolivian company)
                     Business and culture

True case: A promising partnership in the shoe
   industry in Zimbabwe was toppled by culture
• First meeting was on a Sunday
• At the home of the family father (and owner)
• In the warm dry period
• Was it a business meeting or a social meet-
   the-family get-together?
                       The culture iceberg

Culture is like the iceberg- 10% is visible
   and 90% is under water:

Failure to appreciate what is below the
    surface can sink the negotiation,
    partnership, joint venture or simply
    result in unfavourable results
                         The culture conflict

"Culture is more often a source of
  conflict than of synergy. Cultural
  differences are a nuisance at best
  and often a disaster."
  - Dr. Geert Hofstede
Culture is difficult to define, with hundreds of
definitions possible. Some of the key
characteristics are:
Culture prescribes the forms of behaviour that
are acceptable to people in a specific
– Culture is learned, we are not born with a culture;
  we are born into a culture
– Culture is dynamic and interactive
– Culture is subjective; we attribute meaning to
  what we see
“Culture is the human aspect of a person’s environment; it
  consists of beliefs, morals, customs, and habits learned
  from others”

“Culture is the total way of life in a society”,

“Culture is the collective programming of mind”,
                           Cultural Universals

   – desire to look beautiful, keep track of time
   – desire to co-operate, to be a member of a group,
     differentiate according to status
   – such as courtship, religious observance, mourning

                       Expressions of Culture
Culture can be expressed through:
     • Words, gestures, objects or pictures which carry a
       particular meaning. Most superficial element of culture

Norms and Rituals
     • Collective activities, ceremonies, ways of greeting, gift-

Myths and Heroes
     • Persons who may be alive or dead who possess
       qualities highly prized in a particular culture
                          Cultural Stereotyping

“Heaven” is where the cooks are French, the mechanics
  are German, the policemen are English, the lovers are
        Italian, and it is all organised by the Swiss

“Hell” is where the policemen are German, the mechanics
 are French, the cooks are English, the lovers are Swiss,
           and it is all organised by the Italians

                       Part I: Gersteland

Based on international assignments and
expatriate posts Gersteland has developed a
structured approach to catagorise business
culture. Based on case studies and
                                  The iron rules
Iron rule # 1:
In international business, the seller adapts to
  the buyer
   • But what if you are the buyer?

Iron rule # 2:
In international business, the visitor is expected
  to observe local customs
   • but important to “be yourself”?
                               Follow the locals…

“When in Rome- do as the Romans do”

“Ru xiang sui su”
(Chinese proverb: Enter village, follow customs)
             Tools to understand and act

The patterns of cross-cultural business

Examples of a structured and analytical
 approach to understand cultural differences.

Tool to understand other cultures and act
                        The Great Divide
Approach developed by Richard Gesteland
The “great divide” between business cultures
 around the world:

  (DF- people)  (RF-people)
                            The Great Divide
• DF people are fundamentally task-oriented
• RF people are more people-oriented
   – RF people find DF people “pushy”,
     “aggressive” or “rude”, no business with
   – DF people find RF people “vague”,”dilatory” or
     “dishonest”, only business with personal
     contacts and network

Northern Europe,                    Most of the world,
US, Australia, NZ                   Arab, Asia, LA
                              Informal vs. formal
• Informal people are more favours egalitarian
  relationships and not occupied with status
         – But informality can of offend high-status people
           from hierarchical cultures
• Formal people are more hierarchical and
  expects respect for status
         – But formality can offend egalitarian sensibilities of
           informal business people

Australia/Netherlands                          Egypt/Japan
                          Rigid vs fluid time
• DF people worships the clock (monochronic)
     • And may look at fluid-time people as lazy,
       undisciplined and rude
• RF people focus more on the people
  around them than time and scheduling
     • And may look at rigid-time people as
       pushy, annoying or stressed

• Denmark/US                     Malaysia/Nicaragua
             Expressive vs. reserved

• Expressive people use high voice and
  body as part of communication
• Reserved people use silence, calm
  and soft voice as part of

Italy                       Thailand
                              Rigid vs fluid time

• Group work 1-a
Place Bangladesh, Japan, Denmark and the US according
  to the parameters:

DF                      vs.                RF

Formal                  vs.                informal

Monochronic             vs.                polychronic

Reserved                vs.                expressive
                     Rigid vs fluid time

• Group work 1-b
A good business friend from Denmark
  asks for your advise as how to tackle
  the Bangladeshi business culture
Give him your 5 most important advices
  that will improve his chance of making
  good business in Bangladesh
                     Part II: Hoffstede

• Survey of 100,000 persons working
  for IBM in 40 countries
• On the basis of these interviews
  Hoffstede developed a structured
  approach to understand culture.
• 4 underlying dimensions of business
                   Hoffstede’s dimensions

Power distance
Degree to which less powerful persons in a
 culture accept the existence of inequality
 and the unequal distribution of power as a
 normal situation

New Zealand (22)    Japan (54)   Phillipines (94)
Low acceptance                    High accept.
                   Hoffstede’s dimensions

Uncertainty avoidance
Extent to which people in a culture feel threatened
  by uncertain or unknown situations. They are
  nerveous of situations they consider
  unstructured, unclear or unpredictable

Singapore (8)         Australia (51)   Japan (92)
Strong avoidance                        weak av.
                Hoffstede’s dimensions

 Extent to which people in a culture look after their
  own interests and those of their immediate
  family, and where ties are loose. Whether group
  needs are subordinated to individual needs.

China (15)           Netherlands (53)         US (91)
Collectivist                                  Indv.
             Hoffstede’s dimensions

Reflected in the different social roles for men
 and women. Male culture stresses
 material success and status; female
 culture stresses quality of life and caring
 for the weak

Sweden (5)         China (55)         Japan (95)
Feminine                               Masc.
                   Hoffstede’s dimensions

Long-term vs. short-term orientations
Extent to which cultures exhibit a pragmatic,
 future-oriented perspective as opposed to
 a historic short-term point of view.

West Africa (16)       Singapore (48)   China (114)
Short-term                              Long-term
               Hoffstede’s dimensions

• Be aware that:
  – Survey made long time ago
  – IBM has a strong corporate culture
  – Dimensions seen from a western point
    of view
  – Is there a single truth?
                                 Individual work 2
Give your self point from 0 – 100 according to Hofstede’s
Power distance

   “I accept inequality in society and in my company
      because power cannot be distributed equally to

   AGREE: 100;
                               Individual work 2
Uncertainty avoidance

  “We must have big changes in the way we make
    business here in the country and be open to new
    relationship with other countries. Bangladesh must be
    open to the outside world and accept that we have to
    change our system accordingly”.

                               Individual work 2

“My individual needs and goals come second to the needs
  of my family and close relatives.”

                                 Individual work 2

“It is an advantage for the development of society that men
    and women have different roles and obligations in
    relation to work, family and business”

AGREE: 100

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