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Chapter 12Managing Cultural Differences
John S. Hill
IntroductionManaging Cultural
Differences
Conceptual Framework: High-Low Context Cultures
Cultural Variations at the Nation State Level
Cultural Underpinnings
Intercultural Negotiations
Organizing International Negotiations
Chapter Outline
A Framework for Understanding Business and Interpersonal Behaviors
Cultural Underpinnings of High-Medium-Low Context Behaviors – The “Whys”
Intercultural NegotiationsOrganizing International
Negotiations
Table 12.1: Business and Interpersonal Relationships in High, Medium and Low Context Societies (NOTE: generalizations)
Context Low Medium High
Country/regional examples
USA, Swiss
Western Europe
Asian, Arabic
Values,attitudes behaviors
Meeting people Informal Formal Formal
Getting acquainted Fast Moderate Slow
Relationship depth Shallow Moderate Deep
Relationship trust Little Trust Much trust
Behavior limits Legal Legal/social Social
Lawyer reliance High Moderate Low/zero
Table 12.1 (continued)
-Context Low Medium HighBusiness relationships Arm’s length Social-
business mixed
Much socializing
Mistakes tolerance High Medium Low
Mistakes accountability
High Medium Low
Individual competition Encouraged Discouraged Anti-social
Insider-outsider Low Moderate High
Patriarchal Low Moderate High
Individualism High Moderate Low
Social class differences Low/moderate Moderate High
Uncertainty tolerance High High Low
Table 12.1 (continued): Flexible Stereotype—L-M-H Context
Low Medium High
LC-FS MC-FS HC-FS
LC-FS Low Context flexible stereotype: Most people are low context (national stereotype), but significant pockets of medium context and smaller numbers of high context groups
MC-FS Medium Context flexible stereotype: Most people in Western Europe are medium context but some are low context (Germans, Swiss); some are higher context (Greeks, Spanish
HC-FS High Context flexible stereotype: National behaviors are rurally-oriented; smaller pockets of medium context behaviors (migrants in transition); minority low context behaviors of urbanites
A Framework for Understanding Business and Interpersonal Behaviors
Low context behaviors Values and attitudes are associated with
capitalist, efficiency-oriented societies. North American and some Western European countries
High context behaviors Less competitive societies valuing
cooperation, harmony and stability. Asia, the Middle East and Latin America
Medium context behaviors Functioning democratic processes,
competition in marketplace, and some movement between social classes. Western European countries
Cultural Underpinnings of High-Medium-Low Context Behaviors—the “whys”
Religion:
“A socially shared set of beliefs, ideas, and actions that cannot be verified empirically yet affects the course of natural and human events—a way of life woven around people’s ultimate concerns.”
Cultural Underpinnings of High-Low Context Behaviors—the “whys”
Polytheistic ReligionsPrimal religions Been around for 3 million years Africa, Australia (Aborigine), SE Asia,
Pacific Islands, North and South America (Indian communities); cults and superstitions in west
Tend to be tribally based; passed on orally between generations; relationship with nature; personal, social and cosmic harmony important; ancestor worship
Cultural Underpinnings of High-Low Context Behaviors—the “whys”
Polytheistic ReligionsHinduism 1500BC beginnings; today 1 billion
followers Major influence on Indian culture: via caste
system (priest-soldier-merchant-artisan + dalits (untouchables); affects food, social relationships, marriage, conduct (dharma)
Samsara: eternal birth-rebirth until Moksha (release); conduct determines rise up caste system
Shinto: Japan’s national religion (600AD)
Blended with Buddhism, Confucianism, Taoism Emphasizes tradition, family, nature, cleanliness
Cultural Underpinnings of High-Low Context Behaviors—the “whys”
Monotheistic Religions Judaism: forerunner of Christianity,
Islam via Abraham Over 13 million followers Ten Commandments basis of western
ethics Israel-based Numerous persecutions historically
Cultural Underpinnings of High-Low Context Behaviors—the “whys”
Monotheistic ReligionsChristianity (Catholicism, Protestantism,
Eastern Orthodox—2 billion followers in Americas & Europe
Spread by Romans in Europe and world via colonization
Protestantism-Capitalism link: productivity/income signs of God’s approval; frugality-industry emphasized; flexible faith
Crucial splits Eastern Orthodox (1054); and Reformation (16th century Martin Luther)
Cultural Underpinnings of High-Low Context Behaviors—the “whys” Islam (1.2 billion followers) 7th century founded by Muhammad in today’s
Saudi Arabia Spread to rest of Middle East and North Africa
by military conquest; to Asia via the Silk Road; still Muslims today
5 Pillars: profess the faith; prayers 5 times/day; Ramadan; charity; Mecca pilgrimage
Lifestyle religion: dominates politics, legal systems, social behaviors and education system
Problems with westernization effects on lifestyles
Cultural Underpinnings of High-Low Context Behaviors—the “whys”
Non-Theistic Religions Buddhism (400 million followers; 1-2 billion
influenced) 6th century founded by Siddhartha Gautama (‘Buddha’) Guided by 4 Noble Truths and Noble Eightfold Path to
individual behaviors (right knowledge, purpose, speech, living etc.)
Emphasizes calmness, wisdom, compassion, spiritualism Confucianism & Taoism (6th century, East Asia) Confucius “greatest single intellectual force” in Asia Relationships between people and societal harmony:
humaneness, love, ‘ideal host’, titles, seniority, respect, ‘arts of peace’
Taoism: act with nature; emotions ‘wasted energy’; no self-assertiveness; complementary forces of yin-yang
Impact of Religion on Societal Behaviors
High context behaviors Emphasize trustworthiness,
interpersonal sociability and societal stability, with the religion emphasizing a sense of community, family unity and nonmaterial orientations
Religion has major effects on lifestyle in most high context societies and tends to emphasize spirituality over all else; very
difficult to change
Impact of Religion on Societal Behaviors
Low context behaviors Christianity does not seem to clash with
highly competitive political and economic systems
Social class systems based on income and wealth are incentives to build up economic resources and move up the social hierarchy
Protestantism rewards hard work and thrift; religiosity declines during
industrialization
Economic and Political System Effects
As countries industrialize, competitive low-context behaviors diffuse from developed urban centers into rural parts
Traditional village economies much less competitive; less turbulent; more community-oriented
Where governments limit or control outside influences, traditional high-context behaviors remain the norm
Social Forces
Social Class Systems based on income and wealth;
they are fluid and mobile Hereditary/seniority systems limit social
and economic competitivenessEducation Industrialized countries: education tend
to be more technical, scientific Developing countries: education is often
elitest and may be less technological—more arts-oriented
Intercultural Negotiations How to do face-
to-face negotiations with
US businesspeople Japanese Latin Americans Western Europeans Asians Middle Easterners Russian
Intercultural NegotiationsNegotiating with US Businesspeople Objective, efficient and competitive
negotiators Prefer informality, rationality and detailed
contractsNegotiating with the Japanese Emphasis on harmony, cooperation,
conformism, and long-term business perspective
Key aspects: after-hours sociability, little use of lawyers, patience required, long-term business orientations, renegotiating points, conflict avoiders, use of silence
Intercultural Negotiations
Negotiating with Latin Americans
More outgoing and emotional Little or no mixing of business with
pleasure The relative unimportance of work Recognition of social and ethnic
distinctions, respect accorded the “Patron”
Intercultural Negotiations
Negotiating with Western Europeans Low context Europeans emphasize
objectivity in business dealings, focusing on contracts. “plain talking”, and efficiency
Medium context nations put more emphasis on relationships, trust, less on lawyers
Key aspects: like procedures, titles; negotiate many points simultaneously; legal contracts part of relationship; looser negotiating postures
Intercultural NegotiationsNegotiating with Asians: like the Japanese Traditionally based and emphasize personal
relationships over written contracts Respect for the past, importance of the family
and people generally (viewed as assets, not costs)
Patience and humility are important; non-emotional
Negotiating with Middle Easterners Religion (Islam) is paramount; social
relationships are all-important; time is not Avoid conflict situations Many social formalities and courtesies;
hereditary aristocracy are ‘men of respect’
Intercultural Negotiations
Negotiating with Eastern Europeans: The Russian Case
Cautious, tough, and disciplined negotiators
Focus on general agreements Relationships built on after-hours
socializing Still cautious about western profit
motives (though changing)
Organizing International Negotiations
Planning and preparation
Conducting the negotiation
Reaching an agreement
What is a good negotiator?
Organizing International Negotiations
Planning and preparation Where to negotiate: home country
cultural advantage as visitors acclimatize Assembling the right team:
internationally experienced; locals important; maintaining team is important
Preparation: country,company background,clear objectives
Organizing International Negotiations
Conducting the negotiation Relationship building required in
most parts of the world; socializing important
Recognize the power brokers; usually senior people
Show respect, patience at all times Body language is important Negotiating style should be known
Organizing International Negotiations
Reaching an agreement High context cultures take time
(often years); often letters of agreement to start
Contracts signify the start of a relationship, but do not define it totally
Organizing International Negotiations
What is a good negotiator? Negotiation objectives important part of what is
planned Spend more time developing different scenarios
and alternatives Focus on common ground and agreements, not
disagreement areas Long-term issues emphasis Flexible, not rigid in setting goals Have no predetermined sequences of points to
cover Take time to build relationships, knows all
aspects of proposed agreement, persuades not argues, is conciliatory
Key PointsHigh-medium-low context cultures are
important frameworks but are generalizations
Religion is very important in high context societies
Face-to-face negotiationsare culturally-loadedCultural understandingparamount in relationshipbuilding