Cultural Language of Business

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Intercultural Rela,ons Class Westwood College

Instructor: Sonara Carter-‐Barber, MS, ATMB, PhD Candidate [email protected]

Bronwen E. Madden Guest Presenter April 27, 2013

hKp://www.LACITD.org

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Source: hKp://wws.peacecorps.gov/wws/mul,media/videos/culturalgaffes/

Introductory Video: Cultural Gaffes

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¢ Group/community ¢ Common experiences ¢ Heritage ¢ Par,cipatory inclusion ¢ Socially accepted behaviors, values, beliefs, and standards

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What is Culture?

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“Culture refers to the socially transmiKed values, beliefs and symbols that are more or less shared by members of a social group.”

Kevin Avruch, Culture as Context “Culture is a common system of knowledge and experiences that result in a set of rules or standards; these rules and standards in turn result in behavior and beliefs that the group considers acceptable.”

Pat K. Chew, The Pervasiveness of Culture in Conflict 4

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•  Beliefs (superstitions) •  Corporate (“the Toyota way”) •  Country / Region •  Economic •  Education •  Ethnicity •  Faith •  Food •  Generation •  Interests (i.e., music, art…) •  Language •  Political •  Social

Culture Defined

It is what makes us unique and interesting and at times, causes misunderstanding

Culture is important in business so we understand how to effec,vely communicate and produce produc,ve rela,onships. First – Understand your own culture. Know your history and your business style. Generally most of us do this naturally without thought; become aware of your ac,ons. Examples: Did you know that in the United States a woman must first extend her hand to engage in a handshake with a male or else it is considered to be rude (but this is opposite in other parts of the world)? Do you stop to think about this or do we naturally act out of habit which we maybe unconsciously learned?

In Mexico, it is considered rude to throw your cash on the counter when checking out at a retail store; you must hand it to the salesperson. No maKer how “cultured” U.S. business people are, I see this mistake take place over and over.

In Korea, it is rude to show the boKom of your cup when taking a drink to someone above you in hierarchy. Do you learn this in business school or from experience?

Why is Culture Important?

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¢ Mul, Ac,ve ¢ Linear Ac,ve ¢ Reac,ve

Many cultures are a mix, but tend to dominate in one or two categories

_______________________________________________________________________________

Richard D. Lewis, When Cultures Collide (1996)

Cultural Types by Lewis

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The Lewis Model

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The Lewis Model

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¢ Low Context Explicitly communicated verbally and in contractual agreements (very direct). This can be viewed as being rude.

¢ High Context Physical context or ini,alized in the person; body language and unspoken gestures (very indirect). This can be viewed as confusing.

_____________________________________________ Edward T. Hall, Beyond Culture (1989)

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Hall’s Communica,on Style

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¢ Monochronic Time Schedules, segmenta,on, and promptness

¢ Polychronic Time Characterized by several things happening at once

Quiz yourself: hKp://x.digitalavenues.com/uploads/mediafiles/dynamic/innovint/toyota_0/

_____________________________________________ Edward T. Hall, Beyond Culture (1989)

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Hall’s Time Orienta,on

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¢ Power Distance ¢ Individualism ¢ Masculinity _______________________________________ Geert Hofstede, Culture’s Consequenses: Comparing Values, Behaviors, InsBtuBons, and OrganizaBons Across NaBons (2001)

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Hofstede’s Cultural Constructs

¢ Uncertainty Avoidance ¢ Long term Orienta,on ¢ Indulgence vs. Restraint

Cultural Awareness

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¢ Individualists Group goals are subordinate to personal goals, the individual is the core of the social unit, independence and personal achievement are highly valued, discipline is loose, tend to cherish their freedoms, make independent decisions, and value directness and strive to stand out (mostly Westerners: US, Western Europe, Canada, Australia)

¢ Collec,vists Personal goals are subordinate to group goals, family and employment organiza,ons are the core of the social unit, duty harmony, politeness, and modesty are very important with high discipline and individuals should not stand out. (Asia, Eastern Europe, La,n America)

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Individualism vs. Collec,vism

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Hapden-‐Turner & Trompenaars Cross-‐Cultural Competence

¢ Universalism Vs. Par,cularism ¢ Specificity Vs. Diffusion ¢ Status: Achieved Vs. Ascribed ¢ Inner Vs. Outer Direc,on ¢ Sequen,al Vs. Synchronous ,me _____________________________________________ Charles M. Hapden-‐Turner & Fons Trompenaars, Building Cross-‐Cultural Competence (2000)

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Kluckhon & Strodbeck Value Orienta,ons

¢ Human Nature: Good Vs. Evil ¢ Man Vs. Nature Orienta,on ¢ Ac,vity Orienta,on: Being Vs. Doing _________________________________________ Florence Rockwood Kluckhon & Fred L. Strodbeck, VariaBons in Value OrientaBons (1961)

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¢ Rela,onship-‐based Vs. Rule-‐based ¢ Sociocentric Vs. Egocentric ¢ Emo,onally Neutral Vs. Expressive ¢ Technology Vs. Nurturing ¢ Harmony Vs. Mastery

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Cultural Variances

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¢ Poli,cal Environment Government stability, public goods available for business…

¢ Economic Environment Income levels, demand, exchange rate risk, etc.

¢ Social Environment Cultural acceptance and idiosyncrasies

Comfort Market: a market in which you understand the culture and the local business nuances. 18

Environment

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¢ Differences That Make A Difference Language, Religion, Tastes, Business Prac,ces, Income Levels, Product Standards, Physical Environments, and Legal Requirements

¢ Adapta,ons Worth Considering To the Product, Promo,onal Materials and Packaging

StandardizaBon Vs. LocalizaBon 19

Market Considera,ons

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¢ Economic Freedom hKp://www.heritage.org/index

¢ Global Compe,,veness hKp://www.weforum.org/issues/global-‐compe,,veness

¢ Global Peace Index hKp://www.visionojumanity.org

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Indices

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¢ Sell directly to end-users (short term) ¢ Sell through an intermediary – an agent or

distributor (long-term) ¢ Hire staff overseas (comply with local

employment laws) ¢ Establish office overseas (investment) ¢ Establish Joint Venture (JV) or subsidiaries

abroad (investment) 21

Distribu,on Channels

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¢ Should I conduct a background check? ¢ Should our agreement be in wri,ng? ¢ At what point do you bring out the contracts? (lawyers vs. pracBcal businessman) Rela,onships = business; trust = partnerships

_______________________________________________________________________________

Roger B. Myerson, GeOng to YES (1996) -‐ The Nash Equilibrium by John Forbes Nash

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BATNA Best Alterna7ve To a Nego7ated Agreement

Don’t accept anything less!

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¢ Become educated ¢ Hire staff ¢ Travel Cultural miscommunica,on is the main reason for business nego,a,ons to fail. Lack of cultural prepara,on is the main reason for ex-‐pat failure. For culture to be engrained, it is typically experienced rather than learned. 23

Mi,gate Cultural Miscommunica,on

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Cultural Summary -‐ USA

“Guanxi” literally means "rela,onships“ and in the Chinese business world it is also understood as the network of rela,onships among various par,es that cooperate together and support one another. In essence, this boils down to exchanging favors, which are expected to be done regularly and voluntarily. Therefore, it is an important concept to understand if one is to func,on effec,vely in Chinese society. Avoid the American stereotype of self-‐interest, quick profit and abandonment. Rela,onships are NOT project-‐based, they are life-‐long. Show an earnest commitment to the interests of the community, not just your bank account.

Example: Cummins -‐ power genera,on equipment, power systems, gasoline engines, custom power supplies; paints elementary schools on the weekends but does not boast about it.

hKp://chinese-‐school.neoirms.com/guanxi.html

Guanxi

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¢ CANNOT “influence a decision” (bribery) ¢ Okay to expedite ac,vity or incen,vize service (,ps) ¢ Keep ,ps/giqs to low value ($20 or less for U.S. government officials)

___________________________________ The Foreign Corrupt Prac,ces Act of 1977 (FCPA) is a United States federal law known primarily for two of its main provisions, one that addresses accoun,ng transparency requirements under the Securi,es Exchange Act of 1934 and another concerning bribery of foreign officials.

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Foreign Corrupt Prac,ces Act

Department of Justice, Criminal Division, Fraud Section Attention: FCPA Coordinator [email protected] / http://www.usdoj.gov/criminal/fraud/fcpa/

California Country Contacts

hKp://www.calchamber.com/interna,onal/contacts/pages/countrycontacts.aspx

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¢ Introduc,ons ¢ Appointment ¢ Business Dress ¢ Conversa,on ¢ First Name or Title ¢ Giq Giving 29

¢ Nego,a,on ¢ Entertaining

Social E,queKe

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Color Supers,,on Color Lucky/Popular Unlucky/Unpopular

Black All Asia-‐Pacific Cultures

White China, Japan, Vietnam

Red China, Japan, Philippines, South Korea, Thailand, Vietnam

Names and red ink; China, Japan, South Korea

Blue South Korea China

Gold Asian Cultures On leaves: Japan

Green Philippines, Vietnam Japan; Don’t wear a green hat in China

Yellow All Asia-‐Pacific Cultures Personal wear: Malaysia

Purple China

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Number Lucky/Popular Unlucky/Unpopular

0 Philippines

3 All Asia-‐Pacific Cultures

4 China, Japan, South Korea

5 South Korea

6 China Thailand, Vietnam

7 Western Countries, Japan, South Korea

8 China, Japan, Philippines, Vietnam

9 China, South Korea, Vietnam

10 Vietnam

13 All Asia-‐Pacific Cultures

Number Supers,,on

Japan South Korea

China Singapore

Hong Kong Canada

USA Australia

Very High High Moderately High Moderate Moderate Moderately Low Low Very Low

Most Formal

Least Formal

Formality Factor

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¢ Percep,ons ¢ Behavior ¢ Communica,on ¢ Management ¢ Nego,a,on/decision-‐making ¢ Rela,ons (your business base) 33

Business Implica,ons

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¢ Date/,me/loca,on ¢ Décor (flags, flowers) ¢ Contact person (including mobile #)

¢ Mee,ng par,cipants list with ,tles

¢ Objec,ves/goals 34

¢ Talking points ¢ Dress ¢ Sea,ng chart ¢ Giq

Business Mee,ng Best Prac,ces

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¢ McCaffrees book Protocol ¢ Holberg’s book Forms of Address ¢ CultureGrams® ¢ Execu,vePlanet.com guides Many others…The four listed are well-‐known authori,es on culture and protocol; however, there are a variety of resources available including the Dos and Taboos Around the World, Kiss Bow or Shake Hands, Business Strategies Interna,onal Keys to Success, Kwintessen,al Global Guides, etc.

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Cultural Protocol Resources

Giq Giving Selec,ng and presen,ng an appropriate business giq

Let's Make a Deal! What you should know before you nego,ate; Intermediaries, protocols, and the nego,a,ng process

Prosperous Entertaining General ,ps, ea,ng and drinking; Ea,ng cont'd and business entertaining; Social entertaining

Public Behavior Acceptable public conduct

About Introduc,on, geography, climate, and popula,on Demographic profile, government and poli,cal structure Economy and entrance requirements

Appointment Alert! Making appointments

Business Dress Guidelines for business dress

Conversa,on General guidelines; Welcome topics of conversa,on; Topics to avoid in conversa,on

First Name or Title? Addressing others with respect

Execu,ve Planet Guides -‐ Outline

hKp://execu,veplanet.com

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¢ Self-‐awareness ¢ Awareness of others

[Distribute CultureGrams] 37

All About Understanding

Los Angeles Center for Interna7onal Trade Development Hosted by El Camino College Bronwen E. Madden, Ac,ng Director El Camino College Business Training Center 13430 Hawthorne Boulevard Hawthorne, California 90250 USA www.LACITD.org [email protected] Appointment Line: (310) 973-‐3177 Fax Number: (310) 973-‐3132

Contact

Quiz What is the belief that your own group culture is superior to other groups or cultures? (A) egocentrism (B) ethnocentrism (C) cultural rela,vism (D) Stereotyping ___________________________________________________________ Source: McGraw-‐Hill Higher Educa,on , Human, CommunicaBon Third EdiBon (2008) hKp://highered.mcgraw-‐hill.com/sites/0073385018/student_view0/chapter7/mul,ple_choice_quiz.html

Quiz People from _____________ cultures rely heavily on situa,onal cues for meaning. (A) high-‐context (B) low-‐context (C) monochronic (D) universalist (E) rela,vist ___________________________________________________________ Source: McGraw-‐Hill Higher Educa,on , Human, CommunicaBon Third EdiBon (2008) hKp://highered.mcgraw-‐hill.com/sites/0073385018/student_view0/chapter7/mul,ple_choice_quiz.html

Quiz The Germans have a _____________ culture. (A) universalis,c (B) rela,vist (C) low-‐context (D) high-‐context (E) collec,vist ___________________________________________________________ Source: McGraw-‐Hill Higher Educa,on , Human, CommunicaBon Third EdiBon (2008) hKp://highered.mcgraw-‐hill.com/sites/0073385018/student_view0/chapter7/mul,ple_choice_quiz.html

Quiz People from _____________ cultures tend to place greater emphasis on community goals and subordinate their own wishes and goals. (A) monochronic (B) rela,vist (C) low-‐context (D) heterogeneous (E) collec7vist ___________________________________________________________ Source: McGraw-‐Hill Higher Educa,on , Human, CommunicaBon Third EdiBon (2008) hKp://highered.mcgraw-‐hill.com/sites/0073385018/student_view0/chapter7/mul,ple_choice_quiz.html

Quiz People in polychronic cultures view ,me as (A) linear (B) standardized (C) precise (D) mul7dimensional (E) inelas,c ___________________________________________________________ Source: McGraw-‐Hill Higher Educa,on , Human, CommunicaBon Third EdiBon (2008) hKp://highered.mcgraw-‐hill.com/sites/0073385018/student_view0/chapter7/mul,ple_choice_quiz.html

Quiz Someone from England is likely to require greater interpersonal space than someone from (A) Korea (B) U.S. (C) Canada (D) Switzerland (E) Germany ___________________________________________________________ Source: McGraw-‐Hill Higher Educa,on , Human, CommunicaBon Third EdiBon (2008) hKp://highered.mcgraw-‐hill.com/sites/0073385018/student_view0/chapter7/mul,ple_choice_quiz.html