Cultural Differences In A Business Environment example essay topic

ESSAY TOPIC (1): A joint venture is affected by the cultural distance between two partners. In what ways are joint ventures and types of international collaboration affected by cultural differences? INDEX INTRODUCTION... 2 What is culture? ...

2-3 The Cultural Orientation Model... 4 The cultural Gap... 5-6 Understanding Cultural Differences... 6 The Challenge of Cultural Success... 7 Cross-cultural training as a solution... 8 The effectiveness of the cross cultural training programs...

8-9 Future Directions for Cross-Cultural Training and International Business Assignments... 10. Conclusion... 10 BIBLIOGRAPHY...

11 INTRODUCTION Since the end of World War II, international operations have become a reality for an increasing number of corporations. Many of these initial efforts began as simple export schemes to sell goods overseas to supplement domestic sales. Over time, however, international operations have become increasingly more complex: from joint-ventures to purchasing existing foreign firms to 'green-field's tart-ups. While export operations usually require no more than extended business trips overseas, more complex international operations demand long-term assignments of key personnel outside their home-country. What would normally be considered routine business transactions in the home country can become very complicated when they are conducted between individuals and organizations from different cultures. In this essay we will examine how this cultural gap can affect international business and joint ventures.

What is culture? The word 'culture' is often described in terms of concrete ideas or social artifacts. Gary R. Weaver describes some common conceptions such as 'good taste,' 'art or music,' or 'something that people in exotic foreign lands had. ' 1 However, culture in the context of international assignments relates to how people perceive the world and the influence this perception has on their actions. It is culture on the interpersonal level.

Different cultures can perceive the same thing differently, which leads to miscommunication and misunderstanding when one crosses into another culture not their own. Weaver defines culture, on the interpersonal level, 'as a system of values and beliefs which we share with others, all of which gives us a sense of belonging or identity" 2. He states that it can be discussed 'in terms of typical ways in which people in a society, group or organization behave, communicate, think or perceive reality. ' 3 Each culture has differing value and belief systems, which effect how people perceive reality and their following reactions to it. A useful analogy to describe how culture impacts on the interpersonal level is that of computer software. Geert Hofstede has defined culture as the 'software of the mind.

' 4 Hofstede compares culture to a computer program, in that individuals learn and acquire patterns of thinking, feeling and acting over time that influence their actions and perceptions. He believes that culture is 'mental software,' 5 in that it predisposes individuals for certain inputs which are processed in a familiar way for a certain set of outputs, or actions. Hofstede states, however, that 'a person's behavior is only partially predetermined by his or her mental programs: (s) he has a basic ability to deviate from them, and to react in ways which are new, creative, destructive, or unexpected. ' 6 The 'mental program' is not absolute. It can change over time to react to new inputs and stimulus. If this were not the case, mutual understanding in intercultural communication would not be possible 7.

Not only does intercultural training enable communication in the procedural sense, it also 'gives us insight into the substance as well as the process. ' 8 Being more sensitive to the cultural variance between parties enable the expatriate to better understand the context of why their foreign counterparts act in certain ways or demand certain items in negotiations. What may appear inconsequential on the surface may be revealed to have greater importance when looked at in the context of the host culture. Intercultural understanding also has an informational aspect, according to Rohrlich. He states that 'the intercultural con texting of world problems is the informational aspect that current intercultural communication theory, even in its rudimentary state, contributes. ' 9 Better cultural understanding by an expatriate gives them a valuable data bank, in essence, about the host culture.

This information can assist them in better executing their work tasks or even the development of culturally appropriate products and services. In summary, the home culture of an expatriate predisposes them to certain behaviors and situations. It allows them to operate efficiently in that environment. However, moving to the host-culture changes that operating environment and makes their 'mental software' less efficient and effective. Culture is clearly a relevant variable when expatriating employees and their families for international business assignments.

Training can be applied to ameliorate these effects. Also, training provides insight into the procedural, substantive and informational aspects of their work and personal life in the host location. The next chapter discusses the overall international assignment process. This provides a background for where cross-cultural training fits into the overall picture. It can be easily now understood that in a global, virtual, matrix ed organization, managers need to be able to build effectiveness across national, organizational, team and interpersonal barriers. Successful cross-cultural managers typically are flexible and possess a broad behavioral repertoire.

1. Gary R. Weaver, 'Understanding and Coping with Cross-cultural Adjustment Stress,' 1.2. Ibid., 1.3. Ibid., 1.4.

Geert Hofstede, Culture and Organizations: Software of the Mind, (New York, NY: McGraw-Hill 1998) 4.5. Ibid., 4.6. Ibid., 4.7. Paul E. Rohrlich, 'Why Do We Study Intercultural Communication? ,' in Culture, Communication and Conflict: Readings in Intercultural Relations, 2d ed., ed. Gary R. Weaver (Needham Heights, MA: Simon & Schuster Publishing, 1998), 84-87.8. Ibid., 85.9.

Ibid., 85. The Cultural Orientation Model This model is based on common tendencies of the people on a number of dimensions or values and has identified the dimensions as: 1. Environment: How individuals view and relate to the people, objects and issues in their sphere of influence. 2. Time: How individuals perceive the nature of time and its use. 3.

Action: How individuals conceptualize actions and interactions. 4. Communication: How individuals express themselves. 5. Space: How individuals demarcate their physical and psychological space. 6.

Power: How individuals view differential power relationships. 7. Individualism: How individuals define their identity. 8.

Competitiveness: How individuals are motivated. 9. Structure: How individuals approach change, risk, ambiguity and uncertainty. 10. Thinking: How individuals conceptualize. The cultural Gap Based on the preceding analysis we could focus now on the ways cultural differences affect joint ventures and international business.

This analysis will examine two different variables within business: people and products. As people is considered everyone from the labor workers and salesmen to the business representatives and the CEO, in other words everyone that can be affected by the cultural differences in a business environment. There are thousands of examples where cultural misunderstandings have killed deals, harmed working relationships, inhibited sales, or increased costs. Managers must be able to succeed everywhere. Understanding culture is part of success. When they become aware of potential cultural differences and realize their implications, they dramatically increase their ability to work with people across the globe.

They will also enhance their competitive advantage by building stronger and sustainable relationships. If they remain unaware of cultural differences, they can jeopardize business relationships and entire projects. Here are real-life examples where cultural differences have an impact on business: o Culture Clash #1: Leslie Whitman meets with Mohammed Said, a client in Kuwait City. After a productive first meeting, Leslie warmly clasps Said's hand with two hands, emphasizing the depth of their mutual goodwill.

For reasons Whitman never understands, Said is never again as cordial. Why not? o Culture Clash #2: Denise Taylor receives an URGENT message on March 1st requesting information be sent to the Amsterdam office by 4/3. She faxes it on March 10, pleased to beat the deadline by three weeks, and is met with a hostile response by her Dutch colleague. He demands that Denise be taken off the project. What happened? o Culture Clash #3: Rod Mackillop spends weeks negotiating with his Japanese client, Yoshio Kushiro.

Finally reaching a common ground, Rod announces to Kushiro that their thinking is parallel. Kushiropromptly thanks Rod for his time and leaves the meeting without further discussion. Why? What do these three situations have in common? In each case, individuals failed to meet their professional objectives because they had an imperfect understanding of another culture. All three cross-cultural misunderstandings could have been avoided.

What Happened? o Culture Clash #1: In Kuwait, and generally throughout the Muslim world, the right hand is sacred and the left hand is profane. By grasping Said with the left hand, Whitman sent an extremely offensive message. o Culture Clash #2: In most of Europe where people write the date as 4/3, they are placing the day first, month second. So the request for information by 4/3 was not for April 3, but for March 4. Denise was not early but six days late. o Culture Clash #3: For Americans, 'parallel' means compatible, on the same track. But to the Japanese, 'parallel' means apart and never to meet, as with two parallel train tracks.

Hence, Kushiro took that to mean negotiations were over. What we really need to consider though is that understanding cultural differences starts with an understanding of our own cultural orientations. As cultural citizens, we are often unaware of how culture forms the basis of our behavior. Our orientations include how we relate to nature, activity, relationships, space, time and language (the way we communicate). To give a few business-related examples, some cultures perceive time as a commodity that is linear and sequential, with value attached to it, and there are other cultures that treat time as a process that's cyclical and simultaneous. Similarly, some cultures are more task / focus -oriented, whereas others are relationship-oriented; some place more emphasis on the individual than on the group (which defines whether a culture is egalitarian / individualistic or hierarchical / collectivistic).

Therefore, "We need to develop awareness of how our own culture influences the way we behave and how others perceive and respond to that behavior". Understanding Cultural Differences Using this process of cultural awareness in our opening example of a business meeting ora sales / product presentation, it is fair to say that in general-and relative to the rest of the world-in the French business culture, formality and logical presentation in a business meeting are imperative to its success. German business culture looks for solidarity of company and product, as well as prompt scheduling, but Italian cultural orientation looks primarily for a tasteful product, flexibility and personality. British business, on the other hand, values politeness, self-control, the quality of product and the sense of humor most highly.

These aren't simple personal differences but rather cultural orientations that have been validated through thorough research. To examine cultural orientations and understand the differences, we should look in depth at each of the countries, their historical experiences, social structures, educational systems and their cultural norms. Generally, our French business counterparts might not respond positively to an informal and casual style of business presentation. Alternatively, German counterparts might be hesitant to accord credibility to late attendees, Italians might tend to assess the presenters according to what taste they exhibit, whether in style of presentation or in dress, and the British would value the understated, reserved presenter who has and is able to exhibit a great sense of humor. All of these different attitudes are equally appropriate responses within their cultural contexts 10.10. (Schneider & Barsoux 1997: 1).

The Challenge of Cultural Success Business cultural success comes with understanding differences and using these orientations positively and considerately. But it is easy to make the mistake of overlooking cultural differences. We tend to look at business objectives and profit, and we minimize the significance of different cultural orientation. One might think that "if x, y, and z want to do business with me, they have to accept my ways". This might seem valid in the world of business, if that world of business was concerned only with business. However, business means more than just "doing business".

It is about building long-term relationships with long-term value and sustained revenues, not just one-off business deals. Successful global businesses invest in people and use cultural differences to create value. These examples show in a clear and concise way how cultural differences and misunderstandings can harm business deals and lead to a communicative havoc even between partners in an international joint venture. However, people are not the only parameter in this case.

Cultural differences may also affect a product's positioning in a specific market. There are numerous examples of products that had a great success in some country markets whereas they failed totally in others. What does this phenomenon actually implies, is analyzed below with some prestigious case studies. In 1980's Ford Motors produced a new vehicle model and launched it under the same name in Europe. In most countries its sales success was great, except for Spain were sales had been dramatically low.

What had happened? Simply, the models' name was meaning "despair" in spanish... something that staff from the marketing department had not taken into account when launching the new vehicle... The second case is that of a pioneer in the field of mobile and wireless Internet solutions, that decided to launch its handheld computing device in Japan, the world's second-largest computer market. Widely popular in the United States, the product-known as a personal digital assistant (PDA) -is an innovative combination of hardware device, operating system and a full suite of personal information management applications. The company was not capturing the full Japanese market potential due to the PDA's English-based interface and design form. Therefore, adapting the product for Japan would involve much more than text translation: both the code and user interface had to be changed to support Japanese characters and, more importantly, the feature set had to be tailored to the preferences of Japanese users.

Cross-cultural training as a solution Given the importance of the problem stated, specialists have tried to cultivate special training programs for those dealing with international business as a means of reducing the size and effectiveness of the so called "cultural shock " Thus, one goal of cross-cultural training programs is to give international assignees skills and strategies that will help them through this process of adjustment. Other purposes for such training include providing factual information about specific cultures, developing skills for cross-cultural negotiation and interaction, and learning about one's own culture and preconceived perceptions of others. Training may also be provided to family members accompanying the expatriate. While the employee has the inherent support and structure of their work, the spouse and children often have greater difficulty in the cultural adjustment process since they may have greater daily contact with the host society. The effectiveness of the cross cultural training programs Academic studies have long held that cross-cultural training affords international sojourners a better chance at succeeding in the host culture. In the case of business assignments, there is usually little question as to the assignee's technical qualifications and skills to satisfy specific job tasks associated with the assignment.

Training, therefore, assumes importance in ameliorating the impact of cultural adjustment on job performance as well as assisting in the adjustment of the assignee's family. Studies done by Black and Mendenhall 11 and Deshpande and Viswesvaran 12 examined many existing studies of cross-cultural training, and its impact upon the effectiveness / success of the expatriate. Each study indicated that cross-cultural training has a positive effect upon the expatriate in terms of success and employee satisfaction factors. Tung also found that more rigorous training lead to a lower failure rate of international assignments. Tung's study found that rigorous selection, where different selection criteria are developed for different types of positions, can lead to a lower failure rate of international assignments as well. Success Factors Several studies identify and / or measure different success factors related to international assignments.

Many of these factors may be positively affected by cross-cultural training. 11. Satish P. Deshpande and Chockalingam Viswesvaran, 'Is Cross-cultural Training of Expatriate Managers Effective: A Meta Analysis,' International Journal of Intercultural Relations 16 (1992): 296.12. Environments,' in Culture, Communication and Conflict: Readings in Intercultural Relations, 2d ed., ed. Gary R. Weaver (Needham Heights, MA: Simon & Schuster Publishing, 1998), 185-186 The following list of success factors can be derived from the above studies: technical competence; relational abilities; family situation; language skill; and host environment (see Figure 1).

The organizational-level attribute is not included in this list, but should be considered in the overall development of training programs for expatriates. Lack of support for training programs will reduce their effectiveness 13. Clear communication and planning between human resource managers and intercultural trainers during the design of programs will ensure that training meets both the individual needs of the expatriate and the organizational priorities of the sponsoring organization. 14 Figure 1. Success Factors Definition Technical Competence Expatriate's technical skill, organizational ability, and belief in the mission of the assignment. Relational Abilities Cultural empathy and ability to adjust to host culture.

Family Situation Family's cultural empathy and ability to adjust to host culture, and their level of support for going on international assignment. Language Skill Speaking and writing ability of expatriate in the host-country language. Host Environment The political, legal, and socioeconomic system of the host country. The first four factors (technical competence, relational abilities, family situation, and language skill) are all related directly to the employee being sent on assignment. The host environment variable will, in part, determine what types of training the employee and their family may require. Therefore, the employee-related variables may be considered in determining what types of training the employee or family could receive to enhance assignment success 15.

Future Directions for Cross-Cultural Training and International Business Assignments The acceptance of cross-cultural training by businesses has made fantastic gains in the last ten years. In this period of heady growth for the training field, it is an opportune time to reassess the status of training, its place in international business, and how it can be improved and better integrated. The implementation of a contingency approach to cross-cultural training will provide a higher level of support to international assignees and their families, which will in turn enhance the effectiveness and success of the assignments to their sponsoring organizations. Companies will also develop a cadre of culturally knowledgeable employees, a necessity for globally-oriented business ventures. Training is generally considered an effective tool to improve the chances of assignment success. Yet, there are areas of study that could be pursued to enhance understanding of why training is effective and on how to best implement it with the international business assignment.

13. Stewart J. Black and Mark Mendenhall, 'Cross-cultural Training Effectiveness: A Review and a Theoretical Framework for Future Research,' Academy of Management Review, No. 1 (1990), 132.14. Deshpande and Viswesvaran, 301.15. Rosalie L. Tung, 'Selection and Training of Personnel for Overseas Assignments,' Columbia Journal of World Business, (Spring 1981), 68-78. Conclusion The global economy has redefined the way corporations do business. While technology has improved the speed of communication, the success of global organizations depends on the skills of individual managers to work effectively with their global partners, colleagues, and team members.

To this end, breaking cultural barriers to build trust, rapport and credibility is a critical leadership skill. A flexible, culturally appropriate behavioral repertoire and an atmosphere of trust, respect and inclusion are essential to successful global performance.

Bibliography

1. Ibid., 1.3. Ibid., 1.4. Ibid., 4.6. Ibid., 4.7. Ibid., 85.9. Ibid., 85.10. 11. Gary R. Weaver (Needham Heights, MA: Simon & Schuster Publishing, 1998), 185-186.