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