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Lecture 24Cultural dimension:
Yesterday, now or later?
Luis San AndresMast-Childs Tribology Professor
Texas A&M University
http://rotorlab.tamu.edu/me489
ME 489 Practices of Modern Engineering
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ChinaA country with a long-long-long history: dynasties and
empires, a peasant revolution and communism, opened to global market in early 1980s’
Chinese firsts: block printing, gun powder & rocketry, compass and watches, etc. Until 18th century more advanced technologically than the West. China did not have an industrial revolution.
For centuries Chinese culture (way of thinking) has influenced greatly the Far East (Japan, Korea, Taiwan, Hong-Kong, Singapore, etc).
What way of thinking?
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A little about China’s economic growth2009 GDP US 14 Trillion, China: 4.91 Trillion
China overtook Britain and France in 2005 and Germany in 2007. In 2009, China surpassed Germany to become the world’s largest exporter. In 2nd quarter 2010, China surpassed Japan as the world’s second largest economy.
Growth averaged over 10 % for the last 30 years.
The per capita GDP in China is $3.6k in 2009, one 14th of the $46.k per person output in the US. Hard currency reserves 2 Trillion
China will surpass the US becoming the world’s largest economy in 2027. China will be twice as large as the US economy in 2050
http://factsanddetails.com/china.php?itemid=376&catid=9&subcatid=58#04
Source: The Economist
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A little about China’s economic growthSources: The EconomistThe World Bank
Gross National Income in PPP dollars
China has a GDP growth rate of ~10% since 1992
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A little more about the BRICs’Sources: The EconomistThe World Bank
Gross National Income per capita in PPP dollars
Note growth of S. Korea!
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China Report Card2011 GDP US 14 Trillion, China: 9.8 Trillion
Growth remains at 10 %
Average wages GDP $7.4 k (up from $ 5k in 2006).
Largest exporter of goods at ~$1.5 trillion dollars worth of goods and services with ~20% going to the USA
Why the fastest growth on earth?
Low manufacturing
costs + influx of capital + huge
internal market(1.5 billion) + technology
The Economist
Trade balanceUSA: -605 $Bn (Jul 2010) (3.0% GDP Q2)China: +179 $Bn (Aug 2010) (10.3% GDP)
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China economy generates jobs elsewhere
China does not only EXPORT stuff!
It also imports technology and services.
The US has a + trade in services (know how)
Source: The Economist
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Cultural dimensions
Cultures and Organizations: Software of the MindBy Geert Hofstede and Gert Jan Hofstede
1.Power Distance2.Individualism / Collectivism3.Masculine / Feminine4.Uncertainty Avoidance
More equal than others
I, We, They
He, She, (S)he
What is different is dangerous
A 5th dimension appears from a Chinese Values Survey. (Uncertainty Avoidance has no equivalent in CVS)
Explains differences
In thinking b/w East and West
9Cultures and Organizations: Software of the MindBy Geert Hofstede and Gert Jan Hofstede
Pragmatic rules for daily life
Teachings of Confucius
1. Society stability is based on unequal relationships between people
2. Family is prototype of all social organizations3. Virtuous behavior: do no treat others as one would not
like to be treated oneself4. Virtue derives from education, hard working, not
spending more than needed, being patient and persevering
Confucius, C. philosopher (~500 B.C.)
10Cultures and Organizations: Software of the MindBy Geert Hofstede and Gert Jan Hofstede
Teachings of Confucius
1.Society stability is based on unequal relationships between people
Must accept differences in status
Basic relationshipsfather-son, brother-younger brother, husband-wife,senior friend-junior friend
Mutual & complimentary obligationsRespect and obedience
Protection and consideration
11Cultures and Organizations: Software of the MindBy Geert Hofstede and Gert Jan Hofstede
Teachings of Confucius
2. Family is prototype of all social organizations
A person is NOT an individual, he/she is a member of a family.
HARMONY is found when everyone maintains face in the sense of dignity, self-respect and prestige.
Losing dignity (face) is like losing a nose, etc.
12Cultures and Organizations: Software of the MindBy Geert Hofstede and Gert Jan Hofstede
Teachings of Confucius
3. Virtuous behavior: do no treat others as one would not like to be treated oneself.Keep one’s place, respect authority.
The Golden rule in Western Values: Treat others as one would like to be treated
4. Virtue derives from education, hard working, not spending more than needed, being patient and persevering.Everything must be done in moderation
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Long Term Orientation (LTO)
Cultures and Organizations: Software of the MindBy Geert Hofstede and Gert Jan Hofstede
The fostering of virtues oriented towards future rewards – in particular perseverance and thrift.
The opposite pole (Short TO) fosters virtues related to the past and present, in particular respect for tradition, preservation of face, and fulfilling social obligations
14Cultures and Organizations: Software of the MindBy Geert Hofstede and Gert Jan Hofstede
http://www.clearlycultural.com/geert-hofstede-cultural-dimensions
Long Term Orientation
Map
15Cultures and Organizations: Software of the MindBy Geert Hofstede and Gert Jan Hofstede
39 countriesCountry SCORE RANK
Past & present,
Futurerewards
Country SCORE RANK
Most Asian countries
have high LTO scores
Long Term Orientation (LTO)
16Cultures and Organizations: Software of the MindBy Geert Hofstede and Gert Jan Hofstede
Explains the difference in thinking between the East and West
Long term orientation- persistence- ordering relationships by status and observing this order- thrift- having a sense of shame
Short term orientation- personal steadiness and stability- protecting your ‘face’- respect for tradition- reciprocation of greetings, favors, and gifts
Long Term Orientation (LTO)
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Key Differences
LTOGeneral norm
Cultures and Organizations: Software of the MindBy Geert Hofstede and Gert Jan Hofstede
Short-Term O Long-Term O
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Key Differences
LTOFamily
Cultures and Organizations: Software of the MindBy Geert Hofstede and Gert Jan Hofstede
Short-Term O Long-Term O
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Key Differences
LTO
School
Cultures and Organizations: Software of the MindBy Geert Hofstede and Gert Jan Hofstede
Short-Term O Long-Term O
Remember “Tiger
Mom” & US STORM
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Key Differences
LTOBusiness &Economics
Cultures and Organizations: Software of the MindBy Geert Hofstede and Gert Jan Hofstede
Short-Term O Long-Term O
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Key Differences
LTO
Religion&
Way of Thinking
Cultures and Organizations: Software of the MindBy Geert Hofstede and Gert Jan Hofstede
Short-Term O Long-Term O
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Cultures and Organizations: Software of the MindBy Geert Hofstede and Gert Jan Hofstede
LTO
GN
P/ca
pita
Short-term Long term
Long Term Orientation vs GNP growth
GrowthRATE
Note the emergence of
East AsianCountries(S Korea,
Taiwan, Singapore,
Japan)
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Understanding ChinaGuanxi Ability to forge solid relationships for mutual benefit and
understanding = BLOOD IS THICKER THAN WATERBenefits & obligations extend beyond the realm of contracts and business.
Guanxi links family sphere to the business sphere. In high LTO societies, having one’s personal network of acquaintances is essential for success. One’s capital of guanxi lasts a lifetime, and would not want to damage it for short-term bottom-line reasons.
Cultures and Organizations: Software of the MindBy Geert Hofstede and Gert Jan Hofstede
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Guanxi
IOUIOU
IOUIOU
IOU
One owes personal
favorsGuanxi costs
time and money!
IOU
This rain is too heavy!
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GuanxiInvitations
wedding
birthday
New Yeargraduation
$$$$$$$$
See, my pockets are empty!
• Gift giving• Mutual help• Comes with
expectations& obligations
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Guanxi example
Singapore, Straits Times, October 20, 2009
guanxi!
(See Corruptions Perceptions Index)
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Better Guanxi meansA higher chance to a)Be hired for a job;b)To get a job promotion;c)To get admission into a good school (primary, etc);d)Avoid nuisances like parking tickets, traffic
violations, etc;e)Same day construction permits, etc;f) A good bed in a hospital; g)Fast track business and endorsements
You owe more and more favors, and others OU2!
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Saving face meansFace saving (or saving face) = maintaining
a good self image (keep reputation and the respect of others)
People who are involved in a conflict and secretly know they are wrong will often not admit that they are wrong because they don’t want to admit they made a mistake. They therefore continue the conflict, just to avoid the embarrassment of looking bad.
http://www.colorado.edu/conflict/peace/treatment/facesavr.htm
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China in 2009
A worry!
Source: The Economist, June 2009 http://www.economist.com/node/18829149
2011 GDP 9.8 Trillion
Growth keeps at 10 %GDP/person $7.4 k
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Energy consumption: the polluters
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The forecasts
Looking towards the 2020s, falling into a “middle-income trap”: losing competitiveness in labor-intensive industries but failing to gain new sources of growth from innovation
A worry!
Source: The Economist, June 2009 http://www.economist.com/node/18829149
for the Chinese!
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A6: The Road to China
The Road to China (May 2006)The outsourcing option isn't as cheap or as easy as it looks.
http://memagazine.asme.org/Articles/
Building Trust (January 2008)The essentials of doing business with China can be developed only over the long haul.
Read all articles & sources, select one and write a group essay (500 words min.) DUE ON December 1
The Economist DebatesDoes China offers a better development model than the West? http://www.economist.com/debate/days/view/553
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A6: Questions to ponderBuilding Trust (January 2008)The essentials of doing business with-and in-China can be developed only over the long haul.
Update some of the statistics & knowledge given in 2008 article
How do Chinese “see” intellectual property? Is this a cultural or an ethical issue?How can a company protect its IP when doing business in China?
Is the description of guanxiwang accurate? How different is from the West business practices and culture?
Is the description of Chinese working women sexist?
How can we help ourselves (Westerners) to build trust with China?
Do Westerners “understand” China (culture)?
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A6: Questions to ponder
What is known as the “Beijing Consensus”? What is the China Model?
Why during the last recession China kept growing while the Western world nearly collapsed?
Why is the West so concerned about the rise of China economic power?
Explain what one debater states as “China is shrinking the idea of the West”
Can economic growth last without freedom?
The Economist DebatesDoes China offers a better development model than the West? http://www.economist.com/debate/days/view/553
READ also the comments from the floor
August 4, 2010
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A6: Questions to ponder
The Road to China (May 2006)The outsourcing option isn't as cheap or as easy as it looks.Update some of the statistics given in the 2006 article
Why do local Chinese companies can compete globally? Is it fair or not?
What are the hidden costs of doing business with China?
What is an inflexible supply chain?
How can the USA benefit from China’s weaknesses described in article?
As of 2011, has trade with Mexico improved? Is the long supply chain still an issue? Source: An update from South of the Border
http://money.cnn.com/2009/11/03/news/international/US_dumps_china_for_mexico/?post
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Other Resources
The WORLD FACTBOOK: World CIA report on CHINAhttps://www.cia.gov/library/publications/the-world-factbook/geos/ch.html
Country factshttp://factsanddetails.com/china.php
Rising power, anxious state:China could be the largest economy by 2020!http://www.economist.com/node/18829149
Friend or foe? A special report on China’s place in the world, Dec 4, 2010:http://www.economist.com/countries/China
National Public Radio (June 22, 2011)
China’s business boom, but its brands don’thttp://www.npr.org/2011/06/22/137320938/chinas-businesses-boom-but-its-brands-dont
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The decline of Western science & technology?
GERD: % of GDP on R&D # technical papers
Asian countries (S Korea and China) are becoming not just more productive but also developing more technology.
Source: The Economist2011 GDP US 14 Trillion, China: 9.8 Trillion
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Inventive leaders in the world
China has no respect for IP! a commonly reported misconception?
Yet in 2011 China will have more patents than Japan!
Is China becoming an INNOVATION tank?
Shall we worry?
Learn more at http://www.top100innovators.com
Source: The Economist
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Corruption in the world 2010 CPI
http://www.transparency.org
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Corruption in the world
Nov 2011
http://www.transparency.org
2010 CPI
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Corruption in the world
Nov 2011
Least corrupt
Never bribery
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Income & the rich
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Practices of Modern
Engineering © Luis San AndresTexas A&M University2011
http://rotorlab.tamu.edu/me489