Culture Analysis Since culture differs from country to country, MNCs need to carry out culture analysis to understand

its nuances. Culture analysis involves two divergent themes: y g Culture Universals: There are certain common cultural practices and values across the world. We understand them as we grow and learn about our surroundings e g e.g. Culture Differentials: Most values and practices, however, differ across the world. It is these cultural differentials that complicate decision making for MNCs Differentials involve decision-making MNCs. cross-cultural evaluation e.g. communication style, behaviour, societal traditions.

Culture Analysis Culture Universals: There are certain common cultural practices and values across the world. We understand them as we grow and learn about our surroundings e.g. expressions of love, happiness, sorrow, love happiness sorrow success etc or celebrations of global events like Christmas, New year etc. Universals are characteristics that are used to identify, compare, compare and contrast cultures These are customs and cultures. practices found in every culture. The only difference is that each culture expresses each custom or practice quite differently. Thus, despite being universals, variations may exist even in these cultural symbols.

Culture Analysis
Dimensions of Cultural Universals Basic Needs: All cultures have the basic needs for survival: food, shelter, clothing. Communication & Education: All cultures develop ways to communicate in order to pass on valuable information. Family Structures: All cultures develop a family or kinship organization. organization Belief in the Unknown: Cultures create religions, rituals, and stories to explain life, death and creation Artistic Expression & Leisure: Cultures develop music, dance, rituals and artistic representations it l d ti ti t ti Government: As cultures and tribes get larger, a system of governance is created and monitored. Trade and Economy: Ultimately, as a culture creates abundance of a resource they seek out ways to trade with other cultures for items they need to improve the quality of life.

Culture Analysis Culture Differentials: Most values and practices however practices, however, differ across the world. It is these differentials that complicate decision-making for MNCs. Differentials involve cross-cultural evaluation. Differentials can be evaluated along two evaluation dimensions: Cultural Mix: The extent of homogeneity-heterogeneity (similarity-dissimilarity) (similarity dissimilarity) within a culture It indicates the culture. degree of diversity and differences existing within a culture. Cultural Complexity: The extent of simplicity-complexity within a culture. The amount of background and contextual information that is required to understand a given situation indicates the complexity of a culture. Cultural Mix and Cultural Complexity are interrelated. The more heterogeneous the culture is, the more will be its complexity too.

Cultural Mix Cultural Mix: The extent of similarity dissimilarity within a similarity-dissimilarity culture. Cultural mix is evaluated along a continuum of heterogeneity and homogeneity. Some countries have homogenous cultures while some have heterogeneous heterogeneous. Heterogeneous cultures may involve: Dominant National Culture: Expresses the core values that are shared by a majority of the people in the country Each country. country has its own dominant national values and practices. Subcultures: There could be sub-cultures, regional or minicultures within a country. In homogenous cultures there is little difference in national a d sub cu tu e and sub-culture. In heterogeneous countries like India, ete oge eous cou t es e d a, diversity is high-there is a wide gap between national and regional or sub-cultures, thus making it difficult to analyze and interpret

Cultural Complexity A. Edward Halls High-Context (VS) Low-Context Cultures B. Hofstedes Framework of National Cultures Individualism (VS) Collectivism Power Distance Uncertainty Avoidance Achievement /Masculinity Long Termism Long-Termism C. Deal-Oriented (VS) Relationship Oriented Cultures Deal Oriented Cultures Relationship Oriented Cultures

Halls High-Context (V.S) Low-Context Cultures: High context refers to societies where people have close connections over a long period of time. Many aspects of cultural behavior are not made explicit because most members know what to do and what to think from years of interaction with each other. Low context refers to societies where people tend to have many connections but of shorter duration or for some specific reason. In these societies, cultural behavior and beliefs may need to be spelled out explicitly so that those coming into the cultural environment k h l l i know h to b h how behave. High Context Less verbally explicit communication, less written/formal information More internalized understandings of what is communicated Multiple cross-cutting ties and intersections with others Long term relationships Strong boundaries- who is accepted as member vs outsider Strong boundaries member outsider Decisions and activities focus around personal face-to-face relationships, often around a central person who has authority. Low Context Rule oriented, people play by external rules More knowledge is codified, public, external, and accessible. Sequencing, separation of Sequencing, separation-of time, of space, of activities, of relationships More interpersonal connections of shorter duration Decisions and activities focus on business

High and Low Context

Ways th t Hi h and L C t t Diff W that High d Low Context Differ The Structure of Relationships High Context: Dense, intersecting networks, long term relationships, strong boundaries, relationship more important than task Low Context: Loose, wide networks, shorter term, compartmentalized relationships, task more important than relationship Type of Cultural Knowledge High Context: More knowledge is below the waterline--implicit, covert, patterns that are not fully visible, hard to explain Low Context: More knowledge is above the waterline--explicit, overt, consciously organized and visible

Hofstedes Framework of Values and Cultures Values differ across cultures and so do behaviours behaviours. Low Vs High Power Distance: The extent to which people accept that power is distributed equally (low) or not (high). Individualism Vs Collectivism: The degree to which people prefer to act as individuals rather than in groups. Achievement Vs Nurturing (Masculine or Feminine): Whether people value assertiveness competition success assertiveness, competition, (achievement/masculine) or relationships, welfare, care and concern (nurturing/feminine). Low Vs High Uncertainty Avoidance: Degree to which people prefer structured situations (high) over unstructured situations (low). Long Vs Short Term Orientation: Valuing futuristic approach vs. emphasizing short termed objectives.

Deal Oriented/Relationship Oriented Cultures

Deal/task Oriented Cultures Engineering culture Professional decision-makers Somewhat risk adverse Tend to react to changes Processes d i employees P drive l Tend to lack commitment Based on facts and data

Relationship Oriented Cultures Entrepreneur culture Visionary leadership Risk takers Want to drive changes Employee empowerment E l Strive on organization commitment Based on trust and faith

Cultural Difference between Japanese and American Lifestyles

American A Culture of self expression self-expression
Clear expression of Joy and sorrow Unequivocal expression of Yes/No. Strong self-assertion High on aggression Excellent negotiating skill g g Priority of self-interest, individual

Japanese A Culture of Self restrain C lt f S lf t i

Ambiguous expression of joy and sorrow Equivocal expression of Yes/No. Weak self-assertion Low on aggression Poor negotiating skill Priority of harmony with others, groups

Cultural Differences between Japanese and American Business American Business

Game concept: Business is a game in pursuit of profits under the rules of laws and contracts

Japanese Business
Mutual trust-oriented business: business is based on trusting relationship among people rather than the rules of game Highly precision-oriented and perfectionism-high dependency on human awareness Quality-oriented Mid-to-long term evaluations g Job security and committment

Efficiency-oriented and approximate accuracy Quantity-oriented Short-term performance p evaluation Easy layoffs, dismissals of employees, and selling of businesses

Cultural Differences between Japanese and American Business American Business

Top down management Low mutual dependence between employers and employees l d l Control of business by stockholders and the management Heavy dependence on machinery and technology, vs. Light dependence on human resources Limited loyalty and work ethics

Japanese Business
Heavy dependence on human resources bottom-up management High mutual dependence between employers and employees l d l Joint management of business by Employees and Employees

Heavy dependence on human skills and core competence Strong loyalty and motivation

Cultural Awareness and Business Etiquette Around the World Greetings and Introductions Forms of Address Use of Business Cards Gift Giving and Receiving Meetings and Appointments Timing Appearance Negotiations Decision-making Styles of Communication

Cultural Awareness and Business Etiquette Around the World Appointment times, date, annotation and measurements can vary considerably. A meeting i the U i d S id bl i in h United States can b put at 1 00 be 1:00 O clock, while other countries would clock 13:00. The US requires 08/12/2008 or August 12, 2008 for the 12/8/2008. The q g measurements in U.S. are gallons and meters, while many other countries use liters and feet. This may seem like small details, but it could create confusion and misunderstanding misunderstanding.

Greetings and Introductions Kiss, Bow or Handshake In Germany, US and UK always shake hands, firmly but briefly. In Japan, greet with a limp hand shake. In most of Europe, you must shake hands with everyone in the party upon arriving and leaving--do not simply wave hello or good-bye good bye as in US US. In Italy, Mexico, Latin America and in Spain, women may kiss on both cheeks after knowing you awhile. In the Middle East, men often embrace or kiss on the cheeks but maintain distance with women. Arab men and women do not shake hands with each other. In Asia, a man should usually wait for the woman to act before he extends a hand. In China people mingle slowly hence they maintain distance China, slowly,

Greetings and Introductions

Kiss, Bow or Handshake In the United States, incorporating a kiss on the cheek or hug as a form of greeting usually only happens between good friends, and rarely between two men. In Latin America, you may encounter "the abrazo," a full embrace with pats on the back. You also may be kissed and hugged in Russia. In the United Arab ou a so ay ssed a d ugged uss a. t e U ted ab Emirates, men will kiss other men three to four times on the cheeks. In France, you might see people kissing alternate cheeks (actually, rubbing cheeks and kissing the air). Generally, in Europe, kissing g g ) y, p , g occurs only after the relationship has become somewhat more personal. As the foreigner, it is a safe bet not to initiate the practice but let the other person initiate. The bow is part of the ritual greeting in Japan. The Chinese may nod or use a slight bow. A slight bow also is used in Indonesia, Malaysia, Singapore and South Korea. While handshakes are used in most of these locations, adopting the local custom of making a bow shows respect for the individual and the culture. In Thailand, the wai combines a bow with a sort of salute.

Forms of Address
In Japan or Chi never use fi t names. S I J China first Surnames are preferred. f d The Japanese often use professional titles in the place of actual names, as an acknowledgment of a person's status e.g. Mr CEO. In Germany, M i always use professional titl after M or M I G Mexico, l f i l titles ft Mr. Mrs. An individual with a Ph.D. should be addressed as Doctor Professor in Germany, France and most European countries. "Madame" i a b i titl of courtesy f "M d " is basic title f t for all women, as i ll is "Monsieur" for men in France. The French will sometimes introduce themselves by first saying their surname, followed by first name. Russians h R i have th three names. Th fi t name i a given name, while The first is i hil the last name is the father's name. The middle name is known as a patronymic. Mr or Mrs before last name is best form of address. In US, I US UK or A t li t ki fi t name i OK P l also h Australia, taking first is OK. People l have abridged names like Bill for Williams.

Business Cards In Japan business cards are extremely important. Present your card with both hands. When you receive a business card spend several seconds studying it and do not write on it or put in your pocket in the presence of the giver. Have one side of your business card translated into Chinese in gold i k H ld th card i b th h d when offering it Chi ld ink. Hold the d in both hands h ff i it, Chinese side facing the recipient. In many parts of the Middle East, you should never use your left hand when giving your business card. When in France, have the other side of your business card translated into French. French business cards are often a bit larger than in many other countries. In US or Europe, business cards are professional and have little detail exchanged casually at the beginning Print your business card in English on one side, and in the language of your host on the other.

Art of Gift Giving and Receiving

In France, suggested gifts are books and music, as they demonstrate interest in gg g y intellectual and aesthetic pursuits. Gifts reflect ones taste. Russians take pleasure in giving and receiving costly gifts that symbolize status and they are generally not wrapped. y g y pp In China, it is wise to demonstrate an appreciation of Chinese culture by gifting items such as ink paintings or tea pots. Chinese philosophy stresses harmony and balance, so give in pairs. g p Gift-giving is a central part of Japanese business etiquette. The correct etiquette is to present/receive gifts with both hands. Before accepting a gift it is polite to refuse at least once or twice before accepting. Gifts in pairs are appreciated. In Gulf countries, gifts should only be given to the most intimate of friends. Gifts should be of the highest quality. Always give/receive gifts with the right hand. Saudis enjoy wearing perfumes. In the US and most parts of Europe, gifts are usually not given in formal settings Be particular about the color of gifts-auspicious in different cultures. In some countries like India people open gifts after guest has left but doing so countries, India, left, in certain other cultures may be rude and impolite. Keep the traditions and religious sentiments of people in mind.

Meetings and Appointments

Chronemics/Sense of Timing: The concept of time differs from culture to culture. People attach different meanings to time. Monochronic vs. Polychronic- Monochronic cultures like to do just one thing at a time. They value a certain orderliness and sense of there being an appropriate time and place for everything. They do not value interruptions. Polychronic cultures like to do multiple things at the same time. A manager's office in a polychronic culture typically has an open door, a ringing phone and a meeting all going on at the same time. Polychronic cultures include the French and the Americans. The Germans tend to be monochronic. Implications: Interactions between types can be problematic. German p yp p businessman cannot understand why the person he is meeting is so interruptible by phone calls and people stopping by. Is it meant to insult him? When do they get down to business? Similarly, the American y g y, employee of a German company is disturbed by all the closed doors -- it seems cold and unfriendly.

Meetings and Appointments

Future vs Present vs Past Orientation Past-oriented societies are concerned with traditional values. They tend to be conservative in management and slow to change those things that are tied to past. Past-oriented societies include India, China, Britain, Japan and most spanish-speaking Latin American countries. Present-oriented societies include the rest of the Spanish-speaking Latin American countries. They see the past as passed and the future as uncertain. They prefer short-term benefits. Future-oriented societies have a great deal of optimism about the future. They think they understand it and can shape it through their actions. They view management as a matter of planning, doing and controlling (as opposed to going with the flow, letting things happen). The US, Germany, pp g g , g g pp ) , y, and, increasingly, Brazil, are examples of future-oriented societies.

Meetings and Appointments

Quantity of Time: In some cultures, time i seen as b i a li i d l i is being limited resource which is constantly being used up. In other cultures, time is more plentiful, if not infinite. In old agricultural societies, time was often seen as circular, renewing itself each year. In societies where time is limited, punctuality becomes a virtue. It is insulting to waste someone's time. Time is money. In cultures where time is plentiful, like India or Latin American, there is no problem with making people wait all day, and then tell them to come back the next day. Time-plentiful cultures tend to rely on trust to do business. Time-limited cultures don't have time to develop trust and so create other mechanisms to replace trust (such as rules, laws). Punctuality is expected in Switzerland, the Netherlands, Japan, China and y p , , p , Belgium but you better be fashionably late in Latin America, Brazil. Punctuality is treated casually in France.

Concept of Time

6 5 4 Week ks 3 2 1 0

6 1
New York

2
Geneva

4
So Africa Japan

Meetings and Appointments

Appearance: The French are very conscious of their appearance. One should dress in wellp tailored professional/formal attire. In Japan, men should wear dark conservative business suits. No fashionable pants- Japanese men find it offensive. Women should dress conservatively, minimal accessories and low heels. American or British dressing is more informal. Sweatshirts and T-shirts are popular business dress in Canada, but are a no-no in Australia, China or many countries in South and South East Asia. Casual clothing is considered more formal in Brazil than in th i B il th i other countries. ti In Latin America, Europe and the US, a well-cut, fitted suit together will be appropriate for women. It is also generally expected that women should look groomed, groomed with hair and makeup often an important element of an overall look. look Different colors have different meanings. While, in Russia, red means beautiful, in South Africa red is the color of mourning. In China, red is the color of good , ,g y y ,p p luck. In Greece, Scotland, green symbolizes victory or honor. In Thailand, purple is worn by a widow mourning her husband's death. In Egypt and Burma, yellow signifies mourning. White means mourning in China and Japan.

Negotiations
Negotiation tactics and behaviours also differ from culture to culture. A famous Japanese writer describes United States negotiators as hard to understand. Americans describe Japanese negotiators as finicky. Time orientation Negotiators from polychronic cultures tend to : start and end meetings at flexible times, take breaks when it seems appropriate, pp p , be comfortable with a high flow of information, expect to read each others' thoughts and minds, sometimes overlap talk, view start times as flexible and not take lateness personally. Negotiators from monochronic cultures tend to: prefer prompt beginnings and endings, schedule breaks, h d l b k deal with one agenda item at a time, rely on specific, detailed, and explicit communication, prefer to talk in sequence, sequence view lateness as devaluing or evidence of lack of respect.

Negotiations
Another dimension of time relevant to negotiations is the focus on past past, present, or future. Cultures like Iran, India, and the Far East are categorized by Carbaugh as past-oriented. The United States, he indicates, tends to be oriented to the present and the near-future. Latin America leans toward both p present and past orientations. Indigenous people in North America combine a past- and future-oriented approach to time that stretches seven generations forward and back. Negotiators focused on the present should be mindful that others may see the past or the distant future as part of the present. Negotiators for whom time stretches into the past or the future may need to remember that a present orientation can bring about needed change.

Negotiations
Negotiation tactics and behaviours also differ from culture to culture Timing of stages of negotiations: Some people spend lot of time on non-task activities while some prefer getting straight to the point. Pre-negotiation Pre negotiation In lot of cultures, like Japan, china, India, significant time and energy is spent on preliminary introductions, ice-breaking, getting to know the other party and so on Pre negotiation exchange of greetings etc is common People are not on. Pre-negotiation etc. common. comfortable dealing with a stranger so they spend lot of time asking personal questions and getting familiar. Many a times, the entire outcome of the negotiation process is affected by what happens pre-negotiation. pre negotiation. In America or Europe people come directly to business. No personal questions asked, no elaborate exchange of greetings. Negotiation While in Japan, a lot of time is spent on finalizing a deal, Americans are far quicker. The t l Th styles of negotiation, ti f ti ti time t k and process f ll taken d followed-all diff f d ll differ from culture to culture.

Negotiations
Location of stages Formal vs. informal locations: While some cultures (USA, European) prefer formal locations e.g. office, meeting rooms etc. for a deal, in certain cultures like India it is common to have deals over informal tea, lunch/dinner (sometimes even at home of the host) Number of locations: Americans prefer one or few number of meetings hence number of locations are also one or few. Indians or Japanese spend lot of time on ice breaking etc so multiple meetings at multiple locations are common ice-breaking etc. common. Participants Type of participants: The leader or head may himself prefer to close deals in some cultures, while i some places i may b d l l hil in l it be delegated to representatives. d i Number of participants: Few in western cultures, several in case of India or Japan Influence tactics Aggression: Generally Americans or Europeans are more aggressive than Indians, Japanese or Chinese. Japanese and Chinese are however, considered more shrewd negotiators. Power play: Political pressure, lobbying, canvassing etc for business is common practice in US and is gradually getting common elsewhere too

Decision-Making
Speed of decisions: Quick vs. slow Timing of decisions: polychronic vs. monochronic, past, present or future oriented Time horizon: Long vs short term decisions Info-processing: Objective (data-based) vs. subjective (relationship-based) Risk propensity: High vs low (ambiguity tolerance) Style of decision-making: Rational vs. intuitive y g

Styles of Communication
You can buy in any language, but to sell you have to speak their language Language can be obstacle in business. Just because someone speaks English, one should remember it never is spoken nor understood quite same way as in U.S.A. Verbal communication Language Dialect Accent Choice of words Intonation, it h I t ti pitch, modulation, frequency d l ti f Speed and fluency

Non Verbal Communication

Clothes & bodily characteristics: Elements such as physique, height, weight, hair, skin color, gender, odors, and clothing send nonverbal messages during interaction. Physical environment: Environmental factors such as furniture, architectural style, interior decorating, lighting , colors, temperature, music also convey meanings.

Non Verbal Communication

Proxemics: The study of how people use and perceive the physical space y p p p p y p around them. The space between the sender and the receiver of a message influences the way the message is interpreted. Space may be divided into four categories: intimate, personal, social and public space. The term Proxemics was developed by Edward T. Hall during the 1950s. The term territoriality is used in proxemics to explain human behavior regarding personal space. Space orientations differ across cultures. They have to do with territory, divisions b t di i i between private and public, comfortable personal di t i t d bli f t bl l distance, comfort f t or lack of comfort with physical touch and contact, and expectations about where and how contact will take place. In Northern European countries, personal space is much larger than in Southern European countries For a countries. German or a Swedish person, for example, the Italians or the Greeks get too close. An American etiquette manual advises this about personal space: "When you meet someone, don't stand too close. Likewise seating When don t arrangements for meetings/negotiations should take norms for space into account. In general, Americans tend to talk with people seated opposite them, or at an angle. For the Chinese, these arrangements may lead them to feel alienated and uneasy. They may prefer to converse while sitting side by side.

Non Verbal Communication

Haptics: the study of touch e.g. handshake, holding hands, kissing, slapping , patting. Touching of oneself e.g. licking, holding, and scratching. scratching The meaning conveyed from touch is highly dependent upon the context and relationship between communicators. Certain cultures, including Mediterranean, Arab, and Latin American, are more tactile and allow more touching. Asian, indigenous American, Canadian, and U.S. cultures tend to discourage touching outside of intimate situations. Certain cultures allow cross-gender touching, including the United States, while same-gender touching is less acceptable. These rules g g p change in Japan, where women are frequently seen holding hands, but not men. In the Mediterranean, it is common to see men holding hands or touching in public, but not women. Greeting rituals fit with these patterns, so awareness of local norms is important for negotiators.

Non Verbal Communication

Oculesics: the role of eyes in nonverbal communication. It can indicate interest, attention, and involvement. Gaze is comprised of the actions of looking while talking looking while listening amount of gaze talking, listening, gaze, frequency of glances, fixation, pupil dilation, and blink rate. Space also relates to comfort with eye contact and attributions related to eye contact or lack of eye contact. In United States and Canadian dominant culture settings as well as many Arab cultures, eye contact is taken as a sign of reliability and trustworthiness. In North American indigenous settings, eye contact may be seen as disrespectful and inappropriate. g y y p pp p Similarly, in Asian settings, looking down is usually interpreted as a sign of respect. In Central America, a slight movement of the eyes may indicate embarrassment, showing respect, or disagreement."

Non Verbal Communication

Kinesics: It is the study of body language. It was developed by anthropologist Ray L. Birdwhistell in the 1950s. Kinesic include Facial Expression: F i l expression i l d f F i l E i Facial i includes face movements, smile, t il frown, etc. Posture: The style of sitting, standing, direction of lean, body orientation, arm position, and b d openness. St di i iti d body Studies investigating th i ti ti the impact of t f posture on interpersonal relationships suggest that mirror-image congruent postures, lead to favorable perception of communicators Gesture: A gesture i a b dil movement i t d d t express meaning. G t t is bodily t intended to i They may be articulated with the hands, arms or body, and also include movements of the head, face and eyes. Speech-independent gestures are dependent upon culturally accepted interpretation and have a direct verbal translation e.g. a wave hello or a peace sign. Speech related gestures are used in parallel with verbal speech to emphasize or supplement the message e.g. pointing to an object. Different cultures attach different meanings to Kinesics. That is why Kinesics are most frequently misunderstood