Does Individualism Drive Economic Development?

It’s the age-old question: do individualist cultures see more economic success than collectivist cultures (e.g. capitalism vs. socialism)?

We’ve mentioned how individualism vs. collectivism is one of the most important (if not the most important) of Hofstede’s cultural dimensions. The degree to which a culture lies along this scale can determine much of the culture’s values and norms.

The West (the US and European countries, in particular) believes that economic development is fueled by individualism.

Is that the case?

The “Spirit of Capitalism”

Adam Smith, the author of The Wealth of Nations (considered “the Bible of capitalism”), wrote that the economic model of the West is rooted in the individual’s aspirations and initiative to earn money, build his career, and elevate his social standing.

He writes:

“The real tragedy of the poor is the poverty of their aspirations. It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. Man is an animal that makes bargains: no other animal does this – no dog exchanges bones with another.”

And he wasn’t the only economist to believe so. Economist Max Weber coined the phrase the “spirit of capitalism,” which embodied the entrepreneurial spirit of the West, the desire to climb the social ladder and build a career, all of which was once believed by some to be the sole method of driving economic success.

However, as we discussed in a previous post, Japan disproved this theory by demonstrating that a collectivist culture, with its own values and norms, can boom economically as well.

Apart from the “Japanese Miracle,” business models like Kaizen’s steps to improvement and the quality circle provide positive outcomes and follow collectivist values.

The Lexus

An example of collectivist culture contributing to economic success:

I was invited to a presentation of the Lexus, a luxury Japanese car brand. The production process involved a unique manufacturing method put in place to guarantee top quality.

The car bodies were mounted in a large hall and transported along an assembly line of steps, in which each worker had his/her own task, like welding or screwing parts to the vehicle. A string hung from the ceiling at each step, allowing workers to stop the entire assembly line production if necessary.

Of course, pulling that string costs the company a fortune. But not doing so, if there is a quality issue, could cost them even more…and might even ding their reputation if left unchecked.

So, despite the costliness of pulling that string, when an assembly worker makes that decision, he’s greeted with cheers.

Why?

Because he took a bullet for the team, stepped up and disrupted the workflow, hopefully with reason. Nevertheless, the worker isn’t punished for putting quality over cost, which is why Lexus has a reputation for reliability.

In this way and many more, Japan has demonstrated that an individualist culture is not required for economic development. Both collectivist and individualist cultures have their strengths.

Next week, we’ll talk about the driving factor behind economic success in either type of culture.

Understanding Cultural Values: With What “Group” Does Your Culture Identify?

Some cultures most identify with their nationality. Others their church. And still others, their family, tribe, or even workplace.

We’ve discussed collectivism in this blog and the mentality of society over self or group over individual.

But of what “group” are we speaking?

In order to better understand the values and norms of a culture, identifying the group with which a culture most closely identifies is essential.

Let’s take a look at some examples.

Who is Your Group?

  • The Irish culture strongly identifies with religion, the Roman Catholic Church.
  • The former Eastern Bloc identifies with Slavic ideals and the party.
  • The French identify with their country, which they call “la grand nation.”
  • The Japanese identify with their company and workplace.

While these are all generalizations (after all, not everyone falls in line with societal values and norms), these broad strokes do highlight the roots of the cultural baobab.

Group identity is flexible. And this is not to say that other groups in said societies are not important.

Family, after all, is important in nearly every culture, and there are other in-groups – like subcultures and company cultures – to which individuals of any society might feel strong ties.

But when trying to understand a culture as a whole and what makes that culture tick, identifying the group that most often defines or impacts the mechanics of society as a whole is essential.

Collectivist vs. Individualist

Group identity, social responsibility, and interdependence are values emphasized in collectivist cultures.

Individuality, self-fulfillment, and independence are those emphasized in individualist cultures.

One wants to fit in.

The other strives to stand out.

One sees conformity as negative.

The other sees singularity as deviant.

As one of Hofstede’s Cultural Dimensions, the scale between collectivist and individualist cultures is just that – a scale. No culture is at the polar extreme, one way or the other.

There are elements of collectivism and individualism in every culture.

And sometimes, these elements are surprising.

We’ll talk about that more next week.

Differences in Values & Norms Between Multi-generational vs. Two-generational Family Structures

The values and norms of traditional societies versus modern ones are vastly different.

As we’ve previously discussed, while it’s unlikely that a business will ever directly negotiate a contract or deal with a remote population, the knowledge that these fundamentally different values and norms exist is important.

Because if there’s one thing I want you to take away from this blog, it’s this: there’s no “correct” or “superior” way of living; there are only different ways.

Just like your own values and norms, others’ serve a purpose. They may serve either a deep ideological purpose or a more practical one, but purpose is there.

Consider the Purpose

As mentioned in a past post, the Western culture’s idea of family structures is evolving; the modern patchwork family is becoming a norm.

Renowned anthropologist, Marvin Harris, wrote:

“In view of the frequent occurrence of modern domestic groups that do not consist of, or contain, an exclusive pair-bonded father and mother, I cannot see why anyone should insist that our ancestors were reared in monogamous nuclear families and that pair-bonding is more natural than other arrangements.”

Opening up our generalized concept of “normal” family structures can help us more thoroughly understand other cultures.

Consider the purpose that creates the values and norms surrounding these structures and what this purpose might indicate about the broader culture.

Two-Generational vs. Extended

Anthropologists identify differences between two-generation families and extended-generation families.

In the West, when politicians spout slogans in defense of “family values,” the family in question is one of two generations.

That is the nuclear family – the mother and father and their children – as well as divorced families, patchwork families, one-parent families, and unmarried parents. Despite the latter’s complexity, they’re also two-generation families.

However, in other cultures, values and norms centered around extended families – or those of at least three generations – are more common.

Extended families include grandparents on both sides, aunts, uncles, cousins, nieces, nephews, and any other kin of the husband and wife.

This valuation of extended families is more prevalent in the world than the Western concept of two-generational families.

Societies that value extended families are typically built on collectivist values, while those that value two-generational families are built on individualist values.

Extended family societies ensure broader social cohesion, communities that are interconnected in order to ensure survival, and the value of personally caring for the aging population.

We’ll talk more about the link between how societies define “family” and the cultural values that determine that definition later in this blog.

But for now, know that more often than not:

  • Two-generational societies = individualism
  • Multi-generational societies = collectivism

As you move forward in reading the blog over the next few weeks, consider what purpose your own values and norms serve. Consider how they might be viewed from the outside, looking in. Only then will you be able to look at other cultures through their own cultural lens.

Social Power Structures & Business Culture: Where are You in the Pecking Order?

Can you question authority in your company? Are you allowed to talk to your boss…look at him/her directly? If you’re on the low end of the pecking order, is your voice heard?

If you answered ‘yes’ to these questions, you’re probably working in a Western company culture.

If you answered ‘no,’ you’re probably in the East.

We’ve been talking about the differences between individualist cultures and collectivist cultures for the past two weeks. Now, let’s take a peek at what happens in a business, East vs. West.

Social Power Structures

Social power structures are one of the most obvious contrasts between the East and the West.

The East centers around a hierarchical structure. Think of it as a building with no stairs. Only floors. Those in a higher position of power socialize at the top level, and those in a lower position of power socialize at the bottom. There is no crossing between the floors. There are social barriers. And, in fact, one might lose face if they mingled with a lower class.

The West, on the other hand, has an egalitarian structure. There are stairs and elevators in the building, and everyone from CEOs to janitors is welcome to cross between. Conversation is much looser and less formal. Inclusiveness is important. And you could argue that those who are able to talk to everyone on their level with grace, treating all with dignity and respect, would gain face doing so.

Social power structures are deeply ingrained in a culture. In the West, the homeless may be invisible to most, but they have a voice to others. In the East, they are invisible and voiceless to all.

Innovation & Business Culture

Ambition and initiative are also Western values which, if imitated in the East, would not go over so well.

For instance, say you’re a newbie at a company. You’ve got a brilliant new idea that will speed productivity sevenfold. You present it to upper management, without prompt, during a morning meeting.

Would you a) be rewarded, or b) be shunned?

In Western companies, this free-thinking initiative would be viewed positively. Ambition is, more often than not, a valued trait in the West.

In Eastern companies, a newbie trying to crack through the hierarchy would be seen as disobedient and, perhaps, a bit dangerous to upper management. This is due to the top-heavy concentration of power. Those in the lower ranks who try to “prove” themselves are putting a toe out of line, breaking the harmony. And they’d lose face because of it.

Cross-Cultural Environment

If you intend to work in a cross-cultural environment, knowing the values of the culture in which you’ll be working – especially the social power structures and business culture – will improve your chances of success.

Knowing these intricacies of culture will help you not to lose face before you even gain one.

What Makes a ‘Face’: Losing Face, East vs. West

When you hear the term “losing face,” more often than not, you associate it with Eastern cultures. But people of every culture have “face” that they can either lose or save.

Basically, “face” is pride, esteem, and reputation, which is interpreted and determined in different ways, depending on the culture in which you live. Face is, in short, the idea that you must behave or achieve in a certain manner to preserve your image. What makes up your “face” and how to “save” it depends on what your culture values.

Face: East

Tradition is greatly emphasized in Eastern cultures, and face can be had by birth (i.e. if you were born into a family of status or wealth).

Last week, we talked about how collectivist societies tend to value group harmony over individualism. Personal ambition or success is much less important than improving the whole.

This prevents individualist characteristics from being fostered from youth. For instance, I’ve been told by Chinese students that they receive lower marks or fails on essays or exams if they contradict the teacher’s opinion or the culturally accepted sentiment on any given topic, no matter how well argued. For this reason and for similar standards set during primary socialization, you find fewer who will “rock the boat,” so to speak, in collectivist countries than you might in their capitalist counterparts.

Individualism is considered much more radical in places like China. It is not embraced, and those who are unconventional and break the mold are thought to be aggressive. Due to the fact that harmony is of the utmost importance to collectivist cultures, anyone considered disharmonious would lose face under this set of cultural values.

Face: West

Western cultural values lie in individualism and independence. They’re also geared toward innovation and so embrace change more readily over tradition.

And in the West, you must earn your face. It isn’t given to you. Even if you’re born into a wealthy family or a family of status, more often than not, you must prove yourself to establish a face.

To make your face, you must make yourself. And to do so in an individualist culture, you must stand out from the crowd. You can do this through professional/personal success or achievement, status, wealth, etc. And once you obtain a certain level of recognition, whether in your town or nationwide, whether in your company or your industry, you must reassert your voice regularly to maintain face.

What can make a Western person of stature lose face?

Disgrace can. Disgrace paramount to much of what is going on in America right now, with sexual assault and harassment scandals knocking down titans of entertainment, politics, and industry. This is just one of the things that can make a Westerner lose face.

Can Face Be Restored?

Face can be restored only through drastic measures in collectivist cultures. In the East, once one’s reputation has been damaged, it’s nearly impossible to recover. As put by sociologist Marcel Mauss, in such cultures, “to lose one’s face is to lose one’s spirit.” It’s better to avoid such face-destroying conflict, altogether.

In Western cultures, if face is lost, it can be more readily restored. In fact, many cheer comebacks, and the restoration of a good reputation might even be considered inspirational by some.

Whether face is restored or not, the loss of it cuts deep in any culture.

Next week, we’ll continue contrasting Eastern and the Western values by discussing the differences in social power structures and business culture. Stay tuned.

How Cultural Values Inform Communication

You are an individualist. Your goal in life is to succeed on your own. To seek out your fortune, using your own talents, your own mind. Individual achievement is paramount to your self-actualization and identity. You believe you have your own voice. You use it. You speak out, directly and without hesitation.

You are a collectivist. Your goal in life is to succeed as a group. To seek out the fair share for all, utilizing everyone’s talents, with a group mindset. Collective achievement is paramount to the group’s well-being. You believe in group think. You speak when expected to, indirectly and with caution.

There are outliers in any culture but, in general, these are the differences between Eastern and Western communication. And it all comes back to the values that inform our behaviors.

What Drives Western Cultures?

“If freedom of speech is taken away, then dumb and silent we may be led, like sheep to the slaughter.” – George Washington

Capitalism and freedom are often the driving factors behind Western cultures. Democracy, free speech, individualism – these values inform the West’s cultural behaviors.

Western communication is direct, clear, and concrete. There’s nothing ambiguous about it; no beating around the bush or mincing of words. The meaning of speech isn’t often lost in a sea of vague undertones or unspoken “understandings.” Nothing is implied or inferred when it comes to business communication. Both parties are taken at their word.

To put it simply, the cards are on the table.

What Drives Eastern Cultures?

“If what one has to say is not better than silence, then one should keep silent.” – Confucius

Collectivism (and in some cases, communism) and harmony are often the driving factors behind Eastern cultures. These values inform the East’s cultural behaviors.

There’s a don’t-rock-the-boat mentality in some Eastern cultures. So, when it comes to communication, they find the straight-shooting of Western cultures ill-mannered.

Nonverbal and indirect communication is favored by many Eastern societies. This is because the group’s entire harmony, as opposed to individualism, is valued.

But this harmony may only play out in words, not necessarily in actions.

For instance, in Chinese culture, a colleague may tell you he’ll have his work in by a certain deadline, but then fail to do so. He may not even have intended to meet this deadline when he claimed he would.

While this might seem to Westerners a form of deceit, it’s more often done to maintain a surface level of harmony than to lie. Others in the culture would understand that their colleagues’ actions wouldn’t necessarily align with their words. This is accepted.

The fact is, the culture knows itself. A direct “no, I can’t get you that by deadline” upsets the balance – an unharmonious response that would make one “lose face.” And so, whether the colleague will keep his word isn’t the issue; the surface harmony is. Therefore, inconsistency is anticipated and accepted by all, so that the relationship may be preserved.

East vs. West Communication

If communication was a body of water, then the Eastern sea would be a glassy surface with plenty of disturbances below, whereas thousands, millions of raindrops would make their mark on the surface of the Western sea, with some waves, and even maybe a hurricane or two.

Either way, when the two seas meet, both sides can be frustrated with the differences in communication styles. Some may even “lose face,” which we’ll talk about next week.