Diversity is an Asset: How Tightness/Looseness of Culture Impacts Innovation

Do you feel more creative when you are given rules to follow or no rules at all?

Does freedom inspire or limit you?

Today, we’ll delve into a study regarding the degree of tightness and looseness in cultures and how that impacts innovation.

But first, let’s identify what tightness/looseness in culture means.

Defining Tightness/Looseness

As you may have guessed, the “tightness” or “looseness” of a culture is related to its hierarchical structures and social norms.

Witkin and Berry define it as the

“degree of hierarchical structure among sociocultural elements in a society”

While Gelfand, Nishii, & Raver define it as

“the strength of social norms and degree of sanctioning within societies.”

In other words, loose cultures allow flexible and informal social norms, while tight cultures maintain order, coordination, and control. 

Why is Impact Innovation?

For decades, scholars in management and economics have examined the connections between innovativeness and economic performance, often concentrating on conventional “hard factors” such as research and development investments or educational initiatives. 

However, in an era of globalization where cultural dynamics play an increasingly crucial role, the impact of cultural characteristics on innovativeness has been relatively overlooked. 

In this study, researchers employ various econometric models to examine the associations between cultural tightness and looseness and national innovativeness.

The Study

In line with the theoretical framework, researchers used the Global Innovation Index and the rank cultural tightness–looseness combination index.

They identified a significant positive association between cultural looseness, as measured by the Global Innovation Index (Uz (2015a)), and national innovativeness. 

However, this correlation did not hold when using data provided by Gelfand et al. (2011a). 

Researchers concluded that the higher number of surveyed countries, larger sample sizes, and a focus on specific tolerance in Uz’s (2015a) study provide a more comprehensive and accurate representation of cultural tightness-looseness, enhancing the reliability of estimation models.

Diversity is an Asset

The study’s interpretation of the results reveals a significant positive connection between innovativeness and cultural looseness when tightness-looseness is measured as a spread of norms. 

This suggests that societal pluralism and diversity of opinions contribute to innovativeness. 

However, cultural looseness does not equate to high individual tolerance in general; rather, it signifies the endurance of varying degrees of specific tolerance of controversial issues within an open society.

These findings align with studies at different levels, indicating that diversity, when managed constructively, serves as an asset for innovativeness rather than an obstacle. 

This study emphasizes the importance of balancing diversity with participatory safety to enhance team identity and foster creativity. 

The cultural values of a society, as reflected in its approach to innovation, play a crucial role in shaping its economic and creative landscape. 

Recognizing the paradoxical nature of cultural looseness—simultaneously allowing individual freedom and embracing culture-specific norms—can provide valuable insights into fostering societal innovativeness.

The Colonial Superiority Complex: Why Adapting to Another Culture is a Struggle for The West

Do you easily adapt to another culture? Do you find value in another’s values and seek to understand norms and behaviors?

For Westerners, in particular, this step in cultural integration is difficult.

And its difficulty has its roots in history.

The Colonial Superiority Complex

Samuel P. Huntington, American political scientist and former director of Harvard’s Center for International Affairs, considers two opposing civilizations as particularly dangerous: the Muslim world and Western civilization.

Why did he consider these two civilizations to be dangerous?

1) Their “superiority complex” in relation to other cultures

2) Their willingness to enforce their values and norms on others

In this case, we’re defining “civilization” as a group of cultures that share history and values.

In his groundbreaking book, The Clash of Civilization, he writes, 

“It is my hypothesis that the fundamental source of conflict in this new world will not be primarily ideological or primarily economic. The great divisions among humankind and the dominating source of conflict will be cultural. […] The clash of civilizations will dominate global politics. The fault lines between civilizations will be the battle lines of the future.” 

Published in the nineties, a number of Huntington’s predictions unfolded in reality. These two civilizations did indeed come to a head in many conflicts along the “fault lines” and continue to today.

Both Muslim civilization and Western civilization have a history of invading other cultures and universally imposing their rule of law and way of life through violence.

While all civilizations enter into war for access to resources, some in history have notably allowed the local culture to remain without much or any interference.

Others, however, attempt to convert cultures to their own way of life, often buoyed by religion.

Consider this: if your belonging to a civilization is based on race (for instance, Chinese or Slavic civilizations), the culture cannot expand.

However, if belonging is built on behavior, values, and norms, then yes, conquered people can adapt to the lifestyle.

European Colonialism in Africa

A vivid illustration of this lies in Africa.

20th century European colonialism exploited the continent both economically and culturally.

Schools, universities, and churches were built, so Western values and norms could be exported.

The political leaders in the West at that time viewed their culture as superior, so imposing it on others came with the territory.

However, as failed attempts at implementing working democracies in North Africa have shown, an external force imposing culture in this fashion does not work and instead results in civil war and failed states (e.g. Libya, Syria).

Although that’s not to say democracy will never work in other countries, a shift from ethnic culture to national culture is required, and such a shift in mentality takes willingness and time.

The West didn’t allow either.

China in Africa

On the other hand, there’s China.

Without anyone noticing, China has become Africa’s biggest trading partner, with more than $200 billion in annual goods exchanged.

During the first decade of the 21st century, a million Chinese expats have moved to Africa, largely as traders and laborers.

But the Chinese approach is different than Western colonialism. No attempts have been made by China to promote their culture on the continent.

There are no Chinese missionaries, think tanks, schools, or cultural centers. China is there purely for economic benefit; not to globally expand their culture and civilization.

African culture and political systems are left untouched by their largest trading partner.

This is the difference in approach. And this historical difference is why those from Western cultures find learning and adapting to another culture to be difficult.

Next week, we’ll talk about how to overcome that.

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.

10 Cultural Universals: Economy

When the economist, Adam Smith, wrote in his 1776 book, Wealth of the Nations, that each of us contributes to a self-regulating system by pursuing our own personal interests, his idea of “personal interests” was not exclusively financial or material.

He understood that cultural values were involved in economics.  

German social scientist, Max Weber, defined this more clearly during the early 20th century. He examined how certain cultural values influenced economic output.

One example he gave was the Protestant culture.

Reformation teachings in the religion called for congregants to gain wealth, and in doing so, the Protestant work ethic and teachings produced a stronger economy than did, for instance, the Catholic counterpart.

At that point in time, Ireland, Italy, Portugal, and Spain – all Catholic countries – had weaker economies than Great Britain and Germany – countries with a larger Protestant population.

Culture Impacts Economy

The plain fact is some economies fail while others succeed. And the success or failure of an economy is largely dependent on culture.

For any given culture to prosper, economists look at a checklist of necessities for economic development. These include:

  • Good governance
  • Stable political system
  • Straightforward laws, enforced honorably
  • Efficient and uncorrupt government officials
  • Available land for businesses
  • Less bureaucracy when it comes to applying for business permits
  • Foreign investment

For an economy to develop fruitfully, these requirements must be fulfilled.

Values, Tastes & Desires

As Francis X. Hezel, SJ, writes in his article, “The Role of Culture in Economic Development”:

“Modern technology alone will never be able to turn around an economy and to boost the standard of living among a population. The development of a mindset, with accompanying values and habits, is a big part of the equation.”

The study of cultural economics examines all this.

Cultural economics differs from traditional economics in the examination of how and why individuals make decisions.

Traditional economics sees decision-making as producing explicit and implicit consequences.

Cultural economics sees decision-making as something arrived at through trajectories involving regularities accrued over the years that direct the individual in decision-making.

Our tastes, our desires are informed by our culture. This begins during primary socialization and continues to be enhanced by the environment we grow in. We internalize these tastes and desires and they inform our future wants.

Individuals and societies have culture-driven wants, needs, desires, and values, all of which drive the economy and the culture, thereby producing economic evolution – or stagnation.

Learn more about the 10 Cultural Universals.