“Fair and Generous” Missteps in Cross-Cultural Business: A Case Study

An American company was looking to build an assembly plant in Eastern Europe.

In an attempt to be “fair and generous,” the company decided not to pay the average living wage of the area, which was much lower than the average living wage in America; rather, they offered to pay new laborers four times that average.

Sounds pretty generous, right?

Well, what they didn’t consider is the disharmony this would sow in the community.

The new lucrative jobs tore the town’s social fabric apart. Folks were anxious about which families would benefit. Things got cutthroat.

The company was now in a precarious position. What should they do in this situation?

Identify the Culture’s Values

With relationship-based cultures, the family unit is often the most important unit in society. Unlike in rule-based cultures, which are often individualist, the family is more important than the individual. In fact, the two are one.

Many in relationship-based cultures support the family financially. Not just parents taking care of their children, but sons taking care of their parents, older brothers and sisters financially responsible for their younger siblings.

In hearing of such a lucrative wage for labor, who wouldn’t jump at the opportunity? Especially when it meant you could better support your in-group financially.

Moreover, the families of potential workers were also invested in these top-paying jobs. Securing the work would mean more money to go around.

Considering this society’s cultural values, what did the company do?

Did they close up shop in Eastern Europe for fear of the consequences of their offer?

Did they take the initial offer off the table and put forth a more comparable living wage?

Nope, they found a cross-cultural solution.

Work within the Culture’s Values

Rather than cut their losses or go back on their word, the company identified the culture’s values and incorporated them into their own.

In order to preserve social harmony in the town, they hired one person from every family unit. The anxiety of potentially being refused this opportunity was spared, and each family was better supported.

This is just one example of a cross-cultural solution that works.

Identify the culture’s values and work within those values the best you can. If you know what your workers care about, what matters most to them, then you know how best to support them, which is mutually beneficial to you.

Rule of Law in Culture: Are Laws More Important Than Relationships?

A hypothetical scenario:

Your best friend is picking you up to head out on the town. As you head into the city center, you notice your friend is driving quite fast; 40 mph in a 20 mph zone down a crowded street.

You see a pedestrian take a step off the sidewalk ahead of your friend’s car. “Look out!” you shout. But it’s too late. Your friend accidentally hits the pedestrian.

An ambulance is called, paramedics try to save the victim, but he doesn’t make it. He dies on the way to the hospital.

Weeks later, you are called to court as a witness to the fatal accident. You know your friend was driving well over the speed limit, but if you tell the truth, he’ll go to prison. If you lie for your friend, he’ll walk away.

Would you lie? Or would you tell the truth?

Survey: Venezuela vs. USA

This was the exact scenario given in a survey sent to 46,000 managers in 40 different countries in a study by Fons Trompenaars and Charles Hampden-Turner.

As a preface, Hofstede’s cultural dimensions define the US is a rule-based society; Venezuela is a relationship-based society.

Knowing this, which society do you think would choose to be truthful in this matter? And which do you think might lie to protect a friend?

As you can see below, the results were exactly as you’d expect.

additional_charts_CMYK-02

96% of American citizens surveyed said that, when confronted with this situation, they would tell the truth and abide by the law. Only 34% of Venezuelans agreed.

The majority of those from the relationship-based society of Venezuela would protect their friend above the law, while the overwhelming majority of Americans would put their societal responsibility before their friend’s fate.

Everyone is Equal in the Eyes of the Law

Western cultures are largely rule-based or “universalist.” Generally, they believe that, in order to be just, established rules and laws should be applied universally.

According to the purest form of justice, all people – friend or stranger, rich or poor, black or white – should be treated equally in the eyes of the law. And, with that perspective, most people in a law-based society would strive toward the rule.

Rules and laws are also seen, more or less, as a black and white matter.

A red light at a pedestrian crossing illustrates the seriousness of law in a rule-based culture.

In Germany or Switzerland – both strict rule-based cultures – place a foot out of line when the pedestrian crossing light is red, and you will see the reaction. Those around you will make it clear – albeit, likely with only a frown – that they’re not happy with your disobedience, albeit likely just with a frown. Even if it’s 2 in the morning.

Laws in a rule-based society are also considered essentially permanent.

For instance, a law that is a law today is unchangeable; it will be the same tomorrow (unless, of course, it’s changed through an often lengthy democratic process that involves party votes and public opinion).

Not even the highest office in the country has the right to change the law in an instant; neither is this highest office immune to the laws.

Beyond the Individual

While rule-based cultures often align with a high degree of individualism, relationship-based cultures walk hand-in-hand with collectivism. This results in a different prioritization of social norms in individualist vs. collectivist cultures.

One Confucian ideal puts this in perspective: care for one’s parents/grandparents comes first; then comes care for one’s children; then, for oneself.

Collectivists see human existence as reaching beyond the individual; rather an individual’s existence is a symbiotic relationship with extended family, the tribe, the village, society. One’s connection to others is part of his/her existence. Existing apart from this is a form of death.

As such, relationships are highly important; oftentimes, more important than rules. The alternative is ostracism which is, again, death.

Imprisonment is a form of ostracism. Should you confess that your friend broke the law, thereby sending him to prison, you are virtually putting him to death.

In this way, you can see the stark and dramatic difference the truth would make in this matter.

In this way, you can see the difference in perspective between relationship-based and rule-based cultures.

In this way, you might begin to understand motivations across cultures.

Directive vs. Supportive Leadership: Which Style Works in Your Culture?

Say, you believe that the success of the team is more important than personal goals, ambition, and achievements.

If that were the case, what type of management style do you think you’d prefer?

Would you want a supportive, inclusive leader offering you relative autonomy? A work environment where everyone can freely voice their opinions and concerns and stand out from the crowd?

Or would you want a directive, authoritarian leader within a company culture where harmony is more important than self-expression?

We’ve talked about how collectivist cultures view the “group” as more important than self. We’ve also discussed that thegroup” differs across cultures.

The group one most values often directs its workplace norms and preferences, including what motivational factors are effective and what type of leadership is preferred.

As to the latter, two styles of leadership are applied in varying degrees across cultures: directive and supportive leadership. Let’s take a look at both.

Directive Leadership

What makes a directive leader?

Here are some directive leadership behaviors:

  • Being task-oriented
  • Demonstrating control over subordinates
  • Dominating interactions
  • Personally managing the completion of tasks
  • Supervising closely
  • Pressuring employees to complete targets accurately and efficiently
  • Focusing on time management

With a directive leader, employees are placed in a role of dependency – depending on the leader to direct every aspect of their task, including how and when to move forward. Employees under directive leaders often demonstrate little personal initiative.

A number of studies have shown directive leadership often contributes to lesser satisfaction and team cohesion. Moreover, directive leadership unsurprisingly leads to less open communication.

However, directive leadership can also result in higher productivity.

Supportive Leadership

What makes a supportive leader?

Here are some supportive leadership behaviors:

  • Meeting employee needs/preferences
  • Showing concern for employee welfare, individual/group needs, and conflict within the group
  • Encouraging a supportive work environment
  • Providing positive feedback
  • Fostering team cohesion and openness
  • Inviting employees to be part of the decision-making process
  • Promoting positive morale
  • Facilitating discussions (as opposed to dominating them)

With a supportive leader, employees are provided more autonomy and encouraged to demonstrate personal initiative and to be individuals within a cohesive group dynamic.

Studies have shown supportive environments can empower and promote positive dependency among team members, despite being open to more potential conflict as a result of open communication and individual expression.

In his study on “Rights and Responsibilities of Dissent: Cooperative Conflict,” Dean Tjosvold concludes that:

“…asserting the right to self-expression contributes to establishing a conflict-positive climate in which differences and frustrations can be discussed openly.”

The hard part when managing across cultures is finding that fine line between cooperative conflict and just plain conflict.

Next week, we’ll discuss the hybrid leadership style that combines directive and supportive leadership. Stay tuned.

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.

Society Over Self: Collectivist Cultural Management

The core group in collectivist cultures is family.

And the definition of family differs across cultures, as we’ve previously discussed.

The West often considers the two-generational core to be “family,” while other cultures include extended relations – or even an entire village – under the umbrella.

Other “groups” in collectivist cultures include in-groups, like the company one works for, or society as a whole.

A group’s success and survival – whether the group is family, the village, the company, or society – ensures individual success and survival.

Because of this, harmony is valued in collectivist cultures, as is interdependence of individual members.

Children are socialized in groups early on in order to become interdependent.

Everyone depends on everyone else, because the group only survives as one.

Being recognized for individual achievement is almost unheard of; rather, collectivists work in tandem and share with group members – both their successes and their failures.

Group Loyalty = Self-Loyalty

In a collectivist culture, group loyalty is self-loyalty.

Think of it this way: society, a company, or a family is like a human body. Each member is a limb or an organ; each member is vital to the body’s function.

So, if one organ fails, the body fails.

If one limb is neglected, then the body isn’t functioning at its most optimal.

It’s with this mentality that collectivist cultures place a higher value on the group than the individual.

An individual’s personal goals and ambitions come second to the group’s overall success and well-being.

To return to our analogy, if a body’s personal goal or ambition was to win an arm-wrestling contest, so it pumped iron every day, focusing only on building up the biceps, but forgot about its legs or its core, then the arms might be able to succeed in meeting their ambition, but the rest of the body would suffer.

This is how collectivist societies view personal goals and ambitions.

Your arm (you, the individual) does not work alone.

A collectivist would sacrifice his own career goals for the sake of the group’s.

Society, First

When society comes first, self comes second.

This is one of the main reasons that in collectivist societies, management differs from individualist cultures.

Last week, we talked about how these differences clash through workplace incentives. “Employee of the Month” is one way in which management in individualist societies incentivize hard work.

But would this work in collectivist cultures? Not so much.

What would then?

We’ll talk about that more next week.

“Employee of the Month”: Self-Realization & Individualist Cultures

What is the “American Dream”?

The Commission on National Goals had the answer for President Eisenhower.

They reported that the primary motivator of American citizens was the possibility of individual self-realization.

What does this mean?

Pull Yourself Up By Your Own Bootstraps

The American Dream doesn’t often include the economic success and overall wellness of one’s neighbor or third cousin.

It’s a dream of one’s own economic success.

In individualist societies – like that of the United States, western Europe, and other Western countries – a person often identifies with themselves above all others and looks to satisfy his own needs before those of the group.

He also sees his path as one of self-determination. “Pull yourself up by your own bootstraps,” so to speak.

Self-reliance, personal freedom, and independence are the values glorified by individualist societies.

The individual is the smallest unit of survival.

Employee of the Month

This is why, at an American company, “employee of the month” is a successful incentive for productivity and improved performance in work culture.

The strong individualist culture means that employees will seek any way in which they can stand out from the pack in a positive light.

When your name and photo are posted on a bulletin board of achievement in the company lobby, recognition is your reward, and it fuels individualist motivation.

As a Swiss manager in the US, I appreciated the effectiveness of this reward system. So, I attempted to bring it back to Switzerland with me.

When I implemented “employee of the month” at the Swiss company I was managing, it fell flat. In fact, not only was it not a motivator, the reward system was met with immediate and breathtaking negativity on the staff’s part.

“This is ‘typical American,’” they said, adding that Swiss workplaces traditionally don’t single out individual successes, as they see success as a result of teamwork.

Although “employee of the month” type of recognition is frowned upon by Swiss companies, they are not so collectivist as to dissuade pay-for-performance or achievement-based promotion, also distinctions. The difference is, these are in-group and colleague-approved.

Collectivist Thought

On the other hand, a collectivist culture, which centers around group betterment, rather than individual development and freedom, would not even humor the idea of “employee of the month.”

An international survey asked managers from Egypt, China, Japan, and the US whether they agreed with the following statement:

“When individuals are continuously taking care of their fellow human beings, the quality of life will improve for everyone, even if it obstructs individual freedom and individual development.”

Who agreed?

  • 70% of Egyptian managers
  • 59% of Chinese managers
  • 61% of Japanese managers
  • 31% of US managers

We’ll talk more about that difference in mentality next week.

Individualist vs. Collectivist: How Important Am I?

Say, you were given a group project, involving teamwork and cooperation.

Your team includes you (of course), Paul, Lisa, and John.

Some of the tasks are more intensive and time-consuming than others. Some are tedious, some are simple, some require no brainwork at all.

As with most team projects, not all members invest the same amount of time and effort into the group project.

You complete 50% of the work on your own.

Lisa and Paul knock out about 22.5% of the work, each.

And John, who was a complete deadweight, contributes about 5%.

With the successful completion of the project, your group is awarded $20,000.

How should this award be distributed?

Individualists vs. Collectivists

“Distribute the money based on individual contribution. Those who did more work should be awarded more, while those who did less work should be awarded less.”

If this is how you answered, then you are likely from an individualist culture.

“The project was completed together, and a team is only strong as a unit. The fairest distribution would be an even split, in order to benefit everyone in the group equally.”

If this is how you answered, then you are likely from a collectivist culture.

“From each according to his ability…”

Craig Storti asks readers to complete the above exercise in his book, Figuring Foreigners Out.

He argues that each mentality – whether the distribution of the award should be even or based on contribution to the project – is based on what your culture teaches you is fair.

Individualist cultures believe fair distribution means being awarded according to one’s effort.

Collectivist cultures believe that fairness lies in the well-being of the whole group, no matter who contributed what.

Of all of Hofstede’s dimensions, some believe the differences between collectivist and individualist societies are the most important.

Social psychologist, Harry Triandis, is one of them. He stated:

“Perhaps the most important dimension of cultural difference in social behavior, across the diverse cultures of the world, is the relative emphasis on individualism versus collectivism.”

Individualist versus collectivist ideals do not apply only to the distribution of wealth, of course. The deep level thinking of an individualist versus a collectivist fundamentally impacts the way each lives their social life: whether one thinks as an individual or as a member of a group.

Hofstede wrote:

“Some animals, such as wolves, are gregarious; others, such as tigers, are solitary. The human species should no doubt be classified with the gregarious animals, but different human societies show gregariousness to different degrees. Here again then, we have a fundamental dimension on which societies differ: the relationship between the individual and the collectivity.”

Hofstede differentiates the two cultures by defining individualistic ties as “loose,” with each individual expected to look after only himself and those in his inner circle, while collectivist ties are integrated from birth, requiring individuals to be cohesive within a group, exchanging unquestioning loyalty for protection.

We’ll talk more about the differences between individualist versus collectivist cultures next week.

Hofstede’s Cultural Dimensions: Where Does Your Culture Fall Along the Scale?

Cultures differ.

That’s what Hofstede found in his research.

But in what dimensions can we categorize these differences?

And at what value does your culture fall along the scale?

Last week, we talked about how Hofstede’s research led him to designate four cultural dimensions.

With further research, he developed five.

Hofstede’s Five Cultural Dimensions

Hofstede’s five cultural dimensions scale the opposing extremes:

  • Uncertainty avoidance vs. uncertainty tolerance cultures –

We’ve talked extensively about uncertainty avoidance over the past few posts.

When valuing a culture’s uncertainty avoidance versus their uncertainty tolerance, ask yourself: Does the society prefer a stable environment? Is risk-taking avoided? Or does the culture promote innovation and demonstrate risk-taking behaviors and an ability to adapt quickly to uncertain events and changeable environments?

  • Long-term vs. short-term oriented cultures –

Some cultures want satisfaction here and now, while others are programmed to look toward the future.

Is this a culture of instant gratification? Or is the society accepting of delayed material, emotional, and social needs?

  • High-power distance vs. low-power distance cultures

Power distance has to do with a culture’s perception of the fair distribution of power. Some cultures strive for a level playing field, while for others, power is allotted to few.

Is equality preferred over hierarchy? Are subordinates accepting of their lower positions, or is there a more democratic power structure?

  • Collectivist vs. individualist cultures –

We’ve also discussed collectivist versus individualist cultures in this blog, with individualist cultures championing the success of the individual, while collectivist cultures are geared more toward the prosperity of the group.

Is the culture more family/group-oriented or does it promote individual ambition and achievement?

  • Masculine vs. feminine cultures 

The foundation of a masculine culture is based in more traditionally masculine traits and vice versa.

Does the culture thrive on competition and aggression? Or does it encourage cooperation and the nurturing of its community members?

Additional Cultural Dimensions

Piggybacking off of Hofstede’s research and insights, other researchers have identified further cultural dimensions, including:

  • Rule-based vs. relationship-based cultures –

In rule-based cultures, behavior is governed by rules and laws.

In relationship-based cultures, behavior is governed by one’s relationship with others.

  • Polite vs. rude cultures –

Polite cultures consider the feelings of others, while courtesy takes a backseat to justice in “rude” cultures.

Does the culture “turn the other cheek”? Or is “an eye for an eye” the motto?

  • Shame-based vs. guilt-based cultures –

Guilt-based cultures are primarily motivated by an internalized conscience, while the behaviors of shame-based cultures are motivated by the approval/disapproval of the group.

And the list goes on.

As research into cross-cultural differences progresses, the data discovered will, no doubt, paint a more intricate picture of the many dimensions in which cultures differ.

The data available to us now enables us to understand more clearly what motivates individuals from different cultural backgrounds – and how cultures operate, as a whole.

We’ll delve deeper into these dimensions next week.

A Conflict of Conscience: Acting Rationally Within Another’s Cultural Baobab

Most people act rationally within their cultural baobab. But it’s much harder to do so when you’re the monkey in another’s tree.

What do I mean by this?

Last week, we discussed Canadian social norms and how they reflect the nation’s cultural values. Politeness is one of these norms. It’s tied to the values of courtesy and non-confrontation, possibly imparted by the British Tories who settled there.

So what if a dude from a not-so-vocally-polite culture immigrated to Canada and was brazenly “impolite” by Canadian standards?

He would be acting rationally within his own cultural baobab, but not within theirs.

This type of social norm is easy enough to correct: if you want to adapt and integrate into Canadian culture, just throw in a few “please and thank you”s and try to be more courteous to people.

But what if a foreign culture’s values touch a nerve in your own and lead to a conflict of conscience?

Revisiting Ahmed, Khalid, and Ann

Do you remember our friends Ahmed, Khalid, and Ann?

When Ahmed helped Khalid cheat on an exam, Ann was upset, as this didn’t fit into the rationale of her culture.

But it did fit into the rationale of Ahmed and Khalid’s culture.

Absent of strong familial support, individual members might not cope on their own in a third world country. So, Ahmed was only helping his cousin succeed, which is harmonious with the roots and branches of his cultural baobab.

Ann, as well, was acting rationally according to her own baobab. Her culture teaches that an individual should succeed of his own volition; cheating isn’t tolerated and reflects poorly on the individual. Not only that, but the results don’t accurately reflect his abilities.

One problem, however: she didn’t consider that she was viewing the incident from her tree’s perspective, rather than that of the culture she was integrating into.

In pushing Ahmed (and Ahmed’s parents) to conform to her own cultural baobab, she was attempting to make them grow a new branch in a day.

Impossible. And probably unnecessary.

In the end, cheating wouldn’t help Khalid succeed in an individualist society…but he was living in a collectivist one, where knowledge is shared, not exclusive to those smart enough to obtain it.

Do Values Ever Change?

Values are deeply rooted. They’re very difficult to pull up and regrow in any cultural baobab.

Cultures only change through introducing and cultivating values below the surface that eventually sprout new branches and new leaves – the social norms that are watered by society.

In the end, Ann hurt both Ahmed and Khalid. In accusing them of cheating, she publicly stated that Khalid was not smart enough or capable of succeeding, while also accusing Ahmed of being dishonest.

Ahmed felt the sting of losing face, so much so, that he asked to be transferred to a different school near his grandparents’, where no one would look at him negatively.

He lost out on a strong education at a better school, while Ann lost the trust and respect of the parents. No one in this conflict of conscience was better off. And neither the individual’s values, nor the culture’s changed because of it.

Cultural Norms: What are They? And How Do They Relate to Values?

Conformity.

Last week, we talked about conforming to cultural norms. But what types of norms are we conforming to? And why and how are we conforming?

Well, to understand norms, first we must talk about values.

Values are what define a culture’s goals and ideals, and cultural norms are, in a way, these values, personified.

Values & Norms

Study.com defines norms relative to culture, thusly: “The term ‘culture’ refers to attitudes and patterns of behavior in a given group. ‘Norm’ refers to attitudes and behaviors that are considered normal, typical or average within that group.”

So, norms are more closely related to our behaviors, while values are more closely related to our attitudes, ideals, and beliefs. Both our values and norms are ingrained in us and in our society through its existing systems, such as family, the education system, and government.

The government and other higher institutions define a nation’s values, while the norms and values are implemented and taught by families and schools. Some degree of conformity in these two areas is expected in every culture. The degree of conformity is often based on survival vs. self-expression values, but conformity always defines cultural norms.

And we are often completely oblivious to the influences of both values and norms in the way we live our lives.

Different Norm Types

There are four different types of norms, which we will detail over the coming weeks.

These are:

norms

The majority culture in any nation invokes these expectations and rules, which are primarily based on their values. Behavior – such as habits, customs, traditions, and rule of law – is guided by the most prominent culture; they create the yardstick of what is considered “right” and “wrong” on the whole.

Swimming With/Against the Current

Do you follow your own culture’s norms? Do you swim with the school of fish? Or do you make a point of standing out from the crowd?

Whether you swim with or against the current, you’re making choices in defiance of your society’s values and norms, or you’re making choices in favor of them. Either way, your individuality is defined by the cultural norms of your society.

Remember, if you want to “fit in” to a foreign culture, you can look at norms as a sort of etiquette guidebook for the culture in which you choose to integrate.