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.

Conformity in Culture: The Colored Pens Study

Say, you’re given a bin of pens.

Most of them are black and a few are blue. Your favorite color to write with is blue.

Which pen would you choose?

This study was conducted by Japanese researcher Toshio Yamagishi and his research team with participants from Japan and the US.

The study involved a default scenario, an initial scenario, a final scenario, and a purchase scenario.

  • Default scenario – participants simply told to choose a pen
  • Initial scenario – participants told they were the first person to choose a pen
  • Final scenario – participants told they were the last person to choose a pen
  • Purchase scenario – participants told they were buying a pen

Considering previous research on the differences between individualist and collectivist cultures, one might think the Japanese would always choose the majority color, due to their preference for conformity, while the American would always choose the minority color, due to their preference to stand out.

The results, however, were a bit more complex.

Preference for Uniqueness

Although the Japanese did choose the majority color and the Americans the minority color in the default scenario, the results between the two cultures were similar in the other three scenarios: the Americans and the Japanese were just as likely to choose either the majority or minority color.

These last three results indicate that both cultures prefer uniqueness in equal measure.

The results also show that each culture, in being the first to choose, is cognizant of other peoples’ desire for uniqueness and, therefore, may be reluctant to offend those who have yet to choose their colored pen.

But when the social situation becomes ambiguous, as in the default scenario, why do the Japanese assume the majority pen, when the results show that they prefer the unique pen just as much as their American counterparts?

This is where the preference for harmony comes in.

Do Not Offend

The default scenario reveals that the Japanese don’t necessarily prefer to conform; after all, they were just as likely to choose unique over conformity in the other three scenarios.

Rather, the Japanese prefer harmony over disharmony.

Yamagishi and his team concluded that the disparity was in the ambiguity: the desire not to offend is stronger in the Japanese than in the Americans, particularly in ambiguous social situations.

And why not offend?

One theory posed by Yamagishi is centered around interpersonal relationships.

Japan is a “closed society” regarding groups and relationships. By this, we mean that it’s considerably more closed to outsiders; if you’re not part of the in-group, you’re not welcome. In this way, it’s harder to replace lost relationships when you’ve offended someone.

The US, on the other hand, is an “open society.” It’s much easier to replace a lost relationship if one has caused offense.

This is why the Japanese avoid offending in ambiguous situations, which may come at the cost of their preferences on occasion. Group loyalty over self-loyalty, as we talked about last week.

The ambiguity of whether your choice of a unique pen may or may not offend someone is balanced against the cost of social rejection.

The result is this strategic and nuanced adaptation under differing scenarios.

How does this apply to the type of management style a culture prefers?

We’ll talk more about that next week.

How Does Maslow’s Hierarchy of Needs Stack Up Across Cultures

Management trainings often cut out the cross-cultural nature of leadership expectations, hierarchies, and values and norms.

So, when you’re put into a cross-cultural leadership position, you’re a fish out of water, and you don’t have much to guide you.

Maslow’s “Hierarchy of Needs”

In Maslow’s theory, human motivation is pretty straight forward.

His “hierarchy of needs” is taught across many business administration curriculums and has been since its inception in the early ’40s.

It was in 1943 that researcher Abraham Maslow identified basic human needs and categorized them in a pyramid.

hierarchy of needs
FireflySixtySeven [CC BY-SA 4.0 (https://creativecommons.org/licenses/by-sa/4.0)%5D

At the bottom are the most basic physiological needs:

When a person’s most basic human needs are satisfied, their more complex emotional and psychological needs rise to the top:

  • Love/belonging
  • Esteem
  • Self-fulfillment/actualization

Think about these needs. Do you feel them in this order and manner?

What A Man Can Be

Maslow once wrote:

“What a man can be, he must be.”

This explains the pyramid in a nutshell: if we can achieve something greater than simply meeting our physiological needs, we will seek it out.

The hierarchy of needs may seem instinctive to the Western mind, so much so that Western managers apply this basic model to motivate their teams and incentivize success.

Self-fulfillment would then be the highest motivation, manifesting itself in power and personal career development.

However, as it turns out, this hierarchy of needs hasn’t stood the cross-cultural test.

Security, Social Needs, & Quality of Life

Let’s take a look at Greece and Japan.

Self-actualization in these countries is undercut by security needs.

According to research done within IBM World Trade Corporation:

“At the country level, higher mean stress turned out to be associated with stronger rule orientation and greater employment stability…When [the mean level of anxiety] is higher, people feel more stressed, but at the same time they try to cope with their anxiety by searching for security.”

Both Japan and Greece had high Uncertainty Avoidance Indexes, which indicate higher stress and anxiety levels.

This is why life-long job security supersedes climbing the corporate ladder or seeking out challenging work in these countries and may be another reason Japanese companies keep on workers even though they may be subpar or their positions could be made redundant.

On the other hand, Norway, Sweden, and Denmark place a lot of emphasis on quality of life, thus building a career takes a back burner to social needs.

Hofstede Disagrees

As Geert Hofstede duly notes:

“My interpretation is that this tells us more about Maslow than about the other countries’ managers. Maslow categorized and ordered his human needs according to the U.S. middle-class culture pattern in which he was embedded himself – he could not have done otherwise.”

This can be said about many studies that unintentionally (or intentionally) discount cross-cultural differences.

Cross-cultural values and norms are not much considered when identifying “human needs.”

Instead, every human is painted with one brush; the brush of whichever culture is doing the research.

Marriage for Economic Advantage in Japan & How Saving Face Impacts Job Loss

The norm in the West is that one should marry for love.

But imagine growing up in a culture where economic advantage was given priority.

This is largely the case in Japan.

History Repeats Itself

Prioritizing economic advantage in marriage is not unique to Japan and other Asian countries; in fact, it was once a Western norm, as well – and pretty recently, at that.

People were often coupled in European countries according to class and, thus, economic advantage.

If you’ve ever read a Jane Austen novel, then you know that locking down a wealthy suitor, preferably one with plenty of property, was much more advantageous to a young woman (and her parents) than finding someone she loved.

It was only at the beginning of the twentieth century that “love marriages” were more commonly sought.

But Confucius saw it differently. He placed economic advantage above love, and in this, the Japanese agree.

Head of Household

One way in which Japanese society differs from the West is that women are more often the heads of household when it comes to finances.

While Japanese husbands have long been responsible for bringing home the bacon just like everywhere else, women are largely in charge of this bacon.

So, what happens when a man should lose his job in Japan?

Well, this is seen as a huge failure on his part – and a personal one, regardless of whether the firing was only an economical company decision.

Job Loss & Suicide Rates

Whereas in a love marriage, a wife would be expected to support her husband through such a crisis, in Japan, not so.

If a Japanese man loses his job, he also loses his social standing…and he may lose his wife too.

Because of the fact that the man would no longer be fulfilling the primary task in the economic marriage compact – making money – he would not expect support from his wife.

Instead, he might expect to lose honor, lose face, and feel the powerful shame that accompanies that loss. This is one of the reasons that suicide rates in Japan after job loss are incredibly high.

According to National Jobs for All Coalition:

“From 1953 to 2003, each 1 percentage point increase in the cyclical component of the male unemployment rate led to a 5.39 percentage point increase in the cyclical component of the male suicide rate. This effect is 38 times larger for Japan than for the United States.” 

Moreover, Japanese companies are very reluctant to fire staff, because of this societal loss of honor and the resulting shame. Layoffs, in fact, are considered taboo. So, instead of firing employees, companies may demote those who are ineffective but keep them on the payroll.

However, don’t consider this act too merciful; although they refrain from firing ineffective employees, they also try to make the office more uncomfortable for them – think smaller, windowless offices without air-conditioning. In fact, they have places called “boredom rooms,” where they essentially try to drive staff to voluntarily quit.

In this way, Japanese norms and values reverberate throughout their culture, with the need to save face permeating up into the very policies and procedures of company culture.

Next week, we’ll continue our tour through marriage in Asia by exploring the “marriage buyer’s market” in China.

Respect Culture: How to Respond to Norms that Make You Uncomfortable

What does respect mean to you?

In the face of disagreement, in the face of, perhaps, discomfort or even anger, what does it mean to respect someone with whom you do not share values or norms?

An example:

You’re Japanese, and you’ve moved to Spain. The Spanish are a warm, open and friendly culture. A kiss on both cheeks is a common greeting, whether you’re a friend or a stranger being met for the first time.

This social norm is not only one you’re not used to; it’s one that makes you incredibly uncomfortable.

What do you do?

Discomfort

I actually know a Japanese woman who struggled with this exact scenario.

She was the wife of a diplomat who had recently transferred to Spain. I met her at a language school.

Not only did she grow up in a culture that is as far removed from Spain as it possibly can be, she was also born to an aristocratic family, so her upbringing was even more disciplined than most. From childhood, she had been taught that public spaces and situations were not the place for physical human contact.

Remember: the Japanese greeting is a bow. A handshake is even too intimate. So, imagine then transitioning into a country in which men and women engage in this public display of affectionate greeting.

A kiss on both cheeks seemed too much for her to bear.

Tolerate, Comply and/or Explain

According to LQ Williams of Owlcation:

“Tolerance is the recognition of the universal human rights and freedoms of others… and the recognition of the value of differences without judgement.”

Tolerance, in essence, is respecting diversity, the world over. Despite feeling uncomfortable with certain cultural norms, you can still demonstrate your tolerance and respect for the culture by complying with other cultural behaviors.

In my Japanese friend’s case, she was taking this step: she was actively trying to learn the language.

Lastly, if you find yourself between a rock and a hard place – that is, between an attempt to integrate into the culture and your discomfort with some of this culture’s social norms and values – then explaining yourself goes a long way.

As Core Languages notes: “Often, just trying to be culturally sensitive is appreciated. Even if you don’t execute well, you’ve taken the time to learn about another and invested in a relationship.”

Who knows – maybe somewhere down the road, you’ll become comfortable with those norms that were initially a roadblock for you, just like my Japanese friend did.

Instead of only accepting the norm, she chose to overcome her deep level of physical discomfort and adapt.

These are some of the battles you may face when living and working in a foreign country. It’s up to you where you draw the line.

But know that in some cases, if you draw the line too close to your own cultural comfort, you may be impeding yourself from successful cross cultural integration.