Culture is an important part of who we are as individuals as well as the society we are part of. It creates a sense of identity, influences norms and behaviours that are considered appropriate and acceptable, along with carving the informal rules that guide our interactions. In a global world where employees come from various and diverse backgrounds and companies operate across international borders; an understanding of the socio-cultural impacts on businesses is vital. Socio-cultural considerations enable us to work together successfully and sell our goods and services in different markets.
Welcome to Topic 5: Social-cultural Considerations for Operating a Global Business. In this topic, you will learn about:
- What culture is and why does it matter
- Hofstede’s four (4) dimensions of culture
- GLOBE project cultural dimensions
- Corporate culture.
These relate to the Subject Learning Outcomes:
- Explain the impact of globalisation on the business environment.
- Outline how global businesses are affected by the type of environment (legal, political, economic, financial and social-cultural) they operate in.
Welcome to your pre-seminar learning tasks for this week. Please ensure you complete these prior to attending your scheduled seminar with your lecturer.
Click on each of the following headings to read more about what is required for each of your pre-seminar learning tasks.
The following chapter sets out a useful overview of social-cultural factors and explores how they affect everyday life in diverse countries. It also discusses how this may impact upon the business context, especially in terms of communication and corporate behaviour and etiquette.
Goodwin-Jones, R 2020, Chapter 6: ‘Contextualising Intercultural Communication’ in Language and Culture in Context - A Primer on Intercultural Communication, Virginia Commonwealth University, pp 2 –19.
Task: Read the chapter from p. 2 to the end of the section on ‘communicative genres’ which ends halfway through page 19.
Hofstede’s work on culture is well known for his studies on the impact of culture on organisations and management. The following article looks at what culture is.
Task: Read Hofstede Insights, 2020, ‘What do we mean by culture’
For this task, you will research two (2) countries with diverse cultures. Based on your research, you will select one (1) key difference between these two (2) countries that may lead to a misunderstanding or miscommunication in a professional context. You are required to:
- Select country one (1) – pick a country you know well. For example, the country you were born in, the country you currently live in or one you have previously lived in.
- Select country two (2) – pick a second country that has quite a diverse culture from the first country chosen.
- Research the differences between these cultures.
- Select one (1) key difference between the culture of these two countries that may lead to a misunderstanding or miscommunication in a professional context.
- Develop a graphic to represent this.
- Post this in your reflective journal. You can access the reflective journal by clicking on ‘Journal’ in the navigation bar for this subject.
Read through this week’s topic content.
Assessment 1 – If you were allocated this week by your lecturer, you will need to co-facilitate the discussion on the discussion forum as per the assessment instructions provided. You can access the activities by clicking on ‘Topic 5: Assessment 1: Facilitation & Participation’. You can also navigate to the forum by clicking on 'BUS100 Assessment 1 Forum' in the navigation bar for this subject.
Assessment 1 – For all students not allocated a facilitation task this week, you are expected to actively participate in the class discussion and respond to peer facilitation. You can access the activities by clicking on ‘Topic 5: Assessment 1: Facilitation & Participation’. You can also navigate to the forum by clicking on 'BUS100 Assessment 1 Forum' in the navigation bar for this subject.
What is culture and why does it matter?
Different countries and even regions or tribes within those countries have different beliefs, institutions, rules, and artefacts which form their culture. Differences in culture can have a significant impact when it comes to the business environment. Employees from diverse cultures may interact differently, have different expectations from their managers and their behaviour may be informed by distinct cultural characteristics.
Culture has been defined as the collective programming of the mind, setting one society apart from another. We may not be aware of our own culture until we compare it to another. For global businesses navigating different cultures may come up when there are opportunities in different markets. With the high level of digital communications, it is easy to publish something via an online platform that results in miscommunication or may even be considered rude or unacceptable. Up to 70 per cent of international ventures fail because of cultural differences (Livermore & van Dyne 2015).
There are, of course, many benefits in creating a successful multicultural company. The following video looks at what these benefits are.
Navigating the multicultural business environment requires unique skills known as cultural competence or cultural intelligence. These skills can be developed and help to work effectively across cultures. When executives from 68 countries were asked about their top challenge, 90 per cent said this was related to cross-cultural management (Livermore & van Dyne 2015).
Hofstede’s four (4) dimensions of culture
Hofstede is well-known for his work on culture and management. He has mapped out cultural characteristics according to four (4) different value dimensions; these are set out in the following table.
| Value dimension | Description |
|---|---|
| Power distance | The extent to which a culture accepts that power in organisations is distributed unequally. High power distance equates with steep organisational hierarchies, with more autocratic leadership and less employee participation in decision making. |
| Uncertainty avoidance | The degree to which members of a society feel uncomfortable with risk and uncertainty. High uncertainty avoidance will be reflected in the high priority placed on rituals, routines and procedures in organisations and society in general. Countries with low uncertainty avoidance tend to emphasise flexibility and informality rather than bureaucracy. |
| Individualism | The extent to which people are supposed to take care of themselves and be emotionally independent from others. |
| Masculinity | The value attributed to achievement, assertiveness and material success as opposed to the stereotypical feminine values of relationships, modesty, caring and the quality of life. |
Contemplate
Reflect on the previous cultural value dimensions for your home country.
- How do you think they would rank against these?
- What would the culture score highly against and how can you tell? Hofstede’s research has mapped this out for different countries.
Once you have considered this for your home country, look up the findings on the Hofstede Insights register. How did this compare to your initial thoughts?
When organisations consider expansion into different markets, researching the culture of the country they want to expand to, should be part of their strategic planning.
GLOBE project cultural dimensions
The Global Leadership and Organisational Behaviour Effectiveness project, otherwise known as GLOBE, has studied more than 120 countries over the last 20 years. It looks at aspects of culture and how this relates to interpersonal trust. The globe project identifies nine (9) key cultural dimensions.
The following table sets out the nine (9) distinct cultural dimensions on the left-hand side and then provides examples of countries that score highly against these dimensions; meaning this is prominent and important to the countries’ culture. It also identifies countries that score low against this cultural dimension, which means this is not a major influence on the countries’ culture.
| Cultural dimension | High - Examples of countries that score high against this dimension | Low - Examples of countries that score low against this dimension |
|---|---|---|
| Assertiveness | The United States, Austria, Germany, and Greece | Sweden, Japan, and New Zealand |
| Future orientation. A propensity for planning, investing and delayed gratification | Singapore, Switzerland, and the Netherlands | Russia, Argentina, and Italy |
|
Gender differentiation. The degree to which gender role differences are maximised |
South Korea, Egypt, India, and China | Hungary, Poland, and Denmark |
| Uncertainty avoidance. A reliance on societal norms and procedures to improve predictability, and a preference for order, structure and formality | Sweden, Switzerland, and Germany | Russia, Bolivia, and Greece |
| Power distance | Russia, Thailand, and Spain | Denmark, the Netherlands, and Israel |
| Institutional collectivism (individualism versus collectivism). Promoting active participation in social institutions | Sweden, South Korea, and Japan | Greece, Argentina, and Italy |
| In-group/family collectivism. A pride in small-group membership, family, close friends | Iran, India, and China | Denmark, Sweden, and New Zealand |
| Performance orientation (much like achievement orientation) | Singapore, Hong Kong, and the United States | Russia, Argentina, and Italy |
| Humane orientation. An emphasis on fairness, altruism, and generosity | Ireland, Malaysia, and Egypt | Germany, Spain, France, Singapore, and Brazil |
So, what do these cultural dimensions mean in practical terms? They tell us how leadership perceptions may differ on a country-by-country basis. They indicate as to what the role of gender or indeed gender differences are in various countries.
Cultural differences also result in different communication styles. In today’s business environment, where the workforce is made up of people from different countries and therefore diverse cultures, a sound appreciation of these dimensions can help us interact better. We can use our understanding of culture to avoid or reduce misunderstanding inefficiency and poor relationships; all of which could lead to higher costs for the business.
Based on the table that sets out the cultural dimensions as well as examples of how countries score against this, let us see if you can match the countries to the cultural descriptions.
Knowledge check
Complete the following task.
Corporate culture
Trompenaars’ work expands on that of Hofstede’s four (4) dimensions of culture as it was found that while national culture was important, corporate culture may overrule aspects of national culture. Trompenaars discusses corporate culture in the following video, 'Dr Fons Trompenaars on Corporate Culture'. It provides insight into what people from different countries may act like and find important within the business context.
Trompenaars' work looks at the four (4) diversity cultures. The following figure maps these.
So, what kinds of attitudes and behaviours do we expect each of these four (4) diverse cultures to display? The following description sets out the various aspects to each based on typical workplace interactions (adapted from Mindtools).
Incubator
The incubator is fulfilment oriented. In terms of the relationship between employees, they prefer to develop spontaneous relationships that grow out of collaborative creative processes. The incubator’s attitude to authority is that status is achieved through individual effort exemplifying growth and creativity. The incubator thinks and learns in an inspirational, creative, process-oriented and ad hoc manner. Incubators’ attitude to people is that they are viewed as co-creators. They manage change through improvising and tuning to the new circumstances.
Family
The family typology is power-oriented. When it comes to relationships between employees these tend to be diffused. This means that work and private life are intricately linked, and the relationships appear indirect, introverted and closed. In terms of the attitude to authority, status is allocated to parent figures who are perceived as being close, yet powerful. Ways of thinking and learning a holistic, lateral, and intuitive. Their attitudes to people are like that of family members a close bond is formed. In terms of managing change the head of the family, the figurative father is looking, to lead change.
Guided missile
The guided missile is a project-oriented typology. Specific tasks within a system of shared objectives characterise the way they view relationships between employees. Guided missiles think and learn in a problem-centred, practical, cross-disciplinary manner. People are seen as experts or specialists. In terms of managing change, the guided missile will shift came along with the shared target.
Eiffel Tower
The Eiffel Tower diversity culture can be classified as role oriented. In terms of relationships between employees, they look to specific roles within a bigger system with a set of required interactions. Authority or status is allocated to distant, yet powerful superiors. The Eiffel Tower‘s way of thinking and learning can be described as:
- analytical
- vertical
- rational
- logical.
Their attitudes to people can be classified as a human resource view. In other words, people are allocated a formal specific task in a hierarchical system. Change is managed through rules and procedures.
Contemplate
Trompenaars recommends that these cultural typologies be considered during global business interactions.
Think about these typologies and how they relate to your own culture. How do you think your own attitude to thinking and learning affects you as a student?
We can also speak of socio-cultural environment factors within the business. This includes the values, behaviours and customs that characterise the business practices. The demographics within an organisation, the gender balance and the vision and mission statements all provide insight into the organisation’s culture.
If an organisation has a culture, for example, that is based around strong family values, they are more likely to provide employee benefits related to this value. Think, in this instance, of flexible work arrangements parental leave and childcare services which may extend to both fathers as well as mothers.
Key Takeouts:
Congratulations, we made it to the end of the fifth topic! Some key takeouts from Topic 5:
- The combination of beliefs, institutions, rules, and artefacts form culture. It is the collective programming of the mind that sets one society apart from another.
- These cultural dimensions tell us how leadership perceptions may differ and provide an indication as to what the role of gender is in various countries.
- Cultural intelligence or competency can avoid or reduce misunderstanding inefficiency and poor relationships; all of which could lead to higher costs for the business.
- Many international ventures fail because of cultural differences.
- Executives from across the world identified their top challenge as cross-cultural management.
Welcome to your seminar for this topic. Your lecturer will start a video stream during your scheduled class time, you can access your scheduled class by clicking on ‘Live Sessions’ found within your navigation bar and locating the relevant day/class or by clicking on the following link and then click 'Join' to enter the class.
Click here to access your seminar.
The learning tasks are listed below, these will be completed during the seminar with your lecturer. Should you be unable to attend, you will be able to watch the recording which can be found via the following link or by navigating to the class through ‘Live Sessions’ via your navigation bar.
Click here to access the recording. (Please note: this will be available shortly after the live session has ended.)
In-seminar learning tasks
The in-seminar learning tasks identified below will be completed during the scheduled seminar. Your lecturer will guide you through these tasks. Click on each of the following headings to read more about the requirements for each of your in-seminar learning tasks.
Based on the self-directed learning tasks, the lecturer will facilitate a discussion to explore the different cultural backgrounds represented in the class.
Based on several short scenario descriptions, you will explore perceptions and ideas on how to manage cultural differences in the workplace. Discuss the scenarios presented in your breakout rooms.
Welcome to your post-seminar learning task for this week. Please ensure you complete this after attending your scheduled seminar with your lecturer. Your lecturer will advise you if it is to be completed during your consultation session. Click the heading to read the requirement for your post-seminar learning task.
Assessment 2 – Do further research for your second assessment and work on the draft for your submission. Flag any questions you may have with your lecturer.
Each week you will have a consultation session which will be facilitated by your lecturer. You can join in and work with your peers on activities relating to this subject. These session times and activities will be communicated to you by your lecturer each week. Your lecturer will start a video stream during your scheduled class time, you can access your scheduled class by clicking on ‘Live Sessions’ found within your navigation bar and locating the relevant day/class or by clicking on the following link and then click 'Join' to enter the class.
Click here to access your seminar.
Should you be unable to attend, you will be able to watch the recording which can be found via the following link or by navigating to the class through ‘Live Sessions’ via your navigation bar.
Click here to access the recording. (Please note: this will be available shortly after the live session has ended.)
- Bognar , S & Reichert, J 2019, American Factory, Netflix.
- GLOBE 2020, GLOBE 2020.
- Yavuz, A, Juan, C, Nikhil, P, & Chang, S 2018, How has globalisation affected emerging market economies?, BIS Paper.
References
- Collinson, S, Narula, R, Rugman, A & Qamar, A 2020, International business, 8th edn., Pearson Publishing.
- Goodwin-Jones, R 2020, 'Chapter 6: Contextualising Intercultural Communication’ in Language and Culture in Context - A Primer on Intercultural Communication, Virginia Commonwealth University, pp. 2 –19, http://langculture.com/book/chap6.pdf
- Hofstede Insights 2020, What do we mean by culture, Hofstede Insights, https://news.hofstede-insights.com/news/what-do-we-mean-by-culture
- Iles, P & Zhang, C 2013, International human resource management: a cross-cultural and comparative approach, Chartered Institue of Personnel and Development Publishers.
- Livermore, D & van Dyne, L 2015, Cultural Intelligence: the essential intelligence for the 21st century, SHRM Foundation, https://www.shrm.org/hr-today/trends-and-forecasting/special-reports-and-expert-views/Documents/Cultural-Intelligence.pdf
- Mindtools, nd, Mindtools the seven dimensions of culture, https://www.mindtools.com/pages/article/seven-dimensions.htm
- Trompenaars, F, Prud’homme, P & Trompenaars, A 2004, Managing Change Across Corporate Cultures, Capstone.
- Trompenaars, F 2019, ‘Necessary new competencies for the future generations at work,’ Journal of Intercultural Management and Ethics, 2(2):29-45.
- Yavuz, A, Juan, C, Nikhil, P, & Chang, S 2018, How has globalisation affected emerging market economies?, BIS Paper, https://www.bis.org/publ/bppdf/bispap100_b_rh.pdf
