Cultural Differences at Work - Coursework Example

Running Head: Cultural Differences at work Cultural Differences at Work (Name) (Course) (University) Date of presentation: Lecturer: Question: How far do national cultural differences explain the wide variation in working hours and holidays taken in different countries like China and the UK? What are the implications of these differences for HR management in multi-nation companies? Table of Contents Table of Contents 2 Abstract 3 Introduction 3 Indicators of Cultural Differences between Nations in Cross Border Businesses: Case of China and the United Kingdom 5 Cultural Similarities between the United Kingdom and China in Business Terms 9 Cultural Differences between Brazil and China in Business Terms 9 HR Implications of Differences in National Cultures on International Businesses 12 Conclusion 15 References 16 Abstract Different countries have different cultural backgrounds and standards of acting and thinking, and these differences strongly influence the business world especially the operations of multinational organizations. The purpose of this paper is to highlight how differences in cultural values between countries impact on business practices with the Chinese and British examples. In particular, this paper attempts to investigate whether cultural differences between countries can explain differences in working time and holidays taken in different countries. Introduction In the 1960s and early 1970s, the number of hours per person were fairly the same between many countries in Europe, Japan, the US and China. Today, the number of hours worked per person between countries has changed so widely. While American workers work as much as they used to work in the 1970s, European workers spend much less time working. On the other hand, Australian, Japanese and Chinese workers have significantly increased their working hours (Francis & Ramey, 2005). Researchers and policy makers have in the recent past focused on the variations in working hours between countries. Both the researchers and policy makers are interested in determining whether decline in working hours in some countries is causing slowdown in economic growth. In a proactive article on the topic of declining working hours, Chang and Kim (2005) reckon that the large variations in working hours can be explained by differences in national cultures such as tax regimes. Indeed, the marginal tax rate differences between countries were much smaller in the 1970s because labor supply differences were very much smaller. Prescott (2004) has explained that cultural differences between countries, while difficult to measure and observe are an important parameter in international business. Failure by multinational companies to appreciate and account for cultural differences can lead to strain business relationships and embarrassing blunders which can drag down a business’s performance. Essentially, if a national culture can be of significant consequences on the people of the same culture, then businesses need to be very cautious on how they deal with cultural differences in cross border interactions. Interestingly, it is important to note that national cultures shapes behaviours of employees and businesses and its influences can penetrate administrative attributes such as laws, government policies and public institutions. Robinson (1979) has defined culture as a set of shared beliefs, assumptions and values that are gained through membership in a social group and which influence the behaviours and attitudes of the group members. This simple definition has three important attributes: first, culture is viewed as a group phenomenon, which distinguishes individuals of one group from that of another group. This perspective implies that culture can exist in many levels including occupational groups, organizational functions, nations and geographic regions. Secondly, the definition implies that culture is acquired through socialization. Indeed, the learning of shared beliefs, values and assumptions is enhanced through interaction with colleagues, family members and the society in general. In this respect, Amao (2008) speaks of culture as a process through which collective programming of the mind occurs. The third attribute is that it is the collective programming of the mind which determines what is culturally acceptable. This means culture provides priorities for one behavior over another. In light of the three attributes above, it is interesting to note that cultural differences between countries tend to remain stable over time. Although at the surface level there may be convergences in cultural habits such as the global spread of American consumer culture, cultural differences persist at the deeper level. A research study by Francis and Ramey (2005) shows significant resilience of varying cultural values even after accounting for cultural changes caused by economic development and modernization. Variations in national cultural values are relevant for large multinational corporations that are exposed to multiple national cultures in their business operations. This implies that managing businesses across borders gives rise to complexities because it forces companies to tailor their business approaches practices to the cultural context in which they operate. Indicators of Cultural Differences between Nations in Cross Border Businesses: Case of China and the United Kingdom Indicators of cultural differences between nations are manifest on the behavioral level and become an important consideration in the success of multinational businesses (Prescott, 2004). For these businesses, differences in cultural values at the behavioral level form the basis of the casual comparison of business success in different countries. One of the most important indicators of cultural differences between countries is the diversity of religious beliefs. According to Amao (2008) there are about twenty major religions, which are in turn sub-divided into around 300 large religious groups and numerous smaller ones. Christianity is the largest high level grouping, accounting for 33% of the world population. Others are Islam (21%) and Hindu (14%). Cultural diversity within these religious groupings is tremendous. As an example, the world’s 2 billion followers of Christianity subdivide into 35, 000 distinct groupings. This can perhaps explain the cultural differences between the Orthodox Christians of Russia and the Protestant Christians of the United States. Majority of researches on religious beliefs as an indictor of cultural differences tend to focus on whether national communities share common religious beliefs. All in all, religion has been identified as an important variable in differences in working culture between countries. For instance, differences in holiday taken by some countries are largely as a result of religious rituals such as the Christmas and Easter holidays which are common in Christian countries (Said, 2003). Language is another important aspect of cultural differences between countries. According to Chang and Kim (2005) language offers a window into the deeper beliefs as well as thought processes of multinational corporations. Research studies have shown language to be a marker of cultural differences between countries. In addition, language provides a basis for grouping countries and regions. A broad indicator of the effect of cultural differences between countries is dependent on the pattern of trust between countries. Researchers looking to explain differences in cultural differences between countries have shown that the level of trust declines as countries grow more different in terms of religion, language, income disparities and geographic distance. The same happens if countries have a history of wars between them. Countries that share more common language and religious beliefs have been shown to have strong trade relationships than with other countries. Sandberg (2005) has shown that having a common language and religion increases bilateral trade by 20%. The United Kingdom is characterised by considerable cultural and geographic diversities and historically, it has been the source of important business ideas and technologies. Although it is one of the smallest countries in the world, it has a relatively high population and is highly industrialized. Britain’s high level of economic development has attracted immigrants from all parts of the world. As a result, the British culture exhibits diversity in terms of religion, language and social values. Nevertheless, there are important cultural aspects that bind the people of the United Kingdom, more especially those in the business world (Said, 2003). One would generally say that the family is the foundation of cultural structures that form the basis of stability for the people. Although family size has significantly reduced in the past few decades, the extended family is quite close in the British society. In order to guarantee rapid success when doing business in the United Kingdom, it is important for one to understand the basic cultural aspects of the British society. For instance, before the British people can start work, they need to know who they are working or doing business with. Britons attach more importance to the people they deal with in business than with the company or business that the individuals work. As Britons are more comfortable doing business with companies and people that they know, questions about the company and the product are expected. Kissing is usual for women. However, British friends often do backslapping and hugging. Embarrassing a fellow publicly is highly disregarded in the United Kingdom. When a person is embarrassed or criticized in public, they lose face with the group (Robinson, 1979). As British people strongly depend on relationships with each other, it is important for a foreign company to spend time to understand their British counterparts professionally. An important element in British business culture is personal relationships. By cultivating personal relationships and building trust, one’s chances of successfully doing business in Britain or working with Britons can increase greatly. Essentially, it is common to see members of the same family or close friends working in the same company. This is because of the strong importance placed upon family or friendly relationships. This is reinforced by the fact that British people prefer to do business or work with the people they trust and know (Robinson, 1979). China has a rich cultural heritage which should not be overlooked when discussing business interaction with this country. With a history spanning five thousand years and a unique mix of ethnic groups, China is regarded as the world’s only continuous ancient civilization. China is the most populous country in the world and accounts for 22% of the world’s population. Since 1970s, China has followed a family planning policy so as to bring to bring the rapid population growth under control. Today, China’s leadership is advocating for reforms, open market policies and has established a socialist market economy. In order to successfully work or o business in China, loyalty, duty, sincerity, respect for elderly, honor and filial piety are the most valued virtues (Sandberg, 2005). The concept of Guanxi or relationship is an important one in China. It is important for anyone to learn this relationship and to be able to handle it effectively in various situations and circumstances. A need to group affiliation, whether to school, family or workgroup collectively characterizes China. Chinese businessmen will always act with decorum and will avoid embarrassing other people as a way of maintaining harmony. The view of harmonious relationships is deeply rooted in the teachings of Confucianism, which is the main religion in China. The society’s culture as a whole will function harmoniously if proper behavior through loyalty, respect and duty are reinforced in relationships. Indeed, doing business in China is a good opportunity to see how the basic teachings of Confucianism are influential to the society including business practices. Cultural Similarities between the United Kingdom and China in Business Terms In work and business relationships, both Chinese and the British do not feel comfortable in hurrying to the point when closing a business deal. Instead, they prefer to interact, socialize and get to know the person with whom they are doing business. It is, therefore, necessary to invest substantial amount of time establishing good rapport and a relaxed, pleasing relationship before discussing business issues in China or the United Kingdom. Reeves and Baden (2000) have explained that a precondition for establishing a successful business relationship in China or the United Kingdom is to establish an atmosphere of mutual trust. Ideally, business people in both countries prefer to establish strong relationships before starting negotiations. Although the process of addressing someone differs in both countries, the process still shows the extent to which both countries value and appreciates authority and hierarchy levels in the society. Embarrassing a British publicly should be avoided. Similarly, relationships in China can be destroyed by saying or doing something that causes other people to lose face. As such, the rule of not embarrassing other people works in both countries. Both Chinese and British business men and women have strong regards for people and not companies. It is, therefore, not advisable to change negotiating teams as this may cause one to start again from the beginning. Moreover face to face meetings are preferred by both the Chinese and British businesspeople. Therefore, written or telephonic communication plays a trivial role in establishing or strengthening work and business relationships. Cultural Differences between Brazil and China in Business Terms Varner (2000) has described many cultural differences between the Western and Eastern thoughts. As a European society, the British culture is deeply rooted in the concepts of utopia, transcendence, ideal reality and the process of transforming the reality is a major concern. Deal and Kennedy, (2004) have highlighted that long dinner hours and taking a long time to know each other is an established way of establishing relationships and doing business in China. This can however not be expected from the British society. Although having dinners together is highly valued in the British society, the aspect does not elicit same significance as in China. In Britain, the process of exchanging business cards is less ceremonious and important than in the United Kingdom. In the United Kingdom, exchanging business cards is just a usual way of exchanging information. In the Chinese culture, any relationship established with an individual represents the relationship with the company. Rather than their individual identities and attributes, foreigners in China are regarded as representatives of their companies. But for the British culture, the individual a person deals with is far more important than the company they represent. The Chinese culture does not allow one to interrupt someone when speaking. But in Britain, this is somehow tolerated and is seen as normal in conversations (Aguiar & Hurst, 2005). In another aspect, the Chinese community is very much collectivist and hence group decisions prevail over the individual. In China, individual are readily willing to subjugate their feelings for the sake of the group. But as for the British society, group decisions are more focused on individual feelings and opinions. Regarding body language, direct eye contact is perceived to be disrespectful in China while in China it is perceived to be a sign of honesty and good faith. While Britons will shake hands while maintaining a steady eye contact, Chinese will look at the ground when shaking hands. According to Stopford (1998) Chinese exhibit a high context culture while the British have a relatively low context culture. This offers some possible implication for multinational companies working in either both countries. Because the British people have such an apparent low context culture and the Chinese have a very high context one, it becomes difficult for businessmen from the two countries to communicate. As an example, language differences come into play when analyzing the British and Chinese cultures. Quite often, the Chinese can speak English in international business transactions but the British people are rarely able to speak China’s native language. Anthony and Shige (2007) have explained that learning more than one language or a foreign language is an important consideration for education systems in many countries including China but other countries such as the United Kingdom and the United States of America do not emphasize on such an importance. As such, when Britons engage in business with other countries, they tend to be at disadvantages, more especially when selling products. Some of the cultural barriers that a Chinese or British businessman needs to overcome in international business seem rather overwhelming. The Chinese value silence and expect other people to interpret their feelings and what their silence means. On the other hand, the Britons are fairly used to expressing themselves and will never hesitate to say what is in their minds. As such, not being able to share opinions can be frustrating. Aguiar and Hurst (2005) have explained that that the Chinese value work ethics in completely different manner than the Britons who tend to promote products enthusiastically and empathically. The Chinese find this to be offensive as it does not fit with their culture. They tend to be gentle and kind in their approaches. In addition, trust is an important aspect when conducting business in high context cultures like China. In other aspects, Chinese managers tend to be afraid of market uncertainties. They are always very apprehensive about promoting their businesses while British managers are very aggressive and have no qualms stepping up their businesses to foreign markets. HR Implications of Differences in National Cultures on International Businesses Doing business across cultures in the world is a thriving venture as the world gets moved closer to a global economy. For a relatively long period of time, multinational companies have been doing business is several countries across the globe and many have had considerable degrees of failure for not taking cultural effects into consideration. In any market, understanding cultural differences is key to success, let alone on the international market stage. While there are national and international cultures, it is important to address differences in business and political cultures when developing international business strategies. Sociologic differences between countries tend to outweigh similarities. This is to say that people and business practices indifferent parts of the world are driven and influenced by different things and considerations. For instance, when responding to adverts, some people value freedom, entrepreneurial approach and reward for efforts, yet others try to avoid individualism as much as possible. Anthony and Shige (2007) have explained that lack of cultural consideration in international business efforts can result in negative response to product promotion efforts and can also impact on an organization’s international image. For instance, Nestle suffered heavy losses and international criticism when its breast milk substitute was found to be the cause of malnutrition in African babies. Although there was nothing wrong with the company’s product, Nestle deserved the blame because it did not take into account the fact that low literacy levels in Africa would result in the misuse of the breast milk substitute. It is important for multinational companies to tailor their business and marketing messages to the cultures of the host countries in which they operate. Various national cultures value life accomplishments as a measure of one’s success. As a result, most of these cultures accept business efforts presented to them alongside possibilities of achieving life goals. However, the type of international business strategies presented to societies that consider status to be a result of birth place, influence and social standing are not acceptable and cannot make good business strategies (Graeme & Peter, 2005). There are some national cultures where people loathe uncertainty and risk taking but in other countries, the attitude of you-too-can-succeed thrives. Some cultures frown on the use of certain terms, colors, symbols and gestures that are disgusting in their life or historical experiences. As an example, different colors appeal more in some cultures especially religious societies. For the Chinese, red is very much a color of success and luck but a warning in many cultures. Also, gold is a symbol of success and prosperity in China (Stopford, 1998). In the international world of business, gender is an important marketing issue and affects an organization’s success in a selected target market. For instance, a foreign company that sells medical suppliers in Russia should be aware of the fact that majority of doctors in the country are women and hence should be treated more differently than men. But in other countries like Australia, China and Japan, men are the majority on the medical profession. Moreover, gender esteem has a considerable implication in international businesses (Ochel, 2000). In countries like Japan, Australia and Arab world, males command ultimate authority over females. In the contrary, females have a greater say in purchase decisions among the Sweden community. Both past and present political influences can also influence the success of businesses in international markets. It is possible that in some countries, some people have never or have recently known the freedom to make personal choices. In other countries, people have to rely on the government to tell them what is culturally good and what should be avoided. In some countries, a seal of government approval can significantly increase consumer trust in a particular product but in other countries, a mere mention of the government my make the consumer to discern the product (Anthony & Shige, 2007). In countries like Saudi Arabia where individual action and thought have been suppressed for many years, individuals may not have the capacity to exercise rational thought when making purchase decisions. As such, it is difficult for the consumers to come up with bold and positive action to buy a particular product. These people will always need to have things explained to them in details so that they can gain confidence to buy the product. In emerging markets like China, India and Brazil, there are special cultural considerations for multinational businesses. In particular, the Chinese market leads the charge of emerging markets on the global business perspective and is expected to represent a significant part of the global market growth for several years to come. Family structures in China vary remarkably from those in Western countries. For China, family considerations impact greatly on individual decisions including investment and purchase decisions. For this group decisions seem to be uppermost in people’s minds. Because older people are the major decision makers in family level, they are logically the target audience in marketing campaigns (Graeme & Peter, 2005). An evident factor in the success of foreign businesses in China is the avoidance of loss of face. As a society, the Chinese people’s business culture is based on the reputation of individuals and social standpoint. In any business practice, the Chinese consider that reducing personal standing is identical to insulting them. Use of derogatory terms may kill marketing efforts. In the Indian society, religion plays a key role in social and business practices. For the Indians, religious beliefs influence all aspects of live including reaction to marketing efforts. For these people, emotive, educational and informative business approaches are readily accepted (Aguiar & Hurst, 2005). Conclusion In the world of business, different countries have their own cultural identities. These are largely a mixture of values, attitudes and social expectations which influence business processes. In today’s global world of business, being aware of cultural differences between nations and their impact on businesses is a precondition for success. This is more especially the case for business managers in multinational companies. Representatives of these businesses in foreign countries need to get a clear understanding of the cultural differences so as to be successful when conducting business in those countries. Most important, workplace values such as number of work hours as well as business communications are strongly influenced by cultural differences, as dictated by each country’s cultural perspectives of thinking, acting and being. This means that what may be considered as offensive or confusing in one country may not be considered as unacceptable or offensive in another country. This is largely due to culture’s decisive role in different contexts. To understand the impact of culture in work ethics and values, business managers must constantly read about different countries’ cultures and keep in mind the crucial role that culture plays in shaping business processes. Constant communication between individuals from different cultural and linguistic backgrounds characterize today’s globalised business world. Therefore, social contacts in business matters need to be constructive and as precise as possible. On this note, it can be concluded that the Chinese and British cultures are widely different and that these differences impact strongly on the success of foreign businesses in those countries. Therefore, companies with cross border expansion objectives should better start by evaluating the role that host countries’ cultures play in business. When venturing into international business, any company, organization or person should make use of cross-cultural understanding as a tool for successful market entry. Undeniably, culture plays a critical role in the success of international businesses and therefore, acknowledging and recognizing the existence of differences between cultures is highly helpful and valuable. Recognizing cultural differences will greatly help multinational companies shorten geographic distances between host and mother countries and hence make businesses more successful. References Aguiar, M. and Hurst, E. (2005). Measuring Leisure: Evidence from Five Decades of Time Use Surveys. Mimeo: University of Chicago. Amao, O. (2008). Corporate Social Responsibility, Multinational Corporations and the Law in Nigeria: Controlling Multinationals in Host States. Journal of African Law, Vol. 52, No. 1, pp. 89-113, 2008. Anthony, G. and Shige, M. (2007). Multinational corporation internationalization in the service sector: a study of Japanese trading companies. Journal of International Business Studies (2007) 38, 1149–1169. Chang, Y. and Kim S. (2005). Heterogeneity and Aggregation in the Labor Market: Implications for Aggregate Preference Shifts. Federal Reserve Bank of Richmond, Mimeo. Deal, T. & Kennedy, A. (2004). Corporate Cultures: The Rite and Rituals of Corporate life. 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