GRASPING CULTURAL DIFFERENCES
Culture encompasses the values and norms shared by members of a group and the economic, social, political, and religious institutions that shape and mold their activities. At a fundamental level, these cultural values frame and guide the interpretation of experience, the processing of information, and the ways people communicate. It is possible to describe culture as a shared set of basic assumptions and values, with resultant behavioral norms, attitudes, and beliefs that manifest themselves in systems and institutions as well as behavioral and nonbehavioral patterns. There are various levels to culture, ranging from the easily observable outer layers, such as behavioral convention, to the increasingly more difficult to grasp inner layers, such as assumptions and values. Culture is shared among members of a group or society and has an interpretative function for the members of that group. Culture is situated between human nature on the one hand and individual personality on the other. Culture is not inheritable or genetic, but rather is learned. Although all members of a group or society share their culture, expressions of culture-resultant behavior are modified by an individual’s personality.
People create their culture as a way to adapt to their physical environment. Customs, practices, beliefs, and traditions for development and survival are passed along from generation to generation. Your culture facilitates day-to-day living by making sense out of your surroundings. The following characteristics of cultures can influence the way an individual might negotiate:
· Self-identity: Cultures provide an individual with a sense of self, which can be manifested anywhere from extreme independence to extreme interdependence. In a negotiation, this cultural sense of self may dictate whether the parties see negotiations as a competition or an opportunity to collaborate.
· Relationships: Cultures also organize the relationships between individuals according to age, sex, status, or degree of kinship. Such relationships may influence a negotiation by dictating who the culture recognizes as its leaders, who makes the decisions, and who will be governed by those decisions.
· Communication: Verbal and nonverbal communication distinguishes one culture from another. A multitude of languages, dialects, and colloquialisms combine with body language and gestures to make communication unique within cultures and subcultures. Another aspect of communication relevant to negotiations is whether the culture exchanges information in a direct or indirect manner.
· Time and time consciousness: In some cultures time may be viewed as a cycle, constantly reoccurring so that it involves many simultaneous experiences and people. Or time can be viewed as a lineal, sequential event. In that case, time once lost is never regained. A culture that views time as lineal and finite will expect negotiations to begin on time and to finish as soon as possible.
· Values and norms: The needs of a culture will dictate its values and norms. These values include both those accepted by the individual for his or her own behavior and those established by the social environment to guide someone else’s behavior. As the parties to a negotiation interact, both sides are making judgments based upon their own culture’s value system, and they may not realize they are sending the wrong message until it is too late.
· Mental process and learning: Each culture has a reasoning process and an accepted system for learning. One culture might emphasize abstract thinking and another might emphasize rote memory.5 Such traits will dictate how information given in a negotiation is received.
Hofstede’s Cultural Dimensions
Cultures can be dissected to identify critical dimensions that impact negotiating styles. Geert Hofstede and Michael Harris Bond formulated five such dimensions from research studies: (1) power distance, (2) uncertainty avoidance, (3) individualism–collectivism, (4) masculinity–femininity, and (5) long-term orientation.6 Hofstede’s value dimensions, however, are not meant to create stereotypes by suggesting that all individuals within a certain culture possess all of the exact same characteristics. As Hofstede explained in a recent interview:
Countries aren’t king-size individuals; they are social systems. It is like the forest and the trees. Forests are not king-sized trees; they are eco-systems of different trees, shrubs, animals, and other organisms. National cultures are eco-systems of different individuals, institutions, and resources.7
Individuals may certainly fail to display the “cultural dimension” that has been listed as the predominant dimension within that individual’s country.8 These cultural paradoxes contradict attempts to fit individual negotiators neatly into one or another category. Nevertheless, they are useful as a tool to anticipate possible negotiating differences that may arise in a cross-cultural negotiation.
Power Distance
The first dimension, power distance, focuses on the degree of equality or inequality between people in the country’s society. A high power distance ranking indicates that inequalities of power and wealth have been allowed to grow within the society and that the ordering of people into a high or low place is “correct” and should be protected; some individuals in the culture are considered superior to others because of their social status or family background. A low power distance ranking indicates that the society de-emphasizes the differences between its citizens’ power and wealth. In these cultures, equality and opportunity for everyone is stressed and people accept the hierarchy only as a necessary convenience. Individuals gain a position in such cultures by earning it through work and achievement.
Negotiators from cultures with a high power distance tend to be more comfortable with hierarchical structures, clear authority figures, and the use of power in a negotiation. Negotiators from cultures with low power distance tend to be more comfortable with democratic structures, flat organizational hierarchies, shared authority, and limited use of power. The United States has a moderately low power distance orientation and Japan has a moderately high power distance orientation. (See Figure 9.1 for a comparison of the two countries in terms of Hofstede’s five dimensions.) Martha Layne Collins was able to use her position as governor of the Commonwealth of Kentucky to meet as an equal with Toyota’s chairman, Shoichiro Toyoda, in order to negotiate the deal outlined in the Chapter Case. The power distance characteristic also came into play in the Toyota negotiation when it became evident that Toyota’s negotiator, Hiroshi Okuda, was not the decision maker and could not sign the contract without authority from the corporation’s chairman.
Uncertainty Avoidance
Uncertainty avoidance focuses on the level of tolerance for uncertainty and ambiguity within the society in its unstructured situations. A high uncertainty avoidance ranking indicates that the society has a low tolerance for uncertainty and ambiguity. This creates a rule-oriented culture that institutes laws, rules, regulations, and controls in order to reduce the amount of uncertainty. A low uncertainty avoidance ranking indicates the society has less concern about ambiguity and uncertainty and has more tolerance for a variety of opinions. This is reflected in a culture that is less rule-oriented, more readily accepts change, and takes more and greater risks.
Figure 9.1 Hofstede’s Cross-Cultural Comparisons, U.S. and Japan
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As discussed in Chapter 8, every negotiation involves some level of risk. Part of a negotiator’s challenge is to establish the level of trust appropriate to or necessary for a negotiation to succeed. In risk-averse cultures, the ability of an outsider to engender such trust is often compromised.
Individualism–Collectivism
The dimension of individualism–collectivism focuses on the degree that the society reinforces individual or collective achievement and interpersonal relationships. A high individualism ranking indicates that individuality and individual rights are paramount within the culture. Individuals in these societies may tend to form a larger number of looser relationships. The “I” is predominant; identity is based on the individual. Involvement with organizations is calculative—that is, done only for a purpose. Leadership, individual performance, and initiative are valued in individualistic cultures.
A low individualism ranking typifies societies of a more collectivist nature with close ties among individuals. There is a tight social framework in which in-groups look after each other and expect absolute loyalty. In a collectivist culture, the “we” consciousness is paramount. Involvement with organizations is moral, membership is an ideal, and public service is a duty. Order, duty, and security are valued, and are provided by reliance on individuals in the group itself and not outsiders. In a collectivist culture there is an emphasis on the context of a communication (how it is said), rather than the content of the communication (what was said).9 As you saw in the Chapter Case, negotiators from a collectivist culture are more likely to respond to an argument based on how a project will benefit the many people involved, rather than trying to sell it on a purely economic basis.
Now refer to Figure 9.2, which compares various countries on the five dimensions of cultures.10 The United States is listed first for individualistic orientation; Japan tends to have a more collectivist orientation. As you might expect, U.S. negotiators tend to be more competitive in their approach, will argue fine points of their position with enthusiasm, and focus on areas of disagreement as problems that need to be solved one at a time. And, as seen in the Chapter Case, U.S. negotiators like closure—such as having a signed agreement in hand when the negotiations conclude. Japanese negotiators, on the other hand, tend to put less emphasis on the words used in a negotiation and more emphasis on the relationship established before the negotiation began. They tend to listen more than talk, and to focus on areas of commonality and agreement rather than disagreement.
Figure 9.2 Nations Exhibiting Extremes in Hofstede’s Cultural Dimensions
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Masculinity–Femininity
The masculinity–femininity dimension focuses on the degree that a culture reinforces, or does not reinforce, the traditional masculine trait of assertiveness. A high masculinity ranking indicates that the society values achievement, control, and power and has a high degree of gender differentiation. In these cultures, males dominate a significant portion of the society and power structure; men are assertive and women are nurturing; and sex roles are clearly delineated. Japan, for example, is a highly “masculine” culture. Martha Layne Collins, as indicated in the Chapter Case, was able to overcome the fact that she was a woman when negotiating with the chairman of Toyota because of her position as governor of Kentucky.
A high feminine ranking indicates that a society has a more nurturing orientation and a lower level of differentiation and discrimination between genders. In these cultures, females are treated as more equal to males; sex roles are more fluid; and its people, the quality of life, and the environment are valued. Service and cooperation count; sympathy for the unfortunate is appreciated. The so-called “male” and “female” traits of assertiveness and nurturing are certainly evident in the use of distributive and integrative bargaining styles and will be discussed later in the chapter, when we explore gender differences.
Long-Term Orientation
The final dimension, long-term orientation, refers to the selective promotion of a particular set of ethics found in Confucian teachings. It focuses on the degree to which a culture is devoted to traditional, forward-thinking values. A high long-term orientation ranking indicates that a society values long-term commitments and respect for tradition. Therefore, it looks toward future rewards rather than immediate recognition and values—in particular, perseverance and thrift. It supports a strong work ethic where long-term rewards are expected as a result of today’s hard work. A low long-term orientation ranking indicates that a society is inclined more toward immediate results and “saving face” by keeping up appearances. In this culture, change can occur more rapidly as long-term commitments do not become impediments to change. Governor Collins found that the long-term orientation of her Japanese counterparts helped her land the Toyota plant for Kentucky. The phased expansion over a number of years, longer perhaps than a U.S. competitor might have been willing to do, gave Kentucky time to relocate and train the necessary workforce.
The GLOBE Study on Cultural Dimensions
The GLOBE (Global Leadership and Organizational Behavior Effectiveness) study11 was a research project designed to develop empirically based theories to describe, understand, and predict the impact of cultural variables on business practices. The study included 62 societies around the world and was based on surveys of more than 17,000 middle managers in the telecommunications, food processing, and banking industries. Those managers were asked to report their perceptions of the common behaviors and institutional practices in their societies—that is, the way things are— and what they perceived to be the values, desires, and aspirations of their societies— that is, the way things should be. The study differed from Hofstede’s study in that the survey sought to identify not only where the society was at the time, but where the society saw itself going.
The GLOBE study identified nine cultural dimensions that could be used for comparing different societal cultures: (1) performance orientation, (2) in-group collectivism, (3) institutional collectivism, (4) power distance, (5) uncertainty avoidance, (6) future orientation, (7) gender egalitarianism, (8) assertiveness, and (9) humane orientation. Six of the nine dimensions have their origins in Hofstede’s cultural dimensions: Power distance and uncertainty avoidance reflect the same constructs; in-group collectivism and institutional collectivism are refinements of Hofstede’s individualist–collectivist dimension; and in lieu of Hofstede’s masculinity–femininity dimension, the GLOBE study developed its gender egalitarianism and assertiveness dimensions. Future orientation, humane orientation, and performance orientation have their origins in other organizational behavioral studies.12
The GLOBE project reduced the complexity of its findings by grouping the 62 societies it targeted into 10 regional clusters, shown in Figure 9.3. The GLOBE project was able to characterize the way the societies within a cluster shared cultural dimensions as well as each society’s aspirations. The nine GLOBE dimensions along with rankings of representative clusters are as follows:
1. Performance Orientation: The degree to which a culture’s people (should) encourage and reward people for performance. (High: Germanic Europe, Confucian Asia, and Anglo; Low: Eastern Europe and Latin America)
2. In-Group Collectivism: The degree to which a culture’s people (should) take pride in and (should) feel loyalty toward their families, organizations, and employers. (High: Southeast Asia, Confucian Asia, Eastern Europe, and Middle East; Low: Anglo, Nordic Europe, and Germanic Europe)
3. Institutional Collectivism: The degree to which individuals are (should be) encouraged by institutions to be integrated into broader entities, with harmony and cooperation as paramount principles at the expense of autonomy and individual freedom. (High: Nordic Europe and Confucian Asia; Mid: Anglo; Low: Latin America, Germanic Europe, and Latin Europe)
4. Power Distance: The degree to which a culture’s people are (should be) separated by power, authority, and prestige. (High: Southeast Asia, Eastern Europe, and Latin America; Mid: Anglo and Confucian Asia; Low: Nordic Germany and Germanic Europe)
5. Uncertainty Avoidance: The degree to which a culture’s people (should) seek orderliness, consistency, and structure. (High: Nordic Europe and Germanic Europe; Mid: Anglo and Confucian Asia; Low: Middle East, Eastern Europe, and Latin America)
6. Future Orientation: The degree to which a culture’s people are (should be) willing to defer immediate gratification for future benefits. (High: Germanic Europe and Nordic Europe; Mid: Anglo and Confucian Asia; Low: Middle East, Latin America, and Eastern Europe)
Figure 9.3 The 10 Clusters of GLOBE Countries
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7. Gender Egalitarianism: The degree to which a culture’s people (should) support gender equality. (High: Eastern Europe and Nordic Europe; Mid: Anglo and Confucian Asia; Low: Middle East and Germanic Europe)
8. Assertiveness: The degree to which a culture’s people are (should be) assertive, confrontational, and aggressive. (High: Germanic Europe and Eastern Europe; Mid: Anglo and Confucian Asia; Low: Nordic Europe and Southeast Asia)
9. Humane Orientation: The degree to which a culture’s people are (should be) fair, altruistic, generous, caring, and kind toward others. (High: Southern Asia and Sub-Sahara Africa; Mid: Anglo and Confucian Asia; Low: Latin Europe and Germanic Europe)
Characteristics of the various GLOBE dimensions that have a direct impact on how an individual from such a society might negotiate are suggested in Figure 9.4. Figure 9.5 shows the relative scores on the nine GLOBE dimensions for the U.S. and Japan.
In summarizing its findings from the 10 society clusters, the GLOBE study noted the following:13
1. The Anglo cluster, consisting of the predominantly English-speaking developed nations that were formerly British colonies, is characterized by an individualist performance orientation. Although their societies value gender equality, they tend to be male-dominated in practice. They aspire to improve performance, future, and humane orientation as well as in-group collectivism.14 Negotiators from these cultures can be expected to use a competitive negotiation style, to communicate directly, to value personal needs and attitudes, and to attempt to persuade with rational arguments.
Figure 9.4 Representative Characteristics of GLOBE Dimensions
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2. Societies in the Middle East cluster share many commonalities in norms and practices reflecting their common historic and religious heritage. They are highly group-oriented, hierarchical, and masculine. They aspire to increase their uncertainty avoidance and their future orientation.15 As negotiators, they might be highly suspicious of outsiders, reluctant to share information, but inclined to communicate directly. They might attempt to control the environment, would not be reluctant to use power tactics, and would be invested in winning.
3. The Southern Asia cluster has a total population of almost 1.5 billion. The cluster has a high power distance rating and strong group and family collectivism practices. These societies aspire for stronger future and performance orientations and lower levels of power distance.16 Negotiators from this cluster would not be inclined to share information, would not be reluctant to use power tactics, would feel a high sense of duty and obligation to the parties they represent, and could be persuaded by emotional arguments.
4. The countries grouped as the Latin Europe cluster—Spain, Portugal, Italy, French Switzerland, France, and Israel—land in the mid-range on all of the studied dimensions, except they have a high power distance and low humane orientation. The cluster’s values are particularly high on performance orientation, perhaps reflecting the participants’ understanding of the impact of global competition.17 Negotiators from this cluster would tend to hoard information, not be reluctant to use power tactics, and be motivated by self-interest.
Figure 9.5 GLOBE Cultural Dimensions, United States, and Japan
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Source: Based on information from Mansour Javidan, Peter W. Dorfman, Mary Sully de Luque, and Robert J. House, “In the Eye of the Beholder: Cross Cultural Lessons in Leadership from Project GLOBE,” Academy of Management Perspectives 20 (February 2006): 86-87.
5. The Germanic Europe cluster is distinguished from other clusters by its industrial relations, which emphasize cooperation between “labor” and “capital” through co-determination and work councils. They are characterized by a strong tendency for standardization and rules, hierarchy, assertiveness, and gender inequality, although they aspire to increase gender egalitarianism, and to reduce uncertainty avoidance and assertiveness.18 Negotiators from these cultures are likely to use a competitive negotiation style, to communicate directly, and to value personal needs and attitudes over any group needs. They may try to control the environment, attempt to persuade with rational arguments, and use power tactics—and will be very invested in winning.
6. The Eastern Europe cluster exhibits distinctive cultural practices including assertiveness, high power distances, gender egalitarianism, and in-group collectivism. This cluster, in converting from a communist philosophy to a market-based economy, aspires to increase its future and performance orientation.19 Negotiators from this cluster are likely to use a competitive negotiation style and would communicate directly, but also would tend to hoard information. They generally feel a high sense of duty and obligation to the parties they represent and would not be reluctant to use power tactics.
7. Results from the GLOBE study on the Latin America cluster include a concern by the participants that these countries are excessively elitist and highly collectivist, in the sense of marked family and group loyalty values and having a high tolerance for ambiguity. On the other hand, the societies aspire to reduce their power distance rankings and increase both future and performance orientations.20 Negotiators in this cluster would tend to be driven by a group interest rather than individual interests, and would allow all of the group to take part in the decision making. They might hoard information and would not be reluctant to use power tactics.
8. The Nordic Europe cluster shared a strong tendency for standardization and rules with Germanic Europe but had a low score on assertiveness and has embraced gender equality. The cluster aspires to reduce the power distance within its societies and to increase in-group collectivism. Negotiators from this culture would enter the negotiations with formalized policies and procedures and would be reluctant to change positions. They would be driven by a group interest rather than individual interests, would allow all of the group to take part in the decision making, and would be more interested in the long-term benefits of the negotiation than in the immediate results.
9. The Confucian Asia cluster emphasizes its in-group and institutional collectivism and performance orientation as its current practice and seeks to reduce its power distance and improve its future orientation. Negotiators would be driven by a group interest rather than individual interests and by their duty and obligations to the group. They are likely to use a competitive negotiation style and be reluctant to share information.
10. Finally, the Sub-Sahara Africa cluster also emphasizes its in-group collectivism and has a high power distance, which it hopes to reduce, and low future and performance orientations, which it hopes to improve. Negotiators in this cluster would not readily share information and would not be reluctant to use power tactics, but would pursue the group’s interest and rely on the group to make the decisions.21
In Box 9.1, reviewing one company’s experience in failing to recognize cultural differences can help you avoid the same mistakes.
BOX 9.1 Traps to Avoid
Ignoring Cross-Cultural Differences
A company’s “knowledge base” is an important resource. It is a product of human experience and thought, which is embedded within a company’s rules, processes, or routines. Creating partnerships requires the sharing of such knowledge. Five principles for successful transfer of knowledge are: (1) recognizing the value of the knowledge; (2) ensuring the motivation of the organization that is sharing the knowledge; (3) developing clear communication channels to transfer knowledge; (4) ensuring the motivation of the organization that is receiving the knowledge; and (5) ensuring that the receiving organization has the capacity to absorb and assimilate the knowledge.
Culture and cultural differences can impact how well knowledge can be shared. Researchers studied a failed attempt by a Nordic Europe business school (NORDED) to market its training program for “Leadership and Management of Change” to a Southern Asia bank (Tai Bank), to determine if there were core problems to avoid. The GLOBE study determined that the Nordic Europe and Southern Asia clusters showed the greatest variance in the dimensions of power distance, in-group collectivism, and uncertainty avoidance. Nordic Europe had a low power distance, low in-group collectivism, and high uncertainty avoidance. Southern Asia had the opposite. Because NORDED was marketing a knowledge product, it needed to satisfy the five principles for the transfer of knowledge just described, which it had difficulty doing because of the cultural differences. Here is a summary of the problem areas:
· Recognizing different cultural values: NORDED’s program was designed around its belief that organizations are better off if their managers are involved in decision making because that leads to better quality decisions. This value is understandable for a low power distance culture (Nordic Europe), but it doesn’t necessarily translate to a culture with a high power distance that values hierarchical management (Southern Asia).
· Understanding different motivations: Sharing knowledge takes time and resources. NORDED’s personnel may have been motivated to share what they considered a valuable product, but Tai Bank’s managers may not have shared that motivation because a culture with an orientation toward in-group collectivism would be reluctant to spend time and energy working with out-group members.
· Communication: How the knowledge is communicated is an important aspect of knowledge exchange. In a culture with high uncertainty avoidance, such as NORDED’s, there would be a preference for advanced planning, high attention to detail, and organization before the delivery of the program. Tai Bank’s low uncertainty avoidance, on the other hand, would tend to support a more fluid program that could be monitored and adjusted during its presentation.
· Assimilation: The degree of similarity between two cultures contributes to the ability of one to assimilate knowledge from the other. In this case, NORDED and Tai Bank’s cultures were so dissimilar that the ability of Tai Bank to actually incorporate the knowledge base that NORDED was attempting to share was limited.
Source: Adapted from Mansour Javidan, Gunter K. Stahl, Felix Brodbeck, and Celeste P. M. Wilderom, “Cross-Border Transfer of Knowledge: Cultural Lessons from Project GLOBE,” Academy of Management Executive 19 (May 2005): 59–76.
