The Uniqueness of Culture

While the issue of complexity and the knowledge base needed by the global manager grows exponentially as additional countries are added to the organization’s domain, not all environmental factors require the same familiarity. Some are more easily dealt with than others. For example, the legal environment is relatively tangible and specific. It is easily viewed and evaluated. And the appropriate corporate response to it is generally relatively clear. The same is true to different degrees for other elements of the environment.

The cultural aspects of the environment, however, are quite different. They are less tangible and less measurable. Even when seeking a definition of the concept, little consensus is found. Kroeber and Kluckhohn, for example, noted 166 definitions of culture. Yet culture permeates the entire organization and all aspects of its operation. The products or services that a firm can successfully offer are culturally determined. Management styles that are effective are culturally determined. Appropriate relations with suppliers, competitors, and government officials are culturally determined. Acceptable public behavior of an organization’s management is culturally determined.

Responding to these cultural dictates is difficult enough within one’s own home society. Nationals often have difficulty getting a clear reading of their own culture, especially when they are in a plural culture society. When attempting to operate in a multicultural situation, there is an exponential magnification of problems with which the firm must deal.

The Ethnic Components of National Culture

To appreciate the extreme degree of cultural adaptation necessary when operating internationally, it is helpful to look at the cultural distinctiveness of different parts of the United States that need to be dealt with if a firm is to be as successful as possible when operating here. Los Angeles, for example, has many of the characteristics of a Third World market. Spanish and Korean are the second and third most spoken languages, and multicultural influences are strong. In San Antonio, Texas, more than half the population speak Spanish in addition to English, have Spanish surnames, and identify strongly with the Mexican-American culture. The same is generally true for all of South Texas. Miami has a strong Cuban cultural influence. The same can be said for different cultures in different parts of the country.

The United States as a melting pot is changing to the United States as a mosaic of many cultures. In such a setting, cultural adaptation of products, services, or processes is often required. As noted by Harris and Moran, where the Hispanic attitude toward fatalism is strong, there is reduced appeal of product guarantees and warranties, while appeal to family motives creates stronger product appeal. Weiner, as well as others, has noted the variable and strong influence on operations of the ethnic composition of different nations. The present author visited one large manufacturing plant in Luxembourg in which the labor force was fairly evenly divided among five different nationalities, all with different languages and cultures.

“Natural” Groupings of Countries

Europe is often thought of as a group of culturally similar firms. However, firms that are successful there recognize clearly that Europe is made up of distinct countries, each requiring individual adaptations if the firm is to reach its full potential. IBM World Trade Europe/ Middle East/ Africa Corporation is very successful in Europe due to its “Europeanness”. Not only do they not treat their European operations in the same manner as the U.S. operation, they have learned that they must treat each European country separately. Consequently, among the various things the firm does that are particular to each country, they maintain a separate national marketing organization in each country, which includes local hiring.

David E. McKinney, head of IBM Europe, reflected a similar view when speaking at The Europe Business Outlook 1991 Conference at The University of Tennessee in April, 1991. According to McKinney, the markets of Europe will not be homogeneous. Diversity will continue to flourish in these markets with different legislation, tax laws, languages, and so on. Roland Magnin, executive vice-president of Xerox, speaking at the same conference stated that this is the reason there are few pan-European advertising campaigns.

In a like manner, other geographically associated countries are culturally grouped. The Middle East is often thought of as composed of countries that are Arabic, Islamic, and similar. However, they are not all Arab. Even when viewing just the Arab countries, there are significant differences. Jordan and Saudi Arabia, in many respects, are more different than they are similar. Also, within the Islamic religion, there are significant differences among the dominant sects.

Latin America, too, is often thought of as composed of similar countries. They, for the most part, speak the same language, Spanish, and to a large extent, have a similar heritage. Even here, however, successfully operating foreign firms have realized that beneath all of the similarities, significant differences arise due to, among other things, an alteration of the culture resulting from political and social conditions. Bolivia and Argentina are worlds apart. U.S. firms have also found that they cannot treat their Canadian operations as mere extensions of their domestic operations. Not only are national adaptations necessary here, but different parts of Canada must be treated in significantly different ways. One member of Pierre Trudeau cabinet said, “Canada is less a country than a collection of little worlds”.

The Differences between Apparently Similar Countries

The manager who is quick to group firms into clusters, however, is not much better off than the one who treats the world as consisting of a homogenized culture. All countries are different from all others. Some are just more different than others. And, to the degree that they are different, they require different behaviors from the firms. The Asian countries of Japan, China, and Korea are often grouped together as being similar. It is felt that if one understands and can function in Japan, then one can function equally well in China or Korea. However, regional specialists have noted that business organizations in Japan, the People’s Republic of China, and the Republic of Korea are not run by the same management principles. In Japan, there is a strong focus on group loyalty and consensus, expressed as wa. Mutual cooperation is of primary concern so that the group can devote their energies to reaching group goals. To more readily reach this state, many Japanese managers will insist that business dealings only occur among friends. In Chinese business relations the guiding term is guanxi, with the emphasis being on the relationship between two persons. It is based on friendship and the exchange of favors, which tends to favor the weaker member of the pair. And, in Korea, the guiding principle is inhwa, which refers to harmony, especially between those of unequal status or rank.

Even though there is some relationship between the guiding business principles of these three Asian countries, they are different and require subtle differences in behavior. To be successful in Japan, firms have to behave in ways that are acceptable to the Japanese and in China, firms must use Chinaspecific criteria and procedures. Performing in this manner would be difficult for a foreigner who spoke the language. It is practically impossible when the language is not spoken. And, as observed by Tung, a major language barrier exists for Western executives who are unable even to guess at the meanings of words from their spelling. This would be true for many other languages of the world, for example, Arabic.

Even here, within the constancy of the Asian cultures, the existence of change, as noted earlier, is at play. Schwind and Peterson have observed that young Japanese management trainees exhibit values more similar to U.S. students studying in Japan than to those of established Japanese managers. The trainees show a significant shift toward the values underlying Western management practices. For example, rather than supporting the collective goals characteristic of Japanese managers, the trainees show a stronger orientation to personal goals and to pay and promotion policies based on performance rather than seniority.

Clusters of Countries

The idea of clustering countries culturally is enticing, because it seems to simplify a complex situation. Consequently, there is an enduring tendency to think of the world as made up of clusters of cultures, within each of which there are fairly common cultural characteristics. Geert Hofstede, for example, studied the cultures of forty different countries, focusing on the dimensions that he labeled Power Distance, Uncertainty Avoidance, Individualism, and Masculinity. He grouped countries into culture areas on the basis of their scores on these dimensions and noted that it is likely on this basis that some cultures can be combined more easily than others in partnership or joint venture arrangements. These more easily combined cultures produce organizational unions that tend to work better.

Now consider again the work force and its changing character. If one were to consider each country as unique, the magnitude of complexity with which the multinational corporation ( MNC must deal is monumental. For example, we are not now dealing with one group of employees from the same country, but with employees of many nationalities in many different countries. The implications of this one environmental factor are enormous. In each country in which the firm operates, management must contend with one or more different national and ethnic cultures. The employees within each culture will respond from a different value base, have different beliefs and different motivations. They will require a different human resource plan with different incentives, managerial styles, and expectations. They will be governed by and respond to different employee legislation. Now to all of these cultural variations, add the dimension of constantly increasing change. The ability of the global manager to respond appropriately to this one dimension is surely challenged. It is clear why it is so tempting to seek apparent clusters in an effort to simplify the situation.