IMPROVING COMMUNICATION BASED ON CULTURAL

COMPETENCY IN THE BUSINESS ENVIRONMENT

by

Walter N. Burton III

A Dissertation Submitted to the Faculty of

The Dorothy F. Schmidt College of Arts and Letters

in Partial Fulfillment of the Requirements for the Degree of

Doctor of Philosophy

Florida Atlantic University

Boca Raton, Florida

May 2011

IMPROVING COMMUNICATION BASED ON CULTURAL COMPETENCY

IN THE BUSINESS ENVIRONMENT

by

Walter N. Burton III

This dissertation was prepared under the direction of the candidate's dissertation advisor, Dr. Patricia Darlington, School of Communication and Multimedia Studies, and has been approved by the members ofhis supervisory committee. It was submitted to the faculty of The Dorothy F. Schmidt College of Arts and Letters and was accepted in partial fulfillment ofthe requirements for the degree ofDoctor ofPhilosophy.

SUPERVISORY COMMITTEE: ~o--b Patricia Darlington, Ph.D. ~.:J~~ Nannetta Durnell-Uwechue, Ph.D. ~~C-~ Arthur S. E ans, J. Ph.D.

c~~~Q,IL---_ Emily~ard, Ph.D. Director, Comparative Studies Program ~~~ M~,Ph.D. Dean, The Dorothy F. Schmidt College ofArts & Letters ~~~~ Dean, Graduate College

ii ACKNOWLEDGEMENTS

I would like to thank the members of my committee Prof. Patricia Darlington,

Prof. Nennetta Durnell-Uwechue, Prof. Arthur Evans, and Prof. Angela Rhone for your diligent readings of my work as well as your limitless dedication to the art of teaching.

I would like to offer a special thanks to my Chair Prof. Patricia Darlington for your counsel in guiding me through this extensive and arduous project. I speak for countless students when I say that over the past eight years your inspiration, guidance, patience, and encouragement has been a constant beacon guiding my way through many perils and tribulations, along with countless achievements and accomplishments.

I am indebted to my family and friends who have always supported my efforts.

In the last eight years, words of encouragement have been a constant comfort. This is all possible because I am blessed with a loving, supportive, devoted, and beautiful wife,

Kelly, who has a belief in me that has carried me throughout this process. Thank you to my children Beau and Mackenzie, for your unconditional love. I am so very proud to be your father. I am truly blessed to have parents who have given me love and a sense of strength beyond what words can describe. To my sister, Kyra, and brother, Michael, thank you for everything, above all, your unwavering love and support. I would also like to thank Jay, Mary Jane, and Jamie Sullivan for the support, devotion, and affection you show for my family.

iii ABSTRACT

Author: Walter N. Burton III

Title: Improving Communication Based on Cultural Competency in the Business Environment

Institution: Florida Atlantic University

Dissertation Advisor: Dr. Patricia Darlington

Degree: Doctor of Philosophy

Year: 2011

The purpose of this study was to show support that certain cultural characteristics of an individual could be identified based on the region where that individual was born and raised. These cultural characteristics were identified and defined, and strategies on understanding these cultural characteristics were reviewed.

This study revealed that by focusing on this understanding, trust can be established quickly and it is this trust that is the basis of building any type of relationship.

Several different macrocultural systems were examined in this study. These included the United States, Asia, Central and South America, India, the Middle East, and the European Union cultures. These are the largest and the fastest growing regions of the world as well as the locations where most of the newly established business relationships are being formed. The study examined each macrocultural system individually by giving some background information on the culture and reasons for their recent explosive economic growth.

iv Upon review of this study, any individual should be able to approach others with the realization that, with some degree of confidence, cultural characteristics of the individual being pursued can be predetermined based on a number of factors. The ability to recognize these factors facilitates a cultural competency that includes the skills and qualities that enable successful outcomes to happen in business contexts where different cultures are interacting. This predetermination will provide a type of blueprint to an individual’s thoughts, tendencies, and even buying patterns. These strategies will reveal ways of sidestepping everyone’s natural tendency to say “no.” By providing this insight into predisposed behavior patterns, most individuals will tend to lower their natural defense barriers and a smooth and effective conversation will follow.

Personality types are recognized during or after a conversation, but cultural characteristics can be determined prior to the start of any conversation. Oftentimes, it is too late to try and figure out a personality type to adjust your sales approach or strategy in the middle of a conversation. There are ways to recognize cultural characteristics and incorporate certain strategies simply by knowing where a prospect was born and raised, as well as knowing their ethnicity.

v IMPROVING COMMUNICATION BASED ON CULTURAL

COMPETENCY IN THE BUSINESS ENVIRONMENT

Chapter 1...... 1

Introduction...... 1

Purpose...... 5

Scope of Study...... 7

Background ...... 10

Assumptions and Operationalizations ...... 12

Research Questions...... 15

Methodology ...... 16

Chapter 2...... 22

Cultural Characteristics ...... 22

Basic Cultural Components...... 23

Power Distance Index: Small vs. Large Power Distance...... 23

Individualism vs. Collectivism...... 24

Masculinity vs. Femininity...... 25

Uncertainty Avoidance Index...... 25

Long-term vs. Short-term Orientation ...... 26

High-context vs. Low-context Communication ...... 26

Communication in High Context vs. Low Context Cultures ...... 27

vi Today’s Technological Influence on Intercultural Communication...... 28

Language...... 29

Non-Verbal Communication...... 30

The Importance of a Good First Impression ...... 34

The Importance and Evolution of the Handshake ...... 39

The Role of Impression Management...... 41

Personality Types in Relation to Cultural Characteristics ...... 43

Driver ...... 44

Analytical ...... 44

Amiable ...... 45

Expressive ...... 45

Chapter 3...... 47

Macrocultural Systems ...... 47

Asian Culture...... 48

Case Study #1. An Inference of Gift Giving within Asian Business Culture ...... 60

Latin America...... 67

Latino vs. Hispanic ...... 69

The Countries in Latin America ...... 70

Argentina ...... 71

Brazil ...... 72

Chile ...... 74

Cuba ...... 75

vii Cuban Exiles in America...... 76

Mexico...... 77

Case Study #1. Brazilian National Culture, Organizational Culture and Cultural Agreement: Findings from a Multinational Company ...... 80

India ...... 88

Case Study #1. India’s Offshoring...... 95

Current Trends ...... 102

The Middle East ...... 103

United Arab Emirates (Dubai)...... 110

Case Study #1. Business Success in the Middle East ...... 111

Family Roles...... 116

Time ...... 118

Space ...... 119

Manners and Customs ...... 119

European Union (EU) ...... 120

Growth in the EU: Business Partnering Innovation...... 125

United Kingdom ...... 129

Ireland/Northern Ireland...... 132

France...... 133

Italy ...... 135

Greece ...... 137

Case Study #1. Diversity of Europe’s Business Cultures under Threat?...... 138

The United States...... 144

viii Urban Culture ...... 149

Rural Culture ...... 150

Silicon Valley ...... 152

Rocky Mountain Region ...... 153

Bible Belt...... 153

Age Groups...... 154

Gender...... 155

Chapter 4...... 157

Results and Conclusions...... 157

Appendix ...... 162

Bibliography ...... 165

ix CHAPTER 1

Introduction

In today’s fast paced, global business environment, it is critical to explore innovative approaches that will facilitate the process and time it typically takes to establish business relationships. This ability to know the individuals that we deal with on a daily basis will give anyone who focuses on this understanding a competitive advantage in today’s business world. Business relationships are created based on mutual trust and understanding. With today’s communication technology, most business people are dealing with individuals from differing cultures on a daily basis and have a limited amount of time to establish the necessary foundation of trust. Therefore it is more critical than ever to understand the cultural background of the individuals who are looking to form this business partnership.

The business world has evolved and so have the conditions to which business people must respond and adapt. The remarkable changes in technology and global politics, such as the end of the Cold War and the creation of a unified European community, created not only the opportunity, but also the necessity, to build new relationships that once were not thought possible. The numbers of organizations that operate globally have grown exponentially. Nearly two-thirds of all U.S. companies carry out business with companies that are headquartered outside the United States.

These relationships are due to the recent advances in communication technology. The

1

click of a button will put individuals who know nothing of each other face-to-face, both trying to achieve his or her goal. More than ever, it is important to understand cultural backgrounds in order to help establish a business relationship. Unfortunately, many assume that people from differing cultures will act in similar fashions to their own.

Schuetz (1944) writes that people, “take it for granted that his fellow man will understand his thought if expressed in plain language and will answer accordingly, without wondering how this miraculous performance may be explained” (p. 501).

Schuetz (1944) takes this even further when he explains that:

Any member born and reared within the group accepts the ready made

standardized scheme of the cultural pattern handed down to him by ancestors,

teachers, and authorities as an unquestioned and unquestionable guide in all the

situations which normally occur within the social world. (p. 501)

Every culture has a paradigm and a set of unwritten rules that they go through when building trust with new individuals. It is these unique cultural traits that need to be understood. It is wise for any intelligent salesperson to learn about other cultures in order to modify their behaviors accordingly. There are identifiable techniques in achieving a common ground between unknown and unfamiliar individuals. One technique is to identify the city, state, country, or region of the world where the individual with whom a relationship is being formed originates and to understand the culture of the area where that individual resides. This information will play a major role in defining some of the cultural characteristics one can expect of that individual prior to any initial contact. Becoming familiar with these common characteristics and modifying one’s own behaviors accordingly can help to achieve a common ground

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between individuals who do not know each other, which will facilitate and enhance the newly established working relationship.

A content analysis of numerous books and articles on culture, business, and how to understand their relationship to one another was conducted. Harold Lasswell originated many of the central questions that content analysis are designed to answer, such as who says what to whom and why. Earl Babbie (1998) defines content analysis as “the study of recorded human communications, such as books, websites…” (p. 12).

Texts are studied under this format in the humanities area of scholarly methodology.

This research method recently became popular in the study of public relations as well.

The reasons for this are similar to the results that were determined in this dissertation.

Content analysis provides insight into the ways groups behave; for a public relations firm this will help them determine how their client should act or what they should say in any given situation. For this dissertation, content analysis provided a research method that enabled me to compress a number of texts and articles into categories that were common and identifiable. The results, similar to what a PR firm might find useful, shows how a businessperson should act or what they should say when encountering someone from a new culture. Many of the texts and articles analyzed were written specifically on cultures such as the United States, Asia, India, Central and South

America, the Middle East, and the European Union. What was missing from scholarship was the codification of these cultural characteristics, supported by extensive research and focused on business communication. A study of this magnitude is particularly timely as advanced technology, such as 4G phones that have real-time video and audio, is coming into fashion. It provided criteria to follow when attempting

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to establish new business relationships. Most importantly, the research condenses a wide array of information available and brings new strategies for a businessperson who is competing in the twenty-first century to follow. Scholarship exists in books, journals, academic dissertations, and publications as well as in other scholarly works that are germane to this paper.

Therefore, the uniqueness of this study can best be described in two ways. The first is the codification of the information from the literature review. It was difficult to find specific texts that focus on the understanding of cultural traits as a key to establishing trust in a relationship. But, throughout the reading, many of the texts would point to similar examples or similar traits that one could expect from a certain group. When these examples seemed to agree with each other, I would use them in this dissertation. In a similar way, the industry experts would respond to my questions and when similar veins of thought from some of the experts were in agreement, I would use them in my examples as well. The literature review was extensive and painstaking and the industry experts certainly had enough experiences to be labeled as experts in their fields. So I believe the codification of this research and interviews is distinct and brings new information to this area of study.

Grounded theory was utilized in this study as well. According to Anselm

Strauss (1987), one of the originators of the theory, grounded theory is a research approach that systematically looks at mostly qualitative information in order to generate workable theories. Strauss emphasized the importance of a sampling group that every grounded theory approach should use. Ideally, using this method, data should be gathered first and then a comparison of answers is made in order to make the theory

4

reliable. Interviews were conducted with 30 business owners and top sales people who have all met certain criteria. These “industry experts” and the methodology of the research and interviews are defined later in this paper in the methodology section.

These interviews, as well as my own business background, clearly show that understanding a potential customer’s culture prior to having a conversation will increase the possibility for success. Communication styles clearly affect first impressions, and it is these first impressions that are critical to establishing business relationships where time is of the essence. A good first impression depends upon reducing uncertainty levels about other people while still being able to build trust. In order to reduce any discomfort or distrust, an intelligent salesperson should employ behaviors that will enhance their chances of building trust, thereby increasing their chances of closing more deals and increasing profits both for their company and for themselves. This first impression in business relationships will be explored in detail later in this paper.

Purpose

The purpose of this study is to show support for the idea that cultural characteristics based on city or region as well as on other cultural traits of an individual can be identified. Also, cultural characteristics are identified and defined and strategies on approaching individuals with these cultural characteristics are reviewed. Upon review of this study, individuals should be able to approach others with the realization that, with some degree of certainty, the cultural characteristics of the individual being pursued can be predetermined based on a number of factors. The ability to recognize these factors provides a cultural competency, which includes the skills and qualities that enable successful outcomes in business contexts where different cultures are interacting.

5

This predetermination will provide a type of blueprint to an individual’s thoughts, tendencies, and even buying patterns. These strategies will reveal ways of sidestepping everyone’s natural tendency to say “no.” By providing this insight into predisposed behavior patterns, most prospects will tend to lower their natural defense barriers, allowing a smooth and effective conversation to follow.

Several different macrocultural systems are examined in this study. The systems being reviewed are 1) Asian culture - which includes China, Japan and the surrounding areas; 2) Latin America – including Brazil; 3) India; 4) the Middle East; 5) the

European Union; and 6) the United States. In addition, many subcultures in the United

States also will be explored. For example, the vastly different cultural characteristics of rural vs. urban individuals, male vs. female, different age groups, and religion will be explored in the U. S. culture. Several case studies will follow each section. These real world studies will explore real life situations that resulted in either a successful or unsuccessful business relationship being formed.

The largest and the fastest growing regions of the world were chosen because these are where a majority of the newly established business relationships are being formed. Included in each regional study are people from these regions currently residing in or doing business in the United States since they obviously bring their cultural traits with them wherever they go. (For example, an Asian American still would have the same identifiable traits as they did in the homeland where they grew up.) In addition, each macrocultural system was examined individually to identify why it has certain traits. This was accomplished by giving some background information on the culture and reasons for its recent explosive economic growth. An examination of each

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region’s impact on the broader world economy and its relationship to the United States in terms of trade is explored. These are important facts to establish because in today’s global village, meetings and information are as close as the click of a mouse button.

Therefore, it is critically important to understand each culture because a number of new relationships are being formed as a result of this technology.

Scope of Study

There have been innumerable studies on personality types conducted for the business community and thousands of books have been written on selling techniques by countless authors and sales gurus. It is commonly agreed that if personality types can be identified, strategies can be employed to better communicate and ultimately “close a deal” with this individual. After extensive research, there is a significant amount of data available that shows how to determine personality types during or after a conversation based on a number of factors (Kroeger & Thuesen, 1992). However, I have been unable to find any study that shows how to predetermine, with any precision, these proven and previously well defined personality types. Unfortunately, personality types are determined during or after the first conversation, and it has been proven that it is during the first conversations and meetings that mutual trust and mutual respect is established (Reynierse, Ackerman, Harker, & Fink, 2001). However, it is my view that there are strategies that can be incorporated to determine, prior to any conversation or meeting, many of the cultural characteristics that would be expected from an individual.

Knowing these characteristics will enhance the probability of success of the newly established business relationship. While personality types are not the focus of this paper, they are identified briefly later in the paper to illustrate how cultural

7

characteristics and personality types sometimes are considered relatively interchangeable.

An example to illustrate clearly this point is as follows (this example is used extensively throughout this dissertation): A salesperson named John has three very important business meetings scheduled for one afternoon. The meetings are scheduled with three different business owners to whom he is trying to sell a new product valued at $25,000. The meetings are scheduled with Sal Bodrado, Victoria Cheng, and Nick

Atkins. John, the salesperson, typically has a no-nonsense approach to sales. So, as usual, he gets straight to the point and shows each prospect the product’s advantages and cost comparisons and asks each to place an order on the spot.

At the end of the day, John has convinced only Sal Bodrado to purchase his product because their personalities seemed to connect and the sales call went fairly well.

Sal Bodrado and John seemed to get along well from the start. Sal was born and raised in Manhattan, New York; he’s used to a fast-paced lifestyle and appreciated John’s no- nonsense approach to sales. The product fit Sal’s needs and they signed the deal on the spot. Sal is used to dealing with people like John on a daily basis, so he felt comfortable and at ease with John’s direct sales approach.

Unfortunately, the other two sales calls did not go well, and the reasons for this are clear. In the case of Victoria Cheng, she was unimpressed with John’s sales tactics.

In her Asian culture it is imperative to develop a relationship prior to doing any type of business with anyone. However, John asked her to sign a contract right away, sidestepping this expectation. Furthermore, she felt it was important to do more research on the product and the company before she felt comfortable with moving

8

forward. Nick Atkins was equally unimpressed with John’s sales tactics. Nick is 66 years old and was born and raised in Durham, North Carolina, where it is important to shake hands, look into each other’s eyes, and be courteous. Unfortunately, John seemed to do this with little sincerity, causing Nick to develop a distrust for John immediately.

In addition, John commented during the presentation that he went to Georgetown

University. Nick asked John if he liked basketball and to that John replied, “No, you couldn’t pay me to watch that sport.” Growing up in the central part of North Carolina located in the middle of University of North Carolina, Duke University, and North

Carolina State, Nick was offended that any man could be so naïve as to not like basketball. Needless to say, Nick couldn’t get John out of his office fast enough.

These examples clearly illustrate that if John had been able to recognize some of the cultural characteristics of his potential prospects and alter his sales approach accordingly, he might have improved his chances for success.

Personality types are recognized during or after a conversation, but cultural characteristics can be determined prior to the start of any conversation. Often, it is too late to try to figure out a personality type and adjust your sales approach in the middle of a conversation. However, there are ways to recognize cultural characteristics and incorporate certain strategies simply by knowing where a prospect was born and raised, as well as knowing their ethnicity.

This study adds a new dimension to the current available information on cultural characteristics and personality types. It provides a blueprint into the behavioral tendencies of potential customers prior to any contact being made. Understanding this behavior by analyzing cultural types not only will increase the speed at which

9

relationships will be established and sales will be made, but also will increase the total number of each as well.

Finally, this paper provided an opportunity to carry out what many authors who are studied in the core courses for the Public Intellectuals degree at Florida Atlantic

University write about. As Todd Gitlin (2006) writes, “One striking thing about the academics communications discourse – critical or administrative – is how little it is to committed to engaging, animating, provoking a general public. The self-enclosure of university culture obstructs public intellectual life – as the erosion of public intellectual life renders self-enclosure comfortable.” (p. 14). The information and findings in this paper are applicable to both academics as well as to the general business community.

Background

Through a combination of hard work, determination, and good fortune, I created and built one of the largest production companies in the State of Florida. Prior to the sale of the business, I had 75 full-time employees, produced 12 national TV shows, and had revenues in excess of $12 million annually. A large part of my responsibilities involved training new employees whose sole job responsibility was to find sponsorship for our TV shows. This meant obtaining significant amounts of money from various companies located all over the world. Every year, these employees were required to speak to thousands of business owners to find the hundred or so who ultimately would sponsor the programs. In my ten-year stretch as owner, I spoke to an average of five to seven business owners daily, trying to get sponsorship dollars. This equated to approximately 10,000 – 14,000 conversations with business owners from all over the

United States and other countries as well during my tenure. I attribute much of our

10

success to our developing sound sales strategies prior to any conversations with these potential sponsors.

My axiological assumptions are as follows: Over ten years, I developed a feeling for the type of person I could expect on the other end of the phone or in face-to- face meetings. Much of this expectation was based upon the area of the country or region of the world that the potential customer resided. Also, the gender, age, and ethnicity contributed to the cultural characteristics that one could expect prior to any conversation. I also experienced many failures because I did not recognize the importance of being culturally aware. For example, I had a meeting scheduled in my office with a potential sponsor of a business program that we produced. We were going to talk about the possibility of doing a series of shows focusing on the economic development in Nuevo Leon, Mexico. A representative from Mexico flew to the studios to check out my company to ensure it was legitimate and to see some sample programming as well. Two things went wrong that morning. First, I did not know that in the Hispanic culture it is acceptable to show up late for meetings; in fact, it is common practice. Second, I did not realize how critical it is in this culture to dress up for the first meeting to try to make a great impression. The Mexican representative showed up an hour late dressed in a three-piece suit and I was in jeans and a T-shirt.

(On Fridays we had “casual day” and the meeting was scheduled for a Friday.) We both failed to recognize the other’s cultural traits and I am convinced this first meeting went poorly because of it. I remember the look in his eye when he walked into my office and saw how I was dressed. I’m sure he felt the anger from my side of the desk as I had arranged my entire day around our scheduled meeting, which started an hour

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late. Needless to say, my company did not produce a segment for Nuevo Leon and we missed out on $30,000 in revenue that morning.

Although these types of traits will be identified and discussed, it is important to point out that these personal descriptions only apply to some individuals from each culture. Not everyone from a certain cultural group will behave as discussed. This study is a general and helpful tool and not an absolute method for identifying predictable cultural characteristics in all individuals. This admonition also should serve as a warning against inadvertent stereotyping. All humans seem to fall prey to this as a way of organizing our own individual world. But stereotyping all individuals that belong to a certain culture will lead to failure. All individuals from a certain group are not alike, and each of us probably never will fully understand everything that we perceive. But as my example about the gentleman from Nuevo Leon, Mexico shows, had I known that “most” individuals from a Latin culture perceived time in a different fashion from “most” individuals from the U.S., a negative first impression would not have been the result. A significant amount of research has been completed that will show the cultural differences that can be expected and that recognizing these differences will lead to a greater probability of successful outcomes.

Assumptions and Operationalizations

Anyone who has been in sales for any significant amount of time will know many of the terms that are mentioned in this paper. For those who are in another field, the assumptions being made and terms being used need to be highlighted in order for this study to be clarified. An understanding of these terms is crucial to understanding the scope and limitations of this study. By reviewing these terms and understanding

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these assumptions, it will give an unambiguous framework within which the recommendations from this study will work. The opposite applies as well; any attempt at establishing a relationship that doesn’t fall within these assumptions would not apply to the findings in this dissertation. Also, it needs to be clearly stated that all of these assumptions and points are generalizations and apply to most, but not all, individuals and situations. This study should be applied when there is a desire for an individual to develop a business relationship with others who may be from a different country or culture. The assumptions and terms are as follows:

• Relationship: The type of relationship that this paper is addressing is first

and foremost a business relationship. There are many similarities to

developing personal and social relationships, but this research focused on

establishing business relationships.

• Timeliness: Timeliness is important; therefore, it is imperative to quickly

establish trust and mutual understanding. It is important to understand that

this trust and “first impression” is made within the first few seconds of

meeting someone. The significance of establishing trust early in a

relationship will be explored in greater detail later in this dissertation as

well. Technology has made it easy to speak to, look at, and communicate

with others from all over the world, and business relationships are being

made at a quicker pace than ever. In addition, if a decision does not need to

be made for several months, clearly it is not as urgent for both parties to trust

each other quickly, and other types of strategies can be pursued.

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• Hierarchy/Status: The business owner makes nearly all the financial

decisions for a company and responds differently about themselves, their

companies, and any opportunities that are placed before them. Anyone other

than the owner, such as a vice president, manager, director, or any other

officer or individual with any professional title who is not an owner, often

will be required to listen and gather information and ultimately will NOT

make any type of decision when it comes to buying a product. Additionally,

they often will be told how they should act and present themselves.

Establishing a relationship with non-owners is not as challenging and

doesn’t require much strategy.

• Relationship Valence: This study is in effect when an exchange of some

sort, primarily monetary, is expected between the two individuals or

companies. There has to be a great deal of trust and respect developed in

order for any type of exchange to take place.

• Value: While the actual products being sold or exchanges being made are

immaterial, they should have a value. If there is nothing of value exchanged,

there is no need to develop any type of trust.

• Intimacy: The two individuals forming the business relationship should

have had no relationship prior to their first communication. If they were a

friend of a friend or a distant relative, other strategies, such as mentioning

their mutual friend, would probably have a better result.

• Relationship Dynamic: The best way to define the individuals being

addressed is to use the initial example given in the background section of the

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study. A salesperson (John), making a sales call to a business owner,

(Victoria Cheng) has shown that the salesperson needs to understand the

culture of said business owner. The individual being approached, typically

the owner of a company, is the potential customer or client (Victoria). This

person is the one who makes the majority of all decisions because it is their

business, often called their “baby” because of the devotion and dedication

that, of necessity, has been spent to grow the company to its current status.

They often are referred to as the DM – the Decision Maker. This is the

person whose cultural characteristics are so important to understand.

• Relationship Establishment: The individual that is seeking to establish a

relationship, typically a salesperson, is the person making the sales pitch.

This individual has the job description of establishing business relationships

(sales) and is required to do this in a timely manner. This individual makes

more money by establishing more relationships (closing more deals). The

product this person is selling is insignificant. It should only be important in

that a good working relationship be established with the potential customer

in order to sell the product. For the rest of this paper, this person will be

referred to as the “salesperson.”

In order to remain focused on the topics of this dissertation, I concentrated on the following questions.

Research Questions

1. What are cultural characteristics and why are they important to understand?

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2. In today’s global, fast paced business environment, how important is it to

establish trust quickly through a good first impression?

3. What are the behaviors one would expect of the individual with whom a

relationship is being formed, based on the city, state, country, or region?

4. When starting a new business relationship with individuals from differing

cultures, what are some methods to establish trust quickly?

5. Are there differences in methods of communication in the business

environment based on culture?

Methodology

The purpose of this research was to understand and isolate the role of culture and its influence when trying to establish a business relationship, with grounded theory being utilized in this study. Martin and Turner (1986) defined grounded theory as a

“systematic qualitative research methodology in the social sciences emphasizing generation of theory from data in the process of conducting research” (p. 141).

The goal of grounded theory is to create concepts that describe an individual’s actions. In grounded theory it is not necessarily the person or people who are analyzed, but rather an event or incident that is explored. The event in this dissertation is the actual encounter in a business environment with an individual from another culture. In grounded theory, it is necessary to have hundreds of these events in order to study the outcome, and the individuals who were interviewed had thousands of such events to analyze.

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The 30 industry experts who were interviewed for this dissertation were former business colleagues of mine who agreed to provide input for this project as a favor to me. Each seemed to display a cheerful enthusiasm to be involved in this research and all generally agreed that it is critically important to establish trust early in any type of relationship in order to create any type of partnership or exchange. Furthermore, during the responses to my questions many of the experts realized that they subconsciously had been looking at people’s cultures more than they even realized. It became apparent early on that many of the responses to certain questions were similar and when this was the case, I pointed out these responses in the macrocultural sections of this paper.

A list of open-ended questions for successful business people who have had the opportunity to meet with and speak to thousands of people from differing cultures and who should have a good understanding of personality types from all over the country and the world was created (Appendix A). In order to support the assumptions that it is possible to predetermine cultural characteristics, the selection criterion for participation in the study was that each expert had to possess a vast amount of experience dealing with individuals from varying cultures. These experts had to possess certain criteria and characteristics in order for them to participate in this study. The criteria are as follows:

• They must have had over 5,000 conversations with different business owners

covering most states in the United States and other countries as well. In

order to quantify this number, it was necessary to understand their day-to-

day conversations and multiply these figures by the number of days on the

job to get an approximate figure.

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• In all conversations, each of the people interviewed must have had no prior

contact with the potential clients upon whom they called. All conversations

that these industry experts had to have made must have been “cold calls.”

• They must sell a product, although the product they are selling is immaterial

for the study. Every salesperson generally utilizes the same techniques for

establishing relationships, and these are irrelevant to the type of product

being sold. It is the techniques themselves that are material to the study.

• They must deal directly with business owners on a day-to-day basis, not with

their assistants. A different technique is utilized in getting past assistants

and secretaries. Hundreds of books have been written on the varying

techniques and strategies to deal with assistants and secretaries (often

referred to as gatekeepers) that will convince them ultimately to let you

speak with the business owners themselves.

• They must establish a working relationship where time is of the essence, i.e.

anything less than two weeks. If time is not important to get the relationship

established, then other strategies can be utilized.

• They must be considered successful in their current business. Their title

must be business owner, manager, or proven top-seller in their industry.

Overall, 30 industry experts who had a combined 336 years of expertise were interviewed. Between all 30, there were over 300,000 conversations with business owners from all over the world. The industry experts were asked 40 questions each. In each case, each individual was asked more questions than initially anticipated in order to get the specific information needed. Each expert’s answers were compared to find

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similar responses to each question. Upon completion of all final interviews, obvious similarities were noted and results are included in the macrocultural systems sections of this paper. Each of the macrocultural systems contains the results of the interviews as well as the literature review focusing on areas where the experts interviewed agreed and where the literature review showed similar findings.

The procedure used to collect the data was voluntary participation in an interview that was administered either personally or over the phone. The instrument was a list of open-ended questions aimed at clarifying or expanding on topics that were researched in the content analysis of many books and articles on culture as well as my personal background on the subject. Most of these books and articles were written specifically on cultures such as the United States, Asia, India, Central and South

America, the Middle East, and the European Union (Abbasi, 1993; Alon, 2003;

Cavusgil & Ghauri, 1990; Dossani, 2008; DSouza, 2003; Hodge, 2000; Kublin, 1995).

Again, what is missing from scholarship is the codification of these cultural characteristics, supported by extensive research, and focused on business communication.

Therefore, the uniqueness of this study best can be described in two ways. The first is the codification of the information from the literature review. It was difficult to find specific texts that focus on the understanding of cultural traits as a key to establishing trust in a business relationship. But, throughout the readings, many of the texts would point to similar examples or similar traits that one could expect from a certain group. When these examples seemed to agree with each other, I would use them in this dissertation. In a similar way, the industry experts would respond to my

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questions and when similar veins of thought from some of the experts were in agreement, I would use them in my examples as well. The literature review was extensive and painstaking and the industry experts had enough experience to be labeled as experts in their fields. So I believe the codification of this research and interviews is distinct and brings new information to this area of study.

The expected outcome of these interviews was to gain a more complete picture by bringing in real life examples and opinions about the role of culture in establishing business relationships. Responses were recorded and compared and similar responses were noted. Often times, these similar responses collaborated with and expanded on ideas that were written in the texts and articles. These conversations with the industry experts, who have a long and successful history of interactions with many differing cultures, influenced the examples and conclusions given in the macrocultural systems sections of this study.

This study also will serve those in the academy in the field of communication and business. Communication professors should be familiar with many of the cultural terms in this dissertation and should be interested in the findings in the macrocultural systems as well. These findings provide these professors with a tool to show their students specific examples concerning intercultural communications. I have found this to be the case in my own situation as an adjunct professor at Florida Atlantic University where I lecture on intercultural communication and organizational communication. In one such class I taught, the examples of how individuals from different cultures work together and respond to authority were current and extremely helpful in bringing to light the terms from the textbook.

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The findings also provide valuable information to business professors as well as anyone interested in improving their chances at establishing any type of successful business or personal relationship. Academics from other specialties such as political science may learn from examining the cultural traits of each of the regions that were explored in this dissertation. In addition to showing the importance of understanding cultural characteristics, this dissertation should persuade anyone who reads it to take an introspective look at themselves in order to better understand their own cultural traits and how their dispositions will effect those around them.

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CHAPTER 2

Cultural Characteristics

It is necessary to understand the meaning of this term “cultural characteristic” because it is these characteristics that will be analyzed and recommendations will be made on establishing relationships based on this understanding. Throughout this paper it is revealed that these cultural characteristics need to be understood in order to establish trust and ultimately create a working relationship. It is necessary to first define many of the cultural characteristics in this chapter and then provide examples that were codified from the literature as well as the industry expert interviews in the macrocultural sections of this dissertation.

Cultural characteristics vary greatly and can be defined in a number of ways.

According to Dodd (1998), “Intercultural competency factors are the skills and qualities associated with the successful outcomes in an intercultural context. You have to know, do, or feel certain qualities usually before successful outcomes occur. And, even though communication contributes to the ultimate success of intercultural experiences, there are other social and personal factors in addition to but related to communication concepts” (p. 173). Dodd also states that, “Every culture has world views, themes, thought processes, expectations, values, modalities, procedures, rules, roles, appearance and material, language and interaction principles, and nonverbal behaviors” (p. 12). By understanding this principle, individuals who wish to achieve a higher level of business success can spend extra time studying the different behaviors of varying cultures. 22

As a businessperson actively participating in the global market, I realize how vital it is to recognize the importance of learning and adapting to the various cultures one inevitably deals with when doing business abroad. According to Ghauri & Usunier

(1996), “Western businesspeople are unfamiliar with the ‘hidden dimensions’ that frequently play a fundamental role in international business transactions. Different cultures require firms to adopt different behavior patterns, since the strategies, structures and technologies appropriate in one cultural setting may fail in another” (p.

31).

Basic Cultural Components

Without an understanding of the different cultures and basic cultural components, any attempt at negotiating anything from a business contract to a treaty can end in catastrophe. Geert Hofstede is famously quoted saying, “Culture is more often a source of conflict than of synergy. Cultural differences are a nuisance at best and often a disaster.”

It’s only human nature to assume that everyone, regardless of where they come from “thinks like us.” Acting on this assumption potentially can lead to offending the other party. While working as a psychologist at IBM during the late 60s and early 70s,

Professor Hofstede began studying interactions between national and organizational cultures, starting with data he collected and analyzed from over 100,000 individuals.

During these studies, Professor Hofstede discovered many dimensions of culture:

Power distance index: Small vs. large power distance. The Power

Distance Index is a way of measuring how the less powerful in a certain culture accept the inequality of power distribution. Cultures with a smaller power distance index, like

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the United States or Australia, for example, are comprised of people who expect more of a democratic style of power relations. Power is distributed more equally than in a higher power distance culture such as Malaysia, where subordinates are more accepting of a more autocratic hierarchy.

Individualism vs. collectivism. This second dimension measures the degree to which members of a particular culture define themselves either apart from or as part of their group membership. Collectivist cultures can be defined as family, religion, community, or any group to which one identifies one’s self. Protection is provided in exchange for unquestioning loyalty. On the other hand, members of individualist cultures are expected to develop their own personalities and look after themselves and their immediate families.

In a society that embraces individualism, such as the United States, self-reliance, independence, and individual leadership are traits that are admired and encouraged.

Members of this society experience a greater freedom of individual expression; personal opinion is acknowledged and respected. Because of this, deference to authority, while still existent, tends to be less prominent than in the contrasting communitarian society, where authority seldom is questioned.

In a communitarian society, interdependence, as opposed to independence, is crucial; value is placed on the group as opposed to the individual. In many cases, this emphasis is even seen in forms of greeting. For instance, in her essay on cultural diversity, Michelle LeBaron (2003) gives an example in a reference to a member of the

Confederated Unatilla Tribes in Oregon, Thomas Morning Owl. When asked the

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question, “Shinnamwa?” or “Who are you?” his response would be a description of his father, mother, tribe, and the place they came from, rather than his name.

Masculinity vs. femininity. Some who have applied Hofstede’s work also have referred to this particular dimension as “Quantity of Life vs. Quality of Life.”

During his tenure at IBM, Hofstede’s research revealed that women’s values tend to remain more consistent among societies than men’s values. Furthermore, the studies revealed that men’s values differ vastly from culture to culture, ranging from extreme competitiveness and assertiveness on one end of the spectrum to more caring and modest, falling more into the feminine category on the other. In societies that support a more feminine culture, the differences in gender roles aren’t as stark in contrast as they are in societies that support a more masculine culture.

Uncertainty avoidance index. This dimension reveals a society’s level of tolerance for uncertainty or unstructured situations. Societies with a low tolerance will have in place strict sets of laws, rules, and other means of control in order to reduce or avoid any uncomfortable amount of ambiguity or uncertainty. These societies are said to have a High Uncertainty Avoidance ranking. At the opposite end of the spectrum are the societies with a Low Uncertainty Avoidance ranking, having a greater tolerance for a variety of opinions. This society is more accepting of change and is less reliant on stringent rules and regulations.

It is important to understand how a society views this structure in their daily lives. By understanding these principles and how individuals from a certain culture may react to new situations, an educated approach allows for a greater number of successful outcomes.

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Long-term vs. short-term orientation. Hofstede added this dimension following a subsequent study of students in 23 countries around the world. Hofstede’s findings focused on a society’s so-called “time horizon” - that is, the importance a society places on its future versus its past and/or present. The findings, data gathered through a questionnaire developed by Chinese scholars, revealed that societies in the

Long-Term Orientation category emphasize thrift and perseverance; a strong work ethic and long-term commitment are characteristics that are rewarded, although for an outsider from a Short-Term Orientation society, this can be frustrating. Societies that fall in the Short-Term Orientation category are more about fulfilling social obligations and “saving face” than they are about long-term loyalty. As a result, change occurs more rapidly as it is not impeded by long-held traditions.

High-context vs. low-context communication. There is another basic component that deals with the ways in which we communicate with each other; specifically, high-context and low-context communication. According to Hall (1981), communication varies according to its degree of field dependence, which itself refers to the degree to which things outside the communication itself affect the meaning. Low- context communication tends to be more direct and explicit, whereas high-context communication relies more on nonverbal cues and insinuation. From a cultural standpoint, you’ll tend to find high-context communication in more homogenous societies such as Japan, where cultural traditions and history are a commonality. The shared cultural past means that information can be conveyed less directly and also can be conveyed more easily through status. By way of comparison, cultures that are more diverse rely more on low-context communication. The lack of shared cultural

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experience requires that people communicate more directly and explicitly with one another.

Hall went on to point out the seeming lack of loyalty and low commitment to relationships in low-context cultures. Staying on task took precedence over nurturing relationships. Again, this is in stark contrast to the high-context culture’s priority of people and process over product. High-context cultures also tend to be more committed to long-term relationships and develop strong bonds, particularly with family and within the community.

This tendency to form strong bonds is also characteristic of polychronic cultures.

People who fall into this category value human interaction over time. In Native

American cultures, you’ll hear tribal members talk about “Indian Time.” Time is flexible, and a greater emphasis is placed on the process and interaction than on the product.

On the opposite end of the spectrum is monochronic time. Characteristic among low-context cultures, monochronic time means as its name implies: taking care of one task at a time. For people in monochronic cultures, time is of the essence. The end product is far more important than cultivating relationships. Diverse low-context cultures, such as in the United States, tend to be monochronic.

Communication in high context vs. low context cultures. Hall (1981) pointed out the dichotomy between high and low context cultures, particularly in communication. Where messages from low-context cultures tend to be detailed and explicit, leaving little doubt to the reader of its content, messages from high-context cultures tend to rely less on details and more on the personal relationship between

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sender and giver. In 2001, a study was conducted by marketing majors at Drexel

University to determine whether or not cultural context (high vs. low) had any impact on the frequency of messages between marketing channel partners. The conclusion was that, while fax and telephone communication tended to increase with cultural distance, e-mail communications actually increased when the cultural distance was small. Hand- written letters were found to be nearly obsolete in both high and low context cultures, compared to other modes of communication. Computers, more than people, ensure that products flow through their proper channels quickly and efficiently; transactions and other communications flow effortlessly between marketing channels. It’s why global

B2B e-commerce possibly could alleviate any issues when it comes to high-versus-low context communication.

Today’s technological influence on intercultural communication.

The Internet’s roots date back to the beginnings of the Cold War in the 1950s. By the

1980s, companies like Prodigy and CompuServe provided access to a few thousand tech-savvy users. Today, roughly one-third of the world’s population is using the

Internet, either for business or for pleasure. Of these, 42% live somewhere in Asia, with Europe and North America following at 24.2% and 13.5%, respectively. Within this decade alone, global Internet use has grown nearly 445% to over 2 billion users worldwide. Of all the regions in the world, Asia tops the list, growing from

114,304,000 users at the end of 2000 to 825,094,396 as of June 2010.1

The phenomenal growth of the Internet was not lost on Hofstede (1984), who referred to culture as “a collective programming of the mind that distinguishes the

1 Retrieved from http://internetworldstats.com/stats.htm 28

members of one group or category of people from another” (p. 51). He understood that the unique values, ideas, and beliefs that distinguish cultures and set them apart should dictate how to reach out to each individual cultural demographic. This certainly is true for online marketing, especially when you consider that some countries limit Internet access to content that the leaders or parties in power deem appropriate for their citizens.

If an organization intends to go global with their product or service, it will need to think locally, targeting each geographic area through its own cultural or sub-cultural system

(Khare, 2009, p. 1).

Language

When I mention language, I am not necessarily speaking about regional or geographical dialect. The way questions and statements are phrased can take on entirely different meanings, depending on the circumstances under which these statements are made. As an example of this, refer to a speech made by Soviet Premier

Nikita Khruschev during a reception at the Polish Embassy in 1956. In a brazen statement that was originally meant to point out what he felt would be the Soviet

Union’s eventual economic superiority over its Western, non-Communist counterparts,

Mr. Khruschev remarked, “Whether you like it or not, history is on our side. We will dig you in!” Whether it was through innocent ignorance of the language or Cold War fears that were the influence, the English translation became distorted and the phrase famously became, “We will bury you!” Needless to say, given the paranoia of this time, this statement certainly was taken as a threat. The context of Mr. Khruschev’s speech was published in Time Magazine in 1956, with the more infamous translation

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quoted.2 In a speech he gave five years later in what was then Yugoslovia, Mr.

Khruschev acknowledged that there was a misinterpretation of that statement, and that it

“got him into trouble.”3

Non-Verbal Communication

In 1960, John F. Kennedy and Richard Nixon faced off in their famous televised presidential debate, the first of its kind. Afterward, a poll was taken to determine the winner among people who either watched the debate on television or listened to it on the radio. The poll revealed that people who listened to the radio listed Nixon as the winner, whereas those who watched the televised debate gave the victory to Kennedy, who subsequently won the presidency hands down that November. It has been speculated that, despite his excellent oratorical skills, Nixon’s uncomfortable body language might have been his undoing. Kennedy’s body language, in contrast, portrayed a confidence that projected the subliminal message that he was more trustworthy.

Non-verbal communication has been vital to the survival of humanity long before the invention of the spoken word. Gestures, eye contact, and posture - all of these serve as methods of conveying messages without speaking a word. Devoid of the bonds of words and phrases, nonverbal skills transcend cultural boundaries. According to Hargie and Dickson (2004),

Culture and sub-cultural variables have a bearing on the different features of the

communicative process...Intercultural differences therefore run much deeper

2 Retrieved from http://www.time.com/time/magazine/article/0,9171,867329,00.html 3 Retrieved from http://www.nationalcoldwarexhibition.org/explore/biography.cfm?name=Khrushchev,%20Nikita 30

than possible differences in language, encompassing not only much of the

nonverbal channel of communication but beyond to the underlying social order

itself and the meaning and values that give it for. (p. 32)

The components of nonverbal communication - including proxemics, chronemics, haptics and gestures - all combine to complete the verbal message.

Proxemics is the study of spatial distance between individuals and this distance typically varies according to culture. In their book on skilled interpersonal communication, Hargie and Dickson (2004) identify four distinct territories associated with proxemics. The first, primary territory, is an area exclusive to the individual. This can be their home or office. Secondary territory refers to an area that can be public but still contain a certain right to occupancy. Think of your favorite table at your favorite restaurant being taken because you didn’t make a reservation. Public territory refers to an area that people have limited claim to, but will lay claim to it nonetheless. To see a good example of this territory, one need only spend a few moments in a parking lot and watch the fireworks as two vehicles vie for the same space. The fourth, interaction territory, is a space created around two or more people who are interacting with each other.

Chronemics refers to the study of time and its use in nonverbal communication.

Chronemics is divided into two cultures: polychronic cultures and monochronic cultures. As mentioned earlier in my section on high-context and low-context cultures, people who are polychronic in nature value human interaction over time, whereas people in monochronic cultures place a greater emphasis on time over human interaction.

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Haptics refers to the tactile component of nonverbal communication. From the time we are developing in the womb, we rely on our sense of touch, which is the first sense to develop during gestation. In business communication, haptics can involve a slap on the back, a kiss on either or both cheeks, or the universal haptic form of communication, the handshake.

Gestures refers to the method of nonverbal communication that involves visible body movements that convey particular messages. There is an interesting anecdote about a trip abroad made by then-U.S. President Richard Nixon. Upon landing at the airport of this foreign country, Mr. Nixon stood at the top of the stairs at the door to his aircraft, smiled, spread his arms wide, and flashed his famous peace signs. To his chagrin, the crowd began to jeer him. Little did he realize that the gesture the unwitting

President made was considered an insult to the people to which he was attempting to promote peace and unity.

Anyone who is a fan of the Texas State Longhorns is familiar with the famous

“longhorn” gesture - sticking up the index and pinkie while holding the two middle fingers down with the thumb. In Rome in 1985, five Americans, jubilant over the news of their beloved Texas Longhorns’ major victory, began dancing in the streets outside the Vatican and flashing the longhorn sign. What they didn’t realize, however, was that in Italy, the longhorn gesture is known as the “cuckold” and is a code used to tell a man that other men are sleeping with his wife. The five men were arrested over the incident.4

4 Retrieved from http://westsidetoastmasters.com/resources/book_of_body_language/chap5.html 32

Communication researchers point out that a gesture that may be of little significance at home can greatly offend abroad, depending on the culture. Another example would be the “A-OK” gesture (making a 0 with your thumb and forefinger while fanning out the remaining three fingers). This is seen as a positive gesture in the

United States. It means that everything is good, that you are correct. In the

Mediterranean, Russia, Brazil, and Turkey, however, this symbol is an obscene gesture, a sexual insult, signifying a certain orifice. In America, when you flash two fingers with your palm outward, you can be flashing someone a peace sign, but in Greece, you’re actually telling someone to go to hell. Turn the palm toward you and you could be making an obscene gesture in Great Britain, Australia, New Zealand, or Malta.

Many times, gestures will betray the person giving them. For example, when

Australia’s former Prime Minister, Bob Hawke, was confronted about the increase in politician’s salaries, he defended their raises by comparing their salaries to those of corporate executives. Whenever he mentioned the corporate executives’ salaries, he made a size gesture by holding his hands roughly 30 centimeters apart. However, when he mentioned the salaries of the politicians, he held his hands considerably further apart

- approximately one meter. He left office a short time later.

From an early age, we begin to learn to communicate; we learn to read facial expressions, body language, and subtle social cues from family and friends. These traits are developed and put to use as adults in our professional and social lives. Through nurturing relationships, such as between a parent and child, we learn traits like empathy.

It took the autistic community to categorize these learned traits and give a label to the people who possess them: neurotypicals, the name given to people not on the autistic

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spectrum. In a recent NPR report, Simon Baron-Cohen, professor of developmental psychotherapy at the University of Cambridge, admitted, “We didn’t really focus on how complex social development is until people with autism pointed out to us that this is something that doesn’t always just develop naturally.” The report focuses on a 27- year-old biomedical engineering major with autism. Communication skills that most of us take for granted are more of a challenge to someone with autism. The student admitted that she still is fine-tuning these skills, learning gradually what are acceptable topics of conversation, and what is considered off-limits.

All of these examples illustrate the importance of understanding that different cultures use a wide variety of nonverbal and verbal messages to communicate. It is easy to make mistakes and offend others from different cultures – even our Presidents make these mistakes. The next section illustrates how critical it is to make a good first impression if you want to establish any kind of productive relationship.

The Importance of a Good First Impression

It is necessary to stress the importance of making a good first impression because it is the most important component in establishing trust. Some readers of this paper may find this point as being overstated but the literature review as well as the industry experts continually stressed this point. There is an old saying, “You never get a second chance to make a good first impression.” Regardless of your culture, regardless of your geographic location, it’s human nature to “judge a book by its cover,” if you will. The tendency to develop pre-conceived notions, consciously or otherwise, about a person we have met recently seems inherent in all of us, whether we want to admit it. For this reason, positive first impressions are critical. When two differing

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cultures meet, the chance of either culture offending the other increases, and can potentially complicate any potential business partnership. During the first and most critical meeting between two individuals, Heffernan (1998) writes,

there is little experience of the other partner's operation or business culture,

leading to high levels of uncertainty. The amount of learning that transpires at

this phase is at its highest level of any stage of the relationship lifecycle. The

lack of experience and understanding between organizations makes the

relationship fragile at this phase. Consequently, the partnership can be easily

terminated at the early interaction stage. (p. 116)

The establishment of trust is seen as a necessary construct and component in relationship building (Nicholson, 2001). Trust is also seen as paramount in the literature that concentrates on consumer relationships (Czepiel, 1990; Berry, 1995). It has been shown that the building of trust in a relationship shows that each will be a reliable business partner (Morgan & Hunt, 1994). Integrity is important as well and goes hand in hand with trust (O'Malley & Tynan, 1997).

According to Montagliani and Giacalone (1998),

The presence of a world economy has forced individuals and groups

representing various organizations, historically foreign to each other in terms of

language, norms and culture, to interact actively and communicate with each

other to conduct business. These interactions are difficult often because of

ignorance of cultural standards and basic cultural aspects of routine

communication. (p. 598)

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Knowing the culture or cultures you will be dealing with is as vital as knowing your own product or service. In-depth cultural knowledge is a necessity, particularly in today’s global business climate. Edward Hall (1959) emphasized the importance of culture when he stated, “Culture is not an exotic notion studied by a select group of anthropologists in the South Seas. It is a mold in which we all are cast, and it controls our lives in many unsuspected ways” (p. 52). Hall went on to point out the ambiguity of culture, describing it as hiding “most effectively from its own participants” (p. 53).

In her 2007 article for the Journal of Business Communication, Daphne Jameson interjected,

Those whose professional lives depend on being able to communicate

effectively in intercultural contexts need greater self-insight about the hidden

force of culture. To help achieve this goal, the field of intercultural business

communication should more strongly emphasize how to understand one’s own

individual cultural identity: the sense of self-derived from formal or informal

membership in groups that impart knowledge, beliefs, values, attitudes,

traditions, and ways of life. (p. 200)

This Socratic call to know one’s self is tantamount to understanding and appreciating other cultures and sub-cultures with which one deals. At the same time, one also must be cautious against relying on one’s own schemata of other cultures, as they tend to be substantially different from the reality of these cultures (Beamer, 1995). Furthermore, this can lead to inaccurate generalizations and even unfair stereotyping that can be detrimental to any relationship, and can limit access to the complex cultural makeup of cultures outside their own (p. 201). Jameson (2007) suggests that a greater emphasis on

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understanding one’s own individual cultural identity would “compliment but not diminish the field’s traditional concern with how to understand the collective group culture of others,” as well as reduce the risk of the subconscious hierarching of nationality and place the emphasis on components related to business, as it should be (p.

200). The educational process developed by Palmer and Varner (2005) combines an intensive study of outside cultural backgrounds with which the employee is likely to interact with an intensive education designed to make the employee aware of his or her own personal and cultural preferences.

By developing an awareness of our own culture, we become aware of our tendency to believe that others say or do things for the same reasons we would, and thus we can stop ourselves from “projecting” our own values onto others. It is equally as important to understand that others have their own set of codes and principles that they live by. Schuetz (1944) explains:

Idioms, technical terms, jargons, and dialects, whose use remains restricted to

specific social groups, exist in every language, and their significance can be

learned by an outsider too. But, in addition, every social group, be it ever so

small (if not every individual), has its own private code, understandable only by

those who have participated in the common past experiences in which it took

rise or in the tradition connected with them. (p. 505)

A simple gesture, such as avoiding direct eye contact, can be interpreted in two entirely different ways, depending on cultural learning. For instance, in the United

States, avoiding eye contact sends a message that the person is weak, shifty, or not to be trusted. In contrast, eye contact aversion in Japan is considered a show of respect. In

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his article for Canadian Social Science, Jiang Lan of Hunan Mass Media Technology

College presented the following analogy: The Japanese auto company Mazda opened a plant in the U.S. and the corporation’s management board presented its new plant’s employees with baseball caps emblazoned with the Mazda logo, encouraging them to wear the caps at work. The employees, who already were mandated to wear the company uniform (khaki pants and blue shirts), assumed that wearing the baseball cap was optional. The Japanese managers, however, viewed not wearing the caps as a sign of disrespect. Likewise, the U.S. employees, when they learned that management believed that employees would be happy to wear the caps if they really cared about the company, felt resentful over being told what they should want to do (Lan, 2007).

In her book about cultural understanding, Sondra Thiederman (2008) recommends that businesspeople learn as much as they can about the culture with which they will be interacting, but also learn how their own culture feels about various issues and how they react to them, through factors such as body language and communication style. This is not as easy as it seems when you consider that one’s own culture is so much a part of them, that what would seem natural to us looks or feels exotic to others.

Thiederman recommends that when immersing yourself in a different culture, observe your reaction to moments of tension, misunderstanding, even moments of anger. He states that it is important to understand that these reactions grew out of values and behaviors conditioned by your culture (Thiederman, 2008; Lan, 2007). He also suggests monitoring your ethnocentric reactions; that is, monitor the tendency to judge other cultures using your own cultural norms. This tendency poses the risk of regarding other cultures as inferior, and can lead to stereotyping.

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Schultz (1944) takes this a step further when he writes that the chances of success are greater when there are few recognizable differences in behavior. In the following quote, Schultz’s term “recipe” can also mean that a successful outcome has been reached:

Even more, it can be stated that the objective chances for the efficiency of a

recipe are the greater, the fewer deviations from the anonymous typified

behavior occur, and this holds especially for recipes designed for social

interaction. This kind of recipe, if it is to work, presupposes that any partner

expects the other to act or react typically, provided that the actor himself acts

typically. He who wants to travel by railroad has to behave in that typical way

which the type “railroad agent” may reasonably expect as the typical conduct of

the type “passenger,” and vice versa. (p. 505)

The importance of a good first impression was shown to be a key dynamic in establishing trust, which ultimately is a main factor in developing any type of relationship. One of the first types of communication that takes place between two individuals is the handshake. This important gesture needed to be analyzed because it is a key element in the initial stages of relationship building.

The Importance and Evolution of the Handshake

The practice of shaking hands can be traced back to the ancient Egyptians of

2800 B.C.E. Throughout history, regardless of the geographic region, people always have favored the right hand when exchanging greetings. Experts speculate that this might be due to the right hand and arm being the primary one used in handling spears and other weapons. To this day, the right hand is favored in many cultures. A perfect

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example is in the Middle East, where it is considered rude to use your left hand for eating, especially from a communal dish.

In ancient Rome, men would engage in a mutual arm clasp, grabbing each other’s arm just below the elbow. This was instrumental in feeling for weapons that might be concealed up the sleeve. During Medieval times, knights added the actual

“shake” to the handshake as a way of dislodging any weapons that might have been missed by the initial clasp.

The handshake is the first step in taking control of the situation in a professional setting. According to psychologist Dr. Nancy B. Irwin, “Generally, the person who extends their hand first has the power in the setting. In our American cultures, the handshake shows interest, openness and confidence.”5

We’re all familiar with the various types of handshakes - the “pump,” the

“crusher,” the “wet noodle,” and the handshake considered nefarious in business - the two-handed shake, also known as “the politician’s handshake.” When meeting someone for the first time, you should be aware that different handshakes convey different messages. For instance, the so-called “dominant” shake - where the greeter offers their hand palm-side down - gives a subliminal message that they want to “have the upper hand” in the situation. Similarly, the twisting dominant begins the same as a classic handshake but ends with a twist to the palm-down position.

When in a professional setting, the handshake should be firm and confident. A firm handshake should not be confused with the bone-crusher. The idea is to exude confidence, sincerity, and trustworthiness without snapping a few metacarpals along the

5 Retrieved from http://www.careerbuilder.com/Article/CB-431-Getting-Hired-Six-Tips-for-a-Perfect- Handshake/ 40

way. Begin the perfect professional handshake by shifting anything that you’re holding out of your right hand and into your left, if you cannot set the object down. Do this ahead of time so that you don’t find yourself in the awkward position of having to switch hands at the last minute. Regardless of your gender, you always should rise from a seated position if you are sitting down. Try to avoid putting your hands in your pockets. If it’s a habit, make it a point to be conscious of whenever you shove your hands in your pockets and remove them immediately. Get used to the feeling of letting your hands rest naturally at your sides. Upon approach, keep your head straight and maintain eye contact. A smile is always good, but a forced smile or a smile that lasts too long will make you seem insincere or overeager. Keep your arm straight and your hand perpendicular, with your thumb pointed toward the ceiling. When the hands connect, make sure the web between your thumb and forefinger is touching theirs.

Keep your palm flat, drape your hand diagonally across theirs, lock thumbs, and try to match their squeeze - firm, but not too overbearing. The shake should come from the elbow rather than the wrist. Linger only for a moment before releasing and stepping back.

The Role of Impression Management

By definition, impression management is the act of controlling information in order to influence the opinion of others. In some cultures, individuals may expect all information to be laid out clearly and concisely in front of them on the first meeting.

Also, some cultures may look for a business card and an extremely professional appearance, which would show signs of respect. Other cultures may not necessarily care to go through the information until the third or fouth meeting and would feel much

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more comfortable in an informal setting. Advertising, marketing, and PR firms are all about impression management. People on first dates practice impression management, though that may not be how they recognize it. On scales both grand and small, we are all masters of our own illusion, the star of our own show. To quote William

Shakespeare, “All the world’s a stage, And all the men and women are merely players;

They have their exits and entrances, And one man in his time plays many parts, His acts being seven ages.”6 For people in business, the audience is a client, a colleague or superior; and just as a stand-up comic will try different material out on different audiences, so we all have a tendency to play differently to different people. People engage in impression management even when they are not intentionally trying to do so.

For example, if you feel like you can just ‘be yourself’ around close friends and family members, you may find yourself acting quite differently - or presenting a somewhat different version of yourself - around your best friend than around your mother, without really thinking about it. You might exhibit such different behavior not only because of your own desire to be viewed somewhat differently by your friend versus your mother, but also because your friend and your mother have different expectations or demands regarding what sort of person you should be. Thus, engaging in impression management can help to ensure that social interactions go smoothly.

Research has indicated that impression management practices such as ingratiation tend to have a positive impact on performance ratings, garnering the favor of supervisors and overall levels of career success. However, if the supervisor in question perceives this behavior as insincere and self-serving, ingratiation can backfire

6 As You Like It, 2.7.139-143. 42

and present its own set of consequences. The danger exists not only in a supervisor- subordinate setting, but also in situations where a businessperson is interacting with a potential client.

The success and failure associated with impression management can be seen in my earlier analogy of John the salesperson and the three clients from three distinctly different cultures. Since John could better relate to Sal Bodrado’s personality than he could the personalities of Nick Atkins or Victoria Cheng, his impression management technique for the former was more successful. If he would have been able to alter his strategy with the latter two, his chances of success would have been greatly improved.

Personality Types in Relation to Cultural Characteristics

It is important to mention the correlation between cultural traits examined previously in this study and personality types that have been examined extensively over the years for the business environment. Many books have been written to describe personality types in the workplace. The understanding of personality types has been studied to determine if individuals should be hired for certain positions or to better determine if a specific personality type would work well with others. Since an individual’s personality type generally provides a predisposition to certain behaviors, the understanding of these personality types has found a wide set of applications in the workplace.

Culture, in my opinion, often determines a personality type. A plethora of books have been written about these personality types, and as I understand more about different cultures of the world, I generally can assign personality types to certain cultural groups. Still, as I state throughout this dissertation, assigning certain

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characteristics to specific groups will be able to apply to most but not all individuals from this group.

The following is a brief description of four distinct and identifiable personality types in the workplace, as well as how most can be assigned easily to certain cultural groups mentioned in this paper. Merrill and Reid (1981) created an early model that identifies four types of personality types and the following paragraphs provide a brief summary of each.

Driver. A driver type personality is results-oriented and has a very strong motivation to succeed; this strongly resembles those who grew up in an urban culture.

They do not want to attend long meetings or have long conversations. They tend to be business owners or team captains when a project is assigned to a group. Multi-tasking comes naturally to them. Also, they tend to put in more hours on the job than most.

They typically talk fast and are very direct and to the point when having conversations.

This abruptness can lead to a tendency to be looked upon as abrasive or sometimes difficult to work with by other individuals in their organization.

Analytical. An analytical type personality is known for being well organized and systematic in their thought processes. The analytical type is disciplined and loyal.

They are perfectionists and seem to be introverted most of the time. They want to be presented with the facts, and the more information you can provide for them the better.

They want this information in a logical manner and also want some time to analyze it prior to making a well-informed decision. Sometimes, others view this cautious approach as overly structured and consider these individuals as always going to do things “by the book.”

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Amiable. An amiable type personality enjoys working in a group environment and will follow the direction as well. As you can tell, this strongly resembles those that have grown up in a rural culture. They are loyal and dependable. They typically are sensitive to the feelings of others and tend to trust the decisions of others. Cultivating a solid working environment with this type of personality requires good conversation and getting to know them on a personal level. This relaxed attitude is sometimes viewed as difficult to work with on occasion because it is challenging to get an amiable person to make a decision.

Expressive. An expressive type personality enjoys socializing and helping others succeed. Typically outgoing and energetic, they tend to be creative talkers and want to understand the entire scope of a project by visualizing it in their minds. They usually are fun to be around and are known to be the life of the party. In addition, expressive types are characteristically good at generating ideas, but sometimes lack the focus to attend to every detail. They are sometimes overly dramatic and impulsive.

This expressive style leads to great ideas and thoughts, but needs to be controlled in order to pull thoughts and actions together in a structured manner.

The drawback of establishing the style of personality type someone may possess is that this is a strategy of looking at how an individual previously responded or acted in certain situations. It has been shown that a good first impression is necessary in order to establish trust in a business relationship and reflecting on that initial meeting or meetings and then trying to figure out a personality type is a strategy that doesn’t work in retrospect. In other words, the first impression already has been made. Still, it is important to understand these well researched personality types because they are

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displayed in the cultural characteristics of individuals and strategies to establish business relationships that have been explored previously.

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CHAPTER 3

Macrocultural Systems

After defining and describing cultural characteristics and components, I now will explore five of the largest economic and political systems of the world to identify the traditions and cultural characteristics of each region. Each region brings to life some of the terms and components discussed earlier and it is my opinion that an understanding and appreciation of these cultural characteristics significantly will help the chances of establishing a strong business relationship. I chose these five macrocultural systems based on the fact that these are where a majority of the newly established business relationships are being formed. Also, the literature review as well as the industry experts agreed on many cultural traits that can be found in the individuals from these regions. Included in each regional study are people from these regions currently residing in or doing business in the United States, as they obviously bring their cultural traits with them wherever they go.

Each regional study is limited in scope and certainly does not cover all cultures that reside within its borders. Yet each regional study provides a credible introduction and background, which is important to recognize in order to gain a better understanding of the cultural characteristics of those who are from or currently reside in each region.

Most of the background information on each region is pulled from the literature review along with some specific examples from the industry experts. The idea for these macrocultural studies is to provide a brief overview of the individual cultures 47

towards a specific end. This clearly illustrates that there are differences between the cultures and making the mistake of not understanding these differences oftentimes will lead to failure when trying to establish any type of relationship. I’ve personally experienced this failure numerous times by not recognizing these differences and the industry experts certainly echoed that sentiment. I would suggest that anyone who is interested in working with these cultures delve much deeper into the nuances of each culture. Therefore, this particular project does not purport to be an in-depth study into each culture but will, in my opinion, provide enough general knowledge of the main cultural differences that are important to recognize.

Each macrocultural study is a different length and may appear to focus disproportionately on some aspects of their individual’s cultures. This is because during my research, which included the literature review as well as the industry expert interviews, I codified the information and primarily reported on cultural characteristics that were being mentioned repeatedly. It is this information that is being brought to the forefront in this dissertation. The systems being reviewed are 1) Asian culture - which includes China and Japan, 2) Latin America – including Brazil; 3) India; 4) the Middle

East; 5) the European Union; and 6) the United States.

Asian Culture

Most Asian cultures adhere to a completely different set of protocols when forming relationships that extend as far back as the country’s earliest civilizations. I feel that it is critically important for all who either currently do business with this region of the world or who plan to do business in the future to understand a brief history of the

Asian culture. By understanding the history of the culture, an intelligent businessperson

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will be able to better understand the individual. I started with a review of China, followed by one of Japan. These are the two largest economies in the region and most of the literature review focused on them. Recently, China overtook Japan as the world’s second largest economy and is on track to surpass the United States as early as 20307.

Since becoming a Communist nation under Mao Zedong’s rule in 1949, The

People’s Republic of China has conducted business with the best interests of the collective, rather than the individual, in mind. Although Western influences have managed to permeate Chinese society, the Chinese Communist Party (CCP) still regulates many facets of Chinese life, including business. Outside entities are scrutinized meticulously and generally are viewed with caution. E-commerce virtually is impossible due to the lack of credit card use and the fact that the Chinese Government strictly controls Internet content, censoring websites that are contrary to the party line.

As recently as 1978, China maintained one of the most closed economies in the world. Things changed, however, in 1979, when China’s government began to expand foreign trade and welcome foreign investment, beginning in the Guangdong and Fujian provinces. The next three decades saw a phenomenal growth in economic development in the Communist nation. In a speech to launch the 2005 China Human Development

Report in Beijing, UN Resident Coordinator in China Khalid Malik stated,

China’s progress in poverty reduction since opening up and reform in the late

70s has been remarkable. In the past 26 years, China’s annual GDP growth rate

has averaged 9.4% and the annual per capital GDP growth rate has reached

8.1%. Such rapid economic development has helped lift more than 250 million

7 Barboza, David. New York Times. August 16, 2010. B1 49

people out of poverty, an unforeseen and unequaled achievement worldwide.

China’s advancement in human development is equally impressive. Life

expectancy in China now exceeds 70. Changing figures in other HDI dimension

such as literacy and education enrollment are also comparable to developed

countries. China today no longer has a single province or autonomous region in

the low human development category. Poverty incidence since opening up and

reform has decreased drastically from 31% to 2.8% (China Human Development

Report, 2005, p. 1).

To resolve the growing wealth disparity between coastal and inland areas, China implemented three initiatives: China Western Development Strategy (2000), Revitalize

Northeast China Initiative (2003), and Rise of Central China Policy (2004). While there still are inequities – rural vs. urban, disparaging poverty among landless farmers, migrant workers and workers who had been laid off – China has made a concerted effort to address these disparities, implementing numerous policies designed to promote economic development among all demographics.

The United States and China historically have had a turbulent relationship.

During World War II, the United States gave significant help to the Chinese against the

Japanese. Today, China boasts one of the fastest growing economies in the world.

China has moved from a country that isolated itself from the rest of the world to a country that is engaged fully in the rest of the world. Strong economic growth has been crucial to the continuing legitimacy of the CCP leadership in the eyes of the Chinese people. China sees a strong economy as the key to both domestic stability and international respect. The government seems to be leaning toward accepting nightclubs,

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stock markets, rock concerts, the Internet, and consumerism to keep its people content and the economy growing.

Globalization has made governing the world’s largest population and second largest economy quite a challenge. Being a part of the international community has brought scrutiny upon China’s handling of human rights issues, the environment, copyright laws, arms control, and legal codes. The leaders make it clear that they want

China to move at its own pace on each of these issues. They talk about how they want to maintain the culture of the people as well as its history and institutions.

At this point I will focus on the research that revealed some of the main cultural traits that most Asians, and Chinese in particular, possess. The literature revealed that among the traits of the American businessperson, few are more important or more respected by the Chinese than proper etiquette, particularly when it comes time to negotiate the contract. As mentioned in the book, Managing Cultural Differences, “The

Chinese businessperson traditionally places much emphasis on proper etiquette. It is recommended that the qualities that foreign businesspersons possess going to the PRC are dignity, reserve, patience, persistence, and a sensitivity to and respect for Chinese customs and temperament” (Harris, Moran, & Moran, 2004, p. 368). Patience is an especially valuable asset when negotiating with the Chinese. In many cases, American salespersons are required to make several trips to China and attend several negotiating sessions before a contract is finalized. Even then, it is not uncommon for Chinese clients to suggest further amendments and/or modifications to a contract even after it has been signed. A general rule of thumb is to not consider a contract final until it has actually been fulfilled.

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There are two reasons for this lengthy negotiation process: 1) The Chinese value humility and integrity and will take the time to investigate the claims made by a salesperson, especially one from outside the People’s Republic of China. 2) Many times, Chinese businesspersons will take advantage of the Americans’ tendency toward impatience and purposefully will drag out the negotiation process for as long as possible in order to wear down the salesperson and gain an upper hand in the negotiation process. As referenced in my example, John’s aggressive approach toward Victoria all but ensured that he would not get the sale. Had he been educated in Chinese culture, he would have known to tone down his aggressiveness, exercise patience, and exhibit humility when making his presentation.

Many of the industry experts supported these statements with specific examples, with several experts having specific examples when it came to getting signatures for contracts. One case in point was trying to negotiate a business deal between a manufacturer in China and a distributor in the United States. The U.S. distributor wanted to get the contract signed and all of the guarantees written in black and white.

The Chinese company wanted to spend more time getting to know the organization as well as the people with whom they would be doing business. The industry expert learned a valuable lesson the hard way - don’t push for signatures early in a relationship with individuals from this region of the world. He pushed too hard and the deal was lost. Both cultures view contracts in completely different ways. The Chinese see it almost as an afterthought once they feel comfortable enough to move forward. The

U.S. culture sees the contract as part of the initial step in getting to know an

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organization. Once the guarantees are spelled out clearly and signed then they spend the effort to get to know each other better.

The Chinese and Japanese certainly share many similar cultural characteristics and the literature reflected this; however, the history and culture of the world’s third largest economy needs to be addressed as well. The people of Japan possess qualities that can be traced back to the various ethical and religious philosophies over the past

2,000 years. Confucianism, Shintoism, Buddhism, Christianity, and other philosophies of living have shaped the ways modern Japanese people think and act. Although many may think this makes modern Japanese people traditional thinkers, that is not the quite the case. Some have labeled Japanese people to be imitators. After decades of imitating the West, the Japanese are becoming more assertive. As mentioned in

Chapter 2, Japanese companies and families generally prefer long-term to short-term planning. The savings rate is much higher in Japan due to this long-term outlook.

The Japanese have a great sense of duty to those around them. Workers will work late without pay so they don’t let their coworkers down. Lifelong friendships are cherished and gifts commonly are given throughout the year to friends. North

Americans and Europeans often are considered untrustworthy friends because they do not keep a close level of contact and communication.

Japan has achieved an almost full literacy rate among its population. There is virtually no permanent underclass. The country seems to be entering into an era of remarkable educational accomplishment. In the school systems themselves, students take pride in their grades and are expected to perform well. If they perform poorly it is considered to be an embarrassment to the family.

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Shortly after WWII, Japan adopted the Total Quality Management business model (TQM), which has been successful, in part, due to the country’s culture of collectivism, holistic thinking, and high-context communication. Ironically, the

American statistician W. Edwards Deming first introduced the idea to Japan. In 1950, while working as an advisor to Japan during their 1951 census, Deming received an invitation from the Union of Japanese Scientists and Engineers (JUSE) to train managers, engineers, and scholars in statistical process control. The resulting management concept became such a success in Japan that many American businesses attempted to adopt TQM, particularly in the last two decades of the twentieth century.

For American businesses, however, America’s low-context culture and individualistic nature prevented these businesses from enjoying the level of success experienced by their Japanese counterparts. To this day, Japan’s businesses employ

TQM, bolstered by the Keiretsu, a business group of companies intertwined through business relationships and shareholdings. Keiretsus generally are centered on one bank, which acts as lender and monitor as well as a guardian against potential hostile takeovers. By acting as a monitoring entity, the central bank in a Keiretsu structure alleviates the monitoring problem encountered by the Berle-Means business structure

(Gilson & Roe, 1993). A prime example of a well-known Keiretsu is Mitsubishi. In addition to its banks (Mitsubishi Bank, Bank of Tokyo-Mitsubishi, and Mitsubishi Trust and Banking), the Mitsubishi Keiretsu includes companies like Kirin Brewery, Nipon

Oil, Nikon, and Mitsubishi, whose divisions include automotive and electronics.

In addition to collectivism and high-context communication, patience and humility are equally as important in Japan. Unlike in the United States where a

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salesperson oftentimes takes on a superlative attitude, as if they are doing their customers a big favor, the exact opposite is true in Japan. The salesperson takes on a more subservient role, while the buyer is seen as superior. The salesperson is the client’s servant, humbling himself or herself to cater to the client’s needs.

Giving gifts is common (and often expected) in Asian cultures. When giving a gift, however, it is important that the gift and the manner in which it is presented do not end up insulting your client. For example, wrapping a gift in white paper is a definite faux pas as white is the color for funerals. Gifts that also are associated with funerals include clocks, handkerchiefs, and other gifts in which the predominant color is white, black, or blue (Morrison & Conaway, 2006, p. 99). In Japan, giving a gift that contains an even number of components, particularly the number four, is considered ominous.

On the other hand, a good cognac or other fine liquor is not only an acceptable gift, but also is highly appreciated. Other acceptable gifts include high-quality pens, electronic gadgets such as iPods, and gourmet foods. In the case of both China and Japan, the presenter of the gift should make sure that it was not made in China. Because everything coming into Asia is thoroughly checked by Customs, it also is advised that the businessperson wait until they are at their destination before they wrap their gift.

This also will ensure that the proper wrapping paper is used, especially if the hotel wraps the gift or a local store that offers gift-wrapping services handles it.

When presenting the gift, the salesperson should not be surprised if their host declines the gift at first; traditionally, a gift is declined several times before it finally is accepted. Gifts should be presented and accepted using both hands.

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Several of the industry experts who traveled to Japan, ultimately looking to buy products to import to the United States, talked about the treatment they received upon arrival. One even went so far as to say that they felt like a rock star because of the way the salespeople in Japan catered to their every need. Some specific examples were limousine service to and from the airport, dinners, drinks, and gifts. All of this continued well after they returned to the United States with more gifts, flowers, and liquor (the same kind they had ordered at dinner in Japan) sent to them.

Another industry expert who worked for IBM in the quality control division traveled extensively to Japan to check several manufacturing facilities to ensure each part being produced met the high expectations set by IBM. He talked extensively about the lavish gifts he received and the friends he made in the process. As the case study in this section also will illustrate, gift giving and maintaining relationships is a priority in the Japanese culture. The IBM executive talked about the many letters he continued to receive from the friends he met in Japan. These letters came for his birthday,

Christmas, Thanksgiving, and even for his children’s birthday. His friend in Japan would include pictures of his family and always would say how it was a pleasure to have had the opportunity to meet and continue a friendship. The executive continued by saying the attitudes of the Japanese workers were much different than those in the

United States. If the quality control engineer had to let U.S. workers know that their products didn’t meet the high expectations set by IBM, the U.S. workers generally would get angry, point fingers, and make excuses, oftentimes blaming IBM for the error. The opposite was true in Japan; if the products didn’t meet the high standards set by IBM, the Japanese workers would apologize, take full responsibility, and do

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everything in their power to make the changes necessary not only to maintain but also to improve the relationship.

It also is important to note the importance of recognizing social role relationships and how they play into interpersonal communications in Japan. According to Kazuo Nishiyama (2000),

Japanese people act and react in certain ways expected of them according to

their respective social positions. They tend to be formal and reserved, and they

are always conscious of their status in relation to that of others. In contrast,

Westerners are usually informal, friendly, and humorous in their interpersonal

interactions. They often unknowingly violate the rather complicated Japanese

social etiquette. (p. 66)

Whereas Westerners think nothing of a hearty handshake or a slap on the back, touching or otherwise violating one’s space is considered highly improper in Japan.

A salesperson traveling to Japan can expect to encounter a lengthy “get acquainted” period, where he will be engaged in small talk over tea. During this period, it is considered rude to discuss business. If it is necessary, an apology is issued. The

Japanese businessman usually will say “Sassoku shigoto no ohanashide mōshiwake gozaimasem ga...” Translated, this means, “I am sorry that I have to rush into the business discussion right away, but…” If a Japanese businessman feels that the salesperson is too aggressive and wants to discuss business too soon, he intentionally will draw the conversation back to more of a social nature. In many cases, an overly aggressive salesperson will not even get to make their presentation. In the West, common sales tactics such as not taking “no” for an answer, arguing their case (“yes,

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but…”), the ultimatum (“take it or leave it”), or an excessively verbose document written in English and presented as a “standard contract” are considered highly offensive to the Japanese (Nishiyama, 2000, p. 77). If they are pressured to do so, they might give what is referred to as a kara henji - an “empty answer” – saying, “yes” even if they do not mean it.

Being granted an appointment can be a daunting task if you are unfamiliar with

Japanese customs. Letters of introduction often are ignored, and “cold calls” are considered downright rude in Japanese culture. The proper method would be to obtain a shōkaijō – a letter of introduction – from an introducer. The introducer can be a mutual friend, banker or executive, or a business consultant. The introducer also can be a government official. Members of the local Chamber of Commerce are held in high regard and often are called upon to act as introducers. The introducer also will act as a chūkaisha – a mediator – to resolve any conflict that arises.

It is important that when conducting business in Japan, the salesperson presents his proposal humbly, paying close attention to the needs of the client. He should keep in mind that business decisions generally are made by consensus, and he should not expect an answer right away. As the examples in this section show, pushing a close is a surefire deal-killer. Again, the salesperson should be humble in their presentation, beginning with a phrase like, “If you are interested in purchasing this product/service…” Using the common Western tactic of saying “Which payment plan do you prefer?” to close a deal is highly offensive, and chances are the salesperson never will do business with that client again.

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As in any successful sale, a follow-up call is extremely important. By sending a letter of appreciation or calling the client personally to thank him for his business, the salesperson further assures the client that he has made the right decision.

Other important factors need to be considered when conducting business with an

Asian company. A major influence is Confucianism, which is practiced throughout

Asia. In Confucianism, five constant superior/subordinate relationships are maintained:

Ruler/Subject, Parent/Child, Elder Brother/Younger Brother, Husband/Wife, and Elder

Friend/Younger Friend. In this hierarchal society, age is especially revered. If two representatives are sent to Japan or China to negotiate a contract, the younger will be expected to defer to his older counterpart.

Another hierarchal trait in the Japanese and Chinese cultures involves gender.

In spite of tremendous strides made in gender equality, women still are regarded as being lower in the hierarchy, and rarely are sent to negotiate a contract. This inequality is seen throughout Asia. In Japan, for example, visitors often are taken to “hostess bars” to discuss business, where a female executive might feel awkward and out of place. In his book, Doing Business with Japan, Kazuo Nishiyama (2000) offers this recommendation for the American female executive traveling to Japan on business:

If the American female executive wishes to be effective, she should dress

conservatively and act professionally in all of her encounters with Japanese

males. She should make special efforts to make clear that she is a

businesswoman, not a female who enjoys men’s admiration. It is a good idea to

have an older American manager accompany her as “senior advisor” and to ask

him to take on socializing duties reserved for men only. It is also advisable to

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give him a “big title” that gives him credibility in the eyes of the Japanese, even

if such a title does not exist at the home office. (p. 61)

Although this may seem archaic and even misogynistic in the United States, this

Confucianism-based hierarchy is seen as the norm in Japan, although many Japanese youth are calling for the equality seen in Western culture.

In addition to Asia’s hierarchal customs, it is important to follow certain protocol when doing business. Entertaining is an important component of doing business throughout Asia. Although the main purpose of a banquet or a night out on the town is to develop a relationship, it is not uncommon in many Asian cultures to discuss business during this time. It is a way for the host to get to know the person with whom they are dealing. For the most part, business entertaining takes place in restaurants and bars; however, in rare cases, a guest may be taken to a home. This should be considered an honor, and behavior should reflect as such. In Chinese culture, if a guest is treated to a banquet, they should reciprocate in kind.

Case study #1. An inference of gift giving within Asian business culture. This is a summary of a larger case study8 designed to shed light on the practice of gift giving and its association to establishing long-term business relationships in the Asian culture. The thought processes, expectations, and values of the Asian culture become apparent by reading and understanding this case study. By understanding this real life example, as well as the others throughout this dissertation, individuals who wish to achieve a higher level of business success can apply these

8 Clare D’Souza, Dept. of Accountancy and Management, La Trobe University, Plenty Road, Bundoora 3083, Australia. 60

principles. Most “Western” business people (and the general public as well) are unfamiliar and unaware of these hidden dimensions of culture.

By practicing this act of gift giving, the Asian culture clearly reveals itself as a collectivist society. Through this practice, they try to maintain relationships and are committed to remaining a part of a larger group. Through this act, value is placed on the group as opposed to the individual. Additionally, this cultural norm shows the mindset of the Asian culture by revealing that these individuals place a great emphasis on maintaining relationships, thus displaying their long-term time horizon. This case study also shows a high-context culture’s priority of people and process over product.

High-context cultures tend to be more committed to long-term relationships and develop strong bonds, particularly with family and within the community, and gift giving strengthens and reinforces these behaviors.

This study proposes to examine the underlying linkage between the intensity of gift giving and constructing relationships. The goal is to provide both researchers and businesses an insight into how to successfully manage profitable relationships in a culture-rich environment that is growing ever more demanding and complicated. Gift giving is seen as an act of reciprocity, and often misconstrued as bribery by Westerners, yet it appears to be an important constituent of the Asian culture and can be seen as a form of relationship investment that, if cultivated well, can uplift interactions between businesses.

Gifts can be tangible or intangible; they may be in the form of cash or in-kind. It is popular to give gifts that have some meaning associated with them. Recognition, affection, and importance are all conferred along with gifts (Stafford, 1997). Gifts also

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encourage reciprocal relations perhaps by discharging a social obligation or expressing gratitude in some form (Fadiman, 1986).

Although gift giving derives its significance from the economic and symbolic value each culture places on the gift (Carrier, 1991; Mauss, 1967), the tradition of gift giving has evolved in numerous dimensions. In a modern day situation, gift giving is seen as a gesture of goodwill or as a token of appreciation or affection. However, from a business perspective it could be categorized into two broad classifications; for instance, it is intended to create an obligation (Shaw & Barry, 1998), or intended for appreciation. The former can be viewed as a long-term bond, the latter as short-term gratification. The process may take place over time and goes through three phases: giving, receiving, and reciprocating (Joy, 2001).

The attention towards gift giving has been viewed more as a social exchange towards individuals, rather than for maintaining strong relationships from a business perspective. It is a subject that may be of equal significance to an understanding of what the implications and ethical considerations are for one of the less tangible factors (gift giving) behind successful business operations in Asia.

Why accentuate on gift giving while doing business in Asia? It is an acknowledged fact that business executives do not base their investment solely on economic considerations; other factors such as networking and business relationships also are vital. Expectations within a culture will directly or indirectly affect many business transactions. Business success in Asia requires an in-depth understanding of their unique business environments and cultures; therefore an understanding of culture is regarded as critical to success in managing. It also is significant for businesses and

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foreign investors, who, in addition, can gain a competitive edge by understanding and incorporating this cultural distinction within a given business.

In an Asian context, gift giving is a distinct cultural and interpersonal act that carries with it specific moral characteristics. However, for Western organizations there is a degree of ambivalence regarding this idea of gift giving. To understand the cultural issues of gift giving, it is best to draw on, in the first instance, some of the underlying differences in business practices. The difference between the management practices of the West and the East lies in the emphasis placed on written contracts and procedures in the former, as compared with building personal relationships in the latter (Davis, Leung,

Luk, & Wong, 1995). The differences are worthy of attention mainly if Westerners intend on doing business in Asia. In the West, business relationships develop after the business is done, unlike Asia where relationships are developed before the business is established (Smith, 1995). When Western businesses started doing business in Japan, for example, they misinterpreted gift giving as inappropriate. For them, accepting a gift feels like accepting a bribe and yet, what may seem to constitute bribery for a

Westerner, may well be in keeping with Japan’s long standing tradition of the recognition, elaboration, and cementing of business and personal relationships.

Notably, some of these differences are vested in their culture; likewise, gift giving also is a cultural practice that helps to define the ethos of a culture and varying value systems, for each gift functions as a method of communication (Senior, 1996).

Etiquettes and local customs drive gift giving in a culture rich environment. Business gift giving is viewed as either an imperative (i.e., a must) or as an adiaphora (i.e., something one may or may not have to do) (Arunthanes, Tansuhaj, & Lemak, 1994). In

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cultures where gift giving is considered an appropriate behavior, it is beneficial to accept the practice.

In Asia, gift giving is not a recent phenomenon and is used as a means of gaining access to, and favorable consideration from, important business associates and government officials.

One classic example that prevails widely is the guanxi-style relationship. Given that gift giving conduct varies greatly across cultures, it may be worthwhile to address

Guanxi style relationships in Asia. The rationale behind discussing guanxi is done not only because it symbolizes gift giving to strengthen relationships, but also because in the process of cultivating guanxi, gifts normally are used (Brunner, Chen, Sun, & Zhou,

1989). The core of the Chinese economy and business conduct is guanxi connections

(Kao, 1993). Guanxi is a complex term, having various connotations. For example,

Guanxi-type relationships refer to the concept of drawing on connections or networks in order to secure favors in personal or business relations. People who share a guanxi relationship are committed to one another by an unspoken code of reciprocity and equity, and disregarding this commitment can damage one’s social reputation (Luo,

1997).

Guanxi is defined as a network of relationships a person builds through the exchange of gifts and favors to attain mutual benefits. It is based on friendship and affection, and on a reciprocal obligation to respond to requests for assistance (Pearce II

& Robinson, 2000). Wong and Chan (1999) have defined guanxi as social interactions within the network place, and its members in the equivalent of an infinitely repeated game with a set of people they know. Their findings revealed that adaptation, trust,

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dependence, and favoritism are found to have a correlation with some of the relationship performance indicators. While Peng (1997) gives a more meaningful definition of guanxi “as being a relationship between two people or organizations containing implicit mutual obligation, assurances and understanding governing Chinese attitudes towards long term social and business relationships” (p. 449), Pearce II and

Robinson (2000) highlight the emphasis on attaining mutual benefits through the exchange of gifts, based on friendship. Wong and Chan (1999) refer to guanxi as social interaction with a set of people they know, while Peng (1997) suggests a broader view, stating that it is not only attaining a mutual obligation between individuals, but on the basis of an organization as a whole. If guanxi were to refer only to interpersonal relationships, then there is a possibility that Western firms may wish to avoid guanxi, due to the several risks involved (Li & Wright, 2000).

The process of cultivating guanxi through gift giving, no doubt, can be seen as an integral part of relationship marketing. For example, the Chinese strive to keep relationships among guanxi members stable and harmonious because guanxi is the basis on which they exchange a lifetime of favors, resources, and business leverage. Guanxi has been synonymous with having a customer orientation, and the aim is to retain customers in the long run. Guanxi style relations also have been defined as a web of personal connections, relationships, and obligations that business people can use to obtain resources or advantages (Davies, 1995; Davies, Leung, Luk, & Wong, 1995) through a continual exchange of favors (Pye, 1992). Guanxi based sales force marketing, in which the decisions virtually are dependent upon guanxi, is found to have a systematic and favorable effect on a firm’s profitability, asset turnover, and domestic

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sales growth. Guanxi style buyer-seller relationships were found to be strongly related to reduced levels of perceived uncertainty about the business environment and a variety of improved performance outcomes (Abramson & Ali, 1997). Accordingly, it seems appropriate to treat guanxi as an integral asset that creates value to ascertain a relationship, as customer retention and loyalty are of paramount importance especially in relationship marketing. Thus, as can be seen from above, the benefits of gift giving in a business relationship can help build ties, cultivate relationships, enthuse loyalty and goodwill, and be an integral part of relationship marketing. Gift giving is regarded as a highly social behavior that individuals perform.

In light of the above discussion, the cultural context of a country can significantly influence business relationships. It is the business climate that proactively sets the conditions that will influence gift giving and, as it can be seen, gift giving is an accepted gesture in Asia. This study indicates quite strongly that gift giving is powerful in shaping the strategy of a continuing relationship. It should be understood that gifts often prompt the need for reciprocity. This study sheds some light on gift giving as a concept to explain the dynamism inherent in building relationships both within and across Asian cultures.

It may be suggested that gift giving within the Asian culture is expected behavior that shows respect to another person and strengthens relationships; it is one of the ways of nurturing such relationships and strengthening the trust, caring, reciprocity and commitment between the parties. Gift giving and relationships interact to produce a distinctive way of business that evolves over time, if invested wisely.

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Latin America

If China is one of the fastest-growing economies in the world, then no doubt

Latin America boasts the hottest market. As of 2006, the U.S. Census Bureau indicated that the Hispanic/Latino population was approximately 45,000,000. With the Latino population in the United States growing by leaps and bounds, it is predicted that the

Latin American population in the United States will nearly double by 2050. Again, it is paramount for anyone in the business world to understand some history behind the

Hispanic culture in order to try to be able to communicate more effectively.

Throughout the years, Latinos have had to fight a number of negative stereotypes, particularly in advertising (Recall Frito Lay’s infamous Frito Bandito commercials of the 1960s). Negative stereotypes, such as portrayals of Latin

Americans as criminals or slovenly, uneducated buffoons, have run rampant throughout the entertainment industry, and it is only in recent years that we are seeing an increase in positive portrayals. Additionally, Latin American leaders are in many cases still perceived as dictators or demagogues, either from the left or the right sides of the political spectrum. Most from outside the culture find it difficult to conceive of Latin

America as a mixture of peoples and cultures, each one distinct from the others. As with all stereotypes, ignorance and bias are the main factors that lend to these conclusions. Once anyone looks beyond these stereotypes, a diversity of cultures is revealed. Europeans, Africans, Asians, and the native people of Latin America all have contributed substantially to these cultures.

The Latin American family unit is the center and focus of most Latinos. These family ties are strong and endure for the lifetime of each individual. These bonds

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extend beyond just the nuclear family and reach well into the extended family. Cousins, godparents, even close friends will remain very close throughout their lives. In times of hardships and struggles, this family unit can be counted on for support. This interaction between individuals and families leads to the fact that most Latin Americans are in urban areas. In the case of Latin America, the urban growth came before industrialization, where the opposite is true in most other countries. Therefore, the city has dominated the cultural settings for most Latin Americans.

Drugs, gangs, poverty, and violence have increased, fueling the desire for many

Latinos to emigrate. Wars have forced thousands to become refugees and families have been separated.

Throughout the literature review, it was revealed that appearance is of big concern to Latin Americans and probably is due to the fact that they always are in close contact with many people. There seems to be a constant desire for honor, status, and prestige. People are trying to impress each other constantly with their public worth.

Latin Americans convey an impression of importance no matter how menial their position.

Concepts of time in Latin America are viewed entirely differently and take on a different cultural meaning than those of Europe and North America. This attitude towards time also reveals the inner workings of their culture. I have used several personal stories in this dissertation to show my initial exasperation with this cultural trait. Other business people from all over the world have long complained about the attitude of Latin Americans. For most Americans who believe that time is money, this attitude appears senseless. However, many would say this attitude is healthy and

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perfectly rational. Latin Americans spend hours with their family and friends over long lunches or dinners; but it is important to realize that this family unit is their source of power and strength. These networks bind Latin American society together. To understand time from a Latino’s standpoint, one would have to look at it as circular rather than linear. The past, from a Latin American’s perspective, is equally as important as the present.

Whereas the typical U.S. business focuses on molding their employees to suit the corporation, Latin America focuses on the individual and what he or she can contribute to that organization. This was noted nearly half a century ago, when Dr.

Stanley Davis, then Assistant Professor at Harvard, observed managerial differences between U.S. and Latin American organizations. “The individual, above all, must not be compromised,” Dr. Davis commented, “and in the Latin American Context the only way that a group can function effectively is by working through the individual members” (1969, p. 88).

Latino vs. Hispanic. In her book, Latinos Inc., author and Assistant

Professor of American Studies and Anthropology at New York University Arlene

Dávila discusses the interchangeable use of the terms “Hispanic” and “Latino.” While using these terms interchangeably is a common practice, there is a difference, as she points out: “…First, this terminology (“Hispanic”) is undoubtedly due to business preference for the officially census-sanctioned category of “Hispanic” over “Latino,” a term of self-designation more connected to social struggles and activism (Noriega &

Lopez, 1996)” (2001, p. 15). Ms. Dávila continues by explaining that, following the cultural struggles of the 1960s and 1970s, the U. S. government officially coined the

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term “Hispanic” to designate anyone of Spanish background in the United States, regardless of their regional heritage. She also points out the start of a generational split, where the youth increasingly is embracing the term “Latino” over the more traditional

“Hispanic.” This is expected to affect the way products and services are marketed to this demographic.

The countries in Latin America. There are 20 countries and one commonwealth (Puerto Rico) that make up Latin America, from Mexico to the islands in the Caribbean, all the way down to the southernmost tip of South America. All possess a rich culture and heritage, yet each is unique in its own way. From the Taino influence of Caribbean nations like Cuba and the Dominican Republic to the

Mesoamerican heritage of Mexico and Central America, the different microcultures, political systems, and economies create a culture with many colors and textures, with the common denominator being Spanish Colonialism. There are a number of common cultural traits, including the practice of keeping visitors waiting for an appointment, even though the visitors themselves are expected to show up on time.

Many of these nations are dealing with a number of issues, such as the endangerment of their indigenous people through assimilation, disease, and encroachment on their land. To curb the onslaught, several agencies, including the

World Bank, are demanding inclusion of programs that protect the rights of indigenous peoples before they even will consider funding economic development projects in places like the Amazon region (Harris, Moran, & Moran, 2004, p. 314).

Throughout its history, the nations of Central and South America have been fraught with conflict between incumbent governments and revolutionary contingents.

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Kidnappings are common, as seen in recent reports of the release of over 15 hostages on

July 2, 2008, including Colombia’s Senator Ingrid Betancourt, who had been campaigning for president when she was kidnapped in 2002. In spite of these and other issues, Latin American countries like Colombia still are experiencing substantial economic growth and are considered key players in the global marketplace. In

Colombia’s case, strict adherence to government budgets and a concerted effort to reduce the public sector deficit have helped Colombia in its economic recovery.

In this paper, I will touch on the protocol of some of the larger and more influential Latin American countries - the nations that are making their presence felt in the international business world. The countries being discussed had similar and important cultural traits mentioned in the literature review.

Argentina. Throughout the 1990s, Argentina enjoyed a period of immense prosperity and unprecedented economic growth. This was to change during the country’s economic crisis of 2001. In her speech at the National Bureau of Economic

Research’s Conference on The Argentina Crisis in Cambridge in July of 2002, Anne

Krueger, First Deputy Managing Director of the International Monetary Fund, pointed out two possible causes: “With hindsight, two factors came together in a destructive cocktail: weak fiscal policy and mounting overvaluation, the latter reflecting relatively high inflation, a stronger dollar, and insufficient domestic flexibility (for example, in the labor market)” (p. 9). By 2005, the crisis was past and Argentina’s economy continues to enjoy steady growth.

There still are challenges to the foreign visitor wishing to conduct business in

Argentina, although some barriers are being worn down. For example, the long-

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standing machismo attitude is being challenged like never before, as more women are becoming active in politics as well as outnumbering their male counterparts in school.

Still, salespersons wishing to do business in Argentina often find themselves confronted with an attitude of superiority, as Morrison and Conaway (2006) mention: “Like the

French, Argentines tend to consider themselves more cultural than people from most countries. This can hamper their business dealing with people from nations Argentines have been known to look down upon” (p. 4).

Although Argentines hold their extended family in the highest honor, there are some cultural anthropologists who believe a high individuality index exists among the general populace. That said, priority should be placed on personal relationships, which tend to remain consistent regardless of the number of times a corporation changes its representative. Maintaining personal relationships over corporate relationships ensures that the negotiation process stays on track.

Although visitors are expected to arrive at their appointments on time, it is not uncommon for their hosts to keep them waiting. By the same token, it is considered impolite to arrive on time at a social function. Visitors who are unsure always can ask their hosts, ¿En Punto? – “On the dot?”

As it is in China, salespersons often have to make several trips to Argentina before negotiations are finalized. In Argentina’s case, this is due to its penchant for litigation and bureaucracy.

Brazil. Although the largest and most populous nation in Latin America,

Brazil is culturally diverse, hosting Portuguese, German, and Egyptian populations, among others. Brazil also has the largest Japanese population outside Japan itself.

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Brazil has regions that are so distinct they easily could be viewed as other countries. In

Brazil, there exists such a tremendous range of geographical, racial, cultural, and economic contrasts. Many Brazilians were unaware of this diversity until just recently as the infrastructure grew and showed such a wide array of cultures. The mass media also informed them of their cultural heritage as well as these profound differences.

History was made in 2002 when Brazilians elected their first president who did not come from its elite class. Luiz Ignácio Lula da Silva, known affectionately to his constituents as “Lula,” never completed his basic education, yet rose to become one of the most successful and influential leaders of the metallurgical union and the Worker’s

Party before his election to the Brazilian presidency. This signifies a shift in policy, and a sign that that the Brazilian people, particularly the middle and lower class, are hungry for a change from the years of repression and inequality they had suffered. According to a study conducted by the World Bank in 1995, Brazil possesses the most unequal wealth distribution in the world, in spite of the fact that the country grew faster than any other in the world between 1960 and 1990 (Harris et al., 2004, p. 332). Since Lula’s election in 2002 and subsequent re-election in 2006, programs such as Fome Zero

(“Zero Hunger”) and Bolsa Familia (“Family Stipend”) have been implemented to help the most marginalized families in the country.

As in most Latin American countries, Brazil’s parentele, or “extended family” institution, plays a significant role in its society. A parentele can consist of hundreds of people from both the maternal and paternal sides, and like other Latin American cultures, this focus on the family unit is extremely important.

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For any businessperson traveling to Brazil, it’s important that they understand the cultural background of their client and govern themselves accordingly. When it comes to cultural identification, Brazilians are particularly sensitive when they are identified as Hispanic: “Brazilians do not consider themselves to be Hispanics, and they resent being spoken to in Spanish” (Morrison & Conaway, 2006, p. 64).

Unlike most Asian countries, arriving late to an appointment in Brazil is not considered a major indiscretion; on the contrary, arriving late is considered a fact of life.

It is important, however, to make appointments at least one week in advance and avoid making appointments altogether during Carnival, Brazil’s equivalent to Mardi Gras.

Like Mardi Gras, Carnival is celebrated for up to a week before Ash Wednesday, the start of the 40-day season of Lent.

To ensure a successful venture in Brazil, establishing strong relationships is a must. This will mean long-term investments of time and money, but they will be well worth it in the end. Ideally, a business appointment should be made between 10 a.m. and 12 noon to ensure that the appointment runs into lunch. Hosting a good meal for a

Brazilian business prospect is tantamount to building a good relationship. However, business is not discussed during the meal itself. Only after the coffee is served is it safe to discuss a topic related to the business at hand. Expect the prospect to review and scrutinize details of an agreement meticulously. Exercising patience and flexibility will go a long way in closing the deal.

Chile. On September 11, 1973, Salvadore Allendis’ Marxist government was overthrown in a CIA-backed military coup. This resulted in 17 years of military rule that created a repressive environment where torture and executions were commonplace.

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Political parties were abolished, as was the Chilean Congress. One of those jailed and tortured by the military junta was Chile’s current President, Michelle Bachelet. Chile’s military rule ended in 1990 with the first free elections since 1970. Today, Chile’s government is similar to that of the United States: a multi-party republic with two legislative houses.

Another common Latin American business trait is the establishment of personal relationships, and Chile is no exception. In Chile’s case, “The initial visit should be by an upper level executive, accompanied by mid-level executives. These mid-level executives are the ones who will make subsequent visits to conduct more detailed business negotiations. At a first meeting, spend most of the time establishing a rapport, then gradually steer the conversation toward introducing your firm” (Morrison &

Conaway, 2006, p. 85). As in Japan, introducing one’s self through a third party is important. Many firms utilize banks and consulting firms to make the introduction.

Chile shares another common trait with Japan in that a hard-sell approach is offensive in the Chilean culture. Terms of a contract should be stated clearly and options such as non-traditional financing terms should be offered. As an indication of a salesperson’s commitment to a business relationship, he or she should ensure the client of continued service after the deal.

Cuba. Much has changed since the United States imposed a complete diplomatic and trade embargo on Cuba in 1963 as a result of souring relations under

Fidel Castro’s regime. When the Cuban dictator stepped down as President in early

2008, his brother, Raul, succeeded him. Since assuming the presidency, Raul Castro has begun to lift a number of bans set in place by this brother; this included bans on

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DVDs, microwave ovens, and personal computers, among other items. Despite these small steps toward reconciliation, many human rights issues, such as the extensive imprisonment of citizens peacefully opposed to the current regime, have yet to be resolved. There also is the fact that the income of the average citizen in Cuba is $10 to

$15 a month. In a recent interview on NPR’s “Marketplace” radio news program,

David Adams, Latin American Bureau Chief for Florida’s St. Petersburg Times, indicated that while change is slow in coming, there are some indications that Raul

Castro is looking at the big picture, indicating a move toward eradicating policies that aren’t working and implementing plans that will improve the lives and livelihoods of

Cuba’s people.

It is not certain which direction the island nation will take following the end of the 76-year-old Cuban president’s regime. However, many Cubans, particularly those who must rely solely on the Cuban peso for their income and who have no one outside of Cuba sending them money, are not happy with the changes. They explain that it’s hard to be optimistic when they still are trying to scrounge enough together for their next meal. Thanks to the Helms-Burton Act of 1996, which mandates that U.S. economic sanctions against Cuba be maintained as long as either Castro brother is in power, significant changes might be slow in coming. But the potential is there and

Cuba’s close proximity to the United States certainly will make it an important trade partner in the future.

Cuban exiles in America. The Mariel Boatlift in 1980 forever changed the face of Miami. Today, there are over 650,000 Cuban-Americans living in Miami-Dade

County. This influx has helped Miami grow from a mere tourist destination to a major

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center of international trade. Cuban Americans are actively involved in politics.

Miami’s South Beach has been enriched with the artists, writers, and musicians who arrived during Mariel and settled in the area.

Whether doing business in Cuba or in Miami, the protocol is similar: create and maintain a personal relationship to help ensure business success. Like so many other

Latin American cultures, Cubans pride themselves in their hospitality. Business negotiations generally begin with small talk over cups of Cuban coffee, as well as the exchange of business cards.

Conducting one’s due diligence always is helpful. Comprehensive preliminary market research as well as research on competitive pricing gives a salesperson an edge when making their presentation to a Cuban business prospect. One thing that can kill a deal is not responding to a call, e-mail, or fax immediately. Impatient Cuban buyers will search quickly for an alternative if they receive no immediate response to their correspondence.

Mexico. Mexico is a country rich in cultural history, beginning with the proud and majestic Mayan and Aztec civilizations and their subsequent fall to Spanish conquistadors and influx of European disease; through its fight for independence from

Spain; and through its economic growth bolstered by free trade agreements such as

NAFTA. A recent report from the World Bank indicated: “Its positive and stable economic performance together with the official decision to combat poverty has permitted a rise in per capita income levels, though poverty and inequality indices are still very high.”9 Dramatic social and cultural changes have accompanied Mexico’s

9 http://www.fas.org/sgp/crs/row/RL34733.pdf 77

population growth. These are shown in Mexico City, where an appearance of a cosmopolitan skyline is replacing what would be perceived as a Mexican capital.

English words such as “okay” and “coffee break” now are common in everyday vocabulary. A siesta is becoming a thing of the past in these new urban areas.

Mass communication certainly has impacted the Mexican culture. Television commercials primarily use models that are European. A symbol of success in the

Mexican culture is the ownership of a television. Antennas dominate the skylines of even the most impoverished areas. Many of these antennas are designed only to create an appearance that the owner owns a television.

When conducting business in Mexico, one must be cognizant of the way

American businessmen and their Mexican counterparts see each other. The book,

Managing Cultural Differences, includes what could be considered a controversial table, which indicates that North Americans and Mexicans harbor rather negative views of each other, while seeing themselves in a more positive light (Harris, 2004, p. 320).

Although it seems that these statistics would make conducting business with each other nearly impossible, the United States enjoys a healthy business relationship with its neighbor to the south.

Harris (2004) and several other authors point out specific examples of cultural differences between the U.S. and Mexico. These are important to recognize and understand as Mexico and the U.S. are strong trading partners and share an extensive border. For example, business appointments should be made two weeks in advance by phone or e-mail, confirming the appointment one week before. As in many other countries, a third-party introduction is important. In Mexico, these third parties are

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known as persona bien colocada – a “well connected person.” Also, plan to arrive on time, even though the client may be late. Punctuality is expected, especially of foreign visitors.

Again, we see the importance of establishing personal relationships to ensure success. In Mexico, they use the term personalismo to define a long-term relationship based on mutual trust and reliability (Morrison & Conaway, 2006, p. 318).

Unlike the U.S. culture, where negotiation and contracts are completed in the beginning of a relationship, in Mexico, patience is a virtue when it comes to these types of negotiations. As in most Latin countries, business in Mexico tends to operate at a slower pace than to what North American or European businesses are accustomed.

During the negotiation process, consultations are made at the lower levels of the chain of command while the ultimate decisions are made at the top. It is important to be patient during the consulting and decision-making process.

As in Japan, Mexicans might say “yes” to an agreement out of politeness rather than out of genuine interest. To avoid any misunderstandings, it is important to get any and all agreements in writing. It also is important to emphasize the benefits that go beyond logistics, stressing the benefits to the person and family. During the negotiation process, the salesperson should not criticize another publicly or otherwise act in such a way that another person would be humiliated. It’s all part of the Mexicans’ value of individual dignity.

Although meetings can take place at breakfast, lunch, or dinner, the best times are during breakfast or lunch. Generally, dinner is eaten at around 8:30 in the evening,

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sometimes even later, which I personally experienced when traveling to Monterrey,

Mexico on business. .

Mexico, along with the Caribbean and Pan American nations, offers plenty of opportunities for business success. Knowing the origins of each culture and understanding how these cultures come into play when conducting business can be helpful in negotiating contracts and successfully establishing relationships.

Mexico and all the Latin American cultures have many unique cultural characteristics that are important to understand when trying to develop trust and a relationship. The following case study shows the complex nature of organizational structures in Brazil. Oftentimes, many people in the United States classify individuals as Hispanic without taking into account the wide variety of cultures that fall under that term. This case study of Brazil reveals how complex the cultures of one such country can be.

Case study #1. Brazilian national culture, organizational culture and cultural agreement: Findings from a multinational company. This case study10 looks into the organizational culture of a Brazilian company, concentrating on its main Brazilian branches as well as on its European, Latin American, Central

American, North American, and Asian branches and describes the influence of national culture on organizational culture. This study also discusses the history and the significance of examining the importance of culture in an organization. Additionally, this study shows the importance of hierarchy and of relational networks, which stress the relevance of the cultural element in organizational structure. Understanding this

10 (2006). Adriana V Garibaldi de Hilal. International Journal of Cross Cultural Management, 6(2), 139- 167. 80

Brazilian culture will help to better understand apparently different, ambiguous, or even contradictory behaviors reflected in the organizational culture practices of a Brazilian company with international operations.

This study adopted a sub-cultural perspective, perceiving the organization as composed by multiple layers of sub-cultures. This perspective emphasizes the existence of differences, although it does not deny the possibility of the existence of consensus in relation to certain values (Martin, 1992). A critical factor that defines the relationship and the existence of sub-cultures is how much they reflect their own particular values.

Here, possibilities offer a spectrum that can include great differences (which can imply deeply rooted conflicts and culture clashes) as well as groups that share similar values and have similar ways of perceiving and interpreting the organizational context events

(which would foster inter-group cooperation). According to Kilduff (1993), organizational members from different nationalities probably will tend to develop specific cultural perspectives while they modify and transform the cultural routines of the organization so as to adapt them to their own cultural bias, possibly using different practical approaches to deal with organizational problems.

Usually, the different systems of meanings, or the different sub-cultures, greatly affect the operations of those organizations. Groups with different cultural viewpoints tend to interpret and to respond to the same organizational events in different ways - accepting, modifying, questioning, or even ignoring the rules and procedures that emanate from the dominant culture (Jermier et al., 1991). Additionally, ethnocentrism, which is the tendency to evaluate others according to our own cultural point of view

(Rocha, 1991), increases the probability of misunderstandings that can result in

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undesirable conflict levels, thus affecting the performance of the organization (Gregory,

1983).

In a relational society such as Brazil, it is important to consider the influence of relational networks on the organizational culture and sub-cultures. Within the relational perspective, interaction can lead to a certain homogeneity of attitudes and practices, thus significantly influencing the existence of cultural agreement (Burkhardt, 1994).

Brazil is the only other country in the western hemisphere that has the continental proportions, the regional contrasts, and the demographic diversity that can be compared to the United States and Canada. According to Hess (1995), Brazil, in spite of its western-like institutions, is a country where western culture has mixed and mingled with non-western cultures for centuries. This mixture of western and non- western, as well as modern and traditional, is what Da Malta (1997) has called the

Brazilian dilemma, or what Brazilians call the Brazilian reality. Brazil is a country where institutions operate through personal relationships as much as general rules.

Diversity is not the best word for describing Brazil and Brazilians; mixture is better.

Brazil is a nation of mixed races (miscegenation), religions (syncretism), and cultures

(diasporas, borderlands).

Hess (1995) describes Brazil as the product of a particular colonial legacy that includes a class of wealthy landowners who supported a highly centralized Portuguese state. In turn the state imposed a latifundia, or plantation agricultural system in Brazil, where the plantations were controlled by patriarchs who exercised nearly absolute authority over their dominions. According to Buarque de Holanda (1995), the colonial legacy also includes the origins of the traditional Latin American personalism, the lack

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of social cohesion, and the looseness of the institutions. Additionally, the Tocquevillian legacy of comparative analysis influenced a number of 20th-century thinkers such as

Louis Dumont (1980). Dumont’s studies focused on two key dimensions for comparing values and patterns of social relations across societies: hierarchy and equality, and holism and individualism.

In the ascribed form of hierarchy used by Dumont, one’s social position is assigned at birth or is limited by one’s family position. In a traditional hierarchical society, laws apply differently to different groups of people. Of course, there are remnants of the ascribed kind of hierarchy even in the most modern of societies, but the legal recognition of such hierarchy is considered an affront to the fundamental value of equality.

Thus Brazil is neither modern nor traditional but both. Da Matta also developed an analysis of intermediary terms or symbols, since there is a tendency in Brazil to move toward a middle ground of mediation and ambiguity. Those mediating terms become sites for the conflict of values and the encompassment of the modern by the traditional.

This seems to apply to Latin American countries as a whole, as Latin American history and social structure seem to imply. For example, the injustices of the Latin

American authoritarian and hierarchical system are blunted by the existence of a number of mediating institutions: extended kin networks, nepotism, the famous

Brazilian jeitinho or the Argentine gauchada (the art of bending rules), and a variety of social practices that would appear corrupt in North America and Western Europe. In short, personal relationships form the flip side of official hierarchies. Personalism is

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more than a cultural system that gives people a social address in the hierarchical society; it is also a resource that people can use to circumvent the official rules of the hierarchical society. Of course, personalism does not work the same way for everyone.

The networks of the weak are usually smaller and less influential. As a result, although personalism can be used as a resource to subvert hierarchy, as an overall system, it ends up reproducing the general hierarchical order (Hess, 1995).

Perhaps the most well known of Da Matta’s studies of mediation is his discussion of the street and the home (1997). The space of the home is identified with the hierarchical and relational/personalistic moral world, whereas that of the street is egalitarian and individualistic. Of course, in Latin America, and especially in Brazil, the two worlds of home and street interact considerably. As a social space, the home, and institutions modeled on the home, such as the workplace, are places where relations among family members and servants or among superiors and subordinates institute hierarchies of race, class, age, and gender. The street is a different sort of place where those hierarchies are suspended. The street is the place where the egalitarian and individualistic principles of the marketplace or legal system are in operation. The home is the place where people find their identity, while the street is the place of individual anonymity. In certain situations the home encompasses the street and all matters are treated in a personal, familiar domestic way; in others the street encompasses the home: the domain of personal relations is submersed totally and the axis of impersonal laws and rules prevails. There is, therefore, a double-edged ethic that operates simultaneously and that determines different behaviors that apply to the street (where behavior is free of the sense of loyalty, free of the meaning of us, ruled by the criteria of individualism, by

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laws and by the rules of the market) and to the home (where behavior is ruled by personal relations, the sense of loyalty and emotions, by reciprocity and friendship).

One of the key factors that differentiates the culture of one organization from the culture of another, and probably the most important factor, is national culture. The basic assumptions, costumes, beliefs and values, as well as the artifacts that characterize the culture of an organization, are always somehow encompassed by the corresponding national culture. It is therefore impossible to study the culture of organizations that operate in a society without studying the culture of that society. Thus the study of the organizational culture of a Brazilian company requires understanding Brazilian culture.

Hofstede’s (1980) most important finding refers to the importance of national culture in order to explain the differences in work-related attitudes and values.

Brazilians, no matter how differentiated they may be in their racial and cultural matrices and in their ecological-regional functions, or in respect of being old settlers or recent immigrants, have come to know themselves, to feel themselves, and to act as a single people, belonging to the one same and only culture. They are a national entity distinct from all others, speaking the same language, differing only in regional accents.

They take part in a body of common traditions that is more meaningful for all than are any of the existing sub-cultural variants. Nevertheless, the cultural uniformity and national unity must not blind us to the disparities, to the contradictions and antagonisms that subsist beneath them as dynamic factors of major importance. Lying hidden beneath Brazilian cultural uniformity is a profound social distance reproduced in organizations in the stratification that separates those with power from their subordinates, where hierarchy, authority, privilege, and tradition mingle with modern

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forms of management, usually derived from individualistic ideologies, revealing the ambiguity and duality of Brazilian culture.

Thus Brazilian organizations usually present a high power distance. The way workers and executives are treated seems, on the one hand, to be based on masculine type controls and use of authority and, on the other hand, on feminine type controls and on the use of seduction and favor typical of relational networks. Moreover, organizations are at the same time producers and product of their culture. The organizational culture (OC) cannot be considered a photograph of the organization but an interpretation of the complex organizational reality as perceived by its members.

Consequently, the dimensions identified in this study partly reflect the OC dimensions identified by Hofstede et al. (1990), but they also show unique features based on the specificities of the organization and of Brazilian culture.

Organizations are symbolic entities: they function according to implicit models in the minds of their members, and these models are determined culturally. In terms of values, it is crucial to answer the questions of who decides what, and how can one be assured that what should be done will be done (Hofstede, 2001).

Results show the influence of national culture on organizational culture, as the dimensions found clearly reflect the ambiguity and double-edged ethic characteristic of

Brazilian culture in particular and of Latin American culture in general. This study also shows the importance of hierarchy and of relational networks, which stresses the relevance of the cultural element in organizational structure and functioning. Quoting

Hofstede (2001): “The structure and functioning of organizations are not determined by a universal rationality. There is no best way that can be deduced from

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technicaleconomical logic” (p. 377).

Also in connection with the importance attributed to hierarchy is the issue of power redistribution, which includes all forms of empowerment such as consultative and participative forms of management. In organizations with a high need for authority, if power redistribution is imposed, it may become self-destructive (because, according to Hofstede (2001) if it succeeds, continued imposition would no longer be possible) or, for example, it only may be reduced to a ritualistic representation of participation because it is perceived as the politically correct discourse by the managerial establishment.

In hierarchical and relational organizations, according to Da Matta (1997a), once people are positioned in a network of personal relationships they automatically are treated as friends and can be a potential source of power resources and a means of social and political manipulation by reciprocity and favor.

Understanding the relational double-edged ethic that governs Brazilian culture helps us to understand apparently different, ambiguous, or even contradictory behaviors of a Brazilian company with international operations.

The analysis of organizational culture is a key factor in order to manage change in an organization, and, as such, its understanding requires the identification of values and practices as well as the existence of groups of cultural agreement and the possibility of coexistence of different systems of meanings. Specifically, in the case of organizations with branches in different countries with different national cultures, it must be noted that organizational values have to be legitimized by the cultural values of the host society and cannot be studied as if they were the exclusive production of

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organizations, as if organizations operated in a vacuum. Thus, according to Hofstede

(1997), the core of the organizational culture is in the practices shared by its members.

Consequently, national cultures would differ mainly on their basic values, while organizational cultures would differ more superficially in terms of their practices, which would be the visible parts of culture and could be manageable within certain limits.

Finally, if managers understand the factors that lead to certain groups forming in their organization, they may be able to use the information to prepare themselves to manage across different groups in order to achieve goals that involve the entire organization’s participation, as well as to deal with conflict between groups by creating bridges between the different commonalities, thus providing the organization with an important leverage point for organizational culture management.

India

As in the other macrocultural sections of this dissertation, it is important to give some background information on the region being discussed. This background information reveals some of the important customs and rituals that need to be understood when trying to develop any type of relationship with an individual from this region of the world. Also included in this section are examples from the literature review, industry expert testimonials, and a case study that illustrates one of the main contributions of India to the world economy – outsourcing. This concept is important for anyone doing business in India to understand because it affects many areas of the

Indian culture and economy.

Since its independence from Great Britain in 1947, India has grown to boast the

12th largest economy in the world, with a Gross Domestic Product of just below one

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trillion U.S. dollars. It is the largest and most varied of the countries in South Asia. Its population is extremely diverse with many varied cultures, languages, and religions.

The vast differences between the country’s geographic regions contribute to the country’s diversity of cultures. India is an extremely crowded country and getting more so every day. On May 11, 2000 India recognized the birth of a child that represented its one billionth resident. Now, about 17% of the world’s population lives in just 2.3% of its land mass called India; almost four times more people than are living in the United

States, occupying about one-third the amount of space.

India’s middle class is growing and India has a near developed economy. In a report to the Millennium Conference held in New Delhi in February of 2000, it was estimated that 25% of the total population in India is affluent and upper-middle class, with sufficient income to stimulate a market economy as consumers. This upper-middle class of India almost equals the entire population of the United States.

India leads the world in smart technology and has a large, young workforce.

India’s GDP grows at about 10% annually. Two thirds of the country’s workforce is in agriculture, which actually produces less than one forth of the country’s GDP. This reveals that almost 30% of the country’s large population lives in poverty. All who visit

India readily sees the extent and visibility of the poverty. Almost 100 million people live in urban slums. Many thousands of homeless sleep on the streets.

India has been the focus for the United States “outsourcing” many of its jobs.

The recent high tech boom has been a key factor in India’s recent growth. Host to companies like Infosys and AMD, Bangalore has been touted as India’s Silicon Valley.

In addition, Bangalore also is the home of Biocon, one of India’s largest biotechnology

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companies. In his new book, India Arriving, Rafiq Dossani (2008) explains that there are a number of theories as to the growth, but no single answer, citing Indians’ expert knowledge of the English language and keen entrepreneurial skills among others (p.

109). India’s economic growth certainly has come from its service sector of information technology (IT). In a more globalized economy, India is a leader in software creation, consulting, and call centers.

Foreign visitors who visit the growing urban areas of India will notice the immense diversity of languages spoken. In India alone, more than a million people speak thirty-five differing languages; however, English is the primary language spoken.

Language identity is a key factor in the distinction between families.

Although home to several religions, Hinduism is the predominant belief system in India. Along with Sikhism, Jainism, and Buddhism, Hinduism is considered a native religion of India and comprises over 80% of the nation’s population.

There is a stark contrast between urban and rural life in India. The total urban population is only 24%, which is in stark contrast to the 74% in the United States. India soon will have the second largest urban population in the world, but urban residents still account for less than a quarter of the total population of the country. Like the United

States, there is quite a disparity between the rich and the poor. These differences, along with religion and language, reveal an immense diversity in the people of India.

All of this diversity certainly does not make life easy for the people of India. A

Business Week (2008) article cited symptoms of India’s growing pains:

The country is reeling from 11.4% inflation, large government deficits, and

rising interest rates. Foreign investment in India’s stock market is fleeing, the

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rupee is falling, and the stock market is down over 40% from the year’s highs.

Most economic forecasts expect growth to slow to 7%—a big drop for a country

that needs to accelerate growth, not reduce it. (p. 1)

High voter turnout in recent elections indicates that democracy has a stronghold in this region. It seems that the people of India look for a political solution to their major challenges. A common thread among most of the people of India is that they believe a political solution can be attained with patience and perseverance. India is the world’s largest democracy and has maintained a stable government and rule of law since the 1950s.

The economic future of India looks bright but the challenges of poverty, over population, and environmental damage is a huge concern. Voters are looking for policies that will encourage a more equitable distribution of wealth while sustaining its growth and popular democratic values.

One of the industry experts interviewed for this paper works extensively with companies based in India. His background is in Information Technology and he owned and operated a successful website company that bought, sold, and appraised domain names (a name that uniquely identifies a website, such as www.apple.com or www.culture.com). He originally started relationships with these organizations prior to the Y2K (Year 2000) computer conversion problem because most of the companies that fixed these vulnerable computers were based in India. He repeatedly mentioned that

India is only a 20-hour flight from Denver and today’s instant communication makes it even closer. He said that you need to be prepared to work in India as if you were going to prepare yourself to use a piece of software for your computer. The analogy works

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because establishing a relationship with someone from India requires you to know which button to push and in what order.

The industry expert stated that Americans need to be aware of many cultural differences in order to develop trust and ultimately a working relationship. Several examples of this are that Indians speak at a much slower rate and Americans need to emulate this; as well, Indians exhibit many nonverbal cues when communicating, such as standing much closer to the person with whom they are speaking as compared to U.S. culture. Businesspersons need to be prepared to feel like their personal space has been violated.

Perhaps one of the most controversial elements stemming from Hindi culture is its caste system. The system was abolished in 1949; nonetheless, it still is deeply rooted in Indian culture. Because of its hierarchical structure, the cast system is by definition inequitable. This system then is a direct contradiction to the democratic society for which most Indians long. In today’s business environment, this strict hierarchal system is evident in the fact that senior colleagues (particularly elder senior colleagues) are respected and obeyed without question. Maintaining a strong relationship with the highest-ranking business executives is vital in conducting business successfully in

India. More accessible are the middle managers; though not the ultimate decision- makers, they have significant input and can forward a proposal through the proper channels in a timely manner.

Handshakes are commonplace today in India, yet many businessmen (and businesswomen) still use the Hindi-oriented Namasté greeting - hands pressed together in front of the chest, fingers pointing upward, accompanied with a slight bow. This is

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considered an appropriate greeting, especially in situations where a handshake would not be considered appropriate, such as when members of the opposite sex greet each other (Dossani, 2008).

Salespersons traveling to India should be prepared for last minute scheduling or re-scheduling of meetings, many which run well into the late evening hours. As in many of the other countries discussed, punctuality is a double standard; although visitors are expected to be on time to appointments, the host does not always reciprocate. It also is wise to schedule appointments as far in advance as possible to allow for flexibility to accommodate any last-minute changes. Salespersons also should bear in mind the many religious holidays and confirm that their appointment does not fall on one of those holidays. Businesses are closed during these holidays, the dates of which change from year to year. To avoid the monsoon season and the extreme heat that plagues the country, it’s always best to schedule visits between October and March.

When conducting business with an individual or a corporation in India, one must bear in mind that the Indian government moves at its own pace. When it comes to obtaining the necessary permits or otherwise dealing with the governmental bureaucracy, patience is a virtue (Mitchell, 2000).

As in Japan, Indians try to avoid saying the word “no.” Unlike the Japanese, however, it is not necessarily due to feeling pressured to say “yes;” rather, avoiding the negative word is simply out of politeness as it carries harsh implications in their culture.

This is another reason for exercising patience during negotiations.

In a departure from many of the other countries and cultures discussed in this dissertation, it is not necessary to create business cards that are printed in two

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languages, since the majority of businesspeople in India speak fluent English.

However, business cards are mandatory.

If a business lunch is in order, Spencer (2000) writes about some important facts to remember about the Indian culture. For example, deciding on the menu items can be a challenge if you are not prepared. Hindus do not eat beef and Muslims do not eat pork. By keeping to Indian cuisine (chicken, lamb, or vegetarian fare), a visitor, unfamiliar with the Indian culture, should be safe with their menu selections.

Cleanliness is extremely important in both Hindu and Muslim cultures. This is why it is important to wash hands both before and after dinner. Food placed on your plate is considered “polluted;” for this reason, you should never offer food on your plate to someone else. Never use your hands to touch a communal dish, as this may cause everyone else to avoid it.

In both Hindu and Muslim cultures, the hand that you eat with is extremely important. Both cultures eat with their right hand as the left hand is reserved for taking care of personal hygiene. Many dishes in both cultures are eaten either with bare hands or with strips of bread dipped into the food. Regardless of how thoroughly you wash both hands, eating with the left is considered rude and unclean.

At the end of the meal it is important that you do not say “thank you.” To not thank a host is considered rude in our culture; however, in Indian culture, thanking a host is considered a form of payment. To get around this, you can invite your host to dinner. Not only will this allow you to say “thanks” without insulting your host, it also will show your host that you value their relationship.

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As illustrated, the Indian culture is quite varied from that of the U.S. in many respects. Recently, India has seen an economy that is on the rise and a thriving middle class. India has been the focus for the United States and other countries “outsourcing” many of their jobs. This recent rise in high tech jobs has been a key factor in India’s recent economic expansion. India’s economic growth stems from its service sector of information technology (IT). In a more globalized economy, India is a leader in software development, call centers, and a wide range of areas associated with technology and the Internet.

This case study11 brings to life how this technology savvy region of the world operates. As mentioned in the Indian business culture section of this dissertation,

India’s middle class is an economic powerhouse that is highly educated, affluent, and driven by technology. It is worth repeating that this one segment of the population is equal to the entire population of the United States. Therefore, with the sudden popularity of the Internet and communication technology, it is critically important to understand the culture and tendencies of these individuals in order to communicate, market, and advertise effectively to this segment of the population.

Case study #1. India’s offshoring. As mentioned in the Indian business culture section, India has become a world focus for “outsourcing” many jobs. Over the course of just a few years, companies from all over the world have found themselves looking to India for customer service support and call center operations. This has lead to explosive growth and with that comes outside competition. This case study12

11 Khare, Nidhi. Indian Journal of Economics and Business Vol: 8 Issue: 1 ISSN: 0972-5784 Date: 06/2009 Start Page: 167. 12 Sridhar Vedala; Kai Peters; Narendra Laljani. European Business Forum Issue: 26 ISSN: 1469-6460 Date: 12/2006 Page: 30. 95

explores current and future strategies that Indian business people are and will be putting into effect to compete in a global economy.

India’s offshoring sector has been driven by cheap labor and a competitive culture. But as the country’s low-cost advantage diminishes, Indian firms will need to find innovative ways to stay ahead of new emerging economies. With an annual economic growth rate of around seven to eight per cent, India has emerged as a future economic superpower. But is the country’s impressive growth due to lower costs alone?

Once India’s cost advantage diminishes, will future growth shift to companies in other low-cost economies?

Cheap labor is the beginning, not the end. While a cost advantage is the key driver in low-end manufacturing or in basic levels of outsourcing, innovative organizations in India now are reaching beyond these markets and are focusing on more sophisticated products and services. One of the best examples of this transformation is the country’s offshore outsourcing sector.

According to a McKinsey study (Chakrabarty et al., 2006), the global market for offshore IT services and business process outsourcing has tripled in the past five years and currently represents a $300 billion opportunity. Over the next five years, the market will grow by an additional $80 billion. India’s offshoring sector is the world’s largest and fastest growing. NASSCOM, the National Association of Software and Service

Companies, reports that in 2004-05 the Indian offshore IT and business process outsourcing industry generated just over $17 billion in revenues and employed an estimated 695,000 people. Revenues are expected to reach $50 billion by 2008.

Many major international corporations have significant investments in captive

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offshore operations. IBM currently employs 39,000 people in India, while Accenture employs 15,000. Competing with them are Indian providers such as Infosys, Wipro, and

Tata Consulting Services, each employing around 50,000 staff.

India’s national competitive advantage in the offshore outsourcing industry arises from multiple sources and the industry has benefited from:

• A large and relatively low-cost English-speaking technical and managerial

talent pool. Compared with the United States and Europe, salaries can be up

to 50-90% lower, depending on the role.

• Education, training, and “self breeding” network hubs such as Bangalore.

There now are more software engineers in Bangalore than in Silicon Valley.

• A large overseas market in which clients increasingly are willing to

outsource and offshore non-core processes.

• An entrepreneurial and competitive business culture undeterred by historic

government apathy to business. The pioneering efforts of the “Top Five”

firms - Tata Consultancy Services, Infosys, Wipro, Satyam, and HCL -

helped build global recognition of India as a quality brand.

Events such as Y2K and deregulation also have contributed to India’s emergence and strength in this sector. Taken together, these factors suggest that the resulting Indian competitive advantage is both sustainable and “imitation-proof” in the foreseeable future. Understanding how innovative practices evolved in Indian firms - and the critical incidents that shaped change in the outsourcing industry - can provide an indication of future developments. Looking ahead, Indian companies will move further up the value chain and become more international.

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Innovation has two key aspects - the “what” and the “how.” The “what” deals with creative ideas, while the “how” deals with ways of transforming these ideas into reality. The first usually is associated with creative individuals, while the second requires a combination of vision, business competencies, and capital. These intrinsic factors are under the company’s control. Extrinsic factors, however, are not. These are driven by politics, technology, demographics, and other, broader factors.

Innovative companies recognize opportunities that others fail to see. During this early phase, Indian providers were able to translate various opportunities into viable business propositions, which eventually paved the way for future growth.

Following independence in 1947, India developed its own constitution, government, and economic policy. The country chose to incorporate many elements of

Soviet economics to improve the welfare of the country, provide protection to the indigenous domestic industry, and to prevent multinational corporations from creating a capital drain out of India. Such restrictive government regulations led to the departure from India of emblematic organizations such as Coca-Cola and IBM. New entrants filled the void left by IBM. HCL was formed in 1976, with a focus on the domestic market, and Wipro - originally founded in 1945 as a consumer care business - launched its IT business in 1980. Infosys was launched in 1981, and was followed by Satyam in

1987.

All of these companies saw a demand for IT services, especially for software.

This gave the domestic providers sporadic opportunities to work on “on-site” projects for some of their international clients located in India. These engagements gave the domestic providers valuable exposure to Western businesses and culture. During this

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era, emerging Indian IT providers were small and fundamentally driven by generating short-term revenues. They focused on simple projects and on growing their businesses.

Globally, the IT industry shifted away from mainframes towards PCs and software applications. This shift widened the access to technology and required a large, skilled workforce to design hardware and software and to service the industry. In the late 1980s, this workforce was not available in California - the centre of these industry changes - so talent had to be imported from elsewhere. Due to the excellence of the

Indian university system, the large number of electronic engineers graduating from these schools, and the lack of opportunities for them in India, many of these engineers migrated to California.

Having acquired initial experience, domestic providers immediately recognized business opportunities in the “on-site” IT support services model. This business model allowed Indian providers to leverage their strengths of human capital while depending least on areas of competitive disadvantage such as infrastructure and capital markets. It also allowed providers to flourish by circumventing government intervention.

Innovative companies are quick to capitalize on initial successes. During this phase, Indian providers recognized the changing trends and associated threats and opportunities. Various innovative practices were conceived and implemented.

For 40 years, India was fundamentally a centrally planned, regulated bureaucracy with very little private enterprise. The fall of the Berlin Wall in 1989 led to considerable reflection about economic development. Two years later, with India running out of hard currency, the then finance minister (now prime minister)

Manmohan Singh abolished trade controls and let private enterprise expand.

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Innovative companies are flexible and prepared to capitalize on new opportunities. When such an opportunity for accelerated growth was presented to Indian providers, they were able to recognize and leverage it immediately.

The third major push factor was the Y2K crisis, which dramatically increased demand for extra IT capacity. The perceived threat, urgency, and demand for resources compelled many companies, especially in the United States, to turn to Indian providers.

In the late 1990s, all of the major Indian providers created offices in parts of the world where Y2K business loomed large. These offices were set up to contact potential clients in order to sell software development in India. The low-cost value proposition, along with the focus on quality and communication, generated confidence among overseas customers, who had previously worked with these providers on “on-site” projects.

Indian providers recognized the opportunity arising from Y2K and offered a compelling, low-cost option. As Y2K software was perceived as mission critical to client organizations, Indian companies invested in client proximity and relationship building rather than relying purely on software coding.

The post-2000 period has seen major growth, with some providers emerging as leading global players. In terms of innovation, this phase witnessed a further strengthening of capabilities and a focus on global expansion.

Friedman (2005) credits Nandan Nilekani, CEO of Infosys, as crucial to his understanding of the enablers behind the global trade in services and the “flattening” of the world. Nilekani points to the post-2000 Internet bubble as the key element. The bubble provided extensive cash and work on projects going far beyond Y2K compliance, expanding into e-commerce and a range of other services. Crucially, while

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most business ventures failed to survive the bubble, a significant amount of technology did. Much of this was infrastructure. The ongoing development of IT and the reduction in costs meant that, by the end of the bubble, the modern global communications network was in place.

Having worked with Indian providers before, customers now were acquainted with virtual management and the value of offshore outsourcing. Furthermore, the dotcom crash put enormous pressure on companies to optimize operations to bring costs down. This, in turn, led to redundancy for many Indian IT engineers in the United

States. As they returned to India, and with an understanding of Western business models and contacts in the United States and beyond, they fuelled growth in India.

This wave of growth saw the emergence of some Indian providers as global players. They were quick to envisage emerging trends and realized that competitive advantage no longer was based solely on cost advantage. As projects became more complex or more mission critical, greater communication was needed. Technology also made real-time communication possible, which meant that offshore outsourcers could effectively become part of the contracting company’s team. Companies began investing in both process and communications excellence in order to achieve the following:

• Operational excellence: Indian providers realized it was essential to keep

costs low while maintaining value in order to sustain competitive advantage.

Measures were adopted to achieve operational excellence by investing in

infrastructure, processes, and systems.

• Delivery innovation: Though Indian providers had gained experience in “on-

site” project execution, it was during this phase that many providers

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developed the concept of offshore delivery, bringing considerable cost

savings to customers.

• Services expansion: There also was a growing demand for outsourcing of

processes other than information technology, including finance and

accounting, human resources, and customer services. Having developed an

IT infrastructure to provide services offshore, Indian providers created

another industry - business process outsourcing (BPO).

• Moving up the value chain: While the BPO industry originally catered to

low-end services, providers soon ventured into the consulting and

engineering markets. They positioned themselves more as partners than as

suppliers.

• Raising equity and building reputation: Funding was essential to sustain

growth. Providers listed on various financial markets to raise capital. Many

providers also listed on Nasdaq to build their reputations.

• Scalability: Fast growth required rapid scalability in India and overseas.

Indian providers responded quickly by embarking on large expansion plans.

Current trends. Having realized the significance of the offshore outsourcing model, global services providers are aggressively expanding their footprint in India and challenging Indian companies for talent on their home turf. This has meant wage increases for employees, increasing congestion in southern Indian cities such as

Bangalore and Chennai, and heightened competition.

Outsourcing also is gaining acceptance in Europe. Global businesses have been operating in Europe for some time, developing the customer proximity that Indian

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providers lack. Indian providers focusing on Europe now may have an uphill task competing with providers already entrenched there.

Given these challenges, Indian companies are focusing on globalization and customer proximity. Low costs have helped Indian providers, but in the wake of the entry of global players into the Indian market, this advantage may shrink. Indian companies will have to transform themselves into global companies. Some providers have used mergers and acquisitions to fast-forward their entry into new markets and gain customer proximity. Others have chosen organic growth and have started aggressively recruiting international teams.

As the “India effect” continues to trigger a re-engineering of the corporate world, there is inevitably soul-searching in the West about the social and economic implications of jobs migrating offshore, and the resulting corporate governance and public policy implications. However, the trend seems to be irreversible, and the outsourcing of research and development and innovation may well gain momentum.

Given India’s track record, and the ambitions of its companies, the question, “Will your job move to India?” may well become more than just a catchy headline.

The Middle East

Considered to be “the Cradle of Civilization,” the Middle East is the birthplace of three major religions in the world: Islam, Judaism, and Christianity. Of the three major religions, Islam is the most prevalent in the Middle East – so much so that it influences almost every aspect of life in the Middle East, including business. Friday is considered the Islamic Sabbath, a Holy day. Because of this, the workweek runs from

Saturday through Thursday. Business meetings and conference calls should be

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scheduled during these days. Appointments never should be scheduled during the holy month of Ramadan.

The differences between these three religions have been the source of many conflicts in the region. Despite its ongoing conflicts, the Middle East still is one of the wealthiest regions in the world, much of this being attributed to its abundance of natural resources, especially oil reserves. Because of this great wealth, this region of the world has been the focus of the U.S. media as well as of a significant number of businesses that are relocating or expanding to that area. It has even been said and could certainly be argued that if U.S. political leaders had understood many of the cultural traits of individuals in this region and its history, the Iraq War never would have been waged.

There are some contradictions in the belief system that is written and told and the actual practice. In Egypt, for example, as Morrison & Conaway (2006) write in

Kiss, Bow or Shake Hands:

Within Islam, all believers are equal and united in the ulema. There is some

ethnic bias against the Bedouin nomads and the Nubians…Men and women are

not treated as equals. Women make up a small percentage of the work force.

While there are women in prestigious jobs like physicians and professors, few

women achieve top executive positions in business. (p. 153)

Still, changes are happening. In Kuwait, a law was passed in 2005 that not only allows women to vote, but also to run for office. In Saudi Arabia, more educated women are pursuing careers in medicine and education. Even the age-old tradition of a man taking multiple wives seems to be less prevalent.

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Even so, it still is rare to find a woman in a business situation in the Middle

East. Visiting businesswomen need to adjust their wardrobe, though they never should resort to wearing an abaya, the traditional black head-to-foot robe. Their clothing should consist of high necklines, long sleeves, and hemlines that are below the knee.

Ankle-length hemlines are ideal. Curves and skin should be concealed as much as possible. A headscarf is recommended, though not always required. When in doubt, it is wise to take advantage of local support networks and female clubs for guidance.

With all the progress and changes taking place, there still are strict laws that govern the various nations in the Middle East. In Saudi Arabia, for example, alcohol, narcotics, pork, and pornography are highly illegal. Possession of any of these, whether by a Saudi or a foreign visitor, carries severe punishments, including amputation and beheading. Visitors should govern themselves accordingly, particularly when it comes to selecting a gift for their host. Acceptable gifts include a compass (which can help a devout Muslim find Mecca, even when traveling), handmade oriental carpets, small electronic gadgets (particularly in Egypt), gold pens, and pencils.

As in many countries, Arab societies are dominated by a collectivist culture.

The individual defers to the consensus of the collective, be it the family, tribe, or workplace. In some cases, this loyalty overrules anything that might result in more efficient and productive operations. Charles Mitchell (2000) offers the following analogy:

One British consultant visiting a small family-owned Saudi Arabian lighting

manufacturer investigating the possibility of becoming a public company was

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both impressed and exasperated by the family’s devotion to the business’s loyal

employees.

‘The company’s ownership faced some hard choices if they wanted to go

public and tap into overseas capital,’ the consultant said. The workforce was

terribly bloated and inefficient. Output and revenue per employee was

embarrassingly low. When I explained this situation to the owners, they only

shrugged. ‘There is not much we can do. Most of our employees have been

here for many years,’ they said.

They balked at the idea of layoffs and firings. Their solution: Cut pay

across the board and reduce everybody’s hours. The workers understood. No

one complained and many even thanked the owners for saving their jobs. I was

stunned. I mean could you imagine that sort of idea flying with a German union

or an American manufacturer? (pp. 15-16)

The lesson learned: When dealing in a highly collectivized culture, it may be wiser to trim the pay of all the workers in a downturn rather than lay off individuals.

The workers themselves actually may want it that way. The case is an excellent example of how a different cultural mindset can present creative solutions to universal business problems. “Multinational corporations and expatriate managers should take notice” (p. 17). The ultimate decision lies with the male leader; however, these decisions are made through the consensus of the collective. In all decisions, Islamic law is taken into consideration; this means that cousins and brothers are trusted before outsiders (Morrison & Conaway, 2006, p. 152).

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To facilitate negotiations, it’s important that a businessperson engage the services of an intermediary. In Egypt, it is required to have an Egyptian agent. In Saudi

Arabia, an experienced contact will speed up the process:

An experienced Saudi Contact will sound out the opinions of various decision-

makers before you meet with them. Then, he will put you in contact only with

the ones most likely to favor your proposal. Do not rush your contact into these

important introductions. To do so is to risk having your proposal turned down

because you met with the wrong persons. (Morrison & Conaway, 2006, p. 154)

Not only is an intermediary a smart business move, it also is mandatory. Foreign visitors need a Saudi sponsor before they can enter the country.

When it comes to business cards, regardless of the country, they should be printed in English on one side and in Arabic on the other. The Arabic side always should be facing the person receiving the card and presented with your right hand.

Arabic is read from right to left. This should be taken into consideration when designing your card. It should be noted that while Arab countries culturally are considered Middle Eastern, not all Middle Eastern countries are considered Arab.

(Consider Iran, Turkey, and Israel.) The League of Arab States includes: Algeria,

Bahrain, Comoros Islands, Djibouti, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya,

Mauritania, Morocco, Oman, Palestine, Qatar, Saudi Arabia, Somalia, Sudan, Syria,

Tunisia, United Arab Emirates (UAE), and Yemen (Harris et al., 2004, p. 517).

There are exceptions to every rule. For example, in Mauritania, Somalia, and

Sudan, their respective tribal languages are preferred to Arabic. And while Islam is the predominant religion in the Arab world, there also are Arabs who practice Christianity.

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Among the values highly regarded in the Middle East are dignity, honor, and reputation. Generosity also is highly revered; in fact, it is among the principles taught by Islam. Truth also is found in Islam; therefore every aspect of life is based on its ideologies, which many times seem out of touch with Western ideas. These factors should be taken into consideration when negotiating a deal in the Middle East.

Recent events in world history have led to a mutual distrust between Western countries – particularly the United States – and countries in the Middle East. Not showing the proper respect for the host country only exacerbates the situation.

Therefore, it is essential for Western businessmen to show the utmost respect toward their Arab hosts and follow protocol to the letter. The following describes some of what a visitor can expect:

When making an appointment in the Middle East, punctuality is not an issue.

The concept of Bukra inshae Allah – “Tomorrow, if God wills” - is ingrained in Arab culture and has its roots in Islam. Because keeping visitors waiting is standard Arab practice, it’s important to keep appointments to one per day. This is not a personal slight on the part of the host; rather, it goes back to the tradition of family taking priority over business, and many times, the tardiness is due to a family obligation that takes precedence over a business deal. There are a few exceptions; a Western-educated client, for example, will expect their visitor to be punctual. In Pakistan, foreign visitors also are expected to keep their appointments on time.

Another fact to bear in mind is that trust is important in the Middle East. In many cases, several meetings are scheduled where no business is discussed in the beginning, in order to establish and cultivate a relationship. For the Western

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businessman, patience is paramount, and should be practiced even when it seems that no progress is being made.

One traditional greeting in the Middle East involves placing the right hand on the chest near the heart to indicate sincerity and warmth. In some cases, modern Arabs might precede this with a handshake, always with the right hand. Since the left hand is reserved for personal hygiene, it should not be used for any other purpose, even for gesturing. Businesswomen always should wait for the host to offer his hand. Another traditional greeting (often practiced in Saudi Arabia) involves each man grasping the other’s right hand, placing the left hand on the other’s right shoulder, and exchanging kisses on each cheek.

Another important fact to note is the offensive manner in which the soles of feet and shoes are viewed. When seated, always keep both feet flat on the ground to avoid showing the soles to others. Showing your soles to another signifies that you consider that person to be “beneath” you.

When it comes to business entertaining, many Arab countries consider hosting visitors a virtue. They will handle all of the details of entertaining. It also is prudent to follow the lead of the host, especially when entering a building. Most of the time, shoes are removed before entering.

During negotiations, it’s also important to bear in mind the hyperbolic nature of the Arab language. A “yes” might only mean “maybe” and should not be considered a final answer until the contract is finalized.

As in many other countries, any attempt to force a decision will be counterproductive. Regardless of the slow pace at which business is conducted,

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patience is essential in negotiating a business deal successfully. Expect to bargain and negotiate, as this is a common practice in the Arab world. The serving of coffee signifies that the meeting is about to draw to a close. In many cases, incense also may be lit at this time (Morrison & Conaway, 2006).

When it is time for a decision, the company’s appropriate representative will be on hand to make the decision. The top executive in the corporation or government agency generally makes the decisions (Harris et al., 2004, p. 534). In some cases, when a mutual agreement cannot be reached, business parties may find themselves resolving their differences in court. Kuwaiti courts in particular act as arbitrators. This should be avoided at all costs, not only to maintain a business relationship but also to avoid humiliating your sponsor publicly, which can have detrimental consequences.

United Arab Emirates (Dubai). I have chosen to include a separate entry for the United Arab Emirates (UAE), specifically Dubai. Although heavily influenced by Islam, the UAE is considerably more liberal than its neighboring countries in many aspects of life. Fluent English is widely spoken in business circles. Although dress still is conservative, it is not as stringent, especially in resort areas, as in neighboring countries.

No one can contest the phenomenal growth that has taken place in the UAE, particularly in the Emirate of Dubai. In recent years, futuristic glass skyscrapers have risen like glistening silver flames (quite literally with the candlelight-inspired design of

Dubai Towers at The Lagoons, currently under construction) from the barren desert.

Although not yet completed, Burj Dubai already is the tallest man-made structure in the world. A host of man-made archipelagos dot the waters off the coast of Dubai, in

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familiar shapes of trees and continents that feature luxurious residential communities.

Laborers brought in from Asia and India are building much of this infrastructure.

While it is true that Dubai has benefited from the oil industry, oil only accounts for just over 5% of its revenues, according to a report published last year. Today,

Dubai’s economy relies on a number of industries, including tourism, IT, and finance.

As of 2006, its economy was valued at over $46 billion USD.

While Dubai and the rest of the Emirates are considered more Westernized than their counterparts in the Middle East, they still adhere to many Islamic practices. As in other Middle Eastern countries, conservative dress is the rule, particularly with women.

Although less stringent than its neighboring countries, women conducting business in

UAE still should dress appropriately – smart business suits with skirts below the knee.

Generally, the less skin showing, the more respect a woman receives.

Although the restrictions on women doing business are similar to other Arab nations, women do experience more freedom in the UAE than in other countries. For example, in the UAE, women are able to move about freely in public unaccompanied.

Although they might face bias based on their gender, women still can successfully conduct business.

By following proper protocol and exercising proper business etiquette, a

Western businessperson can be highly successful and establish business relationships that are powerful and beneficial.

Case study #1. Business success in the Middle East. This is a summary of a larger case study13 designed to shed light on the business practices in the

13 Abbasi, Sami M. Management Decision Vol: 31 Issue: 1 ISSN: 0025-1747 Date: 02/1993 Page: 55. 111

Middle East. The value, thought processes, and expectations of the Middle Eastern culture becomes apparent by reading and understanding this case study. This culture’s view of time and space, along with their value of the family unit, is broadened by this case study. By considering this real life example, as well as the others throughout this dissertation, individuals who wish to achieve a higher level of business success can apply these recommended principles.

In the rush to explore new market opportunities in Eastern Europe, American companies and investors have overlooked a significant region--the Middle East. Yet the trade and investment opportunities are enormous throughout the Middle East region. In its 1992 global economic outlook report, the International Monetary Fund (IMF) had predicted that the Middle East would grow faster than any region in the world between the time of the report and the year 2000, and would return quickly to normal trade following the Gulf War. This prediction appears to be reinforced by recent information from the U.S. Department of Commerce about the surge in exports to Middle East markets. Other reasons for American companies to consider their options in the Middle

East include:

• The region currently has over 200 million consumers (with a plethora of

ethnic types). It offers a rapidly growing market for a multitude of goods and

services.

• A significant share of the world’s fossil fuel resources, which are of crucial

importance to Western economics, are located in and controlled by Middle

Eastern countries. For example, approximately 40% of the world’s oil is

produced in the Middle East and Arab Africa, and about 70% of all proven

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oil reserves are located in this region.

• Many Middle Eastern countries, particularly those in the OPEC group, have

proved to be of strategic military importance to the West. This assertion was

verified during the recent Gulf war.

• The oil-fuelled boom of the mid-1980s caused the wealth of many Middle

Eastern countries to multiply in a short time. They experienced a tremendous

rise in national income and in cash balances available for investment

worldwide, which has helped to alter the pattern of world trade.

• Although not all Middle Easterners are Arabs, Arabic cultural characteristics

are dominant in this region as well as in other parts of the Islamic world,

which comprises over 20% of the world’s population.

• The cultural, ideological, political, and economic mosaics vary greatly

among countries in the Middle East region. However, in most cases there is

a sophisticated infrastructure (road, bridges, schools, communications

networks, utilities), and a high quality of services typically is provided.

In reviewing the above information, it would appear logical that the Middle East would be an ideal choice for trade and investment by American companies. However, this is not the case. The lack of investment and trade could be attributed to a lack of cultural understanding about the Middle East in general. Some contend, however, that it is due to flawed perspectives and a host of subtle cultural and political biases that skew the usually objective process of defining potential market opportunities away from

Middle Eastern countries.

Although some Americans have experienced success in doing business in the

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Middle East, others have encountered problems when confronted with cultures that are unfamiliar and challenging. Nevertheless, if American businesses are to succeed in the latest round of going global, it is important that they look at the U.S.-Middle East business relationship in cultural terms. It is ironic to note that many U.S. allies, such as

Japan, Germany, Britain, Canada, France, South Korea, and others, have made great efforts to become familiar with the cultural dimensions of doing business in the Middle

East. Their acculturation efforts have enabled these countries to capture large shares of business in Middle Eastern markets.

It is well documented that knowledge of another country’s culture can help to reduce the number of failures and hence the cost of doing business there. Each expatriate failure is very costly. A company may expend anywhere from $25,000 to $1 million for each such transfer, depending on the employee’s income, the country involved, and whether his family accompanies him.

Warped cultural understandings may result in problems that have important implications in business relationships among and within firms. Therefore, it is important that managers be familiar with, and oriented to, the cultures of countries in which their firms operate. Culture manifests itself in the attitudes, values, beliefs, morals, mores, habits, and traditions acquired by members of a society.

A manager assigned to the Middle East should make every effort to cut through the web of mythology that surrounds this vastly different culture and region; therefore, it is imperative for managers assigned to the Middle East to receive cross-cultural training to dispel the many misconceptions they may have about Middle Easterners.

Many cultures find in religion a reason for being; typically this is a dominant

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force in their daily lives. Muslims, who comprise the majority in the Middle East, see their religion (Islam) first as a guide to a righteous way of life. Second, they see it as the route to an eternal reward in the hereafter. They may admire Western technology and the supposed “superiority” of Western ideals, but they have a deep and profound reverence for their own values, heritage, traditions, and religion.

It is critical to understand these important tenants of the Islamic faith. The

Islamic ideology first was pronounced through the Prophet Muhammad in Mecca in the

Holy Book, the Koran (or Qu’ran), in 610 AD. Muslims consider Muhammad to be the messenger of Islam--the appointed mouthpiece of God. The Koran is the principal inspiration and basic guidance of Islam. The term “Islam” means submission; that is, the believer’s submission to Allah. In the eyes of believers, Muhammad, like Abraham,

Moses, and Jesus, was a prophet who delivered the message of the true God. However, unlike the Christian conception of Jesus (the Son of God), Muslims do not consider

Muhammad to be a divine figure. Rather, Muhammad was a mortal commissioned by

God to deliver God’s sacred message to mankind. Muhammad’s objective was not to supplant but rather to complement the mission of his predecessors, Jesus and Abraham.

In fact, Muhammad taught that Jesus and Moses were the most important bearers to

God’s people of his hallowed message in the Testaments and the Torah.

In addition, it is important for managers who conduct business in the Middle

East to note that many occurrences are justified in the name of religion. Specifically, the behavior of people in the Middle East is influenced greatly by the belief that destiny depends more on the will of a supreme being than an individual’s behavior. That is, a higher power dictates the outcome of important events, so individual action is of lesser

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consequence than in Western cultures. Even major holidays often are tied to religion in the Islamic world. For example, Islam requires extensive fasting during the holy month of Ramadan. During that month, few major business transactions are accomplished.

Furthermore, Muslims have strict prayer requirements and the faithful must pray five times each day at fixed times. Therefore, businessmen in the Middle East should not be surprised if the man with whom they are engaged in conversation suddenly takes a rug out of his desk drawer, drops to his knees facing the east, and starts praying. The best advice for a visitor is to sit quietly until the praying has finished.

Family roles. Strong family relations and obligations are important factors to be considered when doing business in the Middle East. This is due to the fact that the concept of family often extends to the workplace. In some cases, family members hold managerial and other key positions in a business. The executives’ families seem to be the major influence on their business success. Specifically, the father has absolute authority over activities of family members. This situation develops from the fact that the Middle East is a close kinship-oriented society. From birth, young family members look to older members as role models and the older people play a major role in the intergenerational transfer of religion, attitudes, and values.

There are many economic advantages to having such family relationships. They are helpful in the creation of good business connections, which are extremely important in the Middle East. Middle Eastern business is conducted on a very personal basis; parties to a transaction often know each other and each other’s family members.

Powerful, often interconnected families may influence the sales of products and services, assist in cutting through the mountains of bureaucratic paperwork necessary to

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initiate business, and help in gaining acceptance of licensing and co-production agreements necessary for manufacturing production and regional distribution. These relationships especially are important in countries where business and government are closely intertwined and the government is a principal purchaser.

Patience is the fundamental quality needed for a person doing business in the

Middle East. This need for patience arises from the fact that managerial styles of

Middle Easterners are highly authoritarian, with organizational power and authority focused at the top. It often takes a protracted period of time for a decision to filter down to lower levels in the organization. Some argue that this style of decision making was inherited from early colonial powers in the region (i.e. the Ottoman, French, and British empires), which were characterized by extreme centralization. Thus, individuals raised in such an environment are likely to behave passively and leave all decisions in the hands of high-level managers. One manifestation of this style is that Middle Eastern executives like to deal with presidents and owners of companies, not their assistants.

Therefore, foreign companies are advised to send to Middle Eastern countries those executives who have the power to make decisions.

When foreign businessmen travel to the Middle East for negotiations, they should become silent observers of their counterparts’ habits and also should remain flexible and be prepared to adjust their tactics to consider new information.

They should also remember that, in negotiations, personal relationships play an important role. Consequently, it is important for foreign businessmen to establish not only a business relationship but also a strong bond of friendship with host counterparts.

In addition, Middle East managers tend to interject an emotional appeal in their business

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negotiations. However, they usually are not inflexible in their bargaining position. They almost always will reciprocate an opponent’s concessions.

In the decision-making process, it is advisable that one avoids the “take it or leave it” approach. Tact and diplomacy are extremely important when expressing dissent or even doubt. People in the Middle East believe in the concept of “saving face” and preserving one’s honor. This may explain why some Middle Eastern businessmen would prefer to negotiate through trusted third parties. In general, people in the Middle

East like to be independent, especially persons who are well educated. They respond most favorably in a climate of trust because trust reinforces their concept of cultural pride. Thus, when communicating or negotiating with Middle Eastern businessmen, foreign executives should show sensitivity and empathy to the cultural heritages that exist in the host country.

Winning business negotiations in the Middle East is contingent on developing an understanding and appreciation of the Middle Eastern attitude towards time, space, manners, and customs.

Time. When visiting the Middle East, American and European managers often experience cultural shock relating to differences in the treatment of time. Americans believe that conserving time is an efficient process. A frequently quoted adage is “time is money.” On the other hand, to people in the Middle East, time is controlled by Allah

(God). Punctuality is not important. Time is flexible and businessmen there would resent being coerced into conforming to someone else’s tempo. For this reason, they may show up late for appointments or not come at all. Showing indignation or impatience at such behavior would amaze and offend them. However, this casual

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perception about deadlines and appointments is changing among educated Middle

Eastern businessmen. This change could be attributed to their continuous exposure to the Western way of doing business.

Another aspect of time is the waiting game. For example, visitors received in a business office might find several other people there, each conducting business totally different from the others. The best advice for a person in this situation is to take a seat and wait for his turn. When the time comes to talk, one should not come straight to the point. Rather, one should break the ice with innocuous but positive small talk, discussing such things as the beautiful scenery in the country, the decor of the office, the delicious food one has recently eaten, etc. Keep in mind that the first meeting is only to get acquainted and to establish an amicable relationship. To show professional courtesy, the businessman should make sure that his business cards are presented in

English on one side and in Arabic, or some other Middle Eastern language, on the other side.

Space. Non-verbal cues are very important in the Middle East. Middle Eastern businessmen like to stand close to the people to whom they are talking. A foreign visitor’s backing away might be taken incorrectly as a negative reaction or lack of interest. In addition, kissing on the cheeks is a common practice when members of the same sex greet each other. However, the visiting businessman should avoid

“backslapping” and other forms of playful frivolity acceptable in America, because it is considered rude and inappropriate in the Middle East.

Manners and Customs. Understanding manners and customs is very important for negotiations in the Middle East. In general, Middle Eastern people are

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warm, hospitable, and courteous by tradition. Therefore, misinterpretations of manners and customs may lead to a totally incorrect conclusion. For example, since people in the

Middle East are status- and rank-conscious and also believe that older persons should be respected, it is important to recognize the senior person first in any meeting.

Another example relates to the fact that their social customs are based on the societal and familial dominance of males. Consequently, for traditional Muslims, women usually are not part of business transactions or related entertainment.

As international trade continues to increase, Americans need to become better world citizens by learning more about other cultures. Former U.S. Secretary of

Commerce Robert Mosbacher indicated that: “American companies have to rely on all available tactics for winning in the global marketplace today. Learning international business diplomacy should be the first step they take.” (Glover, 1990, p. 2)

A good starting point for Americans who wish to increase their business in the

Middle East is to eliminate as much bias as possible from their perceptions of the region. We need to begin by recognizing that most of our knowledge about the people in the Middle East comes from media, which entertain rather than educate. Our view of

Middle Eastern customs is distorted by what we read, see, or hear in the electronic and printed media. Economic considerations aside, in the long run, businesspersons with biases that denigrate local cultures cannot hope to function successfully in Middle

Eastern countries.

European Union (EU)

The ability to know the individuals you deal with on a daily basis can give anyone who focuses on this understanding a competitive edge in today’s business

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world. The mutual trust and understanding on which business deals are based is perhaps the most vital component when it comes to dealing with the many cultures that encompass the global marketplace. This most readily can be achieved by learning the cultural traits of both the individual and his or her region, and adjusting your behaviors accordingly. In all cultures, reducing the uncertainty levels about the person with whom one deals, while establishing and building trust, increases the chances of developing a business relationship. The European Union is no exception. Comprised of 27 member states, the EU is a major player in the global marketplace with a wide range of industries fueling its collective economy. Opportunities for international business relationships abound, providing you do your homework on the region in which you wish to do business and govern yourself accordingly. In the following pages I will examine the cultural differences among the various member states of the EU and the impact that these differences have on doing businesses in the various member states. I once again will focus on the areas where the literature review showed similarities and give specific examples from the industry expert interviews.

European influence can be seen all over the world. This is apparent through the struggle for political autonomy and economic advancement in third world or developing countries. The enduring beliefs in self-government and the will to prosper originated from Europe and were heightened by the United States. Japan’s current Democratic system of government and its technology originated from European foundations. Of course, both still have been shaped by long standing traditions of their people. The U.S.

Constitution basically is an expression of European ideas about the limitations of power in a government. The European continent took a brutal beating during World War II.

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It is apparent that since the end of this war, an underlying disgust of war has emerged with Europeans.

There are political and economic reasons to study Europe because the United

States has been allied with European countries for over half a century. Many values are shared between Europeans and North Americans and most would concede that we are more alike than Asians or Middle Easterners. The European Union is quite varied and there is no single way to study all aspects of its economic, social, and political cultures.

By most indicators, the creation of the European Union has been a tremendous success since 1958. The EU has been able to better compete globally in the new economy and new technologies. There are some challenges that lie ahead, such as an aging population and falling birthrates. The rising number of senior citizens and the falling number of young workers paying into the system will translate into problems with pension systems and healthcare. Another challenge that the EU faces is how to attract the millions of additional workers needed to fill the gaps from the aging workforce. EU leaders are working diligently to create an environment that will encourage immigration.

The United States will remain an influential outside force to the EU. European and U.S. economies have long been related and dependent on each other. Recently, mergers and acquisitions, along with the growing popularity of multinational organizations, have accelerated the relationship between the two. There clearly is a healthy competition between their large firms as well. Airbus, based in Europe, is now a large competitor of Boeing in world aircraft production. However, sometimes both

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sides are critical of each other because of general differences of opinion on the environment and human rights issues such as the death penalty.

Since the early 1950s, the EU has grown from 6 member states to 27, with others still likely to join in the near future. Democratically and peacefully, the EU has become a major force politically and economically. Certainly the EU still has some struggles and growing pains, but compared to the Europe of old with warring nation- states, the new Europe is a positive example of unity and diversity.

The concept of a unified Europe is not new. One need only look at the Roman

Empire and the Soviet Union as examples. The idea for European unity began to pick up momentum immediately after World War I. However, steps to unify Europe did not begin in earnest until after the Second World War. Between these two major conflicts,

Europe saw the birth of the Paneuropean Union, also referred to as the Paneuropean

Movement and the Pan-European Movement. The union suffered a brief setback in

1933, when the Nazi regime banned Paneuropean literature and Germany ceased its financial support in favor of its new chancellor, Adolf Hitler.14 After World War II, the organization regrouped and currently is headed by Alain Terrenoire, Director of the

French Paneuropa Union.15

True unification of the nations of Europe can be traced to 1950, when Belgium,

France, Italy, Germany, Luxemborg, and the Netherlands formed the European Coal and Steel Community. The thought was that by unifying economically, the nations could perpetuate in the region the peace that had long eluded them. In 1957, the

European Economic Community was created to integrate economically the charter

14 Retrieved from http://www.paneuropa.org/ 15 Retrieved from http://www.epaneurope.eu 123

nations of what is now known as the European Union. In 1973, three more nations -

Denmark, Ireland, and the United Kingdom - were added in the union’s first expansion.

Greece became a member in 1981, followed by Spain and Portugal in 1986. Following the fall of the Berlin Wall, East and West Germany officially were reunited in 1990; yet it would be another three years before it joined the EU. In 1995, Austria, Finland, and

Sweden became the final member states to join the EU in the 20th Century.

In 2004, the EU grew with the addition of two Mediterranean islands - Cyprus and Malta - and three former Soviet States - Estonia, Latvia, and Lithuania. Slovenia

(part of the former country of Yugoslavia), Slovakia, and the Czech Republic (under communist rule from 1948 to 1989), Hungary (under communist rule from 1947 to

1989), and Poland joined that same year. Bulgaria and Romania are the newest member states, joining the EU in 2007.

Other countries have made their bid to join the European Union. Turkey, for example, has been trying to become a member state since its application to the

European Economic Community in 1959. The country became a member of the EEC in

1963. To join the EU, potential member states need to meet a set of criteria, which include being a functioning market economy with the ability to cope with joining the single market.

Although united, the 27 independent sovereign countries that currently make up the European Union are diverse in a number of areas. According to Brake, Walker, and

Walker (1995),

The EU had, as one of its founding treaties, the establishment of a common

market, but decades later, there is still no equivalent to the home market in the

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U.S. The European market, though much more homogenous than thirty years

ago, is still fragmented by language, non-tariff barriers and consumer

preferences. Companies struggling to innovate and bring new products to the

market need first to overcome the fragmented market to build sufficiently large

order books and investment to finance their business expansion. (pp. 124-125)

In the following paragraphs, I will examine the cultural differences among the various member states of the EU and the impact that these differences have on doing business in the various member states.

Growth in the EU: Business partnering innovation. A report released in 2005 by Ruth Taplin16 indicated that many major corporations in Europe were moving away from growth through mergers and acquisitions in favor of growth through business partnering. The trend toward this new business model is seen as potentially reversing Europe’s trend of failing to coordinate the innovation and growth potential of its small and medium-sized enterprises (SMEs). Interviews conducted with several

SME companies as part of the research for Ms. Taupin’s report pointed out the uphill battle faced by many SMEs:

• Not enough research is carried out by SME companies in Europe.

• There is too little emphasis on market driven and interdisciplinary research.

• Insufficient investment is being made in knowledge-intensive business

development among the SME sectors.

• Not enough young people are being encouraged to take on research careers;

for those who do, they do not have enough knowledge of how to innovate

16 “Innovation and Business Partnering in Japan, Europe and the United States”, Vol: 67 ISBN: 0203968204 Date: 2007 pg. 9. 125

and successfully encourage SME companies to do the same in their future

roles as business leaders.

• A climate of failure being absolute is being promulgated, not allowing and

encouraging those who have failed to get back on their feet and try to

succeed again, without being branded forever as failures.

• Although innovation by consortia of SMEs has been happening in Europe on

an increasingly wider scale, it has not been sufficiently recognized or

heralded.

• More cross-national consortial R&D that involves the new member states

needs to be undertaken.

• The consortium innovation that does exist is not being given enough

recognition; this includes the essential role of external innovation

facilitators, which are crucial to both SME and mid-sized company success,

as this report demonstrates.

• When SME companies become mid-sized companies, they are branded

successful and no longer in need of assistance; this may cause them to fail

because they fall between the cracks.

The report points to business partnering innovation as an effective method of growth for SMEs, as well as to a more altruistic alternative method other than the old method of mergers and acquisitions. Successive Framework Programmes (FP) in

Europe have expanded their budgets to allow for more SME companies with high growth potential to receive the assistance they need to continue to grow. Assistance

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often comes in the form of partnering, both from inside and outside their normal supply chains (p. 10).

The companies interviewed for the report also acknowledged the benefits of existing resource contacts and the knowledge they possess that is accessible via innovation facilitators as well as the benefits of a comprehensive European research database. Through this so-called ‘consortium innovation’ process, growth at both the company and industrial levels are realized (p. 11).

As in other cultures in other parts of the world, it is important to learn as much as possible about the particular European region with which you will be doing business.

Though it would seem that Americans have much in common with their contemporaries on the other side of the Atlantic, it also is important to remember that, relative to the

European nations, America is young, barely 233 years in existence as a country.

Like their American counterparts, Western and Central European cultures do not place the emphasis on taking time to build relations that Middle Eastern and many

Asian cultures do. In their 1999 article on the subject, Camille Schuster and Michael

Copeland noted: “Spending several minutes at the beginning of an interaction is sufficient to establish rapport and develop common ground before getting ‘down to business’ in North America or Northwestern and Central Europe” (p. 65).

Traveling through the various member states of the EU, one easily can discern distinct cultural orientation patterns. For instance, in the second edition of their book,

Walker, Walker, and Schmitz (2003) describe two of these patterns as “being-oriented”

(which stresses affiliation and character) and “doing-oriented” (which stresses achievement) (p. 128). The being-oriented culture clearly is evident in member-states

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like France, Greece, Belgium, Ireland, Italy, Malta, Spain, and Portugal. Emphasis is placed on the quality of life, evidenced in their desire for time to establish a rapport with a potential business partner (p. 129). Lengthy dinners with little or no talk of business are de rigueur, especially during the early phase of negotiations.

Being-oriented cultures tend to be a bit more relationship oriented than doing- oriented cultures. They place an emphasis on trust, preferring to arrange a meeting in person rather than communication through e-mail or phone (p. 131).

On the other side of the coin, the doing-oriented culture (which include member states like Germany, Austria, Sweden, and the Netherlands) feels that it is important to stay on task and produce measurable results. Their emphasis on efficiency through time management and adherence to commitments are key in meeting their set goals.

Personal feelings and preferences give way to a professional attitude and staying focused on business. In contrast to the being-oriented culture, the doing-oriented culture rewards those who achieve and accomplish, rather than their social status (p.

129). Nepotism has no place in a doing-oriented culture.

A business meeting in a doing-oriented culture eliminates any talk about the weather or other small talk. Participants get straight down to business, and are forthright in their opinions. “Yes” means “Yes” and “No” means “No” - there is nothing left to interpretation. Their no-nonsense approach to business leaves some outside this culture to perceive them as abrupt or indifferent (p. 130).

There are other cultural patterns such as sense of personal space (up to 30 inches in the UK vs. 12 inches in Greece). Not recognizing a particular culture’s sense of space can either make or break a deal in some circumstances. Therefore, it is important

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to learn as much as possible about the various cultural patterns. Doing so will make it easier to achieve a successful business deal.

While American culture may seem similar to that of many European countries, it is important to remember that there are differences, and that one should govern themselves accordingly. For instance, as Hodge states, there are member-states within the EU that emphasize hierarchy, rather than the American egalitarian approach.

(Global Smarts, Hodge, 2000, p. 50) By learning about the particular member-state with which you will be doing business, an unintended faux pas will not turn into a potential disaster.

Many of the larger and more influential members of the EU were written about in the literature review and I will expand on those further in the upcoming pages. Also, an example will be mentioned from the industry expert interviews that reveal some of the cultural characteristics that can be expected from individuals in this region:

United Kingdom. Though a member of the EU since 1973, the UK has managed to resist assimilating totally into the EU. It still uses the pound sterling for its currency, rather than the euro. Nonetheless, it is a formidable member state, with its primary language, English, being the primary language of global business as well. In fact, the UK is one of only five regions in Western Europe that boasts a trillion-dollar economy.17

Within the United Kingdom, there are four distinct cultures - the English, the

Scots, the Welsh, and the Northern Irish. Much has been said about the conflict between these cultures. In a recent NPR report, it was discovered that many residents,

17 Retrieved from https://www.cia.gov/library/publications/the-world-factbook/geos/uk.html 129

while acknowledging their country as a member of the EU, still align themselves with their respective tribal origins, be it Welsh, Scot, Irish, or British.

In recent years, the British business environment has loosened its stiff, formal mannerisms, following the USA’s lead in referring to contemporaries and subordinates alike on a first-name basis. This recent trend toward informality has improved their communication skills and has helped British businesses succeed in the global marketplace. One of the things that hasn’t changed is the high level of respect that

Britons have for the law. Another trait of British business culture is that they tend to adhere strictly to a set schedule rather than allow for flexibility. For this reason, it is important that anyone doing business with the British be punctual for their appointments. They also emphasize fulfillment of the task over building relationships.

They rely on facts, rather than instinct, when making important decisions.

As in the United States, office hours usually are from 9a.m. to 5 p.m., Monday through Friday. The exception would be government offices, which stay open until

5:30 p.m. to compensate for the time they close for lunch, usually between 1 and 2 in the afternoon. Although usually they won’t turn down a visitor who drops by on short notice, one always should schedule an appointment at least a few days in advance. Cold calls are frowned upon and usually are intercepted and stopped in their tracks by vigilant assistants who screen the calls of their bosses. When scheduling an appointment, one should bear in mind the times that business executives in the UK normally take their holidays. July and August are very popular vacation months, particularly for those executives with children. In addition, there are two bank holidays in May, as well as the Easter and Christmas holiday periods.

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The rules for keeping a social engagement differ slightly from those of keeping a business appointment. Arrival at a social engagements can and should be a few minutes late. Conservative dress for both men and women are standard in the British business world. Although you rarely see the traditional bowler hat being worn these days, pinstripe suits still are popular, as are suits in black and darker colors like navy and charcoal. Lawyers, accountants, and senior executives often will be seen in high- end double-breasted suits with four buttons on the cuff. Other employees, while still dressing conservatively, will dress in suits befitting their salary. Women can wear conservative trousers or trouser suits. Pens or other writing instruments should never be worn in the breast pockets. Striped ties symbolize certain schools, clubs, or military regiments. To avoid being associated with an organization of which you are not a member, striped ties never are worn as part of business attire. (Chaney & Martin. 2007, p. 15).

When keeping an appointment in Scotland, it should be noted that the traditional kilt generally is seen only at highland weddings and never in the office. Generally, men will wear suits or simply trousers and dress shirts, depending on the immediate office environment. Depending on the season, women will wear modest skirts or dress slacks and blouses.

As in Great Britain, punctuality is important when keeping an appointment in

Scotland. The person who initially called the meeting usually starts the meeting.

Expect there to be some small talk. A discussion about the weather is almost always a safe bet. Avoid discussing politics, and never refer to a Scot as English.

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When exchanging business cards in Scotland, you will note something unique:

Titles such as “Miss,” “Ms.,” “Mr.,” or “Mrs.” will not have a period at the end. This is not a typo; it is a common way to print a person’s title. Both titles and business cards are important, and you should always be prepared to have plenty on hand to pass out.

Unlike the British, Scots still maintain a degree of formality, referring to one on a more formal basis, until they are invited to address each other on a first-name basis.

Ireland/Northern Ireland. At this point, I will transition from the United

Kingdom to the Emerald Isle. While Northern Ireland is a part of the UK, The Republic of Ireland is a sovereign nation and member state of the EU.

Of all the home nations in the United Kingdom, Northern Ireland has the smallest economy. Its industrial sector, particularly textiles and shipbuilding, are world-renowned. In recent years, however, these industries have declined and the resurgence of the nation’s services industry has risen to take their place. In fact, “The services sector contribution to GVA increased from 30% to 40% between 1990 and

2000, where the services sector is defined as constituting the following industries: wholesale and retail trade; hotels and restaurants; transport, storage and communication; real estate, renting and business activities; and other services.”18 A member-state of the

EU since 1973, the Republic of Ireland has sustained itself through its trade-dependent economy. In recent years, construction has helped to fuel the economy, along with strong consumer spending and business investment. In 2008, Ireland began to feel the effects of the worldwide financial crisis. In response, the government moved to

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guarantee all bank deposits, recapitalize the country’s banking system and establish party-public venture capital funds.19

Although Ireland’s approach to time is relatively laid-back, punctuality still is important when making a scheduled appointment. With the exception of running the gauntlet of executive secretaries, scheduling an appointment with an Irish business prospect is relatively easy. It’s always a good idea to schedule an appointment two weeks in advance. It’s important to keep in mind that many companies close completely for lunch between 1and 2 p.m., and that the phone will not be answered during this time either. As with other member states, it’s always best to avoid scheduling an appointment during the Christmas and Easter holidays or during the summer tourist season. The best time to schedule an appointment is September through

May. (Mitchell, 2000)

Some things to avoid: Avoid bringing up the region’s turbulent period in the latter half of the 20th century, known locally as “the troubles.” Another faux pas, in both Northern Ireland and the Republic of Ireland, is to utter the stereotypical

“begorra.” It might generate a few uncomfortable laughs. As mentioned earlier, it is important “not” to offend individuals when meeting for the first time. Some of these examples may seem insignificant, but if these differences in cultures are recognized, a greater chance of a successful relationship will be the result.

France. As one of the EU’s founding members, France is one of its leading nations, ranking as one of the most modern in Europe. This charter nation has become instrumental in the development of the European Union, particularly with the union’s

19 Retrieved from https://www.cia.gov/library/publications/the-world-factbook/geos/ei.html) 133

military capabilities and its progress toward a comprehensive foreign policy.20 When making an appointment, one always should bear in mind that France has instilled a mandatory reduction in their workweek to 35 hours. In many cases, executives are able to compromise by opting for additional vacation time in lieu of reduced hours.

Consequently, it would be difficult to make an appointment during the Christmas and

Easter holiday periods. Generally, employees in France can count on five weeks of vacation time, at least three of which are taken during July and August. In fact, August is considered the worst time to schedule an appointment with a potential business prospect.

Office hours can begin as early as 8 a.m. and end as late as 8 p.m. This may be to compensate for lunch, which can last two hours or more. While the dress code for business generally is conservative, high-quality suits, a touch of elegance, often is normal, particularly in women. Tasteful accessories add the signature style and elegance for which France is famous. During the hot, humid summer months, it is acceptable, and even considered fashionable, for women to forego stockings.

During the meeting, it’s important to use first names only if you have been invited to do so. Titles such as “Monsieur” and “Madame” are used when addressing others; however, avoid using the outdated “Mademoiselle,” regardless of a female colleague’s marital status.

If you’re comfortable enough with your French language skills, remember that you should refrain from using the informal “tu” (“you”) until you are asked to do so. In the interim, it is best to stick to the formal “vous” when speaking directly to a colleague.

20 Retrieved from https://www.cia.gov/library/publications/the-world-factbook/geos/fr.html 134

One of the industry experts who produces a travel show spoke about some of his initial frustrations with the French culture. He mentioned that his first visits to France to get interviews and set up meetings oftentimes ended up in frustration because people took so many days off from work or stayed away for extended hours on their lunch break. But after a few years and a few more visits to France and many other European countries he began to appreciate the balance they seemed to possess between work, life, and culture. He even concluded that maybe his U.S. culture is far too focused on work and achievements, and he said he had many conversations with individuals from France who believed the same way.

Italy. Since joining the Economic and Monetary Union in 1999, Italy has played a major role in European economic and political unification. Its diversified economy includes the manufacture of high-end consumer goods, agriculture, its renowned artisans, and a rather impressive underground economy, which is estimated to account for as much as 15% of the country’s gross domestic product.21 Much of Italy’s economy is driven by small businesses, many of them family-owned. Services, including tourism, account for 65% of Italy’s GDP.

While EU nationals may travel to Italy for up to three months with or without a valid passport or ID, non-EU citizens should check with their respective Italian embassies or consulates to learn the requirements for traveling to and working in the country. While in Italy, you are required to have your documentation with you at all times. Business hours in Italy vary by region. In the northern part of Italy, hours are

21 Retrieved from https://www.cia.gov/library/publications/the-world-factbook/geos/it.html 135

generally Monday through Friday, from 8:30 a.m. to 12:30 p.m., followed by an extended lunch. Work resumes at 3:30 p.m. and continues until 6:30 p.m.

In contrast, businesses in central and southern Italy open from 8:30 a.m. to 12:45 p.m., and are on lunch break until at least 4:30 p.m. Their workday can end as late as 8 p.m. Many businesses also are open on Saturday from 8:30 a.m. to 12:45 p.m.

Business travelers usually will find the pace of business in the southern region to be less hectic. In all regions, business usually is discussed during the long lunch break. Even so, it is best to schedule appointments between 10 a.m. and 11a.m. and after 3 p.m.

Showing up on time for the appointment is advantageous; nonetheless, be prepared to wait, sometimes as long as 45 minutes, for the person with whom you will be meeting.

When dressing for business in Italy, style is key. First impressions are taken very seriously in the nation that hosts the center of the fashion and design world. If you haven’t already, now is the time to invest in a stylish, high-quality suit and matching shoes and accessories. This is not the time to skimp. Your clothes will speak volumes and should be both tasteful and stylish, whether you are a man or a woman. Women also should note that Italian businesswomen wear more makeup than their American counterparts, although it is applied tastefully.

When addressing someone else, use the terms, “Signore” and “Signora.” As in

France, the term “Signorina” is considered outdated and never used in a business setting. When engaging in conversation, topics to avoid include religion (specifically the Vatican and its policies), the Mafia, negative Italian stereotypes, or questions of a personal nature. (Chaney & Martin, 2007).

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Greece. A member of the EU since 1981, Greece’s economy enjoyed an annual growth of nearly 4% between 2003 and 2007. This can be attributed to a combination of infrastructural spending to accommodate the throngs of guests who attended and participated in the 2004 Summer Olympic Games that the country hosted as well as increased credit, which has sustained its record levels of consumer spending.

Like many other nations, Greece has felt the impact of the world financial crisis, and the current New Democracy government continues to deal with the challenges it has faced in its effort to continue with the nation’s economic reforms.22

As in Italy, be prepared to show up on time for your appointment, but also be prepared to wait. You also can be prepared to be the recipient of the hospitality and generosity for which the Greeks are so famous. During business meetings, for example, you can expect to be served small, delectable sweets and strong Greek coffee.

While most offices keep the more modern standard office hours of 8:30 a.m. to

4:30 p.m., there still are some business that keeps the traditional hours of 8:30 a.m. to 1 p.m. and 4 p.m. to 7 p.m. When scheduling an appointment, it’s important to keep in mind that Greece practically shuts down for Independence Day (March 25) and Oxi

Day (October 28), the day when Greece said “no” to Italy when they wanted free passage to invade Greece during WWII.

When dressing for business in Greece, it is important to dress conservatively.

This still is possible even during the hot humid summer months. As in France and Italy, the Greeks are very fashion-conscious, and this should be taken into consideration when planning your business travel wardrobe.

22 Retrieved from https://www.cia.gov/library/publications/the-world-factbook/geos/gr.html 137

Business travelers new to Greek culture should not be alarmed at the energy and decibel level of conversation; although they are opinionated, there is no animosity in the conversation. Greek interaction often is physical and expressive; hugging, touching, kissing on the cheek are normal, as are exaggerated hand gestures. Passing a compliment or showing a genuine interest in learning more about Greece’s contributions to the world will earn points. Criticizing definitely will not be appreciated.

Case study #1. Diversity of Europe’s business cultures under threat? This case study23 brings to life how this diverse region of the world operates.

As mentioned in the European Union’s business culture section of this dissertation, the

European Union is a strong economic entity that has wide-ranging influence worldwide.

With its recent unification, it is critically important to understand the diversities of cultures represented and their tendencies in order to work with and market to this segment of the population. This case study includes specific examples as well as terms previously defined and shows some shining examples to those who wish to establish new business relationships with individuals from this region of the world. It also illustrates how far-reaching Professor Hofstede’s research and findings have permeated and still are used today to define the culture of individuals and their associates.

One of the proudest boasts of the EU in terms of culture is that of its ‘unity in diversity.’ What is meant here is the rich array of languages, customs, and beliefs flourishing in modern-day, united Europe. Indeed, Article 128 of the Treaty of

Maastricht on European Union states quite categorically: “The Community shall

23 Collin Randlesome - Cross Cultural Management Vol: 9 Issue: 2 ISSN: 1352-7606 Date: 04/2002 pg 65. 138

contribute to the flowering of cultures of the Member States, while respecting their national and regional diversity and at the same time bringing the common cultural heritage to the fore”24 (p. 1)

When the concept of culture is applied to business, the result of the 1970s IBM study still dominates thinking, especially in Europe. The work was carried out among some 100,000 IBM employees in over 50 different countries and defines business culture as “...learned assumptions and beliefs, attitudes and values shared by members of a group” (Hofstede, 1980, p. 5). Hofstede’s studies contrast with those of certain

U.S. commentators, and in particular with context theory (Hall, 1981). In a low-context business culture, information is contained in words of precise and unambiguous meaning, whereas in a high-context culture meaning is conveyed through less direct verbal and non-verbal codes. Thus, culture is communication and communication is culture.

An attempt was made by the author to arrive at a more pragmatic definition of business culture and its determinants (Randlesome et al., 1993). The concept of business culture was seen as embracing the attitudes, values, and norms that underpin commercial activities and help to shape the behavior of companies in a given country.

Thus, it was argued that every single European country possesses its own unique business culture. Entire books were written on the business cultures in Germany, France and Spain (Randlesome, 1994; Bruton, 1994; Gordon, 1996).

Discussion subsequently was enriched when a case was made for Europe possessing its own management approach beyond diversity (Calori & de Woot, 1994;

24 Retrieved from http://www.unesco.org/most/lnlaw20.htm 139

Bloom, Calori, & de Woot, 1994). This European model successfully was contrasted with management styles and cultures in the United States and Japan. Indeed, Warner

(2000) affirms that many factors are forging a common European cultural and economic identity as well as a model of management. Thus it is legitimate to enquire, at the beginning of a new millennium, whether Europe’s business cultures are in fact converging or whether they are retaining their diversity. The largest threat to this diversity would appear to be posed by Europeanisation. Paradoxically, however, this same force also makes its unique contributions to diversity in Europe.

The average working week, for example, is shorter in most European countries than it is in the United States; both Europe and the United States work fewer hours than

Japan does (Levine, 1997). Germany introduced the 35-hour week for metal workers in

1995; France cut the working week from 39 to 35 hours in 2000 for all workers, irrespective of sector. Though the aim of both measures was laudable (to reduce unemployment rates), both are anti-competitive in a world that is becoming increasingly competitive (Storck, 1999). Some experts in Germany, for example, Peter Grottian, a professor of political science in Berlin, want more drastic cuts in working hours. He maintains: “Because of progress in productivity, distribution of working hours is possible only if the normal working day is reduced further” (Bechtel, 2000, p. 5).

Diversity even reigns supreme in working patterns in the same industry within the same European country. Experiments are, for example, underway in the construction industry in Germany, both in companies bound by collective agreements and in firms that have abandoned the collective bargaining system. Only one thing is certain: the standard working week - five days a week, seven hours a day, starting and finishing at

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set hours - is no longer regarded as ideal (Stehr, 1999).

Diversity also is to be found in abundance in the education systems of Europe, even in business and management education. Despite the apparently unstoppable spread of the Master of Business Administration (MBA) degree throughout Europe, the education, training and development of managers demonstrates great variations

(Randlesome, 2000).

However, pan-European companies occasionally experience some of the disadvantages of this very diversity. Culture and language issues can impact negatively on the day-to-day routine of the workplace, as is evidenced by the results of a survey among engineering professionals in one division of TRW, the company manufacturing fastening components for many of the world’s carmakers, located in Germany, Spain,

France, and England. Differences in culture and language seriously can affect the productivity of such a company (Grandin & Dehmel, 1997).

Even though operating under the same European rules, providers of financial services continue to differ in their approaches to the market. In the United Kingdom and

Italy, the battle for banking and assurance assets underlines the disparate business cultures operating in terms of such basics as attitudes to mergers and acquisitions

(Rothnie, 1999). The Royal Bank of Scotland acquired NatWest, the UK’s second- largest retail bank. Meanwhile in Milan, Generali is engaged in a battle for Istituo

Nazionale di Assicurazioni (INA) with San Paolo-IMI. NatWest was aiming to convince shareholders that its bid for Legal & General (L&G) would enable the bank to cross-sell to L&G’s policyholders, thus creating a powerful brand across a portfolio of financial services. Unfortunately, the negotiations were leaked and the delicate task of

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selling the deal to the shareholders was rendered difficult. Secondly, the market treated

NatWest’s intention to move into bancassurance with skepticism. Rather than regarding it as a value-enhancing precursor to Europeanisation, the attempt was seen as a muddled shot at diversification. Against this backdrop, the Royal Bank of Scotland made a successful bid for NatWest on the condition that its intended acquisition of L&G was dropped.

If a bid for L&G were to come from a Continental insurer, it will focus minds in

Milan, where Generali launched a bid for INA, in an attempt to destroy San Paolo-IMI’s stated intent to broaden its insurance risk. The finger of suspicion is pointing at Enrico

Cucci, the veteran chief of Mediobanca, who intervened in Italy’s drive for consolidation in 1999, when San Paolo-IMI bid for Banca di Roma. Cucci did not want

Mediobanca to fall victim to any shakeout, and so lobbied the Bank of Italy to rule against hostile banking mergers. Italy is not alone in presenting a contrasting approach to mergers and acquisitions: Germany similarly is averse. From 1945 to 2000, Germany had not witnessed a single successful hostile takeover bid. Though several attempts had been made (British Steel for Klöckner, Pirelli for Continental), all had failed on account of the resistance of the Big Three private commercial banks, which own substantial shareholdings in financial and non-financial companies alike. The year 2000, however, saw a three-month battle in which Vodafone Airtouch acquired Mannesmann. At certain stages of the negotiations matters turned sour. The German press had a field day with reports of a mocking impersonation of Mannesmann chief executive Klaus Esser, by

Chris Gent, his opposite number at Vodafone. Later, German workers staged anti-

British demonstrations to oppose the takeover.

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Doing business on the Internet raises a number of legal and cultural issues that must be heeded by business (Bennet, 1998). Competition laws vary across Europe. In

France, for example, any website that is aimed specifically at French consumers must, by law, be in French. In Sweden, toy advertisements may not be aimed at children.

Payment systems also vary widely across the Continent. In the UK, paying by debit card or credit card is widespread. In Germany, cash-on-delivery is a popular payment method. Thus, German catalogue retailers will not sell to customers who do not have an account with a German bank or a delivery address in Germany. Social policy, education, financial services, and e-tailing represent just four of the areas where the diversity of Europe’s business cultures continues to flourish or even extend.

Europe is not immune to the use, or abuse, of the convergence argument in certain misguided attempts to foster blatantly Euro-skeptic attitudes. Of all the member states of the EU, one can only conjecture a peculiarly British notion when reading such statements as:

Pan-Europeanism is inward-looking, materialistic and shallow. It is destroying

all that is positive about European culture, including its diversity. It is turning us

from a nation of inventors, adventurers, explorers and eccentrics into an offshore

island of passive consumers who would sell their birthrights for cheap new cars

or satellite porn. (Rankin, 1999, p. 16)

As we have seen, pan-Europeanism actually is fostering both convergence and diversity. A more balanced judgment of the interplay between convergence and diversity might conclude that, though Europe currently is characterized by considerable momentum for political and economic integration, national diversity remains strong.

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This diversity can, however, prevent businesses from adopting an integrated approach towards the EU and can lead to inefficiencies. Legislation concerning social policy, education, company law, and taxation still is predominantly nationally based. More fundamentally, from a business perspective, Europe continues to display divergent industry structures (Nicoll & Schoenberg, 1999). Thus, when doing business in Europe it is as essential as ever to respect individual national and regional cultures, and not to be deceived by the fallacies, or propaganda, of a culturally united Europe.

The United States

Out of the variety of cultures a business executive will encounter around the world, perhaps none can be more challenging that right here in our own backyard.

Throughout its nearly 235-year history, the overall character of the United States has been influenced by its plethora of immigrants from just about everywhere on the planet.

These influences have been absorbed into the general American culture, creating a patchwork of subcultures that go beyond one’s origins.

A combination of immigrants, as well as the movement of people from more rural to urban areas, has created cities and regions that maintain a large population growth. This urbanization is the growth of urban areas as a result of this global migration.

Urban areas in the United States are places where heterogeneous assortments of people are condensed into groups of a considerable size. These groups interact, exchange goods, services, and ideas. These urban areas are by no means wholly cooperative, homogeneous communities with a cohesive goal or purpose. Competition

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for jobs, housing, and services can be intense. This competition has brought out the good and the bad in urban living. The good, according to Leon (2007),

It is in cities, and not the countryside, where the human creative flame has burnt

most brightly. For millennia they have been the centers and drivers of

commercial, scientific, political and cultural life, having major influence upon

whole countries and regions. (p. 4)

Unfortunately though, while many cities can appear to be thriving, they are in fact disintegrating. All over the world the middle class and the upper class is abandoning cities to the poor and large parts of these urban areas are left neglected and decrepit. Leon goes on to say,

The positive and progressive aspects of cities and urban centers recognized by

historians, economists and other social scientists contrast with the more

pessimistic tone of much of the epidemiological and public health literature on

cities and urban life. (p. 4)

Reflecting his attitude about the growth of cities, Thomas Jefferson thought that there was even some good in yellow fever when he said to Dr. Benjamin Rush (1803):

The yellow fever will discourage the growth of great cities in our nation & I

view great cities as pestilential to the morals, the health and the liberties of man.

True, they nourish some of the elegant arts, but the useful ones can thrive

elsewhere, and less perfection in the others, with more health, virtue & freedom,

would be my choice.25

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It’s not just health issues that have been associated with urbanization and its negative aspects. Human contact that previously took place in parks and along sidewalks and streets has been replaced with the internet, cell phone, text messages, and access to hundreds of channels on the television. Nature has been removed from the life of countless kids who grow up without ever seeing a farm or knowing the source of many of the foods they eat. Technological developments have enabled many to move away from urban areas to the suburbs. Even the residential areas around the cities are subdivided by age, class, and race, resulting in a sense of isolation for the residents.

Yet, urbanization has been an inevitable result from job opportunities and reduced time and expense in commuting, while improving opportunities for housing.

According to Webber (1964), “The large metropolitan settlement is indeed the locus of a wide variety of activities, and it does indeed comprise a more complex network of functional interdependencies than any one man can comprehend” (p. 81).

This natural and manmade physical environment that surrounds the urban city will certainly affect the way its residents behave and interact with others. According to

Golany (1995), for example, the Chinese and the Japanese have:

developed strong and distinct environmental ethics of human behavioral conduct

constituted in norms and rules toward natural as well as human made

environments. These ethics were expressed in their landscape architecture

(gardens), urban design, and architecture…Both the ancient Chinese and the

Japanese view of the environment is distinctive and unique to their historical

cultures. (p. 19)

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It is clear that the environment in which we grow, live, and compete will certainly influence the way we interact with others. The manmade physical and spatial arrangements that surround us are a unique product of a particular society and culture.

There are an increasing number of interactions between the social sciences and architecture and planning to try to determine the behavioral aspects of individuals based on city design and urban planning. King (1976) writes:

The study of cultural factors in the utilization of space and the modification of

built environments has both theoretical and practical importance. At the most

fundamental level, members of all human societies, irrespective of culture or

location, share common needs: food, shelter, reproduction, socialization,

security from attack. How the members of a society provide for these needs

however, and modify their physical environment to obtain them, is a process

mediated by culture. (p. 12)

Therefore, examining the conditions that are common to most individuals from a certain city, region, or culture provides insight into behaviors that are described throughout this report. Smith (1965) explains that the:

core of an individual’s culture comes from what he calls their institutional

systems. This institution comprises set forms of activity, groupings, rules, ideas

and values. More particularly it is a form or system of activities characteristic of

a given population. Institutional activities involve groups…Moreover,

institutional activities and forms of groupings are also sanctioned by normative

beliefs and values, and social values are expressed in institutional rules. The

basic institutions of a given population are the core of a people’s culture; and

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since society consists of a system of institutionalized relations, a people’s

institution form the matrix of their social structure. (p. 81)

Culture then should be an outgrowth of the city and its many institutions, groupings, spacial arrangements, and rules. New York City for example, as described by Henry Adams (Dunbar & Jackson, 2002) is “something that defied meaning...Prosperity never before imagined, power never yet wielded by man, speed never reached by anything but a meteor” (p. 72). Is it no wonder the residents of this massive, fast-paced city want conversations to be brief and to the point.

In the upcoming pages, a variety of cities, regions, and cultures are explored.

The subsections on this list were selected because many of the industry experts that were interviewed were in broad agreement when talking about these regions or cultures.

For example, the industry experts that were interviewed for this report overwhelmingly agreed about the distinction between the rural and urban cultures in the United States as well as how to approach each of them in order to establish trust and a relationship.

When the experts agreed on similar cultural characteristics among other groups I included them in the subsections as well. Some readers may feel that a certain region, subset, or culture that they may be familiar with might have been left out of this dissertation. The reason for this omission is simply that there wasn’t enough information in the literature review or agreement from the industry experts for that region, subset, or group to be described as having obvious similarities in the way they behaved.

The information in this dissertation shows support for the idea that cultural characteristics based on certain cities, regions, or cultures as well as on other cultural

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traits of an individual can be identified. Some examples of cultural characteristics are identified and strategies on approaching individuals with these cultural characteristics are reviewed. The ability to recognize these factors provides a cultural competency, which includes the skills and qualities that will enable successful outcomes to take place in business contexts where different cultures are interacting.

Urban culture. I will elaborate on this cultural group by alluding to my earlier example. Sal Bodrado, Victoria Cheng, and Nick Atkins each were born and raised in different macrocultural systems. Sal Bodrado was born and raised in

Manhattan, New York, where his environment and culture were very fast-paced. In addition to thoughts and actions, culture also influences communication. In Sal’s culture, communication is done at a faster pace and his culture taught him significant rules and procedures in the way that he communicates with others. It is not just the rate at which he speaks; it also is his attitude towards when to arrive at a meeting, how to work, and when to arrive and leave the office. Dodd (1998) states that,

Time’s applications for intercultural communication begin with understanding

how time is culturally rooted, and our use of time is wedded to our culture’s

cognitive perceptions surrounding time. Some cultures view time with great

precision and expect you to be precise also. For example, Americans, Britons,

Canadians, and Germans expect punctuality. The clock governs a large share of

the people’s relationships. By contrast, some cultures such as African, Latin

American, and Malaysian, are less time conscious. In these cultures, time does

not dominate, except for situations where punctuality is the rule. (p. 14)

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In addition, individuals from large cities such as New York City have a greater emphasis on productivity being equated to time. All of my interviews, as well as my past experiences, prove this to be true. For example, a salesperson generally wouldn’t ask about a potential customer’s family or health. A New Yorker would think these types of questions to be overly intrusive and personal. Urban life in these types of large cities is very complex, given the massive number of people involved. An individual from an urban culture responds best when the conversation is carefully and efficiently planned. Also, be prepared to get a quick response and be ready to take action accordingly. A well-organized conversation goes a long way with this type of personality, so don’t ask personal questions or questions that do not pertain to the conversation at hand.

Rural culture. Nick Atkins, from the early case in point, is a perfect example of someone from a rural culture. Norms toward interpersonal relationships persist with rural cultures, as was demonstrated in the example where Nick was trying to establish an interpersonal relationship by talking basketball, even though this had no effect on the salesperson. Also, I feel that it is possible to identify characteristic norms of rurality.

First, rural cultures emphasize personal know-how, practicality, and simplicity over complexity in approaching decisions. Skills at doing rather than being or knowing are often valued; perhaps such skills relate more to survival. Indications are that bonds of friendships differ from urban cultures. In an urban culture, many people never even get to know their neighbor, as opposed to a rural culture, where it might seem that everyone knows everyone.

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From my interviews, it was widely agreed that rural individuals also possess a more diverse set of categories by which ultimately to judge interpersonal relations. In fact, rural people can judge rather quickly according to some intuitive interpersonal rules. Furthermore, once a decision has been made about whether to trust an individual, it is difficult, if not impossible, to change the mind of the rural individual.

Being from North Carolina, I often found that my accent became much more prominent during a conversation with others from that area, and I think others would agree that even this small adjustment helps build a trusting relationship. According to

Martin & Nakayama (1997),

Code switching is a technical term in communication that refers to the

phenomenon of changing languages, dialects, or even accents. People code

switch for several reasons: (1) to accommodate the other speakers, (2) to avoid

accommodating others, or (3) to express another aspect of their cultural identity.

(p. 241)

This does not apply only to rural individuals, as I have seen this happen with many individuals who react with individuals from their home culture. Harry Hoijer (1954) wrote that,

Language plays a large and significant role in the totality of culture. Far from

being a technique of communication, it is itself a way of directing the

perceptions of its speakers and it provides for them habitual modes for analyzing

experience into significant categories. And to the extent that languages differ

markedly from each other, so should we expect to find significant and

formidable barriers to cross-cultural communication and understanding. (p. 112)

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Unfortunately, the accent seems to work both ways. If a salesperson with a strong southern accent called a New Yorker, that salesperson would probably be perceived as unintelligent. A businessperson in a rural culture being called upon by someone from

New York with a strong accent would consider the caller to be untrustworthy.

Regional differences silently can keep people apart. Some of the most sophisticated people let the subtle prejudices of regional differences affect their attitudes and relationships. Again, by being aware of these characteristics, an intelligent businessperson can adjust their approach accordingly.

The industry experts were in broad agreement about the differences between rural and urban cultural characteristics in the United States. During the interviews many of the experts also agreed that individuals from certain regions or areas in the

United States displayed recognizable cultural characteristics. These regions went beyond the definition of rural or urban and they certainly are worth mentioning in this dissertation. Additionally, the industry experts recognized that certain groups generally showed similar characteristics and these groups are included as well. At first glance, it may seem like this is a random list of regions and groups, but these were the regions and groups where there was broad agreement form the industry experts about identifiable cultural characteristics. I also am listing only the common cultural characteristics that the industry experts mentioned in each of the subsections.

Silicon Valley. The first would be the individuals raised and/or doing business in Silicon Valley. In general, individuals from this region of the country can be expected to be an analytical group and extremely visual. For example, if a salesperson wanted to pitch an idea to someone in this region, they need to bring a

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number of visuals as well as the numbers to support their statements. This was mentioned by several of the industry experts when talking about this region of the

United States. In addition, if the numbers that you present to individuals from this region make sense to them, be prepared to do business. Several experts pointed out that individuals from this area are prepared and will take risks. After all, this is where the founders of Google, Facebook, Apple, and Twitter are located. There has been an entrepreneurial explosion in this region that stretches from San Francisco to Santa

Clara.

Rocky Mountain region. Several of the industry experts agreed that, in general, whether the sales person is Democrat or Republican, Liberal or Conservative, they should expect to meet someone from this region who is relatively liberal in their views. This means, for example, that if an environmentally friendly product or service were offered, it would have a better chance of being sold. On the other hand, however, fancy cars, watches, and clothing seemed to offend more than impress most individuals from this region. One of the experts who produces travel shows about this region mentioned that most individuals from this area have a tradition of art appreciation. His view is that individuals who reside in this region receive a tremendous inspiration from the natural beauty that surrounds them. Therefore, you can expect to meet many full and part-time artists and craftspeople.

Bible Belt. The individuals I interviewed repeatedly referred to this area of the country so I felt it should be mentioned in this dissertation. The region is predominantly Evangelical Protestant, but particularly Baptist. In general, individuals in this area clearly are religious and seem to be drawn to others who share their religion.

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Religion often is mentioned during first conversations about one’s church and family status. If there is a common ground established, business seems to move at a fairly quick pace with trust and mutual understanding facing few barriers. This was widely agreed upon by the industry experts.

As a nation founded on freedom of religion and diversity, it would be difficult to pigeonhole a region in terms of religion and political affiliation. Elazar (1994) compared this diversity to “mosaics.” In citing Elazar, Lieske (2010) also acknowledged relatively homogenous regions such as the Mormon settlement of Utah.

In the Midwest, Amish and Mennonite colonies still dot the countryside. Portions of

Hollywood, Florida, as well as portions of Miami Beach, contain pockets of Jewish communities with synagogues built within walking distance, as it is forbidden for Jews to drive their cars on the Sabbath. These relatively secluded communities are the exception, rather than the rule. However, one particular region known as the “Bible belt,” also considered to be the “Deep South” of the United States, is renowned for its residents’ religious commonality (Christianity).

Age groups. There was a lot of consistency when describing characteristics associated with age. Several of the industry experts agreed that the younger the individual, the more risk they are willing to take. One of the industry experts, who is a financial planner, seemed to describe it best when he said that his experience taught him that the older the individual, the less risks they take. This also holds true in establishing relationships – it is more difficult to establish a new relationship with older individuals.

He also describes the characteristics similarly to the way they invest their money. The opposite applies to younger individuals who are much more prone to investing in riskier

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opportunities. Therefore, a salesperson should take into consideration the type of product that is being sold and the age of the potential buyer. In addition, the industry experts were united in saying that the older the individual, the more respect they should be given. An example of this would be to say, “Yes, sir” or “No, sir.” It was stated several times that older individuals opened up and developed trust faster if given a high level of respect and courtesy. Also, the experts said it is important to include stories or specific examples when presenting ideas to older individuals.

Gender. There were several commonalities concerning women on which to focus. First, I must express that all 30 industry experts that I interviewed were men and all said they occasionally did deal with women; however, they primarily tended to deal with more men on a daily basis. But what generally was agreed upon, based their experiences, was that women are much more visual than men and less willing to take risks. Women need to be given more information before making a decision; i.e. they do seem to respond best when given large amounts of information to digest. Information should be factual, and a logical and structured approach will work extremely well.

Time frames for decisions are a good way to set up further meetings. Do not apply undue pressure for a quick decision or mutual trust will be quickly lost.

Female business owners value a stronger relationship with their business partners than males. In addition, they have a stronger desire to produce a higher quality product and will forego some profit in order to do so. Three of the adjectives that the industry experts continually used to describe the typical female business owner were assertive, creative, and determined.

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The differences in communication patterns in women and men have been documented. Physiologically, men and women are “wired” differently when it comes to speech function. Garner (2009) writes that, in men, the speech function can be found in the left side of the brain, though not in any particular area. In women, the speech function can be found in two specific locations in both hemispheres of the brain. The result is that when a woman speaks, logic and emotion both are incorporated, whereas a man’s speech is more logical and linear. The smooth transition between logic and emotion in women also might explain the value of a stronger business relationship among female business owners.

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CHAPTER 4

Results and Conclusions

To briefly restate the purpose of this study it was necessary to show support for the idea that cultural characteristics can be identified based on city or region, as well as on other cultural traits of an individual. After examining this study, individuals should now be able to approach others with the realization that, with some degree of certainty, the cultural characteristics of the individual being pursued can be predetermined based on the factors outlined in this dissertation. The ability to recognize these factors provides a cultural competency, which includes the skills and qualities that enable successful outcomes to occur in business contexts where different cultures are interacting. This predetermination will provide a type of blueprint to an individual’s thoughts, tendencies, and even buying patterns. These strategies will reveal ways of sidestepping everyone’s natural tendency to say “no.” By providing this insight into predisposed behavior patterns, most prospects will tend to lower their natural defense barriers and a smooth and effective conversation will follow.

This study was completed and driven by the following research questions:

• In today’s fast paced business environment, how important is it to establish

trust quickly through a good first impression?

• What are cultural characteristics and why are they important to understand?

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• What are the behaviors one would expect of the individual with whom a

relationship is being formed, based on the city, state, country, or region?

• When starting a new business relationship with individuals from differing

cultures, what are some methods to establish trust quickly?

• Are there differences in methods of communication in the business

environment based on culture?

These research questions were answered in detail in the macrocultural sections of this study. From the literature review as well as the industry expert interviews, the following macrocultural systems were examined: 1) Asian culture, which includes

China, Japan, and the surrounding areas; 2) Latin America, including Brazil; 3) India; 4) the Middle East; 5) the European Union; and 6) the United States. In addition, many subcultures in the United States were explored. The largest and the fastest growing regions of the world were chosen because these are where a majority of the newly established business relationships are being formed. These real world studies illuminated some real life situations that resulted in either a successful or unsuccessful business relationship being formed. It clearly has been illustrated that understanding an individual’s cultural background and understanding their unique traits helps to establish a foundation for a business relationship. It is prudent to foster a healthy business relationship through cultural understanding and respect while holding onto one’s own cultural identity.

As presented, there is a myriad of ways to communicate and act in order to survive and thrive in the workplace. Our world and our workplace have evolved and so has the conditions to which we must adapt and respond in order to thrive. Enormous

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changes in our world have caused more people to interact with one another on a daily basis. Examples include the break-up of the Soviet Union, the end of the Cold War, the destruction of the Berlin wall in Germany, the unified European Community, and the opening of the Chinese economy (which lifted 250 million people out of poverty).

These events have enabled commerce and trade to expand beyond boarders previously impassable. The number of companies that operate globally has increased exponentially. All of these interactions being discussed are made possible by the recent advances in communication technology. All businesspeople need to become better educated on effective ways of communicating with others in order to respond to and make the most of pervasive cultural differences outside as well as within their own employee population.

As stated earlier, knowing one’s own culture and initial reactions to outside cultures is important in knowing how to govern one’s self when interacting with different cultures. Business owners and salespersons should be able to understand and utilize this information and apply it to their daily work routines. Salespersons should be able to see a significant increase in their closing percentages utilizing the strategies mentioned in the previous pages.

I feel it is important NOT to be afraid of cultural differences; rather embrace them, treating these cultural differences as a resource to establish new relationships. As the global market becomes more tightly knit, these new relationships become vital to the growth of a company and of the individual within the organization. Oftentimes, as the industry experts agreed, if one relationship was established within a certain “new” cultural group, it opened the door to many new relationships from that group.

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Unfortunately, too many people treat cultural differences with negativity and approach the challenges begrudgingly, which further increases the cultural divide. An inert feeling of cultural superiority tends to become the catalyst of the subtle, perhaps even subconscious, feelings of resentment toward having to comply with a culture different from one’s own. Rather than being seen in a negative light, cultural differences should be seen as an opportunity not only to increase sales, but also to establish new friendships, broaden one’s worldview, and create an opportunity for overall self- enrichment.

We also must be mindful of how our own culture already is engaged in a subtle morph to ease communication barriers, both domestically and abroad. Consider the confines of the 140-character-limit “tweet” or how much faster and easier it is to text someone that you’ll “BRB” instead of writing out, “I will be back shortly.” These condensed greetings are causing the traditional forms of establishing a relationship to transform. It is getting to be much more difficult to find the time to establish a trusting relationship through modern technology. Nonverbal messages are almost non-existent in this form of communication and with the majority of the meaning of any message being in the nonverbal realm it is difficult to establish the necessary trust.

Internationally, the influence of Western pop culture has reached even the remotest regions of the planet - and the influence has crept back into our own culture in unexpected ways. In his article for the New York Times earlier this year, Anand

Giridharadas pointed out how English is becoming watered down as a result of technology and the melding of cultures: “Globalization, in bringing cultures together, exerts its own pragmatic pressure. With English the escalator of globalized success, the

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language’s center of gravity is tilting away from English-speaking lands. A stripped- down English of catchphrases and trite idioms, light on richness, is becoming the true global language” (2010, p. 2). Giridharadas also reminded us that culture is dynamic, and as such, is prone to constant change and adjusting. Theological, familial, and other internal and external influences constantly are fluctuating with the times. Keeping this in mind, we must be willing to be flexible and adjust as necessary in our business dealings.

One final thought should be expressed, which limits the scope of this study. As today’s technology seems to make our world smaller, all people in the business community find themselves dealing with individuals from all walks of life. Because of this inter-mingling of cultures and sub-cultures, I feel that eventually it is going to become increasingly difficult to predict certain cultural traits of a person prior to meeting that individual. Although this may get more difficult to predict over time, an intelligent businessperson should use everything in their power to stack the odds in their favor.

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APPENDIX A

Interviewee Requirements

1. Must have had over 5,000 conversations with different business owners from all over

the world.

2. Must sell products that have a monetary value directly to these businesses.

3. Must deal directly with business owners on a day-to-day basis, NOT with their

assistants.

4. Must need to establish a working relationship where time is of the essence (anything

under two weeks).

5. Must have had no contact prior to first conversation with new potential business

owner.

6. Must be considered successful in their current business.

Questions for Each of the 30 Industry Experts

1. What is your title?

2. How long have you been in this business?

3. What did you do prior to this that is similar in methodology to sales?

4. How long at your previous company?

5. With how many new business owners do you speak per day?

6. What does that equate to in one year...an approximate total?

7. Based on revenue, upon what size companies are you calling?

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8. Based on number of employees, upon what size companies are you calling?

9. When dealing with an organization, who makes the buying decisions?

10. To sell your product, how do you approach business owners?

11. Is every sales call similar?

12. In what percentage of time is there only one business owner?

13. What is your approach when multiple business owners are present?

14. What percentage of your sales calls or meetings result in new business?

15. In what areas of the country do you specialize?

16. Is it different dealing with an owner of a company from different regions of the

country; for example, NYC as opposed to Durham, NC?

17. Do you feel that there are differing personality types who own companies?

18. Are you familiar with these different types of personality types:

1-Driver/Controller; 2-Analytical; 3-Expressive; 4-Amiable?

19. Are you familiar with the Myers-Briggs Personality Traits?

20. With different personality types, how do you approach them with your sales pitch?

21. Prior to making a sales call, do you think about an individual’s personality type?

22. Is it possible to determine a personality type prior to making a call?

23. How would you deal with these business owners separately?

24. Can you determine other regions of the country where personality types can be

determined?

25. On what do you base that?

26. What are these regions?

27. How would you divide it up?

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28. How do you prepare for a sales call in each region?

29. Do you approach anyone under 30 different from anyone over 40?

30. How about 50 to 60 years of age?

31. Over 60?

32. Do you approach women differently?

33. Do you approach different races in a unique manner?

34. African American?

35. Asian?

36. Hispanic?

37. Do you approach Canadians differently?

38. Do you approach someone from Mexico differently?

39. Can you tell the personality type based on sexual preference?

40. Can you tell a personality type based on religious preference?

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