What is culture? It may be described as ‘ideas, benefits and values that form a conceptual framework’ (Gertz & Gertz 1975:2-3) Culture can also be described as a pattern of taken-for-granted assumptions about how a given collection of people think, acts and feel that affects how they produce goods and services. Malcolm Warner (Culture & Management in Asia 2002 :2) In more recent years you can find varying cultures across nations such as with American, Japanese or Russian cultures. For example the average American is achievement
orientated and is consequently geared to work at a level of maximum efficiency. In comparison, the average Indian is essentially ‘fatalistic’ and believes in the theory of ‘predeterminism. ‘ These national cultures have been shaped by many variants such as history, Ideas, ecology, technology, institutional network, interpersonal Communication pattern. History shapes culture as with British culture has shaped significantly by the industrial revolution through economic change which created a market economy and capitalist society.
Ideas influences culture for instance religion and philosophy. India for example over 5000 years ago with the writings of ‘Buddhism’ has a strong influence and shaped many of the religions in India today. Ecology of a country and its external environment is vital to developing a national culture, for example natural resources, climate and space. System of value is influenced by availability or non availability of certain goods e. g. Water is valued in the Sahara.
Changes in technology have changed our culture, such as in western countries and in parts of some eastern countries there has been huge developments over the last 20 years in technology for example TV and computers are know a household item. Institutional networking is a societies decision how to organise Social, political and economical life influences cultural patterns e. g. difference between East and West Germany. Consumer tastes and preferences change from country to country what may be desirable and sought after in one country may not be of value on another such as consumables, clothing etc.
One of the most important factors in the modern era is the demand on businesses from host governments. For instance in China a communist state which has both State owned Enterprises (SOEs) and Private firms operating in the country, however both rely on guanxi to develop their external networks and to acquire business opportunities. Private firms lack the institutional supports offered by government agencies and good guanxi connections therefore provide an important substitute for gaining access to scarce raw materials from other resources. (Luo 2000)
A firm must understand prior to developing business in a foreign country its competition in the region, what it needs to do to offer a better product or obtain a market share against its competitors. One modern method which has proved popular in transgressing the Asian market is joint ventures such as Rank Xerox and Fuji Xerox. Similarly a foreign business must understand the human and social behaviour of the region it is looking to invest in, for example in china it has been a tradition to rely more on mutual obligations expressed by a relationship rather than on a legal contract.
In fact it is assumed that to resort to a legal contract was a sign of bad faith. However with the influx of foreign investment there is an acceptance of legal contracts but however this culture should be understood. Similarly in India, a foreign professional should be aware of the caste and class groups and the Hierarchy and inequality that are produced in this tradition. Finally and probably the most fundamental with regards to business is the varying management and cultural systems between regions.
For example Chinese SOEs maintain the traditional respect among Chinese people for ‘loyalty’ to the leader this is also strongly directed the immediate working group and its leadership. This mind set causes a fondness towards fairness and impartiality and a general reluctance among many to accept responsibility and a system that rewards performance. Thus a large power ‘distance’ tends to be maintained between top managers and other members with very little delegation of authority.
This is in stark contrast to the US system where predominately decision making frequently is delegated. Different regions have different approaches to completing tasks; Asian and Hispanic cultures tend to attach more value to developing relationships at the beginning of a shared project whereas European Americans tend to focus immediately on the task and let relationships develop as they work. Explicit knowledge is obviously available in the form of books which can be accessed via libraries etc. or internet data bases or case studies done previously.
Documents and records are a gold mine of useful information, but tacit knowledge will have to be extracted by questioning a valid source of information often by interviewing exploring concepts in action. E-source of information is a huge benefit to companies and many western governments post huge amounts of data on web-sites, for example the UK Government has a National Statistics web-site and the office of the deputy prime minister which boasts’s huge amounts of data useful for foreign investors.
Most companies now advertise via web-sites and the internet, so this data can be collected and vital information gained without even visiting a country first hand. Another example of tacit knowledge and extracting information and that is by direct observation, researching and actually watching activities with interest and reporting back your findings. This is usually unobtrusive and the researcher does not interfere with or participate in the behaviour so in some circumstances could be considered bias.
Travel Agencies hold information and brochures on many foreign cities with the recent rise in low cost airline and city breaks becoming more fashionable. Just by reading a brochure or asking questions, could give vital information and insight into a cities more desirable and fashionable areas and business districts. On last years study trip to Barcelona I gained useful Tacit knowledge into urban redevelopment in a district of Barcelona which was pre Olympics a run down area with little or no business interest, a real blot on the cities landscape.
Prior to the 1992 Olympics the city council decided to rejuvenate this area so invested hugely into developing the area into the athlete’s village. Post 1992, not wanting to lose on there venture, they continued recovering the area, improving the fashionable harbour area with restaurants and bars, enhanced commuter links to the city centre, turned the Olympic village into fashionable flats and community.
This was all done to achieve better use of space within the confines of a compact city. In addition to this the city council have given special grants and incentives for businesses, both foreign and domestic wishing to invest in this part of the city. They also designed a housing benefit scheme for young families and single professionals, all of which are not available in other districts of Barcelona.