effects of values and culture on business_raj_u

Rajparikshit Moondra EPGP-10, POID Assignment – 1, Roll No 18

2 Culture, Value System and its impact on Business - USA & China

ContentsDiscussion:............................................................................................................................................3

Relevance.............................................................................................................................................3

Introduction...........................................................................................................................................3

Values...................................................................................................................................................3

Culture...................................................................................................................................................3

Differential study of Values of USA and China.....................................................................................4

Differential study of Cultures of USA and China...................................................................................6

Impacts of Culture and Values in Business..........................................................................................8

References............................................................................................................................................8


Discussion:Choose any two countries. Study the overall Culture, value system (human value).If you prefer, you can choose five values factors across which you would like to compare the two countries. What are the implications of such knowledge for doing business in the chosen two counties?

RelevanceIt is always interesting to study other cultures and it is extremely important to do just that if you are going to have interactions (business) with them. You don’t want to insult/ offend someone or embarrass yourself during your communication. The below study help us understand the culture and value system of 2 different geographies, comparing broadly and telling us the relevance of such knowledge before one gets into business transactions.

Introduction

Values

In order to understand the members of a particular society, it is required to have some idea of their daily lives , their tradition , their beliefs , their way of looking at the world , their value system. Values determine what is right and what is wrong for an individual , for a group of people ,for the people living in a particular nation. Individual’s value system decide the dos and the don’ts in their life. It forms the foundations of their characters. Depending on their value system , in a given situation they behave in a particular manner.

Culture

It may seem obvious but culture is what makes the Japanese, Japanese; the Germans, German; and the Brazilians, Brazilian. A more formal definition is that culture is a set of learned core values, beliefs, standards, knowledge, morals, laws, and behaviors shared by individuals and societies that determines how an individual acts, feels, and views oneself and others. The culture of various countries differ. There may be some similarity, but they are not the same. The values, beliefs and notions of Japan differ that of America, china or India. An organization is a part of the society . therefore, as far as an organization in a particular nation is concerned, its value system also differs from another organization situated in some other country.


For this comparative study we have considered USA and China.

Differential study of Values of USA and China

USA

Materialistic: American value system differs to great extent. American are more materialistic in their approach as compared to Chinese. Now a days many Americans are getting attracted towards spiritualism, because they have realized the emptiness of mere materialism. Generally Americans are focused to earn more and more money and enjoy all the luxuries in life. They are achievement oriented, interested to attain challenging goals, ambitious and hard working.

Relationship based in give and take: American culture believes in developing relationship of give and take in work life. They regard that relationship should be mutually beneficial. They believe the relationship to be formal in professional life.

Believe in non-interference: Americans are not much inclined to the family. After becoming adult, individuals can take the decision on their own without bothering about their parents.

Equity and co-operation: They believe in equity and co-operation. They are focused in building the team spirit to attain organization goals and objectives. But while encouraging the team spirit, individual’s performance is also rewarded.

Generally preferred top-down approach: As far as decision making is concerned, generally major decisions are taken at the top and communicated at the lower level to take action.

No job security: Americans believe that if today, an employee’s performance is good, he must be rewarded, if tomorrow he is not required or his performance is not up to the mark he need to be sacked. It indicates they do value job security unlike Chinese.


Loyal to the profession: Americans are more loyal not to the organization but to the profession. If they get better opportunity they will leave the organization and join somewhere else.

China

Chinese value system that emphasizes that people should be truthful, generous, sincere, kind hearted and selfless by nature.

Thought counts: One short story will help us to understand Chinese culture. Once upon a time a man went on a long journey to visit his friend with a swan as a gift. On the way the swan escaped and the man tried to catch it. But in his efforts he got hold of nothing but a feather. He reached his destination and gifted his friend that feather and told him what happened. His friend became moved by the story and his sincerity. For him it was a priceless gift. The saying in Chinese is ‘The gift is nothing much, but it is the thought that counts and spreads everywhere.’ In business world Chinese people emphasizes on punctuality.

Jen and yi: Chinese are keen to use the words, Jen and yi. Jean means love and friendship whereas yi means righteousness. These two qualities should be there in the people. They emphasize to maintain a life full of love, harmony and peace. Chinese culture believes in wu wei. It means doing without forcing. It emphasizes on accepting and harmonizing with the flow.

Emphasize on gunaxi: Guanxi or relationship is an important Chinese business element. It helps to minimize the risk, frustration and disappointments. It will help in insuring that business will be successful. It will help in determining the competitive standing of an organization in the long run. Unlike western culture, Chinese prefer to deal with people they know and trust. Trustworthiness is a very important component in Chinese tradition.


Differential study of Cultures of USA and China

1. Social Structure – In China the social structure is formal and hierarchical. You know where you fit in the structure and you abide by the rules there. There is no crossing into other areas. In America, it is much more loose and informal. It is not uncommon to see those of various social levels socializing and knowing each other. There are very few lines that socially are not allowed to be crossed. This can cause problems in business relationships if the visiting culture is unaware of it.

2. Confrontation/Conflict – If you are planning on conducting business in China or expecting an extended stay, it might be useful to know that the direct way that most Americans approach issues is not the way to go in China. Direct conflict or confrontation over issues is highly frowned upon. Doesn’t matter that the “truth” needs to be spoken, respect and honor to each person supersedes that. To prove a point and show yourself in the right even over business issues is considered shameful and should be avoided.

3. Self – The Chinese looks more at the group collective than at individualism. America has become known for its push of individualism which has been a source of conflict with other cultures that look collectively. A person from China is more prone to look at how their acts affect the whole instead of how it affects them personally. They are more willing to give up and sacrifice for the greater good. America’s individualism has been its backbone and the reason for its success as a world power, but when visiting China it needs to be reined in.

4. Face/Reputation – Reputation of the individual is very important in China. If an action will humiliate someone or ruin a reputation, it is avoided. When shame occurs, the person sacrifices their job or whatever it is that will heal the shame. In America, reputations come and go overnight and in the end usually does not matter. The end result is more of the focus. A person is more likely to overlook a reputation to get the job done.

5. Business Relations – When doing business in China, be prepared for much socializing. Business becomes secondary as the parties get to know each better. If it delays a contract, that is perfectly acceptable as long as the correct social time is allotted for. In America, business associates are usually more aloof. There might be some social gathering but the business is more important and the socializing will be sacrificed to get the job done if needed. Though there seems to be shift in America regarding this. The recognition of networking is becoming more pronounced.

6. Morals – Chinese society places high values on the morals of their people. Marriage is not encouraged until the late twenties. In fact, dating is discouraged early in a young adult’s life and proprieties are expected to be held up. The American culture is much more relaxed and some could even argue that there needs to be more moral emphasize.


7. Recognition of the Dead – One of the time honored traditions of the Chinese is the recognition of the dead. Once a year, all members of a family visit the gravesites of each ancestor and pay their respects. Honoring ancestors is very important in Chinese culture. This is in direct contrast to most Americans who rarely know where the majority of their ancestors are laid to rest. This might be due to the fact that most Americans are immigrants who either have lost the information on grave locations or the locations are in foreign countries. China’s culture is much older and the percentage of immigration is far less.

8. Humility – Humility is a revered virtue in Chinese culture. The success of one’s business or personal life is downplayed while in America the successes are lauded. Most Americans in the fast business world consider humility a sign of weakness. This can be an issue that hurts inter-cultural relations. Be very sensitive to comments and actions in the presence of another culture.

9. Time Sensitivity – Crossing cultures for business can be frustrating when it interferes with getting the job done. Most Americans are very time sensitive when it comes to meetings and deadlines. If the meeting was to commence at 2:00, then all parties are to be present at that time. The Chinese do not view time as an absolute but more as a suggestion. Concern is not expressed for a meeting starting late or ending at a different time. The same can be applied to deadlines. If a report is due on Friday, an American would be waiting for that report to be received before end of business day. The Chinese would not worry if it showed up several days later.

10. Respect – Being sensitive to another person’s needs is very important in Chinese culture. It is expected that you will respect the other person and treat them well. Their needs are met at each encounter. This is a characteristic that Americans are insensitive to.


Impacts of Culture and Values in BusinessThere are currently over 160 independent countries in the world, hundreds of major

ethnic groups, and even greater diversity of cultures, and at least 3,000 spoken languages. At the same time, immediate communication virtually everywhere, rapid transportation, global trade, worldwide political interaction, and universal interdependence are ever growing and expanding. Understanding each other and communicating across linguistic, political, religious, and other cultural barriers have become necessary in today’s world for one to succeed.

Differences in consumer behavior, business customs and etiquettes impacts day to day businesses of organization like:

1. Negotiation styles2. Communication3. Business protocol4. Level of formality of arrangements5. International Planning / Strategic Planning / Operational Planning6. Segmentation of markets7. Positioning of products / Marketing mix8. Analysis of buying habits of consumers

References1. Richard D Lewis,(1996) When Cultures Collide – Managing successfully across

cultures2. Adekola, Abel. Global Business Management: A Cross-Cultural Perspective.

Abingdon, Oxon, , GBR: Ashgate Publishing, Limited, 20073. S. Treven, M. Mulej, M. Lynn: The impact of culture on organizational. Management,

Vol. 13, 2008, 2, pp. 27-394. Engel, Dean; Szerlip, Barbara (Editor); Watson, Tom (Illustrator). Passport U.S.A.:

Your Pocket Guide to North American Business, Customs and Etiquette. Novato, CA, USA: World Trade Press, 2001

5. http://hubpages.com/hub/10-Major-Cultural-Differences---China-and-the-United-States

6. http://www.china-nafsa.aief-usa.org/culture/differences.htm7. http://www.mbaknol.com/business-ethics/a-comparative-study-of-value-system-of-

japan-china-america-and-india

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