CHAPTER 3: GLOBALIZATION, SOCIETIES

AND CULTURES

Lecturer: Nguyen Van Dung Ph.D.

 Learning objectives
By the end of the chapter you should be able to:
 Understand the meaning of culture and the various layers of culture

 Understand the variety of different forms of economic organization and

business system
 Identify the key characteristics of international cultural differences

 Understand the different management issues associated with cultural

differences
 Understand the managerial issues associated with cross-cultural teams

 Understand how cultural differences affect international negotiations

 Identify the key characteristics of an economic culture

 Be aware of differences in the ways of conducting business across cultures

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 The different facets of culture
 No universal definition of culture.
 Schneider and Barsoux (1997) identified 164 different
definitions made by anthropologists (nhà nhân loại học).
 More relevant broad definitions of culture include ‘a shared
pattern of behaviour’ (Mead, 1953), a ‘system of shared
meaning or understanding’ (Levi-Strauss, 1971; Geertz,
1973), or ‘a set of basic assumptions, shared solutions to
universal problems … handed down from one generation
to another’ (Schein, 1985).

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 The different facets of culture
 All these definitions have in common the concept that culture is
shared, and contain an implicit decoding of an underlying
pattern of cause and effect relationships.
 According to André Laurent, there are three major layers of
culture:
1. Basic assumptions and meaning – the elements of belief that
are the least visible and probably the most entrenched (cố thủ),
since they deal with ingrained (ăn sâu vào) models of
understanding, meaning and causal relationships that have
been largely shaped by historical factors and transmitted
through the educational process to the next generation. Religious
faith and assumptions about human nature belong to this
category (e.g. ‘all men are equal’, ‘time is limited’)
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 The different facets of culture
2. Values, beliefs and preferences – the explicit expression of
what people consider as good or appropriate in one’s personal or
social life.
 Values can be challenged and possibly changed to some extent
by new information and confrontation with new situations.
 A manager whose assumption about human nature is that
people are fundamentally greedy, for example, will probably
believe that only materialistic rewards will motivate
employees.
 She/he may change this belief if exposed to situations in which
people sacrifice their own financial reward for the benefit of
others.

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 The different facets of culture
3. Behavior – the most visible part of the iceberg.
 It is in action and can be modified through education as well
as through some forms of ‘conditioning’.
 Behavioral change does not necessarily indicate a genuine
modification of the beliefs or assumptions underneath it.
 An autocratic (độc đoán) leader may be told to change
her/his style of leading a meeting although she/he still
believes that employees ‘have to be told’ (belief) based on the
assumption that human beings are fundamentally divided into
‘born leaders’ and ‘passive followers’. In such a case,
behavioral change is superficial (ở bề mặt).

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 The different facets of culture
 In the management field which, by its very nature, is concerned
with the economic achievement of social groups (companies),
culture will be manifest (rõ ràng, hiển nhiên) in four key
dimensions:
 National or ethnic culture: derived from the national, religious
or ethnic origin of citizens or social groups.
 Corporate culture: the accumulated assumptions, values, beliefs
and behavioral norms (quy tắc, tiêu chuẩn) resulting from
 History of the company (good and bad experiences)
 Existing and past leadership (the legacy of charismatic (có uy
tín, có sức lôi cuốn quần chúng) CEOs)
 Ownership structure (family-owned, publicly listed, private,
government-owned) and its size
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 The different facets of culture
 Industry culture: any accepted values and codes of conduct
derived from the professional norms of a particular industry
such as heavy manufacturing, services, oil and gas and so on.
 Professional culture: derived from the training and
professional norms and constraints of different corporate
functions such as accountants, researchers, production
personnel, sales and marketing people and so on.

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 National cultural differences
 From a practical perspective, most cultural research in
management has used nations as their unit of grouping for
cultural categories.
 Analysis of national cultural differences in a business
management context suggests four main streams of differences.
1. Ethnological (dân tộc học) research: ‘silent language’
differences (Hall and Reed Hall, 1990).
2. Managerial values and assumptions: work-related value
differences (Hofstede, 1980); value orientation differences
(Trompenaars, 1993; Hampden-Turner and Trompenaars, 2000);
management assumption differences (Laurent, 1986; Meyer, 2014a
and b, 2015a and b).

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 National cultural differences
3. Country clusters: the grouping of nations according to
similarities in cultural traits (đặc điểm) (Ronen and Shenkar,
1985; Huntington, 1997).

4. Economic cultures: how business systems are organized

and interactions governed (Albert, 1991; Berger and
Dore, 1996; Whitley, 1999; Redding, 2001).

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 Ethnological research: ‘Silent language’
differences
 According to Hall, cultures differ in the way they communicate
through non-verbal signs or ‘silent
language’. He identifies six silent languages.
 Cultures differ according to their perception of time.
 Germanic culture: time can be seen as sequential (tuần tự)
and scarce, leading to the quest for preciseness, punctuality
and deadlinekeeping.
 Some cultures see time as fluid, circular and abundant, as
in Arab countries, where people will be less punctual and
not really disturbed by delays and postponements.

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 Ethnological research: ‘Silent language’
differences
 Differences in the perception of space relate to the
concept of social distance that measures not only the
physical proximity in social interactions but also the
emotional intimacy (sự thân mật, quen thuộc).
 In high-social distance cultures, people will tend to
avoid physical and emotional proximity – a typically
British trait.
 In low-social distance cultures – such as the Latin
countries – people have no objection to physical
contact and the sharing of emotions.

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 Ethnological research: ‘Silent language’
differences
 The language of material goods is linked to the
importance attached to financial wealth as a sign of
status – a materialistic trait of Americans.
 Friendship is built and maintained quite differently. In
some societies, one can make friends rapidly but the
relationship may be superficial and may not last long.
The silent language of this sort of friendship may shock
people coming from societies where friendships are not
so quickly built but last longer.

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 Ethnological research: ‘Silent language’
differences
 The silent language of agreement quite often
differentiates Western cultures from Eastern.
 In Western societies, most agreements or disagreements
are explicitly stated and documented in writing.
 In Eastern cultures, verbal and sometimes ambiguous
agreements are accepted.

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 Ethnological research: ‘Silent language’
differences
 The silent language of context attaches importance to
the person rather than the content in a
communication.
 In high-context societies – mostly Asian, South American
or Latin – the important part of an interaction is the
person (with whom) and the emphasis given to the
setting, the ambiance and ceremonials.
 In low-context societies – Anglo-Saxon, Nordic or
Germanic – the what dominates the communication,
hence the importance attached to written documents
and technical specifications.
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Differences in Managerial Values and
Assumptions
 Several scholars have posited theories of
managerial cultural difference at the level of
nationalities:
 Hofstede’s work-related values

 Trompenaars’ value orientation

 Laurent’s management assumption

 Meyer’s culture map

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Hofstede’s work-related values

 National cultures differed according to four main

dimensions: power distance, individualism, uncertainty
avoidance and
masculinity

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Hofstede’s work-related values

 Power distance: extent to which people in certain

societies accept inequality in power distribution.
 High-power distance societies will accept hierarchical
control and respect authority – as, for instance, in
Malaysia
 Egalitarian (theo chủ nghĩa quân bình) societies will have
a more democratic view of social control, with no
particular reverence for highranking functions – as, for
instance, in Denmark

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Hofstede’s work-related values

 Individualism characterizes a culture in which individuals

look after their own or immediate relatives’ interests.
 This is the case in most Western cultures and translates
into individual assertiveness (sự khẳng định) and
initiative in business contexts.
 Collectivist cultures, on the other hand, will put group
interests above individuals. East Asian cultures commonly
put society ahead of the individual.

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Hofstede’s work-related values

 Uncertainty avoidance is typical of societies in which

ambiguity and unpredictability are not accepted, and
there is a continual search to codify (hệ thống hóa), plan
and regulate the environment (Japan, Spain).
 At the opposite end of the scale are social groups in
which tolerance and risk taking is accepted and
rewarded (USA, Sweden)

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Hofstede’s work-related values

 Masculinity refers to the high value given to

assertive (quyết đoán), competitive behavior.
 Femininity, refers to societies where quality of life,
non-aggressive behavior, interpersonal relations
and concern for the weak are dominant values.

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 Trompenaars’ value orientation
 The cultural differentiation proposed by Trompenaars
(1993), also based on survey data, identifies six
value orientations that differentiate cultures and
impact on the way countries conceive organizations
(see Table 3.1).
 Trompenaars found significant differences in national
groups; most Asian cultures, for
instance, differ from Western cultures in all dimensions

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Table 3.1 Trompenaars’ six value orientations
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Laurent’s management assumption

 André Laurent (1986) asked precise questions

related to organizational and managerial issues of
international managers of various nationalities
attending executive seminars over 25 years. He
found a systematic pattern of national differences
in their replies

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Laurent’s management assumption

 ‘Most managers seem to be more motivated by obtaining

power than by achieving objectives’ (Latin European countries
– Italian, French, Spaniards – agree with this statement,
while Danes, Swedes and
Norwegians disagree).
 ‘It is important for managers to have at hand precise
answers to most of the questions that a subordinate may raise
about their work’ (Asian and Latin nationals strongly support
this statement, while AngloSaxon (Anh) and Nordic (Bắc Âu)
cultures do not).

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Laurent’s management assumption

 ‘In order to have efficient working relationships, it is often

necessary to bypass the hierarchical lines’ (Nordic and Anglo-
Saxon cultures agree, while Chinese, Italian, Spanish or
Indonesian nationals strongly disagree).
 ‘An organization structure in which subordinates have two
direct bosses should be avoided at all costs’
(Chinese, Italians, French and Indonesians reject this
organizational model, while Americans and
Swedes accept the idea of working for two bosses).

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Laurent’s management assumption

 ‘The main reason for having a hierarchical structure

is that everybody knows who has authority over
whom’ (Chinese, French, Japanese and Indonesian
nationals agree, while Americans, Swedes and
British disagree).

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 Meyer’s culture map

 Erin Mayer (2014a) proposed eight scales that

correspond to the eight key cultural issues that managers
working in an international context should understand and
take into consideration.
 Communication

 Evaluation of people

 Persuasion

 Leadership

 Decision making

 Trust

 Disagreements

 Scheduling 28
Table 3.2 The eight dimensions of Meyer’s culture map

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Table 3.2 The eight dimensions of Meyer’s culture map

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Country Clusters

 The clustering approach consists of grouping

countries according to their degree of
geographical, linguistic, religious, historical and
social proximity. Several approaches have been
proposed.
 Ronen and Shenkar (1985) divided the world into
nine clusters: Anglo, Germanic, Nordic, Near
Eastern, Arab, Far Eastern, Latin American and
Independent (Brazil, Japan, India, Israel).

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Country Clusters

 Huntington (1997) grouped countries by what he calls

‘civilizations’ based on language, religion, values, beliefs
institutional and social structures.
 He identified eight modern ‘civilizations’: Sinic (China and
Chinese communities as well as Vietnam and Korea),
Japanese, Hindu, Islamic, Orthodox, Latin American, African
and Western (Western Europe, North America and
Australia).
 Huntington’s grouping has more to do with geopolitics than
with management. He asserted that more and more conflicts
in the world will be due to clashes (đụng độ) of
‘civilizations’.
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 Country Clusters

 The GLOBE (Global Leadership and Organizational Behavior

Effectiveness) study is a collaborative ongoing research project
based on multi-phase, multi-method, multi-sample research
data collection. It assesses two measures:
 Societal Culture, defined as the ‘shared motives, values,
beliefs, identities, and interpretations or meanings of
significant events that result from common experiences of
members of collectives that are transmitted across
generations’

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 Country Clusters

 Cultural Leadership, defined as ‘the ability of an

individual to influence, motivate, and enable others
to contribute toward the effectiveness and success
of the organizations of which they are members’.

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The Lewis Model
 According to Richard Lewis (1996), cultures can be
classified into three groups: linear active, multi-active
and reactive (phản ứng lại).
 In linear active cultures people are task-oriented, highly
organized planners.
 They prefer direct discussion and use facts and figures.
They are prone to accepting compromise (sự thỏa hiệp)
to achieve results.
 In this category we find German, Swiss, North American
and Scandinavian cultures

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The Lewis Model
 Multi-active cultures group people who are
loquacious (nói nhiều), emotional and relationship-
oriented.
 They tend to do several things and talk at the same
time.
 In this category we find Latin American, Southern
European, Western and Northern African and
Middle Eastern cultures.

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The Lewis Model
 In reactive cultures people are introvert (hướng vào nội
tâm), show respect to an interlocutor (người đối thoại)
and listen without interrupting.
 In this category one will find most of the Asian cultures.

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Economic cultures and business
systems
 A business system is the way economic activities
are structured, coordinated and managed.
 It is the result of the interaction between three sub-
systems: governance, culture and institutional
fabric

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Figure 3.1 The architecture of business systems

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 Governance
 Governance reflects the dominant mode of control,
interdependencies and exercise of authority in business firms. This
is made up of three components:
 The ownership system: How the ownership of enterprises is
distributed between the public and private sectors (corporate,
family, associative).
 The networking system: How firms collaborate and do deals
among themselves (contractual, ethnic, religious relationships).
 The management system: Do employees participate in decision
making in business enterprises? Do the employees have access to
top managers or are those functions concentrated within a social
elite?
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 Social culture
 The social culture is constituted by the norms, values and social
codes which form the basis of social interactions and shared
beliefs. This is composed of three components.
 Rationality (sự hợp lý, sự hợp lẽ phải), which describes the way
societies set objectives and the importance they attach to formal
systems and processes in setting objectives.
 Authority, which describes how societies set rules for vertical
order (and determines the legitimate (đúng luật; hợp pháp)
source of power).
 Identity (Tính đồng nhất; sự giống hệt; danh tính), which
describes the rules of horizontal order (what makes the citizens
stick together)
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 Institutional fabric
 The institutional fabric represents the organization,
development and allocation of resources, and comprises four
components:
 Financial capital, its formation and allocation.

 Human capital, how human skills are developed.

 Social capital, the way trust is created among members of

economic agents.
 Role of the state in the regulation and control of business
activities.

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Table 3.4 Assessing a business system

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Table 3.4 Assessing a business system 44
Table 3.4 Assessing a business system

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Table 3.5 Differences in business systems
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Table 3.5 Differences in business systems

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Table 3.5 Differences in business systems

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The impact of cultures on global
management
 Marketing and customer communications (see
Chapter 10)
 Human resources (see Chapter 14)
 Partnerships, mergers and acquisitionss (see Chapter
9)
 Multi-cultural teams
 Negotiations
 Business practices

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 Multi-cultural teams
 Given the variety of cultural heritage, communication and
decision-making processes can be blunted (làm cùn) by cultural
noise: multi-cultural teams can perform either significantly
worse or better than monocultural firms. The performance of
multi-cultural groups is a function of three factors:
1. Multiplicity of perspectives, experiences and viewpoints
increases the richness of information.
2. Possible loss of cohesion owing to miscommunication,
misunderstanding and stereotyping (sự rập khuôn).
3. The ability of team leaders to combine the variety of
perspectives and achieve group synergy.
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Table 3.6 Types of multi-cultural team

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Negotiations
 The difference between international and
domestic negotiations is the cultural backgrounds
of the parties involved.

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 Negotiation framework
 A very simple model of negotiation is provided in Figure 3.2.
 All negotiations can be reduced to a buyer and a seller
seeking to settle a transaction: an export contract or a project,
the acquisition of a company or part of it, a licensing contract
or a joint venture agreement.
 In all cases the seller implicitly (and sometimes explicitly) has a
reservation price which is the price below which the seller is
ready to walk away because there is a better alternative at
this price

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Figure 3.2 Framework for negotiation with
reference to international contracts

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 Negotiation framework
 For the buyer the situation is symmetrically similar.
 Generally, the reservation price will be modified by an
uncertainty factor because forecasts of the potential benefits
or costs are always affected by risks.
 The seller’s opening offer in the negotiation will generally be
much higher than his/her reservation price and the buyer’s
will be much lower than his/her reservation price.

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 Negotiation framework
 The negotiation then takes the form of a ritual (trình tự)
through which the negotiators will seek to find an agreement in
the bargaining range in Figure 3.2.
 If the seller is a better negotiator the price may end up close
to the buyer’s reservation price and vice versa.
 At the end, provided the agreement is within the bargaining
range, one obtains a win–win situation in which both parties
benefit.

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 Negotiation process
 The negotiation ‘ritual’ generally follows a sequential six-stage
pattern:
1 Pre-negotiation: each party prepares its negotiation strategy.
2 Climate setting: introduction of negotiators, greetings, physical
context.
3 Presentation: agenda-setting, opening statements.
4 Mid-point bargaining: substantive (thực chất) debate, request for
clarification, search for common ground, trial ‘concessions’.
5 Closure: binding concessions (nhượng bộ ràng buộc) offered,
search for agreements, final drafting/signing.
6 Post-negotiation: ratification (thông qua, phê chuẩn) of agreements
by corporate headquarters, or government bodies
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 Cultural aspect of negotiating

 International negotiations are affected by culture in ten ways:

 Goal: the negotiation conceived as a way to conclude a contract
(generally US approach) or to build a relationship (generally
oriental or Latin approach)?
 Attitude: the approach to lead to a mutual benefit (win-win) or
to have one side winning over the other (win-lose)?
 Style: formal (stick to strict rules) or informal (personal, friendly,
off-the-record talks)?
 Communication: direct (to the point, business-like, clear messages)
versus indirect (implicit messages, ambiguous gestures)?

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 Cultural aspect of negotiating

 Time: involving punctuality and firm deadlines versus flexibility

and elasticity of deadlines?
 Emotions: showing personal emotion or not during negotiations?
 Form of agreement: is it very specific and detailed or a general
framework?
 Flow process: is the negotiation to start from general principles
and proceed to specific items (deductive (diễn dịch) process) or
is it considered as collection of specific items (inductive (quy
nạp))?

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 Cultural aspect of negotiating

 Team organization: is there one team leader or consensus

among negotiators?
 Risk taking: do negotiators accept ambiguity and show
willingness to find new approaches and share information or try
to avoid revealing too much and departing from a well-known
negotiation platform?
 Influencing the behavior of the other party: whether one will
use a direct approach (either threatening, persuading or
demonstrating) or an indirect one (calling for sympathy,
referring to personal stakes)

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Figure 3.3 Negotiation attributes and cultural differences

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Table 3.7 Impact of culture on negotiating behavior: a comparison of American
and Japanese responses

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Table 3.7 Impact of culture on negotiating behavior: a comparison of American
and Japanese responses

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 Business practices

 ‘Business practices’ refers to the day-to-day interactions that

managers have with customers, suppliers, partners and
government officials.
 Three categories of practice are impacted by cultural
differences: etiquette (nghi thức, phép xã giao), relations, and
competition.
 Business etiquette: set of rituals that take place when people
communicate in business dealings.
 It includes the way people address (chào hỏi) each other, speak,
dress, eat, stand, sit, gesticulate (khoa tay múa chân), pose and
deal with time.

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 Business practices

 Relations involves the way business transactions are established,

whether personal relationships or legal/technical matters are
the prime ingredient of transactions.
 Competition indicates how competitive advantages are
obtained. In some countries, competition is perceived and
practised as a fair game in which products, services and
performances are compared and the winner ultimately
decided on.
 In other countries, different criteria such as ethnic belonging,
family connections or political considerations can determine
the winner.

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Table 3.9 Business practice differences

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Table 3.9 Business practice differences

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Activity 3.1
 Choose a country (territory): Japan, China, Korea,
Singapore, Thailand, Taiwan and present your
understandings about this country
 Geography

 Economy

 Culture

 What you should pay attention when doing business in

this country (in terms of culture)

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