Cross Culture – East & West How to b ridge the gap and use cultural diversity to your advantage Anand Subramaniam

“ Culture is more often a source of conflict than of synergy. Cultural differences are a nuisance at best and often a disaster. ” - Dr. Geert Hofstede

“ Culture is more often a source of conflict than of synergy. Cultural differences are a nuisance at best and often a disaster. ”

- Dr. Geert Hofstede

Highlights Culture – Overview Asia – Prediction Asian Culture – In General Eastern and Western World Asian Culture – Japan & China

Culture – Overview

Asia – Prediction

Asian Culture – In General

Eastern and Western World

Asian Culture – Japan & China

Culture - Overview

Culture - Many Definitions … Culture is learned, we are not born with a culture; we are born into a culture Culture is dynamic and interactive It is subjective and attribute a meaning to what we see Objective or tangible aspects of culture include tools, roads, television programming, architecture, and other physical artifacts Subjective or intangible aspects of culture include norms, values, ideas, customs, and other meaningful symbols

Culture is learned, we are not born with a culture; we are born into a culture

Culture is dynamic and interactive

It is subjective and attribute a meaning to what we see

Objective or tangible aspects of culture include tools, roads, television programming, architecture, and other physical artifacts

Subjective or intangible aspects of culture include norms, values, ideas, customs, and other meaningful symbols

Cultural Stereotyping & Global Manager !! The Humility of the FRENCH The Generosity of the DUTCH The Candor of the JAPANESE The Charm of the GERMAN The Punctuality of the SPANIARD The Compassion of the ENGLISH The Team Spirit of the ARAB The Gentle Tact of the AUSTRALIAN The Efficiency of the RUSSIAN The Discipline of the ITALIAN The Patience and Language Ability of the AMERICAN

What happened to Asia…if !! Heaven is.. where the cooks are French, the mechanics are Germans, the policemen are English, the lovers are Italians, and it is all organised by the Swiss Hell is.. where the policemen are Germans, the mechanics are French, the cooks are English, the lovers are Swiss, and it is all organised by the Italians

Heaven is..

where the

cooks are French,

the mechanics are Germans,

the policemen are English,

the lovers are Italians, and it is all organised by the Swiss

There is one in Asia too… “ When in Rome- do as the Romans do” “ Ru xiang sui su” ( Chinese proverb : Enter village, follow customs)

“ When in Rome- do as the Romans do”

“ Ru xiang sui su”

( Chinese proverb : Enter village, follow customs)

Asia - Prediction

Asian Economy in 2015… 2003 US Japan Germany France China UK Italy Brazil Canada Spain South Korea India 1 2 3 4 6 5 7 8 9 10 11 12 2015 USD trillions 9.9 4.5 2.3 1.6 1.4 1.5 1.3 0.88 0.80 0.68 0.66 0.59 USD trillions US 1 14.5 Japan 2 5.7 China 3 3.1 Germany 4 2.8 France 6 2.1 UK 5 2.1 Italy 7 1.6 Brazil 8 1.4 South Korea 9 1.2 India 10 1.1

Asian - Economic Prediction Asia could (hypothetically) have 5 of the 10 biggest economies in the globe by 2050 (China, India, Japan, combined Korea and Indonesia) China GDP (US$) is projected to overtake UK and Germany within the decade and Japan and US by 2045 India’s GDP is projected to overtake Italy, France, Germany and Japan in 3 decades. Most Asian economies will remain among the fastest growing in the world. Annual average GDP growth in the region in 2006-2020 will be 4.9%. Foresight 2020 Economic, industry and corporate trends. Economist Intelligence Unit 2006

Asia could (hypothetically) have 5 of the 10 biggest economies in the globe by 2050 (China, India, Japan, combined Korea and Indonesia)

China GDP (US$) is projected to overtake UK and Germany within the decade and Japan and US by 2045

India’s GDP is projected to overtake Italy, France, Germany and Japan in 3 decades.

Most Asian economies will remain among the fastest growing in the world. Annual average GDP growth in the region in 2006-2020 will be 4.9%.

Did you know… “ The 19th Century belonged to Europe, the 20th to America and the 21st will be the Asian century” Goldman Sach’s BRICS study predicts that by the year 2050, three of the four largest economies in the world will be Asian: China, USA, India and Japan (in that order) and no European economy will be among the top four.

“ The 19th Century belonged to Europe,

the 20th to America and

the 21st will be the Asian century”

Goldman Sach’s BRICS study predicts that by the year 2050, three of the four largest economies in the world will be Asian: China, USA, India and Japan (in that order) and no European economy will be among the top four.

Why Asia? Asian market growth = emergence of world’s largest new middle class (half billion !!) Asia as a source of highly educated, skilled labor (at low cost up to now) Result: Asia has special place in business globalisation (supply chains) Result: Asia is becoming a world incubator for new high-tech businesses

Asian market growth = emergence of world’s largest new middle class (half billion !!)

Asia as a source of highly educated, skilled labor (at low cost up to now)

Result: Asia has special place in business globalisation (supply chains)

Result: Asia is becoming a world incubator for new high-tech businesses

Change in Working-age Population 1950-2050 Source: UN Population Division - 100% 0% 100% 200% 300% 400% 500% - Population Growth Rate 1950 – 2010 2010-2050 Source: UN Population Division - 100% 0% 100% 200% 300% 400% 500% Indonesia Malaysia Philippines Singapore Thailand Vietnam SE Asia Population Growth Rate

Asian Culture – In General

What many Asian Culture have in common.. Confucianism Manner, etiquette Loyalty / respect parents Benevolence towards in-group

Confucianism

Manner, etiquette

Loyalty / respect parents

Benevolence towards in-group

Where Asian Culture Differs… Role behavior Power and status How rules are applied Expression of individuality

Role behavior

Power and status

How rules are applied

Expression of individuality

Result of doing business in Asia Meaning of contracts Giving and losing “Face” Communication and diplomacy Bottle-necks and risk-avoiding

Meaning of contracts

Giving and losing “Face”

Communication and diplomacy

Bottle-necks and risk-avoiding

Clinching a deal in Asia.. To succeed in Asian cultures, it is critical to notice nonverbal signs and body language. Having no solution is not a problem Proposing one solution may cause a relational conflict Offering more than one solution is an intellectual exercise, to be shared with the other party

To succeed in Asian cultures, it is critical to notice nonverbal signs and body language.

Having no solution is not a problem

Proposing one solution may cause a relational conflict

Offering more than one solution is an intellectual exercise, to be shared with the other party

Greetings In most Asian countries – a gentle handshake Never shake hands with a woman in the some parts of India Staring at someone is intimidating and disrespectful especially Japan Slight bows are appreciated in Asia when presenting business cards

In most Asian countries – a gentle handshake

Never shake hands with a woman in the some parts of India

Staring at someone is intimidating and disrespectful especially Japan

Slight bows are appreciated in Asia when presenting business cards

Touching Don’t Touch in Japan Hold Middle Ground in China and India

Don’t Touch in Japan

Hold Middle Ground in China and India

Eyes, Hands & Feet Eyes: “Closed” in Japan indicates concentration Hands on hip – aggressiveness in Asia along with finger pointing Feet: Remove shoes in Japan, India, Asia in general

Eyes: “Closed” in Japan indicates concentration

Hands on hip – aggressiveness in Asia along with finger pointing

Feet: Remove shoes in Japan, India, Asia in general

Be aware of your surroundings… Western Cultures - “Go for your Life”, “God helps those who help themselves”, “If at first you don’t succeed, try again”, “Winner takes all” Easter Culture - “Don’t rock the boat”, “Go with the flow”, “You take what life gives you”, “We’re in this together”, “We work to live”

Western Cultures - “Go for your Life”, “God helps those who help themselves”, “If at first you don’t succeed, try again”, “Winner takes all”

Easter Culture - “Don’t rock the boat”, “Go with the flow”, “You take what life gives you”, “We’re in this together”, “We work to live”

Business Card In any business travel, arrange to have business cards printed in English and the local language on the other side. Present your card before asking for others’ cards Hold card with both hands so they can read your name not the other way around !! If presenting yourself to more than one person, be sure to start at highest rank downwards. It is disrespectful to present yourself to lower ranked people before higher rank Never put cards in wallet or pocket and considered impolite or ignorant to look at the card for too long !! Always bow / nod when handing and receiving business cards

In any business travel, arrange to have business cards printed in English and the local language on the other side.

Present your card before asking for others’ cards

Hold card with both hands so they can read your name not the other way around !!

If presenting yourself to more than one person, be sure to start at highest rank downwards. It is disrespectful to present yourself to lower ranked people before higher rank

Never put cards in wallet or pocket and considered impolite or ignorant to look at the card for too long !!

Always bow / nod when handing and receiving business cards

Eastern and Western World

Share of the World GDP Source: Reaching for a Renaissance The Economist, March 29, 2007 from IMF

World’s Most Competitive Countries Source: Business Week, May 14 2007 IMD World Competitiveness Yearbook May 10, 2007 41 9 20 United Kingdom 18 22 19 New Zealand 68 13 18 Taiwan (ROC) 6 4 17 Finland 35 16 16 Germany 82 59 15 China (PRC) 11 21 14 Ireland 19 10 13 Norway 26 15 12 Australia 3 17 11 Austria 10 11 10 Canada 7 2 9 Sweden 15 6 8 Netherlands 4 8 7 Iceland 2 5 6 Switzerland 1 1 5 Denmark 12 25 4 Luxembourg 63 12 3 Hong Kong SAR 53 3 2 Singapore 23 7 1 United States Happiness Network Readiness Competitiveness Country

Differences - East and West East Internal self control Communal Hierarchy Modesty Harmony Saving face Silence oriented Time is life Respect for status Respect elders Truth oriented Nosy and curious Hypocritical Sharing Accept Long term oriented Indirect Interdependent Being West External control Individual Equality Achievement Winning Pride Noise oriented Time is money Respect for results Respect competence Fact oriented Value Privacy Open Selfish Control Short term oriented Direct Independent Doing

East

Internal self control

Communal

Hierarchy

Modesty

Harmony

Saving face

Silence oriented

Time is life

Respect for status

Respect elders

Truth oriented

Nosy and curious

Hypocritical

Sharing

Accept

Long term oriented

Indirect

Interdependent

Being

West

External control

Individual

Equality

Achievement

Winning

Pride

Noise oriented

Time is money

Respect for results

Respect competence

Fact oriented

Value Privacy

Open

Selfish

Control

Short term oriented

Direct

Independent

Doing

Asia - Ownership & Control Who owns a company in Asia is more important than what it actually does More than 50% of all Asian public listed companies are owned by one single shareholder who is a patron of a family The importance of family control is often more important than providing high yields to shareholders

Who owns a company in Asia is more important than what it actually does

More than 50% of all Asian public listed companies are owned by one single shareholder who is a patron of a family

The importance of family control is often more important than providing high yields to shareholders

Owner / Entrepreneur - Cultural Differences In Hong Kong When someone starts a new business venture, the entire family works around the clock to make it a success In India The administrative system will put up monumental red tape In US Friends put up their money for the owner In UK Everyone tries to discourage the owner by explaining why it is likely to fail and then scratch his car Owner / Culture Differences In Sri Lanka Friends will ask the owner to hire their sons & nephews

Asian vs. Western Family Controlled Firm Asian Family Firm To hold the family together and family infighting exists To give family members a job For the family’s prestige and honor To honor the ancestral founders of the firm Loyalty is valued over professional and bureaucratic status Western Family Firm Family loyalties are weak Communications are bureaucratised Outside directors or close associates of the controlling family Succession challenges Unemotional - determined by impersonal and economic criteria

Asian Family Firm

To hold the family together and family infighting exists

To give family members a job

For the family’s prestige and honor

To honor the ancestral founders of the firm

Loyalty is valued over professional and bureaucratic status

Asian vs. Western - Values Asian Group Trust Compromise Flexible Western Individualistic Stick to rules Confront Reasoning

Asian vs. Western - Action Asian Long term Collaborative Customer focused Western Short term Control “ Show me the money”

Asian vs. Western – Management Style Asian Relationship Flexible Adaptive Understanding Western Rational Structured Directive Doing

Asian vs. Western – Organisation Asian Informal “ Jack of All Trades” Integrated Co-operative Western Formal “ Master of None” Fragmented Competitive

Build Bridges & Trust Be culture savvy Reduce misperceptions Stereotype vs. Generalisations Reduce communication errors Build trust by communicating plainly Exhibit value out of your performance Respect and value differences

Be culture savvy

Reduce misperceptions

Stereotype vs. Generalisations

Reduce communication errors

Build trust by communicating plainly

Exhibit value out of your performance

Respect and value differences

Asian Culture – Japan & China

Japan Dress code much more formal and address others with surnames Formality is required especially to their bosses and elders To be late at appointment time is regarded to be very rude Like to talk about baseball and do not talk or ask so much about private life Modesty is valued Uncertainty avoidance level is quite high

Dress code much more formal and address others with surnames

Formality is required especially to their bosses and elders

To be late at appointment time is regarded to be very rude

Like to talk about baseball and do not talk or ask so much about private life

Modesty is valued

Uncertainty avoidance level is quite high

Japan (Contd.) Avoid pointing because it is viewed as very rude It is offensive to blow your nose in public Be cautious of facial expressions, smiling can either mean joy, sadness, anger or embarrassment The Japanese are not uncomfortable with silence. You should be patient and give them their silence. Do not try to fill in the void The Japanese see guests all the way to exits, and wait until they are out of sight In the West, “the customer is king,” but in Japan, “the customer is God”

Avoid pointing because it is viewed as very rude

It is offensive to blow your nose in public

Be cautious of facial expressions, smiling can either mean joy, sadness, anger or embarrassment

The Japanese are not uncomfortable with silence. You should be patient and give them their silence. Do not try to fill in the void

The Japanese see guests all the way to exits, and wait until they are out of sight

In the West, “the customer is king,” but in Japan, “the customer is God”

China D ress code is formal when dealing with foreigners Business people are addressed by their titles Surnames representing higher formality in addressing others Punctuality is essential for the subordinates but not for the boss Before deeply talking about business, Chinese appreciate to make friends with each other and to deal with business mostly during dinner Power distance is extremely high Differences in personal manners and styles of communication Place importance to positions and titles of people

D ress code is formal when dealing with foreigners

Business people are addressed by their titles

Surnames representing higher formality in addressing others

Punctuality is essential for the subordinates but not for the boss

Before deeply talking about business, Chinese appreciate to make friends with each other and to deal with business mostly during dinner

Power distance is extremely high

Differences in personal manners and styles of communication

Place importance to positions and titles of people

China (Contd.) Bad news may need to be delivered through an intermediary When you make a phone call to China, state your company name before your own name. Be attentive to the formality required when emailing Instead saying “NO” say something like “difficult or inconvenient.” Be extremely respectful based on the status of another. If a colleague invites you to dinner, be careful that you don’t entertain at a higher level when you return the favor. Don’t expect to be challenged or even influenced by someone of a lower rank than you. (loss of - face, Guanxi, harmony)

Bad news may need to be delivered through an intermediary

When you make a phone call to China, state your company name before your own name. Be attentive to the formality required when emailing

Instead saying “NO” say something like “difficult or inconvenient.”

Be extremely respectful based on the status of another. If a colleague invites you to dinner, be careful that you don’t entertain at a higher level when you return the favor.

Don’t expect to be challenged or even influenced by someone of a lower rank than you. (loss of - face, Guanxi, harmony)

“ Eastern and Western management (business culture) is for 95% the same, and differs in every important aspect.” - Takeo Fujisawa (Honda)

“ Eastern and Western management (business culture) is for 95% the same, and differs in every important aspect.”

- Takeo Fujisawa (Honda)

Good Luck http://www.linkedin.com/in/anandsubramaniam

Good Luck

http://www.linkedin.com/in/anandsubramaniam