1. Culture and its challenges
1.1 Potential costs of culture
It is difficult to translate into numbers the influence cultural factors have on the success of business ventures. However, since the early 1990s, there has been an upsurge of interest in culture, at least in research on international corporate mergers. For example, various studies conducted by the Institute for Mergers & Acquisitions and the British Institute for Management show that the integration of cultural differences has a considerable impact on whether turnover in the firms involved can be increased after the merger (cf. Schneck 2004).
The managers interviewed in these studies emphasised that, in addition to other factors, it was above all differences in the way decisions were made and communicated that were responsible for failures to achieve certain objectives (cf. 5.3.4). Different styles of management, work routines and decision-making practices placed constraints on the sought-for synergetic effects.
Modes of management and decision-making within firms are a product of specific corporate cultures. The degree of fit between these different corporate cultures is one of the key factors in the success or failure of mergers ( cf. 1.5).
1.2 Culture at a glance
So how are we to understand culture? The term culture is used in a variety of ways. A glance at the history of the word gives us insight into the diverse meanings and purposes that have attached to and are still attached to the word in different eras and contexts (cf. Baecker 2003). The word originally referred to taking care of fields and to crop farming. In other words, it was about taking care of the foundations of human existence.
In the Middle Ages, the word was used to describe reverence for religious and artistic objects. This meaning is reflected even today in the use of the term to refer to the artistic products of a culture. Culture refers to cultural goods such as dance, food, painting, literature and music.
The modern use of the term culture developed during the 18th and 19th centuries: culture became something that certain countries, nations, or tribes âpossessâ. Here, the term refers to the way social groups see reality and act within it. Culture is the framework of meaning that enables us to explain the world. Culture is like a pair of spectacles through which we interpret what is going on around us.
1.3 Just a kiss?
This becomes particularly obvious when we are dealing with the supposedly small things that we consider to be perfectly ordinary and normal.
How would you judge the following situation in France? ... You are attending a meeting with a new colleague and are waiting for the other participants to arrive. When the first of these, a female colleague, walks into the room, her male colleague stands up and greets her with a kiss on each cheek. How would you interpret this gesture?
You would probably assume that the two know each other fairly well â and have possibly done so for several years; indeed, you may think they even have more than just a working relationship. Yet this need not necessarily be the case at all. In France, giving someone a kiss on both cheeks is a standard form of greeting, whereas in Germany it is only common among friends who know each other very well.
So if we look at the French greeting through German spectacles, we will probably end up reading too much into the gestures we observe.
Things start to get interesting when we use our assumptions to respond to this form of greeting. Of course it is important to be open to the âsocial mannersâ of other cultures. But a kiss hello in one context is not a kiss hello in another context! The dangers of imitating cultural patterns can be regularly observed at the highest level in television reports about large international gatherings.
The French kiss hello does not make contact with the other personâs cheek and the two individuals donât embrace one another. It is a suggested kiss with no physical contact. When Germans imitate this kiss, they almost automatically include an embrace as well. This amounts to a failure to maintain the physical distance that is customary in France, which leads to considerable consternation in the other person. The reason for this is that, from a French perspective, the boundary of privacy has been overstepped. Viewed through German spectacles, however, this happened much earlier in the encounter, namely, when the kiss hello was preferred to a handshake.
If, in the situation described above, the German male colleague wished to âact Frenchâ and were to welcome the French female colleague with a firm embrace and a kiss on each cheek, the latter would probably feel completely taken aback by this unexpected closeness to the German colleague and would see the close embrace and the kiss on the cheek as an inappropriate violation of her personal space â and would react accordingly with surprise, rejection or marked reservation. French people respond fairly negatively to any violation of their personal space.
This negative response would, in turn, provoke bewilderment on the German side.
The different frames of meaning through which we interpret the situation lead to these highly contrasting types of reaction. In Germany, an embrace and a kiss hello are a sign of familiarity and are common only between two people who know one another well. In France, however, the kiss (without an embrace) is a normal greeting ritual and doesnât presuppose any familiarity. If the German concept is applied to the reserved French greeting and acted upon, this can be misunderstood on both sides and lead to considerable confusion.
In French culture, social interaction is regulated by many different rules of etiquette, rituals and codes. Furthermore, a French personâs privacy is considered inviolable. How else could the former French President François Mitterand have had a mistress for years without this being picked up as an issue by the tabloid newspapers which are otherwise so keen to pick up on a scandal?
Any violation of the rules mentioned above places the person who committed it in an unfavourable light and confirms (as in our example) the French assumption that Germans are not âculturedâ and are basically âbarbariansâ.
The image of the French in Germany is â apart from an acknowledgement of their savoir-vivre â heavily permeated with the notion of the âarrogant bourgeoisâ. When the French side responds with distress, for example, to what was intended as a well-meaning welcoming kiss, this German interpretation of âthe French characterâ is confirmed.
1.4 Culture as a framework for interpreting the world
In the example we just looked at, German and French culture influence both the way the situation is interpreted as well as the meaning ascribed to actions and gestures. The kiss hello has different meanings in Germany and in France and implies different judgements, actions and relationships between the individuals involved. All members of a culture are familiar with their own interpretive framework. It is natural to think and act according to these patterns.
This ânaturalnessâ (or âcommon senseâ) is necessary for us to live and work together. It makes communication easier, helps us to avoid wasting energy over minor irritations in closer interactions and allows us to get things done in a complex world. Consider how tiring it would be to have to explain to our colleague over and over again how we in Germany or in France should greet one another? Our culture defines our reality and shapes our view of the world and of our interactions. But it also shapes the way we do business and the things we strive to achieve.
1.5 A key German value: âqualityâ
The hallmarks of German car manufacturers are quality and technical perfection. âQualityâ is the key value of the German automotive industry, which looks back on a long tradition and is famous throughout the world for its high standards and technical innovations. It is shaped substantially by German culture, in which guaranteeing the quality of a product is considered the foundation for economic success. âQualityâ here is understood in terms of technical perfection and master craftsmanship.
By contrast, US car producers have different key values. When Henry Ford introduced the first assembly line to his automobile production, the idea behind it was not to guarantee any near-perfect standard of quality. He introduced the assembly line to produce automobiles in a cheap and standardised way. The supreme value was the optimum use of available resources. Of course it was also important to guarantee quality and safety â but not to the same extent as in Germany.
These different fundamental values in German and US automobile production still largely determine the way things are done today. When the key values of different business partners are not in alignment, mistaken interpretations and awkwardness arise in joint decision-making â because the key values of a culture are used as a basis for decision-making. The weight we attach to information and the way we select the options that appear attractive to us when making decisions depends upon the criteria we use to judge them. These in turn are based upon the cultural framework of meaning and interpretation and the norms and values that determine what counts as desirable and worth striving for.
All too often, however, cultural differences of this kind are not taken into account, as the capacity for dealing with them efficiently and productively does not exist. Yet today, cultural competence is important at every level of the corporate structure: for decision-makers and managers tasked with determining strategy just as for project and team leaders or people in positions of responsibility in Human Resources. Consultants, trainers and coaches also need to be aware of the intercultural issue and to have a robust model that makes it possible to handle cultural differences consistently and effectively â a model that, when put ...