Business: Cultural Competence
Cultural competence is defined as an individual’s ability to interact effectively with people of different cultures and socio-economic backgrounds. There are four components of cultural competence:
•awareness of one’s own cultural worldview
•attitude towards cultural differences
•knowledge of different cultural practices and worldviews
•cross-cultural skills
Cultural competence is the skills need by individuals of different cultures seeking to collaborate. The skills set begins with self-awareness and spans to the required scope of skills required to adapt and collaborate with individuals from another culture. A key component of cultural competence is cultural literacy. Operating successful international business requires cross-cultural literacy (an understanding of how cultural differences across and within nations can affect the way in which business is practiced). A relationship may exist between culture and the costs of doing business in a country or region.
Culture affects all business functions and the skills of cultural competence are priceless in cross-cultural business. In marketing, the variation in attitudes and values requires firms to use different marketing mixes. For example, the P&G Japanese Camay commercials and -Disneyland Paris. Meanwhile, in Human Resource management cultural competence is required for the successful evolution of managers, production and finance, attitudes toward authority and in attitudes toward change.
How can a firm use it to evaluate the attractiveness of a particular location as a place for doing business?
Cultural competence is a priceless skill for an expanding firm. Before a firm expands they need to examine the proposed particular location in order to ensure the viability of the expansion. The risk of failure due to cultural differences can be easily minimized with cultural competence. To choose a viable location for expansion a firm needs to first understand their own culture, their attitudes towards cultural differences, and the culture of the society surrounding the particular location they intend to expand into and how they need to adapt in order to fit into the new environment. In order for success, the firm needs to plan ahead. Their first task to examine their own culture, behaviors, beliefs and values. The models of cultural examination can help the firm to identify these key traits within their own organization.
The models of cultural examination that will be discussed later in this paper can help the expanding business gain a basic level of understanding about the culture of the proposed expansion. The firm can then use this information to base their research on the particular location, its viability for success and the accommodations the firm will need to make to do business in the proposed society.
Once the firm has outlined their own culture, their attitudes towards their proposed host’s culture and outlined the cultural norms of their proposed host the firm can then begin to examine the various accommodations and changes they need to make in order to fit in and thrive in the proposed new environment.
The cross-cultural research and the increased self-awareness can lead the firm to success in their new location. A major obstacle the firm may experience is their own self-reference criterion (SRC) and ethnocentrism. SRC is the unintentional preference towards the values, and beliefs of an individual’s culture. We are often/usually unaware of our own cultural conditioning. While the definition of ethnocentrism is the concept that a company or individual believes their culture has the best practices for doing things along with undertones of superiority. SRC and ethnocentrism hinder cultural literacy.
How does the comparison of culture to an iceberg fit into cultural literacy?
The comparison of culture to an iceberg comes from the analysis of frontstage (surface) culture and backstage (deep structure) culture. While surface cultural traits are apparent and easily detected backstage or deep structure cultural traits are under the surface. Similar to an iceberg only a small portion of cultural traits are apparent while the majority of culture remains under the surface. For example, surface culture includes the standard, normal, proper ways of doing things that may be evident to the observer and that insiders are willing to share with outsiders. The surface culture is obvious and quickly observed. Meanwhile, the backstage or deep culture compares to the portion of the iceberg under the surface. The larger portion of knowledge and ways of doing things that are not evident to the observer and the insiders may not be willing to share with outsiders. The underwater portion of the culture is the norms of the society and their way of life that goes unsaid and will rarely be explained to outsiders. The deep culture is the key area of focus in cultural literacy. The underlying factors that a culture basis their values and beliefs are the most complicated part of understanding the differences between cultures. The surface of the iceberg only tells a cross-cultural practitioner what to expect on the surface. However, the deep underlying culture gives depth to cultural literacy. For example, “the Canadian culture embraces poutine” is a statement about the surface culture. The underlying French Canadian history and the deeper gap between French and English Canadian cultures are often left unsaid. If a business was to only know the surface culture they would assume that the poutine was equally popular across Canada. However, the underlying history and controversial gap between the English and French areas of the country would lead to the understanding that if you are looking for the best poutine you should look towards the French province of Quebec or the area’s with high concentrations of French settlers.
What is the purpose of cultural models such as those by Kluckhohn and Strodtbeck, Hofstead, Trompenaars and so on?
Cultural models provide the framework for comparing and analysing the key factors of different cultures. Universally there are only a few categories of cultural traits that differentiate the many cultures around the world. Beginning with the cultural model of Kluckhohn and Strodtbeck the key areas of cultural differences begin to become apparent. The most popular model of cultural exploration is that of Hofstead. Hofstede’s four dimensions provide a widely used framework that helps businesses prepare for the differences in behavioral norms of different societies. Though the model of cultural examination creates a comprehensive outline of a particular culture it can only be interpreted as a basis for overly wide examination. Further research into the more narrow practices, behaviours, attitudes and beliefs of the individuals and the more specific group will be required as the cross-cultural relationship grows.
The growing global market, advances in international communication and increased mobility have created a high demand for cross-cultural understanding. The purpose of cultural models is to provide a standardized framework for the preparation of cross-cultural relationships. With so many factors to consider in international business practises, the models aim to guide cross-cultural business practitioners as they conduct primary research into the behaviours, attitudes and beliefs of different societies and cultures. The models of cultural practices aim to examine the larger group and can only define the general culture of a society. Business can use these general guidelines to establish the guiding cultural principals of a society. In international business even a general understanding of the other culture can contribute some level of understanding.
How can each framework be used to analyze culture in a way that benefits business?
Each framework of examining the cultural norms and practises of individual societies can lead the research and considerations of business engaging in cross-cultural business. With the expanding global market and advances in international communication intercultural business etiquette skills are becoming increasingly valuable to both individuals and businesses. Though there are multiple models of cultural examination the most used model in theory and practise is Hofstede’s four dimensions or indices of culture. Hofstede’s model examines a society’s individualism, power distance, uncertainty avoidance and masculinity/femininity in a structured manner that helps guide cross-cultural business practises.
Kluckhohn and Strodtbeck
Kluckhohn and Strodtbeck use a series of questions to determine classify and analyze cultural traits. Business can use the questions to analyze the cultures of their consumers and stakeholders and prepare themselves for multicultural business relationships. The
Relationship between Humans and Nature
Do people believe that their environment controls them, that they control environment, or that they are part of nature?
Time Orientations
Do people focus on past events, on the present, or on the future implications of their actions?
Beliefs about Basic Human Nature
Are people easily controlled, can they be trusted or not, do they act freely and responsibly?
Activity Orientations
Do people desire accomplishments in life, carefree lives, or spiritual and contemplative lives?
Relationships between Individuals
Do people believe that individuals or group are responsible for each person’s welfare?
Do people prefer to conduct most activities in private on in public?
Hofstede’s Four Dimensions or indices of culture
Hofstede’s value survey model uses 4 dimensions or indices of culture to examine the scope of world cultures. In business, this model is often used to guide initial cross-cultural activates due to its functional relevance. Hofstede’s model is the guiding model of cultural examination in practice and theory. The four and later five dimensions of cultural traits can guide businesses to consider the individualism/collectivism, power distance, uncertainty avoidance, masculinity/femininity and long-term orientation of a society.
Individualism & Collectivism
Individualism & Collectivism refers to the degree to which people in a country prefer to act as individuals rather than in groups and the relations between the individual and his/her fellows.
Power Distance
Power Distance measures the degree of social inequality considered normal by people and distance between individuals at different levels of hierarchy. The scale is from equal (small power distance) to extremely unequal (large power distance).
Uncertainty Avoidance
Uncertainty Avoidance measures the society’s need to avoid uncertainty about the future, their degree of preference for structured versus unstructured situations. The scale considers structured situations: have tight rules may or may not be written down (high context society?). While high uncertainty avoidance: people with more nervous energy (easy going ) rigid society, “what is different is dangerous”.
Achievement & Nurturing (Originally Masculinity & Femininity)
Achieving and Nurturing or masculinity and femininity factors of a society examine the division of roles and values within a cultural society. In a masculine cultural society, values prevail assertiveness, success, competition. Meanwhile, in a feminine cultural society values prevail quality of life, maintenance of warm personal relationships, service, care for the weak, solidarity.
After Hofstede’s original four dimensions of cultural defining traits was made popular long-term orientation was added to the defining categories of cultural examination.
Long-Term Orientation
Long term orientation was originally called Confucian dynamism. This dynamic of cultural behaviors represents such values as thrift, persistence, and traditional respect of social obligations. This aspect of cultural identity determines how organizations and individuals to adopt longer planning the horizon, with individuals ready to delay immediate gratification for greater long-term benefits.
Trommelaars’ Cultural Dimensions
Trommelaars and Hamden-Turner’s (1997) model of cultural dimensions are very similar to the work of Hofstede’s four dimensions of cultural traits. Trommelaars and Hamden-Turner (1997) classified cultures along a mix of behavioral and value patterns. The model identifies seven value orientations that examine the core differences between different cultures. Some of these seven core value differentiation can be regarded as nearly identical to Hofstede’s dimensions, others offer somewhat different perspective.
What role does religion play in understanding a culture?
Religion is entwined with culture. As one of the key determents of culture, religion is part of the traditions and practices passed from one generation to the next. Religion is often linked to the values shared within a culture. When trying to understand why people from a particular culture share certain values their religious beliefs often hold the key to their reasoning. Religion goes hand in hand with cultural traditions, values and behaviours. Often many traditions, holidays and festivities within a culture originate from a religious background. However, the underlying values from a society’s dominant culture produce the basis of the society’s expected ethical standards and behavioural norms. The values derived from the founding religion create the founding values of the society and often lead the ethical expectations of that society.
