Going Abroad 2014 - Waldemar Pfoertsch - ebook

Going Abroad 2014 ebook

Waldemar Pfoertsch

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Going abroad - How to understand foreign markets and do business around the globe Understanding foreign culture is essential for all business people around globe. With this publication, managers and students who potentially want or need to do business in foreign countries are provided with a “how to do manual”. This book actually encourages new managers to prepare for this step and make them more sensible about potential pitfalls and lost opportunities. The reader will learn about: How to understand your own culture and how to behave when dealing with others How to make things happen abroad How to sell to foreigners How to win a bargain How to understand each other in international teams How to get along with the bosses at home How to get the best performance out of your employees How to teach in a foreign Country What it takes to be a winner Here the reader can get guidelines for Business and Social Eti-quette. He can learn a lot about international ways of doing business, and understand Business and Social Etiquette in various countries. This publication gives also valuable advice, how deal with the company headquarters, when you are abroad and how to balance your social life in the foreign environment. It is written from a global perspective and answers questions, which many have learned the hard way. After reading this small booklet the reader will have a much easier way to participate on the rapid growth of international business.

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Going abroad

Going abroad

How to understand foreign markets and do business around the globe

Waldemar Pförtsch (Ed.)

With 10 Figures and 4 Tables

Editor

Waldemar Pfoertsch

Professor International Business

Pforzheim University

Tiefenbronnerstrasse 65

75175 Pforzheim Germany

[email protected]

Copy Editors

Carla Melo

Karin Herrlin

Michaela Mendes

Chief Editor

Yvonne Krepper

Marion Park

Graphic design and layout

Juliane Rafaela Zierbus

ISBN 978-3-7375-2877-1

Catalog-in-Publication Data

This work is subject to copyright. All rights are reserved, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilm or in any other media. Duplications of the publication or parts thereof is permitted only under the provision of the German copyright law from September 1063, in its current version, and permission for use must always be obtained from the editor. Violations are liable for prosecution under the German Copyright Law.

© Waldemar Pfoertsch www.pfoertsch.com

The use of general descriptive names, registered names, trademarks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use.

Cover design: Anna Pfoertsch, Wellesley, MA, USA.

Preface

Understanding foreign culture is essential for all business people around globe. With this publication, managers and students who potentially want or need to do business in foreign countries are provided with a “how to do manual”. This book actually encourages new managers to prepare for this step and make them more sensible about potential pitfalls and lost opportunities.

The reader will learn about:

How to understand your own culture and how to behave when dealing with others

How to make things happen abroad

How to sell to foreigners

How to win a bargain

How to understand each other in international teams

How to get along with the bosses at home

How to get the best performance out of your employees

How to teach in a foreign Country

What it takes to be a winner

Here the reader can get guidelines for Business and Social Etiquette. He can learn a lot about international ways of doing business, and understand Business and Social Etiquette in various countries.

This publication gives also valuable advice, how deal with the company headquarters, when you are abroad and how to balance your social life in the foreign environment. It is written from a global perspective and answers questions, which many have learned the hard way. After reading this small booklet the reader will have a much easier way to participate on the rapid growth of international business.

Waldemar Pförtsch Stuttgart/Shanghai 2014

Table of Contents

Preface

Introduction

International Ways of Doing Business

How to understand your own culture and how to behave when dealing with others

Getting Started

How to make things happen abroad?

Marketing

How to sell to foreigners?

Negotiation

How to win a bargain?

Communication across cultural and language barriers

How to understand each other? Melanie Reithmeier, Nina Schaffarczyk, Susanne Brückner

Managing People Abroad

How do I get the best performance out of my employees?

Going International, Transferring Skills and Training

How to teach in a foreign country?

Business and Social Etiquette

Guidelines to business and social etiquette

Getting things done

Making the machinery work

Dealing with the Headquarters

How to get along with the bosses at home

Managing your personal and family life

Guidelines to work life balance

The Road to Success

What does it take to be a winner?

About authors and the editor

The editor

Introduction

Waldemar Pförtsch

One of the most significant trends in the economic world in the past decades has been the rapid growth of international business. Markets have become the battle ground for companies from all over the world, and we talk today about the globally interconnected world. Markets have become truly global for consumer and business-to-business goods, many services and financial instruments of all types. This has not only created opportunities, but also expanded the risk and vulnerability of local markets. The importance of understanding the international business environment and the difference that might exist in the business environment in the domestic and international contexts becomes an important asset for small and large companies in all places of the world.

As everybody knows, we live in economic difficult times and may enter into an entirely new era, an age of increasingly frequent and intense periods of turbulence in the global economy. The complete set-up of international relationships is changing on a country and company level. The economic development of the 80s, which led to the establishment of the “Triade”, consisting of the developed nations of the USA, Europe, and Japan have metamorphosed to a kind of “constellation”, including BRIC countries (Brazil, Russia, India, China) and the Next Eleven (N-11) a group of developing countries with great prospects for the future. They consist of Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, Turkey, South Korea, and Vietnam.

This “constellation of markets” became the target markets for product and service offerings for companies from around the world. The companies which understand the various market conditions and players will be the ones which will prosper.

Economic globalization began 30 years ago, but it was not widely recognized until recently in the past 15 years. The Organization of Economic Cooperation and Development (OECD) defined economic globalization as an ongoing process. In this process, economic activities, markets, technology and forms of communication are with increasing global characteristics, while the national ones are in decrease.

It is an unstoppable trend for the development of the world economy. However, for each country, it is also a double-edged sword, both an opportunity and a challenge at the same time. In past years, overseas investments and enterprise mergers and acquisitions, which benefit companies in trading, cash flow, technology transfer or simply cost reduction, have become the important strategies for enterprises’ developments.

“Going abroad” is a trend, a need and a privilege, no matter whether the company is focusing on steady growth or on an ambitious expansion. However ‘going abroad’ is not as simple as stepping out of the house and greeting the neighbors. There is much more to be considered and to prepare before and after the decision is taken.

The book is a treasure book which comprehensively covers every stage and every detail required for going abroad, while it is also a simple handbook, which can be referred to easily once there is a need.

The reader will learn from many examples and descriptions about international business activities. Many companies and places are mentioned. You will even understand why Enzo Ferrari did not sell this company to Ford, and what the intercultural mishaps were when US centric business men wanted to be successful in Europe and vice versa.

In twelve chapters the “how to do business abroad” is described in a very illustrative way. The reader will experience difficult and funny situations and can learn for his own business developments abroad. There are hints and rules to be learned. It is your choice to follow them, but many managers who did are in a much comfortable position today than before.

This book is based on the research of many scholars put together for practical use in the international battleground. It is based on Lennie Copeland’s and Lewis Grigg’s book “Going International”, which was published by Plume Printing in the year 1985 when many US companies were expanding internationally. Now it is the task of many more companies from many more countries, and the practical and theoretical experience of other researchers and practitioners were put together by international business students of Pforzheim University to develop the basis for business around the globe.

Of course not all subjects could be covered, but this overview will lay the ground work for further understanding of doing business abroad.

International Ways of Doing Business

How to understand your own culture and how to behave when dealing with others

Mirja Wagner, Géraldine Quelle, Aline Reichert

Abstract   Culture has many meanings. Culture can be a way of life for someone, it can be a person’s background, or it can simply be many different nationalities coming together as one community. For companies on their way to success in international markets, it is important to have a solid understanding of the general rules of a culture in order to become a trusted commercial partner. Managers who wish to be an effective player in the international arena must learn how to behave abroad as well as in the company’s home country.  To start off, the reader will be given some explanations on the phenomenon of interactions between people in general and especially on doing business between different cultures.

1 What does culture mean?

1.1 Definition of culture

The word “culture” is a concept, which we deal with unconsciously every single day, and it can be described or interpreted in many different ways. The media is filled with articles and books including the word “culture”, but what does it mean exactly and how can it be defined? The authors Robert Grosse and Duane Kujawa give the following definition in their book “International Business”. “Culture can signify various patterns of behavior, values or beliefs, which are the characteristics of a specific community. A community can be a town, a city, a region, a country or even a company.”

In comparison, Terpstra and David propose this definition: “Culture is a learned, shared, compelling and interrelated set of symbols, whose meaning provides a set of orientations for members of a society. These orientations taken together provide solutions to problems that all societies must solve if they are to remain viable.”

There are several elements that are especially important in order to understand the relationship of cultural matters and global management.

Culture is learned: It is not innate—people are born into cultures and during childhood, adapt and learn the rules and values of their culture. This also means that it is possible to adapt to a new and different culture.

Culture is shared: Members of a particular group share various similarities, which are typical for their culture.

Culture is compelling: The individuals belonging to a certain group are often not aware of their specific behavior resulting from the influence of their culture.

Culture is interrelated: This means that it is important to study a culture as a whole entity. Specific elements should not be isolated, because they have to be understood in the complete context.

Culture provides orientation: A particular group often acts in a similar way to an upcoming problem or situation. Examining a culture can help predict the manner in which group members might react.

1.2 Understanding culture

“The first step to understanding another culture is, understanding your own”. This is a very important statement made by Lennie Copeland and Lewis Griggs in their book “Going International”, which was published by Plume Printing in the year 1985 when many US companies were expanding internationally.

Many aspects, explanations and examples given in this chapter originate from Copeland and Grigg’s publication, but they can also be identified in many other publications. Culture does not only exist in a region or a country, it can also be a significant part of a company. A company can have its own “corporate culture”. Two international corporations, Proctor & Gamble and IBM, are cited by Copeland and Griggs as companies whose cultures are defined by “the American way of doing business”.

If we take the “American way” as an example, we can identify strong and particular attitudes and behaviors that are common at work. Certain things are silently expected, others are declined, forming a special kind of “American glasses” through which the world is viewed, interpreted and evaluated. Copeland and Griggs see a fundamental problem in wearing “cultural glasses”. As travelers and visitors to other nations, people are often not aware of the frame of reference they are carrying along, whether it is American or some other nationality. When confronted by people who eat, dress, communicate and generally act in unfamiliar ways, travelers have difficulties understanding differences and are not aware of influences from their own values and behaviors.

According to Copeland and Griggs, “cultures are not right or wrong, better or worse, just different”. Cultures are shaped by their own logic, which makes it hard for foreigners to understand and make sense of it. Anthropologists explain this phenomenon to have developed from the different climates, terrains or resources that peoples had to adapt to in the past. Just like animals, “mankind evolved diverse solutions to life’s problems”.

1.3 Development of culture

Two important factors that influence the way a culture develops are geography and history. The following examples demonstrate what impact history had on the United States of America and on Germany.

In America, the pioneer spirit permeates its culture.  The philosophy of starting out with nothing and then being able to achieve anything in life, if one just works hard enough, is very typically American. Children grow up with a strong sense of pride for their country, being taught that America is a unique and special place, and that they are lucky to be growing up in such a great nation. Up until recently, each school day started out with a recitation of the “pledge of allegiance” and the national anthem is played at the beginning of every sports event. In the attitudes and ways of doing business, Americans are guided by this strong sense of patriotism.

On the other hand, Germans of the current generation never learned to be proud of their country. Although National Socialism and World War II are history, consequences can still be felt. Very few Germans exhibit national pride, and hanging a national flag out of their window, something very common in America, is rarely done. In contrast to American pride, Germans are very careful about what they say or do concerning nationalism. It is no surprise that in business and in private life, the average German does not tend to take big risks in general, preferring security and predictability.

1.4 Problems in culture

1.4.1 Cross-cultural misperception

Every national group sees the world in a different way. Perception is a process by which each individual selects, organizes, and evaluates stimuli from the external environment to provide meaningful experiences for him or herself. Perceptual patterns are neither innate nor absolute. They are selective, learned, culturally determined, consistent, and inaccurate. Perception is selective because there are too many stimuli in the environment for you to observe at one time. Therefore you screen out the overload and allow only selected information through your perceptual screen to your conscious mind. Perceptual patterns are learned; we are not born with a certain way to see the world, but our experience teaches us how to perceive the world.

Perception is also culturally determined because one’s cultural background influences the way of seeing the world in a certain way; and perception tends to remain constant. Once you see something in a particular way, you continue to see it that way. Your interests, values, and culture act as filters and lead you to distort, block and even create what you choose to see and hear. You perceive what you expect to perceive according to what you have been trained to see, according to your cultural map. For example, read the following sentence:

“Finished files are the result of years of scientific study combined with the experience of years.”

If asked to count the number of F’s in the sentence, most non-native speakers see all six F’s whereas many native speakers only see three of them. They do not see the F’s in the word of because it is not an important word in understanding the sentence. Usually we selectively see those words that are important according to our cultural conditioning (in this case, our linguistic conditioning).

1.4.2 Cross-cultural misinterpretation

Interpretation happens when an individual gives meaning to observations and their relationships; it is the process of making sense out of perceptions. Interpretation organizes your experience to guide your behavior. Your experience helps you to make assumptions about the things you see so you will not have to rediscover meanings each time you encounter similar situations. For example, you make assumptions about how doors work, based on your experience of entering and leaving rooms; that is why you do not have to relearn each time how and that you have to open a door. Consistent patterns of interpretation like the one mentioned help you to act appropriately and quickly every single day.

Since there are more stimuli coming down on you than you can keep distinct, you only perceive those images that may be meaningful. As said before, you group perceived images into familiar categories that help you to simplify your environment and become the basis for your interpretations. For example, when a driver approaches an intersection, he or she might not see what is happening on the sidewalk, but will definitely notice whether the traffic light is red or green (selective perception). If the light is red, he or she automatically places it in the category of all red traffic signs (categorization) and will stop like prior times (behavior based on interpretation).

Categorization helps you to distinguish what is important in your environment and to behave accordingly; it becomes ineffective when we place people and things in the wrong group. Cross-cultural miss-categorization happens when someone uses his home country categories to make sense of foreign situations. For example, a Korean businessman entered a client’s office in Stockholm and encountered a woman behind the desk. Assuming that she was a secretary, he announced that he wanted to see Mr. Silferbrand. The woman responded by saying that the secretary would be happy to help him. The Korean became confused. In assuming that most women are secretaries rather than managers, he had misinterpreted the situation and acted inappropriately. His category makes sense because most women in Korean offices are secretaries but it proved counterproductive since this particular Swedish woman was not a secretary.

Stereotyping involves a form of categorization that organizes your experience and guides your behavior toward ethnic and national groups. Stereotypes never describe individual behavior; rather they describe the behavioral norm for members of a particular group. For example the stereotype of German businessmen is to be very punctual, busy and ambitious. Stereotypes, like other forms of categories, can be helpful or harmful depending on how one uses them. Effective stereotyping allows people to understand and act appropriately in new situations. But you should always keep in mind that stereotypes describe a group norm and not the characteristics of a specific individual, that they only describe a group and do not evaluate it and that you can and should modify them, based on further observation and experience with the present people and situations.

The problem with stereotyping is that it often leads to prejudice, a pre-judging of people you actually do not even know. In contrast to stereotypes, prejudices are based on emotions and easily translate into feelings of uneasiness and fear.

Even more dangerous than stereotyping and prejudice, certain groups of people feel that they are superior to others. In this state, others are seen as having positions below one’s own and that gives rise to making judgments about what is right and wrong according to one’s own values. This is called ethnocentrism. This attitude inevitably leads to conflicts with people from other countries, as they will probably think the same about their own culture.

1.4.2.1 Sources of misinterpretation

Misinterpretation can be caused by inaccurate perceptions of a person or situation that arise when what actually exists is not seen. It can be caused by inaccurate interpretation of what is seen; that is, by using my meanings to make sense out of reality. For example if a German (businessman) greets his American partner with “Mister” although they have seen each other already, the American categorizes the German as a businessman and interprets his formal behavior to mean that he does not like the American or is uninterested in developing a closer relationship because North Americans maintain formal behavior after the first few meetings only when they dislike or distrust the associates so treated. Culture strongly influences, and in many cases determines, your interpretations. Both the categories and the meanings you attach to them are based on your cultural background. Sources of cross-cultural misinterpretation include subconscious cultural “blinders”, a lack of cultural self-awareness, projected similarity, and parochialism (narrow-mindedness).

1.4.3 Subconscious cultural blinders

Because most interpretation goes on at subconscious level, you lack awareness of the assumptions you make and their cultural basis. Your home culture reality never forces you to examine your assumptions or the extent to which they are culturally biased, because you share your cultural assumptions with most citizens of your country. All you know is that things do not work as smoothly or logically when you work outside your own culture as when you work with people more similar to yourself. For example, a Canadian conducting business in Kuwait was very surprised when his meeting with a high-ranking official was not held in a closed office and was constantly interrupted. Since the Canadian-based cultural assumption is that important people have large offices and do not get interrupted, he came to the conclusion that this officer was neither a high ranking one nor interested in conducting the business, which might not have been the truth.

1.4.4 Lack of cultural self-awareness

Although you think that the major obstacle in international business is to understand the foreigner, the greater difficulty involves becoming aware of your own cultural conditioning. As anthropologist Edward Hall has explained, “What is known least well, and is therefore in the poorest position to be studied, is what is closest to oneself.” You are generally least aware of your own cultural characteristics and are quite surprised when you hear foreigners’ descriptions of you. For example, many Germans are surprised to discover that they are seen by foreigners as well-educated, punctual, disciplined… A Newsweek survey reported the characteristics most and least frequently associated with Americans:

Another very revealing way to understand the norms and values of a culture involves listening to common sayings and proverbs. They tell you what a society recommends and what it avoids. For example does the American proverb Early to bed, early to rise, makes one healthy, wealthy and wise indicate the values of diligence and work ethic whereas the proverb There’s more than one way to skin a cat indicates originality and determination.

To the extent that you can begin to see yourself clearly through the eyes of foreigners, you can begin to modify your behavior, emphasizing your most appropriate and effective characteristics and minimizing those least helpful. To the extent that you are culturally self-aware, you can begin to predict the effect your behavior will have on others.

1.4.5 Projected similarity

Projected similarity refers to the assumption that people are more similar to you than they actually are, or that a situation is more similar to yours when in fact it is not. Projected similarity particularly handicaps people in cross-cultural situations. For example, you assume that people from the orient who drink Coca-Cola and wear Levi’s jeans are more similar to you, Western people, than they actually are. When you act based on this assumed similarity, you often find that you act inappropriately and thus ineffectively. At the base of projected similarity is a subconscious parochialism (narrow-minded behavior). You automatically assume that there is only one way to be – your way. Therefore people often fall into an illusion of understanding while being unaware of their misunderstandings. “I understand you perfectly but you don’t understand me” is an expression typical for such a situation. The other possibility is that all communicating parties may wonder later why other parties do not live up to the “agreement” they had reached.

One of the best exercises for developing empathy and reducing parochialism and projected similarity is role reversal. For example, when dealing with a foreign businessman try to imagine the type of family he comes from, the number of siblings he has, the social and economic conditions he grew up with, his goals in working for his organization, his life goals and so on. Asking these questions forces you to see the other person as he or she really is, and not as a mere reflection of yourself. It forces you to see both the similarities and the differences. Moreover it encourages highly task-oriented businesspeople such as Americans or Germans, to see the foreigner as a whole person rather than someone with a position and a set of skills needed to accomplish a particular task.

1.4.6 Cross-cultural misevaluation

Even more than perception and interpretation, cultural conditioning strongly affects evaluation. Evaluation involves judging whether someone or something is good or bad. Cross-culturally, you use your own culture as a standard of measurement, judging that which is like your own culture as normal and good and everything, which is different as abnormal and bad. Your own culture becomes a self-reference criterion: since no other culture is identical to your own, you tend to judge all other cultures as inferior. A common mistake made by Americans for example is that they affiliate with personnel or business contacts because they speak English. It is totally wrong to assume that speaking your language indicates intelligence, business know-how or local competence; it is only an indication of language skills. Evaluation rarely helps in trying to understand or communicate with people from another culture.

To sum it up, what you should consider to have an effective cross-cultural communication is to assume difference until similarity is proven rather than the reverse, instead of interpreting or evaluating a situation you should just observe what is actually said and done and try to see a foreign situation through the eyes of your foreign colleagues (role reversal) and last but not least once you develop an explanation for a situation, treat this explanation as a guess and not as a certainty and check it with other foreign and home country colleagues to find out whether it is plausible.

2. Problems occurring in International Business

What are some basic cultural problems encountered in doing international business? To start off with, it is necessary to adopt the attitude that no point of view, especially one’s own, is the norm everywhere. The “cultural glasses” that were referred to earlier must be left on the table so that each situation can be approached without assumptions and expectations. International business people will be confronted with different kinds of thinking and behavior in all elements of work: communication, selling strategies, and marketing, to name a few.  The clearer the view, the more effective results will be. 

2.1 The importance of time

The first attitude that could become a problem to deal with is the concept of time in different cultures. Although time is universal, the way cultures manipulate it to fit their lifestyle (or vice versa) is very interesting to examine.  Let’s take a look at some examples.

The American businessman is always in a hurry, rushing from one appointment to the next, constantly chasing the clock. Copeland and Griggs speak of an American clock that “runs” and a clock that “walks” in other countries. Time is a valuable good and is seen as a limited resource, therefore one has to try to save and not waste it - time is money.  A relentless clock ticks in the American ear that is guaranteeing a constant awareness of how much time has already been spent. For this reason the typical American tries to work as productively as possible, strictly organizing all activities on a daily calendar and working by a structured agenda in each meeting.  Punctuality considering meetings, job interviews or any kind of sales activity is therefore extremely important. The meaning of being “on time” is also to be underlined, because it can be a form of communication as well. Being early can leave the impression that the visitor is anxious or overly eager and has too much spare time. Being late or keeping someone waiting would be considered as lack of interest or disrespect. Wasting precious time with too much small talk in the beginning of a meeting is also something that an American would try to avoid. After a short period of introductions and exchange of small talk, the meeting will turn straight to the topic and purpose of the visit.

In Asia and the Middle East, the first step of a meeting is an extended social acquaintance. This period can take several hours or even days and consists of drinking tea or coffee together, while observing the business partner. The objective is often not even mentioned during this time. An American is likely to assess this as “doing nothing” or a “waste of time”, whereas an Arab would consider it as socializing and “doing something”. The lack of obvious progress towards the objective should not be misinterpreted, because often, important steps towards credibility and rapport are established during apparently meaningless conversations. Future business is often based on those foundations.

The Germans’ attitude is comparable to the Americans’. Germans are known to always be punctual and disciplined at work and in private life. One should arrive at a meeting 5 minutes before the scheduled time, because the most important decisions often take place then. Following a strict timetable, appointments are scheduled at specifically arranged times and meetings are structured through clear agendas. This strict concept of time is often also found in leisure time. Activities have a certain routine and usually take place regularly.  This is especially true with after-work hours, holidays and vacations, which are observed with religious importance.  To disturb a German who is on vacation for the sake of work that needs to be done is an absolute no-go.

When doing business abroad, working hours, opening hours and public holidays should be generally considered, because they can influence the information and workflow. Every country has its own national holidays – official and unofficial – for example, the 2nd Christmas Day in Germany, the Friday after Thanksgiving in the USA, and the Chinese New Year.

2.2 Conduct and communication

Values and behaviors are deeply rooted in every culture and therefore have to be treated with great sensitivity. They are very important in certain groups. Americans are usually concerned with objective facts and pay less attention to sensitive issues, such as manners, gestures or greeting rituals. The focus is on the objective, which means that it’s not the way a goal is achieve but the fact that it is reached. “A good loser is a loser” is an expression, which clarifies the American attitude regarding their “goal-orientation”.

In Japan or in China, “actions are judged by the manner in which they are performed”. It is less important to finally accomplish the task, as long as the method used was worthy of merit. Grace and honor are keywords symbolizing the concept of “face-saving”, which is important in every aspect of life.  Being in control of one’s emotions is something that is more particular to the Japanese than other Asians. This self-control, which the Japanese see as a virtue, is interpreted by Westerners as coldness or lack of interest, when the truth could be quite the opposite. Physical space and contact are also issues that may cause problems in international interactions. Americans hug or slap their business partners on their backs as a form of friendly greeting. In European and Middle Eastern societies, “kissing” the partner’s cheeks (sometimes more than once) is a common form of greeting, a gesture that would shock an American or Asian. Personal physical space also varies according to culture, as do sitting/standing according to hierarchy, which can have huge significance in one and absolutely no significance in another.

Many other problems that can be encountered fall into the category of communication and conduct. These points will be covered in more detail later in the book. 

2.3 Work attitudes and motivation

Many years ago, people had to work in order to survive. These days, putting food on the table is only one of many reasons for people to work. In some cultures, the work one does defines the person.  In the U.S., for example, “What do you do?” is a question that quickly follows initial exchange of names.  Americans would find it hard to carry on a conversation without knowing what the other person does for a living.  Being a land of immigrants who arrived with very little materialistic fortune, it is not hard to understand that the amount of money a person makes equals accomplishment and prestige in society. While other motivational factors do play a role in the work attitude of Americans, financial reward can be considered the foremost motivator for this culture.

In contrast, there are many cultures in the world that do not value the concept of hard work and its accompanying financial reward. For example, South American cultures value time with family and friends highly and would rather work less and sacrifice pay to socialize. They prefer being paid by the hour so that they can choose their working hours according to their needs.In Japan, where the company is as important as family, motivation is derived from pride of belonging to a certain company. Here, it is not so much the position one holds or the salary one receives, dedication and seniority are respected and the main motivators for a job to be done well.

Germans have a strong need for security. A strong driving motivator for them is the need to save money for lasting investments, such as a house, and a large nest egg for their retirement.

While Germans yearn for the good life as Americans do, they are not driven by the immigrant work ethic, nor do they have the competitive atmosphere that Americans live in. The social security that German workers enjoy gives them the luxury of job security, long vacations, less working hours. The work attitude of the Germans can be seen more clearly in the following graph that shows the constantly decreasing number of working hours from 1990 to 2010.

In Germany, it would be futile to motivate workers with higher pay as in the U.S., or demand longer hours for the sake of stronger ties to the company as in Japan. To learn and understand what work means to people of different cultures means knowing how and what motivates them.

2.4 Individualism vs. collectivism

Although individuals have preferences about whether they like to work alone or in groups, a stronger tendency for this preference can be seen according to cultures as well. The USA is a country in which individualism is very important, meaning independence from the organization and having the capability to develop one’s personal time with a certain amount of freedom. Self-actualization is an objective that strongly motivates employees, because they usually prefer to be challenged. Americans just want “to do their own thing”. It can also be described as “social Darwinism”, which signifies the “survival of the fittest”.

Japan, on the other hand, is a country in which collectivism is a common and widely spread philosophy. The Japanese are dependent on the organizations and group work. Japanese workers are seen as very loyal to their work groups and their company in general. A strong identification with the employer is encouraged with a special company anthem or a get-together after work. They want to achieve success as a group or, in other words, as an entity. Harmony and hard work are dominating factors at the workplace – “The nail that sticks out gets hammered back in place”.

The USA and Japan are two extreme opposite examples of individualism vs. collectivism. We see strong preferences one way or the other when we take a look at some other countries. The following chart illustrates the manifestation of individualism in certain countries in relationship to uncertainty avoidance. It is ranked from 0, which means that people prefer to work in groups and reaches up to 100, representing a strong tendency to individual working methods. The countries with the highest and lowest GDP in 2006 are shown in fig. 2.

2.5. Power Distance

Power Distance is a term describing the relationship between superiors and subordinates. The behavior of employees in how they interact with their bosses, subordinates and colleagues varies from country to country. Without basic information about the power distance in another country, expectations will not be met and will lead to tension in the office. In cultures in which values like individualism and self-fulfillment are important, the relationship between superiors and subordinates is more open, i.e. the power distance is small. The executive might give his subordinate the opportunity to take responsibility himself. Discussions or constructive criticism among them often is normal and even desired.

In countries with greater power distance, consultation among superiors and subordinates does not take place. Subordinates are used to execute the work in the way they are told to by their boss. This is the case in South America and most parts of Asia. In Japan, for example, consultations take place on a horizontal level, but rarely between different layers. Participation in decision-making is a direct result of knowledge and not of the degree of responsibility. There is also a large difference in the degree of power distance among the countries of southern and northern Europe. Scandinavians as well as Germans and Austrians are often encouraged to take part in the process of decision-making and usually prefer a consultation style.