Culture is a complex factor that is critical to comprehending the business environment. Multinational corporations frequently struggle to understand cultural differences. Most international business blunders are the result of managers' failure to fully comprehend the disparities.
According to Geert Hofstede, a well-known Dutch writer and academic, "culture is the software of the mind," referring to the social programming that governs how we think, act, and perceive ourselves and others. It implies that culture is a learned behavior that can thus be altered.
Culture is the result of human interaction. It provides patterns for meeting social needs that are socially acceptable. It is passed down from one generation to the next. It is acquired during a person's development in a specific society. Material culture (involving man-made things such as automobiles, clothing, and so on) and non-material culture are two types of culture (involving ideals, beliefs, values, language etc.).
Elements of Culture
Cultural characteristics play a significant role in the development of business strategies. There are various types of cultures throughout the world, each with its own distinct essence. When it comes to defining the term "culture," there are several elements that contribute to the culture of a specific region or people.
Language: Language is more than a means of communication. It affects our culture and even our thought processes.
Ideals: Every society or civilization has a set of norms that are an integral part of the culture. In a given situation, they are what is expected, customary, right, or proper. This can include a culture's folklore, mores, taboos, and rituals.
Values: The social values of a particular civilization are also regarded as cultural elements. Values frequently refer to things to be accomplished or things that are highly valued in a particular culture.
Religion and beliefs: Religion and beliefs of people in a civilization also play an important role in shaping the culture. The beliefs include people's prevalent perceptions of reality. They include myths, metaphysical beliefs, and scientific facts.
Social collectives: Social collectives are symbolic social constructions such as social groups, organizations, communities, institutions, classes, and societies.
Status and roles: A status or social role is simply a slot or position within a group or society that provides an overall picture of the social structure and is thus an important component of culture. Traditional gender or age-based roles can also be included.
Cultural integration: This includes the degree of harmony or integration between various cultural elements. This can include subcultures, local cultures, and the distinction between historical and cultural traditions.
Preferences: This refers to society's definition of what things are attractive or unappealing as objects of desire. It is common for things that are acceptable in one culture to be offensive in another. Thus, culture frequently provides standards of taste in specific areas of human activity.
Organization of Culture
The term cultural organization refers to the social structure and the integration of the cultural system's traits, complexes, and patterns. Stratification, or differentiation based on factors such as age, gender, caste, occupation, education, income, and so on, is an important aspect of social and cultural organization. It is critical to recognize such roles and ranks in order to negotiate effectively. The political system, administrative system, educational system, religion, family, and so on are all important institutions in modern culture. Culture traits, complexes, and patterns can also help us understand how a culture is organized. These may vary from one community to the next.
Cultural Adaptation
It refers to how a social system or an individual fits into his or her physical or social environment. A social system can be as small as a family, as large as an organization, or as large as an entire society, such as a tribal society. Survival necessitates adaptation. Adaptations include the type of food, clothing, and climatic and weather conditions. Cultural adaptation can be thought of in a variety of contexts. For example, the energy crisis has prompted us to reconsider our energy policy and conduct additional research into alternative energy resources. Adaptation is also important at the individual level. A worker who joins a trade union must conform to the union's goals, rules, and procedures. Anyone who joins a new organization must adjust to their new surroundings. A company and its employees must adapt to the environment of the various markets.
Cultural Shock
Cultural shocks are frequently caused by environmental changes. This includes anxiety, confusion, and insecurity brought on by a strange new environment. If people or businesses are to survive, they must adapt to a new culture. Proper preparation to understand the culture can help to avoid culture shock.
Cultural Transmission
The elements of the culture are passed down among the culture's members, from one generation to the next, and to new members admitted into the culture. Some aspects of one culture can be passed down to another. Every generation inherits a collection of cultural elements, many of which have accumulated over time. Cultural behaviors are passed down through families and societies by parents, teachers, elders, and others. A lot of transmission occurs from contemporary sources, such as clothing styles, types of books, movies, technology, and political, social, and economic viewpoints. Thus, cultural transmission occurs both vertically and horizontally. Cultural diffusion is also caused by the spread of culture from one location to another.
Culture and Organizational Behavior
Several fundamental beliefs and behaviors reflect the cultural impact on management. Let us look at some examples of how a society's culture can have a direct impact on management approaches and organizational behavior.
Centralized vs. Decentralized Decision Making:
Top managers make the majority of decisions in some societies. Decisions are made in some other societies by middle and lower level managers or by others dispersed throughout the enterprise.
Safety vs. Risk
Some organizational decision makers are risk averse and have difficulty dealing with uncertain situations. Others are more willing to take risks and even encourage them. This is frequently related to society.
Individual vs. Group Reward
Individual bonuses or commissions are sometimes given based on a person's individual work. In other cases, cultural norms may dictate that group rewards be given over individual rewards. Whether or not rewards improve employee performance or have a negative impact due to jealousy or other factors is often dependent on society.
Informal vs. Formal Procedure
In some societies decision making happens many times through informal means, while in others there are formal meetings, procedures etc., which are strictly adhered to.
High vs. low Organizational Loyalty
In certain societies we have people who identify very strongly with their organization or employer. In others, we find people relating more by their occupational group, such as engineers, managers, doctors etc.
Cooperation vs. Competition
In certain societies people love to cooperate with one another more while in others we have people competing with one other more than anything.
Short Term vs. Long Term Horizon
In terms of choosing objectives some societies like to think more about the short term goals of achieving profit and efficiency. Others are more interested in long term goals like market share and technological development.
Stability and Innovation
Certain groups of people crave stability and will always fight against change. Others, on the other hand, promote change and try to foster innovation.
All of the aforementioned characteristics thus have a direct impact on the business environment, both internal and external.
Influence of culture on communication and decision making
Globalization has had an impact on the way organizations perform their routine activities over the last decade. To keep up with the fast-changing environment, there is a greater emphasis on project management. Globalization is reducing business boundaries on a daily basis. People are moving more freely between different countries and cultures. With the growth of multinational corporations in international markets, there is a greater need to understand the cultural dimensions of various countries. Communication has a significant impact on team performance in multicultural teams. Cultural differences have a significant impact on communication in multicultural project teams. Many multinational corporations hire people from various cultures. National cultures influence decision making, which is critical when managing mixed-culture teams. It also gives project teams insight into why people from different cultures act or respond differently in different situations, with an emphasis on decision making:
Culture continues to dominate most aspects of communication in many countries. There are significant differences and similarities in the communication styles of various teams, and the differences are mostly attributed to cultural factors. There are also significant differences in the decision-making styles of different teams, and these differences are strongly linked to cultural factors. Traditional patterns of communication behavior are changing over time, particularly as economic conditions change. The main implication is that understanding cultural differences and similarities will help teams perform better. Knowledge of cultural differences and similarities would also help with management. As a result, by keeping in mind the significance as well as the impact of various national cultures and providing each member with social working knowledge of peers as well as a better understanding and knowledge about the social background of the team mates within the mixed culture team, arguments and conflicts due to misunderstanding and pre judgement can be minimized. As a result, it will improve the efficiency and effectiveness of the working process and environment in multicultural project teams.
Technological development and social change
Technology is a major driver of social change. Our society is undergoing rapid change as a result of the development of new techniques, inventions, and modes of production. Social attitudes, beliefs, and customs are evolving. For example, we hear about marriage on the internet. Women's social lives and status have changed dramatically. Women now work side by side with their male counterparts in factories, offices, and the concept of sharing household chores has emerged. ‘Ready-to-eat food, improved food processing and preservation, and improved kitchen and household appliances have enabled women to leave their kitchens and work in the outside world.
The impact of advancements in better automobiles and communication services has caused significant changes in society, with information exchange occurring at an increasing rate every day. The changes have a significant impact on media services, resulting in a significant reduction in the social distance between urban and rural areas.
In some cases, technological advancements have had a negative impact on society, such as pollution. However, the massive change in society brought about by technological advancements is a significant factor that has a significant impact on the business world.
