Cross-Cultural Awareness

Nowadays, globalisation has turned out to be a popular term. As business becomes more and more international, companies try to expand and do business in foreign countries. In order for them to adapt in the global market they need to gain an insight into the different cultures. Understanding a country's business culture is a vital factor in setting up a successful business and communicating effectively. Cross-cultural awareness is a challenge for every international business person.

A lot of research has been done in the field of cross-cultural understanding and communication. The theories of many academics are and have been applied to business and management in our days.

One of these researchers is Edward Hall. He differentiates one culture from another by the style each one communicates (Schneider & Barsoux, 2003). Some cultures, where the message is explicit, are low-context (Germans, Scandinavian countries). Such cultures are characterized by flexible ingroups and outgroups. On the other hand, in high-context cultures (Japan, Arab countries) the message is unclear and it's difficult to be entered if the person is an outsider.

Another academic known for his research in the field is Geert Hofstede. He developed four cultural dimensions - power distance, individualism, uncertainty avoidance and masculinity. Power distance is the emotional distance between superiors and subordinates. It's concerned with a society's level of inequality. Individualism, the opposite of collectivism, is the extent to which an individual belongs to a group. In individualistic countries, such as USA, everybody is responsible for himself. On the contrary, in collectivistic societies, such as Korea, the individual is protected by the group. Uncertainty avoidance deals with how comfortable people feel about unknown situation, their tolerance for ambiguity. Masculinity, the opposite of femininity, is the degree to which there is a differentiation between genders.

Trompenaars is a researcher who has developed cultural model with seven dimensions (Wikipedia). These include universalism vs particularism (what is more important - rules or relationships), individualism vs communitarianism (similar to Hofstede's dimension individualism vs collectivism), neutral vs affective (the extent to which we show our feelings), achievement vs ascription (our status is either given to us or we have to prove ourselves to receive it), specific vs diffuse (how far do we get involved), time orientation (refers to time commitments), internal vs external control.

Ronald Inglehart developed a cultural map which illustrates the correlation of values in different cultures (World Values Survey). It is concerned with two dimensions: traditional/secular and survival/self-expression values. The traditional/secular values dimension indicates how religious the societies are.

Fig 1. Inglehart Values Map

Source: http://www.worldvaluessurvey.org/library/set_illustrations.html

Sweden and Venezuela are our practical examples showing the extent to which culture can cause differences in doing business in foreign countries.

According to Anders Porter (2006) "knowing the tricks of the trade is key to succeeding in business, and it's fair to say that every country has its very own bag of tricks".

If we dig into Sweden's bag, we can see that it has some areas for consideration before doing business with Swedes. Generally speaking, Sweden has proven itself as a well-developed country and an international business leader. Brands such as Ikea and Volvo are examples of successful and effective business within the country.

Sweden has its own cultural characteristics different from the customs of other countries. That's why we have to examine the way they work before establishing a business there. We don't mean to stereotype the society but to catch the general idea of the key areas which can help avoiding any cultural misunderstanding.

According to Hofstede's research Sweden is a strong individualistic country. He links that with religion. Over 50% of Swedes practice Christianity. It correlates with the Individualism dimension. There are questions from the WVS which prove that Sweden is a strong individualistic society. For example, when they were asked if it's necessary to love their parents or the parents should earn the children's respect and love, most of the Swedes said that respect should be earned. It means that they don't belong to any distinct group and look after themselves.

If we take Hall's Low and High-Context cultures into account, we can say that ranking high on individualism Sweden is a low-context culture. This means that communication is direct - a prerequisite for successful negotiations. For example, it very difficult to negotiate with Japanese because Japan is a high-context culture and there is a lot to guess. The message is so implicit that you are not even sure if an answer "yes" really means "yes". So, negotiating with Swedes is a smooth process.

Swedes are not integrated into in-groups. They are an individualistic society tolerant to other people - outgroups. We can see that from Inglehart's map where Sweden is very high on self-expression. Inglehart states that ranking high on this dimension means tolerance to outgroups. When asked if children should possess the quality tolerance and respect for other people, more than 90% of Swedes answered positively. This fact may turn out to be an obstacle for Bulgarians. Being a collectivistic country (Hofstede's research), it isn't tolerant to other people outside its group.

Another impediment is the differences between the management style of Swedes and that of Bulgarians. A Swedish manager considers himself as a coach rather than a commander (Sverigeturism). He delegates tasks and doesn't take advantage of his superior position. It's exactly the opposite in Bulgaria. Bulgarian managers have authoritarian style of management. Employees are told what to do and managers expect privileges. That's why Bulgarians should change their management style if they are to manage Swedish people and want to adapt to the situation.

In Anders Porter's opinion, companies in Sweden are less hierarchical than companies in other countries. Hofstede's Power Distance dimension (PD) proves that statement. The distance between superiors and subordinates in Sweden is quite low - 31 (average 65). The manager benefits from creativity and motivation of staff through cooperation and agreement. Swedes value consensus