Cultural Differences as a Hidden Hurdle to Successful Business
Doing Business Between Germany and Spain
©2011
Bachelorarbeit
71 Seiten
Zusammenfassung
Inhaltsangabe:Introduction:
The main effect of globalisation over recent decades has been the development of the world as a united market place.
Through multinational companies, globally accepted management styles or organisational structures the impression might be given that there are hardly big differences in the way people do business all over the world. However, the variety of human cultures makes it impossible to believe that there is a uniform theory corresponding to all cultures on earth or assimilating their way of doing business.
Misunderstandings while doing business or even failure of business relationships are, despite ever increasing market transparency, part of every day business life. It is less frequently the consequence of economic discrepancies but more often hidden cultural incompatibilities that can cause problems between two or more parties.
Even between countries that have maintained business relationships for many years, as is the case between Germany and Spain, the problem of cultural differences is unfortunately present and moreover underestimated.
For Germany, the European export champion, Spain has been for at least a decade one of the top export destinations. Also German companies located in Spain contributed 8% to that countrys G.D.P. for 2010. Those big subsidiaries originated from a successful attempt to do business with a different culture and yet, to a greater or lesser extent, still face this difficulty every day.
This applies equally to enterprises that are pure exporters, those having production plants, distribution or sales departments in the respective country.
Helping businesses avoid the potential obstacles arising from cultural differences through sensitivity and understanding would improve working relationships and smoothen the path toward economic growth.
Hit hard by the European economic crisis, Spain had and still has to suffer economic cutbacks. Since Germany is the second largest destination for Spanish exports it needs to maintain this presence in Germany.
As the head of Spanish government José Luis Rodríguez Zapatero and the German chancellor Angela Merkel pointed out on the German-Hispanic summit conference on 2nd of February 2011 in Madrid, there is still a lot of potential that can be exploited when both parties are pro-active.
Looking at the above mentioned facts it is evident that both countries need each other. Besides creating a common political base, it is essential for their […]
The main effect of globalisation over recent decades has been the development of the world as a united market place.
Through multinational companies, globally accepted management styles or organisational structures the impression might be given that there are hardly big differences in the way people do business all over the world. However, the variety of human cultures makes it impossible to believe that there is a uniform theory corresponding to all cultures on earth or assimilating their way of doing business.
Misunderstandings while doing business or even failure of business relationships are, despite ever increasing market transparency, part of every day business life. It is less frequently the consequence of economic discrepancies but more often hidden cultural incompatibilities that can cause problems between two or more parties.
Even between countries that have maintained business relationships for many years, as is the case between Germany and Spain, the problem of cultural differences is unfortunately present and moreover underestimated.
For Germany, the European export champion, Spain has been for at least a decade one of the top export destinations. Also German companies located in Spain contributed 8% to that countrys G.D.P. for 2010. Those big subsidiaries originated from a successful attempt to do business with a different culture and yet, to a greater or lesser extent, still face this difficulty every day.
This applies equally to enterprises that are pure exporters, those having production plants, distribution or sales departments in the respective country.
Helping businesses avoid the potential obstacles arising from cultural differences through sensitivity and understanding would improve working relationships and smoothen the path toward economic growth.
Hit hard by the European economic crisis, Spain had and still has to suffer economic cutbacks. Since Germany is the second largest destination for Spanish exports it needs to maintain this presence in Germany.
As the head of Spanish government José Luis Rodríguez Zapatero and the German chancellor Angela Merkel pointed out on the German-Hispanic summit conference on 2nd of February 2011 in Madrid, there is still a lot of potential that can be exploited when both parties are pro-active.
Looking at the above mentioned facts it is evident that both countries need each other. Besides creating a common political base, it is essential for their […]
Leseprobe
Inhaltsverzeichnis
Isabelle Mrugalla
Cultural Differences as a Hidden Hurdle to Successful Business
Doing Business Between Germany and Spain
ISBN: 978-3-8428-1383-0
Herstellung: Diplomica® Verlag GmbH, Hamburg, 2011
Zugl. Hochschule Aschaffenburg, Aschaffenburg, Deutschland, Bachelorarbeit, 2011
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Index
REGISTER OF ILLUSTRATIONS
VII
REGISTER OF ABBREVIATIONS
VIII
1 INTRODUCTION
1
2 CULTURE AND BUSINESS ARE ACTING IN CONCERT?
4
2.1 The concept of culture
4
2.2 Culture in business behaviour
6
3 THE STUDY
9
3.1 Design of the survey
9
3.2 The study - Five elements of doing business
11
3.2.1 Making contact
12
3.2.1.1 Communication channels
13
3.2.1.2 Base of authority
17
3.2.1.3 Expectations about the first meeting
19
3.2.2 Business lunch
24
3.2.3 Business meeting
29
3.2.3.1 Meeting culture
29
3.2.3.2 Communication style
31
3.2.3.3 Attitude towards feedback
35
Index page VI
3.2.3.4 Timing
38
3.2.4 Negotiation
40
3.2.4.1 Goals of negotiating
40
3.2.4.2 Decision-making process
43
3.2.5 Cultivation of contact
47
3.2.5.1 Implementation
47
3.2.5.2 The right way for cultivation of contact
49
3.2.5.3 How to treat the network
50
3.3 Tendency to adjustment
52
4 CONCLUSION
54
BIBLIOGRAPHY 56
BIBLIOGRAPHY INTERNET SOURCES:
57
REGISTER OF APPENDIX
58
Register of Illustrations
Figure 1: Hispanic-German Summit
... 2
Figure 2: The "Onion Diagram": Manifestation of Cultures at Different Levels of
Depth... 5
Figure 3: Ranking of the Five Elements of Doing Business (n=10) ... 12
Figure 4: Communication Channel Passive Reaction on Enquiries (n=18) ... 13
Figure 5: Communication Channel Internet Research (n=18) ... 14
Figure 6: Communication Channel Network Related Channels (n=18) ... 16
Figure 7: Base of Authority Portfolio of Polarity (n=11) ... 18
Figure 8: First Meeting Formality of Addressing (n=18) ... 20
Figure 9: First Meeting Topic (n=18)... 21
Figure 10: First Meeting Contact Person (n=18) ... 23
Figure 11: Business Lunch Functions of a Business Lunch (n=15)... 25
Figure 12: Business Lunch Importance for Business Partner (n=15) ... 26
Figure 13: Business Lunch Centre of Doing Business (n=15)... 26
Figure 14: Business Lunch Topic (n=15) ... 27
Figure 15: Business Meeting Function (1) (n=15) ... 29
Figure 16: Business Meeting Function (2) (n=15) ... 30
Figure 17: Business Meeting Efficiency (n=15)... 31
Figure 18: Communication Style (n=14) ... 32
Figure 19: Communications Style Willingness to Adjustment (n=14) ... 34
Figure 20: Communication Style Ability to Adjustment (n=14) ... 35
Figure 21: Feedback (1) (n=14) ... 36
Figure 22: Feedback (2) (n=14) ... 37
Figure 23: Timing Punctuality (own assessment) (n=13) ... 38
Figure 24: Timing Punctuality (external assessment) (n=13) ... 39
Figure 25: Goal Setting (self-assessment) (n=11) ... 40
Figure 26: Goal Settings (external assessment) (n=11)... 41
Figure 27: Goal Strategy (self-assessment) (n=11) ... 42
Figure 28: Goal Strategy (external assessment) (n=11) ... 42
Figure 29: Decision-Making (self-assessment) (n=11)... 44
Figure 30: Decision-Making (external assessment) (n=11)... 45
Figure 31: Implementation Culture (n=10) ... 48
Figure 32: Cultivation of Contact (n=11) ... 49
Figure 33: How to Treat Your Network (n=11) ... 51
Figure 34: Trend to Adjustment (n=11) ... 52
Register of Abbreviations
A
appendix
G.D.P.
gross
domestic
product
n
sample
size
1 Introduction
The main effect of globalisation over recent decades has been the devel-
opment of the world as a united market place.
Through multinational companies, globally accepted management
styles or organisational structures the impression might be given that
there are hardly big differences in the way people do business all over the
world. However, the variety of human cultures makes it impossible to be-
lieve that there is a uniform theory corresponding to all cultures on earth
or assimilating their way of doing business.
Misunderstandings while doing business or even failure of business re-
lationships are, despite ever increasing market transparency, part of every
day business life. It is less frequently the consequence of economic dis-
crepancies but more often hidden cultural incompatibilities that can cause
problems between two or more parties.
Even between countries that have maintained business relationships
for many years, as is the case between Germany and Spain, the problem
of cultural differences is unfortunately present and moreover underesti-
mated.
For Germany, the European export champion, Spain has been for at
least a decade one of the top export destinations.
1
Also German compa-
nies located in Spain contributed 8% to that country's G.D.P. for 2010.
2
Those big subsidiaries originated from a successful attempt to do busi-
ness with a different culture and yet, to a greater or lesser extent, still face
this difficulty every day.
This applies equally to enterprises that are pure exporters, those having
production plants, distribution or sales departments in the respective
country.
Helping businesses avoid the potential obstacles arising from cultural
differences through sensitivity and understanding would improve working
relationships and smoothen the path toward economic growth.
Hit hard by the European economic crisis, Spain had and still has to
suffer economic cutbacks. Since Germany is the second largest destina-
tion for Spanish exports it needs to maintain this presence in Germany.
3
1
Ct. Dauderstädt, M., E. Hillebrand (2009), S. 1 und 2.
2
Ct. Tordable, D. (2011).
3
Ibid.
1 Introduction page 2
As the head of Spanish govern-
ment José Luis Rodríguez Zapatero
and the German chancellor Angela
Merkel pointed out on the German-
Hispanic summit conference on 2
nd
of February 2011 in Madrid, there is
still a lot of potential that can be
exploited when both parties are pro-
active.
4
Figure 1: Hispanic-German Summit,
Feb. 2011
5
Looking at the above mentioned facts it is evident that both countries
need each other. Besides creating a common political base, it is essential
for their economical development to enhance the business relationship
among companies.
Trying to support the postulated proactivity this paper is meant to create
cultural sensitivity for and understanding of the way the other culture does
business. After reading this paper companies that deal with the respective
culture will have improved their abilities to distinguish economical misfit
from cultural misleading. Through avoiding the second, an unnecessary
complication due to cultural misunderstanding, they will be able to aug-
ment their success.
To make that possible the cultural differences are researched through a
quantitative study. The principle factors that frequently lead to misunder-
standings or even to failure of deals are summed up from practical busi-
ness guides.
This selected collection of guides is the base to generate the hypothe-
ses examined by the study. On a business to business level the hypothe-
ses are checked for substance, actuality and practical relevance.
Where it is possible, the evaluation of the results is supported by theo-
retical concepts of culture.
To create a better understanding of cultural differences in the context of
business the thesis starts with a definition of the concept of culture. After
delimiting cultural behaviour though the concept of mental programming
the second chapter also points out the core elements of culture and its
visible characteristics. The development of culture from the historical
viewpoint introduces cultural diversity across national borders.
After creating an understanding of cultural diversity among nations, this
paper connects national culture with business behaviour and shows the
importance of culture in this context.
4
Ct. Grüttner, A. (2011).
5
Source: Tordable, D. (2011).
1 Introduction page 3
The empirical study as the main part of this thesis is introduced by ex-
plaining the design of the study, pointing out how the study was prepared
and conducted, indicating its limitations as well as problems and obstacles
that occurred and have to be taken into account.
The evaluation of the study is divided into five elements of doing busi-
ness referring to a general chronology of a business relationship starting
with making contact, then comes the business lunch, followed by the
business meeting. The next element is negotiation and the final one is the
cultivation of contact.
The study finishes with an attempt to answer the question whether or
not a tendency to an adjustment of cross-cultural business behaviour at a
European level exists.
2 Culture and business are acting in concert?
Talking about culture the first step to set up a solid foundation is to define
what culture means and why this paper refers to cultural differences
among nationalities. Secondly this chapter will connect national culture to
the way of doing business in international context.
2.1 The concept of culture
If you would ask random people on the street what comes into their minds
when thinking about culture, some might say that Rock 'n Roll is a culture,
several would mention a religious affiliation like Islam or Buddhism and
others again might even think of the German "Bierkultur" (the culture of
drinking beer). As different or non-selective as those answers appear to
be, the question arises if there is a general definition of culture.
The most comprehensive and widest accepted definition comes from
the anthropologists Kroeber and Kluckhohn in the middle of 19
th
century.
They categorized a set of over 100 definitions and came to the following
résumé:
"Culture consist of patterns, explicit and implicit, of and for behaviour ac-
quired and transmitted by symbols, constituting the distinctive achievement of
human groups, including their embodiment in artifacts; the essential core of cul-
ture consists of traditional (i.e., historically derived and selected) ideas and es-
pecially their attached values; culture systems may on the on hand, be consid-
ered as a product of action, on the other, as conditioning elements of future ac-
tion." (Kroeber & Kluckhohn, 1952, p. 181)
This definition seems to be all embracing but in order to work with the
term culture in the context of business, we need more concise and catchy
statements to build a proper and illustrative base.
To display this precise picture of cultural behaviour, it is necessary to
first mention what behaviour can be, if it's not cultural. The theory of men-
tal programming of human beings refers to three different levels that are
driving human behaviour, a universal, a collective and an individual level.
Universal behaviour is unique for every person in the world. It has the
same meaning to everyone. A good example for this is laughing.
The existence of an individual level is proven by the fact that there are
not even two people in the world that are completely alike. Unique charac-
teristics shape our personality, even when we are surrounded by the
same environment or have similar genes like brothers, sisters or twins do.
The aforesaid, are completely (on universal level) or just partly (on indi-
vidual level), inherited and influenced by genes.
In contrast to the inherited programming the collective level is a contin-
ual learning process. The resulting common behaviour is shared only with
2 Culture and business are acting in concert? page 5
some individuals. This group is different from other groups, sharing a dis-
tinct common behaviour. This collective behaviour is a culture of its own.
6
Apart from the awareness that there are different cultures on earth it is
also important to point out other core statements about culture to narrow
down the definition.
One is that there is only a single success criterion for culture that is effi-
ciency or effectivity in providing survival and prosperity. A subjective point
of view tends to be judgmental about other cultures. As a result one needs
to constantly picture there is no good or bad when it comes to talking
about cultures. Secondly culture is not static but it finds itself in a continu-
ous process of change.
7
Still culture can be parallel "transferred through
societies, organisations and groups" which makes it very persistent over
time.
8
And the most challenging when it comes to understanding a culture
is the fact that the obvious and visible characteristics derive from hidden
values and beliefs.
9
Those values and beliefs are the inside of the previously mentioned col-
lective mental programming. They are the core elements of every culture.
The following figure is representing layers of culture like those of an on-
ion. It shows how the inner values get displayed on the outside.
Symbols are the most superficial, visible manifestation of values. This
can be words, gestures, pictures or
objects. Only the same cultural group
understands their complex meanings.
Real or imaginative persons, dead or
alive, here named heroes, shape the
model of behaviour through their
characteristics that are highly valued.
Representing only social essence
activities, rituals are actually not
necessary to achieve a goal. But they
link the individual to norms of a
certain culture. They create a sense
of belonging.
10
Figure 2: The "Onion Diagram": Manifesta-
tion of Cultures at Different Levels of Depth
11
6
Ct. Hofstede, G. (2003), p. 2.
7
Ct. Mole, J. (2003), p. 8 a. 9.
8
Ct. Hofstede, G. (2003), p. 3.
9
Ct. Mole, J. (2003), p. 8 a. 9.
10
Ct. Hofstede, G. (2003), p. 10.
11
Source: Hofstede, G. (2003), p. 11.
2 Culture and business are acting in concert? page 6
Indeed it's not that you can catch sight of the three discrete layers, but
one can see practices in every day
life that cannot be interpreted
easily by outsiders.
12
An outsider moreover represents the counterpart to a culture and is in-
trinsically an autonomous culture. Without a counterpart the diversity
wouldn't even be recognized.
13
From the historical viewpoint varying values developed on the basis of
different, geographical requirements. Determining which values that were
adapted by a group is their effectiveness of solving problems. So the de-
cisive factor in which value system one finds himself is his surrounding.
14
This general division already started with the existence of the Homo
sapiens. From then on the human race distinguishes in genes, language
and culture.
15
Since then people get passed on the respective value system in their
childhood through their social environment.
16
Parents, school, close
friends and the society they live in influence the imparting of values.
2.2 Culture in business behaviour
When you need a counterpart to realize disparity of cultures the obvious
question is who represents the counterpart in international business. The
answer is already delivered by the historical development of culture, pre-
viously explained and can also be found in the word itself. It is the inter-
country relationship. People from different nationalities come together to
negotiate, bringing different expectations and beliefs regarding correct
behaviour.
17
From the phase of making contact across the business lunch, the busi-
ness meeting and the actual negotiations through to the cultivation of con-
tacts the parties remain mostly with two iron roles. "Iron Rule No. 1"
18
is
that "in International Business the Seller Adapts to the Buyer".
19
And the
second rule is applied in the absence of a seller-buyer relationship, telling
that "the Visitor Is Expected to Observe Local Customs".
20
Observing and adapting are first steps to connect to a different culture
but they only refer to a superficial level of practices that arise out of deeply
embedded value system, earlier explained as the outer layers of an onion.
12
Ct. Hofstede, G. (2003), p. 10.
13
Ct. Mole, J. (2003), p. 9.
14
Ct. Trompenaars, F., C. Hampden-Turner, (1997), p. 23.
15
Ct. Hofstede, G. (2003), p. 3.
16
Ibid., p. 4.
17
Ct. Mole, J. (2003), p. 9.
18
Gesterland, R. (2005), p. 17.
19
Ibid.
20
Ibid., p. 18.
2 Culture and business are acting in concert? page 7
Therefore this initial effort does not create the real understanding that is
necessary to build up a satisfactory cooperation.
21
When performing business across cultures underneath the surface, one
will find two different main cultures that affect the way of doing business -
the corporate and the national culture. Those two are not identical phe-
nomena.
22
But they definitely do influence each other.
But to which extent does national culture influence business?
The IBM study on which Geert Hofstede builds up his concept of collec-
tive programming did proof subsistence of national differences. For exam-
ple on the topic of work goals and preferences it came out that people
from the same company (IBM) that had the same organisational structure,
from the same departments in the respective country, gave different an-
swers that must have been influenced by a socialization process they
experienced before joining the company.
23
This phenomenon was traced
through other questions and other studies and produced a picture of a
clear variety among nations.
So an organisational structure that is remarkably uniform and therefore
seems to be free of national culture is still influenced by a deeper value
system. The uniformity that just shows the effect of an action does not
mean that the reason why this action has been provoked was the same.
24
Not like in this special case business relations usually take place
among companies with different corporate cultures. Most don't even have
an established and published corporate culture, but they still have a cer-
tain way they do things around their companies. This "way of doing things
around here" is one of the most simple but also most vivid definitions of
corporate culture.
25
Yet, small and middle sized companies in both countries, Spain and in
Germany, make a major contribution to the majority of economic power.
26
With the information gathered together in chapter 2.1 the elements that
influence corporate culture can be highlighted as the following.
Regularly, the owner and his mental programming determine the com-
pany's culture. Also the employees working in a company bring in their
mental programming. Nevertheless, having taking into account the com-
pany cultural mix, the dominating factor remains the national culture.
Next to these internal factors there are external ones that influence the
action in a company like society or technology (the second could also be
seen as an internal factor). The society surrounding the company is above
21
Ct. Mole, J. (2003), p. 10.
22
Ct. Hofstede, G. (2003), p. 393.
23
Ibid., p. 49.
24
Ibid., p. 5 and 6.
25
Ct. Deal T. E., A. A. Kenney (1982), p. 4.
26
Ct. The Economist (2011) and Dirección General de Política de la PYME (2010),
p. 3.
2 Culture and business are acting in concert? page 8
all the carrier of collective mental programming. The technological influ-
ence will be stated in the end of this paper.
The founder of a company, his employees and the society do all have
the collective programming of mind, a common culture that influences the
way people behave, not only in private but also in professional life. So
culture and business are acting in concert and doing international busi-
ness without taking into account that the cultural diversity of the respective
country would be irresponsible with respect to economic success.
3 The study
Realizing an opinion and attitude survey may seem easy initially but soon
one learns that it is more than asking questions and summing up the re-
sults. There are many things to be taken care of to ensure valid and us-
able results. To provide background information and show the complexity
of the creation of a survey, at first, this chapter displays the structure of
the survey, as well as the needed assumptions and given limitations. In
the second part the results will be evaluated. In order to do that ahead of
every question the hypotheses are established. The survey is designed to
prove or disprove the hypotheses. Moreover an explanation of recurring
problems and attempts at their resolution will be supported by theoretical
literature.
3.1 Design of the survey
The survey was conducted among German and Spanish companies on an
anonymous basis.
A demographical spread was made through branches (trading, service,
production or industry) and company size by employees (<10, <50, <250,
<1.000, <10.000 and 10.000 and more).
There were three different approaches to contact companies. The first
was to contact selected German Chambers of Commerce and a founda-
tion. The information that those had active contact to Spanish companies
was provided by the German umbrella organisation of the German Cham-
bers of Commerce.
They published the link to the study on their home pages, in newsletters
or, like the foundation, sent mailings, to contact their members.
The second way was an internet research in the business register of
the Chamber of Foreign Trade for Germany and Spain, as well as in the
register of the Spanish Chamber of Commerce for Germany.
Thirdly, the social network facebook that is nowadays used by a lot of
companies to acquire clients was integrated into the generation of poten-
tial participants through direct mailings and postings.
Only the second way provided an approximate estimation of the con-
tacted companies that was around 170 for every country. 79 companies
reacted on the link, 36 started the survey and 19 completed it. 6 were
Spanish and 13 German.
Important for the selection of the participants was a single criterion: the
surveyed companies should not have a subsidiary in the respective coun-
try. Thereby the impact of multinational corporate culture that would not
eliminate but decrease the existence of national culture was foreclosed.
3 The study page 10
So the attendees were rather pure exporters or had a branch, sales or
distribution office, a production plant or a joint venture in the prevailing
country.
Depending on the nationality the survey was realised in the adequate
mother tongue to provide the highest degree of understanding the con-
tent. Language is essential for every survey, especially when it is about
cultural differences. It is the most obvious part of diversity among cultures
that determines to a large extent the ability of thinking.
27
Even in the original language a survey involves risks. Cultural behav-
iour can be observed best in deeds that happen naturally but a survey is
exactly the contrary, it is written and provoked. So all of the results are
based on words.
28
To improve the thereby limited information content the
study uses different sources. For example the survey was generated on
the base of three different practical guides. They focus on practical, busi-
ness related information. A different theoretical point of view written by
well-known anthropologists namely Geert Hofstede, Edward T. Hall, Rich-
ard R. Gesterland, Fons Trompernaars and Charles Hampden-Turner is
used to analyse the results. These various sources are meant to enlarge
the information content.
Another risk that can blur the result is the culture of the
writer/researcher. When he/she observes, describes, understands or pre-
dicts things they are always determined by his/her own cultural values.
29
This risk is reinforced by a phenomenon called ethnocentrism. Without
thinking about it, it makes a person believe that his behaviour together
with the values it is based on is the only right way of doing things.
30
There-
fore it is important to be as objective as possible for the researcher and
the writer. For the reader it is necessary to keep this threat in mind while
reading with an open eye and an open mind.
To smooth over these obstacles and to help avoid thinking in stereo-
types there are four points one should take into account for conducting a
scientific study that produces valid information about a population:
· Describe, don't judge!
· Use more than one source!
· The statistical majority counts!
· Discriminate! Search for different characteristics to distinguish
one national culture from the other!
31
Bearing this in mind one should read through the study always taking
into account that the behaviour of one's business partner also implicates
27
Ct. Hofstede, G. (2003), p. 21.
28
Ibid., p. 4.
29
Ibid., p. 15
30
Ibid., p. 1 and 10.
31
Ibid., p. 14.
Details
- Seiten
- Erscheinungsform
- Originalausgabe
- Jahr
- 2011
- ISBN (eBook)
- 9783842813830
- DOI
- 10.3239/9783842813830
- Dateigröße
- 4.3 MB
- Sprache
- Englisch
- Institution / Hochschule
- Hochschule Aschaffenburg – Wirtschaft und Recht, Studiengang Business Administration
- Erscheinungsdatum
- 2011 (April)
- Note
- 1,0
- Schlagworte
- culture business spain negotiation germany
