part 6: Global entrepreneurship class - culture

Global Entrepreneurship
Developing Global Mindset for
Entrepreneurs

Brian David Butler

Teaching:
Brian Butler is currently a professor with Forum-Nexus,
which is co-sponsored by the IQS Business School of the
Ramon Llull University in Barcelona, and the
Catholic University of Milan. He teaches classes on
International Finance and Global Entrepreneurship in
brian.butler@forum-nexus.com Europe every July and January.
briandbutler@gmail.com
LinkedIn/briandbutler
Skype: briandbutler In Miami, Brian has taught Finance, Economics and Global
Trade at Thunderbird’s Global MBA program in Miami.

He previously worked as a research analyst at the
Columbia University Business School in New York
City.

Brian David Butler

International:
A global citizen, Brian was born in Canada, raised in
Switzerland (where he attended international British
school), educated through university in the U.S., started his
career with a Japanese company, moved to New York to
work as an analyst, married a Brazilian, and has traveled
brian.butler@forum-nexus.com extensively in Latin America, Asia, Europe and North
briandbutler@gmail.com
LinkedIn/briandbutler America.
Skype: briandbutler
Brian currently lives in Recife, Brazil where he is teaching
classes on ―Global Entrepreneurship‖ at the university
―Faculdade Boa Viagem‖.

Brian Butler:
Founder of “KookyPlan.com”
– the wiki for Entrepreneurs

Schedule for today
1. First ½ - Midterm exam

2. After break
▫ Discussion about exam, doubts

3. Cross-cultural issues for Global Entrepreneurs

Mid-term Exam – May 8th, 2010
-- 830 am-10am

• 1.5 to take exam

Global Entrepreneurship:
developing the global mindset for
entrepreneurs

Class #6
Saturday May 8th , 2010
•Cross cultural issues for
Global entrepreneurs

Question:

• Who thinks they might:
1. Start a company with business overseas?
2. Work with a foreign company someday?
3. Work with foreigners someday?

▫ Are you ready? How high is your cultural
intelligence?

Cultural Competence:
• Goals:
▫ To be successful in business across cultures or in
multicultural operations.
▫ Understand when you need to adapt. When working
with employees from other cultures, a person has to
determine how much they might need to adapt their
behaviors around different business functions.
▫ To be able to succeed with people from different
cultural backgrounds

• But, beware:
▫ An employee’s success in a certain area does not mean
they will be successful in the same area in another
culture.
http://globotrends.pbworks.com/culture

Importance for global entrepreneurs
• When ―localizing‖ foreign business models, you
need to consider a PEST analysis

• A big part of which involves CULTURE:

▫ What is different (from one country to next)
▫ What might make the business NOT work (if you
transfer it without making modifications?)

The “S” of “PEST(LE)”
social
• lifestyle trends
• demographics
• consumer attitudes and opinions
• media views
• law changes affecting social factors
• brand, company, technology image CULTURE
• consumer buying patterns
• fashion and role models
• major events and influences
• buying access and trends
• ethnic/religious factors
• advertising and publicity
• ethical issues

National
perspectives

where you
are influences
what you see.

Hofstede analysis
• "Culture is more often a source of conflict than
of synergy. Cultural differences are a nuisance
at best and often a disaster."
▫ - Dr. Geert Hofstede

Cultural Orientation Index

COI

Cultural Orientations Indicator -COI

• The COI generates an analysis of cultural gaps by
comparing your COI cultural profile with national
and regional cultural profiles, and it reveals
▫ similarities and differences
▫ as well as potential culture-based risk and success
factors.
• On the basis of these results, individuals can develop
effective cross-cultural management and business
strategies.

Cultural Orientations Indicator- COI

Cultural Orientations Indicator -COI

• the COI incorporates 10 dimensions of culture,
which each meet three criteria:
▫ 1. Each dimension recognizes an important aspect
of business and social life.
▫ 2. Each dimension represents components found
in every socio-cultural environment. It is a basic
orientation and shared rationale for behavior.
▫ 3. Each dimension has practical value to anyone
who needs to reconcile, integrate or transcend
cultural difference in order to obtain a desired
outcome.

Areas of potential conflict circled

NOTE:

• One thing we need to remember is that cultures
are never exclusively one or the other: cultures
will likely be one and the other, but with a
clear tendency toward one of these two
extremes.

Gap Analysis

Q:
will John
Smith have
trouble in
Brazil?

COI – Brazil vs.Analysis
Gap USA

More analysis

• Lets look at the variables one-by one….

• Individualism:
▫ How individuals define their identity.
▫ This dimension ranges from those on one end, such
as many Americans, who see themselves as
individuals first and as members of a community
second, to those on the other end of the spectrum,
such as many Asians, who see their interests as tied
first and foremost to being members of a
community.

http://culturallyteaching.com

• Individualism:

• Individualistic vs. Collectivistic cultures
▫ Where do you see Brazilian vs. US culture with
relation to individualist vs. collectivistic comparison?
 (example from previous class: group at Disney world)


Brazil + USA - Key differences:
• Individualism:

▫ USA: very individualistic, universalistic
▫ Brazil: sort-of -collectivistic, particularistic

Univeralistic vs. Particularistic
Cultures

• Univeralistic – rules are fair, and apply to
everyone, regardless of circumstances

• Particularistic – rules might not be fair, and
special circumstances might mean they should
not apply to me in this circumstance…

Q:
will John
Smith have
trouble in
Brazil?

• Power: How individuals view different power
relationships.
▫ North American cultures typically value equality
between people, especially in the US. In many other
cultures, especially in Asia, age and status associated
with it and position are venerated, and hierarchy is
paramount.


• Power:

▫ Hierarchy vs Equality

▫ How do you think the US + Brazil are different on
this dimension?


• Power:
▫ USA: more towards - equality
▫ Brazil: more towards - hierarchy

• Power:
• Hierarchy – flat equalitarian vs. hierarchy
▫ Question: is it ok to publicly challenge your boss, or to
chastise an employee?
▫ Can decisions be made by the lowest of employees?
▫ Do low-level employees think ―I'm just as good as the
boss‖?
▫ Famous Quote: ―we hold these truths to be self –evident
that all men are created equal‖ Thomas Jefferson, US
Declaration of Independence


• Basically, Power Distance refers to inequality.
• Does a culture find inequality okay and in fact
necessary to maintain societal structure (high Power
Distance)? Or does a culture find inequality wrong and
strive to reduce inequality (low Power Distance)?
▫ 104 Slovakia (= high Power Distance)
▫ 94 Philippines
▫ 90 Romania
▫ 81 Mexico
▫ 67 Colombia
▫ 57 Spain
▫ 49 South Africa
▫ 45 Jamaica USA is NOT the extreme of equality-
▫ 40 USA orientation!!!
▫ 39 Canada
▫ 36 Australia
▫ 35 Great Britain
▫ 18 Denmark (= low Power Distance)

• In LOW power distance cultures,

▫ people are considered as existentially equal. The
inequality is just one in roles, and is not existential.
▫ Merit, what you do with yourself, is more important
than the family that you were born in.

▫ In organizations, subordinates most often expect
their managers to ask for their input.
▫ Privileges and status symbols tend to be frowned
upon.


• Power Distance have to do with Education?

• Low Power Distance culture:
▫ Teachers expect initiatives from students in class
▫ Teachers are experts who transfer impersonal truths
▫ Students treat teachers as equals


• Power Distance have to do with Education


• Competitiveness:
▫ How individuals are
motivated. This dimension
measures what motivates
people in regard to others
▫ Cooperation? Or cut-throat
competitiveness?

▫ How do you think Americans
and Brazilians are different
in this respect?


• Competitiveness:
▫ USA: competitive
▫ Brazil: collective / competitive (in group / out)

• Americans, for example, are motivated by
competitive factors, such as getting ahead and
succeeding personally.
• In other cultures, the prevailing cultural emphasis is
on succeeding through cooperating with others
and moving the larger enterprise ahead.,

• Environment:
▫ How individuals view and relate to the people,
objects, and issues in their sphere of influence.
▫ The range is from those who want to control
their environment on one end, such as
Americans, to those who value harmony and
constraint above all, on the other, such as many
Asian cultures.

• Environment:
▫ USA -control
▫ Brazil - harmony, control

• Time:
▫ How individuals perceive the nature of time and its use.
▫ This has three axes—
 one regarding focus, such as those who prefer to focus on
one thing at a time to those who are multi-focused;
 a second that measures those who see time as fixed
versus those who see it as fluid; and
 a third that captures a person’s predilection for viewing
things in the present, the past, or the future.


Time

photo by badboy69

Areas of potential conflict circled

Why do you think TIME is not circled as a CONFLICT area?

• Time:
▫ USA - single focued, fixed
▫ Brazil - multi focused, fluid

• Time, the way people use it, usually
divides cultures in two categories:
• 1. monochronic/linear (or ―clock time‖)
2. polychronic/flexible


• Time:
▫ For example,
 many Americans are single focused, fixed time, and
future oriented, which is why they often face
challenges with Latin Americans, for example, who
are multi-focused, see time as a fluid thing, and for
whom the past is a key driver.


• Action:
▫ How individuals view actions
and interactions.
▫ This dimension measures
one’s penchant for ―doing‖
versus ―being.‖
▫ Again, Americans are very
doing-oriented, while many
other cultures, especially in
the Middle East, are being-
oriented.


• Action:
▫ How individuals view actions and interactions.
This dimension measures one’s penchant for
―doing‖ versus ―being.‖ Again, Americans are
very doing-oriented, while many other cultures,
especially in the Middle East, are being-oriented.
▫ USA: doing
▫ Brazil: being

cultural theory
Have you noticed, for instance, that some
characteristics of monochronic cultures fit
very nicely with ideas highly valued in
individualistic societies? Which also tend to be
small power distance? In cross-cultural
theory literature, the
monochronic/individualist/small power
distance cultures are considered doing
cultures. At the other end of the spectrum,
polychronic/collectivistic/large power distance
cultures are called being cultures.

“Doing” Cultures
• Here are some very broad characteristics of
doing cultures:
▫ Status is earned (e.g. the work you do in your job).
It is not merely a function of who you are
(e.g. birth, age, seniority).
▫ Status is not automatic and can be forfeited if one
stops achieving (e.g. you quit your job).
▫ Great emphasis is placed on deadlines, schedules
etc.



http://culturallyteaching.com/ photo by Susan_NYC

▫ Tasks take precedence over personal relationships
in most cases (e.g. your family may not like it but
they understand if you have to miss a family
birthday party because you have work to do).
▫ People are supposed to have a personal opinion,
which they are expected to verbalize.

• read more from CulturallyTeaching.com


“Being” Cultures
• And here are some very broad characteristics
of being cultures:
▫ Status is built into who a person is. It’s automatic
and therefore difficult to lose.
▫ Titles are important and should always be used, in
order to show appropriate respect for someone’s
status.



http://culturallyteaching.com/ photo by nao.k

▫ Harmony should be maintained, and therefore
direct confrontation or disagreement is to be
avoided. Saving face is highly valued.
▫ Relationships often take precedence over tasks.
Much time is spent on greeting and farewell
rituals or getting to know someone before
agreeing to do business with them

• read more from CulturallyTeaching.com


Put your country on the doing/ being
map…
• The U.S. is definitely a doing culture.
• Great emphasis is put on people being
productive, including the times one is supposed
to be ―off‖, such as on weekends. In this case,
weekend productivity is measured in the amount
of house chores, errands or other activities that
people are able to do.


map…
• What are some words or expressions that people in
doing cultures tend to use most often? Words that
have a positive connotation in doing
cultures? Below you can find some that
immediately come to mind:
▫ rights, negotiate, fairness, necessity, objectives,
question, criticize, self, friendship, ―do your own
thing‖, contract, litigation, self-interest, self-respect,
individual, dignity, I, me, pleasure, adventure, privacy,
truth, law, order, safe, predictable, tight, work, save,
moderation, goal, permanent, future, economy, effort,
invest, deadline, schedule*

map…
• being cultures? Here are a few:
▫ harmony, face, sacrifice, family (in a symbolic
sense), tradition, respect, father (as a title), older
brother, younger brother, wisdom, protect,
pleasing, honor, duty, loyalty, relativity,
unstructured, loose, flexible, relation, gift, today,
yesterday, tradition*


Effect on communication styles
• 1. The Doing (D) person is eager to get to the
point. The Being (B) person would rather spend
some time getting to know the person they’re
speaking with, and talk about personal stuff
before getting to the point.


Effect on communication styles
• 2. Given the concern for deadlines and
schedules of D people, they are very careful
about the amount of details they include in a
conversation. Only the details that are
DIRECTLY related to the topic will make it. The
others will be left out. This can be quite
challenging for B people who need a much larger
amount of details in order to fully understand an
issue, and feel comfortable talking about it.

• Communication:
▫ How individuals express
themselves.
communication styles and
predilections across four
indicators:
1. context, which refers to how
much the context of a
situation drives the
conversation (Americans
typically say what they mean,
which is low context; in a
high context culture, such as
Japan, you are supposed to
surmise things from what’s
not being said);

• Communication:

▫ four indicators:

2. direct versus indirect
communication styles
(Americans are typically
direct; Japanese are
indirect);


• Communication:


3. expressive styles, which
means using facial and hand
gestures as part of
communicating versus an
instrumental style, in which a
person is far less
demonstrative when
communicating;


• Communication:


4. and how much formality is
required to communicate in a
given culture.


• Communication:

▫ USA: low context, direct, instrumental
▫ Brazil: high context, indirect, expressive

• Communication:

Americans are typically low
context, direct, expressive,
and informal in their
conversational approach; on
the other end of the
spectrum, Japanese are high
context, indirect,
instrumental, and very
formal in business
communications.
.


• Space:
• How individuals demarcate their physical and
psychological space.
• Americans typically treat their physical and
psychological space as private and guard it against
strangers; other cultures are conditioned to a more
public approach to both aspects.
• Hence, Americans are uncomfortable with customs in
the Middle East in which men kiss each others’ cheeks
in greeting and hold hands when walking together.


• Space:
▫ How individuals demarcate their physical and
psychological space. Americans typically treat their
physical and psychological space as private and
guard it against strangers; other cultures are
conditioned to a more public approach to both
aspects. Hence, Americans are uncomfortable with
customs in the Middle East in which men kiss each
others’ cheeks in greeting and hold hands when
walking together.
▫ USA - private
▫ Brazil - private / public

• Structure:
▫ How individuals approach
change, risk, ambiguity, and
uncertainty.
▫ This dimension ranges from
those who like to work within
orderly confines, to those
who flourish in flexible
situations.
▫ Many Americans are pre-
disposed toward flexibility,
while many Japanese prefer
order.


• Structure:
▫ How individuals approach change, risk,
ambiguity, and uncertainty. This dimension
ranges from those who like to work within orderly
confines, to those who flourish in flexible
situations. Many Americans are pre-disposed
toward flexibility, while many Japanese prefer
order.
▫ USA & Brazil... both flexible. Finally, we agree on
something!!

• Thinking:
▫ How individuals
conceptualize.
how people think, 2
measures:
 from inductive to
deductive reasoning
 Inductive reasoning goes
from the specific to the
general. Deductive reasoning
goes from the general to the
specific.


• Thinking:
▫ How individuals conceptualize. This dimension
measures how people think, from inductive to
deductive reasoning to linear to systemic
patterns of data collection and analysis. Many
Americans are inductive, linear thinkers who like
short, relevant statements and anecdotal
examples, to Germans, who like theoretical
concepts and abstractions.
▫ USA: Inductive, linear
▫ Brazil: deductive, syste

• Thinking:
▫ How individuals
conceptualize.
 Many Americans are
inductive, linear thinkers who
like short, relevant statements
and anecdotal examples, to
Germans, who like theoretical
concepts and abstractions.


• Thinking:
▫ How individuals
conceptualize.
how people think, 2
measures:
 from inductive to
deductive reasoning
 to linear to systemic
patterns of data collection
and analysis.


Inductive thinking
• Inductive reasoning is making a conclusion based on a set of
empirical data. If I observe that something is true many times,
concluding that it will be true in all instances, is a use of
inductive reasoning.

• Example:
▫ All sheep that I've seen are white
▫ All sheep must be white

• This example makes inductive reasoning seem useless, but it
is in fact very powerful. Most scientific discoveries are made
with use of inductive reasoning. A majority of mathematical
discoveries come about from conclusions made with inductive
reasoning, or observation. But the key word is "discovery."
With induction something can be discovered but not proven.

Deductive thinking
• Deductive reasoning starts with a general rule, a
premise, which we know to be true, or we accept
it to be true for the circumstances. Then from
that rule, we make a conclusion about something
specific.
• Example:
▫ All turtles have shells
▫ The animal I have captured is a turtle
▫ I conclude that the animal in my bag has a shell

Deductive thinking
• Another example of a deductive argument :
▫ All men are mortal
▫ Socrates is a man
▫ (Therefore,) Socrates is mortal
Seems ok, but :
▫ Everyone who eats steak is a quarterback.
▫ John eats steak.
▫ [Therefore,] John is a quarterback. (?)
Prejudice – watchout
―all Chinese are good at math.‖, He is chinese, so he
must be good at math… (?)
-- deductive thinking can get you in trouble!

…while Being Wary of Stereotypes
• Just as there are Americans and Australians who are
fluid time-oriented and are indirect communicators,
so too are there Brazilians who attend meetings at
the time agreed upon, and Japanese who are direct
communicators.
▫ ―by assigning particular cultural orientations to
national cultures, a generalization is created and is
only a starting point for further inquiry, which is
subject to review, validation and change. The
keydifferences among cultures are the emphasis and
the expression given to one over the other depending
on the situation.‖
http://www.thunderbird.edu/wwwfiles/pdf/executive_education/consulting
_network/knowledge_center/thought_pieces/kinsinger_2009_ucoi_ci.pdf

Resources to learn more
• http://globotrends.pbworks.com/Culture-
issues-in-Brazil
• Thunderbird here Download the PDF »
• see the TMC site here: http://www.tmcorp.com/

Resources to learn more
• Attitudes
▫ Brazil's Attitude Towards Diversity
▫ Brazil's Attitude Towards Change
▫ Attitudes Towards Authority
▫ Attitudes Towards Family
▫ Attitudes toward material wealth
•
• Business/Industry
▫ Brazilian Deal or No Deal
▫ Brazil's Business Etiquette
▫ Business meeting etiquette in Brazil
▫ Brazilian Communication Patterns
▫ Brazilian Sports Industry
▫ Brazillian Coffee Industry
▫ Business and Religion in Brazil
▫ Brazilian Music Industry
▫ Jeito

International IQ moment

What is happening
in Greece? -
discussion

Athens Greece – at the heart of a
Athens Greece
European Crisis?

Athens Greece

• What is
happening in
Greece? –
discussion for
next class?

Homework part #1– due Wednesday for
feedback, or at next class
• Typically, cultural factors drive the differences in
business etiquette encountered during
international business travel.
• Using the globalEdge Website, find five tips
regarding business etiquette in Greece.

part 6: Global entrepreneurship class - culture

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part 6: Global entrepreneurship class - culture