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Globalization and National Business Cultures. International Business Communication between Western Europe and the Former Sowjet Union

The present study investigates constants and changes in the business culture of two successor states of the Soviet Union, Belorussia and Uzbekistan, and compares them with relevant aspects of the business culture of the UK. The main theoretical
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  Helmut (Michael) Daller   Globalisation and National Business Cultures. Intercultural Business Communication between Western Europe and the Former Soviet Union 0 Abstract The present study investigates constants and changes in the business cul-ture of two successor states of the Soviet Union, Belorussia and Uzbek  1 -istan, and compares them with relevant aspects of the business culture of the UK. The main theoretical question is whether radical economic changes and economic globalisation lead to a convergence in business culture or whether old cultural values still prevail. There is clear evidence that the role of managers has changed since the collapse of the Soviet Union. My data show, however, that there are still significant cultural dif-ferences in the role of managers from Russia and the UK with important consequences for business communication across cultures. A striking ex-ample is the high power distance in Hofstede's terms which was typical 2 for managers in the Soviet Union and is still important today as my data show. These findings support the hypothesis that although there may be dramatic changes in a society important underlying cultural traits contin-ue to exist over a long period of time. This supports the view that inter-cultural differences will continue to play an important role even in a global economy. 1 Introduction The present study compares data from the UK and two successor states of the Soviet Union: Belorussia and Uzbekistan. Both have a different cul-tural background which makes them good candidates for a comparison of  business cultures. Belorussia has always been the most Western part of the Soviet empire. It is traditionally an Orthodox state with close links to The official name is now: Republic of Belarus. 1   G. Hofstede, Culture's Consequences. International Differences in Work- 2  Related Values  (Beverly Hills, London: Sage Publications, 1980a).  the West and to its neighbour Russia. Uzbekistan is traditionally an Islam-ic country and its language, Uzbek, is part of the Turkish language family. It is not accidental that recent massive investments have come especially from Turkey. The country itself is multicultural, just like many countries in Central Asia with large minorities, e.g. about 5% Koreans. Language  policy seems to be a good indicator of a countries affiliation. Whereas Belorussia sticks to the Cyrillic alphabet Uzbekistan has introduced a change towards the Latin alphabet adapted to the needs of the Uzbek lan-guage. Uzbekistan and Belorussia were part of completely different cul-tural areas at least up to the formation of the Soviet state. Both countries are now trying to introduce a market economy and to establish links with Western countries and with Western companies. In order to illustrate the importance of the problem of intercultural busi-ness communication and the vast amounts of money that are at stake, I should like to give some facts about international co-operation in Be-lorussia. In 1998 there were 1445 joint ventures between local and for-eign companies in Belorussia of whom about 1000 were operational. Fur-thermore there were more than 800 foreign- owned companies. The for-eign investment was 548 Million US-Dollars. The foreign partners came 3 from 64 countries (mainly Holland, Germany and the USA). According to Ditchkovsky (personal communication) cultural differences play a role in the failure of about 40% of these joint ventures. It is very difficult to get exact figures in this area because the real reason for a failure is often dif-ficult to determine. Many failures might be attributed incorrectly to pure-ly economical reasons although cultural differences are the main problem area. If we make the conservative estimation that only in 10% of the cas-es the failure is mainly due to cultural differences, about 50 Million Dol-lars are lost in Belorussia alone every year due to problems in intercultur-al business communication, and Belorussia is only a small country of the former Soviet Union. D. Ditchkovsky, '   !"#$%&'()*   $   +,*-,./"$0-)   1%,+1%)*-)2   0   3 )"$0-%'""3&)   )"4,0-)()*&)   "'   -,%%)-$%))    5,0167.)8)    9,.'%60/   4   1998 : . ' (Information about the activities of companies with foreign in-vestment in the Republik of Belorussia in 1998) (Minsk: Institute for Pri-vatisation and Management).    2 Theoretical Background 2.1 Does globalisation lead to a more homogeneous world-wide busi-ness culture? One of the main questions in the discussion about globalisation is whether and how the differences between local cultures and values will  be reduced in favour of a cultural globalisation. This is also called (cul 4 -tural) homogenisation or the convergence theory. The proponents of cultural homogenisation argue that accelerating globaliza-tion in the form of global media, information systems and huge multinational organizations is eroding local cultures and traditions.   5   There has been support for both positions. It has been argued that global 6 -isation is not a straight-forward process and there might be interactions  between different forces at work. Appadurai points to 'the tension be-tween cultural homogenization and cultural hetero-genization'. Some ar  7 -eas of modern society might tend more easily towards cultural globalisa-tion than others. Science and technology have been mentioned in this context, since 'science and technology ... speak in a universal language'. 8 One of the fiercest criticism against the idea of a unified global business culture comes from Geert Hofstede whose work is devoted to the investi-gation of cultural differences. Even such apparently universal systems as See also: U. Beck, What is Globalization?  (Oxford: Blackwell, 2000). 4  John Beynon, 'General Introduction' in: J. Beynon and D. Dunkerley 5 (eds.), Globalization: The Reader   (London: Athlone Press, 2000), p. 22. Feffrey C. Ady, 'Minimizing Threats to the Validity of Cross Cultural Or  6 - ganizational Research'   in: R. L. Wiseman and R. Shuter (eds), Communi-cating in Multinational Organizations  (International and Intercultural Communication Annual, Volume XVIII). (Thousand Oaks, London, New Dehli: Sage Publications, 1994), pp. 34/35.   Arjun Appadurai, 'Disjuncture and Difference in the Global Cultural 7  Economy  (first published 1990)' in: J. Beynon and D. Dunkerley (eds.), Globalization: The Reader   (London: Athlone Press, 2000), p. 94.   C. Kerr, J. Dunlop, F. Harbison and C. Myers,  Industrialisation and In 8 -dustrial Man  (Harmondsworth: Penguin, 1973), p. 54 (quoted after M. Waters, Globalization  (London: Routledge, 1995) p. 17.  accounting where 2 and 2 should be 4 world-wide are culturally deter-mined as Hofstede points out. 'Accounting and management control sys-tems are manifestations of culture. (...) They are best understood as un-certainty-reducing rituals .' 9   Hofstede is very sceptical about cultural homogenisation in the global economy because underlying cultural values or "mental programs" as he calls them are deeply rooted in national cultures. A world-wide homogenization of mental programs about power and depen-dence, independence, and interdependence under the influence of a presumed cultural melting-pot process, is still very far away, if it will ever happen. (Hof-stede 1994, p. 47) This position has practical consequences for management theories and leadership styles. According to Hofstede there is "very little evidence of 10 international convergency over time" (Hofstede 1994, p. 77). The main question in the present study is whether and to what extent underlying cultural traits prevail in societies in transition like the successor states of the former Soviet Union. 2.2 Hofstede's framework Hofstede's carried out research on cultural differences. He included 116.000 questionnaires from more than 50 countries in his research. Hof-stede (1980a et passim) distinguishes between four cultural dimensions. Later a fifth (long-term orientation) was added. According to Hofstede the following five dimensions can be found in all business cultures: ¥power distance   ¥uncertainty avoidance   ¥individualism vs. collectivism   ¥femininity vs. masculinity   ¥long-term vs. short-term orientation.   G. Hofstede, Cultures and Organizations . Software of the Mind. Inter  9 -cultural Cooperation and its Importance for Survival   (London: Harper-Collins Business, 1994), p. 155.   G. Hofstede, 'Motivation, Leadership, and Organization: Do American 10 Theories Apply Abroad?'    Organizational Dynamics ', (Summer 1980b),  pp. 40 - 63.    For example the business culture of the UK scores low in power distance (rank 35 from 50 countries), low in uncertainty avoidance (rank 35/50), high individualism (rank 3/50), high in masculinity (rank 9/50) and low in long-term orientation (rank 18/23) (Hofstede 1994, p. 26 ff.) In the present study I will mainly on three aspects of Hofstede's frame-work: power distance, uncertainty avoidance and individualism/collec-tivism. 2.3 Business Culture in Russia For political reasons, Hofstede (1980a, p. 399) could not include data from the Soviet Union at the time of his research. Since then several stud-ies have been carried out. Puffer and Shekshnia summarise research done on Russia using Hofstede's framework. According to these research 11 findings the Russian business culture is characterised by high power dis-tance, high uncertainty avoidance, high collectivism, high femininity and a high short-term orientation. The high power-distance in Russia is espe-cially important for the role of the manager. Russian managers, in production settings at least, are expected by their subor-dinates to be dominating and commanding to live up to the image of their role. 12   According to Puffer these managers are at the same time more relation-ship-orientated than Western managers, which reflects the more collective structure of Russian business culture. Data within Hofstede's framework 13 about the business culture of Uzbekistan are not available at the moment. However, there are data from Turkey which would allow at least some Sheila Puffer and Stanislav V. Shekshnia, 'The Fit Beween Culture and 11 Compensation'  , in: S. Puffer et al. (eds.),  Business and Management in  Russia  (Cheltenham: Edward Elgar, 1996), p. 270.   Sheila Puffer, 'The Four Cs of the Russian Manager'  , in: S. Puffer et al. 12 (eds.),  Business and Management in Russia  (Cheltenham: Edward Elgar, 1996), pp. 139.   There are two main types of leadership according to Puffer: task-orien 13 -tated behaviors and relationship-orientated behaviors. See: Sheila Puffer, 'Leadership in a Russian Context'  , in: S. Puffer et al. (eds.),  Business and  Management in Russia  (Cheltenham: Edward Elgar, 1996), p. 45.
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