MASTER2 ManagementInternational ProgrammeIndividualis MEMOIRE

Anne20112012

An overview of cultural impact on management

NGUYEN Minh Ha
1

No tudiant : 6076715

ACKNOWLEDGEMENTS
I would like to thank my professor and my friend Ngoc Tran whose advices helped me improve my thesis. I would also like to thank my university University Jean Moulin Lyon 3 for offering me an excellent opportunity to experience a new culture, through the Erasmus Exchange Program. My one-year exchange enriched even more my intercultural competences, which has inspired me the topic. Since a great deal of bibliographical sources of this paper come from the courses that I followed during my Master, Id like to thank all the professors for offering such interesting and inspirational lectures.

ABSTRACT
Globalization has brought new ventures for business; it opens all the doors and barriers between countries. Many believe that the world is getting smaller and there will be only one big culture in the near future. This paper argues that cultural boundaries still exist, indeed, as a powerful underlying factor that can either impede or foster international business. The thesiss purpose is to discuss about different impacts that culture has on management. While culture has different meanings, management has different ways to be approach. This thesis brings an overview on the subject of cross cultural management in highlighting the need of cultural differences recognition. One of the great methods to recognize culture as well as its impact on management is to identify cultural standards i.e. the underlying norms of thinking, perceiving, judging, and acting that the vast majority of individuals in a given culture is considering as normal for themselves and others. Moving from this step, some practices that enable an efficient cross cultural management is discussed.

CONTENTS
INTRODUCTION...........................................................................................................6 The meaning of culture..................................................................................................7 1.What is culture?............................................................................................................7 Definition....................................................................................................................7 Characteristics of culture............................................................................................8 The concept of organizational culture.........................................................................8 2.What is management?...................................................................................................9 3.Why does culture matter in management?..................................................................10 Culture as an advantage or disadvantage..................................................................11 How culture affects management..............................................................................12 II. Bringing cultural differences to the surface...............................................................14 1.Recognizing culture....................................................................................................14 Cultural values..........................................................................................................14 Cultural standards.....................................................................................................17 2.Insights of each chosen culture...................................................................................18 1) Vietnam.................................................................................................................18 a) First glance.............................................................................................................18 b) Cultural profile......................................................................................................18 Structure and Process.....................................................................................................18 Hierarchy and Power......................................................................................................19 Communication..............................................................................................................20 Time and organization...................................................................................................22 Cooperation and Competitiveness.................................................................................23 Leadership and Management.........................................................................................24 2) Finland...................................................................................................................27 a) First glance..................................................................................................................27 b) Cultural profile......................................................................................................27 Structure and Process.....................................................................................................27 Hierarchy and Power......................................................................................................29 Communication..............................................................................................................30 Time and organization...................................................................................................31 Cooperation and Competitiveness.................................................................................33 Leadership and Management.........................................................................................34 3) Russia.....................................................................................................................36 a) First glance..................................................................................................................36 b) Cultural profile...........................................................................................................37 Structure and Process.....................................................................................................37 Hierarchy and Power......................................................................................................38 Communication..............................................................................................................39 Time and organization...................................................................................................39 Cooperation and Competitiveness.................................................................................40 I. 4

Leadership and Management.........................................................................................42 III. How to avoid pitfalls?...............................................................................................44 1.Cross cultural training.................................................................................................45 Learning style............................................................................................................45 2.Intercultural competence.............................................................................................46 Stereotypes................................................................................................................49 3.Using organizational culture as an advantage.............................................................49 4.Building a strong multicultural team..........................................................................53 5.Guidelines for an effective international cooperation.................................................55 Conclusion.....................................................................................................................56 REFERENCES..............................................................................................................57

List of figures: Figure 1: How culture affects management Figure 2: Gudykunst, Wiseman and Hammer three-factor model Figure 3: Developmental model of intercultural sensitivity Figure 4: The founding principles in building an inclusive diversity culture List of tables: Table 1: Main cultural dimensions in management research Table 2: Comparison between monochronic and polychronic culture

INTRODUCTION
Managers, who readily accept that the cuisine, the literature, the music and the art of other countries run parallel to one another, must also learn to accept that the art of management differs in other countries. Andr Laurent, Professor INSEAD Despite the globalization, despite the convergence of behaviors in many ways among different countries, the concept of the melting pot still remains a myth. People usually say that the world is getting smaller, but is it the case? It might be true that people all over the world are converging in some ways dressing, food, entertainment; however, the underneath cultural layers which affects people behavior, values, perception, communication styles, etc. cannot be detected easily. The notion of melting pot should also be questioned. In so-called multicultural cities such as Paris and New York, we can easily find different cultural communities rather than cultural meltdown. We observe cultural diversity rather than assimilation, divergence and fragmentation rather than convergence. The notion that business is business, that management is immune to cultures influence, is thus challenged. Contrary to the common believe that management consists in a set of universal principles, management is indeed influenced by culture. The word management worldwide used actually came from America; though the entire concept of management can be different in other parts of the world. Lets take the position of a manager in different countries as example: While the opportunity of becoming a manager is open to anyone in the Unites States, the word manager is connected with seniority in Japan, and social class in France (i.e. cadre vs. non-cadre). Such assumption as management, like science, has its own practices which are universally followed should also be revised. For example, in Asia herbal therapy combination of medicinal herbs, animal and mineral substances accounts for the majority of medicine treatment, whereas medicine with chemical components is mostly used in Western countries. Culture can be described as an iceberg only 10 % can be seen on the surface, while 90% is underwater. Indeed, culture is an influential undercurrent which can undermine or boost business success, especially on the international scale. As Confucius says All people are the same. Its only their habits that are so different the impact of culture on management is usually neglected. Thus, culture needs to be brought to the surface cultural awareness should be developed. 6

While organizations stress on other type of management, intercultural management is classified as soft management. Even though crosscultural or intercultural management is not the most important part in management, it is usually overlooked. However, it is necessary that managers desiring to go international take into account the invisible current, its depth and force. Therefore, this thesis aims to provide an overview of intercultural management in both intercultural collaboration and companys overseas establishment cases. First and foremost, a brief introduction about culture and management is presented. Then I will move on to discuss about the importance of culture in management. As examples of national cultures influence in international business, I choose Vietnam my home country; Finland the country where I spent one exchange year, and Russia the largest country in the world. Finally in the third part of the thesis, Id like to discuss about solutions and practices for an efficient cross cultural management.

I. The meaning of culture

1.What is culture?
Definition
There are several definitions of culture, depending on different fields of study anthropology, sociology, humanities, philosophy, management, etc. There is no single definition of culture; it is indeed a complex concept. Here are some of these definitions of culture, in broad sense: At its broadest sense, is regarded as the set of distinctive, spiritual, material, intellectual and emotional features of a society or a social group. It includes not only arts and letters but also modes of life, fundamental rights of human beings, value systems, traditions and beliefs. UNESCO Collective programming of the mind that distinguishes the members of one group or category of people from another. Culture, in this sense, includes systems of values; and values are among the building blocks of culture. Hofstede, 1980 Historically evolved values, attitudes and meanings which are learned and shared by the members of a community and which influence their material and non-material way of life. Tayeb, 2003 Is a set of human-made objectives and subjective elements that in the past have increased the probability of survival and 7

resulted in satisfaction for the participants in an ecological niche, and thus become shared among those who could communicate with each other because they have a common language and they live in the same time and place - Larry A. Samovar, Richard E. Porter, Edwin R. McDaniel, 1991 A set of basic assumptions - shared solutions to universal problems of external adaptation (how to survive) and internal integration (how to stay together) - which have evolved over time and are handed down from one generation to the next. Edgar Schein, 1995

From these definitions, we can see that there are three main aspects of human society embedded in culture: linguistic, physical and psychological. One important function of culture is that it provides structure, stability and security for a group and its members. Indeed, the concept of self is culturally bounded: shared values, traditions, history, language are represented in characteristics of a given group and therefore reflected in each member of the group, and from which the notion of in-group/out-group comes.

Characteristics of culture
- Culture is learned: culture is not innate; it is learned through the socialization process. - Culture is dynamic: it can be changed from generation to generation, from place to place, from group to group. - Culture is selective: only a selected number of behavior patterns are chosen and embedded. - Culture is pervasive: culture infiltrates in every single aspect of our live and influence our way of thinking, our behaviors, our perception, etc. - Culture is ethnocentric: cultural patterns can lead us to subjectivity in our evaluation of others.

The concept of organizational culture

The concept of organizational/corporate culture has been introduced in management literature since the early 1980s. Organizational culture can be seen as: - A system of shared values, actions, and beliefs that develops within an organization and guides the behavior of its members Schein, 1986; Scholz Holbauer, 1990; Scholz, 2000; Hofstede, 2005. 8

The articulated publicly announced principles and values that a group claims to be trying to achieve, such as product quality or price leadership Deal and Kennedy, 1982 The broad policies and ideological principles that guide a groups actions towards stockholders, employees, customers and other stakeholders Ouchi, 1981; Pascale and Athos, 1981; Packard,1995 The implicit, unwritten rules for getting along in the organization, the ropes that a newcomer must learn to become an accepted member, the way we do thing around here Schein, 1968; Van Maanen, 1976; Ritti and Funkhouser, 1987 From those definitions, it is implied that corporate culture holds an important role in organizations it encourages a shared identity among an organizations member, it gives instructions as well as orientation for companys actions in general, and for decision-making in particular. Contrary to the simple belief in the convergence of a socalled global culture, companies in the process of internationalization have to confront with the harmonization of different corporate cultures.

2.What is management?
According to Donald J. Cough, management is the art and science of decision making and leadership. Mary Cushing Nile rather defines management as a social and technical process which utilizes, resources, influences, human action and facilitates changes in order to accomplish organizational goals, while George R. Terry considers it as a disconnect process consisting of planning, organizing, activating and controlling performed to determine and accomplish the objectives by the use of people and resources. According to Harold Koontz, Management is an art of getting things done through and with the people in formally organized groups. It is an art of creating an environment in which people can perform and individuals and can cooperate towards attainment of group goals. According to F.W. Taylor, Management is an art of knowing what to do, when to do and see that it is done in the best and cheapest way. Thus, it is quite difficult to give a precise definition of the term management. Several authors have brought their own views about management by laying emphasis on different aspects: for example, F.W Taylor puts emphasis on engineering aspects, while Elton Mayo highlights human relations aspects; George R. Terry stresses on decision making aspect whereas Ralph Davis concentrates on leadership aspect and some other like Barry Richman underline integration or coordination aspect. 9

However, the essence of management to manage by results, projects or objectives remains the same. It is both social and technical process which helps in the creation, direction, maintenance and operation of an organization. Management consists of planning, organizing, leading, decision making, controlling and coordinating all in order to achieve pre-determined goals of a given organization. Thus, we can say that a good management includes the notion of effectiveness and efficiency: being effective means doing the appropriate task, while being efficient means doing the task appropriately. A good manager should have the capacity to influence, to inspire full commitment to the project as well as to the people involved.

3.Why does culture matter in management?

As mentioned above, culture is like an iceberg: the observable parts are on the surface of the ice, such as artifacts and behaviors; whereas underneath lie the values and beliefs which provide explanation for those behaviors, and further deep down underlie the basic assumptions value orientations. These latter are especially difficult to comprehend; therefore they need interference and interpretation. A Ford foundation executive with over twenty years of overseas travel experience once said that most problems in cross cultural projects come from different ideas of right and wrong. This statement refers to two main problems in intercultural communication: 1. People tend to get others live according to their own cultural beliefs and values ideas about right and wrong, for example. 2. Something completely acceptable in one culture might be perceived as unacceptable, even forbidden in other cultures. People want to believe that their cultural values and beliefs are right, that the way their culture reflects in their behaviors is the right way to do things, and interestingly they tend to get upset when people of other cultures dont agree and tell what is wrong. People from different cultural contexts will have different sets of values and beliefs, thus this implies that one doesnt have any basis to judge any other people than those of their own culture. One survey conduct by a consulting firm in Europe found out that cultural differences are the biggest source of difficulty in integrating European acquisitions. Here is another example from an American oil company setting up a drilling operation on a Pacific island and hired local labor. Within a week, all the foremen were found lined up on the floor with their throats cut. Only afterwards did they understand that hiring younger men as foremen to boss older workers was not acceptable in a society where age indicates status. On 10

using their own cultural criteria for recruitment, the company failed to anticipate the deadly consequences. It is therefore obvious that culture and cross cultural management plays a crucial role, whether it regards intercultural corporation or companies doing international business. Culture partly defines the individuals attitudes and behaviors in both social and organizational levels; culture can either provide advantages for organization or impede international business. David A. Victor gave the following conclusion about the importance of understanding culture as well as the bad consequence of ignoring culture: Lack of understanding deriving from ethnocentrism or ignorance of culturally based assumptions erroneously believed to be universal can readily escalate to unproductive conflict among people of differing cultural orientation. Still, in an increasingly competitive world economy, it is harder for the successful business venture (than it may have been in the past) to conduct business exclusively within the safe confines of a single domestic business environment. Dean Papadopoulos in 25th Annual Pacific educational conference1 pointed out three main benefits of cultures to individuals and groups: - Culture organizes our life with daily, weekly and annual customs and traditions that bind us to our group. When managers know how to create the values from differences between cultures and establish an organization culture, possibly that people in this organization have the same view of the way they should follow - Culture provides us with the face-to-face human interaction and tactile contact that are needed for our development and survival. Cultures provide people a natural sense about surrounding environment and surviving tool as well as abilities to adapt and develop. - Culture is scientifically immeasurable characteristic known to all individuals who belong to strong and reaffirming groups: a sense of belonging to a group that is collectively wiser than any individual. As Maslows hierarchy pyramid about humans need, after psychological requirement for surviving and safety, human need to be loved and belonging which can be seen as one of the benefits of culture. After the feeling of belonging, trust can be built up more easily.

Culture as an advantage or disadvantage

Many managers, instead of seeing cultural differences as a problem to be solves, know how to make advantages of them. Indeed, each country has it own institutional and cultural characteristics which can be the source of competitive advantage. Culture, although hard to separate, is deeply embedded in institutional and organizational behaviors. For example, collectivism in Russia can be seen as an
1

25th Annual Pacific Educational Conference Pacific Educator.

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advantage: managers positively assess the capacity of Russian employees in terms of team work and norms compliance. Or successful Japanese companies are more inclined to emphasize long-term goals and global vision; they also stress on the life time employment system which is seen not as a formal contract but a commitment from both sides management and employees. Another example coming from France: many industrial innovations of France, such as the TGV and the extensive nuclear power program, are believed to be resulted from the French educational system which places high value on engineering and administration (i.e. grandes coles), as well as the close relationship between state and industry. Companies operating overseas, understanding cultural differences and knowing how to adapt, will be more likely to success. From a marketing perspective, fast-food restaurant chains such as McDonalds, KFC, and Burger King, are great example in this case: they adapt their products to the local culture and taste. Nevertheless, culture can also be a source of disadvantage. In Denmark, the impact of culture on competitive advantage was questioned by the daily newspaper Morgenavisen: it was warned that Danish companies entering the international market could be constrained by the cultural influence of Janteloven (loosely translated as Act normal, thats crazy enough) it signifies the importance of keeping a low profile. The newspapers argued that, as a consequent, Danish companies would not be aggressive enough in marketing and in competition with other international companies. Clarke (2000) wrote: The official proponents of Asian values have often abused the value they claim to uphold. The deeply held commitment to hard work, sense of thriftiness, and concern for the family, belief in education, desire for consensus and respect for authority is the bedrock of the value system that has served Asia in the early decade of its industrialization. However, dynastic rules and paternalistic industrialists have often translated these values into nepotism, cronyism and corruption. Such a system of patronage crowds out a spirit of initiative and independent entrepreneurship. This statement points out the danger of overall generalizations about culture, especially when they are mingled with political discourse. Politicians may use this type of discourse about cultural values in order to legitimate their excessive use of power which may goes against an economy of dynamic firms.

How culture affects management

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Source: Caroll and Gannon, 1997 From a societal perspective, culture is a general resource which helps people in a particular society to understand their own and others behavior (Leach, 1982). The societal culture is connected to organizational culture, and these two levels can be considered as a dynamic relationship (Kanungo and Jaeger, 1990). The characteristics of the societal-level culture constitute an organizations external environment, which have influence on peoples actual behavior and shapes normative conditions for their conduct inside organizations. Kanungo and Jaeger (1990) address this issue in their study of developing countries and the impact of the external environment on employees motivation and performance results as well as shared norms, values, attitudes, beliefs and behavior forms at work, called as internal work culture. The dimension of internal work culture consists of descriptive assumptions about a human nature (i.e. what people are) and prescriptive assumptions about peoples behavior (i.e. how people should behave). According to Kanungo and Jaeger, these assumptions shape organizational practices and characterize work ethic as well. As Kanungo and Jaeger (1990) put it, the knowledge about how the things are (descriptive assumptions) affects peoples beliefs about the appropriate behavior at work (prescriptive assumptions). The early socialization or conditioning process involves the influence of different institutions, such as family and educational institutions, religion and political atmosphere. As individuals learn the mode of 13

thinking, feeling, and performance, they are thus shaped by ideological and cultural influences. These influences of socialization behavior dispositions (or ethics) are relevant in management. Managers, as long as employees are all belong to (at least) one culture; they all go under the process of acculturation through social interactions, they are all culturally bounded. Therefore, in order to understand their behaviors, it is first necessary to understand the social framework in which they are bounded: what is the national identity of their country, how does the educational system work, how do institutions and government affect their lives, how do they communicate, what are the religions in their country, etc. In understanding this, one will understand more clearly the social behaviors and values as well as ethics standards of a manager.

II. Bringing cultural the surface

1.Recognizing culture
Cultural values

differences

to

Kluckhohn (1951, p. 395) defined a value as: A conception, explicit or implicit, distinctive of an individual or characteristic of a group, of the desirable which influences the selection from available modes, means and ends of action, i.e. the general norms that prevail in a given society or organization (Popitz, 1980). Hofstede (1992, p.2) defined values as broad tendencies to prefer certain states of affairs over others; values are feelings with an arrow to it: they have a plus and a minus side. Schwartz (1999) described values as conceptions of the desirable that guide the way social actors (e.g. organizational leaders, policy-makers, individual persons) select actions, evaluate people and events, and explain their actions and evaluations. Overall speaking, we can suppose that the system of values, which constitutes a culture, gives guidance to problem solutions of human beings and, for that reason, there are a universal or nearly universal system of values independent from cultural boundaries (c.f. Kluckhohn, 1953, p. 507; 1972, p. 273). Several studies aiming to measure cultural values have been carried out, among those we can list Hofstede (1968, 1972 and 2001), Schwartz (1992), Trompenaars (1993), GLOBE (2002) (c.f. Table 14

below). Dimensions, which are quantitatively measured, can be used as independent explanatory variables in quantitative research, what makes them most useful if a significant coefficient can be found in appropriate regression analysis (Fink, Klling, Neyer, 2005). Thanks to these dimensions, we can understand better similarities and differences among cultures.

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Main cultural dimensions in management Source: The cultural standard method Fink, KLLING, Neyer, 2005 Nevertheless, cultural dimensions dont straightly forecast problems encountering in intercultural management and business. They explain neither how business encounters are perceived, nor how and why managers and staff react in a specific way. The values play the role of a guideline, but those reactions are chosen by individuals from the available repertoire provided by culture. In other word, values may be the same across cultures but not norms and behaviors. They remain individual choices, and if they are ill-chosen, undesired and counterproductive results might occur. Actually, Bolten (2001) identified four fundamental problems generated by cultural dimensions: 1. Cultural dimensions give no information about specific individuals and their behaviors. 2. Anyone who operates with such distinctions, and strictly separates between 'inside view' and 'external view', overlooks the fact that cultures are not a container, but is a product of interculturally interconnected actions. In this sense, inside view is a much more diffuse concept than what emic research 16

(means with the eyes of an insider) is always assumed" (Bolten, 2001, p. 105). 3. Cultural dimensions have no explanatory function and may thus lead to the danger of stereotyping. The descriptive statements do not necessarily lead to a special understanding of other cultures. This somehow results a virtual reality. 4. Through the application of culture dimensions will be determined in which form the culture will be realized.

Cultural standards
Culture standards are typical standards of orientations for groups, organizations and nations to perceive, think and act. A standard indicates how an object normally has to look like and how common events should run. A cultural standard fixes the rules how members of a certain culture have to behave and how objects, persons and developments have to be seen, valued and treated Alexander Thomas, 1991, p.5 In order to deal with the aforementioned issue, several method measuring Cultural Dimensions and Standards have been developed by different scholars. The cultural standard concept is based on Jean Paul Piaget (1962 and 1976) developmental psychology and Ernst Boeschs cultural psychology and concept of action: An acting person is always considering possible views and judgments of their counterparts, as well as own experiences and assumed experiences of others. A person reacting will always consider the desirability or necessity to achieve a consensus with a specific partner and also the norms of judgments of his own culture. (1980, page 135). Consequently, in order to understand the dynamics of international business encounters, we need to shift from the comparative studies of cultural differences to the studies of intercultural interactions. The main issue in intercultural management doesnt consist in the differences themselves, but in the way they are perceived, interpreted and managed by members of different cultures in an international context. In this sense, comprehending cultural standards (i.e. main norms of behaviors) is necessary in intercultural management. Cultural standards are based on the values in a given culture, but also on traditional modes and norms of behavior in a given context or organization that comply with these values.

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2.
1) Vietnam

Insights of each chosen culture

a) First glance Vietnam is a South Asian country sharing borders with China, Laos and Cambodia. Vietnamese culture is typically Asian, with some similar cultural features to China the most influential country in Asia in terms of culture due to the geographical position, and due to the fact that the country had been under the domination of China for over a millennium. However, Vietnamese people are very proud of their country, their culture, and their national spirit. Even though the country had been influenced by foreign cultures (i.e. the Chinese domination, the French colonization, and the American occupation in the South), the Vietnamese people have tried their best in order to preserve their own culture. From a poor, agricultural country suffering from numerous wars and separation, Vietnam now has strived to become one of the most potential economies in the world. For example, according to HSBCs prediction in 2012, Vietnam economys total GDP can surpass Norway, Singapore and Portugal by 2050. From a highly centralized planned economy which underwent the post-war embargo instituted by the US and most of Europe, Vietnam has shifted to a socialist-oriented market economy. Since then, the country has experienced astonishingly rapid economic growth, with foreign trade expansion. Every foreigner intending to do business in Vietnam should take into account cultural differences, and should especially be aware of the countrys business culture. As an example, Vietnam is ranked 114 th out of 183 countries by Transparency International (2011), in term of corruption. It is indeed a serious issue, yet many Vietnamese people still consider it as part of the business culture. b) Cultural profile Structure and Process The Vietnamese culture is strongly cased-oriented, or flexible, which means that rules are secondary to relationship, as well as application of exceptions. Flexibility can be described as low need for structure, flexible dealing with unknown situations, people and ideas, and also tolerance for differing behavior. Laws (in legal sense) may not be seen as applying absolutely, and infringements of laws are not always condemned. 18

These characteristics refer to the particularism dimension which is first introduced by Trompenaars (1997). This dimension estimates more specific circumstances or personal backgrounds; therefore decisions are generally made depending on the situations. What is right in one situation may not be in another one. The in-group/outgroup dimension is also related. In Vietnam, the notion of in/out group is clearly defined; the members and non-members are consequently distinguished. At work, hiring and promotion take into account in-group; contracts and deadlines are subjected to be changed or (re)negotiated. In Vietnam, laws do exist; but the main point is not what is written in the texts but how it is interpreted. For example, in universalistic cultures such as Finnish or German, people cross the street when the light turns green because they obey the law; whereas in particularistic cultures, people cross the street when there is no estimated danger. The decision-making process is thus different from universalistic working environment, since it takes longer to analyze different particular elements. Hofstede (2005) refers to Masculinity and Femininity cultural dimension so as to demonstrate the dominance of gender role in one society; this dimension drives the cultural values of two genders. A masculine society is defined as being driven by competition, achievement and success, with success being defined by the winner / best in field a value system that starts in school and continues throughout organizational behavior (Hofstede, 2005). On the contrary, in a feminine society, the core values of life are not around competitiveness or success; it is one where quality of life is the sign of success and standing out from the crowd is not admirable (Hofstede, 2005). With a relatively low score, Vietnam is seen as a feminine society in which people work to live, not live to work. In feminine societies, cooperation, sympathy, and harmony are essential; people value quality of life and job satisfaction more than material success. Hierarchy and Power Hierarchy holds an important place in Vietnamese society. It is manifested from the family to workplace, institution and organizations, as well as in social interactions. As mentioned above, Vietnamese society is a group-oriented society like other Asian cultures. As in most group-oriented societies, the hierarchy is very remarkable in social structure. Hierarchy can be clearly seen at workplace where power is obviously regulated. Decisions and ideas generally come from the top managers, and the eldest person has the most influence over the decision. This implies that employees are not expected to speak out their opinions/ideas in front of their superiors when they are not asked. 19

They are just expected to accomplish the tasks they are given. As for Vietnamese employees, they never question about their superiors/leaders in public, whether it is about the salary or the decisions made by the superiors. It is evidently accepted that superiors have more rights and should be treated differently. Interestingly, salary determination is not based on performance and competences but on position. This implies that managers and superiors are highlypaid compared to their employees, and this is taken for granted by every one. Managers and superiors are supposed to have qualifications and competences needed for their positions, thus they have more power and earn much more than ordinary employees. Power Distance is the relevant dimension in this case (Hofstede, 1980, 2005). Hofstede defines Power Distance as the extent to which the less powerful members of institutions and organizations within a country expect and accept that power is distributed unequally (Hofstede, 2005, 46). Distance is created between two or more people coming from different social ranks or positions (in company). The type of distance mentioned here can be understood as the inequality in using power. Since culture is learned and dynamic, thus the forming of the power distance which is seen as normal phenomena although truly it is the inequality. Vietnam culture can be described as high power distance which is present in daily life as well as in business. Status is very important in Vietnamese society, and is acquired with age, elite education, or even with personal background ascription. In organizations, the subordinate superior relationship is very clear; there is no informal communication between managers and employees, without building an informal relationship in advance. It is difficult for employees to have a discussion or small talk with their employers in an informal way even outside the offices, or to enjoy coffee together. However, this type of hierarchy may create an interesting work environment for Vietnamese, since it emphasizes job satisfaction. The rewards are not bonuses but rather relationship with their superiors which is more valuable. Age is an indication of seniority not only in daily life but also in companies; it is of great importance in Asian cultures. Seniority is another way through which hierarchy is manifested, and seniority can be expressed simply in daily communication, through choice of words, through the way people address to each other. Along with other Asian countries such as China and Japan, Vietnamese language has a quite complicated system of personal pronouns the use of these latter is based on age and position of the interlocutors. One thing to remember: in Vietnam, people dont call others by family name but first name preceded by appropriate designations. Communication 20

Communication is more of indirect, elaborate and contextual style in Vietnam, where information can be transmitted diffusively and playfully information can have different meanings depending on the context. Words are less important than context which contains voices tone, facial expression, gestures, status, and non verbal signs. The dimension Direct/Indirect communication style refers to the notion of low/high context. The word context can be understood as the information that surrounds an event; it is inextricably bound up with the meaning of the event (Johnson, 1986, page 64). It refers to unconscious understanding of hiding ideas in particular communicating situation. In other words, Vietnamese communication style is of highcontext communication. Since many aspects of cultural behavior are not explicit, foreigners may not understand the hidden messages while in-group members already know what do to and what to think, through the cultural process of learning and interactions. This style of communication puts emphasis on understanding without direct verbal communication; and listeners are expected to read between the lines, to infer the main point from the clues given by speakers. As outsiders dont immediately the context information and cannot create close bonds directly, thus high context cultures can be difficult to come into for outsiders. For example, the word no is avoided when one wants to refuse, he/she uses instead neutral responses or excuses, or even affirmative answers. This implies that previous knowledge and/or experiences are needed for understanding. In general, this communication style is employed in relationship-oriented cultures where long term relationships are preferred. Communication approach in Vietnam is formal, which signifies that formal aspects such as addressing code are important (c.f. hierarchy and status). Defined codes and rules are preferred, and people, even foreigners should respect those codes if they want to build strong relationship. The choice of appropriate words depends on several elements: relative ages, social status, gender, degree of acquaintance, respect, and affection between interlocutors. However, as relationships are formed slowly in Vietnam (i.e. high-context culture), and communication style is indirect, this can prolong conflicts. The notion losing face is also extremely important; Vietnamese people always try to prevent the loss of face. Direct confrontation or critics in public is considered rude and undesirable. In fact, the concept of face means the positive social value a person effectively claims for himself (Goffman, 1967, page 5), or the public self-image that every member wants to claim for himself (Brown and Levinson, 1978, page 66). As Vietnamese society is collectivistic (well discuss later on about individualism/collectivism dimension), face consciousness is 21

strong, people therefore put emphasis on groups harmonization and avoid direct confrontations. Unlike western cultures where critics can be seen as constructive, critics are considered as threat towards the criticized persons need for maintaining a positive self-image in Vietnam. Its socially acceptable sometimes its even a must not to show negative feelings in public. Lustig and Koester (1996, page 232) observe that among Vietnamese, showing emotions or tensions externally through gestures or facial expressions are not common. Instead, people use facial management techniques, where facial expression of ones true feeling are repressed and replaced by an expression more socially acceptable, under the circumstances. Therefore, this may put foreigners in embarrassing situations if they dont have prior knowledge or experiences. Time and organization Time talks. It speaks more plainly than words. The message it conveys comes through loud and clear. Because it is manipulated less consciously, it is subject to less distortion than the spoken language. It can shout the truth where words lie. Hall, 1981 In Vietnam, the work rhythm is inconsistent; people can concentrate on several issues at the same time. It means that several things can be done at once. The time managing style is therefore multi-focus. One important implication at work is that plans can be changed regularly; people use more time for relationships than for schedules. Thus, work time and personal time are not clearly separable, and people dont insist on punctuality. For instance, meetings are not only a place to meet and to discuss about agendas items, but also to build relationship. Time is not the decisive factor, so it doesnt control everything and can be not respected fully; small talks and side discussions can talk place during the meeting. In other words, present schedule is subordinate to interpersonal relations which coordinate activity. The way Vietnamese people manage time is synchronic which means that every event has a past, present and future. These three elements are interconnected so that memories of the past and ideas about the future form the present action. In general, the final goal is set carefully but not the plan elements of this latter are interchangeable provide that the final goal will be achieved. People show how they value relationship by giving time. It doesnt mean that time has no importance for Vietnamese people, but it is necessary for them to take care of their relationship which implies to give time. 22

Together with China, Korea and Japan, Vietnam is considered as one of long-term oriented Asian countries. Hofstede gives the following definition of this last one among his five famous cultural dimensions: Long-term orientation stands for the fostering of virtues oriented towards future rewards, in particular, perseverance and thrift (Hofstede, 2001). One typical characteristic of long-term orientated view is that it is not limited to the time frame or any logical puzzle set by any single event. As a matter of fact, LTO is correlated with selfeffacement (Minkov, 2007). The individual thinks of him/herself as a tiny element of life, therefore improving and learning continuously is more important than achieving one particular result. Vietnamese society is illustrated as easily to adapt with the change of contexts from traditions to moderns. Vietnamese are also patient and perseverant for long term relationships not only in life but also in business. Before Vietnamese do business, the first things they look for are trust and relationship (C. Nguyen, personal communication, November 9, 2007). In practice, this implies that it is difficult to reach a deal with Vietnamese if the partners are looking for a short- time contract with straight objectives about profits and requirements in the first meeting. With the wish to reach a business agreement or building a good team work for any cooperation or project, the first thing to do is building relationship and trust. Cooperation and Competitiveness As mentioned above, Vietnamese culture is highly relationshiporiented. Trust is based on personal relationship, and good relationships afford technical collaboration. Trust is not based upon risk calculations in Vietnam, but on relationship. Trust is therefore not rapidly earned; it has to be built gradually. In relationship-based societies, network plays an important role friends, family and extended family, colleagues are crucial for getting things done. Vietnam, among South-East Asian cultures, places on the group and tend to see individuals in terms of their membership (i.e. collectivism). On one hand, unprepared Westerners coming to Vietnam will probably regard Vietnamese humility and modesty as dishonest, and their directness and their consensus-building efforts as bureaucratic red tape (M.A. Ashwill, 2005). On the other hand, Vietnamese think of westerns individual assertiveness and directness as arrogant and insensitive. As for many Vietnamese, relationships are not as formalized as in other countries such as China they do not constitute a vertical line of hierarchy, but rather a complicated web of shared stories, favors, obligations, rights, and accountability that form the basis for interdependence at different societys levels. For many Vietnamese, 23

networks are a matter of social security or even of survival. According to one Vietnamese manager, even though Vietnamese people pay respect towards foreigners trying to communicate in Vietnamese language, what really matters is that foreigners be culturally aware, act in culturally appropriate ways, be able to build up and nourish relationships. It is true that interpersonal relationship is stronger and more important than tasks in Vietnam one cannot get thing done alone even with hard work. Leadership and Management As a matter of fact, feminine societies are said to value equality, solidarity and quality of life. However, deeply impacted by feudalism, Vietnam still remains a patriarchal society where men play a more important role, in the family or at work place. Gender equality still remains an issue in Vietnam, as in other Asian societies. Vietnam is ranked number 79 out of 134 countries in the Global Gender Gap Report 2011 (World Economic Forum), with a score of 0.673 / 1. It means that Vietnam society is fairly gender equal. Nevertheless, there is a huge gap between the Political Empowerment indicator and the three others (Economy, Health, and Education). Vietnam has quite low scores in Women in Parliament (0.32), Women in Ministerial position (0.04) and Years with Female Head of State (o.0). It goes the same for the indicator Legislators, Senior Officials and Mangers (0.28). As a result, there is still much to improve in Vietnam regarding gender equality. However, Vietnamese women are gradually breaking the social convention and have proved themselves in every lifes aspect. Collectivism is one main value of Vietnamese culture groups goals are always beyond individual ones. Basically, collectivism stands for a society in which people from birth onwards are integrated into strong cohesive in-groups, which throughout peoples lifetime continue to protect them in exchange for unquestioning loyalty (Hofstede, 1994). Because of the Confucius deep root in Vietnamese tradition and the history, the culture has always been strongly oriented around family and community. The family constitutes the most important social unit in Vietnam. Actually in the Confucianism framework, the individual is a social being whose identity is derived from her/his social network, e.g. the individual exists and is defined in relation to others. Therefore, Vietnamese always take into consideration seriously what others think of them and expect from them. The five Confucian virtues (humaneness, justice, proper etiquette, wisdom and trustworthiness) are bound by the concept of harmony (Westwood, 1992), e.g. searching for the middle path instead of going to extremes and seeking compromise rather than entering conflicts. The we are more important than the I; harmony and loyalty within a group are very 24

important and should be preserved. Family and community come first and egoistic behaviors are not tolerated. Collectivists consider the subordination of ones personal goals for the sake of the lager collective to which one belongs and seek to achieve results though cooperation. Whenever individual goals and group goals are in conflict, individualism places the right and goals of the individuals ahead of the rights and goals of group to which he/she belongs, whereas collectivism places the groups rights and goals ahead of the individual rights and goals (Ramamoorthy, 1998). Direct confrontation of another person is considered rude and undesirable; it is not conventional to disagree with someone in public. It is related to the communication style discussed above people use indirect expressions or phrases in order to describe disagreement or negative statement without saying no. Additionally, consensus is needed for a viable relationship in order to protect the groups harmony and face as well as to maintain relationships with others, in-group members always search for consensus, not dissent (i.e. notion of face; relationships importance, long-term orientation). One interesting feature is that Vietnamese people feel more comfortable when being recognized as part of a given group. For Vietnamese, relationships between employers and employees, between colleagues, are more than just professional relation. In other words, the boundary between personal and professional relationship is really vague colleagues and employees also belong to the extended family. They feel safer and more comfortable when working with people whom they have known beforehand as they think that it will receive more helps and guides. However, nowadays, when Vietnamese lives become better, people become opener to welcome new, positive ideologies from other countries while keeping the cultural core values. Management is male-dominated in Vietnam, and there are variations in age and seniority of managers based on the particular sector the average age of managers in the state sector is between 40 - 50 years, which reflects the heavy reliance on seniority in Vietnam, and those managers have an average of 10 years of experience. However, the average age of managers in the private and joint venture sectors is much lower (i.e. 38 for the private sector and 42 for the joint venture sector) and those managers have less experience (seven years in the private sector and six years in the joint venture sector). Besides, a research found out that bureaucracy is the most popular management style, given the fact that not long time ago, most of the medium and large companies were state owned; they are characterized by complex and typically undefined organizations where central planning and the ministry support/subvention system have been the rule of the day. Private sector firms also use elements of the bureaucratic, conservative and authoritarian, while the familial style 25

emphasizes parental concern for employees. This type of approach is coherent and understandable with Vietnamese culture and can be indeed orchestrated as long as the size of the firm remains small. However, the joint ventures reveal a slightly different style of management since managers of those companies are generally younger, they are more willing to learn from their foreign partners on how to manage business in an open economy. Nevertheless, there is no significant difference between these three types of firms. In general, good management is mainly based on consensus, and thus a viable relationship is based on searching for consensus. Vietnamese organizations are top-down structure where decisions are made by superiors; hence, responsibility is placed on the decision makers. In addition, paternalism is a key feature in Vietnamese management style: Managers are usually involved in the family life of employees and sometimes provide social support. This is illustrated by the common practice of recruiting new employees from family members of existing workers. Corruption is an activity that misuses public power for private benefits, an organizational behavior seeking for social network advantages (Brass, Butterfield and Skaggs, 1998). From a transaction perspective, corruption can be used as a means to diminish costs or to gain governmental support. Nonetheless, from an overall organizational perspective, corruption might cost more to firms than what they expect to earn from. According to Transparency International report in 2011, Vietnam is ranked 112 out of 183 countries, with a score of 2.9/10 this can be translated that corruption is a hot public concern in Vietnam. Despite several improvements over the past years, corruption is still judged widespread throughout the country, and Vietnams still lagging behind other Asian countries in terms of control of corruption. Corruption affects different sectors such as public administration, police, judiciary, health, education, construction, land management as well as natural resources and the extractive industries (Transparency International Report, 2011). According to the World Bank Enterprise Survey, even though companies dont rank corruption among the most important obstructions in doing business in Vietnam, they report being expected to give gifts or kickback to public officials in order to get thing done. Similarly, nepotism is also considered as a serious problem in Vietnam. To some extent, appointments to posts especially in the public administration sectors are based on family ties and close relationships (i.e. relational orientation). The main challenge consists in two points. First of all, the weak implementation on governmental control over corruption, the lack of institutional and technical capacities results in a high level of corruption. Secondly, bribery, to some extent, is part of the countrys business culture and has always 26

been practiced. Hence, the problem lies in changing the perception of people about bribery. Since it relates to individual behavior and is a perceptual term judged by others, the concept of corruption becomes dynamic and consequently subject to change in the mind-set of people as well as political ideologies. Concerning anti-corruption efforts, the anti-corruption legal framework has improved significantly over the past few years with the adoption of the Anti-Corruption Law in 2005 and the National Strategy on Anti-Corruption to 2020, which constitute major steps forward.

2) Finland
a) First glance Finland is a Scandinavian country sharing borders with Norway, Sweden and Russia. Finland, as other Nordic countries, is known as less populated, small but clean, wealthy, and cold; and two buzz words about this country are Nokia and education. However, there are not many foreigners who have deep knowledge about this exotic and peaceful country. People often think of Finland as a Scandinavian country; however, this definition can easily be opposed by many Finns. As a matter of fact, Finland does belong to the Nordic part of Europe, but it is not a Scandinavian country. According to Merriam Webster and Oxford dictionary, Scandinavia is a group of countries including Norway, Sweden, Denmark and sometimes Finland. Dean Foster in Global Etiquette Guide to Europe affirms that Finland is not a part of Scandinavia. Indeed, Finnish culture is similar to other Nordic countries at the first glance; however it is different from the inside. Finnish life seems to be relative to these others, yet independent as the famous Finnish saying, Swedes no more, never Russian; let us be Finns. Starting as a relatively poor agricultural country which was vulnerable to economic shocks such as the great famine of the 1860s, Finland is now one of the biggest economies in Europe with a highly industrialized and mixed economy. The largest industries are electronics (21.6%); machinery, vehicles and other engineered metal products (21.1%); forest industry (13.1%) and chemicals (10.9%). Moreover, Finland has the 4th largest knowledge economy in Europe, behind Sweden, Denmark and the UK (Source: Wikipedia). b) Cultural profile Structure and Process 27

Nordic and English-speaking countries are said to be universalistic. It is indeed the case of Finland. Rules observances and implementation are attached of great importance. People are expected to obey and respect laws, rules, regulations and contracts. In rule-based societies, there is one single truth that applies everywhere, regardless of circumstances or particular situations. A Universalist tries to apply the same rules to every body in all situations. Fairness is the core value in these societies, therefore differences between people from the narrow environment, such as family, friends and the wider community, such as strangers, or between in-group and out-group members, are not taken in consideration. Personal feelings and emotions are usually put aside in order to have an objective view of the situation. One important feature of universalism is equality. Additionally, it is important to note down that in rule-based society, exceptions in the rules can lead to the systems inconsistency. As a consequent, relationships are secondary to rules. Organizations are perceived as being based on mutual contracts, which are expected to be followed to the letter. Hiring and promotions are based on universal criteria. Finns tend to take company policies very seriously and follow the rules; they do not expect favoritism nor do they expect exceptions to the rules to be made. Besides, Finns generally stick on planned schedules and deadlines, and it is not unusual for managers to expect people to work late and even give up weekends in order to meet target deadlines. Low scored in Masculinity/Femininity Dimension, Finnish society is thus considered as feminine. Femininity stands for a society in which social gender roles overlap: Both men and women are supposed to be modest, tender, and concerned with the quality of life (Hofstede, 2001). In other words, self-control, independence, inner harmony, social justice, and self-respect constitute the characteristics of a feminine society, where the distinguishing between what men can do and what women can do seems to disappear. For example, in Japan- the countries of highest masculinity domination, men roles are supposed to work outside, build career, and earn money, whereas, women places are inside the house to take care of the family. On the contrary, it is not difficult to see a Finnish man taking care of baby and going shopping for family, or women working on building sites, etc. Moreover, Finnish society places high value in peace, environmental protection, and individual well-being. Furthermore, in Finnish mindset, social and interpersonal life includes moments of quietude, which are natural and normal. These moments can involve various possible acts such as peaceful reflection, deep concentration, or creative contemplation, but can also be simple moments of relaxation; they facilitate ones peaceful well-being and personal development (Carbaugh, 2006). All of this justifies the femininity dimension of Finnish culture. 28

Hierarchy and Power Finland puts emphasis on equality whether it is in the workplace or in the society. Organizations are not typically hierarchical: they usually have flat structure and a tendency of decentralization. The egalitarian belief of Finns supports a collaborative and participative management style. Finns are often quite comfortable working in teams and do not expect to be singled out for their contribution. Employees expect to be consulted and involved in decision-making, whether those decisions affect them or their organization in general. Not doing so may appear to be counterproductive because employees typically feel responsible for success beyond the execution of specific instructions. One again, the importance is stressed on equality, and everyone should be treated in the same way. At work place, employees attitude towards manages are generally informal, everyone is called by his/her first name regardless of his/her position and/or status. Finland is rated among one of the least power distance countries with the score of 33 (Hofstede, 2005). In Finnish context, managers are merely functional; they can only exercise in a limited, specific and impersonal approach (Amado et al, 1990). Employees prefer to act autonomously: for them, management serves as a means of facilitation and empowerment, not as control tools. Managers are supervisors, not superiors; they are here just to get the job done. Finns usually respect managers who are experienced and hardworking rather than managers with status alone. It implies that status has no important meaning in Finland where equality takes precedence over hierarchy. Ones status should be achieved by good performance, competences and successes, not by personal background and relations achievement. Finland is the world pioneer in terms of gender equality for example, it is the first country in the world to have unrestricted rights both to vote and to stand for parliament, more than one hundred year ago. According to Baer (2010), gender equality means the equal distribution of resources and equal treatment of women and men in participation at all levels and in all areas of society. Thereby gender equality refers to several measures to support womens rights and anti-discrimination. The implementation of measures to promote gender equality in the past decades in Finland, for instance gender quotas in Corporate Governance Codices, may have resulted in a changing mindset and influenced the way of thinking and behaving. For example, the implementation of certain policies has affected the educational system which leads to changes in the curriculum and way of teaching. Children being taught constantly the image of a genderequal society entering working life with this kind of attitude, will 29

consequently reinforce these policies and put gender equality into practice (Cheung and Chan, 2007). On the other hand, gender equality seems to play a role in shaping the Finnish identity and culture. Since men and women were treated equally, men were encouraged to take family leave and enjoy their fatherhood, women were encouraged to start working after pregnancy by offering better children daycare and giving them the opportunity to fill management vacancies, gender roles and gender stereotypes lost its strength ( Finnish Ministry of Social Affairs and Health, 2006). Communication Finns are more of direct communication styles (i.e. low context). It means that information is transmitted directly, openly and clearly. Finns often say directly what they think and expect others to do the same Finns pride themselves on being direct and expect the same of foreigners. Finns prefer to maintain a certain level of formality with colleagues even though they address each other with first name (i.e. personal and professional relationships are clearly separated). In negotiations and meetings, Finns do not engage in small talk and prefer discussing business matters straightaway. Verbal communication is vital in Finnish business culture and Finns do not normally rely on emotions when negotiating business. Additionally, Finns typically take time to think before speaking, and they are personally committed and invested in what they say. In Finland, the roles of the speaker and the listener in a conversation are very clear: the speaker is supposed to speak and the listener is supposed to listen. Interruption is not common, and silent participation in a conversation is socially acceptable. On important thing to keep in mind: Finns are taught to never interrupt when someone is talking, and they also expect others to do the same. Personal privacy is strongly respected in the sense that it is rare for Finns to start a conversation with a stranger. Because Finns are typically introverted, Finnish communication may seem distant at times, though Finns often become friendly once they know their colleagues better. Silence is seen as one of Finnish national characteristics 2. Generally speaking, Finns are uncomfortable with small talk and have a tendency to avoid it: they would rather keep silent than chatter frivolously. Long silences and pauses in conversation may make foreign business partners uncomfortable, but Finns use the silence to contemplate what has been said. The Finnish natural way of being (luonteva tapa olla) silence and quietude - being alone in a good way (omissa oloissaan),
It is worth mentioning that one cannot talk of the Finn in general. So far and considering own experiences, Finnish people may be on average more silent and perhaps reserved than others, but not in a solely negative way.
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the communication unwritten code of no interruption during ones speech, the rule of socially worthwhile speaking, the use of communication as a means to deliver information in an efficient way all belong to the Finnish identity. Considering Finland and the stereotypical image of the Finn, silence is the most often mentioned trait relating to their typical behavior. Finns are supposed to be rather quiet, not that talkative and maybe even more introverted than people from other countries, such as Mexico or Italy. Bertolt Brecht once stated that Finns are the only people in the world who remain silent in two languages3. The silence of some Finnish people is often interpreted by foreigners as a rude behavior of showing openly their disinterest or indifference. However, knowing that silence is an act of communication just like talking non-stop in other cultures and that some Finnish people follow the rule speak only if you have something to say (Korhonen, 2012) - namely something meaningful is a step towards understanding Finnish communication habits. In Finland, being together with friends without speaking is socially accepted and silence is considered harmonious (Korhonen, 2012). Getting in touch with Finns might seem hard for some foreigners, because starting a conversation without talking too much is hardly possible. Time and organization

The two official languages of Finland are Finnish and Swedish.

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Sources: An Overview of Intercultural Research- Stephan Dahl, 2006, Middlesex University Business School Finland represents a monochromic time view, and adherence to schedules is important and expected. In Finland, missing a deadline is a sign of incompetence and inefficiency. In general, concentration is put on one task or issue at time, and plans are followed with strong commitment to schedules. Punctuality is taken seriously in Finland it implies that in business, meetings are carefully planned and structured. Time is seen as a tangible commodity to be used, saved or wasted; and people dont like unanticipated events which may ruin their schedules or agenda (i.e. time is money approach). The dimension Uncertainty Avoidance is thus relevant in this case: Finland has a fairly high preference for avoiding uncertainty. Countries exhibiting high uncertainty avoidance maintain rigid codes of belief and behavior and are intolerant of unorthodox behavior and ideas (Hofstede, 2005). People try to work hard in order to minimize unforeseen events in the future. Hard working is also part of Finnish cultural values. In fact, the religion to which the majority of Finnish people adhere Lutheranism stresses on working morale14.
The Finnish Lutheran range of thoughts includes an unquestionable respect for hard work, even for workaholics. Kortteinen (1992) describes this spirit as the ethos of
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With a score of 41/100, Finland is classified among short-term oriented cultures. Hofstede notes that Short Term Orientation stands for the fostering of virtues related to the past and present, in particular, respect for tradition, preservation of face and fulfilling social obligations. Short-term oriented societies are generally identified with Truth (i.e. normative) and demonstrate impatience for achieving the results. Relationships are secondary to bottom lines, and there is a clear distinction between good and bad regardless of the circumstances (i.e. universalism). Indeed, Finns tend to look at facts and trust more in contracts and documents than in personal promises and relationships. In addition, they reveal a pragmatic tendency: they tend to think logically and consider all decisions thoroughly. Most have a very analytical point of view and prefer to make decisions based on facts rather than on emotions (i.e. neutral culture); they are open to new ideas but prefer to keep a realistic perspective when negotiating or planning. However, Finns often take time to think throughout and consider the matters from different angles before taking the decision. Cooperation and Competitiveness Finland is a task-oriented culture where trust is based on specialized skills, not on personal relationships. Professional relationships afford personal relationships. Precise planning is preferred, and group members are connected by task. The organization is primarily seen as a system of tasks to be achieved, function to be performed and objectives to be met (Amado et al, 1990). In contrast with relationaloriented contexts where organizations structure is describes in terms of degree of authority and status, in Finland it is rather defined in terms of activities (ibid). Thus within Finnish organizations, one is supposed to deal with a hierarchy of tasks, and the need to determine the responsible for each depends on that hierarchy. At work, personal relationships with colleagues are not as important as in other cultures. In general, relationships with customers and colleagues can be developed quickly, but they remain professional perspective; it is however not required to build friendships with business partners. Finns prefer to keep their personal and professional lives separate. They pay more intention on achievements and performance than building trust and networks. It is also observed that Finns tend to grant more importance to the products quality than to relationship with clients. Privacy is highly valued in Finland; it is associated with politeness and respect. People never intrude someone else privacy and expect others
survival, which can be summarized as follows: life is hard; through working you have to give as good as you get, even if you lost your life and health; and if you survive in this game, you have been worthy of your place in the society.

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to do the same. In that way, one honors his/her own and others privacy. In the Finnish mindset, one should work to live, not vice versa. For most of Finns, after seven or eight hours of work, the rest of time is to spend with family and to enjoy life. They also prefer to have jobs that leave them sufficient time for their own family or to have their private time to relax. As shyness and modesty are part of Finnish cultural values, Finns dont like to show off about themselves. Material success is not a motivation it is indeed quality of life which matters. Leadership and Management Finland, with a score of 63/100, is an individualistic society. The fundamental question addressed by this dimension, according to Hofstede, is the degree of interdependence between members of the society. Hofstede states that in an individualistic society, social framework is loosely knit people are expected to take care only of themselves and their own family (or nuclear family); the notion of extended family doesnt exist. The I is bigger than we, and groups goals are secondary to individual ones. As discussed earlier, Finns separate clearly between personal and professional relationships; they usually dont mix up these two categories. The relation employer/employee is a contract based on mutual advantage: employees are just economic men who will follow their employers interest if it coincides with their self-interest. Therefore, hiring and promotion are based solely on merit. This is correlated with the directness of Finns: they prefer to tell the truth directly even though they may appear to be blunt or even offensive. In both the professional and personal aspects of Finnish culture, Finns are self-sufficient and prefer to keep to themselves. Finns tend to be very private and group work is not as popular as in other western nations. However, Hofstede score might lead to some misunderstandings since individualism nowadays is attached mainly to the American meaning. While Finns exhibit to some extent an individualistic pattern, their groups have strong bond which is related to the sense of community in the Nord identified by Amado et al (1990). In that sense, Finland has a collectivistic pattern, to some extent. The tendency to have specific overalls for universities, or the proud attitude towards military services has demonstrated the Finnish collectivism in some respect. Finnish society shows a consensus-seeking approach it is unquestionable that Finnish society is characterized by an exceptional social cohesion (Alapuro, 1990). For example, defending opinions which seem contradictory at first sight will be considered as not valid and honest in Finland. In Finnish political discourse, it is common to talk about Finnish consensus, and the role accorded to criticism and debate of alternative characteristic of the western concept of democracy is very small, almost non-existent (Tapaninen, 1994). In 34

Finnish organizations, the pursuit of consensus and compromises is fairly peaceful. Unions in Finland have always been pragmatic and satisfied with the centralized collective bargaining system linked to a consensus with the government (Nurmi and skvrav, 1995, p.70). However, according to a report published in 2009 by Katja Boxberg and Taneli Heikka, too much consensus has caused stagnation in both economic and social aspects in Finland. For example, they blame the power of trade unions and left-wing parties for the inflexibility of the labor market which is partly responsible for the high-rate unemployment. Or the strong influence of lobbying in agriculture leads to the fact that Finland has the lowest urbanization in the EU and amongst the highest food prices. The authors claim that Consensus has not condoned individuality, dissidence, or innovation; it is incapable of positive reform or a creative solution, for it seeks compromises that are acceptable to everyone. In Finland, decision-making is top down. According to Ekwall and Karlsson (1999, p. 150-155), the Finnish leaders tend to bear the responsibility to make large decisions alone. The role of leader in Finland is essential, and decisions made are not usually questioned. Additionally, in Finland, it is important that managers are always present and available because employees are familiar to the fact they can reach their managers whenever they need. In general, Finns often take time to think before deciding; however, in business, decisions are made quite rapidly since Finns value the performance (Ekwall & Karlsson, 1999, p. 178)5. The management style of Finnish managers seems to be authoritarian, even aggressive in certain sense. Finns are said not necessarily especially to be conflict-prone, but they certainly do not try to avoid conflicts either (Grandlund and Lukka, 1997, p. 229). It very interesting as it is mentioned above that Finland is consensus-oriented society, but it doesnt seem to be the case in doing business. Finland is ranked number 2 (along with Denmark) out of 183 countries, with a score of 9.4/10 in the Transparency International 2011 Report. It doesnt mean that corruption doesnt exist in Finland indeed it rarely occurs and is not common in daily life. Among different forms of corruption, the old boy network, nepotism, and conflicts of interest in business are considered to be the most worrying forms in Finland. The old boy network appears to be the most pervasive form of corruption in Finland the term refers to the informal network of high-placed men who use their influence to distort or circumvent official decisionmaking processes for the benefit of their networks members.
The original paper is in Finnish, information is taken from Lms, T., 2010. Leadership Styles and Decision-making in Finnish and Swedish Organizations . A Review of International Comparative Management, Volume 11 (1), pp. 139-149, but accredited to the original authors.
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However, from an overall point of view, Finland has a reliable administration system and a relatively high level of transparency in private and public sectors as well as social institutions. Based on the World Bank Governance Indicators, Finlands political-administrative system is stable and meets the terms of good administration, and the quality of governance is quite high when compared to other countries. The rarity of corruption in the public sector has strengthened the reputation of the service society in the eyes of Finnish citizens. In fact, Finns value honesty and legality; honesty and exactitude are often considered to be a part of the Finnish national character. Citizens have traditionally had great amounts of trust in institutions and public organizations. Sami Borgs study Suomalaiset World Values -tutkimuksissa (Finnish people in the surveys of World Values, from the 1980s to the early 21st century) shows that Finns continue to trust strongly in central social institutions: greatest trust is placed in the police, the defense forces, the judiciary and the church (i.e. moral values). Thus it can be said that in general, the current Finnish societal values generate a strong foundation for a national integrity system (Transparency International Report, 2011). Moreover, unlike many other countries, Finland has several different laws concerning anticorruption: the Finnish Constitution, the Administrative Procedure Act, the State Civil Servants Act, the Act on the Openness of Government Activities, etc. This possibly results from the fact that Finland has long held a high rank on different international surveys regarding corruption; therefore anti-corruption is not considered a key issue in political decision-making.

3) Russia
a) First glance Russia the largest country in the world always impresses us whether it is about size, geography, achievements, economy, or culture and history. Extending from North Asia to Eastern Europe, Russia spans ten time zones, covers one eight of the world inhabited land, and integrates a wide range of environments and landforms. Due to its immense surface, there are more than 100 ethnic groups making up Russias population. Throughout the worlds history, Russia has always held a very special position and Russians are very proud of this fact. Indeed, being one of the main actors during the two World Wars in the past, Russian has always been one of the most powerful country in terms of economy, military, science, art and culture. With abundant natural resources in particular oil, natural gas, metals and timbers Russia is the world 9th largest economy. The most remarkable milestone in economic history of Russia is the transition 36

from a central-planning to a market economy, after the dissolution of the Soviet Union. The economic reform in the 1990s led to the rapid privatization process of many industries and agriculture, except energy and defense-related sectors. Undergoing several great difficulties during the transition, Russia has finally achieved consistent growth until the global financial crisis in 2008. Despite the recession, Russias economy hasnt been seriously affected compared to other European countries. As in 2011, Moscow the Russias capital now has the most billionaires of the world. However, one important thing to bear in mind when doing business in Russia: corruption is a significant issue in Russia actually, the country is ranked 143 rd out of 183 according to the Corruption Perceptions Index (Transparency International, 2011). b) Cultural profile Structure and Process Russia is highly ranked in term of particularism in Trompenaarss cultural dimensions (1997). In particularistic societies, decisions are not based upon standardized rules but rather on the exceptional nature of present circumstances. Different situational elements are taken into account in order to make the particular decisions. The common reflection in particularistic societies is that this person is not a citizen but my friend, brother, husband, child or person of unique importance to me, with special claims on my love or my hatred. I must, therefore, sustain, protect or discount this person no matter what the rules say (Trompenaars and Hampden-Turner, 1997). Consequently, members of those societies, such as Russia, have a strong tendency to divide people into two categories: those they know and can trust and those who are strangers and who could be dangerous (i.e. trust and collectivism). Organizations are generally perceived as a family or community where members take care of each other. Contracts and deadlines can be modified. Rules and laws are secondary to relationships: Even though the legal institutions and laws have significantly improved over the last decade, government and government agencies continue to have significant arbitrary power that can help or hurt ones business (Fey and Shekshnia, 2008). According to Mikheyev (1987: 504), to Russians, lying, cheating, stealing, and, to an extent, even killing, by themselves, have no positive or negative connotation: they have to be judged in terms of the particulars of the situation; they could be bad or good depending on the situation. Gender differentiation in Russia is high it has resulted from the long tradition of paternalism. During the Soviet period, Joseph Stalins repressions and the Second World War led to a radical decrease in the male population, thus women were enabled to take over various 37

traditional male activities in such industries as textiles, education, and health care, turning them into womens professions (Grachev, 2004). However, according to the GLOBE study, Russia is less concerned with the issue of gender equality, compared to other countries. Hierarchy and Power Russia is a country with high power distance: indeed, Russia scoring 93/100 on the Hofstedes Power Distance dimension put the country among the 10% of the most power distance societies in the world. Indeed, hierarchy and power distance are very remarkable in Russia culture. This is underlined by the fact that the largest country in the world is extremely centralized: 2/3 of all foreign investments go into Moscow where also 80% of all financial potential is concentrated. Russia has always proud of their special place in the world, of their cultural heritage, and the new wave of Russian capitalism still confirms the tradition: regardless of a Russian entrepreneurs competencies and management style, he or she always has great power within the organization (i.e. ascription). Followers look to the leader as a superior being who has unique rights and deserves compliance. Leaders in Russia are seen, at the same time, as the organizer and patron who tend to totally control the business circle. Usually Russian leaders are not questioned by their employees and their status is respected. Moreover, the centralization tendency in Russian companies allows little decisions to be made at low levels. High Power Distance degree of Russia also explains the tough bureaucratic measures in crisis management and in restructuring enterprises and industries. The tradition of respect for authority and privileges is still strong in contemporary Russian society. (Grachev, 2004) The huge disparity between the less and the more powerful people in Russia leads to a great importance of hierarchy and status. Thus, behavior should reflect and represent ones status in all aspects of business interactions: visits, negotiations or cooperation. Nowadays, Russian businesspeople pay a lot of attention to how they are dressed There is an Old Russian proverb: They want to meet you depending on how you're dressed and they say good bye depending on how wise you seem. Order is the embedded rule of the game each role of the hierarchy has its own code of behavior; knowing this unwritten code is one of the decisive factors of business success in Russia. Decisionmaking should be top-down and provide clear instructions for any task. Delegation is limited in Russia due to the Russian tradition of limited empowerment and severe mistakes punishment, which makes empowerment especially challenging in Russia. As a matter of fact, this tradition can lead to a hesitation of making decisions even when managers delegate such power and/or employees wish to have more 38

power. Hundred of rigid internal procedures and regulations in Russian organizations make employees less autonomous and more reluctant in taking initiative. Besides, showing respect for seniority and recognizing the hierarchical structure is very important for establishing and maintaining strong business relationships. Communication Russian communication style relies much on the context of the discussion (i.e. high context culture). Basically the listener is responsible for the received information he/she needs to make sure of the conveyed meaning of the message. Moreover, messages are embedded in the relationships between people and the status involves. For example, Russian names are composed of three parts: First name, which is the person's given name; Middle name, which is a patronymic or a version of the father's first name formed by adding - vich or ovich for a male and -avna or - ovna for a female; and Last name, which is the family or surname. In formal situations, people use all three names. Friends and close acquaintances may refer to each other by their first name and patronymic. Close friends and family members call each other by their first name only. Moreover, how and where a message occurs is also important. Besides, Russians are well known to be hard bargainers; meetings and negotiations usually take long time since Russians dont like to rush. Facts, figures and especially perseverance are strongly needed in negotiating with Russian (Welsh and Swerdlow, 1992). Russians are straightforward in communication they speak plainly, precisely and to the point. However, from a perspective of Western managers, the Russian communication style is rather an art of using many words but not providing any relevant information (Camiah, 2003). Besides, as long as Russians interact with people considered to be strangers they appear very formal and distant. At the same time, formality is used as a sign of respect. Time and organization Time is seen differently between cultures, particularly in the business world. In Russia, time is fluid and relative; deadlines are more flexible (e.g. deadline could be final and could be not; deadline is the line you go along, not the one you cross 6). Its more about getting things done well than precisely on time. Time commitments are desirable objectives but not necessarily promises. This type of time management
This is Russia an animation created by Antimult studio for Russian lighting company Tochka Opory, showing what Russia really is for foreign businessmen. It can be found on Youtube
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also involves the ability to handle various tasks simultaneously (i.e. multi-focus). Plans are relationship and process oriented; managers manage through distribution of tasks. Russians like to thoroughly research, estimate the possible outcomes and not rush into things. Russian time does not go in a straight line; it is more like a process of quantum leaps and small circles with no clear line joining the circles (Rana Sinha). So this concept of long time pervades every action of the Russian businessman. Lack of perseverance is considered as signs of immaturity. Future Orientation, a cultural dimension introduced by GLOBE (2002), is the degree to which individuals in organizations or society engage in future-oriented behaviors such as planning, investing in the future, and delaying gratification (GLOBE, 2002). This dimension is important to understand the social side of the economy in transition. In fact, during the Communism era, Russians strongly believed in a better life under the national long-term planning system. However, in the 1990s Russia has transformed into a society with limited future orientation7. People lost a clear sense in the new environment full of fragmentation. The political instability and several changes in legislation and have added to this tendency of distrust. People and businesses in the mid- and late 1990s did not rely on savings, quickly transferring inflated rubles into more stable currencies or spending money above all reasonable limits (Grachev, 2004). Cooperation and Competitiveness It is well known that in Russia, relationships are more important than results, which can be inferred that building relationship is essential to get the job done. Most Russian do not trust people who are all about business; they even disdain individualistic, materialistic and competitive values which are at the center of western capitalist style. Therefore, sincerity is crucial in building trust in Russia, and trust is needed to build a relationship. Trust should be build through long cooperation, thus time is needed. Relationships with colleagues and customers develop over time, generally through extended family and personal/professional networks. There is a focus on who you are and who is in your network. Rules are not as important as personal relations. In western perspective of doing business, a written contract is a must; however in Russia, the contracts and relations are not with organizations and companies, but with people. Many Russian managers agree that they conduct business on the basis of friendship. Besides, one cannot start doing business in Russia without building relationships with local authorities Russian legislative system is
7

Curiously, Hofstede study has no record of Russia on Long Term Orientation

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known to be uncertain and even arbitrary. Not all the problems in Russia can be solved with only market instruments. One Russian manager stated: While Westerners use their connections to further their careers and business purposes, their connections are the people that they know. In Russia, its quite different. We look for someone who knows someone whom we could pay to help us.8 In general, the level of trust in Russian organizations is quite low, since managers want to control everything. Recent research on management in Russia has indicated that Russians are quite cautious to share information with strangers and tend to work with those with whom they are familiar and to keep out those they consider outsiders (McCarthy and Puffer, 2003). This results in a situation in which people tend to guard information which they view as being of harm or disadvantage. Shekshnya (2004) noted that information has always been considered as a sacred source of power in Russian organization: it is secretly collected, stored, classified and traded at very high stake. Elenkov (1998) argues that Russias high power distance, along with high uncertainty avoidance and minimal trust in organizations, affects the information flow that is crucial to effective corporate governance. Indeed, scoring 95 in Hofstedes Uncertainty Avoidance, Russians feel an aversion towards confusing situations, as well as they have established one of the most complex bureaucracies in the world. In a negotiation, presentations are either not prepared (i.e. the focus is on building relationships) or extremely detailed and well-prepared. In addition, Russians prefer to have context and background information. For example, paperwork, signatures and stamps is an essential part of working practices in Russia. They generally have little confidence in unsigned documents. Nevertheless, uncertainty avoidance practices are still lack in Russia. The Russian particular term blat denotes dyadic relationships between individuals in which each can make unlimited demands on the other (Pye, 1992). There is actually no accurate English translation of this term. In fact, during the socialist era, it was an exchange of favors of access in conditions of shortages and a state system of privileges where the favor of access was provided at public expense (Ledeneva, 1998, 1997a, 1997b). Blat served the needs of personal consumption and reorganized the official distribution of material welfare; blat exchange was often mediated and covered by the expression of friendship or acquaintance: sharing, helping out, friendly support, mutual care, etc. Intertwined with other types of personal networks, blat provided the right to use public resources
Camiah, N, Hollinshead, G., 2003. Accessing the potential for effective cross-cultural working between the new Russian managers and Westerner expatriates . Journal of World Business, Volume 38, pp. 245-261
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through personal channels (Ledeneva, 1997a). During the decades of a centrally planned economy, blat was an inevitable need rather than a matter of choice. It was, to a great extent, the result of dealing with the permanent shortage of any kind of resources and consumer goods, poor quality, and intolerable delays in service (Michailova and Worm, 2003). This term is linked to personal networks and connections in exchange of informal favors, and thus partly related to corruption and bribery in Russia. Nowadays, as Russians no longer need unofficial exchange of goods, the contemporary blat has moved from the sphere of goods to that of services. The most important motivation for using it seems to be the desire to do business with people who are known and therefore reliable rather than strangers. Leadership and Management Leaders are important in any country; however, the leadership style varies from country to country. As mentioned above, Russian superiors have great power in organizations, and there is such a need for powerful charismatic leaders that Russians generally tend to create them often irrespective of the leaders intentions. Nonetheless, the expectations towards a foreign leader are more complicated (Shekshnya, 2004). Having the same title in a company doesnt mean for foreign manager that he/she has the same level of respect and compliance from the Russian employees as their Russian counterpart. Thats to say, to some degree, foreign executives must live up to a higher expectation than Russian managers since in Russia, the general belief is that foreigners are more progressive and can do more for their staff than Russian bosses. Foreign managers thus will only gain respect from their Russian employees once they prove their capacities and deliver tangible results. Russian culture is also considered to be collectivist (Bollinger, 1994; Holt et al., 1994; Garrison and Artemyev, 1994; Puffer, 1994; Shama, 1994). In fact, Russia has a long tradition of collectivism and paternalism, as well as a history of more than seven decades under the Soviet Union which stressed on the ideology unity and equality (Piirainen, 1997). Individualistic behaviors have been traditionally qualified as undesirable and consequently, suppressed. Selfaccomplishment and personal achievements have always been associated with achieving the objectives of social collectivism (Holt et al., 1994). Vlachoutsicos and Lawrence (1990) stated that Russian work groups have a devoted sense of solidarity; they nourish a strong sense of internal comradeship, they are unified and try to protect collectivist norms. Ashwins (1996) finds that Russian organizational members identify three different forms of collectivity : the symbolic collectivity of the enterprise as a whole; the collective identification of the ordinary workers; and, the collectivity of the immediate work 42

group. Most importantly, she also highlights that in each case, the collective is defined negatively in relation to the outside. In addition, Russian management culture is characterized by a high degree of paternalism. Puffer (1996) believes that the origin of this cultural attribute is related to the Russias history back to the 15th century when Russia was rebuilding after the Mongol invasion. During that time, strong paternalistic relationships between the central power and the subordinates were strongly needed. When two individuals establish a relationship or are in-group members, they know a great deal about the others private life; whereas in individualistic cultures, there is the sharp divide between professional and private life. However, Russias collectivism has different basis compared to Asian countries such as China, Japan or Vietnam. In Russia, strong collective sense was born in the countryside in pre-revolutionary times. Long before the Soviet time, collective farming was encouraged by the Tsars because of their fear of anarchy. Principles of the obshina the commune of villagers were embedded in the peasant psychology and thus brought from the farm to the factory when peasants migrated to cities (Smith, 1990). People who belonged to the obshina lived together, worked at the same fields together and were accustomed to a common fate. Russias strong sense of cohesion thus developed in the pre-revolutionary times and was easily observed in the socialist collectivist-autocratic culture in which there was no place for the individual and her/his own way of thinking and behaving (Garrison and Artemeyev, 1994). Russias culture has been shaped under the strong influence of authoritarianism and orthodoxy. George K. Kennan wrote in Memoirs that Contradiction is the essence of Russia. We can observe this national character from a collectivism/individualism perspective as an example. Although the group means a lot to Russians, individuals strive to secure their dominant position in the group rather than being preoccupied with the group harmony. According to Mikheyev (1987), for Russians a struggle for domination within a group is the most natural thing in the world, and the essence of human relations. It is actually an important difference compared to Asian collectivism where group harmony is vital. According to Elenkov (1997, p.102), a competitive orientation of thinking is an important part of Russian mentality. Ardichvili et al. (1998) note that Russian managers prefer making decisions individually rather than collectively. Additionally, Holt et al. (1994: 135) point out that Russian managers place a high value both on conformity and self-determination, a rather unusual combination of collectivist and individualist characteristics. They interpreted this finding suggesting that Russians publicly behave in harmony with majority expectations while privately maintaining different opinions. In a different framework, 43

Vlachoutsicos and Lawrence (1990) have noted the simultaneous existence and use of centralizing and decentralizing forms of leadership and decision making. Russians do strive for individual success; at the same time, it is difficult for most of them to avoid the guilty feeling while working towards achieving their personal goals and ambitions (Jones and Moskoff, 1991; Puffer, 1994). Russia is poorly ranked in Transparency International reports (143 out of 183 countries with a score of 2.4/10 in 2011) it can be interpreted that corruption is a major problem in Russia. All areas of government are touched by corruption, bribery and embezzlement. Corruption has rooted from the highest ranked of governmental sectors to every aspect of life. Such practices run through the fabric of the whole society, from school teachers taking money from parents to give students better grades to the federal ministers and parliamentary deputies running private business empires. It is so omnipresent in everyday life that people are used to it, have accepted it as normal, as a way to survive, as the way things just are. Generally speaking, corruption in Russia is both a state of mind and a way of life. Two broad categories may be identified: petty corruption where lowranking officials supplement inadequate salaries with bribes, and high-level corruption which involves large-scale misuse of state resources by the political and business elites. A finding estimates that the volume of bribes paid by businesses is bigger, or even doubles the federal budget. There are several causes that allegedly lead to corruption in Russia. First of all, behavioral norms inherited from the Soviet period are often said to be the main cause. Another view asserts that corruption is an inherent element of Russias culture. Finally, a practical point of view assumes that corruption in Russia is the result of a combination of opportunities for powers abuse and incentives to engage in corrupt behaviors. The Russian government has recognized corruption as one of the most urgent problems to solve, notably in establishing an Anti-Corruption council in 2008.

III. How to avoid pitfalls?

The core question here own cultural values, but he/she manages them. order to deal with the perspective. is not to find the differences based on ones how one perceives those differences, and how I will discuss about strategies and actions in issue, from both a theoretical and practical

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1.Cross cultural training

In this era of globalization, cross-cultural training has gained more and more importance. Diversity in organizations or multicultural teamwork may lead to cultural synergy as well as misunderstanding. The main goal of cross cultural training is thus to develop cross cultural awareness and competence by moving from ethno-centric to ethnorelative steps (Bameyer, 2004). Evidently, cross cultural training cannot provide solution for all the issues raised in the field, but it does contribute to people adjustment (Bemeyer, 2004). In practice, cross cultural training deals with culture-related manifestations at workplace. It helps evaluating and tackling, in a constructive way, the challenges brought by cultural differences to workplace. There are two major approaches of cross cultural training: General cross cultural awareness training and Culture/Country specific training. Following is some examples of general cross cultural awareness training: - Cross Cultural Team Building Training will aim to raise team members awareness of each other culturally in order to promote mutual trust, respect and understanding. The result of which will be clearer lines of communication. - Cross Cultural Management Training aims to equip management staff with the knowledge and skills to effectively supervise a multi-cultural staff. Cross cultural awareness training results in a more convivial and understanding work environment. - Cross Cultural Negotiation Training assists negotiators involved with foreign clients or customers with whom they are discussing possible terms and conditions. - Cultural Diversity Training offers HR staff support in helping them understand their responsibilities to ethnic minority staff and/or look at ways of nurturing harmonious inter-personal relationships at work. - Culture Specific Training is generally aimed at one specific country. Such training usually focuses on practical aspects in cross culture such as values, morals, ethics, business practices and etiquette, protocol or negotiation styles with of the given country. This better equips participants with the key skills that will help in building successful business relationships.

Learning style
Everyone has his or her own learning style the way he/she gathers and processes information. There are cognitive abilities acquired through the socialization process. A learning style can be defined as the individual way of treating information, thus it is associated with problem-solving capacity. The concept is therefore culturally bounded as culture shapes within its system what is considered as appropriate 45

problem-solving methods. Hofstede (1980) defines culture as the collective programming of the mind which distinguishes the members of one human group from another; thus culture is settled by national socialization through institutions such as family, school, universities and work (Dubar, 1991). All of these institutions affect the individual learning style. Baymeyer (2004) claims that despite differences and problems arisen in cross cultural encounters, the diversity in learning and working styles provides also a valuable source of cultural synergy, as different ways of problem solving lead to a greater range of solutions. Cross cultural training will be more efficient when cultural differences in learning style are taken into account. Knowing more about different learning styles implies that trainers should orient their training methods according to trainees desire and learning preferences. This application will help people understanding their learning styles strengths and weaknesses, which are useful in cross cultural training and management situations.

2.Intercultural competence
The single great cause of global business transactions is not a lack of technical expertise, hard-work or good intentions it is a lack of people skills for relating successfully across style differences attributed to factors such as national culture, job function and personality. Earnest Gundling, Working GlobalSmart Intercultural competence is the overall capability of an individual to transfer its individual, social, strategic and technical competencies to intercultural circumstances. It involves attitude, knowledge, skills of interpreting and relating, skills of discovery and interaction, critical cultural awareness. Of course, intercultural competence is not a complete new skill it is indeed a combination of social, communicative qualities combine and cultural knowledge (i.e. knowledge about ones own and the targeted cultures). Gudykunst, Wiseman and Hammer (1997) introduced a three-factor model with cognitive, affective and behavioral elements: Affective Cognitive

Behavioral

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Affective competences: sympathy, empathy, diplomacy, selfreflection, tolerance of ambiguity, constructive stereotype, humor. - Cognitive competences: country-specific knowledge, knowledge of cultural dimensions, knowledge of cultural systems - Behavioral competences: putting attitudes and knowledge into action, readiness for action, capability for communication, language skills. This model implies that cross cultural training should provide knowledge and information (cognitive), increase awareness and understanding (affective), and develop skills (behavior). Bennett (1985) argues that the key to intercultural sensitivity and related skills in intercultural communication lies in the way in which learners interpret cultural differences. He suggests that trainers should take into consideration the immediate subjective experience of trainees, which he calls phenomenology of training. According to him, there are two main reasons why emphasis should be put on this. First of all, people do not respond directly to event; they respond to the meaning they attached to events (Kelly, 1963). As a result, trainers need to understand how trainees perceive and interpret relevant life events before choosing appropriate elements for the program. Secondly, intercultural training is more than an acquisition of new skills. Actually the development of intercultural sensitivity requires new awareness and attitudes. Thus trainers need to know in which direction intercultural sensitivity develops so as to facilitate movement in that direction. Thus he suggests the Developmental model as a solution for this matter. From a phenomenological approach, a developmental is ideally based on the key organizing concept which must be internalized for development to occur (i.e. the concept in this case of intercultural sensitivity is difference) (Bennett, 1985). Basically the model presents six stages of development each stage characterizes a way of experiencing cultural difference.

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Source: A developmental approach to training for intercultural sensitivity Bennett, 1986 Denial of difference occurs when individuals are uninterested in or unaware of cultural difference; they generally think of their own culture as the only genuine one. At this stage, the best technique for intercultural sensitivity development is cultural awareness. Defense against difference takes place when individuals start to feel threatened by the difference, thus attempt to oppose the perceived difference, usually through negative stereotyping. Bennett (1985) proposes techniques to increase cultural selfesteem such as discussions the commonality of cultures what is generally good in all cultures Minimization of difference is considered as the last effort to preserve one world view by trying to conceal difference under cultural similarities. The most effective strategy at this stage is to invite resource people from other cultures to discussion group. These people must be selected carefully so that they can provide credible expression of culture difference. Acceptance of difference represents a move from ethnocentrism to ethnorelativism; at this stage, individuals acknowledge and respect cultural difference. The strategy of development here is to avoid precipitate discussion of really significant cultural differences. Trainers should stress recognition and nonevaluative respect for variation in verbal behavior and communication style. 48

Adaptation of behavior and thinking is resulted from the previous stage; the two most common forms of adaptation are empathy and cultural pluralism in order to understand and be understood across cultural boundaries. Once trainees move out of Acceptance phase, several interactive activities can be proposed, and they should be related to real-life communication situations. Integration of difference is the application of ethnorelativism to ones own identity (Bennett, 1985); individuals develop the ability to assess phenomena relative to cultural framework. The main work left at this stage concerns ethics field, since individual integrated cultural differences may encounter difficulty in constructing a personal ethics system. Cultural mediation is one solution (Bochner, 1981).

Stereotypes
Stereotype is a simplified picture of the complex reality in which we live. Stereotype is a set of inaccurate, simplistic generalizations about a group of individuals which enables others to categorize members of this group and treat them routinely according to these expectations (Collins Dictionary of Sociology, 1995). When one meets people from other cultures, the less he/she knows about others cultures, the more he/she tends to use stereotypes. The process comes naturally, and it is needed given the uncertainty and ambiguity in cross cultural encounters. Stereotypes are neutral in themselves, but they can have either negative or positive effects depending on the way they are used. Stereotypes are harmful when they are not descriptive but evaluative, when they are sustainable and used as the only explanation for others behaviors. Therefore, in an intercultural management framework, it is especially crucial to be conscious of stereotypes impacts on international business and thus, to get beyond stereotypes. The more we understand each others culture, the more important it will be to arrive at a shared way of working together rather than imposing our own ways or assimilating to theirs mutual adjustment. Furthermore, it is noteworthy to know which cultural trait is more relevant to the issue, thus to consider the extent to which one reflects the cultural norm on that particular issue.

3.Using organizational culture as an advantage

In the internationalizations process companies usually have to face with the challenge of building and harmonizing corporate culture. A strong organizational culture will reinforce the companys identity, 49

image, and especially provide competitive advantage. In fact, organizational culture promotes a shared identity among organizations members, gives direction for decision-making and general actions. From a business performance point of view, organizational culture can greatly contribute to the creation of added values, by building a high level of coherence in its shared basic assumptions, values and artifacts (Bameyer and Davoine, 2006). A high-performance culture can be distinguished by its members attitude their perception of the organization as a unique entity, and their commitment. However, despite an authentic core which provides necessary ingredient for great teamwork, it isnt enough to foster high performance. In order to turn commitment into strong performance, companies need a set of values and norms which is able to motivate members. The first element of corporate culture consists of corporate values. Unlike values from national culture defined as broad tendencies to prefer certain states of affairs over other (Hofstede, 2005, p.8), corporate values are learned or accepted in a later stage of like, depending on the socializing approach of organization. The second element of corporate culture is code of conduct A code of conduct is a statement that lays out corporate principles, ethics, rules of conduct, and codes of practice or company philosophy concerning responsibility to employees, shareholders, consumers, the environment or any other aspects of society external to the company (Schneider/Barsoux, 1997, p. 247). It specifies the rights and the obligations of both company and employees in different aspects of work, such as dealing with conflicts of interest, corruption and embezzlement, colleagues relationships, health and safety, etc. Code of conduct serves as a basis for decisions and members behavior. As an example, Shekshnya and Fey (2004) has found out that that a strong organizational culture with clear sustainable organizational practices that are used to achieve specific goals has a positive correlation with high-performance in Russia. In fact, during the communist period, Russian organizations were said to be dull place to work because they provided little or no meaning and opportunity for their employees (i.e. non-transparency, arbitrary laws and rules, murky procedures, unclear goals). As a consequence, when foreign companies bring to Russian employees strong, transparent organizational culture and working environment, they can do wonderfully. Many Russians are interested in working for foreign firms so as to experience the organizational culture of an international firm; it is therefore important that firms live up to their interest by having some visible foreign elements in their organizations. Even though specific features depend on the original country and culture of the mother company, these are four fundamental factors that Russian employees expect from their foreign employers: 1) fairness, 2) 50

transparency, 3) meritocracy, and 4) a chance to have an impact on the organization and feel part of something important (Shekshnya and Fey, 2004). Several researches indicate that high level of trust has several advantages at the societal and organizational level. Putait and Lms (2008) pointed out that high trust helps a company to reduce risks, operating costs, to increase employees productivity and to improve life quality, the entire contribute to the companys competitiveness in the long run, i.e. to the companys sustainable development. On the contrary, low level of trust prevents an organization from using available human capital which stimulates synergy effect and thus, hinders organizations sustainable development. From an intercultural management perspective, trust is even more noteworthy in building a high-performance organizational culture. Since organizational trust depends on the context (Putait and Lms, 2006), understanding the characteristics of a context, such as a socio-cultural one, can help a company to design practices and structures for the development of organizational trust. Moreover, the ethical feature should also be stressed out, as individuals from different cultures have different systems of values, thus bear different perception of what is ethical. The ethical aspect of organizational culture refers to the principles of right and wrong in an organizational context, and it creates conditions that help to explain and predict the (un)ethical behavior of managers and employees. Nonetheless, since ethics is concerned with the study of morality and the application of reason to elucidate specific rules and principles that determine right and wrong for any given situation (Crane & Matten, 2004), we can conclude that morality is culturally embedded the idea of right and wrong varies accordingly. As an example, corruption is universally considered as harmful it erodes the principles of good administration, diminishes the citizens trust, leads to inequality and injustice, and hinders the operations of both governments and markets. Lack of trust can undermine the legitimacy of the entire system. Nevertheless, the aforementioned characteristics of Vietnamese and Russian cultures show that corruption, to some extent, has been embedded in national culture. As a consequence, corruption and its related forms (nepotism, cronyism, bribery, and embezzlement) are somehow widely considered as part of business process as well as organizational practices; they are present every day. Since corruption is perceptual and contextual, the term can mean differently for Vietnamese and Russians and Finns. A situation which is judged as unethical by Finns may appear to be totally ethical for Vietnamese (e.g. giving birthday present for superiors children). 51

While fostering companys performance, organizational culture is also a delicate management tool which can have negative effects. For example, if a company affirms that it values employees opinions and suggestions, it needs to implement some ideas provided by employees or these latter will lose faith in the organizational culture. This is especially important to keep in mind as foreign subsidiaries generally reduce the number of expatriates once the subsidiaries become more established it tends to be localized. Thus, as the number of expatriates at a company decreases, foreign firms need to make sure to put extra effort on maintaining their organizational cultures. An effective leadership is critical here, as the process of building an organizational culture begins with aligning the top management around a common vision of the future, defining corporate values, then transmitting the vision and values to the entire organization. Cultural change cannot happen unless leaders set a good example about the behaviors and values that define the evolving culture, and then spread them through personal contact and communication. The following factors can serve as a basis for establishing and developing a strong organizational culture (Barmeyer and Davoine, 2006): - It is important to know the history and the context of the companies involves especially concerning local subsidiaries: is it a newly founded subsidiary or a take over? In the case of a taken over, it is necessary to assess the strengths and weaknesses of the local corporate culture. - What is known about the affiliation between the main company and the subsidiary? What is the quality of this relationship? - How is the cultural proximity as opposed to the cultural distance between the parent company and the subsidiary? - What is the degree of cultural understanding of the two organizations? What is the dominant philosophy ethnocentrism or relativism? - In intercultural process, interfaces and mediators who act as cultural translator by interpreting and adapting cultures play an important role in minimizing conflicts and misunderstanding resulting from cultural differences. - To what extent are manager and employees actively engaged in creating the company values and codes of conduct? - Is social audit conducted in the subsidiary in order to obtain information about how local employees accept and apply the new organizational culture? - Human resource management plays a crucial role.

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4.Building a strong multicultural team

While diversity has been a much debated topic in management theory and practice in recent years, it initially dealt with legal aspects, notably lawsuits avoidance, as well as changes in the labor market demographics (e.g. increased participation of women and minorities) that made it a subject of vital importance for corporations. Nevertheless, there is growing awareness today, that diversity management should go much further than just complying with existing rules or reacting to a shift in labor market resources. The potential of innovation and creation which is inherent to a diverse workforce in terms of ethnic origin, nationality, cultural back-ground, religion, gender, age, education, lifestyle, perception, values, etc. can be used to bridge cultural distance, to find problem solutions, to propose innovative product ideas and targeted marketing initiatives. Effective managers understand that individuals from different cultures with different histories and background will bring some unique and valuable skills for the company. Therefore, a culturally diversified team can be more advantageous. The assertion is once mentioned by Jonathon N. Cummings (2004, p. 360): I argue that external knowledge sharing is more valuable when groups are more structurally diverse in his research about teamwork and cultures. Therefore, diversity can become a competitive advantage. It is noteworthy that diversity management will not bring about any potential benefit unless it is culturally recognized and valued. It implies that individuals should not only recognize cultural differences but also appreciate them.

Source: Building an inclusive diversity culture: principles, processes and practice Pless and Maak, 2004 53

According to this model, in order to build up a high performance multicultural team, first and foremost, team members need to recognize differences while looking for common links. Individuals who feel being recognized as different but equal, who know that they can be their true selves not only in private but also at the workplace, are more at ease with their identity, and thus, are motivated to give their best. There are four pillars which uphold the construction of relationships: reciprocal understanding; standpoint plurality and mutual enabling, trust, and integrity. The first pillar stresses the need to recognize each other as an open communicative being. The second pillar deals with conflicting standpoints situations in which there is an inequality of power distribution i.e. the dominant voice are accepted and generalized while other voices are marginalized. This type of situations typically arises when it comes to a moral arbitration what is right and what is wrong. The construction of the third pillar is based upon ongoing relationships and demands a continual care. In the fourth pillar, integrity can be described as the quality of moral selfgovernance: the individual commits to a set of values and principles independent from all contexts. Intercultural moral point of view is achieved when the four pillars are built upon the recognition foundation. These following are suggested behaviors for managers of multicultural teams (Pless and Maak, 2004): - Showing respect and empathy; - Recognizing the other as different but equal; - Showing appreciation for different voices, e.g. by Listening actively to them; Trying to understand disparate viewpoints and opinions; Integrating different voices into the ongoing cultural discourse. - Practicing and encouraging open and frank communication in all interactions; - Cultivating participative decision making and problem solving processes and team capabilities; - Showing integrity and advanced moral reasoning, especially when dealing with ethical dilemmas; - Using a cooperative/consultative leadership style. Empowerment can help a strong and integrated multicultural team, as every other type of team work, operate even more efficiently. When an individual or a group of people is empowered, they undergo a change in relationship with people who have power i.e. managers in organizational framework. First and foremost, empowerment should be a process, not an event; it has to be implemented continuously, step by step. At the same time, empowerment should deliver some visible results quickly so as to motivate employees further. Secondly, 54

empowerment requires a profound culture change that can be accomplished only when leaders actions correspond with their words. Manager should pay special attention to their behaviors when empowered employees make honest mistakes: they should be tolerant so as not to stifle employees initiative. Also, managers should also be willing to discuss with empowered employees about different alternatives when being asked, but managers should avoid making decision on a previously delegated issue, even if they are asked by empowered employees to do so that it will go quicker.

5.Guidelines for an effective international cooperation

Working and managing in an international environment, I would say, is an art. Evidently it cannot be summed up in some ready-made principles or simple tips. Yet here is the summary of some useful Dos and Donts to keep in mind 9: - Be aware of your own cultural peculiarities. Usually the most ignoring culture is ones own, and it is obviously difficult to look at it from an external point of view. - Dont expect too much that others will think and do as you. Recognize that your way of getting things done is just one among many others, not the best. Otherwise you can never be successful in international environment. - Respect local customs and traditions; adapt your behavior to local norms. However, dont assimilate! - Whenever possible, check your assumptions and expectations with you team colleagues/partners/employees. - Allow open and constructive discussions. - Acknowledge your stereotypes about other cultures, but serve it as prototypes which need to be updated. Dont associate solely the individual with his/her culture. Individuals carry culture with them, but they dont own it. - Try to perceive each individuals uniqueness without cultural background; avoid categorization. - Listen, observe and try to understand before judging and evaluating. If you have to make an evaluation about individuals and their behavior, apply a culturally independent point of view, which implies that the judgment shouldnt be based on ones own cultural values. - Be patient. Working across culture is not an innate ability it requires time, action and investment.

Adapted from 30 tips on how to learn across cultures Andr Laurent

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Beware of using jokes humor can be sensitive in intercultural environment. Build, nourish and maintain trust.

Conclusion
All people are the same. It is only their habits that are so different Confucius This thesis tries to analyze the cultural impacts on international business and management from a theoretical and practical point of view. As a matter of fact, managers might encounter risks or miss opportunities if they ignore the impact of culture. Such attitude may hinder not only business opportunities but also ones selfimprovement. By recognizing differences and allowing them to be openly discussed, we can achieve insights into cultures instead of keeping our blind spot. Furthermore, this helps us to start understanding our own cultures. Recognition is the first step to acquire intercultural competences. By being alert to these signs, we can then anticipate the potential impact of culture, and thus consider alternative approach which leads us to an effective cross cultural management and to work efficiently. The three countries chosen in this thesis come from two different continents: Vietnam from Asia, Finland from Europe while Russia is Eurasian. Therefore, it was very interesting to analyze their cultural profiles, and I try to select only relevant standards in each countrys analysis. However, the appropriate measures at the action step depend upon each individual, who is bounded by his/her own culture. Thats the reason why I try not to give practical suggestions in dealing with each precise culture presented in this thesis I find it more appealing to let the readers think and reflect on their own. Moreover, if I had given recommendations about these countries, there would have no guarantee that those recommendations would be culturally impartial. Once again, I as a cultural being, am also affected in the way of thinking and evaluating, by my own culture. Some people seem to manage cross cultural encounters more naturally than others. Nevertheless, it is ultimately skills that make the difference. Here are some skills which appear to be the most important: tolerance for ambiguity; open-mindedness; non-judgmental capacity; empathy; communicativeness; flexibility; adaptability; curiosity; motivation; warmth in human relationships; self-reliance; tolerance for differences; perceptiveness; failure acceptance. 56

As a matter of fact, this thesis is manifestly not complete and relative, as the management field itself. As every social science, it is an endless discovery. No study and research can claim to be absolutely exact; there is always limitations and thus, room for critics and further researches. As an example, the two studies on the same dimension (Hofstede vs. GLOBE) Uncertainty Avoidance show two completely opposite results about Russia: while Hofstede claims a very high score of Uncertainty Avoidance in Russia, GLOBE study finds out that Russia has the lowest rank on uncertainty avoidance practices, which can be interpreted as uncertainty acceptance. But thats what makes the dynamics and attraction of the field in particular and of science in general.

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