When we marry, most of us discover that our spouse's family has a different set of expectations, values, and beliefs, ranging from broad topics, such as boundaries to specific subjects such as shared holidays. Invariably, these are different from the way we were raised. If we can reconcile our own values with those of our new extended family, we avoid the potential culture clash; if not, and things escalate, the end result can be unpleasant. The same holds true in business.

J.B. (not his real name) is a factory owner in Chennai, in southern India, whose mid-sized business produces revenues of around $250 million a year and has two joint venture agreements. One relationship, with a German company, has happily lasted 18 years. The other, with a U.S.¹ company, he wants to draw to a close, because of their less than desirable approach to doing business.

For example, on one occasion, J.B. wanted to spend $5,000 to manufacture a tool for a particular project and was questioned at length by his U.S. partners as to why he didn't just buy the tool from vendors overseas. J.B. responded that these vendors did not allow him to purchase a single item, only items in bulk, which he felt was wasteful and would incur unnecessary shipping costs. Overall, it was going to be considerably less expensive to make the part. After further laborious discussions, his U.S. partners reluctantly agreed.

In contrast, J.B.'s experience with the Germans is such that, “If I make a request, they will ask me if that is the best solution in my opinion. If I say yes, they trust my expertise.” Why would J.B.'s experience with the Germans be so different than the experience with his U.S. partners? In short: cultural differences. But before examining this example further, let's explore what we mean by the word culture.

We use the word culture in many different contexts, including countries, organizations, and groups, and we talk about cultural misunderstandings, cultural clashes, cultural fit, and even culture shock. However, books and articles focused on cultural topics often neglect to define the term. Perhaps that is not surprising, considering the complexities involved in explaining culture.

Culture was originally an agricultural term, used in the Middle Ages, stemming from the Latin word cultura, meaning the care, cultivation, or honoring of the land; we still talk about cultivating plants. But since the early nineteenth century, culture also became associated with the beliefs, values, and customs of different civilizations. Culture is complex and hard to pin down with a single definition because it encompasses many subcomponents.

One place to start is to compare culture with similar but not synonymous concepts, such as identity, nationhood, values, and norms. Renowned intercultural researcher and the author of numerous books on this topic, including Culture's Consequences,³ Geert Hofstede advises that culture is distinct from identity: Your identity has more to do with where and with whom you belong, as in national identity, or your identity within a particular group. Culture, on the other hand, is concerned with “the collective programming of the mind that distinguishes the members of one group or category of people from another.”⁴ In that regard, Hofstede considers culture to consist of “the unwritten rules of the social game.”⁵ These are the rules we learn from observing what goes on in our specific environment, together with the learning we get from others, rather than something we are born knowing, such as the human propensity for smiling, or the fear of death, which are innate across all races.

Some of the earliest influences of Hofstede and others stemmed from research conducted by cultural anthropologists. For example, Florence Kluckhohn and Fred Strodtbeck's (1961) value orientations theory postulated six different types of beliefs, influences, and relationships. Kluckhohn and Strodtbeck differentiated them according to the following dimensions:

• Relationship with nature—especially the need for control
• Social structure—whether focused mostly on individuals or groups
• Appropriate goals—being or doing
• Time—past (traditions), present (current circumstances), or future (desires/goals)
• Basis of human nature—good or evil
• Conception of space—public or private

These anthropologically sound dimensions speak to all forms of community, including our business lives.

Culture is not synonymous with nationhood for the simple reason that just under 200 countries exist in the world today,⁶ whereas, according to Richard Lewis, there are some 700 national and regional cultures.⁷ Additionally, culture is not synonymous with concepts such as norms and values; it encompasses them.

Many commentators, including Fons Trompenaars⁹, Geert Hofstede,¹⁰ George Simons,¹¹ and Sheida Hodge¹² have represented culture as a multilayered model. Depictions of these representations are either in the form of concentric circles or an iceberg, and highlight the difference between the cultural components of which we are aware and those that are subconscious. Think of a peach with three layers: the outer skin, the flesh, and the innermost pit or stone, as in Figure 1.1:

This approach aligns with Edward T. Hall's three levels of culture, outlined in The Dance of Life: The Other Dimension of Time.¹³ As you can see in the peach graphic, the outer skin represents the conscious or visible manifestations of culture, including literature, food, music, fashion, and art. These are often visible, such as the kimono in Japan, the sari in India or the hijab in Malaysia. The middle layer or flesh comprises norms and values that are often unknown to people outside that culture. Examples include authority, consensus, family, modesty, personal space, and spirituality.

The innermost pit or stone represents the hidden or subconscious assumptions held by a culture about how the world works, such as fatalism, environmental control, and notions of time. Consider the analogy of a goldfish in water. That medium is pivotal to the way the goldfish lives and breathes until the water evaporates or the bowl breaks. This is similar to the culture shock that many experience when moving to a different culture.

Let's now consider the less-than-desirable relationship J.B. has with his U.S. partners and contrast that with his more satisfactory dealings with the German company. How can this be, when you would expect there to be greater similarities between Germany and the U.S. than between Germany and India?

Many factors are involved in business dealings with culturally different partners. One model was developed by Geert Hofstede, who, having analyzed cultural differences since the late 1960s, identified six “dimensions of national cultures,”¹⁴ three of which are especially pertinent to the J.B. example.

The first of these is what Hofstede identified as uncertainty avoidance, meaning the degree to which a culture is tolerant of ambiguity and feels comfortable with unknown situations. Ironically, the United States and India are closer to each other in terms of their comfort with uncertainty than either of them is with the Germans. However, as Hofstede explains, the Germans compensate for their desire to avoid uncertainty by relying on others' expertise. This aligns well with the Indian preference for power, another of Hofstede's dimensions. In India, power is unequally distributed throughout the culture, with the boss (J.B.) being the final decision maker. When the Germans asked J.B. if his suggestion was the best option, and he confirmed that it was, they accepted his opinion. The Germans were presumably able to reduce their level of uncertainty by giving credence to the power differential that J.B. is afforded in Indian society as the head of the company.

The third relevant dimension to mention here is that of short-term or long-term orientation. Germany and the U.S. are both examples of the Western tendency for seeking results in the short-term. In comparison, many Asian cultures, such as India, prefer to take a long-term view. As one Indian executive explained:

“By taking the long view, Indians are apt to make allowances for the fact that not everything is always going to go to plan. That includes the fact that early on in a relationship there are bound to be hiccups. This is only to be expected, given the complexity of human interactions. Yet it's remarkable to us how Americans hold to the belief in one Truth, whereas we Indians know there to be many Truths, each one applicable according to the context in which it is applied.”

Again, why is there more alignment between the Indian and German executives, and more friction between J.B. and his U.S. partners? Perhaps because of J.B.'s industry experience and expertise, the Germans received assurance that their short-term needs would be met. Trust is highly relevant here. Former President Ronald Reagan's comment, “Trust but verify,” is anathema to Indians, who would not consider the need for verification to be indicative of trust.