The Need for Speed, or Process is Cultural: Part Two

by Lisa Dewaard, Ph.D.

In last week’s article, we looked at a number of common business tendencies in the U.S. and discussed how those tendencies are not universal across the globe. We examined each against the Hofstede Insights national culture country scores database to see which values drive these preferences. Specifically, we looked at the first three differences below:

1. Not all cultures value speed. 
2. Not all cultures believe all voices carry equal weight.
3. Not all cultures are comfortable with an experimental approach.
4. Not all cultures view nepotism as a bad thing.
5. Not all cultures place the highest value on the bottom line.
6. Not all cultures view emotion as weakness.

Today, we will tackle the last three. Again, before we begin, I need to make a quick clarification: we differentiate between national culture (the primary culture you are raised in that largely defines the gut reactions you have over the course of your life) and organizational culture (the values set by a company that drive the behaviors they expect at work). Over the course of this series, we will look at M&As through both the national culture and organizational culture lenses (as well as how they interact). For the purposes of this article, we are looking at national culture.

In the United States, our strong preference for an egalitarian society in which all individuals are equally valued and our belief that equal opportunities should be available to all underlie our score of 40 on the Power Distance Index.

For a detailed look at the national culture dimensions

Access our National Culture database and/or compare countries along these dilemma lines

Countries with scores under 50 are considered more egalitarian, those over 50 more hierarchical. Since we place great value on the idea of a level playing field for all, we have many, many laws against nepotism in our country, both in government and business. We also have a strong preference for individualism, another of the social dilemmas that we refer to as national culture dimensions. The U.S. has a score of 91, which is very high. This implies that the predominant belief is one that each individual not only matters very much, but should grow up to be independent and “stand on their own two feet.”

Naturally, there are differences within each culture and not every individual fits the score pattern of the country in which they were raised. We see that there are statistical outliers in every culture; this is to be expected. But there is great value in understanding the broad trends encapsulated in these dimensions.

Typically, each individual is seen as socially, emotionally, and fiscally responsible primarily for themselves and immediate family members (although the degree to which this responsibility is felt varies, especially when it comes to money). 

As we saw with the Power Distance Index, the dimension of Individualism plays a strong role in U.S. society. However, the value that is most often preferred across the cultures of the world is the other end of the dimension, or Collectivism. In the same way that hierarchical societies make up roughly 85% of the world’s population, approximately that same percentage is collectivist. These two dimensions are, in fact, correlated. If a culture prefers egalitarianism, it is more often than not individualist, and if it prefers hierarchy, it is more often than not collectivist. In collectivist societies, there is a preference for doing life together in tight-knit groups. Members of groups share strong bonds and balance responsibilities across group members.

What does this mean in business? It means that who you know is at least as important (sometimes more) than what you can do. When I was in graduate school, one of my professors who was from Russia told me that she didn’t understand why Ph.D. candidates always moved to a different academic institution after graduation. The perspective of the U.S. academy is that we need fresh ideas coming into university departments to make sure that the status quo is always challenged. My professor commented that “we raise the next generation of academics to continue our work. We groom them to take over at our university, not a different one.” This is one way in which nepotism is seen favorably in collectivist cultures but not in individualist ones. The belief that each person should make an impact on their own versus the idea that the work and effort the collective has put into your growth should come back to strengthen the collective are markedly different approaches. 

What about the bottom line? Isn’t all business about making money? Most Americans I know would answer yes, perhaps adding that business is about leaving a legacy for your children or community as well. But the primary impetus is to make money and build wealth. Many other cultures have their focus as long-term market position, which is representative of a very different set of underlying values. Matsushita, the parent company of Panasonic, had a founder that conceived of a 700-year plan to unfold in a series of “ages” (source). When I speak to most U.S. businesses, a five-year plan is the longest they can envision. We typically don’t believe you can look that far ahead as markets change and economies shift. Other cultures believe that you can—but the philosophy behind that is quite different. In our model, this difference is encapsulated in the dimension we call Long-Term Orientation. This dimension has two parts: a philosophical component and a linear time component (which are related).

The U.S. is a short-term oriented culture. We tend to focus on strong principles often rooted in the philosophy of our founding fathers. It’s summed up quite well in a quote by Thomas Jefferson,

“In matters of principle, stand like a rock; in matters of taste, swim with the current.”

For many Americans, standing on principle is non-negotiable. We would say that if “A” represents a specific principle and “B” contradicts it, they can’t both be true. One of them has to be false. And as mentioned above, we don’t find it feasible to look too far down the line. Our score on this is 26 (very low, demonstrating a very strong preference). On the other end of the scale, we find countries like Japan with a score of 88. In the philosophies of many Eastern cultures, we find a more open approach: If “A” and “B” are contradictory, they can both still be true. It is also (logically) long-term oriented cultures that tend to look the farthest down the road. 

What does this mean for M&As? Companies that are contemplating an M&A that find themselves scoring very differently along this dimension will almost certainly have different definitions of how success should be defined. If long-term oriented cultures prefer to focus on market position, the questions that are asked and the goals that are set are of a very different nature than those of a short-term oriented culture. Each group will need to clearly communicate these goals and make space for how the other group conceives of success and its measurement. 

Finally, most of us in the U.S. are raised knowing that we have to control our emotions in school and at work. A failure to be in control of our emotions is often viewed as weakness. In my experience, the rationale is that if someone cannot control their own emotions, how can they handle other things? How can I trust them to get their work done? What if they get derailed by emotion and miss a deadline? It’s viewed as “unprofessional” and, in a culture like ours where we never want to be seen as weak, this is something we want to avoid. Where does this come from? First, it’s tied to Uncertainty Avoidance.

The dimensions for each unique country profile are always working in interaction with one another. So while I highlight Uncertainty Avoidance here, the expression (or lack of expression) of emotions is also tied to Individualism, Masculinity, and sometimes Indulgence.

In cultures with low Uncertainty Avoidance like the U.S., we are often taught that we must “go with the flow” and “be prepared for anything.” Keeping emotions in check is a way we demonstrate we can do that. In cultures with high Uncertainty Avoidance, the unknown is considered a potentially dangerous thing. Most cultures with high Uncertainty Avoidance build lots of steps into daily life tasks to reduce unpredictability. During my times in Russia, which has an Uncertainty Avoidance score of 95, I discovered this first hand. Most legal tasks must be tended to in person, you must find the “right” person, with the “right” stamp for the “right” piece of paper in order to accomplish your task. While this reduces unpredictability in many ways, it also makes things quite complicated. And it can be very stressful. In Russia, emotions are considered natural, normal things that can be expressed because life is a difficult journey for everyone. It is not considered unprofessional to be emotional at work; it is simply something that happens when stress piles up. What does this mean for M&As? If you are working across cultures and someone expresses strong emotions, this does not necessarily mean that you are working with an unstable or unprofessional person. Allow the emotion to be expressed and pass. Then work will continue.

The M&A process is overwhelming at best. When it crosses borders, cultural differences can make it feel impossible. If you find yourself in this situation, reach out to us. We have been assisting businesses as they go through M&As for over 20 years. We have 130 Associate Partners working in 60 different countries and speaking over 30 languages. Culture is what we do and we have data and analytics to make it tangible and manageable. Email us at [email protected] to schedule a complimentary needs analysis call.