Understanding Cross-Cultural Differences:
Through the Lens of Societal Disparities between France and the United States
October 25, 2012
Over the past several decades, the number of businesses expanding globally has increased tremendously. Improved technology and removal of trade barriers has made it significantly easier for firms to expand overseas and take advantage of unsaturated markets and growth opportunities. This increased expansion has led to today’s businesses becoming “globally-interdependent and interconnected” (Okoro, 2012). This interdependency between businesses is clearly evidenced in the recent global economic crisis. As the United States experienced its sub-prime mortgage defaults and the value of the US dollar fell, economies around the world began to decline ("Global Financial Crisis - What," 2009). The worldwide spread of the economic turmoil plainly shows that businesses around the globe are dependent on one another. With the increased dependency and communication of these expanding multinational firms, comes an increased need to understand how culture impacts business. The most successful companies adapt their products and management styles based on the culture they are working with. For example, McDonald’s has experienced global success by developing specialized menus for the country they are entering. They serve a rice burger in Thailand, and offer a paneer cheese and salsa wrap in India, in order to target the large vegetarian population (Madison, 2009). Managers working with international businesses will face difficulties stemming from differences in society, culture and language (Young, 2011). Corporations with multinational presence must prepare their employees through training and education so they can succeed on a global level. In the past, corporations expanding overseas were often unable to maintain their competitive advantage when their managers could not assimilate and work successfully in the new culture. Now firms better understand the importance of understanding cultural differences (Okoro, 2012). When trying to compare cultures, particularly those that seem similar to one another, it can be difficult to determine without analysis the nuanced differences between them that would impact business. For example, when comparing the culture in France with that of the United States, the differences are not as obvious as when compared to China. After all, France is a Western country with a democracy like the US. To address this difficulty, several main concepts have been developed to relate cultures to one another and discover those seemingly small, yet impactful differences. Using these concepts to analyze and relate cultures, the nuanced differences can be determined and allow for better comprehension of the possible discrepancies cultures might face when doing business together. This paper will discuss the most prevalent indices used to compare cultures and will use comparisons between France and the United States to illustrate how even two cultures that may seem similar on the surface can be analyzed to determine the nuanced differences caused by cultural dissimilarities and their impact on business. FINDINGS
Concepts Used to Compare Cultures
Since the beginning of the global business expansion trend, scholars have been intrigued by the impact of culture on a firm’s ability to conduct business with foreign firms (Okoro, 2012). Two particular scholars, the American anthropologist, Edward T. Hall, and Professor Geert Hofstede, developed the backbone of cross-cultural management concepts used to relate cultures to one another. Researchers studying cultural differences today frequently use these concepts in their own studies. For example, a 2010 study by A. W. H. Chan and H. Y. Cheung set out to determine if Hofstede’s cultural dimensions could explain differences in countries’ corporate governance practices (Chan & Cheung, 2011). By...
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Global financial crisis - what caused it and how the world responded
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