3.2.1 – Individualism versus Collectivism
The fundamental issue involved in this dimension is the relation between an individual and his or her fellow individuals. This dimension can be distinguished in Individualism and Collectivism. Individualism is when someone only is concerned about his or her own self-interest and about the interest of his or her immediate family. Collectivism is when the interest of the group takes precedence. This can be for example their extended family or their village. This means that everybody within the group is supposed to look after the opinions and the beliefs of their in-group.
3.2.2 – Large or Small Power Distance
This dimension is about the extent to which less powerful members of institutions and organizations within a country expect and accept that they are less powerful (Hofstede, 2005). It refers to the beliefs people in a culture hold about the appropriateness of power and authority differences in hierarchies such as business organizations. It depends on the society in which degree people are unequal to each other, as no society has ever reached complete equality. Large Power Distance means that people in a culture tend to accept the power of their superiors. On the contrary, Small Power Distance means that people see themselves more as equals, so tend to question mandates of superiors.
3.2.3 – Strong or Weak Uncertainty Avoidance
Central is the extent to which the members of a culture feel threatened by ambiguous or unknown situations (Hofstede, 2005). People have to live with uncertainty because the future is unknown and always will be. Weak Uncertainty Avoidance is a state of mind when you accept the things the way they are and try to make the best of it. They are relatively secure about their situation.
On the other hand, in a society with Strong Uncertainty Avoidance, people dislike ambiguity and therefore try to avoid it whenever possible. They live with anxiety, nervousness, and are emotional and aggressive. In these societies, institutions are established to create security and avoid risk.
3.2.4 – Masculinity versus Femininity
This dimension refers to the distribution of values and emotional roles between the sexes. Masculine societies value assertiveness and competition. Thus, there is a maximum emotional and social role differentiation between the genders, work is more important than family, and they have an admiration for the strong. On the contrary, in feminine societies people place a higher value on being modest and caring, have sympathy for the weak, and search for a balance between work and family. There is only a minimum emotional and social role differentiation between the sexes (Hofstede, 2011).
3.3 – Conclusion
For a cross-border buyer-supplier relationship to work effectively and efficiently, it is important to take into account the cultural differences between the home and the foreign country. Elements that serve as a foundation for a culture are: the social structure of a country, the communication style, and the language spoken. These elements all result from the values and attitudes members of a society have.
Additionally, a country’s culture can be further examined by Hofstede’s theory, which explains a country’s culture by four different dimensions: Individualism versus Collectivism, Power Distance, Uncertainty Avoidance, and Masculinity versus Femininity.
Chapter 4 – Comparison Between Japan and the U.S.
This chapter addresses the third research question ‘What are the actual cultural differences between Japan and the United States linked to their cross-border buyer-supplier relationship?’. First, a short introduction of Japan and the United States is given. Subsequently, the cultural elements of each country are discussed. Thereafter, the culture’s of Japan and the U.S. are further examined by Hofstede’s cultural dimensions.
4.1 – Japan
Japan is a country on its own as it is a compact insular country with clearly defined and virtually unchallenged boundaries. This resulted in the fact that Japan sustained in isolation until the end of the nineteenth century. This strongly contributed to the ‘national self-consciousness’ of the Japanese inhabitants (Caudill, 1973). Throughout history, Japan has been an ethnically and religiously homogeneous society with a feudal past of strong internal and nationalistic loyalty (Ralston et al., 1997). According to Nishimura, Nevgi and Tella (2008) Japan has the following cultural features: a lot of power of traditions, high commitment to complete action chains, reactive, listening culture, data-orientation, high-situational relevance, punctual, hierarchical, high respect for elders and collectivistic.
4.2 – United States
The United States is a very large country with multiple states. It is not realistic to say that every state is the same, but it is possible to have some general idea about the business culture in the U.S. It is commonly known that the U.S. is very individualistic and a Western culture with a capitalistic business environment that evolved out of the English legal and political systems. Moreover, the U.S. represent the height of technological development (Ralston et al., 1993).
Figure 1 shows the contrasting cultural concepts of Japan and the U.S (Hodgson et al., 2008).
Figure 1. Contrasting cultural concepts between the U.S. and Japan. Source: Hodgson, J. D., Sano, Y., & Graham, J. L. (2008).
4.3 – Elements of Culture
This section discusses the elements of the Japanese and the American culture that influence their cross-border buyer-supplier relationship.
4.3.1 – Social Structure
The first element is the social structure. The Japanese social structure is more vertically oriented. Social relationships in Japan are mainly based on ranking. This corresponds to the findings of Nishimura, Nevgi & Tella (2008), who state that Japan has a lot of power traditions, is hierarchical, and have high respect for elders. For Japanese individuals, it is most advantageous to remain in one group in which he started his career and move up step by step in the course of time. It is difficult to enter another group with already established vertical links between individuals because the individual must start again at the bottom (Nakane, 1970).
The American social structure is more horizontally oriented. People in the U.S. treat each other more like equals, whether the relationship is between parents and children or God and man. The horizontal relationships are basically give-and-take relations, in which both sides expect to satisfy each other (Huer, 2012).
4.3.2 – Communication
Communication is the second element of culture. It is related to the previously defined theory of communication (section 2.2.4) of Hall and Hall (1995). They made a distinction between low- and high-context cultures. Japan is regarded as a high-context culture (Appendix 3). This is in line with the cultural feature defined by Nishimura et al. (2008) of high-situational relevance. The United States is viewed as a low-context culture (Appendix 3) (Hall & Hall, 1995). This affects the way in how to communicate with each other.
This section looks deeper into the elements of culture that relate to a type of context culture. The U.S., a low-context culture, typically expresses clearly and directly what is meant. Hence, the U.S. is characterised by direct and linear communication, in which communication is direct, precise, dramatic, open, and based on feelings or true intentions (Nishimura, Nevgi & Tella, 2008). This can be linked to Hofstede’s dimensions of Individualism and Collectivism, as low-context cultures value Individualism over Collectivism, which is true for the U.S.
Japan, a high-context culture, culture plays a more significant role. This is because the real message is not transmitted in the message itself, but has to be determined based upon the context of the message. The receiver has to read ‘between the lines’ to understand the message. The communication style is influenced by the closeness of human relationships, the well-structured social hierarchy, and the strong behavioural norms. In the process of establishing these close relationships and on the basis of Japan’s high-context culture, Japanese businesspeople gather a lot of information about their partners to create a good relationship, which explains the cultural feature of data-orientation (Nishimura, Nevgi & Tella, 2008).
An example to illustrate their communication style is that during meetings people tend to speak one after another with hardly any interruptions. This shows that Japan is a listening culture (Nishimura, Nevgi & Tella, 2008). In addition, asking questions is regarded as impolite, whereas in the U.S. the opposite is true. Typically, communication in high-context cultures is indirect, ambiguous, harmonious, reserved and understated. There is a greater emphasis on the nonverbal aspects of communication than the verbal aspects (Nishimura, Nevgi & Tella, 2008).
An example for this linked to Japan and the U.S. is the use of the words ‘yes’ and ‘no’. In contract negotiations, Japanese businesspeople often use ‘yes’ to say that they understand it, however, their American counterparts assume by ‘yes’ that they agree with the contract. The same is with the use of the word ‘no’. Japanese businesspeople consider saying directly ‘no’ as impolite, therefore, they try to say it in an indirect way through for example saying that they need to look further into it. This can be regarded by the U.S. business culture as evasive (Cortazzi& Jin, 1997).
4.3.3 – Language
Thirdly, language plays an important role in a relationship. The first thing that needs to be taken into account is that the languages of Japan and the United States are totally different from each other. This language barrier limits the opportunities for easy communication. Also, the language of communication will probably be English since English is a lingua franca and the Japanese language is more difficult to master. This could work as a disadvantage for the Japanese businesspeople, because of the process of cultural accommodation. Consequently, they might not express themselves the same as they would in their native language (Ralston et al., 1995).
Moreover, not only the language itself but also the use of words by addressing people from different hierarchical levels is very distinctive. For example, in English the pronoun ‘you’ is used to refer to young or old people, to the president or to your neighbour. Whereas in Japan, there are different words of ‘you’ depending on the level of politeness and the relationship. Also, only a small distinction can be made in English by saying ‘Hi’ or ‘Good morning’ to someone. In Japan, there are 210 different word forms for addressing people (Yum, 1988).
4.4 – Hofstede’s Four Dimensions Applied to Japan and the US
In the preceding text, there have been already some examples on how Japanese and American cultures conduct business. This section further examines the important elements of the two business cultures by applying Hofstede’s theory.
The following results of Japan and the U.S. on the four dimensions suggest large differences between the two cultures (Appendix 1):
4.4.1 – Individualism versus Collectivism
The U.S. culture is very Individualistic, whereas the Japanese culture tends to be more Collectivistic. People in the U.S. place a high importance on personal performance, everyone is only concerned about themselves and their immediate family. This is reflected in their business culture, as workers strongly believe that they should be compensated according to their individual achievements. Thus, if they believe that their compensation is too low, they will easily switch to another company where they can receive a higher compensation. This suggests that the level of job mobility in the U.S. is relatively high. Job mobility is the degree to which employees switch to other employers, or the number of job shifts within the same organization (Yu, 2010).
On the contrary, Japanese people place the interest of the collective over those of the self. Moreover, they have a strong reactive behaviour, since they do not like to take the initiative but rather follow the group’s decision (Nishimura, Nevgi & Tella, 2008). Performance is therefore related to the group instead of individual performance. Their compensation is, as a consequence, differently structured than in the U.S. Employees’ compensation in Japan is related to the group the person belongs to. So, all the workers that joined a company at the same time will receive the same compensation regardless of their individual talents, insights or efforts. Moreover, compensation solely relates to the length of service and not to the work performance, known as the construct of seniority wages (Gordon, 1981). In addition to this, workers in Japan have long-term contracts with firms, known as the lifetime employment system. This implies that the job mobility in Japan is relatively low, as this is regarded as disloyalty in their culture. Although, because of economic stress in the 1990s this norm is changing (Yu, 2010). Yu (2010) showed in his research that part-time and temporary employment have increased (Appendix 2). He also found a decrease in men’s loyalty to their firms which can serve as evidence for the change in the Japanese employment system.
4.4.2 – Power Distance
The score on this dimension reflects the smallest difference between the two countries. Japan scores a little higher on Power Distance than the U.S. This indicates that the Japanese are more power respecting than the Americans are.
This dimension corresponds to the earlier found characteristics of the social structure of the two countries; the higher Power Distance is linked to the vertical orientation of the Japanese social structure and the lower Power Distance is related to the horizontal orientation of the American social structure.
Moreover, the American business culture can be characterized as informal. It is common to address other people by their first name (Hall & Hall, 1995). Business people in Japan would interpret this as insulting, because they have a more hierarchical society, in which there is a strong distinction made between workers. Additionally, at a first meeting, Japanese business people immediately exchange business cards with each other in order to know how to address the other. So this dimension is strongly related to the cultural element of communication, as the Power Distance between workers determines the way how to communicate with each other.
4.4.3 – Uncertainty Avoidance
There is a significant difference with regard to Uncertainty Avoidance. The U.S. is more risk seeking, their idea is ‘nothing ventured, nothing gained’. Workers have a willingness to take some risk as a challenge for new opportunities (Hofstede, 1983). They regard certainty as a routine, without challenges.
Japan scores really high on this dimension. Workers in Japan strongly prefer uncertainty avoidance over uncertainty accepting. This explains their lifetime employment practices as well as their seniority-based wages. This gives employers certainty about their work environment. It is related to their cultural norm of maintaining harmony and being loyal (Sternquist, et al. 2002). In addition, in Japan, trust is regarded as a solution for uncertainty. Therefore, they choose to create long-term relationships in order to achieve the best outcome and avoid uncertainty (Runyan et al., 2009). As a consequence, Japanese firms spend a lot of time getting to know their partners in order to establish these long-term relationships (Lohtia, Bello & Porter, 2009).
4.4.4 – Masculinity
Japan scores the highest of all participating countries on this dimension and is thus very Masculine. The U.S. has a score slightly above average. In this respect, in Japan, the traditional distinctions between the genders are strongly maintained compared to the division in the U.S. This can clearly be demonstrated by statistics. In 2015 the U.S. counted 42,7 percent female managers, in Japan, this percentage was only 11,1 percent (Expert Market, 2015).
4.5 – Conclusion
Japan and the U.S. are two totally different countries. The countries have different values with regard to the cultural elements and they score differently on all the four dimensions of Hofstede. Japan is more Collectivistic, whereas the U.S. is more Individualistic. Typical features of Japan are a relatively high Power Distance, high Uncertainty Avoidance, and a very Masculine society. The U.S. scores lower on all those dimensions, namely relatively low on Power Distance, low on Uncertainty avoidance, and they are a more Feminine society.
This divergence between them needs to be taken into account while engaging in a relationship in the two countries.
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