Developing Professional Skills
Effects and characteristics of the cultural differences across the world
Final version
Hajós Gertrúd
BA IB Year 1 G3
04. 12. 2022.
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Table of content:
1. Introduction ............................................................................................................................ 3
2. The way which led to cross-cultural management ................................................................. 3
3. Collectivist and individualistic mindset ................................................................................. 5
4. From the Hungarian aspect ................................................................................................... 6
5. Conflict management in multinational corporations ............................................................. 7
6. Cultural differences related to religious diversity ................................................................. 8
7. Mindsets related to cultural effects ...................................................................................... 10
8. Internationalization models used for entering the global market ........................................ 10
9. Conclusion ............................................................................................................................ 11
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1. Introduction
Nowadays, as a consequence of globalization the mass of multi- and international corporations
surround us. This has an influence on our carrier when working in one of these companies or
just living in its neighbourhood. Moreover, in the universities, the number of foreign students
is extremely increasing. So in order to avoid any misunderstandings and create new and
permanent relationships, in both social, academic and labour life, we must consider the cultural
differences and learn how to handle them. This way we can broaden our knowledge which is
as useful as interesting it is. Of course the beginning is always difficult, but by understanding
and mutually respect each other, the efficiency of the labour and the value of the created
friendships can increase a lot.
In this essay, I give a brief summary of the globalization because as I already mentioned, in my
opinion, it was the main reason which led to the creation of the cross-cultural management as
an institution. In section 3, I compare the individualist and collectivist mindsets by firstly giving
a short explanation to the terms and secondly, introducing them through an example where
management advices can be derived as well. In part 4, as a Hungarian, I believe it is appropriate
to discuss the topic from a national aspect, in this case from the Hungarian view by reflecting
on the ethnic-related conflict and a current culture-problem which still requires further
arrangements. In section 5, I am going to focus on the company management, in the case when
the team groups include members of different nations, the importance of cooperating with each
other and finding the common sound and some suggestions regarding the realization of it. There
are various aspects which effect the cultural diversity such as geographic and demographic
conditions. In part 6, I will unfold some facts about the religious diversity, some affects of it,
just like its affect on the eating habits or on their mentalities. This is followed by the cultural
affects in the academic life, where we can group up the university students by extroversion
aspects and other factors defining their behaviour just based on their cultural background in
part 7. Before finishing, I want to share ways of internationalizing the firms which can be
achieved by the Uppsala Model or by the Born Global Model or the combination of the two.
2. The way which led to cross-cultural management
The antecedents of the globalization are led back to the middle age, to the bloom of the longdistance trade. This was the period, when merchants exchanged goods and ancient philosophies
and religions such as Confucianism, Taoism, Buddhism, Hinduism and Christianity on the
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various merchant routes such as the Silk Road which was the busiest merchant route to connect
Asia and Europe. Moreover, the discovery of the American continent, which became possible
only thanks to the new technical inventories such compass, was the beginning of the division
of labour between the continents whereas Europe delivered alcohol and industrial products to
Africa and America, and in return received gold and raw materials from America and slaves
from Africa. Later during the eighteens and nineteenth century new ideas such as liberty,
equality, Nationalism, Socialism, Marxism, Conservatism led to the industrial revolutions
which is considered by the majority the beginning of extreme globalization and the start of the
modern industrial production. In the twentieth century, there have been unimaginable changes
which led to a huge technological development in the military industry. As a result, the world
wars caused a huge destruction and a large number of deaths which later ended up in a pandemic
as well. Later, during the second part of the twentieth century, as information technology and
Internet became more and more achievable and developed, communication and informationchange became much faster and easier. Nowadays, we can easily communicate with people
from the other part of the world and this led to the extending of inter- and multinational
companies. These companies are able to exchange information and products, communicate
about it via Internet, or travel quickly to have face-to-face negotiations where they can interact
with people from other cultures. See Figure 1.
Figure 1: Timeline including the main steps of globalization
Own source
In Figure 1 the important steps of the globalization are illustrated which were described before.
This is the way how we got to the current technological development level we can live in.
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What does globalization have to do with cross-cultural management? When firms step in the
international level, they have to deal with the differences caused by the cultures of other
countries. We live according to different ideologies, have different customs, traditions which is
derived from the different history we went through. It is important for all leaders to consider
these factors in order to have an effective cooperation and as Ralston et al. (2008) mentioned
diverse individual work values must be integrated into a universal corporate structure.
3. Collectivist and individualistic mindset
Different groups, according to which country they are from, can be categorized regarding their
behaviour. A country’s economic orientation and mindset can be either collectivist or
individualist or somewhere between the two ends of the scale. This has an effect on the
development, culture of and behaviour in these countries. Especially the economies in the
Eastern part of the world started to develop later and they emphasize more the teamwork and
the workplace atmosphere than the Western economies. They appreciate social gatherings such
as team building programs outside the working hours and often outside the workplace in a
totally different environment. In the individualistic mindset, people tend to avoid any personal
interaction unrelated to the job which has to be done. Typical examples for the economic values
are the individualistic United States and the collectivistic People’s Republic of China (Ralston
et al., 2008; Lin et al., 2017).
A research conducted by Lin et al. (2017) discussed the traditional Chinese philosophies in
inter-cultural leadership. They interviewed various Chinese leaders who were working abroad
at the moment in multinational companies in Netherlands and in their style of leading they
represented and focused on the teaching of the ancient Chinese philosophies such as
Confucianism, Taoism and Legalism. The researchers focused on the difficulties these
managers faced when communicating and cooperating in an international corporation and the
way they could overcome it. One of the main observations found that people from Netherland
were more open, sincere when it same to expressing their opinions, and even had the courage
to criticize the decision of the superiors publicly. Moreover, during the discussion with the
employees, the Dutch required more activity and expression of opinions from their part and
were not satisfied with the Chinese way of having the centre of attention on the manager which
was acceptable for the Chinese colleagues. So the Chinese superiors tried to find the balance
where they are more open and let others express their ideas, but also Chinese tradition keeper
where the importance of the hierarchy is relevant and the superior has absolute power. This way
both Chinese and Dutch employees can be satisfied. One more main difference was connected
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with the company’s atmosphere. In the Chinese culture, where the collectivist mindset is
dominating, they emphasize the close relationship between employer and employees. They
interact with each other even in the other’s private live in order to help each other and to create
a family atmosphere. However, the Dutch individualistic people do not like when Chinese
leaders try to get to know them and prefer to keep work and private life separately. Moreover,
while in Eastern countries it is considered normal to receive a work-related phone call outside
working hours even in the middle of the weekend to know whether it is an emergency, in Europe
it is not really common.
4. From the Hungarian aspect
Cross-cultural factors can be considered from the aspect of a country not just from the
international view. I would like to examine it from the point of the Hungarian history through
some happenings during the nineteenth century. In the era of revolutions of course Hungary did
not kept calm. It also joined the other countries and tried to achieve freedom and independence
from the Habsburg Empire which had been keeping the country under control for a long period
of time. Before this, in the eighteenth century, Empress Maria Theresa immigrated in Hungary
groups of other nations to make up for the
previous losses in the demography caused
by famines, wars and other factors. See
Figure 2.
Figure 2 shows the effects of the immigration
process started by Empress Maria Theresa. It
reduced the absolute majority of the Hungarian
population but they still remained the relative
majority in the Hungarian Kingdom.
However, the Hungarian nobility did not care
Figure 2: Ethnicity diversity in Hungary
during the reign of Maria Theresa
35%:
Hungarian
17%:
Romanian
15%:
Slovakian
11%:
Croatian
10%:
German
7%:
Serbian
3%:
Ruthenian
2%: Other
about the rights of these ethnic groups when
they tried to get accepted their reform
Source: Eszterházy University of Eger, n.d.
proposals in a peaceful way and before the
revolution they only petitioned for rights considering the Hungarian interests which did not
benefit the other ethnics at all. Because of this during the revolution the Habsburgs got these
groups of people on their sides. The Croatians even tried to attack Hungary because they
thought if the Hungarians had the right to get independence from the Habsburgs then they want
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to free themselves from us. This reflection of our history shows why we must try to cooperate
with other nations and ethnic groups not just to avoid a possible war, but to have successful
business agreements as well.
Still staying inside of the national borders, I have some other points related to the cultural
diversity inside a country. It is an important role for the Hungarian government to deal with the
case of the Romany situation. The question is not based on the racist differentiation but the
economic factors. In the last centuries, the Romany society conducted a moving lifestyle and
had occupations of mainly craftsmen and musicians. However, for the total of this society, this
way of living is not sustainable. Especially after their settlement because nowadays the
wandering is not an appropriate way if living. So the government has to manage the discrepancy
of the Romany pushed out situation by integrating them inside of the Hungarian society.
5. Conflict management in multinational corporations
Nowadays the broader process of globalization has significant role in the daily life of
individuals and led to the increased presence of multicultural distributed teams. In work teams
there are lot of demographic differences such as age, gender, nationality etc. However, the most
discussed difference is the nationality in multinational teams. During the cooperation of these
kind of groups, people of diverse personalities, values and attitudes have to find the consensus
which is quite difficult. In many cases, arguments overtake these stages so we must be prepared
to prevent this scenario. Conflicts are likely to occur in culturally diverse and geographically
distributed teams due to cultural differences that often lead to social categorization and also to
communication problems. Especially, when in these multinational teams the members of some
similar background, which can be geographical or ideological, form a group. These closed small
groups are more likely to have conflicts with outsiders because they value more these mates
and less the outsiders. So, understanding the factors and mechanisms that reduce relationship
conflict in multicultural teams is essential to improve team prospects for success. Multicultural
team members must overcome the obstacle of potentially disparate national perspectives
regarding work expectations. They must form a social identity reflecting a sense of
belongingness to the world-wide culture. The global identity starts the creation of a shared
identity. If the members are able to create this identity and everyone belongs to the same social
category, the effectiveness will increase. Moreover, when multicultural team members have a
high level of global identity, they are more likely to perceive and categorize various national
team members as their global worker ingroup. So, international workers have two identities:
the first preserves their own nation, the second their global identity. Frequent group
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interdependence also contributes to the high performance of multinational companies because
when the team demands become more complex and teams need more assistance from fellow
members to perform their duties which leads to interactions and better co-worker relationships
as well (Harush et al., 2016).
Managing cultural differences is essential because most researches show that the lack of
intercultural interactions result in more competition. When the avoidance behaviour is used in
the companies then the conflicts will just get even deeper. So, in conflict-management we need
rationality, exchange orientation, listening, concern for fairness, as well as self-other
relationship. These behaviours have a positive impact on the workplace atmosphere.
Willingness to collaborate and adopting an appropriate attitude, combined with satisfying
background cultural knowledge, can make intercultural trade and negotiation outcomes better.
Intercultural interaction is necessary for cultural transformation. At an organizational level, a
culture of open-minded discussion with freely expressed views, attentive listening, and
mutually beneficial relationships can avoid conflict, especially in culturally diverse work
places. Emphasizing the relationships instead of competitiveness is crucial for a team’s success.
Conflict related emotions are also culturally constructed and expressed differently: in dignity
cultures, the prevailing emotion of anger is likely to be suppressed through the domination of
professionalism in the workplace. In face cultures, the conflict related emotion shame, is also
likely to be suppressed due to social responsibilities. Apart from understanding the differences
of cultural values that may impact their interaction, various individuals such as those that come
from different nations can also use culturally universal knowledge to create a common
understanding and place for cooperative and effective conflict management (Liu et al., 2017).
6. Cultural differences related to religious diversity
There are various factors influencing the culture of the nations. One of these is the religious
background. It has played a particular role in Europe and its history and created specific values
and attitudes. In the followings I would like to share some factors about it in different contexts.
Cultural values are reinforced by religion. In the European context, examining the Catholic –
Protestant effects is relevant. It has been shown that Protestant communities are more
productive than the Catholic ones when it comes to work and savings created capital growth.
There are several links between religion and financial attitude. For example, Catholics are more
risk averse while Protestants put more control in financial responsibility (Mättö and Niskanen,
2017).
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Exploring work values within a cultural context is important, as the cultural context may shape
and modify values. Therefore, in order to understand the meaning of one’s attributes to work it
is necessary to study the cultural and the social context the individual lives and works in. Several
comparative studies have found significant differences in work values between societies, but it
was not common to compare the work values of different ethnicities in the same country. It is
not a secret that the Jews, Muslims and Christians create a deeply divided society. The three
ethno-religious groups have lived together for more than 100 years, independently from the
establishment of the Israeli state, but their cultures can be still distinguished easily. The Jewish
society is more individualistic than the Christian society and especially the Muslim society.
This individualism is characterized by low power distance and a need for friendship. Muslims,
thanks to their collectivist mindset, will attribute higher value to the work outcome of serving
society more than Christians, while Jews will value it least. In the individual – collectivist scale
the Christians take place somewhere in the middle. Considering these attributes in one country,
in Israel is essential for the multinational companies which are present in the area or consider
working with the residents (Sharabi, 2016).
Religion serves as one of the most enduring sources of core values for consumers, which
influences consumption motives, even at a subconscious level. Religiosity is an informative
measure of how closely religious consumers follow messages to avoid materialism and the
consumption of luxury products. A study discussed the effects religions have on consumer
behaviour when it comes to luxury goods. It has been shown that negatively influences
consumer attitudes toward luxury products. This can be derived from the instruction of avoiding
any materialistic attachment and living a humble life. Negative moral emotions will mediate
the relationship between religiosity and consumer attitudes toward luxury products (GeigerOneto and Minton, 2018).
It might not seem obvious but we must consider eating habits as well if we want to discuss the
culture effects more deeply. This can be relevant for multinational food suppliers or restaurant
chains such as McDonald’s. Consumption behaviour is considered as a complex phenomenon.
It is affected by the perceptions of the person, past experiences with foods and dietary status
which also includes physiological, demographic, economic, social, geographical and cultural
factors. Religion in the nutrition and food cultures of individuals counts as an important factor.
Past food preferences of individuals became part of their belief systems. For this as examples I
can mention the Muslims and Jews who avoid pork and the Hindus who avoid beef. Moreover,
in Islam territories, the consumption of pigs and hunting birds, the meat of animals killed
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without blood, alcohol and stimulants are prohibited. In Christianity the rules are not so strict
but vary according to sectarian differences (Arslan and Aydemir, 2020).
7. Mindsets related to cultural effects
In academic field, the student can be categorized into groups regarding their motivation style.
Mastery motivation orientates individuals toward learning, being challenged and developing
their competence. Performance motivation orientates individuals toward demonstrating their
competence, competing with others and gaining favourable social judgments. This motivation
can be further divided in two sections. The performance approach goals are focused on
demonstrating ability, outdoing others and attaining favourable social comparison judgements,
while performance avoidance goals are concerned with avoiding failure and protecting oneself
from looking stupid, being embarrassed and being judged by others as lacking ability and
competence. In the universities, by conducting researches based on the attitudes of students, we
can set up a better understanding of cultural factors in societies. The results has shown that
performance goals (approach or avoidance) will be higher in embedded societies where
individuals are more influenced in determining their economical actions, and lower in
autonomous societies. Mastery goals will be higher in societies with a flat hierarchy system
than in societies stressing the importance of the hierarchy system. Higher human development
will be associated with greater mastery goals and lower performance approach and avoidance
goals (Fischer, 2017).
8. Internationalization models used for entering the global market
When firms enter the global market, they follow internationalization models which has been
proven as efficient. The two commonly applied models are the Uppsala Model and the Born
Global
Model.
Uppsala
Model
essentially
posits
an
incremental
approach
to
internationalization, progressing from countries with the least to the greatest psychic distance
between the home and host markets. The Born Global Model operates by the rule that it is
possible to succeed in the world market without an established domestic base. In order to enter
the global commercial level, firms need to possess capabilities that will help and enable them
to realize the specific step-by-step planning and the local market analysis in the specific
geographic location. However, firms do not have to choose either Uppsala or Born Global
model because in some cases it has been shown that the combination of the two method is the
most effective way to have success in the internationalization and this method is the Parachuting
internationalization. It considers the cultural differences but puts them in the context of
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boundarylessness in the global business environment. It is a new perspective on strategies that
firms can use to overcome large cultural and psychic distances. In intense global competition,
the most essential thing in order to be successful is the need for international firms to analyse
the customer habits and needs which requires the examination of the local culture. This process
has been substantially speeded up thanks to the Internet by which we can get information
regarding the cultural differences across national markets and about the way to reach a wide
cross-cultural understanding. In the age of the globalization, we have reached a balance in the
dual existence of old and new values which can coexist and complete each other. Furthermore,
it is possible to derive positive consequences from the cultural differences and coexistence. For
example in China, in a country where multiple philosophical traditions coexist at the same time
without any relevant conflict, the people are particularly open to such influences from other
nations but also they want to protect and reserve their own ancient values that have served the
country well in the past and are one of the oldest philosophies still existing in the world (Tarek
et al., 2019; Fang et al, 2016).
While in various places the companies can easily extend their products and services in some
regions the corporations might find some resistance as foreign brands. If the global brand and
the local cultural elements are compatible, there will be an increase in the purchase likelihood
which is beneficial for both parties. The compatibility between the global brand and the local
cultural elements increases consumers’ evaluation of the brand’s local iconness. Higher local
identity enhances while higher global identity weakens the effect of brand local iconness on
product purchase likelihood (He and Wang, 2014).
9. Conclusion
After some reasons and various examples I brought up, I think everyone can see the main
obvious or a little bit abstract points of cross-cultural differences. As a finishing, I would like
to write some useful practical advices which can be easily applied by anyone having difficulties
to cooperate with people from other nations. Open and non-judgemental interaction can
improve any future communication and create a positive atmosphere. To achieve this positive
environment, we should act following three important stages. Firstly, we need to recognize and
identify the differences. Before cooperating with other nations, it is important to have the
appropriate knowledge about their culture and way of thinking. The second step is to respect
and accept differences. It consists not only of identifying and assessing another culture’s key
dimensions, but of adapting your own views of the world to give them greater appreciation. The
final step is to reconcile differences. In this step we must apply knowledge and cultural empathy
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together in order to bring differences into agreement or harmony and pursue our common goal
and adjective (InternationalHub, 2017).
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