Chapter 1　Culture and Communication

Learning Objectives

By the end of the chapter,you are supposed to understand culture metaphors,culture definition,culture values,cultural shock,communication process,and intercultural communication.

Opening Case

David Green had been chairman of an American company,for only 30 minutes when he learned the company was suffering huge losses in Europe.The losses meant the company might not be able to pay U.S.employees their expected annual bonus.Since the bonus system was a key component of the company’s success,with bonuses making up about half of the U.S.employees’ annual salary,this was a much greater threat than simply a disappointing performance by the company.

The company,based in New York,had expanded hugely since 1990s,spending about $325million to acquire foreign companies.But according to David,lack of knowledge about either the cultures of the acquired companies or the cultures of the countries they operated in was a critical factor in the company’s financial nosedive.For example,the bonus system was not an incentive to European workers,who were hostile to the idea of competing with co-workers for their annual pay.Instead they follow pay scales that are the result of contract negotiations by labor leaders who represent workers and reach agreements with management.The idea that individual workers might exceed or fall below the agreed amount of income depending on individual performance was unacceptable to European workers.

The company also learned that products not made in a European country would not easily be able to penetrate that country’s market because of a cultural loyalty to domestically produced goods.

The third problem was that executives of the company recently acquired European companies only wanted to deal with top executives,not with lower-level people sent over from New York.This status issue arises from the cultural characteristic of hierarchy in German culture.

Another cultural issue is that workers in Germany,France,and other European countries typically have a month of vacation in the summer,so production gears down during this slow time.

The fifth problem was that nobody in the executive jobs had had international experience or had lived abroad－the chief financial officer(CFO)didn’t even have a passport,and a last-minute panic occurred to get one for him before a trip he urgently needed to make to Europe.It finally became clear to David that he could not hope to bring the company back to profitability without moving to Europe himself,where he could be at hand to deal with problems immediately while learning what he and the other executives needed to know about culture.

Questions:

(1)What happened to this American company?

(2)What are the reasons for the loss?

(3)What lesson should the company learn from it?

The story is a cautionary tale of how the chairman and executives painfully learned the lessonsof culture they needed to know to operate overseas.

Failure in business activities abroad can be fatal to a company,as the company’s experiencealmost demonstrated.Mistakes can be unconscious as well as unintentional.A whole body ofliterature has appeared that documents cultural blunders in international business efforts.The list oferrors is very long.Along with the errors are lists of do’s and taboos for business people.

These are caveats against those potentially fatal faux pas—as if remembering not to cross yourlegs in Thailand and not to refuse a cup of coffee in Saudi Arabia is all you need to know in order toclose a deal.But lists can’t cover everything,and this proliferation of print does not tell you why youshouldn’t cross your legs or say no to the coffee.And unless you understand the why,you will sooneror later trip up and fall on your face.The blunders-and-bleeps literature is full of instances in whichthe fall really was fatal and the deal came apart.It is always because someone didn’t understand thewhy rather than the what of culture.