Cultural Differences in Daily Business Life Between Germany and Sweden

Table of Contents

List of Graphics

1. Introduction

2. Culture
2.1. Cultural Dimensions by Geert Hofstede
2.1.1. Power Distance
2.1.2. Individualism
2.1.3. Masculinity
2.1.4. Uncertainty Avoidance
2.1.5. Long Termism
2.2. German Business Culture
2.3. Swedish Business Culture

3. Negotiation between Germans and Swedes

4. Conclusion

5. Bibliography

List of Graphics

Figure 1 - Cultural Dimensions for Sweden and Germany compared; Source: Angwin (2001, p. 40)

Figure 2 - Power Distance Index; Source: Malcolm Gladwell (2008, p. 204-9)

Figure 3 - World Map of Power Distance Index; Source: Malcolm Gladwell (2008)

Introduction

When negotiating internationally one should not only consider the broader environmental settings and conditions, but also cultural aspects as negotiators are individuals which are marked by their national and organizational culture as well as their individual experiences^[1].

This seminar paper deals with Sweden and Germany as negotiation partners from a German perspective. Although, one would assume quite various similarities between these countries due to geographical proximity and same origin of language^[2], they are indeed quite different - an issue also investigated by Eoro Vaara^[3]. The aim of this paper is to show that even slight or subtle differences in cultural patterns should be considered. Therefore only who can communicate without cultural misunderstandings can experience successful cross-cultural negotiations.

Sweden has been chosen since there is a lot of research about cultural differences between American, Asian and Arab countries, but hardly any regarding inter-European. Another reason is also because of personal experiences in Sweden and with Swedish friends. It was challenging to investigate in a country, which does not seem to be culturally much apart from Germany.

After a short introduction, the second chapter is giving the reader a definition for culture and an overview of Hofstede’s model of dimensions. This chapter also presents the different kind of cultures from a German and Swedish perspective. Therefore the third chapter deals with negotiations between Germans and Swedes while doing business. This paper ends with the chapter “conclusion”.

Culture

To understand cultural differences in daily business life and their effect on it, one has to understand first culture itself. Therefore first at all a definition for culture will be given.

Since culture does not only define the way we work and manage, culture also affects everyday business routines like the way how a meeting is lead, how decisions are made, how memos are written and what titles are used^[4]. Geert Hofstede^[5] defines culture as “a collective programming of the human mind that distinguishes the members of one human group from those of another. Culture in this sense is a system of collectively held values”^[6]. As culture is complex there is no consistent definition for culture, so that Hofstede’s definition is just one amongst others. However, the oldest human institution and the most obvious difference between cultures is the difference in language.

1.1. Cultural Dimensions by Geert Hofstede

In the following the five dimension model by Geert Hofstede will be presented, which is a typology model^[7]. Each of the dimensions has two contrary sides, which are the ideal type. In Hofstede’s study of more than 50 countries^[8] he developed five dimensions, called Power Distance, Individualism vs. Collectivism, Masculinity vs. Feminism, Uncertainty Avoidance and Long Termism vs. Short-term orientation^[9].

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Figure 1 - Cultural Dimensions for Sweden and Germany compared; Source: Angwin (2001, p. 40)

1.1.1. Power Distance

In Hofstede’s model power distance emphasis the hierarchical differences in a culture and its acceptance of these inequalities – in other words it is the relationship between a boss and his subordinate^[10].

In comparison to other countries, e.g. Arab countries^[11], Sweden and Germany have a quite low power distance. This means that there is no large gap between the wealthy and the poor or the powerful and powerless. Both countries have strong beliefs in equality and behave more like the people they are surrounded with. Germans and even more Swedes do not have the feeling that they need to show off their power or to boast about their title rather they tend to underplay it.

Countries with low power index hierarchies are flat with a decentralized organization and just a few supervisors who are expected to be accessible for their subordinates.

In contrast to countries with a high power index the relation between boss and subordinate is strictly ruled and decisions will be made by the boss instead of the subordinate. Hence a very centralized organization is at hand, where subordinates expect to be told what to do from their supervisor or boss^[12]. As a result people in high power distance cultures tend to express positive emotions to superiors, e.g. to display respect and to achieve a better reputation or awards, and negative emotions to subordinates, e.g. anger, dissatisfaction.

illustration not visible in this excerpt^[13]

Figure 2 - Power Distance Index; Source:

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Figure 3 - World Map of Power Distance Index; Source:^[14]

1.1.2. Individualism

This dimension underlines the relationship between the individual and the rest of the society. Individuals are looking after themselves and are following their own interests rather than being group-orientated. As a result the task and the organization are more important than the society^[15].

As the counterpart of Individualism we find Collectivism, where people are from birth onwards integrated into strong, cohesive in-groups. Within Collectivism equality is emphasized and people participate in sharing and cooperation.

Germany^[16] as well as Sweden^[17] can be considered as individualistic countries compared to a country like Guatemala where they have strong collectivism.^[18]

Germans stress on personal achievements and individual rights^[19], so that the commitment of the employee to work is high^[20].

[...]

^[1] Mead & Andrews, 2009.

^[2] Germanic

^[3] Vaara, E. Constructions of cultural differences in postmerger change processes: A sensemaking perspective of Finnish-Swedish cases. M@n@gement, 2000, 3(2), 81-110.

^[4] Lisa Hoecklin, “Managing cultural differences: Strategies for competitive advantage” (Wokingham, Addison-Wesley, 1994), p.7.

^[5] Dutch social psychologist (http://www.geerthofstede.nl/)

^[6] http://changingminds.org/explanations/culture/what_is_culture.htm

^[7] Geert Hofstede, “Cultures Consequences: Comparing values, behaviors, institutions and organizations across nations, 2nd ed. (Thousand Oaks, Sage Publications, 2001), p.28.

^[8] Ibid., p. xix.

^[9] Ibid., p. 29.

^[10] Geert Hofstede, “Cultures Consequences: Comparing values, behaviors, institutions and organizations across nations, 2nd ed. (Thousand Oaks, Sage Publications, 2001), pp. 79-137.

^[11] Arab countries have a very high power distance of 80.

^[12] Geert Hofstede, “Cultures Consequences: Comparing values, behaviors, institutions and organizations across nations, 2nd ed. (Thousand Oaks, Sage Publications, 2001), pp. 102-107.

^[13] http://www.clearlycultural.com/geert-hofstede-cultural-dimensions/power-distance-index/

^[14] kwout.com/cutout/n/bu/e3/6t9_bor_rou_sha.jpg.

^[15] Geert Hofstede, “Cultures Consequences: Comparing values, behaviors, institutions and organizations across nations, 2nd ed. (Thousand Oaks, Sage Publications, 2001), pp. 209-239.

^[16] with a score of 67 on the scale.

^[17] with a score of 71 on the scale.

^[18] with a score of 6 on the scale.

^[19] http://www.clearlycultural.com/geert-hofstede-cultural-dimensions/individualism/

^[20] Beate Illner & Wiebke Kruse, “Swedish-German Project Team Members: Problems and Benefits due to Cultural Differences”, p.22.