Management Conference at the National Research Technology University in Kazan. Published May, 2017
Exploratory research on the methods of exchange of business knowledge in the relationships between European advisors and business owners / managers in the Russian Federation, in an intercultural context. Excerpt from the Thesis for a Doctorate Degree in Business Administration (DBA) forthcoming.
Title: Crossing Cultural Boundaries; transfer of Management Knowledge and –Skills between Organisational Cultures.
Author: Cees A.M. den Teuling MBA, candidate DBA
External Doctoral Researcher at Sheffield Hallam University Business School. Sheffield, United Kingdom.
General Director of ORANGE BUSINESS IMPROVEMENT
Amsterdam – The Netherlands
Contrast in National Cultures: Russian and Western perspectives.
Russia opened its economy after the implosion of the Soviet Union (or SU) and the collapse of the communist system in the 1990’s and has attracted the interest of Western (and global) Foreign Direct Investment (FDI) since then. The country has a vast territory with a population of about 145 million inhabitants and an overwhelming reserve of natural resources and, at the same time, with a weak legal system, a not-diversified, volatile economy and after some experiments with democracy and a liberal and free-market economy in the nineteen nineties, followed by an authoritarian government emphasizing “vertical power” and improve and maintain the large State’s influence in the domestic economy. Corruption is well spread and elaborated in all levels of the public administration and their institutes.
Frequently, remarkable contrasts are shown the substantial differences between Western and Russian cultures, making the latter difficult to understand by Westerners. Russians and Westerners differ greatly. Merely not only in their National Cultures (NC), but also in the backgrounds they are coming from, stemming from the ideological, religious, economic, political attitudes to the inherited social systems (Michailova, 2000)
For understanding Russia from the Western perspective, it is necessary to dig in Russian history, to the era of the earlier Tzars, when a grass root movement was developed from the mediaeval period as a typical Russian communitarian phenomenon.
The Russian Communitarian Value System (RCVS) is a socio-cultural system which can be seen as establishment of the communitarian system in Russia. The collective is still the organisational form in which RVCS is embodied. Collectives are rooted culturally from the Kievan Princedom of Vladimir (tenth century A.C.) and served constantly as an indispensible vehicle in survival’s struggle and a modus in the communitarian decision-making process. The communitarianism assumed being bounded together, sharing values, loyalty, and mutual support and knitted closely in work groups (Vlachoutsicos, 1998). Another cultural phenomenon is the choice for Orthodoxy, coming from Byzantium, by the end of the tenth century (988). In majority, contributed by the religion’s choice, Russia was relatively isolated from the remaining part of the Europe and the Latin civilization and determined the larger part of the subsequent cultural and historical development of the Russian Empire. As a consequence, the ethnicity and culture of Russia are closely knitted with the Russian version of Orthodoxy, which is serving as the State religion for Russia for more than thousand years.
Unlike the Western world’s focus on individualism, the Russian society has been and is dominated by ruling elites, the Tzars, landowners, the Communist Party Leaders and authoritarian governments. Russians are grown in a society with a lack of personal freedom and get accustomed to it. For over a millennium, the Russian Orthodox Church stresses the obligation of subjugation to the authority and the individual subordination of interests to the common salvation (Puffer and McCarthy, 1995).
The collective nature of Russian society is shown by the existence of in-groups. The centre of each in-group is the individual developed in outward direction. The first in-group is the nucleus family, followed, in sequence, by the extended family, friends and neighbors and is possibly limited to subsistence level in underdeveloped economies e.g. in the country side. In the more industrialized cities and Regions, the in-group can be extended to the workplace and unnumbered business relations (Triandis and Bhawuk, 1997). For being successful, Westerners should be informed, educated and prepared regarding the focal factor in the Russian mentality features (Denison, 1997)
Hofstede applied his dimensional framework to Russia several years ago. In the recent scores published by the Hofstede Centre (www.itim.org) there is an in-depth overview of the Russian culture and its comparison with other cultures. The scores for Russia on the Hofstede dimensions are as follows:
Power Distance (score 93) in Russia reflects the situation where holders of power are extremely distant in society. The great discrepancy between the less and the more powerful persons, leads to a prominent use of status symbols. Behaviour has to reflect and represent the status roles in all areas of interactions. The approach should be top-down and provide clear instructions for any task.
Individualism–Collectivism score in Russia is 39. The fundamental issue, addressed by this dimension is the degree of interdependence a society allows among its members. In collectivistic societies, people belong to “in-groups”, demanding loyalty in exchange of care and “inclusiveness”. The “nucleus” family is extremely important in survival, obtaining information, to be introduced to powerful networks. Communication is on personal basis, authentic and trustful towards the recipient. Russia’s score on Masculinity- is 36. The relatively low score on the Masculine – Feminine dimension may seem surprising in regard to the preference for status symbols, related to the high Power Distance. In working conditions, as well as in meeting with strangers, Russians understate their personal achievements and capacities. Dominant appearance is accepted when it stems from the first-in-command, the leader, but is not appreciated among colleagues and peers.
Uncertainty Avoidance is quite high in Russia (score 95), compared to other cultures. A seriously complicated bureaucratic system has been established there. Russian society deals with the ambiguity to the unknown future with experience of a threatening anxiety, twofold: should we try to control the future or just let it happen? For example, presentations are either not prepared or extremely well-detailed in planning and briefing. In negotiations, Russians prefer to receive detailed context and background information, to avoid any uncertainty. Feeling threatened by the unknown, strong institutions and engraved beliefs are established barriers to avoid the confrontation with any societal uncertainty.
Russia’s score on the Long Term Orientation dimension is 81. This is rather high as well, compared to other cultures. With this score, Russia shows to be a country with a pragmatic mindset. In dealing with the past and the future, while maintaining the connections with the history of the country, Russian culture, in general, prioritizes the existential believe that truth depends really much on situation, context and time. People have ability and a tendency to adapt easily to changing conditions and to cherish traditions. There is a thriftiness and perseverance in achieving results and a strong direction to save and invest.
Russia scores rather low (20) on the Indulgence-Restraint dimension. Societies with a low score in this dimension have a tendency to cynicism, pessimism and negativism, in contrast with indulgent societies and cultures. People with a restraint culture orientation have the perception that their activities and actions are restrained by social norms and don’t feel comfortable while indulging themselves. No much emphasis is put on the control of gratification for themselves and on the pleasure of enjoying leisure time.
In underlying study, the option is to formulate recommendations for the effective and efficient transfer of managerial knowledge, among other approaches, based on the dimension’s scores of Hofstede applied to Russia (and other transitional economies).
Learning experience of consultants and business trainers shows that conflicting values occurred between different NCOs and Organisational Culture (OCs.) It can be assumed that the recipient’s willingness and receptivity for new knowledge is conditional for the engagement in the transfer of knowledge. From the transmitters being engaged in an open process will be requested for adaptation of new directions to Knowledge Transfer (KT.)
Despite the fact that knowledge receivers appear with willingness to accept the new knowledge. Testing of the level of internalization and understanding of the knowledge disseminated in the transfer process is important and necessary. The acquired knowledge will be ensured when it is based on deeply engraved internal values, behaviors and attitudes. Dissemination of the acquired knowledge by receivers into a variety of directions and assurance of its broad utilization and extended benefit by other co-workers is fundamental to the leverage within the organisation. Deep involvement of the top and middle management is a basic condition to facilitate the implementation of the recently acquired knowledge. For Russia, development of clear directions and explicit manuals and instructions are essential for transferring the tactical knowledge into a state of action.
However, Hofstede’s same, fallacious assumption is accepted and argued there as well. He considers Russia as a nation with a unilateral culture. Despite the fact that ethnic Russians inhabitants are the majority of the population and the Russian Language is the “Lingua Franca” of the Russian territory, the Russian nation is a multi-cultural construct, consisting out of in total 89 republics and autonomous regions. There are nearly one hundred officially registered ethnic and indigenous communities and tribes. Hofstede, with his approach to study culture on the national level only, neglects this fact. Additionally, despite the predominant position of the Orthodox Christianity in Russia and the intertwined relationship with the government and state institutions, a variety of religious dominations are present in Russia. In reaction to Hofstede’s position, the researcher of the underlying study shares the opinion of Bergelson (2003), Beugelsdijk (2015), McSweeney (2002) and other authors, according to which Russia should be partially or fully valued by the assumption that there is not a unified Russian culture, but rather a multi-ethnic, multi-religion, tribal and clan-oriented assembly of a variety of cultures, despite the fact that the Russian State institutions use the dominant position, e.g. through the media, to promote all-Russian heritage, traditions and way-of-live. In this study all efforts are made to specify regional cultural effects and their influences on the trans-boundary knowledge transfer process by conducting research on organizational level with involvement of owners, managers and other staff members and questioning the relevant norms, attitudes and behaviors concerning the KT process in their organisations. Organizations with a variety of ethnic backgrounds, widely spread over the vast territory of the Russian Federation are included to grasp a realistic blueprint of the process of KT all over the country and in a diversity of environments and circumstances.
The Trompenaars (1998) framework is mainly based on the cultural and personal “value dilemma”, identified earlier by Parsons & Shils (1951). It includes subjects addressing seven dimensions of cultural valuation, five of which, namely Universalism versus Particularism, Individualism versus Collectivism, Achievement versus Ascription, Neutral versus Affective and Specific versus Diffuse are derived from Parsons & Chils (1951).The remaining two dimensions – Internal versus External communication and Time orientation, are primarily mentioned by Kluckholm & Strodbeck (1961) but derived from Rotter (1966) and Cottle (1968), respectively.
Culture consists of basic human norms, values and assumptions. These norms, values and assumptions have been developed (and are being developed) inter-subjectively. Even if they must provide meaning for careers to be of any significance, they are still mainly unconscious. They have an impact on behaviour, organisational (or equivalent) climate, and other cultural manifestations, but they are nonmaterial and non-behavioural in themselves (Bjerke, 1999). Acting as researchers and management consultants Trompenaars and Hampden-Turner (2005) argue that their model gives insight in cultural diversity, especially in MNC’s and provide explanations to avoid misunderstandings based on cultural values and attitudes. Their “Seven Dimensions of Culture” model consists of the following dichotomies, which enlighten distinctions between NC’s. Universalism vs. Particularism dimension divides NC’s based on the (relative) position of rules and laws as opposed to individual relationships. Particularistic or pluralistic societies focus on human friendships more than on laws and formal rules. Examples of strict universalistic countries are the US and Germany, while China and Russia are proponents of the more particularistic (pluralistic) societies. Individualism vs. Collectivism (communitarianism) (discussed also by Hofstede) divides societies by their tendency to give relative weight to individual or group interests. Personal welfare, fulfillment and happiness are seen as important in individualist societies, where members are directed initially to take care of themselves first. To the opposite, in more collectivistic oriented societies the interest of the community is regarded as more important as the individual. An example of a strict individualistic society is the US while Japan can be seen as a strong collectivistic oriented country. Achievement versus, Ascription is based on the distinction of how societies distribute authority and status. Accomplishments of the personal status is the tendency in achievement-oriented societies, while in ascription-oriented societies the status ascribed based on social position, wealth, gender, age and similar conditions, the extensive valorization of titles to clarify status in society and organization, is important. In these societies, hierarchy-driven respect for superiors and seniority is present. Achievement orientation, to the extreme, is found in the US. While in contrast, the Russian and Chinese societies show a strong ascription orientation. Neutral vs. Affective dimension is based on the view how societies validate the expression of emotions (in public). In societies with a tendency to neutrality in showing emotions by their citizens are characterized by not revealing the personal thinking and feeling… Hiding emotions and a self-possessed control over gesturing, feelings and/or facial expressions and lack of physical contact are valued. In dichotomy, societies with an affective orientation are characterized by transparency and verbal and non-verbal expressions of feelings and thoughts and an easy flow of the admiration of emotions, the delivery of dramatic statements. An example of a strong neutral oriented country Japan can be mentioned. In contrast, Mexico can be labeled as a society with a strong affective orientation. With respect to the Russian attitudes towards this dimension, generally a split in behaviour can be noted. In the public sphere, Russians act neutral, reserved and on distance but show emotions, share feelings and thoughts without any barrier in the nucleus family or among friends.
Specific vs. Diffuse dimension is oriented on the extent in which individuals engage in single or multiple sections of their personal lives. Specific-oriented societies show the tendency of their members to a clearly separation of work and personal lives. Also each social group in this type of society shows different approaches to authority inside the group. Contrasting, members of the societies, characterized as diffuse-oriented, consider the separate elements of their life as connected, interrelated and emphasize that there is no exact difference and separation between the work-related area and the domain of personal life. A highly specific society can be observed in the US. In contrast, China, and to a certain extent, also Russia can be designated as examples of medium- and highly diffused societies. Internal vs. External dimension relates to the effect of the environment on people’s lives. Societies with an internal or inner-directed orientation have a mechanistic approach to nature. They believe that nature is complicated and can be controlled with appropriate expertise. Additionally, members of internally oriented societies tend to have more outspoken, dominating attitudes and are reluctant of any change. On the contrary, members of an outer-directed or external oriented society have a more organic approach to the nature and the preferred mindset is learning to live in agreement with nature and to adapt to the external situation. In general, they show a more flexible and adaptive approach and are at ease and ready to compromise with changes, to avoid disturbance and achieve harmony. Russia would be an example of an internal oriented society, while the Benelux and Scandinavian countries are more external oriented. Regarding the Time Orientation dimension, Trompenaars and Hampden-Turner (2005) argued that there were two directions in which societies respond to the time. Related to time orientation, they mentioned the Sequential vs. Synchronic dichotomy in regard with the member’s orientation towards the assigned position of the past, present and future. Societies distinguished on the base of the member’s preference for sequential approach prefer to do a single activity at a time and are strict in planning and scheduling. On the contrary, synchronic society’s members consider time as intangible and more flexible and tend to do in parallel a number of activities. They are ready to select actual activities based on upcoming priorities on their “to do” list, neglecting or following loosely to agreed schedules and confirmed agendas. Another distinction is the difference between the past, present and future oriented societies. Societies with a past-orientation, estimate the future as the irrevocable repetition of the past experiences and events and are bound to referrals to and glorification of origin of the own family, the (family) business, history and the national heritage. They are motivated by the desire to re-create and restore a “golden” century in history. Predecessors, ancestors and senior persons are shown respect and all positions and events are placed, viewed and discussed in a historical context. Present-oriented societies and their members are not giving much weight to the past nor future and are mainly dedicated to and orientated on current and actual directions, activities and goals, which are estimated as the utmost importance. Good planning, interest in present networks, relationships and orientation on the actual situation in the terms of contemporary style and impact is present in theses societies. In contrast, societies with a future-oriented attitude do not see the past as having a major significance in the determination what is to come in future and are focused on and characterised by deliberations on prospects, aspirations, achievements to come and potentials
Ralston, Holt, Terpstra and Kai-Cheng (2007, p. 23) reported that their findings “substantially support the cross-vergence with cultural-dominant and suggest that the concept of global corporate culture can be feasible in the long term, especially if cross-convergence proves to be a transitional state, and values assimilation is a mutual process”. However, in this study it is argued that these findings are not particularly supportive for the global organisation concept in the short term, especially from the perspective of differences at the sub-dimensional level. There appear to be too many work value differences to make this concept presently realistic. Thus, these findings better support the multi-domestic approach as a reasonable strategy for international business today. This implies that focusing effort on understanding and coordinating the different cultural values would be a more beneficial strategy than trying to force-fit them into a single corporate culture.
Giving room to local influences in case of a multi-national organisations subsidiary seems to be a more effective approach than pressing all into a single (corporate) mould. According to Smith (2011), it is necessary to take into consideration the reasons nations vary in the extremity of their dominating communication styles. It is widely accepted that the basis for the contrast between collectivistic and individualistic nations lies in the strength and nature of the bonds between individuals and groups. What might be the distinctive and heretofore neglected principle that drives differences in communication?
Communication is the essential mode to “bridge” cultural differences and to establish cultural awareness. As argued by Bennett and Bennett (2003, 2004), there is a gap in communications styles between cultures oriented towards “collective” or “individual”. The readiness and willingness to share knowledge with fellow workers inside or outside the own community is an example where the “communication gap” is manifested (Szulanski, 1995). “To answer the question on the readiness of sharing knowledge with co-workers, we may do best to focus not on convergences between East Asian moderation and collectivism but on the communication styles that prevail in the rather more collectivistic nations scoring at the extremity pole of the present analysis. Although, there is no relevant empirical data, the nations scoring on extremity are among those often considered to be “honor cultures” (Smith, 2011, p. 230).
National pride, traditionalism and chauvinism also support an atmosphere of pre-occupation with resistance to treats from outside, while nations, more involved in modernization are more directed in maintaining the in-group harmony.
To conclude and to adopt a single approach for researching the attitudes, values and behaviors of the process of KT, it will be not satisfactory to acclaim a full scope on all decisive elements in the organisation’s KT processes. It is purposeful to develop an individual, “customized” and adjusted “research framework” separately directed for the purpose of the underlying study and mainly constructed out of the selected approaches of authors, mentioned before.
Within the present study, an attempt is made to identify the “manifest” and “latent” behaviour, attitudes and beliefs of the studied population, by considering among others the Hofstede’s (2007) Value Service Module (VSM) and the Trompenaars’ and Hampden-Turner’s (2005) Seven dimensions of Culture, as instruments for explanation. Despite the well-founded critical remarks on Hofstede’s six dimensions model, Hofstede’s approach will be partly and selectively applied in the research of the influence of NC on the OC. Supporting arguments are that Index Scores Estimates for Russia are available for comparison and the fact that this study is aimed at understanding the knowledge transfer process and the level of obtained SVC, therefore, its object is not on the NC level but on the level of- and inside OC’s.
Additional models and directions (Action Research and the “Competing Values Framework) will be included in the following parts of the thesis, to reach a more rich and diverse oriented research question(s), dedicated to the level of OC. As argued and explained in Smith, Dugan and Trompenaars (1996), an initial survey in Russia (ex-U.S.S.R.) using the Trompenaars Culture Values Questionnaire (CVQ) is conducted among a sample of organisational employees, originated from 43 countries. Since the underlying study is focused on the process of transfer of (managerial) knowledge inside Russian organisations, some attention is given to the specific conditions in Russia, regarding the possibilities and obstacles for surveying in the Russian cultural environment. Research by Bergelson (2003) listed a summary of cultural related topics for Russia, to be taken into account, while preparing any survey and emphasizing the need for intercultural sensitivity and culturally mindful communication. Especially the careful and controlled translation in to the Russian language is of great concern. Despite the barriers and bottlenecks regarding surveys in Russia, the Trompenaars CVQ tool (partly) in combination with other research tools will be implemented in the underlying research,
Testa (2008) argues that several theoretical constructs provide support for such relationship, as well as direction for developing hypothesis. Evidence of the presence of a “Fit” (close relation) between NC values and the managerial practices in an organisation supports this argument. (Newman and Nollen, 1996)
NC is important in the workplace because of the common beliefs, ideas and attitudes that develop among groups. When an individual with a strong ethnic culture enters the workplace, their past experiences impacts their perception of the environment. Previous research by Kattman (2014) emphasized that NC is often dominant over OC. This can be negated in case of a strong leadership. With the limited research conducted in his study, the author concluded that within these organisations, OC was more influential than NC. This may have to do with isomorphism and the fact that business want to be successful. According to Woywode (2002) isomorphism suggests that institutional differences tend to diffuse with one another over time, causing the decrease of those differences. Companies across the globe are struggling to increase their competitive edge. The continuous improvement methods and tools may be spreading through benchmarking and communications of company successes. In the past, NCOs may have biased company efforts. With company leaders, striving to increase company performance, the OC, driven through business and management practices now appears to take precedence. Dusan (2004) brings the managerial behaviour in Serbia as a good example of such orientation. Specifically, research data about NC in Serbia confirmed the facts from Hofstede’s study of having High Power Distance and Uncertainty Avoidance, and Low Individualism and Masculinity. However, unexpectedly the Serbian managers appeared to have higher scores on Power Distance, Uncertainty Avoidance and Collectivism than non-managers. Only on the Masculinity dimension the managerial sub-culture was found less “feminine” in comparison to value orientation of the other employees. Leadership in the Central and Southeast European cultures is in many occasions intertwined with a strong “masculine touch”. Managers, not behaving and acting in accordance with masculine approach and setting, are regarded as “weak” and encounter all sorts of difficulties and obstacles to perform the requested standards.
According to Gerhart (2009) there are two approaches towards the importance of differentiation of OC. The Resource Based View (RBV) emphasized the importance of differentiating OC and style of leadership as paths to sustained competitive advantage, in contrast, the contextual view argues that OC is largely determined by the environment and highlights the role of other, industrial forces such as NC. On average, the conceptual analysis and re-analysis of empirical evidence does not support the hypothesized strong role of NC as a constraint on OC. Therefore, organisations may have more discretion in choosing whether to localize or standardize OC and related management practices, than is suggested by conventional wisdom.
An argument for a situational approach to OC is that the influx of the close environment has more impact than the overarching influence of a national culture.
In their latest study Sasaki and Yoshikawa (2014) extended the current state of cultural investigation in the domain of international business. Several ways of future theoretical and empirical research on culture could be developed through conceptual discussion. In identifying the main criticism of current knowledge, this study focuses mainly on overcoming assumptions concerning the monolithic nature of NC and recognizes the limitations associated with the problem of spatial reductionism in intra-national regional cultures and with introducing it as a unit of analysis, borrowing the concept from the field of economic geography. As argued by Frenken and Boschma (2007, p.635) “an attractive evolutionary theory for economic geography as well for the social sciences, providing a theory of change, applicable to specific processes in space and time”. The dynamic character of the organisation, acting as an agent of change, is targeted on the accomplishment of ensured SVC through the successful implementation of KT”.
The monolithic nature of NC as assumed and defended by a number of scholars as Hofstede (1980) showed to be a rather simplistic view on the reality, working with average outcomes. Based on more advanced research techniques, inside a national population, more strata can be recognized, identified and questioned. As far as this research is focused on Russia, the multi-ethnic culture is taken in consideration. In the following section the specifics of Organisational Culture in connection with the process of transferring managerial knowledge is addressed.
Cees A.M den Teuling, October 2016. Amsterdam The Netherlands