The five dimensions of culture and BRIC versus BRIICS

19 September 2011


I went to a very interesting talk recently by Cristina Escallón which was hosted by the Colombian Tourist board. The topic caught my eye as it was dealing with culture in the workplace and having worked on a big multinational project years ago with Price Waterhouse and in multicultural teams at Thomas Cook, I was keen to learn how our understanding of the dimensions of culture has evolved.

My learning was based on the Hofstede study of the cultures of IBM many years ago which focuses on the following five dimensions of culture:
1. Power Distance
2. Individualism
3. Masculinity
4. Uncertainty Avoidance
5. Long Term Orientation
 
It’s clear that there is now a lot more research available to help us with a new challenge as to how business practices may need to evolve to work successfully with the BRIC[1] or BRIICS[2]  cultures. I will explain why I’ve used the word BRIICS later.

Cultural differences
Cristina is a Colombian who had been living in the UK for 16 years and had some interesting stories to share on how differences in direct versus indirect communications between Dutch and Colombian cultures had caused all manner of difficulties with a joint venture in South America.
 
Comfort with silence
She explored some of the many different dimensions of culture such as our comfort with silence. In Thailand and Japan average comfort levels of up to 16 seconds are diametrically opposed to those in the US, which are as little as 2 seconds.  
 
Being versus doing
She also demonstrated how different cultures accord status based on “being” and who you are in the Middle East versus “doing” in Anglo Saxon cultures. 
 
Universal versus contextual rules
Our Western perception of universal rules with an emphasis on rights, rules and contracts are very different to Russia and the Middle East where rules are much more contextual. In addition the US and UK preoccupation with task versus getting to know the people first is one of the most striking of differences between Chinese, Malaysian, Russian and Brazilian culture. Cristina talked about how children in Asia are brought up focusing much more on verbs whereas children in UK culture are often first taught the name of objects. 
 
Management of emotion
She also demonstrated the scale for how emotions are managed outwardly where Japan and Egypt are on the opposite sides of the scale. If we remember the recent Japanese earthquake you may remember the calm that prevailed in the face of adversity and disaster on our TV screens versus the noisy scenes of mourning in Egypt for the victims of the uprising.
 
UK challenges for US expats
Cristina reminded us that it is our own reactions to other cultures that we should use as a mirror to remember the conditioning that has shaped our different view of the world.  She commented on how surprised many US expats are by the cultural differences when they come to work in the UK. On the surface many cultures with the same language look similar but spend any time living and working in a country and the differences become much more visible. South Americans in the audience nodded when Cristina mentioned that even those choosing to work in neighbouring South American countries found quite a few cultural differences.
 
Managing global, virtual teams
Cristina talked about the challenge of managing virtual global teams and the need for more structure and discipline that this requires, together with an understanding of trust when dealing with conflict.
 
BRIC versus BRIICS
Many of us will be familiar with the acronym BRIC for what we have also called the “Tiger economies” that have not suffered the recent economic downturn we’ve seen in the US and Europe. With fast growing economies these countries have seemed tempting markets for expansion. However a recent Economist article[3] drew my attention to some interesting new additions to the BRIC group, gaining attention due to the strength of their economic growth. The Economist points out that the BRICS alone account for about 21% of global GDP.
 
The 5th BRIIC?
Many may not be aware that Indonesia is home to the second largest number of Facebook members and it has developed an insatiable appetite for smartphones and scooters. According to the Economist is has one of the best performing economies of the G20 club, growing by 6% and has a huge population of 238 million with a fast growing middle class, forecast to grow to 150m by 2014. Some banks like Nomura are saying their middle class is becoming bigger than that of India. To counter the enthusiasm however there are still issues with the poor infrastructure and reports of corruption but it’s clear that Indonesia is a market that may soon join the BRIC club.
 
The BRIICS?
Now that South Africa has been invited to join BRIC by China there is some speculation by Bloomberg that although it is a minnow in population (49 million) compared to the other players, it could increase its power on the world stage as Africa’s main representative in BRIC. Its GDP forecasts for 2011 and 2012 are on a par with that of Brazil as shown below but its latest industrial production figures and whopping unemployment rate of 25.7% are an issue.
 
Country
GDP 2011
%
GDP 2012
%
Industrial Production
Consumer Prices 2011
Unemployment Rate %
Brazil
+3.6
+3.8
-0.3
+6.5
6.0
Russia
+4.3
+4.5
+5.2
+8.9
6.5
India
+7.9
+8.2
+3.3
+6.8
10.8
Indonesia
+6.5
+6.3
+5.7
+5.9
6.8
China
+9.0
+8.6
+13.5
+5.4
6.1
South Africa
+3.2
+3.9
-6.0
+3.7
25.7
Source: Economist Intelligence Unit estimates,  % change on year ago
: The Economist Economic Indicators September 17th 2011 Page 97
 
Implications for how we do future business
The learning for me from my study of culture and the presentation last week was how diametrically opposed many of the BRIC[2] country cultures are from Anglo Saxon culture.   Given the rise of these BRIC markets, the way we do business there will have to be shaped by the cultures of these countries going forward in order to be successful.  I remember being fascinated by the Confucius stories told by an Asian Thomas Cook colleague many years ago which seemed timeless and as full of meaning for everyday life as we hold our Shakespearean drama. In fact the teachings of Confucius from 500BC actually shaped Hofstede’s 5th dimension of culture using a questionnaire designed by Chinese scholars.
Source: Thequoteblog
 
Changes in Asian culture
Interestingly however perhaps Asian culture is changing too and I was intrigued by the recent Economist article[4] about the increasing number of Asian women who are rejecting marriage and marrying later and less than in the past. This is likely to exacerbate an existing issue with the Chinese one child policy which has driven up the male to female population ratios drastically in China. It is still too early to predict whether this reluctance to marry will lead to an influx of foreign brides which happened in Taiwan and South Korea.
 
The second Chinese consumer revolution
Having a clear understanding of trends in these BRIC markets will be key to developing new products and services for these regions. Players such as Home Depot an American DIY chain have made expensive mistakes by not adapting their product to the local Chinese market. The Economist[5] reports that both Nestle and Unilever are preparing for what they call “a second consumer revolution among the 665million Chinese who live in rural areas”.
 
Travel growth forecasts for BRIC markets
The UNWTO latest international tourism receipts show how China has jumped to number three position and overtaken the UK.
 
The UNWTO graph below illustrates the huge jump we are likely to see in the Asia Pacific share of international tourist arrivals by 2020.
 
 
 
 Source: World Tourism Organisation (UNWTO)
 
China is on its way to becoming the biggest luxury good market and we know that the main drivers of air travel growth over the next twenty years will happen within the Asia Pacific region as shown by the Boeing forecasts below:
 
 
Souce: © Boeing
 
What are your predictions for the impact the growth of the BRIC markets will have on the travel industry?
 
Want to know more about the BRIC markets?
Come along to the WTM sessions titled:
with representatives from IATA, Oneworld Alliance and N America Air China Ltd
or:
“Power Talk: Investing in BRICS tourism” with Stephen Sackur and the Brazilian Tourist Board on 9th November to find out more about the BRIC economies and the impact they could have on your market whether that’s receiving visitors from these countries or doing business in them.
 


[1] BRIC = Brazil, Russia, India, China 
[2] BRIIC = Brazil, Russian, India, Indonesia, China and South Africa
 [3] Economist July 23-29 2011 “Missing BRIC in the wall” page 51
[4] Economist August 20-16 2011 “Asia’s lonely hearts Why Asian women are rejecting marriage and what that means”
[5] The Economist July 9, 2011, “The Mystery of the Chinese Consumer” page 59-60
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