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What Germany can learn from Singaporean Business Culture

Bachelor Thesis 2016 42 Pages

Economics - Case Scenarios

Excerpt

II. Table of Contents

I. ABSTRACT

II. TABLE OF CONTENTS

III. LIST OF FIGURES

IV. LIST OF ABBREVIATIONS

1. INTRODUCTION

2. DEFINITION OF BUSINESS CULTURE:

3. SINGAPORE
3.1 CULTURE
3.1.1 Beliefs
3.1.2 Behaviours and Social practices
3.1.3 Norms and Customs
3.2 VALUES
3.3 COMMUNICATION
3.3.1 Meetings, Negotiations and Contracts
3.3.2 Manners and Taboos

4. GERMANY
4.1 CULTURE
4.1.1 Beliefs
4.1.2 Behaviours and Social practices
4.1.3 Customs and Norms
4.2 VALUES
4.3 COMMUNICATION
4.3.1 Meetings, Negotiations and Contracts
4.3.2 Manners and Taboos

5. SIMILARITIES
5.1 CULTURE
5.2 VALUES
5.3 COMMUNICATION

6. DIFFERENCES
6.1 CULTURE
6.2 VALUES
6.3 COMMUNICATION

7. CONCLUSION

8. REFERENCES

I. Abstract

The purpose of this paper is to analyse the similarities and differences between the German and Singaporean business culture. Throughout the comparison a conclusion is drawn on what Germany can learn from Singaporean business culture. Therefore it is important to understand the term business culture and both its components, it is based on. The analysis is divided into three main topics: Culture, values and communication with several subheadings. Moreover the similarities and differences are explained, before a conclusion is drawn.

III. List of Figures

Figure 1: Singaporean communication pattern

Figure 2: Germanys construct of social hierarchy

Figure 3: German communication pattern

IV. List of Abbreviations

Abbildung in dieser Leseprobe nicht enthalten

1. Introduction

Since the world is becoming more and more multicultural, international and connected, cultures and their components change over time. Modern companies of today, who are looking to do business in Europe and Asia are most successful when building up regional headquarters rather than focus on a specific market with country-specific headquarters.

In the past, Singapore became the predominant location for regional headquarters in Asia (especially South-East Asia) for various reasons. The former British colony provides all necessary aspects to attract foreign direct investments in conjunction with an English speaking environment. As of today Singapore became one of best and easiest countries to do business with in conjunction with a stable political environment.

The counterpart in Europe for Singapore is the export-oriented Germany. After its reunification in 1990, Germany became the strongest economic power in Europe and one of the strongest worldwide. With the focus on export to all continents, it is necessary to build up headquarters around the world to maximize the effectiveness. Today, about 1400 German firms are located in Singapore, which makes them an important partner.

Since multinational companies become bigger and more involved in different sectors, success in business will inevitably demand a change of corporate and business culture. Therefore it is important to understand foreign cultures and business cultures to better adapt to the foreign culture. Additionally improvements of other business cultures can be used and implemented into the own business culture.

This paper tries to determine the main differences between Germany and Singapore and to answer the question what Germany can learn from Singaporean business culture.

2. Definition of Business Culture:

The term business culture stands in close relation to the terms corporate and organizational culture, which all were defined various times. “Corporate culture is a soft, holistic concept, with however, presumed hard consequences (Hofstede and Hofstede 2005, p. 35). Furthermore business culture embraces everything that could be important or desirable and displays itself through the thoughts and acts of its employees (Herbst 2006).

However, to further understand the term business or corporate culture, a closer look on its components has to be taken. A business is a whole entity, which reflects the history of the organization and the values that were socially constructed by the people who formed the organization (Hofstede and Hofstede 2005). Nevertheless, the corporate culture is not only embodied in its members, but also in other stakeholders and persons who interact with the organization, in particular customers, suppliers and the press.

The term culture stands for the “shared mental software of the people in an organization … [which are] different in many respects from national cultures” (Hofstede and Hofstede 2005, p. 35). The term culture will be further analysed in section 3.1.

3. Singapore

3.1 Culture

The term culture and its definitions are numerous, which impedes the understanding of culture. More than 200 pages were gathered by Alfred L. Kroeber and Qyde Kluckhohn in 1952 to collect all further definitions of the expression ”culture”, but since then, additional studies and attempts have been made.

The term culture, as defined by Edward Tylor (1981, p. 1), "is that complex whole which includes knowledge, belief, art, morals, law, custom and any other capabilities and habits acquired by man as a member of society". It is “the collective programming of the mind that distinguishes the members of one group or category of people from another” (Hofstede and Hofstede 2005, p.400).

Singapore’s unique culture is influenced by many characteristics. This uniqueness can be ascribed to major influences, both from Eastern and Western cultures. Since it became independent in 1965 Singapore has been a British colony for 146 years after it was founded in 1819 by Sir Stamford Raffles. Today, Singapore contains one of the most diverse cultures all over the world with 4 official languages and a multicultural society, living together peacefully. The Singaporean society consists of 74.2% Chinese, 13.3% Malay, 9.2% Indian, and 3.3% others people (Singapore Tourism Board 2016). The figures from the Singapore Tourism Board show that about three quarters of the population is Chinese or has a Chinese heritage, which implicates a major impact on society.

Impact of Chinese Heritage on Singaporean Culture

When further analysing the impact of Chinese Heritage on Singaporean culture it needs to be mentioned, that there are two ethnic Chinese groups that have an influence. In the first part of the analysis, the focus will be set on the traditional Chinese background, whereas the second will have a closer look at the Straits-born Chinese or Peranakan.

According to the latest estimates, ethnic Chinese account for 75% of Singapore’s population of 3 million and have control over 81% of Singapore’s listed companies in terms of market capitalization (Haley and Low 1998). What should be taken into consideration while interpreting the given statistics is that Chinese family and clan associations are prevalent in Singapore (Chhokar et al. 2007). These clan associations rely on personal relations and keep key positions occupied by those whom the owner could trust (Witt and Redding 2014). Within nearly all clan associations, wealth and power have a tremendous impact in determining one’s social position, since the majority of clans was initiated, controlled and led by wealthy business people, which had a high social status and prestige as leaders. To further increase the power, network, coordination and assistance among clan associations the Singapore Federation of Chinese Clan Associations (SFCCA) was formed in 1986 as an umbrella organization. This cohesion shows that the cultural values of Chinese Singaporeans differ to those from mainland China. As Creel (1953) describes that the traditional Chinese culture is reflected heavily on the philosophy of Confucius, who emphasized the importance of farming rather than business. Businesspeople were considered the lowest in the social hierarchy, below officials (intellectuals), farmers and workers. On the other hand early Chinese values in Singapore valued entrepreneurs’ spirit and encouraged the setting up of businesses, especially family-run businesses (Godley 1981).

Another important contribution to Singapore’s cultural heritage is due to the Straits-Born Chinese or Peranakans. Chhokar et al. (2007) defines Peranakans as a distinct ethnic group peculiar to Singapore and parts of Malaysia, who can trace their ancestry to both ethnic Chinese and Malays. The culture compounds of Chinese, Malay and English components and has broad up many of Singapore’s political leaders, e.g. Lee Kuan Yew and Goh Keng Swee. These first generation leaders came from the British-educated Peranakan elite and formed many institutions that brought progress for Singapore citizens and the country itself. An example therefore would be the British-style public administration rather than a traditional Chinese structure (Chhokar et al. 2007).

In conclusion many influences from the East and West had an impact on Singapore’s culture. Different heritage brought up different leadership styles and formed a unique culture.

Impact of the Government on Singaporean Culture

After independence in 1965, the People’s Action Party (PAP) dominated government and implemented export-orientated developmental state policies similar to those of Taiwan and South Korea (Woo-Cummings 1999). Today there are about 7,000 multinational companies operating in Singapore with half of them being regional headquarters (Chhokar et al. 2007). With that enormous amount of big companies, influences from other countries were inevitable. Besides MNCs there is also one other major type of business organization in Singapore: Big, government-linked companies (GLC), which operate in different sectors, e.g. taxi operations or newspaper publication. With a successful and still rising business environment, it is no wonder that Singaporean workers have the highest average regional income.

Besides interfering in the economic sector, the Singaporean government is influential in other sectors as well. For example, the government provides infrastructure (education, medical services, television and more), directs the capital markets (e.g. the Development Bank of Singapore), owns 75% of housing facilities with the legal right to take possession of the rest if necessary (with all rights of the Housing Development Board) (Haley and Low 1998, pp. 532-33). These economic activities, combined with big governmental influences on the market make Singapore a crafted construct. Haley (1998, 1999) defines the term crafted construct as follows: “today, Singapore’s crafted culture appears hierarchical, disciplined, repressed and materially successful – a showhouse of technocratic, authoritarian, dependent capitalism. Tiny Singapore’s viable combination of high growth, top-down management, social development and authoritarian policy offers a cultural model that giant China is trying explicitly to emulate” (Haley and Low 1998, p.531). Furthermore despite some innate geographical and socio-cultural characteristics, the government has tried through policy measures, regulation, planning, propaganda and information to forge a Singaporean soul that will satisfy Singapore’s raison d’être, currently economic growth and welfare (Haley and Low 1998, p.530).

All interferences and crosslinks that affect, craft and shape Singaporean culture in a certain way do also have a down side. As a consequence of the heavy interference, an increase in Uncertainty Avoidance, measured by Hofstede and Hofstede (2005), can be seen and today Singapore has the lowest score of Uncertainty Avoidance among 74 countries.

Uncertainty Avoidance can be described as “the extent to which the members of a culture feel threatened by ambiguous or unknown situations” (Hofstede and Hofstede 2005, p. 403). The heavy impacts on many situations in life give Singaporean citizens’ security and a feeling that everything will be taken care of, even though there is also criticism. Haley et al. (1996) and Khong (1995) described that the public’s recognition of the government’s extraordinary performance record provides the foundation for the government’s claim moral authority and tangible proof of the ruling élite’s effectiveness.

The impact of the government on Singapore’s culture created a crafted culture in a vicious circle. As mentioned before the public is valuing the performance of the government, on the other hand the government is using this validation to keep and increase their impact on society.

3.1.1 Beliefs

As stated before culture is a complex term and many experts tried to define it, but beliefs always played an exceptional role when analysing cultural aspects. Lustig and Koester (2010) discussed the term belief as an idea that people assume to be true about the world. Beliefs, therefore, are a set of learnt interpretations that form the basis for cultural members to decide what is and what is not logical and correct. In the following, two types of beliefs are going to be categorized, the central and peripheral beliefs.

Central beliefs are fundamental ideas that directly appear to a person’s self-perception. This can include basic expectations about how the world runs, or what is real and what is not. These expectations and assumptions are learnt from authorities, in particular parents, family, teachers and clubs. Even though they are learnt, shared and learnt beliefs in the same culture are so essential to basic assumptions or expectations, that they remain typically unnoticed (Lustig and Koester 2010, pp. 86-87).

A central belief in Singapore is the dealing with errors and mistakes as well as handling mistakes and the effect of losing face, also called kiasu (Sim 2015). Many Asian countries belong to the so called collectivist societies, where people “are integrated into strong and cohesive in-groups, which throughout people’s lifetime continue to protect them in exchange for unquestioning loyalty” (Hofstede and Hofstede 2005, p.399).

This “group” can consist of the family, colleagues from work or even the whole nation, so it is important to remain integrated in the particular group, which concludes that not losing or taking the face of other people in the group is mandatory. Even though the correct dealing with losing face still remains a part of the Singaporean culture it is of decreasing importance today. The economic security, the concept of capitalism and maximizing one’s individual profit lead to more individualization among Singaporeans and drifting away from a collectivist society. Furthermore Houben et al. (2003) states that within a company, mistakes are still hidden as long as possible in order not to lose face. Singaporeans focus more on “trouble shooting” rather than on the problem itself, but additionally it is also mentioned that “Singaporeans are too similar to western people. They shouldn’t have a problem here” (Houben et al. 2003, p.345). This indicates that the concept of losing face has different perspectives to be looked at. On one side it still affects Singaporeans, especially with a certain family background, but all in all it is a concept of former times, since the society more and more is drifting towards individualization, especially within the working environment.

3.1.2 Behaviours and Social practices

Different societies normally follow certain beliefs, customs, values and norms of their own. These find their expression in typical and predictable patterns of behaviour, very often referred to as social practices. Furthermore social practices can be divided up into two categories, formal and informal.

When discussing formal practices we have to take rituals, ceremonies and routines into consideration: they and are most likely performed in public and in a group. Examples of formal practices amongst others can be praying in a church, honouring a dead person at a funeral or a marriage. Of course these practices vary in a wider range as marriage procedures and funerals differ from religion to religion, but the effect and results are equal.

Informal practices are part of everyday tasks and are similar to central beliefs (see section 3.1.1), which remain nearly unnoticed while accomplishing them. They can include eating, working, playing and other everyday tasks that are common in life. Compared to formal practices, there is one major difference: the structured routine.

Even though informal practices do also have a certain structure such as eating and work, they vary as you eat different food at different times in different places, whereas praying is the same procedure every time. Additionally it is important to mention that the majority of a culture is following the culture’s typical social practices, however, there are exceptions. These differences in behaviour make each member of a culture unique in its own way.

One special social practice is gift giving. Since Singapore has diverse cultural influences, gift giving can be a problem as practices and manners differ. In general, gift giving while doing business is considered fine and a common way of expressing thanks towards your business partner. Smaller presents are common, such as pens with the company logo, etc. This creates a feeling of appreciation and acknowledgement. Exchanging and receiving gifts typically is done with both hands: the procedure takes place usually after the meeting ends (Ministry of Foreign Affairs of Denmark 2016). This etiquette can be found everywhere in Singapore, but since the largest ethnic group is Chinese, it is mandatory to have a special look at the particular group. When exchanging gifts with ethnic Chinese people, both parties have to be cautious, since for example the number four rhymes with the word death in Chinese language, so it is absolutely necessary not to give anything in a set of four. Furthermore clocks are not considered as appropriate since the Chinese term of “giving clock” is also associated with the word death. Moreover not only ethnic heritages do play a major role in gift giving, also the religion is part of it, since a religion can have restrictions on food, beverages etc. Whereas in Christian countries such as Germany, Italy etc. alcohol, especially wine is considered appropriate as a business gift, in Islamic countries, such as Middle-Eastern countries it is absolutely inappropriate, since alcohol is prohibited. Islamic influences are limited in Singapore but do appear, since about 15% of the population is considered Islamic (Singapore Tourism Board 2016).

All in all gift giving is very similar to European countries, but it is helpful to inform yourself about your business partner in advance to prevent incidents. Additionally cultural training, especially for western business partners can be provided to further understand Asian Business behaviours that strengthen the bonds towards the business partner, since relationships are very important and the foundation of doing business in Asia.

3.1.3 Norms and Customs

Norms and customs are closely related to values and can appear on a formal level, such as written laws or on an informal level, such as social control. In general, norms are rules and socially shared expectations of appropriate behaviour in a group or culture. If the appropriate behaviour is harmed in any way, sanctions are consequently enforced (Lustig and Koester 2010, p. 89).

As mentioned before values are closely related to norms and customs in a way that if norms reflect the values of a culture, it is considered as stable but if they differ, then there is a destabilizing tension. An example given by Trompenaars and Hampden-Turner (1997) would be the failed norms of communism in Eastern Europe that did not match the values of its society with disintegration as a result.

Since culture is changing over time, so do customs and norms. Additionally their importance and intensity change, too, whereas values and beliefs tend to be more enduring (Lustig and Koester 2010). The fact that norms change over time or due to new influences from other cultures makes them hard to keep or pass on to the next generation.

As norms and customs were defined previously, they are now separated into two different categories: behaviour and communication.

Behaviour is very important in Singaporean culture as Singapore is also known as “the fine city”. Adjusting to the given rules and laws is mandatory, however, behaviour is subjective to each and every one, especially greeting behaviours. They depend on various factors such as ethnicity, religion and social status. As Singapore is a multicultural society there is no general greeting etiquette, but when doing business the handshake is the most common method since it is used barely by any large ethnic group, even though there are exceptions.

Additionally, touching and personal contact is very limited and should not be exaggerated too much. An example for an exception would be if only one ethnic group works for a certain company or is part of a meeting, but since Singapore has a large variety of international companies and a multicultural society, exceptions are very limited when doing business.

Besides norms on behaviour, norms will also appear while communicating. They are an indication on how to engage and disengage from conversations and what to talk about.

As people behave according to the norms of their culture, they believe that their culture and its norms are the right way of communicating. Additionally Lustig and Koester (2010) state that norms are also linked to beliefs and values of each culture, but can be readily inferred through behaviours. When analysing Singapore’s communication styles, many aspects have to be taken into consideration. This will be handled in section 3.3, however, there is an important norm that affects communication greatly, which is the general respect for elder people. This norm called adat (customs), evolved from the Malayan influences on Singapore’s culture and symbolizes that age and leadership is valued and that the older person is respected (Norazit 1998). Even though it is a Malayan practice it is also implemented in the Chinese culture. Chinese families in Singapore still retain some of the influences of the traditional Chinese family system which stands for loyalty to the family and also respect for elders. With regard to the analysis from Lustig and Koester (2010) that importance and intensity of norms change over time compared to values and beliefs, the current situation states that the ties to the traditional Chinese culture are much weaker as they were in the past (Choy 1987).

3.2 Values

Values are a big part of any individual or group, but to precisely define it, it first needs to be distinguished from actual behaviours and characteristics.

Values can be described as “the concept an individual or group has regarding the desirable” (Trompenaars and Hampden-Turner 1997, p. 22). Values therefore are not actual characteristics of a culture; they serve more as guiding principles of what is good or bad, appropriate or inappropriate.

Thus, the desired characteristics or values do not naturally represent actual behaviour of a culture. Moreover, values do not only differ from culture to culture, they also distinguish themselves in their valence and intensity. To further understand and assign values correctly the terms valence and intensity have to be defined.

Values can be seen positive or negative in any regard by a culture, so their valence is of major importance to put values in the right order. Additionally the intensity of a value is added as a second indicator to describe if the value is of significant importance or not.

The clash of cultures in Singapore, the British impacts from being a former colony and the fact that Singapore is a relatively new country impedes the search after shared values for the Singaporean culture. Several attempts were made to combine and identify the national values that represent the Singaporean culture. In 1989 the Institute of Policy Studies (IPS) has been addressed by the government to identify national values that would help to unite Singaporeans and shape a national identity, which reflect values and attitudes from all relevant cultures and heritages that led Singapore survive as a nation (McKenna and Richardson 1995).The research team of the IPS foundation recommended national values, which were adapted by the Parliament and former Prime Minister Goh Chok Tong to include the governments point of view. After several nation-wide debates over two years, five nationwide shared values were officially released on January 15th 1993 by the Parliament. The values appear as followed (Haley and Low 1998):

1. Nation before community and society above self.
2. Family as the basic unit of society.
3. Community support and respect for the individual.
4. Consensus, not conflict.
5. Racial and religious harmony.

Every value implemented in these nationwide determined values has its origin somewhere from an ethnic group. An example can be found in section 3.1.3, where it was mentioned that family and remaining loyal towards the family is of great importance in the Chinese culture. This can be assigned to the second shared value, that family is the basic unit of society.

The Chinese value was implemented and crafted so that it addresses all Singaporeans and its subcultures, which value the family, e.g. the Indian families in Singapore. Family stands not only for the inner circle of the family, but more for a wider family. The care taking process as described by Ahuja (2014) is that ”every domestic decision [is] made, jointly, with a view to helping the youngest generation to thrive and be more successful than the generation before” (Ahuja 2014, par. 7).

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Details

Pages
42
Year
2016
ISBN (eBook)
9783668908369
ISBN (Book)
9783668908376
Language
English
Catalog Number
v460848
Institution / College
University of Applied Sciences Koblenz – Wirtschaft
Grade
2,6
Tags
what germany singaporean business culture
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Title: What Germany can learn from Singaporean Business Culture