L24 Cultures LongTerm Orientation more - TRIBGROUP …rotorlab.tamu.edu/me489/lectures_FA11/L24...

1

Lecture 24Cultural dimension:

Yesterday, now or later?

Luis San AndresMast-Childs Tribology Professor

Texas A&M University

http://rotorlab.tamu.edu/me489

ME 489 Practices of Modern Engineering

2

ChinaA country with a long-long-long history: dynasties and

empires, a peasant revolution and communism, opened to global market in early 1980s’

Chinese firsts: block printing, gun powder & rocketry, compass and watches, etc. Until 18th century more advanced technologically than the West. China did not have an industrial revolution.

For centuries Chinese culture (way of thinking) has influenced greatly the Far East (Japan, Korea, Taiwan, Hong-Kong, Singapore, etc).

What way of thinking?

3

A little about China’s economic growth2009 GDP US 14 Trillion, China: 4.91 Trillion

China overtook Britain and France in 2005 and Germany in 2007. In 2009, China surpassed Germany to become the world’s largest exporter. In 2nd quarter 2010, China surpassed Japan as the world’s second largest economy.

Growth averaged over 10 % for the last 30 years.

The per capita GDP in China is $3.6k in 2009, one 14th of the $46.k per person output in the US. Hard currency reserves 2 Trillion

China will surpass the US becoming the world’s largest economy in 2027. China will be twice as large as the US economy in 2050

http://factsanddetails.com/china.php?itemid=376&catid=9&subcatid=58#04

Source: The Economist

4

A little about China’s economic growthSources: The EconomistThe World Bank

Gross National Income in PPP dollars

China has a GDP growth rate of ~10% since 1992

5

A little more about the BRICs’Sources: The EconomistThe World Bank

Gross National Income per capita in PPP dollars

Note growth of S. Korea!

6

China Report Card2011 GDP US 14 Trillion, China: 9.8 Trillion

Growth remains at 10 %

Average wages GDP $7.4 k (up from $ 5k in 2006).

Largest exporter of goods at ~$1.5 trillion dollars worth of goods and services with ~20% going to the USA

Why the fastest growth on earth?

Low manufacturing

costs + influx of capital + huge

internal market(1.5 billion) + technology

The Economist

Trade balanceUSA: -605 $Bn (Jul 2010) (3.0% GDP Q2)China: +179 $Bn (Aug 2010) (10.3% GDP)

7

China economy generates jobs elsewhere

China does not only EXPORT stuff!

It also imports technology and services.

The US has a + trade in services (know how)

Source: The Economist

8

Cultural dimensions

Cultures and Organizations: Software of the MindBy Geert Hofstede and Gert Jan Hofstede

1.Power Distance2.Individualism / Collectivism3.Masculine / Feminine4.Uncertainty Avoidance

More equal than others

I, We, They

He, She, (S)he

What is different is dangerous

A 5th dimension appears from a Chinese Values Survey. (Uncertainty Avoidance has no equivalent in CVS)

Explains differences

In thinking b/w East and West

9Cultures and Organizations: Software of the MindBy Geert Hofstede and Gert Jan Hofstede

Pragmatic rules for daily life

Teachings of Confucius

1. Society stability is based on unequal relationships between people

2. Family is prototype of all social organizations3. Virtuous behavior: do no treat others as one would not

like to be treated oneself4. Virtue derives from education, hard working, not

spending more than needed, being patient and persevering

Confucius, C. philosopher (~500 B.C.)

10Cultures and Organizations: Software of the MindBy Geert Hofstede and Gert Jan Hofstede

Teachings of Confucius

1.Society stability is based on unequal relationships between people

Must accept differences in status

Basic relationshipsfather-son, brother-younger brother, husband-wife,senior friend-junior friend

Mutual & complimentary obligationsRespect and obedience

Protection and consideration

11Cultures and Organizations: Software of the MindBy Geert Hofstede and Gert Jan Hofstede

Teachings of Confucius

2. Family is prototype of all social organizations

A person is NOT an individual, he/she is a member of a family.

HARMONY is found when everyone maintains face in the sense of dignity, self-respect and prestige.

Losing dignity (face) is like losing a nose, etc.

12Cultures and Organizations: Software of the MindBy Geert Hofstede and Gert Jan Hofstede

Teachings of Confucius

3. Virtuous behavior: do no treat others as one would not like to be treated oneself.Keep one’s place, respect authority.

The Golden rule in Western Values: Treat others as one would like to be treated

4. Virtue derives from education, hard working, not spending more than needed, being patient and persevering.Everything must be done in moderation

13

Long Term Orientation (LTO)

Cultures and Organizations: Software of the MindBy Geert Hofstede and Gert Jan Hofstede

The fostering of virtues oriented towards future rewards – in particular perseverance and thrift.

The opposite pole (Short TO) fosters virtues related to the past and present, in particular respect for tradition, preservation of face, and fulfilling social obligations

14Cultures and Organizations: Software of the MindBy Geert Hofstede and Gert Jan Hofstede

http://www.clearlycultural.com/geert-hofstede-cultural-dimensions

Long Term Orientation

Map

15Cultures and Organizations: Software of the MindBy Geert Hofstede and Gert Jan Hofstede

39 countriesCountry SCORE RANK

Past & present,

Futurerewards

Country SCORE RANK

Most Asian countries

have high LTO scores

Long Term Orientation (LTO)

16Cultures and Organizations: Software of the MindBy Geert Hofstede and Gert Jan Hofstede

Explains the difference in thinking between the East and West

Long term orientation- persistence- ordering relationships by status and observing this order- thrift- having a sense of shame

Short term orientation- personal steadiness and stability- protecting your ‘face’- respect for tradition- reciprocation of greetings, favors, and gifts

Long Term Orientation (LTO)

17

Key Differences

LTOGeneral norm

Cultures and Organizations: Software of the MindBy Geert Hofstede and Gert Jan Hofstede

Short-Term O Long-Term O

18

Key Differences

LTOFamily

Cultures and Organizations: Software of the MindBy Geert Hofstede and Gert Jan Hofstede

Short-Term O Long-Term O

19

Key Differences

LTO

School

Cultures and Organizations: Software of the MindBy Geert Hofstede and Gert Jan Hofstede

Short-Term O Long-Term O

Remember “Tiger

Mom” & US STORM

20

Key Differences

LTOBusiness &Economics

Cultures and Organizations: Software of the MindBy Geert Hofstede and Gert Jan Hofstede

Short-Term O Long-Term O

21

Key Differences

LTO

Religion&

Way of Thinking

Cultures and Organizations: Software of the MindBy Geert Hofstede and Gert Jan Hofstede

Short-Term O Long-Term O

22

Cultures and Organizations: Software of the MindBy Geert Hofstede and Gert Jan Hofstede

LTO

GN

P/ca

pita

Short-term Long term

Long Term Orientation vs GNP growth

GrowthRATE

Note the emergence of

East AsianCountries(S Korea,

Taiwan, Singapore,

Japan)

23

Understanding ChinaGuanxi Ability to forge solid relationships for mutual benefit and

understanding = BLOOD IS THICKER THAN WATERBenefits & obligations extend beyond the realm of contracts and business.

Guanxi links family sphere to the business sphere. In high LTO societies, having one’s personal network of acquaintances is essential for success. One’s capital of guanxi lasts a lifetime, and would not want to damage it for short-term bottom-line reasons.

Cultures and Organizations: Software of the MindBy Geert Hofstede and Gert Jan Hofstede

24

Guanxi

IOUIOU

IOUIOU

IOU

One owes personal

favorsGuanxi costs

time and money!

IOU

This rain is too heavy!

25

GuanxiInvitations

wedding

birthday

New Yeargraduation

$$$$$$$$

See, my pockets are empty!

• Gift giving• Mutual help• Comes with

expectations& obligations

26

Guanxi example

Singapore, Straits Times, October 20, 2009

guanxi!

(See Corruptions Perceptions Index)

27

Better Guanxi meansA higher chance to a)Be hired for a job;b)To get a job promotion;c)To get admission into a good school (primary, etc);d)Avoid nuisances like parking tickets, traffic

violations, etc;e)Same day construction permits, etc;f) A good bed in a hospital; g)Fast track business and endorsements

You owe more and more favors, and others OU2!

28

Saving face meansFace saving (or saving face) = maintaining

a good self image (keep reputation and the respect of others)

People who are involved in a conflict and secretly know they are wrong will often not admit that they are wrong because they don’t want to admit they made a mistake. They therefore continue the conflict, just to avoid the embarrassment of looking bad.

http://www.colorado.edu/conflict/peace/treatment/facesavr.htm

29

China in 2009

A worry!

Source: The Economist, June 2009 http://www.economist.com/node/18829149

2011 GDP 9.8 Trillion

Growth keeps at 10 %GDP/person $7.4 k

30

Energy consumption: the polluters

31

The forecasts

Looking towards the 2020s, falling into a “middle-income trap”: losing competitiveness in labor-intensive industries but failing to gain new sources of growth from innovation

A worry!

Source: The Economist, June 2009 http://www.economist.com/node/18829149

for the Chinese!

32

A6: The Road to China

The Road to China (May 2006)The outsourcing option isn't as cheap or as easy as it looks.

http://memagazine.asme.org/Articles/

Building Trust (January 2008)The essentials of doing business with China can be developed only over the long haul.

Read all articles & sources, select one and write a group essay (500 words min.) DUE ON December 1

The Economist DebatesDoes China offers a better development model than the West? http://www.economist.com/debate/days/view/553

33

A6: Questions to ponderBuilding Trust (January 2008)The essentials of doing business with-and in-China can be developed only over the long haul.

Update some of the statistics & knowledge given in 2008 article

How do Chinese “see” intellectual property? Is this a cultural or an ethical issue?How can a company protect its IP when doing business in China?

Is the description of guanxiwang accurate? How different is from the West business practices and culture?

Is the description of Chinese working women sexist?

How can we help ourselves (Westerners) to build trust with China?

Do Westerners “understand” China (culture)?

34

A6: Questions to ponder

What is known as the “Beijing Consensus”? What is the China Model?

Why during the last recession China kept growing while the Western world nearly collapsed?

Why is the West so concerned about the rise of China economic power?

Explain what one debater states as “China is shrinking the idea of the West”

Can economic growth last without freedom?

The Economist DebatesDoes China offers a better development model than the West? http://www.economist.com/debate/days/view/553

READ also the comments from the floor

August 4, 2010

35

A6: Questions to ponder

The Road to China (May 2006)The outsourcing option isn't as cheap or as easy as it looks.Update some of the statistics given in the 2006 article

Why do local Chinese companies can compete globally? Is it fair or not?

What are the hidden costs of doing business with China?

What is an inflexible supply chain?

How can the USA benefit from China’s weaknesses described in article?

As of 2011, has trade with Mexico improved? Is the long supply chain still an issue? Source: An update from South of the Border

http://money.cnn.com/2009/11/03/news/international/US_dumps_china_for_mexico/?post

36

Other Resources

The WORLD FACTBOOK: World CIA report on CHINAhttps://www.cia.gov/library/publications/the-world-factbook/geos/ch.html

Country factshttp://factsanddetails.com/china.php

Rising power, anxious state:China could be the largest economy by 2020!http://www.economist.com/node/18829149

Friend or foe? A special report on China’s place in the world, Dec 4, 2010:http://www.economist.com/countries/China

National Public Radio (June 22, 2011)

China’s business boom, but its brands don’thttp://www.npr.org/2011/06/22/137320938/chinas-businesses-boom-but-its-brands-dont

37

The decline of Western science & technology?

GERD: % of GDP on R&D # technical papers

Asian countries (S Korea and China) are becoming not just more productive but also developing more technology.

Source: The Economist2011 GDP US 14 Trillion, China: 9.8 Trillion

3838

Inventive leaders in the world

China has no respect for IP! a commonly reported misconception?

Yet in 2011 China will have more patents than Japan!

Is China becoming an INNOVATION tank?

Shall we worry?

Learn more at http://www.top100innovators.com

Source: The Economist

39

Corruption in the world 2010 CPI

http://www.transparency.org

40

Corruption in the world

Nov 2011

http://www.transparency.org

2010 CPI

41

Corruption in the world

Nov 2011

Least corrupt

Never bribery

42

Income & the rich

43

Practices of Modern

Engineering © Luis San AndresTexas A&M University2011

http://rotorlab.tamu.edu/me489