The influence of culture on entrepreneurial activities. A study for the CSB Pilot Course
Roberta Fiusco and Davide Storni, two students at University of Split, Faculty of Economics, Business and Tourism, wrote this paper for the CSB pilot course, one of the main Output of the Cultural Studies in Business project.
Within the different schools of economic thought, in the 90s, it has emerged attention to the importance of culture as an influential element in the course of economy history. David Throsby in his book “Economics and Culture” affirms that the most important contribution in this field is certainly the one given by Max Weber, at the end of the nineteenth century, which analyzes the influence of the Protestant work ethic on the birth of capitalism. According to this analysis, there is a connection between the cultural environment in which the economic activities effects themselves.
Culture can be defined as an evolving set of collective beliefs, values and attitudes that change over time and this differs from each country. In addition, the concept of culture involves a set of intellectual knowledge which, acquired through study, reading, experience, the influence of the environment and subjectively and autonomously reworked, become a constitutive element of the personality, contributing to enrich the spirit, develop or improve individual faculties, especially judgment and critical analysis.
There are many areas in which culture can influence the way you relate to others and each of these areas are influenced directly by our culture. For instance, we refer to area such as age/gender/ethnicity and religion, body language and communication style, personal appearence/dress, food and beverage traditions, cultural assumptions, ethics, political correctness, business orgaization, management style and leadership, business relationships, work expectations, time management and so on. We found out some practical examples:
In some countries, women are seen at the same level as men, capable of accomplishing anything and holding managerial entrepreneurials roles. On the other hand, there are other countries, for example Far East, in which the situation is totally opposite because women are still fighting for her rights in the workplace and for equal opportunities in education and other sectors of society;
As far as body language and communication style are concerned, we need to know that our facial expressions and the way we communicate reveal our feelings and our moods regarding the situation we are in. Some gestures are similar across cultures like a smile to express happiness or an expression of anger that means that you are upset, but some aspects differ between cultures. For example, in our country, Italy, during a conversation the body language and the physical contact is normal because it belongs to our way of be but probably for another person with different culture it can bother him finding this situation uncomfortable;
Sometimes cultural differences may be present within the same nation. In Italy the culture is very different between the North and the South. Referring to business organization people from the North tend to be more focused on business and make deals being at the same time serious and reserved. The South shows differences in this aspect regarding business and negotiation styles because people are more relaxed and more affable. These variations affect many aspects of negotiations in Italy.
From these examples, we understand that culture influences the social relationships of individuals and consequently also the relationships that individuals establish to carry out their business. What we should to analyse is the management style around the world and how identify optimal business systems according to a specific cultural environment, as well a show to manage cultural differences in various business environments. For this reason, culture and business are closely connected because the first is one of the key component of business. Culture influences management, decisions and all the business functions from accounting to production especially today with the globalization of trade and business. Indeed, operating into a globalised economy, cultural sensitivity is essential. This means that, now more than ever, it is important for business men to understand the culture of their foreign markets if they wish to succeed internationally. For instance, some companies apply their strategies without thinking about the counterparts who probably come from other countries and forgetting that they have different interests, motivations and goals. It can cause frustration, miscommunication and misunderstanding that could lead to failure and create a tense working environment. So, it is important to understand which are also the implications for business and entrepreneurial activities. It would be necessary to minimize the possibility of cross-cultural misunderstandings to benefit from our differences. This will result in happier work environments and better business relationships. Who knows, it may even lead to more tangible goals for the company like higher sales or increased profits. Tolerance, flexibility, humility, justice/fairness, ability to adjust to varying tempos, curiosity/interest, knowledge of the country, ability to command respect and the ability to integrate oneself, are some of the basic criteria to be more open and to have more opportunities for transforming the concept of culture such as competitive advantage driver in foreign markets.
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