I hope you had a beautiful weekend. Let´s continue with our Entrepreneurs without Money saga. Today it is the turn of the Cultural Context. when doing the Entrepreneurial Contextual Analysis Up to this day, we have covered eight of them.

1. Temporal Context-done √
2. Industry Context-done √
3. Technology Context-done √
4. Social Context-done √
5. Institutional Policy Context-done√
6. Organizational Context-done √
7. Geographic Context-done √
8. Spatial Context-done √
9. Cultural Context-today
10. Political Context
11. Environmental Context
12. Ethical Context
13. Financial Context

Let´s start:

This is one of the most difficult contexts to manage. And it is one of the contexts which is dismissed or ignored by many. Why? Not just, because of its definition which is so blurry.  “One of the difficulties in examining the cultural effects in relation to entrepreneurial activity is the lack of a precise and commonly understood definition of culture” (McGrath et al., 1992). “Anthropologists suggest that culture is related to the ways in which societies’ organize social behavior and knowledge (Hall, 1973; Kroeber and Parsons, 1958)”. Nevertheless, let´s stick to this general definition for the time being: Culture is defined as the beliefs, behavior, ideas, thoughts of a particular society or a group of people. But the difficulty of analyzing a cultural context is so hard because, in the same society, there are so different sub-cultures with a number of variables depending on the family and ancestor roots. In one family we can find two or three or more sub-cultures.

Nevertheless its´ complications, we will write about the cultural context from a general point of view. The idea of what is the culture or subcultures in China may be quite tough to quantify. Particularly if we do not know their language or we have not lived in China for several years.  The main questions I will share today, have been prepared considering the ideas of Sumantra Ghoshal and Lynda Gratton books on management and strategy when it comes to the variable culture.

• What are the Chinese most representative culture insights? What are the Chinese most important values?
• What are the core beliefs of the Chinese population?
• What are the norms of behavior? Can we segment them?
• What do Chinese people value?
• How are the relations between women and men in China? Machismo?
• What are the motivations and aspirations of Chinese people? What is their level of commitment and trust?
• What skills and behaviors are necessary to meet the Chinese business goals?
• What is the dominant psychological contract between individuals and organizations in China?
• What is the Chinese management philosophy? How is their management style? Do they see off-shore operations from the point of view of development? Or do they see them only as an expansion opportunity or as a source of revenues?
• What is the Chinese operating style?
• How do people in the Chinese organizations who are expanding to Latin America, operate and interact with each other?

• Is it important to nurture personal relationships with Chinese? What is the degree of relevance to emphasize personal relationships rather than formal structures or controls? Are personal relationships more important than coordination of technical or operational details?
• How Chinese do decision-making? Is it a group decision making and commitment to long-term welfare for employees and their communities?  On the other hand, is it just a vertical authoritative decision making?
• Far from being villainous or exploitative, are Chinese interested to help countries like El Salvador to be better off (Is it social and economic progress the Chinese motto)?
• Is the Chinese culture in the process to evolve from static to dynamic? A static efficient culture is about exploiting available economic options of the countries as efficiently as possible and that´s it. Meanwhile dynamic efficient cultures trigger local innovations that create new options and new resources, not only for local welfare, but also by shifting existing resources to highest value added, moving the economy to a different level, and in consequence, a new hybrid culture is born.
• Do Chinese Foreign subsidiaries look for access, legitimacy, and influence in the countries where they operate?
• Are Chinese corporations interested to invest in our country to help us to stop digging our incipient democracy? Will the Chinese investments help us to raise up as a country with a value added from the point of view of our culture? Remember, when a country is in a hole, the first thing to do to get out of the hole is to stop digging. A better understanding, of both Chinese individual and corporate motivations, will help to create a new and different management model for the Chinese Development Value proposition in Latin America.
• Is the Chinese Government interested only to complement what the USA has not been able to help us during the last decades? Probably Beijing agenda has nothing to do in terms of imperiling the US hegemony in Latin America, but the US hegemony in the region is a fact. Read this article for a Foreign Affairs author own opinion please: Stop Obsessing about China from Michael Beckley.

El Salvador has a profound desire to live in peace, to stop corruption at every level, to leave the past behind, to keep their traditions and Christocentric cultural roots, and to move forward for the next generations future endeavors. This desire for growth and renewal is implicit in our entrepreneurship efforts and existing companies. Salvadoran existing companies are learning a new cultural context for development. Our corporations have started to evolve, and to understand there is a strong correlation between the relative prosperity of an economy and its quotient of healthy and integrality companies. Growing integral businesses (at any level: big and SME companies) is the essence of value creation. Integral and ethical businesses help to create growing integral and ethical economies. We are interested to develop best practices which can help us to improve our competitiveness in the world marketplace, but not at expenses of losing our humanity. Will China development proposition help us to improve not just financial, economic, environmental-social performance, but also ethical, educational, technological and our local human capital brain development?

Ghoshal, Bartlett and Moran wrote a paper called “A New Manifesto for Management”. I have extracted this phrase from it: “Companies create fresh value for society by developing new products and services and finding better ways of providing existing ones”. Are the Chinese considering to help El Salvador to raise our standards holistically, and add value for our economies respecting our culture and helping us to enhance and protect our culture?

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Finally, let´s finish with the following reflection: Our country is in need of non-reimbursable financing alternatives to raise up from the “valley of death”. As a society which suffered an internal conflict or civil war in the 80s, we are in the stage of “entrepreneurship without money” in several industries and economic sectors (despite that we have companies with more than 50 or 70 years of existence). A civil war or violence by gangs are the main cause of our current poverty and migration to other countries. We have been receiving help from the USA and multilateral sources for several years, but we got in debt for it.

To explore another source of aid is not a sin, and it doesn´t make us unfaithful to the US hegemony or interests in our region. Nevertheless, before asking for China´s help or funds or shared collaboration or FDI or whatever, we need to be prepared, and we also need to foresee the whole picture before rushing into the wrong alternatives.  If Salvadorans don´t know what, who, how, when and why and until what point we can negotiate with China, we will be in troubles. We also have to set up the correct limits. And we need to keep our pre-established agreements, diplomatic and commercial relations with the US afloat. The decisions we make today will affect our future, undoubtedly.

This is it. More to continue on my next post, we will see the political context. Stay tuned!

Thank you.

Source References which inspired me to write this article:

https://sloanreview.mit.edu/article/a-new-manifesto-for-management/

https://www.economist.com/the-americas/2016/11/17/a-golden-opportunity

https://www.economist.com/content/inner-turmoil

https://www.foreignaffairs.com/articles/china/2018-09-21/stop-obsessing-about-china?cid=nlc-fa_fatoday-20180921

Disclaimer: All the presentation slides shown on this blog are prepared by Eleonora Escalante MBA-MEng. Nevertheless, all the pictures or videos shown on this blog are not mine.  I do not own any of the lovely photos or images posted unless otherwise stated.

Published by eleonoraescalantestrategy

Corporate Strategy Artist, San Salvador, El Salvador View all posts by eleonoraescalantestrategy