How cultural values influence the conduct of business and economic success? To what extent is their role unproven and exaggerated?

Essay by pinkrottenUniversity, Bachelor'sB+, November 2008

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Culture was developed historically and influences attitudes, business systems and competitiveness. However it can not be used as the sole answer to explain the difference in business and economic success between different countries. For there is other contributing factors such as the involvement of the state, late industrialisation, the world economy, development of technology or even the industries a country operates in. Yet, we are aware that culture is not outside business but permeates business practice.

Over the years culture has been discussed by many theorists debating whether culture is influential, such as Porter who said that once a strong culture has been established it then very difficult to change or adapt if it determines economic success. Whitley said that the market and business systems vary but determine the state, and North supported this statement by saying cultures succeed because they develop market mechanisms. Weber on the other hand suggested that religion shapes culture for example America and UK were the first to industrialise because they practiced an established religion- Protestantism.

Rostow supports Weber by saying that the Protestant ethic is pre requisite for economic modernization but economic growth happens in stages. However Samuelson contradicts the culture theory by stating national performance, management and organisation are shaped by economic factors and technology.

The Anglo American system is culturally very different from the countries in the east such as Germany, China and Japan. The Americans are very individualistic, have a very short term vision in business and are shareholder focused. They hold the position of the most dominate country in the world economy, but is that due to their national culture? Yes they were one of the first to industrialise, but their success could have derived from using Chandler's 'first mover advantage' in terms of business investments e.g. automobile. Success could...