PART TWO COUNTRY DIFFERENCES

One of the interesting aspects of Hindu culture is the reverence for the cow, which Hindus see as a gift of the gods to the human race. The sacred status of the cow created some unique problems for McDonald's when it entered India in the 1990s, since devout Hindus do not eat beef (and many are also vegetarians). The accompanying Management Focus looks at how McDonald's dealt with that challenge.
Economic Implications of Hinduism Max Weber, who is famous for expounding on the Protestant work ethic: also argued that the ascetic principles embedded in Hinduism do not encourage the kind of to Weber, entrepreneurial activity in pursuit of wealth creation that we find in ~rotestantism.~~~ccording traditional Hindu values emphasize that individuals should not be judged by their material achievements, but by their spiritual achievements. Hindus perceive the pursuit of material well-being as making the attainment of nirvana more difficult. Given the emphasis on an ascetic lTfeftyle, Weber thought that . devout Hindus would be less likely to engage in entrepreneurial activity than devout Protestants. Mahatma Gandhi, the famous Indian nationalist and spiritual leader, was certainly the embodiment ofHindu asceticism. It has been argued that the values of Hindu asceticism and self-reliance that Gandhi advocated had a negative impact on the economic development of postindependence ~ n d i aBut ~ . ~ one must be careful not to read too much into Weber's arguments. Modem India is a very dynamic entrepreneurial society and millions of hardworking entrepreneurs form the economic backbone of India's rapidly growing economy. Historically, Hinduism also supported India's caste system. The concept of mobility between castes within an individual's lifetime makes no sense to traditional Hindus. Hindus see mobility between castes as something that is achieved through spiritual progression and reincarnation. An individual can be reborn into a higher caste in his next Iife if he achieves spiritual development in this life. In so far as the caste system limits individuals' opportunities to adopt positions of responsibility and influence in society, the economic consequences of this religious belief are somewhat negative. For example, within a business organization, the most able individuals may find their route to the higher levels of the organization blocked simply because they come from a lower caste. By the same token, individuals may get promoted im to higher positions within a f r as much because of their caste background as because of their ability. However, the caste system has been abolished in India and its influence is now fading.

of suffering Path as a ro mindfulnes: Buddhism 2 like Hindu: world. Because Buddhism. entrepreneu the lack of may represt

Confuciani
Confucianit For more th system of C than 200 m Confuciani! a religion, ( centuries, a around a ca - and ethical not concen afterlife.
Economic Ir implication a different Japan, Sou explain the of particul: In Confi In modern their organ conscious culture wh, Howeve is not blin superiors 2 these "bles the Chinesc Guanxi lit

..

'

Buddhism
Buddhism was founded in India in the sixth century BC by Siddhartha Gautama, an Indian prince who renounced his wealth to pursue an ascetic lifestyle and spiritual perfection. Siddhartha achieved nirvana but decided to remain on earth to teach his followers how they too could achieve this state of spiritual enlightenment. Siddhartha became known as the Buddha (which means "the awakened one"). Today Buddhism has 350 million followers, most of whom are found in Central and Southeast Asia, China, Korea, and Japan. According to Buddhism, suffering originates in people's desires for pleasure. Cessation

ner it lam IW I d it
IS

Management Focus
In many ways, McDonald's Corporation has written are strictly segregated into vegetarian and the book on global expansion. Every day, on nonvegetarian lines to conform with preferences in average, somewhere around the world 4.2 new a country where many Hindus are vegetarian. McDonald's restaurants are opened. By 2004, the According to the head of McDonald's lndian company had 30,000 restaurants in more than 120 operations, "We had to reinvent ourselves for the countries that collectively served close to 50 million lndian palate." customers each day. For a while, this seemed to work. Then in 2001 One of the latest additions to McDonald's list of McDonald's was blindsided by a class-action lawsuit countries hosting the famous golden arches is India, brought against it In the United States by three where McDonald's started to establish restaurants lndian businessmen living in Seattle. The in the late 1990s. Although lndia is a poor nation, businessmen, all vegetarians and two of whom were the large and relatively prosperous middle class, Hindus, sued McDonald's for "fraudulently estimated to number between 150 million and 200 concealing" the existence of beef in McDonald's million', -attracted McDonald's. India, however, French fries! IVlcDonald's had said it used only 100 offered McDonald's unique challenges. For percent vegetable oil to make French fries, but the thousands of years, India's Hindu culture has company soon admitted that it used a "minuscule" revered the cow. Hindu scriptures state that the cow amount of beef extract in the oil. McDonald's settled is a gift of the gods to the human race. The cow the suit for $10 million and issued an apology, which representsthe Divine Mother that sustains all human read, "McDonald's sincerely apologizes to Hindus, beings. Cows'give birth to bulls that are harri'essed ' vegetarians, and others for failing to provide the to pull plows, cow milk is highly valued andused to kind of information they needed to make informed produce yogurt 'and ghee (a form of butter), cow dietary decisions at our U.S. .restaurants.': Going urine has a unique place in traditional Hindu forward, the company pledged to do a befter job of medicine, and cow dung is used as fuel. Some 300 labeling the ingredients of its food' and lo' find a million of these animals roam India, untethered, substitute for the beef extract used in it's oil. revered as sacred ~oviders. They are everywhere, However, news travels fast in the Qpbalsociety ambling down roads, grazing in rubbish dumps, and of the 21st century, and the ?eketation' that resting in temples--everywhere, that is, except on - McDonald's used bekf eejractin its6i~wa&enough your plate, for Hindus do not eat the meat of the - tobring Hindu nationalists-ontcsthestr&etsinDelhi, sacred cow. where-theyvandalized one ~ c ~ o n a l d ' s restaurant, McDonald's is the.world3slargest user of beef. c3us'ing $45,000 in dai%ag&;ish&t6d-slogans Since its founding in 1955, countless animals have o~utsideof a n ~ t h e r ; ~ ~ i c l i e t e d ?cbmpanyJs fhe' died to produce Big Macs. How can a company headquarters; and cdlled on India's,prime minister whose fortunes are built upon beef enter a country to close McDonald's stores i n the country. where the consumption of beef is a grave sin? Use McDonald's lndian franchise holders quickly issued pork instead? But there are some 140 million denials that they used oil that contai&d G e f extract, Muslims in India, and Muslims don't eat pork. This and Hindu extremists responded by stating they leaves chicken and mutton. McDonald's responded would submit McDonald's oil t o laboratory tests to to this cultural food dilemma by creating an lndian see if they could detect beef extract. version of its Big Mac-the "MaharajaMacn-which have little The negative publicity seerhed:~ois made from mutton. Other additions to the menu impad on McDonald's l$g-feriiT15tans~in India, conform to local sensibilities such'as the-"Mc4loo however. The- company conti,?$ed. tu; open Tikki Burger," which is made fromchicken.All foods restaurants, and by 2005 had 65 restaurants in the .. ,_ . .. ' .+

The .ear

Big
and 5 in

tive rnic . by , In . ned

t or

mic the and lurt that k at

ism ion. : an e in tion n of f an ;oul .lete Y to e to

._>

r,

<

132

PART TWO

COUNTRY DIFFERENCES
'

After a slow start, by early 2005 lslamic banks were starting to gain traction in Pakistan. Two fullfledged lslamic banks were operating 25 branches in Pakistan, and a third was scheduled to start operating in early 2005. In addition, nine conventional banks, including Standard Charter and AG Zurich, had opened some 23 branches offering Islamic banking services, and several other major conventional banks, including Citibank and ABN Arnro, were negotiating for licensees with the Pakistani banking authoritiesto start offering lslamic banking services in the country. Estimates now suggest that by 20101 Some 20 percent of all assets in the Pakistani banking system will be held by lslamic banks.

Their growth seems assured. As one customer stated, "I never went for conventii& banking as it in is based on interest, which is pmK~iiii?l Islam and amounts to waging war against Allah. Now I have my bank account in an lslamic bank and it satisfies my faith."
SOU~C~S: "Forced Devotion," ~ h e b n o m r s t ~ebdary , 17,2001, PP. 76-77; "Islamic Banking-MarchesOR," The Banker, February I 2000; F Bokhari, "Bankers Fear , : Introduction of Islamic System Will Prompt Big Withdrawals,n Financial Times, March 6, 2001, p, 4; and Agence France Presse, uls,amic Banking Booms in Pakistan," January 2005 (source of quote),

Given the lslamic proclivity to favor market-based systems, Muslim countries are likely to be receptive to international businesses as long as those businesses behave in a manner that is consistent with Islamic ethics. Businesses that are perceived as making an'unjust profit through the exploitation of others, by deception, or by breaking contractual obligations are unlikely to be welcomed in an Islamic country. In addition, in Islamic countries where fundamentalism is on the rise, hostility toward Westem-owned businesses is likely to increase. In the previous chapter, we noted that one economic principle of Islam prohibits the payment or receipt of interest, which is considered usury. This is not just a matter of theology; in several 1s1a~ic states, it is also becoming aimatter of law. In 1992, for example, Pakistan's FederaI Shariat Court, the highest Islamic law court in the country, pronounced interest to be un-Islamic and therefore illegal and demanded that the government amend all financial laws accordingly. In 1999: Pakistan's Supreme Court ruled that Islamic banking methods should be used in the country after July 1, 2001, but also ruled that Western banking methods could stilI be used.3' The accompanying Country Focus takes a closer look at how Islamic banking is being introduced in Pakistan.
'

Hinduism
Hinduism has approximately 750 million adherents, most of them on the Indian subcontinent. Hinduism began in the Indus Valley in India more than 4,000 years ago, making it the world's oldest major religion. Unlike Christianity and Islam: its founding is not linked to a particular person. Nor does it have an officially sanctioned sacred book such as the Bible or the Koran. Hindus believe that a moral force in society requires the acceptance of certain responsibilities, called dharma.-~indus believe in reincarnation or rebirth into a different body after death. Hindus also believe in karma, the spiritual progression of each person's soul. A person's karma is affected by the way he or she lives. The moral state of an individual's karma determines the challenges he or she will face in the next life. By perfecting the soul in each new life, Hindus believe that an individual can eventually achieve nirvana, a state of complete spiritual perfection that renders reincarnation no longer necessary. Many Hindus believe that the way to achieve nirvana is to lead a severe ascetic lifestyle of material and physical self-denial, devoting life to a spiritual rather than material quest.

I
I

Inmany wa the book 1 average, s McDonald': company h countries tt customers One of tl countries h c where McD in the late the large a t estimatedn million, att offered M thousands revered the is a gift of represents l beings. C a to pull plow produce yc urine has medicine, 2 million of t revered as amblingda resting in c t your plate, sacred cov McDbna Since its fa died to prc whose fort1 where t6e pork inste
'

Muslims in leaves chic to this cult! version a i f i mad& fr( $ qQrifo~.;tc jikki Burgc

PART TWO COUNTRY DIFFERENCES

includes amchoor, a tangypowder made from green mangoes, mint, cumin and pomegranate, but ~t must always include kala namak, a black salt with a pleasant whiff of sulfur, vital to chaat lovers. Going for chaat, Mr. Sharma says, is a social act with the same casual sociability as going for a beer. (Most lndians are Hindus and Muslims and drink little or no alcohol.) "After work a group of men will buy each other rounds of chaat on the way to the train and sometimes even have competitions over who can eat more." Piyush Sukhadia, an owner of chaat and sweet stores, said, "In lndia a guy might have a Mercedes and live in a house on a hill, but he still puts on his slippers and goes to eat chaat." The word chaat means "to lick," in Hindi, says Mr. Sukhadia, whose family business was established in when his great-greatgrandfather received the title of official sweetmaker to the nabob of Cambay in southern Gujarat- He said that 'haat' used be humble food with a taint of the street, it is now fashionable in lndia and here to offer a chaat station even at elegant weddings. that end 'andip Pate'' the Owner Of Chowpatty Foods, one of the first chaat houses in the United States, has just importeda chaat cart from lndia in the red-and-white color scheme of the Chowpatty chaatwallahs. Chowpatty is the biggest chaat and sweet specialist in the OakTree Road neighborhood of Iselin, N.J., which lures thousands of IndianAmericans from as far away as Philadelphia and
18901

Boston to shop and snack every weekend. OakTree Road serves a knowledgeableclientele and has the best quality sweets and chaats in the region: all the major manufacturers have shops there, a$ even amateurs like Shalimar and the Galaxy food,court serve lively chaats with startlingly fresh flavors. On Oak Tree Road you w11lsee the ingredients bins, for chaats divided in rows of stainless~steet but a traditional chaatwallah sits surrounded byahis mounds of dry ingredients and bowls of yogurt', chaatmasala,cllantro or mint chutney and tamarind chutney and his own mix of jaljeera, the "firew&bf' that is used to fill the habit-formingpanipun..,'!)just got back from India, and Iwas eating 60 or 70 pani puk day," Mr. Patel says. a A fine tribute to pan, pu" appears in a 1991 memoir about Mumbal by Ganghadar Gopal Gadgll. ~f~~~ several thousand words describing the process of eating and experiencing pan[ pu", he concludes with this tribute to the afterglow that, as I can attest, follows apanipufi binge: that state. of beatitude the Maharashtrians stop being surly, the Marwaris look at the millions of stars without being reminded, of their own millions, the Sindhis admire the horizon wiihout any intention ofA6eifing it, the Gujaratis speculate on the moon instead of the scrips they should have sold, the North Indians dream of things other than Hindi as the official language of the United Nations, and-eventhe Parsi ladies stop nagging their husbands."

VALU
Value establ freed( o f wo consic Value 2, der inciivi No fixthe life. C conce eating are e? folkw or bac

law, custom, and other capabilities acquired by man as a member o f ~ociety."~ Since then hundreds o f other definitions have been offered. Geert Hofstede, an expert on cross-cultural differences and management, defined culture as "the collective programmingo f the mind which distinguishes the members o f one human group from another. . . . Culture, i n this sense, includes systems o f values; and values are ~ among the building blocks o f ~ u l t u r e . "Another definition o f culture comes from sociologists Zvi Namenwirth and Robert Weber who see culture as a system o f ideas and argue that these ideas constitute a design for living.' Here we follow both Hofstede and Namenwirth and Weber by viewing culture as a system o f values and norms that are shared among a group o f people and that when taken together constitute a design for living. By values we mean abstract ideas about what a group believes to be good, right, and desirable. Put differently, values are shared assumptions about how things ought to be.6 By norms we mean the social rules and guidelines that prescribe appropriate behavior i n particular situations. We shall use the term society to refer to a group o f people who share a common set o f values and norms. While a society may be equivalent to a country, some countries harbor several societies (i.e., they support multiple cultures), and some societies embrace more than one country.

A$ aware Britai their 1 talk-a Alten a sch~ busin Amer with ; sched about case l time 1 many obses need Fa and s: and ( For e a Jap hand: This symE exec1

ipter 2, .: costs, re how nes run icy. B y nations ; rapid , comer, ernism, pick to Nestern tern (or naterial xtment Vestern fluence )w they ;he cost ipitalist servers explain. .ors can ;pect o f )eration country es such
t.

Shannoiz-Shpletonf The Nmu ~ o r ~irnks k WHERE FLAVORS MEET: Chutneys accompany a platter o f serr(fi.ied noodles) at a chaaf station at Sukhadia's i n Midtown, Nezo York.

~ltures i )f some md this 193 and average here 84 ; in the nphasis rting to

Manhattan has lately been seized by a craze for lndian snacks, with upscale new places like Spice Market, Bombay Talkie, Von Singh's, Devi, Lassi and Babu all claiming that Indian street food is their inspiration. Many of them adapt well to New Yorkstyle eating on the run, especially flatbreads like parathas and chapatis and wraps like dosas, kathi 'rol/s and Bombay frankies (a roti wrapped around tandoori chicken). Asking Ihdians in America about chaat, India's national snacks, is like asking Americans in lndia about burgers: the word unleashes unbearable cravings, nostalgia and homesickness. "1 remember goingtd"KwalitySnacks for papri chaat when Iwas a boy;" said Gandar Nasri, 74, a retired New York City taxi driver, who moved from Delhi in 1855. "Nothing will ever taste like that again."Taste good chaat, and you understand why it is not soon forgotten. Chaats are jumbles of flavor and texture: sweet, sour, salty, spicy, crunchy, soft, nutty, fried and flaky tidbits, doused with cool yogurt, fresh cilantro and tangy tamarind, and sprinkled with chaat masala, a spice mixture that is itself wildly eventful. The contrasts are, as one fan said, "a steeplechase for your mouth," with different sensations galloping by faster than you can track them. All Indians in America are homesick for the same thing, says Mitra Choudhuri, a software engineer from Gujarat, who lives in Fort Collins, Colo. "There isno chaat here, only curries," he said. But this has finally changed in the New York region. In Jersey

City the Little lndia strip on NewarkAvenue is lined with places for chaats and sweets, while only one restaurant serves the rich curfles familiar-.to 'mo'stl Americans as lndian food. (lndianscall thosedishes2Punjabi,_afterPunjab, the northern cegj~n ,where: they originated-frh.) In Jackson ~eighf'sf~hueens: signs for new chaat menus-fiuttei fiom-@+an$, awnings, reflecfmg, according to .sanjii&@b.dY (in: o w n e ~ Rajbhog Foods) a growing.in$is'i~~ce'by~ of lndians in America on the authentic fosdsof home. All over India, chaatwallahs, sri8cRT'J"e'ndow,' ply their tradefrom street carts or small storefronts. Like, New York's hot dog vendors they are ubiquitous in parks, at train stations, In busy shopping-streets. Chowpatty Beach in Mumbai (formerly Bombay) is. famous all over lndia for the quality and variety'of its chaats. Some chaats are light and crunchy, like an ethereally flavored snack mix, and others are . practically lunch, like samosa qhaaf: piping hot samosas split open and coveredlyvith spicy chick peas, minced onion and cilantro, yogurt and tamarind. Chaats are mixed to your specifications . (spicier, not so much cilantro; extra chickpeas); . handed over on a banana leaf and devoured instantly. -"Chaats are like every flavor of chips and e v e y kind of pizza you have here," said Dave Sharma, an owner of Amma, a Midtown restaurant, who-is ,from Mumbai. "We eat chaat wheneverwe haue a small hunger, but we will travel miles to get good . one. And people are loyal to their favorites." .S>> Some legendary c h a a t w a l l a h s , ~ i t a t -* . Bhelwala in Mumbai, have occupied the same space or patch of sidewalk for generations. Mumbai, and Mr. Bhelwala in particular, are famous for bhelpun, a puffed-rice chaat with bits of mint and potato. "We say that the flavor of the chaat is in the chaatwallah's hands," Mr. Sharma said. "And it's true, literally and figuratively." Chaats can be made with almost anything crispy: fried bits of chickpeas, puffed rice, peanuts, browned mashed-potato patties, fresh ginger, moong bean sprouts and ipicedusted toasted lentils. Chaat masala usually
z
*7

$+

?ologist morals,

J , 'Mumbai To Midtown, Chaat Hits Thle Spot', New York T~mes, March 9, 2003. :

DIFFERENCES IN CULTURE

115

trong as ; than a s .ula was that were .ledthem , are still e loyalty, ships, the ?, and an nenial or

ill often een well uire (by . 2-to-face 2d into a :ussions .hingthat se rather 3usiness , Saudis I meeting ced back nernbers . s without sortance not react !xecutive
ful force, )e based an, or in megerial true this nomadic IS placed : consult , business :t on their not know iork has kingdom, der that it lndertake

manual labor or basic service work. Currently, some allowed to go to school; today 55 percent of 6 million foreign nationals reside in Saudi Arabia. university students in the kingdom are women. In These expatriates, who are primarily from other 2004, Saudi women were granted the right to hold Muslim nations, undertake many of the menial commercial business licenses, a significant occupations that Saudis disdain. Although oil advance considering the women held some $25 revenues have made this social stratification billion in deposits in Saudi banks and had little possible, the Saudi government sees it as a opportunity to use them. As Saudi society evolves, potential long-term problem-almost 90 percent of women may come to play a greater role in business. all private-sector jobs in Saudi Arabia are filled by foreign nationals-and has launched a program of sources: G. Rice, "Doing Business in Saudi Arabia," Thunderbird International Business Review. January"Saudiazation." The aim is to change cultural values February 2004, pp. 59-84; A. Kronerner, "Inventing a toward work perceived as menial, and by doing so, Working Class in Saudi Arabia," Monthly Labor Review, to help build a modern economy. So far success May 1997, pp. 29-30; "Out of the Shadows, into the had been halting at best. World-Arab Women," The Economist, June 19, 2004, Saudi society is starting to change in other pp. 28-30; and B. Mroue, "Arab Countries Boycott U.S. important ways. Slowly the rights of Saudi women Goods over Mideast Policies," Los Angeles Times, July are being expanded. In 1964, Saudi girls were not 29, 2002, p. C3.

manual lab(

6 million fo
These exp, Muslim na; occupatio~ revenues I possible, 1 potential lo1 all private-: foreign nati "Saudiazati' toward worl to help buil had been h Saudi sl important \n are being e

Saudi Arabia is not the easiest place in the world f0rVUestem enterprises to do business. On the one hand, the oil-rich kingdom offers many opportunities for enterprising businesses. Western ~onstruction companies have long played a role in building infrastructure in the kingdom. Western brands from Coca-Cola, Nike, and McDonald's to Body Shop, Next, and Benetton have a significant Presence. Western aerospace companies such as Boeing and Lockheed have sold a significant number of aircraft to Saudi Arabia o w r the years. The Saudi market is one of the larger in the Middle East, with a growing population of 22 million and purchasingPower Parity per capita of $12,845 in 2003. Since 2000, the government has signaled that it is more open to foreign investment in ~ertain sectors of the economy, although oil and gas extraction is still reserved for state-owned enterprises. On the other hand, Saudi Arabia is a historically c~mervative country where a large segment of the population desires to preserve the religious values and ancient traditions of t k region, and this can spill over into the business sector. 'The culture of the country has been shaped by Islam and the Bedouintradition. The source of law in Saudi Arabia is Islamic law (the Shari'ah), and religious edicts derived from this influence on everyday life. For example, stores and restaurants close at the five daily prayertimes, and many restaurants,including Western ones such as McDonald's, have separate dining areas for men and Women. Women in Saudi Arabia are not allowed to drive a car, sail a boat, O r fly a plane, or to appear ~utdoors with hair, wrists, O ankles ex~osed-something that Western r companies need to keep In mind when doing business in the country or with Saudis elsewhere. Saudi adherence to Islamic values has also given rise to anti-American sentiment, which has been increasing since the American-led invasion of another Muslim nation, Iraq. Cultural solidarity has expressed itself in consumer boycotts of American products. More disturbing than COnSUmer boycotts has been a rise in terrorist attacks against Western expatriates in Saudi Arabia, significantly increasing the perceived risks of doing business in the kingdom.

Bedouin traditions have been just as strong as Islamic values in shaping Saudi culture. Less than a hundred years ago, the Arabian Peninsula was populated by nomadic Bedouintribes. Values that were important to those proud nomads, and enabled them to survive in their harsh desert landscape, are still found in modern Saudi society. They include loyalty, status, an emphasis on interpersonalrelationships,the idea of approximate rather than precise time, and an aversion to any behavior that might seem menial or servile (including manual labor). Reflecting Bedouin traditions, Saudis will often conduct business only after trust has been well established-a process that might require (by Western standards) a large number of face-to-face meetings. Saudis may resent being rushed into a business decision, preferring to let discussions proceed in a more relaxeqfashion-something that Westerners with their attqhment to precise rather than approximate time might find taxing. Business meetings may be long because many Saudis maintain an "open office" andwill interrupts meeting to conduct other business, which can be traced back to the Bedouin tradition where all tribal members have a right to visit and petitiontheir leaders without an appointment. Given t,he cultural importance attached to status, Saudi executives will not react well if a foreign company sends a junior executive to transact business. Loyalty to family and friends is a powerful force, and job security and advancement may be based than, or in on family and friendship addition to, demonstrated technical or managerial competence. Westerners might construe this negatively as nepotism, but it reflects a nomadic culture where trust in family and tribe was placed above all else. Saudi executives will also consult with family and friends before making a business decision, and they may place more weight on their opinions than that of experts whom they do not know as well. The Bedouin aversion to menial work has produced a chronic labor problem in the kingdom, and foreign companies will quickly discover that it is difficult to find Saudi nationals who will undertake