Cross Cultural Management: An International Journal

Culture and innovation

Paul HerbigSteve Dunphy
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 Volume 5 Number 4 1998

Culture and Innovation

Paul Herbig and Steve Dunphy

The Authors
Paul Herbig is Managing Director, Herbig & Sons Marketing Consultants,
13818 Shavano Ridge, San Antonia, Texas 78230, USA.

Steve Dunphy is in the Department of Management and Marketing, North-

eastern Illinois University, 5550 North St. Louis Avenue, Chicago, Illinois
60625, USA.

Abstract
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Culture is an all inclusive system of communications which incorporates the

biological and technical behaviour of human beings with their verbal and
nonverbal systems of expressive behaviour. Culture is the sum total of a way
of life: it is the pattern of values, traits, or behaviours shared by the people
within a region. The article examines the relationship between culture and
innovation.

Introduction - Culture

Culture is an all inclusive system of communications which incorporates the

biological and technical behaviour of human beings with their verbal and
nonverbal systems of expressive behaviour. Culture is the sum total of a way
of life, including such things as expected behaviour, beliefs, values, lan-
guage, and living practices shared by members of a society; it is the pattern
of values, traits, or behaviours shared by the people within a region.

Some catalyst must exist that is capable of transforming private mean-

ings into public meanings so they become understood by other members of
the society; culture is that catalyst. Culture consists of both explicit and im-
plicit rules through which experience is interpreted. The function of culture
is to establish modes of conduct, standards of performance, and ways of
dealing with interpersonal and environmental relations that will reduce un-
certainty, increase predictability, and thereby promote survival and growth
among the members of any society. Culture influences behaviour and ex-
plains how a group filters information; cultural meanings render some
forms of activity normal and natural and others strange or wrong.

Human societies create a hierarchy of codes for regulating human inter-

action which offers order, direction, and guidance in all phases of human
problem solving by providing tried and true methods of satisfying physio-
logical, personal, and social needs. For example, culture provides standards
and rules regarding when to eat and what is appropriate to eat for break-
fast, lunch, dinner, and snacks, and what to serve to guests at a dinner
party, a picnic, or a wedding. Shared cultural norms give the people of any
society a sense of their common identity and a means of relating to one an-
other. Cultural beliefs, values, and customs continue to be followed so long
as they yield satisfaction. However, when a specific standard no longer fully
satisfies the members of a society, it is modified or replaced, so that the re-
sulting standard is more in line with the current needs and desires of the so-

13
 Cross Cultural Management

ciety. Thus, culture gradually but continually evolves to meet the needs of
society.

In this process of social evolution, people find certain behaviours and

values to be adaptive and helpful; others, nonadaptive and even harmful.
Helpful practices are shared and rewarded; harmful practices are discour-
aged or discarded. Over a period of time, useful behaviours, values, and ar-
tifacts become institutionalised and incorporated as part of the cultural
traditions. The individual internalises these institutionalised practices and
often forgets their origin. Shaking hands, a characteristic form of greeting in
many Western cultures, may have originated in the primitive practice of
strangers clasping each others weapon arm, both as a sign of friendship and
as a protection from attack. Its original function had considerable usefulness
and was therefore institutionalised as a social tradition; now, hundreds of
years later, it is functionally obsolete, but it still survives as a valued cus-
tom. Likewise, many of any societys cultural behaviours and traditions have
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outlived their original purposes and survive as symbolic acts - cultural bag-
gage.

One culture may focus on different aspects of an agreement (legal, fi-

nancial) rather than another (personal, relationships). Some cultures focus
on the specific details of the agreement (documenting the agreement),
while other cultures focus on how the promises can be kept (process and
implementation). Americans negotiate a contract; Japanese negotiate a per-
sonal relationship. Culture forces people to view and to value differently the
many social interactions inherent in fashioning an agreement.

One example of differences in culture lies in the importance attached to

the group versus the individual. In Japan, the impulses and needs of the in-
dividual tend to be subordinated to the good of the group; in the United
States, any intrusion by the group on the rights of the individual is regarded
as unwarranted. (One is the land of the big WE, the other is the land of the
big I). Compatible with these orientations is a concern in Japan for minimis-
ing differences, preserving harmony, and reinforcing group loyalty; these
customs are derived from ancient Japan where a nation short on resources
but long on people required the participation of all its members in an or-
derly manner if survival were to result - hence a heavily collectivist tradition
evolved. In the United States, the prevailing customs tend to maximise dif-
ference, confrontation, and compromise. This individualistic approach may
be derived from the frontier days when ones nearest neighbour was miles
away and one had to be driven, self-oriented, and individualistic to survive.
The aim of decision making in Japan is to avoid discord in pursuit of con-
sensus, while in the United States it is to promote competition in ideas in
pursuit of objective truth. Despite equally pragmatic goals, decisions in Ja-
pan tend to be based on mood but in the United States on arguments.
Vastly different philosophies but equally reasonable based upon their own
respective geographical parameters and historical background.

Existing cultural conditions determine whether, when, how, and in

what form a new innovation will be adopted. If the behaviour, ideas, and
material apparatus which must accompany the use of innovation can affect
improvements along lines already laid down in the culture, the possibilities
of acceptance are much greater (Saxon, 1954). An attempt to introduce
boiling water into the habits of rural peasants in Peru only had an adoption
rate of five percent over a two year period. The reasons for such a low rate

14
 Volume 5 Number 4 1998

were: only the sick drink boiled water, the peasants lacked an understand-
ing of germ theory (because germs are so small and not directly immedi-
ately observable to the peasants), and no surplus time nor adequate means
existed to gather the extra firewood necessary to create the fire needed to
boil the water (Rogers and Shoemaker, 1971).

Culture and Innovation

Culture has a profound influence on the innovative capacity of a society. A

societys values provide social direction to the process of technological de-
velopment. The social organisation of a culture may either foster or inhibit
technological development. It tends to operate as a source of authority, re-
sponsibility, and aspiration, thus influencing the course of technological ad-
vance and the creation of material culture. Says Margaret Mead on the
cultural costs of an innovation:
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To the Chinese, the introduction of power machinery meant that he had to throw over not
only habits of work but a whole ideology; for dissatisfaction with the ways of his fathers in
one particular meant doubt of the fathers way of life in all its aspects. If the old loom must
be discarded, then 100 other things must be discarded with it, for there are somehow no
adequate substitutions.
The barriers to technological change can be conceptualised in cultural
terms; the basic values of the group, the concepts of right and wrong, the
nature of the articulation of the elements of the culture, and the fundamen-
tal fit or integration of its parts. Other barriers can be found in the nature of
the social structure of the group, the prevailing type of family, the relation-
ship of its members, the factors of caste and class, the locus of authority in
familial and political units, the nature of factions, the individual and group
motivations, the nature of perception, and the characteristics of the learning
process (Foster, 1962). Those cultures which value creativity will have a
greater number and quality of innovations, and those countries that reward
technical ability and higher education will prosper in innovative pursuits.
The level of innovation within a society is directly proportional to the en-
couragement and status given to entrepreneurial efforts within the culture
and to the emphasis given it relative to the survival of the culture (national
goal).

Wallace (1970) found that culture influences tolerance of new ideas

and inquisitiveness. Shapero and Sokol (1982) observed that different cul-
tures have different attitudes towards business formation. Moulin (1961)
found that per capita number of Nobel Prize winners in the sciences differed
across cultures. Barnett (1953) postulates a positive correlation between the
individualism of a society and its innovative potential; the greater the free-
dom of the individual to explore and express opinions, the greater the likeli-
hood of new ideas coming into being. Individualistic societies value freedom
more than collectivist societies and freedom is necessary for creativity. Indi-
vidualistic societies do not stress loyalty to the extent that collectivist socie-
ties do, so they are able to gather more information necessary for invention.
People in individualistic societies prefer small firms whereas those in collec-
tivist societies prefer large firms. The compensation and recognition that in-
ventors require is more likely in individualistic societies which are typically
more willing to single people out. The psychological characteristics of inde-
pendence, achievement, and nonconformity, all of which have been found
to encourage innovation, are more common in individualistic societies
(Shane, 1992).

15
 Cross Cultural Management

Rothwell and Wissema (1986) reported nine important factors of inno-

vation, three of which were directly culturally bound and several others in-
directly influenced by culture. The required cultural characteristics of
innovating societies included: willingness to face uncertainties and take bal-
anced risks; urgency and timeliness and readiness to accept change; and a
dynamic long-term orientation. In a static society which encourages the
status quo, innovation will be difficult or occur only under acute conditions.
Innovations require perseverance and entrepreneurship. These talents are
available in any society but whether or not they are mobilized is very much
culturally determined (their italics!).

Hofstede (1984) indicated that societies which score high on individu-

alism and low on the power dimension have a higher economic growth and
a greater tendency to innovate, a finding confirmed by Shane (1992).
High-power distance cultures (Latin) prefer centralised hierarchical struc-
tures whereas low-power distance cultures (Anglo) prefer decentralised hi-
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erarchical structures; the latter climate is more conducive to innovation.

The greater a society stresses social hierarchy, the less the innate inventive-
ness of that society tends to be (Shane, 1992). Inventiveness is more likely
to occur in less bureaucratic surroundings, since bureaucracy reduces crea-
tive activity. Innovation requires decentralised authority. Hierarchical socie-
ties tend to have control systems based more on rules and procedures,
which inhibit creativity and inventiveness. Hierarchical societies tend to be
more fatalistic and thus less inclined to undertake the hard work necessary
for innovation. As innovation is change and hierarchies tend to minimise
change, the two elements tend to be mutually exclusive.

Hofstede (1980) also indicated that weak Uncertainty Avoidance

(high-risk tolerance) societies tend to take risks easier, are relatively toler-
ant of behaviours and opinions different from their own, and are enam-
oured of technology, traits which encourage entrepreneurship and
innovation. Hofstede found that high-uncertainty avoidance cultures seek
more control over their environments. Masculine cultures show a strong
preference for outputs and emphasise performance versus preference for
feminine cultures for processes and aesthetics, indicating differences in
product innovation expertise (Haiss, 1990; Schneider, 1989; Hofstede,
1980). Beteille (1977) stressed the correspondence between democracy,
capitalism, competition, and individualism. Mokyr (1991) indicated open-
ness to new information, willingness to bear risks, religion, and value of
education all matter in generating technological progress within a society.

Herbig and Miller (1991) argue that cultural attributes are the primary
difference between the different innovative expertise seen in the United
States and Japan. These cultural factors have resulted in a marked trend to-
wards miniaturisation of technology-based consumer products in Japan. The
cultural tendency towards group working and group solidarity seen in that
country has contributed towards the Japanese stressing mass production
and total quality control, emphasising process innovations, while these
same factors have inhibited independent entrepreneurship and individual
creativity, resulting in a detrimental effect upon radical innovations and in-
ventions (Twaalfhoven and Hattori, 1982). Table 1 shows various studies
on cultural traits and their reported influence on the innovation process.

A study by Chol Lee (1990) indicated that while early adopters were in-
novative, laggards were not. High levels of innovativeness were associated

16
 Volume 5 Number 4 1998

Table 1: Previous Studies Conclusions on Cultural Influences on Innovation

Cultural Traits Affects on Innovation
Barnett (1953)
Higher Individualism Higher Innovation Capacity
Rothwell and Wissema (1986)
Willingness to Take Risks Higher Innovation Capacity
Readiness to Accept Change
Long-Term Orientation
Hofstede (1984); Shane (1992)
High Individualism Higher Innovation Capacity
Low on Power/Status/Hierarchy
Hofstede (1980)
Weak Uncertainty Avoidance Higher Entrepreneurship
Haiss, 1990; Schneider, 1989; Hofstede, 1980
Masculine versus Feminine Innovation Differences
Beteille (1977)
Political Democracy, Capitalism Related Variables
Competition and Individualism
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Mokyr (1991)
Openness to New Information Higher Innovation Capacity
Willingness to Bear Risks
Religion
Value of Education to a Society
Herbig and Miller (1991)
Individualism Higher Radical Innovations
Low Power Distance Higher Radical Innovations
Homogeneous Society More Lower Order
Innovations
Twaalfhoven and Hattori (1982)
Collectivist Higher Process
Less Radical Innovations
Chol Lee (1990)
Early Adapters Higher Innovation Capacity
High Education Levels
Low Levels of Centralised Government,
A Positive Attitude Towards Science
Frequent Travel.

with high levels of education, low levels of centralised government, positive

attitudes towards science, and frequent travel. Although the emphasis in
this book is more towards sourcing than adoption, Lees study indicates that
sourcing, the generation of innovation, is related to the adoption of innova-
tion. It is not so much early adopters are very innovative as the innovators
are early adopters. In order to source, one must already be at the frontier of
science. To become sourcers at the frontiers of science, one must necessarily
be ready and willing adopters. Lee categorised countries as to their adopter
category: Innovators were Japan and the United States; Early Adopters in-
cluded Canada, Denmark, Sweden, Switzerland, and the former West Ger-
many; Early Majority countries included the other industrialised countries
and NIEs; Late Majority countries included most other third world coun-
tries.

What traits do productive cultures have in common? Gunnar Myrdal

(1971), in his book Asian Drama, concentrated on culture to find those dif-
ferentiating factors. He attempted to distill those cultural traits which were
useful for economic development. Thirteen items were on his list: efficiency,
diligence, orderliness, punctuality, frugality, scrupulous honesty, rationality
in decisions on actions, change, alertness to opportunities as they arise in a

17
 Cross Cultural Management

changing world, energetic enterprise, integrity and self-reliance, coopera-

tiveness, and the willingness to take the long view.

Myrdal attempted to explain the roots of poverty in India. If ever there

was a country, apart from China, with the potential to prosper simply by
giving ordinary people a chance, it would seem to be India. It has so many
people, and Indian emigrants have been well noted as merchants, scientists,
and professionals. Britain shipped them to Africa and Southeast Asia to help
administer the empire. Emergency rooms in many US hospitals ran on In-
dian and Pakistani manpower during the 1960s and early 1970s. Yet India
itself has been slower to take off than other lesser endowed East Asian
economies (Fallows, 1989b).

Myrdal argued that the Indian system, rather than promoting produc-
tive economic traits, encouraged unproductive behaviour by ordinary Indi-
ans. Because the caste system froze most people in position, those in the
higher castes had better educational opportunities and went into the profes-
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sions; those in the lower castes had no chance to rise. Religion became a de-
structive force towards social inertia for those Indians who remained in
their native land. Indians came to distrust anyone not of their own caste or
tribe. Indian emigrants behaved in many of the ways Myrdal endorsed - un-
like their cousins and countrymen at home.

Most people work in the hope of reward. The tighter the connection be-
tween effort and reward, the harder ordinary people will try. Exploitative
class sytems that freeze people in place become disincentives to work hard.
Lack of trust in institutions also kills incentives to work hard. People will
not care as much about traffic laws if they know they can bribe the police;
they will not trust the laws if they think the courts are crooked. When the
radius of trust is broad and when people think they can affect their destiny,
then people will make the society rich, strong, and fair by innovating and
developing it (Fallows, 1989b).

Religion and Culture

Religion is a socially shared set of beliefs, ideas, and actions which relate to
a reality that can not be verified empirically yet is believed to affect the
course of natural and human events. Religion can be viewed as an inter-
preter of the social order or as a means of societal control. Because such be-
liefs condition peoples motivations and priorities, religion affects their
actions. Religious institutions serve to influence the nature, development,
and application of technology by propagating norms, customs, prohibitions,
and standards of conduct which serve to influence the nature, development,
and application of technology. Ruttan (1988) indicated that a societys
dominant religion and ideology affects its inherent level of innovative ca-
pacity.

Religion affects people in many ways because it prescribes proper be-

haviour, including work habits. Many Americans and Europeans believe
work is a moral virtue and disapprove of the idle. In Hinduism and Bud-
dhism, the emphasis is on the elimination of desires because desires cause
worries; not striving brings peace and a person at peace does not suffer. The
entanglements and preoccupations of material things are to be avoided.
Limited material aspirations do not provide wide incentives to innovate. Of-
ten, religious values are biased against technological change and the likely
effects of this change. Mahatma Gandhi, considering technological industri-

18
 Volume 5 Number 4 1998

alisation a negation of human values, said, The machine should not be al-
lowed to cripple the limbs of man...by working with machines we have
become machines ourselves, having lost all sense of art and handiwork.
(Mukerji, 1954). Superstitious religions, which assert that fate cannot be
understood and is beyond earthly control, break the connection between ef-
fort and reward.

Medieval historian Lynn White, Jr., claims that the spectacular success
of the West in cultivating science and technology is rooted in the Judeo-
Christian belief that the domination of nature is sanctioned by religion. Ju-
daism provides the religious basis for high achievement orientation; the re-
ligion stresses that perfection in conduct (following Gods commandments)
will result in Gods rewarding one some day. Judaism has an individualistic
self-reliant aspect with a high regard for time (McClelland, 1961). The per-
sistent, aggressive effort made by Westerners to exploit every possible natu-
ral force and resource resulted in their becoming the worlds leaders in
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technology. Those whose religions taught them to take a more benign atti-
tude towards nature failed to develop technology to its full potential. The
Judeo-Christian viewpoint was augmented and elaborated upon in the sev-
enteenth century by philosophers and essayists who held that nature should
be made to serve the business and conveniences of man. Thus, modern
science, which provided a superior means of understanding the natural
world, would ensure it would be mastered more thoroughly.

Contrast these achievement-oriented, materialistic, God helps him who

helps himself, Western values to those of Islam. The Islamic value system
requires a commitment to God and a constant awareness of Gods presence
even while engaged in material work. Wealth is considered a favour of God
to be appreciated. Wealth is to be used to satisfy basic needs in moderation.
With the real ownership of wealth belonging to God, man is considered only
a temporary trustee. Material advancement does not entail higher status or
merit. Mohammed is reported to have said: all innovation is the work of
the devil. Bukra insha Allah, a favourite expression for the traditional
Arab, means tomorrow if Allah wills. Inshallah means God willing. Ar-
abs believe their time is controlled, to a certain extent, by an outside force -
namely Allah; nothing happens unless Allah wills it. This results in their be-
ing very fatalistic in their view of life, even to the point of some Muslims re-
jecting insurance policies as an attempt to defy the working of Allahs will
(Harris and Moran, 1987).

Islam also contains several elements which mitigate against change. Is-
lam is not only a faith but a political community with integration, rather
than separation, of church and state. It is a way of life with every activity,
down to the smallest detail, regulated by the Koran. This complete integra-
tion of life makes it extremely difficult to alter the institutions of Muslim
countries unless the priests or ulema, who interpret the Koran, are favour-
able to proposed changes. If they oppose changes, they can become a fanati-
cal opposition, a result which has led to many assassinations of reformers in
Arab countries (Dean, 1956). Change becomes a high risk; as a result, Is-
lamic beliefs have a detrimental effect upon the innovative potential of Is-
lamic states.

The obscurantist influence of Islam was the stronger for two considera-
tions that distinguished sharply East and West. The first was the all-
pervasive role of the Muslim religion, which reigned sovereign even in those

19
 Cross Cultural Management

spheres that had long been reserved in the West to secular authorities. The
dichotomy between church and state was never established in Islam, per-
haps because the Muslim people and their world were a creation of the
faith, whereas Christianity had had to make a place for itself in the powerful
Roman state. No legitimate source of sanction and authority in Islam existed
outside the teachings of the Prophet. The second was the unity of Islam in
the matter of intellectual inquiry which worked against the success of devi-
ant patterns of thought or behaviour, at best unfavourable, at worst hostile
to scientific endeavour. The pragmatic creativity of European science, like
the vitality of the European business community, was linked to the separa-
tion of spiritual and temporal (Landes, 1969).

Often where religious and political systems are intertwined, definite

cultural bias exists against technology that might affect tradition. This usu-
ally occurs in undeveloped, not technically progressive societies. Many ex-
amples can be cited (Islam and Arab nations; Catholicism and Ireland,
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Spain, Latin American nations) where state mandated religion exists. More
often than not, the educational level and general intellectual environment
in such states is not conducive to innovation.

20
 Volume 5 Number 4 1998

References

Barnett, H.G. (1953). Innovation: The Basis of Cultural Change. New York:
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Beteille, A. (1977). Inequality among Men. Oxford: Blackwell.

Dean, Vera Micheles (1956). The Nature of the Non-Western World. New
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Fallows, James (1989a). Containing Japan, The Atlantic Monthly, May,

pp.40-59.

Fallows, James (1989b). More Like Us: Making America Great Again. Boston:
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Foster, George M. (1962). Traditional Cultures and the Impact of Technologi-

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Harris, Philip R. and Robert T. Moran (1987). Managing Cultural Differ-

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Herbig, Paul A. and Joseph C. Miller (1992). Cultural Aspects of Innova-

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Landes, David S. (1969). Unbound Prometheus. London: Cambridge Univer-

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21
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