How Business Cultures Think

How Institutions Think, was written twenty one years ago by anthropologist Mary Douglas. Her argument was basically that all institutions generate their own world of images, symbols, ideas, and past experiences, and people in the institution, to some degree, must accept this thought-world in order to function. Thus the institution as a whole largely shapes individual decisions in an institution. As an expatriate worker assigned to do business overseas I would suggest the first thing they need to learn is how the host culture thinks.

Douglas’ typology for categorizing cultures is based on the concept of grid and group. Grid relates to how many roles are in a society, business or institutions. The more roles (like the military or university) the higher the group. Fewer roles, such as a local Subway franchise, is identified as a low grid social environment.

Group is measured by strength of membership of a collective body in a social environment. The stronger the group the greater the requirements for association, as well as conformity to collective values. A strong group business is found in companies like Samsung of Korea; a low group business would likely be like Home Depot in America.
As the graph shows, the four major categories of social environments are Individualist, low grip/low group, which I call Franchisers; Bureaucratic, high grid/low group, tagged The Man; Hierarchy, high grid/high group, The Chief and; Egalitarian, low grid/high group, called Facilitators.

In the next few posts I will try to unpack these classifications. For now, generally speaking, most Americans operate as franchisers, most large companies function as bureaucrats, many Asian companies operate in a hierarchy and small companies are often facilitators. Of course there are exceptions to every rule. But the point is, to be more effective living overseas it’s helpful if we understand how cultures think.