Cross-Cultural Analysis of France - Essay Example

? Cross-Cultural Analysis of France France is among the viable foreign investment locations in the world. The country does not impose any administrative restrictions for foreign investors, though some cases may require mandatory permits or declarations. The business world holds the perception that crossing over to France and establishing a subsidiary is not as challenging as initiating operations in East Asia. The base reason for this perception has been the Americanization of French culture and life, a hotly debated topic in the past decade (Carroll, 2001). Nonetheless, the business culture of France still reserves some surprises for Americans and other western nations. This report seeks to provide a cross-cultural analysis of France as a potential location for investment. The report seeks to provide a profile for the cultural environment of France, exploring issues that may have significant impact on management, including business protocols, language, housing, clothing, social institutions, education, and others. Introduction According to the 1958 constitution, France is a parliamentary republic. A president, who is the head of state, leads the country. The latter monitors the functioning of democratic institutions as far as the constitution is concerned. The country also has a Prime Minister in charge of day-to-day policy. A bicameral parliament governs the country. It comprises of a Senate with directly elected representatives from the departments and region, and a House of Representatives elected by the universal suffrage every five years. The metropolitan France has twenty-two regions with ninety-six departments. The communities, departments, and regions share the centrally collected tax revenues (Smircich, 2005). France is the largest West European country with a population of approximately 65 million people, about four-fifths of the size of Texas. Due to the large area coverage, the country has different environmental orientation. The country has mountains in the south and east, volcanoes in the middle and beaches in other parts. The beaches are also very different, comprising of cliffs, sand, and stones. Consequently, the country has different climate conditions: dry and hot in the east and south, and rainy in the north and west. The country does not have an official religion, but most of the citizens are Roman Catholic. The country hosts over 4.5 million foreigners, majority of whom are from communist countries and other European countries (UHY, 2011). As far as French citizens are concerned, education is very important. This is evident from the fact that the French educational system is almost free from primary school through to a doctorate degree for French citizens. Population According to a survey carried out in 2010, about three-quarters of the French population live in the cities, with a population density of 97 inhabitants per square metropolitan kilometer. The major currency in use is the Euro. The country majorly speaks French. According to economic statistics, the service sector accounts for over 74% of the overall employment, compared with 5% in agriculture. The industrial sector of the country continues to suffer significant deficits in foreign trade due to the fierce competition from the Far East. In 2009, the country made a Gross Domestic Product of 1950 billion Euros, an increase of 2.5% from 2007. The average growth rate was 0.6%, slightly below the Eurozone average of 0.7% and 0.8% of the US figure. The GDP purchasing power parity in 2010 was $2.097 trillion, with a GDP per Capita purchasing power parity of $32,700. The global economy has been slow in all areas because of the recent financial crisis. The global effect was initially high, but France gained from its little exposure and encouraged a strong public spending policy to maintain a high demand level (Fatehi, 2003). Economy Since 2008, the rate of unemployment has increased to stand at 10% of the overall active population, slightly higher than the average European rate of 9.6%. The country reduced the interest rates in the second quarter of 2010 to 3.3% in efforts to prevent collateral effect from the financial crisis. This figure represents a significant decrease of 4% since 2008. Additionally, the inflation rate is 1.6% compared to 3.6% in 2008 (Sivakumar and Nakata, 2001). The establishment of the European Central Bank in 1998 was to oversee the implementation of a single monetary policy. With headquarters in Frankfurt, the European Central Bank and national central banks of all European Union members form the European System of Central Banks. The primary functions of the ESCB are to manage and hold the official foreign reserves of EU member states, implement and define the monetary policies of the EU, and conduct foreign exchange operations adhering to the foreign exchange policy of the community (Kostova and Roth, 2003). Nonetheless, the foreign exchange policy is a shared responsibility. The Banque de France constitutes an integral portion of the European System of Central Banks in accordance with the Maastrich Treaty. France has numerous commercial banks that support functionality and financing of business in the region. The category now includes a wider category of institutions, including major deposit banks with extensive international and domestic networks, merchant banks, foreign banks, and Credit Agricole. Other institutions offering financial services to both local and foreign investors include venture capital firms, leasing companies, savings banks, and other government-sponsored financial institutions. For a company seeking to initiate business operation in the region, obtaining short-term finance from specialized institutions is easy. The most common method of financing in France is discounting of bills (Kostova and Roth, 2003). Other methods include loan facilities or overdrafts, and factoring and assignment of debts. Therefore, introducing business operation in France has the added advantage of obtaining financial assistance from institutions in place. Culture France has a remarkable history of centralization evident from the transportation system, business, government, and geography. This centralization outlook originated from the authority and power of the earlier monarchs and regardless of the democratization process, it remains a significant part of the French presidency. Nonetheless, people should be careful not to confuse individuality with individualism, which are both very important to the French. In essence, individuality refers to having a different but equal sense of place in society, while individualism in the business environment refers to the greater emphasis placed on judgment and social status of an individual. Another important aspect of the French culture is the attention to regulations (Fatehi, 2003). Drawing upon Hofstede Analysis of France, the French have low tolerance to ambiguity and uncertainty. For companies wishing to conduct business operations in the country, this means that the French are reluctant to taking risks. Based on previous researches and studies, all decisions in the country follow a strict pattern of careful decision-making and review by a considerable number of people before implementation. This creates some form of hierarchy, thus the high power distance in Hofstede’s analysis (Michael and Hofstede, 2011). Therefore, it is important for a company operating in France to have a well-defined and distinct organization. Furthermore, the French are very individualistic. Majority prefer working alone. This makes competition stiffer as companies seldom form mergers or other forms of associations. The firm should consider this fact as it determines the survival of the company in the market. Additionally, the French are feminine. More and more women practice in the business world. Indeed, most women spend their time at work. Therefore, men and women play the same roles in both the family and the society. The French society is egalitarian, but the French culture has various socio-economic classes and class distinctions (Sivakumar and Nakata, 2001). Family and Relationships Based on the rural communities and Catholic Church values, the basic unit of society in France is the family. However, the family structure has evolved from the extended family in the twentieth century to unclear family after the Second World War. Since then, the country has seen more divorces and fewer marriages. The evolution of the legal family status and divorce law bear witness to these social changes. According to a recent study, the family and household composition continues to evolve in the metropolitan France. The report further indicates that single parent families increased to 7.4% between 1982 and 1999 (Mulholland and Owen, 2007). Moreover, the number of unmarried couples has increased by a 2% average for both men and women. Therefore, one in three house hosts a person living alone, and one in four homes house a childless couple. The French law does not recognize same-sex marriage. Therefore, the business should strategize their products to reflect the family structure of the French. Education The French value education. The educational system in the country is highly ramified, organized, and centralized. It has three main stages: higher education, secondary education, and primary. Both secondary and primary educations are largely public, though some private schools exist, particularly a strong countrywide network of secondary and primary Catholic education. On the other hand, higher education has both public and private elements. Secondary education students do baccalaureat exam, which grants them access to higher education. In 2000 for instance, the baccalaureat pass rate was 78.3%. The French government spent 7% on its GDP in 1999-2000 in education, accounting for 37% of the national budget. All state-funded schools are independent from the Roman Catholic Church, and education is free, including universities. Moreover, non-secular organizations may organize education. The educational system in France differs from the American or Northern-European systems because it emphasizes on the importance of societal partaking rather than being responsibly independent (Sivakumar and Nakata, 2001). Therefore, the business could target the highly educated individuals as the country has a high literacy level. Language The French often communicate in French. Academie Fracaise sets the standard of language purity in the country, though this standard is not mandatory and is occasionally ignored by influential societal groups. For instance, Lionel’s left-wing government sought for feminization of some functions, while the Academie sought to name them more traditionally. The government has initiated some action to promote the French language and culture, including designing a subsidies system and preferential loans to support French cinema. Moreover, advertisements targeting the larger public have to be in French in accordance with the Toubon Law. However, the government does not regulate language use by private parties in non-business environments or force French-based websites to be in French. This is very important, as it will affect the promotional strategies of the subsidiary set for inauguration (Chevrier, 2003). Diet and Nutrition Food enjoyment is a highly prioritized tradition in the French culture. Dishes and ingredients differ by region. Many regional dishes have become both national and regional. Wine and cheese have become an integral part of the French cuisines, playing different national and regional roles with the many variations. Typically, the French devour a simple breakfast of tea or coffee served in traditional handless large bowls and breakfast pastries or bread. Dinner and lunch are the major meals of the day. Formal meals consist of a starter course, a salad, a main dish, and dessert course or cheese (Holden, 2002). The French cuisine incorporates rich desserts, with most homes desserts having yogurt or fruit. The company should bear this in mind, particularly if the management wishes to offer the employees food and drinks. Aesthetics France is the home of art in Europe. The country boasts of a rich history of paintings spanning over 10 centuries. France is home to the world’s greatest painters, including Leonardo da Vinci, Jacques-Louis David, and others. Moreover, the Louvre in Paris is among the largest and world’s most famous art museums, holding voluminous artworks of French artists and others. The country has a wide variety of folk music, including styles of immigrants from Asian, Latin America, and Africa (Michael and Hofstede, 2011). Perhaps this might affect the managerial decision on the interior design of the company’s premises, as well as create ideas for the right mix of aesthetics during casual meetings with stakeholders. Recreation and Sports The most popular sport in France is football, though other such as cycling, basketball, sailing, handball, and rugby union. The country holds the French Open tennis tournament and Tour de France, the annual cycling race. Also important to note is that modern Olympics originated from France. Similar to other cultural areas, the Ministry of Youth Affairs and Sports oversees the sports events. The company may face managerial challenges when organizing for events may enhance teamwork. However, an analysis of the sports within the location of the business premises may provide insight into the way forward. The French follow the Roman Catholic calendar, including observing the Ascension Day, Easter Christmas, All Saints Day, Pentecost, and, Assumption of Mary. The government only determines the National Holiday and Labor Day (Carroll, 2001). All other holidays depend on the agreement between the employees union and the employers. This is important for the management in designing a comprehensive work schedule for the company. Labor Legislation and Labor Market Employees and employer relations follows the French labor code, individual employment contracts, collective bargaining agreements, and company regulation. For each specific job category, there must be employment contracts. The French law identifies two categories of contracts: permanent contracts with an indefinite term and temporary contracts for a specified period. The latter may occur in various circumstances, including the absence or leave of a permanent employee, seasonal activities, occasional and temporal increase in business, and as part of job-creation schemes by the government. A union in France refers to a local body, not a national unit. Most unions have affiliations with national federations of unions. The formation of unions depends on the industrial sector rather than individual crafts, thus a single workplace may have several unions with different ideologies. Despite their low percentage, trade unions are very powerful, so management has to consider this factor. In France, the law provides for different forms of employee representation, including the appointment of personnel delegates for companies with more than ten employees (Holden, 2002). These delegates oversee group and individual complaints on the working conditions. In addition, companies with more than 50 employees must for Work Council, with the representatives of the Work Council having the final decision on the cultural and social activities of the company, but not the power of veto. Moreover, the management of the company must provide the Council with the same information made available to shareholders. All employees must receive a minimum monthly salary of not less than 1365 Euros for a 35 hours working week. Foreign employees enjoy the same legal protection as natives, as long as they reside in the country. EU members enjoy certain administrative privileges, as non-EU executives must apply for certain accreditations. According to the labor code, the maximum working hours for all businesses in 35 hours per week, though hours worked beyond the 35 hours mark may receive supplementary days off (Mulholland and Owen, 2007). Furthermore, all employees are entitled to five weeks paid leave per year. The French Social Security system provides employees with disability, retirement pension, paternity and maternity pay, sickness, family allowances, and work-related sicknesses or accidents. The employees and the company finance the system through contribution and taxation. The law also allows for distribution of substantial allowances for medical expenses. Indeed, the employer pays 45% of the gross salary for the charges. Dressing The French tend to be very conscious of their appearance. Majority of the individuals in business dress conservatively and spend in well-tailored clothing. The most acceptable clothing is in dark colors and patterned fabrics. Interestingly, most businesspersons do not take off their jackets or loosen their ties in the office. Women are expected to dress conservatively, without gaudy or bright colors. This is very important for the management if they intend to design uniforms or work cloths for their employees, as well as deciding the most suitable dress code (UHY, 2011). Attitudes towards Time The French treat time very casually, with tolerance to ten minutes lateness in business meetings. This is very important for the management as far as dealing with clients and the employees. The French respect privacy, thus knocking and waiting before entering a room is advisable (Sivakumar and Nakata, 2001). Additionally, it is important to give notice before arrival. Another important French business culture is the foreigner’s discretion for gift giving. The most preferred gifts by the French are music or books, as they show interest in pursuant of intellect. Conclusion The French closely observes culture and tradition. They are very aware of their presence and proud of their national heritage. The long history and roles in important world events is a source of pride and boast to them. Based on Hofstede’s cultural analysis, the country has high uncertainty avoidance index, power distance, and individualism. Masculinity is relatively low. This information will enable the management of the organization to design and implement business strategies and policies that correspond to the culture of the country (Smircich, 2005). References Carroll, R. (2001). Cultural Misunderstanding: The French-American Experience. Chicago: University of Chicago Press. Chevrier, S. (2003).Cross-cultural Management in Multinational Project Groups. Journal of World Business, vol. 38, no. 2. Fatehi, K. (2003). International Management: A Cross-Cultural and Functional Perspective. Upper Saddle River: Prentice-Hall. Holden, J. (2002).Cross-Cultural Management: A Knowledge Management Perspective. London: Prentice Hall. Kostova, T. and Roth, K. (2003). Social Capital in Multinational Corporations and a Micro-Macro Model of its Formation. Academy of Management Review, vol. 28, no. 2. Michael M. and Hofstede, G. (2011) "The evolution of Hofstede's doctrine", Cross Cultural Management: An International Journal, Vol. 18 Iss: 1, pp.10 - 20 Mulholland, L. and Owen, D. (2007). France Business Culture Report. Retrieved on May 19, 2012, from http://www.misco-project.eu/France_Culture_Field_Report.pdf Sivakumar, K. and Nakata, C. (2001).The Stampede toward Hofstede’s Framework: Avoiding the Sample Design Pit in Cross-cultural Research. Journal of International Business Studies, vol. 32, no. 3. Smircich, L. (2005). Concepts of culture and organizational analysis. Administrative Science Quarterly, 28, 339-358. UHY. (2011). Doing Business in France. Retrieved on May 19, 2012, from http://www.uhy.com/media/PDFs/doing_business_guides/Doing%20Business%20in%20France.pdf Read More