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EXPLAINED: how business mentality and psychology differs between countries

If you want to pursue a business career today, you're certain to have contact with people from many cultures and countries. While globalisation is a powerful force, it has not swept away all the cultural differences that shape how people work.

EXPLAINED: how business mentality and psychology differs between countries
Photo: Getty Images

Studying or training at an institution that promotes cross-cultural understanding could therefore help you work more productively with both international colleagues and businesses in other countries. 

To get some expert insight on this important topic, The Local spoke to Benjamin Voyer, a psychologist, behavioural scientist and a professor in the Department of Entrepreneurship at ESCP Business School. With campuses in six major cities in six European countries, cultural diversity is a key part of the learning process at this prestigious business school.

Find out how ESCP Business School can provide you with unique cross-cultural experience

A psychological edge

Why do you need an understanding of psychology in business at all? “An understanding of how people’s values affect their behaviour is crucial,” says Professor Voyer. 

As the world becomes more complex, psychological insights can “give you an edge” whether you’re designing a product, tailoring marketing for different audiences – or just trying to get the best out of your own multinational team.

This is why ESCP’s Bachelor in Management (BSc) – which students complete over three years in three countries – includes an Introduction to Psychology and Sociology course. “It’s so important that we teach this from year one,” says Professor Voyer, who teaches at ESCP’s London campus.

Photo: Professor Voyer of ESCP Business School

Individualism: US and UK rank highly

So what are the key differences between major countries in Europe and the US, for instance? Professor Voyer says while it’s important to avoid reducing nations to stereotypes, some clear distinctions remain.

He points to Hofstede Insights and its model for comparing countries on six cultural dimensions as an authoritative source for these differences in the business world.

In terms of individualism, for example, the UK ranks nearly as highly as the US – and significantly ahead of Italy, France and Germany. Spain, with its strong family connections, has a notably low score for individuality among European countries, with Austria and Poland also relatively low.

“Generally, European countries have a lot of common values that relate to individualism,” says Professor Voyer. “They promote being unique and expressing your individuality.”

But if you want to follow a truly individualistic path in business, the US and the UK appear to be especially favourable locations.

“In the US, your working life tends to form a more important part of who you are than in Europe, and discussions about money are less taboo,” adds Professor Voyer. “In some European countries, like Poland, avoiding uncertainty and family values matter more.”

Know someone ready for a cross-cultural challenge? Find out more about ESCP’s Bachelor in Management (BSc) and download the brochure

‘Masculine’ and ‘feminine’ nations

Can a country be ‘masculine’ or ‘feminine’? It sounds like a question that could easily invite controversy. But according to Professor Voyer, the evidence from psychology says some of the clearest differences in Europe are in this area  – so long as you understand how the terms are interpreted.

A high score for masculinity indicates, among other things, a society driven by competition to be the best, while a low score means caring for others and quality of life are more dominant values, according to Hofstede Insights.

Scandinavian countries are especially ‘feminine’ by this criteria – Sweden scores only five, with Norway and Denmark not much higher. By contrast, ‘masculine’ countries include Italy (70), the UK (66), Germany (66) and the US (62). France and Spain are more balanced.

Photo: Getty Images

“In ‘masculine’ countries, gender roles are more strictly defined,” says Professor Voyer. “The expectation that nurses are female and doctors are male is much more marked than in Sweden or Norway.

“But it doesn’t necessarily mean masculinity is dominant. ‘Feminine’ cultures allow for more balance if you as a woman want to be a CEO or member of parliament, for example.”

Power distance

The way business is done varies greatly according to local attitudes to hierarchy. This is measured by the ‘power distance’ element of the rankings.

In countries with low scores, managers count on the experience of team members and employees can expect to be consulted. Examples include the Scandinavian countries again – with Denmark standing out – and Austria.

The UK and Germany are also relatively informal, with both scoring only a little more highly than Sweden. France ranks as significantly more hierarchical, along with Spain to a slightly lesser degree.

“The French language has a formal and informal way of talking to people that shapes how social hierarchy works,” says Professor Voyer. “I’m British and French. If I speak French, I tend to say ‘vous’ to formally address people in a shop or a working interaction. But in English-speaking countries, I’m more informal because the language is more direct.”

According to Hofstede Insights, French companies usually have “one or two hierarchical levels more than comparable companies in Germany and the UK”. CEOs of big French companies also use PDG (for President Director General), as a more prestigious alternative to CEO.

Cross-cultural learning

In addition to London, ESCP has campuses in Paris, Berlin, Madrid, Turin, and Warsaw. Professor Voyer says the cross-cultural approach offers students on the Bachelor in Management (BSc) programme invaluable preparation for the business world.

“One of the straightforward definitions of culture is ‘how do we do things?’” he says. “Every course has a group work component where you work with the same team for a semester. That challenges students to understand the group dynamics and resolve differences, which is very important for anyone who wants an international career.”

Want an international business career or know someone who does? Find out more about studying at ESCP Business School: click here to download the brochure.

For members

EDUCATION

Swiss universities still highly ranked but slip in ratings

While ETH Zurich is still the best university in continental Europe, overall Switzerland’s higher-education institutions dropped in international ranking.

Swiss universities still highly ranked but slip in ratings

Zurich’s Federal Polytechnic Institute (ETH) has been named the best university in continental Europe by the 2022 QS World University Rankings of 1,422 universities, compiled by global higher education analysts, QS Quacquarelli Symonds.

Although it retained its title, ETH Zurich lost one place compared to the previous year, falling from eighth to ninth position. The eight best universities are all in the UK and the United States.

ETH, a public research university focusing exclusively on science, technology, engineering, and mathematics, holds its top position in continental Europe for the 15th time in a row.

Of the 10 Swiss universities listed, three — including ETH’s sister school, the Federal Polytechnic Institute of Lausanne (EPFL) — are in the top 100, and seven in top 250.

However, QS points out that eight Swiss institutions lost their rank. “Only the University of Basel is progressing, while the University of Italian Switzerland remains stable”.

All the universities are judged based on criteria such as academic and employer reputation; faculty citations (measuring research impact); the faculty/student ratio (teaching capacity index); and the international ratio of professors and of students (measure of the internationalisation of a university).

“ETH Zurich enjoys the best international reputation in the country, ranking 18th and 51st globally in academic and employer reputation indicators,” QS said.

Other Swiss universities rated in the survey are University of Zurich (83th place), Bern (120th), Geneva (125th), Basel (136th), Lausanne (203rd), Svizzera Italiana (240th), St. Gallen (501), and Fribourg (571).

You can read more about the winner the ETH, here:

Why ETH Zurich has been ranked the ‘best university in continental Europe’

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