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Cultural Theory for Business Partner Selection

18 March 2009

Spire Research and Consulting and the LogicMills School of Thinking are collaborating to develop a new tool that leverages the anthropological paradigm of Cultural Theory to measure culture compatibility between business partners. This is believed to be the first deployment of the empirically grounded social sciences paradigm of Cultural Theory to support business partner selection. Participants at a seminar organized on 18 March by Spire and Logicmills were presented with the broad outlines of the tool and how it could assist firms not only in the process of selecting the right partner but in taking the right steps to bridge cultural differences when negotiating and maintaining business partnerships. 

Spire’s Group Managing Director, Leon Perera, kicked off the event with an overview of the role of organizational and strategic alignment between partners in shaping the success of joint ventures, mergers/acquisitions and strategic alliances. He discussed the role of various selection criteria in choosing partners, broadly grouped around the themes of market access, cost control and capability development, with reference to Spire’s experience in partner selection consulting in countries such as China and India. He then went on to stress the crucial role of motivational alignment between partners. 

“It is crucial to understand not only how well-matched the partnership candidates are to your aims, but also how well-matched you are to theirs” Perera explained. “Too often, this kind of assessment is done in a one-sided manner, with firms going into a partnership where the other side values them less than they value the partner.” 

In introducing the speakers from Logicmills, Perera spoke of how cultural compatibility is often seen as a “soft issue” that is resistant to quantification, and hence is usually de-prioritized when companies make business partnership decisions. 

Academic Director of LogicMills and an Assistant Professor at the Singapore Management University, Dr Mark Nowacki, then introduced the sociological paradigm of Cultural Theory (CT) and grid/group analysis as a tool to aid organizations in understanding their cultural structures and that of their partners. He introduced the audience to the various culture typologies that are used in CT to classify organizations, such as “egalitarians”, “hierarchists” and “individualists”. He stressed that every organization had characteristics of each but to different degrees, generating a unique grid for each one. He also explained how the shape of the grid could differ across departments and country teams within a single company. 

It is Dr Nowacki’s belief that in these uncertain times, Cultural Theory offers organizations new ways of extracting value, anticipating business challenges, and building key strategic alliances. He noted: “Cultural Theory identifies those crucially important yet routinely overlooked patterns of human behaviour. The world is a more predictable, manageable place for the Cultural Theorist. Knowledge replaces gut feel. Cultural Theory, in short, gives us a sharp competitive edge just where other organizations see only intractable problems and baffling complexity.” 

The presentations were followed by an open discussion facilitated by Dr Steven Ney, an Assistant Professor at the Singapore Management University, who coauthored a well-received book with Mary Douglas, the founder of Cultural Theory. 

“For many business and social analysts, recognizing that a problem has cultural causes is the end of analysis and the onset of paralysis. More often than not, pointing to culture is little more than an apologetic shrug,” says Ney. “For Cultural Theorists, however, a cultural problem is the starting point of our analysis. Cultural Theory make sense of what seems so inexplicable by casting it in terms of patterns of behaviour and reasoning that we all can recognize. In this way, cultural problems no longer spell the end because, since they are essentially unknowable, there is nothing we can do. Rather, Cultural Theory allows us to think of these messy problems like any other management challenge: a barrier but also an opportunity.” 

Spire and Logicmills are collaborating to implement the pilot testing and launch of the new consulting tool.

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