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To describe the social and cultural context of a nation, it is useful, especially from a business perspective, to identify the nation as having a “high context” or a “low context” culture. Some cultures are high context cultures, like Chinese, Arabic, Slavic, and Spanish, while some are low context cultures, like Anglo-American, German, and Scandinavian. Most countries can be placed somewhere along the high context - low context continuum, shown below.
This is a very broad-brush distinction, however, and not everyone and every interaction in a particular culture could be described by the kinds of characteristics (stereotypes) described below. Besides, each culture has both high context and low context elements. India, for instance, will be positioned somewhere towards the high context end of the continuum.
High context cultures. A high context culture evolves when a group of people have had a very long history together, forging close connections over long periods of time, so much so that not everything in their daily interactions needs to be explicit. Most people know how to behave and what to expect of others from years of interactions with each other, as if they have been living in a small town where everyone knows everyone else. In other words, they can “read between the lines.” History, tradition, and language are important in high context cultures. “In our relationship with them, we cannot ignore their history, since they themselves do not view any single event in their personal, communal, professional, or national lives as an isolated event; everything is contextualized by shared history, shared experience, shared kinship, shared friendship, shared enmities, and/or shared prejudices… In high context cultures, written contracts and formal agreements are of lesser importance; the culture itself provides alternative enforcement mechanisms (Russian culture, for example, uses shame, fear, personal friendship, honor, loyalty, and obligation to enforce agreements).
Low context cultures. In a low context culture, people have also had many connections, but of shorter duration, and some could indeed be impersonal in nature. People tend to play by the rules, which are often explicit and public – with the task being often more important than relationships. They think of the present and the future, rather than of the past. Written agreements and contracts are more important than verbal agreements, and, in fact, form the basis for future transactions between companies from different countries.
A low context culture may be easier to enter for a company than a high context culture because an outsider can get on with the task at hand rather than first trying to develop deep relationships. For instance, in a high context culture like in France or Japan, business dealings are often preceded by much wining and dining. In China, a high-context culture, the role of guanxi (connections or relationships) is pre-eminent in business dealings. In a low context culture like Germany or the United States, business can be done without first getting to know each other very much (though it is always a good idea to get to know prospective partners, customers, etc., before beginning to interact with them).
Source: Adapted from Vinod K. Jain, Global Strategy: Competing in the Connected Economy. (Routledge, 1996, Chapter 4)
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