Abstract This paper is an analysis of culture within Taiwan. It will focus on how different cultural elements and dimensions effect and influence business in Taiwan. This paper will also look into the implications for businesses from the United States seeking to conduct business within Taiwan. Taiwan has a unique blend of traditional Chinese cultural as well as modern Western influences. It is an open and welcoming culture and one that plays an important role in the East Asian economy. Global Business Cultural Analysis: Taiwan Introduction to Taiwan Taiwan is a small island country located off the east coast of China in Asia.
Also known as the Republic of China (ROC), it is the place where the ROC settled after losing control of mainland China to the People’s Republic of China (PRC). Taiwan’s population is made up of mostly Han Chinese with a few other Chinese ethnic groups and a smaller number of aboriginal tribes. The official language spoken in Taiwan is Mandarin Chinese; however, about 70% of people in Taiwan speak both Mandarin and a dialect known as Taiwanese. Another dialect call Hakka is spoken by about 15% of the population and the aboriginals have several other dialects as well (Deaton & Paxson, 2000).
Taiwan has unique political status because of their strained relationship with China. At present, the PRC claims it has control over Taiwan and its territories, even though the PRC has never has exercised any governmental control over those regions. China has threatened to put political pressure on any country wanting to officially recognize Taiwan as a sovereign nation, which has led many countries, including the United States, to only recognize Taiwan in an unofficial capacity. These countries, while still doing business with Taiwan, are forced to only officially recognize China, thereby reducing Taiwan’s global influence (Friedberg, 2005).
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On the economic front, Taiwan has done very well in the past few years, experiencing rapid economic growth. It is commonly referred to as one of the East Asian Tigers, a group which includes Hong Kong, Singapore, South Korea and Taiwan. The countries in this group were relatively poor until around the 1960’s when they underwent educational reforms. These educational reforms, coupled with their cheap yet dynamic workforce helped industrialize their countries and spark rapid economic growth. “In the 21st century, all four regions have since graduated into advanced economies and high-income economies” (Vadra, 2010, p. 0). Although the economic growth rate in Taiwan has slowed recently, it remains at a relatively high, yet sustainable rate. What are the major elements and dimensions of culture in Taiwan? Taiwan, like almost every country, has many different elements and dimensions of culture woven together to form an intricate and unique society. These components of society affect day to day life in both obvious and also unexpected ways. Taiwan has the same core grouping of cultural elements that one would think of affecting any country: communication, religion, ethics, moral values, social structure, and education.
However, the main elements which control the actions of most individuals and society as a whole will differ from other countries. For Taiwan, education and religion along with social structure play the major roles in the shaping of Taiwanese culture. It will be found that the main, guiding cultural elements in Taiwan, such as their religions, the sources from which they get their values and attitudes, and also their feelings of responsibility, are especially different from the main cultural elements guiding most of the western world. 1. 2. Communication Communication plays a major role in any functioning society.
The way people communication and interpret the communications of others can drastically shape the actions of a society. Communication within a culture can usually be defined as either low context or high context. In low context cultures, “cultural behavior and beliefs may need to be spelled out explicitly so that those coming into the cultural environment know how to behave” (Satterlee, 2009). On the other hand, in high context cultures, “as a result of years of interaction with each other, many aspects of cultural behavior are not made explicit, because most members know what to do and what to think” (Satterlee, 2009).
Communication within Taiwan is high context, with more nonverbal forms of communication used than in low context countries, such as the United States or United Kingdom. Even the official spoken language of Taiwan, Mandarin Chinese, is a high context language (Hall, 2000). High context communication. High context communication implies that “there is less verbally detailed communication and less written/formal information. Instead, there is a more subliminal understanding of what is communicated” (Kuo-Ying & Majtaba, 2010). Duties and responsibilities are frequently assumed or subtly implied rather than directly assigned or commanded.
Elements of communication in high context cultures such as Taiwan include indirect and embellished verbal messages, avoidance of directly challenging another person’s opinions, and situational changes. Also, an importance is placed on personal face-to-face interaction. Nonverbal communication. Nonverbal communication plays a large role in the communication process in high context countries like Taiwan. Elements, such as facial expression, eye movement, the tone of voice, gestures, and body language are all important parts of communication within Taiwanese culture.
Religious beliefs Taiwan has a large population of people practicing eastern religions such as Buddhism, Taoism and small bits of Confucianism, as well as a small but growing Christian and Catholic population (Chou, & Chen, 2005). It is also common for individuals to do some mixing of religions to accommodate their personal ideas or desires. Most religions in Taiwan incorporate ancestral worship, which is a large part of the religious practices in Taiwan. Ancestral worship even affects national holidays within Taiwan. Ancestral worship in Taiwan.
Ancestral worship is a religious act born from the belief that an individual’s ancestors have a continued existence after death and that these spirits of deceased family members have the ability to influence things in the physical world. Ancestral worship is practiced by some out of respect and honor for their ancestral heritage. For others, however, it is practiced more out of fear of upsetting spirits that may possibly influence the individual’s fortune on earth. In Taiwan, several national holidays are focused around ancestral worship practices.
Among these holidays is Tomb Sweeping Day, a holiday where families visit the graves of their ancestors to attend to their burial place as well as pay homage. Another holiday which sprang from the traditions of ancestor worship is Ghost Festival, which is a time where people place food outside their homes to feed wandering spirits. Chinese New Year also has its roots in the traditions of ancestor worship and is a time often used by families to pay their respects to their ancestors (Newell, 1976). The role of Buddhism in Taiwan.
Buddhism and Taoism are the two foremost religions practiced in Taiwan. Combined, they are practiced by more than 75% of the religious population in Taiwan (USDS, 2008). Although Buddhism teaches the putting aside of earthly ties and possessions, including family, influences from both Taoism and Confucianism and integrated some forms of ancestral worship into practiced Buddhism within Taiwan. The role of Taoism in Taiwan. Taoism and Buddhism together are the two largest religions in Taiwan. The beginning of the Taoist religion came from the early Chinese nature worshipers.
Taoist beliefs center on the idea that all things have a natural order and that through obtaining harmony with nature one can obtain eternal life. These beliefs add to the non-confrontational aspects of Taiwan’s high context culture. The role of Confucianism in Taiwan Confucianism, though practiced in Taiwan by lesser numbers than Taoism or Buddhism, is to many “an honored school of thought and ethical code” (USDS, 2008). Very similar to Taoism, Confucianism has more of a focus on performing well within society and also ritualistic ancestor worship. The Role of Christianity in Taiwan. Christian churches have been active in Taiwan for many years, and today, the population includes a small but significant percentage of Christians” (USDS, 2008). Both Catholic and Mormon churches are set up in Taiwan, but their numbers are much smaller. A majority of the aboriginal population in Taiwan are Christian. Ethical practices Ethical standards are often tied very closely to the culture in which they are practiced. According to Stedham, Yamanura, and Lai in an article examining Japanese and Taiwanese ethics: “ethics cannot be understood independent of the local cultural fabric” (2008).
Taiwanese tend to be very utilitarian representing “a collectivist culture that tends to be more homogeneous and has a greater group orientation” (Muk, 2007). Therefore, ethical decisions made by Taiwanese people are likely to focus on the wellbeing of their social group. Values and attitudes “Values are invisible and a ‘core element of culture’. These invisible values become evident in behavior. Decision making and the resulting actions and behavior are manifestations of the predominant values in a culture” (Stedham et al. , 2008).
In Taiwan, many of the values center around the individual’s social groups, most notably, the family. Saving face is another factor which often influences and motivates decision making within the Taiwanese culture. The concept of face is “related to the preference for harmony and avoidance of conflict. One aspect of face is concerned with a person’s moral character which can only be earned by fulfilling one’s obligation to others” (Stedham et al. , 2008). Face also includes “one’s reputation or prestige which can be earned through accomplishments or through bureaucratic or political power” (Stedham et al. 2008). Great lengths will be taken to avoid situations which might cause damage or embarrassment for one’s self or other resulting in a loss of face. Another factor affecting Taiwanese cultural attitudes is the concept of guanxi, which literally translated means relationship. Having a good reputation and relations on both a personal and professional level is very important to Taiwanese people. Attitudes toward gender within Taiwanese society. Gender, though in the process of equalizing, still plays an important role within Taiwanese society.
Research indicates that women in Taiwan’s job market “suffer lower earnings than men as job opportunities are not made available to them due to the labor market discrimination, family responsibilities, or lack of job mobility” (Bishop, Gronder, Liu, & Chiou, 2007). However, due to the fact that Taiwan’s industry is constantly growing, with more jobs in the labor market being filled with female workers, discrimination against females in both hiring and compensation is effectively diminishing over time (Bishop et al. , 2007). Generational differences.
Younger generations tend to follow the religious or ethical guidelines set by their predecessors more out of tradition than true belief. Therefore, there is some movement away from previously accepted religious thoughts and ideas within the younger generations in Taiwan. Recent research indicates that “young Chinese people seem not to identify themselves with traditional Chinese values and Confucian ethics. Maybe it is the result of conflict between Eastern and Western cultures. However, traditional thoughts still significantly influence most people in Chinese ocieties” (Lin & Ho, 2009). Social structures Social structures are very important in Taiwan because the culture is quite Unitarian in its design. One of the largest and most central social structures in Taiwan is family and filial piety. Religion, because of its widespread acceptance, is also a major social structure in Taiwan. Another important social structure is politics with many people in Taiwan voicing their opinions on political matters, especially those matters dealing with mainland China.
Military service also has bearing within society, and is an inevitable part of young men’s lives in Taiwan due to the fact that military service is compulsory. The importance of filial piety. Especially popular in Confucian households, filial piety is, along with brotherly love, considered the ‘roots’ of humanity. It is believed that the way perfect virtue and human perfection will become evident as an individual shows care and respect for these ‘roots’ of humanity (Ruiping, 2006). This belief translates into strong familial ties within the Taiwanese culture, as well as deep feelings of responsibility to one’s family.
The cultural effects of politics. A Datamonitor country profile of Taiwan stated: “the issue of reunification with mainland China continues to dominate domestic politics and international relations. With both the People’s Republic of China (the mainland) and the Republic of China (Taiwan) claiming to be the legitimate authority over Taiwanese land, frequent tensions between the two are common” (2010). Within Taiwan, the debate over international policy with China is ongoing, with some in favor of increasing ties with the mainland and others advocating more independence for Taiwan.
Another aspect of the strained relationship between Taiwan and China is the fact that China has greater influence in the global arena and has therefore been able to stop Taiwan’s efforts in seeking to gain global recognition as a sovereign national by the United Nations. China has also threatened severing diplomatic standings with any country to officially recognize Taiwan as its own nation. Therefore, many countries, including the United States maintain unofficial diplomatic ties with Taiwan, keeping their official diplomatic status with China intact.
Mandatory military service. It is written into Taiwanese law that males between the ages of 18 and 22 are eligible for selective compulsory military service. Service duration is 12 months. Males students seeking higher education can obtain deferments, were they have several years to complete their education before serving their time in the military. Also, any citizen between the ages of 19 and 36 are considered eligible for drafting into the Taiwan military (USDS, 2008). Education Education is a very important part of Taiwanese society.
Because of the high population density in Taiwan, there are high levels of competition for spots in top universities as well as positions in the job market. Academic excellence is so emphasized by parents that it often creates stress for students, who feel pressured to be the best. Emphases on education. Even though Taiwan’s laws mandate education through the ninth grade, approximately 95% of students go on to some form of higher education. Many parents see education as the best way to advance their children’s future. Taiwan also has a large number of cram schools for subjects ranging from math and English to sports.
Students will often spend several hours after the normal school day or on weekends getting extra tutoring and study at cram schools. High stress levels in education faced by students. According to statistical analysis by Cheng Kai-Wen, some of the biggest contributors to stress for Taiwanese college students include fear of inferiority, excessively high expectations from parents, anxiety about the future, and lack of sleep (2009). Many parents believe that a better life can be achieved through academic excellence and therefore push their children to perform well in school.
This mind set from parents can lead to children who feel guilt or shame when they are not performing up to expectations. Though Taiwan has not seen the high rates of student suicide that its Asian neighbor South Korea has experienced, it is not unheard of for students to take their own life after poor test performances. Higher education. Higher education is popular in Taiwan and, due to an increasing number of universities, greater numbers of students are able to attend under-graduate and graduate schools. How are these elements and dimensions integrated by locals conducting business in Taiwan?
Successful businesses will understand the culture they are operating within and seek to incorporate elements of that culture into their policies and practices in order to be more appealing to their target markets. Therefore, many elements of culture will automatically be integrated into locals’ businesses. In Taiwan, cultural elements such as religion, education, and attitudes are sown into the fabric of local businesses. This section will examine how elements such as religion, education, and ethics are taken from the surrounding culture and integrated into local businesses within Taiwan. 1. 2. 3.
Religion in local business Research done on the affects of religion in business negotiation styles indicated that the principles of Buddhism as well as Confucianism can have an effect on the business making decision made by Taiwanese (Farazmand, Tu, & Daneefard, 2011). Business decision made will take into account the good of the group over the good of the individual. Also, because of the high religious population, there is a large market for items used in religious practices such as incense burners, paper money, good luck charms, prayer beads, and religious ornaments. Education and its effects on business
With increasing levels of education in Taiwan has come increased competition for better and higher paying jobs. This increased competition has led to a rapid growth in the number of people obtaining higher education degrees, such as masters or doctorate degrees (Wang, 2003). Taiwan’s economy is very open to small business owners, which gives those with the education and desire to start their own business a welcoming and available environment. Business ethics and attitudes In Taiwan it is believed that “ethical standards and moral conduct must come from within business people” (Cavico, Majtaba,Venezia, & Venezia, (2011).
Many ethical standards and cultural attitudes in Taiwan are rooted in their religious beliefs, especially the teachings of Buddhism, Taoism, and Confucianism. Taiwanese businesses incorporate these standards of hard work, and family responsibility. Often, the unwritten cultural norms are relied upon to govern the decisions of employees. Also, the concept of corporate social responsibility is gain more popularity in Taiwan, with more people calling for corporations to operate in a more honest and open manner (Ip, 2007). Generational differences.
As the new generations shift away from the traditional religious practices and beliefs held by previous generations there is also a shift in moral and ethical standards. Thought possibly to be a result of the increasing embracement of Western culture, this shift in viewpoint within Taiwan could actually be beneficial for American businesses within Taiwan due to the fact that the younger generations are moving more towards Western values and ideas. After researching moral cognizance in both the United States and Taiwan, Cavico et al. ecommended a stronger push not only for business ethics education, but for the incorporation of teaching ethics into every aspect of education (2011). How do these factors compare with culture and business within the United States? The differences between high context and low context cultures include communication differences, relational differences, as well as religious and educational differences. Research has shown that there is a “significant difference between Taiwan and America in individualism/collectivism attitude” (Jung-Tsung, 2010). Communicational differences
Communication differences between the United States and Taiwan involve so much more than a simple difference of spoken languages. There is a completely different style of communicating with different backgrounds of understanding as well as different personal beliefs and goals. Businesses in the United States operate within a low context culture whereas businesses in Taiwan operate within a high context culture. To cross this barrier will require American businesses to have an understanding of high context communication and managers that are capable of working within a high context environment.
Comparing high context and low context cultures. “High context communication tends to be more indirect, ambiguous, and understated than low context communication, which is direct and precise, and expresses feelings and intentions rather open” (Usunier, & Roulin, 2010). Therefore, business communication may contain more implied concepts in Taiwan than business communication in the United States. Religion in the workplace The United States approach to dealing with religion in the workplace has been one of suppressing outward signs and discussion of religion so as to avoid any potential conflict which may arise.
Taiwan tends to be more accepting of displays of religion, probably due to their focus on group harmony. Many prominent businessmen in Taiwan are very open about their religious affiliations, making charitable donations in the name of their religion (Hoh, 2002). Religious discussion is allowed and sometime encouraged, but when issues become uncomfortable or divisive it is ignored or avoided. Education emphasis in the US compared to in Taiwan In Taiwan, there is an emphasis put on education by parents and also businesses looking to hire new employees.
In fact, education is emphasized so heavily that “attendance at cram schools is an experience that the majority of Taiwanese have while growing up” (Liu, 2012). This causes individuals to seek higher education such as graduate degrees or doctorates in order to obtain highly contended, higher level jobs. Social Structures One of the main differences between Taiwanese social structures and those in the United States is the strong family connection maintained by the Taiwanese people.
While Americans still view family as an important group in society, the feelings of filial piety in the United States are not as deep and motivating as they are in Taiwan. Also, religion, while still a factor in American culture is not as prevalent to the culture as it is in Taiwan. What are the implications for US businesses that wish to conduct business in Taiwan? Businesses seeking to conduct business within Taiwan should have a clear and complete understanding of how business is done in Taiwan.
Not only should they learn laws and regulations which will be relevant to their desired business, but they must also study the culture to understand the people and what motivates and inspires them. Businesses from the United States who are studying the culture of Taiwan will discover important differences between American and Taiwanese ways of doing business. They will then need to incorporate policy which will successfully blend the needs and goals of their business with the needs and goals of the Taiwanese culture. Possible miscommunication
Whenever companies conduct business in a foreign country, language must be taken into account. The Taiwan’s national language is Mandarin Chinese, with some of the population speaking Hakka along with some aboriginal dialects. There has been a strong push recently to learn English in Taiwan, with English classes being mandatory in school and a large number of English cram schools open for further training. Even so, the English level may be quite low, so American businesses seeking business opportunities in Taiwan should have interpreters who have a complete knowledge of both languages.
An understanding of the culture is also important when communicating and research on cultural do’s and don’ts should be conducted before initiating communication to avoid confusion and unintentional offense. For example, it is offensive in Taiwanese culture to give a clock or watch to someone as a gift because it symbolizes the termination of the relationship. A full understanding of the culture will help businesses from the United States in forming good relationships and create good guanxi for their company in Taiwan (Stedham et al. , 2008). Accommodating religious freedom
It is important for American businesses to understand and facilitate the different religious practices in Taiwan. As simple as insuring employees have adequate time off for important religious holidays and not requiring them to break their religious convictions, such as vegetarianism, respecting and accommodating the religious beliefs of the Taiwanese will help to insure the success of a prospective business there. The cultural element of avoiding conflict will help to make sure no religious discrimination or fighting will take place so businesses need not worry about that aspect as much as they do in America.
Ethical policies Businesses from the United States with operations in Taiwan should have ethics policies that are written with the Taiwanese culture in mind. They should remember that, often times, there is no need to spell everything out specifically. With the concept of corporate social responsibility become more prevalent in Taiwan, it will be important for American business to highlight appropriate social involvement (Ip, 2007). Understand employee’s family focus. One aspect that businesses can encourage their employees to focus on is family.
This will demonstrate the company’s commitment to one of Taiwan’s most important social structures, the family. The encouragement and facilitation of strong family ties will go a long way to establish a favorable public image for foreign companies operating within Taiwan. Effects of current political environment Taiwan’s economy is currently independent of China; however, any foreign business in Taiwan would be wise to watch the political relationship between mainland China and Taiwan very closely.
Taiwan has been slowly moving towards closer ties with China which would allow China to “assert increasing influence over Taiwan. As a consensus emerges in Taiwan on establishing closer relations with China, the thaw [of political tensions] is calling into question the United States' deeply ambiguous policy, which is supposed to serve both Taiwan's interests (by allowing it to retain its autonomy) and the United States' own (by guarding against an expansionist China)” (Gilley, 2010).
Should China be allowed to exert control over Taiwan’s economy and political environment it could drastically change the way foreign businesses are allowed to operate in Taiwan. The effects of national healthcare on business. While healthcare is not a major cultural issue, it is useful to note that Taiwan currently has nationalized healthcare, offering inexpensive healthcare to all their citizens. While some in Taiwan oppose this system of healthcare because it can be easily abused, national healthcare would affect businesses by lowering their employee coverage costs.
Conclusion With favorable ties to the United States and growing acceptance of the Western world, Taiwan is a promising opportunity for businesses from the United States. With careful research and consideration of the culture, Taiwan could be a very profitable venture. American companies in Taiwan should be careful not to ignore the strong cultural elements in Taiwan, such as religion, family, and communication differences. However, because of Taiwan’s willingness and eagerness to work with foreign business and to expand its global presence, it is very open to foreign commerce.
Taiwan’s rapid growth and solid economy can be a very useful tool in the future as they seek to gain wider global acceptance. Taiwan’s favorable economic situation provides the ideal environment for businesses from the United States. American businesses can take advantage of the available workforce and welcoming culture found in Taiwan. Ultimately, Taiwan is a culture that is based in tradition, yet still open to new ideas and influences. The people are friendly and accepting of foreigners into their culture. They are eager to share their culture with others.
On the business side of things, Taiwanese companies work together with many American corporations and the both the culture and regulations in Taiwan in favorable to incoming businesses. Even though Taiwan has faced many challenges in the past and will continue to face those challenges in the future, mainly the task of reaching satisfactory and beneficial foreign relationships with China, Taiwan has remained strong and continued to grow. Taiwan is certain to have a bright future in the world arena. References Bishop, J. A. , Grodner, A. , Liu, H. ; Chiou, J. (2007). Gender earnings differentials in Taiwan: A stochastic frontier approach. Journal Of Asian Economics, 18(6), 934-945. Chou, T. , ; Chen, M. (2005). An exploratory investigation of differences in personality traits and faith maturity among major religions in Taiwan. Chinese Journal of Psychology, 47(4), 311-327. Datamonitor: Taiwan. (2010). Taiwan Country Profile, 1-76. Deaton, A. , ; Paxson, C. (2000). Growth, demographic structure, and national saving in Taiwan. Population and Development Review, 26, 141-173. Erling, H. 2002). Buddha business. Far Eastern Economic Review,165(35), 54. Gilley, B. (2010). Not so dire straits. Foreign Affairs, 89(1), 44-60. Hall, E. T. (2000). Context and meaning. In L. A. Samovar ; R. E. Porter (Eds. ). Intercultural communication: A reader (9th ed. ). Belmont, CA: Wadsworth Publishing Co. Farazmand, F. A. , Tu, Y. , ; Daneefard, H. (2011). Is religious culture a factor in negotiation: a cross-cultural comparison of Iran, Taiwan and the United States. Journal Of International Business Research, 10(1), 27-44. Friedberg, A. (2005). The future of U. S. -China relations: Is conflict inevitable? " International Security 30(2), 7-45 Ip, P. (2007). Corporate social responsibility and crony capitalism in taiwan. Journal of Business Ethics, 77(1-2), 167-177. Jung-Tsung, T. (2010). Cross-cultural comparisons between Taiwan and America. Interdisciplinary Journal Of Contemporary Research In Business, 2(4), 116-129. Kai-Wen, C. (2009). A study of stress sources among college students in Taiwan. Journal Of Academic & Business Ethics,21-8. Kuo-Ying, H. , & Mujtaba, B. G. (2010).
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