How to Balance Money and Respect in Terms of Cultural Difference

Ye Li Su Ning Luo Xiaoling

摘要：瑞典公司宜家（IKEA）進駐西班牙，以擴大其市場份額。另一方面，公平貿易咖啡（來自南非的咖啡豆）在美國銷售并獲得公平的價格，以便其家人投資于保健和教育，對品質和環境保護進行再投資。宜家和公平貿易咖啡公司在運營過程中都會經歷文化差異。但是，不同之處在于，由于宜家不顧北歐和南歐之間的文化差異，宜家將變得更加發財。而公平貿易咖啡在很大程度上可能會遭受發達國家和發展中國家之間的文化沖擊。在這些情況下，宜家和公平貿易咖啡將面臨什么樣的文化沖突？當人們經歷文化差異時，他們會表現出更多的尊重或更多考慮自己的口袋嗎？

關鍵詞：文化差異;文化沖突;尊重紙張;類型;文獻評論

Abstract： IKEA， one of the Sweden company， entries into Spain in order to expand its market share. In the other hand， Fair Trade Coffee， which coffee beans come from South Africa， market their harvest through in America and receive a fair price in order to allow their families to invest in their families' health care and education， reinvest in quality and protect the environment. Both IKEA and Fair Trade Coffee will experience cultural difference during they operate their business. However， the difference is that IKEA will become more fortune since IKEA face cultural difference between North Europe and South Europe without consider While Fair Trade Coffee in large degree may experience culture shock between developed country and developing country. In these cases， What kind of cultural conflict do IKEA and Fair Trade Coffee will face？ When people experience cultural difference， will them show more respect or consider more their pocket？

Key words： Cultural difference; Cultural conflict; Respect; Money

CLC number：D368? ? ? ? ? Document identification code： A

1 Introduction

IKEA is one of the words top retailer of furniture in South Sweden. After over six decade from manufactured furniture by using wood， entering Spanish market becomes one of the global strategies of IKEA. IKEA creates its products with its unique Swedish culture and the company regards “creating better daily life for many people” as its vision. Therefore， IKEA intends to expand its market share globally. （Inter-IKEA. Systems B.V， 2020） In this time， European markets offers IKEA a lot of consumers and Spain as one of the European markets， appears large market potential. （ Finding Universe， no. date）

With regard to Fair Trade Coffee， or equal exchange coffee， it means coffee that “trade by bypassing the coffee trader and therefore giving the producer（and buyer） higher profits. ”（Coffee Research Institute， 2006） In 2000， Starbucks began to purchasing Fairtrade certified coffee and helped US growing the market. Starbucks paid average price of $1.56 per pound for our premium green （unroasted） coffee in 2010， and bought 269million pounds of coffee in fiscal 2010.（Starbucks Corporation， 2020） Starbucks， as a role of supplier， certified coffee from South Africa directly supports a better life for farming families in the developing world through fair prices， community development and environmental stewardship. “Fair trade coffee farmers market their own harvests through direct， long-term contracts with international buyers， learning how to manage their businesses and compete in the global marketplace.” （Grounds For Change， 2020）

2 Methodology/Findings

In terms of IKEA， its Swedish products are favourable in Spain market since most people there are rely on cost reduction and cost avoidance as core metrics. The following survey conducted by? ? ? shows that people always use products with cost reduction and cost avoidance， flowing by products with higher efficiency.

For Fair Trade Coffee， people may face cultural conflicts while they do business because of the different value judgement. In order to find out the problem specifically， firstly， Geert Hofstede will be applied to both IKEA and Fair Trade Coffee as follows：

According to Geert Hofstede （no. date）， the cultural dimensions of IKEA and Fair Trade Coffee are shown on the following diagrams. Among these diagram， IKEA exists the cultural difference between Sweden and Spain and Fair Trade Coffee shows the cultural difference between South Africa and America.

From Chart 2， it can be clearly seen that Sweden （score of 31）has lower power distance than Spain （score of 57）， with regard to individualism， Sweden shows higher score （71） than Spain （51）. Take consideration of Masculinity， the score of Spain is more than eight times as much as that of Sweden and with respect to uncertainty avoidance， Spain （score of 88） presents 39 score much than Sweden （score of 49） and in terms of Long-term Orientation， Sweden （34） appears almost half score of that in Spain （61）. Considering indulgence aspect， Spain shows more than two times as much as that of Sweden. （Hofstede Insights， 2020）

According to Geert Hofstedes 6-D model of national culture， what need to be emphasized is that IKEA with Swedish value shows differences between Spanish culture mainly focus on Power Distance （PDI），Masculinity， Uncertainty Avoidance （UAI） and Indulgence. （Hofstede Insights， 2020） People with higher PD scores （like Spain） indicates that Spain is a hierarchical society. With hierarchical value， Spanish people intend to be more centralized and accept a hierarchical order in which every body has a place and which needs no further justification. With regards to Masculinity， Spain is a highly masculinity society while Sweden is intend to be more feminine. In other words， Spanish people intend to educate their children in search of harmony， refusing to take sides or standing out. （Hofstede Insights， 2020） Therefore， in Spain， men are supposed to be tough and from Mars， in the meanwhile， winning and quality is important and they consider big is beautiful. In Sweden society， conflict is to be solved through compromise and negotiation. In terms of Uncertainty Avoidance （UAI）， Spain with very high UAI score means that they make life more complex than Sweden and Spain is considered the second noisiest country in the world. “A recent survey shows that 75% of Spanish young people wanted to work in civil service （i.e. a job for life， no concern about the future） whereas in the USA only 17% of young people would like it.”（Hofstede Insights， 2020） Take consideration of Indulgence， Spanish people prefer to control the gratification of their desire and consider indulging themselves is somewhat wrong. Whats more， people in Spain look for quick result without delays. （Hofstede Insights， 2020）

It can be clearly seen from the bar chart 3 that South Africa （score of49）has higher power distance than the USA （score of 40）， with regard to individualism， South Africa shows lower score （65） than the USA （91）. Take consideration of Masculinity and Uncertainty Avoidance （UAI）， the score of South Africa is more or less the same as that of the USA. In terms of Long-term Orientation， South Africa （34） appears 8 score higher than that of the USA （26）. Considering indulgence aspect， South Africa shows more or less the same as that of the USA. （Hofstede Insights， 2020）

Based on Geert Hofstedes 6-D model of national culture， it is important that Starbucks， as the main supplier of Fair Trade Coffee， shows American value that is different with the one of South Africa. These value mainly focus on Individualism （IDV），Uncertainty Avoidance， Long-term Orientation and Indulgence.

“Within American organisations， hierarchy is established for convenience， superiors are accessible and managers rely on individual employees and teams for their expertise.” （Hofstede Insights， 2020） Take consideration of Individualism， American present “liberty and justice for all”. （Hofstede Insights， 2020） Therefore， American society and government emphasis on equal rights. Because people in the USA think highly of their individual capability， American often independent and look after themselves and their immediate families only and should not rely too much on authorities for support. That means， Americans are the best joiners in the world. Otherwise， it also mean that it is often difficult for American to develop deep friendships， especially for men in the USA. “In business world， employees are expected to be self-reliant and display initiative. Also， within the exchange-based world of work we see that hiring， promotion and decisions are based on merit or evidence of what one has done or can do.” （Hofstede Insights， 2020） The relationship of empolyer /employee is contractual based on mutual advantage and hiring. Promotion decisions in South Africa are to be made based on merit only， which is similar to the USA and management in South Africa society is the management of individual. Furthermore， with regards to Uncertainty Avoidance， American present “a fair degree of acceptance for new ideas， innovative products and a willingness to try something new or different， whether it pertains to technology， business practices or food.” （Hofstede Insights， 2020）

In terms of Long-term Orientation， South Africa shows more normative than the USA. People in South Africa have a stronger concern with establishing the absolute Truth than American. People in South Africa “exhibit great respect for traditions， a relatively small propensity to save for future，? and a focus on achieving quick results.” （Hofstede Insights， 2020） As far as Indulgence is concerned， American place a higher degree of importance on leisure time and act more as they please and spend money as they wish than people in South Africa.

Applied Hofstedes model of national culture to IKEA， Spanish people especially emphasize personality， high quality of products and pragmatism. In IKEA， the ‘business innovations “include new materials that contribute more to a sustainable environment and are less costly or using the newest ways of packaging， handling and transporting materials.” （Connell， L.，2019） Considering Swedish in IKEA group has its knowledge about customers， understanding the purchasing factors that influence customers decision making. In order to drive costs down， IKEA find out new and innovative ways to incorporate low cost model in its business. Moreover， IKEA call it “Democratic Design”， because they believe good home furnishing is for everyone. Additionally， IKEA workers pack and ship their products in space-efficient flat-packs， storage and transportation costs are reduced. The business idea of IKEA devote to create products that have a beautiful design， good function， are of good quality and available at a low price. Therefore， today， IKEA is the worlds largest furniture retailer， recognized for its Scandinavian style. That means? Scandinavian style of IKEA products is also popular in Spain. （Connell， L.，2019）

In the other hand， “Fair trade coffee growers are guaranteed a minimum ‘fair trade price of $1.26/pound FOB for their coffee. If world coffee price rises above this floor price， fair trade coffee farmers will be paid a small （$0.05/pound） premium above market price.” （Starbucks Corporation， 2020） Fortunately， coffee farmers can offer a certain amount of credit from coffee importers against future sales， helping farmers stay out of debt to local coffee “coyotes” or middlemen. （Coffee Research Institute， 2006） However， since the coffee industry is volatile， unpredictable and subject to dramatic price fluctuations， coffee farmers in South Africa may face the rise of living income and the low receive of credit. It seems that Fair Trade Coffee will face relatively severe cultural conflict within Starbucks while fundamental problem that Fair Trade Coffee faced is the price difference. （Coffee Research Institute， 2006）

Therefore， in order to make further analysis of the fundamental problem of Fair trade coffee， the theory of Price Scissors will be introduced following the analysis of the national culture. This theory is mentioned by Leon Trotsky and indicates the trend lines of agricultural and industrial price indexes. Based on Trotsky， price scissors can be drawn on the graph with time on a horizontal axis and price level on a vertical axis. Then “the plotting of industrial and agricultural prices on the graph will look like a pair of scissors， meeting at a juncture and then sharply moving in opposite directions. （Chappelow， J.， 2019） According to Chappelow， J.， 2019， “Price scissors is a term that refers to a sustained change in the terms of trade between different goods or classes of goods. Often this can involve a countrys drop in the price received for a developing economys agricultural exports，while its manufactured goods imports rise in price or remain relatively stable.” This， however， will easily lead to the conflict that the rural agricultural population contribute to the decline in incomes and the rise cost of living. （Chappelow， J.， 2019）

Based on the theory of Price Scissors， The prices of industrial and agricultural goods have got two direction， which leads to two different situations. Firstly， The prices of industrial and agricultural goods shot in opposite directions， that means both of the price of coffee beans in Fair Trade Coffee are going to be declined and the industrial prices will continue to decrease. This phenomenon will ultimately leads to the drop of the living income for farmers of South Africa in Fair Trade Coffee， making them hard to buy manufactured goods. Once the manufactured goods of Fair Trade Coffee are difficult to be bought， the output of Starbucks coffee will be stopped and moved to subsistence farming and famine may follow. （Chappelow， J.， 2019） Secondly， a sharp increase in the price of textiles create a price scissors. In this occasions， domestic finance Fair Trade Coffee will struggle to cope with the burden of paying raw materials and other textiles， while being unable to sell their products at the price they do as usual. Thus， the income for farmers in South Africa of Fair Trade Coffee will become increasingly scarce， while their cost of living will rise because of higher prices of the coffee drink of Fair Trade. （Chappelow， J.， 2019）

In general， Fair Trade Coffee farmers face the issue which the price gap between declining living income and increasing living costs. （Chappelow， J.， 2019） This problem become urgent and severe in certain degree. In order to solve this problem， an estimated price for Fair Trade Coffee that is not normally priced in the market or sold in the market need to be analyzed. Therefore， Shadow Pricing is going to be mentioned here.

The term shadow pricing is used to refer either one of two situations. One is “the actual market value of a money market fund share even if it's stated value is $1 per share” and the other is “the assignment of a dollar value to an abstract commodity that is not ordinarily quantifiable as having a market price but needs to be assigned a valuation to conduct a cost-benefit analysis.” （Hayes， A.， 2019） However， Shadow pricing is more frequently used in the process of cost-benefit analysis in business decision making. Take the dilemma of Fair Trade Coffee into account， what can be account for is not just the cost value of the produce， but more importantly， the costs of benefits of intangible assets that are difficult to assign a dollar value （Hayes， A.， 2019） The intangible asserts here are something that like goodwill， brand recognition and intellectual property and so on. Thats how to help Fair Trade Coffee farmers to stay out of the exploitation of the capitalist.

Shadow pricing can avoid the problem of exploitation in a certain degree and relieve the cultural conflict within Fair Trade Coffee. However， it seems to be too idealistic since the shadow price does not exist and it is also a subjective and inexact， or imprecise and endeavor. If business like Fair Trade Coffee intends undertake a project or investment， it often perform a comparative analysis of the project or investment cost against the projected benefits.（Hayes， A.， 2019）

3 Discussions and conclusions

In conclusion， Based on Edward W Said， the purely Western humanities appear the Orientalist equivalent of attempts. Therefore， it seems to them that culture is antipositivistically， intuitively and sympathetically. Here， IKEA， Spain and America represent one of the western culture which is “ the crisis imposed on it by such threats as barbarism， narrow technical concerns， moral aridity， strident nationalism， and so forth. However， South Africa as the opposite site to the Western culture， which is called non-Orientalist culture， “perforce more immediately responsive to the threats to humanistic culture of a self-aggrandizing， amoral technical specialization represented， in part at least， by the rise of fascism in Europe.” （Edward W. S， 2003） In South Africa， about 1.5% of the population belief Islam and major economic immigrants from India and Pakistan in South Africa also contribute to the Muslim community before the end of apartheid. （Sawe， B. E.， 2017） Thus， Fair Trade Coffee appears both Islam from and capitalism from America. “The notion of a type —— Oriental， Islamic， Arab， or whatever —— endures and is nourished by similar kinds of abstractions or paradigms or types as they emerge out of the modern social sciences.” （Edward W. S， 2003）

In general， Greater different value exists in Fair Trade Coffee rather than in IKEA， however， when it comes to benefit， the first thing should be think is to balance the consequence between morality and just money. Out of the rule of law， what can be judged is the ethics for everyone. When someone try to deal with something， it is wise for he to measure the order of priority for event and respect each other and try his best to get things in a virtuous cycle instead of think highly of money to get sever problem to be avoided in a large degree.

（責任編輯：陳之曦）