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Culture refers to the cumulative deposit of knowledge, experience, beliefs, values, attitudes, meanings, hierarchies, religion, notions of time, roles, spatial relations, concepts of the universe, and material objects and possessions acquired by a group of people in the course of generations through individual and group striving.

Examples of culture: Norms. Norms are informal, unwritten rules that govern social behaviors, Languages, Festivals Rituals & Ceremony, Holidays, Pastimes, Food, Architecture.

Different types of culture in Malaysia since Malaysia is one of the multi-racial countries. Malaysian enjoys the different type of culture such as food. Variety type of food Nasi lemak, Wan Tan Mee and Tosai.

Culture plays an important role all over the world. All country have their own culture.

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How does cultural diversity impact an organization?

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How does cultural diversity impact an organization?

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People of many ethnicities, ages, genders, beliefs, and lifestyles make up today's workforce.

If managed well, diversity can give an organization a competitive edge, but if not, an unwelcoming work climate can hurt a firm's bottom line.

A varied workplace culture would benefit a company in a variety of ways, particularly in terms of productivity and efficiency.

Allowing culturally different employees to discuss together could result in a diverse range of solutions.

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Diversity: 5 Reasons Why Workforce Diversity is Good for your Workplace

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NEGOTIATION
Culture has a significant impact on how individuals think, interact, and act. It also has an impact on the types of deals people conduct and how they negotiate them. Because of the immense diversity of the world's cultures, no negotiator, no matter how competent or experienced, can fully comprehend all of the cultures that may be met. In negotiation have some process which involve the culture diversity. First process is negotiation goal: which is  contract or relationship. Negotiators from various cultures may have different perspectives on the aim of a negotiation. For dealmakers from some cultures, the first and foremost purpose of a business negotiation is a signed contract between the parties. Other cultures believe that the purpose of a negotiation is to create a relationship between the two parties rather than a signed contract. Next is negotiation attitude. Due to cultural, psychological, or both variations, businesspeople appear to approach deal-making with one of two main attitudes: that a negotiation is either a process in which both parties benefit (win-win) or a fight in which one side must win and the other loses (win-lose).Win-win negotiators see deal making as a collaborative, problem-solving process; win-lose negotiators view it as confrontational. Moreover, personal style. A negotiator's personal style refers to how he or she addresses others, utilizes titles, dresses, speaks, and interacts with others. The personal style of negotiators is heavily influenced by culture. A formal negotiator insists on addressing counterparts by their titles, avoids personal anecdotes, and avoids questioning about the private or familial lives of other negotiating team members.

An informal negotiator strives to start the conversation on a first-name basis, swiftly establishing a personal, pleasant contact with the other party. Each culture has its own formalities with their own special meanings. Lastly, emotionalism. Almost every account of bargaining behavior in other cultures emphasizes a group's emotional propensity. Varied cultures have different standards on when and how to exhibit emotions, which are also brought up during negotiations. Dealmakers should make an effort to comprehend them.

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Example of Negotiation process impact by culture.

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Example of Negotiation process impact by culture.

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Negotiating goal: Contract or relationship?

For example, in a poll of over 400 people from twelve different nations that were published in The Global Negotiator, the researcher discovered that while 74% of Spanish respondents said their goal in negotiation was to get a contract, just 33% of Indian executives agreed.

Asian negotiators, whose primary purpose is to build a relationship, devote more time and effort to the preliminary stages of negotiations, whereas North Americans prefer to rush through this stage of the process.

Personal style: Informal or formal?

For example, that Germans have a more formal style than Americans. For an American, addressing someone by their first name is a sign of friendship and hence a positive trait.

When a Japanese person meets someone for the first time, using their first name is considered disrespectful and thus unacceptable.

Communication: Direct or indirect?

You can expect a straightforward and definite reaction to your offers and queries in a culture that values directness, such as the American or Israeli cultures.

Interpreting seemingly imprecise comments, gestures, and other indicators can help you get a response to your offers in cultures that rely on indirect communication, such as the Japanese.

For example, the indirect ways in which Japanese negotiators communicate displeasure have frequently caused foreign corporate leaders to feel that their offers were still being considered when they were actually rejected by the Japanese side.

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Cultural differences can play a role in interview expectations. From appropriate hand gestures to attire expectations, it can be difficult to know just how to put your best foot forward. When not aware of cultural differences, interviewees and interviewers can take each other’s behavior's as rude, disengaged, or not serious, or they may simply get confused by the whole situation. When we attend an interview this is all the process we should look after. The first is Formality. An interview should be treated as an exam, and we should treat it as such. Keep in mind that some cultures require highly formal interactions during the interview, but others are happy with a more relaxed dialogue that displays hints of our individuality. Next, body language. We send 95 percent of all communication by the way we move. It's all about your tone of voice, gestures, and posture. Although eye contact is desirable, recruiters are aware that eye contact patterns differ by culture, thus it is not required. Moreover, Interaction: In a normal American interview, how you speak and portray your experience may differ significantly from what is anticipated elsewhere. You're expected to sell yourself in some culture. Others may anticipate candidates to be more quiet or inquisitive. Furthermore, appearance. It can be difficult to know how to dress for cross-cultural interviews. Some cultures believe that smart clothing shows sophisticated abilities. In some societies, there is a fine line between wearing well and dressing too well, which means your attire could be perceived as elitist.

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Question asked by the interviewers

Japan job interviews Japan are frequently multi-staged and group-oriented. During the interview, the interviewer is likely to ask various personal questions. These can include questions about the interviewee's age, family situation, how long he plans to stay, his future aspirations and personal career ambitions, and so forth. But in the US, the interview itself could be more forward-looking. The interviewer is likely to inquire about your professional ambitions and plans. The interviewee is frequently asked where he sees himself in five years.

Body Languages

Extended direct eye contact is considered impolite and disrespectful in Asian countries but the same eye contact has the opposite meaning in the US. This is in sharp contrast to interviewing in the United States, where maintaining eye contact throughout a job interview is required to demonstrate confidence and professionalism.

Communication

Speak loudly and clearly may be construed to be a positive trait in the UK. But in many other countries such as Malaysia they believe speaking softly is good quality. A job interview in the United States is all about selling oneself. The interviewee should be able to sell the benefits and skills he will contribute to the company. In general, the tone of the interview is mostly optimistic, positive, and enthusiastic. But in Japan, the interviewee should know about their company, their vision, mission.

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Advertising attempts to sell goods by appealing to consumers through gender identity, celebrity endorsement, romantic imagery, notions of achieving happiness or contentment and other cultural dimension  not tangibly related  to the advertised product or service. Advertising is part of  the glue that holds our culture together which allows us to share a common experience in a landscape populated by brands, images, logos and even jingles.  It  reflects and influences our  cultural  value  and therefore it cannot be ignored when building effective advertising. The standardized approach of advertising the product as “one sight one sound one sell” offers efficiencies in creation and production.  In practice, the standardization perspective has not worked out too well.  One reason for the failure of global advertising is that consumers in different countries have varying conventions  and customs, so they simply do not  use products the same way. So it means that we all have different perceptions of the world and that we will not react the same way to the same things mentioned.

Language
It may seem somewhat obvious to state that language is the key to effective cross cultural advertising. However, the fact that companies persistently fail to check linguistic implications of company or product names and slogans demonstrates that such issues are not being properly addressed. It is imperative therefore that language be examined carefully in any cross cultural advertising campaign.

Communication Style

Understanding the way in which other cultures communicate allows the advertising campaign to speak to the potential customer in a way they understand and appreciate. Generally communication should be straight forward and to the point. But when attempting to relate to different cultural markets each respond to a different style and understanding the style that is appropriate is vital in creating an effective marketing campaign for any business. Know whether each culture prefers direct or indirect communication, aggressive or passive calls to action, emotional or rational appeals, and a fast or slow pace of speech can help to establish connections with consumers, since we will be speaking to them in familiar ways.

Image

Images are also culturally sensitive. Whereas it is common to see pictures of women in bikinis on advertising posters on the streets of London, such images would cause outrage in the Middle East. The bottom line is that to create ads that appeal to different cultures, remember to be aware of the principles and traditions observed in each culture. The best way to accomplish this is identify your target market’s needs, wants and desires. Analyzing all of the images in an ad for cultural acceptance and understanding that different colors and settings evoke different emotions in different cultures.

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CULTURE EFFECT ON ORGANIZATION STRUCTURE

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Culture shape organization base on the culture adopted. For example An organization that doesn't adopt the practice of diverse cultures does not succeed well in the global business level. The lack of people from different religions, different languages, and other diverse beliefs makes it difficult for the organization to conduct business with clients coming from a specific religion or language  due to the absence of employees from diverse cultures.
The people at the international level may have different cultures that may be difficult to understand if a company lacks diversity in culture.

The Structure of Earnings Inequality in the United States and Japan. For example, American manufacturing employees' earnings are shaped heavily by job characteristics, positions in the authority hierarchy, and (for workers) union representation. The earnings of Japanese employees are conditioned more by "life-cycle "variables such as age and by the organizational structures and processes associated with firm internal labor markets-seniority, promotions, and internal training.

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The rewards system use by organization such as  wages,  salaries,  bonuses, commission. They can be a significant influence of culture. For example an organization where employees are usually paid using commission or performance. In the United States, specific patterns of incentives vary due to enterprise structure and industry characteristics. In Japan, most incentive mechanisms are based on the qualifications of employees and the length of service. Japanese staff emphasize awards for team achievement rather than individual awards.

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At the beginning of the company’s establishment, it is inevitable to conduct cross-border trade. At this time, different religious beliefs and cultural differences will cause difficulties for the establishment of the company. For example, McDonald’s in India, because of the low local wages, The local price is very cheap. Secondly, because of the popularity of vegetarianism in India, all foods must be marked whether they are vegetarian or not, and even beverages need to be marked. This also causes all McDonald's products in India to have corresponding labels. Secondly, Because of religious beliefs, all foods involving beef and pork are absent. For example, the Big Mac has been replaced with a large chicken burger, and a vegetarian burger has been specially introduced in India, and the seasoning sauce of the burger will be converted into the curry. All are affected by differences in religious beliefs and cultural customs, so you need to consider the beliefs and culture of your country when you start a business, because if you make mistakes in these fields, you will not be tolerated by people in your country, so multinational companies We must pay attention to these factors at the beginning of entrepreneurship and make various plans and arrangements, so as to effectively carry out entrepreneurship.

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Because of different cultural systems, different countries have different labor and personnel policies. For example, when recruiting, Western countries like to determine the salary of employees based on the nature and ability of their work, while in China, Chinese companies often value the interpersonal communication of employees. Relationships, work experience, and academic qualifications. Compared with other countries, companies hope that employees can work in different companies. Some companies in China do not want employees to change jobs. They often restrict the brain drain under certain conditions. It will cause problems for the company’s operations. For example, the company’s multinational business has different cultures in the host country and its own country, and the two cultures will have an impact on the company. Compared with smaller companies, these impacts are often Fatal, for example, differences in labor and personnel policies often make it impossible for companies to quickly recruit some professional talents in multinational businesses, resulting in business failure or slow business progress.

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Examples of communication style in advertising 

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Examples of communication style in advertising 

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An explicit communicator (e.g. USA) assumes the listener is unaware of background information or related issues to the topic of discussion and therefore provides it themselves.

Implicit communicators (e.g. Japan) assume the listener is well informed on the subject and minimises information relayed on the premise that the listener will understand from implication.

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MEETING
People are different and meetings with multicultural employees and/or clients require a unique approach. Different countries flow different concepts. This makes having cross-cultural meetings difficult but could also give us a broader perspective of the company or situation.
Cultural differences in how they manage time
Although time is the same everywhere, it is not viewed in the same way everywhere. Consider holding a meeting with someone who is multitasking between phone calls and allowing individuals to enter and exit the room. Would we consider this a "waste of time"? Of course, some countries will think that as a waste of time but some countries will accept that way. There are 2 ways to describe that, which are the monochronic way and the polychronic way. Monochronic: People in this society are acutely aware of the passage of time. In English-speaking countries and Northern European countries, terms like "wasting time" and "losing time" are common. There is a strong sense of time, and arriving late for an appointment or meeting is considered impolite and disrespectful. Everyone's time is valuable, and it should be used wisely. People in a monochronic culture focus on one thing at a time, plan carefully and are concerned with completing tasks in a systematic way. But in polychronic cultures have quite various views on time. They multitask and feel that time is flexible and uncontrollable. The agenda of a meeting won't always be followed at a company where this culture is strong. Instead, attendees are expected to multitask during the meeting, leave early, or answer phone calls.
Cultural differences in communication
It's not about reading between the lines, which would be inefficient, but communication should be plain. Because monochronic cultures aim to be as efficient as possible, unnecessary pre-meeting chit-chat and indirect communication are not tolerated. Direct communication is simple and honest; you can say exactly what you intend. On the other hand, in many nations around the world where a polychronic culture dominates, communication is cautious and concerned with maintaining one's face. They wish to safeguard another's regard and honor.

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Cultural differences in how they manage time
In Japan, the Japanese are very serious in their meeting . They do not like to waste their time.It is necessary to follow to a meeting's agenda and time constraints. If a meeting runs late, it reflects poorly on the attendees. They appear inefficient and confusing in communication, or they did not prepare enough to end the meeting on time. As a result, it is critical to terminate the meeting on time in order to avoid "losing face" and preserve your dignity.
But for polychronic countries such as Latin America, Southern Europe, and the Middle East, has a very different take on time. They would not stick with the agenda, they will do multitasking while attending a meeting. They also did not stick on a time, they prefer flexible timing.
Cultural differences in communication
In the Netherlands, the culture is down to earth and direct. They tend to have direct communication and straight the agenda. They feel inefficient if a meeting took long for chit-chat and also indirect communication. For them, Direct communication is honest and straightforward.
In Japan, the Japanese tend to have chit-chat before the meeting. This shows that they can get the other well before they agree to an agreement. Even though they have an agenda and they stick to it, but they are very comfortable using indirect communication.
In Brazil, the Brazilian prefer chit-chat more than a meeting . They have met without an agenda. Because they prefer direct communication, which without any delaying they will straight to the point.

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Marketing is the process of getting potential clients or customers interested in your products and services. The keyword in this definition is "process". Marketing involves researching, promoting, selling, and distributing your products or services. This discipline centers on the study of market and consumer behaviors and it analyzes the commercial management of companies in order to attract, acquire, and retain customers by satisfying their wants and needs and instilling brand loyalty. Today, marketing is something that every company and organization must implement in its growth strategy. Many companies use marketing techniques to achieve their goals without even realizing it, as they work to promote themselves and increase sales of their product or service. These days, marketing is one of the key aspects of business. People often do not know exactly what marketing is and, when asked, they define it as selling or advertising. While these answers are not wrong, they are only a part of marketing. There are many other aspects to marketing like product distribution, promotion, designing and creating materials like landing pages and social media content, improving customer experience, doing market research, establishing market segments, and much more. Marketing is very broad and encompasses all the strategies that help a company, brand, or individual achieve their objectives.

Language
Languages are some of the major cultural differences in marketing that companies ought to understand before they market their products and services in a foreign country. Previously, grave mistakes have occurred during translation, which has led to devastating effects. One of the most memorable embarrassing mistakes in international marketing happened when General Motors was marketing its cars by the brand name ‘Nova,’ which in South American local languages, translated to, ‘it won’t go.’ These mistakes obviously don’t help the company to sell its products. Therefore, companies need to pay attention to language and translations to avoid business failure.

Purchasing Power/Pricing
In as much as pricing strategies appears to be economic factors, they are important cultural differences in marketing. It is common knowledge that some cultures have a higher purchasing power than others. For example, people in the United States have a higher purchasing power than those in Africa. This plays a significant role in how you should price your products and services. In addition, it should be taken into consideration that some people have high purchasing power, but tend to hold money rather than spend. Therefore, you have to come up with a strategic marketing plan that will make people exercise their high purchasing capability.

Consumption Habits
As a marketer, you are already aware that personalities and cultures combine to shape the consumption behavior of individuals in a particular country or region. Before marketing your products, you need to determine whether individuals in a specific country make individualistic or collective buying decisions. This will help you to formulate a marketing approach that appeals to personality or a strategy that pulls the entire society. You’re also required to understand the psychological and societal factors influencing buying decisions.

Age/Demographics
Just like in domestic marketing, age and other demographics significantly contribute to cultural differences in marketing. For example, in developing countries, literacy levels among senior citizens, especially those above 60 years is very low. Therefore, you may decide to target your marketing message not directly at this demographic group, especially when selling digital devices. Moreover, you’ve to understand the dominant demographic groups in a country before you can modify your marketing messages. This will help your country to appeal and communicate to the majority rather than the minority.

Taste and Preferences
Eating habits are further important cultural differences in marketing that multinational companies need to understand. For a food selling company, it is essential to understand the eating habits of a particular region before marketing its menu. For instance, McDonald’s and other fast-food companies had to start offering vegetable products in India rather than meat products. Likewise, these companies have started to increasingly cater to international tastes, like rice dishes for the Asian market.

Religion
Religious beliefs are important cultural differences in marketing that should be considered when selling in foreign markets. They influence how a particular society perceives various products and services. Organizations have to understand the impact of religion and its role in society. For example, in Muslim countries, marketing secular women outfits might be off as the religion in these countries requires women to dress in a modest way, which is highly regulated. Besides, some marketing messages have been at loggerheads with religious groupings after their messages were deemed to be offensive towards a particular religion. Religion is a very critical aspect that companies need to understand before they can start marketing their products at the international stage.

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Mandarin is China's official tongue, is also the top language worldwide for marketing and also for other businesses platforms.

For Malaysia has two official languages which is
Malay and English. This are the two languages that Malaysia will use for marketing and for the others businesses platforms.

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Culture and regulation are two different things for companies？

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Culture and regulation are two different things for companies？

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The essence of culture and institutions in an enterprise is to influence people's behavior and expectations of behavior.
People can get a "sense of achievement" from culture-influenced behaviors. The sense of accomplishment comes from dignity.
The matching of culture and system is consistent, both at a low level, or both at a high level, on the contrary, it is a safe zone of development. When culture is high and institutions are low, efficiency will be affected. When culture is low and institutions are high, the impact lasts. These are the danger zones. When both are low, it belongs to the early stage of entrepreneurship, which is inherently unstable and the team also has unstable expectations. At this stage, the focus will not be on culture or system.It's business, so it's a relatively safe quadrant for institutions and culture.
Therefore, both culture and system are rational propositions for enterprises, although the concept of "culture" sometimes seems more emotional. Regardless of the difference between the two, as far as system and culture are concerned, system is the growth dividend, and enterprise culture is also the growth dividend. Only by putting forward corresponding targets can we have the direction of growth. The system can be "standardized" and "refined".
Look at our existing culture (descriptive things) and systems in terms of industry discipline, customer value, and employee growth. When I have to resolve a customer complaint, it's called a system. When I am happy and feel a sense of accomplishment after solving a customer's complaint, this is culture.
The company has Mature and Sophisticated culture. The former system management, to elaborate high order, the corresponding is efficient profit. The latter corresponds to culture, accumulation, and persistence.

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Open access peer-reviewed chapter

DOI: 10.5772/intechopen.90631

Abstract

Theoretical considerations that choose to make reference to the institutional and cultural considerations presuppose that these are in an optimal form. However, this is not the case in the real world. This chapter argues that the coevolution requirements of institutional and culture change are critical for economic outcomes. When institutions and culture coevolve in an optimal pattern, economic development and growth are facilitated. In contrast, when institutions and culture deviate from the optimal pace of coevolution, incompatible alterations of institutions and culture may end up causing an inability of the policy designers to implement the required changes in institutions and/or cultural behaviors. The result can be a series of failing attempts to implement a modernized progrowth framework of institutional settings and cultural behaviors. Using a dataset of 80 countries for the period 1981-2019, the analysis concludes that institutions and culture are complements-and not substitutes-in terms of their role in economic development, as when both sizes are strong it leads to higher levels of GDP per capita. When either or both of them are at a weak level, economic development is much lower.

chapter and author info

Authors

Kyriaki I. Kafka

Department of Economics, National and Kapodistrian University of Athens, Athens, Greece

Pantelis C. Kostis

Department of Economics, National and Kapodistrian University of Athens, Athens, Greece

Panagiotis E. Petrakis*

Department of Economics, National and Kapodistrian University of Athens, Athens, Greece

*Address all correspondence to: ppetrak@econ.uoa.gr

DOI: 10.5772/intechopen.90631

From the Edited Volume

Perspectives on Economic Development - Public Policy, Culture, and Economic Development

Edited by Ryan Merlin Yonk and Vito Bobek

1. Introduction

Many studies and empirical works have come to conclusions about the important role of the institutional and/or cultural background in economic development and growth. Theoretical constructs that choose to refer to the institutional and cultural background presuppose that both of these backgrounds are in optimal form. However, this is not the case in the real world.

The requirements regarding the coevolution of the institutional and cultural background are crucial to the development process of an economy. When institutions and culture coevolve in an optimal pattern, economic growth is facilitated. In contrast, when institutions and culture deviate from the optimal pace of coevolution, incompatible alterations of institutions and culture may end up causing an inability of the policy designers to implement the required changes in institutions and/or cultural behaviors. The result can be a series of failed attempts to implement a modernized development framework for the institutional and cultural background of societies, leading to the perpetuation of stagnated growth prototypes. A stagnated growth prototype can be transformed into a progrowth one by introducing ambitious institutional and cultural alterations through structural reforms. These reforms require the optimal coevolution of institutions and culture. However, the process of the reorganization of the institutional background and the change of culture can be seriously interrupted by the so-called coevolution requirements of institutions and cultural background. In fact, the evolution of institutions and culture can be toward the same direction but may not coincide time-wise. Then, the prevailing cultural background, which has not been altered yet, could work as a brake to the new institutional setting or vice versa. Therefore, the implementation of structural reforms can fail, given that institutional and cultural behaviors can be incompatible.

The purpose of this chapter is to highlight the problems arising from the asynchronous change of the institutional and cultural background for the economic development and growth. In that way, the aim is to highlight the interconnection between the institutional and cultural background and how this interconnection affects the economies. In other words, the chapter aims to show whether the institutional and cultural background functions in a complementary or substitutive way in their role in economic development, contributing to the debate on whether or not they coevolve. The analysis is based on a sample of 80 countries for the period from 1981 to 2019.

The structure of the chapter is as follows: In Section 2, the coevolution of institutions and cultural requirements is presented. In Section 3, why institutions and culture usually lead to stagnated growth prototypes is presented. In Section 4, a descriptive analysis on culture is presented and institutions are complements or substitutes, while Section 5 analyses the fact that structural reforms that promote growth need institutional and cultural changes that also promote growth. Finally, the chapter ends with the conclusions.

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2. The coevolution of institutions and culture

In general, the problem of coevolution in a system, the subparts of which evolve at a different pace, creates imbalances and failures in its effective operation. The evolution of institutions and culture does not always present a compatible path of evolution leading to conflicts when institutions and culture do not match. The issue under investigation has a time dimension, but usually it has a qualitative nature as well. In other words, institutions may change at the same direction with the cultural background, but these changes may not be compatible as far as the end result is concerned.

Thus, incompatibility may arise because either the institutions may change but not the cultural background or the cultural behaviors may change but the institution changes do not follow. In addition, incompatibility may appear because both concepts may evolute but their stationary equilibrium is not characterized by the optimum supplementary combination of institutions and cultural behavior matching.

But there is an even worse situation of incompatibility. This is when a change in institutions may appear and the noncompatible cultural behaviors would act to oppose and cancel these changes and vice versa. This is a very probable situation, which can arise after the implementation of an institutional structural reform, which we usually expect to be enforced and have fruitful results on growth in short- or medium-term horizon, but the prevailing cultural behaviors may sterilize those reforms.

In this way, during the process of their evolution, a vicious cycle of interaction between the institutions and culture can be created. If the two concepts could change at the same rate, that is, when there is coevolution, then the economy could approach a new point of equilibrium, enhancing the efficiency of the economic system.

The relevant literature on the coevolution of institutions and culture focuses on the hypothesis of the natural selection of the institutions [ 7, 8, 9, 10, 11]. According to that, some institutional and behavioral traits might give competitive advantage to individuals or populations within their local environment [ 12]. Nevertheless, gaining an understanding of the way in which institutions and culture interact is not an easy task, due to the endogenous character of their evolution [ 13, 14].

Samuel Bowles' contribution to the field of coevolution process [ 8, 9, 10, 15, 16, 17] focuses on the impact of the institutions on human behavior through the ways in which particular institutional settings prompt individuals to draw one or another response from their varied behavioral repertoires. Furthermore, the structure of social interactions, both within and between groups, affects the pace and direction of cultural evolution, the economic institutions and policies that influence ingroup-outgroup relationships, and other aspects of preferences, casting doubt on the economists' canonical premise that preferences are exogenous [ 18]. In addition, some institutions may reduce the variance of reproductive success within groups and, thus, weaken the force of selection on the level of individuals [ 8]. The emergence of these institutions depends on the existence of such group-beneficial traits and these in turn may only be able to proliferate if these institutions are in place.

According to Veblen [ 19], institutions shall be understood as the rules, habits, and other culturally transmitted norms that individuals follow when interacting with each other [ 20]. He shows that evolution may also create institutions that are complementary to the mate choice based on genetically fixed preferences, which can be interpreted as genetically coded information processing. The evolutionary theory of institutional change of [ 19] centers on the notion of "habits of thought,", where habits are viewed as durable and adaptable-in the long run-propensities on how to think and act. Because these habits reside within individuals, institutional change involves the simultaneous coevolution of both shared prevalent habits of thought (institutions) and the habits of individuals [ 21]. Endogenous interactions among institutions and culture, and their coevolution are important during economic evolution [ 13].

However, we do not have adequate critical information on how economic institutions may impact on culture, due to the fact that we know very little about the process of cultural transmission, which means that we do not have adequate information on who acquires what trait from whom, under what conditions, why, how, and how persistent the traits may be once the initiating environment is withdrawn [ 22]. Furthermore, there is no strong evidence on how culture and institutions evolve over time and whether they mutually reinforce each other or whether one is a precursor to the other [ 23]. Thus, the question is posed on whether culture and institutions coevolve or they proceed independently or causality is unidirectional.

Bisin and Verdier [ 24] claim that culture and institutions jointly evolve and interact, and focus on the process as determined by the interaction and not on the cause of the interaction. They define the cultural (or institutional) multiplier as the ratio of the total effect of institutional (or cultural) change on economic prosperity divided by the direct effect, that is, the counterfactual effect that would have occurred had the distribution of cultural traits in the population (or the institutions) remained constant after the institutional (or cultural) change. In that way, they contribute to the analysis of whether culture and institutions coevolve or their change is incompatible in time and quality considerations.

In sum, the coevolution process of institutions and culture is the product of complex interactions between human behavior, preferences, economic performance, and time. How and in which speed the institutions change vis-à-vis the cultural background‑and vice versa‑is particularly important, as coevolution affects the effectiveness of the growth model, since different degrees of compatibility can be observed.

3. The role of institutions and culture in stagnated growth prototypes

The existence of an optimum structure of institutions that is associated with an optimal nexus of cultural values can exist at the theoretical level for the sake of simplifying reality and for improving the analytical tools of comprehension. Thus, in real economy, "stagnated growth prototypes" are created since usually the institutions and culture that prevail interrupt the process of economic development and growth and could be characterized as idiosyncratic [ 25]. The prevalence of a stagnated growth prototype has crystal-clear effects on the mode of operation of the economies, the most important one being the increase in the level of insecurity and the inefficient allocation of resources. Thus, an optimal growth pattern often cannot be encountered, as the existence of idiosyncratic institutions is one of the most significant reasons for the deviation from the optimal pattern [ 25].

For instance, a stagnated growth prototype could be described as following [ 25]: (a) Existence of extractive institutions [ 26]. The economies that are dominated by extractive institutions are characterized by the absence of established relations between the members of the economic system. This results in the emergence of conditions that favor factors that enhance the existence of idiosyncratic institutions. Factors that enhance the creation of idiosyncratic institutions (hierarchies and high transaction costs) are coordination failures, asymmetries of information, evolution path dependence, and rent-seeking activities, which all lead to the appearance of high systematic risk. (b) Existence of specific characteristics that act in a peculiar manner, shaping human behavior and preferences. This could be the case when there exist idiosyncratic cultural values like uncertainty avoidance behaviors, in-group collectivism, high time discount preferences, and lack of trust, as well as nondiversified investment attitudes [ 27, 28] and loss aversion behaviors [ 29, 30, 31].

There is a two-sided effect between idiosyncratic institutions and idiosyncratic cultural background described above, since the existence of idiosyncratic institutions can lead to the formation of an idiosyncratic cultural background and vice versa. This interrelationship perpetuates the existence of idiosyncratic institutions and cultural characteristics. Thus, a stagnated growth prototype is generated and prevails. This stagnated growth prototype has no endogenous energy to break the barriers to growth. Stagnated institutions always affect culture and vice versa, through the coevolution pattern that they follow and that has a long lasting ability to survive. When a stagnated growth prototype is prevailing in an economy, it can experience long periods of stagnation or periods near stagnation. These periods usually can be interrupted only by large waves of foreign incoming capital, which usually take the form of a very large public or private investments in specific sectors.

4. Culture and institutions: complements or substitutes?

In this section, we try to examine whether the cultural and the institutional background of the societies and the economies are characterized as substitutes or complemented issues in relation to their effects on economic development. To achieve the objectives of the chapter, a dataset of 80 countries is used for the period of 1981-2019.

Initially, as a measure of economic development, GDP per capita (purchasing power parity; 2011 international dollars) is used derived from the World Economic Outlook (WEO) database of the International Monetary Fund (IMF).

To measure the cultural background, the present chapter makes a selective selection of seven cultural values that express the cultural background of the societies that make up the sample under analysis, based on relevant studies in the literature [ 2, 32, 33, 34]. The data contributing to the cultural background were compiled from the World Values Survey (WVS) and supplemented by data from the European Values Study (EVS) for corresponding questions, on the following waves: 1981-1984, 1990-1994, 1995-1998, 1999-2004, 2005-2009, 2010-2014, and 2017-2019.

To measure institutional background, the World Economic Freedom Index is used as reported by the Fraser Institute [ 36]. The construction of the index is based on 42 subindices and is set on a scale of 0-10, with 10 representing the best performance and 0 the worst performance. Despite the availability of alternative indicators to reflect the institutional background of economies (such as the Heritage Foundation's financial freedom index and the protection against the risk of expropriation of the ICRG), the Fraser Institute Index is used as the most appropriate because of the long period under study as well as due to the sample size of the countries covered by this indicator. The degree of economic freedom, based on this indicator, is calculated on the basis of the institutions and policies applied by each country in five areas: size of state, rule of law, access to a strong currency, freedom of international trade, and regulatory environment in bank credit, employment, and entrepreneurship.

Authoritative research has consistently confirmed that people living in countries with a high degree of economic freedom enjoy a higher level of prosperity, have wider political and social rights, and present longer life expectancy. Hall and Lawson [ 37] conduct a literature review using the Fraser Financial Freedom Index. They result in 402 articles using this index, 198 of them using it as an independent variable. They note that 134 of these 198 articles conclude that financial freedom leads to faster economic development and growth, better living standards, higher levels of happiness, etc., while only 8 articles conclude that financial freedom has a negative impact to economic growth through increasing economic inequalities. Williamson et al. [ 35, 38, 39, 40]-among others-use the Fraser Financial Freedom Index as a measure of the quality of the institutional background. They note that this is a comprehensive measure that includes the factors that historically economists have found to be significantly related to economic development and growth.

The foundation of the relationship between the cultural and institutional background and their relation to GDP per capita of the economies is outlined in a four-quadrant scatter plot, as shown in Figure 1.

The first quadrant (A) brings together countries with strong institutional and weak cultural backgrounds, the second quadrant (B) countries with strong institutional and cultural backgrounds, the third quadrant (C) countries with weak institutional and cultural backgrounds, and the fourth quadrant (D) countries with weak institutional and strong cultural backgrounds.

For each country included in the sample, its average values for the cultural background, institutional background, and GDP per capita are calculated for the entire analysis period, so that for each country, there is one value for each variable. Following the methodology of [ 41], countries with a strong cultural background/institutional background are those with scores above 7, while those with a weak cultural background/institutional background are those with score below 6.

Figure 2 illustrates in a descriptive way the relationship between cultural and institutional background and their relation to the level of economic development. Countries in quadrants (A) and (B) clearly outperform those countries in quadrants (C) and (D), as they have a stronger institutional background. Moreover, countries belonging to quadrants (B) and (D) clearly outperform those in quadrants (A) and (C), as they present a stronger cultural background.

Quadrant (B) countries, those with strong institutional (average 7.83) and strong cultural background (average 8.07), have the highest average GDP per capita of $ 39.826. This group includes countries such as Norway, Sweden, Hong Kong, Switzerland, and Canada, countries that are characterized by high economic freedom and at the same time by social behaviors that promote economic development and growth, such as high levels of generalized trust, respect, independence, and honesty. In contrast, countries in quadrant (C), those with weak institutional (average 5.39) and weak cultural background (average 3.41), have the lowest average GDP per capita of $ 8.443. This group includes countries such as Iran, Libya, Zimbabwe, Algeria, and Venezuela, that is, countries with a low degree of economic freedom and social attitudes that oppose economic development and growth processes. A comparison of these two quadrants highlights that the institutional and cultural backgrounds are complementary, as when both are strong, a significantly higher degree of economic development is achieved. Countries in quadrant (A), those with strong institutional (average 7.21) but weak cultural backgrounds (average 4.84), average GDP per capita of $ 17.973. This group includes countries such as Latvia, the Czech Republic, Georgia, Lebanon, and Kazakhstan, which, while characterized by a high degree of economic freedom, are also characterized by social behaviors that are opposed to economic development and growth processes. A comparison with quadrant (C) shows that the improvement of the institutional background leads to a much higher level of economic growth. Also, the scatter chart does not show countries belonging to quadrant (D) characterized by weak institutional and strong cultural background, while the opposite relationship holds (quadrant A). This demonstrates that the cultural background alone is not sufficient and exists only in a strong form when there is also a strong institutional background, thus reinforcing the hypothesis of complementarity between the two kinds of background.

Table 1 gives a detailed breakdown of the countries belonging to each quadrant and the average of each country for GDP per capita, cultural background, and institutional background.

5. Structural reforms that promote growth need institutional and cultural changes that also promote growth

Institutions are one of the most important areas affected by the implementation of structural reforms [ 45]. This is why structural reforms usually concern institutional reforms that involve market, or even nonmarket, institutions. Essentially, market institutions refer to economic institutions and thus reforms concern institutions such as the labor market, the product market, the taxation, social security and financial system, etc. Reforms in nonmarket institutions may concern political institutions (quality of democracy, politicians/political parties, municipalities, etc.) or social institutions (judicial system, legal system, army, education system, healthcare system, etc.).

Johnson [ 45] examines the relationship between the time of the implementation of major reforms and the institutional quality index, concluding that countries with more powerful institutions (as they are approached from the perspective of property rights and the rule of law) introduced important reforms earlier. In other words, it seems that there is a negative association between the time of the implementation of structural reforms and the quality of the institutions.

Moreover, Kafka [ 3] concludes that the only way for economies to improve their institutional background and their innovative performance and to converge with the economies that form the frontier of performance in innovation and institutions is through economic policies to accelerate change in the institutional background, such as structural reforms. Her analysis concludes to the creation of thermal maps that present-for each of the 152 economies included in the analysis-the specific institutions that need to be structurally reformed.

Furthermore, surveys such as those by [ 46, 47, 48] associate political institutions with economic reform effectiveness. Rajan and Zingales [ 47] note that democracy can obstruct reforms, if special interests prevail in the societies where these reforms are implemented, given that the capitalists are usually fortified in speculative positions and, thus, they often are the primary opponents of economic reforms, which may disrupt their interests. Fernandes and Rodrik [ 46] reach a similar conclusion, stressing that interest groups may block reforms if there is certainty over the distribution of the benefits of structural reforms. Also, Giuliano et al. [ 48] note that the increase in the quality of democratic institutions has a positive and statistically significant impact on structural reforms. Haggard [ 49] claims that the institutions may overcome collective action dilemmas by restricting the selfish behavior of interest groups.

As far as the cultural background is concerned, often this must also change for the impact of structural reforms to be more effective. As Kafka [ 3] points out, changing the cultural background through economic policy requires a long-term wait for results that can exceed 20 or 30 years, while requiring interventions focused on the education of societies. But what economic policy makers should not miss is to take into account the cultural characteristics of their society before making decisions. Not all societies are ready to accept all economic policies and each economic policy is expected to have different efficiencies based on the cultural characteristics of the society for which it is intended for [ 3]. Structural reforms must take into account not only the formal rules and procedures but also informal behaviors and deep-rooted models and values that lie between the formal declaration of the intention to implement a particular structural reform and its actual implementation [ 53]. Ban [ 54] argues that cultural background is a critical issue in every attempt to implement a structural reform.

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6. Conclusions

The forces deployed in the society either encourage the prevalence of features that promote a progrowth model or lead to a variety of problematic growth models, or to a mixture of progrowth and antigrowth characteristics with ambiguous results.

The transformation of a stagnated model to a progrowth one is not an easy task, focusing mainly on the coevolution requirements. Since the coevolution requirements cannot be met, there is a possibility that a perpetual stagnated prototype may become stronger. More specifically, the stagnated growth prototype may be transformed into a progrowth optimal prototype through suitable structural reforms on institutional and cultural background. However, the coevolution process taking place between institutions and culture may interrupt this process, having as a result a series of failing attempts to implement a modernized progrowth framework of institution settings and cultural behaviors leading to the salvation of the existing stagnated growth prototype, despite the probable design of ambitious structural reforms.

The analysis of the chapter reveals the complementary relationship between the institutional and cultural background in terms of their role in economic development and growth, as when both sizes are strong it leads to higher levels of GDP per capita. When either or both of them are at a weak level, economic development is much lower.

Thus, the existence of economic freedom is an important condition for economies to thrive. However, when these conditions are accompanied by social behaviors that promote economic development and growth and relate to individuals' trust and independence, the highest possible level of economic growth is achieved.

For instance, the presence of institutional structures that adequately manage property rights and contracts between economic actors has a positive impact on the level of economic development. But when this is accompanied by a high level of generalized trust and respect for other members of the society, the positive impact on economic development multiplies as the performance of the already satisfying cultural background improves. In addition, when there is an institutional background in which government spending, taxation, and the size of state-controlled enterprises are such that state decisions do not replace private choices, financial freedom is increased with significant benefits for economic performance. But when this institutional framework characterizes societies that are independent of choices, the benefits of the institutional and cultural background to the level of economic development are even more crucial.

By presenting in a different way the conclusion about the complementarity of the two sizes, the results of the analysis lead to the fact that even if the institutional background is strong, it depends on whether the cultural background is weak (quadrant A in the analysis) or strong (quadrant B in the analysis) to determine whether or not an economy achieves satisfactory economic development. Thus, the same institutional background may have a different impact on economic development depending on the cultural background.

This relationship gives a good explanation of why economic policies, such as structural reforms, are effective in some countries and noneffective in others. The transformation of a stagnated growth prototype to a progrowth one is not an easy task, focusing on the coevolution requirements. Since the coevolution requirements cannot be met, there is a possibility that a perpetual stagnated prototype may become stronger. More specifically, the stagnated growth prototype may be transformed into a progrowth optimal prototype through suitable structural reforms on institutional and cultural background. However, the coevolution process taking place between institutions and culture may interrupt this process, having as a result a series of failing attempts to implement a modernized progrowth framework of institution settings and cultural behaviors leading to the salvation of the existing stagnated growth prototype, despite the probable design of ambitious structural reforms. Thus, the conclusion on the complementarity of the two sizes is therefore an important contribution for all those who design or pursue economic policy in either developing or developed economies.

Kyriaki I. Kafka, Pantelis C. Kostis and Panagiotis E. Petrakis (May 6th 2020). Why Coevolution of Culture and Institutions Matters for Economic Development and Growth?, Perspectives on Economic Development - Public Policy, Culture, and Economic Development, Ryan Merlin Yonk and Vito Bobek, IntechOpen, DOI: 10.5772/intechopen.90631. Available from:

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Why Coevolution of Culture and Institutions Matters for Economic Development and Growth?

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Theoretical considerations that choose to make reference to the institutional and cultural considerations presuppose that these are in an optimal form. However, this is not the case in the real world. This chapter argues that the coevolution requirements of institutional and culture change are critical for economic outcomes.

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How do cultural differences affect international business?

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How do cultural differences affect international business?

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1. Religious beliefs
(1) Religious festivals
Some shops are not allowed to open on Sunday, the Christian Sunday in European and American countries. In Muslim countries, there is a daytime fast during Ramadan, so you can't negotiate business during Ramadan. And the run-up to religious holidays is often a good time for sales.
(2) Religious requirements and taboos
Hindus do not eat beef, Muslims are forbidden to eat pork and alcoholic beverages, and Jews are forbidden to eat pork and shellfish.
(3) Religious organizations
In areas with strong religious forces, religious people themselves are large group consumers, so international marketing should try to win the support of religious institutions, at least if their marketing activities will not be opposed by local churches.
(4) Others
Religious sects and women's social status also affect the development of international marketing.

2. The aesthetic
Preference for product quality and choice of color affect international trade. For example, Egyptians like green and taboo blue, think blue symbolizes evil. Japanese people pay more attention to the quality of products rather than the price, and are less sensitive to the price.

3. Material production culture
(1) Energy supply, such as electricity and water power. Voltage, power shortage of the market, battery demand may be greater. Sales of electrical appliances will face difficulties.
(2) Transportation infrastructure, such as railways and highways. Affect the transportation and distribution of logistics.
(3) The accessibility and popularity of media. Countries with underdeveloped networks should not adopt online promotion.

4. Customs
For example, China and English-speaking countries have different customs and habits, and they have different local conditions and customs in traditional lifestyles, hobbies, taboos and other aspects.
In the reception, Chinese people are more hospitable, pay great attention to face, specification, grade, taste, quantity, all should be considerate; British and American people pay more attention to politeness, decent and effective, and give guests a certain freedom of space. People in English speaking countries treat, the meal is generally simpler than In China, the habit is that each person, in the restaurant treat is also the host and guest each point their own meal, after the meal may also pay each bill. The method of splitting food and going Dutch is a typical reflection of individual exclusivity in western food culture, while Chinese people share it.

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How cultural differences impact international business in 2017 | Hult International Business School

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As companies continue to expand across borders and the global marketplace becomes increasingly more accessible for small and large businesses alike, 2017 brings ever more opportunities to work internationally.

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Benefits include anything done for the employee's comfort and advancement and are provided in addition to salary. Benefits help maintain employee morale and motivation, which in turn keeps employees longer. Welfare measures need not be monetary only, but of any kind/form. Employee benefits include monitoring working conditions and creating industrial harmony through health infrastructure, industrial relations and sickness, accident and unemployment insurance for workers and their families.
Labour benefits are all activities of an employer aimed at providing employees with certain facilities and services other than wages or salaries.
In daily life, employees not only pay attention to work benefits, but also pay more and more attention to various welfare requirements. The following are the types of employee welfare: catering welfare, clothing allowance, housing welfare, transportation welfare, paid vacation, holiday welfare, birthday welfare, employee event welfare and health check-up.
What kind of welfare system each country adopts is influenced by many factors such as historical tradition, political power contrast and external system demonstration in the process of establishing the welfare system.

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Employee welfare means anything done for the comfort and (intellectual or social) improvement of the employees, over and above the wages paid. In simple words, it means "the efforts to make life worth living for workmen." It includes various services, facilities and amenities provided to employees for their betterment. These facilities may be provided voluntarily by progressive entrepreneurs, or statutory provisions may compel them to provide these amenities; or these may be undertaken by the government or trade unions, if they have the required funds.
According to ILO, "Employee welfare should be understood as such service, facilities and amenities which may be established in or in the vicinity of undertakings to enable the persons employed in them to perform their work in healthy and peaceful surroundings and to avail of facilities which improve their health and bring high morale".
Learn about:-
1. Introduction and Meaning of Employee Welfare 2. Concept of Employee Welfare 3. Objectives 4. Types 5. Importance 6. Approaches 7. Policy 8. Benefits 9. Schemes and Procedures of Employee Welfare Activities 10. Programme.

Employee Welfare: Meaning, Concept, Approaches, Benefits, Objectives, Schemes, Types, Policy and Importance
Contents:

1. Introduction and Meaning of Employee Welfare

2. Concept of Employee Welfare

3. Objectives of Employee Welfare

4. Types of Employee Welfare

5. Importance of Employee Welfare

6. Approaches to Employee Welfare

7. Employee Welfare Policy

8. Benefits of Employee Welfare

9. Schemes and Procedures of Employee Welfare Activities

10. Employee Welfare Programme

Employee welfare means anything done for the comfort and (intellectual or social) improvement of the employees, over and above the wages paid. In simple words, it means "the efforts to make life worth living for workmen." It includes various services, facilities and amenities provided to employees for their betterment. These facilities may be provided voluntarily by progressive entrepreneurs, or statutory provisions may compel them to provide these amenities; or these may be undertaken by the government or trade unions, if they have the required funds.

The objectives of employee welfare are to improve the life of the working class, to bring about holistic development of the worker's personality and so on. Employee welfare is in the interest of employee, employer and the society as a whole. It enables workers to perform their work in healthy and favorable environment.

Hence, it improves efficiency of workers and keeps them content, thereby contributing to high employee morale. It also develops a sense of responsibility and dignity amongst the workers and thus makes them good citizens of the nation.

Apart from the wages and salary, anything done by the organization to improve the living standard of employees and keep them contented comes under the realm of employee welfare. All those services, benefits and facilities offered to employees by the employer to make his life worth living, are included in employee welfare.

According to ILO, "Employee welfare should be understood as such service, facilities and amenities which may be established in or in the vicinity of undertakings to enable the persons employed in them to perform their work in healthy and peaceful surroundings and to avail of facilities which improve their health and bring high morale".

Employee welfare is for the betterment of the workers. It involves adjustment of an employee's work life and family life to the community and social life. Welfare measures may be both voluntary and statutory (prescribed under labour laws).

The need and importance of employee welfare is being increasingly appreciated throughout the civilized world. The concept of welfare is a dynamic one and has different connotations in different countries and at different times in the same country, according to the prevailing value system, social institution, degree of industrialization, and the general level of social and economic development.

Some describe employee welfare or labour welfare as 'an attitude of mind' while others merely catalogue the schemes and measures which should be included in labour welfare. There are some who emphasize the voluntary nature of measures and include the measures that are undertaken by the employers beyond what is required by law. Some interpret labour/employee welfare measures to mean only measures which are legally obligatory.
International Labour Organization (ILO) defines welfare as:
According to the ILO, 'employees' welfare should be understood to mean such services, facilities, and amenities which may be established in or in the vicinity of undertakings to enable the persons employed in them to perform their work in healthy and congenial surroundings, and provided with amenities conducive to the good health and morale.'

Welfare work is the task to be done by the employer voluntarily for the intellectual, physical, moral, and economic betterment of employees, over and above which is laid down by law, or what is expected as a part of contractual benefits for which the employee may have bargained.

Thus, under this definition we may include housing, medical and educational facilities, nutrition, facilities for rest and recreation, cooperative societies, day nurseries and creches, provision for sanitary, accommodation, holidays with pay, social insurance measures undertaken voluntarily by the employers, and would also include schemes like provident fund, gratuity, and pension etc. The term welfare is thus very flexible.

In India, which has embarked upon a vast programme of industrialization, the need for labour welfare is all the more important because it creates a healthy atmosphere in the work place, keeps the labour force stable and contended, and helps in maintaining industrial peace, thereby improving productive efficiency of the workers.

It is in recognition of this need that under successive five year plans, and also in the industrial policy statements, welfare measures had been accorded a due place. The agencies responsible for administering welfare measures are the Central Government, State Government, employers and their organizations, workers' organizations, and Statutory Welfare Funds.

To supplement the efforts of the employees and the State Governments in providing welfare amenities to the workers, welfare funds have been set up in coal, mica, iron ore, manganese ore, limestone and dolomite mines, and in the beedi industry.

The principal activities financed out of the fund include general welfare such as medical facilities, water supply, education and recreation, and housing. The funds have been created by the levy of the cess on production or consumption or export of the minerals and, in the case of beedi, on the manufactured beedis.

The terms 'employees' welfare' and 'workers' welfare' are used interchangeably to denote various services provided by the employers to the employees in addition to wages. According to Arthur James Todd, "Employee welfare means anything done for the comfort and improvement, intellectual or social of the employees over and above the wages paid which is not a necessity of the industry".

According to a publication of ILO, Employee welfare should be understood as meaning with services, facilities and amenities which may be established in or in the vicinity of undertakings to enable the persons employed in them to perform their work in healthy and peaceful surroundings and to avail of facilities which improve their health and bring high morale".

Employee welfare is a dynamic concept as new welfare measures are added to the existing ones along with social changes. It is also a comprehensive concept. The modern concept of employee welfare entails all those activities of the employers which are directed towards providing the employees with certain facilities and services in addition to wages or salaries.

These are not a form of employers' goodwill or charity to the workers, but are facilitative services to build and maintain the morale of the workers to achieve the objectives of the organisation. It is not only in the interest of the employees to provide them with necessary medical benefits, recreation facilities, retirement benefits, etc., but also in the interest of the organisation itself.

The employees feel satisfied if they are provided with such services and they also feel committed to the organisation. Though welfare services are merely maintenance factors and not motivators, yet they are necessary for the health of the organisation since they bear close connection with the productivity of the employees.
The basic features of employees' or labour welfare are as follows:
(i) Labour welfare includes various facilities, services and amenities provided to workers for improving their health, efficiency, economic betterment and social status.

(ii) Welfare measures are in addition to regular wages and other economic benefits available to workers due to legal provisions and collective bargaining.

(iii) Labour welfare measures are flexible and ever-changing. New welfare measures are added to the existing ones from time to time.

(iv) Welfare measures may be introduced by the employers, government, employees or by any social or charitable agency.

(v) The purpose of labour welfare is to bring about the development of the whole personality of the worker to make him a good worker and a good citizen.
The objectives of employee welfare are discussed below:
(i) To enhance the level of morale of employees.

(ii) To create a loyal, contented workforce in organization.

(iii) To develop a better image of the company in the minds of the employees.

(iv) To enable the workers to live comfortably and happily.

(v) To develop efficiency of the workers.

(vi) To reduce influence of trade unions over the workers.

(vii) To expose philanthropic and benevolent activities of the company.

(viii) To make the workers know that the company takes care of them.

(ix) To develop positive attitude towards job, company and management.

(x) To reduce tax burden.

(xi) To develop a feeling of satisfaction of employees with the company.

(xii) To develop a sense of belonging to the company.

(xiii) To retain skilled and talented workers.

(xiv) To develop better human relation.

(xv) To prevent social evils like drinking, gambling through improvement of working conditions, cultural activities and social conditions.

Employee Welfare - 2 Types: Statutory and Voluntary
Employee welfare can be divided into two categories, namely:
(1) Statutory, and

(2) Voluntary

Type # 1. Statutory:

The government has passed a number of legislations in order to set minimum standards of safety and welfare for the employees at their workplace. Provisions have been made for the welfare facilities such as washing, storing, first-aid appliances, hours of work, sanitation, etc.

Type # 2. Voluntary:

The employers voluntarily have provided welfare amenities to the employees besides the statutory facilities. They are more concerned with the welfare of their employees. Organizations such as Godrej and L & T provide adequate transport and similar other facilities to their employees. Facilities for recreation, medical treatment, free meals or subsidized meals, schooling facilities for children, and sports and games are provided by many organizations.

Organizations have given opportunities to work with flexible working schedules. It helps to meet business commitments while at the same time supporting one's personal life needs. Organizations also provide medi-claim insurance coverage to employees for expenses relating to hospitalization due to illness, disease, and injury. Harassment policies are also made to protect harassment of any kind to employees.

The voluntary welfare facilities may also classified into those provided within and outside the factory premises.

(i) Welfare and amenities within the factory premises.

(ii) Welfare and facilities outside the factory premises.

Welfare and amenities within the factory premises include - (i) provision for latrine and urinals, (ii) washing and bathing, (iii) creches, (iv) rest shelters and canteens, (v) arrangement of drinking water, (vi) arrangement for prevention of fatigue, (vii) administrative arrangement within the plant to look after welfare, (viii) uniforms and protective clothing, and (ix) shift allowance.

Welfare and amenities outside the factory premises include - (i) maternity benefit, (ii) social insurance, (iii) benevolent fund, (iv) medical facilities, (v) education facilities, (vi) housing facilities, (vii) recreational facilities, (viii) holiday/leave and travel facilities, (ix) workers' cooperatives, (x) other programme for the welfare of women, youth, and children, and (xi) transport to and from the place of work.
Employee welfare work assumes great importance because of the following reasons:
1. Lack of strong trade union movement - In the absence of strong trade unions and effective leaders, welfare work helps the workers in the industry to stand on their own feet, think properly and systematically of their interests, progress hand in hand and participate in the nation's development.

2. Poverty - Poverty is one of the main reasons behind the provisions of labour welfare activities. Indian workers in majority are poor, and are, therefore, unable to provide a healthy living for their families and good education for their children.

3. Illiteracy - In India, the number of educated workers is low. Being illiterate, they are unable to receive advanced industrial training, understand the problems in industries, and understand their own interests and those of nations.

4. Low level of health and nutrition - Due to poverty and illiteracy, the Indian workers remain unhealthy and ill fed. This reduces their productivity and efficiency.

5. Lack of healthy recreation - Due to lack of healthy recreation, the workers indulge in crime and other wrong activities. The employer should provide means of healthy recreation in order to maintain their efficiency.

6. Lack of training - The number of trained workers in India is very low. Thus, it is necessary to have training facilities for such a vast workforce.

- Approaches: Policing Approach, Religion Approach, Philanthropic Approach, Paternalistic Approach and a Few Other Approaches

The different approaches to employee welfare reflect the evolution of the concept of welfare. Earlier, the Government of the land had to compel the industrial houses to provide the basic amenities to their employees. Such compulsion was necessary because the employers believed in exploiting the employee and treating it in an unfair manner. But with passage of time, the concept of welfare has undergone changes. Many progressive managements today provide welfare facilities voluntarily and with enlightened willingness and enthusiasm. In fact, welfare facilities are, no longer, restricted to workers alone, it has been extended to include social welfare also.
A brief description of the various approaches to employee welfare is as follows:
1. Policing Approach:

According to this theory, the factory owners exploit the employee in an unfair manner. Instances of exploitation are making the employees work for long hours, paying low wages, neglecting health and safety provisions, providing unhygienic conditions of work, etc. A welfare state enacts legislation under which managements are compelled to provide basic amenities to the workers. Thus, the state assumes the role of a policeman and compels the employers to provide welfare facilities and punishes the non-complier.

2. Religion Approach:

The religion theory has two aspects namely, the investment aspect and atonement aspect. The investment aspect implies that the fruit of today's deeds will be reaped tomorrow. Any action, whether positive or negative, is thus, treated as an investment. Inspired by this belief, some employers plan and organize welfare facilities for the employees. The atonement aspect of the religion theory implies that the present disabilities of a person are the result of the sins committed by him previously. He should undertake to do good deeds on how to atone or compensate for his sins.

3. Philanthropic Approach:

Affection for mankind is the basis of philanthropic theory. This theory refers to the provision of good working conditions, creches and canteens out of pity on the part of the employers who want to remove the disabilities of the employees. The philanthropic theory is more common in social welfare rather than in industrial enterprises.

4. Paternalistic Approach:

According to the paternalistic theory, the industrialist holds the entire industrial estate, properties and the profits accruing from them in trust. This trust is not actual and legal but it is moral. The employers provide for the well-being of their employees out of funds under their control. As, the whole enterprise is held in trust for the benefit of the employees, this theory is also called trusteeship theory.

5. Placating Approach:

When workers are organized and unions are strong, management has to appease them. As crying children are pacified by sweets, workers are pleased by welfare works. This theory is based on the assumption that management can bring peace in the organization by welfare measures.

6. Public Relations Approach:

According to this theory, welfare facilities provided by the employers to the employees, create a good image of the employer in the mind of the general public. Some employers proudly take their visitors around the plant to show how well they have organized their welfare activities.

7. Functional Approach:

According to the functional theory, welfare work is a means of securing, preserving and increasing the efficiency of labour. Welfare facilities are provided by the employers to the employees to make them more efficient.

8. Social Approach:

The social responsibility of business has been assuming great significance these days. The social theory implies that an industrial establishment is morally bound to improve the conditions of society in addition to improving the condition of the employees. Labour welfare is gradually taking the shape of social welfare.

The first step in employee welfare administration is, to have a dearly defined policy towards it.
The policy must cover:
1. Willingness of the management

2. Objectives sought to be achieved

3. Range of facilities to be provided, and

4. Timing of the facilities

Presently, there is no question of willingness of the employer. The employer is now compelled to provide welfare either by a statue or precedence already established by rivals. Objectives of welfare must be to enhance efficiency of employees and not merely to comply with the provisions of Factories Act / Mines Act / Plantation Labour Act / Motor Transport Workers Act, or Merchant & Shipping Act, 1958.

The range of welfare has two dimensions, type of facilities and coverage of employees. With regard to coverage, it may be stated that the facilities must be extended to employees at all levels in the organisation. Timing of the facilities should be such and provided, when there is a need for them, and when the time if opportune.

1) Employees would start working sincerely and honestly.

2) It would improve the productivity and efficiency of the employees.

3J The attachment and belongingness among the employees would be developed.

4) Employees would be healthy and they would be mentally and physically fit to perform in the best manner. Thus; it promotes a healthy work environment.

5) Employees can enjoy stable, developed, dedicated employees, moreover, employees will work with interest and with full involvement.

6) Higher Productivity, higher efficiency, promotes health industrial relations, ultimately industrial peace can be achieved.

7) Absenteeism, labour turnover such problems of the employees would not arise in the organisation.

8) Employees would come forward to share additional responsibilities of the company.

9) It will improve the standard of living of the employees.

10) Work environment, work culture will be developed in the organisation.

11) It enhances the goodwill and reputation and thereby image of the company.

12) No chance for industrial dispute in the company. Healthy, harmonious relation between employer and employees will be developed.

Employee Welfare - Employee Welfare Activities under Various Schemes and its Procedures

Employee Welfare activities are provided under various schemes by central government/state government / trade unions / voluntary agencies etc.
Those are provided as stated below: Central Government has enacted various laws, to provide certain welfare facilities by the employers to their employee's viz.:
1. Canteen facility if employing more than 250 workers, creche, if employing more than 30 women, welfare officer if employing 500 or more workers.

2. Provision of shelters for taking food and rest if 150 or more persons are employed, first aid rooms, in mines employing more than 150 workers

3. Educational facilities, in the estate for the children of workers where there are 25 workers children, between the age of 6 and 12, housing facilities to every worker and his / her family residing in the plantation.

4. Uniforms, raincoats to drivers, conductors and line checking staff, for protection against rain and cold, medical facilities, to the motor transport worker

5. Ensure regular payment of minimum wages / equal pay for equal work irrespective of sex / provide suitable residential accommodation to workers / to provide such protective clothing to the workmen, as may be prescribed.

Employee Welfare - Employee Welfare Programme and its Principles
The following are generally given as the principles to be followed in setting up a employee welfare programme: 1. The programme should satisfy real needs of the workers:
This means that the manager must first determine what the employees' real needs are. Extreme care and serious research should go into the decision of whether or not to offer a particular employee service. More evidence is required than a mere unfounded bias of the manager.
2. The programme should be such as can be handled best by a group approach:
For example, life insurance purchased as a group can be obtained at a significantly lower price than some insurance purchased by the individual. But it is argued that depending upon the differences in sex, age, marital status, number of children, type of job and the income level of employees, there are large differences in their choice of a particular benefit.

As a result, it is suggested that a package total value of benefits should be determined and the selection of the mix of benefits should be left to the choice of each individual employee. This is known as the 'cafeteria approach'. Such an approach individualizes the benefit system though it may be difficult to operate and administer.
3. The employer should not assume a benevolent posture:
Some employers foster dependency on employees which is counter-productive. The paternalistic and benevolent approach has fallen in disrepute as a result of the employee's desire to gain independence and dignity.
4. The cost of the programme should be calculable and its financing established on a sound basis:
There are several employee services such as pension, provident fund, insurance, etc., which are not cheap to administer. The cost of such benefits can hardly be termed a fringe. It is, therefore, essential that before conceding any such service over the collective bargaining table sound actuarial estimates of costs are made and adequate provisions for financing it are established.

5. The management should ensure cooperation and active participation of unions and workers in formulating and implementing the programme.

6. There should be a periodical assessment or evaluation of the programme and necessary timely improvement on the basis of feedback.

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Employee Welfare: Meaning, Objectives, Types, Approaches, Benefits, Schemes

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Employee welfare means anything done for the comfort and (intellectual or social) improvement of the employees, over and above the wages paid. In simple words, it means "the efforts to make life worth living for workmen." It includes various services, facilities and amenities provided to employees for their betterment.

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Norway, Sweden, Finland, Denmark, Switzerland, Luxembourg, Iceland. These countries are typical of Nordic high welfare states.
Their per capita incomes are among the highest in the world, their politics are stable and their governments are efficient and clean. Social security is generally very good, the crime rate is low.
These countries are characterized by high taxes and welfare benefits. Education, health care, old age and housing are all covered by the state, but a large proportion of national income is also paid in taxes.
The Swiss
The average annual salary in Switzerland is 54,940 euros. Despite the high level of water consumption, Switzerland has one of the lowest unemployment rates in Europe and wages are typically calculated at 14 months of the year. The average workweek is 31 hours. The main developments are tourism, watches and watches, textiles, banking and insurance.
The Norwegian
Workers in Norway are entitled to 26 days off a year. For workers over 60, the working week cannot exceed 40 hours. In Norway, the average work week is 27.4 hours.
The average salary in Norway is 5,000 euros per month, which translates to 46,891 euros per year. Norway also has one of the lowest unemployment rates in the world.
Luxembourg
Luxembourg is also a popular destination for Portuguese immigrants. Luxembourg, a founding member of the European Union, has one of the eu's lowest unemployment rates at 6.5 percent. Though. The level of consumption is high, but the level of wages is also quite high.
The annual salary in Luxembourg is 56,806 euros. The average working week is 30 hours, and the country's main industries are banking, finance, civil construction, real estate, and transportation.
The Danish
Denmark is often overlooked as a country of high happiness, with a minimum salary of 14,000 kr per month equivalent to 10,200 RMB. In terms of per capita wages, it is almost the highest in the EU, equivalent to more than 3,800 euros per month. The minimum hourly wage is almost a quarter higher than in the UK; It has been ranked among the top 4 in the world in terms of per capita GDP for the last three years.
Belgium
Belgium's per capita monthly income is around 3500 Euros, and the average salary in the petrochemical industry is 54% higher than the average of the whole industry. The hotel industry pays the lowest wages. Ninety-five percent of Belgian workers also receive other fringe benefits. Three-quarters of employees will be paid 13 months a month. More than 40% of employees have company cars. Sixty-five percent of the population is covered by health insurance.

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Nordisk Samarbejde / Nordic co-operation

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A country whose national income and welfare are among the highest in the world

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A country whose national income and welfare are among the highest in the world

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Australia, Canada, United States, United Kingdom, France, Germany, Netherlands, Belgium, Austria, New Zealand, Singapore, Ireland, Japan, Spain, Israel.These countries are all capitalist powers. National income and welfare levels are among the highest in the world.
Political stability, political integrity, although not as good as Nordic countries, but better than other countries. Social welfare is also relatively uncomparable in other countries.
These countries have much to admire when it comes to ensuring the welfare of employed workers.
1. Working hours
According to statistics, their average working time per week generally ranges from 27 to 36 hours. In 26 major European countries, the average working time is 32.5 hours, equivalent to working 6.5 hours per day, five days per week.
To put that in perspective, germans work an average of 26 hours a week, or 5.2 hours a day.
The French work 28 hours a week, 5.6 hours a day.
The British work 32 hours a week, 6.4 hours a day.
2. Day of rest
The average European worker works 187 days a year and has 178 days off.
3. Pay will only be increased
In Germany, wage changes can only be decided in favour of workers, that is, pay increases, not cuts, even if the company goes bust.
4. The government pays back wages first
In Germany, once an enterprise arrears its employees' wages, the government pays them first. The government pays its employees what companies owe them.
5. Separation allowance
Couples who live apart because of work receive subsidies from the government.
The labor Bureau pays for the transportation of employees to visit their families.
If you do not want to separate, the labor Bureau will also pay the baggage handling fee when moving.
6.Generous social security
Workers who have paid compulsory insurance for at least 360 days in the three years prior to unemployment are eligible for unemployment benefits.
68 per cent of final salary payable to dependent children after unemployment. If you don't have children, you can get 63% of your final salary.
They can receive 68 percent or 63 percent of their original wages for 832 days after they lose their jobs. There are no taxes to be paid during this period.
Those who have not worked for more than 832 days are not entitled to unemployment benefits, but can continue to receive basic security benefits, 53% of their original wages, with no time limit.

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The 10 Best Countries In Europe To Live, Visit & Working In 2021

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Ways to manage culture differences in workplace.

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Ways to manage culture differences in workplace.

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The cultural differences might be seen in collaboration communication, time perception, formality, or specific cultural calendars. Understanding, communicating, and interacting with people from other cultures is important especially in the workplace we have to learn how to manage cultural differences among colleagues. From this, we can learn a new culture, avoid consequences among colleagues. Here few ways to manage cultural differences in the workplace. The first is Teamwork. It is important to have an open mind towards the new culture, embrace teamwork activities and sharing of tasks rather than focus on individual differences. Next is awareness. Celebrating cultural diversity and making everyone aware of your coworkers' ideas, customs, and way of life is an excellent way to start building a healthy work environment. Last but not least, communication. The best method to practice good communication in a multi-cultural setting is to keep an open mind, be aware of cultural variations, practice active listening (getting acclimated to other accents), and be aware of your nonverbal communication as well as our voice tone. If we look after every culture, we can learn a lot of new and unique information, which makes our life more entertaining.

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The Importance of Diversity In The Workplace

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1. (Knight, 2015)https://hbr.org/2015/12/how-to-run-a-meeting-of-people-from-different-cultures

2. (Salacuse, 2004) https://iveybusinessjournal.com/publication/negotiating-the-top-ten-ways-that-culture-can-affect-your-negotiation/

3. (WITTE, 2018) https://greatergood.berkeley.edu/article/item/the_subtle_way_cultural_bias_affects_job_interviews

4. (Bronola, 2018) https://medium.com/the-looking-glass/the-impact-of-cultural-diversity-in-the-workplace-930ceb44585f

5. (Williams, 2011)https://earthbound.report/2011/10/26/the-trouble-with-advertising-2/

6. (Claessens, 2019)https://marketing-insider.eu/cultural-differences-in-marketing/

7. (Unknown, 2021)https://www.commisceo-global.com/blog/culture-in-advertising

8. (Matousek, 2018)https://www.businessinsider.com/what-mcdonalds-is-like-around-the-world-2017-11

9. (Unknown, Get smarter, 2018) https://www.getsmarter.com/blog/career-advice/culture-import-export-trade/

10. (James R. Lincoln, 2008) https://www.jstor.org/action/doBasicSearch?Query=Cultural+Effects+on+Organizational+Structure%3A+The+Case+of+Japanese+Firms+in+the+United+States

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1. Kirthana Devi Vinayaga Murthy 203022187

2. Inbatharashini Anbarasan 203022188

3. Yang Quanting 192921223

4. Okompor Celestine Ewere, 193921464

5. Qi yuhan 192921200