Effective Ethics & Compliance in the Context of Turkish Culture

Introduction

In 2017 I first wrote a blog post about Culture, Compliance and Turkey with a first discussion of the 6 dimensions of Turkish culture according to Geert Hofstede and their meaning for compliance management in this country.

In the beginning of 2019, the Turkish Ethics and Reputation Society TEID founded a Special Interest Group on Ethical Culture to research this topic more deeply in a series of workshops that I am moderating.

The objectives of the group are

• to develop a deeper understanding of the concept of culture, using the Hofstede 6D model of national culture, in particular for Turkey;
• to open-mindedly discuss the manifestation of the Hofstede dimensions as Ethics & Compliance professionals in Turkish business (i.e. in people’s behavior in our companies);
• to analyze where we see that these cultural behaviors pose challenges to / present opportunities for an effective Ethics & Compliance culture;
• to develop strategies within the context of Turkish culture to use these circumstances (exploit opportunities; counter challenges) for achieving more robust Ethics & Compliance in Turkish business – i.e. using the characteristics of Turkish culture as a tool for better compliance.

As the group work progresses, I will write about the results of the workshops in a series of posts here on my blog.

The group has started working in January 2019 and met again in March and in May. After an extended summer break, we finally resumed our workshops in November. Further meetings are planned roughly every other month.

1. The first meeting focused on the criteria of effective compliance, the concept of culture, the difference between national and organizational culture and introduced the Hofstede 6D model.
2. In the second workshop, we briefly looked at other culture models than Hofstede (GLOBE, Global Values Survey GSV) and then made a deep analysis and discussion of the culture dimension “Uncertainty Avoidance” in Turkey.
3. The third workshop was dedicated to the dimension “Power Distance”.
4. In the fourth meeting, after the long pause, we recapped the model for new participants and had a comparative discussion of the Hofstede culture profiles for Turkey and Canada, which are quite different, and the implications for effective Ethics & Compliance programs.

I will keep updating this overview article as well as writing posts on each of the individual group meetings.

Why Hofstede?

I first came to Turkey as an internal auditor in 2005. It was my first audit engagement. We were auditing the distributor sales channel of one business division. I remember the Turkish finance and accounting colleague, which who, we would closely collaborate during the audit, greet us with sweets and in this first meeting I also learned my first Turkish sentence: “Tatlı yiyelim tatlı konuşalım”, meaning “let’s first eat sweets and then we shall talk pleasantly”. I experienced the hospitality and the openness and friendliness of the Turks in these first days. In the audit interviews I also heard one sentence very often: “Mr. Michael, you have to understand: Turkey is different.” We soon found out how different Turkey was. In the course of the audit we discovered a system of undeclared conflicts of interest through close relations and ownership of distributors by company managers. As a result of the audit, several managers needed to leave the company. After this experience, I said to my colleagues: “If I ever want a real professional challenge, I will become a compliance office in Turkey.

Fast forward eleven years to the summer of 2016: There I was, meanwhile married to my Turkish wife Burcu and having three binational kids. And I was being offered to become Head of Compliance of a Turkish company. After getting familiar with the new work environment and the company and having dealt with the immediate priorities of managing the remediation of an internal audit that had been conducted before I was hired, it was in the late spring of 2017, after almost a year working and living in Turkey that I was sitting down and remembering the sentence from 2017, “Turkey is different”. Why different? And how different? Why was this country regarded as a high corruption risk country with a slowly but steadily decreasing score in Transparency International’s Corruption Perception Index (CPI)? What were the root causes of this? Were they connected to Turkish culture? Yes, according to my experiences from a number of audit engagements in this country with plenty of findings related to conflicts of interests, gifts and hospitality, bribery, control-override by management and so on. But how could I understand this relation better?

I needed a model of Turkish culture, or any national culture, that I could relate to Ethics & Compliance risks. So I started my research – with Google – on models of national culture and particular the culture profile of Turkey and found the Hofstede model of Turkey on the homepage of the Hofstede Institute as well as plenty of other references to Hofstede’s model. I happened to attend an event organized by the Turkish Ethics and Reputation Society (TEİD) just a few weeks later, where the speaker was also using Hofstede to explain some compliance challenges in Turkey. This spurred me on to stay with the model. Interestingly I found several papers that analyzed the correlation between Hofstede’s cultural dimension scores and the CPI, so other (serious) researchers were using Hofstede to look at compliance-related topics, too.

All models are wrong but some are useful.

– George E.P. Box, British statistician

I also found other models in my research, most importantly GLOBE and the World Values Survey, but the Hofstede 6D model had the simplicity I was looking for. I am aware that the Hofstede model has also been criticized scientifically. And I cannot say it is the best model available, and I don’t feel qualified to make that judgment, but it is the model I chose to stick with. Anyway, as a physicist, I am aware that any model is just an approximation of reality. And being approximations, they are not entirely precise.

The best model of a cat is another, preferably the same, cat.

– Norbert Wiener, American mathematician and philosopher

Turkish culture in the Hofstede 6D model

The figure below shows four of the six dimensions of Turkish culture according the the Hofstede 6D model of national culture. The four dimensions shown are

• Power Distance (PDI), which is high,
• Uncertainty Avoidance (UAD), which is very high,
• Masculinity (MAS), which is low (feminine),
• Individualism (IND), which is low (collective).

These four dimensions are in the first approximation the most relevant from an Ethics & Compliance perspective, while the remaining two dimensions, Indulgence and Long-term Orientation, which were added to the Hofstede model later on, are at first not so relevant for my discussion.

This is the end of part 1 of this series of blog posts. In the following parts, I will explore in more depth the current criteria for what constitutes an effective compliance program and then analyze the culture dimensions of Turkey to determine the cultural challenges and opportunities for more effective compliance in this country.