Culture, Compliance & Turkey – post from 2017

This post, written in 2017, continues to receive a lot of attention. I have taken the topic up in more detail in a series of posts started in 2019.

While I still stand behind what I have written here, this first post was based more on literature research, some personal experience and reflection. The 2019 posts are the result of a Special Interest Group (SIG) on Culture and Compliance in Turkey. I have initiated this group within the Turkish Ethics and Reputation Society TEiD in January 2019. In the SIG we are conducting a series of workshops in which we discuss and analyze Turkish culture by its dimensions according to the 6D model of Geert Hofstede – one dimension at a time.

The members of the SIG come from a variety of industries, multinationals and Turkish corporations and SMBs. They are all Turkish nationals, so the outcomes of our workshops are not the view of a foreigner from a different cultural background but those of Turkish Ethics & Compliance professionals (or related functions) about their own national culture and its impact on the effectiveness of Ethics & Compliance programs in Turkey.

Ethics & Compliance programs based on the Western (US dominated) paradigm, stressing individual accountability, encouraging speak-up and focused of principles over rules must overcome specific challenges in Turkey and other countries characterized by high-power distance, low individualism, feminine, high uncertainty avoidance cultures.

Culture, noun: the customary beliefs, social forms, and material traits of a racial, religious, or social group; also: the characteristic features of everyday existence (such as diversions or a way of life) shared by people in a place or time

– Merriam-Webster

Introduction

Even before I started working as a Compliance Officer in a pharmaceutical company in Turkey, I had been fascinated with Turkish culture and the specific challenges it poses to Compliance Management for a long time.

I first came to Turkey in 2005 as an internal auditor and in the course of the ensuing three audit engagements over the course of three years, we were faced with several conflict of interest cases and a fraud scheme.

Tatlı yiyelim, tatlı konuşalım. (Let’s first eat sweet and then talk sweetly.)

– Turkish proverb

This was the first sentence in Turkish I was taught by the colleagues from the local Finance function during the first days of the first engagement, laughing when they provided the audit team with enough sticky-sweet bakery for a football team – every single day. Later in my career I came again to Turkey as an auditor, but in a different company and industry, and found some instances of at least questionable behavior by a member of senior management that wasn’t challenged by anyone locally because he as a senior manager stood in a certain sense above the rules.

In parallel, having being married now for close to ten years to a Turkish wife and having got to know well the extensive Turkish family, I have grown to understand and appreciate, even to love, Turkish culture also from a private perspective, which has given me an enhanced perspective also in my professional life.

When we were still living in Germany, I sometimes said jokingly that if I ever wanted a real challenge, I would go to Turkey and research about Turkish culture and Compliance. The story of how I came to work in Turkey has to be told as well, in a separate post, because it is also a story of “applied integrity”. Suffice it to say here that the opportunity arose sooner that I had expected.

Challenge accepted.

– Barney Stinson

The Hofstede 6-D Model of National Culture

My analysis is based on the work of Prof. Geert Hofstede, a Dutch scientist in the area of intercultural learning, who conducted a large-scale empirical study with IBM about the differences of national cultures at the end of the 60s. Since then, the Hofstede Institute has been continuing and updating his work. Although the results have been discussed controversely, I haven’t found a better model yet in my personal research that corresponds to my personal experiences and observations so well.

The Hofstede model breaks down national culture in six characteristic dimensions (the sixth one having been added quite recently):

  1. Power Distance
  2. Individualism (Collectivism)
  3. Masculinity (Femininity)
  4. Uncertainty Avoidance
  5. Long-term (short-term) Orientation
  6. Indulgence (Restraint)

Power Distance describes how power is distributed in a society. Is it distributed fairly equally or concentrated? Is the society very hierarchical? How are decisions taken: by participation or top-down? And is this viewed and accepted as normal by society?

Individualism (Collectivism) describes the extent to which an individual’s interest and an individual’s self-fulfillment are above or subordinate to the interest of a group. This dimension strongly determines the predominant style of communication in a society: low-context in individualistic societies, high-context in collectivistic societies.

Masculinity (Femininity) describes certain socio-cultural aspects like role distribution and clear distinction between men’s and women’s tasks as well as performance and achievement orientation (masculine cultures) as opposed to relationship orientation and co-operation (feminine cultures).

Uncertainty Avoidance means how the society deals with unknown situations; e.g. by analysis, planning and control but also by rituals, traditions, rules and conventions, superstition as well as rules-orientation; worries about health, money and the future belong also to this context; as well as openness for news, innovation, foreign people.

Long-term (Short-term) Orientation characterizes in how far the society’s interest is focused on short-term success or long-term, sustainable solutions.

Indulgence (Restraint) finally means, how openly the society deals with the needs of individuals; enjoyment in spare time, openness with regards to sexual life and orientation.

Turkey in the Hofstede model

On a scale of 1 to 100 points used in the Hofstede model, Turkish culture is depicted as follows below in comparison to German culture.

Source: https://www.hofstede-insights.com/product/compare-countries/

Using the online database of the Hofstede Institute, any two or even three countries can be chosen for comparison. I choose Germany as a comparison for the obvious reasons that I am German and received my primary socialization in Germany. Germany is useful from a Compliance perspective also for the reason that Germans are widely perceived as being principle-oriented and rules-observant (if not obsessed), disciplined and order-loving, honest, critical and direct (to the extreme of being rude), rational and organized.

Analysis of the Culture Dimensions for Turkey

Power Distance and Individualism

The direct comparison with Germany shows diametrically opposite values in the dimensions Power Distance and Individualism. Whereas in Germany, Power Distance is low and Individualism is high, the opposite is the case for Turkey: Power Distance is pronouncedly high and Individualism is low.

The Hofstede Institute characterizes Turkish culture in the Power Distance dimension as follows:

Dependent, hierarchical, superiors often inaccessible and the ideal boss is a father figure. Power is centralized and managers rely on their bosses and on rules. Employees expect to be told what to do. Control is expected and attitude towards managers is formal. Communication is indirect and the information flow is selective. The same structure can be observed in the family unit, where the father is a kind of patriarch to whom others submit.

Hierarchy as an inherent trait of culture is also evident in everyday communication: Persons of authority are politely addressed by title and not directly by name, starting in the family: the younger siblings call the older brother ağabey and the older sister abla; in the office, employees higher up in the hierarchy are addressed respectfully as bey/hanım (I am Michael bey) whereas on the same level or hierarchically downwards, the first name is used.

Regarding the low Individualism of Turkish culture, the Hofstede Institute writes:

Turkey … is a collectivistic society. This means that the “We” is important, people belong to groups (families, clans or organisations) who look after each other in exchange for loyalty. Communication is indirect and the harmony of the group has to be maintained, open conflicts are avoided. The relationship has a moral base and this always has priority over task fulfillment. Time must be invested initially to establish a relationship of trust. Nepotism may be found more often. Feedback is always indirect, also in the business environment.

In the examples in the introduction, I have already described these forst two important factors as differentiating the Turkish culture so much from my own German culture and – most importantly for Communication – from the principles underlying the anglo-american idea of Compliance as it is being enforced globally through the FCPA and more lately the UK Bribery Act.

Quod licet Jovi non licet bovi. (What is allowed for the Lord is not allowed to his cattle. )

– Latin proverb

This factor combination of a high Power Distance and Collectivism is problematic from a Culture of Integrity perspective more so than directly from a Compliance perspective.

  • The relative measure of Integrity is more the integrity of relationships and values within the group (team, department, family…) and loyalty to, due respect for or deference to the authority of the head/leader of the group than the fulfillment of higher, more abstract ethical standards.
  • People identify through belonging to a group and are loyal to that group by a sense of identity and the emotional and moral relationship and loyalty to the leader (patron).
  • The leader defines the rules and enforces compliance by authority, control and positive as well as negative sanctions of behaviors. The tone from the top is important and has a direct effect – through the personal relationship aspect – on the behavior of members of an organization, who want to fulfill the leader’s expectations.
  • The patron as head of the group has a clear moral responsibility to help, support and take care of the needs of the members of the group (including their dependents); including material, physical support.
  • The group leader himself does not have to adhere to the same norms as his subordinates; elites, unequal power distribution, different principles for different positions in the hierarchy are accepted. This relativizes the clarity of expectations from all members of the organization. The expectations are more dependent on the direct relationship with the leader, not generalized rules, and can be subject to change.
  • The leader rewards with favors, help in personal situations, also for family members, also positive sanctioning of rules violations, and also material gifts (the giving of gold pieces is widely customary in society for important events like marriage, birth of a child…) or visible and open favoritism in the hierarchy. On the other hand, the leader punishes by loud, open and direct criticism (which can including shouting, emotional expressions, strong language) and also the exemption from support, material rewards…
  • Speaking up can be inhibited by the feeling of loyalty to the leader and group as well as by the notion that it’s not perceived as wrong if the leader breaks his own set of rules. Also a dependency on a favorable view in the eyes of the leader or interdependence between group members because of favors given, owed, material gifts exchanged, personal family relationships … can inhibit breaking out of the collective group and acting as an individual speaking up. It can also be perceived as ayıp (improper, lacking respect) to speak up, especially criticizing a hierarchical higher person.
  • As a consequence, situations are abundant and acceptable that would be regarded under strict “Western” interpretation as potential or actual Conflicts of Interest. These are culturally and from a historical and social perspective absolutely normal and acceptable. Nepotism, favoritism towards relatives, are fairly normal, accepted and frequent. Employment of a relative or working with a vendor owned by a relative is not perceived as inherently problematic: through the cultural mechanisms of Power Distance and Collectivism, loyalty and control can be expected and in a tradition of the society, these mechanisms have actually been successful. In some respects, this informal level of control by relationship has even lower transactional costs than fixing, controlling and enforcing all rights and obligations in contracts in complete and clear terms with all possible contingencies.
  • It’s these (potential) conflicts of interest situations that are the most immediate problems from a (anglo-american) Compliance perspective, in my opinion. I would even go so far as to say that the conflict of interest is the “mother of all compliance issues”.

Masculinity

Turkey has a tendency to the feminine side of this cultural dimension.

This means that the softer aspects of culture such as leveling with others, consensus, sympathy for the underdog are valued and encouraged. Conflicts are avoided in private and work life and consensus at the end is important. Leisure time is important for Turks, it is the time when the whole family, clan and friends come together to enjoy life. Status is shown, but this comes more out of the high PDI [Power Distance Indicator].

In this context it is also interesting to mention the expression iş arkadaşı (work friend) for colleague: Contrary to Germany, where colleagues usually are anything but friends, but just the people you have to work with because you are in the same department. There are German proverbs like “You can choose your friends but not your colleagues.” The Turkish expression shows a different perception that fits with the higher Collectivism score as well as the more feminine tendency of society.

Uncertainty Avoidance

This cultural dimension score is very high in Turkey.

Turkey scores 85 on this dimension and thus there is a huge need for laws and rules. In order to minimize anxiety, people make use of a lot of rituals. For foreigners they might seem religious, with the many references to “Allah”, but often they are just traditional social patterns, used in specific situations to ease tension.

However, having rules and laws does not mean following them and Turkey isn’t particularly good at getting your rights using the legal ways. There’s a lack of domestic motivation to fight corruption, because people are generally unaware of corruption’s effect on society, enforcement is low in the absence of sufficiently effective penalties and public investigation and enforcement lacking qualified personnel resources.

Long-term Orientation and Indulgence

Both cultural dimensions do not show a very pronounced preference in the Hofstede analysis of Turkey so no dominant cultural preference can be inferred.

Excursus: Communication Style

Communication is closely tied to the dimension Individualism (Collectivism). Turkey as a collectivistic culture has a high-context communication style while Germany has an (extremely) low-context style. The following table and charts illustrate the differences quite clearly.

Source: https://www.slideshare.net/mobile/awidzinska/hofstedes-cultural-dimensions-17196634

Source: http://www.businessinsider.com/communication-charts-around-the-world-2014-3

Source: based on https://hbr.org/2015/12/getting-to-si-ja-oui-hai-and-da (Turkey added myself based on my own judgment.)

Conclusion

The combination of a high Power Distance with low Individualism (in conjunction with more feminine cultural tendencies) leads to specific challenges for an Integrity Culture according to the predominant view from an anglo-american perspective as driven by global FCPA and UKBA enforcement. This is also reflected in Turkey’s score in the Transparency International Corruption Perception Index, which has been steadily declining since 2014, and it’s position in the TRACE matrix. It’s up to us as Integrity & Compliance professionals to understand and then address these challenges specifically when designing and implementing our programs in Turkey.

This is particularly important for Turkish subsidiaries of multinationals. In these, Compliance programs are largely driven by corporate central functions. Local senior management in Turkey may be composed of individuals with international experience, partly expatriates, with intercultural experience, who are more familiar to the anglo-american principles of Compliance. But the same managers may on the other side not be aware of the inherent characteristics of their own national culture and the impact their behaviors have on the members of their organization as a consequence of these culture dimensions. In addition, the vast majority of the members of the organization in Turkey will have experienced their primary socialization fully within the context of Turkish culture and hence will be fully living and working within a Turkish socio-cultural mindset. This means that any Integrity & Compliance training and communication will be received and understood by them through the frame of reference of Turkish culture.

By developing an understanding of this cultural frame of reference, Compliance programs in Turkey should particularly focus on:

  • The role of leaders and the tone from the top, which is even more important in a high Power Distance culture like Turkey.
  • Clearly expressed, personalized expectations of the leader regarding Compliance from each individual member of the organization linked to the personal relationship to the leader rather than higher principles.
  • Socializing Compliance as a part of the “work family”, as a trusted “brother” and “work friend” to help and support. Use high-context, informal and social ways of communications instead of low-context trainings and Compliance mailings and information. Enable situations for direct and individual interaction with Compliance personnel.
  • Potentially establish the Compliance Head as a patron in his own right, utilizing the Power Distance to drive Compliance. It clearly helps if the Compliance Officer speaks Turkish, even if not as a native speaker. But making visible efforts to explain expected behavior in the employees’ own mother tongue is a sign of respect, demonstrates appreciation, creates a common ground and helps set a higher context.
  • The necessity of controls of compliant behavior and timely and visible sanctioning of non-compliance by the leaders.
  • Explaining that speaking up is not a breach of loyalty and that actually the collective (the local organization embodied by the leader) as well as the leader personally expect speaking up.
  • Establishing anonymous channels for raising concerns and reporting misconduct.

Culture eats Strategy for breakfast.

– Peter Drucker

We cannot change national culture and certainly shouldn’t try to. We have to understand that what we call company culture is embedded into a much stronger and much older national culture, which people literally have taken up with their mother’s milk. We have to respect this culture and learn to work within it, using its characteristics to the advantage of our objectives as Integrity & Compliance professionals.

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