Australia and America aren’t that different, right?

US Flag

Just because two countries might seem culturally similar on the surface, doesn’t necessarily mean they approach business in the same way.

Anthropologist James Downs defined culture as “a mental map which guides us in our relations to our surroundings and to other people.” Variations in our mental maps are obvious when we think about business cultures in countries like Japan or China, where we also attribute many differences in behavioral customs and etiquette to culture. They are less pronounced in countries where outward similarities appear to prevail over the differences; physical features, language and common heritage are example of such superficial similarities.

An important aspect of creating successful business opportunities abroad is to learn to recognise cultural differences – even when they are scarce on the surface. As this article demonstrates with the example of Australia and the United States, even countries that share many economic, political and cultural alliances can be exceedingly different upon deeper investigation.

Common heritage, common provenance

Outwardly, Australian culture and American culture appear quite similar. Both are predominantly of Caucasian/Anglo-Saxon ancestry and share English heritage and language. They are relatively young cultures that grew through liberal immigration policies during their early political formation, and follow well known and understood legal traditions and governance systems.

Both Australia and the United States were conceived as British colonies; the United States for its economic/trade value and Australia as a prison colony. Settlers of the two nations eventually conquered rough and unfriendly terrain by overpowering the indigenous and working the land for mining and farming.

Over time, the United States and Australia have maintained an excellent political relationship, with Australia backing every US military intervention, including the most recent in Iraq and its continued presence in Afghanistan. In 2011, both nations celebrated the 60th anniversary of the ANZUS treaty, the formal statement of each country’s military commitment to one another.

Meaningful differences

However, outside of these external factors, the cultural differences between the two countries, especially in a business or political context, is disarming. While both are relatively young countries, the political and religious philosophies that characterised each nation’s early settlers is quite different.

The earliest influx of immigrants to the United States was most famously the Pilgrims, who were looking to escape religious persecution in Europe. The puritanical Pilgrims had a strong Calvinist religious tradition, which emphasised hard work and individual salvation. On the other hand, early Australia was settled by convicts who were considered renegades of the law and the church at a time that the Church of England was strongly identified with authority. Thus, from its earliest days, community was emphasised as an alternative to the central “command-and-control” religious structures that classified law and order in England.

Consequently, US culture has evolved to be one that is very individualistic in nature, with emphasis on free will and the self-made man achieving economic success through the American dream. Australia, in line with its community-oriented heritage is a culture that emphasises common good, or the popular expression “fair go for all.”

Leadership in the cultural context

Cultural differences in philosophies about the role of the individual and authority not surprisingly affect leadership structures in the workplace. Australian culture places much emphasis on egalitarianism, while the United States places more emphasis on authoritative and strong leadership styles.

For example, the Australian Prime Minister customarily will ride in the front seat with her car driver, and will insist on being addressed by her first name. The United States President, on the other hand, will always ride in the back of a town car, must always be addressed as “Mr. President,” and is formally referred to the “Commander in Chief”.  A common tradition in Washington of referring to leaders no longer in an official capacity by their previous titles underscores this cultural value of authority.

These fundamentally different attitudes to leadership place American command-control leadership styles in direct contrast with the Australian fraternal leadership style. In Australia, the leader must win the respect of his peers and followers by virtue of his character, rather than by virtue of his position. In the United States, leaders are expected to take control through more active leadership roles, and can use their position to leverage power in order to gain followers.

Although there is an emerging trend toward the evolution of flat business organisations in American business literature and business schools, most U.S. businesses are still characterised by clear structure and reporting certainty. Employment law has evolved to afford employees some basic civil rights protections, but employees generally work at will, meaning that they often lack meaningful control in the workplace. Consequently, work is often considered “serious” in the United States, and paired with an individualistic culture, Americans work hard to rise through the structured ranks.

Australian organisations, on the other hand, prefer flexibility and autonomy in the workplace. Work is a part of life, but certainly lacks the all-consuming characteristic that dominates life in the United States. A fitting metaphor for the differences in work culture derives from a sports analogy of American football versus Australian football. Australian football is fluid and lacks structured plays. There are often plans, but the team equally relies on flexibility and innovation. U.S. football is classified by engineered plays that are designed to protect the star Quarterback.

Modern day economy, modern day lessons

Fortunately for Australia, the Government had the foresight in the early 1990s to implement a mandated retirement savings policy, which has made the country a focus for hedge fund managers all over the world. Now valued at over AU $1.1 trillion (US $1.17 trillion), the pool of contestable investment funds is the fourth largest, despite the fact that the country’s population sits at around one-third of France. Australia’s contestable pension fund market is projected to reach US $1.9 trillion by 2015, making it the largest in Asia. Comparatively, Japan’s market is projected to reach US $897 billion by 2015, Singapore’s US $124 billion and Hong Kong’s US $112 billion.

With Australia’s ascent to a serious player in the world economy, the cultural differences described in this article are going to become increasingly important as Wall Street courts what has long been perceived as its less sophisticated counterpart. The Australian culture’s strong emphasis on relationship building and character will continue to elude those investors that don’t seek to fully understand the cultural implications at play.

It will take a bit of time to reprogram the notion that because Australians appear to be so familiar, that they expect the same social and business relationships and organisational leadership structures as Americans. Only by endeavoring to truly understand the differences between the two cultures will the opportunities to form business synergies and successful global business strategies emerge.

­–Derek Linsell is founder of U.S-based Apricot Consulting, which has an office in Melbourne.

  • Thanks Derek, a very interesting article and one that echoes what I always say to expats arriving from an English speaking culture – “watch out, language is not a culture, it’s just a tool of communication”. Also interesting in the Australia/ America mix is the different attitude to self promotion; in Australia you are a tall poppy if you make too much of your achievements, but in America you may run the risk of not being included in the team if you do not make your experience and expertise clear to all involved. A friend who recently moved from Melbourne to New York found he had to really ramp up his laid back, understated ways as he was literally being talked over.