Specific/Diffuse Essay

Specific and diffuse are concepts from the work of Dutch author Fons Trompenaars and British writer Charles Hampden-Turner, as explored in their management philosophy best sellers Riding the Waves of Culture: Understanding Diversity in Global Business (1997) and Managing People Across Cultures (2004). Trompenaars is a specialist in the field of cross-cultural communication, an interdisciplinary field that studies the communication differences among—and between—different cultures. Though incorporating academic disciplines, the field originated in international business, when corporate representatives abroad found that knowing the language was not enough to communicate effectively, and that the things at the heart of the cultural differences they encountered were more significant than simply chop-sticks-versus-cutlery etiquette.

Trompenaars and Hampden-Turner developed a model of culture with seven dimensions; every culture can be described according to its position in those seven dimensions: universalism vs. particularism; individualism vs. collectivism; neutral vs. emotional; specific vs. diffuse; achievement vs. ascription; sequential vs. synchronic; and internal vs. external control. The first five govern the ways people interact with each other, the sixth governs time orientation, the last reflects the attitude toward the environment and general surroundings.

The differences described by these dimensions are often so deep that it can take a visitor a long time to even recognize that they are present; they may realize that something is off about their interaction in the foreign culture, but ascribe it to a language barrier, a lack of local intimate social group, or some other cause, because the expectations inculcated by these dimensions are so fundamental that it often does not consciously occur to us that they even are expectations. To expect someone to knock on a door before entering means being aware that knocking is a choice, that it is possible not to knock; that is merely etiquette, and deviation is empirical, concrete, easy to notice and articulate. What Trompenaars and Hampden-Turner attempt with their model is to articulate much of that which has remained unsaid about variations among and amid cultures.

The specific/diffuse dimension describes the extent to which people get involved with each other’s lives—that is, the extent to which their life transpires in intersecting or nonintersecting layers or spheres. Trompenaars and Hampden-Turner provide the example of two bosses. One, when employees run into him at random in the mall or some other nonwork situation, may be greeted informally, spoken to informally, given less personal space. The other, when encountered in a nonwork situation, is still deferred to—is accorded some degree of respect in matters that have nothing to do with his job, treated as if his opinion has more weight, and this may even be true of people who don’t work for him. Though the United States is considered a culture of the former type—the specific type—there are nevertheless plenty of Americans who find themselves in the position of the latter, such as certain celebrities. Ian Fleming’s James Bond novels, for instance, became American best sellers when Jack Kennedy revealed an affection for them, and Ronald Reagan’s inclusion of Jelly Belly jelly beans in his inauguration celebration helped to propel that brand to national success.

When we describe the difference in terms of respect, it starts to sound like a class system, which is misleading. What is going on is whether one’s reputation is specific (confined to context) or diffuse (permeating the rest of the areas of one’s life). This affects, for instance, how much you expect to know about the personal lives of your coworkers, and how likely you are to interact with them socially outside work. Specific cultures put sharp dividing lines between work and personal life. Diffuse cultures do not. In Germany, for instance, the wife of a doctor will be called Frau Doktor just as he is called Herr Doktor—the title permeates just as the husband’s surname does, and for the same reason: it is that much a part of him, as is she.

There is an online example of the difference between specific and diffuse approaches in the social networking sites Facebook and Myspace. Myspace groups all friends together without differentiation, except the ability to add “top friends,” and some limited content filtering. It is essentially diffuse. Facebook, on the other hand, categorizes friends as workmates, roommates, significant others, schoolmates, family, and so on, and actively encourages the use of this differentiation, while optional applications allow for the mapping of acquaintanceship to show that Bob married Carol who went to school with Ted who lives with Alice who works with Bob.

Specific cultures are likely to keep business and personal life separate, while workmates and business acquaintances in diffuse cultures will want to know each other in nonbusiness contexts and consider that necessary in order to have a grasp of each other’s character. This is one of the communications barriers overseas workers can run into; keeping to oneself or avoiding answering questions that seem intrusive in a diffuse culture can make one seem standoffish, cold, or awkward, regardless of personal charisma or social skills. Americans doing business with visiting foreigners often find that business negotiations only really begin once “the ice has been broken” somehow, which may take days of wining and dining, taking in a baseball game, and visiting nightlife hotspots.

On the other hand, while one’s character permeates deeper in a diffuse culture, Trompenaars and Hampden-Turner describe the boundary of private space as being more severe. The French favor high windows and high fences, making a stronger boundary marker of private space. Trompenaars describes his own discomfort with an American friend helping himself to a beer in the refrigerator after it is offered; even though Trompenaars (from a diffuse Dutch culture) had invited him to have the beer, it was a breach of his expectations for an acquaintance to open the refrigerator instead of waiting to be served. In certain diffuse cultures, it may be strictly inappropriate to ask certain questions—such as about religious or political beliefs—of anyone who is not an intimate. NonAmericans often comment on the confessional nature of American culture, in which a virtual stranger may reveal sexual details, sometimes for no apparent reason except to make small talk—while those same Americans might be just as put off by moving to a culture where coworkers live in the same apartment building, and have fewer barriers between personal and work life.

Bibliography:

  1. Fons Trompenaars and Charles HampdenTurner, Managing People Across Cultures (Capstone, 2004);
  2. Fons Trompenaars and Charles Hampden-Turner, Riding the Waves of Culture: Understanding Diversity in Global Business (McGraw-Hill, 1998).

Spot Market

A spot market is a real-time market for the trade of commodities or securities, where the transactions are conducted instantly, in contrast with the futures exchange or the forward market, where a price is agreed upon for a transaction that will occur at a specified point in the future. The spot market, then, is the one that operates most like ordinary retail markets, with cash exchanged for goods “on the spot.” The spot price is the price for which something sells on the spot market, and is relevant in futures/forward trades as well as other considerations.

The internet and other technological advances have increased the importance of the spot market in commodities. Assets can be bought and sold repeatedly throughout the day, because of the lack of a need to take the time to physically transfer them back and forth. Even so, a delay is sometimes built into the way the market works: the spot market is especially huge in the foreign exchange market that has become the subject of such intense speculation in the last few decades, but on that market there is a two-day delivery date, a length of time originally chosen because of the time it took to physically deliver currency from one bank to another. Spot transactions are the second-most common on the global foreign exchange market, after swaps. Foreign exchange transactions are conducted with currency pairs: the transaction currency (the currency the buyer is paying in) and the counter currency (the currency that is being purchased), though this is somewhat a matter of perspective, since each party is both a buyer and seller.

The spot market has also become important to the energy market. Suppliers with surplus energy or natural gas can use the internet to instantly locate prospective buyers, negotiating prices—often almost instantaneously thanks to the algorithms in automated auction-style bidding systems (buyers can dictate ahead of time that they are willing to pay up to a certain amount for a certain quantity, without needing to be there to monitor the market, just as systems like eBay will increase the user’s bid as necessary up to a specified maximum bid). The energy can then be transferred to the customer within minutes of the surplus being identified, an extraordinary acceleration compared to the pace at which transactions transpired when trading floors were the only venue for spot markets. Some energy markets mandate spot price pools, which are independent exchanges that pool the bids and prices of various buyers and sellers in order to set fair values, with the goal of “clearing the market,” making transactions rapid and facilitating quick exchanges.

There is no single spot market for most commodities, and markets are less interlinked than stock exchanges. They can be privately operated, organized by industry agencies, or government operated, and may be available to the public, authorized brokers, or specific members, depending on the nature of the exchange and the commodity. Spot prices are generally publicly available, and affect other markets and exchanges by acting as a barometer by which the value of a thing can be estimated.

Though ownership transacts instantly, delivery and payment may be delayed some, depending on the market. As stated, foreign exchange has a two-day delivery; crude oil can have a delivery of up to a month; while energy delivers within an hour. In all cases, the spot price paid is the price set at the time of the transaction, regardless of whether anything impacts the value during that brief period before delivery.

Bibliography:

  1. James L. Bickford, Forex Wave Theory: A Technical Analysis for Spot and Futures Currency Trade (McGraw-Hill, 2007);
  2. Rob Booker, Adventures of a Currency Trader: A Fable About Trading, Courage, and Doing the Right Thing (Wiley, 2007);
  3. Paul J. Devereux and Robert A. Hart, “The Spot Market Matters: Evidence on Implicit Contracts From Britain,” Scottish Journal of Political Economy (v.54/5, 2007);
  4. Kathy Lien, Day Trading the Currency Market: Technical and Fundamental Strategies to Profit From Market Swings (Wiley, 2005);
  5. Wayne McDonell, The FX Bootcamp Guide to Strategic and Tactical Forex Trading (Wiley, 2008);
  6. Anne Neumann and Boriss Siliverstovs, “Convergence of European Spot Market Prices for Natural Gas?: A Real Time Analysis of Market Integration Using the Kalman Filter,” Journal of Applied Economics (v.13/11, 2006);
  7. David M. Newbery, “Competition, Contracts and Entry in the Electricity Spot Market,” Rand Journal of Economics (v.29/4, 1998);
  8. Ed Ponsi, Forex Patterns and Probabilities: Trading Strategies for Trending and Range-Bound Markets (Wiley, 2007);
  9. Dominick Salvatore, International Economics (Wiley, 2007);
  10. Frank Sensfuss, Mario Ragwitz, and Massimo Genoese, The Merit Order Effect: A Detailed Analysis of the Price Effect of Renewable Electricity Generation on Spot Market Prices in Germany (ISI, 2007);
  11. J. Stevenson, Filtering and Forecasting Spot Electricity Prices in the Increasingly Deregulated Australian Electricity Market (University of Technology, Sydney, 2001).

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