MGT 403 Chapter 4
Individualism
the political philosophy that people should be free to pursue economic and political endeavors without constraint; the tendency of people to look after themselves and their immediate family only Like the effects of the other cultural dimensions, the effects of individualism and collectivism can be measured in a number of different ways. Hofstede found that wealthy countries have higher individualism scores and poorer countries higher collectivism scores Countries with high individualism also tend to have greater support for the Protestant work ethic, greater individual initiative, and promotions based on market value. Countries with low individualism tend to have less support for the Protestant work ethic, less individual initiative, and promotions based on seniority.
Collectivism
the political philosophy that views the needs or goals of society as a whole as more important than individual desires; the tendency of people to belong to groups or collectives and to look after each other in exchange for loyalty Like the effects of the other cultural dimensions, the effects of individualism and collectivism can be measured in a number of different ways. Hofstede found that wealthy countries have higher individualism scores and poorer countries higher collectivism scores
Culture
acquired knowledge that people use to interpret experience and generate social behavior. This knowledge forms values, creates attitudes, and influences behavior
Values
Basic convictions that people have regarding what is right and wrong, good and bad, and important and unimportant
GLOBE Culture & Management
GLOBE researchers adhere to the belief that certain attributes that distinguish one culture from others can be used to predict the most suitable, effective, and acceptable organizational and leader practices within that culture. In addition, they contend that societal culture has a direct impact on organizational culture and that leader acceptance stems from tying leader attributes and behaviors to subordinate norms The GLOBE project set out to answer many fundamental questions about cultural variables shaping leadership and organizational processes. The meta-goal of GLOBE was to develop an empirically based theory to describe, understand, and predict the impact of specific cultural variables on leadership and organizational processes and the effectiveness of these processes. Overall, GLOBE hopes to provide a global standard guideline that allows managers to focus on local specialization. Specific objectives include answering these fundamental questions: Are there leader behaviors, attributes, and organizational practices that are universally accepted and effective across cultures? Are there leader behaviors, attributes, and organizational practices that are accepted and effective in only some cultures? How do attributes of societal and organizational cultures affect the kinds of leader behaviors and organizational practices that are accepted and effective? What is the effect of violating cultural norms that are relevant to leadership and organizational practices? What is the relative standing of each of the cultures studied on each of the nine core dimensions of culture? Can the universal and culture-specific aspects of leader behaviors, attributes, and organizational practices be explained in terms of an underlying theory that accounts for systematic differences across cultures?
Hofstede's & Cultural Dimensions
In 1980, Dutch researcher Geert Hofstede identified four original, and later two additional, dimensions of culture that help explain how and why people from various cultures behave as they do.27 His initial data were gathered from two questionnaire surveys with over 116,000 respondents from over 70 different countries around the world—making it the largest organizationally based study ever conducted. The individuals in these studies all worked in the local subsidiaries of IBM. As a result, Hofstede's research has been sometimes criticized because of its focus on just one company; however, samples for cross-national comparison need not be representative, as long as they are functionally equivalent. Because they are so similar in respects other than nationality (their employers, their kind of work, and—for matched occupations—their level of education), employees of multinational companies like IBM form attractive sources of information for comparingPage 130 national traits. The only thing that can account for systematic and consistent differences between national groups within such a homogeneous multinational population is nationality itself—the national environment in which people were brought up before they joined this employer. Comparing IBM subsidiaries therefore shows national culture differences with unusual clarity.28 Despite being first published nearly 40 years ago, Hofstede's massive study continues to be a focal point for additional research, including the most recent GLOBE project, discussed at the end of this chapter. The original four dimensions that Hofstede examined were (1) power distance, (2) uncertainty avoidance, (3) individualism, and (4) masculinity. Further research by Hofstede led to the recent identification of the fifth and sixth cultural dimensions: (5) time orientation, identified in 1988, and (6) indulgence versus restraint, identified in 2010.
Trompenaars
In 1994, another Dutch researcher, Fons Trompenaars, expanded on the research of Hofstede and published the results of his own ten-year study on cultural dimensions.44 He administered research questionnaires to over 15,000 managers from 28 countries and received usable responses from at least 500 in each nation; the 23 countries in his research are presented in Table 4-5. Building heavily on value orientations and the relational orientations of well-known sociologist Talcott Parsons,45 Trompenaars derived five relationship orientations that address the ways in which people deal with each other; these can be considered to be cultural dimensions that are analogous to Hofstede's dimensions. Trompenaars also looked at attitudes toward both time and the environment, and the result of his research is a wealth of information helping explain how cultures differ and offering practical ways in which MNCs can do business in various countries. The following discussion examines each of the five relationship orientations as well as attitudes toward time and the environment. Trompenaars and Hampden-Turner presented the respondents with a dilemma and asked them to make a decision. Here is one of these dilemmas along with the national scores of the respondents:47 You are riding in a car driven by a close friend. He hits a pedestrian. You know he was going at least 35 miles per hour in an area of the city where the maximum allowed speed is 20 miles per hour. There are no witnesses. His lawyer says that if you testify under oath that he was driving 20 miles per hour it may save him from serious consequences. What right has your friend to expect you to protect him? My friend has a definite right as a friend to expect me to testify to the lower figure. He has some right as a friend to expect me to testify to the lower figure. He has no right as a friend to expect me to testify to the lower figure. With a high score indicating strong universalism (choice c) and a low score indicating strong particularism (choice a), here is how the different nations scored:
Indulgent Societies
Indulgent societies encourage instant gratification of natural human needs Countries that show a high indulgence index tend to be located in the Americas and Western Europe, including the USA, Australia, Mexico, and Chile (see Figure 4-6). Freely able to satisfy their basic human desires, individuals in these societies tend to live in the moment. They participate in more sports and activities, express happiness freely, and view themselves as being in control of their own destiny. Freedom of speech is considered vital, and smaller police forces are commonplace. People in indulgent cultures tend to view friendships as important, have less moral discipline, and exhibit a more extroverted, positive personality.
Long-Term Time Orientation
Long-term-oriented societies tend to focus on the future. They have the ability to adapt their traditions when conditions change, have a tendency to save and invest for the future, and focus on achieving long-term results. Asian cultures primarily exhibit long-term orientation. Countries with a high long-term orientation index include China, Japan, and Indonesia (see Figure 4-5). In these cultures, individuals are persistent, thrifty with their money, and highly adaptable to unexpected circumstances. Relationships tend to be ordered by status, which can affect the way that situations are handled. Additionally, people in long-term-oriented cultures are more likely to believe that there are multiple truths to issues that arise, rather than just one, absolute answer.
GLOBE Cultural Dimensions
Phase one of the GLOBE project identified the nine cultural dimensions: 1. Uncertainty avoidance is defined as the extent to which members of an organization or society strive to avoid uncertainty by reliance on social norms, rituals, and bureaucratic practices to alleviate the unpredictability of future events. 2. Power distance is defined as the degree to which members of an organization or society expect and agree that power should be unequally shared. 3. Collectivism I: Societal collectivism refers to the degree to which organizational and societal institutional practices encourage and reward collective distribution of resources and collective action. 4. Collectivism II: In-group collectivism refers to the degree to which individuals express pride, loyalty, and cohesiveness in their organizations or families. 5. Gender egalitarianism is defined as the extent to which an organization or a society minimizes gender role differences and gender discrimination. 6.Assertiveness is defined as the degree to which individuals in organizations or societies are assertive, confrontational, and aggressive in social relationships. 7. Future orientation is defined as the degree to which individuals in organizations or societies engage in future-oriented behaviors such as planning, investing in the future, and delaying gratification. 8.Performance orientation refers to the extent to which an organization or society encourages and rewards group members for performance improvement and excellence. 9. Humane orientation is defined as the degree to which individuals in organizations or societies encourage and reward individuals for being fair, altruistic, friendly, generous, caring, and kind to others. The first six dimensions have their origins in Hofstede's cultural dimensions (see Figure 4-11). The collectivism I dimension measures societal emphasis on collectivism; low scores reflect individualistic emphasis and high scores reflect collectivistic emphasis by means of laws, social programs, or institutional practices. The collectivism II scale measures in-group (family or organization) collectivism such as pride in and loyalty to family or organization and family or organizational cohesiveness. In lieu of Hofstede's masculinity dimension, the GLOBE researchers developed the two dimensions they labeled gender egalitarianism and assertiveness. The dimension of future orientation is similar to Hofstede's time orientation dimension. Future orientation also has some origin in past research, as does performance orientation and humane orientation. These measures are therefore integrative and combine a number of insights from previous studies.
Communitarianism
Refers to people regarding themselves as part of the group (collectivist view) Trompenaars recommends that when people from cultures with high individualism deal with those from communitarianistic cultures, they should have patience for the time taken to consent and to consult, and they should aim to build lasting relationships. When people from cultures with high communitarianism deal with those from individualistic cultures, they should be prepared to make quick decisions and commit their organization to these decisions. Also, communitarianists dealing with individualists should realize that the reason they are dealing with only one negotiator (as opposed to a group) is that this person is respected by his or her organization and has its authority and esteem.
GLOBE
a multi-country study and evaluation of cultural attributes and leadership behaviors among more than 17,000 managers from 951 organizations in 62 countries Conceived in 1991, the GLOBE project is an ongoing research project, currently consisting of three major interrelated phases. GLOBE extends and integrates the previous analyses of cultural attributes and variables published by Hofstede and Trompenaars. The three completed GLOBE phases explore the various elements of the dynamic relationship between the culture and organizational behavior
Short-Term Time Orientation
Short-term-oriented cultures focus more on the past and present than on the future. These societies have a deep respect for tradition, focus on achieving quick results, and do not tend to save for the future Spain, the USA, and the UK were identified as having a low long-term orientation index (Hofstede's short-term orientation). Individuals in short-term-oriented societies believe in absolutes (good and evil), value stability and leisure time, and spend money more freely. Traditional approaches are respected, and feedback cycles tend to be short. Gift giving and greetings are shared and reciprocated.
The Nature of Culture
The word culture comes from the Latin cultura, which is related to cult or worship. In its broadest sense, the term refers to the result of human interaction.16 For the purposes of the study of international management, culture is acquired knowledge that people use to interpret experience and generate social behavior.17 This knowledge forms values, creates attitudes, and influences behavior. Most scholars of culture would agree on the following characteristics of culture: Learned. Culture is not inherited or biologically based; it is acquired by learning and experience. Shared. People as members of a group, organization, or society share culture; it is not specific to single individuals. Transgenerational. Culture is cumulative, passed down from one generation to the next. Symbolic. Culture is based on the human capacity to symbolize or use one thing to represent another. Patterned. Culture has structure and is integrated; a change in one part will bring changes in another. Adaptive. Culture is based on the human capacity to change or adapt, as opposed to the more genetically driven adaptive process of animals. Because different cultures exist in the world, an understanding of the impact of culture on behavior is critical to the study of international management.19 If international managers do not know something about the cultures of the countries they deal with, the results can be quite disastrous.
Cultural Diversity
There are many ways of examining cultural differences and their impact on international management. Culture can affect technology transfer, managerial attitudes, managerial ideology, and even business-government relations. Perhaps most important, culture affects how people think and behave. In overall terms, the cultural impact on international management is reflected by basic beliefs and behaviors. Here are some specific examples where the culture of a society can directly affect management approaches: Centralized vs. decentralized decision making. In some societies, top managers make all important organizational decisions. In others, these decisions are diffused throughout the enterprise, and middle- and lower-level managers actively participate in, and make, key decisions. Safety vs. risk. In some societies, organizational decision makers are risk-averse and have great difficulty with conditions of uncertainty. In others, risk taking is encouraged and decision making under uncertainty is common. Individual vs. group rewards. In some countries, personnel who do outstanding work are given individual rewards in the form of bonuses and commissions. In others, cultural norms require group rewards, and individual rewards are frowned on. Informal vs. formal procedures. In some societies, much is accomplished through informal means. In others, formal procedures are set forth and followed rigidly. High vs. low organizational loyalty. In some societies, people identify very strongly with their organization or employer. In others, people identify with their occupational group, such as engineer or mechanic. Cooperation vs. competition. Some societies encourage cooperation between their people. Others encourage competition between their people. Short-term vs. long-term horizons. Some cultures focus most heavily on short-term horizons, such as short-range goals of profit and efficiency. Others are more interested in long-range goals, such as market share and technological development. Stability vs. innovation. The culture of some countries encourages stability and resistance to change. The culture of others puts high value on innovation and change.
The Environment
Trompenaars recommends that when dealing with those from cultures that believe in dominating the environment, it is important to play hardball, test the resilience of the opponent, win some objectives, and always lose from time to time. For example, representatives of the U.S. government have repeatedly urged Japanese automobile companies to purchase more component parts from U.S. suppliers to partially offset the large volume of U.S. imports of finished autos from Japan. Instead of enacting trade barriers, the United States was asking for a quid pro quo. When dealing with those from cultures that believe in letting things take their natural course, it is important to be persistent and polite, maintain good relationships with the other party, and try to win together and lose apart.
Cultural Dimensions
Understanding the cultural context of a society, and being able to respond and react appropriately to cultural differences, is becoming increasingly important as the global environment becomes more interconnected. Over the past several decades, researchers have attempted to provide a composite picture of culture by examining its subparts, or dimensions.
Femininity
a cultural characteristic in which the dominant values in society are caring for others and the quality of life Countries with a low masculinity index (Hofstede's femininity dimension), such as Norway, tend to place great importance on cooperation, a friendly atmosphere, and employment security. Individuals are encouraged to be group decision makers, and achievement is defined in terms of layman contacts and the living environment. The workplace tends to be characterized by low stress, and managers give their employees more credit for being responsible and allow them more freedom. Culturally, this group prefers small-scale enterprises, and they place greater importance on conservation of the environment. The school system is designed to teach social adaptation. Some young men and women want careers; others do not. Many women hold higher-level jobs and do not find it necessary to be assertive.
Maculinity
a cultural characteristic in which the dominant values in society are success, money, and things Countries with a high masculinity index, such as the Germanic countries, place great importance on earnings, recognition, advancement, and challenge. Individuals are encouraged to be independent decision makers, and achievement is defined in terms of recognition and wealth. The workplace is often characterized by high job stress, and many managers believe that their employees dislike work and must be kept under some degree of control. The school system is geared toward encouraging high performance. Young men expect to have careers, and those who do not often view themselves as failures. Historically, fewer women hold higher-level jobs, although this is changing. The school system is geared toward encouraging high performance.
Emotional Culture
a culture in which emotions are expressed openly and naturally. People in emotional cultures often smile a great deal, talk loudly when they are excited, and greet each other with a great deal of enthusiasm. Mexico, the Netherlands, and Switzerland are examples of high emotional cultures. Trompenaars recommends that when individuals from emotional cultures do business in neutral cultures, they should put as much as they can on paper and submit it to the other side. They should realize that lack of emotion does not mean a lack of interest or boredom, but rather that people from neutral cultures do not like to show their hand. Conversely, when those from neutral cultures do business in emotional cultures, they should not be put off stride when the other side creates scenes or grows animated and boisterous, and they should try to respond warmly to the emotional affections of the other group.
Specific Culture
a culture in which individuals have a large public space they readily share with others and a small private space they guard closely and share with only close friends and associates Austria, the United Kingdom, the United States, and Switzerland all are specific cultures In specific cultures, people often are invited into a person's open, public space; individuals in these cultures often are open and extroverted; and there is a strong separation of work and private life. Trompenaars recommends that when those from specific cultures do business in diffuse cultures, they should respect a person's title, age, and background connections, and they should not get impatient when people are being indirect or circuitous. Conversely, when individuals from diffuse cultures do business in specific cultures, they should try to get to the point and be efficient, learn to structure meetings with the judicious use of agendas, and not use their titles or acknowledge achievements or skills that are irrelevant to the issues being discussed.
Achievement Culture
a culture in which people are accorded status based on how well they perform their functions Achievement cultures give high status to high achievers, such as the company's number-one salesperson or the medical researcher who has found a cure for a rare form of bone cancer. Austria, the United States, Switzerland, and the United Kingdom are achievement cultures Trompenaars recommends that when individuals from achievement cultures do business in ascription cultures, they should make sure that their group has older, senior, and formal position holders who can impress the other side, and they should respect the status and influence of their counterparts in the other group. Conversely, he recommends that when individuals from ascription cultures do business in achievement cultures, they should make sure that their group has sufficient data, technical advisers, and knowledgeable people to convince the other group that they are proficient, and they should respect the knowledge and information of their counterparts on the other team.
Diffuse Culture
a culture in which public space and private space are similar in size and individuals guard their public space carefully because entry into public space affords entry into private space as well Venezuela, China, and Spain are diffuse cultures In diffuse cultures, people are not quickly invited into a person's open, public space because once they are in, there is easy entry into the private space as well. Individuals in these cultures often appear to be indirect and introverted, and work and private life often are closely linked. Trompenaars recommends that when those from specific cultures do business in diffuse cultures, they should respect a person's title, age, and background connections, and they should not get impatient when people are being indirect or circuitous. Conversely, when individuals from diffuse cultures do business in specific cultures, they should try to get to the point and be efficient, learn to structure meetings with the judicious use of agendas, and not use their titles or acknowledge achievements or skills that are irrelevant to the issues being discussed.
Ascription Culture
a culture in which status is attributed based on who or what a person is Ascription cultures accord status based on age, gender, or social connections. For example, in an ascription culture, a person who has been with the company for 40 years may be listened to carefully because of the respect that others have for the individual's age and longevity with the firm, and an individual who has friends in high places may be afforded status because of whom she knows. Venezuela, Indonesia, and China are ascription cultures Trompenaars recommends that when individuals from achievement cultures do business in ascription cultures, they should make sure that their group has older, senior, and formal position holders who can impress the other side, and they should respect the status and influence of their counterparts in the other group. Conversely, he recommends that when individuals from ascription cultures do business in achievement cultures, they should make sure that their group has sufficient data, technical advisers, and knowledgeable people to convince the other group that they are proficient, and they should respect the knowledge and information of their counterparts on the other team.
Neutral Culture
a culture which emotions are held in check both Japan and the United Kingdom are high-neutral cultures. People in these countries try not to show their feelings; they act stoically and maintain their composure Trompenaars recommends that when individuals from emotional cultures do business in neutral cultures, they should put as much as they can on paper and submit it to the other side. They should realize that lack of emotion does not mean a lack of interest or boredom, but rather that people from neutral cultures do not like to show their hand. Conversely, when those from neutral cultures do business in emotional cultures, they should not be put off stride when the other side creates scenes or grows animated and boisterous, and they should try to respond warmly to the emotional affections of the other group.
Synchronous Time
people tend to do more than one activity at a time, appointments are approximate and may be changed at a movement's notice, and schedules generally are subordinate to relationships. People in this culture often will stop what they are doing to meet and great individuals coming into their office Mexicans operate under more of a synchronous-time orientation and thus tend to be much more flexible, often building slack into their schedules to allow for interruptions. The French are similar to the Mexicans and, when making plans, often determine the objectives they want to accomplish but leave open the timing and other factors that are beyond their control; this way, they can adjust and modify their approach as they go along. As Trompenaars noted, "For the French and Mexicans, what was important was that they get to the end, not the particular path or sequence by which that end was reached. Trompenaars recommends that when doing business with future-oriented cultures, effective international managers should emphasize the opportunities and limitless scope that any agreement can have, agree to specific deadlines for getting things done, and be aware of the core competence or continuity that the other party intends to carry with it into the future. When doing business with past- or present-oriented cultures, he recommends that managers emphasize the history and tradition of the culture, find out whether internal relationships will sanction the types of changes that need to be made, and agree to future meetings in principle but fix no deadlines for completions.
Sequential Time
people tend to do only one activity at a time, keep appointments strictly, and show a strong performance for following plans as they are laid out and not deviating from them. In the United States, people tend to be guided by sequential-time orientation and thus set a schedule and stick to it.
Restrained Societies
restrained cultures regulate and control behavior based on social norms Countries that show a low indulgence index (Hofstede's dimension of high restraint) tend to be located in Asia and Eastern Europe, including Egypt, Russia, India, and China. In these societies, individuals participate in fewer activities and sports, express less happiness, and believe that their own destiny is not in their control. Maintaining order is seen as vital, resulting in larger police forces and less crime. People tend to value work ethic over friendships, exhibit introverted personalities, and follow a stricter moral discipline
Particularism
the belief that circumstances dictate how ideas and practices should be applied and that something cannot be done the same everywhere In cultures with high particularism, the focus is more on relationships and trust than on formal rules. In a particularist culture, legal contracts often are modified, and as people get to know each other better, they often change the way in which deals are executed. In his early research, Trompenaars found that in countries such as the United States, Australia, Germany, Sweden, and the United Kingdom, there was high universalism, while countries such as Venezuela, the former Soviet Union, Indonesia, and China were high on particularism. Figure 4-10 shows the continuum Trompenaars recommends that when individuals from particularist cultures do business in a universalistic culture, they should be prepared for rational, professional arguments and a "let's get down to business" attitude. Conversely, when individuals from universalist cultures do business in a particularist environment, they should be prepared for personal meandering or irrelevancies that seem to go nowhere and should not regard personal, get-to-know-you attitudes as mere small talk.
Universalism
the belief that ideas and practices can be applied everywhere in the world without modification In cultures with high universalism, the focus is more on formal rules than on relationships, business contracts are adhered to very closely, and people believe that "a deal is a deal." Trompenaars recommends that when individuals from particularist cultures do business in a universalistic culture, they should be prepared for rational, professional arguments and a "let's get down to business" attitude. Conversely, when individuals from universalist cultures do business in a particularist environment, they should be prepared for personal meandering or irrelevancies that seem to go nowhere and should not regard personal, get-to-know-you attitudes as mere small talk.
Power Distance
the extent to which less powerful members of institutions and organizations accept that power is distributed unequally. Countries in which people blindly obey the orders of their superiors have high power distance. In many societies, lower-level employees tend to follow orders as a matter of procedure. In societies with high power distance, however, strict obedience is found even at the upper levels; examples include Mexico, South Korea, and India. For example, a senior Indian executive with a PhD from a prestigious U.S. university related the following story The effect of this dimension can be measured in a number of ways. For example, organizations in low-power-distance countries generally will be decentralized and have flatter organization structures. These organizations also will have a smaller proportion of supervisory personnel, and the lower strata of the workforce often will consist of highly qualified people. By contrast, organizations in high-power-distance countries will tend to be centralized and have tall organization structures. Organizations in high-power-distance countries will have a large proportion of supervisory personnel, and the people at the lower levels of the structure often will have low job qualifications. This latter structure encourages and promotes inequality between people at different levels.
Uncertainty Avoidance
the extent to which people feel threatened by ambiguous situations and have created beliefs and institutions that try to avoid these Countries populated with people who do not like uncertainty tend to have a high need for security and a strong belief in experts and their knowledge; examples include Germany, Japan, and Spain. Cultures with low uncertainty avoidance have people who are more willing to accept that risks are associated with the unknown and that life must go on in spite of this. Examples include Denmark and Great Britain. The effect of this dimension can be measured in a number of ways. Countries with high-uncertainty-avoidance cultures have a great deal of structuring of organizational activities, more written rules, less risk taking by managers, lower labor turnover, and less ambitious employees. Low-uncertainty-avoidance societies have organization settings with less structuring of activities, fewer written rules, more risk taking by managers, higher labor turnover, and more ambitious employees. The organization encourages personnel to use their own initiative and assume responsibility for their actions.