(Mt) – The World Characterized by Different Cultures in Different Societies Analysis

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International Management TENTH EDITION Culture, Strategy, and Behavior Fred Luthans | Jonathan P. Doh Chapter 4 OBJECTIVES OF THE CHAPTER THE MEANINGS AND DIMENSIONS OF CULTURE A major challenge of doing business internationally is to respond and adapt effectively to different cultures. Such adaptation requires an understanding of cultural diversity, perceptions, stereotypes, and values. In recent years, a great deal of research has been conducted on cultural dimensions and attitudes, and the findings have proved useful in providing integrative profiles of international cultures. However, a word of caution must be given when discussing these country profiles. It must be remembered that stereotypes and overgeneralizations should be avoided; there are always individual differences and even subcultures within every country. This chapter examines the meaning of culture as it applies to international management, reviews some of the value differences and similarities of various national groups, studies important dimensions of culture and their impact on behavior, and examines country clusters. The specific objectives of this chapter are 1. DEFINE the term culture, and discuss some of the comparative ways of differentiating cultures. 2. DESCRIBE the concept of cultural values, and relate some of the international differences, similarities, and changes ­occurring in terms of both work and managerial values. 3. IDENTIFY the major dimensions of culture relevant to work settings, and discuss their effects on behavior in an ­international environment. 4. DISCUSS the value of country cluster analysis and ­relational orientations in developing effective international management practices. The World of International Management Culture Clashes in Cross-Border Mergers and Acquisitions I n one of the largest cross-border deals ever proposed, ­Belgian-Brazilian beverage giant ABInBev offered US$104.2 billion to acquire British-owned SABMiller. Both ­companies have multiple investments and brands in every major beer market in the world. The merger brings ABInBev’s brands of Budweiser, Busch, Corona, and Stella Artois together with SABMiller’s brands of Miller, Foster, Grolsch, Peroni, Castle, and Carlton, resulting in the largest beverage company on the globe. The combined company will account for 30 percent of beer sales worldwide and 60 percent of sales in the U.S. market. In late 2015, SABMiller’s shareholders agreed to the terms of the deal.1 Mergers and acquisitions are among the most challenging strategic moves by companies seeking to grow their markets and reap hoped-for efficiencies. Many cross-border mergers and acquisitions have failed or experienced extreme difficulties in the face of cultural differences that manifest in communication, work policies, compensation systems, and other aspects of strategy and operations. These cultural differences can be aggravated by geographic, institutional, and psychological ­distance. With operations spanning the globe, and leadership teams in both Latin America and Europe, the combined ­ABInBev and SABMiller company will need to address the interests of its culturally diverse constituencies. Although both SABMiller and ABInBev have recent, extensive experience with cross-border mergers and acquisitions, neither company has been involved in a deal this large. How can this integrated company fully realize the benefits of combining people, production, and brands from diverse cultures? Will ABInBev be able to achieve its aggressive sales goal of US$100 billion annually by 2020? Looking at some past cross-border mergers, both successful and failed, may provide some insight. DuPont in Denmark When DuPont, the U.S.-based giant chemicals company, set out to acquire Danisco, a Danish producer of food ingredients, ­shareholders in Denmark initially voiced skepticism and disapproval. To better understand the concerns of the Danish investment ­community, DuPont sent executives to Copenhagen.2 Gaining 122 an understanding of the cultural and business perspectives of those shareholders through face-to-face, in-person meetings, DuPont executives were able to determine that their original offer was seen as offensively low. In response, DuPont adjusted its offer, resulting in a 92 percent approval rate from Danisco’s shareholders. Dupont’s CEO claims, “These face-to-face conversations were critical for the actions we took next, and, ultimately, for the successful outcome of the deal.”3 After the deal was complete, DuPont made culture a strong focus of itsintegration efforts by first hosting a “Welcome Week” with presentations to all employees about the new combined firm, adjusted to local communication styles. After this weeklong celebration, designed to encourage excitement and positive thinking, the company gauged successes and failures using regular pulse surveys. These surveys “created a heat map of potential geographic locations where there might be confusion or miscommunication.”4 Anticipating and measuring potential places of difficulty allowed managers to address issues as quickly and transparently as possible, easing the integration process. DuPont’s CEO reflected on the successful acquisition of Danisco, saying, “If we didn’t execute and integrate well, and if we didn’t get synergies quickly, it wouldn’t be a victory.”5 DuPont’s careful, level-headed due diligence, strong communication, and appreciation for Danisco’s corporate and national cultures ultimately helped the firm evaluate the potential success of a combined business venture and avoided dealending cultural conflicts. Forming the right deal and designing an integration process with the goal of maximizing the value of the deal provided the merging companies with the tools necessary to optimize their combined value and avoid the pitfalls of cultural miscommunications.6 The Daimler-Chrysler Debacle Looking at failed cross-border mergers can lend some valuable insight as well. One classic case is that of Daimler-Chrysler, two companies that came together in a US$36 billion acquisition that faced severe challenges from the start. Although it was hailed as a historic “merger of equals,” enthusiasm dissolved in the face of cultural and personality clashes.7 From the onset, German executives were uncomfortable with the lack of protocol and loose structure at Chrysler. Conversely, the American managers felt that their German bosses were too formal and lacked any flexibility. In its first attempt to resolve these issues, top leaders at the company quickly worked to establish firm-wide processes that would dictate a unified approach to planning, information exchange, communication, and decision making. Executives believed that a unified company culture—part American, part German—would lead to a better working relationship between employees and result in improved fiscal results for the company. After just a few months, however, continued cultural difficulty led executives to conclude that imposing a single culture on its diverse workforce was a short-sighted strategy. Engineers between the two companies continued to disagree over quality and design, and personality conflicts persisted. Americans found Germans to have an “attitude,” while Germans found Americans to be “chaotic.”8 In response to these failures, Daimler-Chrysler took a more drastic approach to altering its operations. Rather than attempting to impose the Daimler culture on Chrysler employees, individual business groups were permitted to adopt whichever culture worked best for them. Essentially, two cultures were allowed to persist at the merged company—those of American Chrysler and of German Daimler. Though this strategy worked well for groups that were located solely in the United States or Germany, business divisions that spanned both countries continued to face challenges. Communication was often misinterpreted, and the approach to staffing was questioned by executives on both sides.9 After a decade of struggle, the merger was ultimately reversed. Daimler sold nearly its entire stake in Chrysler to an American private equity group for a fraction of its original investment, and Chrylser entered bankruptcy proceedings just two years later. Roland Klein, former manager of corporate communications at the merged Daimler-Chrysler, remarked that “Maybe we should have had a cultural specialist to counsel us. But we wanted to achieve the integration without outside help.”10 ABInBev’s Past Experiences In many ways, ABInBev’s own history may provide the best example of a previously successful cross-border merger. In 2008, Belgian-Brazilian-based InBev acquired U.S.-based Anheuser Busch, creating the world’s largest brewing company. InBev first bid $65 per share for Anheuser Bush, which was initially rejected. The final price agreed to was $70 per share. With operations on every continent, the newly combined company had to quickly adapt to diverse national and organizational culture backgrounds. InBev’s organizational culture, heavily influenced by AmBev, was described as “a work atmosphere reminiscent of an athletic locker room . . . a culture that includes ferocious cost 123 124 Part 2 The Role of Culture cutting and lucrative incentive-based compensation programs.”11 In contrast to this, Anheuser-Busch was known as a familyfriendly company founded in St. Louis in the 1800s with strong emphasis on community involvement. Anheuser-Busch “won numerous awards for its philanthropy, diversity, community involvement, and employer of choice. The company was known for luxurious executive offices and lots of perks, with six planes and two helicopters to transport its employees.”12 It was clear to leadership that these two distinct cultures— one very competitive and low cost, the other inclusive with many expensive corporate reward systems—would create conflicts in regards to communication, informal relationships between employees, employee satisfaction, and mentorship.13 In response, ABInBev formulated an integration plan that, among other actions, led to the creation of a new board of directors for the combined company, which included the current directors of the InBev board, the Anheuser-Busch president and CEO, as well as one other current or former director of the Anheuser-Busch board. The management team consisted of executives from both companies’ current leadership teams.14 Ultimately, the ABInBev merger was a financial success, with EBITDA rising from 23 percent to 38 percent in the three years following the deal. Despite initial cultural clashes, this merger succeeded due to the recognition and education of these differences and the international management experience of the company’s leaders.15 Going Forward Companies from the same cultural clusters inherently understand one another’s values, expectations of leadership, and communication styles better than people from different cultural clusters would. With diligent planning and education of their workforce, two firms from different organizational and national cultural backgrounds, such as SABMiller and ABInBev, can still find success through mergers or acquisitions. Although companies from different geographic regions would not have an “inherent understanding,” it is possible to replicate it through employee training and strong leadership, as past mergers at DuPont and ABInBev demonstrated. Managers and executives at a newly merged company should educate its employees on the cultural differences of the two joining firms, putting the combined company in a position to leverage the merger as an opportunity to create a new corporate culture that emphasizes elements and values common to both companies’ national cultures while preserving, where necessary, attributes of the distinct cultures of each. Despite diversity among its British, Belgian, Brazilian, and American roots, cultural commonalities and understanding may help to propel the SABMiller and ABInBev merger forward. The companies certainly face challenges ahead, but, as demonstrated by past successes, proper management and careful planning can maximize their chances for long-term success. Our opening discussion in “The World of International Management” shows how culture can have a great impact on mergers. For some companies, like DuPont and ABInBev, early recognition of differences led to more successful company integration. National cultural characteristics can strengthen, empower, and enrich management effectiveness and success. MNCs that are aware of the potential positives and negatives of different cultural characteristics will be better equipped to manage under both smooth and trying times and environments. ■ The Nature of Culture culture Acquired knowledge that people use to interpret experience and generate social behavior. This knowledge forms values, creates attitudes, and influences behavior. 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: 1. Learned. Culture is not inherited or biologically based; it is acquired by learning and experience. 2. Shared. People as members of a group, organization, or society share culture; it is not specific to single individuals. 3. Transgenerational. Culture is cumulative, passed down from one generation to the next. 4. Symbolic. Culture is based on the human capacity to symbolize or use one thing to represent another. 5. Patterned. Culture has structure and is integrated; a change in one part will bring changes in another. 6. Adaptive. Culture is based on the human capacity to change or adapt, as opposed to the more genetically driven adaptive process of animals.18 Chapter 4 The Meanings and Dimensions of Culture 125 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. For example, a partner in one of New York’s leading private banking firms tells the following story: I traveled nine thousand miles to meet a client and arrived with my foot in my mouth. Determined to do things right, I’d memorized the names of the key men I was to see in Singapore. No easy job, inasmuch as the names all came in threes. So, of course, I couldn’t resist showing off that I’d done my homework. I began by addressing top man Lo Win Hao with plenty of well-placed Mr. Hao’s—sprinkled the rest of my remarks with a Mr. Chee this and a Mr. Woon that. Great show. Until a note was passed to me from one man I’d met before, in New York. Bad news. “Too friendly too soon, Mr. Long,” it said. Where diffidence is next to godliness, there I was, calling a room of VIPs, in effect, Mr. Ed and Mr. Charlie. I’d remembered everybody’s name—but forgot that in Chinese the surname comes first and the given name last.20 ■ 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. Table 4–1, for example, compares the most important cultural values of the United States, Japan, and Arab countries. A close look at this table shows a great deal of difference among these three cultures. Culture affects a host of business-related activities, even including the common handshake. Here are some contrasting examples: Culture Type of Handshake United States Asian Firm Gentle (shaking hands is unfamiliar and uncomfortable for some; the exception is the Korean, who usually has a firm handshake) Soft Light and quick (not offered to superiors); repeated on arrival and departure Brusque and firm; repeated on arrival and departure Moderate grasp; repeated frequently Gentle; repeated frequently Light/soft; long and involved British French German Latin American Middle Eastern South Africa Source: Lillian H. Chaney and Jeanette S. Martin, Intercultural Business Communication (Englewood Cliffs, NJ: Prentice Hall, 1995), p. 115. Table 4–1 Priorities of Cultural Values: United States, Japan, and Arab Countries United States Japan Arab Countries 1. Freedom   1. Belonging   1. Family security 2. Independence   2. Group harmony   2. Family harmony 3. Self-reliance   3. Collectiveness   3. Parental guidance 4. Equality   4. Age/seniority   4. Age 5. Individualism   5. Group consensus   5. Authority 6. Competition   6. Cooperation   6. Compromise 7. Efficiency   7. Quality   7. Devotion 8. Time   8. Patience   8. Patience 9. Directness   9. Indirectness   9. Indirectness 10. Openness 10. Go-between 10. Hospitality Note: “1” represents the most important cultural value, “10” the least. Source: Adapted from information found in F. Elashmawi and Philip R. Harris, Multicultural Management (Houston: Gulf Publishing, 1993), p. 63. 126 Part 2 The Role of Culture 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. These cultural differences influence the way that international management should be conducted. Another way of depicting cultural diversity is through visually separating its components. Figure 4–1 provides an example by using concentric circles. The outer ring consists of the explicit artifacts and products of the culture. This level is observable and consists of such things as language, food, buildings, and art. The middle ring contains the norms and values of the society. These can be both formal and informal, and they are designed to help people understand how they should behave. The inner circle contains the implicit, basic assumptions that govern behavior. By understanding these assumptions, members of a culture are able to organize themselves in a way that helps them increase the effectiveness of their problem-solving processes and interact well with each other. In explaining the nature of the inner circle, Trompenaars and Hampden-Turner have noted that [t]he best way to test if something is a basic assumption is when the [situation] provokes confusion or irritation. You might, for example, observe that some Japanese bow deeper than others. . . . If you ask why they do it the answer might be that they don’t know but that the other person does it too (norm) or that they want to show respect for authority (value). A typical Dutch question that might follow is: “Why do you respect authority?” The most likely Japanese reaction would be either puzzlement or a smile (which might be hiding their irritation). When you question basic assumptions you are asking questions that have never been asked before. It might lead others to deeper insights, but it also might provoke annoyance. Try in the USA or the Netherlands to raise the question of why people are equal and you will see what we mean.21 Chapter 4 The Meanings and Dimensions of Culture 127 The explicit artifacts and products of the society Figure 4–1 A Model of Culture The norms and values that guide the society The implicit, basic assumptions that guide people’s behavior Source: Adapted from Fons Trompenaars and Charles Hampden-Turner, Riding the Waves of Culture: Understanding Diversity in Global Business, 2nd ed. (New York: McGraw-Hill, 1998). A supplemental way of understanding cultural differences is to compare culture as a normal distribution, as in Figure 4–2, and then to examine it in terms of stereotyping, as in Figure 4–3. Chinese culture and American culture, for example, have quite different norms and values. So the normal distribution curves for the two cultures have only limited overlap. However, when one looks at the tail-ends of the two curves, it is possible to identify stereotypical views held by members of one culture about the other. The stereotypes are often exaggerated and used by members of one culture in describing the other, thus helping reinforce the differences between the two while reducing the likelihood of achieving cooperation and communication. This is one reason why an understanding of national culture is so important in the study of international management. French culture U.S. culture Figure 4–2 Comparing Cultures as Overlapping Normal Distributions Source: Revised and adapted from various sources, including Fons Trompenaars and Charles Hampden-Turner, Riding the Waves of Culture: Understanding Diversity in Global Business, 2nd ed. (New York: McGraw-Hill, 1998), p. 25. 128 Part 2 The Role of Culture Figure 4–3 How the Americans see the French: Stereotyping from the Cultural Extremes • • • • How the French see the Americans: • • • • arrogant flamboyant hierarchical emotional French culture naive aggressive unprincipled workaholic U.S. culture Source: Revised and adapted from various sources, including Fons Trompenaars and Charles Hampden-Turner, Riding the Waves of Culture: Understanding Diversity in Global Business, 2nd ed. (New York: McGraw-Hill, 1998), p. 23. ■ Values in Culture values Basic convictions that people have regarding what is right and wrong, good and bad, and important and unimportant. A major dimension in the study of culture is values. Values are basic convictions that people have regarding what is right and wrong, good and bad, and important and unimportant. These values are learned from the culture in which the individual is reared, and they help direct the person’s behavior. Differences in cultural values often result in ­varying management practices. Values in Transition Do values change over time? Past research indicates that personal value systems are relatively stable and do not change rapidly.22 However, changes are taking place in managerial values as a result of both culture and technology. A good example is provided by examining the effects of the U.S. environment on the cultural values of Japanese managers working for Japanese firms in the United States. Researchers, focusing attention on such key organizational values as lifetime employment, formal authority, group ­orientation, seniority, and paternalism, found that 1. Lifetime employment is widely accepted in Japanese culture, but the stateside Japanese managers did not believe that unconditional tenure in one organization was of major importance. They did believe, however, that job security was important. 2. Formal authority, obedience, and conformance to hierarchic position are very important in Japan, but the stateside managers did not perceive obedience and conformity to be very important and rejected the idea that one should not question a superior. However, they did support the concept of formal authority. 3. Group orientation, cooperation, conformity, and compromise are important organizational values in Japan. The stateside managers supported these values but also believed it was important to be an individual, thus maintaining a ­balance between a group and a personal orientation. Chapter 4 The Meanings and Dimensions of Culture 4. In Japan, organizational personnel often are rewarded based on seniority, not merit. Support for this value was directly influenced by the length of time the Japanese managers had been in the United States. The longer they had been there, the lower their support for this value. 5. Paternalism, often measured by a manager’s involvement in both personal and off-the-job problems of subordinates, is very important in Japan. Stateside Japanese managers disagreed, and this resistance was positively associated with the number of years they had been in the United States.23 There is increasing evidence that individualism in Japan is on the rise, indicating that Japanese values are changing—and not just among managers outside the country. The country’s long economic slump has convinced many Japanese that they cannot rely on the large corporations or the government to ensure their future. They have to do it for themselves. As a result, today a growing number of Japanese are starting to embrace what is being called the “era of personal responsibility.” Instead of denouncing individualism as a threat to society, they are proposing it as a necessary solution to many of the country’s economic ills. A vice chair of the nation’s largest business lobby summed up this thinking at the opening of a recent conference on economic change when he said, “By establishing personal responsibility, we must return dynamism to the economy and revitalize society.”24 This thinking is supported by past research, which reveals that a culture with a strong entrepreneurial orientation is important to global competitiveness, especially in the small business sector of an economy. This current trend may well be helpful to the Japanese economy in helping it meet foreign competition at home.25 Other countries, such as China, have more recently undergone a transition of values. As discussed in Chapter 2, China is moving away from a collectivist culture, and it appears as though even China is not sure what cultural values it will adhere to. Confucianism was worshipped for over 2,000 years, but the powerful messages through Confucius’s teachings were overshadowed in a world where profit became a priority. Now, Confucianism is slowly gaining popularity once again, emphasizing respect for authority, concern for others, balance, harmony, and overall order. While this may provide sanctuary for some, it poses problems within the government because it will have to prove its worthiness to remain in power. As long as China maintains economic momentum, despite its recent slowdown, hope for a unified culture may be on the horizon.26 ■ 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. Hofstede 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 ­comparing 129 130 GLOBE (Global Leadership and Organizational Behavior Effectiveness) A multicountry study and evaluation of cultural attributes and leadership behaviors among more than 17,000 managers from 951 organizations in 62 countries. power distance The extent to which less powerful members of institutions and organizations accept that power is distributed unequally. uncertainty avoidance The extent to which people feel threatened by ambiguous situations and have created beliefs and institutions that try to avoid these. individualism The political philosophy that people should be free to pursue economic and political endeavors without constraint (Chapter 2); the tendency of people to look after themselves and their immediate family only (Chapter 4). collectivism The political philosophy that views the needs or goals of society as a whole as more important than individual desires (Chapter 2); the tendency of people to belong to groups or collectives and to look after each other in exchange for loyalty (Chapter 4). Part 2 The Role of Culture 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.29 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 2010.30 Power Distance Power distance is “the extent to which less powerful members of institutions and organizations accept that power is distributed unequally.”31 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: What is most important for me and my department is not what I do or achieve for the company, but whether the [owner’s] favor is bestowed on me. . . . This I have achieved by saying “yes” to everything [the owner] says or does. . . . To contradict him is to look for another job. . . . I left my freedom of thought in Boston.32 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.33 Uncertainty Avoidance Uncertainty avoidance is “the extent to which people feel threatened by ambiguous situations and have created beliefs and institutions that try to avoid these.”34 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. Individualism We discussed individualism and collectivism in Chapter 2 in reference to political systems. Individualism is the tendency of people to look after themselves and their immediate family only.35 Hofstede measured this cultural difference on a ­bipolar continuum with individualism at one end and collectivism at the other. Collectivism is Chapter 4 The Meanings and Dimensions of Culture 131 Table 4–2 Countries and Regions Used in Hofstede’s Research Arabic-speaking countries (Egypt, Iraq, Kuwait, Lebanon, Libya, Saudi Arabia, United Arab Emirates) Argentina Australia Austria Bangladesh Belgium Flemish (Dutch speaking) Belgium Walloon (French speaking) Brazil Bulgaria Ecuador Estonia Finland France Germany Great Britain Greece Guatemala Hong Kong (China) Hungary India Indonesia Iran Ireland Israel Italy Panama Peru Philippines Poland Portugal Romania Russia Salvador Serbia Singapore Slovakia Slovenia South Africa Spain Suriname Sweden Switzerland French Canada Quebec Canada total Chile China Colombia Costa Rica Croatia Czech Republic Denmark East Africa (Ethiopia, Kenya, Tanzania, Zambia) Jamaica Japan Korea (South) Luxembourg Malaysia Malta Mexico Morocco Netherlands New Zealand Norway Pakistan Switzerland German Taiwan Thailand Trinidad Turkey United States Uruguay Venezuela Vietnam West Africa (Ghana, Nigeria, Sierra Leone) Source: From G. Hofstede and G. J. Hofstede, Cultures and Organizations: Software of the Mind, 2nd ed. (New York: McGraw-Hill, 2005). the tendency of people to belong to groups or collectives and to look after each other in exchange for loyalty.36 Like the effects of the other cultural dimensions, the effects of individualism and collectivism can be measured in a number of different ways.37 Hofstede found that wealthy countries have higher individualism scores and poorer countries higher collectivism scores (see Table 4–2 for the 74 countries used in Figure 4–4 and subsequent ­figures). Note that in Figure 4–4, the United States, Canada, Australia, France, and the United Kingdom, among others, have high individualism and high GNP. Conversely, China, Mexico, and a number of South American countries have low individualism (high ­collectivism) and low GNP. 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. Masculinity Masculinity is defined by Hofstede as “a situation in which the dominant values in society are success, money, and things.”38 Hofstede measured this masculinity A cultural characteristic in which the dominant values in society are success, money, and things. 132 Part 2 The Role of Culture 70,000 Figure 4–4 GDP per Capita in 2015 versus Individualism ⬥ Australia 60,000 ⬥ Singapore ⬥ USA ⬥ Canada 50,000 GDP per Capita in US$ Germany ⬥ ⬥ Belgium ⬥ United Kingdom ⬥ France 40,000 ⬥ Japan ⬥ Italy ⬥ Spain 30,000 ⬥ South Korea ⬥ Saudi Arabia 20,000 ⬥ Chile ⬥ Venezuela Russia ⬥ Brazil ⬥ Mexico ⬥ 10,000 Colombia ⬥ Peru ⬥ ⬥ Argentina ⬥ China ⬥ Thailand ⬥ Indonesia Bangladesh ⬥ 0 0 10 20 ⬥ India ⬥ Nepal 30 40 50 60 70 80 90 100 Individualism Score Source: Original graphic by Ben Littell under supervision of Professor Jonathan Doh based on data from The World Bank and from G. Hofstede and G. J. Hofstede, Cultures and Organizations: Software of the Mind, 2nd ed. (New York: McGraw-Hill, 2005). femininity A cultural characteristic in which the dominant values in society are caring for others and the quality of life. dimension on a continuum ranging from masculinity to femininity. Contrary to some stereotypes and connotations, femininity is the term used by Hofstede to describe “a situation in which the dominant values in society are caring for others and the quality of life.”39 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. Chapter 4 The Meanings and Dimensions of Culture 133 Table 4–3 Ten Differences between Short- and Long-TermOriented Societies Short-Term Orientation Long-Term Orientation Most important events in life occurred in the past or take place now Most important events in life will occur in the future Personal steadiness and stability: a good person is always the same A good person adapts to the circumstances There are universal guidelines about what are good and evil What are good and evil depend on the circumstances Traditions are sacrosanct Traditions are adaptable to changed circumstances Family life is guided by imperatives Family life is guided by shared tasks Supposed to be proud of one’s country Trying to learn from other countries Service to others is an important goal Thrift and perseverance are important goals Social spending and consumption Large savings quote, funds available for investment Students attribute success and failure to luck Students attribute success to effort and failure to lack of effort Slow or no economic growth of poor countries Fast economic growth of countries up until a level of prosperity Source: From G. Hofstede, “Dimensionalizing Cultures: The Hofstede Model in Context,” Online Readings in Psychology and Culture, Unit 2 (2011), http://scholarworks.gvsu.edu/orpc/vol2/iss1/8/. 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. Time Orientation Originally called Confucian Work Dynamism, time orientation is defined by Hofstede as “dealing with society’s search for virtue.” 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. 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.40 Hofstede’s original time orientation research only included 23 countries, leading to some criticism. However, in 2010, the research was expanded to include 93 countries. Table 4–3 highlights ten differences ­between long- and short-term-oriented cultures. Asian cultures primarily exhibit long-term orientation. Countries with a high longterm 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. 134 Part 2 The Role of Culture Figure 4–5 Countries with Very High Long-Term and Short-Term Orientation Scores High Short-Term High Long-Term Note: Country rankings were completed using Geert Hofstede’s Long-Term Orientation (LTO) scores. High Short-Term refers to countries with scores less than 35 and High Long-Term refers to countries with scores greater than 60. Source: Original graphic by Ben Littell under supervision of Professor Jonathan Doh based on data from Geert Hofstede, “Dimensionalizing Cultures: The Hofstede Model in Context,” Online Readings in Psychology and Culture, Unit 2 (2011), http://scholarworks.gvsu.edu/orpc/vol2/iss1/8/. 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.41 Indulgence versus Restraint Based on research related to relative happiness around the world, Hofstede’s most recent dimension measures the freedom to satisfy one’s natural needs and desires within a society. Indulgent societies encourage instant gratification of natural human needs, while restrained cultures regulate and control behavior based on social norms.42 The research leading to the identification of this sixth dimension included participants from 93 countries. Table 4–4 highlights ten differences between indulgent and restrained cultures. 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. 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.43 Chapter 4 The Meanings and Dimensions of Culture 135 Table 4–4 Ten Differences between Indulgent and Restrained Societies Indulgent Restrained Higher percentage of people declaring themselves very happy Fewer very happy people A perception of personal life control A perception of helplessness: what ­happens to me is not my own doing Freedom of speech seen as important Freedom of speech is not a primary ­concern Higher importance of leisure Lower importance of leisure More likely to remember positive ­emotions Less likely to remember positive ­emotions In countries with educated populations, higher birthrates In countries with educated populations, lower birthrates More people actively involved in sports Fewer people actively involved in sports In countries with enough food, higher percentages of obese people In countries with enough food, fewer obese people In wealthy countries, lenient sexual norms In wealthy countries, stricter sexual norms Maintaining order in the nation is not given a high priority Higher number of police officers per 100,000 population Source: From Geert Hofstede, “Dimensionalizing Cultures: The Hofstede Model in Context,” Online Readings in Psychology and Culture, Unit 2 (2011), http://scholarworks.gvsu.edu/orpc/vol2/iss1/8/. Figure 4–6 Countries with Very High Indulgence and Restraint Scores High Indulgence High Restraint Note: Country rankings were completed using Geert Hofstede’s Indulgence versus Restraint (IVR) scores. High Indulgence refers to countries with scores greater than 50 and High Restraint refers to countries with scores less than 25. Source: Original graphic by Ben Littell under supervision of Professor Jonathan Doh based on data from Geert Hofstede, “Dimensionalizing Cultures: The Hofstede Model in Context,” Online Readings in Psychology and Culture, Unit 2 (2011), http://scholarworks.gvsu.edu/orpc/vol2/iss1/8/. 136 Part 2 The Role of Culture Integrating the Dimensions A description of the four original and two additional dimensions of culture is useful in helping to explain the differences between various countries, and Hofstede’s research has extended beyond this focus and shown how countries can be described in terms of pairs of dimensions. In Hofstede’s and later research, pairings and clusters can provide useful summaries for international ­managers. It is always best to have an in-depth understanding of the multicultural environment, but the general groupings outline common ground that one can use as a starting point. Figure 4–7, which incorporates power distance and individualism, provides an example. Upon first examination of the cluster distribution, the data may appear confusing. However, they are very useful in depicting what countries appear similar in values and to what extent they differ from other country clusters. The same countries are not always clustered together in subsequent dimension comparisons. This indicates 5 Figure 4–7 ⬥ Guatemala ⬥ Ecuador Power Distance versus Individualism an t Pakis ⬥ collectivist 15 ⬥ 35 Uruguay ⬥ y⬥ ⬥ Turke Brazil ⬥ Iran Jamaica ⬥ Individualism (IDV) ⬥ Panama ⬥ esia ⬥ Indon ⬥ orea ⬥ Peru S. K⬥ Salvador a sh am an ⬥ ⬥ ietn Afric glade Taiw ⬥V ⬥ ⬥W⬥ d ⬥ , Ban n a a il in Ch Tha e apor Chile ⬥ Sing ng o K g ysia ⬥ Serbia ⬥ Hon Mala ⬥ frica Portugal ⬥⬥ E A ⬥ Slovenia Romania ⬥ ⬥ Bulgaria ⬥ es Mexico ippin ⬥ Phil ⬥ Croatia Greece Trinidad ⬥ 25 45 ⬥ Arab rocco ⬥ Japan Argentina ⬥ ⬥ Mo ⬥ India Russia ctrs ⬥ ⬥ Suriname ⬥ Spain 55 ⬥ Slovakia Austria ⬥Czech Rep. ⬥ ⬥ Poland Malta ⬥ ⬥ Finland 65 ⬥ ⬥ Norway Ireland ⬥ ⬥ Sweden ⬥ France ⬥ ⬥ Denmark Italy ⬥ New Zealand Netherlands ⬥⬥ ⬥ Belgium NI ⬥ Hungary 85 Great Britain ⬥ Australia ⬥ ⬥ Belgium Fr Canada Quebec Canada total ⬥ ⬥ Switzerland Fr ⬥ S. Africa ⬥ Germany Switzerland Ge 75 ⬥ ⬥Israel Estonia, Luxembourg individualist Venezuela Colombia ⬥ Costa Rica ⬥ Legend ed slant regular Asia and Muslim countries italics Latin America quadrant partition lines United States 95 10 30 small Europe and Anglo countries 50 70 Power Distance (PDI) 90 110 large Source: From G. Hofstede and G. J. Hofstede, Cultures and Organizations: Software of the Mind, 2nd ed. (New York: McGraw-Hill, 2005). Chapter 4 The Meanings and Dimensions of Culture 137 that while some beliefs overlap between cultures, it is where they diverge that makes groups unique to manage. In Figure 4–7, the United States, Australia, Canada, Britain, Denmark, and New Zealand are located in the lower-left-hand quadrant. Americans, for example, have very high individualism and relatively low power distance. They prefer to do things for themselves and are not upset when others have more power than they do. The other countries, while they may not be a part of the same cluster, share similar values. Conversely, many of the underdeveloped or newly industrialized countries, such as Colombia, Hong Kong, Portugal, and Singapore, are characterized by large power distance and low individualism. These nations tend to be collectivist in their approach. Similarly, Figure 4–8 plots the uncertainty-avoidance index against the power-­ distance index. Once again, there are clusters of countries. Many of the Anglo nations tend to be in the upper-left-hand quadrant, which is characterized by small power distance 5 ⬥ market ore Figure 4–8 family ap Sing Power Distance versus Uncertainty Avoidance Jamaica ⬥ weak 15 ⬥ Denmark 25 Hong ⬥ Sweden a ⬥ Chin ⬥ m tna Vie Great Britain ⬥ 35 ⬥ Kong ysia Mala⬥ ⬥ Ireland ia Uncertainty Avoidance (UAI) ⬥ Ind ⬥ Canada total ⬥ ⬥ ⬥ New Zealand 55 ⬥ ⬥ ⬥E ⬥Austria ⬥ Italy ⬥ Israel 85 Costa Rica ⬥ machine 95 Legend 105 10 ed slant regular Asia and Muslim countries italics Latin America 30 ⬥ rs ⬥Brazil Colombia ⬥Venezuela ⬥ Croatia ⬥ Mexico ⬥ Panama ⬥ Romania ⬥⬥ Serbia Suriname ⬥ Russia ⬥ Uruguay Europe and Anglo countries small Ecuador ⬥ y orea Turke S. K⬥ ⬥ ⬥ Bulgaria ⬥ ⬥ Spain ⬥ ⬥ France Chile ⬥ Argentina Peru ⬥ Slovenia n Belgium Fr ⬥Japa ⬥⬥ Poland ⬥ Malta Salvador ⬥ ⬥ Belgium NI quadrant partition lines 115 and Thail o cc o r o M ⬥ ⬥ Hungary ⬥ sh glade ct ⬥ Arab ⬥ n a t is Switzerland Fr Pak ⬥ Czech Rep. ⬥ ⬥ Luxembourg Slovakia ⬥ Ban ⬥ n a Taiw ⬥ frica ⬥W A n ⬥ Ira Canada Quebec ⬥ Germany 65 a Afric ⬥ ⬥ Estonia Finland 75 strong ⬥ Netherlands ⬥ Trinidad Switzerland Ge nesia ⬥ Indo S. Africa ⬥ Australia ⬥ Norway es ippin ⬥ Phil United States 45 ⬥ Guatemala ⬥ Portugal pyramid ⬥ Greece 50 70 Power Distance (PDI) 90 110 large Source: From G. Hofstede and G. J. Hofstede, Cultures and Organizations: Software of the Mind, 2nd ed. (New York: McGraw-Hill, 2005). 138 Part 2 The Role of Culture and weak uncertainty avoidance, while, in contrast, many Latin, Mediterranean, and Asian nations are characterized by high power distance and strong uncertainty avoidance. The integration of these cultural factors into two-dimensional plots helps illustrate the complexity of understanding culture’s effect on behavior. A number of dimensions are at work, and sometimes they do not all move in the anticipated direction. For example, at first glance, a nation with high power distance would appear to be low in individualism, and vice versa, and Hofstede found exactly that (see Figure 4–7). However, low uncertainty avoidance does not always go hand in hand with high masculinity, even though those who are willing to live with uncertainty will want rewards such as money and power and accord low value to the quality of work life and caring for others (see Figure 4–9). Simply put, empirical evidence on the impact of cultural dimensions may differ from commonly held beliefs or stereotypes. Research-based data are needed to determine the full impact of differing cultures. 5 Figure 4–9 e ⬥ apor Sing Masculinity versus Uncertainty Avoidance ⬥Jamaica weak 15 ⬥ Denmark 25 ng g Ko ⬥ Hon am ⬥ Sweden tn ⬥ Vie Great Britain ⬥ ⬥ Ireland ysia 35 a ⬥ Chin ⬥ Mala ia Uncertainty Avoidance (UAI) ⬥ Ind nesia⬥ Indo ⬥ Norway rica ⬥ E Af ⬥ Netherlands 55 Finland ⬥ Estonia ⬥ Canada total ⬥ United States ⬥ ⬥ ⬥S. Africa New Zealand ⬥ Australia ⬥ frica WA n a r I ⬥ ⬥ Canada Quebec ⬥Trinidad and Thail Arab ⬥ an Taiw ⬥ ⬥ istan Luxembourg, Pak ctrs, cco Moro⬥ Germany ⬥ Ecuador ⬥ Slovenia 95 ⬥Austria ⬥ Switzerland Fr ⬥ Czech Rep. Croatia Costa Rica ⬥ ⬥ Switzerland Ge desh ⬥Brazil 85 Slovakia (110) la ⬥ Bang ⬥ 65 75 strong es ippin ⬥ Phil 45 Italy ⬥ ⬥ Venezuela Israel ⬥ ⬥ Colombia ⬥ ⬥ Mexico y Bulgaria Turke Chile Argentina ⬥ ⬥ ⬥ ⬥⬥⬥ France ⬥ ⬥ orea S. K Peru ⬥ Spain Panama Romania ⬥ ⬥ Serbia Suriname ⬥ ⬥ ⬥ Poland ⬥ Salvador Belgium Fr Russia ⬥ ⬥ Hungary n Japa ⬥ ⬥ Belgium NI ⬥ Malta Legend ⬥ Guatemala ⬥ Uruguay ⬥ Portugal 105 ed slant regular Asia and Muslim countries italics Latin America Greece Europe and Anglo countries quadrant partition lines ⬥ 115 5 25 feminine 54 Masculinity (MAS) 65 85 masculine Source: From G. Hofstede and G. J. Hofstede, Cultures and Organizations: Software of the Mind, 2nd ed. (New York: McGraw-Hill, 2005). ⬥ Chapter 4 The Meanings and Dimensions of Culture 139 Table 4–5 Trompenaars’s Country Abbreviations Abbreviation Country ARG AUS BEL BRZ CHI CIS CZH FRA GER HK IDO ITA JPN MEX NL SIN SPA SWE SWI THA UK USA VEN Argentina Austria Belgium Brazil China Former Soviet Union Former Czechoslovakia France Germany (excluding former East Germany) Hong Kong Indonesia Italy Japan Mexico Netherlands Singapore Spain Sweden Switzerland Thailand United Kingdom United States Venezuela The Hofstede cultural dimensions and country clusters are widely recognized and accepted in the study of international management. His work has served as a springboard to numerous recent cultural studies and research projects. 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.46 Universalism vs. Particularism Universalism is the belief that ideas and practices can be applied everywhere without modification. Particularism is the belief that circumstances dictate how ideas and practices should be applied. 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.” In cultures with high universalism The belief that ideas and practices can be applied everywhere in the world without modification. particularism The belief that circumstances dictate how ideas and practices should be applied and that something cannot be done the same everywhere. 140 Figure 4–10 Trompenaars’s Relationship Orientations on Cultural Dimensions Part 2 The Role of Culture Universalism Particularism USA Aus Ger Swe UK NL Swi Czh Ita Bel Brz Fra Jap Arg Mex Tha Sin HK Chi Ido CIS Ven Universalism vs. Particularism Individualism USA Communitarianism Arg CIS Mex Czh UK Swe Aus Spa NL Brz Swi Bel Ven HK Ita Ger Chi Fra Ido Jpn Tha Sin Individualism vs. Communitarianism Neutral Jpn Emotional UK Sin Aus Ido HK Tha Bel Ger Swe Czh Arg Fra USA Spa Ita CIS Brz Chi Swi Ven NL Mex Neutral vs. Emotional Specific Aus UK Diffuse USA Swi Fra NL Bel Brz Czh Ita Ger Arg Jpn Mex Ido CIS Tha HK Sin Swe Spa Chi Ven Specific vs. Diffuse Achievement Ascription Aus USA Swi Swe Ger Arg Tha Bel UK Mex Fra Ita NL Spa Jpn Czh Sin CIS Brz HK Chi Ido Ven Achievement vs. Ascription Source: Adapted from information found in Fons Trompenaars, Riding the Waves of Culture (New York: Irwin, 1994); Charles Hampden-Turner and Fons Trompenaars, “A World Turned Upside Down: Doing Business in Asia,” in Managing Across Cultures: Issues and Perspectives, ed. Pat Joynt and Malcolm Warner (London: International Thomson Business Press, 1996), pp. 275–305. 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. In follow-up research, 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? a. My friend has a definite right as a friend to expect me to testify to the lower figure. b. He has some right as a friend to expect me to testify to the lower figure. c. 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: Chapter 4 The Meanings and Dimensions of Culture 141 Universalism (no right) Canada United States Germany United Kingdom Netherlands France Japan Singapore Thailand Hong Kong Particularism (some or definite right) 96 95 90 90 88 68 67 67 63 56 China South Korea 48 26 As noted earlier, respondents from universalist cultures (e.g., North America and Western Europe) felt that the rules applied regardless of the situation, while respondents from particularist cultures were much more willing to bend the rules and help their friend. Based on these types of findings, 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. Individualism vs. Communitarianism Individualism and communitarianism are key dimensions in Hofstede’s earlier research. Although Trompenaars derived these two ­relationships differently than Hofstede does, they still have the same basic meaning, although in his more recent work Trompenaars has used the word communitarianism rather than collectivism. For him, individualism refers to people regarding themselves as individuals, while communitarianism refers to people regarding themselves as part of a group, similar to the political groupings discussed in Chapter 2. As shown in Figure 4–10, the United States, former Czechoslovakia, Argentina, the former Soviet Union (CIS), and Mexico have high individualism. In his most recent research, Trompenaars posed the following situation. If you were to be promoted, which of the two following issues would you emphasize most: (a) the new group of people with whom you will be working or (b) the greater responsibility of the work you are undertaking and the higher income you will be earning? The following reports the scores associated with the individualism of option b—greater responsibility and more money.48 Individualism (emphasis on larger responsibilities and more income) Canada 77 Thailand 71 United Kingdom 69 United States 67 Netherlands 64 France 61 Japan 61 China 54 Singapore 50 Hong Kong 47 Communitarianism (emphasis on the new group of people) Malaysia Korea 38 32 communitarianism Refers to people regarding themselves as part of a group. 142 Part 2 The Role of Culture These findings are somewhat different from those presented in Figure 4–10 and show that cultural changes may be occurring more rapidly than many people realize. For example, findings show Thailand very high on individualism (possibly indicating an increasing entrepreneurial spirit/cultural value), whereas the Thais were found to be low on individualism a few years before, as shown in Figure 4–10. At the same time, it is important to remember that there are major differences between people in high-­ individualism societies and those in high-communitarianism societies. The former stress personal and individual matters; the latter value group-related issues. Negotiations in cultures with high individualism typically are made on the spot by a representative, people ideally achieve things alone, and they assume a great deal of personal responsibility. In cultures with high communitarianism, decisions typically are referred to committees, people ideally achieve things in groups, and they jointly assume responsibility. 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. neutral culture A culture in which emotions are held in check. emotional culture A culture in which emotions are expressed openly and naturally. 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. 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. Neutral vs. Emotional A neutral culture is one in which emotions are held in check. As seen in Figure 4–10, 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. An emotional culture is one in which emotions are openly and naturally expressed. 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 vs. Diffuse A specific culture is one in which individuals have a large pub- lic space they readily let others enter and share and a small private space they guard closely and share with only close friends and associates. A diffuse culture is one 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. As shown in Figure 4–10, Austria, the United Kingdom, the United States, and Switzerland all are specific cultures, while Venezuela, China, and Spain are diffuse 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. 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. An example of these specific and diffuse cultural dimensions is provided by the United States and Germany. A U.S. professor, such as Robert Smith, PhD, generally would be called “Doctor Smith” by students when at his U.S. university. When shopping, however, he might be referred to by the store clerk as “Bob,” and when golfing, Bob might just be one of the guys, even to a golf partner who happens to be a Chapter 4 The Meanings and Dimensions of Culture 143 graduate student in his department. The reason for these changes in status is that, with the specific U.S. cultural values, people have large public spaces and often conduct themselves differently depending on their public role. In high-diffuse cultures, on the other hand, a person’s public life and private life often are similar. Therefore, in Germany, Herr Professor Doktor Schmidt would be referred to that way at the university, local market, and bowling alley—and even his wife might address him formally in public. A great deal of formality is maintained, often giving the impression that Germans are stuffy or aloof. 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 vs. Ascription An achievement culture is one in which people are a­ ccorded status based on how well they perform their functions. An ascription culture is one in which status is attributed based on who or what a person is. 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. 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. As shown in Figure 4–10, Austria, the United States, Switzerland, and the United Kingdom are achievement cultures, while 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. Time Aside from the five relationship orientations, another major cultural difference is the way in which people deal with the concept of time. Trompenaars has identified two different approaches: sequential and synchronous. In cultures where sequential approaches are prevalent, people tend to do only one activity at a time, keep appointments strictly, and show a strong preference for following plans as they are laid out and not deviating from them. In cultures where synchronous approaches are common, people tend to do more than one activity at a time, appointments are approximate and may be changed at a moment’s notice, and schedules generally are subordinate to relationships. People in synchronous-time cultures often will stop what they are doing to meet and greet individuals coming into their office. A good contrast is provided by the United States, Mexico, and France. In the United States, people tend to be guided by sequential-time orientation and thus set a schedule and stick to it. 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 achievement culture A culture in which people are accorded status based on how well they perform their functions. ascription culture A culture in which status is attributed based on who or what a person is. 144 Part 2 The Role of Culture important was that they get to the end, not the particular path or sequence by which that end was reached.”49 Another interesting time-related contrast is the degree to which cultures are past- or present-oriented as opposed to future-oriented. In countries such as the United States, Italy, and Germany, the future is more important than the past or the present. In countries such as Venezuela, Indonesia, and Spain, the present is most important. In France and Belgium, all three time periods are of approximately equal importance. Because different emphases are given to different time periods, adjusting to these cultural differences can create challenges. 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. The Environment Trompenaars also examined the ways in which people deal with their environment. Specific attention should be given to whether they believe in controlling outcomes (inner-directed) or letting things take their own course (outer-directed). One of the things he asked managers to do was choose between the following statements: 1. What happens to me is my own doing. 2. Sometimes I feel that I do not have enough control over the directions my life is taking. Managers who believe in controlling their own environment would opt for the first choice; those who believe that they are controlled by their environment and cannot do much about it would opt for the second. Here is an example by country of the sample respondents who believe that what happens to them is their own doing:50 United States Switzerland Australia Belgium Indonesia Hong Kong Greece Singapore Japan China 89% 84% 81% 76% 73% 69% 63% 58% 56% 35% In the United States, managers feel strongly that they are masters of their own fate. This helps account for their dominant attitude (sometimes bordering on aggressiveness) toward the environment and discomfort when things seem to get out of control. Many Asian cultures do not share these views. They believe that things move in waves or natural shifts and one must “go with the flow,” so a flexible attitude, characterized by a willingness to compromise and maintain harmony with nature, is important. 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 Chapter 4 The Meanings and Dimensions of Culture 145 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. ■ Integrating Culture and Management: The GLOBE Project Most recently, the GLOBE (Global Leadership and Organizational Behavior Effectiveness) research program reflects an additional approach to measuring cultural differences. 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.51 At the heart of phases one and two, first published in 2004 and 2007, is the study and evaluation of nine different cultural attributes using middle managers from 951 organizations in 62 countries.52,53 A team of 170 scholars worked together to survey over 17,000 managers in three industries: financial services, food processing, and telecommunications. When developing the measures and conducting the analysis, they also used archival measures of country economic prosperity and of the physical and psychological well-being of the cultures studied. Countries were selected so that every major geographic location in the world was represented. Additional countries, including those with unique types of political and economic systems, were selected to create a complete and comprehensive database upon which to build the analysis.54 This research has been considered among the most sophisticated in the field to date, and a collaboration of the work of Hofstede and GLOBE researchers could provide an influential outlook on the major factors characterizing global cultures.55 While phases one and two focus on middle management, phase three, first published in 2012, examines the interactions of culture and leadership in upper-level management positions. More than 1,000 CEOs, and more than 5,000 of their direct reports, were surveyed by 40 researchers across 24 countries. To provide compatibility across all phases of the GLOBE project, 17 of the 24 countries surveyed in phase three were also included in the initial study performed for phases one and two.56 A further explanation of phase three, which deals primarily with leadership, occurs in Chapter 13. Table 4–6 also provides an overview of the purposes and results of the different phases. Table 4–6 GLOBE Cultural Variable Results Variable Highest Ranking Medium Ranking Lowest Ranking Assertiveness Spain, U.S. Egypt, Ireland Sweden, New Zealand Future orientation Denmark, Canada Slovenia, Egypt Russia, Argentina Gender differentiation South Korea, Egypt Italy, Brazil Sweden, Denmark Uncertainty avoidance Austria, Denmark Israel, U.S. Russia, Hungary Power distance Russia, Spain England, France Denmark, Netherlands Collectivism/societal Denmark, Singapore Hong Kong, U.S. Greece, Hungary In-group collectivism Egypt, China England, France Denmark, Netherlands Performance orientation U.S., Taiwan Sweden, Israel Russia, Argentina Humane orientation Indonesia, Egypt Hong Kong, Sweden Germany, Spain Source: From Mansour Javidan, Peter W. Dorfman, Mary Sully de Luque, and Robert J. House, “In the Eye of the Beholder: Cross Cultural Lessons in Leadership from Project GLOBE,” Academy of Management Perspectives 20, no. 1 (2006), p. 76. 146 Part 2 The Role of Culture The GLOBE study is interesting because its nine constructs were defined, conceptualized, and operationalized by a multicultural team of over 100 researchers. In addition, the data in each country were collected by investigators who were either natives of the cultures studied or had extensive knowledge and experience in those cultures. Culture and 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.57 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:58 • • • • • • 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? GLOBE’s Cultural Dimensions Phase one of the GLOBE project identified the nine cultural dimensions:59 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. Chapter 4 The Meanings and Dimensions of Culture 147 Hofstede and the GLOBE Project: Comparing the Research Geert Hofstede Dutch researcher 1980 (updated in 1988 & 2010) Scholars GLOBE Project 170 researchers Date 2004 (Phase 1 –cultural dimensions) Completed Identified Dimensions Collectivism I Individualism Collectivism II Power Distance Power Distance Uncertainty Avoidance Uncertainty Avoidance Gender Egalitarianism Masculinity Assertiveness Time Orientation (1988) Future Orientation Performance Orientation Indulgence (2010) Humane Orientation IBM employees ~116,000 participants > 70 countries Sample Managers from 951 companies ~17,000 participants > 60 countries Source: Original graphic by Ben Littell under supervision of Professor Jonathan Doh based on data from G. Hofstede and G. J. Hofstede, Cultures and Organizations: Software of the Mind, 2nd ed. (New York: McGraw-Hill, 2005), and the GLOBE project research. 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.60 These measures are therefore integrative and combine a number of insights from previous studies. A unique contribution of the GLOBE project is the identification of both values, which represent how people think things should be, and practices, which represent how things actually are. For example, GLOBE researchers found that China exhibits a high level of power distance in practice (a score of 5.02) despite the fact that the Chinese people desire a lower level of power distance (a score of 3.01) in their culture. Figure 4-12 shows the differences in values and practices within Brazil. Recently, further analysis has been conducted with regard to corporate social responsibility (CSR), a topic discussed in detail in Chapter 3.61 GLOBE Country Analysis The initial results of the GLOBE analysis are presented in Table 4–7. The GLOBE analysis corresponds generally with those of Hofstede and Trompenaars, although with some variations resulting from the variable definitions and methodology. Hofstede critiqued the GLOBE analysis, pointing out key differences between the research methods; Figure 4–11 Comparing the Cultural Dimension Research: Geert Hofstede and the GLOBE Project 148 Part 2 The Role of Culture Assertiveness 7 Figure 4–12 Comparing Values and Practices in Brazil 6 Uncertainty Avoidance Institutional Collectivism 5 4 3 2 1 0 Power Distance In-Group Collectivism Performance Orientation Future Orientation Humane Orientation Gender Egalitarianism Values Practice Source: Original graphic by Ben Littell under supervision of Professor Jonathan Doh based on data from the GLOBE project research. Hofstede was the sole researcher and writer of his findings, while GLOBE consisted of a team of perspectives; Hofstede focused on one institution and surveyed employees, while GLOBE interviewed managers across many corporations; and so on. The disparity of the terminology between these two, coupled with the complex research, makes it challenging to compare and fully reconcile these two approches.62 Other assessments have pointed out that Hofstede may have provided an introduction into the psychology of culture, but further research is necessary in this changing world. The GLOBE analysis is sometimes seen as complicated, but so are cultures and perceptions. An in-depth understanding of all facets of culture is difficult, if not impossible, to attain, but GLOBE provides a current comprehensive overview of general stereotypes that can be further analyzed for greater insight.63,64 We will explore additional implications of the GLOBE findings as they relate to cross-cultural perspectives in Chapter 5 and managerial leadership in Chapter 13. The World of International Management—Revisited This chapter’s opening discussion of the successes and failures of cross-border mergers by DuPont, ABInBev, and Chrysler illustrates the importance of culture and how cultural differences may contribute to global management challenges. Cultural distance can influence both positively and negatively how decisions are made, reported, and resolved. Having read this chapter, you should understand the impact culture has on the actions of MNCs, including general management practices and relations with employees and customers, and on maintaining overall reputation. Recall the chapter opening discussion about the merger of ABInBev and ­SABMiller and then draw on your understanding of Hofstede’s and Trompenaars’s cultural dimensions to answer the following questions: (1) What dimensions contribute to the ­differences •B etween 6 and 9 direct reports of each CEO assessed the CEO’s leadership behaviors, personal reactions, and firm performance • Common method and response variance eliminated through research design • Internally oriented top management team (TMT) outcomes included commitment, effort, and team solidarity • Externally oriented firm outcomes included competitive sales performance, competitive ROI, and competitive domination of the industry • Involve more than 40 researchers in 24 countries • 17 of the 24 countries completed phases 1 and 2 in addition to phase 3 • Interviews and surveys were conducted for 40 CEOs within each country • A total of more than 1,000 CEOs and 5,000 of their direct reports were respondents in the project • Previously defined leadership qualities from phases 1 and 2 (i.e., CLTs) were converted into behavioral leadership items and combined into scales for phase 3 •L eaders tend to behave in a manner expected within their country • Cultural values do NOT have a direct effect on CEO behavior; rather, the effect is indirect through CLTs (culturally endorsed theory—i.e., leadership expectations) • Both the fit of CEO behaviors (to expectations) and degree of leadership behavior predict effectiveness • Superior and inferior CEOs exhibit different patterns of behavior within their country •V alidation of culture and leadership scales • Ranking of 62 societal cultures on 9 culture dimensions • Grouping of 62 cultures into 10 culture clusters • Creation of 21 primary leadership and 6 global leadership scales • Determination of relationships between culture dimensions and leadership ­dimensions • Determination of universally desirable and culturally specific leadership qualities (i.e., CLTs) Major Results Source: From Peter Dorfman, Mansour Javidan, Paul Hanges, Ali Dastmalchian, and Robert House, “GLOBE: A Twenty Year Journey into the Intriguing World of Culture and Leadership,” Journal of World Business 47 (2012), p. 505. GLOBE phase 3 • Determine the manner in which national culture influences executive leadership processes • Examine the relationship between ­leadership expectations (CLTs) and CEO behavior • Examine the relationship between CEO leadership behavior and effectiveness • Determine which CEO leadership behaviors are most effective •E mploy rigorous psychometric assessment procedures for scale items • Translate and back translate survey instruments in each country • Conduct pilot tests in several countries • Control for common source error in research design • Use rigorous statistical procedures to ensure scales can be aggregated and reliable • Assess cultures and organizations on practices (i.e., as is) and values (should be) • HLM used to test hypotheses (culture to leadership at organizational and societal level) • Involve a total of over 160 researchers from 62 national societies in the research project • Conduct individual and focus group ­interviews with mid-level managers in domestic organizations • Check items for relevance and understandability • Survey over 17,000 managers representing 951 organizations in 62 cultures GLOBE phases 1 & 2 • Design and implement multiphase and multimethod program to examine the relationship between national culture, leadership effectiveness, and societal phenomena • Identify leadership attributes critical for outstanding leadership • Develop societal culture questionnaire • Develop leadership questionnaire Design Strategy Method Purpose Table 4–7 Globe Phases One, Two, and Three Chapter 4 The Meanings and Dimensions of Culture 149 150 Part 2 The Role of Culture between how Brazilian and United Kingdom workers address management problems, including operational or product flaws? (2) What are some ways that Brazilian culture may affect operational excellence in a positive way? How might it hurt quality? (3) How could managers from Brazil or other similar cultures adopt practices from European cultures when investing in those regions? SUMMARY OF KEY POINTS 1. Culture is acquired knowledge that people use to interpret experience and generate social behavior. Culture also has the characteristics of being learned, shared, transgenerational, symbolic, patterned, and adaptive. There are many dimensions of cultural diversity, including centralized vs. decentralized decision making, safety vs. risk, individual vs. group rewards, informal vs. formal procedures, high vs. low organizational loyalty, cooperation vs. competition, short-term vs. long-term horizons, and stability vs. innovation. 2. Values are basic convictions that people have regarding what is right and wrong, good and bad, and important and unimportant. Research shows that there are both differences and similarities between the work values and managerial values of different cultural groups. Work values often reflect culture and industrialization, and managerial values are highly related to success. Research shows that values tend to change over time and often reflect age and experience. 3. Hofstede has identified and researched four major dimensions of culture: power distance, uncertainty avoidance, individualism, and masculinity. Recently, he has added a fifth dimension, time orientation, and more recently yet, a sixth dimension, indulgence vs. restraint: Each will affect a country’s political and social system. The integration of these factors into two-dimensional figures can illustrate the complexity of culture’s effect on behavior. 4. In recent years, researchers have attempted to cluster countries into similar cultural groupings to study similarities and differences. Through analyzing the relationship between two dimensions, as Hofstede illustrated, two-dimensional maps can be created to show how countries differ and where they overlap. 5. Research by Trompenaars has examined five relationship orientations: universalism vs. particularism, individualism vs. communitarianism, affective vs. neutral, specific vs. diffuse, and achievement vs. ascription. Trompenaars also looked at attitudes toward time and toward the environment. The result is a wealth of information helping to explain how cultures differ as well as practical ways in which MNCs can do business effectively in these environments. In particular, his findings update those of Hofstede while helping support the previous work by Hofstede on clustering countries. 6. Recent research undertaken by the GLOBE project has attempted to extend and integrate cultural attributes and variables as they relate to managerial leadership and practice. The GLOBE project identified nine cultural dimensions through the study of middle managers from over 900 different countries. These analyses confirm much of the Hofstede and Trompenaars research, with greater emphasis on differences in managerial leadership styles. Unique to the GLOBE project is the identification of both values, which ­represent how people think things should be, and practices, which represent how things actually are. KEY TERMS achievement culture, 143 ascription culture, 143 collectivism, 130 communitarianism, 141 culture, 124 diffuse culture, 142 emotional culture, 142 femininity, 132 GLOBE, 130 individualism, 130 masculinity, 131 neutral culture, 142 particularism, 139 power distance, 130 specific culture, 142 uncertainty avoidance, 130 universalism, 139 values, 128 Chapter 4 The Meanings and Dimensions of Culture 151 REVIEW AND DISCUSSION QUESTIONS 1. What is meant by the term culture? In what way can measuring attitudes about the following help differentiate between cultures: centralized or decentralized decision making, safety or risk, individual or group rewards, high or low organizational loyalty, cooperation or competition? Use these attitudes to compare the United States, Germany, and Japan. Based on your comparisons, what conclusions can you draw regarding the impact of culture on behavior? 2. What is meant by the term value? Are cultural values the same worldwide, or are there marked differences? Are these values changing over time, or are they fairly constant? How does your answer relate to the role of values in a culture? 3. What are the four major dimensions of culture studied by Geert Hofstede? Identify and describe each. What is the cultural profile of the United States? Of Asian countries? Of Latin American countries? Of Latin European countries? Based on your comparisons of these four profiles, what conclusions can you draw regarding cultural challenges facing 4. 5. 6. 7. i­ndividuals in one group when they interact with individuals in one of the other groups? Why do you think Hofstede added the fifth dimension of time orientation and the sixth dimension related to indulgence versus restraint? As people engage in more international travel and become more familiar with other countries, will cultural differences decline as a roadblock to international understanding, or will they continue to be a major barrier? Defend your answer. What are the characteristics of each of the following pairs of cultural characteristics derived from Trompenaars’s research: universalism vs. particularism, neutral vs. emotional, specific vs. diffuse, achievement vs. ascription? Compare and contrast each pair. How did project GLOBE build on and extend ­Hofstede’s analysis? What unique contributions are associated with project GLOBE? In what way is time a cultural factor? In what way is the need to control the environment a cultural factor? Give an example for each. INTERNET EXERCISE: RENAULT-NISSAN IN SOUTH AFRICA The Renault-Nissan alliance, established in March 1999, is the first industrial and commercial partnership of its kind involving a French company and a Japanese company. The Alliance invested more than 1 billion rand in upgrading Nissan’s manufacturing plant in Rosslyn, outside Pretoria, to increase output and produce the Nissan NP200 pickup and the Renault Sandero for the South African market. Visit the Renault-Nissan website at http://www.renault.com to see where factories reside for each car group. Compare and contrast the similarities and differences in these markets. Then answer these three questions: (1) How do you think cultural differences affect the way the firm operates in South Africa versus France versus Japan? (2) In what way is culture a factor in auto sales? (3) Is it possible for a car company to transcend national c…

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