The Impact of National Culture

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The Impact of National Culture

• MGMT414

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A look at culture

• Knowledge, belief, art, morals, law, custom, and
  any other capabilities and habits acquired by man
  as a member of society Sir Edward Taylor,
  English anthropologist, 1832-1917
• A set of distinctive spiritual, material,
  intellectual and emotional features of society or
  a social group includes art and literature,
  lifestyles, ways of living together, value
  systems, traditions and beliefs UNESCO 2002
• Collective programming of the minds Geert
  Hofstede

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What is Culture?

• The entire set of social norms and responses that
  
• dominate the behavior of a population. It is a
• conglomeration of beliefs, rules, institutions
  and
• artifacts that characterize human population.
• It is transmitted by symbols, stories and rituals
  
• over generations.

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Culture is
acquired knowledge that people use to filter the
life experiences and to generate social behavior.
It is

• Learned
• Shared
• Cumulative
• Symbolic
• Integrated
• Dynamic

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Levels of Culture
National Culture
Business Culture
Organizational Culture
Occupational Culture
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Surface manifestations
Values
Basic Assumtions
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ELEMENTS OF CULTURE
Language
Social Structure
CULTURE
Communication
Values and Attitudes
Religion
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Why do we experience problems?

• Assumptions
• We are alike! I do not have to worry about
  anything!
• We may be different, but I would like to do
  business the way I know and want!
• They are different, I need to be very careful and
  cautious. I do not know what I am getting into.
• They are different, but I can train them about
  our ways

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Perceptions and Stereotypes

• A Perception is a person's interpretation of
  reality. In other words perception is a filtered
  experience, and the fabric of the filter is
  determined by our cultural background. It is very
  likely that same occurrences may be interpreted
  differently by people from diverse cultural
  backgrounds.
• A Stereotype is a tendency to think in terms of
  generalizations. We generally categorize people
  as belonging to a single class. We should never
  let ourselves be trapped in this lazy way of
  thinking about other countries and people.

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HOFSTEDE'S Cultural Dimensions

• Power Distance
• Uncertainty Avoidance
• Individualism/Collectivism
• Masculinity/Femininity
• Time Orientation

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Power Distance

• Inequality is not disturbing
• Everyone has a place
• People should depend on a leader
• The powerful are entitled to privileges
• The powerful should not hide their power
• Authoritarian Management
• Limited Communication/Feedback
• Centralized Decision Making

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Uncertainty Avoidance

• Less risk tolerant
• Less entrepreneurial
• Low tolerance of deviant people and ideas
• Avoid conflict
• Respect for laws and rules
• Experts and authorities are usually correct
• Consensus is important

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Individualism/Collectivism

• People are responsible for themselves
• Individual achievement is ideal
• More independent decision making
• Competence is the central criteria
• People are not emotionally dependent on
  organizations or groups
• Loyalty?

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Masculinity

• Clear definitions of gender roles
• Men are assertive and dominant
• Support for Machismo
• Men should be decisive
• Work is priority
• Growth, success, and money are important

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Power Distance

• Organizational Structure
• Relatively Flat - Hierarchical Pyramid
• Status Symbols
• Relatively Unimportant - Very Important
• Importance of "Face"
• Face Saving less important - Face Saving
  Important Participative Management
• Possible - Not Possible
• Role of Manager
• Facilitator - Expert

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Uncertainty Avoidance

• Corporate Plans
• Seen as guidelines - Seen as important to follow
• Competition
• Seen as Advantageous - Seen as Damaging
• Budgeting Systems
• Flexible - Inflexible
• Control Systems
• Loose - Tight
• Risk
• Take - Avoid

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Collectivist - Individualist

• Decision Making
• Group Consensus - Individual
• Reward Systems
• Group Based - Individual/Based on Merit
• Ethics/Values
• Particularism - Universalism
• Organizational Concern
• Look after employees - Employees look after
  selves

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Femininity / Masculinity

• Valued Rewards
• Quality of Life - Money, Performance
• Networking
• Important for Relationships - Important for
  Performance
• Interpersonal Focus
• Maintaining Relationship - Getting the Task done
• Basis for Motivation
• Service to Others Ambition - Getting Ahead

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Hofstedes Cultural Classification Schemes

• Power Distance Index (PDI)
• Uncertainty Avoidance Index (UAI)
• Individualism (IDV)
• Masculinity (MAS)
• Long-Term Orientation (LTO)

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Power Distance Index (PDI)
LARGE POWER DISTANCE SMALL POWER DISTANCE
acceptance of inequalities no acceptance of
inequalitiespower is distributed
un-equally strive for power equalizationacceptanc
e of hierarchies differences must be
justifiedeverybody has his/her place little
acceptance of hierarchies
Location ScoreMalaysia 104 (highest
largest Mexico 81 power distance) Hong Kong
68France 68Portugal 63Greece 60Spain
57Japan 54Italy 50USA 40 Canada 39
Location Score Netherlands 38Germany 35UK 35
Switzerland 34Finland 33Norway 31Sweden 31D
enmark 18Israel 13Austria 11 (lowest
smallest power distance)
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Uncertainty Avoidance Index (UAI)
STRONG UNCERTAINTY AVOIDANCE WEAK UNCERTAINTY
AVOIDANCE
control the future let the future happendont
like risk and ambiguity relaxed about
othersbeliefs in conformity, stability practice
more important than codesand principles for
belief and behaviorintolerance toward
deviant deviance is toleratedpersons and ideas
Location ScoreGreece 112 (highest need to
Portugal 104 avoid uncertainty)
Japan 92France 86Spain 86Italy 75Austria 70G
ermany 65Finland 59
Location Score Switzerland 58Norway 50Canada
48USA 46UK 35Sweden 29Denmark 23Singapore
8 (lowest need to avoid uncertainty)
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Individualism (IDV)
I - INDIVIDUALISM WE- COLLECTIVISM
preference for loosely knit social framework
preference for tightly knit social framework
high individual autonomy self centered low
ind. autonomy-we centered individuals take care
of selves and immediate family only will be
taken care of when needed loyalty to family,
group, clan
Location Score Norway 69Switzerland 68Germany
67Finland 63Austria 55Spain 51Japan 46Gr
eece 35Portugal 27Pakistan 14Venezuela 12
(lowest most We oriented)
Location ScoreUSA 91 (highest most
Australia 90 I oriented)
UK 89Canada 80Netherlands. 80Italy 76Denma
rk 74Sweden 71France 71
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Masculinity (MAS)
MASCULINITY (performance/achievement) FEMININITY
(welfare/relations)
winner take all (reflected also in women)
welfare for all (reflected also in
men)preference for achievement, preference for
relationshipsheroism, assertiveness modesty,
caring for the weakand material success quality
of lifemaximum social differentiation between
the sexes minimum social differentiationperforma
nce societies focus on peoples welfare
Location ScoreJapan 95 (highest
performance/Austria 79 achievement
orientation)Italy 70Switzerland 70UK 66Germa
ny 66USA 62Hong Kong 57
Location ScoreGreece 57Canada 52France 43
Finland 26Netherlands 14Norway 8Sweden 5
(lowest most welfare/ relations oriented)
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Long-Term Orientation (LTO)
SHORT TERM LONG TERM
Traditions are adapted to our time Respect for
traditions Limited respect for social
obligations Respect for social regardless of
costs Keep up with the Joness Frugality,
economizing w/resources Low private
savings High savings rate, can invest Expects
quick results Patience with results Need to own
the truth Respect the demands of virtue
Place Index Poland 32 Germany
(W) 31 Australia 31 New Zealand 30 USA 29 UK 25
Zimbabwe 25 Philippines 19 Nigeria 16 Pakistan
00 (short term)
Place Index China 113 (long term) Hong
Kong 96 Taiwan 87 Japan 80 Brazil 65 India 61
Thailand 56 Singapore 48 Netherlands 44 Sweden 3
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Mapping cultural dimensions
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(Marieke de Mooji, 2005)
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Cross-cultural comparisons

• High- vs. Low-context cultures
• Hofstedes classification scheme
• Project GLOBE
• World Value Survey (WVS)

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High- vs. Low-context cultures

• High-context cultures
• Interpretation of messages rests on contextual
  cues
• Examples China, Korea, Japan, etc.
• Low-context cultures
• Put the most emphasis on written or spoken words
• United States, Scandinavia, Germany, etc.

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Project GLOBE

• 9 dimensions
• - uncertainty avoidance
• - power distance
• - collectivism
• - collectivism II
• - gender egalitarianism
• - assertiveness
• - future orientation
• - performance orientation
• - humane orientation

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Clusters

• Anglo cultures (US, GB, Australia)
• High on individualism and masculinity, low on
  power distance and uncertainty avoidance
• Latin European
• High uncertainty avoidance
• Nordic
• Low masculinity
• Far Eastern
• High power distance, low individualism

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• World Value Survey

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Fons Trompenaars Charles Hampden-Turner

• Universalism vs Particularism (What is important?
  Rules or relationships?)
• Neutral vs Affective Relationships (How do we
  show our emotions?)
• Individualism vs Communitarianism (Do we prefer
  to work individually or in a group?)
• Specific vs Diffuse Relationships (How far do we
  get involved?)
• Achieved status vs Ascribed status (Do we work to
  get where we are or is prestige/status given?)
• Time orientation
• Internal vs External orientation (Do we control
  the environment or leave it to fate/destiny?)

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High and Low Context Cultures

• Contextual differences affect the way you
  approach situations such as decision making,
  problem solving, and negotiating.

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a. Contextual Differences cont.

• Decision making In lower context cultures,
  business people try to reach decisions quickly
  and efficiently. Theyre concerned with reaching
  an agreement on main points, leaving details to
  be worked out later by others. In higher-context
  cultures, details are important and they take
  their time.

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a. Contextual Differences cont.

• Problem Solving Low context cultures encourage
  open disagreement, whereas high context cultures
  avoid confrontation and debate.
• Negotiating Low context cultures view
  negotiations impersonally and focus on economic
  goals, whereas high-context cultures emphasize
  relationships and a sociable atmosphere when
  negotiating.

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Methodology

• Six countries were selected from the CRANET
  database varying from high to low context. Turkey
  and Greece as high context countries, Italy and
  France as medium context and Finland and Sweden
  as low context countries. The dependent or
  criterion variable, internal transparency, was
  measured by using the questions related to
  whether organizations brief clerical and manual
  employees on issues of business strategy,
  ?nancial performance and the organization of
  work. A seven-point scale was created, with six
  indicating the brie?ng of both clerical and
  manual employees on all three issues, and zero
  indicating no brie?ng of either category on any
  of the issues.
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Strategic Nature of HRM, Union Presence and
Direct Communication in 9 countries listed in
order of high to low context
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Findings

• One way analysis of variance was conducted and
  showed that there was signigficant difference
  between the three groups (high, medium and low
  context countries) in terms of their average
  internal transparency score. As high context
  countries Turkey and Greece had 2.12 average
  internal transparency score, as medium context
  countries France and Italy had 2.93 average
  internal transparency score and as low context
  countries Finland and Sweeden had average
  internal transparency scores of 4.62. This shows
  that as predicted in high context cultures, there
  is less formal information sharing between the
  organization and the employees while in low
  context cultures the level of formal
  communication is much higher.
•