Global Business Environment Joan Lofgren Lecture 4b Focus on Hofstede/Trompenaars September 7, 2017

Have you heard of Hofstede? Joan Lofgren, September 7, 2017

Geert Hofstede’s four cultural dimensions Power distance: measures the degree to which less powerful members of organizations and institutions accept the fact that power is not distributed equally. Uncertainty avoidance: measures the extent to which people feel threatened by ambiguous situations and have created institutions and beliefs for minimizing or avoiding those uncertainties. Joan Lofgren, September 7, 2017

Hofstede’s four cultural dimensions (cont.) Individualism vs. collectivism Individualism: the tendency of people to look after themselves and their immediate family only. Collectivism: the tendency of people to belong to groups who look after each other in exchange for loyalty. Joan Lofgren, September 7, 2017

Hofstede’s four cultural dimensions (cont.) Masculinity vs. femininity Masculinity: the degree to which the dominant values of a society are success, money and material goods. Femininity: the degree to which the dominant values of a society are caring for others and the quality of life. Later added: Long-term versus short-term orientation Indulgence versus restraint Joan Lofgren, September 7, 2017

Hofstede found…. cultural norms and values very powerful in the workplace organizational culture less influential than national cultures successful management in one culture no guarantee of success in another countries may not have a single national culture Joan Lofgren, September 7, 2017

Hofstede’s cultural dimensions (cont.) Hofstede will become a familiar name in your studies! Many other scholars have built upon his approach. http://www.geert-hofstede.com/ Joan Lofgren, September 7, 2017

Joan Lofgren, September 7, 2017 Figure 5.2 Hofstede’s power distance against individualism for 20 countries Source: Hofstede, G. (1983). The cultural relativity of organizational practices and theories, Journal of International Business Studies, Fall, p. 92. Copyright © Geert Hofstede Joan Lofgren, September 7, 2017

Fons Trompenaars’ seven cultural dimensions 1. Universalism vs. particularism 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 some things cannot be done the same everywhere. Joan Lofgren, September 7, 2017

Fons Trompenaars’ seven cultural dimensions (cont.) 2. Individualism vs. collectivism: centres on whether individual rights and values are dominant or subordinate to those of the collective society. 3. Neutral culture vs. emotional culture: Neutral culture: A culture in which emotions are held in check. Emotional culture: A culture in which emotions are expressed openly and naturally. Joan Lofgren, September 7, 2017

Fons Trompenaars’ seven cultural dimensions (cont.) 4. Specific vs. Diffuse: measures whether work relationships (e.g. the hierarchical relationship between a senior manager and a subordinate) are workplace ‘specific’ or extend (diffuse) into the social context outside the workplace. 5. Achievement vs. Ascription: measures whether one’s status within organizations is based on merit (“achieved”) or on class, gender, education or age (“ascribed”). Joan Lofgren, September 7, 2017

Fons Trompenaars’ seven cultural dimensions (cont.) 6. Attitudes toward time Sequential: cultures that view time in a sequential or linear fashion; order comes from separating activities and commitments. Synchronic: cultures that view events in parallel over time; order comes from coordinating multiple activities and commitments. Joan Lofgren, September 7, 2017

Fons Trompenaars’ seven cultural dimensions (cont.) 7. Attitudes toward the environment: measures the emphasis, a particular culture places on people’s relationship with nature and the natural environment. Joan Lofgren, September 7, 2017

Relevance of culture for IB Culture underlies all social activity, thus also business International business by nature crosses cultural boundaries as it moves from one national economy to another Managers in foreign countries often face a choice of adapting to local practices vs following those of the company/home culture. Is globalization leading to a homogenization or convergence of cultures (eg McDonaldization)? Joan Lofgren, September 7, 2017

Learning about a foreign culture As a means of information gathering and evaluation—the manager need not depend on the perceptions and opinions of others about the local market, the situation in the company. Interpreting cultural contexts that influence business operations, eg in negotiations. Your own experiences? Joan Lofgren, September 7, 2017

Activity on cultural identity Prepare a mind map of your cultural identity. Put your name on the top. You will then share highlights from your mind map in a small group. Note: You are not expected to share anything confidential with the class as a whole, although I will ask for voluntary comments. Please turn in your mind map to me. Joan Lofgren, September 7, 2017