Business and People Management INTERNATIONAL MANAGEMENT GLOBAL Business and People Management Professor H. Michael Boyd, Ph.D.

The Meanings and Dimensions of Culture Chapter 4 The Meanings and Dimensions of Culture

The Meanings and Dimensions of Culture The specific objectives of this chapter are to DEFINE the term culture, and discuss some of the comparative ways of differentiating cultures. 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. IDENTIFY the major dimensions of culture relevant to work settings, and discuss their effects on behavior in an international environment. DISCUSS the value of country cluster analysis and relational orientations in developing effective international management practices.

The Nature of Culture Culture is Acquired knowledge that people use to interpret experience and generate social behavior. This knowledge forms values, creates attitudes, and influences behavior.

The Nature of Culture Characteristics of culture Learned Shared Transgenerational Symbolic Patterned Adaptive

Priorities of Cultural Values United States, Japan, and Arab Countries

Cultural Diversity How Culture Affects Managerial Approaches Centralized vs. Decentralized Decision Making Centralized: In some societies, top managers make all important organizational decisions. Decentralized: In others, these decisions are diffused throughout the enterprise, and middle- and lower-level managers actively participate in, and make, key decisions.

Cultural Diversity How Culture Affects Managerial Approaches Safety vs. Risk Safety: In some societies, organizational decision makers are risk-averse and have great difficulty with conditions of uncertainty. Risk: In others, risk taking is encouraged, and decision making under uncertainty is common.

Cultural Diversity How Culture Affects Managerial Approaches Individual vs. Group Rewards Individual: In some countries, personnel who do outstanding work are given individual rewards in the form of bonuses and commissions. Group rewards: In others, cultural norms require group rewards, and individual rewards are frowned upon.

Cultural Diversity How Culture Affects Managerial Approaches Informal vs. Formal Procedures Informal: In some societies, much is accomplished through informal means. Formal: In others, formal procedures are set forth and followed rigidly.

Cultural Diversity How Culture Affects Managerial Approaches High vs. Low Organizational Loyalty High: In some societies, people identify very strongly with their organization or employer. Low: In others, people identify with their occupational group, such as engineer or mechanic.

Cultural Diversity How Culture Affects Managerial Approaches Cooperation vs. Competition Cooperation: Some societies encourage cooperation between their people. Competition: Others encourage competition between their people.

Cultural Diversity How Culture Affects Managerial Approaches Short-term vs. Long-term Horizons Short-term: Some cultures focus most heavily on short-term horizons, such as short-range goals of profit and efficiency. Long-term: Others are more interested in long-range goals, such as market share and technological developments.

Cultural Diversity How Culture Affects Managerial Approaches Stability vs. Innovation Stability: The culture of some countries encourages stability and resistance to change. Innovation: The culture of others puts high value on innovation and change.

A Model of Culture

Business Customs in South Africa Arrange a meeting before discussing business over the phone. Make appointments as far in advance as possible. Maintain eye contact, shake hands, provide business cards for everyone. Be respectful of women, while aware that in their society they may be “tested.” Maintain a win-win situation. Be patient; don’t interrupt. Keep presentations short; avoid flashy visuals.

Values in Culture Values Basic convictions that people have about Right and wrong Good and bad Important and unimportant Learned from culture in which the individual is reared Differences in cultural values may result in varying management practices.

Comparing Cultures as Overlapping Normal Distributions

Stereotyping from the Cultural Extremes

U.S. Values and Possible Alternatives

Value Similarities and Differences Across Cultures Strong relationship between level of managerial success and personal values Value patterns predict managerial success and can be used in selection/placement decisions Country differences in relationship between values and success; however, findings across U.S., Japan, Australia, India are similar Values of more successful managers favor pragmatic, dynamic, achievement-oriented, and active role in interaction with others Values of less successful managers tend toward static and passive values; relatively passive roles in interacting with others

Hofstede’s Cultural Dimensions Power Distance Uncertainty Avoidance Individualism―Collectivism Masculinity―Femininity Time Orientation Indulgence vs. Restraint

Hofstede’s Cultural Dimensions Power Distance The extent to which less powerful members accept that power is distributed unequally High power distance countries: people blindly obey superiors; centralized, tall organizational structures (Mexico, South Korea, India) Low power distance countries: flatter, decentralized organizational structures, smaller ratio of supervisor to employee (Austria, Finland, Ireland)

Hofstede’s Cultural Dimensions Uncertainty Avoidance The extent to which people feel threatened by ambiguous situations; create beliefs/institutions to try to avoid such situations High uncertainty avoidance countries: high need for security, strong belief in experts and their knowledge; structure organizational activities, more written rules, less managerial risk taking (Germany, Japan, Spain) Low uncertainty avoidance countries: people more willing to accept risks related to unknown, less structured organizational activities, fewer written rules, more managerial risk taking, higher labor turnover, more ambitious employees (Denmark and Great Britain)

Hofstede’s Cultural Dimensions Individualism The extent to which people look after themselves and immediate family only Collectivism The tendency of people to belong to groups and to look after each other in exchange for loyalty High individualism countries: wealthier, Protestant work ethic, greater individual initiative, promotions based on market value (U.S., Canada, Sweden) High collectivism countries: poorer, less support of Protestant work ethic, less individual initiative, promotions based on seniority (Indonesia, Pakistan)

Hofstede’s Cultural Dimensions Masculinity A cultural characteristic in which the dominant social values are success, money, and things Femininity A cultural characteristic in which the dominant social values are caring for others and quality of life High masculine countries: stress earnings, recognition, advancement, challenge, wealth; high job stress (Germanic countries) High feminine countries: cooperation, friendly atmosphere, employment security, group decision making; low job stress (Norway)

Hofstede’s Cultural Dimensions Time Orientation (1988) A cultural characteristic dealing with society’s search for virtue Long-term oriented societies: focus on the future, able to adapt traditions when conditions change, tend to save and invest, focus on achieving long-term results (Asian countries) Short-term oriented cultures: focus on quick results, do not tend to save, service to others, belief in absolutes, value stability and leisure (U.S., UK, Spain)

Hofstede’s Cultural Dimensions Indulgence vs. Restraint (2010) Indulgent: trait related to relative happiness based on instant gratification Restraint: a cultural characteristic based on regulating and controlling behavior according to social norms Indulgent societies: perceived happiness, life in control, positive emotions, basic needs satisfied (U.S., UK, Australia, Chile) Restrained societies: less happiness, sense of helplessness, less likely to remember positive emotions, basic needs not always met (China, Egypt, Romania)

Trompenaars’s Cultural Dimensions Universalism vs. Particularism Universalism: belief that ideas/practices can be applied everywhere High universalism countries: formal rules, close adherence to business contracts (U.S., UK, Germany, Sweden, Australia) Particularism: belief that circumstances dictate how ideas/practices apply High particularism countries: legal contracts often modified, the way deals executed change as people get to know each other (China, Indonesia, Venezuela)

Trompenaars’s Cultural Dimensions Individualism vs. Communitarianism Individualism: people regard themselves as individuals Countries with high individualism: stress personal and individual matters; assume great personal responsibility (U.S., UK, Argentina, Mexico, Thailand) Communitarianism: people regard themselves as part of a group Value group-related issues; committee decisions; joint responsibility (Malaysia, Korea)

Trompenaars’s Cultural Dimensions Neutral vs. Emotional Neutral: culture in which emotions are held in check High neutral countries: people act stoically and maintain composure (Japan and UK) Emotional: emotions are expressed openly and naturally High emotion cultures: people smile a lot, talk loudly, greet each other with enthusiasm (Mexico, Netherlands, Switzerland)

Trompenaars’s Cultural Dimensions Specific vs. Diffuse Specific: large public space shared with others and small private space guarded closely High specific cultures: people open and extroverted, strong separation of work and personal life (Austria, UK, U.S., Switzerland) Diffuse: public and private spaces have similar size, public space guarded because shared with private space Diffuse cultures: people indirect and introverted, work/private life closely linked (Venezuela, China, Spain)

Trompenaars’s Cultural Dimensions Achievement vs. Ascription Achievement culture: people accorded status based on how well they perform functions High status to high achievers (Austria, Switzerland, U.S., UK) Ascription culture: status based on who or what a person is Status based on age, gender, social connections (Venezuela, China, Indonesia)

Trompenaars’s Cultural Dimensions Time Sequential: only one activity at a time, appointments kept strictly, follow plans as laid out (U.S.) Synchronous: multitask, appointments are approximate and easily changed, schedules subordinate to relationships (France, Mexico) Past/Present vs. Future: Future more important (Italy, U.S., Germany) Past/Present more important (Venezuela, Indonesia, Spain) All 3 time periods equally important (France, Belgium)

Trompenaars’s Cultural Dimensions The Environment Inner-directed: people believe in controlling outcomes Dominant (sometimes aggressive) attitude toward environment (U.S., Switzerland, Australia) Outer-directed: people believe in letting things take their course “Go with the flow,” flexible attitude, willingness to compromise and maintain harmony (China, many other Asian countries)

Integrating Culture and Management: The GLOBE Project GLOBE: Global Leadership and Organizational Behavior Effectiveness Project extends and integrates previous analyses of cultural attributes and variables Evaluates nine different cultural attributes using middle managers from 951 organizations in 62 countries First two phases: middle management Multi-cultural team of 170 scholars from around the world worked together to survey 17,000 managers in 3 industries: financial services, food processing, and telecommunications Covered every major geographic region of the world Third phase: upper-level management Team of 40 researchers from 24 countries surveyed 5,000 reports from 1,000 CEOs

The GLOBE Project The Nine Dimensions of the GLOBE Project Uncertainty avoidance Power distance Collectivism I: Societal collectivism Collectivism II: In-group collectivism Gender egalitarianism Assertiveness Future orientation Performance orientation Humane orientation

GLOBE Country Analysis The results of the GLOBE project Correspond generally with those of Hofstede and Trompenaars Different from Hofstede in that many more researchers with varied perspectives were involved (vs. Hofstede working alone); studied many companies (vs. Hofstede studied one company) GLOBE provides a current comprehensive overview of general stereotypes that can be further analyzed for greater insight

GLOBE Cultural Variable Results

GLOBE Analysis Managerial Perspectives in the United States and Brazil

Review and Discuss 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?

Review and Discuss 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?

Review and Discuss 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 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?

Review and Discuss 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.

Review and Discuss 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.