1. International Management and Culture
Arild Aspelund

2. Outline Dealing with people in a global setting The cultural aspect
A practical example of International Joint Ventures

3. International Management
International labor markets and global firms
International worker mobility problems
National management styles and practices
National orientations
Strategy and control
Headquarters – Subsidiary relationship
Local subsidiaries need people who can manage well locally
Headquarters need people who can coordinate and control worldwide
One need to find a trade-off…
Dealing with culture in cross-country negotiations and alliances

4. The Cultural Aspects What is culture? How do you get your culture?
The normative definition: The sum total of the beliefs, rules, techniques, institutions, and artifacts that characterize human populations
The behavioral definition: The collective programming of the mind
How do you get your culture?
Culture is taught through socialization processes
Socialization processes are the influence from parents, friends, education, and the interaction with a particular society
These influences result in patterns of behavior common to all members of a given society
A corporation might define such a society and hence define corporate culture

5. Hofstede’s Four (five) Dimensions of Culture
Power distance
The extent that a culture excepts that power is unequally distributed
Generally low in Scandinavia
High in south America and France
Uncertainty avoidance
Degree to which members of a culture is uncomfortable with risk and uncertainty
High uncertainty avoidance in e.g. France, Argentine and Japan
Low in the US, Denmark, India and the UK

6. Hofstede’s Four (five) Dimensions of Culture
Individualism
The extent to which people are supposed to take care of themselves and be emotional independent from others
Generally high in Scandinavia, the US and UK
Low in Indonesia, Thailand and South America
Masculinity
The value attributed to achievement, assertiveness, and material success
High in Germany, Japan and the UK
Generally low in the feminine societies of the Scandinavian countries and the Netherlands

7. Hofstede’s Four (five) Dimensions of Culture
Long-term Orientation
To what extent do people have a future-oriented perspective rather that focus on the present
Also labeled “Confucian dynamism”; developed by Chinese scientists
A response to the critique of the “Western Mindset” of Hofstede’s original IBM study
Long term orientation:
Persistence, ordering relationships by status and observing this order, thrift, having a sense of shame
Short term orientation:
personal steadiness and stability, protecting your ‘face’, respect of tradition, reciprocation of greetings, favors, and gifts
On this scale Norway and China are at the opposite ends…

8. Trompenaar’s Seven Dimensions of Culture - A managerial extension of Hofstede
Universialism versus Particularism
Ex: A salesman that has not fulfilled his monthly sales quota due to sickness in his family
Universal reactions: The US, Canada and Switzerland
Particular exceptions: Korea, Russia and China
Individualism versus Collectivism
Are the rights and values of the individual dominant or subordinate of the collective society?
Individualists: Canada, the US, and Switzerland
Collectivists: Japan, Egypt and India

9. Trompenaar’s Seven Dimensions of Culture - A managerial extension of Hofstede
Neutral versus Emotional
How much emotions are displayed at the workplace
Is it acceptable to make a significant investment from “gut feelings” and intuition?
No! Japan, Germany, Switzerland and China
Yes! Italy and France
Specific versus Diffuse
Do hierarchies exist only at the workplace or does it exist also in the society outside the company?
Ex: Your boss ask you to paint his house over the weekend
NO! Australia and the Netherlands
ok…China, Japan, Singapore and India

10. Trompenaar’s Seven Dimensions of Culture - A managerial extension of Hofstede
Achievement versus Ascription
Is your status in the organization tied to achievements that you have done, or your gender, age, education or social class (ascribed status)?
Merit in Scandinavia and the US, the UK and Canada
Ascribed in Egypt, Russia, Japan and France
Attitudes toward time
Time viewed as sequential steps or time viewed as synchronic (many things happen simultaneously)
Northern Europe are sequential (punctual and planning)
Southern Europe are synchronic and regard chronological precision as mere coincidence…

11. Trompenaar’s Seven Dimensions of Culture - A managerial extension of Hofstede
Attitudes towards the environment
Some cultures try to control and subjugate the environment, others try to work with the nature
This is a dimension more related to religion and philosophy than national cultures
Historically the first is highly associated with western Europe and North America and the industrial revolutions
A short list of distinction between Hofstede and Trompenaar
Hofstede more related to national cultures and inevitably market selection decisions in marketing and offshoring decisions in sourcing
Trompenaar more related to management of multinational enterprises and more applicable to everyday managerial problems
Trompenaar is also more recent and had the benefit of looking at Hofstede’s work and some of the critique against it…

12. Values and Alliances - An Application of Hofstede’s Framework
As we have seen , Dutch scientist have traditionally taken lead positions in the study of culture in international Business
Harry Barkema and Freek Vermeulen have been key contributors the past two decades
The current study seek to answer two questions
Which cultural differences are the most disruptive for the initiation and development of International Joint Ventures (IJVs)?
Are cultural values stable over time?
Unique data from 828 foreign entries of 25 Dutch multinationals in 72 countries, spanning from 1966 to 1994

13. Values and Alliances - An Application of Hofstede’s Framework
Results systematically point to differences in uncertainty avoidance and long-term orientation as key predictors of…
tendency to prefer international wholly-owned subsidiaries over IJVs
and long-term survival of IJVs
These factors dominate over differences in power distance, individualism, and masculinity
How would you explain these differences?
The study also show that the cultural dimensions are fairly stable over time