The Impact of National CultureMGMT414

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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

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.

Culture is

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

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

Levels of Culture

National Culture

Business Culture

Organizational Culture Occupational Culture

Surface manifestations

Surface manifestations

ValuesValues

Basic Assumtions

Basic Assumtions

ELEMENTS OF CULTURE

Social StructureLanguage

CommunicationValues and Attitudes

Religion

CULTURE

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

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.

HOFSTEDE'S Cultural Dimensions

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

• +Time Orientation

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

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

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?

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

Power Distance Organizational Structure

Relatively Flat - Hierarchical PyramidStatus Symbols

Relatively Unimportant - Very ImportantImportance of "Face"

Face Saving less important - Face Saving Important Participative Management

Possible - Not Possible Role of Manager

Facilitator - Expert

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

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

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

Hofstede’s Cultural Classification Schemes

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

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acceptance of inequalities: no acceptance of inequalities:power is distributed un-equally strive for power equalizationacceptance 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 40Canada 39

Power Distance Index (PDI)

LARGE POWER DISTANCE SMALL POWER DISTANCE

Location ScoreNetherlands 38Germany 35UK 35Switzerland 34Finland 33Norway 31Sweden 31Denmark 18Israel 13Austria 11 (lowest; smallest

power distance)

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Location ScoreGreece 112 (highest need to Portugal 104 avoid uncertainty) Japan 92France 86Spain 86Italy 75Austria 70Germany 65Finland 59

control the future let the future happendon’t 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 ScoreSwitzerland 58Norway 50Canada 48USA 46UK 35Sweden 29Denmark 23Singapore 8

(lowest need to avoid uncertainty)

Uncertainty Avoidance Index (UAI)

STRONG UNCERTAINTY AVOIDANCE WEAK UNCERTAINTY AVOIDANCE

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preference for loosely knit social framework preference for tightly knit social framework high individual autonomy – self centered low ind. autonomy-we centered individualstake care of selves and immediate family only will be taken care of when needed

loyalty to family, group, clan

Location ScoreNorway 69Switzerland 68Germany 67Finland 63Austria 55Spain 51Japan 46Greece 35Portugal 27Pakistan 14Venezuela 12 (lowest; most

“We” oriented)

Individualism (IDV)

Location ScoreUSA 91 (highest; most Australia 90 “I’ oriented) UK 89Canada 80Netherlands. 80Italy 76Denmark 74Sweden 71France 71

“I” - INDIVIDUALISM: WE- COLLECTIVISM:

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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 differentiationperformance societies focus on peoples’ welfare

Masculinity (MAS)

Location ScoreJapan 95 (highest; performance/Austria 79 achievement orientation)Italy 70Switzerland 70UK 66Germany 66USA 62Hong Kong57

Location ScoreGreece 57Canada 52France 43Finland 26Netherlands 14Norway 8Sweden 5

(lowest; most welfare/relations oriented)

MASCULINITY (performance/achievement) FEMININITY (welfare/relations)

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Place IndexChina 113 (long term)Hong Kong96Taiwan 87Japan 80Brazil 65India 61Thailand 56Singapore 48Netherlands 44Sweden 33

Place IndexPoland 32Germany (W) 31Australia 31New Zealand 30USA 29UK 25Zimbabwe 25Philippines 19Nigeria 16Pakistan 00 (short term)

Traditions are adapted to our time Respect for traditionsLimited respect for social obligations Respect for social regardless of costsKeep up with the Jones´s Frugality, economizing w/resourcesLow private savings High savings rate, can investExpects quick results Patience with resultsNeed to own the truth Respect the demands of virtue

Long-Term Orientation (LTO)

SHORT TERM LONG TERM

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Mapping cultural dimensions

MAS

FEM

PDI- PDI+

Austria

Germany

Finland

Netherlands

NorwayDenmark

Sweden

UKUSA

China

Chile

Czechia

Italy

Spain

Argentina

Japan

France

Success

Belgium

Portugal

Switzerland

Canada

Status needs low

PowerSocial status

Success

PowerSocial Status

Turkey RussiaPanama

Thailand

GreecePoland

Mexico

Hungary

Venezuela

(Marieke de Mooji, 2005)25

Cross-cultural comparisons

High- vs. Low-context cultures

Hofstede’s classification scheme

Project GLOBE

World Value Survey (WVS)

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27Low context

High context Japanese

Arabian

Latin American

Spanish

ItalianEnglish (UK)

French

English (US)

Scandinavian

German

Swiss EXPLICIT

IMPLICIT

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.

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

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?)

High and Low Context Cultures

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

• Decision making: In lower context cultures, business people try to reach decisions quickly and efficiently. They’re 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.

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.

a. Contextual Differences cont.

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, financial performance and the organization of work. A seven-point scale was created, with six indicating the briefing of both clerical and manual employees on all three issues, and zero indicating no briefing 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

Strategic Nature of HRM Union Presence

Direct Communication

N Mean SD Mean SD Mean SD

Turkey 171 13.48 5.19 2.62 1.85 2.06 1.56

Greece 180 15.53 5.99 3.24 1.52 2.18 1.57

Bulgaria 157 9.71 5.70 2.93 1.73 2.46 1.85

Italy 117 17.26 6.29 3.88 1.04 2.74 1.79

France 140 18.09 3.57 3.21 1.06 3.09 1.85

Slovenia 161 14.44 5.04 3.84 1.17 3.21 1.93

Estonia 118 12.90 5.20 1.92 1.30 3.20 1.80

Sweden 383 15.25 4.07 4.73 0.76 4.50 1.76

Finland 293 13.97 4.73 4.54 1.01 4.76 1.52

Total 1720 14.51 5.38 3.71 1.53 3.43 2.00

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.

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