MNCE9

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Session

Socio-cultural Environment9MNCE

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Socio-cultural Environment

Business is as much a socio-cultural phenomenon as itis an economic activity.

Per capita income in two countries may be the same, yetthe consumption patterns in these countries may differ.

Socio-cultural forces have considerable impact onproducts people consume; designs, colors and symbolsthey like; dresses they wear and emphasis they place onreligion, work, entertainment, family and other socialrelations.

Socio-cultural environment influences all aspects ofhuman behavior andis pervasive in all facets ofbusiness operations.

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Culture

Culture can be defined as a "sum total of humanknowledge, beliefs, art, morals, laws, customs and

any other capabilities and habits acquired by humans

as members of society.

It is a distinctive way of life of a group of people,

their complete design of living.

Culture thus refers to entire human social heritage - a

distinctive life style of a society and its total valuesystem which is intricately related to the consumption

pattern of the people and management philosophies

and practices.

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Definition ofCulture

The integratedsum total oflearned behavioral traits thatare manifest & shared bymembers of a society

the man-made part ofour environment the

distinctive life style of apeople acquired thru learnedbehavior

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Communication &language (inc. non-verbal)

Dress & appearance Food & eating habits Time & time

consciousness

Rewards & recognitions Relationships Values & norms Sense of self & space Mental process & learning Beliefs & attitudes

Perhaps no other set of variablesmore daunting & complex

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WHAT IS CULTURE?

Culture is acquired knowledge that peopleuse to interpret experience and generatesocial behavior.

This knowledge forms values, createsattitudes, and influences behavior.

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WHAT IS CULTURE?

Culture is a system of values and normsthat are shared among a group of peopleand that when taken together constitute adesign for living.

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AModel ofCulture

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Evident and Deep Culture

Iceberg Theory

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Evident Culture.. customs, language, art, artifacts & behavior

the first cultural phenomena you recognize as a foreigner.

ie siesta in Mexico, being punctual in Germany, job hoppingin the U.S., driving on the left in UK, bull fights in Spain.

Evident Culture.. customs, language, art, artifacts & behavior

the first cultural phenomena you recognize as a foreigner.

ie siesta in Mexico, being punctual in Germany, job hoppingin the U.S., driving on the left in UK, bull fights in Spain.

Deep Culture.. the underlying aspects of a culture, i.e. values, norms,

cause -effect relationships, views of the world, -- very

difficult to change

Deep Culture.. the underlying aspects of a culture, i.e. values, norms,

cause -effect relationships, views of the world, -- very

difficult to change

Definitions

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fine arts

literature drama classical music

popular music folk-dancinggames cooking dress language

rituals techniques laws customs

notions of modesty concept of beauty

ideals governing child-rearing rules of descent

cosmology relationship to animals patterns of superiorityrelations definition of sin courtship practices concept of justice

incentives to work notions of leadership tempo of work patterns of group

decision making concept of cleanliness attitudes toward the dependent

theory of disease approaches to problem solving concept of status mobility

eye behavior nature of friendship concept of self ordering of time Roles

in relation to status by age, sex, class, occupation, kinship, and so forth.conversational patterns in various social contexts concept of past and future

definition of insanity patterns of visual perception preference for

competition or cooperation body language Social interaction rate notions of

adolescence notions about logic and validity patterns of handling emotions

facial expressions arrangement of physical space community sense mythsvalues assumptions etc!

EVIDENTCULTURE

DEEP

CULTURE

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The Determinants of Culture

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Culture

Some of the important elements to

understand a country's culture are:

language, aesthetics, education, religionsand superstitions, attitudes and values,

material culture, social groups and

organizations, and business customs andpractices.

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Elements of Culture: LLanguage AAesthetics

Graphic & StructuralArts Folklore Music, Drama, Dance

MMaterialCulture

Technology

Economics

BBelief Systems

Humans and The Universe

SSocial Institutions Political Structures Education Social Organization

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Culture-Language

Language is an important element of culture and it isthrough language that most of the communicationstake place.

When General Motors of the United States literallytranslated its marketing phrase 'Body by Fisher' intoFlemish language, it meant 'Corpse by Fisher'.

Similarly, the phrase "Come alive with Pepsi" facedproblems when it was translated into Germanadvertisements as "Come out of grave" or in Chineseas "Pepsi brings your ancestors back from the grave".

When the American car called 'Nova' was introduced in

Puerto Rico, sales were poor until the companyrealized that the word Nova was pronounced as 'No va'- which literally meant in Spanish "does not go". Saleswere better when the name was changed to 'Carbie'.

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LANGUAGESpoken Language Language does far more than just enable people tocommunicate with each other. The nature of a language also structures the way we perceivethe world.

The classic illustration of this phenomenon is that whereas theEnglish language has but one word for snow, the language ofthe Inuit (Eskimos) lacks a general term for it. Instead, becausedistinguishing different forms of snow is so important in the livesof the Inuit, they have 24 words that describe different types ofsnow (e.g., powder snow, falling snow, wet snow, drifting snow).

Because language shapes the way people perceive the world,it also helps define culture. Countries with more than one language often have more thanone culture. Canada has an English-speaking culture and a French-speaking culture.

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LANGUAGE

Spoken Language

English is increasingly becoming the language ofinternational business.

Most people prefer to converse in their own language,

and being able to speak the local language can buildrapport, which may be very important for a business deal.

International businesses that do not understand the locallanguage can make major blunders through impropertranslation.

For example, the Sunbeam Corporation used the Englishwords for its Mist-Stick mist-producing hair curling ironwhen it entered the German market, only to discover afteran expensive advertising campaign that mistmeansexcrement in German.

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LANGUAGE

Unspoken Language

We all communicate with each other by a host ofnonverbal cues.

The raising of eyebrows, for example, is a sign ofrecognition in most cultures, while a smile is a signof joy.

Many nonverbal cues, however, are culturallybound.

While most Americans and Europeans use thethumbs-up gesture to indicate that its all right, inGreece the gesture is obscene.

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LANGUAGE

Unspoken Language Another aspect of nonverbal communication is personalspace, which is the comfortable amount of distancebetween you and someone you are talking with.In the United States, the customary distance apart

adopted by parties in a business discussion is five to eightfeet. In Latin America, it is three to five feet.Consequently, North Americans may feel that LatinAmericans invading their personal space are beingaggressive and pushy. And can be seen backing away

from them during a conversation. In turn, the Latin American may interpret such backingaway as aloofness.The result can be a regrettable lack of rapport betweentwo businesspeople from different cultures.

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Culture-Education

Education is generally understood as formal schooling. However, it is better to adopt a broader perspective and defineeducation as any process, formal or informal, through whichone learns skills, ideas and attitudes.

Education is important as it affects not only the educationlevels but also the development of mental faculties and various

skills. In general, educated people have been found to be moresophisticated, discriminating and receptive to new products andideas.

Availability of educated manpower like skilled labor, techniciansand professionals is also dependent on the country's education

level. Media to be used by a company for promoting its products andservices are also dependent on education level prevailing inthe country.

The conventional forms of printed communications, forinstance, do not work in countries where literacy rates are low.

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Culture-Education The availability of a pool of skilled and educated workers

seems to be a major determinant of the likely economicsuccess of a country.

The knowledge base, training, and educationalopportunities available to a country's citizens can also give

it a competitive advantage in the market and make it amore or less attractive place for expanding business.

In analyzing the competitive success of Japan since 1945,for example, Michael Porter notes that after the war, Japanhad almost nothing except for a pool of skilled and

educated human resources.The recent trend to outsource information technology jobsto India, for example, is partly due to the presence ofsignificant numbers of trained engineers in India, which in

turn is a result of the Indian education system.

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Culture-EducationThe general education level of a country is also a goodindex of the kind of products that might sell in a country andof the type of promotional material that should be used.

For example, a country where more than 70 percent of the

population is illiterate is unlikely to be a good market forpopular books.

Promotional material containing written descriptions ofmass-marketed products is unlikely to have an effect in a

country where almost three-quarters of the populationcannot read.

It is far better to use pictorial promotions in suchcircumstances.

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Culture-Religions and Superstitions

Religions are a major determinant of moral and ethicalvalues and influence people's attitudes, habits and outlookon life which are reflected in their work habits andconsumption patterns.

There are numerous religions and faiths in the world. Eachone has its own morals and codes of conduct.

In some countries, single storey houses are preferredbecause it is considered bad to have another's foot on oneshead.

Location of a building and its architecture in many Asiancountries is governed by the principles of 'vastushastra' andFeng Shui rather than purely geographical and economicconsiderations.

A working knowledge of the religions prevalent in the targetmarkets helps in understanding people's work habits,underlying motivations and consumption behaviors.

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Culture-Attitudes and Values

'What is important and desirable' differs fromsociety to society and is largely governed bythe attitudes and values existing in a society.

Americans in general are more receptive to

change and risk taking, but people in manysocieties are averse to change and risktaking. They prefer doing what is traditionaland safe.

New products are not accepted unless thesehave the approval of local chiefs or religiousleaders.

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Culture-Technology Technology includes the ways and means applied in making

of material goods. It is technical know-how in possession of the people of a

society. Choice of technology has its repercussions on the size of

investment, scale of operations as well as type and numberof workers to be employed. Technology transfer has been a highly controversial issue in

the past. Because of supply of obsolete or inappropriate technology,

many developing countries have laid down stringent rules

and regulations concerning technology imports andpayments. Since transfer of new technology is often riddled with

workers' resistance to change and public criticisms,multinational corporations generally have suitable actionplans to counter such opposition.

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Culture-Material Culture Business implications of material culture of a

society are obviously many.

The goods and services that are acceptable inone market may not be acceptable in another

market because of differences in materialcultures of two societies.

For example, sophisticated electronicappliances widely in demand in the

technologically and economically advancedWestern countries may not find a market in theless developed countries ofAsia, Africa orLatin America.

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Culture-Social Groups andOrganizations

A study of social groups and organizations isimportant as it determines how people relate toone another and organize their activities.

The size and cohesiveness of the family, role ofmen and women in society, and positions ofdifferent social classes differ from country tocountry.

Social groups and organizations mould the patternof living and interpersonal relationships of peoplein a society.

They influence the behavioral norms, codes ofsocial conduct, value systems, etc., that may be ofrelevance to the international business managersin their decision making.

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Culture- Business Customs andPractices

A familiarity with business customs and practices prevalent indifferent countries is a must to avoid business blunders.

American managers, for instance, are by nature highly workoriented and attach utmost importance to speed and punctualityin business dealings. They are, moreover, highly achievementoriented and fond of new things.

Japanese, on the other hand, are also workaholics but they arevery slow in decision making

Latin Americans too do not believe in haste and spendconsiderable time in socializing and developing friendships

before coming to business transactions. While in countries like the United States it is necessary to havefinal agreement in writing, this practice is not much appreciatedin many West Asian countries where oral agreement alone isconsidered more than sufficient.

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Culture, Society, and the Nation-State

There is not a strict one-to-one correspondence betweena society and a nation-state.

Nation-states are political creations. They may contain a single culture or several cultures.

The relationship between culture and country is oftenambiguous.

One cannot always characterize a country as having asingle homogenous culture, and even when one can,one must also often recognize that the national culture is

a mosaic of subcultures. While the French nation can be thought of as the politicalembodiment of French culture, the nation of Canada hasat least three culturesan Anglo culture, a French-speaking Quebecois culture, and a Native Americanculture.

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Subcultures Within each culture there are manysubcultures that can have

business significance.

Subcultures are found in all national cultures and failure torecognize them may create impressions of sameness which in realitymay not exist.

A single national and political boundary does not necessarily meana single cultural entity.

Canada, for instance, is divided between its French and Englishheritages, although politically the country is one.

Because of such distinctive cultural division, a successful marketing

strategy among the French Canadians might not effectively workamong the English Canadians or vice-versa.

Similarly a single personnel policy may not work with workersemployed in two different plants if they belong to different subcultural groups and differ in their work habits and underlyingmotivations.

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CULTURAL CHANGE

Culture evolves over time, although changes

in value systems can be slow and painful fora society. Social turmoil is an inevitableoutcome of cultural change.

As countries become economically stronger,cultural change is particularly common.

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CULTURE AND THEWORKPLACE

How does a society's culture impact on the valuesfound in the workplace?

T

here are many ways of examining culturaldifferences and their impact on internationalmanagement.Culture can affect technology transfer, managerialattitudes, managerial ideology, and even

businessgovernment relations.Perhaps most important, culture affects howpeople think and behave.

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CULTURE AND THE WORKPLACE

Here are some specific examples where the culture of asociety can directly affect management approaches: Centralized vs. decentralized decision making.In somesocieties, top managers make all important organizationaldecisions. In others, these decisions are diffused

throughout the enterprise, and middle- and lower-levelmanagers actively participate in, and make, key decisions. Safetyvs.risk.In some societies, organizational decisionmakers are risk averse and have great difficulty withconditions of uncertainty. In others, risk taking isencouraged, and decision making under uncertainty is

common. Individualvs. grouprewards.In some countries,personnel who do outstanding work are given individualrewards in the form of bonuses and commissions. Inothers, cultural norms require group rewards, and individual

rewards are frowned on.

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CULTURE AND THE WORKPLACE Informalvs.formalprocedures.In some societies, much is

accomplished through informal means. In others, formalprocedures are set forth and followed rigidly.High vs.loworganizationalloyalty.In some societies,people identify very strongly with their organization oremployer. In others, people identify with their occupational

group, such as engineer or mechanic. Cooperation vs.competition.Some societies encouragecooperation between their people. Others encouragecompetition between their people. Short-term vs.long-term horizons.Some cultures focusmost heavily on short-term horizons, such as short-rangegoals of profit and efficiency. Others are more interested inlong-range goals, such as market share and technologicdevelopment. Stabilityvs.innovation.The culture of some countriesencourages stability and resistance to change. The culture

of others puts high value on innovation and change.

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Values in Culture

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CulturalDiversity

A supplemental way of understanding cultural differences is tocompare culture as a normal distribution, as in Figure 1, and then toexamine it in terms of stereotyping, as in Figure 2.

French culture and American culture, for example, have quitedifferent norms and values.

So the normal distribution curves for the two cultures have onlylimited overlap. However, when one looks at the tail ends of the two curves, it is

possible to identify stereotypical views held by members of oneculture about the other.

The stereotypes are often exaggerated and used by members ofone culture in describing the other, thus helping reinforce thedifferences between the two while reducing the likelihood ofachieving cooperation and communication.

This is one reason why an understanding of national culture is soimportant in the study of international management.

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CulturalDiversity

Figure 1

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CulturalDiversity

Figure 2

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CulturalDiversity

Differences in work values also have been found to reflect culture andindustrialization.

Researchers gave a personal-values questionnaire (PVQ) to over 2,000managers in five countries: Australia (n 281), India (n 485), Japan (n 301),South Korea (n 161), and the United States (n 833).

The results showed some significant differences between the managers in

each group. U.S. managers placed high value on the tactful acquisition of influence and

on regard for others. Japanese managers placed high value on deference to superiors, on

company commitment, and on the cautious use of aggressiveness andcontrol.

Korean managers placed high value on personal forcefulness and

aggressiveness and low value on recognition of others. Indian managers put high value on the non-aggressive pursuit of objectives. Australian managers placed major importance on values reflecting a low-

key approach to management and a high concern for others. In short, value systems across national boundaries often are different.

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CulturalDiversity At the same time, value similarities exist between cultures.

In fact, research shows that managers from different countries often havesimilar personal values that relate to success.

England and Lee examined the managerial values of a diverse sample ofU.S. (n 878), Japanese (n 312), Australian (n 301), and Indian managers(n 500).

They found that:1. There is a reasonably strong relationship between the level of success achieved

by managers and their personal values.2. It is evident that value patterns predict managerial success and could be used in

selection and placement decisions.3. Although there are country differences in the relationships between values and

success, findings across the four countries are quite similar.4. The general pattern indicates that more successful managers appear to favor

pragmatic, dynamic, achievement-oriented values, while less successfulmanagers prefer more static and passive values.

5. More successful managers favor an achievement orientation and prefer an activerole in interaction with other individuals who are instrumental to achieving themanagers organizational goals.

6. Less successful managers have values associated with a static and protectedenvironment in which they take relatively passive roles.

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CulturalDiversity

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Similarities Across CulturesSimilarities Across Cultures

Managers in US and Russian firms Managers performed similar functions

Devoting effort to communication and networkingincreased performance and promotion opportunities

Similar types of interventions improved performance(Hawthorne effect?)

US and Korean employees Similar antecedents influenced organizational

commitment (position in hierarchy, tenure, age) Other factors that increased commitment

Size of firm (larger firms = less commitment)

Employee focus (greater focus = more commitment)

Perceptions of organization (positive view = more commitment)

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Business Customs in SouthAfrica

Arrange meeting before discussingbusiness over phone.

Make appointments as far in advance aspossible.

Maintain eye contact, shake hands,provide business card

Maintain a win-win situation

Keep presentations short

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both consumer

& businesscultural traditions,

norms beliefs &behaviors

need to be thoroughlyunderstood &accounted for to fullysucceed in anyinternational businessendeavor

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In Taiwan,

receiving a

pineapple for agift is a good

omen for a

businessperson

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Cultural Give &

Take-D

os &D

onts JapanDo not open in front of

giver/ no bows, ribbons

Europe: avoid red & white /dontwrap flowers; dont spend toomuch

Arabia: Dont give at outset

Latin Am.: Give after informalmeetings

China: present privately; dontmake a big deal of it

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What number inChinese-speakingcountries and also

in Japan is asominous as thenumber 13 inWestern culture?

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The number7 is considered bad

luck in Kenya, good luck in the

Czech Republic and has amagical connotation in

Benin, Africa.

The number10 is bad luck in

Korea.

The number4 means death in

Japan.

OtherNumbers

OtherCountries

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A: a silk tie

B: a silverMont Blanc pen

C: a gold clock

D: a crystal paperweight

E:

gold and jade cufflinks

The executive of a Chinese company is

celebrating their65th

birthday. Which ofthe following is not a appropriate gift?

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A: a silk tie

B: a silverMont Blanc pen

C: a gold clock

D: a crystal paperweight

E:

gold and jade cufflinks

The executive of a Chinese company is

celebrating their65th

birthday. Which ofthe following is not a appropriate gift?

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In England, it isinappropriate to

discuss businessafter work overdrinks.

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Youre creating a salestraining manual foremployees doing business in

Japan. When would youtell them NOT to discussbusiness?

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Youre creating a salestraining manual foremployees doing business in

Japan. When would youtell them NOT to discussbusiness?

At the start of abusiness meeting

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At a business dinner in Korea, yourcounterparts wine glass is half-empty. What should you do?

A:refill herglass immediately

B: sit back and let herrefill herown glass

C: wait until herglass is empty

and then refill itD: fill yourown glass andreplace it with hers

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At a business dinner in Korea, yourcounterparts wine glass is half-empty. What should you do?

A:refill herglass immediately

B: sit back and let herrefill herown glass

C: wait until herglass is empty

and then refill itD: fill yourown glass andreplace it with hers

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When writing names

in Korea, what coloris not appropriate to

use?

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When writing names

in Korea, what coloris not appropriate to

use?

Red

Red represents witchcraft and deathin many African countries.

Red is a positive colorin Denmark.

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Red

China - symbol of celebration and

luck, used in many culturalceremonies that range from

funerals to weddings

India - colorofpurity (used in

wedding outfits

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Yellow

Yellow Asia -

sacred, imperial Western

cultures -joy,

happiness.

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Blue China - associated w/immortality.

Hindus - the colorofKrishna

Middle East- protective color

* Note: Blue is often considered tobe the safest global color.

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Green China - studies indicate this is not a good

colorchoice forpackaging, green hats mean

a man's wife is cheating

Arab world-the colorof Islam Ireland- religious significance

Some tropical countries - associated withdanger

Western cultures - indicates environmentalawareness

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Dimensions ofCulture

For well over two decades, researchershave attempted to cluster countries intosimilar cultural groupings for the purpose

of studying similarities and differences.

Such research also helps us to learn thereasons for cultural differences and how

they can be transcended.

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Cultural Researchers

w/ Marketing Applications

HALL

Hofstede

Trompenaars

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Edward T. Hall

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MONOCHRONIC vs.POLYCHRONIC TIME

M-time is one-thing-at-a-time Monochronic cultures stress a high degree of

scheduling

and an elaborate code ofbehaviorbuilt aroundpromptness in meeting obligations and appointments

Americans are mostly monochronic

P-time is many-things-at-a-time human relationships and interactions are valued over

arbitrary schedules and appointments.

Many things may occurat once (since many people areinvolved in everything), and interruptions are frequent.

P-time is common in Mediterranean and Colonial-Iberian-Indian cultures.

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HIGH vs. LOW-

CONTEXT CULTURES

terms referto the fact that when people communicate, they take forgranted

how much the listenerknows about the subject underdiscussion.

In low-contextcommunication, listenerknowsvery little & must be told practically everything

In high-contextcommunication listener isalready 'contexted' - does not need much

background information

C t t l B k d

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Contextual Background

of Various Countries

High

Context

Implicit

Japanese

Arabian

LatinAmerican

Spanish

Italian

English (UK)

French

North American (US)

Scandinavian

GermanSwiss

LowContext

Explicit

G t H f t d

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Geert Hofstede

organizational psychologist

In 1991 surveyed IBM employees &managers in 53 countries

Identified 5 dimensions thatnational culture and explained 50%of the differences in respondentsattitudes especially significant because the

type of organization is heldconstant

1. Power

distance

2. UncertaintyAvoidance

3. Individualism

4. Masculinity

5. Time Horizon

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Hofstedes CulturalDimensions

Some researchers have attempted to provide a compositepicture of culture by examining its subparts, or dimensions.In particular, Dutch researcher Geert Hofstede found there

are four dimensions of culture that help to explain how andwhy people from various cultures behave as they do.

Power DistanceUncertainty Avoidance

Individualism Versus CollectivismMasculinity Versus FemininityTime Horizon

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Geert Hofstede

1. Power distance

or the degree to whichmembers of a societyautomatically accept ahierarchical or unequaldistribution of power inorganizations and thesociety

H f d C l l Di i

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Hofstedes Cultural Dimensions-Powerdistance

Powerdistance is the extent to which less powerfulmembers of institutions and organizations accept thatpower is distributed unequally.

Countries in which people blindly obey the orders of theirsuperiors have high power distance.

In many societies, lower-level employees tend to followorders as a matter of procedure.

In societies with high power distance, however, strict

obedience is found even at the upper levels.

H f t d C lt l Di i

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Hofstedes Cultural Dimensions-Powerdistance

Organizations in low-power-distance countries generally willbe decentralized and have flatter organization structures.

These organizations also will have a smaller proportion ofsupervisory personnel, and the lower strata of the workforceoften will consist of highly qualified people.

By contrast, organizations in high-power-distance countrieswill tend to be centralized and have tall organizationstructures.

Organizations in high-power-distance countries will have alarge proportion of supervisory personnel, and the people at

the lower levels of the structure often will have low jobqualifications.

This latter structure encourages and promotes inequalitybetween people at different levels.

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Geert Hofstede

2. Uncertaintyavoidance

or the degree to whichmembers of a givensociety deal with theuncertainty & risk ofeveryday life and prefer towork with long-termacquaintances and friendsrather than with strangers

Hofstedes Cultural Dimensions

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Hofstedes Cultural Dimensions-Uncertainty avoidance

Uncertainty avoidance is the extent to whichpeople feel threatened by ambiguous situations,and have created beliefs and institutions that tryto avoid these.

Countries populated with people who do not likeuncertainty tend to have a high need for securityand a strong belief in experts and theirknowledge.

Cultures with low uncertainty avoidance havepeople who are more willing to accept that risksare associated with the unknown, that life mustgo on in spite of this.


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Hofstedes Cultural Dimensions-Uncertainty avoidance

Countries with high-uncertainty-avoidancecultures have a great deal of structuring oforganizational activities, more written rules, lessrisk taking by managers, lower labor turnover,

and less ambitious employees. Low-uncertainty-avoidance societies haveorganization settings with less structuring ofactivities, fewer written rules, more risk taking bymanagers, higher labor turnover, and more

ambitious employees. The organization encourages personnel to use

their own initiative and assume responsibility fortheir actions.


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Hofstede s Cultural Dimensions-Uncertainty avoidance

High uncertainty avoidance countries: e.g.,Germany, Japan, Spain

Low uncertainty avoidance countries: e.g.,

Denmark and Great Britain

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Geert Hofstede

3. Individualism

or the degree to whichan individual perceiveshim- or her-self to beseparate from a groupand free from group

pressure to conform


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Hofstede s Cultural Dimensions-Individualism

Individualism is the tendency of people tolook after themselves and their immediatefamily only.

Hofstede measured this cultural differenceon a bipolar continuum with individualismat one end and collectivism at the other.

Collectivism is the tendency of people tobelong to groups or collectives and to lookafter each other in exchange for loyalty.


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Hofstede found that wealthy countries have higherindividualism scores and poorer countries highercollectivism scores.

Note that in Figure, the United States, Canada, Australia,Denmark, and Sweden, among others, have high

individualism and high GNP. Conversely, Indonesia, Pakistan, and a number of SouthAmerican countries have low individualism (highcollectivism) and low GNP.

Countries with high individualism also tend to have greater

support for work ethic, greater individual initiative, andpromotions based on market value. Countries with low individualism tend to have less support

for the work ethic, less individual initiative, and promotionsbased on seniority.


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High individualism countries: e.g.,U.S., Canada, Sweden

High collectivism countries: e.g.,Indonesia, Pakistan

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Geert Hofstede

4. Masculinity

or the degree towhich a society looksfavorably onaggressive andmaterialistic

behavior


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Hofstede s Cultural Dimensions-Masculinity

Masculinity is defined by Hofstede as asituation in which the dominant values in societyare success, money, and things.

Hofstede measured this dimension on acontinuum ranging from masculinity to femininity.

Contrary to some stereotypes and connotations,femininity is the term used by Hofstede to

describe a situation in which the dominantvalues in society are caring for others and thequality of life.


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Countries with a high masculinity index, such asthe Germanic countries, place great importanceon earnings, recognition, advancement, and

challenge. Individuals are encouraged to be independent

decision makers, and achievement is defined interms of recognition and wealth.

The workplace is often characterized by high jobstress, and many managers believe that theiremployees dislike work and must be kept undersome degree of control.


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Countries with a low masculinity index(Hofstedes femininity dimension), such asNorway, tend to place great importance oncooperation, a friendly atmosphere, andemployment security.

Individuals are encouraged to be group decisionmakers, and achievement is defined in terms of

layman contacts and the living environment. The workplace tends to be characterized by low

stress, and managers give their employeesmore credit for being responsible and allow them

more freedom.

Hofstedes Cultural Dimensions-

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Cultures with a high masculinity index, such as theJapanese, tend to favor large-scale enterprises, andeconomic growth is seen as more important thanconservation of the environment.

The school system is geared toward encouraging highperformance.

Young men expect to have careers, and those who donot often view themselves as failures.

Fewer women hold higher-level jobs, and theseindividuals often find it necessary to be assertive.

There is high job stress in the workplace, and industrialconflict is common.


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Cultures with a low masculinity index (high femininity)tend to favor small-scale enterprises, and they placegreat importance on conservation of the environment.

The school system is designed to teach social

adaptation. Some young men and women want careers; others do

not.

Many women hold higher-level jobs, and they do not find

it necessary to be assertive. Less job stress is found in the workplace, and there is

not much industrial conflict.


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High masculine countries: e.g., Germaniccountries (Austria, Switzerland, Germany)

High feminine countries: e.g., Norway

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Geert Hofstede

5. Time horizon(short term to long

term)

or the degree towhich members of aculture are willing todefer present

gratification in orderto achieve long-termgoals

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Integrating the Dimensions

A description of the four dimensions of culture is useful in helping toexplain the differences between various countries, and Hofstedesresearch has extended beyond this focus and shown how countriescan be described in terms of pairs of dimensions.

The integration of these cultural factors into two-dimensional plotshelps to illustrate the complexity of understanding cultures effect on

behavior. A number of dimensions are at work, and sometimes they do not all

move in the anticipated direction. For example, at first glance, a nation with high power distance would

appear to be low in individualism, and vice versa, and Hofstedefound exactly that (see Figure).

However, low uncertainty avoidance does not always go hand inhand with high masculinity, even though those who are willing to livewith uncertainty will want rewards such as money and power andaccord low value to the quality of work life and caring for others (seeFigure).

Simply put, empirical evidence on the impact of cultural dimensionsmay differ from commonly held beliefs or stereotypes.

S ll P Large Power

PowerDistance and Individualism-Collectivism

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PowerDistance Index

0

112

10 110

Small Power

Distance

Collectivist

Large Power

Distance Collectivist

SmallPower

Distance

Individualist

Large Power

Distance

Individualist

4

1

2

3

5

6

IndividualismI

ndex

1. Costa Rica2. Korea &

Mexico3. Brazil & India

4. Israel &

Ireland

5. Australia &

U.S.A.

6. France & Italy

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PowerPower--Distance and UncertaintyDistance and Uncertainty--

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yyAvoidanceAvoidance

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MasculinityMasculinity--Femininity and UncertaintyFemininity and Uncertainty--

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yy y yy yAvoidanceAvoidance

Case Study

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Case Study

Work Value and Attitude Similarities

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Early research by Ronen and Kraut reported that countries could be

clustered into more or less homogeneous groups based onintercorrelations of standard scores obtained for each country fromscales measuring leadership, role descriptions, and motivation.

These researchers then attempted to cluster the countries by use ofthe mathematic technique of nonparametric multivariate analysis,known as smallest space analysis (SSA).

Simply put, this approach maps the relationships of various culturedimensions among the countries by showing the distance betweeneach.

By looking at the resulting two-dimensional map, one can see thosecountries that are similar to each other and those that are not.

Drawing on the work of many earlier researchers as well as that of4,000 technical employees in 15 countries, Ronen and Kraut were

able to construct SSA maps of various countries, including theUnited States, France, India, Sweden, and Japan. These maps showed five country clusters: (1) Anglo-American

(United States, United Kingdom, Australia); (2) Nordic (Norway,Finland, Denmark); (3) South American (Venezuela, Mexico, Chile);(4) Latin European (France and Belgium); and (5) Germanic(Germany, Austria, and Switzerland).


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Drawing on the work of many earlier researchers as well as

that of 4,000 technical employees in 15 countries, Ronen andKraut were able to construct SSA maps of various countries,including the United States, France, India, Sweden, andJapan.

These maps showed five country clusters: (1) Anglo-American(United States, United Kingdom, Australia); (2) Nordic

(Norway, Finland, Denmark); (3) South American (Venezuela,Mexico, Chile); (4) Latin European (France and Belgium); and(5) Germanic (Germany, Austria, and Switzerland).

Commenting on the overall value of their research, Ronenand Kraut concluded:

An importantaspectofthisstudyisthepotentialforpractical

application bymultinationalorganizations. Forexample,knowledgeofrelativesimilaritiesamong

countriescan guidethesmooth placementofinternationalassigneesandtheestablishmentofcompatibleregionalunits,andpredicttheeaseofimplementing variouspoliciesandpracticesacross nationalboundaries.

C t Cl t

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Country Clusters

To date, perhaps the most integrative analysis of all available findings hasbeen provided by Ronen and Shenkar.

After conducting a thorough review of the literature, they found that eightmajor cluster studies had been conducted over the previous 15 years.

These studies examined variables in four categories: (1) the importance ofwork goals; (2) need deficiency, fulfillment, and job satisfaction; (3)managerial and organizational variables; and (4) work role andinterpersonal orientation.

Based on careful analysis of these research efforts, Ronen and Shenkaridentified eight country clusters and four countries that are independent anddo not fit into any of the clusters (see Figure).

Each country in Figure that has been placed in a cluster is culturally similarto the others in that cluster.

In addition, the closer a country is to the center of the overall circle, thegreater its per capita gross national product (GNP).

Those countries with similar GNPs will not necessarily have interclustersimilarity, but to the extent that GNP influences values and culture, thesecountries will have converging cultural values.

C t Cl t

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Country Clusters

Country Clusters

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Country Clusters

The concept of country clusters is useful to thosestudying multinational management as well. Ronen and Shenkar note: Asmultinationalcompaniesincreasetheirdirect

investmentoverseas,especiallyin less developedandconsequentlylessstudiedareas,theywillrequiremoreinformation concerningtheirlocalemployeesin ordertoimplementeffectivetypesofinteractionsbetween theorganization andthe hostcountry.

Theknowledgeacquiredthusfarcan helponetounderstandbettertheworkvaluesandattitudesof

employeesthroughouttheworld. American theoriesworkverywellforWestern nations. Aretheyequallyapplicablein non-Western countries? Clearly,moreclusterresearch iscalledfor,including

research in countriesfromallpartsofthe globe.

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Trompenaars Cultural

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pDimensions

A more recent description of how cultures differ, byanother Dutch researcher, Fons Trompenaars, isreceiving increasing attention as well.

Building heavily on value orientations and the relationalorientations of well-known sociologist Talcott Parsons,Trompenaars derived five relationship orientations thataddress the ways in which people deal with each other;these can be considered to be cultural dimensions that

are analogous toH

ofstedes dimensions. Trompenaars also looked at attitudes toward both timeand the environment,

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Trompenaars Cultural Dimensions-

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pUniversalism vs. Particularism

Universalism is the belief that ideas and practices canbe applied everywhere without modification.

Particularism is the belief that circumstances dictatehow ideas and practices should be applied.

In cultures with high universalism, the focus is more on

formal rules than on relationships, business contractsare adhered to very closely, and people believe that adeal is a deal.

In cultures with high particularism, the focus is more onrelationships and trust than on formal rules.

In a particularist culture, legal contracts often aremodified, and as people get to know each other better,they often change the way in which deals are executed.


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Based on these types of findings, Trompenaarsrecommends that when individuals fromparticularist cultures do business in auniversalist culture, they should be prepared for

rational, professional arguments and a lets getdown to business attitude. Conversely, when individuals from universalist

cultures do business in a particularistenvironment, they should be prepared for

personal meandering or irrelevancies that seemto go nowhere and should not regard personal,get-to know-you attitudes as mere small talk.


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High universalism countries: e.g., Canada,U.S., Netherlands, Hong Kong

High particularism countries: e.g., China,

South Korea


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pIndividualism vs. Communitarianism

Individualism: people as individuals

Countries with high individualism: stress personal andindividual matters; assume great personalresponsibility (e.g., Canada, Thailand, U.S., Japan)

Communitarianism: people regard selves as part ofgroup

Value group-related issues; committee decisions; joint

responsibility (e.g., Malaysia, Korea)


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Individualism vs. Communitarianism Although Trompenaars derived these two relationships differently

than Hofstede, Trompenaars has used the word communitarianismrather than collectivism.

For him, individualism refers to people regarding themselves asindividuals, while communitarianism refers to people regardingthemselves as part of a group.

Although the definitions are not exactly the same, the fact that there

are differences (e.g., Mexico and Argentina are collectivistic inHofstedes findings but individualistic in Trompenaarss research)points out that cultural values may be changing (i.e., Hofstedesfindings may be dated).

For example, with Mexico now part of NAFTA and the globaleconomy, this country may have moved from dominant collectivisticor communitarianistic cultural values to more individualist values.

Trompenaars also found that the former communist countries ofCzechoslovakia and the Soviet Union now appear to be quiteindividualistic, which of course is contrary to assumptions andconventional wisdom about the former communist bloc.

In other words, Trompenaars points out the complex, dynamic natureof culture and the danger of overgeneralization.


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Individualism vs. Communitarianism

High-individualism societies stress personal and individual matters;high-communitarianism societies value group-related issues. Negotiations in cultures with high individualism typically are made

on the spot by a representative, people ideally achieve things alone,and they assume a great deal of personal responsibility.

In cultures with high communitarianism, decisions typically arereferred to committees, people ideally achieve things in groups, andthey jointly assume responsibility.

Trompenaars recommends that when people from cultures with highindividualism deal with those from communitarianism cultures, theyshould have patience for the time taken to consent and to consult,and they should aim to build lasting relationships.

When people from cultures with high communitarianism deal with

those from individualist cultures, they should be prepared to makequick decisions and commit their organization to these decisions. Also, communitarianistics dealing with individualists should realize

that the reason they are dealing with only one negotiator (asopposed to a group) is that this person is respected by his or herorganization and has its authority and esteem.

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Neutral vs. Emotional

Aneutral culture is one in which emotions areheld in check.

People in these countries try not to show theirfeelings; they act stoically and maintain theircomposure.

An emotional culture is one in which emotionsare openly and naturally expressed.

People in emotional cultures often smile a greatdeal, talk loudly when they are excited, andgreet each other with a great deal of enthusiasm.


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Trompenaars recommends that when individuals fromemotional cultures do business in neutral cultures, theyshould put as much as they can on paper and submit itto the other side.

T

hey should realize that lack of emotion does not meandisinterest or boredom, but rather that people fromneutral cultures do not like to show their hand.

Conversely, when those from neutral cultures dobusiness in emotional cultures, they should not be put off

stride when the other side creates scenes or growsanimated and boisterous, and they should try to respondwarmly to the emotional affections of the other group.


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High neutral countries: e.g., Japan andU.K.

High emotion cultures: e.g., Mexico,

Netherlands, Switzerland


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Specific vs. Diffuse

Aspecific culture is one in which individuals have a largepublic space they readily let others enter and share and asmall private space they guard closely and share with onlyclose friends and associates.

Adiffuse culture is one in which public space and privatespace are similar in size and individuals guard their publicspace carefully, because entry into public space affords entryinto private space as well.

In specific cultures, people often are invited into a personsopen, public space; individuals in these cultures often areopen and extroverted; and there is a strong separation ofwork and private life.

In diffuse cultures, people are not quickly invited into apersons open, public space, because once they are in, thereis easy entry into the private space as well.

Individuals in these cultures often appear to be indirect andintroverted, and work and private life often are closely linked.


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Trompenaars recommends that when those from specificcultures do business in diffuse cultures, they shouldrespect a persons title, age, and backgroundconnections, and they should not get impatient whenpeople are being indirect or circuitous.

Conversely, when individuals from diffuse cultures dobusiness in specific cultures, they should try to get to thepoint and be efficient, learn to structure meetings withthe judicious use of agendas, and not use their titles oracknowledge achievements or skills that are irrelevant tothe issues being discussed.


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High specific cultures: e.g., Austria, U.K.,U.S.

High diffuse cultures: e.g., Venezuela,

China, Spain


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Dimensions Achievement vs. Ascription

Achievement culture: status based on howwell perform functions (Austria, Switzerland,

U.S.) Ascription culture: status based on who or

what person is (e.g., Venezuela, China,Indonesia)


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Dimensions Time

Sequential: only one activity at a time; appointmentskept strictly, follow plans as laid out (U.S.)

Synchronous: multi-task, appointments areapproximate, schedules subordinate to relationships(e.g., France, Mexico)

Present vs. Future: Future more important (Italy, U.S., Germany) Present more important (Venezuela, Indonesia All 3 time periods equally important (France, Belgium


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Dimensions The Environment

Inner-directed: people believe in control ofoutcomes (U.S., Switzerland, Greece, Japan)

Outer-directed: people believe in lettingthings take own course (China, many otherAsian countries)

Integrating Culture and Management:

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The GLOBE Project

GLOBE: Global Leadership and Organizational BehaviorEffectiveness.

Project extends and integrates previous analyses ofcultural attributes and variables.

Evaluates nine different cultural attributes using middlemanagers from 951 organizations in 62 countries.

Multi-cultural team of 170 scholars from around the worldworked together to survey 17,000 managers in 3

industries: financial services, food processing, andtelecommunications.

Covered every major geographic region of the world.

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GLOBE Results

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GLOBE Results

Corresponds generally with those ofHofstedeand Trompenaars.

Different from Hofstede in that many more

researchers with varied perspectives wereinvolved (vs. Hofstede workng alone); studiedmany companies vs. Hofstedes IBM.

GLOBE provides a current comprehensive

overview of general stereotypes that can befurther analyzed for greater insight.

GLOBE Project

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GLOBE Project

GLOBE Analysis

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GLOBE Analysis

International Blunders

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International Blunders

To avoid making blunders, a person must beable to discern the difference between whatmust be done, what must not be done, and whatmay or may not be done. Complete knowledge

and understanding of a foreign culture, however,is almost impossible to acquire. Understandingof any foreign culture requires knowledge in agreat many areas. Unfortunately, even a well-

intended person can commit a blunder byoverlooking just one seemingly unimportantaspect of a foreign culture.

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On New Years Day 1985, A former

president ofAmerican Express, Japan wasfeatured in a full-page ad in a photo ofhimself wearing a Japanese kimono.Apparently, no foreigner had done thisbefore and it was suspected by manyJapanese that it was intended as a joke tomake fun of the local culture. Some evencomplained that it was an intentionalattempt to humiliate the Japanese.

The peoples of each culture uniquelyutilize body movements as methods of

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utilize body movements as methods ofcommunication. The meanings of

motions and signs common in oneculture may relay something quitedifferent in another. Consider, forexample, the OK sign commonly used inthe United States. In France it signifies

zero, and in Japan it symbolizes money.In parts of South America, however, it isa vulgar gesture. One unfortunatecompany learned this when it had anentire catalog printed with an OK stampon each page. Although the error wasquickly discovered, it created a costlysix-month delay while all of the catalogswere reprinted.

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People in the United States shake their heads up anddown to signify yes. Many British, however, make thesame motions just to indicate that they hearnotnecessarily that they agree. To say no, people shaketheir heads from side to side in the United States, jerktheir heads back in a haughty manner in the MiddleEast, wave a hand in front of the face in the Orient,and shake a finger from side to side in Ethiopia. AsianIndians sometimes shift their heads from side to sidein a slightly jerky manner to indicate interest. However,in New Zealand people suck in a bit of air to show thesame interest.

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During the groundbreaking ceremonies forHitachis

subsidiary,H

itachiA

utomotive Products (USA

), Inc.,the Governor of Kentucky presented the Japaneseexecutives with a flag of the Commonwealth ofKentucky. After opening the flag for all to see, theJapanese carelessly dragged it along the ground. In

Japan (and in many other countries), flags are nottreated with the same respect as they are in America.The Japanese really meant no disrespect; they simplywere unaware of U.S. customs about flags. However,many in the audience, especially the olderAmericans,were offended.

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One U.S. company lost a major contract opportunity in

Greece because its managers tried to impose U.S.customs on the Greek negotiators. Besides being tooforthright and outspoken in the eyes of the Greeks, theAmericans tried to set time limits for the meetings. TheGreeks, however, considered time limits insulting and

thus felt that theA

mericans showed a lack of finesse.The Americans also wanted the Greeks to first agreeto principles and then allow their subordinates toworkout all necessary details. The Greeks viewed thisas a deceptive strategy; they preferred to directlyhandle all arrangements regardless of the timeinvolved.

One large firm went to China with a 50-plus page legal

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g p p g gdocument to license pollution control technology. The

Chinese laughed at them, tossed it out, and theproposed deal would have fallen through, but becausegood personal relations had been established, theyallowed the firm to start over. A 10-page documentwas then developed and accepted.

A Columbus, Ohio company committed a minor errorin filling out a form in Brazil. Unfortunately, thismistake resulted in the firm being unable to withdraw$200,000 in profits it eventually earned there. What

was the minor error? Someone had failed to place acheck in a box on the document that would haveallowed the company to withdraw profits at areasonable rate.

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Protocol with regard to location is often the source of

international blunders between cultures.A

Chicagocompany was bidding on a public works project inThailand and was waiting for the Thai contingent toarrive at their Chicago offices for the meeting. Afterhours of waiting, the Chicago company found out that

theT

hai group was still waiting to be picked up at theairport. They rescheduled a meeting for the next day,only to find out that the same communication problemexisted. The Thai group waited for the Chicagocompany to pick them up at the hotel, while theChicago company expected the Thai group to meetthem at the Chicago office.

In France, McDonalds overlooked a cultural difference thatl d t f liti ti I l ti F h t

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led to years of litigation. In selecting a French partner,McDonalds examined a number of characteristics that would

ensure sales. McDonalds is very good at this and, as usual,was successful. However, it did not examine carefully enoughits partners attitudes about cleanliness. Because Frenchfirms sometimes place less emphasis on cleanliness thanU.S. firms do, local references of the French partner did not

expose this as a troublesome issue.A

s business in Francegrew, however, McDonalds soon observed hygiene habits itconsidered unacceptable in its U.S. outlets. These habits,though, were not viewed as negatively by the French partneror by most of the French customers, for that matter. The realproblem? Many of the outlets customers were U.S. tourists

expecting U.S. standards. The French outlets, there- fore,negatively impacted McDonalds global image andthreatened its clean reputation at home.

A local supermarket hoping to impress Japanesevisitors served sushi and tea to its guests Unfortunately

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visitors served sushi and tea to its guests. Unfortunately,it not only served the fish cooked when the fish should

have been served raw, but the supermarket also servedChinese tea.

Even the rejection of a cup of coffee can cause majorproblems. While a very profitable opportunity was beingnegotiated, one U.S. executive innocently made themistake of refusing a Saudi Arabians friendly offer tojoin him for a cup of coffee. Such a rejection isconsidered an affront in Saudi Arabia. Naturally, theSaudi became much less sociable, and the negotiationprocess was much less successful than it might havebeen.

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Even Professors of International Business have been

known to make mistakes. Indiana University, forexample, hosted an important international businessconference in 2002 and invited five distinguishedspeakers to talk about the history of internationalbusiness education. Dr. John Daniels, past president of

the Academy of International Business and a highlyvisible researcher in the field of international business,was one of the special speakers. As he was about tomake his presentation, however, he saw he had aproblem. Sitting in the audience was a person whom Dr.

Daniels had identified in his already circulated paper asdead.

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