Individualism / Collectivism (IDV)
Individualism and collectivism captures the extent to which people are expected to be self-reliant and
distant from others(individualism) instead of mutually dependent and closely tied to
others(collectivist).Compared with individualist cultures, collectivist’s cultures may respond more
positively to relationship management efforts because they are more sensitive and responsive to RM
norms. In collectivist cultures, reciprocity norms and mutual interdependence govern relationships. Thus
collectivists emphasize long term social bonding and dependence, manifested as familiarity ,friendship
,long term ties and close personal relationships. Individualists prefer arm’s length relationships that
persist for self-serving reasons. In cultures with higher individualism, relationships based on long term
social bonding and dependence become more difficult to form and the beneficial effect of relationships
on outcomes are weaker. Research has found that in highly Individualistic societies such as the US, UK
and Germany, individuals are much more trusting of external agents and will more willingly enter a
business relationship than those from highly Collectivist societies, such as China, Japan and South Korea.
Western companies may therefore find it more difficult to form an initial business relationship with
companies which are based in collectivist societies. However, while initially collectivists may be unwilling
to trust external agents, overtime a much stronger and enduring relationship may develop and indeed
be stronger within these societies.
Role of uncertainty avoidance
It is the extent to which members of a culture feel threatened by unknown situations. In high
uncertainty avoidance cultures, they embrace predictability and avoid ambiguity while those with low
avoidance accept uncertainty more readily and take more risks and value flexibility over the use of
formal rules. Relationship management linked to uncertainty reductions is more effective at building
and maintaining relationships in high uncertainty avoidance cultures and less effective in low
uncertainty cultures. Countries such Italy, Brazil and Botswana which are of high uncertainty work hard
to maintain the existing relations that they have in business because they fear change and unpredictable
situations whereas the US firms are open to taking risks and show less interests in uncertainty
avoidance so they are comfortable with change that is why they have business relationships with more
countries around the world.