Becoming aware of Cultural Differences in a Global Environment: Lecture Outline
Ethnocentric
The belief that the best work approaches and practices are those of the home country (the country
in which the company’s headquarters are located).
 Managers with an ethnocentric attitude see people as inferior to people in the home country.
 Managers would not trust foreign employees with key decisions or technology.
 “ours is better than theirs”
Advantages:
 Simpler structure
 More tightly controlled
Disadvantages:
 More ineffective management
 Inflexibility
 Social and political backlash
Polycentric
The view that managers in the host country (the foreign country in which the organization is
doing business) know the best work approaches and practices for running the operations.
 Managers with a polycentric attitude view every foreign operation as different and hard to
understand.
 Thus, managers are likely to leave their foreign facilities alone and let foreign employees
figure out how best to do things.
Advantages:
 Extensive knowledge of foreign market and workplace
 More support from host government
 Committed local managers with high morale
Disadvantages:
 Duplication of work
 Reduced efficiency
 Difficult to maintain global objectives because of intense focus on local traditions
Geocentric
A world-oriented view that uses the best approaches and people from around the globe.
 Managers with this type of attitude believe that it’s important to have a global view both at
the organization’s headquarters in the home country and in the various foreign work
facilities.
 Successful global management requires enhanced sensitivity to differences in national
customs and practices.
 Management practices in Chicago might not be appropriate in Shanghai or Berlin.
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Advantages:
 Forces understanding of global issues
 Balanced local and global objectives
 Best work approaches used regardless of origin
Disadvantages:
 Difficult to achieve
 Managers must have both local and global knowledge
Hofstede’s Cultural Dimensions
Geert Hofstede developed a valuable framework to help managers better understand differences
between national cultures. He surveyed more than 116,000 employees in 53 countries. He found
cultural differences should be carefully interpreted, based on averages and not on individuals. In
other words, people are different, even within the same culture, so cultural statements that apply
to a society do not necessarily apply to each of its members. His huge database revealed that
national culture has a major impact on employee’s work-related values and attitudes, and that
understanding cultural differences are critical to doing business globally. Hofstede found that
managers and employees varied on five dimensions:
 Power Distance
People naturally vary in terms of physical, intellectual abilities, status, and position. This
variation, in turn, creates differences in wealth and power. How does a society deal with these
inequalities?
A high (large) power distance society accepts wide differences in power in organizations.
When negotiating in high power distance countries, companies find that it helps to send
representatives with titles at least as impressive as those with whom they are bargaining.
Employees tend to show great deal of respect for those in authority.
In contrast, a low (small) power distance society plays down inequalities as much as possible.
Superiors still have authority, but employees are not fearful or in awe of the boss. Employees
tend to not like the boss to tell them what to do, or have power over them.
 Long Term Orientation (LTO)
LTO explains to us the extent to which a society exhibits a pragmatic (practical, sensible)
future oriented perspective rather than a conventional historic or short term point of view.
Countries scoring high on this dimension are the Asian countries. These countries believe in
many truths, have a long term orientation, easily accept change and have thrift for investment.
Cultures scoring low on this dimension believe in absolute truth, are conventional and
traditional, have a short term orientation and a concern for stability. Most Western countries
score fairly low on this dimension.
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 Uncertainty Avoidance
We live in a world of uncertainty. The future is largely unknown and always will be. Societies
respond to this uncertainty in different ways.
Countries with low uncertainty avoidance are relatively tolerant of behavior and opinions that
differ from their own because they don’t feel threatened by them. People in such cultures are
relatively comfortable with risks. That is, people feel quite secure.
A society that is high in uncertainty avoidance is characterized by a high level of anxiety
among its people, which manifests itself in nervousness, high stress, and ambiguity. Because
people in these cultures feel threatened by uncertainty and ambiguity, mechanisms are created
to provide security and to reduce risk, such as more formal rules. Generally speaking, people
living in a high uncertainty avoidance culture have little tolerance for unusual ideas that
challenge the status quo.
If uncertainty avoidance is low, people will tolerate behavior and opinions that differ from
their own, they are open to risk, and feel quite secure. People are more apt to embrace change,
in general, and prefer to work without many formal rules.
 Individualism vs. Collectivism
Individualism refers to a loosely knit social framework in which people are supposed to look
after their interests and those of their immediate family. They can do so because of the large
amount of freedom that an individualistic society allows its citizens. If people are conditioned
in an individualist culture, then they are more comfortable with small family units, and they
are more likely look to self and immediate family for strength. Networking is more
impersonal.
The opposite is collectivism, which is characterized by a tight social framework in which
people expect others in groups of which they are a part (such as family or an organization) to
look after them and to protect them when they are in trouble. In exchange, they feel they owe
absolute loyalty to the group. If people are conditioned by collectivist society, then they tend
to expect others in groups (to which they belong) to look after them; feel absolute loyalty to
group; have large family and organizational networks.
 Masculinity and Femininity
People socially conditioned in a masculine culture are more likely to be highly assertive,
competitive, and strive for material success and high achievement.
In contrast, those conditioned in a feminine culture emphasize the importance of relationships,
modesty, caring for the weak, and quality of life.
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Examples of Hofstede’s Cultural Dimensions
Country
Australia
Canada
England
France
Greece
Japan
Mexico
Singapore
Sweden
United States
Venezuela
Individualism
vs. Collectivism
Individual
Individual
Individual
Individual
Collective
Collective
Collective
Collective
Individual
Individual
Collective
Power Distance
Small
Moderate
Small
Large
Large
Moderate
Large
Large
Small
Small
Large
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Uncertainty
Avoidance
Moderate
Low
Moderate
High
High
High
High
Low
Low
Low
High
LTO
Strong
Moderate
Strong
Weak
Moderate
Strong
Strong
Moderate
Weak
Strong
Strong