The Impact of National Culture
MGMT414
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, 18321917
• “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
2
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
acquired knowledge that people use to filter the
life experiences and to generate social behavior. It
is:
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Learned
Shared
Cumulative
Symbolic
Integrated
Dynamic
Levels of Culture
National Culture
Business Culture
Organizational Culture
Occupational Culture
Surface
manifestations
Values
Basic
Assumtions
ELEMENTS OF CULTURE
Language
Social Structure
CULTURE
Communication
Values and Attitudes
Religion
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
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Power Distance
Uncertainty Avoidance
Individualism/Collectivism
Masculinity/Femininity
• +Time Orientation
Power Distance
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•
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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
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•
•
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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
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•
•
•
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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
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•
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•
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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 Pyramid
Status Symbols
Relatively Unimportant - Very Important
Importance 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)
19
Power Distance Index (PDI)
LARGE POWER DISTANCE SMALL POWER DISTANCE
acceptance of inequalities:
power is distributed un-equally
acceptance of hierarchies
everybody has his/her place
Location
Malaysia
Mexico
Hong Kong
France
Portugal
Greece
Spain
Japan
Italy
USA
Canada
20
no acceptance of inequalities:
strive for power equalization
differences must be justified
little acceptance of hierarchies
Score
104 (highest; largest
81 power distance)
68
68
63
60
57
54
50
40
39
Location
Netherlands
Germany
UK
Switzerland
Finland
Norway
Sweden
Denmark
Israel
Austria
Score
38
35
35
34
33
31
31
18
13
11 (lowest; smallest
power distance)
Uncertainty Avoidance Index (UAI)
STRONG UNCERTAINTY AVOIDANCE
WEAK UNCERTAINTY AVOIDANCE
control the future
don’t like risk and ambiguity
beliefs in conformity, stability
and principles
intolerance toward deviant
persons and ideas
let the future happen
relaxed about others
practice more important than codes
for belief and behavior
deviance is tolerated
Location
Greece
Portugal
Japan
France
Spain
Italy 75
Austria
Germany
Finland
21
Score
112 (highest need to
104 avoid uncertainty)
92
86
86
70
65
59
Location
Score
Switzerland
58
Norway
50
Canada
48
USA
46
UK
35
Sweden
29
Denmark
23
Singapore 8
(lowest need to
avoid uncertainty)
Individualism (IDV)
“I” - INDIVIDUALISM:
WE- COLLECTIVISM:
preference for loosely knit social framework
high individual autonomy – self centered
take care of selves and immediate family only
preference for tightly knit social framework
low ind. autonomy-we centered individuals
will be taken care of when needed
loyalty to family, group, clan
Location
USA
Australia
UK
Canada
Netherlands.
Italy
Denmark
Sweden
France
22
Score
91 (highest; most
90 “I’ oriented)
89
80
80
76
74
71
71
Location
Score
Norway
69
Switzerland
68
Germany
67
Finland
63
Austria
55
Spain
51
Japan
46
Greece
35
Portugal
27
Pakistan
14
Venezuela 12 (lowest; most
“We” oriented)
Masculinity (MAS)
MASCULINITY (performance/achievement)
FEMININITY (welfare/relations)
winner take all (reflected also in women)
preference for achievement,
heroism, assertiveness
and material success
maximum social differentiation between the sexes
performance societies
welfare for all (reflected also in men)
preference for relationships
modesty, caring for the weak
quality of life
minimum social differentiation
focus on peoples’ welfare
Location
Japan
Austria
Italy
Switzerland
UK
Germany
USA
Hong Kong 57
23
Score
95 (highest; performance/
79 achievement orientation)
70
70
66
66
62
Location
Greece
Canada
France
Finland
Netherlands
Norway
Sweden
Score
57
52
43
26
14
8
5
(lowest; most welfare/
relations oriented)
Long-Term Orientation (LTO)
SHORT TERM
LONG TERM
Traditions are adapted to our time
Limited respect for social obligations
Keep up with the Jones´s
Low private savings
Expects quick results
Need to own the truth
Place
China
Hong Kong 96
Taiwan
Japan
Brazil
India
Thailand
Singapore 48
Netherlands
Sweden
24
Respect for traditions
Respect for social regardless of costs
Frugality, economizing w/resources
High savings rate, can invest
Patience with results
Respect the demands of virtue
Index
113 (long term)
87
80
65
61
56
44
33
Place
Poland
Germany (W)
Australia
New Zealand
USA
UK
Zimbabwe 25
Philippines 19
Nigeria
Pakistan
Index
32
31
31
30
29
25
16
00 (short term)
Mapping cultural dimensions
Japan
Success
Power
Social status
Success
Hungary
Austria
Switzerland
Germany
UK
USA
MAS
Canada
Mexico
China
Poland
Italy
Argentina
Czechia
Greece
Belgium
Spain
Status needs
low
Turkey
France
Thailand
Russia
Panama
Portugal
FEM
Finland
Netherlands
Chile
Denmark
Power
Social Status
Norway
Sweden
PDI-
25
Venezuela
PDI+
(Marieke de Mooji, 2005)
Cross-cultural comparisons
High- vs. Low-context cultures
Hofstede’s classification scheme
Project GLOBE
World Value Survey (WVS)
26
High- vs. Low-context cultures
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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.
Japanese
High context
IMPLICIT
Arabian
Latin American
Spanish
Italian
English (UK)
French
English (US)
Scandinavian
27
German
Low context
Swiss
EXPLICIT
Project GLOBE
9 dimensions:
- uncertainty avoidance
- power distance
- collectivism
- collectivism II
- gender egalitarianism
- assertiveness
- future orientation
- performance orientation
- humane orientation
28
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
30
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?)
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High and Low Context Cultures
Contextual differences affect the
way you approach situations such
as decision making, problem
solving, and negotiating.
a. Contextual Differences cont.
• 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.
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 sevenpoint 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.
•