Michael Richarme, Ph.D. Senior Vice President Decision Analyst, Inc. Two Main Items of Discussion How are people doing economically around the world? How are people similar or different? Monthly Economic Index Conducted in the last week of each month for over 11 years Sample of over 30,000 consumers each month Nine economic indicators measured Results in a forward-looking index of 9-12 months in the future United States in February 2010 Decision Analyst Economic Index United States 120 Index 110 100 95 90 80 Feb-07 Aug-07 Feb-08 Aug-08 Month Feb-09 Aug-09 Feb-10 Decision Analyst U.S. Economic Index by Census Division (Three-Month Moving Average*) United States by Census Division Major Global Economies North America Index South America Index Canada 100 Brazil 131 United States 95 Argentina 84 Mexico 90 Europe Index Asia-Pacific Index Germany 97 China 139 Italy 95 India 117 Spain 88 Australia 99 Great Britain 87 France 81 Trading Blocks Suffer Together Major trading blocks (North America, European Union) are suffering similarly in this economic recession Some areas of the world are countering that trend The BRIC Economies Brazil, Russia, India, China Economic growth engines All but Russia doing very well in this recession China and India are major exporters Brazil is heading toward energy self-sufficiency and has a trading agreement with the EU China Over the Past 3 Years Decision Analyst Economic Index China* 140 130 Index 120 110 100 90 80 70 Feb-07 Aug-07 Feb-08 Aug-08 Month Feb-09 Aug-09 Feb-10 India Over Past 3 Years Decision Analyst Economic Index India 140 130 Index 120 110 100 90 80 70 Feb-07 Aug-07 Feb-08 Aug-08 Month Feb-09 Aug-09 Feb-10 Brazil Over the Past 3 Years Decision Analyst Economic Index Brazil 140 130 Index 120 110 100 90 80 70 Feb-07 Aug-07 Feb-08 Aug-08 Month Feb-09 Aug-09 Feb-10 A Study of Cultural Differences Geert Hofstede, the Netherlands Large scale study in the 1980’s Over 116,000 questionnaires About 150 questions in length Twenty different languages 50 countries Adults Fundamental Issues Examined Ways in which organizations are structured Motivations of people within organizations Issues people face within their society Four Dimensions Power Distance Uncertainty Avoidance Individualism/Collectivism Masculinity/Femininity Power Distance Defined as the degree to which power is exerted in either an autocratic manner or a democratic manner Autocratic – what the boss says, goes Democratic – let’s discuss it before deciding Typical PDI Statements Low PDI – “Inequality in society should be minimized; the system is to blame for things going wrong; cooperation among the powerless can be based on solidarity” High PDI – “Everyone has his rightful place; power is a basic fact of society; the underdog is to blame for things that go wrong” Countries PDI Country Power Distance Index World Rank Austria 11 1 Great Britain 35 10 Canada 39 15 United States 40 16 Japan 54 21 Korea 60 60 Chile 63 29 India 77 42 Philippines 94 47 Highly Autocratic Low scores Highly Democratic High Scores Uncertainty Avoidance Degree of risk acceptance and tolerance for uncertainty Low Uncertainty – not a lot of anxiety about the future High Uncertainty – need reassurance about what is going to happen Typical Uncertainty Statements Low UAI – “hard work is not a virtue; more acceptance of dissent; authorities there to serve the citizens; belief in common sense” High UAI – “Uncertainty is a continuous threat; time is money; strong need for consensus; ordinary citizens are incompetent compared with the authorities” Countries UAI Country Uncertainty Avoidance Index World Rank Austria 70 27 Great Britain 35 6 Canada 48 12 United States 46 11 Japan 92 44 Korea 85 34 Chile 86 36 India 40 9 Philippines 44 10 Highly Comfortable Low scores Highly Anxious High Scores Individualism/Collectivism Individualism is the relative importance of freedom, challenge, use of personal time Collectivism is the relative importance of training, use of skills, physical conditions, and benefits This dimension indicates the degree to which a person “goes it alone as an entrepreneur” or “feels at home in the pack” Typical Individualism Statements Low IDV – “Belief in group decisions; expertise, order, duty, security provided by organization or clan; identity is based on the social system” High IDV – “Self-orientation; everybody has a right to a private life and opinion; belief in individual decisions; identity is based on the individual” Countries IDV Country Individual Collectivism Index World Rank Austria 55 33 Great Britain 89 48 Canada 80 46 United States 91 50 Japan 46 28 Korea 18 11 Chile 23 15 India 48 30 Philippines 32 21 Highly Collective Low scores Highly Individual High scores Masculine/Feminine Masculine is the relative importance of earnings, recognition, advancement, challenge, assertiveness, self-reliance Feminine is the relative importance of cooperation, desirable living area, job security, nurturing, responsibility This index shows the degree of the gender gap Typical Masculinity Statements Low MAS – “Service ideal; sex roles in society should be fluid; small and slow are beautiful; differences in sex roles should not mean differences in power” High MAS – “Money and things orientation; performance and growth are important; decisiveness; sex roles should be clearly differentiated; men should dominate” Countries MAS Country Masculine Feminine Index World Rank Austria 79 49 Great Britain 66 41 Canada 52 28 United States 62 36 Japan 95 50 Korea 39 13 Chile 28 8 India 56 30 Philippines 64 39 Highly Feminine Low scores Highly Masculine High MAS scores Things to Consider Don’t make value judgments – it is OK for people to have different cultural values Think about their cultural values before trying to do business with them Go more than half-way to accommodate differences between cultures Questions or comments? Michael Richarme, Ph.D. Senior Vice President Decision Analyst, Inc. 604 Avenue H East Arlington, TX 76011 mrichar@decisionanalyst.com