3004-Three-Autumn2011

Cross-Cultural Management Chapter Three: 

Cross-Cultural Management Chapter Three Autumn 2011

3 Topics covered in the chapter:: 

Cultural research at the basis of application Different cultural researchers Lack of equivalence Hofstede’s work in detail 3 Topics covered in the chapter: The limitations of Hofstede’s work Applying Hofstede’s work to practice Connecting Hofstede and other models (i.e. iceberg, onion)

3 The aims of the chapter: 

Familiarize yourself with the predominant cultural models Consider alternative perceptions Understand the limitations of cultural research Understand Hofstede’s cultural dimensions and know about Trompenaars Be able to criticize Hofstede’s cultural approach and employ alternatives Understand the importance of cultural research 3 The aims of the chapter Learn to practically apply the Hofstede dimensions

Welcome to chapter three. Suggested reading:: 

Welcome to chapter three. Suggested reading: Book(s) Hofstede, G. & Hofstede, G.J (2010), “Culture and organizations: Software of the mind”, McGraw-Hill, London, ISBN: 978-0-07-177015-6, e-book Hofstede, G. (2001), “Cultures consequences: Comparing values, behaviors, institutions, and organizations across nations (2 nd Ed.), Sage, London, ISBN: 0-8039-7323-3 Trompenaars, F. & Hampden-Turner C. (1998), “Riding the waves of cultures: Understanding cultural diversity in global business”, McGraw-Hill, London, ISBN: 07863-1125-8 Articles McSweeney, B. (2002), “Hofstede’s model of national differences and their consequences: A triumph of faith – a failure of analysis”; Human Relations, Vol. 55, No. 1, pp. 89 - 118

3 Cultural research: 

3 Cultural research Cultural research since the 1970‘s refers to a combination of anthropological and historical approaches when investigating popular cultural tradition and interpretations It is grounded in critical theory Is a very holistic research topic, combining social and political theory, history, philosophy, literary theory, communication studies and others It seeks to understand the ways in which meaning is generated, disemminated, and produced through practices, beliefs, institutions, political, economic, and social structures within a given culture

3.1 Important cultural researchers: 

3.1 Important cultural researchers George Peter Murdock (1897-1985) Edward Twitchell Hall, jr. (1914-2009) Edgar Henry Schein (1928-) Geert Hofstede (1928-) Fons Trompenaars (1952-) Clyde Kay Maben Kluckhohn (1905-1960) und Fred Strodtbeck (1919-2005) HALL HOFSTEDE SCHEIN TROMPENAARS MURDOCK STRODTBECK

3.1.1 George Murdock (1897 - 1985): 

3.1.1 George Murdock (1897 - 1985) Published a list of known cultures Published first cross-cultural data set in 1957 (565 cultures across 30 variables) established through Human Relations Area files that systematically classified anthropological inforamtion about a larger number of traditional and nonliterate societies 1967 his culture collection encompressed 1200 cultures across 100 variables 1969 together with Douglas R. White he developed the ‚standard cross-cultural sample‘ consisting of the 186 major cultures along 2000 variables Strong inspirational value for Geert Hofstede who based parts of his cross-cultural study (Hermes Study) on Murdocks work First major empirical approach to ethnological studies, inc. old populations MURDOCK

3.1.2 Edgar Henry Schein (1928 -): 

Surface Culture Deep Culture 3.1.2 Edgar Henry Schein (1928 -) Contributed significantly in the field of organizational development Career development Group process consultation Organizational culture He cornered the notion of ‚corporate culture‘ His model of organizational culture comprizes of three layers: Artifacts and behavior: tangible or verbally identifiable elements in an organization, i.e. architecture, furniture, dress code Responsed values: an organization‘s stated or desired cultural elements, i.e. professionalism Assumption: actual values that the organization represents, not correlated with the previous stated values. „Hard to regognize those from within.“ In 1975 Selfridge and Sokolik developed the „Cultural Iceberg Model“, which was enhanced by Schein in 1985 „Cultural Iceberg Model“ SCHEIN

3.1.3 Kluckhohn (1905 - 1960) and Strodtbeck: 

3.1.3 Kluckhohn (1905 - 1960) and Strodtbeck Looked at … How people view humanity (good, evil, mixed)? How people see nature (domination, harmony, subjugation)? How people approach interpersonal relationships (individualistic, group, hierarchical)? How people view activity and achievement (being, controlling, doing)? How people view time (past, present, future)? How people view space (private, public, mixed)? STRODTBECK

3.1.4 Edward Twitchell Hall, jr. (1914-2009): 

3.1.4 Edward Twitchell Hall, jr. (1914-2009) Particularly known for his concept of the ‚hidden dimension‘: describing the subjectivity of cultural dimensions that surround mankind Coined the term ‚polychronic‘, describing the ability to attend to multiple events simultaneoulsy, an opposed to „monochromic“ referring to handling events one at a time One of his main contribution to cultural research was also the concept of ‚extension transferrence‘, meaning humanity‘s rate of evolution increases with innovation and creation of technology This most noted contribution however is the concept of high vs. Low context cultures He is considered the founding father of intercultural communication studies He was the first considering ‚proxemics‘ as one element of cultural difference HALL

3.1.5 Geert Hofstede (1928 -): 

3.1.5 Geert Hofstede (1928 -) Investigated the interactions between national and organizational cultures Argues that national and regional cultural groupings affect the behaviour of societies and organizations Hofstede is very famous for his four cultural dimensions: Power distance Individualism vs. Collectivism Masculinity vs. Feminity High vs. Low uncertainty avoidance A fifth dimension was later added with the contribution of Michael Harris Bond: Long- vs. Short-term orientation These classifications describe societal averages or tendencies, but not characteristics of individuals Hofstede‘s work is considered the largest cross-cultural study, covering also multiple (social) hierarchies Hofstede is the most cited Dutch researcher and cornered the study of cross-cultural research  HERMES STUDY IBM; 117,000 questionnaires; 1967 - 1973 HOFSTEDE

3.1.6 (Al)Fons Trompenaars: 

3.1.6 (Al)Fons Trompenaars Fons Trompenaars and Charles Hampden-Turner have collected the largest cross-cultural data base in the world, compiling key business issues that relate to cultural differences Trompennars‘ work focuses on top-management and thus remained within a distinct social class 30,000 top managers 30 countries Trompenaars and Hampden-Turner developed a seven-dimensional model of culture: Universalism vs. Particularism: What is more important? Rules or relationships? Individualism vs. Communitarianism: Do we function as a group or as individuals? Neutral vs. Emotional: To which extent do we display our emotions? Specific vs. Diffuse: How seperate do we keep our personal and professional life? Achievement vs. Ascription: Do we have to prove ourselves or do we receive status that is given to us? Sequential vs. Synchronic: Do we do things one at a time or several things at once? Internal vs. External: Do we control our environment or are we controlled by it? TROMPENAARS

3.1.7 An alternative synthesis of country cultures: 

3.1.7 An alternative synthesis of country cultures LATIN-EUROPEAN France, Belgium Italy, Spain Portugal GERMANIC Austria Germany Switzerland LATIN-AMERICAN Argentina Chile Mexiko NEAR EASTERN Turkey Iran Greece FAR EASTERN Malaysia, Singapore Hong Kong, Phillippines Indonesia, Taiwan Thailand ARAB Bahrain Oman Saudi Arabia U.A.E. ANGLO USA Canada UK Ireland South Africa NORDIC Finland Sweden Denmark INDEPENDENT India, Israel, East Africa INDEPENDENT West Africa, Brazil, Japan Organization along ethnicity/race With exceptions no close relationship within the cluster Not suitable for concluding behavior and value traits

3.1.8 Cross-cultural research: Lack of equivalence: 

3.1.8 Cross-cultural research: Lack of equivalence Cultural bias Selection of classifications, research interests and respondents; interpretation of results Culture is no island Cultures influence each other Ethnocentricity Dominance of Western researchers, particularly US

3.2 Hofstede’s work in detail (1/2): 

3.2 Hofstede’s work in detail (1/2) Scope of Hofstede‘s research: HERMES STUDY 117,000 questionaires 60,000 participants 50+ countries 1967 - 1973 IBM (at that time identified as HERMES) Research implication: Hofstede‘s work had immediate results on many international business systems Compensation practices Budget control Entrepreneurial behavior Training design Conflict resolution Virtual team building Global employability Workgroup dynamics Performance Innovation Leadership styles Management control systems Participative management Project management Factor analysis of 32 questions in 40 countries

3.2 Hofstede’s work in detail (2/2): 

3.2 Hofstede’s work in detail (2/2) Criticism: Single company data, a large multinational organization with its own corporate culture Results are limited timewise, too much cultural progress affects the accuracy of Hofstede‘s findings (1978) Hofstede has measured national culture only partially as influences from corporate/ organizational culture cannot be excluded Non-exhaustive study, as only a fraction of possible cultural dimensions have been addressed Hofestede‘s work did not cover all cultures but only 50+ countries His research is strongly Western biased Model suggest that national level data can be generalized into individual behavior Dimensions: Individualism vs. Collectivism Masculinity vs. Femininity Low power distance vs. High power distance High uncertainty avoidance vs. Low uncertainty avoidance Short-term vs. Long-term orientation

3.3 Hofstede’s cultural dimensions: 

3.3 Hofstede’s cultural dimensions WESTERN REST OF THE WORLD Individualism Masculitity Low power distance High uncertainty avoidance Short-term orientation Collectivism Femininity High power distance Low uncertainty avoidance Long-term orientation 1 2 3 4 5 1 2 3 4 5

3.3.1 Individualism vs. collectivism (1/2): 

3.3.1 Individualism vs. collectivism (1/2) INDIVIDUAL People take care of themselves Self-orientation Identity based on the individual Guilt culture Decisions based on the individual needs „I“-mentality Emphasis on individual initiative and achievement Everyone has the right to private life COLLECTIVE Expect high loyalty to the group (family, organization) Group orientation Decision on what is best for the group Identity based on social system Shame culture Dependence on organizations and institutions „We“-mentality Emphasis on belonging Private life ‚invaded‘ by institution and organizations with which one is affiliated INDIVIDUAL COLLECTIVE 0 100 US AUS CAN D A IND PAK BANG, CHN UK Countries as per Index D 67 B 75 F 71 CH 68 A 55 CZ 58 PL 60 DK 74 IND 48 CHN 20 PAK 14 BANG 20 THA 20 INDO 14 US 91 CAN 80 UK 89 IRL 70 AUS 90 NZ 79

3.3.1 Individualism vs. collectivism (2/2): 

National Politics Religion/ Ideas Work School Other More economic development Modern industry, urbanization Greater social mobility Nuclear family Less economic development More traditional agriculture Less social mobility Extended family/tribe Political power by voter Laws/rights same for all Political power by interest groups Law/rights depend on group Polytheistic Group conversions Science/technolgy seen as ... Family relationships a disadvantage in hiring Hiring and promotion based on skills/rules More working hours Relatives prefered in hiring Hiring and promotion take in-group status into account Fewer working hours Monotheistic Conversion 1-1 Factual reporting about science/technolgy Teachers deal with individuals Students expected to speak up Learn how to learn Disability a handicap to overcome Children take care of self as soon as possible Security through insurance Teachers deal with groups Students expected to listen Learn how to do Disability a shame Children maintain lifelong contacts with family Security through social network INDIVIDUALISM COLLECTIVISM 3.3.1 Individualism vs. collectivism (2/2)

3.3.2 Masculinity vs. femininity (1/2): 

3.3.2 Masculinity vs. femininity (1/2) MASCULINITY Society in which social gender roles are clearly distinct Man are supposed to be assertive, tough and focused on material success Women are supposed to be more modest, tender, and concerned with quality life A society that often expresses the above values through non-codified regulations Strong confining pressures from within society to conform to those values FEMININITY Society in which social gender roles overlap Both, man and women, are supposed to be modest, tender, and concerned with quality of life A society that expresses its values through codified regulations Less confining and restraining pressures from within society MASCULINITY FEMININITY 0 100 US AUS CAN A IND PAK UK, D, CHN Countries as per Index D 66 B 54 F 86 CH 70 A 79 CZ 57 PL 64 DK 16 IND 56 CHN 66 PAK 50 BANG 55 THA 34 INDO 46 US 62 CAN 52 UK 66 IRL 68 AUS 61 NZ 58 BANG

3.3.2 Masculinity vs. femininity (2/2): 

3.3.2 Masculinity vs. femininity (2/2) Social norms Politics/ Economics Religion Work Family/ School Ego oriented Money and things are important Live in order to work Relationship oriented Quality of life and people are important Work in order to live Economic growth high priority Conflict solved through force Environment protection high priority Conflict solved through negotiation Less important in life Both men and women as priests Larger gender wage gap Fewer women in management Preference for higher pay Smaller gender wage gap More women in management Preference for fewer working hours Most important in life Only men can be priests Traditional family structure Girls cry, boys don‘t; boys fight, girls don‘t Failing is a disaster Flexible family structure Both boys and girls cry; neither fight Failing a minor accident MASCULINITY FEMININITY

3.3.3 Low vs. high power distance (1/2): 

3.3.3 Low vs. high power distance (1/2) LOW POWER DISTANCE Society makes little difference of status and power among its citizens Power inequality is mediated by the group, often reflected through legislation Wealth, although unequality distributed, is partly transferred from the rich to the poor Regulation (law, rights, rules) tend to be in favour of the less powerful HIGH POWER DISTANCE Society greatly differentiates between its citizens regarding power and status Power inequality is fully affecting the less powerful Wealth is strongly unequally distributed and little effort is made to support the poor Regulation, if existent, that may protect the less powerful is either ambiguous or non-enforceable LOW PD HIGH PD 0 100 BANG, CHN Countries as per Index D 35 B 65 F 68 CH 34 A 11 CZ 57 PL 57 DK 18 IND 77 CHN 80 PAK 55 BANG 80 THA 64 INDO 78 US 40 CAN 39 UK 35 IRL 28 AUS 36 NZ 22 PAK UK, D AUS US CAN A IND

3.3.3 Low vs. high power distance (2/2): 

3.3.3 Low vs. high power distance (2/2) Social norms Political Work School Those in power have privileges Powerful people try to look as powerful as possible Inequality the norm; everyone has specific place Respect for authority All have equal rights Powerful people try to look less powerful as they are Inequality should be minimized Respect for individuality Military/autocratic/oligarchic government Power struggle Little discussion/violence common Government based on majority Power sharing Much discussion, little violence Short organizational pyramids Narrow salary range from top to bottom Subordinates expect to be consulted Students dependent on teachers Parents side with teachers to maintain order Students treat teachers with respect- even out of class Teachers treat students as equals Parents may side with students against teachers Students treat teachers as equals Tall organizational pyramids Wide salary range from top to bottom Subordinates expect to be told HIGH POWER DISTANCE LOW POWER DISTANCE

3.3.4 High vs. low uncertainty avoidance (1/2): 

3.3.4 High vs. low uncertainty avoidance (1/2) HIGH UNCERTAINTY AVOIDANCE Societies experience challenges when exposed to uncertainty Societies strongly seek to obtain clarity for future happenings Regulations often support the necessity of planning and certainty for the population Society feels threatened by experienced uncertainty Affekts risk taking behavior  lower risk taking LOW UNCERTAINTY AVOIDANCE Society have little challenges when confronted with uncertainty Societies little seek to obtain clarity for future happenings Regulations leave room for interpretation regarding obtaining clarity for future events Society feels anxious by experienced uncertainty Affects risk-taking behavior  high risk taking HIGH UA LOW UA 0 Countries as per Index D 65 B 94 F 86 CH 58 A 70 CZ 74 PL 93 DK 23 IND 40 CHN 30 PAK 70 BANG 60 THA 64 INDO 48 US 46 CAN 48 UK 35 IRL 35 AUS 51 NZ 49 AUS BANG PAK, A D CAN US CHN UK IND

3.3.4 High vs. low uncertainty avoidance (1/2): 

3.3.4 High vs. low uncertainty avoidance (1/2) Social norms Politics/ Legal system Religion School Family Conservatism, law and order Xenophobic Express emotions Openness to change, innovation Tolerance of diversity Supress emotions Weak interest in politics Citizen protest repressed More and specific laws and regulations High interest in politics Citizen protest accepted Fewer and general laws and regulations Protestant, Buddhism, Taoism, Hinduism Little persecution for beliefs Avoid ritualization and ceremony Teachers have all answers Structured learning Teachers may say „don‘t know“ Open-ended learning Catholic, Islam, Judaism, Shintoism aggressively fundamentalist Ritualized/ceremonial Traditional gender roles Children taught world is hostile Fewer gender roles Children taught world is benevolent HIGH UA LOW UA

3.3.5 Short- vs. long-term orientation (1/2): 

3.3.5 Short- vs. long-term orientation (1/2) SHORT-TERM ORIENTATION Societies with a short-term orientation are considered: Personally steady Stable/little change Respect for tradition LONG-TERM ORIENTATION Societies with a long-term orientation are considered: Persistant Status and power oriented, and meticulously obeying this order Thrifty Shame oriented SHORT-TERM ORIENTATION LONG-TERM ORIENTATION 0 Countries as per Index D 31 B - F - CH - A - CZ - PL - DK - IND 61 CHN 118 PAK - BANG - THA 56 INDO - US 29 CAN - UK 25 IRL - AUS 31 NZ 30 CHN THA IND D, AUS NZ US UK

3.3.5 Short- vs. long-term orientation (2/2): 

3.3.5 Short- vs. long-term orientation (2/2) Social norms Politics/ Legal system Religion School Family xx xx xx xx xx xx b b Short-term orientation Long-term orientation

3.4 Hofstede’s dimensions impact on business: 

3.4 Hofstede’s dimensions impact on business A delegation of a Danish (low power distance) company is visiting the office of a potential new partner in Malaysia (high power distance) in order to start negotiations on a possible cooperation. How do you think the cultural difference between them possibly affects this meeting? The senior members of a UK company (high individualism) visit Korea (high collectivism) in order to celebrate the success of a product launch, which involves speeches, praises, etc. How do you think this dimension affects these aims? A German (high masculinity) company seeks to set up shop in Brasil (high femininity) and wants to know how differences between the two cultures affects their business relationships. What can you suggest to them? Two business partners, one from Switzerland (high uncertainty avoidance) and one from India (low uncertainty avoidance) agree on the launch of a new product. When you think about the agreement, how do you think that cultural differences affect the way how both go about it? A US company (short-term orientation) plans to cooperate with a Japanese company (long-term orientation) and seeks to launch a new product in Japan. How do you think that the difference between the two cultures possibly affects how the two sides drive the process of operation? High vs. Low power distance Individualism vs. Collectivism Masculinity vs. Femininity High vs. Low uncertainty avoidance Short- vs. Long-term orientation 1 2 3 4 5

3.5.2 Models used in the cross-cultural sector : 

3.5.2 Models used in the cross-cultural sector Reached popularity through E. H. Schein Identifies viable area consisting of behavior, symbols, artifacts and an invisible level in form of values, beliefs Developed by Geert Hofestede (1991) Comprizes of a set of four layers, each of which includes the lower level or is a result thereof Culture is like an onion that can be peeled, layer-by-layer to reveal the content ONION MODEL Surface Culture Deep Culture ICEBERG- MODEL

Chapter three: Learning expectations: 

Chapter three: Learning expectations Familiarize yourself with the five dimensions of Hofstede Understand how they can be used in business Know where to find and to interpret the country scores and what they mean for business Comprehend what Hall’s three dimensions are and how Trompenaars’ and Hampden-Turners’ seven dimensions make sense in the business world Know about the models used to explain culture