Cross cultural management: Hofstede's values for managers in Ukraine
Cross culturalcooperation and tradeGlobal marketing, national culture andmanagementYuriy ROBUL1Вівторок, 25 червня 13 р.
Globalized environment2Вівторок, 25 червня 13 р.
Global marketingenvironment• Globalized consumption- North America, Western Europe and South-West Asia are drivers- Globalized standards of living• Globalized manufacturing- Production facilities are placed in the countries with low pricedlabour, from where production is distributed globally in order toreduce costs3Вівторок, 25 червня 13 р.
The end of history andthe last man• The worldwide spread ofliberal democracies andfree market capitalism ofthe West and its lifestylemay signal the end pointof humanityssociocultural evolutionand become the ﬁnal formof human government- F. Fukuyama «The end ofhistory and the lastman» (1992)Francis Fukuyama4Вівторок, 25 червня 13 р.
Globalized management• Globalized management was initially intended to reﬂectthe state of «the end of history»- The one and unique form of human government causes the unique form ofgovernment of any kind of organization of humans- Management would therefor become:‣ Homogenous: no signiﬁcant differences persist among different parts ofhuman beings‣ Standardized: standards and rules are the same for every single organization‣ Imperative: standards and rules prescribe the way an organization should actand how it should be structured• Should we pay any particular attention to the differencesin origin while all become the same by the end?5Вівторок, 25 червня 13 р.
Many faces of globalizedmanagement• Global organizations- Issues, originated fromcultural or other societaldifferences are ignored,overcome or shadowed- Global consumption andmarketing- Global identity• Not-global organizations- Issues, originated fromcultural or other societaldifferences are stressed,and put at the heart ofbusiness- Consumption of localbrands- Local identity6Вівторок, 25 червня 13 р.
Standardization vs.Adaptation• Standardization- Due to technology,communications andtransportation the worldbecomes more and morehomogeneous- Management should bestandardized along withbest practices- Global forces• Adaptation- Due to a fear of lost ofidentity people want topreserve their origin,culture, traditions, andparticularities thereof- Global managementshould be adapted alongwith such particularities- Local forces7Вівторок, 25 червня 13 р.
Standardization• Due to technology, communications andtransportation the world becomes more andmore tied and homogeneous• People are ready to renounce from theirparticularities in order to get products of theworld class• People beneﬁt from low costs, originated fromthe global size of the market8Вівторок, 25 червня 13 р.
Does standardizationwork (always) well?• Not all kinds of needs and wish causes the global demandover all segments- There are globalized and not globalized segments- Trend for customization- Trend for tracing back the roots- Anti-globalization movement• Globalization does not always mean reduced prices- Louis Vuitton, Hermes, Rolls-Royce...• Flexible production units and reduction of number ofproduction cycles sometimes reduce the value of globalizedsize of the market9Вівторок, 25 червня 13 р.
Adaptation• People are different in their habits, customsand insights due to inherited national cultureand societal issues that may causes- Difference in needs and demands- Different structure of channels of distribution- Different forms of government regulation, presence or absencethereof, etc.10Вівторок, 25 червня 13 р.
Many faces of difference• Consumers- Language, culture, habits- Societal structure- Dominant values andbeliefs- Disposed income• Marketplace- Channel structure- Placement of productionunits over the territory(logistics, operations, etc.)- Government regulations(labour, capital, stakes,etc)- Economical situation(GDP, inﬂation, wages, etc)11Вівторок, 25 червня 13 р.
Types of globalenvironmentGlobalized TransnationalCalm InternationalLocal forcesGlobal forcesHigh impactHigh impactLow impactLow impact12Вівторок, 25 червня 13 р.
Types of globalenvironmentStandardization andcentralizationHigh-tec productsStandardization oncertain levelsBear, autosDisciplined andrationalized approachConstructionAdaptation anddecentralizationFoods & beveragesLocal forcesGlobal forcesHigh impactHigh impactLow impactLow impact13Вівторок, 25 червня 13 р.
Types of management inglobal environmentGlobalizedmanagementMulti-levelmanagementRoutinemanagementAdaptedmanagementLocal forcesGlobal forcesHigh impactHigh impactLow impactLow impact14Вівторок, 25 червня 13 р.
Many faces of globalizedmanagement (2)GlobalizedRoutineMulti-levelAdapted«The end of history»«Everybody here does it»«Think global - do local»Application of standardrules is selective inaccordance to localdifferencesHow to teach locals to be fullyglobalized?How to understand what is going on?How to (re)conciliate what is goingon on different levels?How to be properly adapted withoutlost of goals and vision?Challenges15Вівторок, 25 червня 13 р.
Impact of national culture16Вівторок, 25 червня 13 р.
Hofstede’s culturalinsights• «Culture is thecollectiveprogramming of themind distinguishingthe members of onegroup or category ofpeople from others»Geert Hofstede17Вівторок, 25 червня 13 р.
Hofstede’s culturaldimensions• Power Distance (PDI)• Individualism versus collectivism (IDV)• Masculinity versus femininity (MAS)• Uncertainty avoidance (UAI)• Long-term versus short-term orientation (LTO)• Indulgence versus Restraint (IVR)18Вівторок, 25 червня 13 р.
Cultural dimensions:expected values for Ukraine020406080100120PDI IDV MAS UAI LTO0925346923851110521040904230903293646068095363993Russia Poland Romania SlovakiaUkraine20Вівторок, 25 червня 13 р.
Comparison US -Ukraine020406080100120PDI IDV MAS UAI LTO2946629140092534692Ukraine (Indirect evaluation) USA21Вівторок, 25 червня 13 р.
Cultural differences ofUkraine• People accept a hierarchical order in which everybody has aplace and which needs no further justiﬁcation.- Hierarchy in an organization is seen as reﬂecting inherent inequalities, centralization ispopular, subordinates expect to be told what to do and the ideal boss is a benevolent autocrat• Ukraine, with an IDV score of 46 is considered a collectivisticsociety, close to the middle.- Close long-term commitment to the member group, be that a family, extended family, orextended relationships.- Loyalty in a collectivist culture is paramount, and over-rides most other societal rules andregulations.- In collectivist societies offense leads to shame and loss of face, employer/employeerelationships are perceived in moral terms (like a family link),- hiring and promotion decisions take account of the employee’s in-group, management is themanagement of groups.22Вівторок, 25 червня 13 р.
Cultural differences ofUkraine (2)• Ukraine seems to be a masculine society –highly success oriented and driven.- It is important to be regarded as successful and to reach yourgoals.‣ Status is an important aspect in this, and of course being ableto show which status you have.‣ Status symbols like cars, impressive houses, clothes etc. play abig role.‣ People work hard to achieve a high living standard and beingable to “show their achievements”. Long working hours anddedication to work are needed in order to achieve this.23Вівторок, 25 червня 13 р.
Cultural differences ofUkraine (3)• Ukraine’s expected score on UAI is 92 — a veryhigh preference for avoiding uncertainty.- Rigid codes of belief and behavior, and- Intolerance of unorthodox behavior and ideas.- Emotional need for rules (even if the rules never seem to work)‣ people have an inner urge to be busy and work hard,‣ innovation may be resisted,‣ security is an important element in individual motivation.• There has been no LTO estimation for Ukraine24Вівторок, 25 червня 13 р.
Cultural dimensions of managersand graduates from economicaldepartments of high schools020406080100120PDI IDV MAS UAI LTO5025591876092534692Indirect evaluation Managers (direct evaluation)25Вівторок, 25 червня 13 р.
Summary• PDI: In general as expected, gradual lowering over yearsmay be forecasted• IDV: Surprisingly much lower than expected (IDV=18 outof 100)- Avoidance of individual responsibility may be one of the component thereof• MAS: Masculine society as expected in spite of declaredvalue of public wellbeing• UAI: Surprisingly much lower than expected(UAI = 25 out of 100)• LTO: Much higher than expected, conservative society,contracted by societal myopia26Вівторок, 25 червня 13 р.
Cross culturalcomparisons020406080100120PDI IDV MAS UAI LTO29466291405025591876092534692Ukraine (Indirect evaluation) Ukraine (Managers (direct evaluation))USA27Вівторок, 25 червня 13 р.
Troubles in cooperation• Sometimes difﬁcult access to (dealing with) persons, whotake ﬁnal decisions- Formal procedures and rituals• Individual attribution of tasks and responsibilities- Being sometimes avoided by Ukrainian counterparts• Very different level of UAI- Resulting sometimes at neglecting of restriction, imposed by law by Ukrainiancounterparts• Considerable level of LTO- Prevalence of short-time orientation; dominance of traditionalist way of working andliving28Вівторок, 25 червня 13 р.
Troubles in marketing• Social responsibility and capital are sellingbadly in general• Prestige is over evaluated at the expense ofrational values and attributes of an offer• Consumers do not care of many things, crucialfor westerns in order to avoid uncertainty- Failed planning, bad price evaluation and future use of the productare among the most frequent issues29Вівторок, 25 червня 13 р.
Values and guidelines formanagerial decisions30Вівторок, 25 червня 13 р.
Splitting outorganizations• Do managers at all levels in an organizationbehave in the same way?• Which guidelines they follow taking decisions?31Вівторок, 25 червня 13 р.
Rokeach Value Survey• Behavior of humans is deﬁned and guided bytheir values- Terminals: whom I wish to be- Instrumentals: how to become whom I wish to be- Rokeach Value Survey (RVS): 36 universal values, distributedequally by these two sets32Вівторок, 25 червня 13 р.
• The terminal values1. True Friendship2. Mature Love3. Self-Respect4. Happiness5. Inner Harmony6. Equality7. Freedom8. Pleasure9. Social Recognition10. Wisdom11. Salvation12. Family Security13. National Security14. A Sense of Accomplishment15. A World of Beauty16. A World at Peace17. A Comfortable Life18. An Exciting Life• The instrumental values1. Cheerfulness2. Ambition3. Love4. Cleanliness5. Self-Control6. Capability7. Courage8. Politeness9. Honesty10. Imagination11. Independence12. Intellect13. Broad-Mindedness14. Logic15. Obedience16. Helpfulness17. Responsibility18. Forgiveness33Вівторок, 25 червня 13 р.
RVS Research inUkraine 2013• Is there a common system of dominant valuesin organizations?• Which parts constitutes this common system?- IT companies in Ukraine with high globalized proﬁle- Top, middle and bottom line managers are studied separately34Вівторок, 25 червня 13 р.
RVS Research in ITbusiness in Ukraine,2013• Is there a common system of dominant valuesin organizations?- No, there is no common system- The difference between values of top and middle level managers isbeing observed for almost 20 years, the limits are not broken- Top managers are guided by a different set of dominant valuesthan middle and bottom line managers35Вівторок, 25 червня 13 р.
Top 4 valuesTerminal Rating Instrumental RatingTop managersTop managersTop managersTop managersSalvation 4 Honesty 4Freedom 3 Responsibility 3Happiness 2 Cheerfulness 2A comfortable life 1 Broad-Mindedness 1Middle level managersMiddle level managersMiddle level managersMiddle level managersSalvation 4 Honesty 4Happiness 3 Responsibility 3Mature love 2 Forgiveness 2A comfortable life 1 Broad-Mindedness 136Вівторок, 25 червня 13 р.
• The terminal values1. True Friendship2. Mature Love3. Self-Respect4. Happiness5. Inner Harmony6. Equality7. Freedom8. Pleasure9. Social Recognition10. Wisdom11. Salvation12. Family Security13. National Security14. A Sense of Accomplishment15. A World of Beauty16. A World at Peace17. A Comfortable Life18. An Exciting Life• The instrumental values1. Cheerfulness2. Ambition3. Love4. Cleanliness5. Self-Control6. Capability7. Courage8. Politeness9. Honesty10. Imagination11. Independence12. Intellect13. Broad-Mindedness14. Logic15. Obedience16. Helpfulness17. Responsibility18. Forgiveness37Вівторок, 25 червня 13 р.