Assessment details The details of each assessment component are .docx

Assessment details
The details of each assessment component are set out below.
Each assessment will be marked according to the general
criteria for assessment as prescribed by the university grading
system and the specific criteria set out in the Cover and
Assessment Sheets that are available in the Appendices of this
booklet and in the Assignment Tool in the online unit.
In your assessments, make sure that you correctly cite all
references.
Present a 1500-word persuasive essay for a selected national
health priority area.
MUST THINGS TO COVER
Ottawa charter ( Focus on those things on page 2 ! and ignore
page 1 )
Link
livelighter.com (health-professionals/for-ur-practice) to Ottawa
charter
Choose one of these theories:
· Erikson’s psychological stages and Seligman- positive
psychology (these two theories must go together)
· McNaught’s framework of well-being
· Constructivist
Present a persuasive essay for a selected (evidence based)
national health priority area “Why is your topic a national
health priority area and how is this being addressed?’
Choose a country and a disease that many people of the country
have.
Description of Task
Research a national health priority area that and present an
argument with supporting literature that this is a valid and

credible health priority for a specific country or region. You
need to justify why this has been classified as a health priority
area and argue a case for being an area of focus for health
promotion.
Your essay should address the following requirements:
• Define the health priority and state why it is a priority.
Include information on what it is and whom it affects.
• In your priority areas, show evidence of credible and current
research data to illustrate that this is a valid argument.
• Which specific target groups are impacted e.g. youth (12–18
years), young adults (18– 30 years) or seniors (60+)
• Illustrate the positioning of the priority within frameworks of
wellbeing.
• How are fundamentals of health promotion addressing this
area of concern? Discuss in relation to action and strategies of
health promotion. Are there any gaps?
• Reference in text (APA) format and include reference list as
per APA format
* Academy of Managemenf Executive, 2004, Vol. 18. No. 1
An interview with
Geert Hofstede
Interview by Michael H. Hoppe
Geert Hofstede received an M.Sc. in mechanical engineering
from Delft Technical
University in 1953 and earned his Ph.D. in social psychology,
cum laude, from Groningen
University in 1967. He worked for six years for IBM Europe
where he founded and
managed the Personnel Research Department. He first entered
academics in 1971 virhen

he assumed a visiting lecturer position at IMD in Lausanne,
Switzerland. Subsequently
Professor Hofstede held faculty positions at the European
Institute for Advanced Studies
in Management in Brussels and at INSEAD in Fontainebleau,
France. In 1980 he returned
to industry as a director of human resources of Fasson Europe in
Leyden, the Netherlands.
Just previously, he had published Culture's Consequences, the
book which is the subject
of this Retrospective, and opened wide the door of comparative
cultural analysis in
business and elsewhere, as a tool for both academics and
practitioners. He returned to
academics in 1983 to serve as dean of the Semafor Senior
Management Program in
Arnhem. In 1986 he was appointed professor of organizational
anthropology and
international management at Maastricht University where he
received emeritus status in
1993. During his time at Maastricht, he published a student-
level book. Cultures and
Organizations: Software of the Mind (1991) which has been
translated into 16 other
languages. Since retiring in 1993, Professor Hofstede has served
as a fellow at the
Institute for Research on Intercultural Cooperation and of the
Center for Economic
Research, both at Tilburg University, and has held visiting
professorships in Hong Kong,
Hawaii, and Australia. An entirely re-written second edition of
Culture's Consequences
appeared in 2001, and a re-written Third Millennium Edition of
Cultures and
Organizations: Software of the Mind, co-authored by Gert Jan
Hofstede, followed in 2004.

Professor Hofstede is a fellow of the Academy of Management
and an eminent scholar
with the Academy of International Business. He has received
honorary doctorate degrees
from universities in the Netherlands, Bulgaria, Greece, and
Sweden. Geert Hofstede has
been married to Maaike van den Hoek since 1955. They have
four sons and eight
grandchildren. Contact: [email protected]
When I read Culture's Consequences in 1980 for
the first time, it greatly helped me make sense of
my personal and professional cross-cultural
experiences up to that point in my life. What
personal and professional experiences led you to
write the book?
The main motive w a s intellectual curiosity. I had
worked a s a psychologist on the international staff
of IBM Europe, traveling around and observing the
ways IBMers in different countries went about sim-
ilar tasks. Having been a factory worker, work-
study engineer, and line manager myself made me
see things other psychologists might have missed.
Then I was a polyglot, a product of the Dutch
school system of the 1940s—I could converse with
people in Dutch, English, French, German, and
Italian, and I picked up bits and pieces of other
languages, like Greek and Turkish. Being origi-
nally trained a s a mechanical engineer had disci-
plined my mind to order experiences in a system-
atic and parsimonious way. In IBM and later in
IMD, INSEAD, and ELASM, I met many bright peo-
ple from different countries who were very willing
to share their own insights and observations. And
living abroad as a Dutch family in Switzerland and

Belgium, with four children in the local school sys-
75
76 Academy of Management Executive February
Geert Hofstede
tems, supplied us with first-hand experiences of
the transfer of local culture.
Giants in a field of study tend to stand on the
intellectual shoulders of other past and present
giants of their own and other fields. Less well-
known thinkers may contribute at times, too. Who
influenced your thinking and work in large
measure, then and now?
Adriaan de Groot [1914-], the founder of psycholog-
ical measurement in Holland. He was trained as a
mathematician and later wrote his doctoral thesis
based on interviews with chess grand masters.
During the chess world championships in Holland
in 1937, he asked them to think aloud while they
were playing a match. When de Groot had become
a professor of psychology, he published a book on
social science methodology that became my most
inspiring reading during my own doctoral study.
De Groot justified my structured approach to hu-
man issues. In the USA he influenced Herbert
Simon's work on the empirical study of decision-
making and the limits to rationality. Another
source of inspiration was Karl Popper, whose the-
ory of the progress of science through falsification

has remained my philosophy to the present day.
Then I should name Alex Inkeles and Daniel Levin-
son who from a broad analysis of the anthropolog-
ical, sociological and psychological literature
back in 1954 predicted the dimensions of national
culture that I was to find empirically in the 1970s.
Finally there is Thomas Kuhn, whose idea of the
structure of scientific revolutions helped me under-
stand the initial and later reactions to my own
publications on culture.
As you were conducting your research for
Culture's Consequences, what particular
theoretical or methodological issues presented
you with the greatest difficulties to overcome?
The level-of-analysis issue! Discovering that you
can't compare countries on categories developed
for comparing individuals. Countries aren't king-
size individuals; they are social systems. It is like
the forest and the trees. Forests are not king-size
trees; they are eco-systems of different trees,
shrubs, animals, and other organisms. National
cultures are eco-systems of different individuals,
institutions, and resources. For comparing organi-
zations or occupations, one needs again different
categories. Even quite respectable authors have
gone astray on this issue. The problem is that each
level is dealt with by a different social science
discipline: countries by anthropology and political
science, organizations and occupations by sociol-
ogy, individuals by psychology. Most authors have
been trained in one of these disciplines only. When
they move into another discipline's territory, they
are unaware of the different laws that apply there,

or they think they don't need them. In this era of
interdependence, choosing the right level of anal-
ysis and what happens when we move across lev-
els should be part of the basic training for all the
social sciences, which is rarely the case.
What accounted for the tremendous impact that
the book had on those studying and practicing
cross-cultural issues in management at the time?
Being there at the right time [1980], when the im-
portance of culture, both national and corporate,
began to be recognized. Before me, there were lots
of theories, but no one else had done any serious
empirical research in the field. And, of course, writ-
ing the book in English and having it published by
a good publishing house (Sage) provided a broad
distribution across social science boundaries.
2004 Hofstede 77
There was also some resistance to your
conclusion that culture matters, in particular
among scholars and practitioners in the United
States. How did you explain it at the time—and
in retrospect?
Yes, in particular to my 1980 article in Organiza-
tional Dynamics: "Motivation, leadership and or-
ganization: Do American theories apply abroad?"
Asking a question like that was sacrilegious to
some people inside and outside the US. In some
circles it still is! It w a s a paradigm shift a la
Thomas Kuhn.

Culture's Consequences greatly shaped the study
and methodology of many academic disciplines
and spawned numerous dissertations, including
mine. What were some of the most promising
and less promising directions in which scholars
took your work—and what were clearly dead
ends?
The dissertations can be divided into replications
and applications. Regarding replications, some
people tried to compare categories of respondents
within countries, not realizing that my compari-
sons only apply to entire national or regional cul-
tures. Most other replications were on two or three
cultures, which didn't contribute much, since for
purely statistical reasons a trend found across 40
countries does not need to replicate itself across
every subset of two or three. Yours was a shining
exception with 18 overlapping cultures and, there-
fore, very important. But I like the applications
best, people relating my dimensions to phenom-
ena in societies, such a s differences in language
structure, in savings rates, in consumer behavior,
in corporate governance, in medical practice, and
endless other fields.
This reminds me of your and your associates'
book on Masculinity and Femininity: The Taboo
Dimension of National Cultures [1998], in
particular the discussion in Part III on the
relationships between culture and sexuality and
culture and religion. What reactions and follow-
up research did this discussion generate?
Not a s much a s I would have liked—it's still a

taboo. But these things take time. If our book h a s
influenced research by others, it takes years before
the results are published. The citations of Cultme's
Consequences only really took off after eight years.
The issue can only become more important. I ex-
pect more reactions in the coming years.
Since I brought up the masculinity-femininity
dimension, which of your five dimensions (I am
including the short-term versus long-term
dimension that emerged from your work with
Michael Bond) has been either the most
misunderstood or underutilized, as you look back
on the last twenty years of research?
This depends on the area of application. Psychol-
ogists, for example, often overlooked Uncertainty
Avoidance, while management students over-
looked Masculinity and Femininity. Many superfi-
cial readers only remember Individualism and
Collectivism and try to attribute to it all cultural
differences they see.
Overall, what difference, if any, did Culture's
Consequences and the numerous resulting
articles and books on culture and management
make for the practitioners who struggled with
cross-cultural management issues in the
emerging global marketplace at the time?
Providing them with a terminology and a concep-
tual framework through which the fuzzy and scary
area of cultural differences becomes accessible to
management strategy. Recognizing that there is
such a thing a s national cultural differences at all.
At least the younger managers have got accus-

tomed to this idea. The older ones who still decide
about major international ventures are often still
incredibly naive about culture, and this, I believe,
explains the dramatically poor success record of
transnational mergers, acquisitions, and alli-
ances. Cultural integration is a top management
responsibility, but if top managers don't know
what culture is, the disasters are predictable.
Cultural integration is a top
management responsibility, but if top
managers don't know what culture is,
the disasters are predictable.
If you could do it over again, what different
publication strategies, if any, would you use to
enhance the message and impact of your work?
None, I think. Publishing books with good publish-
ing houses was the most effective way of spread-
ing my ideas—this is evident from the Social Sci-
ence Citation Index: my books [monographs] are
by far the most cited sources. Next are articles in
good journals, such a s Organizational Dynamics.
Least effective are chapters in readers—hardly
anybody cites them.
78 Academy of Management Executive February
As you reflect on the impact of your work and the
ways in which management theory and practice
are discussed today, what pleases you the most?
Having made a difference. Do you remember the

musical from the 1970s How to Succeed in Business
Without Really Trying'? My ideas influenced man-
agement theory and practice beyond what I tried
for. I never planned or expected things to go this
way—it is still a surprise.
What displeases you the most?
Visibility has its price. One also attracts the rats,
fleas, and paranoids of the academic and business
world who try to inflate themselves by disparaging
others.
Culture's Consequences and the thousands of
articles and books that built on it did not only
influence the ways in which we think about and
practice management. In fact, from the beginning
you incorporated findings from many other fields
of study into your work. In what other academic
fields or areas of our lives do you see your
research having had a major influence?
A major influence can be noticed in psychology,
especially through the introduction of the cultural
[rather than individual] dimension of Individual-
ism versus Collectivism. Also, since the 1990s in
marketing, especially for explaining and predict-
ing differences in consumer behavior, and in or-
ganizational theory, especially through the di-
mensions of Power Distance and Uncertainty
Avoidance. But I have seen applications in the
fields of history, medicine, social anthropology,
social geography, law, political science, public
administration, journalism, international sports,
information technology, archives management, ac-
counting, laboratory management, quality control,

in ethics, in engineering education, in nuclear
power regulation.
Could you give an example from any of these
fields that truly intrigues or fascinates you?
What most excited me in the past year was an
exchange with Dr. Robert McCrae, the main con-
temporary authority on personality measurement
and one of the champions of the "big five" dimen-
sions of personality. He discovered that national
norms for personality scores across more than 30
countries were significantly correlated with four of
my culture dimensions [all except Long Term Ori-
entation]. We have just submitted a joint article
about this to an anthropology journal.
Two years ago, you published a re-written
second edition of Culture's Consequences in
which you sum up and integrate your and other
scholars' findings and thinking over the past
twenty years. What are the one or two major
ways, if any, in which you think differently today
about the theory and practice of management
than you did in 1980?
Upon reflection, I don't believe that I have very
much changed my mind about management. I
have always been skeptical about fads. A
present fad is the myth of the magical powers of
top executives. The importance of management
in general, and of top management in particular,
is overrated and top managers are overpaid. In
many cases top managers have been brought
in who turn out to be parasites on their corpora-

tion rather than assets to its real success. The
importance of the people who do the work is
underrated, although this trend differs between
countries and parts of the world.
The importance of management in
general, and of top management in
particular, is overrated and top
managers are overpaid.
Say more about that!
Last year my associates and I published an article
in the Journal of International Business Studies
based upon the views [collected in the late 1990s]
of evening MBA students from 15 countries. We
asked these people, most of whom had day jobs in
companies, to identify the major goals of the top
business leaders in their country, the tycoons.
There were striking differences between countries.
Among U.S. students from five different universi-
ties from all over the country, there was a remark-
able consensus on the importance of ego goals for
these top leaders: personal wealth and power. In
comparison, students from Latin countries put
"family interests" higher. Asian students more of-
ten chose long-term profits and "creating some-
thing new." European students perceived their ty-
coons to pay more attention to their responsibility
toward employees and toward society.
2004 Hofstede 79
What did you learn about yourself through your

extensive and intensive involvement with
"culture"?
That there is a difference between knowing and
practicing.
I admit, this is a pretty personal question, but
could you give an example.
After a lecture in Japan, someone asked me a
"don't you think that. . .?" question and I bluntly
answered "no," as I would have done in Holland. I
must have offended the questioner badly; there are
less direct ways of answering, such as "That is an
interesting question. I would say that.. ." Under
stress, one falls back on one's native instincts.
Understanding the big differences in
mindsets between people from different
countries helps enormously in
interpreting v^hat's going on—and where
we can and cannot hope for progress.
What did you learn about humankind's ongoing
struggles with issues of peace, war, sustainabil-
ity, justice, equity, and so forth?
Those are enough questions for a week's discus-
sion. But if you want a general answer: What I
think I learned is that understanding the big dif-
ferences in mindsets between people from differ-
ent countries helps enormously in interpreting
what's going on—and where we can and cannot
hope for progress.
What's next?

Part of my intellectual inheritance is taken over by
our eldest son Gert Jan Hofstede who is a re-
searcher and associate professor at Wageningen
Agricultural University. Gert Jan in 2002 published
a book about training methods. Exploring Cultures,
with our friend Paul B. Pedersen and me as co-
authors. At present, Gert Jan is helping me revise
the popular text Cultures and Organizations: Soft-
ware of the Mind which originally appeared in
1991. We expect it to be available in 2004. And,
since it has appeared in 16 translations, we'll have
to manage the updating of these as well. After that
my ambition is to write my memoirs, in Dutch and
with our grandchildren as a target readership—the
way I would have liked to read about my grand-
father's lifetime.
Geert, thank you for your time and generosity—
with this interview and over the past more than
20 years.
Michael H. Hoppe is a Senior
Program & Research Associate at
the Center for Creative Leader-
ship in Greensboro, North Caro-
lina, where he conducts leader-
ship development programs and
research on cross-cultural leader-
ship effectiveness. He holds de-
grees in clinical and educational
psychology from the University of
Mimich and SUNY at Albany and
earned his Ph.D. in adult and in-
stitutional studies from UNC-
Chapel Hill. Contact: hoppem®

ieaders.ccJ.org.
International Encyclopedia of Organization
Studies
Cultural Intelligence
Contributors: Linn Van Dyne, Soon Ang & Tjai M. Nielsen
Edited by: Stewart R. Clegg & James R. Bailey
Book Title: International Encyclopedia of Organization Studies
Chapter Title: "Cultural Intelligence"
Pub. Date: 2008
Access Date: February 1, 2019
Publishing Company: SAGE Publications, Inc.
City: Thousand Oaks
Print ISBN: 9781412915151
Online ISBN: 9781412956246
DOI: http://dx.doi.org/10.4135/9781412956246.n115
Print pages: 346-350

© 2008 SAGE Publications, Inc. All Rights Reserved.
This PDF has been generated from SAGE Knowledge. Please
note that the pagination of the online
version will vary from the pagination of the print book.
javascript:void(0);
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http://dx.doi.org/10.4135/9781412956246.n115
Cultural intelligence (CQ) is a person's capability to function
effectively in situations characterized by cultural
diversity. Cultural intelligence is a four-factor,
multidimensional construct. Those with high CQ have four key
capabilities: They are able to anticipate what will happen in
cross-cultural situations; they have a wide un-
derstanding of multicultural situations; they are confident of
their capabilities and are intrinsically interested in
experiencing culturally diverse settings; and finally, they are
able to vary their verbal and nonverbal behaviors
in response to cultural characteristics of the situation.
CQ is a critical individual capability with important personal,
interpersonal, and work-related implications given
the wide-ranging effects of globalization and diversity
throughout most of the world. In work settings, CQ has
direct relevance to expatriates, members of global project
teams, professionals with global contacts, market-
ing and sales managers, worldwide sourcing specialists, cross-
functional project managers, and multicultural
domestic team members.
Conceptual Overview

Contemporary conceptualizations of intelligence emphasize that
it is more than academic intelligence or cog-
nitive ability, as noted by Robert Sternberg and Douglas
Detterman in 1986. For example, researchers and
managers recognize the importance of nonacademic intelligence
such as interpersonal intelligence, emotion-
al intelligence, and social intelligence. Like these other forms
of intelligence, CQ complements IQ (cognitive
ability) by focusing on specific capabilities that are important
for high-quality personal relationships and ef-
fectiveness in culturally diverse settings. Cultural intelligence
provides insights about individual capabilities to
cope with and flourish in multicultural situations, engage in
intercultural interactions, and perform effectively
in culturally diverse social and work groups.
Sternberg and Detterman integrated the numerous views of
intelligence and proposed four complementary
ways of conceptualizing individual-level intelligence based on
different loci: (a) metacognitive intelligence is
knowledge and control of cognition (the processes individuals
use to acquire and understand knowledge); (b)
cognitive intelligence is individual knowledge and knowledge
structures; (c) motivational intelligence acknowl-
edges that most cognition is motivated and thus it focuses on a
person's capability to channel energy toward
acquiring knowledge as a locus of intelligence; and (d)
behavioral intelligence focuses on individual capabili-
ties at the action level (behavior). This framework is
noteworthy because it recognizes multiple forms and loci
of intelligence within an individual and moves beyond the more
traditional focus on linguistic, logical-mathe-
matical, and spatial intelligence. It complements Howard
Gardner's ideas on aspects of intelligence that are
related to self-regulation and interpersonal relations.

Drawing on this perspective of multiple loci of intelligence, P.
Christopher Earley and Soon Ang conceptu-
alized cultural intelligence as a multifactor construct with
mental (metacognitive and cognitive), motivational,
and behavioral components. Metacognitive CQ reflects the
mental capability to acquire and understand cul-
tural knowledge. Cognitive CQ reflects general knowledge and
knowledge structures about culture. Motiva-
tional CQ reflects individual capability to direct energy toward
learning about and functioning in intercultural
situations. Behavioral CQ reflects individual capability to
exhibit appropriate verbal and nonverbal actions in
culturally diverse interactions.
CQ is an individual difference capability. Although CQ is
influenced by stable personality characteristics (such
as extroversion and openness to experience), CQ is not an
aspect of personality. CQ is also different from
a person's values. While personality and values are strongly
influenced by early socialization experiences,
CQ is more state-like and fluid. It is an individual capability
that develops over time based on ongoing experi-
ences, education, training, and exposure to multicultural and
international situations.
CQ is a specific individual difference because it focuses on
culturally relevant capabilities. It is more specific
than broad individual differences such as general cognitive
ability and personality. However, CQ is not specif-
SAGE
© 2008 by SAGE Publications, Inc.
SAGE Reference

of 7
International Encyclopedia of Organization Studies
ic to a particular culture (e.g., CQ does not focus on the
capability to function effectively in France or Japan
or any other specific culture). In sum, CQ is a malleable
individual capability that evolves over time and is
specific to culturally diverse types of situations.
CQ is similar to, yet distinct from, two other forms of
intelligence—general cognitive ability and emotional in-
telligence. General cognitive ability (the ability to learn) is an
important individual difference that predicts per-
formance across many jobs and settings. General cognitive
ability, however, is not specific to certain contexts
such as culturally diverse situations. In addition, it does not
include behavioral or motivational aspects of in-
telligence. Emotional intelligence, or EI (the ability to deal with
personal emotions), is similar to CQ because it
goes beyond academic and mental intelligence. However, EI
differs because it focuses on the general ability
to manage emotions without consideration of cultural context.
CQ is also similar to, yet distinct from, other aspects of
intercultural competence. It is similar since it focuses
specifically on capabilities that are related to culture. However,
CQ is different because it is explicitly ground-
ed in the theory of multiple intelligences. Thus, it is based on a
theoretically grounded, comprehensive, and
coherent framework.
Four Factors of Cultural Intelligence
Metacognitive CQ is how a person makes sense of intercultural

experiences. It reflects the processes in-
dividuals use to acquire and understand cultural knowledge. It
occurs when people make judgments about
their own thought processes and those of others. This includes
strategizing before a multicultural encounter,
checking assumptions during an encounter, and adjusting mental
maps when actual experiences differ from
expectations.
Cognitive CQ is a person's knowledge and understanding of how
cultures are similar and how cultures are dif-
ferent. It reflects general knowledge structures and mental maps
about cultures. It includes knowledge about
economic and legal systems, norms for social interaction,
religious beliefs, aesthetic values, and language in
different cultures.
Motivational CQ is a person's capability in directing energy and
effort toward learning about and functioning
in cross-cultural situations. It includes a person's inherent
interest in experiencing other cultures and interact-
ing with people from different cultures. It also includes the
extrinsic value people place on culturally diverse
interactions as well as their sense of confidence that they can
function effectively in settings characterized by
cultural diversity.
Behavioral CQ is a person's capability to adapt verbal and
nonverbal behavior so it is appropriate for different
cultures. It includes having a flexible repertoire of behavioral
responses that are appropriate in a variety of
situations and having the capability to modify both verbal and
nonverbal behavior based on those who are
involved in a specific interaction or in a particular setting.
Research Results on Cultural Intelligence

In global and multicultural settings, CQ capabilities are
important for individuals in their personal life and in
their work life as employees, peers, and managers.
Understanding CQ helps to provide insights into the age-
old sojourner problem of why some people thrive in culturally
diverse settings, but others do not.
Although empirical research on cultural intelligence is
relatively new, the initial results are strong and promis-
ing. To date, Ang, Linn Van Dyne, Christine Koh, and Kok-Yee
Ng have demonstrated that CQ predicts cul-
tural judgment and decision making (CJDM) and task
performance. More important, CQ increases our under-
standing of these performance outcomes over and above
demographic characteristics, general cognitive abil-
SAGE
SAGE Reference
Page 3 of 7
ity, emotional intelligence, and openness to experience. In other
words, even after accounting for the effects
of these other predictors, CQ further increases the ability to
predict and understand decision-making perfor-
mance. Those who have higher CQ are more effective at making
decisions about intercultural situations. CQ
also predicts adjustment in situations characterized by cultural
diversity. As with CJDM, CQ adds explanato-
ry power over and above demographic characteristics, general

cognitive ability, emotional intelligence, and
openness to experience. Those with higher CQ capabilities are
more likely to feel adjusted in situations char-
acterized by cultural diversity.
Examining the four factors of CQ further enhances the
understanding of these relationships. More specifically,
metacognitive CQ and behavioral CQ predict task performance.
Those who have the capability to make sense
of intercultural experiences (such as making judgments about
their own thought processes and those of oth-
ers) perform at higher levels in multicultural work settings. The
higher the metacognitive CQ, the higher the
task performance. Similarly, those who have the capability to
adapt their verbal and nonverbal behavior to fit
specific cultural settings have a flexible repertoire of behavioral
responses that enhances their task perfor-
mance in culturally diverse settings. Thus, the higher the
behavioral CQ, the higher the task performance. Fi-
nally, motivational CQ and behavioral CQ each predict three
different forms of adjustment (see below). Those
who are interested in experiencing other cultures and feel
confident that they can interact with people who
have different cultural backgrounds are better adjusted in
culturally diverse situations. Likewise, those who
have a broad repertoire of verbal and nonverbal behavioral
capabilities feel better adjusted in situations char-
acterized by cultural diversity. This pattern of relationships
applies to the three types of adjustment typical-
ly included in international research: general adjustment,
interaction adjustment, and work adjustment. The
higher the motivational CQ, the higher the adjustment;
similarly, the higher the behavioral CQ, the higher the
adjustment.
In another empirical study that focused specifically on

motivational CQ and expatriate adjustment, Klaus Tem-
pler, Cheryl Tay, and N. Anand Chandrasekar demonstrated that
motivational CQ predicts all three types of
adjustment, even after controlling for time in the host country
and experience in international assignments.
More important, they also demonstrated that motivational CQ
adds incremental variance over and above
cross-cultural interventions such as the realistic living
conditions preview and the realistic job preview. These
results highlight the importance and utility of motivational CQ
for expatriates.
Overall, research has demonstrated that metacognitive CQ and
cognitive CQ explain variance in CJDM, over
and above demographics, general cognitive ability, EI, and
openness to experience. In addition (controlling
for demographics, EI, openness, cross-cultural adaptability, and
rhetorical sensitivity), metacognitive CQ and
behavioral CQ predict task performance, while motivational CQ
and behavioral CQ predict adjustment to new
cultures. Finally, motivational CQ predicts three forms of
expatriate adjustment over and above time in the
host country, international experience, and realistic previews.
Given that CQ has implications for performance and adjustment,
it is important to understand its antecedents
(what predicts CQ). Ang, Van Dyne, and Koh have
demonstrated that those with more experience interacting
with people who have different cultural backgrounds have
higher CQ. This includes each of the four factors
of CQ (metacognitive, cognitive, motivational, and behavioral).
Research also demonstrates that traitlike indi-
vidual differences such as personality characteristics predict CQ
(which is a state-like individual difference).
Trait-like personality characteristics are not specific to a certain
task or situation. Instead, in most cases they

emerge during early childhood socialization and are relatively
stable over time. In contrast, as noted by Albert
Bandura, state-like individual differences (such as state anxiety
or specific self-efficacy) are specific to cer-
tain situations or tasks and tend to be malleable over time.
Consistent with this, research demonstrates that
personality characteristics (more distal individual
characteristics) predict CQ (more proximal individual char-
acteristics). Specifically, examining the Big Five personality
characteristics, they demonstrated relationships
between conscientiousness (responsible, planful, persistent) and
metacognitive CQ; agreeableness (likeable,
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good-natured, cooperative) and behavioral CQ; emotional
stability (calm, secure, controlled) and behavioral
CQ; and extraversion (sociable, assertive, active) and
metacognitive CQ, cognitive CQ, and behavioral CQ.
In addition, and most important, research demonstrates
relationships between the Big Five personality char-
acteristic of openness to experience (curious, imaginative,
intellectual) and all four factors of CQ. This con-
trasts significantly with prior research, which has rarely
demonstrated significant relationships for openness
to experience.
Practical Implications of CQ

The realities of contemporary organizations suggest that CQ has
important implications for individuals and
for organizations because globalization and diversity require
employees to interact with people from a variety
of backgrounds. This includes those in entry-level, middle
management, and executive roles, which suggests
the benefits of assessing CQ during the hiring and selection
process. For example, those with low levels
of cultural intelligence may pose a significant risk to
organizations that operate in diverse, global business
environments. CQ also has implications for training and
development programs because enhancing global
leadership capabilities can be an important source of
competitive advantage. Global leaders not only must
work effectively in dynamic and diverse contexts, but they also
must actively model appropriate behaviors for
others in the organization. In sum, incorporating CQ as a core
competency by including it in hiring, selec-
tion, training, and development programs should have
significant implications for organizations operating in
today's global and diverse marketplace.
Critical Commentary and Future Directions
Initial reactions to the idea of cultural intelligence and the
research on CQ have been positive. The construct,
however, is still relatively new and there are many areas
needing additional research and practical application.
First, although the idea of cultural intelligence was introduced
and developed by scholars from different cultur-
al backgrounds, and although the Ang and colleagues' 20-item,
four-factor measure—the Cultural Intelligence
Scale (CQS)—was developed, validated, and cross-validated in
both Asian (Singapore) and Western (United

States) cultural settings using expatriates and global
professionals from diverse cultural backgrounds, future
research and validation efforts are needed in other cultures and
in other settings. For example, it will be in-
teresting and important to examine CQ in Latin, Middle Eastern,
East-Central European, Indian, and African
settings. Perhaps the predictive validity relationships will be the
same. Alternatively, differences in cultural
values may cause differences in the importance of some aspects
of CQ. For example, it is possible that CQ
motivation is less important in predicting adjustment for those
with more traditional cultural values. Alterna-
tively, the relationships may differ for those from polychronic
cultures in which time is viewed as more circular
than linear.
Second, it is also important that future research examine an
expanded nomological (rules of reasoning)
network of antecedents and outcomes of cultural intelligence.
For outcomes, this could include contextual
performance (behaviors that are not explicitly required by the
job and contribute indirectly to the technical
core—such as helping peers and making innovative
suggestions). Perhaps those who are high in CQ are
more capable of identifying discretionary contributions that
would be viewed positively in a particular cultural
context. Likewise, those who are high in CQ may be more
capable of going beyond clearly specified core role
responsibilities. Their high CQ may give them extra capacity to
contribute positively to organizational goals,
even in multicultural contexts.
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Third, future research could also benefit from examining CQ as
a selection tool for identifying those with high-
er capability to function effectively in culturally diverse
situations. Assessment of CQ for selection could in-
volve both self-ratings of CQ as well as observer ratings. In
addition, future research could consider CQ as
a predictor of successful performance for employees in a wide
variety of jobs such as members of global
project teams, professionals with global contacts, marketing and
sales managers, worldwide sourcing spe-
cialists, cross-functional project managers, and multicultural
domestic team members.
Fourth, additional research is also needed on what predicts CQ.
For example, although the finding that open-
ness to experience predicts all four factors of CQ is exciting and
contrasts significantly with prior research
on openness, research is needed on other predictors of CQ. One
intriguing idea would be to examine CQ
at different stages of exposure to other cultures. This could
involve examination of the trajectory of CQ. For
example, researchers do not know if CQ develops relatively
rapidly or slowly when people are exposed to
cross-cultural situations. Researchers also do not know if some
types of exposure and contact have negative
rather than positive effects on CQ. Given the results of contact
theory research that demonstrates both pos-
itive and negative effects, this will be an important area that
should be addressed by CQ researchers. This
also suggests the benefits of moderator research that examines

the boundary conditions of when exposure is
beneficial, what types of exposure are beneficial, and how much
exposure is beneficial.
Fifth, as noted by Harry Triandis, another promising area for
future research is investigating training tech-
niques that enhance individual cultural intelligence. This could
include training people to acknowledge their
inherent ethnocentrism and then to integrate a broader range of
information, look for multiple cues, try to un-
derstand the situation from the perspective of those in the
culture, and suspend judgments when encounter-
ing new cultural contexts. Likewise, future research could
consider the difference between successful intelli-
gence (based on success within a particular sociocultural
setting) compared to cultural intelligence (based on
success in cross-cultural or culturally diverse settings), as noted
by Sternberg and Elena Grigorenko.
Sixth, given the plethora of constructs already introduced and
used in cross-cultural research, it will be impor-
tant to assess the extent to which CQ increases researchers'
understanding of individual attitudes, cognitions,
and behaviors—over and above these other constructs. For
example, it would be useful and interesting to
examine CQ in conjunction with some of the more commonly
used intercultural competence constructs such
as the Cross-Cultural Adaptability Inventory, Cultural Shock
Inventory, Culture—General Assimilator, Intercul-
tural Development Inventory, Intercultural Sensitivity
Inventory, Socio-Cultural Adaptation Scale, and Intercul-
tural Adjustment Potential Scale.
Another area for future research is considering CQ at a higher
level of analysis. One option would be to con-
sider how CQ of individual team members influences overall

performance of multicultural teams. It also would
be useful to consider the meaning of grouplevel CQ, as well as
its antecedents and consequences. For ex-
ample, Maddy Janssens and Jeanne Brett proposed that
culturally intelligent teams adopt a “fusion” model
of collaboration that blends and also allows for the coexistence
of unique differences. Such a fusion model
would contrast significantly with the more traditional, dominant
coalition model (which emphasizes one per-
spective) and the integration/identity model (which emphasizes
cooperative collaboration).
In sum, although early reactions to the cultural intelligence
construct have been positive and the initial con-
ceptual and empirical research is promising, researchers still
know relatively little about CQ. Ultimately, the
value of the CQ construct will depend on the results of future
research and whether employees and managers
in organizations in a variety of cultural settings recognize the
personal and organizational benefits of CQ.
• cultural intelligence
• intelligence
• capabilities
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• multicultural work teams

• cognitive skills
• multiculturalism
• verbal behavior
Linn Van Dyne, , Soon Ang & , and Tjai M. Nielsen
http://dx.doi.org/10.4135/9781412956246.n115
See also
• Communication
• Cross-Cultural Management
• Diversity
• Emotional Intelligence
• Globalization
• Interactionism
• Multiculturalism
Further Readings
Ang, S., Van Dyne, L., and Koh, C. S. K.Personality correlates
of the four-factor model of cultural intelligence.
Group and Organization Management31(2006). 100–123.
http://dx.doi.org/10.1177/1059601105275267
Ang, S., Van Dyne, L., Koh, C. S. K., & Ng, K. Y. (2004,
August). The measurement of cultural intelligence.
Paper presented at the Annual Meeting of the Academy of
Management, New Orleans, LA.
Bandura, A. (1977). Social learning theory. Englewood Cliffs,
NJ: Prentice Hall. http://dx.doi.org/10.1111/
j.1460-2466.1978.tb01621.x
Earley, P. C., & Ang, S. (2003). Cultural intelligence:
Individual interactions across cultures. Palo Alto, CA:
Stanford University Press. http://dx.doi.org/10.1016/S1571-
5027%2807%2919004-5
Earley, P. C., and Mosakowski, E.Cultural intelligence. Harvard
Business Review82(2005). 139–153.
Gardner, H. (1993). Multiple intelligences: The theory in

practice. New York: Basic Books.
Janssens, M., and Brett, J. M.Cultural intelligence in global
teams: A fusion model of collaboration. Group and
Organization Management31(2006). 124–153.
http://dx.doi.org/10.1177/1059601105275268
Sternberg, R. J., & Detterman, D. K. (Eds.). (1986). What is
intelligence? Contemporary viewpoints on its na-
ture and definition. Norwood, NJ: Ablex.
Sternberg, R. J., and Grigorenko, E. L.Cultural intelligence and
successful intelligence. Group and Organiza-
tion Management31(2006). 27–39.
http://dx.doi.org/10.1177/1059601105275255
Templer, K. J., Tay, C., and Chandrasekar, N. A.Motivational
cultural intelligence, realistic job preview, realistic
living conditions preview, and cross-cultural adjustment. Group
and Organization Management31(2005).
154–173. http://dx.doi.org/10.1177/1059601105275293
Triandis, H.Cultural intelligence in organizations. Group and
Organization Management31(2006). 20–26.
http://dx.doi.org/10.1177/1059601105275253
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http://origin-sk.sagepub.com/reference/organization/n72.xml

http://dx.doi.org/10.1177/1059601105275267
http://dx.doi.org/10.1111/j.1460-2466.1978.tb01621.x
http://dx.doi.org/10.1111/j.1460-2466.1978.tb01621.x
http://dx.doi.org/10.1016/S1571-5027%2807%2919004-5
http://dx.doi.org/10.1177/1059601105275268
http://dx.doi.org/10.1177/1059601105275255
http://dx.doi.org/10.1177/1059601105275293
http://dx.doi.org/10.1177/1059601105275253International
Encyclopedia of Organization StudiesCultural Intelligence
International Encyclopedia of Organization
Studies
Teams, Cross-Cultural
Contributors: Arménio Rego & Miguel Pina e Cunha
Edited by: Stewart R. Clegg & James R. Bailey
Book Title: International Encyclopedia of Organization Studies
Chapter Title: "Teams, Cross-Cultural"
Pub. Date: 2008
Access Date: February 1, 2019
Publishing Company: SAGE Publications, Inc.
City: Thousand Oaks
Print ISBN: 9781412915151
Online ISBN: 9781412956246
DOI: http://dx.doi.org/10.4135/9781412956246.n528
Print pages: 1531-1533
© 2008 SAGE Publications, Inc. All Rights Reserved.
This PDF has been generated from SAGE Knowledge. Please
note that the pagination of the online
version will vary from the pagination of the print book.

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A cross-cultural team (CCT) is a group of individuals from two
or more national cultures accomplishing an
organizational task, interacting interdependently, and mutually
sharing responsibility for outcomes. Examples
of a CCT can be as different as a management team of a Sino-
American joint venture, a football or basketball
team counting on high-profile superstars from a dozen
countries, and a team of engineers working together
on new product development “round the clock” in three
different time zones. CCT members can interact face-
to-face, virtually, or in both ways. CCTs do not possess inherent
(dis)advantages over monocultural teams,
since the relationship between cultural heterogeneity and
effectiveness depends on such aspects as the na-
ture of the task, the degree of heterogeneity, the leader
behavior, and the cross-cultural competences of its
members.
Conceptual Overview
Several factors account for the use of CCT in organizations.
When a subsidiary does not have enough capa-
bilities to solve a problem, to take advantage of opportunities,
or to respond to threats, it may take advantage
of capabilities residing in other parts of the organization. In
other cases, the need for efficiency precludes
the constitution of local teams when the necessary knowledge
exists elsewhere and may be accessed. The
time it takes to build new capabilities can also discourage a
company from building a new team from scratch.
Sometimes, certain capabilities (e.g., R&D) may be scarce and
inimitable or may be locally bounded. Com-

panies may also want to take advantage of competencies located
at different places (e.g., local market skills,
knowledge of competitors, or best practices) or to gain insight
about ways to achieve the overall integration,
local differentiation, and learning at the global level. The
constitution of a CCT for managing international joint
ventures (IJV) is also frequent.
Considering the above, some companies are trying to develop
networks of people with diverse capabilities
throughout the organization and to mobilize them quickly into
well-functioning teams operating at the global
level. CCTs are thus emerging in several distinct contexts,
including the management of IJV, the development
of products for multi-country markets, the formulation of
integrated strategies for a wide range of countries,
the rationalization of worldwide manufacturing operations, and
the composition of talented top management
teams.
Cross-cultural teams can thrive on cultural diversity, although
people from different cultures tend to differ in
their values, cognitive schema, outward physical behavior (e.g.,
eye contact, punctuality, conversational style,
interruption patterns, and conflict resolution) and language.
Historical animosities between neighboring coun-
tries may lead to a lack of trust between individuals on the same
team, who may also come to the team setting
with different understandings of what teamwork is all about.
The meaning of “leadership” also depends on
national culture and differs for team members on the basis of
their cultural background.
Culture can thus create barriers to communication and
understanding and be a source of interpersonal con-
flict. It can also create different judgments and reactions to the

same leader behavior. These effects may be
especially problematic during the early stages of the team's life
cycle, when cultural differences create time-
consuming discussions and introduce uncertainty into the
relationships between/among members or between
members and their leader.
Well-functioning cross-cultural teams can, however, facilitate
innovative approaches to complex organization-
al challenges and devise new ways of implementing innovative
solutions. They can generate more ideas of
higher quality in brainstorming tasks and outperform
homogeneous teams in identifying problems and gener-
ating solutions, leading to significant productivity gains. These
positive effects result from the fact that diver-
sity increases the breadth of perspective and the problem-
solving capacity of the team.
The above discussion indicates that cross-cultural teams, like
any other teams, can be either effective or in-
effective. As Joseph Distefano and Martha Maznevski have
argued, they can be “destroyers” or “creators.”
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Within “creator” teams, cultural differences are explicitly
recognized and accepted and are incorporated into
every group process. They create culturally synergistic

solutions, promote creativity and cohesiveness among
team members, and nourish the acceptance of new ideas. These
positive effects tend to result from the ap-
plication of three principles: (1) teams map the “territory” to
understand the differences among individuals and
the impacts of these differences; (2) they create bridges by
communicating in ways that explicitly take differ-
ences into account; and (3) they integrate members by
monitoring participating patterns, resolving disputes,
and creating new perspectives that are appreciative of
differences.
The role of the leader is particularly relevant at the outset of the
CCT, since this is the time when team break-
downs due to diversity are more likely. Some leader
characteristics can be potent instigators of a well-func-
tioning team. These include the ability to understand the
technical challenges faced by the team; the ability to
influence, negotiate and motivate; openmindedness for learning;
humility; cross-cultural communication com-
petences; multicultural experience; cultural sensitivity to
anticipate the strains that can emerge from multicul-
tural interaction; emotional stability; cultural empathy; and
cultural intelligence.
Another cause of CCT effectiveness is the nature of the task.
Three types of tasks have been considered to
be creative, computational, and coordinative. Donald Hambrick,
Sue Davison, Scott Snell, and Charles Snow
have suggested that multinational group effectiveness depends
on the interaction between the nature of the
task and the heterogeneity level in different diversity variables.
For example, high-value diversity contributes
to improved effectiveness when the task is creative, but not
when it is computational or coordinative, and a
low degree of familiarity with the team's working language

decreases group effectiveness, the effect being
more pronounced when the task is one of coordination. In
general, diversity creates the greatest difficulties
for groups charged with coordination tasks, and it is more
promising in creative work.
Another relevant topic for the analysis of crosscultural teams,
as proposed by Christopher Earley and Elaine
Mosakowski, is the amount of heterogeneity. A team composed
of Swedes and Finns, for example, is not as
diverse as a group of Swedes and Chinese. Highly homogeneous
teams are those whose members perceive
themselves as sharing key salient characteristics. This
homogeneity leads team members to share expec-
tations about how each member should act. In a moderately
heterogeneous team, members perceive differ-
ences among themselves based on a few salient features that
make the distinction between subgroups pos-
sible. They can identify more with “their” subteam than with the
team as a whole. Subgroups, factions, and
several subcultures may therefore be expected, as evidenced by
Donald Hambrick, Jiatao Li, Katherine Xin,
and Anne Tsui in their study of an IJV management team, in
which two coalitions (Chinese and North Amer-
icans) felt significant levels of conflict and mistrust, reduced
their interactions, and began to make decisions
in a rigid and mechanical way. A highly heterogeneous team is
one whose members differ on salient traits. It
cannot easily rely on a preexisting identity or on subgroup
identities, because few commonalities exist. When
facing external demands, the team forms a “hybrid culture” of
simplified rules, norms, expectations, and roles
that members share and “enact” after mutual interaction. This
may require significant time and effort to build
up the team, but it may also offer a sense of identity, generate
positive affect, facilitate communication, pro-

mote trust, and improve performance.
Earley and Mosakowski found an empirically upright U-shaped
relationship between cultural heterogeneity
and team effectiveness: If sufficient opportunity to work
together exists, homogeneous and highly heteroge-
neous teams will be more effective than moderately
heterogeneous ones. One implication is clear: companies
should carefully avoid the constitution of teams where cultural
factions are likely to emerge. For example, Li,
Xin, Tsui, and Hambrick have suggested that in order to avoid
the emergence of managerial factions, man-
agement teams should be characterized by high levels of
heterogeneity. Another implication is that, in the
short run, teams may not develop a strong hybrid culture and
may fail to deliver the desired performance. It
is also in recently formed teams that leaders should be more
vigilant of possible team breakdowns caused by
diversity.
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Critical Commentary and Future Directions
Research on the relationship between cultural heterogeneity and
team performance tends to be mixed and
complex. Every team is different and needs to operate distinctly
to unleash the potential of multicultural mem-
bership. Several variables (e.g., leadership style, nature of the

task, heterogeneity, cross-cultural competen-
cies of members, team stage) moderate the relationship. Future
studies may explore these and other moder-
ators and the ways they interact. Research questions may
include the following: (a) How does the nature of
the task interact with team heterogeneity and leader behavior?
(b) How do these interactions influence team
functioning and performance? (c) Do CCTs with members from
different organizations differ from those made
by members of the same company? (d) What factors moderate
the relationship between leadership and CCT
performance? (e) What happens when the leader corresponds to
the leadership prototype of some members,
but not of others? (f) What leadership competencies and styles
are necessary to lead different kinds of CCTs
(e.g., R&D teams, top management teams)?
Another important research stream refers to virtuality. New
pressures facing organizations have led many of
them to use virtual CCTs. Some authors, such as Norhayati
Zakaria, Andrea Amelinckx, and David Wilemon,
suggest that these teams may become ongoing structures rather
than short-term, projectspecific entities, or
may even become the prevalent form of work for many
multinationals. If this exercise of foresight is correct,
they will become an integral and common element of the global
organizational landscape. However, as as-
serted by Mitzi Montoya-Weiss, Anne Massey, and Michael
Song, researchers have just begun to explore vir-
tual CCTs, with extant theory on how teams operate being
largely based on research carried out on nonvirtual
teams. Virtual CCTs confront researchers and practitioners with
a number of new challenges resulting from
the confluence of technology-mediated communication,
geographical dispersion, and the absence of face-to-
face interaction. All these factors heighten the potential for the

lack of understanding and the diminution of
trust.
Therefore, research on virtual CCTs is necessary in a number of
areas, including the virtual/nonvirtual com-
parison: How does virtuality impact cross-cultural and
monocultural teams? Are there different determinants
of their performance? Do virtual cross-cultural teams require
different leadership styles? A second area con-
cerns trust: What are the effects of cultural heterogeneity on
trust in the case of virtual teams? What methods
can be used to accelerate the development of trust? What is the
relationship between trust and team perfor-
mance? Another research avenue concerns the exercise of power
and influence: How do leaders (and team
members) exercise power and influence in virtual CCTs? How
do members from different cultures respond to
the exercise of interpersonal power and influence? A fourth area
is that of conflict management: What sources
of substantive and relational conflict emerge in virtual CCTs?
How are conflicts and disagreements handled?
What are the most effective conflict management styles? A final
area refers to team performance: How should
the performance of virtual CCTs be assessed? What variables
moderate the relationship between determi-
nants and effectiveness?
In summary, the cross-cultural team is a microcosm of diversity,
and a fundamental entity for understanding
both the promises and the difficulties of working with people
from other cultures. If working in diverse settings
may be easier said than done, the new virtual organizational
arrangements may be adding a new layer of
complexity to the challenges of teaming up with the faceless
other.

• cross-cultural teams
• teams
• team performance
• virtual
• team management
• top management team
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• virtual teams
Arménio Rego & and Miguel Pina e Cunha
http://dx.doi.org/10.4135/9781412956246.n528
See also
• Team Diversity
• Team Learning
• Team Process
• Teams, Virtual
Further Readings
Chang, S., and Tharenou, P.Competencies needed for managing
a multicultural workgroup. Asia Pacific Jour-
nal of Human Resources42(1)(2004). 57–74.
http://dx.doi.org/10.1177/1038411104041534
Distefano, J. J., and Maznevski, M. L.Creating value with
diverse teams in global management. Organization-

al Dynamics29(1)(2000). 45–63.
http://dx.doi.org/10.1016/S0090-2616%2800%2900012-7
Earley, C., and Mosakowski, E.Creating hybrid team cultures:
An empirical test of transnational team func-
tioning. Academy of Management Journal43(1)(2000). 26–49.
http://dx.doi.org/10.2307/1556384
Hambrick, D. C., Davison, S. C., Snell, S. A., and Snow, C.
C.When groups consist of multiple nationalities:
Towards a new understanding of the implications. Organizations
Studies19(2)(1998). 181–205.
http://dx.doi.org/10.1177/017084069801900202
Hambrick, D. C., Li, J., Xin, K., and Tsui, A. S.Compositional
gaps and downward spirals in international joint
venture management groups. Strategic Management
Journal22(2001). 1033–1053. http://dx.doi.org/10.1002/
smj.195
Li, J., Xin, K. R., Tusi, A., and Hambrick, D. C.Building
effective international joint venture leadership
teams in China. Journal of World Business34(1)(1999). 52–68.
http://dx.doi.org/10.1016/
S1090-9516%2899%2900007-3
Montoya-Weiss, M. M., Massey, A. P., and Song, M.Getting it
together: Temporal coordination and conflict
management in global virtual teams. Academy of Management
Journal44(6)(2001). 1251–1262.
http://dx.doi.org/10.2307/3069399
Ng, E. S. W., and Tung, R. L.Ethnocultural diversity and
organizational effectiveness: A field study. In-
ternational Journal of Human Resource Management9(1998).
980–995. http://dx.doi.org/10.1080/
095851998340702
Schweiger, D. M., Atamer, T., and Calori, R.Transnational
project teams and networks: Making the multina-
tional organization more effective. Journal of World
Business38(2)(2003). 127–140. http://dx.doi.org/10.1016/
S1090-9516%2803%2900006-3

Zakaria, N., Amelinckx, A., and Wilemon, D.Working together
apart? Building a knowledge-sharing culture
for global virtual teams. Creativity and Innovation
Management13(1)(2004). 15–29. http://dx.doi.org/10.1111/
j.1467-8691.2004.00290.x
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http://dx.doi.org/10.1016/S0090-2616%2800%2900012-7
http://dx.doi.org/10.2307/1556384
http://dx.doi.org/10.1177/017084069801900202
http://dx.doi.org/10.1002/smj.195
http://dx.doi.org/10.1002/smj.195
http://dx.doi.org/10.1016/S1090-9516%2899%2900007-3
http://dx.doi.org/10.1016/S1090-9516%2899%2900007-3
http://dx.doi.org/10.2307/3069399
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http://dx.doi.org/10.1080/095851998340702
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http://dx.doi.org/10.1111/j.1467-8691.2004.00290.x
http://dx.doi.org/10.1111/j.1467-
8691.2004.00290.xInternational Encyclopedia of Organization
StudiesTeams, Cross-Cultural

Learning TopicCountry Cultural Differences
In workplaces, as in communities and nations, people spending
time together are likely to share certain values, attitudes, and
beliefs. Because of this established culture, people at work may
have developed certain preferences or orientations in the
following situations:
· interacting and communicating with others
· working in teams
· making decisions
· responding to and evaluating risks and opportunities
· managing or attempting to resolve disagreements and conflicts
· interacting with those at different levels in the organization
· engaging in numerous other workplace activities
Those who have studied and compared societal cultures and
their possible implications for the workplace have identified
some differences that can be important for success.
Perhaps the leading expert on cultural differences and their
potential implications for business is Geert Hofstede, a Dutch
scholar who worked for IBM in the late 1960s. Hofstede's early
research (1980) examined, compared, and categorized the
culturally derived preferences of IBM employees in many
countries. He, and other scholars who have followed in his path,
created a classification scheme that differentiates country
cultures across what were originally four dimensions, though
they have since been expanded to include six.
In what is probably his best-known book, Cultures and
Organizations: Software of the Mind (published first in 1991
and revised and republished in 2010 with his son Gert Jan and
Michael Minkov), Hofstede presents a careful explanation of his
work and its implications. Hofstede reminds his readers that
"culture is learned, not innate" (p.6), and introduces the analogy
of culture as "software of the mind."
Hofstede uses the layers of an onion to help convey the way
culture manifests itself. Values are deep at the core or center of
the onion and are very slow to change compared with the other
manifestations of culture. Examples of common core values in

US businesses include integrity, accountability, fairness, and
excellence. Other layers of culture include our rituals (e.g.,
greeting with a firm handshake and direct eye contact), the
heroes we honor (examples include Warren Buffett and Steve
Jobs), and on the outside of the onion, the symbols that have
special meaning for societal members.
Examples of U.S. Business Cultural Manifestations
Created by Christina Hannah
Using an analogy of culture as mental programming, Hofstede
explains that we are each conditioned (or programmed) by
multiple societal levels: national, regional, ethnic, religious,
linguistic, gender-oriented, generational, socioeconomic, and
professional. Values associated with these levels may or may
not be in harmony. One consequence of these multiple sources
of programming is that it can be difficult to predict what will
influence a person's response or behavior in particular
situations.
Our present interest is not in delving deeply into the causes and
consequences of individual differences in values, attitudes, and
beliefs, but rather to learn about those shared at a societal level.
Hofstede explains that his extensive research, and that of others
who have studied culture, make it possible to differentiate
between and among national cultures using a set of dimensions.
He originally proposed the first four dimensions in the list
below, then added a fifth—long-term orientation (Moskowitz,
2009)—and later added indulgence as a result of further
research by and insights from collaborators.
Here is a simple explanation of Hofstede's current six
dimensions:
· Power distance (PDI)—In countries with a high power
distance dimension score, we can expect those in lower level
positions to respect or defer to those who outrank them. In other
words, power is thought to come with position. In such cultures,
employees may expect managers and leaders to make decisions

and might be surprised or uncomfortable when asked for input.
In countries with a low power distance score, we are likely to
find that employees treat those they report to more as
colleagues and hold the view that respect must be earned. There
may, of course, be exceptions to this model (for example in
military and paramilitary organizations). Not surprisingly, the
United States's score on this dimension is relatively low at 40.
The score for France is is 69. In comparison, the scores for
Malaysia, Slovakia, Guatemala, Panama, the Philippines, and
Russia are all above 93 (Hofstede, Hofstede, & Minkov, 2010,
pp. 57-58). This means that, in general, we can expect
employees in the United States to expect a more egalitarian
workplace than may be true in other societies.
· Individualism or collectivism (IDV)—In countries with high
scores for individualism (like the United States), you are likely
to find a shared belief in developing strong individuals who are
comfortable working and making decisions on their own. In
such workplaces, you will probably find an emphasis on the
importance of developing, recognizing, and rewarding
individual contributions. In countries that score low on the
individualism dimension, you are likely to find an emphasis on
the community, team, group, or department (i.e., the collective).
People may be embarrassed if they are singled out publicly for
praise or recognition, because they strongly believe their
success depends upon the support and work of others. For this
dimension, the US score is the highest, at 91. The score for
France is 71. The country with the lowest score is Guatemala,
with a score of 6 (Hofstede, Hofstede, & Minkov, 2010, pp. 95-
97).
· Masculinity and femininity (MAS)—The label used for this
dimension may not be the best. The basic idea is that some
country cultures place a relatively high value on
competitiveness, assertiveness, achievement, etc. Such countries
are given a high score for masculinity because these preferences
and traits were historically associated with men more than
women. Other country cultures place greater value on caring for

others, cooperation, quality of life, etc. Such countries are
given a high score for femininity on this dimension. Despite the
problems with these unfortunate gender-based labels, when you
step back and compare countries you will probably recognize
that there are some where businesses seem to value competition
over cooperation, achievement and success over quality of life,
and so on. Japan has a masculinity (MAS) score of 95. The US
score is moderate at 62. The score for France is 43. Sweden has
the lowest score for this dimension, with a 5 (Hofstede,
Hofstede, & Minkov, 20110, pp. 141-143).
· Uncertainty avoidance (UAI)—This dimension recognizes that
there are differences among countries, which results in
differences among the leaders of businesses that operate therein
and the extent to which they are willing to take risks. In
countries that are low in the uncertainty avoidance dimension,
business leaders might be very comfortable exploring new
opportunities and see this as the likely path to success. In other
countries, this may not be the case. Sometimes those in country
cultures that are highly risk averse (with high uncertainty
avoidance scores) have a very good reason for their responses.
There may be, for example, significant legal penalties for
failure, including the possibility of being sent to jail in the
event of bankruptcy or reneging on debts. The country with the
highest score for uncertainty avoidance (UAI) is Greece at 112.
France is relatively high, with a score of 86, and the US score is
46, indicating a tolerance for uncertainty and acceptance of
risk-taking to achieve success (Hofstede, Hofstede, & Minkov,
2010, pp. 192-194).
· Long-term versus short-term orientation (LTO)—In countries
with a high long-term orientation score, shared work values
emphasize learning, accountability, and self-discipline. Patience
and waiting to make a profit are acceptable. Creating and
nurturing lifelong networks is valued. In contrast, those
favoring a shorter-term orientation tend to focus on "the bottom
line" and value achievement, freedom, and independent
thinking. Quarterly and annual profitability are important.

Korea, Japan, and China have high long-term orientation scores
(100, 88, and 87, respectively). France has a moderate score of
63. In contrast, the US LTO score is low, at 26 (Hofstede,
Hofstede, & Minkov, 2010, pp. 255-257).
· Indulgence versus restraint (IVR)—In countries with high
scores on indulgence, you are likely to find people who value
having fun and enjoying life. In the United States, for example,
it is common to find that employees emphasize the importance
of a good work-life balance and quality of life. The IVR score
for the United States is relatively high (68) and for France is
moderate (48). Pakistan has the lowest score (0) among the
countries studied. Territories with the highest indulgence scores
are Venezuela (100), Mexico (97), and Puerto Rico (90)
(Hofstede, Hofstede, & Minkov, 2010, pp. 282 - 285).
A very important caveat when reading and thinking about
Hofstede's work is to remember that the comparisons are at the
societal level, rather than the individual level. In other words,
in any country you will find individuals who are different from
what you see suggested as the norm for the country culture. In
fact, for any given dimension you may find yourself thinking
"but this isn't what I'm like" or "this doesn't explain what
happens in my organization." Those who have studied and
compared country cultures ask you to suspend these responses
temporarily and to try instead to look at a country as a whole,
and then consider how it compares on these dimensions with
other countries. When you adjust your imaginary lens to
consider cultural differences from a broader perspective, you
are able to discover things that may be helpful when explaining
what happens when companies do business abroad, when people
work together on country teams, and when they work together in
multicultural, multinational organizations.
One challenge is that we are often less knowledgeable about our
own shared country culture than we are about the cultures of
others (Hofstede, 1980). This is because our culturally derived
values and preferences are so deeply embedded that we may not
be aware of how they influence our decisions and behaviors.

Those who have worked or studied in a country other than their
own are likely to have developed higher levels of cultural
intelligence than those who have not had this experience.
The United States has traditionally tended to place strong
emphasis on equality, individualism, risk-taking, assertiveness,
achievement, and the opportunity to enjoy life (pursuit of
happiness).
This brief introduction to the comparative work on country
cultures and their potential consequences for individuals and
their organizations, along with the Resources below, should
help you understand the possible sources of confusion or
conflict that could, if not anticipated and well-managed, result
when multinational and multicultural team members work
together. These issues may include training, coaching,
mentoring, and effective leadership. Remember to consider as
well the possible advantages associated with building and using
teams with members who bring different country cultural
perspectives to their work (Chakrabarti, Gupta-Mukherjee, &
Jayaraman, 2009).Resources
Hofstede shares some of his insights in An Interview with Geert
Hofstede, while Hofstede's Five Dimensions of Culture covers
similar points addressed above. You might also want to read
Does Culture Matter? Refresher on Hofstede, Trompenaars, and
Gesteland.
Although Hofstede is probably the most frequently cited
theorist, there are substantial criticisms of his work such
as Mirror, mirror on the wall: Culture's consequences in a value
test of its own design. Hofstede responds to criticism in Who is
the fairest of them all? Galit Ailon's mirror?
There are also alternative models to Hofstede's; the GLOBE
project is one such alternative, explained in GLOBE: A twenty
year journey into the intriguing world of culture and leadership.
Cultural Intelligence explains a model for understanding how
well individuals might perform in cross-cultural settings.
Examples of effective methods of success for cross-cultural
teams are covered in Teams, Cross-Cultural.Check Your

Knowledge
Question 1
Using Hofstede’s onion metaphor, what are the ways in which
country culture manifests itself?
At the core of the onion are values. In US business, typical
values are integrity, accountability, fairness, and excellence.
The other layers of the onion are rituals (e.g., again in the
United States—a firm handshake, direct eye contact); the heroes
who are honored (e.g., Steve Jobs, Warren Buffett); and
symbols (e.g., big corner office).
At the core of the onion are values. In US business, typical
values are integrity, accountability, fairness, and excellence.
The other layers of the onion are rituals (e.g., again in the
United States—a firm handshake, direct eye contact); the heroes
who are honored (e.g., Steve Jobs, Warren Buffett); and
symbols (e.g., big corner office).
Question 2
What are the six dimensions of national culture identified by
Hofstede? Describe each one briefly.
Power Distance (PDI)—Is a measure of the extent to which
those in lower levels are expected to defer to people who
outrank them. Individualism/Collectivism (IDV)—This is a
measure of how comfortable the culture is with strong
individual performance and contributions, versus a preference
for achieving goals collectively, or as part of a group.
Masculinity/Femininity (MAS)—This is a measure of how
highly a culture values traits such as competitiveness,
assertiveness, and achievement (historically thought of as
masculine traits).
Other cultures may place higher value on traits such as caring
for others, cooperation, and quality of life (historically thought
of as feminine traits). Uncertainty Avoidance (UAI)—This
dimension measures the extent to which a culture is comfortable
with risk-taking and the willingness to explore new
opportunities. Long-Term vs. Short-Term Orientation (LTO)—A
culture that has a long-term orientation is likely to be patient

and comfortable with waiting for a deferred profit. The
emphasis would be on work values such as learning,
accountability, and self-discipline. In a culture with a short-
term orientation, you are likely to see a focus on the "bottom
line," and work characteristics such as achievement, freedom,
and independent thinking. Indulgence vs. Restraint (IVR)—This
dimension measures the emphasis within a culture on having fun
and enjoying life.
Power Distance (PDI)—Is a measure of the extent to which
those in lower levels are expected to defer to people who
outrank them. Individualism/Collectivism (IDV)—This is a
measure of how comfortable the culture is with strong
individual performance and contributions, versus a preference
for achieving goals collectively, or as part of a group.
Masculinity/Femininity (MAS)—This is a measure of how
highly a culture values traits such as competitiveness,
assertiveness, and achievement (historically thought of as
masculine traits).
Other cultures may place higher value on traits such as caring
for others, cooperation, and quality of life (historically thought
of as feminine traits). Uncertainty Avoidance (UAI)—This
dimension measures the extent to which a culture is comfortable
with risk-taking and the willingness to explore new
opportunities. Long-Term vs. Short-Term Orientation (LTO)—A
culture that has a long-term orientation is likely to be patient
and comfortable with waiting for a deferred profit. The
emphasis would be on work values such as learning,
accountability, and self-discipline. In a culture with a short-
term orientation, you are likely to see a focus on the "bottom
line," and work characteristics such as achievement, freedom,
and independent thinking. Indulgence vs. Restraint (IVR)—This
dimension measures the emphasis within a culture on having fun
and enjoying life.
Question 3
Why is the study of Hofstede’s dimensions of national culture

important?
Leadership: Depending upon the part of the world (and
specifically, the country) in which an organization is operating,
"good" leadership may be seen as something very different than
good leadership in the United States. Source: Hofstede, 1980.
Customer service: Many organizations try to optimize by
consolidating customer service in another part of the world.
This may or may not be successful, depending upon how well
the organization understands the cultures of the countries being
served as well as the culture of the country from which the
service is being provided. Marketing: When marketing to
consumers in a country other than your own, it is essential to
understand the "other" culture so that marketing materials are
appropriate. Virtual teams: When an organization establishes
virtual teams that operate in more than one country, the
organization—and especially, the team members—will need a
good understanding of the national culture(s) of other team
members.
Leadership: Depending upon the part of the world (and
specifically, the country) in which an organization is operating,
"good" leadership may be seen as something very different than
good leadership in the United States. Source: Hofstede, 1980.
Customer service: Many organizations try to optimize by
consolidating customer service in another part of the world.
This may or may not be successful, depending upon how well
the organization understands the cultures of the countries being
served as well as the culture of the country from which the
service is being provided. Marketing: When marketing to
consumers in a country other than your own, it is essential to
understand the "other" culture so that marketing materials are
appropriate. Virtual teams: When an organization establishes
virtual teams that operate in more than one country, the
organization—and especially, the team members—will need a
good understanding of the national culture(s) of other team
members.
Question 4

What is meant by the term Cultural Intelligence (CQ)?
Cultural Intelligence is an individual’s ability to function
effectively in situations characterized by cultural diversity.
Source: Dyne, Ang & Nielsen, 2008, para. 1.
Cultural Intelligence is an individual’s ability to function
effectively in situations characterized by cultural diversity.
Source: Dyne, Ang & Nielsen, 2008, para. 1.
Question 5
What are the four key capabilities held by people who have high
CQ?
They are able to anticipate what will happen in cross-cultural
situations (metacognitive CQ). They have a wide understanding
of multicultural situations (cognitive CQ). They are confident of
their capabilities and are intrinsically interested in experiencing
culturally diverse settings (motivational CQ). They are able to
vary their verbal and nonverbal behaviors in response to
cultural characteristics of the situation (behavioral CQ). Source:
Dyne, Ang & Nielsen, 2008, paras. 10-13)
They are able to anticipate what will happen in cross-cultural
situations (metacognitive CQ). They have a wide understanding
of multicultural situations (cognitive CQ). They are confident of
their capabilities and are intrinsically interested in experiencing
culturally diverse settings (motivational CQ). They are able to
vary their verbal and nonverbal behaviors in response to
cultural characteristics of the situation (behavioral CQ). Source:
Dyne, Ang & Nielsen, 2008, paras. 10-13)
Question 6
Why is CQ important?
Individuals who have high CQ capabilities are more effective at
making decisions about intercultural situations. They are also
more likely to feel well-adjusted in situations characterized by
cultural diversity. Those who have the capability to make sense
of intercultural experiences perform at higher levels in
multicultural work settings. And people who have the capability
to adapt their verbal and nonverbal behavior to fit specific
cultural settings have a flexible repertoire of behavioral

responses that enhances their task performance in culturally
diverse settings. Those who are interested in experiencing other
cultures and feel confident that they can interact with people
who have different cultural backgrounds are better adjusted in
culturally diverse situations. Source: Dyne, Ang & Nielsen,
2008, paras. 15-16.
Individuals who have high CQ capabilities are more effective at
making decisions about intercultural situations. They are also
more likely to feel well-adjusted in situations characterized by
cultural diversity. Those who have the capability to make sense
of intercultural experiences perform at higher levels in
multicultural work settings. And people who have the capability
to adapt their verbal and nonverbal behavior to fit specific
cultural settings have a flexible repertoire of behavioral
responses that enhances their task performance in culturally
diverse settings. Those who are interested in experiencing other
cultures and feel confident that they can interact with people
who have different cultural backgrounds are better adjusted in
culturally diverse situations. Source: Dyne, Ang & Nielsen,
2008, paras. 15-16.
References
Chakrabarti, R., Gupta-Mukherjee, S., & Jayaraman, N. (2009).
Mars-Venus marriages: Culture and cross-border M&A. Journal
Of International Business Studies, 40(2), 216-236
http://ezproxy.umuc.edu/login?url=http://search.ebscohost.com/
login.aspx?direct=true&db=bth&AN=36587323&site=eds-
live&scope=site
Hofstede, G., Hofstede, G.J., & Minkov, M. (2010). Cultures
and Organizations: Software of the Mind (3rd. ed.). New York:
McGraw Hill.
Hofstede, G. (1980). Motivation, leadership, and organization:
Do American theories apply abroad?. Organizational
Dynamics,9(1), 42-63. Retrieved from
http://ezproxy.umuc.edu/login?url=http://search.ebscohost.com/
login.aspx?direct=true&db=pbh&AN=5143098&site=ehost-
live&scope=site

Learning ResourceCorruption in International Business
Corruption: Cash for Favors
A common practice worldwide is for government favors to be
sought in exchange for surreptitious payments in cash.
Corruption is not merely a problem in developing countries. In
recent years, American, German and Italian companies have
been implicated in corruption scandals, both domestic and
international.
Source: Stockmonkeys.com
The Problem of Corruption
When a large corporation decides to enter a foreign market, it
must usually secure a number of licenses, permits, registrations,
or other government approvals. Certain types of business may
be even be illegal unless the corporation is first able to obtain a
change or adjustment to the nation’s laws or regulations. Since
the power to authorize the foreign corporation’s activities is
vested in the hands of local politicians and officials, and since
corporations have access to large financial resources, it should
not be surprising that some corporate executives resort to
financial incentives to influence foreign officials. While certain
financial incentives, such as promises to invest in local
infrastructure, may be legitimate, any form of direct payment to
the foreign official that is intended to influence that official’s
public decisions will cross the line into illegal subornation, also
commonly referred to as bribery.
Bribery is one of the archetypal examples of a corporation
engaged in unethical behavior. A number of problems can be
attributed to business bribery. First, it is obviously illegal—all
countries have laws that prohibit the bribery of government
officials—so the foreign company engaging in bribery exposes
its directors, executives, and employees to grave legal risks.
Second, the rules and regulations that are circumvented by
bribery often have a legitimate public purpose, so the

corporation may be subverting local social interests or harming
local competitors. Third, the giving of bribes may foment a
culture of corruption in the foreign country, which can prove
difficult to eradicate. Fourth, in light of laws such as the US
Foreign Corrupt Practices Act (FCPA) and the Organization of
Economic Cooperation and Development (OECD) Convention
on Anti-Bribery (discussed in greater detail below), bribery is
illegal not only in the target country, but also in the
corporation’s home country. Fifth, a corporation that is formally
accused or convicted of illicit behavior may suffer a serious
public relations backlash.
Despite these considerable disincentives, experts report that
worldwide business corruption shows little signs of abating.
Transparency International (TI), a leading anticorruption
organization based in Berlin, estimates that one in four people
worldwide paid a bribe in 2009. It appears that the total number
of bribes continues to increase annually. The World Economic
Forum calculated the cost of corruption in 2011 at more than
five percent of global GDP (US$ 2.6 trillion) with over $1
trillion paid in bribes each year (ICC, 2011).
Governments and intergovernmental organizations have
redoubled their efforts to combat the perceived increase in
international business corruption. Globalization, which
accelerated in the final decades of the twentieth century, is
often cited by specialists as contributing to the spread of
corruption. Corporations and businesses in every nation have
become increasingly dependent on global networks of suppliers,
partners, customers, and governments. The increased interaction
between parties in different countries has multiplied the
opportunities for parties to seek advantage from illicit
incentives and payoffs. Although outright bribery is clearly
unethical and illegal, there is great deal of behavior that falls
into a gray zone that can be difficult to analyze according to a
single global standard. When does a business gift become a
bribe? What level of business entertainment is right or wrong?
Over the past two decades, governments and regulators have

sought to clearly define the types of behavior that are
considered unethical and illegal.
Another factor that has heightened the sense of urgency among
regulators is the magnitude of recent cases of corruption
(several of which are described in greater detail below). The
cost to shareholders as well as stakeholders and society has
proven enormous. Governments and international organizations
have ramped up their enforcement of anticorruption laws and
sought increasingly severe penalties, sometimes imposing fines
amounting to hundreds of millions of dollars. Largely as a result
of these efforts, most multinational corporations have developed
internal policies to ensure compliance with anticorruption
legislation. However, as we will see in the case study featured
in this chapter, such compliance also raises complex ethical
dilemmas for corporations. It remains difficult to regulate
ethical behavior when social and cultural norms vary
significantly from country to country. Acts that are considered
unethical in one country may represent a traditional way of
doing business in another. One legal scholar explains the
difference as follows: “A common misconception, held in both
Western and developing countries, and even among many
researchers on corruption, is to confuse what is corrupt with
what is legal. Laws are defined by values, as are ethical norms,
but the two are not equivalent” (Eiher, 2009).
This resource will explore the impact, reasonableness, and the
effectiveness of anticorruption laws and corporate compliance
rules. Finally, we will discuss a case in which the line between
corruption and traditional business practices remains difficult to
ascertain.
The Scope of the Problem
Recent cases of corruption in international business have
attracted considerable media attention. Paying a traffic officer
to ignore a minor traffic violation is unremarkable; paying a
senior government official a secret bribe of millions of dollars
to get a large contract signed is a different matter.

While virtually all multinational companies have adopted
anticorruption policies, it is not clear how often these policies
are fully implemented and internalized as part of the corporate
culture. The emphasis on anticorruption policies is relatively
recent and, even in the most responsible organizations, such
policies are still works in progress. However, there is some
evidence that the implementation is not always as effective as
might be hoped.
For example, a study by Control Risks (2013) and the
Economist magazine’s Intelligence Unit showed that while most
companies acknowledge the need to combat bribery and
corruption, many are complacent and unprepared to deal with
scandals inside their own organizations. The review of global
attitudes on corruption surveyed more than 300 senior lawyers
and compliance heads in April 2013. It painted a disturbing
picture. The authors concluded that “too many companies still
fall short of best practices in their anticorruption compliance
programs.” Despite ranking anticorruption high on most
corporate agendas, the report noted a “danger of complacency”
among companies, and as a result, “the risk of a company
finding itself in the middle of a corruption-based investigation
remains real” (Tedesco, 2013).
Transparency International’s Corruption Perceptions Index
(CPI) ranks countries and territories according to their
perceived levels of public sector corruption. It is an aggregate
indicator that combines different sources of information about
corruption, making it possible to compare countries. Perceptions
are used because corruption is generally a hidden activity that is
difficult to measure. The CPI confirms that corruption remains a
problem worldwide and takes place even in the wealthiest
countries (Transparency International, 2013). Research in 2012
by the Austrian economist Friedrich Schneider placed the
annual loss to the German economy alone at €250 billion
(“Corruption Will Cost Germany,” 2012).
The Dow Jones State of Anti-Corruption Survey in 2011, which
surveyed more than 300 companies worldwide, found that more

than 55 percent of companies have found cause to reconsider
working with certain global business partners due to concerns
about possible violation of anticorruption regulations.
Additionally, the biannual survey indicated than more than 40
percent of companies believe they have lost business to
competitors who won contracts unethically, an increase from
only 10 percent in the 2009 study. “Strict liability provisions in
legislation like the UK Bribery Act make businesses responsible
for the activities of their agents and partners overseas, and this
is having a direct impact on the occurrence of new business
partnerships between firms,” said Rupert de Ruig, managing
director of Risk and Compliance, Dow Jones (Dow Jones Risk
and Compliance, 2011).
Global social costs from corruption include the reluctance of
investors to commit to projects in developing economies,
inhibited growth of businesses due to syphoning off of revenues
for bribes, and diversion of funds from food, medical, and
educational aid programs. In addition, it seems likely that
corruption hampers the development of executive talent in
developing nations, given that frustrated local executives may
seek to emigrate to countries where corruption is less prevalent.
Consider for example, the long term impact of the necessity of
paying a bribe to get running water in a household in rural India
(Campion, 2011). This type of corruption can effectively
exclude the poor from access to vital public services. Economist
Daniel Kaufmann (1997) of the Harvard Institute of
International Development cites public sector corruption as the
most severe obstacle to development in developing and post-
communist countries.
Notable Examples of Corruption
The number and magnitude of recent corruption cases
prosecuted by government authorities is disconcerting.
Moreover, these widely-publicized cases may represent only the
tip of the iceberg: regulatory bodies focus principally on the
bribery of public officials so that other forms of business

corruption are under-reported. As of 2013, the ten largest cases
successfully tried pursuant to the FCPA are listed below (in
order of magnitude of fines) (Cassin, 2013):
1. Siemens (Germany)—$800 million in 2008
2. KBR/Halliburton (USA)—$579 million in 2009
3. BAE (UK)—$400 million in 2010
4. Total SA (France)—$398 million in 2013
5. Snamprogetti Netherlands BV/ENI SpA (Holland/Italy)—
$365 million in 2010
6. Technip SA (France)—$338 million in 2010
7. JGC Corporation (Japan)—$218.8 million in 2011
8. Daimler AG (Germany)—$185 million in 2010
9. Alcatel-Lucent (France)—$137 million in 2010
10. Magyar Telekom/Deutsche Telekom (Hungary/Germany)—
$95 million in 2011
There are other recent examples of large-scale corruption in
international business, described in greater depth in the sections
below.Walmart in Mexico
According to a report issued by the Mexican Employers
Association in 2011, companies operating in Mexico spend
more than 10 percent of their revenue on corrupt acts. One of
the most well-known cases was the Walmart scandal that was
brought to light in September 2005 and resulted in the
company’s stock value dropping by as much as $4.5 billion.
Evidence unearthed by internal and external investigations
revealed a widespread use of bribes, alleged to total over $24
million. The bribes were paid to facilitate the construction of
Walmart stores throughout Mexico. The country is a huge
market for Walmart—one in every five Walmart stores is in
Mexico. As of October 2014, the investigation continued,
having implicated Walmart management at the most senior
levels of complicity or awareness.GlaxoSmithKline in China
In September 2013, China’s Xinhua news agency reported that a
police investigation into bribes paid by drug manufacturer
GlaxoSmithKline (GSK) indicated that the bribes were
organized and paid by GSK China and not by individuals

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