This document discusses culture and cultural diversity. It defines culture and identifies some key dimensions of cultural variation, including individualism vs collectivism, power distance, uncertainty avoidance, and masculinity vs femininity. It also discusses frameworks for analyzing culture like Hofstede's cultural dimensions and Trompenaars' cultural orientations. Specific cultural differences between countries like the US, Japan and Germany are examined across these dimensions. The impact of culture on areas like decision making, risk tolerance, and rewards is covered.

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Chapter 4
The Meanings and
Dimensions of Culture

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Culture
 Article: Emphasis on face to face interaction in Japan
 International managers need to keep in mind that practices
around the world differ greatly
 Culture: acquired knowledge that people use to interpret
experience and generate social behavior; forms values, creates
attitudes, and influences behaviors
 Can be learned, shared, transgenerational, symbolic, patterned, and
adaptive

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Cultural Diversity
 Centralized v. Decentralized Decision Making
 who makes the decisions?
 Safety v. Risk
 should people make risky decisions?
 Individual v. Group Rewards
 how does the culture reward success?
 High v. Low Organizational Loyalty
 do people identify with the employer or the job more?
 Cooperation v. Competition
 how should employees interact in the workplace?

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US v. Japan v. Germany
 Decision Making: US and Germany
are more decentralized, Japan
centralized
 Safety v. Risk: US takes most
risk, Germany moderate risk, Japan
focuses on safety
 Rewards: US and Germany focus on
individual rewards, Japan focuses on
group rewards
 Loyalty: Japan is loyal to
organization, US and Germany loyal
to occupational group
 Cooperation v. Competition: Japan
likes cooperation, US and Germany
prefer competition

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Components of culture
 The explicit artifacts and products of the society
(buildings, language, food)
 The norms and values that guide the society
 The implicit , basic assumptions that guide people’s behavior

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Values
 Values are basic convictions that people have regarding what is
right and wrong, good and bad, important and unimportant
 Can values change over time?
 Japanese values seem to be changing after a long term
recession; “era of personal responsibility”

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Hofstede’s Four Dimensions
 Dutch researcher GeertHofstede identified four main
dimensions of culture
 Power Distance: the extent to which less powerful members of
organizations accept that power is distributed unequally
 Uncertainty Avoidance: the extent to which people feel threatened
by ambiguous situations and have created beliefs and institutions
that try to avoid these
 High uncertainty avoidance: high need for security and a strong
belief in experts; Germany, Japan
 Low uncertainty avoidance: more willing to accept risks; Denmark,
Great Britain

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Hofstede’s Four Dimensions (cont.)
 Individualism: the tendency of
people to look after themselves
and their immediate family only
 Opposite is collectivism, which
is the tendency to belong to
groups and to look after each
other in exchange for loyalty.
 Masculinity: a cultural
characteristic in which the
dominant values in a society are
success, money, and things.
 The contrary is
femininity, which is a cultural
characteristic in which the
dominant values are caring for
others and the quality of life.

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Trompenaars Cultural Dimensions
 Another view is that of FonsTrompenaars, with five relationship
orientations that address the ways in which people deal with
each other
 Universalism v. Particularism
 Universalism is the belief that ideas and practices can be applied
everywhere without modification, so they focus on formal rules
 Particularism is the idea that circumstances dictate how ideas and
practice should be applied, so they focus more on relationships
and trust
 Individualism v. Communitarianism
 Communitarianism has the same idea as collectivism

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 Neutral v. Emotional
 Neutral culture is one in which emotions are held in check (United
Kingdom)
 Emotional culture is one in which emotions are expressed openly and
naturally (Mexico and the Netherlands)
 Specific v. Diffuse
 Specific culture is one in which individuals have a large public space
they readily let others enter and share and a small pricate space they
guard closely and share with only close friends and associates. There is
a strong separation of work and personal life.
 Diffuse culture is one in which public space and private space are similar
in size and individuals guard their public space carefully b/c entry into
public space affords entry into private space. Work and private life are
closely linked.

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 Achievement v. Ascription:
 Achievement cultures focus on how well people perform
 Ascription cultures focus on who or what the person is

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US v. Japan v. Germany
 US has high individualism and
low power distance, weak
uncertainty
avoidance, moderate degree of
masculinity
 Japan has moderate
individualism and moderate
power distance, strong
uncertainty avoidance, and a
very high degree of masculinity
 Germany has slightly lower
individualism and low power
distance, moderate uncertainty
avoidance, and a high degree of
masculinity

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Time
 Sequential time v. Synchronous time
 In cultures that have sequential approaches, people tend to do one
thing at a time, and they follow plans strictly. (United States)
 In cultures with synchronous approaches, people do multiple things
at a time and things like appointments are subject to change.
(France and Mexico)
 Example: People in the US will keep an appointment, while in
Mexico they might change it if something else comes up.

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Environment
 Two views of the environment
 Idea that managers are in control of their fate and environment
 Dominant in US thought
 Idea that they must “go with the flow”
 Dominant in Asian nations
 Example: US govt urging Japanese car companies to purchase
component parts in order to balance the flow of trade (quid pro
quo)

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GLOBE Project
 Global Leadership and Organizational Behavior Effectiveness:
a multicountry study and evaluation of cultural attributes and
leadership behaviors among more than 17,000 managers from
951 organizations and 62 countries; measures cultural
differences
 Meta-goal was to develop an empirically based theory to
describe, understand, and predict the impact of specific cultural
variables on leadership and organizational processes and the
effectiveness of these processes.

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Chapter 5
Managing Across Cultures

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Strategic Predispositions
 Ethnocentric predisposition: a nationalistic philosophy of
management whereby the values and interests of the parent
company guide strategic decisions
 Polycentric predisposition: a philosophy of management whereby
strategic decisions are tailored to suit the cultures of the countries
where the MNC operates
 Regiocentric predisposition: a philosophy of management
whereby the firm tries to blend its own interests with those of its
subsidiaries on a regional basis
 Geocentric predisposition: a philosophy of management whereby
the company tries to integrate a global systems approach to
decision making

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Meeting the Challenge
 Globalization imperative: a belief that one worldwide approach to
doing business is the key to both efficiency and effectiveness
 A large number of companies use a large number use the same
strategies abroad as they do at home
(US, Canada, France, Germany, Japan, UK)

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Meeting the Challenge
 Factors that help facilitate the need to develop unique strategies for
different cultures, including:
 The diversity of worldwide industry standards
 A continual demand by local customers for differentiated products
 The importance of being an insider
 The difficulty of managing global organizations
 The need to allow subsidiaries to use their own abilities and
talents and not be restrained by headquarters

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Cross- Cultural Differences and
Similarities
 Parochialism: the tendency to view the world through one’s
own eyes and perspectives
 Simplification:process of exhibiting the same orientation
toward different cultural groups

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Example of Similarities
 Korean firms and US firms
 As organizational size inc, commitment declined
 As structure became more employee-focused, commitment
increased
 the more positive the perception of organizational climate, the
greater the employee commitment

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Differences Across Cultures
 Different clusters require a different approach to forming an
effective compensation strategy
 Pacific rim countries – incentive plans should be group-based
 EU nations (France, Spain, Italy, and Belgium) – similar
compensation strategies
 Great Britain, Ireland, and the United States – managers value their
individualism and are motivated by the opportunity for earnings,
recognition, advancement, and challenge
 Study – US affiliates used a hybrid form of HRM practices,
where they closely follow local practices when dealing with the
rank and file but even more closely approximate parent-
company when dealing with upper-level management

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Doing Business in China
 Technical competence – send
engineers to answer questions in
precise detail
 Punctual
 Nod to show that they understand
 Guanxi; “good connections”
 Guanxi represents nepotism, where
individuals in authority make decisions
on the basis of family ties or social
connections rather than objective
indices
 Good listening skills
 Collective society in which people
pride themselves on being members of
a group

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Doing Business in Russia
 Build personal relationship with
partners – personal relationships
are very important
 Use local consultants
 Different business ethics (giving
bribes)
 Could take months for something to
get done, so be patient
 Stress exclusivity
 Be careful about compromising or
settling things too quickly, because
this is often seen as a sign of
weakness

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Doing Business in India
 Be on time for meetings
 Unless close, personal questions
shouldn’t be asked
 Public displays of affection are
considered inappropriate
 The namaste gesture can be
used to greet people
 Bargaining for goods and
services is common
 Pointing is done with the chin and
beckoning is done with the palm
turned down

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Doing Business in Brazil
 Physical contact is an acceptable form
of communication
 Face-to-face is preferred as a way to
communicate, so avoid simply e-
mailing or calling
 Form a strong relationship before
bringing up business issues (tend not
to trust people)
 Appearance is very important
 Patience, because many processes
are drawn out
 Still be prepared despite the slow
processes and relaxed environments