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1. LD 7198
Advances in Responsible International Business:
Contexts and Challenges
LECTURE 6.1
The Cultural Environment

2. Objectives
• Define culture
• Understand the benefits of cross-cultural proficiency
• Explore the levels of culture
• Evaluate different categorisation of culture
• Changing nature of national culture

3. Keep in Mind
• What are some of the challenges of working in a different
country?
• What would be the challenges to managing cross-
culturally?

4. • Cross-cultural risks is one of the major risks that businesses faces
when they go abroad.
• Miscommunication or misunderstanding of local contexts and cultures
may pose a significant risk to the success of international businesses.

5. What is culture?
• Hofstede, a Dutch organizational anthropologist, views culture as
‘collective mental programming’ of people, and the ‘software of the mind,’;
How we think and reason.
• National culture is the pervasive and shared values, beliefs, and norms
that guide life in any society.
• It influences what people believe about themselves, what behaviours are
appropriate, and what behaviours are not acceptable in any society.

6. What is culture?
• Incorporates both objective and subjective elements.
• Objective aspects of culture include tools, roads, dressing,
architecture, and other physical artifacts.
• Subjective aspects include norms, values, ideas, customs, and
other meaningful symbols.

7. Schein’s Iceberg (1980)

8. • Artefacts-
• represent the visible level of a culture.
• These are the aspects of a culture that one can easily observe. Examples
include norms, behaviour, language, rituals etc.
• Espoused Beliefs and Values :
• These are the beliefs or ideas that members about the rightness and
wrongness of a decision/action.
• Basic assumptions
• These refer to the assumptions that are held by the members of the society.
The basic assumptions of a society inform the values and artefacts of the
culture.

9. Cross-Cultural Proficiency is Paramount in international
business
Examples: it shows up in
• Developing products and services
• Communicating and interacting with foreign business
partners
• Negotiating and structuring international business
ventures
• Interacting with current and potential customers
• Preparing advertising and promotional materials
International Business: Strategy, Management,
and the New Realities
9

11. Assessing Cultural Environments:
It can mean many things…
• Religion and State
• Verbal/Nonverbal communication
• Gender roles (how the role of women is perceived)
• Importance of family
• Concern for the environment
• Attitudes towards health, fitness and diet
• Fashion
• Gentrification and urban migration
• Multiculturalism (attitudes towards immigration)
• Levels of trust in authority/establishment
• Cultures of wealth

12. What culture is NOT…
Culture is:
• Not right or wrong. Culture is relative. There is no cultural
absolute. Different nationalities simply perceive the world
differently.
• Not about individual behavior. Culture is about groups. It
refers to a collective phenomenon of shared values and
meanings.
• Social not biological. Culture is derived from the social
environment. We are not born with a shared set of values and
attitudes; we learn and acquire as the grow up.

13. Culture is Learned
• Socialization: The process of learning the rules and behavioral
patterns appropriate to one's given society, i.e. cultural learning.
• Acculturation: The process of adjusting and adapting to a
culture other than one's own, strongly experienced by expatriate
workers.
• Culture is like an iceberg – you see the tip of the iceberg;
below the surface is the much larger base of assumptions,
attitudes and values that strongly influence decision-making,
relationships, conflict, and other dimensions of business.

14. Hofstede Cultural dimensions
• Geert Hofstede conducted one of the early studies of national cultural
traits.
• He collected data on the values and attitudes of 116,000 employees
at different subsidiaries of IBM.
• Based on this research, Hofstede identified different independent
dimensions of national culture

15. Hofstede Cultural dimensions
• Hofstede grouped national cultures along dimensions meaningful to
business:
• Work related values are not universal
• Local values used to determine HQ (Headquarters) policies
• MNC may create unnecessary morale problems if it insists on uniform moral
norms
• Starting point for understanding of business situations across-cultures
• Effective international managers MUST understand own culture AND
other culture(s)

16. Hofstede’s Cultural Dimensions
Power distance
Extent to which less powerful members of a society expect and accept that power is
distributed unequally.
In societies with low power distance, the gaps between the powerful and weak are
small, while there are significant gaps in powers between the powerful and the weak
in high power distance.
E.g. of low PD US, UK, Israel and e.g of high PD include Malaysia, the Philippines etc
Uncertainty avoidance
The extent to which members of a society avoid or accept uncertainty / ambiguity
Degree of preference for structured versus unstructured situations
E.g. of low UA countries are Singapore, Denmark, UK etc and high UA include Japan,
Belgium

17. Hofstede’s Cultural Dimensions
Individualism/Collectivism
Idea that an individual’s identity is fundamentally
his or her own (individualism) as against being tied
to the identity of his or her collective group
(collectivism)
Individualist societies stress individual
responsibility and success – for example, US and UK
Collectivist societies stress loyalty to group in
return for support – for example, South America
and Asia.

18. Masculinity/Femininity
Refers to the society’s orientation based on traditional male
and female values.
Masculine values prevail: assertiveness, success,
competition
Feminine values prevail: quality of life, maintenance of
warm personal relationships, service, care for the weak,
solidarity

19. Long-term orientation (added in 1991)
Emphasis on perseverance and
savings for the future
Attitudes towards time – less
concerned with immediate results
Persistence – (patience?)

21. Evaluation of Hofstede’s Methodology
• Hofstede's methodology: Culture may be too complex to be captured
by survey.
• Unit of analysis is country: there may be subcultures.
• IBM values may influence national values
• Culture is dynamic
• Despite these criticism, many recent studies validate Hofstede’s
dimensions

22. The GLOBE MODEL
• Global Leadership and Organizational Behaviour Effectiveness (GLOBE)
is a large-scale research programme which comprised a network of
170 social scientists and management scholars.
• The study is based on a survey of 17,000 managers from three
industries (banking, food processing and telecommunications) across
62 cultures.
• The GLOBE researchers identified nine dimensions of culture (House
et al. 2002; Magnussen et al. 2008, p. 186):

23. GLOBE Cultural Dimensions
1. Uncertainty avoidance: The extent to which a society tries to avoid the
unpredictability of future events, e.g. by relying on rituals or bureaucratic practices.
2. Power Distance: The degree to which members of a culture expect and
accept power to be distributed unequally.
3. Collectivism I (Societal Collectivism): The degree to which organisational and
societal institutional practices encourage collective distribution of resources and
collective action.
4. Collectivism II (In-Group Collectivism): The degree to which individuals express
loyalty and cohesiveness in their organisations or families.
5. Gender Egalitarianism: The extent to which a society minimises gender role
differences and discrimination

24. 7. Future Orientation: The degree to which individuals engage in future
oriented behaviours such as delaying gratification, planning and
investing in the future.
8. Performance Orientation: The extent to which a society encourages
and rewards group members for performance improvement and
excellence
9. Humane Orientation: The degree to which individuals encourage and
reward individuals for being fair, altruistic, friendly, generous, caring or
kind.

25. Summary
• Culture shapes our perceptions/actions
• Different perceptions of the world
• Next, we discuss navigating cross-cultural risks.