The document discusses how national culture impacts global business operations and managing cultural diversity. It analyzes the 1997 crash of Korean Airlines Flight 801, which was caused by the crew not challenging the captain's mistakes due to Korean culture's emphasis on hierarchy and conformity. It then discusses how people from different cultures think and behave differently based on dimensions like individualism vs collectivism and uncertainty avoidance. Managing these cultural differences is important for effective global teams, communications, and negotiations.

1. Managing Cultural Diversity
and Global Teamwork
The Culture Code
Impact of National Culture upon
business operations and
managing it for better outcomes

2. Korean Airlines Flight 801 August 6th 1997
On August 6th 1997, on approach to
Antonio B. Won Pat International Airport
at the US territory of Guam, Korean
Airlines flight 801 flew into Nimitz Hill,
about 3 nautical miles (5.6 km) short of
the runway, at an altitude of 660 feet (200
m).
228 of the total of 254 passengers and
crew were killed.
The glideslope instrument landing system
(ILS) was not working but the flight
captain believed it was.
The second pilot made a slight attempt to
protest but the captain pressed on and
descended steeply until the crash.
What happened?

3. Do you think it is normal to have
Hierarchy or Equality
at the workplace?
Korean culture teaches a strong deference to authority,
strict hierarchy that has been established throughout
centuries. It also prides itself on conformity.
Inevitably, traditional Korean culture permeates all areas of
society and finds its reflection in cockpit culture.
Therefore, the crew did not take decisive action although
they saw their captain’s fatal mistake.
Thankfully, not every time differences in the way people
perceive life and work have such tragic outcomes.
Yet, in the global workplace people of different origin do think
and behave in different ways. A clear understanding of this
will help improve the performance of multicultural teams and
operations.

4. Why do we think differently?
85%
11% 4%
PDI > 55
PDI < 40
PDI ≈ 50
- 5.5 billion
- 248 million
- 611 million
If your answer was “equality” there you are:
you belong to those 11% of world’s population who think so.
The rest do not share the same view.

5. Culture – the rules of the social game
Culture is the collective programming of our mind that
happens from the moment we are born and start
imitating and learning from surrounding humans.
By Culture we understand the unwritten rules of the
social game which distinguish one group of people
from another group.
Culture is grounded deeply in the common
understandings of a group of people about what is
good or bad, right or wrong, appropriate or not, etc.
We call these understandings shared values.
How do values influence our behavior?

6. Our values influence profoundly the way
we choose to do things. Every day, all
day, we make countless decisions about
what course of action to take in our life
and in our work.
We make decisions based on our
individual perceptions of reality, as the
unique personalities we are.
But somewhere in our individual
personality there is a level of the social or
group programming that influenced us
while we grew into the society of our
origin.
Unconsciously, we follow certain common
patterns of behavior and choices in the
family, at school, in social relations, at the
workplace, in science, in morals, in
politics, or in just about any interaction
with other humans.
These patterns are manifestations of our
national culture.
What is the impact of National Culture?

7. Like a system of fractals which tend to be similar at every level, our values i.e. our Culture show through all
activities that we engage into. Large groups of people like nations who share similar values tend to follow
similar patterns of behavior.
To the outside observers these patterns in group thinking and behavior would be perceived as traits of
national culture and would be easily distinguished from their own culture.
When engaged in interactions outside their own culture of origin people often perceive the differences between
National Cultures as miscommunication, confusion, amazement or culture shock.
What happens in culture shock?

8. IN CULTURE SHOCK
When you notice a violation of the usual rules that you are used to
you tend to attribute it to the ignorance or stupidity of others.
Everyone involved spends tons of time on fixing communication.
More often than not people give up and qualify the other party as
“difficult personality”.
In fact, at the global workplace, the major part of differences and
difficulties arises from differences in national culture.
If such violations persist, you suspect dishonesty or malpractice.
Only later, if at all, you consider the possibility of a different set of rules
which are, however, unknown to you.
Expectations and biases contribute heavily to your reaction to violations
of the “normal” rules.
How is National Culture manifested at the workplace?
IN CULTURE SHOCK

9. Let’s take as a single example the differences in
attitudes to Hierarchy or Equality at the workplace.
In some cultures people consider as normal to have
hierarchy at the workplace and feel a great distance
between themselves and their superiors.
In other cultures the dominant view is egalitarian and
people do not consider their superiors entitled to
special attitude just because of their position.
Here are some workplace notions and practices which are
profoundly influenced by differences in these views:
Ø The idea of what is an good leader
Ø The expectations of how a good employee performs
Ø How meetings are structured
Ø The way decisions are taken
Ø How information is handled and shared
Ø The way Trust is built across the workplace
Are we really that different?

10. Countries’ rank on attitudes to Hierarchy vs. Equality
40
60
95
93
80
54
77
35
68
18
80
39
0 20 40 60 80 100
United States
South Korea
Saudi Arabia
Russia
Mexico
Japan
India
Germany
France
Denmark
China
Canada PDI
How do cultural differences translate into behaviors?
We are similar in the way that we all face the
same dilemmas in life and work. But we differ
largely in the choices we make when solving
these dilemmas.
Look at the numbers which show the
differences among several countries on just
the dilemma of Hierarchy vs. Equality.
Behind each of these numbers there are
hundreds of behavior patterns which reflect
Culture differences.

11. EGALITARIAN
countries
HIERARCHICAL
countries
COMMUNICATION Direct Indirect
INFORMATION FLOW Shared Selective
DECISION MAKING Decentralized Centralized
DELEGATION Natural Conditional
TAKING INITIATIVES Encouraged Sanctioned
CONTROL Disliked Expected
Just some of the differences you can expect when
working with people from different cultures
But we are not in global business, many of us, right?

12. Are CEOs aware of the impact of National Culture on business operations?
More than 17% of US total workforce are foreign born
employees
27.4 million – 17.1% of total workforce
43.6% of total
sales is
foreign sales
More than 43% of sales revenue of 500 top companies is
generated by business abroad
USA remains top destination for foreign direct
investment but faces stiff worldwide competition for
investment dollars
$ 4T of inward
stock of foreign
direct
investment
Quick facts

13. Every second challenge facing CEOs is connected
to either people issues or global issues, or both.
18%
20%
21%
22%
24%
25%
28%
48%
60%
64%
Global uncertainty
National infrastructure
Income disparity
Global recession
Labor relations
Emerging markets
Cyber security
Global competitors
Top Talent
Developing leaders
% of CEOs concerned with:
Things keeping CEOs awake at night
Why should Culture be part of these concerns?

14. Because this is what happens when you fail to account for culture differences

15. There is good news, however
Ø Miscommunication and wrong interpretation at
the workplace are a constant loss of time
Ø Assuming that people across cultures share the
same views leads to bad investment decisions
Ø Failing to understand the values that underline
different consumer behavior drowns marketing
campaigns
Ø Differences in how negotiations should happen
are a major cause of broken or missed business
deals
Challenges in Multicultural Business operations

16. The good news about Culture
What are the dimensions of National Culture?
It can be measured
It can be managed
Based on research, we are able to express in hard
numbers intangibles such as human values,
assumptions, biases and convictions.
So we can have educated expectations and
interpretations about what drives different people.
There are 6 data-based dimensions of National
Culture which make it possible to compare
differences in patterns of behavior.

17. The 6 basic dilemmas
HIERARCHY VS. EQUALITY
Handling inequality
INDIVIDUALISM VS. COLLECTIVISM
Dependence on others
PERFORMANCE VS. QUALITY OF LIFE
Sources of motivation
FEAR VS. EMBRACE OF UNCERTAINTY
Dealing with the unknown
RIGIDITY VS. FLEXIBILITY
Time perspective
INDULGENCE VS. RESTRAINT
Dealing with natural drives
Long Term
Orientation
Individualism
Masculinity
Uncertainty
Avoidance
Power
Distance
Indulgence

18. Why should we care about Cultural Diversity?

19. You operate in a globalizing economy Values
Navigating global politics
Multicultural teams
Attracting foreign capital
Designing for diverse consumers
Sourcing global innovation
Negotiating with different others
In all aspects of the current integrated economy different Values shared by different people impact
the bottom line.
Knowing and managing the interactions of different national cultures is a key competence for
managing global operations.

20. Effectiveness of
globally distributed
teams
Improved corporate
communications
Engagement of
multicultural workforce
Success in global sales
and negotiations
Inspired global
leadership
Diversity and inclusion
of multicultural teams
Here is what you get when you manage Culture in business

21. About us

22. Who we are
What we do
Hofstede Insights was founded more than
30 years ago inspired by the research of
Geert Hofstede. We translated his
academic work into applicable business
solutions.
https://www.hofstede-insights.com
@HofstedeInsight
#theculturefactor
We have
We manage the impact of Culture on work,
life and commerce by aligning Culture and
strategy.
nearly 100 associate partners in 40
countries.

23. We provide services to over 5000 organizations

24. Daniela Kaneva
Associate Partner
Daniela is Associate Partner at Hofstede Insights, senior
consultant for California, USA, based in Los Angeles.
Daniela’s lifelong career in international sales and
marketing has brought her expert and hands-on
experience with more than 25 nations in Europe, across the
Russian Federation, Western Balkans, Middle East, United
States and Mexico.
Working with clients on national or global business
operations, Daniela designs solutions in the areas of
organizational culture for performance, managing
multicultural diversity and international marketing.
Daniela works with business applications of Culture on its
three levels – national culture differences, organizational
culture optimization and value-based consumer marketing.
https://www.linkedin.com/in/daniela-kaneva/
https://www.hofstede.us
daniela.kaneva@hofstede-insights.com
+1.626.429.0513