Session

Socio-cultural Environment

MNCE

Socio-cultural Environment
Business is as much a socio-cultural phenomenon as it is an economic activity. Per capita income in two countries may be the same, yet the consumption patterns in these countries may differ. Socio-cultural forces have considerable impact on products people consume; designs, colors and symbols they like; dresses they wear and emphasis they place on religion, work, entertainment, family and other social relations. Socio-cultural environment influences all aspects of human behavior and is pervasive in all facets of business operations.

WHAT IS CULTURE?
The word culture comes from the Latin cultura, which is related to cult or worship. In its broadest sense, the term refers to the result of human interaction.

Culture
Culture can be defined as a "sum total of human knowledge, beliefs, art, morals, laws, customs and any other capabilities and habits acquired by humans as members of society. It is a distinctive way of life of a group of people, their complete design of living. Culture thus refers to entire human social heritage - a distinctive life style of a society and its total value system which is intricately related to the consumption pattern of the people and management philosophies and practices.

Definition of Culture
The integrated sum total of learned behavioral traits that are manifest & shared by members of a society the man-made part of our environment the distinctive life style of a people acquired thru learned behavior

Perhaps no other set of variables more daunting & complex

Communication & language (inc. non-verbal) Dress & appearance Food & eating habits Time & time consciousness Rewards & recognitions Relationships Values & norms Sense of self & space Mental process & learning Beliefs & attitudes

WHAT IS CULTURE?
Culture is acquired knowledge that people use to interpret experience and generate social behavior. This knowledge forms values, creates attitudes, and influences behavior.

WHAT IS CULTURE?
Culture is a system of values and norms that are shared among a group of people and that when taken together constitute a design for living.

A Model of Culture

Iceberg Theory

Evident and Deep Culture

Definitions
Evident Culture
.. customs, language, art, artifacts & behavior
the first cultural phenomena you recognize as a foreigner. ie siesta in Mexico, being punctual in Germany, job hopping in the U.S., driving on the left in UK, bull fights in Spain.

Deep Culture
.. the underlying aspects of a culture, i.e. values, norms, cause -effect relationships, views of the world, -- very difficult to change

fine arts literature drama classical music popular music folk-dancing games cooking dress language rituals techniques laws customs DEEP CULTURE

EVIDENT CULTURE

notions of modesty concept of beauty ideals governing child-rearing rules of descent cosmology relationship to animals patterns of superiority relations definition of sin courtship practices concept of justice incentives to work notions of leadership tempo of work patterns of group decision making concept of cleanliness attitudes toward the dependent theory of disease approaches to problem solving concept of status mobility eye behavior nature of friendship concept of self ordering of time Roles in relation to status by age, sex, class, occupation, kinship, and so forth. conversational patterns in various social contexts concept of past and future definition of insanity patterns of visual perception preference for competition or cooperation body language Social interaction rate notions of adolescence notions about logic and validity patterns of handling emotions facial expressions arrangement of physical space community sense myths values assumptions etc!

The Determinants of Culture

Culture
Some of the important elements to understand a country's culture are: language, aesthetics, education, religions and superstitions, attitudes and values, material culture, social groups and organizations, and business customs and practices.

Elements of Culture:
Language Aesthetics
 Graphic & Structural Arts  Folklore  Music, Drama, Dance

Material Culture
 Technology  Economics

Belief Systems  Humans and The Universe Social Institutions  Political Structures  Education  Social Organization

Culture-Language
Language is an important element of culture and it is through language that most of the communications take place. When General Motors of the United States literally translated its marketing phrase 'Body by Fisher' into Flemish language, it meant 'Corpse by Fisher'. Similarly, the phrase "Come alive with Pepsi" faced problems when it was translated into German advertisements as "Come out of grave" or in Chinese as "Pepsi brings your ancestors back from the grave". When the American car called 'Nova' was introduced in Puerto Rico, sales were poor until the company realized that the word Nova was pronounced as 'No va' - which literally meant in Spanish "does not go". Sales were better when the name was changed to 'Carbie'.

LANGUAGE
Spoken Language Language does far more than just enable people to communicate with each other. The nature of a language also structures the way we perceive the world. The classic illustration of this phenomenon is that whereas the English language has but one word for snow, the language of the Inuit (Eskimos) lacks a general term for it. Instead, because distinguishing different forms of snow is so important in the lives of the Inuit, they have 24 words that describe different types of snow (e.g., powder snow, falling snow, wet snow, drifting snow). Because language shapes the way people perceive the world, it also helps define culture. Countries with more than one language often have more than one culture. Canada has an English-speaking culture and a Frenchspeaking culture.

LANGUAGE
Spoken Language English is increasingly becoming the language of international business. Most people prefer to converse in their own language, and being able to speak the local language can build rapport, which may be very important for a business deal. International businesses that do not understand the local language can make major blunders through improper translation. For example, the Sunbeam Corporation used the English words for its Mist-Stick mist-producing hair curling iron when it entered the German market, only to discover after an expensive advertising campaign that mist means excrement in German.

LANGUAGE
Unspoken Language We all communicate with each other by a host of nonverbal cues. The raising of eyebrows, for example, is a sign of recognition in most cultures, while a smile is a sign of joy. Many nonverbal cues, however, are culturally bound. While most Americans and Europeans use the thumbs-up gesture to indicate that its all right, in Greece the gesture is obscene.

LANGUAGE
Unspoken Language Another aspect of nonverbal communication is personal space, which is the comfortable amount of distance between you and someone you are talking with. In the United States, the customary distance apart adopted by parties in a business discussion is five to eight feet. In Latin America, it is three to five feet. Consequently, North Americans may feel that Latin Americans invading their personal space are being aggressive and pushy. And can be seen backing away from them during a conversation. In turn, the Latin American may interpret such backing away as aloofness. The result can be a regrettable lack of rapport between two businesspeople from different cultures.

Culture-Aesthetics
Aesthetics are of special interest to the international business executives for these govern the norms of beauty in a society and are helpful in correctly interpreting meanings of various methods of artistic expressions, colors, shapes, forms and symbols in a particular culture. Colors, for instance, mean different things to different people. The color of mourning is black in the United States, but it is white in the Far East. Green is restful color to Americans, but it is disliked by people in Malaysia where it connotes illness and death. Symbols also need to be interpreted correctly. Seven, for instance, signifies good luck in the United States but just opposite in Singapore, Ghana and Kenya. Use of number four should be avoided in Japan because it is pronounced as 'shi' which in Japanese means death.

Culture-Education
Education is generally understood as formal schooling. However, it is better to adopt a broader perspective and define education as any process, formal or informal, through which one learns skills, ideas and attitudes. Education is important as it affects not only the education levels but also the development of mental faculties and various skills. In general, educated people have been found to be more sophisticated, discriminating and receptive to new products and ideas. Availability of educated manpower like skilled labor, technicians and professionals is also dependent on the country's education level. Media to be used by a company for promoting its products and services are also dependent on education level prevailing in the country. The conventional forms of printed communications, for instance, do not work in countries where literacy rates are low.

Culture-Education
The availability of a pool of skilled and educated workers seems to be a major determinant of the likely economic success of a country. The knowledge base, training, and educational opportunities available to a country's citizens can also give it a competitive advantage in the market and make it a more or less attractive place for expanding business. In analyzing the competitive success of Japan since 1945, for example, Michael Porter notes that after the war, Japan had almost nothing except for a pool of skilled and educated human resources. The recent trend to outsource information technology jobs to India, for example, is partly due to the presence of significant numbers of trained engineers in India, which in turn is a result of the Indian education system.

Culture-Education
The general education level of a country is also a good index of the kind of products that might sell in a country and of the type of promotional material that should be used. For example, a country where more than 70 percent of the population is illiterate is unlikely to be a good market for popular books. Promotional material containing written descriptions of mass-marketed products is unlikely to have an effect in a country where almost three-quarters of the population cannot read. It is far better to use pictorial promotions in such circumstances.

RELIGIOUS AND ETHICAL SYSTEMS

Religion can be defined as a system of shared beliefs and rituals that are concerned with the realm of the sacred. Ethical systems refer to a set of moral principles, or values, that are used to guide and shape behavior.

Culture-Religions and Superstitions

Religions are a major determinant of moral and ethical values and influence people's attitudes, habits and outlook on life which are reflected in their work habits and consumption patterns. There are numerous religions and faiths in the world. Each one has its own morals and codes of conduct. In some countries, single storey houses are preferred because it is considered bad to have another's foot on ones head. Location of a building and its architecture in many Asian countries is governed by the principles of 'vastushastra' and Feng Shui rather than purely geographical and economic considerations. A working knowledge of the religions prevalent in the target markets helps in understanding people's work habits, underlying motivations and consumption behaviors.

Culture-Attitudes and Values

'What is important and desirable' differs from society to society and is largely governed by the attitudes and values existing in a society. Americans in general are more receptive to change and risk taking, but people in many societies are averse to change and risk taking. They prefer doing what is traditional and safe. New products are not accepted unless these have the approval of local chiefs or religious leaders.

Culture-Technology
Technology includes the ways and means applied in making of material goods. It is technical know-how in possession of the people of a society. Choice of technology has its repercussions on the size of investment, scale of operations as well as type and number of workers to be employed. Technology transfer has been a highly controversial issue in the past. Because of supply of obsolete or inappropriate technology, many developing countries have laid down stringent rules and regulations concerning technology imports and payments. Since transfer of new technology is often riddled with workers' resistance to change and public criticisms, multinational corporations generally have suitable action plans to counter such opposition.

Culture-Material Culture
Business implications of material culture of a society are obviously many. The goods and services that are acceptable in one market may not be acceptable in another market because of differences in material cultures of two societies. For example, sophisticated electronic appliances widely in demand in the technologically and economically advanced Western countries may not find a market in the less developed countries of Asia, Africa or Latin America.

Culture-Social Groups and Organizations

A study of social groups and organizations is important as it determines how people relate to one another and organize their activities. The size and cohesiveness of the family, role of men and women in society, and positions of different social classes differ from country to country. Social groups and organizations mould the pattern of living and interpersonal relationships of people in a society. They influence the behavioral norms, codes of social conduct, value systems, etc., that may be of relevance to the international business managers in their decision making.

Culture- Business Customs and

Practices
A familiarity with business customs and practices prevalent in different countries is a must to avoid business blunders. American managers, for instance, are by nature highly work oriented and attach utmost importance to speed and punctuality in business dealings. They are, moreover, highly achievement oriented and fond of new things. Japanese, on the other hand, are also workaholics but they are very slow in decision making Latin Americans too do not believe in haste and spend considerable time in socializing and developing friendships before coming to business transactions. While in countries like the United States it is necessary to have final agreement in writing, this practice is not much appreciated in many West Asian countries where oral agreement alone is considered more than sufficient.

Culture, Society, and the NationState

There is not a strict one-to-one correspondence between a society and a nation-state. Nation-states are political creations. They may contain a single culture or several cultures. The relationship between culture and country is often ambiguous. One cannot always characterize a country as having a single homogenous culture, and even when one can, one must also often recognize that the national culture is a mosaic of subcultures. While the French nation can be thought of as the political embodiment of French culture, the nation of Canada has at least three culturesan Anglo culture, a Frenchspeaking Quebecois culture, and a Native American culture.

Subcultures
Within each culture there are many subcultures that can have business significance. Subcultures are found in all national cultures and failure to recognize them may create impressions of sameness which in reality may not exist. A single national and political boundary does not necessarily mean a single cultural entity. Canada, for instance, is divided between its French and English heritages, although politically the country is one. Because of such distinctive cultural division, a successful marketing strategy among the French Canadians might not effectively work among the English Canadians or vice-versa. Similarly a single personnel policy may not work with workers employed in two different plants if they belong to different sub cultural groups and differ in their work habits and underlying motivations.

CULTURAL CHANGE
Culture evolves over time, although changes in value systems can be slow and painful for a society. Social turmoil is an inevitable outcome of cultural change. As countries become economically stronger, cultural change is particularly common.

CULTURE AND THE WORKPLACE

How does a society's culture impact on the values found in the workplace? There are many ways of examining cultural differences and their impact on international management. Culture can affect technology transfer, managerial attitudes, managerial ideology, and even businessgovernment relations. Perhaps most important, culture affects how people think and behave.

CULTURE AND THE WORKPLACE

Here are some specific examples where the culture of a society can directly affect management approaches: Centralized vs. decentralized decision making. In some societies, top managers make all important organizational decisions. In others, these decisions are diffused throughout the enterprise, and middle- and lower-level managers actively participate in, and make, key decisions. Safety vs. risk. In some societies, organizational decision makers are risk averse and have great difficulty with conditions of uncertainty. In others, risk taking is encouraged, and decision making under uncertainty is common. Individual vs. group rewards. In some countries, personnel who do outstanding work are given individual rewards in the form of bonuses and commissions. In others, cultural norms require group rewards, and individual rewards are frowned on.

CULTURE AND THE WORKPLACE

vs. formal procedures. In some societies, much is accomplished through informal means. In others, formal procedures are set forth and followed rigidly. High vs. low organizational loyalty. In some societies, people identify very strongly with their organization or employer. In others, people identify with their occupational group, such as engineer or mechanic. Cooperation vs. competition. Some societies encourage cooperation between their people. Others encourage competition between their people. Short-term vs. long-term horizons. Some cultures focus most heavily on short-term horizons, such as short-range goals of profit and efficiency. Others are more interested in long-range goals, such as market share and technologic development. Stability vs. innovation. The culture of some countries encourages stability and resistance to change. The culture of others puts high value on innovation and change.
Informal

Values in Culture

Cultural Diversity
A supplemental way of understanding cultural differences is to compare culture as a normal distribution, as in Figure 1, and then to examine it in terms of stereotyping, as in Figure 2. French culture and American culture, for example, have quite different norms and values. So the normal distribution curves for the two cultures have only limited overlap. However, when one looks at the tail ends of the two curves, it is possible to identify stereotypical views held by members of one culture about the other. The stereotypes are often exaggerated and used by members of one culture in describing the other, thus helping reinforce the differences between the two while reducing the likelihood of achieving cooperation and communication. This is one reason why an understanding of national culture is so important in the study of international management.

Cultural Diversity

Figure 1

Cultural Diversity

Figure 2

Cultural Diversity

Cultural Diversity
Differences in work values also have been found to reflect culture and industrialization. Researchers gave a personal-values questionnaire (PVQ) to over 2,000 managers in five countries: Australia (n 281), India (n 485), Japan (n 301), South Korea (n 161), and the United States (n 833). The results showed some significant differences between the managers in each group. U.S. managers placed high value on the tactful acquisition of influence and on regard for others. Japanese managers placed high value on deference to superiors, on company commitment, and on the cautious use of aggressiveness and control. Korean managers placed high value on personal forcefulness and aggressiveness and low value on recognition of others. Indian managers put high value on the non-aggressive pursuit of objectives. Australian managers placed major importance on values reflecting a lowkey approach to management and a high concern for others. In short, value systems across national boundaries often are different.

Cultural Diversity
At the same time, value similarities exist between cultures. In fact, research shows that managers from different countries often have similar personal values that relate to success. England and Lee examined the managerial values of a diverse sample of U.S. (n 878), Japanese (n 312), Australian (n 301), and Indian managers (n 500). They found that:
1. There is a reasonably strong relationship between the level of success achieved by managers and their personal values. 2. It is evident that value patterns predict managerial success and could be used in selection and placement decisions. 3. Although there are country differences in the relationships between values and success, findings across the four countries are quite similar. 4. The general pattern indicates that more successful managers appear to favor pragmatic, dynamic, achievement-oriented values, while less successful managers prefer more static and passive values. 5. More successful managers favor an achievement orientation and prefer an active role in interaction with other individuals who are instrumental to achieving the managers organizational goals. 6. Less successful managers have values associated with a static and protected environment in which they take relatively passive roles.

Cultural Diversity

Similarities Across Cultures

Managers in US and Russian firms
Managers performed similar functions Devoting effort to communication and networking increased performance and promotion opportunities Similar types of interventions improved performance (Hawthorne effect?)

US and Korean employees

Similar antecedents influenced organizational commitment (position in hierarchy, tenure, age) Other factors that increased commitment
Size of firm (larger firms = less commitment) Employee focus (greater focus = more commitment) Perceptions of organization (positive view = more commitment)

Business Customs in South Africa

Arrange meeting before discussing business over phone. Make appointments as far in advance as possible. Maintain eye contact, shake hands, provide business card Maintain a win-win situation Keep presentations short

both consumer & business

cultural traditions, norms beliefs & behaviors need to be thoroughly understood & accounted for to fully succeed in any international business endeavor

In Taiwan, receiving a

pineapple for a
gift is a good omen for a businessperson

Cultural Give & Take-Dos & Donts

JapanDo not open in front of giver/ no bows, ribbons Europe: avoid red & white /dont wrap flowers; dont spend too much Arabia: Dont give at outset Latin Am.: Give after informal meetings China: present privately; dont make a big deal of it

What number in Chinese-speaking countries and also in Japan is as ominous as the number 13 in Western culture?

Other Numbers Other Countries

number 7 is considered bad luck in Kenya, good luck in the Czech Republic and has a magical connotation in Benin, Africa.  The number 10 is bad luck in Korea.  The number 4 means death in Japan.
The

The executive of a Chinese company is celebrating their 65th birthday. Which of the following is not a appropriate gift?

A: a silk tie
B: a silver Mont Blanc pen C: a gold clock D: a crystal paperweight E: gold and jade cufflinks

The executive of a Chinese company is celebrating their 65th birthday. Which of the following is not a appropriate gift?

A: a silk tie
B: a silver Mont Blanc pen C: a gold clock D: a crystal paperweight E: gold and jade cufflinks

In England, it is inappropriate to discuss business after work over drinks.

 Youre creating a sales training manual for employees doing business in Japan. When would you tell them NOT to discuss business?

 Youre creating a sales training manual for employees doing business in Japan. When would you tell them NOT to discuss business?

At the start of a business meeting

At a business dinner in Korea, your counterparts wine glass is halfempty. What should you do?

A: refill her glass immediately B: sit back and let her refill her own glass C: wait until her glass is empty and then refill it D: fill your own glass and replace it with hers

At a business dinner in Korea, your counterparts wine glass is halfempty. What should you do?

A: refill her glass immediately B: sit back and let her refill her own glass C: wait until her glass is empty and then refill it D: fill your own glass and replace it with hers

 When writing names in Korea, what color is not appropriate to use?

 When writing names in Korea, what color is not appropriate to use?

Red

Red represents witchcraft and death in many African countries. Red is a positive color in Denmark.

Red
China - symbol of celebration and luck, used in many cultural ceremonies that range from funerals to weddings India - color of purity (used in wedding outfits

Yellow
Yellow Asia sacred, imperial Western cultures - joy, happiness.

Blue
China - associated w/immortality. Hindus - the color of Krishna Middle East - protective color * Note: Blue is often considered to be the safest global color.

Green
China - studies indicate this is not a good color choice for packaging, green hats mean a man's wife is cheating Arab world- the color of Islam Ireland - religious significance Some tropical countries - associated with danger Western cultures - indicates environmental awareness

Dimensions of Culture
For well over two decades, researchers have attempted to cluster countries into similar cultural groupings for the purpose of studying similarities and differences. Such research also helps us to learn the reasons for cultural differences and how they can be transcended.

Cultural Researchers w/ Marketing Applications

HALL Hofstede Trompenaars

Edward T. Hall

MONOCHRONIC vs. POLYCHRONIC TIME

M-time is one-thing-at-a-time
Monochronic cultures stress a high degree of scheduling and an elaborate code of behavior built around promptness in meeting obligations and appointments Americans are mostly monochronic

P-time is many-things-at-a-time
human relationships and interactions are valued over arbitrary schedules and appointments. Many things may occur at once (since many people are involved in everything), and interruptions are frequent. P-time is common in Mediterranean and ColonialIberian-Indian cultures.

HIGH vs. LOWCONTEXT CULTURES

terms refer to the fact that when people communicate, they take for granted how much the listener knows about the subject under discussion.

In low-context communication, listener knows very little & must be told practically everything In high-context communication listener is already 'contexted' - does not need much background information

Contextual Background of Various Countries

Japanese
Arabian

Latin American
Spanish Italian English (UK) French

High Context Implicit

Low Context Explicit

North American (US)

Scandinavian

German
Swiss

Geert Hofstede
organizational psychologist
1. Power distance 2. Uncertainty Avoidance 3. Individualism 4. Masculinity 5. Time Horizon

In 1991 surveyed IBM employees & managers in 53 countries Identified 5 dimensions that national culture and explained 50% of the differences in respondents attitudes
especially significant because the type of organization is held constant

Hofstedes Cultural Dimensions

Some researchers have attempted to provide a composite picture of culture by examining its subparts, or dimensions. In particular, Dutch researcher Geert Hofstede found there are four dimensions of culture that help to explain how and why people from various cultures behave as they do. Power Distance Uncertainty Avoidance Individualism Versus Collectivism Masculinity Versus Femininity Time Horizon

Geert Hofstede

1. Power distance
or the degree to which members of a society automatically accept a hierarchical or unequal distribution of power in organizations and the society

Hofstedes Cultural DimensionsPower distance

Power distance is the extent to which less powerful members of institutions and organizations accept that power is distributed unequally. Countries in which people blindly obey the orders of their superiors have high power distance. In many societies, lower-level employees tend to follow orders as a matter of procedure. In societies with high power distance, however, strict obedience is found even at the upper levels.

Hofstedes Cultural DimensionsPower distance

Organizations in low-power-distance countries generally will be decentralized and have flatter organization structures. These organizations also will have a smaller proportion of supervisory personnel, and the lower strata of the workforce often will consist of highly qualified people. By contrast, organizations in high-power-distance countries will tend to be centralized and have tall organization structures. Organizations in high-power-distance countries will have a large proportion of supervisory personnel, and the people at the lower levels of the structure often will have low job qualifications. This latter structure encourages and promotes inequality between people at different levels.

Hofstedes Cultural DimensionsPower distance High power distance countries: e.g., Mexico, South Korea, India Low power distance countries: e.g., Austria, Finland, Ireland

Geert Hofstede

2. Uncertainty avoidance
or the degree to which members of a given society deal with the uncertainty & risk of everyday life and prefer to work with long-term acquaintances and friends rather than with strangers

Hofstedes Cultural DimensionsUncertainty avoidance

Uncertainty avoidance is the extent to which people feel threatened by ambiguous situations, and have created beliefs and institutions that try to avoid these. Countries populated with people who do not like uncertainty tend to have a high need for security and a strong belief in experts and their knowledge. Cultures with low uncertainty avoidance have people who are more willing to accept that risks are associated with the unknown, that life must go on in spite of this.

Hofstedes Cultural DimensionsUncertainty avoidance

Countries with high-uncertainty-avoidance cultures have a great deal of structuring of organizational activities, more written rules, less risk taking by managers, lower labor turnover, and less ambitious employees. Low-uncertainty-avoidance societies have organization settings with less structuring of activities, fewer written rules, more risk taking by managers, higher labor turnover, and more ambitious employees. The organization encourages personnel to use their own initiative and assume responsibility for their actions.

Hofstedes Cultural DimensionsUncertainty avoidance

High uncertainty avoidance countries: e.g., Germany, Japan, Spain Low uncertainty avoidance countries: e.g., Denmark and Great Britain

Geert Hofstede

3. Individualism
or the degree to which an individual perceives him- or her-self to be separate from a group and free from group pressure to conform

Hofstedes Cultural DimensionsIndividualism

Individualism is the tendency of people to look after themselves and their immediate family only. Hofstede measured this cultural difference on a bipolar continuum with individualism at one end and collectivism at the other. Collectivism is the tendency of people to belong to groups or collectives and to look after each other in exchange for loyalty.

Hofstedes Cultural DimensionsIndividualism

Hofstede found that wealthy countries have higher individualism scores and poorer countries higher collectivism scores. Note that in Figure, the United States, Canada, Australia, Denmark, and Sweden, among others, have high individualism and high GNP. Conversely, Indonesia, Pakistan, and a number of South American countries have low individualism (high collectivism) and low GNP. Countries with high individualism also tend to have greater support for work ethic, greater individual initiative, and promotions based on market value. Countries with low individualism tend to have less support for the work ethic, less individual initiative, and promotions based on seniority.

Hofstedes Cultural DimensionsIndividualism

Hofstedes Cultural DimensionsIndividualism

High individualism countries: e.g., U.S., Canada, Sweden High collectivism countries: e.g., Indonesia, Pakistan

Geert Hofstede

4. Masculinity
or the degree to which a society looks favorably on aggressive and materialistic behavior

Hofstedes Cultural DimensionsMasculinity

Masculinity is defined by Hofstede as a situation in which the dominant values in society are success, money, and things. Hofstede measured this dimension on a continuum ranging from masculinity to femininity. Contrary to some stereotypes and connotations, femininity is the term used by Hofstede to describe a situation in which the dominant values in society are caring for others and the quality of life.

Hofstedes Cultural DimensionsMasculinity

Countries with a high masculinity index, such as the Germanic countries, place great importance on earnings, recognition, advancement, and challenge. Individuals are encouraged to be independent decision makers, and achievement is defined in terms of recognition and wealth. The workplace is often characterized by high job stress, and many managers believe that their employees dislike work and must be kept under some degree of control.

Hofstedes Cultural DimensionsMasculinity

Countries with a low masculinity index (Hofstedes femininity dimension), such as Norway, tend to place great importance on cooperation, a friendly atmosphere, and employment security. Individuals are encouraged to be group decision makers, and achievement is defined in terms of layman contacts and the living environment. The workplace tends to be characterized by low stress, and managers give their employees more credit for being responsible and allow them more freedom.

Hofstedes Cultural DimensionsMasculinity

Cultures with a high masculinity index, such as the Japanese, tend to favor large-scale enterprises, and economic growth is seen as more important than conservation of the environment. The school system is geared toward encouraging high performance. Young men expect to have careers, and those who do not often view themselves as failures. Fewer women hold higher-level jobs, and these individuals often find it necessary to be assertive. There is high job stress in the workplace, and industrial conflict is common.

Hofstedes Cultural DimensionsMasculinity

Cultures with a low masculinity index (high femininity) tend to favor small-scale enterprises, and they place great importance on conservation of the environment. The school system is designed to teach social adaptation. Some young men and women want careers; others do not. Many women hold higher-level jobs, and they do not find it necessary to be assertive. Less job stress is found in the workplace, and there is not much industrial conflict.

Hofstedes Cultural DimensionsMasculinity

High masculine countries: e.g., Germanic countries (Austria, Switzerland, Germany) High feminine countries: e.g., Norway

Geert Hofstede

5. Time horizon
(short term to long term)

or the degree to which members of a culture are willing to defer present gratification in order to achieve long-term goals

Integrating the Dimensions

A description of the four dimensions of culture is useful in helping to explain the differences between various countries, and Hofstedes research has extended beyond this focus and shown how countries can be described in terms of pairs of dimensions. The integration of these cultural factors into two-dimensional plots helps to illustrate the complexity of understanding cultures effect on behavior. A number of dimensions are at work, and sometimes they do not all move in the anticipated direction. For example, at first glance, a nation with high power distance would appear to be low in individualism, and vice versa, and Hofstede found exactly that (see Figure). However, low uncertainty avoidance does not always go hand in hand with high masculinity, even though those who are willing to live with uncertainty will want rewards such as money and power and accord low value to the quality of work life and caring for others (see Figure). Simply put, empirical evidence on the impact of cultural dimensions may differ from commonly held beliefs or stereotypes.

Power Distance and Individualism-Collectivism 0 Small Power Distance Collectivist

Large Power Distance Collectivist

Individualism Index

2 3

1. Costa Rica 2. Korea & Mexico 3. Brazil & India 4. Israel & Ireland 5. Australia & U.S.A. 6. France & Italy

Small Power Distance 112 Individualist 10

Large Power Distance Individualist 110

Power Distance Index

PowerPower-Distance and IndividualismIndividualismCollectivism

PowerPower-Distance and UncertaintyUncertaintyAvoidance

Masculinity/Femininity and Uncertainty Avoidance 0

Uncertainty Avoidance Index

Weak Uncertainty Avoidance Feminine

Weak Uncertainty Avoidance Masculine

2 1 4 5 8

7 9

1. Norway 2. Malaysia 3. Jamaica 4. U.S.A. 5. Taiwan 6. Costa Rica 7. Australia 8. Mexico 9. Japan 10. Greece

6
Strong Uncertainty Avoidance Feminine 10

112

10 Strong Uncertainty
Avoidance Masculine 100

Masculinity Index

MasculinityMasculinity-Femininity and UncertaintyUncertaintyAvoidance

Case Study

Work Value and Attitude Similarities

Early research by Ronen and Kraut reported that countries could be clustered into more or less homogeneous groups based on intercorrelations of standard scores obtained for each country from scales measuring leadership, role descriptions, and motivation. These researchers then attempted to cluster the countries by use of the mathematic technique of nonparametric multivariate analysis, known as smallest space analysis (SSA). Simply put, this approach maps the relationships of various culture dimensions among the countries by showing the distance between each. By looking at the resulting two-dimensional map, one can see those countries that are similar to each other and those that are not. Drawing on the work of many earlier researchers as well as that of 4,000 technical employees in 15 countries, Ronen and Kraut were able to construct SSA maps of various countries, including the United States, France, India, Sweden, and Japan. These maps showed five country clusters: (1) Anglo-American (United States, United Kingdom, Australia); (2) Nordic (Norway, Finland, Denmark); (3) South American (Venezuela, Mexico, Chile); (4) Latin European (France and Belgium); and (5) Germanic (Germany, Austria, and Switzerland).

Work Value and Attitude Similarities

Drawing on the work of many earlier researchers as well as that of 4,000 technical employees in 15 countries, Ronen and Kraut were able to construct SSA maps of various countries, including the United States, France, India, Sweden, and Japan. These maps showed five country clusters: (1) Anglo-American (United States, United Kingdom, Australia); (2) Nordic (Norway, Finland, Denmark); (3) South American (Venezuela, Mexico, Chile); (4) Latin European (France and Belgium); and (5) Germanic (Germany, Austria, and Switzerland). Commenting on the overall value of their research, Ronen and Kraut concluded: An important aspect of this study is the potential for practical application by multinational organizations. For example, knowledge of relative similarities among countries can guide the smooth placement of international assignees and the establishment of compatible regional units, and predict the ease of implementing various policies and practices across national boundaries.

Country Clusters
To date, perhaps the most integrative analysis of all available findings has been provided by Ronen and Shenkar. After conducting a thorough review of the literature, they found that eight major cluster studies had been conducted over the previous 15 years. These studies examined variables in four categories: (1) the importance of work goals; (2) need deficiency, fulfillment, and job satisfaction; (3) managerial and organizational variables; and (4) work role and interpersonal orientation. Based on careful analysis of these research efforts, Ronen and Shenkar identified eight country clusters and four countries that are independent and do not fit into any of the clusters (see Figure). Each country in Figure that has been placed in a cluster is culturally similar to the others in that cluster. In addition, the closer a country is to the center of the overall circle, the greater its per capita gross national product (GNP). Those countries with similar GNPs will not necessarily have intercluster similarity, but to the extent that GNP influences values and culture, these countries will have converging cultural values.

Country Clusters

Country Clusters
The concept of country clusters is useful to those studying multinational management as well. Ronen and Shenkar note: As multinational companies increase their direct investment overseas, especially in less developed and consequently less studied areas, they will require more information concerning their local employees in order to implement effective types of interactions between the organization and the host country. The knowledge acquired thus far can help one to understand better the work values and attitudes of employees throughout the world. American theories work very well for Western nations. Are they equally applicable in non-Western countries? Clearly, more cluster research is called for, including research in countries from all parts of the globe.

Fons Trompenaars
7 dimensions of culture
Universalism vs. Particularism
What is more important - rules or relationships?

Individualism vs. Communitarianism

Do we function in a group or as an individual? How far do we get involved?

Specific vs. Diffuse cultures

Do we display our emotions?

Affective vs. Neutral cultures

Do we have to prove ourselves to receive status or is it given to us?

Achievement vs. Ascription

Sequential vs synchronic cultures

Do we do things one at a time or several things at once?

Internal vs External control

Do we control our environment or work with it ?

Trompenaars Cultural Dimensions

A more recent description of how cultures differ, by another Dutch researcher, Fons Trompenaars, is receiving increasing attention as well. Building heavily on value orientations and the relational orientations of well-known sociologist Talcott Parsons, Trompenaars derived five relationship orientations that address the ways in which people deal with each other; these can be considered to be cultural dimensions that are analogous to Hofstedes dimensions. Trompenaars also looked at attitudes toward both time and the environment,

Trompenaars Cultural DimensionsUniversalism vs. Particularism

Universalism is the belief that ideas and practices can be applied everywhere without modification. Particularism is the belief that circumstances dictate how ideas and practices should be applied. In cultures with high universalism, the focus is more on formal rules than on relationships, business contracts are adhered to very closely, and people believe that a deal is a deal. In cultures with high particularism, the focus is more on relationships and trust than on formal rules. In a particularist culture, legal contracts often are modified, and as people get to know each other better, they often change the way in which deals are executed.

Trompenaars Cultural DimensionsUniversalism vs. Particularism

Based on these types of findings, Trompenaars recommends that when individuals from particularist cultures do business in a universalist culture, they should be prepared for rational, professional arguments and a lets get down to business attitude. Conversely, when individuals from universalist cultures do business in a particularist environment, they should be prepared for personal meandering or irrelevancies that seem to go nowhere and should not regard personal, get-to know-you attitudes as mere small talk.

Trompenaars Cultural DimensionsUniversalism vs. Particularism

High universalism countries: e.g., Canada, U.S., Netherlands, Hong Kong High particularism countries: e.g., China, South Korea

Trompenaars Cultural DimensionsIndividualism vs. Communitarianism

Individualism: people as individuals Countries with high individualism: stress personal and individual matters; assume great personal responsibility (e.g., Canada, Thailand, U.S., Japan) Communitarianism: people regard selves as part of group Value group-related issues; committee decisions; joint responsibility (e.g., Malaysia, Korea)

Trompenaars Cultural DimensionsIndividualism vs. Communitarianism

Although Trompenaars derived these two relationships differently than Hofstede, Trompenaars has used the word communitarianism rather than collectivism. For him, individualism refers to people regarding themselves as individuals, while communitarianism refers to people regarding themselves as part of a group. Although the definitions are not exactly the same, the fact that there are differences (e.g., Mexico and Argentina are collectivistic in Hofstedes findings but individualistic in Trompenaarss research) points out that cultural values may be changing (i.e., Hofstedes findings may be dated). For example, with Mexico now part of NAFTA and the global economy, this country may have moved from dominant collectivistic or communitarianistic cultural values to more individualist values. Trompenaars also found that the former communist countries of Czechoslovakia and the Soviet Union now appear to be quite individualistic, which of course is contrary to assumptions and conventional wisdom about the former communist bloc. In other words, Trompenaars points out the complex, dynamic nature of culture and the danger of overgeneralization.

Trompenaars Cultural DimensionsIndividualism vs. Communitarianism

High-individualism societies stress personal and individual matters; high-communitarianism societies value group-related issues. Negotiations in cultures with high individualism typically are made on the spot by a representative, people ideally achieve things alone, and they assume a great deal of personal responsibility. In cultures with high communitarianism, decisions typically are referred to committees, people ideally achieve things in groups, and they jointly assume responsibility. Trompenaars recommends that when people from cultures with high individualism deal with those from communitarianism cultures, they should have patience for the time taken to consent and to consult, and they should aim to build lasting relationships. When people from cultures with high communitarianism deal with those from individualist cultures, they should be prepared to make quick decisions and commit their organization to these decisions. Also, communitarianistics dealing with individualists should realize that the reason they are dealing with only one negotiator (as opposed to a group) is that this person is respected by his or her organization and has its authority and esteem.

Trompenaars Cultural Dimensions

Countries with high individualism: e.g., Canada, Thailand, U.S., Japan Countries with high communitarianism: e.g., Malaysia, Korea

Trompenaars Cultural DimensionsNeutral vs. Emotional

A neutral culture is one in which emotions are held in check. People in these countries try not to show their feelings; they act stoically and maintain their composure. An emotional culture is one in which emotions are openly and naturally expressed. People in emotional cultures often smile a great deal, talk loudly when they are excited, and greet each other with a great deal of enthusiasm.

Trompenaars Cultural DimensionsNeutral vs. Emotional

Trompenaars recommends that when individuals from emotional cultures do business in neutral cultures, they should put as much as they can on paper and submit it to the other side. They should realize that lack of emotion does not mean disinterest or boredom, but rather that people from neutral cultures do not like to show their hand. Conversely, when those from neutral cultures do business in emotional cultures, they should not be put off stride when the other side creates scenes or grows animated and boisterous, and they should try to respond warmly to the emotional affections of the other group.

Trompenaars Cultural DimensionsNeutral vs. Emotional

High neutral countries: e.g., Japan and U.K. High emotion cultures: e.g., Mexico, Netherlands, Switzerland

Trompenaars Cultural DimensionsSpecific vs. Diffuse

A specific culture is one in which individuals have a large public space they readily let others enter and share and a small private space they guard closely and share with only close friends and associates. A diffuse culture is one in which public space and private space are similar in size and individuals guard their public space carefully, because entry into public space affords entry into private space as well. In specific cultures, people often are invited into a persons open, public space; individuals in these cultures often are open and extroverted; and there is a strong separation of work and private life. In diffuse cultures, people are not quickly invited into a persons open, public space, because once they are in, there is easy entry into the private space as well. Individuals in these cultures often appear to be indirect and introverted, and work and private life often are closely linked.

Trompenaars Cultural DimensionsSpecific vs. Diffuse

Trompenaars recommends that when those from specific cultures do business in diffuse cultures, they should respect a persons title, age, and background connections, and they should not get impatient when people are being indirect or circuitous. Conversely, when individuals from diffuse cultures do business in specific cultures, they should try to get to the point and be efficient, learn to structure meetings with the judicious use of agendas, and not use their titles or acknowledge achievements or skills that are irrelevant to the issues being discussed.

Trompenaars Cultural DimensionsSpecific vs. Diffuse

High specific cultures: e.g., Austria, U.K., U.S. High diffuse cultures: e.g., Venezuela, China, Spain

Trompenaars Cultural Dimensions

Achievement vs. Ascription
Achievement culture: status based on how well perform functions (Austria, Switzerland, U.S.) Ascription culture: status based on who or what person is (e.g., Venezuela, China, Indonesia)

Trompenaars Cultural Dimensions

Time
Sequential: only one activity at a time; appointments kept strictly, follow plans as laid out (U.S.) Synchronous: multi-task, appointments are approximate, schedules subordinate to relationships (e.g., France, Mexico) Present vs. Future:
Future more important (Italy, U.S., Germany) Present more important (Venezuela, Indonesia All 3 time periods equally important (France, Belgium

Trompenaars Cultural Dimensions

The Environment
Inner-directed: people believe in control of outcomes (U.S., Switzerland, Greece, Japan) Outer-directed: people believe in letting things take own course (China, many other Asian countries)

Integrating Culture and Management: The GLOBE Project

GLOBE: Global Leadership and Organizational Behavior Effectiveness. Project extends and integrates previous analyses of cultural attributes and variables. Evaluates nine different cultural attributes using middle managers from 951 organizations in 62 countries. Multi-cultural team of 170 scholars from around the world worked together to survey 17,000 managers in 3 industries: financial services, food processing, and telecommunications. Covered every major geographic region of the world.

The GLOBE Project

The 9 Dimensions of the GLOBE Project:
Uncertainty avoidance Power distance Collectivism I: Social collectivism Collectivism II: In-group collectivism Gender egalitarianism Assertiveness Future orientation Performance orientation Humane orientation

GLOBE Results
Corresponds generally with those of Hofstede and Trompenaars. Different from Hofstede in that many more researchers with varied perspectives were involved (vs. Hofstede workng alone); studied many companies vs. Hofstedes IBM. GLOBE provides a current comprehensive overview of general stereotypes that can be further analyzed for greater insight.

GLOBE Project

GLOBE Analysis

International Blunders
To avoid making blunders, a person must be able to discern the difference between what must be done, what must not be done, and what may or may not be done. Complete knowledge and understanding of a foreign culture, however, is almost impossible to acquire. Understanding of any foreign culture requires knowledge in a great many areas. Unfortunately, even a wellintended person can commit a blunder by overlooking just one seemingly unimportant aspect of a foreign culture.

On New Years Day 1985, A former president of American Express, Japan was featured in a full-page ad in a photo of himself wearing a Japanese kimono. Apparently, no foreigner had done this before and it was suspected by many Japanese that it was intended as a joke to make fun of the local culture. Some even complained that it was an intentional attempt to humiliate the Japanese.

The peoples of each culture uniquely utilize body movements as methods of communication. The meanings of motions and signs common in one culture may relay something quite different in another. Consider, for example, the OK sign commonly used in the United States. In France it signifies zero, and in Japan it symbolizes money. In parts of South America, however, it is a vulgar gesture. One unfortunate company learned this when it had an entire catalog printed with an OK stamp on each page. Although the error was quickly discovered, it created a costly six-month delay while all of the catalogs were reprinted.

People in the United States shake their heads up and down to signify yes. Many British, however, make the same motions just to indicate that they hearnot necessarily that they agree. To say no, people shake their heads from side to side in the United States, jerk their heads back in a haughty manner in the Middle East, wave a hand in front of the face in the Orient, and shake a finger from side to side in Ethiopia. Asian Indians sometimes shift their heads from side to side in a slightly jerky manner to indicate interest. However, in New Zealand people suck in a bit of air to show the same interest.

During the groundbreaking ceremonies for Hitachis subsidiary, Hitachi Automotive Products (USA), Inc., the Governor of Kentucky presented the Japanese executives with a flag of the Commonwealth of Kentucky. After opening the flag for all to see, the Japanese carelessly dragged it along the ground. In Japan (and in many other countries), flags are not treated with the same respect as they are in America. The Japanese really meant no disrespect; they simply were unaware of U.S. customs about flags. However, many in the audience, especially the older Americans, were offended.

One U.S. company lost a major contract opportunity in Greece because its managers tried to impose U.S. customs on the Greek negotiators. Besides being too forthright and outspoken in the eyes of the Greeks, the Americans tried to set time limits for the meetings. The Greeks, however, considered time limits insulting and thus felt that the Americans showed a lack of finesse. The Americans also wanted the Greeks to first agree to principles and then allow their subordinates to workout all necessary details. The Greeks viewed this as a deceptive strategy; they preferred to directly handle all arrangements regardless of the time involved.

One large firm went to China with a 50-plus page legal document to license pollution control technology. The Chinese laughed at them, tossed it out, and the proposed deal would have fallen through, but because good personal relations had been established, they allowed the firm to start over. A 10-page document was then developed and accepted. A Columbus, Ohio company committed a minor error in filling out a form in Brazil. Unfortunately, this mistake resulted in the firm being unable to withdraw $200,000 in profits it eventually earned there. What was the minor error? Someone had failed to place a check in a box on the document that would have allowed the company to withdraw profits at a reasonable rate.

Protocol with regard to location is often the source of international blunders between cultures. A Chicago company was bidding on a public works project in Thailand and was waiting for the Thai contingent to arrive at their Chicago offices for the meeting. After hours of waiting, the Chicago company found out that the Thai group was still waiting to be picked up at the airport. They rescheduled a meeting for the next day, only to find out that the same communication problem existed. The Thai group waited for the Chicago company to pick them up at the hotel, while the Chicago company expected the Thai group to meet them at the Chicago office.

In France, McDonalds overlooked a cultural difference that led to years of litigation. In selecting a French partner, McDonalds examined a number of characteristics that would ensure sales. McDonalds is very good at this and, as usual, was successful. However, it did not examine carefully enough its partners attitudes about cleanliness. Because French firms sometimes place less emphasis on cleanliness than U.S. firms do, local references of the French partner did not expose this as a troublesome issue. As business in France grew, however, McDonalds soon observed hygiene habits it considered unacceptable in its U.S. outlets. These habits, though, were not viewed as negatively by the French partner or by most of the French customers, for that matter. The real problem? Many of the outlets customers were U.S. tourists expecting U.S. standards. The French outlets, there- fore, negatively impacted McDonalds global image and threatened its clean reputation at home.

A local supermarket hoping to impress Japanese visitors served sushi and tea to its guests. Unfortunately, it not only served the fish cooked when the fish should have been served raw, but the supermarket also served Chinese tea.

Even the rejection of a cup of coffee can cause major problems. While a very profitable opportunity was being negotiated, one U.S. executive innocently made the mistake of refusing a Saudi Arabians friendly offer to join him for a cup of coffee. Such a rejection is considered an affront in Saudi Arabia. Naturally, the Saudi became much less sociable, and the negotiation process was much less successful than it might have been.

Even Professors of International Business have been known to make mistakes. Indiana University, for example, hosted an important international business conference in 2002 and invited five distinguished speakers to talk about the history of international business education. Dr. John Daniels, past president of the Academy of International Business and a highly visible researcher in the field of international business, was one of the special speakers. As he was about to make his presentation, however, he saw he had a problem. Sitting in the audience was a person whom Dr. Daniels had identified in his already circulated paper as dead.