SISU IBUS2001 Cross-Cultural

Negotiation and Management

Lecturer and Course Coordinator:

Dr. Julian Yim

Week 3 Lecture
Understanding dimensions and theories of Culture
(Luthans & Doh, Chapter 4 )
 Today we will… 2

• The specific objectives of this chapter are to

1. DEFINE the term culture and discuss some of the
comparative ways of differentiating cultures.
2. DESCRIBE the concept of cultural values, and relate
some of the international differences, similarities,
and changes occurring in terms of both work and
managerial values.
3. IDENTIFY the major dimensions of culture relevant to
work settings through Hofstede cultural model.
4. DISCUSS the first assignment-group case study report

Dr Julian Yim 2
 What is Culture? 3

“All people are the same. It’s only their habits that are so
different.” -Confucius from around 500 BC
• Culture is those deep, common, un-stated experiences
which members of a given culture share, which they
communicate without knowing, and which form the backdrop
against which all other events are judged (Hall, 1966).
• Culture is the Software of the Mind (Hofstede, 2000).
• Culture is the way in which a group solves problems and
reconciles dilemmas (Schein 1985; Trompenaars and
Hampden-Turner 2003)
• Watch Canvas video 1. What is culture

Dr Julian Yim
 The Nature of Culture

• Culture is the acquired knowledge that people use to interpret experience and
generate social behavior.

• Learned: Culture is acquired by learning and experience.

• Shared: People share culture; it is not specific to single
individuals.
• Transgenerational: Passed down from one generation to the next.
• Symbolic: Culture is based on the human capacity to symbolize.
• Patterned: Culture is integrated; change in one part, changes
another.
• Adaptive: Culture is based on the human capacity to change or
adapt.
Areas Affected by Culture 5

• Technology transfer
• Managerial attitudes
• Managerial ideology
• Business-government relations
• Human thinking and behavior

Dr Julian Yim
 Priorities of Cultural Values 6

United States Japan Arab Countries

Freedom Belonging Family security

Independence Group harmony Family harmony

Self-reliance Collectiveness Parental guidance
Equality Age/seniority Age
Individuality Group consensus Authority
Competition Cooperation Compromise
Efficiency Quality Devotion
Time Patience Patience
Directness Indirectness Indirectness
Openness Go-between Hospitality

Dr Julian Yim
 Cultural Diversity

• Specific examples where the culture of a society can directly affect management
approaches.

1. Centralized vs. decentralized decision making.

2. Safety vs. risk.
3. Individual vs. group rewards. • Culture can affect
technology transfer,
4. Informal vs. formal procedures.
managerial
5. High vs. low organizational loyalty. attitudes,
6. Cooperation vs. competition. managerial
7. Short-term vs. long-term horizon. ideology, and even
8. Stability vs. innovation. business-
government
relations.
Cultural Impact on International Management:
1. Centralized versus Decentralized Decision Making 8

• Centralized - Top managers make all

important organizational decisions
• Decentralized - Decisions are diffused
throughout the enterprise
– Middle- and lower-level managers actively
participate in and make key decisions

Dr Julian Yim
Cultural Impact on International Management:
2. Safety versus Risk 9

• Organizational decision makers are risk-

averse and have great difficulty with
conditions of uncertainty in some societies
• Some societies encourage risk taking and
decision making under uncertainty is common

Dr Julian Yim
Cultural Impact on International Management:
10

3. Individual versus Group Rewards

• Individual rewards - Given to personnel who

do outstanding work in the form of bonuses
and commissions
• Group rewards - Required by cultural norms,
and individual rewards are frowned upon

Dr Julian Yim
Cultural Impact on International Management:
4. Informal versus Formal Procedures 11

• Informal societies - Much is accomplished

through informal means
• Formal societies - Formal procedures are set
forth and followed rigidly

Dr Julian Yim
Cultural Impact on International Management:
5. High versus Low Organizational Loyalty 12

• High loyalty - People identify very strongly

with their organization or employer
• Low loyalty - People identify with their
occupational group
– Such as engineer or mechanic

Dr Julian Yim
Cultural Impact on International Management:
13

6. Cooperation versus Competition

• Some societies encourage cooperation

between their people
• Others societies encourage competition
between their people

Dr Julian Yim
Cultural Impact on International Management:
7. Short-term versus Long-term Horizons 14

• Some cultures focus most heavily on short-

term horizons
– Such as short-range goals of profit and
efficiency
• Some cultures are more interested in long-
range goals
– Such as market share and technological
developments

Dr Julian Yim
Cultural Impact on International Management:
8. Stability versus Innovation 15

• Culture of some countries encourages

stability and resistance to change
• Culture of others puts high value on
innovation and change

Dr Julian Yim
 Figure 4-1: A Model of Culture

• Another way of depicting cultural diversity is through visually separating its

components.

Source: Trompenaars, Alfons, and Charles Hampden-Turner. Riding the Waves of Culture: Understanding Diversity in Global Business. New York: McGraw-Hill, 1998.
 Figure 4-2: Comparing Cultures as Overlapping Normal
Distributions

Sources: Revised and adapted from various sources, including Trompena1717171717ars, Alfons, and Charles Hampden-Turner. Riding the Waves of Culture: Understanding
Diversity in Global Business. New York: McGraw-Hill, 1998.
Figure 4-3: Stereotyping from the Cultural Extremes

Sources: Revised and adapted from various sources, including Trompenaars, Alfons, and Charles Hampden-Turner. Riding the Waves of
Culture: Understanding Diversity in Global Business. New York: McGraw-Hill, 1998.
 Values in Culture

• Learned from the culture in

which the individual is reared,
• Values are basic convictions and they help direct the
that people have regarding person’s behavior.
what is right and wrong, • Differences in cultural values
may result in varying
good and bad, important and management practices.
unimportant.
 Values in Transition

• Do values change over time?

• Personal value systems are relatively stable and do

not change rapidly.
• However, managerial values are changing. • Individualism in
• For Japanese managers working in Japanese firms in Japan is on the rise,
the U.S. indicating that
– Lifetime employment is not as accepted. Japanese values
are changing.
– Obedience and conformity is not as important and
you can question a superior. • The culture is
starting to embrace
– They support team values but remain individuals.
what is being called
the “era of personal
responsibility.”
 Value Similarities and Differences
Across Cultures

1. Strong relationship between level of managerial success and

personal values
2. Value patterns predict managerial success and can be used in
selection/placement decisions
3. Country differences in relationship between values and success;
however, findings across U.S., Japan, Australia, India are similar
4. Values of more successful managers favor pragmatic, dynamic,
achievement-oriented, and active role in interaction with others
Values of less successful managers tend toward static and
passive values; relatively passive roles in interacting with others
National cultural dimensions in the
business context
• Geert Hofstede’s Cultural Dimensions

• Hofstede was one of the first researchers to analyze

the influence of NATIONAL culture on management
practices (1980s)
• Empirical study at large multinational company (IBM)
• 66 national subsidiaries
• 116,000 questionnaires
• 60 out of 150 questions concerned values and
opinions.
• Now scores showing relative positions of 70+
countries
• Rank ordered countries
Dr Julian Yim 22
 Hofstede’s Cultural Dimensions
Hofstede’s cultural dimensions 23

Six aspects of national culture that affect our thinking about

organizations :
1. Power Distance
2. Uncertainty Avoidance
3. Individualism―Collectivism
4. Masculinity―Femininity
5. Time Orientation
6. Indulgence vs. Restraint
Hofstede’s research shows how countries can be described in
terms of pairs of dimensions.

The Hofstede insights website has a Compare Countries tool

allowing you to select up to three countries to compare across
six dimensions. Access the comparison here:
https://www.hofstede-insights.com/country-comparison/
Dr Julian Yim
Hofstede’s dimensions of
national culture 24

https://www.hofstede-insights.com/product/compare-countries/

Dr Julian Yim
Hofstede’s Cultural Dimensions 25

• Power Distance
– The extent to which less powerful members accept
that power is distributed unequally
• High power distance countries: people blindly
obey superiors; centralized, tall organizational
structures (Mexico, South Korea, India)
• Low power distance countries: flatter,
decentralized organizational structures, smaller
ratio of supervisor to employee (Austria, Finland,
Ireland)

Dr Julian Yim
Hofstede’s Cultural Dimensions 26

• Uncertainty Avoidance
– The extent to which people feel threatened by ambiguous
situations; create beliefs/institutions to try to avoid such
situations
• High uncertainty avoidance countries: high need for
security, strong belief in experts and their knowledge;
structure organizational activities, more written rules, less
managerial risk taking (Germany, Japan, Spain)
• Low uncertainty avoidance countries: people more
willing to accept risks related to unknown, less structured
organizational activities, fewer written rules, more
managerial risk taking, higher labor turnover, more
ambitious employees (Denmark and Great Britain)

Dr Julian Yim
Hofstede’s Cultural Dimensions 27

• Individualism
– The extent to which people look after themselves and
immediate family only
• Collectivism
– The tendency of people to belong to groups and to look
after each other in exchange for loyalty
• High individualism countries: wealthier, Protestant
work ethic, greater individual initiative, promotions
based on market value (U.S., Canada, Sweden)
• High collectivism countries: poorer, less support
of Protestant work ethic, less individual initiative,
promotions based on seniority (Indonesia, Pakistan)

Dr Julian Yim
Hofstede’s Cultural Dimensions
28
• Masculinity
– A cultural characteristic in which the dominant
social values are success, money, and things
• Femininity
– A cultural characteristic in which the dominant
social values are caring for others and quality of
life
• High masculine countries: stress earnings,
recognition, advancement, challenge, wealth;
high job stress (Germanic countries)
• High feminine countries: cooperation, friendly
atmosphere, employment security, group
decision making; low job stress (Norway)

Dr Julian Yim
Hofstede’s Cultural Dimensions 29

• Time Orientation (1988)

– A cultural characteristic dealing with society’s
search for virtue
• Long-term oriented societies: focus on the
future, able to adapt traditions when conditions
change, tend to save and invest, focus on
achieving long-term results (Asian countries)
• Short-term oriented cultures: focus on quick
results, do not tend to save, service to others,
belief in absolutes, value stability and leisure
(U.S., UK, Spain)

Dr Julian Yim
Hofstede’s Cultural Dimensions
30
• Indulgence vs. Restraint (2010)
– Indulgent: trait related to relative happiness based on
instant gratification
– Restraint: a cultural characteristic based on regulating
and controlling behavior according to social norms
• Indulgent societies: perceived happiness, life in control,
positive emotions, basic needs satisfied (U.S., UK, Australia,
Chile)
• Restrained societies: less happiness, sense of
helplessness, less likely to remember positive emotions,
basic needs not always met (China, Egypt, Romania)

Dr Julian Yim
Examples of Hofstede’s Cultural Dimensions
31

Source: Based on G. Hofstede, “Motivation, Leadership, and organisation: Do American Theories

Apply Abroad?” organisational Dynamics, Summer 1980, pp. 42–63.

Dr Julian Yim
Table 4.5
Criticism of Hofstede’s model 32

•Criticisms include
•surveys to measure culture -> unsuitable
•nations as units of analysis -> not the most
appropriate
•surveys at only one company -> information
cannot be about entire national cultures.

Dr Julian Yim
 Cultural Dimensions—Trompernaars
Dr Fons Trompenaars on Culture
Relations to others:
•Universalism vs. particularism.
•Individualism vs. communitarianism.
•Neutral culture vs. emotional culture.
•Specific culture vs. diffuse culture.
•Achievement culture vs. ascription culture.
Relations to time and environment:
6. Relation to time: sequential/synchronic
7. Relation to the environment: inner- versus outer-directed
•Trompenaars also looked at attitudes toward both time and the environment.
•Time can be viewed as sequential, synchronous, future-oriented, or past- and
present-oriented.
•Environment is the degree people believe they can control outcomes (inner-
directed) or let things take their own course (outer-directed).
Relations to the others 34

Dr Julian Yim
 Relations to time and the environment 35

Table 5.2 Relations to time and the environment

Source: adapted from Trompenaars (1993: 8–11) and his other publications.

Dr Julian Yim
Integrating Culture and Management: The
GLOBE Project 36

• GLOBE: Global Leadership and Organizational Behavior

Effectiveness
• GLOBE extends and integrates the previous analyses of cultural
attributes and variables published by Hofstede and
Trompenaars.
– 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
• First two phases: middle management
– 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
• Third phase: upper-level management
– Team of 40 researchers from 24 countries surveyed 5,000
reports from 1,000 CEOs
Dr Julian Yim
Figure 4-10: Comparing the Cultural Dimension Research:
Hofstede and the GLOBE Project

• Source: Original graphic by Professor Jonathan Doh based on data from Hofstede, Geert. Cultures and Organizations: Software of the Mind. New York: McGraw-Hill, 2005, and the GLOBE project research.
GLOBE’s Cultural Dimensions

• Uncertainty avoidance by relying • Assertiveness, confrontation, and

on norms, rituals, and practices. aggression in social relationships.
• Power distance is how power is • Future orientation—planning,
shared. investing, and delaying
• Collectivism I: Societal gratification.
collectivism—encourage/reward • Performance orientation—how
collective distribution of they encourage/reward group
resources. performance improvement.
• Collectivism II: In-group • Humane orientation—encourage
collectivism—how they express or reward fair, altruistic, friendly,
pride, loyalty, and cohesiveness. generous, and caring behavior
• Gender egalitarianism—how toward others.
they minimize gender role
differences.
Culture construct definitions and sample questionnaire
items 39

Table 2.8 Culture construct definitions and sample questionnaire items

Source: House et al. (2004): 30

Dr Julian Yim
Culture and Management

• The GLOBE project set out to answer many fundamental questions about
cultural variables shaping leadership and organizational processes.

• Are there leader behaviors, attributes, and organizational practices that are
universally accepted and effective across cultures?
• Are there leader behaviors, attributes, and organizational practices that are
accepted and effective in only some cultures?
• How do attributes of societal and organizational cultures affect the kinds of
leader behaviors and organizational practices that are accepted and effective?
• What is the effect of violating cultural norms relevant to leadership and
organizational practices?
• What is the relative standing of each of the cultures studied on each of the nine
core dimensions of culture?
• Can the universal and culture-specific aspects of leader behaviors, attributes,
and organizational practices be explained in terms of an underlying theory that
accounts for systematic differences across cultures?
GLOBE Country Analysis

• The GLOBE analysis corresponds generally with those of Hofstede

and Trompenaars, with some variations resulting from the variable
definitions and methodology.

• The GLOBE analysis is sometimes seen as complicated, but so

are cultures and perceptions.

• GLOBE provides a current, comprehensive overview of general

stereotypes that can be further analyzed for greater insight.
 SUMMARY 42

• Understand the term culture and discuss some of

the comparative ways of differentiating cultures.
• Understand the concept of cultural values and
relate some of the international differences,
similarities, and changes occurring in terms of
both work and managerial values.
• Identify the major dimensions of culture relevant
to work settings and discuss their effects on
behavior in an international environment.

Dr Julian Yim
 Week 3 Tutorial: Activity 1 - Quiz 2 43

• Please download the Quiz 2 from Canvas

Week 3 course materials and answer it in the
tutorial.
• Self-managed quiz is useful for the review of
knowledge learned in this week lecture.
 Quiz answers will be provided in the tutorial.
Please make sure the students attend the
tutorial.

Dr Julian Yim
 Week 3 Tutorial: Activity 2
44
• Please read the following case. Identify and discuss the
impact of cultural differences on business and why MNCs
need to recognize and incorporate cultural differences in their
strategic decision-making (300 words). Post your answer to
week 3 Canvas discussion forum during week 3 tutorial.
– The World of International Management: Culture Clashes
in Cross-Border Mergers and Acquisitions (posted in
Week 3 course materials)

Dr Julian Yim
Week 3 Tutorial: Activity 3 -
Discussion for Assessment 2 Group Case 45

(Euro Disneyland)
• Assessment 2 instruction and marking guide
are available in Canvas.
• You also need to read the report template.
• Work with your group members by dividing
the tasks.

Dr Julian Yim
Week 3 Tutorial: Activity 4
Review and Discussion (optional) 46

1. What is meant by the term culture?

– In what way can measuring attitudes about the following help
differentiate between cultures: centralized or decentralized
decision making, safety or risk, individual or group rewards, high
or low organizational loyalty, cooperation or competition?
• Use these attitudes to compare the United States, Germany,
and Japan, and based on your comparisons, what
conclusions can you draw regarding the impact of culture on
behavior?
2. What is meant by the term value?
– Are cultural values the same worldwide, or are there marked
differences?
– Are these values changing over time, or are they fairly constant?
– How does your answer relate to the role of values in a culture?

Dr Julian Yim
Week 3 Tutorial: Activity 4
Review and Discussion (optional)
47

3. What are the four major dimensions of culture studied by Geert

Hofstede?
– Identify and describe each
– What is the cultural profile of the United States? Of Asian countries?
Of Latin American countries? Of Latin European countries?
• Based on your comparisons of these four profiles, what
conclusions can you draw regarding cultural challenges facing
individuals in one group when they interact with individuals in
one of the other groups?
• Why do you think Hofstede added the fifth dimension of time
orientation and the sixth dimension related to indulgence versus
restraint?
4. As people engage in more international travel and become more
familiar with other countries, will cultural differences decline as a
roadblock to international understanding, or will they continue to be a
major barrier?
– Defend your answer
Dr Julian Yim
Week 3 Tutorial: Activity 4
Review and Discussion (optional)
48

5. What are the characteristics of each of the following pairs of

cultural characteristics derived from Trompenaars’s research:
universalism vs. particularism, neutral vs. emotional, specific
vs. diffuse, achievement vs. ascription?
– Compare and contrast each pair
6. How did project GLOBE build on and extend Hofstede’s
analysis? What unique contributions are associated with
project GLOBE?
7. In what way is time a cultural factor? In what way is the need
to control the environment a cultural factor?
– Give an example for each

Dr Julian Yim