MGT 604

Managing in the Global Context

Topic 3
Understanding Cultural Dimensions (1)
 Semester Topics
Week 1: Intro to cross-cultural management / assessing the global environment
Topic 2 - Strategy for global operations & emerging economies
Topic 3 - Understanding cultural dimensions (1)
Topic 4 - Understanding cultural dimensions (2)
Topic 5 - Ethics and Corporate Social Responsibility
Topic 6 - Organisational Structure and Control Systems
Topic 7 - Cross-cultural communication, negotiations and decision making
Topic 8 - International Human Resource Management
Topic 9 - Expatriation and Repatriation Management
Topic 10 - Leadership and Control in the Global Context
Topic 11 - Managing & Motivating Multicultural Global Teams.

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 Topic 3
• Culture and Organisations
• Cultural Stereotypes
• Cultural Intelligence
• Kluckhohn and Strodtbeck’s Theory
• Hofstede’s Cultural Dimensions

Readings: Chapter 3, Deresky, H. (2017). International

Management: Managing Across Borders and Cultures. Text
and Cases, Pearson, 9th edition.
Case Study: Read the Case Study: Miscommunication in
Brazil (Textbook, pp.178-180).

VIDEO: Geert Hofstede Explains His Cultural Dimensions

Theory https://www.youtube.com/channel/UCC5EEtqfF3lbJ7KzrtXGtfg
Cultural Similarities & Differences

Preferred Healing Dwelling

Religion
Food practices

Customs
Values Language

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 Importance of
understanding culture

President Barak Obama greeting the President Donald Trump greeting the
Emperor of Japan Emperor of Japan

Whose foreign policy was more successful in Japan?

Culture and
Its Effect on Organisations
• Societal culture affects
organisational culture.

• “We know that cultural values

can predict employee
outcomes with similar or even
more strength than traditional
factors such as
demographics, personality
traits, and cognitive ability” (
Taras V. et al, 2011)
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 Influence of Culture on Behavior

US managers
Culture believe in individual
achievements

Latin American
managers consider
loyalty to the family
when hire staff
Behavior Values

European managers hire

people known for high
professional achievements

Attitudes
Asian managers often hire members
of their family and friends

Nancy J. Adler, International Dimensions of Organizational Behavior (2008)

http://books.google.com.au/books?id=w_AnUby8L3EC&printsec=frontcover&source=gbs_ge_summary_r&cad=0#v=onepage&q&f=false
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Cultural Intelligence (CQ)
• Cultural intelligence
• How well a person
can adapt and
manage effectively
in culturally diverse
settings

• Cultural sensitivity or
cultural empathy
• The awareness
and an honest
caring about
another individual’s
culture
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See more on the Cultural Intelligence Centre site: https://culturalq.com/what-is-cq/

 Cultural Stereotypes
Cultural stereotypes describe the attitudes of many people most of the time.

But NOT of all people all the time!

Think of 3 cultural
stereotypes that you may
have about other cultures.

What caused you to develop

those stereotypes?

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Cultural Prejudice
• Cultural Prejudice is the belief or perception that
people of a different culture are inferior or have
negative characteristics because of their skin color,
religion or cultural background.
• Cultural Competence helps managing our
prejudices
• Watch Gail Price-Wise talking about managing cultural prejudices in
everyday life: https://youtu.be/E1MI_h0HIcw

Question: Does cultural prejudice negatively

impact your ability to manage people and conduct
business in a global context? Give examples
Cultural Diversity and Subcultures

A subculture is a group of people within a culture that

differentiate themselves from the larger culture to which
they belong.

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 Kluckhohn and Strodtbeck’s
Values Orientation Theory (1961)
• One of the earliest identifications of the dimensions of culture was developed
by Kluckhohn and Strodtbeck (1961) as Values Orientation Theory.

1. Basic nature of human beings:

• Good—left to their own devices, individuals are basically good and will act
in a reasonable and responsible manner;
• Evil—individuals are basically evil and are not to be trusted;
• Mixed—individuals are a mixture of good and evil.

2. Relationships among people:

• Individualistic—the primary responsibility of an individual is to him- or
herself.
• Individual abilities and characteristics are the primary consideration;
• Group—responsibility to family and groups is most important.
• Ability to fit into the group is more important than individual ability;
• Hierarchical—Similar to the group orientation with the addition that distinct
differences in status are expected and respected.
Kluckhohn and Strodtbeck’s
Values Orientation Theory (1961)

3. Activity orientation:
• Being—the point of life is to live and experience an
understanding.
• Doing—the point of life is actually to do things, be
involved, and accomplish goals.

4. Relation to nature:
• Subjugation—nature and the environment determine
human activities;
• Harmony—humans should live in harmony with their
environment;
• Domination—Humans can exert domination over their
environment while they control their own destinies.
Operational Value Differences: Change

“Occasionally, two grey

“Change is possible” “Change is impossible”
horses produce a white
horse, but very few. If you
have two white horses,
the chances are you
Emphasis on Training Emphasis on selection breed white horses”. (Lee
and Development (T&D), and aptitude; selecting
Kuan Yew, Former
giving people the the right person for the
opportunity job; no or little Singapore PM)
to learn on the job. expectations that the
employee will change “An honourable man is an
much. honourable man, and a
liar is a liar; both are born
and not made. One
cannot change to the
other any more than that
same old leopard can
change its spots.” (Gene
Stratton-Porter, A Girl of
the Limberlost)

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Operational Value Differences: Nature
People dominant People are in
over nature harmony with
nature

Policy decisions are Policy decisions are

mainly made to fulfil made to protect the
people’s needs. nature, while meeting
people’s needs.

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Doing vs. Being Cultures
Doing Balancing Being

Employee works hard Actively adjusting their Employees work only as

to achieve goals, to workload, controlling much as needed to be
get tasks done and maintaining able to live.
balance between work
and leisure

US, Japan, Korea, France, Spain Latin America, India,

China Middle East

Material Interested in working People will not work

remuneration fewer hours to for future rewards.
motivates people to balance family life They experience life
work harder as it is.
The Classic Tale Of The Mexican Fisherman :
https://www.youtube.com/watch?v=cMhQyURKztM
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The Concept of Time and Cultures

Focus on Focus on
Focus on Past:
Present: Future:
Traditions and
Based on current Innovations for
customs
moment future profit

How can time affect management decisions?

Expecting
Maintaining Long-term
immediate
great traditions expectations
results

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The Concept of Space and Cultures
Private Mixed Public
Cultures Orientation Cultures

An executive Lower level An executive

holds employees work in holds important
important open space. meetings in an
meetings open area, with
behind closed Top-management open doors and
doors, while have their private many interruptions
the secretary offices that are not from employees
screens all easily accessible. and visitors
calls and visits

Employer: Employee: Employer:

“It is “Can I enter the “Space
important to office directly or belongs to
have your should I wait to everyone”.
own office”. be given a
permission?” 18
 GEERT HOFSTEDE - Cultural Analysis

• In the 1980s, Prof. Hofstede began to

publish his research based on surveys
of over 116,000 people who worked for
IBM in 50 countries.

• His conclusion was: “Culture is more

often a source of conflict than of
synergy. Cultural differences are a
nuisance at best and often a
Geert Hofstede - an influential
disaster."
Dutch researcher in the fields of
organisational studies,
organisational culture, cultural
economics and management.
Watch the interview with Hofstede (2011)
https://www.youtube.com/watch?v=wdh40kgyYOY

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Hofstede Cultural Dimensions

1.Power Distance

2.Uncertainty Avoidance

3. Individualism /
Collectivism
4. Masculinity /
Femininity
5. Long-term / Short-
term orientation
6. Indulgence / Restraint
Hofstede Cultural Dimensions

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1. POWER DISTANCE
Power Distance – the extent to which the less powerful
members of organisations within a country expect and accept
that power is distributed unequally.
=
The extent to which employees accept that their boss has more
power than they have.

Signs of High Power Distance include:

•
inclination to authoritarian style of management;
•
centralisation and strict hierarchy are popular;
•
wide salary range between the top and bottom of
organisation
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 Key Differences
Low Power Distance High Power Distance
Inequalities among people should Inequalities among people are
be minimised expected and desired
Hierarchy in organisation means an Hierarchy reflects natural inequalities
inequality of roles, established for between superiors and subordinates
convenience
De-centralisation is popular Centralisation is popular
The salary range between the top The salary range is broad
and bottom of company is narrow
Subordinates expect to be Subordinates expect to be told what
consulted to do
Privileges are frowned upon Privileges are expected and popular

Read ‘In Asia, Power Gets in the Way’:

https://hbr.org/2012/04/in-asia-power-gets-in-the-way
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2. Uncertainty Avoidance
Uncertainty Avoidance – the extent to which the members
of a culture feel threatened by uncertain or unknown
situations.

Signs of High Uncertainty Avoidance include:

•
acceptance of only familiar risks,
•
resistance to innovations,
•
inclination to creating rules,
•
anxiety or aggression are often visible

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Key Differences

Low Uncertainty Avoidance High Uncertainty Avoidance

Uncertainty is a normal feature of Uncertainty is felt as continuous threat
life
Ambiguous situations and unfamiliar Ambiguous situations and unfamiliar
risks cause no discomfort risks raise fears
What is different is curious What is different is dangerous
Rules should be limited to those that There is an emotional need for rules
are strictly necessary
Tolerance of deviant ideas and Intolerance of unconventional ideas
behavior

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3. Individualism vs. Collectivism
Individualist vs. Collectivist Societies
In individualist societies ties between individuals are loose, and
individual needs are superior to group needs.

In collectivist societies people are integrated into strong groups, and

group’s needs dominate individual needs.

Signs of Collectivism:
- identity is based on social group,
- confrontation is usually avoided,
- management is the management of
groups,
- relationship prevails over task

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Individualism vs. Collectivism

In individualistic societies:
•
People care about their personal
fulfilment

In collectivist societies:
-
Business relies on prior friendship,
-
Arguments must be avoided to
maintain harmony
-
Relationships rely on morality
-
Shame and guilt are used as the
means of control.

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 Key Differences
Collectivist Society Individualistic Society
People are born into extended Everyone grows up looking after
families himself/herself
People are motivated by duties, People are motivated by their own
norms, obligations preferences, needs, rights
Children learn to think “We” Identity is based in the individualistic
“I”
Direct confrontation is usually Relationship is a contract based on
avoided out of fear mutual advantage
Hiring and promotion take into Hiring and promotion are based on
account the interests of group skills and rules only
Management is the management of Management is the management of
group individuals
Relationship prevails over task Task prevails over relationship

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4. Masculinity vs. Femininity

Masculinity or Femininity: Inclination of the

society to such values as recognition,
achievements, challenges, and earnings.

Signs of high Femininity (low Masculinity):

- focus on relationships,
- cooperation emphasised,
- quality of life is valued

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Masculine vs. Feminine Societies

Masculine societies:
• Social gender roles are well defined and clearly distinct
• Some occupations are considered typically male, others essentially
female
• Men are breadwinners
• Man and women follow different types of higher education
• Weaker position of the mother in the family

Feminine societies:
• Social gender roles overlap,
• Both men and women are supposed to be modest and tender,
• People are concerned with quality of life.

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Key Differences
Feminine Masculine
Dominant values in society are Dominant values in society are material
caring for others and quality of life success and progress
Everyone is supposed to be modest Money and assets are important
Both men and women are allowed Men supposed to be assertive,
to be tender and concerned with ambitious and tough. Women are
relationship supposed to be tender and take care of
relationship
Sympathy for the weak Sympathy for the strong

Stress on equality, solidarity and Stress on competition and performance

consensus
Conflicts are resolved through Conflicts are resolved by fighting them
compromise out

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5. Long-term / Short-term orientation

Long-term orientation is typical for

in East Asia. This cultural dimension
describes the time horizons
accepted in societies and often is
called "Confucian work dynamics”.

• Long-Term-oriented societies attach more

importance to the future. They foster
pragmatic values oriented towards rewards,
including persistence, saving and capacity for
adaptation.

• In Short-Term-oriented societies, values

promoted are related to the past and the
present, including steadiness, respect for
tradition, reciprocation and fulfilling social
obligations.

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6. Indulgence vs. Restraint
This dimension is defined as the extent to which people
try to control their desires and impulses, based on the
way they were raised.

A tendency toward a
relatively weak control
over their impulses is
called “indulgence”,
whereas a relatively
strong control over their
urges is called
“restraint”.

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Indulgence vs. Restraint

Restrained societies Indulgent societies

Restrained societies have a Indulgent societies have a
conviction that such gratification tendency to allow relatively free
needs to be curbed and gratification of basic and natural
regulated by strict norms. human desires related to
enjoying life and having fun.

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 Power Distance &
Individualism/Collectivism
Low to high Power Distance
Low power High power
distance with CHINA INDONESIA distance with
Collectivism S. KOREA SINGAPORE Collectivism

CENTRAL ASIA ARAB COUNTRIES

PHILIPPINES
JAPAN
Individualism to
Collectivism

INDIA
ISRAEL RUSSIA

SPAIN

DENMARK GERMANY SOUTH AFRICA

High power
CANADA FRANCE
Low power USA distance with
distance with SWEDEN BRITAIN Individualism
Individualism

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Hofstede,G. (1991) Cultures and Organizations: Software of the Mind, p. 54
 Conclusions

• The country scores in these theories are relative

(i.e. societies are compared to other societies).

• These relative scores have been proven to be

quite stable over decades but gradually change.

• Forces that cause cultures to change tend to be

global (or regional) in nature. They affect many
countries at the same time.

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 THANK YOU
FOR YOUR ATTENTION!

End of Topic 4

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