Cross-Cultural Management

Culture
The word « culture » comes from Latin
« cultura », which refers to cult or worship.
In management aspect, « culture » means
acquired knowledge that people use to
interpret experience and generate social
behavior.
This knowledge forms values, creates
attitudes, and influences behavior.
 Cultural Values
Values: basic convictions that people have
regarding what is right and wrong, good and
bad, important and unimportant.
 Level of culture
pervasive and extends to the whole of a
Dominant Culture country

practices of North Indian are different from

Sub Culture those obtain in South India.

TATA is different from that of INFOSYS while that

Organizational of INFOSIS is not the same as that of WIPRO.

Occupational An Account for example speaks the same

financial language whether he or she is an
Indian or an American. So is the case with a
medical practitioner or an attorney.
 Cultural diversity
 Most importantly, culture affects how people think and
behave.
 Therefore, cultural differences have impacts on
international management.
 An example of handshake:
American (firm), Asian (gentle), British (soft),
French (light and quick), Latin American (moderate
grasp)
 Priorities of cultural values are not the same in
different countries or groups of countries.
 Priorities of Cultural Values
United States Japan Arab Countries
Freedom Belonging Family security
Independence Group harmony Family harmony
Self-reliance Collectiveness Parental guidance
Equality Age/seniority Age
Individualism Group consensus Authority
Competition Cooperation Compromise
Efficiency Quality Devotion
Time Patience Patience
Directness Indirectness Indirectness
Openness Go-between Hospitality
 Cultural diversity

Using graphics to depict cultural diversity:

Concentric circles
The implicit assumption that
guides people’s behavior
(Intangible, helpful in problem
solving & interaction with
others)
The norms and values that
guide the society( Helps
People understand how
they should behave)
The explicit artifacts and products
of the society ( Language, food,
building, art etc)

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 Cross-Cultural Management
CCM is a fairly new field that is based on
theories and research from:
• Cross Cultural Psychology
• International Business
• Organizational Behaviour
• Human Resources
• Anthropology
Goals for Cross-Cultural Management
Cross Cultural Management seeks to
• understand how national cultures affect
management practices
• identify the similarities and differences across
cultures in various management practices and
organizational contexts
• increase effectiveness in global management
 Hofstede’s Cultural Dimensions
• Dutch researcher Geert Hofstede found there are
four dimensions of culture.
• Hofstede’s initial data: questionnaire surveys with
over 116000 respondents from over 70 different
countries who worked in the local subsidiaries of
IBM.
• The fifth dimension was added later.
• Criticized because of its focus on just one
company.
• Popular in the research field of cross-cultural
management.
Hofstede tried to eliminate the impact
of changing organizational cultures
and analyzed the influences of
different national cultures.
Hofstede’s studies of the interactions between
national cultures and organizational cultures
demonstrated that there are national and
regional cultural groupings that affect the
behaviors of societies and organizations, and
that are very persistent across time
 Dimensions of Hofstede’s framework
of assessing culture
• Low and High Power Distance

• Individual and collectivism

• Masculinity v/s Femininity

• Uncertainty avoidance

• Long and short term orientation

 Hofstede’s Cultural Dimensions

a) Power distance:
 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. This should be observed at
lower levels or even upper levels.

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 Power Distance:
unequal power of distribution.
ItHigh
is thePower
distance
distance
between individuals at different levels
Low power
of hierarchy.
distance

Hofstede
Countriesobserved
in whichtwo types
people of distance:
blindly obey the Countries which people (supervisors and sub
1.orders
High power
of theirdistance
superior, employees ordinates) are apt to regard one another
2.acknowledge
Low power distance
the boss’s authority simply by equal in
respecting that individual’s formal position in power.
the hierarchy, and they seldom bypass the
chain of command
Results
• Less Harmony and less cooperation • More harmony and cooperation.
• Centralized order • Decentralized structure
• Autocratic Leadership • Democratic leadership
• Taller Organization structure • Flatter organization structure

Maxico, South Korea and India. Austria, Esrael, USA, UK, Denmark
 Hofstede’s Cultural Dimensions

Uncertainty avoidance
 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; examples
include Germany, Japan, and Spain.
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 Hofstede’s Cultural Dimensions

Individualism
 The tendency of people to look after
themselves and their immediate family only.
Collectivism (in contrast to individualism) is the
tendency of people to belong to groups or
collectives and to look after each other in
exchange for loyalty.
 Hoftstede’s findings show that the wealthy
countries have higher individualism scores
and poorer countries higher collectivism
scores. 18
 Individual and collectivism
Individual
Interest of Self and Family
‘I’ consciousness
Independence of Individual from
organization.
Grater Individual Initiatives
Promotions are based on Merit and
performance
USA, UK, Australia
collectivism
Interest of Group
‘We’ consciousness
Dependency on organization
Less Individual initiatives
Promotions are seniority based
Japan, Taiwan and Pakistan
 Hofstede’s Cultural Dimensions

Masculinity
 A cultural characteristic in which the
dominant values in society are success,
money, and things.
Femininity
 In contrast, 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.

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 Masculinity v/s Femininity
Traditionally, ‘masculine’ values – assertiveness, materialism, aggressiveness and a
lack of concern for others that prevail in society, femininity emphasizes feminine values – a
concern for others, for relationships, nurturing, care for weak and for quality of life. The
degree of masculinity affects in the following characteristics way:
High Masculinity Low Masculinity

• Career is considered as most • Importance is placed on cooperation

important
• Work needs take precedence
• Individual decision-making is
emphasized
• Achievement is given importance and
is defined in terms of money and
recognition
and friendly atmosphere.
• Employee security gets precedence.
• Group decision – making is
emphasized
• Achievement is defined in terms of
human contacts and living
environment

Countries with high masculinity – India, Japan, Countries with low masculinity – Denmark,
USA, UK etc. Norway, Sweden etc.
Short-term/long-term orientation
• The dimension of short-term/long-term orientation
reflects the extent to which the members of a
national culture are oriented toward the recent past
and the present versus oriented toward the future
• The short-term orientation supports immediate
consumption and opposes the deferral of pleasure
and satisfaction
• A longer-term orientation favors the opposite
strategy, that is, doing what is necessary now
whether pleasant or unpleasant, for the sake of
future well-being