Chapter 2: Literature Review
2.2 Factors that affect the cross cultural management: Cultural layers and
2.2 Factors that affect the cross cultural management: Cultural layers and dimensions
The anthropologist Kluckhohn (1954) states that culture is to society as memory is to humans. No human being can function without relying on memory, and no society can function without shared norms and knowledge of its physical, historical, social, political and economic environments (Bhagat, 2012). For example, management in western cultures has a different meaning than in countries such as Japan, South Korea or China: group work and helpful, supporting leaders are highly valued, in contrary to Western Europe, Canada or the US where the focus is on the individual results and a more self-centred way of working.
(Kuruvilla and Chung, 2013)
Culture is a highly complex kind of reality (Usunier 1998). Most of the cultural body is invisible, it can be imagined like a top of an iceberg. Cross-cultural research situations call out those focus points (sometimes conflict points) that are showing the differences of one culture and another, one manager and another, or one employee and another. The
employment system, institutional and legal systems, value systems, time orientations make the hidden parts of the imaginary iceberg, if we hold on to the assumption, they are under the water.
“Culture” has a compound definition: it includes practices (as things we are doing in a certain place) and values (the way we do them). (Redfield, 1962). Systems of beliefs, norms, attitudes, behavioural intentions and values are included in the definition of culture according to Triandis (1972). It is a shared system of representations and meaning
(Goodenough, 1971; Geertz, 1983), can be recognized as basic assumptions and value orientations (Kluckhohn and Strodtbeck, 1961). Geert Hofstede (2001) defines the culture of
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a society as the “collective mental programming” of a group of people in a given nation or geographic locale who speak the same language and have had considerable history in common.
In his theory the mental programing of the individual starts with their social environment where they grow up and experience. The programming starts with the direct environment, the family and with time it involves, neighbourhood, kindergarden, school, friends, workplace and overall living community. In Figure 1 we can see that culture is distinguished from human nature on one side and personality on the other. Although the borders between each side is quite blur and still under research by social scientist, one of most important lesson is that culture is learnt, not inherited, it acquired by learning and experiences. It’s shared between a group (or organization, society) and transgenerational.
Figure 1 Three levels of uniqueness in human mental programming Source: Hofstede (1994)
In Figure 2 we can see the layers of the cultural programming. While in childhood one learns the basic values – good/bad, right/wrong, logical/illogical, beautiful/ugly – later more
specific layers are added, like national, professional and corporate. These layers’
determinates one’s practices and the “way of doing things”.
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Figure 2 Layers of cultural programming Source: Adapted from Hofstede (1991)
Hofstede also conducted perhaps the most comprehensive study of how values in the
workplace are influenced by culture. He analysed a large database of employee values scores collected by IBM, between 1967 and 1973, covering more than 70 countries, from which he first used the 40 largest only and afterwards extended the analysis to 50 countries and 3 regions. He introduced four dimensions of preference, or value-differences: power distance, uncertainty avoidance, individualism- collectivism and masculinity-femininity. Power Distance Index (PDI) expresses the extent of acceptable equality and inequality between people in a society. Hofstede (2001) proposes the power distance as a dimensional national culture: “The extent to which the less powerful members of institutions and organizations within a country expect and accept the power is distributed unequally.” While High power distance index indicates imbalance of power and financial conditions approved by a society, low power distance index societies, instead, stress on minimizing the differences on power and wealth between individuals. In these societies citizen has same equality and
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opportunities (Hofstede, 2001). The level of hierarchical of organizational structure reveals the extent of power distribution. Furthermore, an organization with high autocratic
leadership and centralization of authority characterized society with high Power Distance in which the hierarchical structure is dominance (Hofstede, 1983). Uncertainty Avoidance Index (UAI) deals with the extent of the uncertainty and ambiguity that a society can tolerate (Hofstede, 1980). Countries with high uncertainty avoidance ranking try to minimize
unstructured conditions. These rule-oriented societies constitute laws and regulation in order to reduce the extent of ambiguity. These cultures are aggressive, emotional and security seeking (Jandt, 2006). However, countries with low uncertainty avoidance index have more tolerance and promptly accept changes. Thus, they feel lower need to regulate every
uncommon situation. This enables the society to take more risks. These cultures are more relaxed, unemotional, and less aggressive (Jandt, 2006). Individualism (IDV) index demonstrates the extent that society insists on individual or collective relationships
(Hofstede, 1980). Some people put effort on more freedom and caring only for close family member while, collectivist people integrated into strong in-group have more significantly concern into the group taught than personal interest (Hofstede, 2001). According to Hofstede in organization, the level of individuality depends on the factors such as educational level, size, history, and culture of the organization. In individualistic work environments,
employees “are expected to work rationally according to their own interest, while in a collectivistic culture, “an employer never hires just an individual, but a person who belongs to an in-group” (Hofstede, 2001). One can argue that, collectivist society stress on
establishing good and strong relationship, in order to create an integrated group. Thus, they
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emphasize on relationship based business, particularly, first attempt to establish a
relationship in order to do business (Svensson, 2010). To Hofstede (2001) Chinese values countries with high willing to establish strong relationship (guanxi) and group thinking ranks as collectivist societies. This dimension refers to extent of role divisions between genders.
Hofstede (1980) found that the women’s social role has less variation between different cultures rather than men’s role. He asserts masculine cultures are those who insist on
maximum distinction between the roles of men and women in the societies (Hofstede, 1980).
Thus, country can be characterized as masculine or feminine culture due to predominant values in the society. High Masculinity ranking emphasizes on culture with high domination of male in the society with competitive, assertive, and ambitious traits. On the contrary, feminine cultures care more about quality of interpersonal relations and quality of working life. Managers in the masculine work environment are more decisive and assertive while in feminine cultures, managers are intuitive and insist on general agreement (Jandt, 2006) The various, distinct values have significant effects on the working methods of managers and companies with interests abroad, often in a place where culture and behaviour can be very different. In more individualistic countries, “all members are expected to look after themselves and their immediate families.” Individualistic countries are, for example, France and the United States. Collectivist countries include Vietnam and Pakistan. According to Hofstede, masculinity versus femininity refers to the terms which society identifies as assertiveness versus caring. For instance, Japan and Austria ranked high in masculinity;
Denmark and Chile ranked low.
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A fifth dimension was added in 1991 based on research by Michael Harris Bond, supported by Hofstede, who conducted an additional international study among students with a survey instrument that was developed together with Chinese professors. That dimension, based on Confucian thinking, was called Long-Term Orientation (LTO) very society has to maintain some links with its own past while dealing with the challenges of the present and the future.
Societies prioritize these two existential goals differently.
Societies who score low on this dimension, for example, prefer to maintain time-honoured traditions and norms while viewing societal change with suspicion. Those with a culture which scores high, on the other hand, take a more pragmatic approach: they encourage thrift and efforts in modern education as a way to prepare for the future. (Geert-Hofstede)
In other words, the higher the score the more likely members of the culture think about goals in a longer term way—decades or lifetimes. The lower the score the more likely members conceptualize goals and opportunities in terms of the near and relatively known future. This of course effects the patterns of decisions that people make and the combinations of decisions that groups make together. (Foster 2015)
In the business context this dimension is related to as "(short term) normative versus (long term) pragmatic" (PRA). In the academic environment the terminology Monumentalism versus Flexhumility is sometimes also used.
In the 2010 edition of Cultures and Organizations, a sixth dimension has been added, based on Michael Minkov's analysis of the World Values Survey data for 93 countries. This new dimension is called Indulgence versus Restraint (IND). Indulgence stands for a society that
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allows relatively free gratification of basic and natural human drives related to enjoying life and having fun. Restraint stands for a society that suppresses gratification of needs and regulates it by means of strict social norms. (Geert-Hofstede) In cultures that score high on indulgence, happiness and expressing happiness is always good. In those that score low, happiness and expressing happiness can be bad. Life is not secure and safe in more restrained cultures and people are more careful about how they view their experiences.
(Foster 2015)
Figure 3 Hofstedes's Dimensions of Culture Source: www.linkedin.com
While studying about culture and cultural differences around the world, nationality and national character are the issues always in the middle of interest. Even researchers link culture to a specific country or countries when speaking about this topic. Everybody had heard about the so-called stereotypes, a more or less accurate form of characterization which describes general, most common attributes of people from other countries. Although
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stereotypes are based on many individual’s congruent experience, and in fact, some does have a good point, the majority is invalid, because of the influence of personal behaviour and the given situation. There is a big possibility of someone not fitting the pattern: you could always meet a Japanese who is not so reserved or polite, talk to a shy, serious Latino or wait long hours for a German, because that specific person doesn’t have the qualities you might expect knowing the typical profile of that country or society – with the words of Ralph Linton “no matter how carefully the individual has been trained or how successful his conditioning has been, he remains a distinct organism with his own needs and with
capacities for independent thought, feeling and action. Moreover, he retains a considerable degree of individuality”. (Bhagat, Triandis and McDevitt 2012) Worth to mention
Goffman’s conclusion here: he said that “culture concerns systems of meaning, ideas and patterns of thought. It represents more a model for the behaviour or members of a given group than a model of their behaviour”. (Goffman 1974). So, there is no reason to think about culture as some general pattern fitting to a whole society: it is rather similar to a bunch of activities shared by a particular group of people. Culture can be viewed as a set of beliefs or standards, shared by a group of people, which help the individual to decide what is, what can be, how one feels about it, what to do, and how to go about doing it (Goodenough, 1971) But an interesting study of a Swedish writer Selma Lagerlof (Petit, 1960) states that culture is “what remains when that which has been learned is entirely forgotten”. Since culture is not
“forgotten”, it is mostly unconsciously covered in individual and collective behaviour and actions with members of the same cultural group.
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The cultural environment we born, grew up and live has incredible power to form everyone's way of thinking and behaviour. So that our customs, education, religion and the general norms we respect are highly affected by the characteristics of different cultural backgrounds.
Normally, in a large, coherent cultural environment there is major resistance against outside impact, and people have their priorities of supporting the national industries and consume goods that are manufactured on the spot, e.g. South Korea (Kuruvilla and Chung, 2013) In a well-maintained national culture like this, making people understand and accept cross-cultural diversity means another challenge for the human resources manager. But it should not be forgotten that a person is not just a stereotype, and there are a lot of contradictions between our principles and actions. It is common to see in Taiwan that a straight-out nationalist, who has deep bias toward foreign entrepreneurs or westerners, only favours famous overseas brands and selects import goods when purchasing appliances for his/her own home.
Baligh (1994) says that culture is a set of components such as relationships, language and communication, institutional systems and law, values, time orientations and mindsets. He states that there must be a fit between culture and the organizational structure, but for that we need to decide whether knowledge is universal or relative, in other words, whether
management knowledge is free and independent of context or environment. If we agree that the management knowledge is context free, then the use of culture in international
management research makes very little sense, and does not worth studying it. But if we think about culture as various, local ways of doing things, then there is a question of whether these local cultures converge or not, and in what ways. The cross-cultural study of management
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states that they do converge, but the process will be slow so that the related research findings can hold true and stay valid for a long period of time. There is the impact of modern
technology which cannot be ignored, neither the differences of ‘modern’ and ‘traditional’, individualism versus collectivism. In reality, the so-called modern culture is based on western values, despite the rich historical and value system of collectivist nations in Asia.
Migrations, ethnic group and subculture movements, numerous assimilations have directed our world to its recent complexity, where the borders of different cultures have even more complicated definitions. Ethnicity, as a belief based on habits and a sense of belonging to a specific group of people, with a matter of individualization have led to an interesting form where globalization accompanied by fragmentation and singularization, especially in regarding consumption (Firat, 1995)