Session 2 What is National Culture? Globalizing HR Core MBA Course

1. Session 2What is National Culture?Globalizing HR Core MBA Course Paul Sparrow Ford Professor of International HRM Manchester Business School 12th January 2004

2. What is National Culture ? • More than just business etiquette... • The collective programming of the mind (Hofstede, 1980) • A system for creating, sending, storing and processing information (Hall and Hall, 1987) • Values, beliefs and expectations that members come to share (van Maanen and Schein, 1979) • Knowledge, beliefs, art, morals, laws, customs and any other capabilities and habits acquired by man as a member of society (Tylor, 1971) • Behaviours that become the norm because a large percentage of people either ascribe to it or break it while acknowledging it is a norm in which they don’t believe (Yoshida and Brislin, 1995)

3. National Culture Is Something That… • Is shared by all or almost all members of some social group • The older members of the group try to pass on to the younger members • Shapes behaviour, or structures one’s perception of the world (as in the case of morals, laws and customs) Adler, N. (1986) International dimensions of organizational behavior. Boston: Kent Publishing

4. Culture - HRM Linkage • Cultural assumptions/ values answer questions for group members • Types of interactions and behaviours which lead to effectiveness and most appropriate relationships • Determines information managers notice, interpret and retain • Leads to different ways of seeing the same event, different problem resolution and solutions • Frames organisational values, norms and artefacts deemed to be consistent • Links to range of organisational behaviours…

5. Cultural Assumptions and OB • Power and authority relationships - leadership • Coping with uncertainty and risk-taking – problem solving • Interpersonal trust • Loyalty and commitment • Motivation – social loafing • Control and discipline – tolerance of deviant behaviour • Co-ordination and integration • Communication • Consultation and participation - conflict Tayeb (1996)

6. Kluckhohm & Strodtbeck’s 6 Fundamental Questions • Who are we? • How do we relate to the world? • What do we do? • How do we relate to each other? • How do we think about time? • How do we think about space?

7. Value Orientations • Values orientations determined by… • Individual psychology (socio-political and personal influences) • Lifestage • Generation subculture (what occurs in history/society that has a formative influence)

8. CPQ4Value Orientations (1) • Human Nature Orientation • Good/evil - inherently corrupt, manipulative • Changeable - stable, dye-cast or redeemable • Man-to-Nature Orientation • Subjugation - submit to nature (firm) • Mastery - need/duty to understand, control • Harmony - work with nature (firm) to maintain balance

9. Value Orientations (2) • Activity Orientation • Being - living for moment, spontaneous • Doing - striving for goals, keeping busy • Thinking - reflecting, living rationally • Relational Orientation • Individual • Collateral • Hierarchical

10. Cultural Convergence ? “Social borders are starting to give way to the information and technology driven processes of convergence that have already turned political borders into largely meaningless lines on economic maps” .... “...The consequences go far beyond surface issues of taste to fundamental issues of thought process and mind-set... The essential continuity between generations has begun to fray” (Kenichi Ohmae, Borderless World. 1995)

11. Cultural Nationalism ? “(Young managers) are drinking cappucino and Perrier, furnishing the apartment with IKEA, eating sushi, dressing in the United Colours of Benetton, listening to US/British rock whilst driving the Hyundai over to McDonald’s” .... “... Yet the more homogeneous lifestyles are becoming, the more steadfastly we shall cling to deeper values - religion, language, art and literature. As our worlds grow more similar, we will increasingly treasure the traditions that spring from within” (Naisbitt and Aburdene, 1990)

12. Three Frameworks for Comparing Cultures • Over 20 measures of cross-cultural differences • Communication context (Hall, 1976, 1983) • Status and function (Laurent, 1983) • Work-related values (Hofstede, 1980, 1991) – also touch on Trompenaars

13. Key dimensions of culture Schein Relationship with nature Human activity Human nature Relationships with people Time Truth and reality Trompenaars Relationship with nature Relationships with people Universalism versus particularism Individualism versus collectivism Affectivity Diffuse versus specific Achievement versus ascription Relationship with time Kluckholn and Strodtbeck Relationship with time Human activity Human nature Relationships with people Time Adler Human nature Relationship with nature Individualist/collectivist Human activity (being/doing) Space (private/public) Time (past/present/future) Hall Space: personal/physical Time: monochronic/polychronic Language: high context/low context Friendships Hofstede Uncertainty avoidance Power distance Individualism/collectivism Masculinity/femininity Source: Schein 1985

14. Context in Communication • Individuals search for meaning in and interpret communications in reference to national culture • Programmed differently in relation to extent to which you rely on ‘hidden dimensions’ • Model built on qualitative insights • High context societies attend to covert clues • Use the situation, non-verbal behaviour etc

15. Communication in High Context Societies “... Many Japanese managers are convinced they can communicate with each other without words at all. It is called ‘Haragei’ or ‘Belly language’ because of the country’s cultural homogeneity... Japanese can somehow convey their intentions through penetrating stares, casual glances, occasional grunts and meaningful silences. As a rule foreigners are beyond such communication” Source: New York Times

16. Characteristics of High Context Cultures • Long lasting, deep relationships • Shared code communications, fast, efficient • Personal responsibility, premium on loyalty • Agreements spoken, not written • Tight distinctions between insiders and outsiders

17. High Context Cultures: What The British Really Mean (1)… WHAT THEY SAY WHAT THEY MEAN Not bad Good or very good Quite good A bit disappointing Perhaps you would like to } I want you to to this, but am open think about …….. } to comments. If I hear nothing, } I will assume that you are doing it It would be nice if you…… }

18. High Context Cultures: What The British Really Mean (2)… WHAT THEY SAY WHAT THEY MEAN Oh, by the way…. I am about to get the primary purpose of our discussion Incidentally…. I was a bit disappointed that I am most upset and cross you …….. It is a pity that you didn’t…. I hear what you say I disagree and do not wish to discus it any further } } } } }

19. High Context Cultures: What The British Really Mean (3)… WHAT THEY SAY WHAT THEY MEAN With the greatest respect I think that you are wrong (or a fool) Very interesting I don’t agree/believe you Perhaps we could consider some other options I don’t like your ideas I’d like to think about that a bit more I’ll bear it in mind I don’t propose to do anything I’ll think about it } } } } } }

20. Locating Low and High Context Cultures HIGH LOW Germany German Swiss Scandinavia North America Belgium, Holland, Denmark France Britain Southern Europe Middle East Asia, Africa, Latin America Japan xxxx xxxx xxx xxx x x xx xxx xxx xxx xxx

21. Characteristics of Low Context Cultures Lawyers per 100,000 people = 279 in U.S., 114 in U.K., 77 in Germany, 29 in France 11 in Japan

22. Characteristics of Low Context Cultures • Shorter, fewer deep relationships • Messages have to be made explicit • Diffused and hard-to-pin down authority • Written, legally-binding agreements • Changeable boundaries between insiders & outsiders • Faster change in behaviour patterns

23. Andre Laurent’s Work Face managers with decisions they make Tap managers’ attitudes to organisational power 9 European countries and U.S. , followed by China, Indonesia and Japan Preferences that emerge in situations that reflect: Function of managers Status of managers Role of managers

24. Function of Manager:Expert or Facilitator ? “...It is important for a manager to have at hand precise answers to most of the questions that his subordinates may raise about their work”: percentage in agreement ? WHAT DO YOU THINK ??? PERCENTAGE WHO AGREE ?

25. The Cross Cultural Puzzle of IHRM It is important for a manager to have at hand precise answers to most of the questions that his subordinates may raise about their work. Source: Laurent 1983

26. Societal Status of Managers ? “...Through their professional activity, managers play an important role in society” Percentage in agreement ? WHAT DO YOU THINK ??? PERCENTAGE WHO AGREE ?

27. Societal Status of Managers ? “...Through their professional activity, managers play an important role in society” Percentage in agreement ? Denmark 32% U.K. 40% Netherlands 45% Germany 46% U.S.A. 52% Sweden 54% Switzerland 65% Italy 74% France 76%

28. Hierarchy and Communication Flows “...In order to have efficient work relationships, it is often necessary to bypass the hierarchical line:” Percentage in disagreement ? WHAT DO YOU THINK ??? PERCENTAGE WHO DISAGREE ?

29. Hierarchy and Communication Flows “...In order to have efficient work relationships, it is often necessary to bypass the hierarchical line:” Percentage in disagreement ? Sweden 22% U.K. 31% U.S.A. 32% Netherlands 37% Switzerland 41% Belgium 42% France 42% Germany 46% China 66% Italy 75%

30. Hofstede’s View of Culture: Work Values and Job Outcomes INDIVIDUALISM Interests of individual take precedence COLLECTIVISM Interests of the group take precedence SOCIAL ORIENTATION i.e. relative importance of the interests of the individual vs. the interests of the group POWER RESPECT Authority inherent in one’s position within hierarchy POWER TOLER-ANCE Assess authority in view of perceived rightness POWER DISTANCE i.e. approp- riateness of power/ authority within organisations UNCERTAINTY ACCEPTANCE Positive response to change and opportunities UNCERTAINTY AVOIDANCE Prefer structure and a consistent routine UNCERTAINTY ORIENTATION i.e. emotional response to uncertainty and change AGGRESSIVE GOAL BEHAVIOUR Value materialism, money and assertiveness. Gender roles PASSIVE GOAL BEHAVIOUR Social relevance, quality of life,welfare GOAL ORIENTATION i.e. what motivates people to achieve different goals LONG-TERM OUTLOOK Value dedication, hard work and self image SHORT-TERM OUTLOOK place less emphasis on hard work TIME ORIENTATION i.e. extent to which members of a culture adopt a long-term or short-term outlook on work or life

31. Hofstede’s Dimensions of Culture 1. Individualism/ collectivism • Individualism signifies loose ties between a person and their fellow human beings • Importance given to individual needs and behaviour • People in collective societies tend to look after one another • Social groups of primary importance

32. Individualism vs Collectivism • Personal autonomy within decision-making • Loose ties between individuals • Own interests over social framework for belonging • Calculative commitment to organisations • Specific role definitions and relationships • Considerable extra-firm mobility • Low levels of paternalism • Example: UK, USA, France, Australia, Germany (individualistic) versus Latin America (collectivist)

33. Individualism Index (IDV) INDIVIDUALISTIC COLLECTIVE Source: Hofstede (1991)

34. Hofstede’s Dimensions of Culture 2. Power Distance • Extent to which it is legitimate for there to be unequal distributions of power and wealth across the hierarchy • Low power distance cultures try to reduce such inequalities • High power distance cultures tolerate or maintain the differences

35. Power Distance • How close are Supervisor- Subordinate relationships ? • If close, is closeness open and friendly or critical and controlling ? If not close, is the distance caring or controlling? • How is authority distributed and used ? Is it widespread throughout all levels, or concentrated at the centre ? • How is responsibility distributed ? Are there differences in who gets responsibility for successes and failures ? • How are proposals originated and approved ? Do actions come from above or are they generated from within ? • Do leaders encourage involvement or compliance ?

36. Power Distance Index (PDI) HIGH MODERATE LOW Source: Hofstede (1991)

37. Hofstede’s Dimensions of Culture 3. Uncertainty Avoidance • Rules and regulations and other organisational procedures to deal with uncertainty • Management tends to revolve around tasks, systems, discipline and goals • Low uncertainty avoidance cultures do not mind coping with chaos or change

38. Uncertainty Avoidance • Extent to which ambiguity and uncertainty is tolerated • Need for regulations for every eventuality • High formalisation of procedures • Specialist roles, standardisation • Lower labour turnover • Risk averse managers • Examples: high bureaucratic organisations in Latin America, Korea, Japan, Greece, Portugal and Belgium

39. Uncertainty Avoidance Index (UAI) UNCERTAINTY AVOIDANCE UNCERTAINTY ACCEPTANCE Source: Hofstede (1991)

40. Impact of Uncertainty Avoidance on European Managers (1) “...Britons learn to expect the unexpected... promises are customarily greeted with scepticism, speedy responses with surprise and errors with resignation. British managers feel comfortable with uncertainty” Source: Barsoux (1992)

41. Impact of Uncertainty Avoidance on European Managers (2) “... Germans, in contrast, expect reliability and punctuality... without rules life would become anarchic, hence the national obsession with planning and adherence to plans... even linguistically (they) consign their verbs to the end of a sentence, so speakers have to know where they are heading before they set off” Source: Barsoux (1992)

42. Impact of Uncertainty Avoidance on European Managers (3) “... A French manager,analysed a problem and discussed every possible approach to it (and has therefore) ... relegated the implementation of his plans to a formality” Source: Barsoux (1992)

43. Hofstede’s Dimensions of Culture 4. Masculinity/ Feminity • Masculine societies distinguish role allocations between sexes clearly • Macho - superman ideal type • Feminine societies involve co-operation, tolerance • Sex-role divisions are played down

44. Masculinity • Dominant values in culture are aggressive, challenging, dominance and materialism (masculine) versus caring, co-operation, security and quality of life (feminine) • Strong separation of male careers • Industrial conflict • High stress cultures • Focus on power and material success • Eg. Italy, Japan, Venezuela and Mexico (masculine) and Scandinavian countries (feminine)

45. Masculinity Index (MAS) PASSIVE GOAL ORIENTATION AGGRESSIVE GOAL ORIENTATION Source: Hofstede (1991)

46. Power Distance, Uncertainty Avoidance and Organisation Structure Uncertainty avoidance Index 0 Small power distance Weak uncertainty avoidance (village market) • SIN Large power distance Weak uncertainty avoidance (family) • JAM 16 • HOK • DEN 32 • SWE • IRE • GBR • MAL • IND • NZL • USA • IDO • PHI • NOR 48 • CAN • SAF • AUL • EAF • NET • WAF • SWI 64 • IRA • THA • EQU • FIN • TAI • ARA • PAK • BRA • AUT • GER • COL • VEN 80 • KOR • ITA • MEX • TUR • CHL • ISR • COS • PAN • SPA • FRA • ARG • YUG • PER Large power distance Strong uncertainty avoidance (pyramid of people) 96 Small power distance Strong uncertainty avoidance (well-oiled machine) • JPN • BEL • SAL • URU • POR • GUA • GRE 112 10 30 50 70 90 110 Power distance index Source: Hoecklin 1994

47. Trompenaars: Universalism versus Particularism • Extent to which people believe that general principles are more, or less, important than unique circumstances and relationships • Distribution of scores across countries shows a separation between East and West and between North and South • Western and Northern states believing more in universalist principles. • Universalism • Focus is more on rules than on relationships • Legal contracts are readily drawn up • A trustworthy person is the one who honours their “word” or contract • There is only one truth or reality, that which has been agreed to • A deal is a deal • Particularism • Focus is more on relationships than on rules • Legal contracts are readily modified • A trustworthy person is the one who honours changing circumstances • There are several perspectives on reality relative to each participant • Relationships evolve Source: Hoecklin 1995 p. 41

48. Specific More “open” public space, more “closed” private space Appears direct, open and extrovert “To the point” and often abrasive Highly mobile Separates work and private life Varies approach to fit circumstances especially with use of titles( e.g. Herr Doktor Muller at work is Hans in social and some business environments) Specific Versus Diffuse Relationships • Degree of involvement individuals are comfortable with in dealing with other people • Individuals have various levels to their personalities, from a more public level to the inner, more private level. • Diffuse • More “closed” public space, but, once in, more “open” private space • Appears indirect, closed and introvert • Often evades issues and “beats about the bush” • Low mobility • Work and private life are closely linked • Consistent in approach, especially with use of titles (e.g. Herr Doktor Muller is Herr Doktor Muller in any setting) Source: Hoecklin 1995 p. 45

49. Neutral versus Affective Relationships • Relates to the different ways in which cultures choose to express relationships • In affective cultures it is natural to express emotions openly • More neutral cultures - emotions held in check in order not to confuse work situations • Neutral • Show immediate reactions either verbally or non-verbally • Expressive face and body signals • At ease with physical contact • Raise voice readily • Affective • Opaque emotional state • Do not readily express what they think or feel • Embarrassed or awkward at public displays of emotion • Discomfort with physical contact outside “private” circle • Subtle in verbal and non-verbal expressions Source: Hoecklin 1995 p. 44

50. Implications of Hofstede’s Work • Work-related values are not universal • National cultural values are likely to persist, even when a multinational tries to impose the same norms • Local values determine how HQ regulations are re-interpreted in units • Unneccessary morale problems, poor implementation or failed business result from imposition of parent values