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Trans-national service value creation: influence of national culture

Trans-national service value creation: influence of national culture. Subhashish Samaddar Kallol Bagchi Somnath Mukhopadhyay. Introduction. Basic research questions Hofstede’s work on cultural dimensions Research Hypothesis Country’s Service Sector Method and Data Results

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Trans-national service value creation: influence of national culture

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  1. Trans-national service value creation: influence of national culture Subhashish Samaddar Kallol Bagchi Somnath Mukhopadhyay

  2. Introduction • Basic research questions • Hofstede’s work on cultural dimensions • Research Hypothesis • Country’s Service Sector • Method and Data • Results • Conclusion and Future Research

  3. Basic Research Questions • Does country’s culture influence ountry’s service level? If so – how?

  4. Hofstede (1980a,b; 1991) • Culture – Collective mental progamming of a nation • Hofstede’s 4 Cultural Dimensions • Power Distance (PD) • Uncertainty Avoidance (UA) • Individualism and collectivism (IC) • Masculinity and Femininity (MF)

  5. PD • To the extent a nation believes in unequal power distribution • High PD value means high acceptance of inequality in power distribution • In a high PD culture management decisions will be centralized and hierarchical

  6. UA • To the extent a nation collectively tries to avoid uncertain situations in management decision making • Nations with high UA attempts to create mechanism that reduces risk taking decisions • Firms in these nations may have more rigid rules and exhibit less tolerance for uncommon ideas and behaviors

  7. IC • Individualism refers to a loosely coupled social network where people take care of themselves. In contrast, collectivism refers to a tightly coupled social network where the group feeling is very strong. • In national cultures where individualism is high, employee loyalty is considered more important than efficiency.

  8. MF • Masculine cultures are characterized by doing and acquiring rather than thinking and observing. In the workplace this dimension is reflected in merit-based opportunities for high earnings, recognition, advancement, and reward

  9. Research Hypothesis • H1. The greater the power distance present in a national culture, the lower will be the nation’s growth of services market. • H2. The greater the uncertainty avoidance present in a national culture, the lower will be the nation’s growth of services market.

  10. Research Hypothesis Contd. • H3. The more individualistic a nation’s culture is, the higher will be the nation’s growth of services market. • H4. The more masculine a nation’s culture is, the higher will be the nation’s growth of services market.

  11. Country’s Service Sector • The service sector consists of the "soft" parts of the economy such as insurance, government, tourism, banking, retail, education, and social services

  12. Table 1a: Data Sources and Their Meanings

  13. Argentina, Australia, Austria, Brazil, Canada, China, Colombia, Costa Rica, Denmark, Ecuador, El Salvador, Finland, France, Germany, Greece, Guatemala, Hong Kong, Hungary, India, Indonesia, Iran, Italy, Malaysia, Mexico, Morocco, The Netherlands, New Zealand, The Philippines, Poland, Portugal, Russia, South Africa, Singapore, Slovenia, South Korea, Spain, Sweden, Switzerland, Thailand, Turkey, UK , US and Venezuela.

  14. Sample Data of 4 Dimensions on Selected Set of Nations (N= 43)

  15. Method • We ran a correlation with five attributes – averaged SVA across 2001-2004, PD, UA, IC, and MF to infer about our four hypotheses. • We then analyzed yearly SVA values across two dimensions taken together. We clustered each of the four dimensions into two groups – High (H) and Low (L). We analyzed SVA across six combinations of 2X2 cultural dimensions with two values – H and L. We created 6 group combinations.

  16. Correlation Results

  17. Statistical Test Results of Difference in Cultural Group Means

  18. Conclusion • Our study shows that the cultural dimensions are significantly related service activities (directions of our first three hypotheses support the expected relationship from the previous literature) • The group difference tests indicate that these differences are significant. Service managers in national and multi-national enterprises (MNE) must pay attention to these results when analyzing international markets their companies are involved with

  19. Future Research • Scholars need to connect the service innovation (or product innovation) with cultural dimensions. • Connect managerial decision making styles with service or product innovations. Depending on the findings managers can determine whether they should change their style of leadership.

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