National Culture
Outsourced (2006)- basis of an academic paper on intercultural communication in
business (Briam, 2010)
o Film produced by US and Indian filmmakers
o Western Novelty Products outsourced due to a cost saving- they could save $11,000
for Todd’s job
o For Todd, the alternative is getting fired- busy labour market, lower salary, effort of
finding new job- there is a good opportunity in India
o The challenge is repatriation upon return
Hofstede’s Cultural Framework
In depth notes in Marketing Folder
Since the publication of Hofstede's classic theory of cultural comparisons between nations
(1980), management theorists have focused attention on the effect of national culture
within organisational practices (Harzing and Pinnington, 2011)
Power distance*
– Tolerance of inequalities of wealth, power and status
Uncertainty avoidance*
– Intolerance of uncertainty and ambiguity
Individualism/collectivism*
– Extent to which individuals see themselves as part of groups
Masculinity/femininity*
– Assertiveness and competitiveness vs modesty and caring
Long term orientation
– Importance of maintaining links with the past while dealing with future
challenges
Indulgence
– Extent to which people try to control desires and impulses
*original 4 dimensions
Hofstede Country Comparison: India and US
Big Power Distance in India- more likely to accept hierarchical ways of working: managers
have more control and more esteem as a boss
Individualism in America- looks like they prefer not to be in a group, whereas India may be
incentivized by working in a group
Similar in masculinity
Indulgence fairly low in India, signals they may not be driven by money
Culture definition: Culture as a concept stems from the fields of social anthropology and
sociology. In general, its definition has been used to describe an entity or a community of
people within a social system- it is defined by the Matsumoto (1996) as ‘the set of attitudes,
values, beliefs and behaviours shared by a group of people, but different for each individual,
communicated from one generation from the next’. However, culture is not a well-defined
term (Münch and Smelster, 1992); it defines roles and relationships that originate from
,norms and values in the sociological tradition, or from views and attitudes in the social
psychological context (Wunthow and Witten, 1988)
A nation, therefore, is described as an ‘aggregate of communities and individuals’ who are
linked by certain characteristics- be it the language, history, common descent or history;
which then forms distinct groups (OED, 2018).
Three Views on National Culture
There are three different approaches to national culture, which derives from underlying
philosophical differences in how we understand about knowledge.
Positivist
The positivist approach outlines that culture is a variable and can be mapped objectively.
The theory is that culture is objective and functional. Each culture possesses common values
and behaviours that respond to threats to human wellbeing- or human needs, according to
Hofstede (1980). Hofstede is a positivist thinker, and his theory is that there are distinct
ways that a culture can fulfil these needs, which therefore creates a variation in cultural
dimensions linked to values (Hofstede, 1980). Because the number of these threats or needs
are limited, we are able to group these cultures and map them across common variables.
(TALK ABOUT HOFSTEDE THEORY HERE?)
Critical of H: Hofstede noted that nations with cold climates had low power distance,
creating objective knowledge about national culture. The theory assumed that these people
had more reliance on technology to survive, and power is more distributed and
decentralised. However, to critically analyse this, I can draw on my personal experiences of
living in Hong Kong. The climate is tropical, but it is one of the most technologically
advanced economies. Alternatively, one could consider Korea; whilst it is a cold climate it
has a politically authoritarian system and power is not widely distributed.
This perspective recognises the cultural disparities arising from the external influence of
culture on government. Positive analysis is frequently used in management literature and is
known to be fundamental to the consideration and identification of culture (Harzing and
Pinnington, 2011).
Cross-cultural management studies mostly adopt the Positivist approach as it tends to
define culture as an autonomous variable that influences human behaviour (Smith and
Bond, 1998).
Usefulness to IHRM:
- It is useful in the way that it challenges the idea that there is a global solution to
management. It helps scholars and practitioners understand that national cultures
vary and opened up a new school of thought and field of endeavour from the early
70s onwards.
Hofstede says that these are the most important and useful for organisations:
- High Uncertainty Avoidance = accepting new rules and systems EXAMPLE: Germany,
you would not have to work hard to implement new rules/systems
- Low UA = reject rules (or require more enforcement/encouragement) EXAMPLE: UK,
US
, - High Power Distance = H’s work suggests you can use authoritarian management for
performance e.g performance management: fire lowest 10% of performers
- Low PD = require consultative approach for performance train and nurture lower
performers
(Hofstede, 2001)
When German firm Daimler (creator of Mercedes-Benz) merged with American company
Chrysler at the end of the 1990s, it was considered a "merger of equals." A few years
later, it was named a "fiasco." Conflicting company cultures saw both divisions at battle as
soon as they merged. The differences between the firms included their degree of
formality, their philosophy on issues such as wages and expenses, and their styles of
operation. The German culture had become dominant and the level of employee
satisfaction at Chrysler had heavily reduced. One joke circulated in Chrysler at the time
was, "How do you spell DaimlerChrysler? ...'Daimler'—'Chrysler' is quiet.' By 2000,
significant losses were expected, and a year later redundancies began. In 2007, Daimler
sold Chrysler to Cerberus Capital Management for a value of $6 billion (Jacobsen, 2012). If
Daimler had taken Hofstede’s studies into consideration when acquiring an American
company, it is likely that DaimlerChrysler may have been a success story instead.
Critique:
Use Hofstede critiques in hand-written notes e.g. solely IBM (data set invalid)
McSweeney (2002) was key in H criticism
Also that it ignores race and post-colonialism (Ailon, 2008)
‘Women bear children and then breast-feed them, so they must stay with them’ Hofstede
(2001) : This functionalist and objectivist arguably enforces many stereotypes of men and
women across the world in potentially problematic ways.
Interpretive Views
Interpretive perspectives, unlike positivist ones, pay greater attention to how people make
sense of their reality (Harzing and Pinnington, 2011). The approach is often associated with
the work of Weber and Schutz (1978), Schwandt (1994) or Burrell and Morgan (1979) and
discusses culture as subjective and meaningful. The theory is that groups and individuals
experience society and context through meanings in local contexts that guides behaviour.
We can consider cultural stereotypes through media and literature and analyse these stories
in the way provide cultural norms.
Geertz (1973) established a theoretical conceptual framework of culture as ‘webs of
significance spun by individuals’ (Harzing and Pinnington, 2011). He claims that the study of
these webs is not experimental science, but an interpretive practise in the search for
meanings. Therefore, culture is not defined as a set of dimensions with high or low ratings,
but instead as a method of ‘sense-making’. Geertz’s influence on research and culture is
significantly noticeable in comparative management studies (Harzing and Pinnington, 2011).
In comparative management for example, Gannon (2009) proposes ‘cultural metaphors’ to
aid the understanding of a nation’s culture. Whilst positivist theories suggest scores,
Gannon outlines a cultural profile by comparing it with one of its local characteristics.
Harzing and Pinnington (2011) suggest that these cultural metaphors can aid employees
