Samenvatting
Lectures and articles in one summary
- Instelling
- Vrije Universiteit Amsterdam (VU)
Summary of lectures and articles in one summary.
[Meer zien]Voorbeeld 4 van de 35 pagina's
Voorbeeld 4 van de 35 pagina's
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Voorbeeld van de inhoud
Lecture 1. Culture and Cross-national differencesPeng et al. Institution based view as a third leg for a strategy tripod
How to explain the success and failure of business firms has been a central issue in strategic management. However,
researchers tend to look at industry-and firm-level factors, and the importance of institutions is forgotten.
Research question: What determines firm strategy and performance in this globalized world?
1. Industry-based competition: Industries are not equally competitive (demand and supply); firms behave
differently in more competitive industries as opposed to less competitive industries
2. Firm resources (and capabilities): even within a given industry, firms are not the same. Some firms are more
resourceful than others. Resources = assets that can create value and are
owned by focal firms, which include, but are not limited to, technology,
human capital (talented managers and employees), brands, etc.
3. Institutions: “the humanly devised constraints that structure human
interactions”. These constraints can be formal or informal. In short,
institutions are “rules of the game”.
Currently, scholars have two opposing views regarding how institutions may affect firms:
Unlike resources and industry competition, institutions have an indirect impact on firms. Institutions are just
the background.
Institutions have direct impacts on firms (Ingram & Silverman, 2002), not only by changing firm strategies
but also by shaping performance outcomes
Institutions can directly impact firms, or via strategic choices (important decisions: formal and informal constraints).
The rise of the institution-based view is based on the institutionalism movement throughout social sciences
(external) and on the criticism on the industry and resource-based view (internal). The industry-based view ignored
histories and institutions, for example a cost leadership strategy might be unethical. The resource-based view does
not establish appropriate contexts, e.g. hard-to-imitate resources may become nonvaluable in other contexts. Since
lots of companies do business in emerging markets nowadays, the institution-based view has become more
important. Treating institutions as background is no longer wise.
Two core propositions of the institution-based view:
(bounded) rational choices: institutions should reduce uncertainty and actors can rationally pursue their
interests and make strategic choices within the constraints in a given institutional framework.
Formal and informal institutions as compensatory structures: where formal constraints are unclear, the
informal constraints will play a larger role but often they are combined to govern behaviour. Formal rules
can change easily and suddenly, informal rules will not. People will try to figure out which behaviours are
closest to their own (people from Brexit will go to Amsterdam because lot is the same).
So function of institutions in short: reduce uncertainty by (1) conditioning the ruling norms and behaviours
and (2) defining the boundaries of what is legitimate.
Guanxi = strong tie = people exchange information, resources et cetera. They are supporting each other. This is
common in China, while in in the US the firms just use lobbying and in Russian it is about social ties. -> relationship
Addressing four fundamental questions of strategy (institution based view adds new insights):
1. Why do firms differ?
2. How do firms behave?
Take position that is less vulnerable relative to the five forces (industry based), firms with specific
capabilities differentiate successful firms (resource based) and firms need to take into account the influence
of formal and informal rules of the game (institution based)
3. What determines the scope (=product and/or geographic) of the firm?
From 1950 the government was against co-operation within the same industry so firms began to search
outside the industry for unrelated acquisitions and thus the product-scope was based on diversification.
, 4. What determines the success and failure of firms around the globe?
Competitiveness (industry-based) or firm specific capabilities (resource-based) determine performance
differences, but institution-based view states it is based on institutional forces.
Summary
Institutions are an important pillar that affects firm strategy and behavior. Remember, you need the third
leg to support the remaining two
International managers need to bear this in mind
Culture is a salient and critical element of the institutional environment
Rosen. Mapping world cultures
Although some scholars argue that cultures are distinct and different, others also contend that some cultures are in
fact similar. Which view is correct? How to reconcile these two different perspectives?
Research question: How to categorize national culture? What are the implications of such categorization?
Culture = a shared way of life of a group of socially interacting people, transmitted from one generation to the next
via acculturation and socialization processes. So it is (1) collectively owned, (2) enduring (but may change over time)
and (3) it is preserved via the socialization process.
Categorize culture
Although national cultures are different, we can understand cultural differences by grouping certain cultures
together while distinguishing them from others. This can be done by examining the relative (dis)similarity among
cultures. Research shows that in the supervisor-subordinate relations:
Southern Europeans prefer directing, while northern Europeans prefer coaching.
Southern Europeans endorse participation and equality, while northern Europeans prefer hierarchy and
loyal involvement.
Predicting cluster formation: ecocultural framework
Culture is influenced by religion, language (e.g. culture of speaking or social use of language) and geography
(resources, population density). Economic variables could be important to cultural variations as well. For example
GDP-PPP, but also business freedom, investment freedom and financial freedom are ways to differentiate clusters.
Convergence = pressures associated with globalization, as goods, services, capital, know-how and people move
across borders, facilitated by political and economic integration, trade and FDI, and international organizations. The
new communication and transportation possibilities erode cultural diversity.
Divergence = vast majority of MNEs remain regional, so national diversity endures. It appeared that cultures evolve
slowly, but it could also be that values, beliefs and attitudes have shifted but cluster formations are the same
because members have moved simultaneously.
Hofstede’s Culture Dimensions
During 1978-83, he conducted detailed interviews with hundreds of IBM employees in 53 countries.
He assessed patterns of similarities and differences among the replies, from which he developed five
dimensions of culture.
Culture = "the collective programming of the mind which distinguishes the members of one group or
category of people from another."
Individualism vs. collectivism – The degree to which individuals are expected to take care of only themselves and
their immediate families (i.e., “I” or “We”)
Power distance – The degree to which the less powerful members of a society accept and expect that power is
distributed unequally
Future orientation – How individuals in a society organize their time and resources for the future (e.g. savings)
Femininity vs. masculinity – Masculinity refers to the degree that individuals in a society value achievement,
heroism, assertiveness and material rewards for success. Its opposite, femininity, stands for a preference for
cooperation, modesty, caring for the weak and quality of life.
Uncertainty avoidance – The degree to which the members of a society feel uncomfortable with uncertainty and
ambiguity (e.g. long contracts)
,Other culture dimensions (from GLOBE):
Performance orientation – The degree to which a society encourages and rewards innovation, high standards,
excellence, and performance improvement
Participative leadership – The degree to which leaders involve others in making and implementing decision
Autonomous leadership – The degree to which leadership is independent and individualistic, which includes being
autonomous and unique.
Self-protective leadership – The degree that behaviors ensure the safety and security of the leader and the group
Coaching – How individuals organize their resources to meet the challenges for now vs. those for the future
Mapping cultures (see slide 34 + 35 + 36)
Cultural mapping = parsing and ordering of the culturally meaningful environments in which organizations are
embedded.
Collect 11 studies, which covered 70 nations
Use computer programs to establish a dendrogram tree
Determine the cut-off points that produce a meaningful number of clusters
Note: clusters are collections of members, where members in a cluster are similar and members in different
clusters are dissimilar. Similarity can reduce uncertainty and increase opportunism, impacting on entry
mode and contracting forms.
Summary
Culture as a national identity
Clustering is one useful way to understand national culture
For international managers, it is critical to know where you are and where the other party (partner,
competitor, etc.) is at.
Taras. Does country equate with culture?
Research question: Culture has been assumed to reside within countries (e.g., the approach by Hofstede). Is there
any within-country variation of culture? How do the within-country and across-country variations account for
culture differences? Are they equally important? Which one is more relevant?
Culture = (1) a relatively stable, (2) multi-level construct comprised of values, beliefs, norms, traditions, and artifacts
that (3) are shared in a given population
Reasons that support using countries to proxy culture, two implicit conditions must be met:
1. Within a country, the variation of culture (or cultural orientations) among individuals is small
2. Across countries, the variation of culture among individuals is large
Reasons against using countries to proxy culture:
1. Instant communication and increased personnel mobility (e.g., immigrants) make cultural differences less
pronounced, so differences are blurred.
2. National borders are not aligned with ethnic and tribal countries (e.g. Nigeria border)
3. Research shows that 70-90% of variance in cultural values may reside within countries, whereas 10-30% of
variance residing between.
How to move beyond the national approach?
– The geography approach
Collect relevant information within a country to see if information collected from different places are
similar. For instance, researchers study the children’s stories in textbooks to see if across different regions in
a country, the stories told are consistent
If the results are similar, then the idea of national culture is supported. Alternatively, the national culture
hypothesis will be rejected
– The cluster approach
Study the culture dimensions to see if across nations, cultures are similar
, Similar to the Ronen and Shenkar’s (1985, 2013) method
This paper uses the latter approach (define the jorurnal pool, conduct a literature review to sort out relevant
studies, code the variables & perform the analysis)
Findings
1. The within-country factors can account for more variance than the across-country factors
a. For example, respondent age, education, and income can explain the variation of cultural values
(e.g., individualism) way better than a distinction based on country
b. Older respondents tend to be more collectivistic than younger respondents.
c. Well-educated individuals tend to be more individualistic than less-educated ones.
2. Even if the tests of national averages are significant, this does not mean that people in these countries are
actually different. The variance within a nation has rarely been considered in prior research
3. Regional indices do not solve the problem of within-country variations in culture. Other factors (e.g., age,
education, family backgrounds) at the individual level may have greater explanatory power. For example,
differences among individuals in the same age groups were greater than differences between those groups.
4. Demographic and environment characteristics could be more relevant when considering cultural regions.
For instance, education, income and age are crucial factors that influences one’s values.
Summary
Despite the relevance of national culture approach, within-country cultural variation still matters
Socio-economic factors (e.g., age, education, and income) at the individual level can explain within-country
culture variances considerably
For international managers, these represent additional considerations that you shall have when interacting
with others – even if they are from the same country
Lecture summary
Institutions—where culture is a critical element—are an important pillar that affect firm strategy and
performance (Peng et al., 2009)
National cultures can be (dis)similar to each other (Ronen & Shenkar, 2013)
Within-country culture variation is crucial. One should not think cross-country cultural difference only
Lecture 2. Culture and managerial decision making
Triandis. Cultural influences on personality
Background and motivation
Personality is an important individual trait. Cultural influences are important
However, researchers have different views regarding how culture may affect personality:
o Shweder -> individual differences are context dependent and not generalizable (environmental
influences)
o McCrae -> personality traits are more of human biology than product of life experience”, suggesting
that personality may be influenced by national culture. So global traits do exist.
How to reconcile these two opposing perspectives? Is it about the individual or about the country?
Research question: Is it valid to claim that culture influences individual personality? To what degree does culture
affect personality?
Culture = culture is to society what memory is to individuals, which includes “what has worked in the experience of
a society so that it was worth transmitting to future generation” OR “Shared standard operating procedures,
unstated assumption, tools, norms, values, habits...the environment”. Thus the environment may influence culture
such that individual can be shaped by culture.
Personality = an individual’s characteristic pattern of thought, emotions, and behaviour behind those patterns.
Hence, personality can be understood as a configurationof cognitions, emotions and habits activated when
situations simulate their expression–In short, personality can be summarized as “the individual’s unique adjustment
to the world”.
Ecology to culture links
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