Ccmsp 3, hofstede study & cc perspective, pptx

MANAGEMENT IN ACTION – SOCIAL , ECONOMIC AND ETHICAL ISSUES

(MBA – 401)**************

Module IV

CROSS CULUTRAL MANAGEMENT SYSTEMS AND PROCESSES

ByProf. (Brig.) RAMESH CHANDRA

CCMSP-3

HOFSTEDE STUDY ON CULTURE AND WORKPLACE

• Geert Hofstede was a Dutch researcher whose study is a classic in the annals of cross-cultural management research and was published in his book (1991) ‘CULTURE AND ORGANIZATIONS: SOFTWARE OF THE MIND’.

• He drew his data for the study from a collection of 1,16,000 attitude surveys administered to IBM employees in 70 countries and 3 regions, namely East Africa, West Africa and Saudi Arabia between 1967 and 1973.

• By restricting research to one company, he tried to eliminate the impact of changing organizational cultures and analysed the influence of different national cultures.

• 53 cultures were eventually analysed and contrasted according to four cultural dimensions.

• Hofstede’s database was unique, not only because of its large size, but also because it allowed him to isolate cultural effects.

• If his subjects had not performed similar jobs in different countries for the same company, no such control would have been possible.

• Cross-cultural comparisons were made along the following four dimensions:

1.Power distance. 2. Uncertainty avoidance 3. Individualism - Collectivism, and 4. Masculinity - Femininity.

COUNTRIES AND REGIONS USED IN HOFSTEDE’S RESEARCH

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FOUR DIMENSIONS OF HOFSTEDE’S CROSS-CULTURE STUDIES

1. Power Distance • Power distance is the extent to which members of a society

accept that power in institutions and organizations is distributed unequally.

• People in a high power distance culture accept a hierarchical order, in which everybody has a place that needs no further justification. Inequality in power is seen as normal and acceptable reality.

• In high power distance societies, the superior is inclined to increase the inequality of power between himself and his subordinates , and the subordinates endeavour to decrease that distance.

• Countries in which people blindly obey the orders of their superiors have high power distance. Even at higher levels , strict obedience is the practice.

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• Examples of high power distance countries would include Mexico, South Korea, Philippines, Venezuela and India.

• The power distance for India has a ranking of 77 compared to the world average of 56.5. These scores indicate a greater level of inequality in India.

• Hofstede found that power distance is greatest in Malaysia and least in Austria and Israel. This dimension shows desirability of equality and inequality in the society or dependence versus interdependence. Contd ----

• People in low power distance societies strive for power equalization and demand justification of power. Organisations in low power distance countries are usually decentralised and have flatter structures.

• The employees in low power-distance cultures expect to be consulted and treated more as equals, expecting their managers to be supportive. They feel more able to control their own destiny and expect to be in control of their career, making their own choices and decisions.

2. Uncertainty Avoidance• If members of a society feel uncomfortable with

ambiguity and try to structure situations to avoid ambiguity, their tolerance for ambiguity is low or uncertainty avoidance is high.

• Detailed and rigid structures, procedures, uniform behavior and belief in absolute truths help in avoiding ambiguity.

• Unstructured, vague and unpredictable situations provide opportunities for using multiple approaches if members of a society feel comfortable with ambiguity. Deviant behaviors and ideas are tolerated, and they are seen as sources of creativity. Contd ------

• So, uncertainty avoidance is the extent to which people feel threatened by ambiguous situations, and have created beliefs and institutions that they try to avoid these.

• This dimension measures how far cultures prepare or socialize their members into accepting ambiguous situations and tolerating uncertainty about the future.

• High uncertainty–oriented nations tend to have a high need for security & a strong belief in experts & their knowledge. Examples include Germany, Spain & Japan. Members in such countries are more anxiety-prone & have high job stress. Contd--

• Employees place high premium on job security, career planning, health insurance and retirement benefits.

• Clear rules and regulations are welcomed and those managers who decide and give clear instructions are highly respected.

• Countries with low uncertainty culture are more entrepreneurial and innovative and exhibit less emotional resistance to change. They are likely to feel more comfortable with ambiguity, uncertainty and unstructured situations. Swedes, for instance, suppress emotions and in business they opt for the rational course rather than the emotional course.

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• Based on the varying levels of tolerance for uncertainty and ambiguity, different cultures have been given a ranking. A high ranking on this dimension indicates that that the country is more rule-oriented, and has low tolerance for uncertainty and ambiguity and vice-versa.

• India has a ranking of 40 as against the world average of 65.

• Examples of high uncertainty avoidance countries include Japan and Greece; and low uncertainty avoidance countries are United States, Canada and New Zealand, etc.

3. Individualism - Collectivism • The fundamental issue addressed by this dimension

is the degree of interdependence a society maintains among individuals.

• It relates to people’s self-concept i.e. whether they think in terms of ‘I’ or ‘we’.

• Individualism is the tendency of people to look after themselves and their immediate families only. Collectivism is the tendency of the people to belong to groups and to look after each other in exchange for loyalty.

• Individual cultures stress individual achievements and rights and expect the individual to focus on his/her needs. Competition is expected. Contd ----

• Americans, high on individualistic score, readily go to the court against authority and each other to claim their rights.

• Individual decisions are valued over group decisions and individuals have the right to differ from the majority opinion.

• Managers do not have strong emotional bond with the company. He/she is loyal for so long as it suits his/her interests. There is the sense that one should be fair to all.

• Collectivism stands for a preference for a tightly knit social framework in which individuals expect their relatives, clan, and other in-groups to look after them in exchange for unquestioning loyalty. Contd --

• In collective cultures, children are taught to think in terms of ‘we’. Employers and employees are seen as members of one extended family; relationship prevails over task and duty.

• Promotions and advancements are often based on seniority and loyalty rather than on performance. Employee performance is better when he/she works in an in-group than when working alone or in an out-group.

• Hofstede found that wealthy countries had higher individualism scores and poorer countries had higher collectivism score. Countries like USA, Canada, Denmark and Sweden had high individualism and higher gross national product. Japan was an exception. Conversely, countries like Pakistan or those in Latin America had low individualism (high collectivism) and low gross national product.

4. Masculinity-Femininity• This dimension refers to types of accomplishments

valued by a particular culture. Different qualities have been attributed to two sexes.

• Toughness, competitiveness, aggression, perseverance, achievement and assertiveness have been attributed to men, where the dominant values in society are success, money, materials and ambition, etc.

• Compassion, creativity, empathy, collaboration, harmoniousness, and aestheticism have been attributed to women, where the dominant values in society are cooperation, caring for others and quality of life. It is termed as ‘femininity.’ Contd ----

• A society has a sexist orientation if it emphasizes differentiation on sex roles, allocating social roles according to such differences, expecting men to work in areas requiring masculine virtues and women to work in areas requiring feminine virtues.

• In such societies, roles are largely determined by men and they impose masculine values in all roles. In such societies, there is premium on competitiveness and aggression, with empathy and collaboration being discounted. Such a culture is termed as ‘masculine’.

• The examples of masculine cultures would include countries such as UK, Germany, South Africa & Italy.

• Countries like Japan, with a high masculinity index, place great importance on earnings, recognition, advancement and challenge. Individuals are encouraged to be independent decision-makers, and achievement is defined in terms of wealth.The workplace is characterised by high job stress and managers believe that their subordinates don’t like working, hence requiring some amount of control.

• Countries like Norway, with low masculinity index tend to place great importance on cooperation, friendly atmosphere and employment security. Individuals are encouraged to be group decision-makers and achievement is defined in terms of human contacts and living environment. The workplace has a cordial atmosphere and managers give more credit to employees and freedom to act.

• Countries with high femininity tend to favour small–scale enterprises and place great importance on conservation of environment. The school system is designed to teach social adaptation. Many women hold higher-level jobs and they do not find it necessary to be assertive. Industrial conflict is less and workplace has less stress.

• Power distance : It is the distance between the individuals at different hierarchy. The employees in low- power distance cultures expect to be consulted and treated more as equals, expecting their managers to be supportive. They feel more able to control their own destiny and expect to be in control of their career, making their own choices and decisions.

• Uncertainty avoidance : It measures how far culture prepares their members into accepting ambiguous situations. Clear rules and regulations are welcomed and those managers who decide and give clear instructions are highly respected.

• Individualism : It is the tendency of people to look after themselves & their immediate families only. Collectivism is the tendency of the people to belong to groups and to look after each other in exchange for loyalty. Distinction between individualism and collectivism can be best understood by knowing who makes the decision, individual or the group, and how this affects performance.

• Masculinity : A situation in which the dominant values in a society are success , money , & materials. Femininity is a situation in which the dominant values in society are caring for others and quality of life. Young men expect to have careers, and do not often view themselves as failures. Fewer women hold higher level jobs and they often find it necessary to be assertive. Industrial conflict is common.

A BRIEF ON FOUR WELL KNOWN DIMENSIONS THAT HOFSTEDE EXAMINED

COMPARATIVE RANKING OF COUNTRIES ON FOUR DIMENSIONS OF CULTURE

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INTEGRATING CULTURAL DIMENSIONS• A description of the four dimensions of culture

is useful in helping explain the differences between various countries.

• But Hofstede has gone beyond this to show how countries can be described in terms of pairs of dimensions.

• Figure 1, which incorporates power distance and individualism, provides an example.

Figure 1: A Power Distance & Individualism Plot

• As seen in Figure 1, the US is located in the lower left quadrant. Americans have very high individualism and relatively low power distance.

• Americans prefer to do things for themselves and are not upset when others have more power than they have. Americans are taught that everyone is equal, so individuals having important titles or jobs do not overly impress them.

• Australians, Canadians, the British, New Zelanders and Netherlanders have the same basic values and therefore can be clubbed together in one cluster as shown in lower left quadrant of Figure 1.

• Figure 2 plots the uncertainty avoidance index for 53 countries against power distance.

• Once again there are cluster of countries. Many of the Anglo nations tend to be in the upper left-hand quadrant, which is characterised by low power distance and weak uncertainty avoidance.

• Similarly, Figure 3 plots 53 countries in terms of uncertainty avoidance and masculinity-femininity.

• The integration of these cultural factors into a two-dimensional plot explains culture’s effect on behaviour. A number of dimensions are at work and sometimes they do not all move in the anticipated direction.

Figure 2: A Power Distance and Uncertainty Avoidance Plot

Figure 3: A Masculinity –Femininity and Uncertainty Avoidance Plot.

SYNTHESIS OF COUNTRY CLUSTERS• To date, perhaps Ronen and Shenkar have provided the

most integrative analysis of all available findings. They have classified countries into eight clusters and four countries that are independent and do not fit into any of the eight clusters.

• Several studies examined the variables, including : (1) the importance of work goals; (2) need deficiency, fulfillment and job satisfaction; (3) managerial and organizational variables; and (4) work role and interpersonal orientation.• Countries in the same cluster are culturally similar.• Figure 4 provides a synthesis of country clusters.

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Figure 4: A Synthesis of Country Clusters

Evaluation of the Synthesis of Country Clusters

• Not everyone agrees with the synthesis presented above.

• Some researchers place India and Israel in the Anglo culture cluster because of the strong Anglo ties of these counties.

• Others combine the Nordic and Germanic clusters into one cluster. Still others believe that some Latin European countries such as Italy, Portugal and Spain are culturally much closer to those of the South American culture and would cluster them there.

EVALUATION OF INDIA AS PER HOFSTEDE’S STUDY

Based on his study, Hofstede classified India as : High on power distance dimension (i.e. a society

where less powerful members accept the unequal distribution of power).

Weak on the uncertainty-avoidance dimension (i.e. tolerance for future uncertainty and risk is low).

Dominant on the collectivism dimension (i.e. emphasis is on group orientation).

Dominant on the masculine dimension (i.e. high level of bureaucracy and social caste system prevails).

EVALUATION OF HOFSTEDE’S WORKWEAKNESSES1. Like all national culture studies, it assumes that

national territory and limits of culture correspond. It is not so in the case of smaller countries , and in case of bigger countries there are sub-cultures.

2. Hofstede’s respondents worked within a single industry (IBM) and single multinational. Here, the objection is that unskilled manual workers are not taken into account, who may form bulk of the population of that country.

3. Some of the dimensions suggested overlap. For example, some traits of low-power distance are similar to the femininity dimension.

STRENGTHS1. The information population (IBM employees) is

controlled across countries, which means comparison can be made.

2. The four dimensions tap deep into cultural values and make significant comparisons between national cultures.

3. The connotations of each dimension are highly relevant. The question asked of the informants relate to issues of importance to international managers.

4. No other study compares so many national cultures in so much detail.

CROSS CULTURAL PERSPECTIVES IN DIFFERENT COUNTRIES Culture is country specific belief, values and norms of a social

group shared by its members and distinct from other social groups.

Culture concerns economic, political, social structure, religion, education, and language.

Hofstede (1980) reinforces by stating, “the essence of culture is the collective programming of the mind.”

Obviously, country specific and organisation specific culture requires careful attention of international HR professionals, which otherwise may stand against effective management of international operations.

A high rate of expatriate failure (ranging from 25 to 50 percent) is mainly due to cultural shock that usually occurs within 4 to 6 months after arrival in the foreign country. Hence, the following cultural issues need attention as per Harris and Moran: Contd---

1. Sense of self and space: People in a number of countries (especially Arabs and

Asians) prefer to stand close when conversing. An interpersonal difference of only 6 inches is very disturbing to a Northern European or an American who is used to conversing at arm’s length.

Japanese and Chinese emphasise group cooperation, whereas Canadians and Americans value independence and creativity.

In Japan, bosses often sit together with their employees in the same large room. The heads of some of the biggest Japanese firms ride the public subways to work in the morning so that they can be with their workers.

In contrast, North Americans prefer private space. In India, usually one finds the boss occupying a large territory in any public/private sector organisation.

2. Dress and Appearance: Garments and body decorations vary by culture. Anyone disrespecting the turban in India may

be roughed up badly. Formal dress for business meetings may be

essential in some cultures but not in others.

3. Language : Foreign language skills are the gateway to the

cross-cultural understanding. Words and gestures mean different things to

different people. Consider the following examples:

Examples : Ford introduced a low cost truck ‘Fiera’ into some

Spanish speaking countries. Unfortunately, the name meant ‘ugly old woman’ in Spanish. Needless to point out, the name did nothing to boost sales.

Ford also experienced slow sales when it introduced a top-of-the-line automobile ‘Comet’ in Mexico under the name ‘Caliente’. The puzzling low sales were finally understood when Ford discovered that ‘Caliente’ is a slang for a ‘street walker’.

Such ethnocentric actions (applying home country procedures and evaluation criteria without any variation) inevitably fail to deliver the goods because of the cultural mismatch.

4. Food, eating habits & perceptual problems: Different cultures may have different ways of

preparing and eating food. Beef, a favourite of many Americans, may be a prohibitive term (leave alone eating the same) in the Hindu culture. Some may eat with their hands; others prefer to use chopsticks or a full set of cutlery.

A US manager who sees the wife of a Latin American host enter the door of the kitchen assumes that the woman is putting the finishing touches on the meal. Unknown to the manager perhaps is the fact that the woman actually is supervising the cooking of the food and is checking to see that everything is in order.

5. Time and time consciousness: The sense of time varies with different cultures. To

Americans, time is money. They are obsessed with making and keeping appointments. They live by schedules, deadlines and agendas.

In other cultures (Latin American, Mediterranean, Arabs, Indians etc.) such as Mexico, people have no problem with loosely scheduled meetings and late coming.

Consider the following example. An American company eager to do business in Saudi Arabia sent over a sales manager to ‘get something going’. The sales officer began calling contracts soon after his arrival on a particular Monday. Contd ---

After many disappointing appointments, the salesman ran into an old friend who gave him an introduction to some basic rules of Saudi etiquette and how to do business with the Arabs.

The officer learned that he had repeatedly insulted his contacts by his impatience, refusal of coffee, the ‘all business-like talk’ attitude and aggressive selling.

Even individual acts such as handling papers with his left hand and exposing the sole of his shoe while sitting on the floor were offensive to Saudi sensibilities.

6. Relationships: Cultures specify human and organisational

interactions by age, gender, status and family relationship, as well as by wealth, power and wisdom.

In Hindu culture, all family members generally live under one roof (self, spouse, children, parents etc.) Here monogamy (one wife) is the rule but in other cultures, polygamy (one husband, several wives) or polyandry (one wife, several husbands) might well be accepted.

In some cultures, elderly people are respected and their advice is accepted without question. Other cultures might dismiss them as unwanted.

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In some countries, women must wear veils and remain without identity, but in others they are treated with respect even when their faces are exposed to view.

Women drivers, for example, are an ordinary sight in most parts of the world, but not in conservative Islamic Saudi Arabia.

In late 1990, when 50 Saudi women broke with cultural tradition and drove automobiles through the capital city of Riyadh, religious leaders went on the offensive and the government cracked down hard. All the women involved who had government jobs, were fired, and they all lost their passports for two years, as did their husbands.

7. Values and norms: Material wealth might be the dominant value in

some cultures. People are ready to do anything to acquire wealth.

In other cultures, people may value means as important as ends.

Sharing wealth with others may be a way of life in some cultures.

Customs regarding gift giving, birth, death, marriage, treating elders with respect, showing exemplary manners also differ from culture to culture.

8. Beliefs and attitudes: Religious beliefs and attitudes vary among cultures. Hindus

let things happen. Most North Americans try to control events by taking charge of things all by themselves (Internals).

Some religions teach reincarnation whereas others believe that they pass this way only once and, hence want to achieve and enjoy as much as they can.

Some religions teach sacrifice and caring for others. Other religions emphasise individual success leading to overall community welfare.

In some cultures, work is valued as an act of service to God; in others, it is not valued properly and hence, employees working therein do not recognise the importance of quality and commitment.

9. Mental process and learning: Across cultures, one can always find profound

differences in the ways people think and learn. Some people emphasise logical thinking and proceed cautiously, weighing pros and cons from various angles.

In other cultures, people may go after ideas, take risks, face innumerable difficulties and come in the way with courage and finally emerge victorious.

Some cultures emphasise abstract thinking and conceptualising, where as others favour routine memorisation.

The Japanese, Koreans and Chinese languages emphasise learning through word pictures whereas the English prefer to do the same through words.

10. Work habits and practices: The attitude towards work may vary greatly across

various cultures. In some, there is a strong focus on work values and ethics, whereas in others, it is missing.

You may be praised profusely for turning out good work in some cultures; in others you may be pulled down at every stage for not meeting expectations

(called management by objectives). Europeans favour power and status; Americans

prefer to be informal and value initiative and achievement greatly; Japanese emphasise consensus and teamwork in workplace more than anything else.

THANK YOU !!

ANY QUESTIONS ??