International Management

Assignment MBA PT 2010

Upkar Jheeta
Part 1

Companies are subject to external forces that they must live with and react to:
increasing competition, global customers and suppliers, threats of new entrants and
substitute products (Porter, 2006). Any organisation that has successfully
penetrated other markets realizes the benefits of understanding and addressing the
unique differences of each market. Apart from obviously needed translation of
documents and advertising materials, even more important and often overlooked are
the intercultural competencies needed to establish strong working relationships with
subordinates, business associates and clients. Cultural related business research
requires robust frameworks for analysis and application of this complex
phenomenon. Business research has largely relied upon and applied Hofstede's
dimensions to cultural problems. In this paper I will compare Geert Hofstede’s
Cultural Dimensions, and Fons Trompenaars and Charles Hampden-Turner Cultural
factors.

Geert Hofstede’s  Dimensions of Culture

Geert Hofstede defined national culture as the set of collective beliefs and values
that distinguish people of one nationality from those of another. In his original work,
Hofstede identified four important dimensions in national culture:

1)      Uncertainty Avoidance

2)      Power Distance

3)      Individualism versus Collectivism

4)      Masculinity versus Femininity

Later he added another cultural dimension, “Confucian dynamism”, which captures

the difference between a long-term and short-term orientation.
Trompenaars’ and Hampden-Turner’s cultural factors  

Adopting Parson’s five relational orientations as their starting point, Trompenaar and
Hampden-Turner identified SEVEN important cultural dimensions. They viewed
culture mainly as the way in which a group of people solves problems and reconciles
dilemmas. 

1)      Universalism versus Particularism

2)      Specific versus Diffuse Cultures

3)      Achievement versus Ascription Cultures

4)      Individualism versus Communitarianism

5)      Affective versus Neutral Culture

6)      Time as sequence vs. Time as synchronization

7)      Inner-directed versus Outer-directed

As can be seen there are Western oriented viewpoints within these cultural factors
suggested by Hofstede, Trompenaars and Hampden-Turner. Even although such
authors will argue that those completing their questionnaires are from a variety of
cultural heritages, the workers were employed in Western companies with strong
organisational cultures (Rowley & Harry, 2007)

The Hofstede Model of Cultural Dimensions can be of great use when it comes to
analyzing a country’s culture. However, Hofstede’s research has been criticised on a
number of counts, these debate concentrates mainly on five points:

1) surveys are inappropriate instruments to measure culture,

2) unit of analysis of nations is not the best unit suited for studying culture,
3) one company can’t provide information about entire national cultures,
4) the IBM data is old and obsolete,
5) four dimensions can’t tell the whole story
The averages of a country do not relate to individuals of that country. Hofstede
generalises about the entire national population in each country solely on the basis
of analysis of a few questionnaire responses. The respondents were simply certain
categories of employees in the subsidiaries of a single company: IBM (Sweeney).
A study fixated on only one company cannot possibly provide information on the
entire cultural system of a country (Graves 1986, 14-15; Olie 1995, 135;
Søndergaard 1994, 449). Hofstede said he was not making an absolute measure, he
was merely gauging differences between cultures and this style of cross-sectional
analysis was appropriate (Hofstede 1998, 481). In addition, Hofstede points out that
the use of a single multinational employer eliminates the effect of the corporate
policy and management practices from different companies influencing behaviour
differently, leaving only national culture to explain cultural difference (Hofstede
1980).

Tayeb (1996) objects to the methodology. The research is entirely based on an

attitude-survey questionnaire, which Tayeb contends is the least appropriate way of
studying culture. The data has been collected through questionnaires, which have
their own limitations. Not only that, but in some cultures the context of the question
asked is as important as its content. Especially in group-oriented cultures, individuals
might tend to answer questions as if they were addressed to the group he/she
belongs to. While on the other hand in the United States, which is an individualistic
culture, the answers will most likely be answered and perceived through the eyes of
that individual. There are no evidence-based reasons for assuming that the average
IBM responses reflected ‘the’ national average. Hofstede’s assumption is a mere
leap of faith. It is not grounded in evidence. Furthermore, IBM subsidiaries
demonstrably had many nationally atypical characteristics, because it is drawn from
a single company comprising middle-class employees (Robinson, 1983). Hofstede’s
response has been to argue that IBM employees in different countries constitute
suitably matched samples so that the work value distance between an average IBM
employee in Germany and one in the UK is equivalent to that between an average
German adult and an average UK adult. The question is, though, whether IBM,
which has a powerful US-derived organisation culture, may have socialised its
employees so powerfully that their values do not reflect aspects of local national
cultures. It could be argued that for comparative purposes involving many countries
Hofstede’s survey-based approach is highly efficient.

Some researchers have contended that the research on cultural dimensions

conducted by Hofstede and his associates has been culturally biased (Roberts and
Boyacigiller, 1984). The team comprised Europeans and Americans, whereas the
studies include many countries from other parts of the world. Also the researchers
background and research was from only one discipline, a better foundation is for
multi-disciplinary approach (Nasif et al. 1991, 83-84).

Some researchers have claimed that the study is too old to be of any modern value,
particularly with today’s rapidly changing global environments, internationalisation
and convergence. Hofstede countered saying that the cross-cultural outcomes were
based on centuries of indoctrination, recent replications have supported the fact that
culture will not change overnight (Hofstede 1998, 481).

Fons Trompenaars and Charles Hampden-Turner have developed a model of culture

with seven dimensions, which appears to be a variation on the same theme of
reducing cultural complexity

Some of these value orientations are similar to Hofstede's dimensions. Of these

seven value dimensions, two reflect closely Hofstede’s dimensions of
Collectivism/Individualism and to a lesser extent power distance. Trompenaars’ and
Hampden-Turner's communitarianism - individualism value orientation seems to be
virtually identical to Hofstede's Collectivism/Individualism. Their
achievement/ascription value orientation, which describes how status is accorded,
appears to be linked to Hofstede's power distance index, at least if one accepts that
status is accorded by nature rather than achievement, and that this reflects a greater
willingness to accept power distances. It is, however, not a complete match, as
Hofstede's power index does not only relate to how status is accorded, but also to
the acceptable power distance within a society, an area that is not touched upon by
Trompenaars and Hampden-Turner.

There has been some criticism of Trompenaars and Hampden-Turner, notably from
Hofstede (1996) who claimed that the theory of Trompenaars is not supported by his
database. As a result of correlation and factor analysis at the country level, Hofstede
said that only two dimensions could be identified, both of which correlated with
Hofstede’s “Individualism” dimension. In a response to this criticism, Hampden-
Turner & Trompenaars (1997) made explicit the differences in approach. They
presented two contrasting lists of assumptions attributed to Hofstede’s work and their
own, respectively. Part of their critique of Hofstede referred to the uses to which their
two contrasting approaches could be put. Hofstede’s approach appears to be about
the analysis of the variables of national culture, whereas Trompenaars and
Hampden-Turner are more involved in the process of cultural creation.

Other criticisms of Trompenaars model include:

The model fails to recognise the influence of personal characteristics on behaviour.

The model distinguishes the differences between cultures, but does not provide
recommendations on how to work with specific cultures.

Additional dilemmas may be added to the seven original dimensions of culture. No

assurance can be given that this list is complete.

Trompenaars and others such as Hofstede emphasised that companies should

acknowledge the differences between the cultures in which they operate. However,
other authors including Ohmae (Borderless World) and Levitt (Globalisation of
Markets) argue that national borders are diminishing and that the world should be
seen as a whole and not made up of different countries with different cultures.

Conclusions
One of the weaknesses of cross-cultural analysis is in real life, cultures do not have
strict physical boundaries and borders like nation states. Its expression and even
core beliefs can assume many permutations and combinations as we move across
distances.

There is some criticism in the field that this approach is out of phase with global
business today, with transnational companies facing the challenges of the
management of global knowledge networks and multicultural project teams,
interacting and collaborating across boundaries using new communication
technologies.

In spite of all the shortcomings and criticisms faced by the Hofstede model, it is very
much favoured by trainers and researchers. There are two reasons for this. Firstly, it
is a easy to use tool to quantify cultural differences so that they can be discussed.
Discussing and debating differences is after all the main method of training and
learning. Secondly, Hofstede's research at IBM was conducted in the workplace, so
Hofstede tools brings cross-cultural analysis closer to the business side of the
workplace, away from anthropology, which is a matter for universities

Trompenaars and Hampden-Turner provided a tool to explain how national culture

differs and how culture can be measured. Their research showed that cultural
differences matter and that reconciling cultural differences can lead to competitive
advantage to companies in consolidating / globalising industries.

Trompenaars and Hampden-Turner’s model gives employees who deal with cross-
cultural relations a tool/context to better understand value sets and behaviours.

Part 2

Case Study 1 – Case 3 (a Letter from Mr. Smith)

Model – The Self –Reference Criterion (Lee 1966)

Perception of market needs can be blocked by one's own cultural experience. Lee
(1965) suggested a way, whereby one could systematically reduce this perception.
He suggested a four point approach.

a) Define the problem or goal in terms of home country traits, habits and norms.

b) Define the problem or goal in terms of the foreign culture traits, habits and norms.

c) Isolate the SRC influence in the problem and examine it carefully to see how it
complicates the pattern.
d) Redefine the problem without the SRC influence and solve for the foreign market
situation

When confronted with problem, we react spontaneously on the basis of knowledge

assimilated over a life time – knowledge that is product of the history of our culture.
We seldom stop to think about a reaction; we simply react. Thus when faced with a
problem in another culture, the tendency is to react instinctively and refer to our SRC
for it a solution, which is what Mr Smith often referred to. His reactions based on
meanings, values, symbols and behaviour relevant to his own culture and usually
different from, those of the Mexican culture. Such decisions are often not good ones.

In this case study Mr Smith has defined the issues from his countries own cultural
experiences but has failed progress from this point. This was highlighted in
communication with his staff. Excellent cross-cultural communication skills are
essential in our interdependent world. Communicating successfully with multicultural
colleagues, clients, and customers improves business performance, competitive
advantage, and talent retention.
Every day we work with people from different cultural backgrounds with all their
accompanying challenges and opportunities. If handled well, these interactions can
increase productivity (e.g., projects coming in on time) and improve performance,
innovation, and progress. If poorly managed, they may lead to misunderstandings,
mistakes, antagonistic feelings, and lost opportunities and this was core to the
problems experienced by Mr. Smith.
.
The culture that one lives in is reflected in the way one communicates both verbally
and nonverbally. Hall (1998) identified two types of cultures based on the dominant
nature of communication. The first he called a “low context” culture, which is
exemplified by an emphasis on verbal communication. A “high context” culture,
which he referred to as an “unconscious” culture.
Communication in “low context” cultures is characterized by messages that are
primarily verbal. Low context messages tend to be impersonal, codifying
communication into specific words. Communication in “high context” cultures is
characterized by messages that are primarily tacit, nonverbal, and not explicitly
stated in words. High context communications tend to be personal, intimate in
content.
The Mexican and the American cultures are contrasted in many ways. In Hall's
(1998) typology, the Mexican culture (being a Latin culture) is classified as a “high
context” culture while the American culture (being of Anglo-Saxon/Northern
European origin) is classified as a “low context” culture. In addition, the two cultures
are contrasted strongly on three of Hofstede’s (2001) cultural dimensions: power
distance, uncertainty avoidance, and individualism. In comparison with Americans,
Mexicans have greater respect for authoritative figures (strong power distance), are
less likely to take risks (strong uncertainty avoidance), and tend to be more
dependent on other people (weak individualism), this explains the reason why Mr.
Smiths works often left decision making to him.
Because of these cultural differences, Mexican and American employers are likely to
have diametrically opposed perceptions about what constitutes communication
competence.
The Mexican and the American cultures are contrasted on the dimension of
individualism (Hofstede, 2001). Qualities that characterize individualistic cultures
include a value of emphasizing strong, bold, forceful, self-assured behaviours
(Assertiveness). Thus, Americans would be expected to place greater importance on
assertive behaviours than would Mexicans.

Collectivist societies like in Mexico believe in taking collective decisions, whereas

individualistic societies like the USA believe in individual decisions, which impacts
the way leadership is exercised (Hofstede, 2001 ) this had caused Mr Smith issues
especially when expecting his managers to carry out task independently. Mexico
has been described as a collectivist society, with focus on its tight social groups and
harmony.
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