Study Guide - Chapter 4 – Differences in Culture

Brief chapter summary and most important points

Introduction and definition

National differences in culture play an important role in international business. When a firm is selling to
international customers it needs to pay attention their specific cultural needs and communicate with
them in a way appropriate to their cultural values. When negotiating with a firm from another country
it is useful to know their motivations and expectations and the style of negotiation and communication
with which the other side will be familiar. When managing workers from outside the home country, or
when investing in a business in another location it is necessary to understand how to manage those
workers, how to direct, motivate, lead, communicate with them in a way which is compatible with their
own cultural values.

Charles Hill, the textbook author, defines culture as “a system of values and norms shared among a
group of people and, when taken together, constitute a design for living”. Culture occurs within any
society or grouping including organizational culture, student hall culture etc. we however are dealing
with differences in national culture, how people in one country differ from people in another country. It
is important for a manager to have cultural literacy, that is an ability to understand and respect different
cultures, however we should avoid cultural stereotyping, that is expecting that all people from a certain
culture will automatically have certain values or behave in a certain way, there are always individual
differences within cultural groups.

The definition of culture above mentioned values and norms, ‘values’ reflect a society’s underlying
beliefs; such as a belief in the free expression of the individual or the belief that individuals have a broad
responsibility to wider society. In Asian cultures for example there is a strong belief in filial
responsibility, or duty to family which is not so strongly found in other cultures. Values then lay the
context for ‘norms’ which describe how people should behave in certain situations, norms can be
broken down into ‘folkways’ which basically proscribe etiquette and manners, and ‘mores’ which
proscribe expected standards of behavior in a more central manner related to the standard rules that
allow the functioning of the society.

Where does culture come from?

Culture is learned behavior, that is, there is no genetic component to culture and the differences that
groups have is explained by the environment which surrounds them. So why do different societies end
up with such different cultures and values?

Cultures evolve over time and are dependent upon a wide range of factors in the local environment.
Figure 4.1 identifies some of these factors including the education system, religion, social structure etc.
Note in this figure that there is a ‘bi-directional’ relationship, that is culture influences is influenced by
each of these things and culture also influences these things at the same time. There are many
examples of how each of these items may influence culture; in Asian cultures for example there is an
underlying value of respect for hierarchy and obedience to those considered to be in a ‘higher position’,
this value has been perpetrated by the education system which has never really encouraged free
expression or ‘disagreeing with the teacher’, and it also influences education in that students are
‘normed’ to remain quiet during class and teachers are ‘normed’ to lecture and express their superior
knowledge. Having gone through the education system in this way, individuals then carry through these
norms to their working lives, remaining silent in company meetings for example while the chairman or
managing director leads and gives guidance to ‘lower-level’ employees.

How can we understand and measure culture?

It is important to know that cultures differ and understand the importance of cultural literacy, but how
can we actually get an insight to the values, beliefs and norms of any other culture? Simple guidebooks
to doing business in other places have limited use, they tend mostly to focus on ‘business manners’ such
as how to hand over a business card or what gifts should not be given to a business contact.
Understanding the underlying values and beliefs of another society, which has influenced these
behaviours, is more difficult.

Thankfully we have a well-developed tool that can not only help us to further understand our own
culture, but allows us to compare our culture with that of any other country. This tool was developed by
Geert Hofstede and breaks all cultures down in to five underlying dimensions. Understanding how
countries vary on these dimensions is key to understanding how organisations and individuals function
and behave in other cultures. The five dimensions are:

Power distance

Basically societies acceptance or otherwise of hierarchy and respect for others that are perceived to be
higher in that hierarchy. Asian societies have high power distance, managers her have a lot of positional
power and employees are rather obedient. In western societies power distance tends to be low,
meaning managers have to persuade and accept opinions from those working below them.

Individualism vs collectivism

Do people in a society see themselves first and foremost as individuals with a desire to have
independence or freedom of expression, or do they see themselves primarily as part of a wider grouping
with responsibilities to and from the groups of which they are a member? Asian societies tend to be high
in collectivism, which encourages employee loyalty and respects harmony in the workplace, western
societies are more individualistic, workers here demand more individual attention to their own needs.

Uncertainty avoidance

How willingly do people in the society accept change, and are they comfortable working in a state of
ambiguity? On the contrary to what extent is a society resistant to change and to what extent is there a
demand for certainty and clarity in the work environment? Hong Kong for example has very low levels of
uncertainty avoidance (they do not avoid uncertainty), this is reflected in a workforce that is flexible and
organisations that ae nimble and quick to adapt. Other countries with high levels of uncertainty
avoidance (for example France) finds workers who demand clarity int her responsibilities, duties,
reporting relationships and career paths, and organisations which tend to be bureaucratic and rigid in
nature.

Masculinity vs femininity
 In a highly masculine society traditionally ‘masculine values’ dominate. Organisations and managers are
expected to be tough, competitive, demanding, task-focused, strong, decisive etc. No matter whether
you are a male or female working in a masculine society you will be expected to, need to, adopt such
behaviours. In a feminine society, feminine values dominate; here managers will be expected to be
supportive, considerate, people-focused, again even male managers in such societies will be expected to
display these characteristics.

Long versus short-term orientation

This dimension captures attitudes towards time, persistence, and acceptance of how things are now.
Countries with a short term orientation naturally take a shorter term view of business and individual
performance and a more contractual viewing of relationships. In long-term orientation countries there is
a greater respect for lengthy ongoing relationships and a greater willingness to be patient for business
results to materialize.

Another dimension ‘indulgence’ has also been added by Hofstede in recent years, this dimension
however is relatively untested and is not included in your textbook.

Evaluation of Hofstede’s model and conclusion

Hofstede’s model is one of the most widely used tools in international business, there are limitations to
it (discussed in the textbook) but overall it is one of the most widely accepted tools that we have for
measuring culture and it is has been tested and largely verified in many, many follow-up academic
studies. Perhaps more importantly it has been adopted and accepted by the international business
community and practicing business-people who have had experience of working in and managing
people from other cultures confirm the value of Hofstede’s dimensions and its overall validity in terms
of predicting business behavior in other societies.

Resources supplied and required and suggested reading

View the PowerPoint files of Chapter 4 available on Moodle

Read Chapter 4 from the assigned textbook

Participate in the class and play an active part in the group discussion and activity

Review the same class session made available as a recording

Visit the following website which provides detail on the Hofstede model and scores for each country on
each dimension:

https://www.hofstede-insights.com/product/compare-countries/

Answer the 10 multiple choice questions covering chapter 4 that have been prepared as a turnitin
assignment available on Moodle

Complete the written self-assessment questions that come at the end of this study guide
 In your groups: complete the following activities

Please DO NOT repeat the information you have presented this week in your final presentation and
report. What you have done in class would be a task undertaken AFTER you have made the decision
about which country to enter, and you then consider in which ways your managerial behaviour should
change. You would not normally complete this task BEFORE the decision has been taken. So please in
your project DO NOT talk in detail about Hofstede’s dimensions as they apply to each country.

With respect to your group project, the only thing you need to include is a calculation of the cultural
distance between Hong Kong and each of the two countries. This can be done by calculating the
ABSOLUTE differences between Hong Kong and each of the countries on the four dimensions. An
example of this calculation is provided below.

Dimension HK score Country A +/- difference Country B +/- difference

Power distance 68 75 7 48 20
Individualism 25 64 39 23 2
Uncertainty Avoidance 29 22 7 35 6
Masculinity 57 36 21 67 31
Cultural distance 74 59

From the above, we can calculate that country B has a lower overall cultural distance from Hong Kong
than Country A. Therefore it will be easier for a Hong Kong manager to work in country B and there will
be fewer cultural difficulties. In your WCAM you will thus have a criterion which is cultural distance, and
when marking the two countries country B will score higher than country A.

Please complete this table/calculation for your two countries during this week.

Take a look at the following suggested articles also available on Moodle

‘Tiktok shop accused of imposing toxic work culture’ and ‘TikTok executive to step back’ Financial Times
September 9th 2022

How London employees of Tiktok Shop, a business owned by the Chinese firm Bytedance
rebelled against the working conditions imposed, that were seen as incompatible with the local
British culture. Many employees decided to leave the company, eventually leading to the
Chinese head of the London office to step back from his duties.

‘The Uncultured Science’ The Economist July 27th 2019

How the culture of a country effects its economic growth. Although somewhat politically
incorrect to say, some cultural attitudes may be more conducive to achieving long term
 economic development.

‘Tremble and obey’ The Economist October 13th 2018

How the dramas which are a staple of Chinese TV reflect the cultural values of today. How the
messages being sent out via these dramas reinforce values that the government wishes to
promote.

‘When Chinese Managers Meet American Workers’ Shanghai Daily July 2nd 2009

The problems relating to power distance and uncertainty avoidance faced by Chinese managers
responsible for managing American workers.

‘Bold Fusion’ The Economist February 17th 2007

Profile of William Amelio the CEO of Lenovo and report on how the American and Chinese
cultures are working together within the company. How training is being offered to Chinese
managers on 'executive expressions' and what the rest of the world needs to learn from Chinese
business culture.
 Self-Assessment Questions

This week’s self-assessment questions will be the basis for our in-class exercise this week. You will
complete this exercise and make a short group presentation within the class. Please do NOT submit
answers to these questions, additionally there is no ‘model answer’ for these questions. Please note
that although completing these questions may help you in your preparation for the final exam, the
inclusion of any question below does not imply that similar questions either will or will not be on the
final exam paper.

For your group project you have been assigned two countries, using these countries make use of Geert
Hofstede’s framework to find the answers to the following questions:

1. Identify Hong Kong’s scores on each of the four dimensions of culture

2. Identify the scores of each of the two countries you have selected on each of these dimensions

3. Identify the major differences between Hong Kong and each of the two countries you have selected.

4. Consider and discuss how the differences in national culture may impact managerial methods or
styles that a Hong Kong manager would need to make in managing workers from the one country you
have focused on.

5. How helpful are Geert Hofstede’s dimensions in telling you how to manage in another culture? What
do you think are the limitations of the Hofstede model?