Cross Culture

Management in
International
Business
• Bachelors Program on Digital Business
• Foreign Trade University
• October 2023
• 3rd Class
Walmart America:
Proper Walmart Greetings
• https://www.youtube.com/watch?v=A16TgDn89xc&t=7s
Your homework
Excellent!
G3 – strong local authorities
G4 & 6 – invest in training local staff but on what?

Please think about these three questions: 5 minutes group

discussions
Q1. Should they compete with the existing supermarkets,
like Vinmart, Kmart and Aeonmart?
Q2. Should they focus only on E-Commerce, in which case
they would not be competing with the existing supermarkets?
Q3. Should they focus on quality or low price?
Understanding cross cultures and its
impacts on business
• Recap from the second class
Three models of cross culture analyses
What are the parameters of each model?

Edward T. Geert Richard

Hall Hofstede Lewis
Who used the following terminology?
• High and low context?
• Multi-active, Linear-active and Reactive?
• Uncertainty avoidance?
Parameters of the Three models
Edward T. Hall
1. Monochronic and Polychronic
Do one thing at a time vs. doing multiple things at a time

2. Low Context and High Context

the society members are diverse, need to spell out everything – the society
members not diverse, assume the members share the same
meaning/thinking

3. Personal Space
Need a large personal space or not
Geert Hofstede’s 6 parameters
Geert Hofstede
1. Power distance
2. Collectivism vs. individualism
3. Masculinity vs. Feminity
4. Uncertainty avoidance
5. Long-term vs. short-term orientation
6. Indulgence vs. restraint
6 Dimensions of Hofstede
1. Power Distance = Extent to which the less powerful members of
a society accept and expect that power is distributed unequally.
• Authoritarian or Egalitarian
2. Individualism = whether individual decision making is
encouraged or not and people are generally held accountable for
their mistakes.
• Individualistic vs. Collectivism
3. Masculinity = Emphasis on aspects such as achievement,
heroism, material reward and competitiveness whereas a non-
masculine or feminine society puts emphasis on co-operation, care
for the weak and quality of life
• Masculine vs. Feminine
Hofstede’s 6 Dimension
4. Uncertainty avoidance = a society’s tolerance for uncertainty
and ambiguity. Countries with lower uncertainty avoidance may be
more willing to experiment and try out new ideas (risk taking).
Cultures with higher uncertainty avoidance commonly prefer rules
and structures to flexibility and creativeness.
• Risk taking vs. risk avoidance
5. Long-term orientation = Time horizon for business objectives,
planning and performance.
• Long-term vs. short term
6. Indulgence versus restraint = Cultures that favor indulgence
favor the gratification of human drives to enjoy life and have fun.
Cultures favoring restraint consciously suppress the gratification of
needs and regulate it according to strict social norms.
How the surveys/scoring was done
ex. Power Distance
Items used for composing the power distance index were as follows:
1. Answers by nonmanagerial employees to the question “How
frequently, in your experience, does the following problem occur:
employees being afraid to express disagreement with their
managers?” (mean score on a 1–5 scale from “very frequently” to
“very seldom”)
2. Subordinates’ perception of the boss’s actual decision-making style
(percentage choosing the description of either an autocratic style or a
paternalistic style, out of four possible styles plus a “none of these”
alternative)
3. Subordinates’ preference for their boss’s decision-making style
(percentage preferring an autocratic or a paternalistic style, or, on the
contrary, a style based on majority vote, but not a consultative style
Definition of Masculine/Feminine Society:
by G. Hofstede from ‘Cultures and Organizations’
• A society is called masculine when emotional gender roles
are clearly distinct: men are supposed to be assertive, tough,
and focused on material success, whereas women are
supposed to be more modest, tender, and concerned with the
quality of life.
• A society is called feminine when emotional gender roles
overlap: both men and women are supposed to be modest,
tender, and concerned with the quality of life.
Three Models to understand cultural
differences
Lewis Model: Richard Lewis is a scholar from the UK.
Inspired by E. Hall.
• Developed three categories and in which every culture and
individuals has a place.
• Includes emerging countries such as from East and South
Asia, and Africa
About the Lewis Model
• The Lewis Model is based on data drawn from 75,000
executives taking residential courses and more than 150,000
online questionnaires to 68 different nationalities.

• While the three types are distinctive, each possesses

behavioral elements from the other two categories. It is a
question of which one is dominant.
• Many individuals deviate from the national type; because of work
situation, e.g. engineers and accountants tend to be Linear, sales
people Multi-active, lawyers and doctors Reactive or other reasons.
Your findings from “When Cultures Collide”
• How does Richard Lewis explain “culture”?

• What is the most important programming tool for a society or a

country?

• Benjamin Whorf’s hypothesis = Language we speak largely

determines our way of thinking. RL appears to agree with this
and notes that the “thought = internalized language.” But what
about translation? Good interpreters/AI can translate different
languages to our own language. Do you agree or not agree with
the hypothesis of Benjamin Whorf?
When Cultures Collide: What is the ‘Truth?’

• For a German and a Finn, the truth is the truth.

• In Japan and Britain it is all right if it doesn’t rock the boat.
• In China there is no absolute truth.
• In Italy it is negotiable.
 Individual
preference/idea

Collective programming

Learned

Common to mankind/Inherited
Lewis Model
Based on the surveys, observation and analyses, RL
categorized the countries into three groups
⚫Linear Active – talks half the time, does one thing at a time, plans ahead,
sticks to facts

⚫Multi Active – talks most of the time, does several things at once, plans
grand outline only, feelings before facts

⚫Reactive – listens most of the time, reacts to partner’s action, polite and
indirect, must not lose face
My Cultural Profile: See the Black Dot
What are the characteristics of three groups?
15 dimensions of people’s behavior and
cultural preferences
8. Job/people orientation
1. Listening and speaking 9. Expressing disagreement
2. Planning 10. Interruptions
3. Directness 11. Truth
4. Connections 12. Patience
5. Feelings 13. Body language
6. Tasks and actions 14. Facts
7. Face 15. Social/professional
What are the characteristics of the three
categories?
1. Work/study style
• Do one thing at a time
• Do multiple things at once
2. Planning
• Plan ahead
• Make a grand design only
• Adjust as you go
3. Communication
• Talks half the time
• Talks all the time
• Listens
What are the characteristics of the three
categories?
4. Relationship
• Relationship with family and friends very important
• Separate work matters from relationship
5. Rules
• Following rules (laws, regulations, company rules) important
• If necessary, you don’t need to follow the rules
6. Time keeping
• Important to be on time
• Adjust
The Story of Sven and Antonio
Cultural/value differences – reaction to a critical situation (from the World
Value Survey data a study of 65 countries reflecting 75% of the world
population)

You are riding in a car with a close friend, who hits a

pedestrian. You know that your friend was diving 60 km
per hour when the maximum allowed was 40 km per hour.
There are no witnesses. His lawyer says that if you
testify under oath that he was only driving 40 km per hour
it may save him from serious consequences. -> What
do you do?
Cultural/value differences – reaction to a
critical situation (from the World Value Survey
data a study of 65 countries reflecting 75% of
the world
• More population)
than 90% of managers in Canada, the US, Switzerland,
Australia, Sweden, Norway and Germany reported that they
would not testify falsely under oath to help their close friend.
• Fewer than half the managers in South Korea, Venezuela,
Russia, Indonesia and China said that they would refuse to
testify – meaning that more than 50% said that they would
testify falsely.

• Some cultures put more emphasis on universal commitments

like honesty while others put more weight on loyalty to
particular people and relationships.
Why categorization of countries useful?
• It enables us to
1. Predict a culture’s behavior
2. Clarify why people did what they did
3. Avoid giving offense
4. Search for some line of unity
5. Standard policies
6. Perceive neatness and ordnung
 World Population by the Lewis Category

Linear-Active 600,000,000

Muti-Active 3,300,000,000
Population by
Reactive 1,700,000,000
Cultural
CategoryHybrid (Multi-Active and Reactive)
(2005) Indonesia 215,000,000

Philippines 75,000,000

Total 6 billion (approximately)

Only three models on cross culture issues?
• There are many others.
• New analyses and knowledge added to the existing wealth of
knowledge/ideas.
• Study yourself who else is doing the analyses.
How can we make the use of Lewis Model
in business?

Project: How do you design the following knowing the three

cultures and their pros and cons?
• Scheduling
• Project planning
• Time keeping
• Tasks and actions
• Facts, etc.
Please discuss among your team for 10
minutes:
You are the team leader and have an American, a German, a
Korean, a Japanese and an Italian team members.

1. How do you schedule meetings and make sure that all the
members are on board?
2. How will you make sure that all the team members’
opinions are heard and discussed?
3. How do you agree on a strategy for the business?
Homework for the next class, October 26
• Read “Culture Clash in the Boardroom” – a Case Study by
Harvard Business Review
• Please respond to the following questions:
• What are the critical issues at the Boardroom?
• Three recommendations for Liu Peijin’s action.
• Reasons for your recommendations from cultural perspectives.
• Each group to present their answers
• Limit: one slide for each question
• Presentation for each group: 5 minutes only