Cultural Constraints

in Management Theories

Presented by:
 Tahir Ahmad
 Muhammad Waqas
 Iqra Amin
 Faiqa Kafayat
WHO IS GEERT HOFSTEDE
 Gerard Hendrik (Geert) Hofstede (2 October 1928 – 12 February
2020) was a Dutch social psychologist.
 He was a well-known pioneer in his research of cross-cultural
groups and organizations and played a major role in developing a
systematic framework for assessing and differentiating national
cultures and organizational cultures. 
 His studies demonstrated that there are national and regional
cultural groups that influence the behavior of societies and
organizations.
 He is best known for developing one of the earliest and most
popular frameworks for measuring cultural dimensions in a global
perspective.
 He described six dimensions of national cultures.
Management Theorists are Human
 My argument is that not only employees are human - a discovery
from the 1930s, with the Human Relations school (Mayo, 1933), and
managers are human, an idea introduced in the late 40s by Herbert
Simon's "bounded rationality" (Simon, 1947) and elaborated in
Richard Cyert and James March's Behavioral Theory of the
Firm  (1963, and recently appeared in a second edition).
 Management Scientists, theorists, and writers are human too: they
grew up in a particular society in a particular period, and their ideas
cannot but reflect the constraints of the environment they know
Introduction
 The linguistic origin of the word is from Latin manus, hand, via the
Italian maneggiare, which is the training of horses in the manege;
subsequently its meaning was extended to skillful handling in
general, like of arms and musical instruments, as Don Armado
illustrates. However, the word also became associated with the
French menage, household, as an equivalent of "husbandry" in its
sense of the art of running a household. The theatre of present-day
management contains elements of both manege and menage and
different managers and cultures may use different accents.
Introduction
 The founder of the science of economics, the Scot Adam Smith, in
his 1776 book The Wealth of Nations, used "manage," "management"
(even "bad management") and "manager" when dealing with the
process and the persons involved in operating joint stock companies
(Smith, V.i.e.). British economist John Stuart Mill (1806-1873)
followed Smith in this use and clearly expressed his distrust of such
hired people who were not driven by ownership. Since the 1880s the
word "management" appeared occasionally in writings by American
engineers, was canonized as a modern science by Frederick W.
Taylor in Shop Management in 1903 and in The Principles of
Scientific Management in 1911.
Introduction
 While Smith and Mill used "management" to describe a process and
"managers" for the persons involved, "management" in the American
sense-which has since been taken back by the British-refers not only
to the process but also to the managers as a class of people. This
class
 (1) does not own a business but sells its skills to act on behalf of the
owners and
 (2) does not produce personally but is indispensable for making
others produce, through motivation. Members of this class carry a
high status and many American boys and girls aspire to the role. In
the U.S., the manager is a cultural hero.
MANAGEMENT OF SUCCESSFUL MODERN ECONOMIES

We will look at management in its context in other successful modern

economies:
 GERMANY

 JAPAN

 FRANCE

 HOLLAND

 OVERSEAS CHINESE
 GERMANY
Apprenticeship system
Used both on shop floor and in offices
Includes practical work and classroom courses
Afterward apprentices are given a certificate that is recognized throughout the

nation
Many German leaders have ascended to their position through apprenticeships
German workers do not need managers for motivation
Managers are expected to assign tasks and be an expert on resolving technical

issues
They expect their boss or Meister to assign their tasks and to be the expert in

resolving technical problems. Comparisons of similar German, British, and

French organizations show the Germans as having the highest rate of personnel
in productive roles and the lowest both in leadership and staff roles.
They do not think of manager vs non-manager but rather cadre vs. non-cadre
A person becomes cadre by going to the proper schools and they gain the status

persistently
 JAPAN

 The American type of manager is also missing in Japan. In the

United States, the core of the enterprise is the managerial class.
The core of the Japanese enterprise is the permanent worker
group; workers who for all practical purposes are
 tenured and who aspire at life-long employment. They are distinct
from the non-permanent employee
 Refers to a process and a class of people
 This class:
 "Does not own a business but sells its skills to act on behalf of the
owner"
JAPAN

 "Does not produce personally but is necessary for making others

produce, through motivation“
 They take part in Japanese-style group consultation sessions for
important decisions, which extend the decision-making period but
guarantee fast implementation afterwards. Japanese are to a large
extent controlled by their peer group rather than by their manager.
 Carry a high status
 Cultural hero
 University graduates first enter the permanent workforce
 Paid according to seniority
 Change positions based on need - Line to staff
 In view of the amazing success of the Japanese economy in the past
thirty years, many Americans have sought for the secrets of Japanese
management hoping to copy them.
FRANCE

This principle is based on the honor of each class in their society

 Class have always been and will remain stratified

 "Superiors behave as superior beings and subordinates accept and

expect this“
 French do not think in terms of managers versus non-managers but

in terms of cadres versus non-cadres; one becomes cadre by

attending the proper schools and one remains it forever; regardless
of their actual task, cadres have the privileges of a higher social
class,
 Fayol was a French engineer whose career as a cadre superior

culminated in the position of President-Directeur-General of a

mining company
 Taylor's work appeared in a French translation in 1913, and Fayol

read it and showed himself generally impressed but shocked by

Taylor's "denial of the principle of the Unity of Command" in the
case of the eight-boss-system.
 FRANCE
.
 Taylor was not really concerned with the issue of authority at
all; his focus was on efficiency. He planned to split the task of
the first-line boss into eight specialism
 Dividing the labor of the production department in to eight
main compartments.
1. Time and cost
2. Work instruction
3. Processes and order in which they executed
4. Process preparation
5. Maintenance
6. Quality check
7. Technical supervision
8. Employee management with supervision of Taylor the system
worked.
HOLLAND

 Shows there are no universal management theories

 Even today it is not widely accepted that management theories'
validity stops at national borders
 the management principle to be a need for consensus among all
parties, neither predetermined by a contractual relationship nor by
class distinctions, but based on an open-ended exchange of views
and a balancing of interests.
 In terms of the different origins of the word "manager," the
organization in Holland is more menage (household) while in the
United States it is more manege (horse drill).
HOLLAND

 Based off of these discoveries management scientists, and theorists

should be treated as human too
 Their ideas reflect the time period, and society that they are a part of
 Based on the principle of a need for consensus among all parties
 Open-ended exchange of views
 Balancing of interests
 Spend a lot of time on formal consultations to keep up the group
consensus
OVERSEAS CHINESE
 Economic development in the past thirty years we find three
countries mostly populated by Chinese living outside the Chinese
mainland: Taiwan, Hong Kong and Singapore.
 Overseas Chinese play a very important role in the economies of
Indonesia, Malaysia, the Philippines and Thailand, riches and now
counted among the world's wealthy industrial countries. Yet very
little attention has been paid to the way in which their enterprises
have been managed.
 Overseas Chinese American enterprises lack almost all
characteristics of modern management. They tend to be small,
cooperating for essential functions with other small organizations
through networks based on personal relations. They are family-
owned, without the separation between ownership and
management .
OVERSEAS CHINESE
 They normally focus on one product or market, with growth by
opportunistic diversification; in this, they are extremely flexible.
Decision making is centralized in the hands of one dominant family
member, but other family members may be given new ventures to
try their skills on. They are low-profile and extremely cost-
conscious, applying Confucian virtues of thrift and persistence. Their
size is kept small by the assumed lack of loyalty of non-family
employees, who, if they are any good, will just wait and save until
they can start their own family business.
 Overseas Chinese prefer economic activities in which great gains can
be made with little manpower, like commodity trading and real
estate. They employ few professional managers, except their sons
and sometimes daughters who have been sent to prestigious
business schools abroad, but who upon return continue to run the
family business the Chinese way.
Hofstede’s 5 Dimension
of Cultural Constraints
Dimensions of Culture
 Power Distance (PDI)
 Individualism versus Collectivism (IDV)
 Masculinity versus Femininity (MAS)
 Uncertainty Avoidance (UAI)
 Long-Term Orientation/Short-Term Orientation (LTO)
Power Distance
 The extent of unequal power distribution that exists in a culture - as
experienced by the less powerful members of the society or
organization.
Power Distance Index
 Centralized Organization  Flatter organization
 Large gaps in compensation  Supervisor and employees are
 Authority and respect considered almost as equals.

High PDI Low PDI

Individualism VS Collectivism
Individualism VS Collectivism
 The high side of this dimension, called individualism, can be defined
as a preference for a loosely-knit social framework in which
individuals are expected to take care of only themselves and their
immediate families.

 It's the opposite, collectivism, represents a preference for tightly-

knit members of a particular group to look after them in exchange
for unquestioning loyalty.

 A society's position on this dimension is reflected in whether

people's self-image is defined in terms of "I" or "We".
Individualism VS Collectivism
 An enjoyment of challenges
 An expectation of individual
rewards for hard work
 Maintaining harmony among
group members
 People work for intrinsic
rewards

High IDV Low IDV

Masculinity VS Femininity
 The masculinity side of this dimension represents a preference in
society for achievement, heroism, assertiveness, and material
rewards for success. society at large is more competitive.

 It's opposite, femininity, stands for a preference for cooperation,

modesty, caring for the weak and quality of life. Society at large is
more consensus-oriented.

 In the business context masculinity versus femininity is sometimes

also related to as “Tough versus Tender” cultures.
Masculinity VS Femininity
 Money and achievement are  Relationship
important. oriented/consensual
 More focus on quality of life.

High Low
Uncertainty Avoidance
Uncertainty Avoidance
 The uncertainty avoidance dimension expresses the degree to which
the members of a society feel uncomfortable with uncertainty and
ambiguity.

 The fundamental issue here is how a society deals with the fact that
the future can never be known: Should be try to control the future or
just let it happen?

 Countries exhibiting strong UAI maintain rigid codes of conduct

codes of belief and behavior, and are in tolerate of unorthodox
behavior and ideas.

 Week UAI societies maintain a more relaxed attitude in which

practice counts more than principles.
Uncertainty Avoidance
 People are expressive and are  Less sense of urgency
allowed to show anger or
emotions, if necessary

High Low
Long-Term/Short-Term Orientation
Long-Term/Short-Term Orientation
 Every society has to maintain some links with its own past while
dealing with the challenges of the present and the future society is
prioritized these two existential goals differently.

 Societies who scored low on this dimension, for example, prefer to

maintain time-honored traditions and norms while viewing social
change with suspicion.

 Those with the culture which scores high, on the other hand, take a
more pragmatic approach: they encourage thrift and efforts in
modern education as a way to prepare for the future.
Insights of Cultural Management
Idiosyncrasies of
American Management
Theories
Idiosyncrasies of American Management
Theories
America:
 Power distance: below average

 Uncertainty avoidance: below average

 Individualistic: high

 Masculine: fairly

 Term oriented : short

Germany:
 Uncertainty avoidance :high

 Individualistic :average
 French :
 Power distance :high

 Uncertainty avoidance :high

 Feminine :less

 Individualism : less

Dutch:
 Feminism : extreme

 Term oriented : long

 Individualistic : high

 Uncertainty avoidance : below average

 Power distance : below average

Hong Kong & China:

 Power distance: large

 Uncertainty avoidance: low
 Collectivism: low
 Term oriented: long
Idiosyncrasies of American
Management Theories
American culture is reflected in American theories.
 3 necessary elements are :

 1) Stress on market process :

 In USA from 1970-80 organizations were considered "transaction
cost "
~transaction cost : achieving economic efficiency by reducing cost of
exchange
 In labor market labor sell their labor in return of price. If cost of

economic transactions(getting information finding whom to trust) is

low in hierarchy employees will create hierarchical organization.
 Cultural point of view :organization is directly related with market

because market is the base model.

2) The Stress on the Individual
 In US , psychology is prioritized over sociology, we may get
information from individuals but culture is a collective phenomenon.
Tree example
 Culture can be compared to a forest, while

individuals are trees. A forest is not just a bunch of trees: it is a sym
biosis of different trees, bushes, plants, insects, animals and micro-
organisms, and we miss the essence of the forest if we
only describe its most typical trees. In the same way, a culture canno
t be satisfactorily described
in terms of the characteristics of a typical individual. There is a tende
ncy in the US management
literature to overlook the forest for the trees and to ascribe cultural 
differences to interactions among individuals. 
2) The Stress on the Individual
 National and organizational culture are two different phenomenon,
Value of national culture is set by majority of members starting from
their childhood while of corporate is set b experiences of
organization by employees at adult age

 National culture can be changed very slowly but corporate can be

changed very consciously but its very difficult

 Corporate culture keep employees with different national culture

together
3) Stress on managers rather than
employees
 In US literature managers are considered as core - elements of
organization (may result of extreme individualism)
 US focus much on managers that us have almost 10 books and
articles on management
 20 or 30 years ago more researches are conducted on managers
rather than employees
 Japan focus less on managers
Conclusion
The management theorist who ventures outside his or her
own country into other parts of the world is like Alice in Wonderland.
He or she will meet strange beings, customs, ways of organizing or
disorganizing and theories that are clearly stupid, old-fashioned or
even immoral-yet they may work, or at least they may not fail more
frequently than corresponding theories do at home.
Then, after the first culture shock, the traveler to Wonderland will feel
enlightened, and may be able to take his or her experiences home and
use them advantageously. All great ideas in science, politics and
management have travelled from one country to another, and been
enriched by foreign influences.
The roots of American management theories are mainly in Europe: with
Adam Smith, John Stuart Mill, Lev Tolstoy, Max Weber, Henri Fayol,
Sigmund Freud, Kurt Lewin and many others. These theories were re-
planted here and they developed and bore fruit.