Variables

e colloquial e.^ To date, the 1950s, [he English-:cepted defi-

ted mainly r embodi-!cially their

mental pro-

latterns of lind”. This s behavior mate from vare of the

and thus ex-•acticed by a ne up in spe-

.sic elements

isychologists m them into Lictive, dense ured reason-lat the basic

; subsequent

3 t of culture.

not national given aware-ution of this , values and es and proc-•ch, but their ly or society. ;y are partly

CHAPTER 2 THE CULTURAL CONTEXT OF IHRM

25

conscious and partly unconscious. The third level is described as underlying assumptions, which are often presumed to be self-evident. They include convictions, perceptions, thoughts and feelings, which are usually invisible and unconscious. Nevertheless, they are the sources of values and the actions based on them. Schein emphasizes that relationships that lead from artefacts through values to underlying assumptions are much weaker than those leading in the contrary direction, because the influence of underlying assumptions on values and artefacts is stronger than vice versa.

The basic assumptions of Schein’s ideas originate in the work of Kluckhohn and Strodtbeck from 1961″ According to the authors, assumptions are organized independently of individual cases in typical patterns in each culture based on the human capacity to survive. Some of the underlying assumptions will be explained in more detail below, modeled according to explana-tions by Schein.”^ The following questions are implicit in the six underlying assumptions:^”

The nature of reality and the nature of truth: What is real and what is not? Do members of a culture a s s u m e more of an experimental position, where decisions about true and false depend on experiment, or do they follow more traditional convictions?

The time dimension: How Is the time dimension defined and calculated? How important is time? Do members of a culture live more in relation to thepast or to the future? Are they oriented more to the long-term or the short-term?

ThB-effect of spatial proximity and distance: How Is s p a c e attributed to members of a society? What objects and locations are private and what are public? What role does spatial distance play In evaluating relationships e.g. In regard to level of intimacy?

The nature of being human: What does it mean to be human? Is human nature marked more by

good or bad Intentions? C a n people change and develop, even a s adults? ;

The type of human activity: How

is the relationship to the environment

evaluated? Is the

A

environment considered more compelling or overpowering? Are the members of a society more

passive in their fate or do they try to actively change it?

The nature of human relationships:

What Ideas about criteria of social order dominate in a society

(e.g. age, origins, s u c c e s s ) ? What characterizes relationships between people? Is team s u c c e s s or

Individual s u c c e s s important?

_An example of Schein’s culture levels is found in Scholz, Messemer and Schrbter.^^ The authors analyze culture within the European Community using Schein’s concept. They state that there are great similarities on the artefact level of the European states, which evokes the impression that there are no major differences between countries. However, the consensus is much lower on the levels of values and basic assumptions. Under the heading of assumptions, the authors discuss Christianity, the basic understanding of democracy as well as capitalist market organiza-tions as examples. O n the values level, they mention national legislation on abortion as an example. The artefacts level addresses laws and guidelines that are initiated at the European level. The authors conclude that Europe is a culture corridor with major similarities and differ-ences on the levels of basic assumptions, values and artefacts. The diversity of definitions and concepts, only a small part of which can be presented in this chapter, underlines the need for a clear, unambiguous definition of the term culture for research work in intercultural comparative research.

Cross-cultural management Studies

Cross-cultural management studies aim to describe and compare the working behavior in vari-ous cultures. Suggestions on improving interaction between members of various cultures can be drawn from these analyses. This section will describe important results of cross-cultural

20

CHAPTER 2 THE CULTURAL CONTEXT OF IHRM

i

management studies. The overview starts with the historically significant study

by

Hofstede.

The GLOBE study and results of the studies by Trompenaars and Hampden-Turner as well as

work by Hall and Hall are also presented and

discussed.””

H o f s t e d e ‘ s c r o s s – c u l t u r a l m a n a g e m e n t

study . The research of Hofstede occupies a special

place in the field of cross-cultural comparative research”^ because it was the first major study in

this field. It can be positioned on the values level, the intermediate level of Schein’s concept of

culture. This means that it results in variables that are partly conscious and partly unconscious.

A famil

This approach is different from other studies that primarily consider the artefacts

level. The lat-

a small

ter concentrates on easily measurable, but hard to interpret variables like, for example,

eco-

ture w<nomic growth of a country or its political system.

firm. Tt

In his original study, Hofstede identified four cultural dimensions based on preliminary theo-

retical considerations and statistical analyses, which can be used to describe cultural

differences

between countries.”^ This is the most comprehensive study on this subject ever conducted by

means of one questionnaire. In total, the analysis was based on 116 000 questionnaires

from

I B M employees. The surveyed employees represented all hierarchical levels of the company and

possessed

various qualifications, from unskilled workers

to university graduates.

Employees

from a total of 38 various profession groups were surveyed.^” In addition, the study was con-

ducted during two different periods in I B M subsidiaries (1967-1969 and 1971-1973).^’ The

questionnaire was translated into 20 different languages

in t o t a l . O u t of 150 questions,

60

were based on convictions and values of the

respondents.^” Since the survey questioned

only

The resindividuals employed at subsidiaries of the same company, there is a high probability according

accur to Hofstede that the determined differences are actually the result of national differences and the

‘mental program’ of the employees.”’ Four underlying dimensions of country cultures were

D i s c uss

identified from the values obtained within the scope of the study. These dimensions together

1 R.

explained

49 per cent of the variance .Hofstede named them power distance,

uncertainty

avoidance,

femininity vs. masculinity, and individualism

vs. collectivism. A later study involv-

ing participants from the Asian

Pacific region included a fifth dimension, Confucianism

or

long-term

orientation.

The power distance dimension

represents the scale on which the members of a culture accept

that power is not distributed equally in institutions. It expresses the emotional distance between

employees

and superiors.’^^ Power inequality exists in many cultures, but may be more or less

pronounced from culture to culture. Societies marked by high power distance, and high power

inequality, accept hierarchical organization structure, in which every individual can occupy their

place without any need for justification. Cultures with low power distance aspire to equal power

distribution and demand explanations for any instance of formalized power inequality. The im-

portant difference between societies that differ with respect to the Power Distance Index is in

how power inequalit}’ is dealt with. See I H R M in Action Case 2.1. Naturally, this implies conse-

quences for the structure of organizations.””

The cultural dimension of uncertainty’ avoidance represents the extent to which

the members of a culture feel threatened

by uncertain, ambiguous

and/or unstructured situations and try to avoid them. Cultures with strong uncertainty avoidance are characterized by strict beliefs and behavioral codes and do not tolerate people and ideas that deviate from these. In cultures with weak uncertainty avoidance, the significance of practice exceeds the significance of principles and there is high tolerance for deviations. The major difference between countries with differing Uncertainty Avoidance Index is the reaction of individuals to time pressure or uncertainties in the future. People try to influence and control the future to a varying extent.^^Just like the power distance dimension the uncertainty avoidance dimension implies consequences for the structure of organizations. Hofstede even goes as far as to claim that countries life.^° 1 with weaker uncertainty avoidance are more likely to bring about fundamental innovations,

Lited to because they have greater tolerance for deviate thinking. See I H R M in Action Case 2.2.

The

However, he sees a decisive drawback for these nations in the implementation of such

L vidual

Hofstede. as well as les a special jot study in concept of nconscious. rel. The lat-ample, eco-linary theo-1 differences inducted by naires from impany and

Employees dy was con-973).^’ The jestions, 60 ;tioned only :y according aces and the iltures were ms together

uncertainty tudy involv-

•icianism or

ilture accept nee between more or less high power occupy their equal power lity. The im-•t Index is in aplies conse-

;h the mem-mations and ed by strict om these. In significance :en countries ; pressure or ing extent.^* iplies conse-lat countries innovations, n Case 2.2. ion of such

r

CHAPTER 2 THE CULTURAL CONTEXT OF IHRM

27

I

RM in Action Case 2

Establishing a branch of a family business in China

A family-owned carbon steel company from Germany has extended Its business to Hong Kong. The owners bought a small traditional Chinese firm and decided to copy the successful structure they had developed at home. This struc-ture was headed by three general managers who equally shared the responsibilities tor the business activities of the firm. The consequences were as tollows.

Now the Chinese employees were assigned tasks by people they have never seen before and whom they did not understand. Many misunderstandings occurred, some were quite costly.

The employees back In Europe were only concerned with whether the assigned tasks were completed and did not consider any other obligations to the Chinese employees, such as taking care of the relationships

with the Chinese government, banks, etc. _ „ .

3 Eventually, the local employees became frustrated and were ready to leave the company.

The result was that the management model was changed again and a single managing director of the subsidiary was accountable tor all business activities in Hong Kong.

D i s c u s s i o n Q u e s t i o n s :

Relate the described situation to one of the cultural dimensions identified by Hofstede. How can you explain it?

How does this situation compare to comparable situations in your home country? What are the limits of a cultural explanation?

Source: Based on DGFP, M. Festing, K.-P. Gempper, G. Gesche, J. Hagenmuller, U. Hann, D. Slevogt, G. Trautwein, P. Esch and 8. Armutat (eds) Interkulturelle Managementsituation In der Praxis, Kommentierte Fallbeispiele tur Fuhrungskratte und Personalmanager (Bielefeld: Bertelsmann, 2004).

innovations, because detailed work and punctuality are required for implementation. An out-standing implementation of complex processes is associated with cultures with higher uncer-tainty avoidance. In summary, he ascertains that more Nobel Prize winners have come from

Great Britain than Japan, but Japan was able to introduce more new products into the world market.^^

The cultural dimension of femininity vs. masculinity identified by Hofstede is based on the assumption that values can be distinguished as more masculine or more feminine (see I H R M in Action Case 2.3). The masculine orientation comprises the pursuit of financial success, heroism and strong performance approach; the feminine orientation contains preferences for life quality, modesty and interpersonal relationships. Furthermore, role flexibility in the feminine oriented cultures is more clear-cut than in more masculine cultures, in other words, roles of the sexes overlap, which means that both women and men could be modest and value a certain quality of life.”° The fundamental difference betv/een the two approaches is the form of social roles attrib-uted to gender by the relevant society.'”

The cultural dimension of individualism vs. collectivism describes the extent to which indi-vidual initiative and caring for oneself and che nearest relatives is preferred by a society as

CHAPTER 2 THE CULTURAL CONTEXT OF IHRM

RM in Action Case 2.2

Long-term development plans of a German

Multlnatlonalin the USA

Peter

A German firm fiad developed Its activities in the electrical Industry in the USA for two years and the CEO1

Hansen was happy with their current performance: market share tor important products had increased significantly

and progress was better than expected. The number of employees had Increased,

Including quite a tew local

American managers in high-level management positions – a situation which was rather unusual tor a subsidiary of a German multinational in its early stage of development. The CEO’s goal from the beginning was to avoid an ethno-centric approach to the American activities of his firm and to take a polycentric approach that supported recruitment of local managers.

One of these US local managers was John Miller, the marketing director of the company. During the last two years, he has been thoroughly prepared tor his job. The company had sent him to various high-level training pro-grams at top business schools and had provided him with a long-term career plan, which included short-term vertical career advancement. While Peter Hansen wanted to support the development of an American management style he nevertheless tried to transfer some HP practices which are highly valued In Germany – particularly investing in training and taking a long-term intra-organizational career perspective. While some US firms took this approach, these ideas were not as widely accepted in the US as in Germany. However, Peter Hansen assumed that these policies would be valued by the new US employees of the firm and would provide an important incentive tor employee retention.

One morning, Peter Hansen was shocked to learn that John Miller was about to quit his job. A competitor had ottered John a challenging position – in large part because he had systematically built up his knowledge and experi-ence base – supported by his German employer. How can you interpret Peter Hansen’s surprise from a cultural point of view? ‘

D i s c u s s i o n Q u e s t i o n s :

 

Relate the described situation to one of the cultural dimensions identified by Hofstede. Can you explain Peter Hansen’s surprise using this theory?

How does this situation compare to comparable situations in your home country? What are the limits of a cultural explanation? ‘

opposed to, for example, public assistance or the concept of extended family. In more indi-vidualist cultures, there is merely a casual network of relationships between people. Each person is primarily responsible for himself. More collective cultures, on the contrary, have closer, more clearly defined systems of relationships. This applies both to extended families as well as companies. A clear line is drawn between one’s own group and other groups. In exchange for the care offered by one’s own group, the group member provides very intense sense of loyalty. The distinguishing aspect of this dimension is the predominant self-sufficiency among individuals in a society. This applies to private life just as professional life. See I H R M in Action Case 2.4. Thus, this dimension is marked by consequences for the structure of organizations.

With regard to professional life, collectivist companies differ from individualist companies in that the relationship between the superior and the employee in collectivist structures can be described as more informal. Furthermore, recruitment and career progression is often within the so-called ingroup. Management means management of groups and the reward systems are fre-quently group-oriented. On the contrary, individualist companies focus on individual aspects

Ellsabe that be Ing a jc aged tc This manag Norwec it was: 40 per make It

D i s c u

1 Re

2 Ce

di£

Source

3rd ed Sonnta

when St usually I sented c pany, at worke d

Giver cultural land, N . was a p’ question results, : nese Va^ 100 peo from tht sions. D feminini could nc could nc by resea tion in t tains val

in Peter

of a cultural

, more indi-eople. Each icrary, have i families as

• groups. In very intense •ninant self-essional life, the structure

:ompanies in tures can be :n within the tems are fre-idual aspects

CHAPTER 2 THE CULTURAL CONTEXT OF IHRM

29

RM in Action Case 2.3

Female Careers in Various Environments

Elisabeth Harstad was employed as a trainee at the Norwegian risk management consultancy DNV when she realized that being a woman was a barrier. Although trainees were supposed to go abroad the company had problems find-ing a job for Elisabeth in a foreign subsidiary. ‘I wanted to go to London, Houston, or Singapore. At the end I man-aged to get an International assignment from Oslo to Copenhagen’.

This was in the 1980s. However, Harstad did not give up and pursued her career intensively. Today she is the manager of the research & innovation unit at DNV – and since 2006 member of the board of directors of the large Norwegian chemical company Vara. When the new members of the board of directors were elected, for the first time it was an advantage tor Elisabeth to be a woman. Since 2008, Norwegian companies are required by law to have

40 per cent female members of their board of directors. Thus, Elizabeth is part of an experiment –

if women do not

make it to the top on their own, politics support this process in Norway.

.D i s c u s s i o n Q u e s t i o n s :

Relate the situation in Norway to one of the cultural dimensions identified by Hofstede. How can you explain it?

Can the rules for quotas of female managers be applied In other countries as well? What are the advantages and disadvantages?

Source: M. Festing, P. J. Dowling, W. Weber, A. D. Engle: Internationales Personalmanagement, Wiebaden: Gabler, 3rd ed. (2011) based on L. Nienhaus. Der neidische Blick auf die norwegische Quote, Frankfurter Allgemeine Sonntagszeitung 2007, S. 42. Reproduced with kind permission from VS Verlag Fur Sozialwissenschaften.

when structuring reward systems. The relationship between the superior and the employee is usually based on a relatively neutral, impersonal contractual foundation. Although the four pre-sented dimensions were derived from data collected from employees of a multinational com-pany, according to Hofstede, they were confirmed in later studies by other researchers, who worked with different methods and studied different target groups.”^

Given the composition of the research team during Hofstede’s first study, the risk that the cultural identity of researchers from Western industrial countries (Great Britain, France, Hol-land, Norway, USA) influenced the form of the questionnaire could not be ruled out. There was a possibility that some questions were considered irrelevant in some cultures, while other questions relevant for these cultures were not even included. To rule out possible distortion of results, a questionnaire that clearly reflects Chinese cultural identity was later designed (Chi-nese Value Survey). This questionnaire was translated into ten languages and used to survey 100 people from 23 countries. Only a few items in the Chinese Value Survey were transferred from the I B M questionnaire in the same form. Nevertheless, the results reflected four dimen-sions. Dimensions similar to power distance, individualism vs. collectivism and masculinity vs. femininity were manifested in this study as well. Only the uncertainty avoidance dimension could not be confirmed in this study. Instead, another dimension was discovered, one which could not be related to the results of the original pan-European I B M study. It was described by researchers as Confucianism dynamics. This dimension essentially reflects a basic orienta-tion in the life of people, which can be either more long-term or short-term in nature. It con-tains values that Western researchers can recognize, but they were not taken into account in

30 CHAPTER 2 THE CULTURAL CONTEXT OF IHRM

RM in Action Case 2.4

Meeting on a Friday in Kenya?

For a long time our building company had finished an important project concerning a new major route in Kenya. How-ever, not all the money had been paid by our customer. Therefore, the managing director of the Kenyan subsidiary of the building corporation organized a meeting with the representative of the respective Kenyan government agency. The meeting was scheduled for the next Friday at ten a.m.

The meeting started and the representative was very polite and friendly. However, at the same time he also seemed to be quite nervous. Every few minutes he received a telephone call or had to initiate a telephone call himself. All phone discussions were carried out in the local language. Despite the Interruptions, I tried to explain the reason for my visit – the outstanding account balance. Of course, the government representative apologized for every interrup-tion. However, after 15 minutes we were both extremely tense because the conversation did not advance at all.

Eventually, I said that I was sorry that my counterpart had so much to do and asked for another meeting the next Tuesday. Instantly, the government representative was relaxed again and happily confirmed the new meeting. Now he could finally concentrate on the preparation and organization of his big family meeting this weekend, which is typi-cal for large Kenyan families.

D i s c u s s i o n Q u e s t i o n s :

Relate the described situation to one of the cultural dimensions identified by Hofstede. How can you explain it?

• • How does this situation compare to comparable situations in your home country? Please explain. Where are the limits of the cultural explanation?

Source: Based on DGFP, M. Festing, K.-P. Gempper, G. Gesche, J. Hagenmuller, U. Hann, D. Slevogt, G. Trautwein, P. Esch, and S. Aimutat, (eds) Interkulturelle Managementsituation in der Praxis. Kommentierte Fallbeispiele fur Fuhrungskratte und Personalmanager (Bielefeld: Bertelsmann, 2004).”*^

the previous questionnaire. Cultures that ate classified as long-term in this dimension ate characterized by:

great endurance and/or persistence in pursuing goais

position of ranking based on status

adaptation of traditions to modern conditions

respect of social and status obiigations within certain limits

high savings rates and high investment activity

readiness to subordinate oneseif to a purpose

the feeling of shame .

Short-term classified cultures, on the contrary, are characterized by:

personal candor and Stability

avoiding loss of face

The fir ence oriente all val of Con

3nya. How-jbsidiary of jnt agency.

•ne he also’ call himself. 3 reason for iry interrup-at all.

ng the next jBting. Now ;tuch |s typi-

explainit?

lerearethe m

5. Trautwein, beispiele fur

mension are

CHAPTER 2 THE CULTURAL CONTEXT OF IHRM

31

respect of social and status obligations without the consideration of costs low savings rates and low investment activity

expectations of quick profit; respect for traditions

greetings, presents and courtesies based on reciprocity.

The first set of values is viewed as more future-oriented and dynamic (in particular, persist-ence and frugality); the second set of values is viewed as more present-oriented or past-oriented and is relatively static.”” The name of this dimension comes from the fact that nearly all values of the short-term and long-term dimension could be drawn directly from the study of Confu ciamsm. 45

C o u n t r y – s p e c i f i c results of the Hofstede study . The results for individual countries were obtained by the evaluation of predetermined answers, which ensured that the results could be demonstrated by point values. The point values reflect relative and not absolute positions of the countries.’ The results are graphically represented with the help of coordinates systems, which contain a cultural dimension on the X-axis and another one on the Y-axis respectively. The rep-resentation demonstrates the extent of cultural distance between two countries with regard to these dimensions. For example, in Figure 2.1 individual countries are assigned to the coordi-nates system based on individualism vs. collectivism and power distance dimensions.

FIGURE 2.1 Results of the Hotstede study (I); Power distance and individualism vs. Collectivism

Small Power Distance

Collectivistic

Large Power Distance

ndividualistic

I

50 60 70 110 Power Distance Index

Source: G. H. Hofstede, ‘Culture’s consequences: Comparing values, behaviors, institutions, and organizations across nations’, 2nd ed. [Thousand Oaks: Sage, 2001), p. 217. Reproduced with permission.

 

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