Running head: INDIVIDUALIST VERSUS COLLECTIVIST ECONOMIC VALUES 1

Individual V. Collective Economic Values

Name

Institution

Date
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1. Key Term and Why You Are Interested in It

After getting into a business that’s when I realized we end up creating relationships with

everyone we interact with and I noticed that most successful businesses thrive through having

good relations with others. By comparing my marriage of more than ten years to the business I

have it could not have been possible without first creating a fruitful relationship with my spouse

and understanding how each of us thinks individually and collectively it is done by mainly

studying one another so both parties are receiving benefits and are mutually respected. This is

why I have chosen to extensively study the individualist versus collectivist economic value

(Biddle, 2014).

2. Explanation of the Key Term

Individualism is the habit of someone being independent and where this person uses self-

interests to be motivated and archive goals (Biddle, 2014). Many companies encourage this

because it creates competition which results in growth and prosperity. Collectivism encourages

group work and does not reward individuals but identifies and rewards group work. Both values

have benefits and drawbacks therefore we cannot truly say that one value is greater than the

other, as a future leader in business having a better understanding will allow me to better serve

potential business partners and their needs (Guiso, Sapienza & Zingales, 2015).

3. Major Article Summary

The main article I have chosen to summarize is “understanding the individualism-

collectivism cleavage and its effects: lessons from cultural psychology (Gorodnichenko &

Roland, 2016). A correlation is drawn by the authors between the dimensions of individualism-

collectivism and their economic impacts generally. Also, individualism and collectivism can be

directly correlated to culture. Geert Hofstede is best known for his research on cultural
INDIVIDUALIST VERSUS COLLECTIVIST ECONOMIC VALUES 3

dimensions. Individualism is one of the six dimensions that he developed with his research,

indices. Individualism can be derived in each of the dimensions to determine where along the

spectrum their values lie, countries such as Great Britain, America, and Canada endorse

individualistic values while countries like China, Pakistan, and Nigeria lend themselves to

collectivism. The presupposition of the key terms implies individualism would lend itself to

innovation and personal gain, while collectivism makes actions needing a group easier.

Collectivism led to higher efficiencies in the economy because the innovation rate was higher

while individualism resulted in higher innovation that led to greater levels of productivity and

output which in the long run had a greater positive impact on economic development and growth.

The article draws a clear distinction between individualism and collectivism and their relational

difference.

4. Discussion

a). Gorodnichenko and Roland (2016) concluded that there was a causal effect of

individualism on innovation and the long-run growth. Their focus on the dimensions of

individualism versus collectivism demonstrates its impact on the economy (Guiso, Sapienza &

Zingales, 2015). The business leader must have insightful knowledge of the macro-

environmental factors and risks associated with doing business outside the borders. As we try to

gain a better understanding of the global economy, we must understand that economic systems

are very complex with many variables. The various economic systems we plan to engage have

been created in various cultures all over the world.

b) The debate whether culture affects economic outcomes is not a new one, over the

years however better techniques and more data have allowed us to identify how different groups
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of people have particular preferences and beliefs (Satterlee, 2016). The purpose of this review of

individualism versus collectivism was not to determine if one value is greater than the other but

to give the reader an understanding that both have their places in the business profession and

must have a clear understanding of how their business peers outside their borders think and wish

to communicate to make their decisions.

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References

Biddle, C. (2014). Individualism vs. collectivism: Our future, our choice. The Objective

Standard, 7(1), 19-28. Retrieved May 5th, 2021, from

http://www.investopedia.com/articles/investing/022415/worlds-top-10-economies.asp

Gorodnichenko, Y., & Roland, G. (2016). Understanding the individualism-collectivism cleavage

and its effects: Lessons from cultural psychology. In Institutions and comparative

economic development (pp. 213-236). Palgrave Macmillan, London. Retrieved May 5th,

2021, from http://eml.berkeley.edu/~groland/pubs/IEA%20papervf.pdf

Guiso, L., Sapienza, P., & Zingales, L. (2015). Does culture affect economic outcomes?. Journal

of Economic Perspectives, 20(2), 23-48. Retrieved May 5th 2021, from

http://ezproxy.liberty.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&

db=bth&AN=21792450&site=ehost-live&scope=site

Hofstede, G. (2016). Cultural Dimensions . Retrieved May 29, 2017, from Geert Hofstede:

https://geert-hofstede.com/cultural-dimensions.html

Satterlee, B. (2016). Cross Border Commerce: with biblical worldview applications (2nd ed.).

Roanoke, Virginia: Synergistics, inc