Volume 6 Number 1 1999

Models of National Culture - A

Management Review
Tony Morden

The Author
Tony Morden is a Principal Lecturer, School of Business and Management,
University of Teesside, Middlesbrough, UK

Abstract
The purpose of this article is to summarise, analyse, and compare various
models of national culture; and to discuss their relevance to the study and
practice of local and international management.

The article defines national culture and describes the cross-cultural pur-
pose of models of national culture. It summarises, analyses, and illustrates:

- single dimension models

- multiple dimension models
- historical-social models

of national culture and applies these on a polycentric basis within the con-
text of the process and practice of management.

The article concludes with a summary comparison of the various mod-

els of national culture described in detail in it.

Introduction

This article defines national culture, and comments on the relevance of na-
tional culture to the study and practice of management. It describes the
cross-cultural purpose of models of national culture. It summarises, analy-
ses, and illustrates:

- single dimension models

- multiple dimension models
- historical-social models

of national culture; and applies these within the context of the process and
practice of management.

National Culture Defined

Hofstede [1, 2] defines national culture as the collective mental programming

of the people of any particular nationality. Hofstede suggests that people
share a collective national character which represents their cultural mental
programming. This mental programming shapes the values, attitudes, com-
petences, behaviours, and perceptions of priority of that nationality.

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 Cross Cultural Management

National culture is defined by Fukuyama [3] as inherited ethical habit.

An ethical habit can consist of an idea or value, or of a relationship. Ideas,
values, and relationship patterns constitute the ethical codes by which socie-
ties regulate behaviour. They are nurtured by repetition, tradition, and ex-
ample. They are reinforced through images, habits, and social opinions.

The Relevance of National Culture to the Study and Practice of

Management

Morden [4] notes that ‘a crucial implication of the work of Hofstede,

Hampden-Turner & Trompenaars and other contributors to the...developing
body of experience and knowledge about international culture and manage-
ment is that (national) cultural interpretation and adaptation are a prereq-
uisite to the comparative understanding of national and international
management practice. Such knowledge is, for instance, a prerequisite to the
effective entry into new markets and new countries, ... (or) to the establish-
ment of effective programmes of international human resource develop-
ment, and the development of appropriate skills and competences on which
the achievement of corporate success depends.’

Hofstede [2, 5] comments that the author of any particular theory or

prescription is as much “culturally conditioned” as anyone else. Theories or
prescriptions reflect the cultural environment from which they originate.
Hofstede [2] states that ‘not only organisations are culture bound; theories
about organisations are equally culture bound. The professors who wrote
the theories are children of a culture; they grew up in families, went to
schools, worked for employers. Their experiences represent the material on
which their thinking and writing have been based. Scholars are as human
and as culturally biased as other mortals’ (p.146).

Hofstede suggests, in consequence, that there can be no guarantee that

management theories and concepts developed within the cultural context of
one country can, with good effect, be applied in another. This implies that it
is not possible for such theories and concepts to be “universally valid” or ap-
plicable.

The Cross-Cultural Purpose of National Culture Models

Morden [4, 6] describes the widely documented view that it is unrealistic to

take an ethnocentric and universalistic view towards the principles and
practice of management as they are applied in other countries and other
cultures. What works well in one country may be entirely inappropriate in
another. In the face of cultural diversity and the need to view international
management from multiple perspectives (Hampden-Turner and Trompenaars
[7, p.17]), there is a need to understand, and to apply locally appropriate
models of national culture to the process and practice of management. This
logic has two implications. These are:

Best fit

Morden [4, 6] suggests that international managers and multinational com-

panies may need to take a best fit or contingency approach to issues of or-
ganisation and management; and to developmental activities associated

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Volume 6 Number 1 1999

with them. The style of management must be appropriate to the prevailing

local contingencies. Any one ethnocentric style may be inappropriate else-
where. Hence the need for:-

Polycentricity

Perlmutter [8] defines polycentricity in terms of the acceptance and use of

cultural diversity. Organisation and management are to an appropriate de-
gree locally adapted according to the requirements of the prevailing national
culture. Other cultures are in turn free to take the best from any one locality
and to adapt it to their own circumstances (as in the case of Theory Z as a
style of management). Cultural diversity is accepted and encouraged. It is
not resisted as would be the case under ethnocentricity; nor is it “homoge-
nised” into multinational geocentricity.

Single Dimension Models

The national culture models described under this heading are based upon a
single dimension or variable. Three models are described and illustrated be-
low.

High and Low Context Cultures

Hall [9, 10, 11] differentiates high context and low context cultures. Context
is defined in this case in terms of how individuals and their society seek infor-
mation and knowledge.

People from high context cultures obtain information from personal in-
formation networks. Before such people make a decision, or arrange a deal,
they have become well informed about the facts associated with it. They
have discussed the matter with friends, business acquaintances, and rela-
tives. They will have asked questions and listened to gossip.

People from low context cultures seek information about decisions and
deals from a research base. Whilst they will listen to the views of colleagues
or relatives, they place much emphasis on the use of reading, reports, data-
bases and information sources. Information highways, the Internet, E-Mail
and other forms of the communication and information revolution may be
looked upon as an added bonus as sources of useful knowledge.

High and low context cultures are illustrated in Figures 1 and 2.

A suggested high context - low context demographic ranking is shown in Fig-

ure 3.

Monochronic and Polychronic Cultures

Lewis [12] differentiates monochronic and polychronic cultures.

Monochronic cultures act in a focused manner, concentrating on one

thing at a time within a set time scale. Lewis, for example, categorises the
Germans, the Finns, and some North Americans as being monochronic. To

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 Cross Cultural Management

Figure 1: High Context Culture

Figure 2: Low Context Culture

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Volume 6 Number 1 1999

Figure 3: A Suggested High Context - Low Context Demographic Ranking

High Context
$ Japanese
$ Chinese
$ Italians, Spanish, Portuguese, French, Mediterranean peoples
$ Latin Americans
$ Arabs, Africans
$ Indians, and other Indian sub-continent
$ Koreans, South East Asians
$ Central Europeans
$ Slavs
$ Other American cultures
$ Benelux countries
$ British, Australians
$ Scandinavians, Finns
$ North Americans (US WASPs and Canadians)
$ New Zealanders, (white) South Africans
$ Germans, Swiss, Austrians
Low Context

such people time is a scarce resource which has its opportunity cost. There
may be a perception that “time is money.”

Polychronic cultures are flexible and unconstrained by concerns with

time. Polychronic people do many things at once, often in an unplanned or
opportunistic sequence. They may not be interested in time schedules or
concepts of “punctuality.” They consider that the “reality” of events and op-
portunities is more important than adherence to what they perceive to be
artificial constructs of planning, schedules, and appointments. Time is nei-
ther seen as a resource nor as an opportunity cost that equates to money.
Matters can always be settled tomorrow. Lewis suggests that, for example,
Indians, Polynesians, Latin Americans, and Arabs are polychronic.

Monochronic and polychronic characteristics are compared in Table 1.

Morden [6] suggests that the mixing of monochronic and polychronic cul-
tures may give rise to constant culture clash and disagreement. It may call for
the establishment of agreed modes of co-operation and co-ordination.

On the other hand, the mixing of these two cultures may yield synergies
as features of each complement the other. For instance, the greater flexibil-
ity of the polychronic may facilitate ongoing developmental processes that
are subject to unpredictable external change, making it easier for the mono-
chronic to modify plans and schedules in order to adapt.

A suggested monochronic - polychronic demographic scale is shown in

Figure 4.

Fukuyama’s Analysis of Trust

Fukuyama [3] analyses the relationship between trust, social capital, and the
development of organisation and management. He identifies and compares
low trust and high trust societies. Fukuyama comments that ‘a high trust so-
ciety can organise its workplace on a more flexible and group-oriented ba-
sis, with more responsibility delegated to lower levels of the organisation.

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 Cross Cultural Management

Table 1: Monochronic and Polychronic Characteristics

Monochronic Polychronic
introvert extrovert
patient impatient
quiet talkative
minds own business inquisitive/interfering
likes privacy gregarious
plans ahead methodically plans grand outline/"vision"
does one thing at a time does several things at once
follows systems mixes systems
works fixed hours works any hours
punctual unpunctual
dominated by timetables and schedules timetable unpredictable
compartmentalises projects lets one project influence another

sticks to plans changes plans

sticks to facts juggles facts
gets information from statistics, gets first-hand, oral information
reference books, database

job orientated people orientated

works within department goes round all departments
follows correct procedures pulls strings
accepts favours reluctantly if at all seeks favours

plays role within team plays as many roles as possible

delegates to competent colleagues
completes action sequences
uses fixed agendas
focused communication, to the point
writes memoranda, uses written record
respects officialdom
delegates to relations
completes human transactions
inter-relates agendas
talks for hours
dislikes writing too much, prefers flexibility to commitment
seeks out (top) key person

Figure 4: A Suggested Monochronic - Polychronic Demographic Scale

Monochronic
* Germans, Swiss, Austrians
* Americans (White Anglo-Saxon Protestant or WASP)
* Scandinavians, Finns
* British, Canadians, New Zealanders
* Australians, (white) South Africans
* Japanese
* Dutch, Flemish Belgian
* Other American cultures
* French, Walloon Belgian
* Koreans, Taiwanese, Singaporeans
* Czechs, Slovakians, Slovenians, Croats, Hungarians
* Chinese
* Northern Italians
* Chile
* Other Slavs
* Portuguese
* Spanish, Southern Italians, Mediterranean peoples
* Indians, and other Indian sub-continent
* Polynesians
* Latin Americans, Arabs, Africans
Polychronic

Low-trust societies, by contrast, must fence in and isolate their workers with
a series of bureaucratic rules. Workers usually find their workplaces more
satisfying if they are treated like adults who can be trusted to contribute to
their community rather than like small cogs in a large industrial machine

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Volume 6 Number 1 1999

designed by someone else. The Toyota...manufacturing system, which is a

systematisation of a communally organised workplace, has led to enormous
productivity improvements as well, indicating that community and effi-
ciency can go together. The lesson is that modern capitalism, shaped by
technology, does not dictate a single form of industrial organisation that
everyone must follow. Managers have considerable latitude in organising
their businesses to take account of the sociable side of...human personality.
There is no necessary trade-off...between community and efficiency; those
who pay attention to community may...become the most efficient of all’
(p.31).

Low trust societies

Fukuyama suggests that in familistic societies, the primary avenue to socia-

bility and community is family or broader forms of kinship, such as tribes or
clans. Societies that have strong families but weak bonds of trust among
people unrelated to one another will tend to be dominated by family-owned
and family managed businesses.

Fukuyama suggests that Latin Catholic countries such as France, Spain,

and Italy exhibit a “saddle-shaped” distribution of organisations, with:

- strong families and family business sector;

- a strong state and state sector; or large foreign-owned companies;
- relatively little between by way of intermediate social groups or
organisations.

In particular, Fukuyama suggests that the relatively slow transition of

French family businesses into modern corporate structures with effective
professional management; and the influence of the state in developing large
scale enterprise, (and in rescuing failing private companies such as Ren-
ault), are due to:

* a low level of interpersonal trust amongst the French;

* a traditional difficulty in associating with others spontaneously in groups;

* a habitual preference for basing interpersonal relationships on formal-

ised, centralised, and hierarchical rules within bureaucracies.

This is associated with a cultural distaste for informal, face-to-face rela-

tionships of the type required in new, more informal Theory Y or Theory Z
types of association (for instance of an Anglo-Saxon type); and a strong
preference for authority that is centralised, hierarchical, and formally/le-
gally defined. Fukuyama contends that French people of equal status may
find it difficult to solve problems between themselves without reference to a
higher and centralised form of authority.

More generally, Fukuyama suggests a correlation between hierarchy and

the absence of trust that characterises low-trust societies. Hierarchies are
necessary because not all people within a community can be relied upon to
live by tacit ethical rules alone. ‘They must ultimately be coerced by explicit
rules and sanctions in the event that they do not live up’ (p.25) to these
ethical codes.

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 Cross Cultural Management

High trust societies

Fukuyama suggests that countries that have strongly developed associa-

tional life as manifest by vigorous private, non-profit, and communal or-
ganisations; professional associations; charitable institutions; (etc.) are
likely to develop strong private economic and business institutions that go
beyond the family.

Such countries (Fukuyama quotes the USA and Japan) appear to pos-
sess the ability spontaneously to generate strong social groups/organisa-
tions in the middle part of the spectrum - that is, in the region between the
family on the one hand, and the state on the other. He suggests that this
ability is missing in such countries as China and Russia, and in the Latin
Catholic countries which he categorises as low trust in character.

In contrast with low-trust societies, high trust ones have strong organi-
sations in the middle, rather than the saddle shaped distribution of organi-
sations at the poles of family and state. In other words, there appears to be
a relationship between high trust societies with plentiful social capital, and
the ability to create large, private business organisations. Such societies can
be contrasted with familistic ones in that they are characterised by a high
degree of generalised social trust, and a strong propensity for the spontane-
ous sociability upon which middle range enterprise formation depends.

Fukuyama suggests that the most effective organisations are based on

communities of shared ethical values. These communities do not require ex-
tensive contractual or legal regulation of their relations and social architec-
ture because prior moral consensus gives members of the group a basis for
mutual trust. Fukuyama comments that ‘social capital has major conse-
quences for the nature of the industrial economy that society will be able to
create. If people who have to work together in an enterprise trust one an-
other because they are all operating according to a common set of ethical
norms, doing business costs less. Such a society will be better able to inno-
vate organisationally, since the high degree of trust will permit a wide vari-
ety of social relationships to emerge. Hence, the...sociable Americans
pioneered the development of the modern corporation in the late nine-
teenth and early twentieth centuries, (whilst) the Japanese have explored
the possibilities of network organisations in the (later) twentieth. By con-
trast, people who do not trust one another will end up co-operating only un-
der a system of formal rules and regulations, which have to be negotiated,
agreed to, litigated, and enforced (if necessary by coercive means). This le-
gal apparatus, serving as a substitute for trust, entails what economists call
“transaction costs”. Widespread distrust in a society, in other words, im-
poses a kind of tax on all forms of economic activity, a tax that high-trust
societies do not have to pay’ (pp.27-28).

Within this context, Fukuyama makes particular reference to the syn-

drome of free riding. Fukuyama contends that societies manifesting a high
degree of communal solidarity and shared values may enjoy a more effec-
tive management process than their low-trust counterparts in that they may
lose less value from “free riders.” Free riders benefit from value generation
by an organisation or society, but do not contribute proportionately (or at

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Volume 6 Number 1 1999

all) to the effort by which that value is generated. The free rider problem is
a classic dilemma of group behaviour.

One solution to the problem involves the group imposing some form of
coercion or discipline on its members to limit the amount of free riding they
can get away with. This may involve the use of close and frequent monitor-
ing and supervision (Theory X), which is expensive. Output or service qual-
ity may be unpredictable or unreliable.

Alternatively (and more efficiently) the incidence of free riding may be

lessened if the group possesses a high degree of social solidarity. People be-
come free riders when they put their individual interests ahead of the
group. But if they strongly identify their own well-being with that of the
group, or put the group’s interests ahead of their own in the relative scale of
priorities, they may be less likely to shirk work or avoid their responsibili-
ties. Supervision is replaced by identification, participation and commitment.

Multiple Dimension Models

The national culture models described under this heading are based on mul-
tiple dimensions or variables. Three models are described and illustrated be-
low.

Hofstede’s Model

Hofstede [1, 2] proposes that national culture and values, as they affect the
work environment and its management, could be categorised on the basis of
four variables, namely:

[1] Power Distance: which is how society deals with the fact that people are
unequal in a social and status sense; and how different societies deal with
this reality.
[2] Uncertainty Avoidance: which is how society copes with uncertainty about
the future, and deals with the reality of risk.
[3] Individualism - Collectivism: which indicates the relative closeness of the
relationship between one person and others. It anticipates fundamental
issues about individual motivation and place (and the management
thereof), and about the organisation and functioning of society as a
whole.
[4] Masculinity - Femininity: which identifies the sexuality of roles in society,
and the degree to which a society allows overlap between the roles of men
and women. It anticipates the issue of the relative values which society
places on the sexes, and on the roles that they carry out.
Hofstede’s model is summarised by Morden [13], and illustrated in Figure
5.

Hampden-Turner & Trompenaars’ Analysis

Hampden-Turner & Trompenaars [7] suggest that the nature of enterprise

value systems, and the value judgments associated with them, appear to de-

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 Cross Cultural Management

Figure 5: Cultures’ Consequences Summarised

Index Scores Typical Countries Symbolic Organisation and Characteristics
Power Distance Latin-European; “Pyramid of people”; hierarchical unity of com-
large; Latin-American; mand; strong leadership; rules
Uncertainty Japan; South Korea;
Avoidance strong Arab countries

Power Distance Germany; Austria; “Well oiled machine”; rules settle everything;
small; Uncertainty Switzerland; strong personal discipline
Avoidance strong Israel

Power Distance African and Asian countries

“Family”; undisputed personal authority of patri-
large; Uncertainty (except
arch/matriarch/leader; few formal rules; fatal-
Avoidance weak Japan and South Korea)
ism?
Power Distance Nordic and
“Village market”; no decisive hierarchy; flexible
small; Uncertainty Anglo Saxon;
rules; problems solved by negotiation
Avoidance weak Jamaica
Source: Hofstede [1, 2]

pend on the resolution of seven value dilemmas. They contend that these di-
lemmas, and the varying solutions associated with them, permit the
manager to understand key cultural differences between the approach taken
by different nationalities to the process and practice of management. These
seven value dilemmas are:

[1] Making rules and managing exceptions (universalism versus

particularism). The enterprise must to some degree formalise, stan-
dardise, and codify its operations in order to ensure consistency and
continuity. There exists a minimum (or requisite) level of bureaucracy
without which enterprise activities cannot be reliable or systematic. At
the same time, however, the value system needs to be able to recognise,
and deal with exceptions, changes, and the need for innovation.

[2] Deconstructing and constructing (analysing versus integrating).

The management process may require either or both (i) the analysis of
concepts or phenomena into their constituent parts; and (ii) their inte-
gration into whole patterns, relationships, and wider contexts. Analy-
sis and integration are the opposite ends of an intellectual process,
illustrated by the tendency of Anglo-Saxons to analyse (deconstruct);
and Eastern (and Germanic) societies to seek cohesive patterns (con-
struct or integrate).

[3] Managing communities or individuals (individualism versus

communitarianism). Work organisations must support and motivate
the individual employee, looking to their personal motivation and ca-
reer aspirations. At the same time, the contribution of the individual
must be seen within the wider context of the community that is the en-
terprise. How should the enterprise define the character of the relation-
ship between the individual and the organisation; and how should it
manage that relationship? Ultimately, whose interests are defined
within the value system to come first? The relationship between the in-
dividual and the organisation provides a key dilemma, particularly in
societies identified by Hofstede as strongly individualistic.

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Volume 6 Number 1 1999

[4] Internalising the outside world (boundary management or

inner-directed versus outer-directed). The value system will determine
where direction and purpose originate.

Direction and purpose may on the one hand come from driving (or
entrepreneurial) forces within the organisation. Relationships with the
outside world will be perceived as having to be managed, whether
positively or defensively. There will be widespread perceptions of a fi-
nite boundary between the internal and the external environments,
and the strategic use of concepts of “fit”.

Alternatively, the enterprise may operate in what it perceives to be a

symbiotic relationship with its environment, absorbing and adapting
from it as it moves through time.

[5] Synchronising time processes (time as “sequence” versus time as

“synchronisation”). The value system of the enterprise will determine
its attitude to time, and how it should use it. This dilemma poses two
questions. These are:

* the length of time horizon. Enterprise management must decide what

the length of its time horizons will be, dependent on its definition of
mission and purpose, and dependent upon the demands of its stake-
holders for results and returns. Typically, German, Japanese, and
South Korean corporations are able to take a longer term view of their
businesses than their Anglo-Saxon competitors.

* speed or synchronisation. Enterprise management may have to choose

between doing things quickly, in the shortest possible sequence of
time; or achieving the synchronisation of events over time such that the
achievement of those events is co-ordinated, and co-ordinates with
other events which are related within a wider context. Hampden-
Turner & Trompenaars cite the example of the Toyota system of kan-
ban (already referred to above) as an approach to manufacturing that
depends on the synchronisation of events rather than their speed. Once
synchrony has been achieved, speed may in any case follow, as in the
case of Just In Time (JIT), or accelerated systems of new product speci-
fication and design, reduced cycle time, (etc).

[6] Achieved status versus ascribed status. The value set of the en-
terprise needs to determine the basis for allocating status and reward.
The allocation of status may depend upon the achievement of certain
types of criteria directly associated with enterprise performance within
its market or operating context. Or, it may instead depend upon some
other characteristic important to enterprise management. Such criteria
might include age, seniority, length of service, education, family asso-
ciations, or past service to the state.

[7] Equality versus hierarchy. Different corporate value sets will give
different emphasis to the establishment of hierarchical order and
authority, or the achievement of equality.

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 Cross Cultural Management

The contribution of the individual, on the one hand, may be valued

highly. Mechanisms of empowerment, consultation, and participation
will be put in place. Decision making may be based on consensus, as in
the case of the Japanese nemawashi or the Korean sajeonhyupui. The
concept of management may itself be seen in terms of professional
equality and contribution, not hierarchy.

Alternate cultures will emphasise the precedence of the authority

and judgement of the hierarchy of ownership and management. Indi-
vidual members of staff must accept their place in the organisation’s
“pecking order”, and accept the judgement of those above them in the
hierarchy. Management may be conceptualised in terms of centralisa-
tion and control.

Hampden-Turner & Trompenaars’ model is summarised by Morden

[13].

Lessem & Neubauer’s Analysis

Lessem & Neubauer [14] analyse European management systems. They

categorise the impact of national culture under four inter-related criteria.
These are:

* the tension between pragmatism and idealism/wholism that character-

ises European approaches to the theory and practice of management.
The Anglo-Saxons and the Dutch tend to take a more pragmatic line to-
wards management issues than their more idealistic or wholistic Ger-
man counterparts.

* the tension between a rationalist approach to dealing with manage-

ment issues, as for instance taken by the French; and the humanist or
people-oriented approach that is characteristic of the family companies
of Italy and Spain.

Lessem & Neubauer’s matrix is reproduced in Figure 6. Lessem & Neubau-

er’s four criteria are analysed below.

Pragmatism

Pragmatism is a dominant influence in the conceptualising of management

principles and practice, especially in the English speaking Anglo-Saxon
world. Pragmatism is:

* empirically and experientially orientated.

* competitively focused.

* individualistic, and personality orientated.

* action orientated.

Pragmatism focuses on the enterprise and on its capacity on an experiential

basis to develop into a learning organisation. Within this context, the indi-

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Volume 6 Number 1 1999

Figure 6: Lessem & Neubauer’s Matrix

RATIONALISM

PRAGMATISM THE EUROPEAN BUSINESS IDEALISM/WHOLISM

SPHERE

HUMANISM

vidual manager strives for self-development through the process of action

learning.

Hampden-Turner & Trompenaars [7] categorise a pragmatic approach

to management as being categorised by:

* individualism rather than communitarianism, with a tendency to-

wards egalitarianism.

* the ability to combine universalism and particularism (that is to be able

to handle rules and exceptions at the same time).

* scepticism about the value of structure and hierarchy.

* a focus on achieved status.

* a tendency to see time in practical terms as a sequence. Perceived “pat-

terns” in time, or concepts of synchrony, may be rejected as being sub-
jective or “academic” constructs.

* a tendency to outer-directedness.

Rationalism

Rationalism is defined by the OED as ‘a theory which regards reason, rather

than sense’ (or experience) ‘as the foundation of certainty in knowledge’.
Rationalism is typically French, but is also characteristic of much of North-
ern Europe. Rationalist management is characterised by:

* a scientific and positivist outlook, and a logical mode of concept formu-

lation.

* a focus on the organisation through concepts of structure, role, hierar-

chy and requisite bureaucracy.

* professional but depersonalised management.

* a belief in the value of planning and dirigisme.

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 Cross Cultural Management

Hampden-Turner & Trompenaars categorise a rationalist approach to man-

agement as being characterised by:

* a belief in the structural and managerial value of formal organisation

and hierarchy.

* a tendency towards universalism and the logical application of rules.

* a tendency towards inner-directedness.

* a tendency towards communitarianism. Individuals are seen as the in-

habitors of roles.

* a focus on ascribed status and the acceptance of inequality.

Lessem & Neubauer suggest that, inter alia, rationalism is associated

with the work of Henri Fayol and Elliot Jaques.

Wholism/idealism

Wholism is defined by the OED as ‘something made up of parts in combina-

tion; a complex unity or system’. Webster’s Dictionary defines wholism as
‘a conception of something in its highest perfection; a theory that affirms
that mind, or the spiritual or ideal is of central importance in reality, assert-
ing that the ideal element in reality is predominant’.

Wholism/idealism is in particular associated with German speaking

countries; (for instance see Box 1). Wholistic management is characterised
by:

* a systems orientated co-ordination and integration.

* co-operation and co-determination.

* developmental processes.

* partnership between public and private interest.

* a sensitivity towards the interdependence between the organisation

and its environment.

Lessem & Neubauer suggest that wholism ‘stands directly opposed to

the brand of economic freedom embodied in Adam Smith’s laissez-faire or in
Darwin’s survival of the individually fittest’ (p.40). The role of the organisa-
tion, its employees and its management must instead be seen in the context
of the needs of the greater whole or system of which it is a part.

Hampden-Turner & Trompenaars categorise a wholistic/idealistic ap-

proach to management as being characterised by:

* an emphasis on integration (with the objective of constructing whole

concepts as the purpose of analysis/deconstruction), for instance
through the use of systems thinking.

* a perception of time as synchronisation as well as sequence. People

seek wider patterns and cycles.

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Volume 6 Number 1 1999

Box 1: The Aims and Principles of the Carl-Zeiss-Stiftung

Zeiss is a German company which has achieved an international reputation for quality and technological
innovation. The name of Zeiss is to be found worldwide on a range of high quality, high technology sci-
entific and optical instruments.

The company’s success was inspired by the precepts of one of its founders, Professor Ernst
Abbe, who was a partner of Carl Zeiss. Abbe believed that excellence derived from providing a secure,
supportive working environment for the company’s workforce, and allowing individuals to develop their
talents to the full.

The Carl Zeiss company was founded in 1846 by Carl Zeiss, a university technician who was born
in 1816. Its sister company, the Schott Glaswerke, was established with the assistance of Ernst Abbe.
Otto Schott carried out research into the dependence of optical and other properties of glass on its com-
position. The two companies achieved synergy by developing products which complemented each
other at the forefront of technology.

Ernst Abbe, a physicist, had become a partner of Carl Zeiss in 1875. Abbe sowed the seeds of fu-
ture success in two ways. Firstly, he employed eminent scientists and was thereby able to expand the
product range. Secondly, he established the company as a foundation (stiftung) in 1889, following the
death of Carl Zeiss. The Foundation was to become the sole owner of both the Zeiss works and its sister,
the Schott Glaswerke.

The Foundation Statute, designed by Abbe, is summarised below:

Stated Aims

* to develop, produce and sell high-quality products in the fields of optics, precision engineering, elec-
tronics and precision glass technology for national and international markets.

* to provide employees with exemplary social benefits.

* to allow employees to develop their capabilities to the full.

* to promote important work in science and technology, and to participate in activities of general social
value.

Principles

* science and technology complement each other.

* science, technology and economic activity should serve mankind, and not vice versa.

* economic stability and progress safeguards jobs.

* the company and its employees are mutually dependent.

Science, progressive technology, and social responsibility are therefore the determinants of the activi-
ties of the Carl-Zeiss-Stiftung.

* a tendency towards universalism and the use of rules. This application

of rules is internalised rather than being imposed externally by a hierar-
chy, and is facilitated by high levels of self-discipline and self-control.
(Hofstede categorises the Germans as having low Power Distance,
which is consistent with this internalisation of rules and self-control).

* a tendency towards communitarianism. Individuals may be seen as

system components.

* a tendency towards egalitarianism. Status is achieved through func-

tional expertise and operational performance.

Humanism

Humanism is defined by Webster’s Dictionary as ‘pertaining to the social life

or collective relations of mankind; devoted to realising the fullness of hu-

33
 Cross Cultural Management

man being; a philosophy that asserts the essential dignity and worth of
man’.

Humanism is associated in particular with Italy. It is also a feature of

Spain, Greece, and Ireland. Humanism is characterised by:

* an emphasis on the family group and the community.

* a sense of personal obligation and duty.

* enterprise based on family, community, or socio-economic network.

* flexibility and adaptability; opportunism and change.

* a personalised and “convivial” management style.

* fashion, feeling, “taste”, and sentiment.

Humanism in business is developed by the family patriarch or matriarch; or

by the impannatore (defined by Lessem & Neubauer as ‘designer, responsi-
ble for shaping and responding to fashion, as well as for organising produc-
tion, also urging firms to experiment with materials and processes’ [14,
pp.214-215]). Each function as entrepreneur, leader, and social architect.

Hampden-Turner & Trompenaars categorise a humanistic approach to

management as being characterised by:

* the management of communities of individuals (being both individual-

istic and communitarian).

* a tendency to personal equality within the hierarchy of the family, the

community, or the socio-economic network. Each person has his or her
place, duties, obligations, and rights within that context. Some people
may also believe that whatever Fate has decreed the individual must
accept.

* particularism: it is the manager’s job to deal with exceptions and indi-

vidual cases as they arise. The universalistic application of rules may be
perceived as being synonymous with bureaucratic control by the state,
and with corruption by officials.

* outer-directedness and opportunism.

* the perception of time as short term sequence within longer term his-
torical patterns or synchrony.

Historical-Social Models

The national culture models described under this heading are based on
historical-social dimensions or variables. Two models are described and il-
lustrated below.

The Euromanagement Study

Bloom et al’s 1994 book Euromanagement [15] is based on a major study

which aimed to find out whether there are any common characteristics be-

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Volume 6 Number 1 1999

tween European managers. The study sample comprised the Chief Execu-
tives and senior management from thirty five companies, in fourteen
countries across Europe, who were members of the European Round Table.

Bloom et al suggest that the basic characteristics of a European man-

agement model comprise the following:

[1] The capacity to manage international diversity: a characteristic that binds

Europe together is the ability to handle diversity. Europeans are familiar
with, understand, and respect diversity. Europe’s history and trading
needs have taught its people how to deal with this diversity, and how to
integrate it within the work context. At the same time, this acceptance of
diversity has enabled European companies to develop the ability to work
successfully in other cultures and countries, and to make effective
polycentric use of the natural human talents found there.

Lessem & Neubauer [14] suggest that this capacity to manage diversity
includes coping with the fundamental tension between the pragmatic and
the wholistic/idealistic approaches to the nature of society that character-
ise different European cultures.

[2] An orientation towards people: in general terms, Europeans (like the Japa-
nese) regard people as an integral part of business. There is less emphasis
on the American and Anglo-Saxon view of people as a resource whose re-
lationship with the enterprise is purely an instrumental and a contractual
one.

Europeans tend towards individualism (in contrast to the communi-

tarianism of Japan). They have a view that people are to be served by
progress - not the other way round. Nor are shareholders to be the only
beneficiaries of the activities of the enterprise. European companies may
reflect this belief in the security and quality of life offered to their work-
ers, in their tolerance of individual differences, and in the styles of man-
agement they espouse.

[3] Social responsibility: European companies tend to perceive themselves

to be an integral part of society. Bloom et al suggest (p.18) that ‘this
means they:

- act in a socially responsible way;

- consider profits to be one of the main goals of the company but not
its raison d’être;

- opt for long-term thinking on strategic decisions and investments’.

The view that institutions are a key part of the wider community is a
wholistic one. Wholism has already been described above. It derives
from the work of a wide range of European philosophers; and has been
encouraged by the success of the Japanese who hold parallel views
about the integrated nature of the development of society, its technol-
ogy, and its institutions. The earning of profit by the enterprise is sim-

35
 Cross Cultural Management

ply seen as a means to a larger and more important end associated with
that social development and technological progress.

[4] Internal negotiation: the basis of many of the internal transactions of

European organisations, and of their internal relationships, is negotiative.
These relationships are in turn characterised by Kay [16] as relational,
that is essentially long-term and based on trust. Negotiative behaviour is
in general terms seen to be non-opportunist. On the long term both parties
to the negotiated relationship must receive mutual advantage; neither
should undertake activities that might damage the other.

[5] A degree of informality: many Europeans tend to be sceptical about the

value of formal management systems and written rules. The management
process may be informal and intuitive, with intense verbal communica-
tion and periodic negotiation. The distribution of power and the role of
leadership may therefore under such circumstances be of considerable in-
terest to European managers, since they may not be able to rely on for-
malisation or hierarchy in order to exercise authority or make/frame
decisions.

Some Europeans have bitter experience of bureaucracies as tools of totali-

tarian oppression or vehicles of official corruption. This may help to sus-
tain scepticism about the value of the well-organised and systematic
structures that their Anglo-Saxon or North European counterparts are in-
stead happy to develop.

South East Asian Management

Chen [17], Cragg [18], and Seagrave [19] suggest that there are certain key
historical-social influences on the development of management practice in
South East Asia. These influences are mainly Chinese. They are summarised
below.

Taoism

Taoism is a wholistic philosophy that emphasises the inter-relationship and

interaction of every entity and everything in the world.

Each entity, in turn, will comprise varying (or opposing) internal ele-
ments or forces. These are the yin and the yang. Harmony must actively be
maintained between these elements in order to secure the wholeness and in-
tegrity of that entity. This will give the entity a character of one-ness.

Whilst everything has a character of one-ness, this one-ness is subject to

change, in accordance with the laws of nature. Nothing is static or immuta-
ble; change is natural and inevitable. The pursuit by managers of “stability”
is therefore a chimera; such a search is bound to fail.

Confucianism

Confucius (551-479? BC) was a Chinese sage. His doctrines became known
as Confucianism. Confucianism became a moral and religious system in
China, and more widely throughout much of South East Asia. In particular,
Confucianism became a structure of ethical precepts for the management of
society based upon:

36
Volume 6 Number 1 1999

* the concept of ren, which involves benevolence, humaneness, and patron-

age in the treatment of others.

* the achievement of social harmony and social order within a hierarchically

arranged society. Confucius taught that mankind was divided between
“inferiors”, whose task was obedience; and “superiors,” whose task was to
provide for the common welfare of all. The doctrine states that there is an
obligation (through ren) on those at the top of society to look after their
inferiors; and on those lower down in the strata of society to toil cheer-
fully in pursuit of the greater good.

The individual person is not perceived as an isolated entity or “individual”.

Man is a social being who is to interact with others under the guidance of
the ren of his leaders.

The role of the mandarin

Chinese state functionaries were known as gwan. They became known as

mandarins from the Portuguese mander, which means “to command”.

The mandarinate became conceptualised as a professional meritocracy,

responsible to a higher authority for the quality and effectiveness of its per-
formance. It became associated with a Confucianist perception that officials,
leaders, and managers should act in a diligent, hard-working, and ambitious
manner. It is their personal responsibility to bring forth a sustained effort
from their subordinates within a social or organisational context which
meets the needs and aspirations of the wider community of which it is a
part, and which may depend upon it for its livelihood and prosperity.

The development of such principles have become the basis of the work
ethic that is seen throughout the “Tiger” economies of South East Asia.

Personal relationship (guanxi)

Guanxi means cultivating, developing, and maintaining personal relation-

ships on the basis of the continuing exchange of favours. Friendship and em-
pathy between the two parties are of secondary importance (though they
are useful in reinforcing the relationship). The commitment that results
from the relationship is perceived in utilitarian terms, particularly if the sur-
rounding social context lacked basic legal, constitutional, or associational
frameworks; or was positively hostile. The overseas Chinese communities of
South East Asia and the Pacific Rim have often been persecuted or denied
constitutional rights since they were first established. Strong interpersonal
bonds based on guanxi and shinyung (trust) hold together the plethora of
communities and trading links upon which ‘the invisible empire of the over-
seas Chinese’ (Seagrave, [19]) is based.

Face

The achievement of harmony requires the maintenance of an individual’s

face. Face is a person’s dignity, self-respect, status, and prestige. If an indi-
vidual “loses face” the effect is perceived to be the same as if he or she had
actually lost eyes, nose, or mouth. Social interaction or negotiation should

37
 Cross Cultural Management

therefore be conducted so that nobody’s face is lost. At the same time, face
can be given, as when respect or praise is paid to someone else.

The five cardinal relations

Chen [17] notes that whilst Confucius identified many kinds of human rela-
tionships, the five cardinal relations are the most fundamental. These five re-
lationships and their appropriate characters are:

- sincerity between father and son

- righteousness between ruler and subjects

- distinction and separate functions between husband and wife

- order between older brothers and younger brothers

- faithfulness among friends.

Chen comments that ‘these five cardinal relationships are based on differen-
tiated order among individuals. This means that the Confucian concept of
these relationships emphasises the importance of differentiation in social hi-
erarchical order. Hence, Confucius’s famous saying goes “let prince be
prince, subject be subject, father be father, son be son.”

The five fundamental relations can also be classified into predetermined

relationships (such as father-son and brother-brother) and voluntarily con-
structed ones (such as friend-friend relations)...in the first category (prede-
termined relationships), the self is underdeveloped, as individual behaviour
is more or less dictated by fixed status and responsibilities. For thousands of
years, it has been drummed into people that relationships, especially those
within the family, are very important and the individual per se is less impor-
tant. A Chinese is enmeshed within a network from birth, whether it is the
family, the work unit, the government or the Party...in other words, a Chi-
nese is not primarily an individual, rather, he or she is a member of a fam-
ily. Children should learn to restrain themselves, to overcome their
individuality so as to maintain harmony in the family’.

In the second category (voluntarily constructed relationships) ‘the self

becomes much more dynamic...in building new relationships...the self takes
initiative and is active...it is the individual who is capable of defining roles
for himself and who is located at the centre of the relationship...the individ-
ual is the initiator of social interactions in the non-predetermined cardinal
relationships with others beyond the familial environment. The individual is
a true and sophisticated architect in relationships’ (pp.56-57).

The strategic thinking of Sun Tzu

Sun Tzu was an adviser to the Chinese Emperor Wu. His teachings, com-
piled in about 500 BC, are based on historical Chinese experience of fight-
ing wars and handling the frequent conflicts that characterised the times.

Sun Tzu’s book, The Art of War, [20], describes effective and ineffective
strategies by which to fight wars or defeat the opponent. The Chinese ideo-

38
Volume 6 Number 1 1999

Be so subtle that you are invisible

Be so mysterious that you are intangible
Then you will control your rival’s fate
Sun Tzu

gram for “strategy” is the same as that for “war”, so it is natural for the Chi-
nese (and other South East Asian adherents) to perceive the two concepts in
the same light. As a result, South East Asians tend to perceive the market-
place as a battlefield. Strategies for waging war have therefore been applied
to strategies for waging business. In terms of management style and process,
these strategies include the following:

[1] Strategic management (applying and implementing strategy): there is a

need for effective strategic planning and strategic management. Chen
[17] comments that ‘with careful and detailed planning, one can win;
with careless...planning, one cannot win’ (p.42). The objective should be to
conquer by strategy; the most important thing is to avoid head-on con-
flicts.

[2] Moral influence: by which Sun Tzu meant the degree to which the people
are in good accord and agreement with their ruler, such that they will be
willing to accept the hardship and dangers of war. In a competitive busi-
ness world, the manager should try as much as possible to establish corpo-
rate goals that are shared by all employees, ‘so that all in the company
come to view themselves as members of the group crossing the river in the
same boat. They would be more likely (to) consider company affairs as
their own and be willing to make personal sacrifices when needed’ (Chen,
p.43).

[3] The ability of generals: a good general, according to Sun Tzu, should pos-
sess five key qualities. These are wisdom, sincerity, benevolence, courage
and strictness.

Chen suggests that ‘these...qualities of generalship can be used to

measure corporate leadership. A corporation is not unlike an army in
terms of its organisation. A powerful and efficient leader is indispensable
to the success of a corporation. The five positive qualities of Sun Tzu’s
generalship are also those needed by chief executive officers’ (p.44).

[4] Regulation, delegation, and training: Sun Tzu stressed the need for formal-
ised sets of rules and regulations; the designation of rank and status; the
proper allocation of responsibilities; and the establishment of appropri-
ate organisation structure.

It is also necessary to delegate the appropriate power and authority to

subordinates; or rather to the most able subordinates. Chen comments
(pp.48-49) of Sun Tzu’s ‘preconditions for victory (that) “he whose gener-
als are able and not interfered with by the sovereign will win.” This is the
principle of “not using the suspectable at all and using the trustworthy with
full confidence”... he advised a good balance between an authoritarian
leader and unorganised decentralisation, as either of (these) extremes is
harmful to an organisation’.

The implication is that in a highly competitive environment, corporate

managers should have sufficient authority and flexibility such that they

39
 Cross Cultural Management

can formulate and implement their strategies in response to conditions of

change. Senior managers should have confidence in their chosen subordi-
nates, and delegate them with enough power to carry out their work,
without the need for constant upward referral for decision-making or
sanction.

At the same time, Sun Tzu emphasised the need for effective training.
Training is a prerequisite to the achievement of organisational efficiency.
Sun Tzu commented that if soldiers do not understand or know how to
follow signals, they will not act correctly. Nor will they be ready for battle.
Chen comments that ‘in a business context, companies with well-trained
employees can be managed with great efficiency. Successful business or-
ganisations all over the world have good...training programmes’.

The taipans

The taipan is defined by Cragg [18] as the “supreme ruler” or “big boss”.
The title of taipan is accorded in the east to those leaders considered worthy
of great respect, in the strictest of Confucian traditions. This respect is paid
to the taipan’s business acumen and achievement.

The first taipans were the British (and especially Scots) heads of the
Hong Kong trading companies. Cragg suggests that one of the most memo-
rable of these ‘original taipans was William Jardine...(who) was known lo-
cally as “the Iron-Headed Old Rat” ’ ([18], p.2).

Taipans from a variety of nationalities are now to be found throughout

South East Asia. There are South Korean taipans, Malays, Thais and Philip-
pinos. But many of these taipans are overseas Chinese.

Cragg describes the taipans of South East Asia as sharing such charac-
teristics as being:

- strongly autocratic in style.

- strongly entrepreneurial and opportunistic.

- risk-takers (for whom “there is no shame in attempt or failure; only in a

failure to try”).

- exponents of rapid decision-making.

- supreme users of networks and connections (for instance through

gquanxi).

- keen to nurture creativity and encourage innovation.

- persistent attenders to detail.

- skilled at managing and manipulating face.

- steeped in the ways of both East and the West; and being capable of
managing the cultural schizophrenia and dilemmas to which such a
dual focus gives rise.

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 Volume 6 Number 1 1999

Figure 7: National Culture Models Summarised and Compared

High/Low con- Mono- Trust (Fu- Hofstede Hampden- Lessem and Euromanage- South East
text (Hall) chronic/Poly- kuyama) Turner and Neubauer ment (Bloom et Asian Manage-
chronic (Lewis) Trompenaars al) ment (Chen,
Cragg and Sea-
grave)

1. Seeking X
information/knowledge
2. Single focus/con- X
centrated behaviour
3. Multiple focus/diffused X
behaviour
4. Low trust X X
5. Familism X X X
6. High trust X
7. Power Distance X X X
8. Uncertainty Avoidance X X
9. Individualism - X X X X X X
Collectivism
10. Masculinity - Femininity X
11. Making rules/managing X X
exceptions
12. Deconstructing/ X
constructing
13. Managing X X X X X X
individuals/
managing
communities
14. Boundary management X
15. Conceptualising time X
16. Achieved status/ X X X
ascribed status
17. Equality/hierarchy X X X X X
18. Pragmatism X
19. Rationalism X
20. Wholism/idealism X X
21. Humanism X X X
22. Managing diversity X X X
23. Social responsibility X X X
24. Negotiative/relational X X
behaviour
25. Informality X X
26. Taoism X X
27. Confucianism X
28. The role of the X X
mandarin/profes-
sionalism/elitism
29. Work ethic X X X X
30. Personal X
relationship/guanxi
31. Face X
32. The five cardinal X
relations
33. The strategic influence X
of Sun Tzu
34. Leadership/leadership X X X X
qualities
35. Delegation and training X X
36. The role of the Taipan X X

41
 Cross Cultural Management

Cragg comments that the domains of the taipans are typically characterised
by family involvement in which, for example, key financial and management
responsibilities are entrusted to relatives, relations, or long established
friends.

Summary Comparison

The main features of the national culture models described and illustrated
in this article are summarised and compared in Figure 7.

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Volume 6 Number 1 1999

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 Cross Cultural Management

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44