CHP 5

Slide 5.
Chapter 5
International culture
Alan M Rugman and Simon Collinson, International Business, 5th Edition, © Pearson Education Limited 2009
Slide 5.2
International culture
• Objectives
• Introduction
• Elements of culture
• The importance of culture in different business
contexts
• National stereotypes and key dimensions of
culture
• Cross-cultural management
• Culture embodied in national institutions.
Slide 5.3
Objectives
• Define culture and explain the factors that
underlie cultural differences.
• Show where and why cultural differences matter
to international managers.
• Explain a number of frameworks that help identify
important cultural differences.
• Examine how firms can anticipate and cope with
cultural differences.
Slide 5.4
Introduction
• Culture: “the sum total of the beliefs, rules,
techniques, institutions and artifacts that
characterize human populations” or “the collective
programming of the mind”.
• Socialization Process: The process of

enculturation or the adoption of the behaviour
patterns of the surrounding culture.
Slide 5.5
Elements of culture
Slide 5.6
Table 5.1 World population percentages in terms of home region, language and religion
Sources: www.census.gov; www.adherents.com
Slide 5.7
Language
• Language is critical to culture because it is the
primary means used to transmit information and
ideas.
• Knowledge of local language can:
– permit a clearer understanding of a situation;
– provide access to local people;
– allows the person to pick up nuances, implied
meanings, and other information that is not stated
outright.
Slide 5.8
Religion
• Religions influence lifestyles, beliefs, values and
attitudes and can have a dramatic effect on the
way people in a society act toward each other and
towards those in other societies.
• Religion also influences:
– the work habits of people;
– the work and social customs (from the days of the
week on which people work to their dietary habits);
– politics and business.
Slide 5.9
Values and attitudes

• Values: basic convictions that people have
regarding what is right and wrong, good and bad,
important and unimportant.
• Attitude: a persistent tendency to feel and
behave in a particular way toward some object.
Slide 5.10
Customs and manners

• Customs: common or established practices.
• Manners: behaviour regarded as appropriate in a
particular society.
Slide 5.11
Corporate culture
• Corporate culture is a term used to characterize,
how the managers and employees of particular
companies tend to behave.
• Corporate culture is also used by human resource
managers and senior management in their
attempts to proactively shape the kind of
behaviour (“innovative”, “open”, “dynamic”, etc.)
they hope to nurture in their organizations.
• Promoting a distinctive corporate culture is also
expected to enhance the sense of community and
shared identity that underpins effective
organizations.
Slide 5.12
The importance of culture

in different business contexts
Slide 5.13
Influences of culture
on international management
Culture influences strategic management in a number of
ways:
• Work attitudes
–for example, work ethics, organization commitment,
etc.
• Achievement motivation
–the desire to accomplish objectives and achieve
success.
• Time and future
–for example: punctuality, decision-making time
constraints, time expectations on implementation of
plans, etc.
• Ethics
–standards of conduct and morality.
Slide 5.14
Culture and strategic management

• Cross-cultural management issues arise in a
number of situations, including:
– Within a firm: Work attitudes, achievement
motivation, time and future and ethics, etc.
– Between firms: M&As, joint ventures, alliances
and buyer-supplier relationships.
– Between a firm and customers: Dealing with
customers.
Cf.) Dealing with national institutions.
Slide 5.15
Figure 5.1 Cross-cultural business contexts
Slide 5.16
National stereotypes and key

dimensions of culture
Slide 5.17
Two approaches to culture

Two different approaches to looking at culture:
• the psychic or psychological level, which focuses
on the “internalized” norms, attitudes and behaviour
of individuals from a particular culture;
• the institutional level, which looks at national (or
group) culture embodied in institutions (government,
education, economic institutions as well as in
business organizations).
Slide 5.18
Geert Hofstede’s four cultural

dimensions
• Power distance: measures the degree to which
less powerful members of organizations and
institutions accept the fact that power is not
distributed equally.
• Uncertainty avoidance: measures the extent to
which people feel threatened by ambiguous
situations and have created institutions and
beliefs for minimizing or avoiding those
uncertainties.
Slide 5.19

dimensions (Continued)
• Individualism vs. collectivism
– Individualism: the tendency of people to look after
themselves and their immediate family only.
– Collectivism: the tendency of people to belong to
groups who look after each other in exchange for
loyalty.
Slide 5.20

dimensions (Continued)
• Masculinity vs. femininity
– Masculinity: the degree to which the dominant
values of a society are success, money and
material goods.
– Femininity: the degree to which the dominant
values of a society are caring for others and the
quality of life.
Slide 5.21
Figure 5.2 Hofstede’s power distance against individualism for 20 countries

Source: Hofstede, G. (1983). The cultural relativity of organizational practices and theories, Journal of International Business Studies, Fall, p. 92. Copyright © Geert Hofstede
Slide 5.22
Fons Trompenaars’ seven

cultural dimensions
1. Universalism vs. particularism
– Universalism: the belief that ideas and practices
can be applied everywhere in the world without
modification.
– Particularism: the belief that circumstances
dictate how ideas and practices should be applied
and somethings cannot be done the same
everywhere.
Slide 5.23

cultural dimensions (Continued)
2. Individualism vs. collectivism: centres on
whether individual rights and values are dominant
or subordinate to those of the collective society.
3. Neutral culture vs. emotional culture:
– Neutral culture: A culture in which emotions are
held in check.
– Emotional culture: A culture in which emotions
are expressed openly and naturally.
Slide 5.24

4. Specific vs. Diffuse: measures whether work
relationships (e.g. the hierarchical relationship
between a senior manager and a subordinate)
are workplace ‘specific’ or extend (diffuse) into
the social context outside the workplace.
5. Achievement vs. Ascription: measures
whether one’s status within organizations is
based on merit (“achieved”) or on class, gender,
education or age (“ascribed”).
Slide 5.25

6. Attitudes toward time
– Sequential: cultures that view time in a
sequential or linear fashion; order comes from
separating activities and commitments.
– Synchronic: cultures that view events in parallel
over time; order comes from coordinating multiple
activities and commitments.
Slide 5.26

7. Attitudes toward the environment: measures
the emphasis, a particular culture places on
people’s relationship with nature and the natural
environment.
Slide 5.27
The GLOBE project’s nine

dimensions of culture
1. Assertiveness.
2. Future orientation: A propensity for planning,
investing, and delayed gratification.
3. Gender differentiation: The degree to which
gender role differences are maximized.
4. Uncertainty avoidance: A reliance on societal
norms and procedures to improve predictability, a
preference for order, structure and formality.
5. Power distance.
Slide 5.28
The GLOBE project’s nine

dimensions of culture (Continued)
6. Institutional collectivism: individualism vs.
collectivism.
7. In-group/family collectivism: A pride in small-
group membership, family, close friends etc.
8. Performance orientation: (much like
achievement orientation).
9. Humane orientation: An emphasis on fairness,
altruism and generosity.
Slide 5.29
Cross-cultural management
Slide 5.30
Figure 5.4 Management dimensions of culture
Slide 5.31
Useful strategies for

managing cultural diversity
• Some useful strategies for managing cultural diversity
Recognize diversity.
– Build diversity issues into recruitment, HRM planning,
strategy, location decisions, alliances and partnerships.
– Identify where and to what degree local divisions
should be encouraged or empowered to take the lead
in expressing and managing diversity.
– Encourage cross-border discussion and interaction as
well as focused training.
– Aim for a cultural balance in particular areas of
strategic and tactical decision-making.
– Lead from the top.
Slide 5.32
Multinational organizational structures:

imperialist or independent?
• Ethnocentric: top management is dominated by
home-country nationals and procedures and
management styles are “transferred” from head
office and “imposed” on regional subsidiaries in
place of local “ways of doing things”.
• Polycentric: firms tend to act like a federation of
semi-autonomous organizations with financial
controls or strict reporting structures holding them
together.
• Geocentric: An equal sharing of power and
responsibility between headquarters and
subsidiary.
Slide 5.33
Table 5.3 Organization types reflecting cultural predispositions
Slide 5.34
Culture embodied in national

institutions
Slide 5.35

institutions
• Western Pluralism: emphasizes individual
competitiveness, commonly represented by
separate ventures competing in price-defined
markets for success.
• Command Economies: are centrally planned

hierarchies with less individualism and less
individual incentive.
Slide 5.36

institutions (Continued)
• Organic Ordering: refers to the family-centred
hierarchies of Asia, Southern Europe and Latin
America.
• Structured Networks: reflect the more equal,

structured relationships between companies and
with public sector organizations that exist in some
countries.

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Slide 5.

• Socialization Process: The process of

Values and attitudes

Customs and manners

The importance of culture

Culture and strategic management

Cf.) Dealing with national institutions.

Figure 5.1 Cross-cultural business contexts

National stereotypes and key

Two approaches to culture

Geert Hofstede’s four cultural

Geert Hofstede’s four cultural

Geert Hofstede’s four cultural

Figure 5.2 Hofstede’s power distance against individualism for 20 countries

Fons Trompenaars’ seven

Fons Trompenaars’ seven

Fons Trompenaars’ seven

Fons Trompenaars’ seven

Fons Trompenaars’ seven

The GLOBE project’s nine

The GLOBE project’s nine

Figure 5.4 Management dimensions of culture

Useful strategies for

Multinational organizational structures:

Table 5.3 Organization types reflecting cultural predispositions

Culture embodied in national

Culture embodied in national

• Command Economies: are centrally planned

Culture embodied in national

• Structured Networks: reflect the more equal,

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