INTERNATIONAL BUSINESS

MANAGEMENT

DBA315 & INT203

Culture in International Business Management
23 October 2023

International Business Management / 23 October 2023

CULTURE’S INFLUENCE on INTERNATIONAL
BUSINES

Culture can be defined as the acquired

knowledge that people use to interpret
experience and generate social behavior.
This knowledge forms values, creates
attitudes, and influences behavior.

International Business Management / 23 October 2023

 CULTURE’S INFLUENCE on INTERNATIONAL
BUSINES

The establishment of an organization in cross- cultural

environments requires a set of interrelated processes
that demand careful planning and strategies. At an
individual level, for example, when people move from
one culture to another, they take with them the taken-
for-granted meaning structure of their home culture.
They continue to choose actions consistent with it and
to interpret their own and their host’s responses in
terms of it .

International Business Management / 23 October 2023

 CULTURE’S INFLUENCE on INTERNATIONAL
BUSINES

Cultural Clusters
Society is defined as a group of people who share a
common set of values and norms. Culture is the social
glue that binds society together. Nation-states are
political creations that are made up of various
subcultures. You may easily understand that there is no
one-to-one correspondence between a society and a
nation-state. For the sake of simplicity, scholars use the
nation-state as an indicator of societies’ national culture

International Business Management / 23 October 2023

 CULTURE’S INFLUENCE on INTERNATIONAL
BUSINESS

Cultural Clusters
People tend to emphasize differences more than
similarities, which results in stereotyping. Stereotypes
are often exaggerated and used by members of one
culture in describing others. Culture is a mysterious
concept; it can simultaneously be used as a baseline for
othering and gathering. Stereotypes, we argue, are
them consequence of parochialism.

International Business Management / 23 October 2023

 CULTURE’S INFLUENCE on INTERNATIONAL
BUSINESS
Cultural Clusters
Paracholism is defined as a narrow focus in which people see
things only through their own eyes and from their own
perspective.
Instead of parochialism, cosmopolitanism has been encouraged
for global cooperation and cross-cultural communication.
Cross-cultural literacy means an understanding of how
cultural differences across and within nations can affect the
way business is conducted.

International Business Management / 23 October 2023

 Hofstede’s Dimensions

Dutch social psychologist Geert Hofstede (1928

- 2020) initially identified four dimensions of
culture which aim to explain how and why
people from various cultures behave.
Hofstede’s initial data were based on two
questionnaire surveys, with over 116,000
respondents from over 70 different countries
working for IBM’s local subsidiaries. This study
is one of the largest in terms of its sample size.
International Business Management / 23 October 2023
 Hofstede’s Dimensions

The four dimensions identified in the study

were ;
1.power distance,
2.uncertainty avoidance,
3.individualism,
4.masculinity .

International Business Management / 23 October 2023

 Hofstede’s Dimensions

Hofstede further added to the framework;

5.the time orientation dimension (in 1988)

and
6.the indulgence versus restraint dimension
(in 2010)

International Business Management / 23 October 2023

 Hofstede’s Dimensions

1. Power distance (high vs. low) is “the level of

acceptance by a society of the unequal
distribution of power in institutions.” In
Countries in which power distance is high,
employees acknowledge the superiors’
authority, respect the formal position in the
hierarchy, and avoid bypassing the chain of
command and better cooperation at work.

International Business Management / 23 October 2023

 Hofstede’s Dimensions

1. Power distance (high vs. low)

Subordinates always use titles while calling
their superiors. In low power distance
countries, people working together are apt
to regard each other as equals
independently from hierarchical positions,
which promotes harmony, open
communication, and better cooperation at
work.
International Business Management / 23 October 2023
 Hofstede’s Dimensions

2. Uncertainty avoidance (high vs. low)

assesses “the degree to which people in a
country prefer structured over unstructured
situations and whether they are willing to
take risks.” High uncertainty avoidance results
in informal rules and rigid standard operating
procedures (SOPs) in business settings.

International Business Management / 23 October 2023

 Hofstede’s Dimensions

2. Uncertainty avoidance
Managers tend to make low-risk decisions;
aggressiveness among employees is not high, and
lifetime employment is the norm. Low level of
uncertainty avoidance means less structured and
less formal work environment; risk-taking is
appreciated; job mobility is common

International Business Management / 23 October 2023

 Hofstede’s Dimensions

3. Individualism versus collectivism identifies

“the extent to which a culture emphasizes the
individual versus the group.” Countries
scoring high on this dimension are known to
be individualistic. Individualistic cultures value
hard work and risk-taking. People are free to
focus on their personal goals, but they are
also held responsible for their actions.

International Business Management / 23 October 2023

 Hofstede’s Dimensions

3. Individualism versus collectivism

On the other hand, in collectivist cultures,
people tend to be strongly associated with
groups such as family or work teams.
Collective goals are prioritized over
personal ones. Success or failure is shared
among teammates.

International Business Management / 23 October 2023

 Hofstede’s Dimensions
4. Masculinity versus femininity, sometimes called
achievement versus nurturing, dimension
“identifies whether traditionally masculine or
feminine values prevail in a given society.” High
masculine cultures tend to appreciate assertiveness
and materialism. In contrast, low masculine
cultures; in other words, feminine cultures
emphasize the quality of life and concern for others
and relationships.

International Business Management / 23 October 2023

 Hofstede’s Dimensions
4. Masculinity versus femininity,
Gender-based role identifications are not strong in
feminine cultures. Although masculine cultural
values seem to be more relevant in business
success, Scandinavian countries, having feminine
cultural values and being home of successful global
companies such as IKEA, Lego, Volvo, Ericsson, etc.

International Business Management / 23 October 2023

 Hofstede’s Dimensions

5. Time orientation is defined as “dealing with

society’s search for virtue.” Originally called
Confucian Work Dynamism, time orientation can be
long-term or short-term. Long-term oriented
societies tend to focus on the future; they can adapt
changes; they tend to save and invest for the future.
Short-term oriented cultures focus more on the
past and present. There is a tendency to respect
tradition and fulfill social obligations.
International Business Management / 23 October 2023
 Hofstede’s Dimensions

The last dimension of Hofstede’s framework is

“about relative happiness around the world, and it
is called
6. indulgence versus restraint.” Indulgent societies
encourage instant gratification of natural human
needs, while restrained cultures regulate and
control behavior based on social norms

International Business Management / 23 October 2023