32 chapter 2 the cultural context of ihrm

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According to results of the Idofstede study, the US culture is characterized more by indi-vidualist behavior. The same applies to the other Anglo Saxon countries such as Australia or the United Kingdom. The extent of power distance is classified as rather low for all these countries. In terms of the characteristics for both of these cultural dimensions, many South Asian countries can be described as the opposite. For example, Singapore, Hong Kong and Taiwan (and also many South American countries) are characterized by collectivist values and a high power distance. These clusters are culturally distant from each other according to results of the study. The countries are assigned to one duster due to statistically established similarities among them.
Some Asian cultures tend to score high on uncertainty avoidance and high on power dis-tance. Among them are Singapore and Hong Kong. On the contrary, the German speaking countries such as Germany, Austria and Switzerland build with others a cluster that can be described by a comparably strong tendency of uncertainty avoidance and a relatively low power distance.
As a result of combining the masculinity index with the uncertainty avoidance dimension, we can identify a cluster that includes predominantly German-speaking countries Germany, Austria and Switzerland. All three countries are attributed more masculine values with relatively high uncertainty avoidance tendency. The group of predominantly German-speaking countries is the second most masculine-oriented after Japan. Opposite to this is the Scandinavian cluster, includ-ing Denmark, Sweden, Norway and Finland.
In terms of the fifth dimension, long-term vs. short-term orientation of cultures, the USA, for example, is characterized by a rather low value. Therefore, it is classified more as a short-term oriented culture. This result is the opposite of the Asian countries, which demonstrate higher value for long-term orientation. Thus, the robust economic growth of the Four Asian Tigers in the 1980s - Hong Kong, Singapore, South Korea and Taiwan - is partly traced back to a strong orientation on Confucianism values.'*'' Table 2.1 presents examples of how cultural context may effect selected H R M practices.

TABLE 2.1 Examples of the impact of the cultural context on HRM practices

behavi of H o deterrr insteac Hoi derivei level, t extent the de( practic questit potent

Anc The e> try bo: compa that th culture sent th equall) nation: scholai tity an
The was CO many i characi of pers

HRM practices Recruitment and selection
Impact of the cultural context
In societies tow on In-group collectivism' individual achievements represent important selection criteria.
In societies high on 'in-group collectivism' the emphasis in the recruiting process is more on team-related skills than on individual competencies.
distorti would distinct also CO ing am dimens

t r a i n i n g and development


Task distributii
In societies higti on gender egalitarianism women have the f same chances for vertical career advancement as men.
In societies low on gender egalitarianism female managers are rare.
In societies high on uncertainty avoidance employees tend to be rather risk averse and prefer fixed compensation packages or seniority-based pay.
In societies low on uncertainty avoidance employees tend to be rather risk-taking and accept high income variability through performance-based pay.
Societies high on collectivism tend to emphasize group Societies high on individualism rather attribute individual responsibilities in the work system.

useful, study £


e by indi-ustralia or r all these any South Kong and values and cording to established

power dis-n speaking hat can be itively low
lension, we ny, Austria Itively high ntries is the iter, includ-
he USA, fot
. short-term crate higher an Tigers in ; to a strong lontext may

asis in the i o n

ien. tagers
5S tend to packages
s tend to ility




A r e f l e c t i o n o n t h e H o f s t e d e

s t u d y .

The Hofstede study is an important contribution to

cross-culture management research. The

thorough execution of this comprehensive study and

its repetition at different points in time is very impressive. The results enable assertions about

potential differences between


cultures and could serve as guidelines of explaining

behavior at least in initial orientation. However, there has been an ongoing debate and critique

of Hofstede's study, aside from fundamental criticism of his concept of culture, described as

determinist and universalist,'*^ and his approach of trying to reduce cultures to a few dimensions

instead of using more sophisticated descriptions.'*^

Hofstede's study is accused of lacking theory, because the cultural dimensions were mainly

derived ex-post. As already noted earlier in the chapter, Idofstedc's study is placed on the value

level, the intermediate level of the Schein

concept. However, the emerging question is to what

extent the standardized questionnaire method is able to reach the unconscious and, thus, assess

the deeper motives of managers' actions. Hofstede is criticized for not drawing

a line between

practices per se and perceived practices, in other words a sort of wishful thinking.'^'^ Significant

questions have been raised about the lack of separation between values and behavior^* and the

potential distortion of the 'Western outlook' of the research.^^

Another criticism of the Hofstede study is that countries rather than cultures are delimited.

The example of what was once Yugoslavia in the 1990s shows with terrible clarity that coun-

try borders by no means contain

relatively homogenous cultural groups. Kaasa et al.^^ have

compared the Hofstede data with newer data from the European

Social Survey



that the Hofstede values should be regarded with some skepticism, especially in terms of multi-

cultural societies like Belgium. It should be assumed that Idofstede did not

adequately repre-

sent the existing ethnic groups and his study cannot classify countries with

several relatively

equally co-existing languages


his country clusters. Finally,

it should




national cultures are not the only

influencing factor of behavior.^'* This is a major reason why

scholars increasingly assume a progressively lower influence of nation states on cultural


tity and behavior.^^

The following points are germane in thinking about the study's representative nature: the study was conducted in one company (IBM) only. Hofstede himself evaluates this as positive, because many conditions could be maintained constant. However, in the case of an organization that is characterized by a very strong corporate culture such as IBM it should be assumed that the choice of personnel is based on a similar profile of requirements around the world, which may lead to distortion of results (i.e. selected 'IBMers' were not typical national citizens). So the question is: would the results of random sampling of several companies come out differently as regards the distinctions between individual countries or country clusters? The representative nature of data is also contested, because the I B M study sample was mainly limited to middle-class males in market-ing and service positions. Kirkman et al.^^ acknowledge the significance of Hofstede's culture dimensions but note that future research should take the following issues into consideration:

  1. Realization of intra-levei studies: Along with assessing the individual level, groups, organizations and country levels must De taken Into consideration.

    1. Inclusion of cross-cultural differences: Cultures should not be considered homogenous, specific intracultural variance should be taken Into consideration.

    1. Inclusion of theoretically relevant moderator variables: Culture should not be measured as the only

influencing factor, other variables like sex, class affiliation, etc. should be taken into account. - .•

Effects of interaction between culture variables: There is a lack of empirical evidence about the interplay of individual culture variables, but their interaction should also be taken into account.

Although the historical prominence of the Hofstede study makes continuing debate on the results useful, the results must be scrutinized from today's point of view. The results of Hofstede's first study are from 1967-1973. Determining the scope of validity of these results for individual

countries today certainly requires a new, comprehensive study. Although it is assumed that cul-tures do not change fundamentally in such a time period, certain decisive changes may have occurred like, for example, the reunification of Germany, which could influence average values/'' In a recent study, Kaasa et al. tested Hofstede's values once again for the European sample and came to the overall conclusion that Hofstede's values are relatively stable. However, changes are seen in countries with subsequent strong economic growth (e.g. Spain, Portugal) or after signifi-cant system changes such as a country joining the EU.^^ Because of such changes it is not surpris-ing that an index based on Hofstede's values and dimensions developed by Kogut and Singh"'^ that claims to measure cultural distance and serve as a predictor of how challenging a specific for-eign location will be to a person has been criticized as outdated, of limited validity, and bound to a simplistic, static approach.*'**

The GLOBE Study /. I
The GLOBE study was a transnational project, initiated by Robert J. House in 1991. The research team currently consists of 170 researchers from 62 countries.''* GLOBE is an acronym for Global Leadership and Organizational behavior Effectiveness, in other words, this project concerns the effectiveness of leadership and behavior in organizations at a global level with spe-cial consideration given to cultural influence factors. Three research phases were planned in total. Phase 1 (1993/1994) consisted of the development of underlying research dimensions (new social and organizational cultural dimensions, and six leadership dimensions). The objec-tive of Phase II was to gather data on these dimensions. Phase III consists of an analysis of the effects of leadership behavior on the performance and attitudes of employees.*'" The goal of the GLOBE study can be illustrated with the following questions:

  1. Are there leadership behaviors, attributes and organizational practices that are generally accepted and effective across cultures?

  1. Are there leadership behaviors, attributes and organizational practices that are accepted and effective In some cultures only?

  1. How much do leadership attributes that are traced back to social and organizational contexts affect the effectiveness of specific leadership behavior and Its acceptance by subordinates?

  1. How much do behaviors and attributes in specific cultures influence the economic, physical and psychological wellbeing of the members of societies researched in the study?

  1. What Is the relationship between these socio-cultural variables and an international competitive capacity of the various sample societies?

The GLOBE research tries to study the complex relationships between culture, leadership behavior, organizational effectiveness, social co-habitation conditions and the economic success of societies.

C u l t u r e d i m e n s i o n s of t h e G L O B E s t u d y . The study is to some extent based on Hofstede's dimensions: uncertainty avoidance and power distance. However, the dimensions are modified and expanded, leading to some confusion when Hofstede and GLOBE results are assessed and compared. This may be seen as somewhat ironic, given the topic area.'''* The Collectivism dimension is divided into social and group/family-based collectivism, which describe two levels of the same dimension. The above dimensions are measured on the social and organizational level respectively. In addition, there is a distinction in the questions between practices [as is) and values [should be) of respective dimensions. Thus, the survey covers practices that are assessed as common in the respective societies or organizations. Furthermore, value dimensions deter-mine what specific practices should be like in respective organizations or societies. Authors of the GLOBE study are purposefully trying to overcome the earlier critiques of the Hofstede

s assumed that ciil-changes may have ce average valuesL'' iropean sample and )wever, changes are gal) or after signifi-ges it is not surpris-Kogut and Singh*''* nging a specific for-idity, and bound to

Duse in 1991. The DBE is an acronym words, this project obal level with spe-:s were planned in :search dimensions nsions). The objec-f an analysis of the
The goal of the

generally accepted

accepted and
Jonal contexts affect lates?
nic, pfiysical and
inal competitive
iLilture, leadership ; economic success
ised on Hofstede's sions are modified :s are assessed and The Collectivism describe two levels md organizational ractices. (as is) and s that are assessed dimensions deter-cieties. Authors of s of the Hofstede



study, namely that the borders bettveen values and practices are blurred in his study and cannot be distinguished. The different dimensions are explained briefly below.

      1. 'Institutional Collectivism describes tfie degree to which organizational and societal institutional practices encourage and reward collective distribution of resources and collective action'.

      1. In-Group Collectivism is 'The degree to which individuals express pride, loyalty, and cohesiveness in their organizations or families'.®®

      1. Uncertainty Avoidance includes 'the extent to which a society, organization, or group relies on social norms, rules, and procedures to alleviate unpredictability of future events'.**^

    1. Power Distance is defined as 'the degree to which members of a collective expect power to be distributed equally'.**®

    1. Gender Egalitarianism: is 'the degree to which a collective minimizes gender inequality'.®^

    1. Assertiveness is 'The degree to which individuals are assertive, confrontational, and aggressive in their relationship with others'.^®

    1. Performance Orientation is defined as 'the degree to which a collective encourages and rewards group members for performance improvement and excellence'.^*

  1. Humane Orientation includes 'the degree to which a collective encourages and rewards individuals for being fair, altruistic, generous, caring, and kind to others'.

R e s u l t s of t h e G L O B E s t u d y . Quantitative collection of data was conducted in 62 countries by the GLOBE study; 17370 people from middle management, 951 organizations and 3 indus-tries (finance, food and telecommunication services) were surveyed. Based on a literature analy-sis by the GLOBE study authors, the analyzed countries and cultures were separated into ten land clusters and tested empirically.''® This resulted in the following cultural regions: South Asia, Latin America, North America, the Anglo cluster, Germanic and Latin Europe, Sub-Saharan Africa, Eastern Europe, the Middle East and Confucian Asia. These cultural regions have differ-ent characteristics within the respective cultural dimensions. Unique profiles emerge when com-bining cultural dimension characteristics for different cultures.
A r e f l e c t i o n o n t h e G L O B E s t u d y . The GLOBE study explicitly takes into account the me-thodical challenges of cross-cultural comparative research and its theoretical foundation is more comprehensive than that of the Hofstede study. The participation of 170 scholars from around the world helped to avoid a one-sided Western focus and there is a distinction between organiza-tional cultures and national cultures.®'* Furthermore, the dimensions identified in the GLOBE study are also refined compared to other cross-cultural management studies. In view of the em-pirical research, for example, more branches have been included as compared to Hofstede, who has often been criticized for limiting his sample to I B M employees only. Among other differen-ces to the Hofstede study is that managers were surveyed instead of employees.
The Gf^OBE study does have some limitations. Hofstede has criticized the GLOBE study, stating that the scales do not measure what they should, and criticizes the further differentiation of his original five dimensions. But this criticism has been rejected by authors of the GLOBE study,®® generating an ongoing debate.®*' In addition, it should be noted that despite the expan-sion to three industries (finance, food and telecommunications), there is limited industry focus in the GLOBE study as well - the data is not representative for other industries. Similar to the criticism of Hofstede, widespread equivalence of culture to nation can be a source of concern as well. This is yet another example of the ongoing 'level of analysis' debate in organizational studies. Although authors of the GLOBE study counteract this by taking into consideration various culture levels (individual, organizational and social levels) and further distinguish the sample in some countries (e.g. South Africa, Switzerland and Germany), it should be noted that


cultures may consist of various subcultures and that this is not sufficiently reflected in the GLOBE study at the present stage. Large population countries like China, India and the USA are very heterogeneous and cannot really be covered by the relatively small sample of the GLOBE study.®®

T h e T r o m p e n a a r s a n d H a m p d e n - T u r n e r s t u d y . Trompenaars and Hampden-Turner con-ducted a survey with employees of various hierarchical levels and various businesses starting in the 1980s and continuing for several decades.®® The target group was primarily participants of cross-cultural training conducted by Trompenaars. Approximately 15 000 questionnaires were evaluated in the first study. By 2002 there were about 30 000 questionnaires from 55 coun-tries.®^ In their book 'Riding the Waves of Culture' Trompenaars and Hampden-Turner differ-entiated between seven dimensions, the characteristics of which mark the differences between cultures.®® They grouped these seven dimensions by three aspects: relationships between people, concept of time and concept of nature.
Relationships between people:
Universalism vs. Particularism: Universalist thought is characterized according to the authors by the following logic: 'What is good and right can be defined and always applies'.®* Particularist cultures, on the contrary, pay more attention to individual cases, deciding what is good and correct depending on relationship and special friendship arrangements.
Individualism vs. Communitarianism: The underlying question here is: 'Do people regard themselves primarily as individuals or primarily as parts of a group?'®^ The other question is whether it is desirable that individuals primarily serve group aims or individual aims. Individualist cultures, similar to Hofstede's explanation, emphasize the individual, who predominantly takes care of himself.®® : ' ' / - • •
Emotional vs. Neutral: This dimension describes how emotions are treated and whether they are expressed or not.®" Neutral cultures tend to express little emotion; business is transacted as objectively and functionally as possible, in affective cultures, an emotional cultural basis is accepted as a part of business lite and emotions are freely expressed across many social contexts. 85
Specific vs. diffuse: in diffuse cultures a person is involved in the business relationship, whereas specific cultures focus more on contractually regulated aspects. Specific cultures demand precision, an objective analysis of circumstances and presentation of results, whereas diffuse cultures take other context variables into consideration.®®
Ascription vs. Achievement: In cultures focused on status achievement, people are judged based on what they have achieved, in other words the goals they have fulfilled recently. In ascrlptlve cultures, the status is ascribed from birth by characteristics such as origin, seniority, and gender.®*'
Concept of time:
Sequential vs. Synchronic concept of time Cultures are differentiated by the concept of time where they may be more past, future or present oriented. The different concept of time is also demonstrated by the organization of work processes. Sequential behavior is behavior that occurs successively and synchronous behavior is the possibility to 'multitask' and do a number of things at the same time.®®

Concept of nature:


Internal vs. external control This dimension describes the concept of nature and refers to the extent to which societies try to control nature. Trompenaars and Hampden-Turner refer to the

:ted in the d the USA iple of the

urner con-starting in ticipants of naires were 55 coun-rner differ-es between ;en people,

authors by ularist

and correct
is whether ultures,
re ot
er they are ted as
8 is ii
p, whereas and
tged based ptive

j gender. 87

t ot time also
it occurs )t things at

5 to the )the

example ot the Sony executive Merita, who explained the invention of the Walkman: from the love ot classical music and the desire not to burden the world with his own music taste. This is an example ot external control, ot how people adapt heavily to the environment. In Western societies, the mindset is different; music is heard in the headphones not to be bothered by the environment. Another example is wearing a tacemask during the cold/tlu season. According to Trompenaars, in external control cultures masks are used because one does not want to infect others, whereas in internal control cultures masks are used to protect one's self from outside sources ot infection.®®

An explicit rationale for the operationalization and the genesis of the seven dimensions by Trompenaars and Hampden-Turner remain unclear. The authors use single aspects of other studies, like Kluckhohn and Strodtbeck, Parsons, and Hofstede - without in-depth justification for their selection - and leave out others, also with no justification. To date, Trompenaars and Hampden-Turner have not demonstrated the validity or reliability of their dimensions, or justi-fied their classification schema. An empirical basis for their characterization of differences in national characteristics is also not presented. However, this model is quite often used in execu-tive education programs as a practical template to monitor behavior and to draw conclusions for interaction with foreign business partners. L "

T h e c u l t u r a l d i m e n s i o n s by Hall a n d Hall . Based on their own experiences as government and corporate advisors and various qualitative studies, anthropologist Edward Hall and his wife Mildred HalL® have presented four dimensions that differentiate cultures. They do not claim that their model covers all possibilities pointing out that other dimensions may also exist. The relationship between culture and communication is emphasized in particular, as one would not be possible without the other. The dimensions mainly involve cultural differences in communi-cation forms and time and space concepts.

    1. High vs. Low Context Communication: Cultures differ in the way their members communicate with each other. In High Context cultures, a more indirect form ot expression is common, where the receiver must decipher the content ot the message from its context, whereas in so-called Low Context cultures the players tend to communicate more to the point and verbalize all-important information. Examples ot High Context cultures are Japan as well as France. Germany is more ot a

Low Context culture.

    1. Spatial orientation: The focus ot this dimension is on the distance between people ot various cultures when communicating. Distance that is adequate for members ot one culture, may feel intrusive tor members of another culture.

  1. Monochrome vs. polychrome concept of time: A monochrome concept of time is dominated by processes, where one thing is done after the other, whereas in the polychrome concept these actions occur at the same time.

  1. Information speed: This dimension focuses on whether information flow in groups is high or low during communication. Thus, in the USA people tend to exchange personal information relatively quickly, while in Europe such a rate of information exchange would require a more extended

      1. acquaintance.®*

As already mentioned, the classification of cultural dimensions by Hall and Hall came about in an inductive way and does not claim to be complete. In addition, the dimensions are closely related and overlapping and cultural regions are represented in a macro sense such as the USA and Europe. Intracultural differences are not touched upon, but personal differences are referred to. The works by Hall and Hall, similar to that of Trompenaars and Hampden-Turner, focus on offering a practical template, allowing individuals to perceive and handle cultural differences.


A reflection of cross-cultural management Studies

Cross-cultural studies are generally subject to the problem of not doing justice to a dynamic, context-sensitive concept of culture/^ This criticism has been widely recognized in recent years. However, intercultural interactions contain their own momentum and new aspects become more salient, that cannot be explained with the existing culture dimensions. In this context, qualitative research is increasingly called on to assess these dynamic changes.^® In addition, some authors find it important to consider culture in the context of task or role specific situa-tions and not just on the values level, which is the perspective of many studies.^"* The limits of the explanatory power of the results of cross-cultural management studies for explaining the influence of the cultural context are demonstrated by Gerhart''® using the example of organiza-tional cultures. According to Gerhart, in the GLOBE study 23 per cent of the variance is explained by country-specific differences, however, only 6 per cent of which is actually due to cultural differences. Nevertheless, Gerhart agrees that cultural differences are important but notes that these differences do not have as great an influence as it is frequently assumed. He identifies a need for action with respect to theoretical and empirical research.'® The static-dynamic nature of culture is increasingly discussed by practitioners and researchers alike. The next section will focus on how cultures may develop and change.


So far, this chapter has primarily dealt with how culture can be defined and conceptionalized and some results of cross-cultural management research have been reported. Most explanations and concepts were based on a somewhat static outlook. We now will discuss the extent to which cultures may undergo changes over time. This discussion is closely related to the issue of whether organizations and their management practices are similar due to increasing international inter-connectedness and the coordination of the global economy (convergence) or still exhibit specific cultural characteristics. For example, culture convergence between European countries is often imputed given the development of the European Union, and attendant harmonization of laws and regulations. Thus, increasing convergence of the cultures of individual countries within the EU is assumed. As a result, the meaning of cultural differences may be safely given little consider-ation. If the opposite is true and we assume a long term stability in cultural differences (cultural divergence), their investigation may be a decisive success factor in international business activ-ities for the foreseeable future. In terms of activity within the European Community, this would mean that pan-European standardization of management practices would not be easily achieved and adaptation of practices to underlying local conditions would be required.
Both of these two conflicting positions on cultural convergence continue to generate contro-versy in the academic literature.''' Child'® analyzed a multitude of cross-cultural studies and dis-covered that there are as many researchers who came to the conclusion that cultures are similar, as studies that claimed just the opposite. Upon detailed analysis he determined that studies posi-tioned on the macro level (e.g. analyses of organizational structure) tended to find evidence for convergence, while studies positioned on the micro level, e.g. dealing with the analysis of behav-ior of employees, reached more divergence-oriented conclusions. As a result, it can be concluded that organizations around the world are becoming more similar in their processes and technolo-gies, because they are embedded in institutions that are also subject to convergence," but real and meaningful differences in the behavior of employees remain, and these differences are enduring. This is also underlined by Schein, who assumes that the influences operating from the surface artifact level to the underlying assumption level are much weaker than the influence on deep assumptions on surface level artifacts.*"®
A new combination of various cultural elements is taking place, which results in new ways of distinguishing otherness and hybridization of what were once distinct cultures.*"' Recently,



transnational regions have been investigated. These are regions in which country borders are

progressively superseded by cultures. Due to growing interdependence and a high flow of migra-

a dynamic,

tion, culture is not confined to a territorially limited area. This represents new challenges for

ecent years,

H R M , but at the same time, it also offers new opportunities.



Intracultural changes must also be considered by HR managers. In this context, dernographic



changes are an example where there has been considerable discussion on the extent of value shift



between generations.*"^ Generation

Y is mentioned as an example

in this context, because it is

lecific sitLia-

distinguished by different demands

when it comes to professional

relationships and employee

'he limits


retention.'"® Since this generation was born into an information society and grew up

with the



computer, these people are described as fast, self-organized learners. This generation

is highly

DI organiza-

flexible when it comes to multitasking and demonstrates high potential for scrutinizing decisions



due to a high level of awareness. This makes members of Generation Y attractive but somewhat

iially due to

self-absorbed employees with

distinct preferences such as distinct work-life balance preferences.

,nt but notes

This phenomenon should be

observed beyond cultural borders. The aging of entire societies,

; identifies a

and hence their workforces (for example in Japan and Italy) also represents a form of this gen-

amic nature

erational phenomenon.

section will





In the preceding sections, we outlined how the cultural environment may influence H R M . In

summary, it can be concluded that an

adequate understanding of the cultural context, as it


impacts the behavior of organization's

employees, is of decisive importance. Thus, results of


cross-cultural comparative research may provide valuable hints to managers about how to cope

ent to which

with employees of foreign cultures.*"' Furthermore, they can form the basis for the development

e of whether

of intercultural training measures. These results could also be of great use to H R M in an inter-

tional inter-

national firm because it could assist a structured analysis about the transferability of specific ele-

bibit specific

ments of the parent firm's existing HR policy to foreign subsidiaries. In this context,

it would be

tries is often

conceivable to decide whether incentive systems for groups or for individuals would



tion of laws

in a specific culture.*"®

;s within the

Table 2.1 summarizes these ideas about

the cultural context and gives examples

of envi-

tie consider-

ronmental differences

which could lead to problems when MNEs attempt to introduce world-

ices (cultural

wide-standardized H R M practices.*"®

Within this context, it is important to recall the

isiness activ-

discussion on the convergence and divergence

of IflRM and work practices, as mentioned in the

/, this would

first chapter.

sily achieved

;rate contro-dies and dis-s are similar, studies posi-evidence for sis of behav-be concluded nd technolo-;e," but real fferences are ting from the influence on

new ways of *°* Recently,

, - . 1 1 : , :if:,!.

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