Key Terms Related to International Business - 3 Top Cultural Dimension Models
Introduction to Cultural Dimensions
The definition and development of international business
International business can be defined as cross-borders trade whereby business owners and entrepreneurs from one cultural background seek to establish business relationships with business owners from other cultural backgrounds. These relationships are sought in order to expand business operations to global markets and gain further profits from global trade. This type of cross borders commerce occurred from the dawn of civilized history, but increased from the time of the renaissance to the 20th century. Even more so, international business transactions exploded in the current age of globalization due to cascading developments and advancements in transportation and telecommunication technologies.
The problem of global trade - clashing cultural backgrounds and worldviews
As international business is trade between members of different cultures, one key factor related to global trade is the different ways in which business owners and employees from one cultural background examine, interpret, and respond to problems that arise within the business and the relationships formed within them. In essence through cultural conditioning, members from different national. ethnic, or racial backgrounds develop different lenses by which they see and interpret activities in the world around them including their workplaces (Fisher, 1986). Cultural anthropologists describe this as a clash between cultural worldviews.
Organizational behavior scientists devise concepts of cultural dimensions
Given the growing phenomena of international business and the subsequent necessity of interaction between peoples from different nations, organizational behavior scientists began to notice and research the different ways in which those of the various cultures responded to problems and interacted with one another. This research allowed them to decipher and codify what they termed "cultural dimensions" that helped to explain the behaviors of cross-cultural members within their own and other business organizations. The end purpose was to help employees from one particular society to understand their own national cultural tendencies as well as the general cultural tendencies of other members of the organization they might encounter at the workplace.
Three major models of cultural dimensions
At least three major models of cultural dimensions emerged to help measure differences in perspectives found in multi-national workforces. Those three models were developed by
- Hofstede's Model - IBM organizational anthropologist and researcher Geert Hofstede (1980) - later revised and expanded by Hofstede, Hofstede, and Minkov (1988, 2010);
- Fons Trompenaars and Charles Hampden-Turner (1993)
- The GLOBE Project (2004) - formulated by a group of researchers led by Robert J. House of the Wharton School of the University of Pennsylvania.
This article takes a brief look at each of these three top models of cultural dimensions.
Books on Cultural Dimensions
Three Models of Cultural Dimensions
The three top models of cultural dimensions can be referred to as Hostede's; Trompenaars & Hampden-Turner, and the GLOBE Project.
Hofstede's Value Survey Module
Geert Hofstede's (1980) was the first of the three most commonly recognized cultural dimension models. He developed his model as head researcher for IBM Europe division. Hofstede's model originally included four dimensions, but has since been revised and expanded to seven cultural dimensions. The later two dimensions were developed from the work of Michael Minkov. As of 2010, Hofstede and his colleagues extended their research to representative samples from 93 countries.
Hofstede's group defined the cultural dimension of power distance as the degree to which "the less powerful members of an institution, society, or organization within a nation's borders expect and accept that power is distributed unequally" (Hofstede, Hofstede, & Minkov, 2010). This like all other dimensions are measured on a continuum. Thus, there are some places in the world where citizens do not expect their leaders to share power with them; in fact they expect the opposite.
In the Hofstede national cultural framework, individualism refers to societies in which bonds in relationships are loose with everyone expected to look after his or her self. Conversely, collectivism pertains to national norms that insist on members being integrated into strong, cohesive in-groups that continue to protect them with unwavering loyalty throughout their lifetime.
As discovered by Hofstede, uncertainty avoidance measures the degree to which the members of society "feel uncomfortable with uncertainty and ambiguity." Hofstede observed that members of national cultures that display strong tendencies towards uncertainty avoidance "maintain rigid codes of belief and behavior and become impatient with unorthodox actions and ideas. Contrastingly, members of those national cultures with a tendency towards weak uncertainty avoidance maintained a more open and relaxed attitudes towards new ways of doing things.
The fourth dimension listed by Hofstede is masculinity versus femininity. In this framework, masculinity can be characterized within a society that promotes achievement, heroism, assertiveness, and material reward for success. On the other hand, femininity refers to a social structure that promotes cooperation, modesty, caring for the less fortunate and weak, and quality of life. In short, masculine societies are more competition-oriented whereas feminine societies are more consensus-oriented. The GLOBE Project found cause to break this dimension into two separate scales titled assertiveness and humane orientation.
Hofstede adapted this fifth dimension from Michael Bond's Chinese Value Survey. In Bond's survey Long-term vs. short-term orientation was referred to as Confucian dynamism. In this national cultural dimension, long-term orientation focuses on the degree to which a given society embraces long-term devotion to traditional, forward-thinking values. In this case, forward thinking refers to how the national cultural norms can be preserved into the long-term future. Those nations that are strong in a long-term orientation value: (a) persistence; (b) ordering relationships according to social status; (c) thrift; and (d) having a sense of shame. Societies where members maintain a short-term orientation value (a) personal steadiness or stability; (b) protecting 'face' or personal honor; (c) respect or tradition; and (d) reciprocation of greetings, favors, and gifts (Culturally Clear).
Fons Trompenaars and Charles Hampden-Turner (1993) teamed together to introduce an alternative cultural dimension framework. The original database employed to formulate their model included over 55,000 participants and as of 2012 grew to over 80,000. Moreover, samples were drawn from over 60 different cultures.
Universalism versus particularism
The universalism versus particularism national cultural dimension asks the question: what is more important, rules or relationships? More specifically, universalism refers to the extent which people place importance on laws, rules, values, and obligations whereas particularism speaks to the extent to which members of a given society think that each circumstance and-or relationship dictates what rules they will live by. Universalists believe the rules are concrete and should applied no matter the circumstance; particularists view rules and societal norms as relative to the moment.
Individualism versus communitariansim
The individualism vs. communitarianism cultural dimension seeks to answer the question: do we function in a group or as individuals? More specifically, individualism in Trompenaar's framework measures the degree to which people in a given national culture believe in personal freedom of expression and achievement whereas communitarianism measures the degree to which people believe that the group is more important that than the individual. This feature of Trompenaar's model is very much similar to Individualism measured in Hofstede's model. As will be seen below, the GLOBE project broke this dimension into three measures.
Neutral versus affective (emotional)
The neutral versus emotional (or affective) cultural dimension answers the question: do we display our emotions or not? Thus in this category of cultural outlook, neutral refers to the extent to which members of a given society believe they should control their emotions whereas emotional refers to national cultures wherein members want to find ways to express their emotions.
Specific versus Diffuse
This dimension seeks to answer the question: how separate do we keep our work lives from our private lives? In this fourth measured aspect of cultural programming, "specific" pertains to the extent to which members of a given society believe they should keep work and personal lives separate whereas "diffuse" pertains to people who see a connection between their work and personal lives.
Achievement vs. Ascription
The national cultural dimension achievement versus ascription asks the question: do we have to prove ourselves to receive status or is it given to us? More specifically, the cultural dimension "achievement" refers to the extent to which people in a given society believe that you are what you do and base their worth accordingly. Those with an achievement orientation value performance over status. Conversely, "ascription" refers to the extent to which people believe a person should be valued because of who they are regardless of performance. Those with an ascription viewpoint believe power, title, and position matter more than performance. This cultural dimension is similar to the Performance orientation dimension in the Globe Project framework.
Sequential vs. Synchronic
Trompenaar's sequential vs. synchronic dimension attempts to answer the question: do we do things one at a time or several things at once? In this continuum Sequential Time is characterized by people who like events to happen in order. According to Mindtools, "they place a high value on punctuality, planning (and sticking to your plans), and staying on schedule. In this culture, 'time is money,' and people don't appreciate it when their schedule is thrown off." On the flip side, Synchronous Time is characterized by people who see the past, present, and future as interwoven. They are prone to work on several projects at once and see plans and commitments as flexible.
Internal vs. External Control
This seventh national cultural dimension answers the question: to what extent do we control our environment; do we control our circumstances or are we controlled by them? Do we make life happen or does life happen to us? Those with an internal locus of control believe they can control the environment around them and are thus the captains of their own destiny. The ability to accomplish goals and objectives rests entirely on their own shoulders. Conversely, those with an external locus of control believe there are life forces at work in nature (such as fate or luck) and thus further believe they have little or no control of what happens to them. Those with an external direction orientation believe they must work with their environment to achieve goals.
Project GLOBE is an 11-year, 61-nation research project with the aim of examining characteristics of national cultures and how they influence the behaviors of members of a given society. The researchers surveyed over 17,000 middle managers in food processing, finance, and telecommunications industries. Consequently, Project GLOBE researchers identified nine cultural competencies or dimensions:
Performance orientation has to do with the degree to which a group entity (organization or society) encourages and rewards organizational members for the quality of their work. Thus, in the GLOBE model, this dimension seeks to answer the question: do we encourage and reward members for improvement and excellence of performance.
Assertiveness orientation seeks to measure the extent to which individuals in society or organizations are aggressive, confrontational, or assertive in social relationships. This dimension is similar to the masculinity side of Hofstede's masculinity-femininity scale.
Future orientation measures the extent to which individuals within a given society or organization invest in the future, delay self-gratification, and contemplate the future through strategic foresight and planning.
The GLOBE Project's human orientation dimension seeks to measure the extent to which members of a given society or organization cheer on those who reflect attitudes of fairness, generosity, and kindness towards others. This dimension is similar to the femininity aspect of Hofstede's masculinity-femininity scale.
Also referred to as Collectiveness I, this cultural dimension seeks to measure the extent to which a given organizational culture encourages and rewards an collective disbursement of available resources and collective action.
Also known as Collectivism II, in-group collectivism attempts to ascertain the degree to which members of a given group or organization express loyalty, pride, and sense of oneness with the group.
Gender egalitarianism reflects the degree to which the roles of men and women in a given group, organization, or society are strictly defined or overlap.
Like the Hofstede model, this cultural dimension refers to the degree to which members of a given society or group tolerate inequality in sharing of power. Does the person at the top make all decisions without question or opportunity for challenge or he or she expected to involve members in the design and decision-making process?
This is another dimension drawn from Hofstede's model. Uncertainty avoidance seeks to measure the extent to which members of a group, organization, or society are intolerant towards changes in traditional practices, societal norms, old-time religious rites.