The transferability

of management practices

Group 10
Francesco Pozzo
Giulia Rinaudo
Marc von Majewski

Agenda
1

1.

Findings Of G. Hofstede And E. Hall About Cultural

Differences

2.

Three Management Practices Impacted By Cultural

Differences

3.

2.1

Decision Making

2.2

Organization Design

2.3

Power

Limitations Of G. Hofstede & Halls Research

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Hofstedes Cultural Dimensions

2

The Study
Hofstede helps us to identify areas of
cultural difference that may have an
influence on the organization:

It indicates to
what extent a
society feels
threatened by
uncertain and
ambiguous
situations and
try to avoid
them

Longterm &
pragm
atism

It is related to
the distribution
of roles (of
achievement,
power, control)
between the
genders

Uncert
Uncert
ainty
ainty
avoida
avoida
nce
nce

Is the degree to
which people
prefer to act as
individuals or
as members of
group

Mascul
inity vs
feminit
y

Individ
ualism
vs
collecti
vism

Power
Distan
ce
Is the extent to
which a
society
accepts
unequal power
distribution

In 1970s Hofstede surveyed 116,000 IBM

employees in 40 countries about their workrelated values
He found that managers and employees vary in
5 value dimensions of national culture
The 5 dimensions are interrelated

This dimension
described
weather
people focus
on working for
today or for
future.

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Power Distance
3

Low PowerDistance
High PowerDistance

Societies that
emphasize
egalitarianism and
shared power

Societies that believe

in strict authority and
hierarchy and have
low egalitarianism
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Individualism vs. Collectivism

4

Individualistic
cultures
Collectivist
cultures

The need of
individuals over
groups is emphasized

Group success is more

important than
individual
achievement
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Masculinity vs. Feminity

5

Masculine
Feminine

More aggressiveness,
higher value on
material possession
and pursuit on
personal goals

More emphasis on
quality of life personal
relationships and the
welfare of others
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Uncertainty Avoidance
6

Low uncertainty
High uncertainty

Cultures that value

risk taking, ambiguity,
and limited structure

Cultures that value

predictability,
structure, and other.
Low tolerance for
conflict
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Long Term & Short Term Orientation

7

Short-term
orientation
Long-term
orientation

Short-term orientation
that emphasizes the
present

Long-term orientation
that values hard work
and personal sacrifice
for future generations
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Edward T.Halls theory:

Interpersonal Communication
8

High-context
culture

Low-context Culture

Overtness of
messages

Many covert and implicit

messages, with use of
metaphor and reading
between the lines

Many overt and explicit

messages that are simple and
clear

Locus of control
and attribution
for failure

Inner locus of control and

personal acceptance for
failure

Outer locus of control and blame

of others for failure

Use of non-verbal
communication

Much nonverbal
communication

More focus on verbal

communication than body
language

Expression of
reaction

Reserved, inward reactions

Visible, external, outward

reaction

Cohesion and
separation of
groups

Strong distinction between

in-group and out-group.
Strong sense of family.

Flexible and open grouping

patterns, changing as needed

Level of
commitment to
relationships

High commitment to longterm relationships.

Relationships more
important than tasks.

Low commitment to relationship.

Task more important than
relationships

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Low Context vs. High Context Cultures

9

Low-context
cultures
High-context
cultures

Focus on the message

itself. The
communication is
direct, and based on
feelings or true
intentions.

Focus lies on the

context. Personal
reputations, close
human relationships
and mutual trust are of
high importance

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Edward T.Halls Time Orientation

10

Monochronic Culture

Polychronic Culture

Interpersonal
Relations

Interpersonal relations are

subordinate to present
schedule

Present schedule is subordinate

to interpersonal relations

Activity Coordination

Schedule cp-ordinates
activity; appointment time is
rigid

Interpersonal relations coordinate

activity; appointment time is
flexible

Task Handling

One task at a time

Many tasks are handled

simultaneously

Breaks and
Personal Time

Breaks and personal time are

sacrosanct regardless of
personal ties

Breaks and personal time are

subordinate to personal ties

Temporal
Structure

Time is inflexible; time is

tangible

Time is flexible; time is fluid

Work/personal
time separability

Work time is crearly

separable from personal time

Work time is not clearly

separable from personal time

Organisational
Perception

Tasks are measured by output

in time (activity x hour or
min)

Task are measured as part of

overall organisational goal

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Monochronic &Polychronic Cultures

11

Monochronic
cultures
Polychronic
cultures

Characterized by
punctuality and
scheduling their
working time preciously
and focusing on the
ultimate goal

Multiple activities at the

same time, taking more
effort in relationships
than in appointments
and schedules

ESCP

Agenda
12

1.

Findings Of G. Hofstede And E. Hall About Cultural

Differences

2.

Three Management Practices Impacted By Cultural

Differences

3.

2.1

Decision Making

2.2

Organization Design

2.3

Power

Limitations Of G. Hofstede & Halls Research

ESCP

Global Decision Making Styles

Introduction
13

None of the following decision styles

are the right way to make a decision;
they are only different

Styles can be combined for a variety

of purposes in different situations,
fostering flexibility and cross- cultural
understanding

Existence of different decision making

approaches is widely acknowledged,
but remains poorly understood

There is a growing need to know how

managers make decisions in different
parts of the world
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Global Decision Making Styles

Europe
14

Autocratic Leadership:

Authorization for action has to be passed

upward through echelons of management
before final
decisions can be made
(e.g. Germany, Turkey)

Participative Leadership:

Decision making authority is decentralized

and built on consensus
(e.g. Scandinavian Countries)

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Global Decision Making Styles

United States
15

U.S. Decision Making Process:

Tendency to analyze situations and/or

conceptualize potential solutions. This
mindset encourages a structured and
formalized decision making process

Make decisions that either respond to

challenges or create opportunities for
their efforts to be recognized and
praised by others

Utilitarianism:

More influenced by a short-term, costbenefit approach to decision making

than their Asian counterparts

Around the middle between autocratic

and participative management styles
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Global Decision Making Styles

Asia
16

Autocratic Leadership:

Value systems presuppose the

manager to be automatically the most
wise

High power distances between

employer and employee (social order
through harmony-within-hierarchy)

Moral Idealism:

Consider Problems, alternatives and

solutions from a long-term, societal
perspective rather than an
individual perspective (looking at
the big picture)
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Global Decision Making Styles

Middle East
17

A Relationship Driven Culture:

Arab managers have long

traditions of consultative
decision making
Cultural dimensions that impact
the decision making process:

Collective
2.
Family
3.
Hierarchy
4.
Honor/Shame/Face
5.
Networks
While business in the Middle East tends to be
transacted in a highly personalized manner, the final
decisions are made by the top leaders
1.

Global Decision Making Styles

Clashes
18

Some Examples:
China U.S.A.

Europe Middle East

The ability to maintain

and exercise power was
found to be a key factor
for Chinese business
leaders.
American managers will
likely try to change the
organizational power
structure in order to
improve business
performance.
In a China-U.S. joint
venture, their desire to
maintain a high degree of

Europeans pride
themselves on being
decisive; managers in the
Middle East, with a
different sense of temporal
urgency, associate the
importance of the matter at
hand with the length of
time needed to make a
decision. For example, a
hasty American would
insult a Middle East
customer by pushing for a
ESCP
quick decision; it would

Agenda
19

1.

Findings Of G. Hofstede And E. Hall About Cultural

Differences

2.

Three Management Practices Impacted By Cultural

Differences

3.

2.1

Decision Making

2.2

Organization Design

2.3

Power

Limitations Of G. Hofstede & Halls Research

ESCP

Organization Design
Areas of cultural differences that may have an influence on the
20

High context vs. Low context

Individualism vs. Collectivism

Uncertainty Avoidance

Long/Short term orientation

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High context cultures vs. low context cultures

21

High context cultures

Low context cultures

Middle East, Asia, Africa and

South America

Relational, collectivist,
intuitive and contemplative
People emphasize
interpersonal relationships
Trust is an important first
step to any business
transaction

North America and

Western Europe

People value logic, facts

and directness
Solving a problem means
lining up the facts
Decisions are based on fact
rather than intuition
Communicators are
expected to be efficient in
telling what action is
expected

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Individualism vs Collectivism 1/2

22

Individualism

USA, UK, Canada

USA

Built on the social-political

ideals of Individualism

American Individualism is
solidified in the creation of
Americas Declaration of
Independence

American small business

emphasize individualism,
focusing on each
employee as an individual
with strengths and talents

Collectivism

Japan, China

Awareness of how your

actions affect group
dynamics and playing
down personal
achievements
Emphasis on collectivity
and group loyalty in the
large corporations

ESCP

Examples 2/2
23

Japanese Multinational
electronics and ceramics
Kyoceramanufacturer

Apple

American Corporation
designing, developing and
selling consumer electronics,
computer software, online
services and computers

The epitome of American

Individualism

Apples CEO Steve Jobs has

defined Apples design, focus,
innovation and business
model and made Apple one
of the most successful and
influential companies

decentralized
management system
designed to support
employee empowerment
Amoeba management

Collective employee
contributions are
essential to Kyocera
success

Employees describe
Amoeba as a joint effort
and management by all

Employees like
independent owners and
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business partners with

Uncertainty Avoidance
24

High Uncertainty
Avoidance

Germany

Germans are not keen on

uncertainty, by planning
everything carefully they try
to avoid the uncertainty

Germany wants to reduce its

risks to the minimum and
proceed with changes step
by step

Low Uncertainty
Avoidance

US, Singapore, Denmark

US was at the core of the

housing bubble with
amateur investors taking
significant risks in the
market

Banks fueling the bubble

by making loans to risky
individuals

Outcome was a disaster

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Long Short Term Orientation

25

Long term orientation

China, Japan countries with

Confucian tradition
Key characteristics (Harvard):
humility and self control
It is the ability to manage the
tendency we have for
immediate self-gratification,
by subordinating that passion
or desire so we dont
jeopardize the ultimate goal

Short term orientation

US

Time is more related to the

present
American businesses
measure their performance
on a short-term basis, with
profit and loss statements
being issued on a quarterly
basis. this drives to strive
for quick results within the
work place

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Comparison between US and Japanese Company

26

US company

Japanese company

Vertical

Cross Functional

Workers are promoted

within a department

Workers are assigned various

jobs within a company

Your career is developed

within market

Your career is developed

within the company

You change company or jobs

and proceed within the
market(short term orientation)

Basically once you are hired

to the company, you will
work for the company for
ages(long term orientation)
ESCP

Agenda
27

1.

Findings Of G. Hofstede And E. Hall About Cultural

Differences

2.

Three Management Practices Impacted By Cultural

Differences

3.

2.1

Decision Making

2.2

Organization Design

2.3

Power

Limitations Of G. Hofstede & Halls Research

ESCP

Power Distance
Example
28

Hofstedes Power Distance Index (PDI):

Measures the extent to which the less powerful members of organizations and
institutions (like the family) accept and expect that power is distributed unequally

Country
Austria

Awarding of Human Rights

activist Liu Xiaobo with the
2010 Nobel Peace Prize

Reaction of Countries with

equally distributed power
would be something like
moderation

Chinese authorities felt

threatened by someone
that preaches higher power
sharing

PDI
11

Germany

35

Italy

50

France

68

India

77

China

80

ESCP

Agenda
29

1.

Findings Of G. Hofstede And E. Hall About Cultural

Differences

2.

Three Management Practices Impacted By Cultural

Differences

3.

2.1

Decision Making

2.2

Organization Design

2.3

Power

Limitations Of G. Hofstede & Halls Research

ESCP

Hofstede & Halls research limitations

30

Differences between people within the country are

excluded: with the increasingly globalized world are
arised many ethnic groups with different cultures that
can not be categorized in the same way
The national characteristics that Hofstede and Hall
claimed to uncover are the cluster of people using
stereotypes. While the statement may be true for
many people within a culture, there are many others
within the culture for which it is not true.
Another problem with Hofstedes approach is that he
claims that can call an organizational culture based
on interviews to only IBMs employees
There are thousands of international companies and
millions of national companies, it is very difficult to
standardize the behaviour of all these people, and it is
harder to do it with a model of less than 200 people
as Hofstede did

The culture is
dynamics and it
keeps changing
while time is
changing. But
the social,
political and
economical
situation in one
country cannot
change from
one day to
another. It is for
this reason that
the dimensions
still can be
useful when
people are
trying to get
idea about ESCP
any

ESCP

Sources
32

http://www.kwintessential.co.uk/cultural-services/articles/middleeast.html

http://bizshifts-trends.com/2012/02/09/comparing-global-decision-making-styles
-u-s-china-japan-europe-germany-u-k-middle-east/

clearlycultural.com

http://www.marin.edu/buscom/index_files/Page605.htm

http://www.netcompetition.org/antitrust/apples-individualism-vs-googles-collec
tivism#sthash.ocgfUQmv.dpuf

http://scholarworks.gvsu.edu/cgi/viewcontent.cgi?article=1014&context=orpc
http://www.culture-at-work.com/highlow.html
http://www.filippsapienza.com/CultureContextEnglish.html

http://changingminds.org/explanations/culture/hall_culture.htm

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