Managerial Orientations

Cross-cultural risk is exacerbated by ethnocentric orientation— using our own culture as the
standard for judging other cultures. Most of us are raised in a single culture; we have a tendency
to view the world primarily from our own perspective. Ethnocentric tendencies are widespread
and entail the belief that one’s own race, religion, or ethnic group is somehow superior to others.
Polycentric orientation refers to a host-country mind-set in which the manager develops a
strong affinity with the country in which she or he conducts business. Geocentric orientation
refers to a global mind-set in which the manager is able to understand a business or market
without regard to country boundaries. Geocentric tendencies are like a cognitive orientation that
combines an openness to, and awareness of, diversity across cultures. Managers with a
geocentric orientation make a deliberate effort to develop skills for successful social behavior
with members of other cultures. They adopt new ways of thinking, learn to analyze cultures, and
avoid the temptation to judge different behavior as somehow inferior.
Interpretations of Culture (cont’d)
An idiom is an expression whose symbolic meaning is different from its literal meaning. It is a
phrase you cannot understand by knowing only what the individual words in the phrase mean.
For example, “to roll out the red carpet” is to welcome a guest extravagantly—no red carpet is
actually used. The phrase is misunderstood when interpreted in a literal way. In Spanish, the
idiom “no está el horno para bolos” literally means “the oven isn’t ready for bread rolls.” But
the phrase is understood as “the time isn’t right.” In Japanese, the phrase “uma ga au” literally
means “our horses meet,” but the everyday meaning is “we get along with each other.” Idioms
exist in virtually every culture, and people often use them as a short way to express a larger
concept. Managers can study national idioms to gain a better understanding of cultural values.
Hofstede’s Typology of National Culture
Individualism versus collectivism refers to whether a person functions primarily as an
individual or as part of a group. In individualistic societies, ties among people are relatively
loose, and each person tends to focus on his or her own self-interest. These societies prefer
individualism over group conformity. Competition for resources is the norm, and those who
compete best are rewarded financially. Australia, Canada, the United Kingdom, and the United
States tend to be strongly individualistic societies. In collectivist societies, by contrast, ties
among individuals are more important than individualism. Business is conducted in the context
of a group in which others’ views are strongly considered. The group is all-important, as life is
fundamentally a cooperative experience. Conformity and compromise help maintain group
harmony. China, Panama, and South Korea are examples of strongly collectivist societies.
Power distance describes how a society deals with the inequalities in power that exist among
people. In societies with low power distance, the gaps between the powerful and weak are
minimal. In Denmark and Sweden, for example, governments institute tax and social welfare
systems that ensure their nationals are relatively equal in terms of income and power. The United
States also scores relatively low on power distance. Societies characterized by high power
distance are relatively indifferent to inequalities and allow them to grow over time. There are
substantial gaps between the powerful and the weak. Guatemala, Malaysia, the Philippines, and
several Middle East countries are examples of countries that exhibit high power distance. The
Apply Your Understanding exercise at the end of this chapter illustrates high power distance with
an Ethical Dilemma on the relationship between an executive and a maid in Colombia. Social
stratification affects power distance. In Japan, almost everybody belongs to the middle class,
while in India the upper stratum controls most of the decision making and buying power. In
companies, the degree of centralization of authority and autocratic leadership determines power
distance. In high power distance firms, autocratic management styles focus power at the top and
grant little autonomy to lower-level employees. In low power distance firms, managers and
subordinates are relatively equal and cooperate to achieve organizational goals.
Uncertainty avoidance refers to the extent to which people can tolerate risk and uncertainty in
their lives. People in societies with high uncertainty avoidance create institutions that minimize
risk and ensure financial security. Companies emphasize stable careers and produce many rules
to regulate worker actions and minimize ambiguity. Managers may be slow to make decisions as
they investigate the nature and potential outcomes of several options. Belgium, France, and
Japan are countries that score high on uncertainty avoidance. Societies that score low on
uncertainty avoidance socialize their members to accept and become accustomed to uncertainty.
Managers are entrepreneurial and relatively comfortable taking risks, and they make decisions
relatively quickly. People accept each day as it comes and take their jobs in stride because they
are less concerned about ensuring their future. They tend to tolerate behavior and opinions
different from their own because they do not feel threatened by them. India, Ireland, Jamaica,
and the United States are leading examples of countries with low uncertainty avoidance.
Masculinity versus femininity refers to a society’s orientation based on traditional male and
female values. Masculine cultures tend to value competitiveness, assertiveness, ambition, and the
accumulation of wealth. They are characterized by men and women who are assertive and
focused on career and earning money and may care little for others. Typical examples include
Australia and Japan. The United States is a moderately masculine society. Hispanic cultures are
relatively masculine and display a zest for action, daring, and competitiveness. In business, the
masculinity dimension manifests as self-confidence, proactiveness, and leadership. Conversely,
in feminine cultures, such as the Scandinavian countries, both men and women emphasize
nurturing roles, interdependence among people, and caring for less fortunate people. Welfare
systems are highly developed, and education is subsidized.
The four dimensions of cultural orientation that Hofstede proposed have been widely accepted.
They provide a tool to interpret cultural differences and a foundation for classifying countries.
Yet, the Hofstede framework suffers from some limitations. First, the study is based on data
collected from 1968 to 1972. Much has changed since then, including successive phases of
globalization, widespread exposure to transnational media, technological advances, and changes
in the role of women in the workforce. The framework fails to account for the convergence of
cultural values that has occurred during the last several decades. Second, Hofstede’s findings are
based on the employees of a single company—IBM—in a single industry, making it difficult to
generalize. Third, the data were collected using questionnaires, which is not effective for probing
some of the deep issues that surround culture. Finally, Hofstede did not capture all potential
dimensions of culture.
Partly in response to this last criticism, Hofstede eventually added a fifth dimension to his
framework: long-term versus short-term orientation. This refers to the degree to which people
and organizations defer gratification to achieve long-term success. That is, firms and people in
cultures with a long-term orientation tend to take the long view to planning and living. They
focus on years and decades. The long-term dimension is best illustrated by the so-called Asian
values—traditional cultural orientations of several Asian societies, including China, Japan, and
Singapore. These values are partly based on the teachings of the Chinese philosopher Confucius,
who lived about 2,500 years ago. Scholars credit such values for the East Asian miracle, the
remarkable economic growth and modernization of East Asian nations during the last several
decades. By contrast, the United States and most other Western countries emphasize a short-term
orientation. The Hofstede framework should be viewed as only a general guide, useful for a
deeper understanding in cross-national interactions with business partners, customers, and value-
chain members.
Contemporary Issues: Are Cultures Converging?
People in many parts of the world consume the same Big Macs and Coca-Colas, watch the same
movies, listen to the same music, drive the same cars, and stay in the same hotels. Although food
often represents a distinct culture, hamburgers, tacos, and pizza are increasingly popular around
the world. Movies and TV shows promote the convergence of customs, fashions, and other
manifestations of culture. Today, college students listen to much the same music and wear
similar clothing worldwide. In Trinidad, the U.S. television series The Young and the Restless is
so popular that in many places work effectively stops when it airs, and it has inspired calypso
songs of the same name. CSI Miami and Desperate Housewives have ranked among the most
popular TV series worldwide. The iconic Barbie doll has become a global phenomenon, even as
the values it represents may not always agree with conservative cultures.
In reality, however, the larger trend is more complex than these examples imply. As international
business integrates the world’s economies, it also increases the choices available to local people
by making their countries culturally richer. Cultural homogeneity and heterogeneity are not
mutually exclusive alternatives or substitutes; they may exist simultaneously. Cross-cultural
exchange promotes innovation and creativity. Globalization brings a wider menu of choices to
consumers and increases diversity within society. Cultural flows originate in many places. Just as
McDonald’s hamburgers have become popular in Japan, so has Vietnamese food in the United
States and Japanese sushi in Europe. Integration and the spread of ideas and images tend to
provoke reactions and resistance to cultural homogenization, thereby spurring individual peoples
to insist on their differences. While some past customs will disappear due to globalization, the
process is also liberating people culturally by undermining the ideological conformity of
nationalism.