T he culture of the national environment in which an organization operates affec
ID: 344750 • Letter: T
Question
T he culture of the national environment in which an organization operates affects the man- agement process through the collective mental programming of its members, its managers, and the management scientists who offer their theories. Four dimensions of national culture differences have been found. Among other things, they affect the implicit models in people's minds of what the act of organizing means. Among the pioneers in management science around 1900, differences along these dimensions are already noticeable. A fifth dimension was added when the research instrument used was designed exclusively by Chinese scholars, and it provides
a cultural explanation for the economic success of East Asian countries in the past quarter century. At the same time, it highlights the influence of the culture of the management scientist on the research questions and the resulting theories.
(Culture; Uncertainty; Power; Individualism)
Cultural Relativity of Management
Theories
The economic success of Japan and other Asian coun- tries has decisively terminated a naive kind of literature that assumed that "successful" (what is that?) "man- agers" (what is that?) behaved the same the world over. There are few serious writers left who would deny, if pressed, that effective ways of leading people and or- ganizations can differ, depending on the national en- vironment. Yet the ultimate consequence of this is rarely drawn: the cultural relativity of any kind of theory of management, not only across countries but possibly even within them. There is still a "one best way" tra- dition in, especially American, management theory, and old habits die hard.
By cultural relativity I mean that the culture of the human environment in which an organization operates affects the management process. My own simplified def- inition of "culture" is: "the collective programming of the mind which distinguishes the members of one group or category of people from those of another" (Hofstede 1991, p. 5). The term "culture" in this sense can apply to nations but also to organizations, occupations and professions, age groups, the sexes, religious groups, ethnic groups etc., although the manifestations of cul- ture at these different levels vary considerably (Hofstede
4 MANAGEMENTSCIENCE/VOL40, No. 1, January 1994
1991, p. 181 ff). Because cultural influences on man- agement are most clearly recognizable at the national level, I will in this article use the word "culture" to mean "national culture," unless otherwise specified.
The collective programming of the mind in a country affects all people, the leaders as well as those led, and it therefore affects the way these people organize. The academic field of Organizational Behavior impresses students that employees are human; it rarely stresses that managers are human too, and that the humanness of the leaders and of the led are closely matched. A next intellectual step which is even more seldomly taken is recognizing that, if all these people are human, then the management scientists a country produces must also be human, and that their theories cannot but reflect the collective programming of the mind dominant in this country, that is its national culture.
For example, some years ago, for a seminar in In- donesia, someone asked me to address the problem of how to train Indonesian managers to replace "Theory X" by "Theory Y." These two theories are really man- agement philosophies, developed by the late American professor Douglas McGregor (1960). The main thrust of Theory X is that the average human being has an inherent dislike of work and will avoid it if he can; therefore people must be coerced, punished and con- trolled, to make them contribute to organizational ob
jectives. The main thrust of Theory Y is that exerting physical and mental effort in work is as natural as play or rest, and that under proper conditions, people will not only accept but seek responsibility and exercise effort toward achieving organizational objectives.
guistic subgroups within nations, are hidden in history. In some cases causal explanations are possible; in many other cases one should simply assume that a small dif- ference arose hundreds or thousands of years ago, and that in being transferred from generation to generation this small difference grew ever larger, until it became as big as we know it today.
HOFSTEDE ManagementScientists Are Human
Before applying this distinction to another culture
than the one with which McGregor was familiar: the
U.S.A. of the first half of the 20thcentury, we should
test what basic, unspoken cultural assumptions are presentinbothTheoryXandTheoryY.InacomparativeDifferencesinNationalCultures study of U.S. values versus those dominant in ASEAN
countries, I found the following common assumptions on the U.S. side and underlying both X and Y (Hofstede 1988):
(1) Work is good for people.
(2) People's capacities should be maximally utilized.
(3) There are "organizational objectives" that exist
apart from people.
(4) People in organizations behave as unattached
individuals.
These assumptions reflect value positions in Mc-
Gregor's U.S. society; most of them would be accepted in other Western countries as well. None of them, how- ever, applies in ASEAN countries. Southeast Asian as- sumptions would rather be:
(1) Work is a necessity, but not a goal in itself.
(2) People should find their rightful place, in peace and harmony with their environment.
(3) Absolute objectives exist only with God. In the world, persons in authority positions represent God, so their objectives should be followed.
(4) People behave as members of a family and/or group. Those who do not are rejected by society.
Because of these different culturally determined as- sumptions, McGregor's Theory X-Theory Y distinction becomes irrelevant in Southeast Asia. In the above- mentioned study I suggest a distinction more in line with Southeast Asian cultures, but this need not concern us here.
Cultural programs differ from one nation to another in ways which are seldom fully recognized and often misunderstood. Every nation has a considerable moral investment in its own mental software, which explains why it is not easy to make cultural differences discuss- able.
The origins of the differences from one nation to an- other, and sometimes between ethnic, religious, or lin-
In order to function as world citizens, we should be able to understand the value differences that come with na- tionality differences. Above all, we should be aware of the position of our own national value system as com- pared to those of various other countries with which we interact.
My own research over the past 25 years has focused on value differences as part of national cultures (Hof- stede 1980, 1991). I found that these can be classified along five dimensions which are largely independent of each other. The first four were initially detected through a comparison of the values of similar people (employees and managers) in 64 different national subsidiaries of IBM Corporation. People working for the same multinational, but in different countries, rep- resent very well-matched samples from the populations of their countries, similar in all respects except nation- ality. These four dimensions have been widely pub- lished (Hofstede 1980), and readers familiar with them can skip their description which follows.
The firstdimension has been labelled PowerDistance, and it can be defined as the degree of inequality among people which the population of a country considers as normal: from relatively equal (that is, small power dis- tance) to extremely unequal (large power distance). On the basis of the answers of IBMemployees in different countries, I have computed scores on this dimension for 50 separate countries and three multicountry regions: East Africa, West Africa, and Arab countries.
The second dimension has been labelled Uncertainty Avoidance, and it can be defined as the degree to which people in a country prefer structured over unstructured situations. Structuredsituations are those in which there are clear rules as to how one should behave. These rules can be written down, but they can also been unwritten and imposed by tradition. In countries which score high on uncertainty avoidance, people tend to show more
nervous energy, while in countries which score low, people are more easygoing. A (national) society with strong uncertainty avoidance can be called rigid; one with weak uncertainty avoidance, flexible. One way of describing countries where uncertainty avoidance is strong, is to say that in these countries a feeling prevails of "what is different, is dangerous." In weak uncertainty avoidance societies, the feeling would rather be "what is different, is curious".
The third dimension is labelled Individualism, and it is the degree to which people in a country prefer to act as individuals rather than as members of groups. The opposite of individualism can be called Collectivism, so collectivism is low individualism. In collectivist societies a child learns to respect the group to which it belongs, usually the family, and to differentiatebetween in-group members and out-group members (that is, all other people). When children grow up they remain members of their group, and they expect the group to protect them when they are in trouble. In return, they have to remain loyal to their group throughout life. In individ- ualist societies, a child learns very early to think of itself as "I" instead of as part of "we". It expects one day to have to stand on its own feet and not get protection from its group anymore; and therefore it also does not feel a need for strong loyalty.
The fourth dimension has been called Masculinityand its opposite pole Femininity. It is the degree to which values like assertiveness, performance, success and competition, which in nearly all societies are associated with the role of men, prevail over values like the quality
of life, maintaining warm personal relationships, service, care for the weak, and solidarity, which in nearly all societies are more associated with the role of women. Women's roles differ from men's roles in all countries; but in some societies, the differences are larger than in others. If the differences are large, the dominant values are "masculine," and the society can be called "tough" to its people: it becomes a performance society. In a masculine society, even the women have fairly tough values, but not as much as the men. If in a country the differences between women's roles and men's roles are relatively small, the dominant values are more "femi- nine," and the society is more "tender" to its people: it becomes a welfare society. In a feminine culture, even the men have fairly tender values. One consequence of the fact that in masculine countries the values of men and women are more different than in feminine coun- tries, is that women's values differ less across countries than men's values.
Table 1 shows the relative positions on these four dimensions of 12 sample countries or regions: Arab countries, France, Germany, Great Britain, The Neth- erlands, Hong Kong, Indonesia, Japan, Brazil, Mexico, U.S.A., and West African countries (the meaning of the fifth column in Table 1 will be explained later).
The table shows that each country has its own con- figuration on the four dimensions. U.S. culture presents itself compared to others as highly individualistic, fairly masculine, and below average on both Power Distance and Uncertainty Avoidance. Japanese culture presents itself as extremely masculine, strongly uncertainty
avoiding, and around average on both Power Distance and Individualism-Collectivism. Indonesia, the country in my earlier example, scores collectivist with a large Power Distance but about as tolerant of uncertainty as the U.S.A., and somewhat feminine. McGregor's the- ories were written from an individualistic, fairly mas- culine cultural background, which make little sense in collectivist, moderately feminine Indonesia.
National Cultures and Implicit
Organizational Models
From the four dimensions of national cultures identified in the IBM study, Power Distance and Uncertainty Avoidance affect both the way in which people organize themselves and the way in which they write about or- ganizing. The two dimensions cover the two crucial questions which have to be answered in any effort at organizing. Power Distance deals with who will decide what; Uncertainty Avoidance with establishing pre- dictability of outcomes, with the need for structures and rules. Both questions are culturally subjective: other things being equal, in countries with smaller Power Distances, the leaders as well as those led will function best with a wider spread of decision power than in countries with larger P.D.s; in countries with stronger Uncertainty Avoidance, all will need more structureand rules than in countries with weaker U.A.
National scores on the Power Distance and on the Uncertainty Avoidance dimension are independent of each other, so that all combinations occur. According to Table 1 and Figure 1, France, for example, scores high on both P.D. and U.A.; Germany low on P.D. but higher on U.A.; Great Britain low on both; and Hong Kong, as an exponent of Chinese culture, high on P.D. but low on U.A.
There is empirical evidence for the relationship be- tween a country's position within a P.D. X U.A. matrix, and models of organizations implicit in the minds of people from those countries which affect the way prob- lems are tackled (Hofstede 1980, p. 320). In the 1970s Owen James Stevens, an American professor at INSEAD business school in Fontainebleau, France, used as an examination assignment for his Organizational Behavior course a case study describing a conflict between two department heads within a company. Among the IN- SEAD MBA students taking the exam the three largest national contingents were French, German, and British.
7
HOFSTEDE ManagementScientists Are Human
QUADRANT 4 GREAT BRITAIN
QUADRANT 1
POWER DISTANCE
SMALL
POWER DISTANCE
QUADRANT 2 FRANCE PYRAMID
LARGE
UNCERTAINTY AVOIDANCE WEAK
HONG KONG MARKET FAMILY
QUADRANT 3 GERMANY MACHINE
UNCERTAINTY AVOIDANCE STRONG
Stevens found that the French in majority diagnosed the case as negligence by the General Manager to whom the two department heads reported. The solution pre- ferred by the French was for the opponents to take the conflict to their common boss, who would issue orders for settling such dilemmas in the future. Stevens inter- preted the implicit organization model of the French as a "pyramid of people": the Chief Executive at the top of the pyramid, and each successive level at its proper place below. This corresponds with large P.D. and strong U.A.: quadrant 2 in Figure 1.
The Germans in majority diagnosed the case as a lack of structure. The competence of the two conflicting de- partment heads had never been clearly laid down. The solution preferred by the Germans was the establish- ment of procedures. Ways to develop these could be calling in a consultant, nominating a task force, or asking the common boss. The Germans, Stevens felt, saw an organization ideally as a "well-oiled machine" in which management intervention is limited to exceptional cases because the rules should settle all daily problems. This reflects the combination of a strong U.A. with a smaller P.D.: quadrant 3 in Figure 1.
The British in majority diagnosed the case as a human relations problem. The two department heads were poor negotiators and their skills in this respect should be developed by sending them to a management course, preferably together. "Transactional analysis" had not yet been invented at that time, but it would be a good term to describe the kind of training recommended. The implicit model of an organization in the minds of the British, Stevens thought, was a "village market" in which neither hierarchy nor rules, but the demands of the situation determine what will happen. This means small P.D. and weak U.A.: quadrant 4 in Figure 1.
Stevens' three implicit models leave quadrant 1 in the P.D. X U.A. matrix unexplained: the combination of large P.D. with weak U.A. No European countries show this pattern, only Asian and African ones. People from these countries were rare at INSEAD, so that there were no sufficient data from this group. A discussion of Stevens' models with Indian and Indonesian col- leagues led to the suggestion that the equivalent implicit model of an organization in these countries is the (ex- tended) "family", in which the owner-manager is the omnipotent (grand)father. This is strongly confirmed for the case of the Overseas Chinese of Hong Kong, Singapore, Taiwan, and Indonesia by Redding (1990).
National Cultures and Organization Theories
Not only the people within organizations, but also those writing about organizing are children of a culture; they grew up in families, went to schools, and worked for employers. Their experiences represent the material on which their thinking and writing has been based. As stated earlier, organization theorists are as perfectly hu- man and as culturally biased as other mortals.
For each of the four quadrants of the P.D. X U.A. matrix I have selected a classical author who described organizations in terms of the model belonging to his corner of the diagram: the pyramid, the machine, the market, or the family. The four are approximate con- temporaries; all were born in the mid-19th century.
Henri Fayol (1841-1925) was a French engineer whose management career culminated in the position of President-Directeur-General of a mining company. After his retirement he formulated his experiences in a pathbreaking text on organization: Administration In- dustrielle et Ge'ne'rale.On the issue of the exercise of authority Fayol wrote:
"We distinguish in a manager his statutoryauthority which is in the office, and his personal authority which consists of his intelligence, his knowledge, his experience, his moral value, his leadership, his service record, etc. For a good manager, personal authority is the indispensable complement to statutory authority" (Fayol 1916, p. 21).
In Fayol's conception the authority is both in the per- son and in the rules (the statute). We recognize the model of the organization as a pyramid of people with both personal power and formal rules as principles of coordination.
Max Weber (1864-1920) was a German academic with a university training in law and some years' ex- perience as a civil servant. He became a professor of economics and a founder of German sociology. Weber quotes a 17th century Puritan Protestant Christian text- book about:
. . .the sinfulness of the belief in authority, which is only permissible in the form of an impersonal authority" (Weber 1930, p. 224).
In his own design for an organization Weber describes the bureaucracy.The word nowadays has a distinctly negative connotation, but to Weber it represented the ideal type for any large organization. About the au- thority in a bureaucracy Weber wrote:
"The authority to give the commands required for the discharge of (the assigned) duties should be exercised in a stable way. It is strictly delimited by rules concerning the coercive means . . . which may be placed at the disposal of officials" (Weber 1921, p. 650).
In Weber's conception the real authority is in the rules. The power of the "officials"is strictlydelimited by these rules. We recognize the model of the organization as a well-oiled machine which runs according to the rules.
Frederick Winslow Taylor (1856-1915) was an American engineer who, contrary to Fayol, had started his career in industry as a worker. He attained his ac- ademic qualifications through evening studies. From Chief Engineer in a steel company he became one of the firstmanagement consultants. Taylor was not really concerned with the issue of authority at all; his focus was on efficiency. He proposed to split the task of the first-line boss into eight specialisms, exercised by dif- ferent persons. Thus, every worker would have eight bosses, each with a different competence. This part of Taylor's ideas was never completely implemented, al-
8
though we find elements of it in the modern matrix organization in which an employee has two (or even three) bosses, usually one concerned with productivity and one with technical expertise.
Taylor's book Shop Management (1903) appeared in a French translation in 1913, and Fayol read it and de- voted six full pages from his own 1916 book to Taylor's ideas. Fayol showed himself generally impressed but shocked by Taylor's "denial of the principle of the Unity of Command" in the case of the eight-boss-system. "For my part", Fayol writes, "I do not believe that a depart- ment could operate in flagrant violation of the Unity of Command principle. Still, Taylor has been a successful manager of large organizations. How can we explain this contradiction?" (Fayol 1970 [1916], p. 85). Fayol's rhetoric question had been answered by his compatriot Blaise Pascal two and a half centuries before: there are truths in one country which are falsehoods in another ("Verite en-depa des Pyrenees, erreur au-dela").
Whereas Taylor dealt only implicitly with the exercise of authority in organizations, another American pioneer of organization theory, Mary Parker Follett (1868- 1933), did address the issue squarely. She writes:
"How can we avoid the two extremes: too great bossism in givingorders,andpracticallynoordersgiven?. . .Mysolution is to depersonalize the giving of orders, to unite all concerned in a study of the situation, to discover the law of the situation and to obey that . . . One person should not give orders to another person, but both should agree to take their orders from the situation" (in Metcalf and Urwick 1940, pp. 58-59).
In the conception of Taylor and Follett the authority is neither in the person nor in the rules, but, as Follett puts it, in the situation. We recognize the model of the organization as a market, in which market conditions dictate what will happen.
Sun Yat-sen (1866-1925) is a scholar from the fourth quadrant of the Power Distance X Uncertainty Avoid- ance matrix, from China. He received a Western edu- cation in Hawaii and Hong Kong and became a political revolutionary. As China started industrialization much later than the West there is no indigenous theorist of industrial organization contemporary with Fayol, We- ber, and Taylor. However, Sun was concerned with or- ganization, albeit political. He wanted to replace the ailing government of the Manchu emperors by a modern Chinese state. He eventually became for a short period nominally the first President of the Chinese Republic.
Sun's design for a Chinese form of government repre- sents an integration of Western and traditional Chinese elements. From the West, he introduced the "TriasPol- itica": the Executive, Legislative, and Judicial branches. However, unlike in the West, all three are placed under the authority of the President. Two more Branches are added, both derived from Chinese tradition and bring- ing the total up to five: the Examination Branch (deter- mining access to the Civil Service) and the Control Branch, supposed to audit the government.
This remarkable mix of two systems is formally the basis of the present government structure of Taiwan, which has inherited Sun's ideas through the Kuomin- tang party. It stresses the authority of the President (large Power Distance): the legislative and judicial powers, which in the West are meant to guarantee Gov- ernment by Law, are made dependent on the ruler and paralleled by the examination and control powers which are based on Government of Man (weak Uncertainty Avoidance).
In the previous paragraphs the models of organization in different cultures have been related to the theories of Founding Fathers (including one Founding Mother) of Organization Theory. The different models can also be recognized in today's theories.
In the U.S.A. in the 1970s and 80s it has become fashionable to look at organizations from a point of view of "transaction costs". Economist Oliver William- son has opposed "hierarchies" to "markets" (William- son 1975). The reasoning is that human social life con- sists of economic transactions between individuals. These individuals will form hierarchical organizations when the cost of the economic transactions (such as getting information, finding out whom to trust, etc.) is lower in a hierarchy than when all transactions would take place on a free market. What is interesting about this theory from a cultural point of view is that the "market" is the point of the departureor base model, and the organization is explained from market failure. A culture that produces such a theory is likely to prefer organi- zations that internally resemble markets to organizations that internally resemble more structured models, like pyramids. The ideal principle of control in organizations in the market philosophy is competition between indi- viduals.
Williamson's compatriot and colleague William Ouchi suggests two other alternatives to markets: "bureaucra-cies" and "clans". They come close to what this chapter called the "machine" and the "family" model respec- tively (Ouchi 1980). If we take Williamson and Ouchi's ideas together, we find all four organizational models described. The "market" however takes a special po- sition as the theory's starting point, and this can be explained by the nationality of the authors. Like Great Britain,the U.S.A. is in the small P.D., weak U.A. quad- rant 4.
In the work of both German and French organization theorists, markets play a very modest role. German books tend to focus on formal systems-on the running of the machine (e.g. Kieser and Kubicek 1983). The ideal principle of control in organizations is a system of formal rules on which everybody can rely. French books usually stress the exercise of power and sometimes the defenses of the individual against being crushed by the pyramid (Crozier and Friedberg 1977, Pages et al. 1979). The principle of control is hierarchicalauthority; there is a system of rules, but contrary to the German case the personal authority of the superiors prevails over the rules.
In China in the days of Mao and the Cultural Rev- olution, neither markets nor rules nor hierarchy, but indoctrinationwas the attempted principle of control in organizations, in line with a national tradition that for centuries used comparative examinations as a test of adequate indoctrination. Political developments after 1989 showed this principle still to be popular with Chinese leaders.
The Influence of Researchers'
National Cultures on Research
Outcomes
The IBM questionnaire was designed by a group of re- searchers from six different Western countries. This is better than having one single dominant researcher cul- ture, but the group was still dominated by Western ways of thinking: other countries covered in the research, like those in East Asia, were not represented in the re- searcher team. Other comparative studies have been set up by even more narrowly selected researcher teams or individuals, virtually all Western.
Composing a research team from people of different national origin does not, in itself, guarantee the elimi-
nation of cultural biases in the research design. A lot depends on the interpersonal dynamics within the team: whose ideas dominate. Non-Western team members often have a junior status and, coming from (usually) large Power Distance cultures, they tend to show def- erence to the Western team leader whom they treat as their guru.
Michael Bond, a Canadian who taught first in Japan, then for many years at the Chinese University of Hong Kong, tested the effect of the Western bias in existing studies of national values by deliberately introducing an Eastern bias. He asked seven Chinese scholars to prepare, in Chinese, a list of values they considered important. This list was developed into a questionnaire, the Chinese Value Survey (CVS), which was translated
into different languages and answered by 50 male and 50 female students in each of 23 countries in all five continents. Analysis of the CVS data produced again four dimensions, just like the IBMstudy. Twenty coun- tries were covered both in the IBM and CVS studies. Across these countries, three of the CVS dimensions were significantly correlatedwith three IBMdimensions: power distance, individualism, and masculinity. Al- though the values measured in the CVS were different from those in the IBM study, the issues of inequality (for power distance), togetherness (for individualism), and social gender roles (for masculinity) were present in both studies. They represent fundamental human problems as important in the East as in the West. The problems are the same, but the solutions differ from country to country, and this is reflected in the different scores on each dimension for each country (The Chinese Culture Connection 1987).
However, none of the dimensions from the CVS study resembled uncertainty avoidance. The values related to this dimension did not seem to have been important enough to the Chinese scholars to be included in their list. Instead, the CVS study found a fifth dimension, unrelated to those from the IBMstudies. Bond called it "Confucian Dynamism", because the values related to it, both on the positive and on the negative side, re- minded him of the teachings of Confucius. On the "dy- namic" side one finds values oriented towards the fu- ture, like thrift (saving) and perseverance. On the op- posite side one finds values rather oriented towards the past and present, like respect for tradition and fulfilling social obligations.
t
You read an article from Geert Hofstede, which, in many ways would be somewhat different from what you learned from textbooks on Hofstede. 1. Discuss what you think of Hoftede's ideas (please do not repeat what his cultural theories are-1 am asking for your interpretations on his assumptions and opinions) 2. Why do you think Hofstede would think of the story in Wong's article? Displaying 1 to 1Explanation / Answer
By implementing the hofstede's four dimensions we can easily increase the over of level of leadership in an organisation.
Power distances can be described as an authoritative differences between the communities inside an organisation. By obtaining the overall power distance between the employees and the leader, effectiveness of the specific leadership could be determined and also the environment of the leader 2 what the employee and teamwork can also be determined which plays an important role in creating an ethical working environment for the employees. Lessen the power distance better the management as well as involvement of the leader towards the team. By maintaining a power distance between employee and leader, a leader can easily increase its level of authority over its employee which is very much needed for completing the task on time by maintaining and the authoritative approach for the organisation.
Uncertainty avoidance can be defined as a process of avoiding the uncertain events in the cultures belonging to some specific region. What is type of dimension, formal contact between the employees as well as leader is an essential art. By maintaining the professionalism between the employee and be a leader uncertainty avoidance provides extremely efficient way of working by maintaining a relationship between an employee and leader by increasing the overall structure of your organisation. Some culture which belong to low uncertainty avoidance have more liberty to take risks and focus on the war on creativity as well as individual choice rather than referring on the structured base.
Individualism can be defined as a culture in which each and every employee is independent and self reliant. This specific fact values the importance of each and every person inside the organisation by specifically provoking them to increase the level of self interest. It is a very effective way of increasing the overall involvement of the employee towards the organisation.Masculinity in an organisational structure can be defined as a partition of values and giving priority to the quality of life as well as compassion towards the weaker employees has signed your organisation. In this type of culture men and women play separate rules in the society, for an example men are directly related to the specific mainstream but profiles while the women are considered as a support to the male employees inside an organisation. By having a masculine leadership one can easily increase its level of involvement inside the organisation by providing strength and support to the structure but feminine culture is also required to create an equilibrium between men and women inside an organisation.
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