Culture and Corruption: A Vicious Cycle Lessons From Project GLOBE Presented by Mansour Javidan 2/27/2019

The impact of culture Max Weber (1864-1920) theorized that the work ethic associated with Protestantism was largely responsible for the differences in wealth between Northern and Southern European countries (1904/1930; 1904/1998). 2/27/2019

The impact of culture Banfield (1958) provided a cultural explanation of poverty and authoritarianism in Southern Italy. 2/27/2019

The impact of culture Myrdal (1968), in a ten year study of South Asia concluded that cultural factors are the principal obstacles to modernization. 2/27/2019

The impact of culture Kahn (1979) and Hofstede and Bond (1988) argued that the impressive economic growth experienced in South East Asian countries during the 1965-1985 period was mainly due to the region’s Confucian cultural roots. 2/27/2019

The impact of culture Harrison (1992) asks the question: “Why do some nations and ethnic groups do better than others?” His answer: “The overriding significance of culture is the paramount lesson I have learned in my thirty years of work on political, economic, and social development” 2/27/2019

The impact of culture Landes (2000), in a review of the evidence, concluded that “Max Weber was right. If we learn anything from the history of economic development, it is that culture makes almost all the difference” 2/27/2019

The impact of culture Even Michael Porter agrees: “Attitudes, values, and beliefs that are sometimes collectively referred to as “culture” play an unquestioned role in human behavior and progress. This is evident to me from working in nations, states, regions, inner cities, and companies at widely varying stages of development.” (Porter, 2000) 2/27/2019

THE GLOBE RESEARCH PROGRAM 160 social scientists and management scholars from 62 cultures representing all major regions throughout the world are engaged in this long-term programmatic series of cross-cultural leadership studies. 2/27/2019

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Participating GLOBE countries Cluster Countries Latin America Argentina Bolivia Brazil Colombia Costa Rica Ecuador El Salvador Guatemala Mexico Venezuela 2/27/2019

Participating GLOBE countries Cluster Countries Latin Europe France Switzerland (French-speaking) Israel Italy Portugal Spain 2/27/2019

Participating GLOBE countries Cluster Countries Confucian Asia China Hong Kong Japan Korea, Republic Singapore Taiwan 2/27/2019

Participating GLOBE countries Cluster Countries Anglo Australia Canada (English-speaking) Ireland New Zealand South Africa (White Sample) United Kingdom United States 2/27/2019

Participating GLOBE countries Cluster Countries Southern Asia India Indonesia Iran Malaysia The Philippines Thailand 2/27/2019

Participating GLOBE countries Cluster Countries Germanic Europe Austria Germany-East (former GDR) Germany-West (former FRG) The Netherlands Switzerland 2/27/2019

Participating GLOBE countries Cluster Nordic Europe Denmark Finland Sweden 2/27/2019

Participating GLOBE countries Cluster Countries Middle East Egypt, Arab Rep. Kuwait Morocco Qatar Turkey 2/27/2019

Participating GLOBE Countries Cluster Eastern Europe Albania Georgia Greece Hungary Kazakhstan Poland Russian Federation Slovenia 2/27/2019

Participating GLOBE countries Cluster Countries Sub-Saharan Africa Namibia Nigeria South Africa (Black sample) Zambia Zimbabwe 2/27/2019

The Theoretical Definition of Culture Shared motives, values, beliefs, identities, and interpretations or meanings of significant events that result from common experiences of members of collectives and are transmitted across generations. 2/27/2019

GLOBE measures both cultural practices (as is) and cultural values (should be). 2/27/2019

Over 17000 middle managers from over 900 corporations in food processing, finance, and telecommunications industries in 62 cultures participated in GLOBE surveys. 2/27/2019

Culture Construct Definitions Power distance: The degree to which members of a collective expect power to be distributed equally. Specific Questionnaire Item Followers are (should be) expected to obey their leaders without question. 2/27/2019

Culture Construct Definitions Family Collectivism The degree to which individuals have strong ties to their small immediate groups Specific Questionnaire Item In this society, children live with parents until they get married. 2/27/2019

Culture and Trust   2/27/2019

Trust in Public Institutions Contracts and Law sub index: Judicial independence Property rights Favoritism in decisions of government officials Organized crime Corruption sub index Irregular payments in exports and imports Irregular payments in public utilities Irregular payments in tax collection 2/27/2019

Culture and Economic Performance   Power Distance Family Collectivism Average GDP/Capita, 1998-2004 -0.49 -.75 Average Economic Performance Rankings 98-05(IMD) 0.36 0.42 Average Competitiveness Rankings 98-05 (IMD) 0.65 Economic Productivity (average GDP/P,98-04, WB) -0.46 -0.69 Average Annual Growth in GDP/capita, 98-04 (WB) -0.45 -0.65 GINI (UN Human Development Report, 2004) 0.34 Share of Income or Consumption by the Top 20% (World Development Report) 0.32 Share of Income or Consumption by the Bottom 20% (World Development Report ) -0.29 -0.28 Extent to which government policies are conducive to competitiveness (IMD index, 2005) -0.56 %of GDP spent on education (UN Human Development Report, 2004) -0.35 -0.48 2/27/2019

Culture and Individual Health 2/27/2019

WHY? The micro approach: Culture as a lens (Javidan et al, 2006; Hofstede, 2001; Lindsey, 2000) Rather well developed by age 16 Shapes of way of interpreting the world Shapes how we make decisions Shapes how we behave and relate to others 2/27/2019

WHY? The macro approach: Institutions (Redding, 2005, North, 1990) Culture underlines and drives the country’s institutional framework The institutional framework underlines its political, administrative, and business systems 2/27/2019

Is it Hopeless? Not necessarily! Cultural values are in the right direction for Power Distance Many countries have young populations Individuals are not cultural robots Leaders can make a difference 2/27/2019

Thank you! Visit GLOBE at: http://www.thunderbird.edu/wwwfiles/ms/globe/ 2/27/2019