Cultural Differences What makes cultures different? Why causes cultural differences problems? One example of cultural differences in business is between the Middle Eastern countries and the Western countries, especially the United States.ﾊWhen negotiating in Western countries, the objective is to work toward a target of mutual understanding and agreement and 'shake-hands' when that agreement is reached - a cultural signal of the end of negotiations and the start of 'working together'.ﾊIn Middle Eastern countries much negotiation takes place leading into the 'agreement', signified by shaking hands. However, the deal is not complete in the Middle Eastern culture. In fact, it is a cultural sign that 'serious' negotiations are just beginning.ﾊImagine the problems this creates when each party in a negotiation is operating under diametrically opposed 'rules and conventions.'ﾊThis is just one example why it is critical to understand other cultures you may be doing business with - whether on a vacation in a foreign country, or negotiating a multi-million dollar deal for your company.

The Geert Hofstede model “Culture is more often a source of conflict than of synergy. Cultural differences are a nuisance at best and often a disaster.” Power distance => PDI Indivualism => IDV Uncertainty Avoidance => UAI Masculinity => MAS Long Time Orientation => LTO Prof. Geert Hofstede conducted perhaps the most comprehensive study of how values in the workplace are influenced by culture. From 1967 to 1973, while working at IBM as a psychologist, he collected and analyzed data from over 100,000 individuals from 50 countries and 3 regions. Subsequent studies validating the earlier results have included commercial airline pilots and students in 23 countries, civil service managers in 14 counties, 'up-market' consumers in 15 countries and 'elites' in 19 countries. From the initial results, and later additions, Hofstede developed a model that identifies four primary Dimensions to assist in differentiating cultures: Power Distance - PDI, Individualism - IDV, Masculinity - MAS, and Uncertainty Avoidance - UAI. Geert Hofstede added a fifth Dimension after conducting an additional international study with a survey instrument developed with Chinese employees and managers. That Dimension, based on Confucian dynamism, is Long-Term Orientation - LTO and was applied to 23 countries. These five Hofstede Dimensions can also be found to correlate with other country and cultural paradigms.

Power Distance Index (PDI) Definition: “The extend to which the less powerful members of institutions and organizations within a country expect and accept that power is distributed unequally.” Hofstede 1991: 28 Country Power Distance Index (PDI) Mexico 81 France 68 USA 40 Germany 35 Denmark 18

Individualism vs. Collectivism Country Individualism Index (IDV) USA 91 France 71 Germany 40 Turkey 37 Mexico 30

Masculinity vs. Femininity Masculinity = clearly distinct gender roles men: assertive, tough focused on material success women: modest, tender concerned with quality of life Femininity = overlapping gender roles both men and women: modest, tender concerned with quality of life Masculinity pertains to societies in which social gender roles are clearly distinct (i.e., men are supposed to be assertive, tough, and focused on material success, whereas women are supposed to be modest, tender and concerned with quality of life). Femininity pertains to in which social gender roles overlap (i.e, both men and women are supposed to be modest, tender and concerned with quality of life).

Masculinity vs. Femininity Country Masculinity Index (MAS) Japan 91 Germany 66 USA 62 France 43 Sweden 5

Ländercodes

Uncertainty Avoidance

Uncertainty Avoidance

Uncertainty Avoidance Country Uncertainty Avoidance Index (UAI) Greece 112 Mexico 82 Germany 65 USA 46 Sweden 29

Long Time Orientation Geert Hofstede added the following fifth (5th) dimension after conducting an additional international study using a survey instrument developed with Chinese employees and managers. That survey resulted in addition of the Confucian dynamism. Subsequently, Hofstede described that dimension as a culture's long-term Orientation. Long-Term Orientation (LTO) focuses on the degree the society embraces, or does not embrace, long-term devotion to traditional, forward thinking values. High Long-Term Orientation ranking indicates the country prescribes to the values of long-term commitments and respect for tradition. This is thought to support a strong work ethic where long-term rewards are expected as a result of today's hard work. However, business may take longer to develop in this society, particularly for an "outsider". A Low Long-Term Orientation ranking indicates the country does not reinforce the concept of long-term, traditional orientation. In this culture, change can occur more rapidly as long-term traditions and commitments do not become impediments to change.

Germany – USA Individualism is higher in the USA Uncertainty Avoidance is more important in Germany

Literature Crosscultural Communication: Geert Hofstede: Cultures and Organizations http://www.geert-hofstede.com/ http://www.cyborlink.com/besite/hofstede.htm Charles M. Hampden Turner, Fons Trompenaars: Building Cross-Cultural Competence Edward T. Hall: Beyond Culture Philip R. Harris, Robert T. Moran, Sarah V. Moran: Managing Cultural Differences, Sixth Edition: Global Leadership Strategies for the 21st Century Edgar H. Schein: The Corporate Culture Survival Guide Author: Rolf Schwermer, rolf.schwermer@fh-hannover.de September 2006