Cross cultural differences and their implications for managing intercultural differences in business contexts

Term Paper, 2018

22 Pages, Grade: 1,0


Table of Contents

II List of Figures

1 Introduction

2 Culture and cultural differences: A complex construct
2.1 Cultural Dimensions by Hofstede
2.2 The Seven Cultural Dimensions by Trompenaars

3 The impact of culture on businesses
3.1 Culture’s influence on work groups
3.2 Managing multicultural work groups

4 Conclusion

III References

IV Affidavit

II List of Figures

Figure 1: The Five Original Dimensions of National Culture by Hofstede

Figure 2: Cultural dimensions by Trompenaars

1 Introduction

“Growing interconnections brought about by the globalization process require that both managers and organizations expand repertoires of roles” (Barbara Parker, 2005, p. 24).

As a result of globalization, many firms have started to compete and work on a worldwide basis. This situation has required organizations to manage their workforces effectively in order to expand into global markets and target different consumer groups (Christiansen, 2013). Moreover, the process of globalization causes more exposure to diversity, not only in daily but also in business life. Managing diversity has therefore become a strategic focus of management in organizations which enables companies to gain competitive advantages on the global market through the company’s most important assets - its people (Richard, 2000).

However, when people from different cultures work together and cannot take shared meanings and circumstances for granted, managers face serious challenges. Potential disagreements in business contexts arise from the fact that an individual’s interpretation of an experience and its meaning may vary according to several cultural aspects such as national, ethic or social scales (Chanlat, Davel, Dupuis, 2013).

Understanding the impact of globalization on cross-culture communication is therefore a crucial asset for organizations aiming for competitive advantages, essentially fulfilling the firm’s mission and building value for the stakeholders (Matthews, Thakkar, 2012). However, cultural differences can be the most difficult influence on management with which to deal as culture does not only have a broad influence on behavior but also because cultural effects are mostly difficult to observe (Thomas, Peterson, 2018). Thus, the formation of a common base by establishing an awareness of cultural differences and the willingness to view them as potential chances is essential to any company dealing with cultural diversity (Chanlat, Davel, Dupuis, 2013).

With increasing relevance of the outlined issue several frameworks for categorizing, analyzing and comparing cultures can be found in literature. Two frameworks that have received a great deal of research attention are Hofstede’s study of work values and Trompenaars’ broad-based studies of value orientations (Thomas, Peterson, 2018).

This paper begins by providing an insight into the existing conventional culture paradigms by giving a brief introduction to the term culture and exposing the two mentioned models. Subsequently, the last chapter outlines possible implications for managing intercultural differences in business contexts.

2 Culture and cultural differences: A complex construct

As mentioned above, due to the continuous relevance of globalization culture has increasingly been the focus of reflection and writing over the past decades (Patel, 2014). Further, the impact of culture in the international businesses is recurrently focused upon, namely in aiming to understand and explain the impact of cultural differences in management decisions, teamwork and performance differences across firms (Ralston et al., 2008). Culture influences firms’ organizational structures since it legitimizes both it existence and the way it functions (Lachman et al., 1994). It further seems to have a strong impact on organizational commitment as the sources of organizational commitment are culturally conditioned (Gelade et al., 2008).

Due to the complexity of the issue, culture is a term that literature defines in diverse ways. According to Hofstede (2010, p. 20), culture can be described as “the collective programming of the mind that distinguishes the members of one group or category of people from others”. In this context, culture is a collective phenomenon that can further be connected to different collectives, each collective consisting of a variety of individuals.

Trompenaars (2012, p. 119) additionally stated that “culture is a dynamic process of human beings that are developing a set of behaviors and values that help them to survive as a group”. Both Hofstede and Trompenaars have developed cultural dimension models which, concerning Hofstede, continue to be widely studied and applied in intercultural research. Initially Hofstede had offered four, and subsequently five, cultural dimensions upon which nations can be distinguished from one another (Patel, 2014). The eventual framework of seven dimensions by Trompenaars can be considered as an extension of Hofstede’s work as it derived primary from the prior work of sociologists and anthropologists. The following chapter reviews these two major frameworks that have been devised for categorizing cultures and to understand cultural differences (Thomas, Peterson, 2018).

2.1 Cultural Dimensions by Hofstede

Between 1967 and 1973, Hofstede used over 116,000 questionnaires to conduct surveys on employees’ behaviors and attitudes at work in different countries of the world and, as a result, generated one of the now best-known studies of how values in workplaces are influenced by culture (Hofstede Insights, n.d., n.p.). He supported the premise that the importance of cultural influences of business cannot be underestimated and, in this context, explained that the differing interpretations that cultures give to their environment are important intercultural influences (Patel, 2014).

A statistic analysis of the country averages of the answers to the questionnaire revealed similarities and common problems, but with solutions differing from country to country, in the following areas:

1. “Social inequality, including the relationship with authority
2. The relationship between the individual and the group
3. Concepts of masculinity and femininity: the social and emotional implications of having been born as a boy or a girl
4. Ways of dealing with uncertainty and ambiguity, which turned out to be related to the control of aggression and the expression of emotions” (Hofstede, 2005, p. 23) Hofstede’s approach not only gained global acceptance but also resulted in the development of four dimensions to classify countries, namely power distance (from small to large), uncertainty avoidance (from weak to strong), collectivism versus individualism and femininity versus masculinity (Dupuis et al., 2013). In late 1980, Hofstede added the long­term versus short-term orientation which can be treated as a fifth universal dimension (Hofstede, 2005).

The figure given below provides an overview of the different dimensions, followed by a summary of each dimension.

Abbildung in dieser Leseprobe nicht enthalten

Figure 1: The Five Original Dimensions of National Culture by Hofstede (adapted from Hofstede Insights, n.d., n.p.)

Power distance indicates “the extent to which a society accepts the unequal distribution of power in institutions and organizations” (Schneider, Barsoux, 2003, p. 87). Thus, the fundamental issue in this context is how a society deals with inequality among people. Relevant research has shown that people in societies exhibiting a large degree of power distance accept a hierarchical order which needs no further justification, whereas in societies with low power distance, people aim to equalize the distribution of power and demand adequate justification in case of inequality (Hofstede Insights, n.d., n.p.).

Uncertainty avoidance refers to a society’s discomfort with uncertainty and expresses the degree to which the members of a society feel uncomfortable with ambiguity. Within his research, Hofstede observed that countries with a strong uncertainty avoidance index (UAI) strive to maintain rigid patterns, beliefs and behaviors, whereas weak UAI countries display a less strict attitude and are more likely to depart from certain standards (Hofstede Insights, n.d., n.p.).

Uncertainty avoiding cultures try to avoid unstructured situations and minimize the possibility of such by integrating and applying strict behavioral codes, laws and rules. A further characteristic is the belief in the absolute truth, which they are claiming to have. In contrast, uncertainty accepting cultures are distinguished by a higher tolerance of different and individual opinions (Hofstede, 2010). They also have fewer rules and maintain an attitude in which practice counts more than principles (Hofstede Insides, n.d., n.p.).

The dimension individualism versus collectivism refers to extremes and represents the degree to which people in a society are integrated into groups. The fundamental issue is the extent to which people remain emotionally independent from groups, organizations and other collectives (Schneider, Barsoux, 2003). Individualism can be defined as a preference for a loose social framework in which individuals are expected to look after him/herself and his/her immediate family. On the other side, collectivism refers to cultures in which people are integrated into cohesive groups and social circles that are distinguished by mutual loyalty. Relevant research has shown that individualism prevails in Western countries, whereas collectivism can predominantly be found in Eastern countries (Hofstede, 2010).

The masculinity/femininity dimension reveals the bias towards either “masculine” or “feminine” values, thus the distribution of values between the genders. Within his studies,

Hofstede (2010) found out that women’s values differ less among societies than men’s values. Further, based on his findings, the masculine gender has been called the “assertive” pole, while the feminine gender has been allocated to the “caring” pole.

The reason the fifth dimension was added later was that this dimension had not been found in the original research, due to the fact that the relevant question had not been asked. However, because the dimension correlated with economic growth, Hofstede considered it an essential addition for his model and labeled it long-term versus short-term orientation. Long­term orientation in this context was defined as “the fostering of virtues oriented towards future rewards - in particular, perseverance and thrift”, whereas short-term orientation was considered as “the fostering of virtues related to the past and present - in particular, respect for tradition, preservation of “face”, and fulfilling social obligations” (Hofstede, Hofstede, Minkov, 2010, p. 239).

In other words, this dimension expresses the fact that every society has to differentiate between two existing goals: the connection between a country’s association with its past and, on the other hand, its current activity and the challenges it faces. Societies who score low on this dimension (short-term orientation), for example Africa, prefer to maintain and respect traditions while mainly East Asian countries (e.g. China and Taiwan) tend to take a more pragmatic approach (Hofstede Insights, n.d., n.p.): countries with a higher score see innovation and adaption as a necessity for future success (“Long Term Orientation vs. Short Term Orientation (LTO)”, 2017).

According to Hofstede (1994), these five dimensions describe the collective programming of the mind which distinguish members of one national group from those of another and, in their entirety, affect how people function and organize themselves.

2.2 The Seven Cultural Dimensions by Trompenaars

Although Trompenaars’ framework referred to “societal” rather than national cultures, the underlying assumptions of culture within this framework remain similar to the previously presented work of Hofstede (Patel, 2014). It consists of seven dimensions which will be summarized in the following, focusing on the additional findings obtained within Trompenaars’ research.

The dimensions are based on the fundamental question of how different aspects of human relationships are affected by culture. Further, Trompenaars distinguishes several layers of culture which, according to him, are expressed by the fact that “different cultures may give a different meaning to the same thing” (Trompenaars, 2012, p. 118).

He further emphasizes the importance of not assuming that cultural differences are merely about visible elements but rather about non-material aspects, such as the status accorded to older people, the relationship between men and women or the respect given to the law (Trompenaars, 2012). According to Trompenaars (2012), the set of assumptions that every culture has developed can be categorized into different dimensions. He further concluded that what distinguishes people from different cultures is where their preferences fall within the following seven dimensions:

Abbildung in dieser Leseprobe nicht enthalten

Figure 2: Cultural dimensions by Trompenaars (adapted from Trompenaars, Hampden-Turner, 1997)


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Cross cultural differences and their implications for managing intercultural differences in business contexts
Fresenius University of Applied Sciences Hamburg
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culture; intercultural; negotiation; cross-cultural; cultural dimensions; multicultural
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Marie Hildebrand (Author), 2018, Cross cultural differences and their implications for managing intercultural differences in business contexts, Munich, GRIN Verlag,


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