International Business 582: The Four Dimensions of Culture
International Market Management: Lecture 9
[Speaker: Douglas Albertson]
Slide #1Slide Title: WSU Online Title Slide
Title: Four Dimensions of Culture
Creator: Babu John Mariadoss
Speaker: Douglas Albertson
online.wsu.edu
Audio:
[Music]
Slide #2
Slide Title: Section 1 Understanding the Global Marketing Environment
Section 1
Understanding the Global Marketing Environment
Module 3
Understanding Global Cultures and Buyer Behaviors
Lecture: The Four Dimensions of Culture
Audio:
In this lecture session, we are going to look at the four dimensions of culture posited by Geert Hofstede, a Dutch organizational anthropologist. Hofstede is a very highly respected and cited research scholar. He provided a universally acceptable framework for classifying cultural patterns. The way he derived his cultural dimensions was that he worked with IBM employees in nearly 40 countries during the 1970s and examined their work related values. And he conducted subsequent studies to validate his earlier research. And he finally came up with four dimensions of culture and these dimensions have been used across the globe, across the country; it is widely used in the United States and it is widely used in not just international marketing, but in different disciplines of management.
So, Hofstede suggests that the cultures of different nations can be compared in terms of four dimensions. Actually it is five dimensions but he initially he started with four dimensions and then later one more dimension was added.
Out of these four dimensions, three of them refer to expected social behavior and the fourth one is concerned with man’s search for truth. And the one that was added later, the fifth one, talks about the importance of time. We will talk about each of these in considerable detail.
Slide #3
Slide Title The Four Dimensions of Culture
The Four Dimensions of Culture
· Power Distance
o The extent to which the less powerful members of institutions/organisations within a country expect and accept that power is distributed unequally
· High Power Distance = More Hierarchical, Accepts inequality in wealth and power
· Attitudes towards fear of expressing disagreement with managers or authority
Audio:
The first dimension – power distance is the extent to which the less powerful members of a society accept of even expect power to be distributed unequally. So, here we are talking about equality or inequality in dealing with others. Like I told you before, there are four dimensions of Holfstede’s cultural typology and three of them refer to expected social behavior.
Power distance is one of the dimensions that relates to expected social behavior. So by talking about power distance, it actually reminds me of the phrase that goes like this, “All societies are unequal, but some are more unequal than others,” right?
In a high power distance culture, hierarchy is strong. Power is centralized at the top and such a culture accepts inequality in wealth and power. Examples of high power distance cultures are Hong Kong and France.
Now, in a low power distance culture, power is equally distributed. For example, superiors and subordinates have a sense of equality. And examples of low power distance culture could be Germany, Austria, the Netherlands and Scandinavia.
And so what we see here is that this whole idea of power distance actually reflects attitudes of people or employees or depending upon which context you see, you are talking about, it reflects attitudes of people towards fear of expressing disagreement with people in power.
Slide #4
Slide Title Power Distance
Power Distance
[Map depicting the power distance scores of countries around the world]
Audio:
So, let’s take a look at the different countries of the world on a world map and then try to compare the difference power distance scores of these cultures. As you can see here, you could see that India, the Philippines and China have a high power distance score, while Austria, Denmark, Finland and Sweden score relatively lower. Even the United States you could see scores low on this dimension – it is a lower power distance country. Then you could see United Kingdom, Ireland, Sweden – all these are low power distance countries. And like I mentioned before, France is a high power distance and Brazil is also high power distance country.
Now, let’s see what the implications of power distance are for the workplace of organizations. The power distance dimension actually reflects the degree of trust among members of a society. Therefore, the higher the power distance, the lower the level of trust. And you can see in organizations that high power distance is reflected in tall hierarchical designs. It is also reflected in companies that have a preference for centralization as opposed to decentralization. And in cultures where you have high power distance, you can see organizations generally have relatively more supervisory personnel.
The power distance dimension also provides us insights into the dynamics between superior and subordinates. For example, in cultures where respect for hierarchy is high, you would see that subordinates may have to navigate through layers and layers of assistance to get to the boss, to even meet the boss. In such cultures you could see that the boss is usually isolated in an office with the door closed and in such cultures superiors may very easily intimidate low level employees.
Now how does the knowledge of the power distance of a country help marketing people? How does it help the international marketer? There is research that suggests that when evaluating alternatives for entering global markets, companies that are high on power distance or companies that are situated in cultures of high in power distance actually prefer sole ownership of subsidiaries because it provides them more control.
Conversely, companies in low power distance cultures may use joint ventures. And when marketing and advertising professionals in the marketing department make commercials in cultures that have a high power distance, they usually use authority appeals. In other words, the advertising copy or the commercial will have the picture or a person who is considerably older and who is considerably of higher power and higher status or holds a position of authority compared to the people in the target segment.
Slide #5
Slide Title: The Four Dimensions of Culture
The Four Dimensions of Culture
· Uncertainty Avoidance
o The extent to which the members of the culture feels threatened by uncertain or unknown future situations
· High Uncertainty Avoidance = High need for written and unwritten rules
· Cultures that have a low UAI score (e.g. Denmark, Sweden and HK) tend to accept each day as it comes and willing to take risks.
· Cultures with high UAI score (Such as Japan, France and Belgium) tend to be less risk-taking
Audio:
The next dimension we are going to see is called uncertainty avoidance and this has to do with dealing with uncertainty. This is the dimension related to man’s search for truth. Uncertainty avoidance is the extent to which the members of a society are uncomfortable with unclear, ambiguous or unstructured situations. It is how much members of a society feel threatened by uncertain or unknown future situations.
High uncertainty avoidance means a high need for written and unwritten rules. Members of uncertainty avoidance cultures may resort to aggressive emotional and intolerant behavior and they are characterized by a belief in absolute truth.
On the other hand, cultures that have a low uncertainty avoidance score, you could also call them uncertainty accepting cultures – for example, Denmark, Sweden, Hong Kong, Ireland and the United States – these cultures are more tolerant of persons whose opinions differ from their own.
Low uncertainty avoidance or acceptance of uncertainty generally manifests itself in behavior that is more contemplative, realistic and tolerant. And you could see some of these values in Southeast Asia and India.
Cultures with high uncertainty avoidance scores such as Japan, France and Belgium tend to be less risk taking.
Slide #6
Slide Titles Uncertainty Avoidance
Uncertainty Avoidance
[Map depicting uncertainty avoidance scores of countries around the world]
Audio:
Let’s take a look at this map of the nations of the world and see which countries are high on uncertainty avoidance while which ones are uncertainty accepting countries. Simultaneously let’s talk about how a knowledge of uncertainty avoidance scores of the different cultures can help global marketers. By understanding the dimension of uncertainty avoidance, global marketers get better equipped to assess the amount of risk with which buyers are comfortable.
In this map you could see the countries that are colored dark are the ones that are high in uncertainty avoidance. So, in Japan and other Asian cultures characterized by low tolerance for ambiguity buyers become very conscious of branding and are likely to exhibit high brand loyalty. Therefore, advertising professionals in countries with high levels of uncertainty avoidance will seek to provide reassurance by way of stressing on warranties, money back guarantees and other risk reducing features in their commercials and in advertising copies.
Hong Kong has an even higher tolerance for ambiguity, i.e. accepting uncertainty. Higher than the United States. The Japan however is quite high on uncertainty avoidance like France and Spain. You could imagine how uncertainty avoidance can manifest consumer behavior by thinking of how people in the US buy investments or invest in stocks and so on versus how people in Japan and in France may invest. Their primary way of investment would be in postal bonds whereas in the US it is primarily in stock.
An idea of the uncertainty avoidance score of these countries can help managers think about deciding investment options for that particular culture of country. Also, managers who have an idea of uncertainty avoidance scores of these countries can design product information accordingly. For example, in the US, if you see a product packaging, you would see that there is not too much product information. In contrast, in some countries in Europe with high uncertainty avoidance a very simple product like windshield wipers will come in a very elaborate packaging with an instruction manual and probably even a CD, to give more information about the product, while in the US it comes in the plastic wrapper.
Therefore, knowledge of uncertainty avoidance about a culture can actually help global marketers to design the different elements of the marketing mix in accordance with what is being popularly believed in those particular cultures.
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