Seminar 2 Morgane Remlinger B3

Cultural aspects of business

The multiplication of international flows also multiply interactions between individuals and
contributes to share the different cultures of the world. The culture of a country, also called national
culture, is composed of norms, values and beliefs and is based on a common history, rituals and
language. Nowadays, cultures are converging to become more similar. With the new technologies it is
easier to communicate with each other, wherever in the world. Indeed, medias have an increasing role
in distance reducing between nations. When geographical distance create a gap, medias contribute to
reassemble people around common references and world actualities. However, the cultures’
convergence is partly superficial. Even if the world is globalizing generally, most part of the sharing
culture comes from the western countries like Europe and the United States. Those countries were the
first developed and they use their soft and hard power to share the western culture to the rest of the
world. Furthermore, in the last decades, the emergence of Asian countries like China or India and their
importance in the globalized economy, allowed the share of the eastern culture. Yet, culture has been
for a long time considered as a synonymous of country, which is not true. Indeed, since the beginning
of colonization to the actual globalization, certain cultures have been shared between several countries
in the same time. In this way, many countries have the same language or way of thinking, without
sharing any borders.

Therefore, culture can’t be understood at a geographical level but more like a multi-level and
dynamic concept. The first level is the global culture, shared by networks and world institutions. The
second level is the national culture, which is more local and concerns fewer people. The third is the
organizational level which shares common values, norms and behaviors of the national culture. Fourth,
there is the group culture, shared into few people, which include national and organizational cultures.
Finally, the last level is the individual culture, created by the socialization and the personality. This
five level formed the culture in general but the model is not rigid. Each level may influence another
with bottom-up and top-down dynamics.

The internationalization of goods, services and work force forced the company to learn about
the foreign cultures to manage the employees in the best way. Even if national culture can’t be
summarize to a country, it influenceS management practices. On the one hand they can’t be
universalized but in the other hand, managers don’t have to make stereotypes about each country. In
our globalizing world, culture and management have to combine to create a performing
Seminar 2 Morgane Remlinger B3

organization. But how can a firm coordinate so many cultures with a decentralized position? Or
do they have to decentralize the management in each countries with the cost that it generates?

Cultures and their links with a determined countries have been the object of several researches.
One of the most relevant is the analyze from Hofstede (1980). His research supports that there are four
dimensions in the national culture: power distance, uncertainty avoidance, masculinity-femininity and
collectivism-individualism. In 1988 he added a new dimension to his model: short or long term
orientation. According to Hofstede, national culture and country are related and the index for each
dimension may help the decision-making and management practices. His model was criticized because
it’s difficult to quantify a culture and he doesn’t take into account several variables such as context,
personality or personal history. Another study, named GLOBE, was conducted with a team of
researchers has met the same kind of critics.

Here we have two new studies about the importance of national culture. The first one is based
on past 558 studies based on surveys of several sources (teachers, researchers and managers). In this
studies they analyzed 32 countries with the four firsts Hofstede’s dimensions. They added twenty
variables to better targets the respondents. The goal of this studies is to improve Hofstede’s study and
understand the real link between national culture and management practices. The result is that country
can’t explain the culture and a country might not be homogenous. The second study is similar and is
also based on Hofstede’s work but with the five dimensions. Researchers have analyzed an American
firm and its 176 work units in 18 countries of the world. The study was based on both financial data,
the measure of the national culture and a survey. The survey was about management practices and
submitted to the employees with a ranking between 1 and 5. To consolidate the studies they added
three variables: labor resources, capital resources and market conditions. Finally, the study confirms
that the management practices must be adapted to the national culture for four of the five dimensions.

Both of them have tryed to go deeper on the culture question in the management world and
agree with Hofstede’s four dimensions. However, their studies have the same drawbacks as their
predecessor. Indeed, understanding culture is very difficult and can’t be summarize with a index for
each country. Even if all those studies are different by their methods, they have similar results,
but does it really exist a method without bias to understand the culture?