Letshwiti B. Tutwane
Last week we looked at the unusual management approach of Ricardo Semler at Semco, a Brazilian company. I then bumped into a reader who asked me to explain further on the cultural dimension of management and especially Geert Hosftede that I had mentioned briefly. I am happy to do that this week. In addition I will introduce another management thinker, Charles Handy, the Irish management coach who has an interesting book on the subject.
Hostede, a Dutch management scholar, social psychologist and once Emeritus Professor of Organisational Anthropology and International Management at Maastricht is the leading scholar in the area of cross-cultural management. Also a former IBM employee, the professor undertook a broad, multinational, longitudinal study identifying cultural differences in the workplace spanning several years. The first study had a sample of 100 000 employees in 40 countries whilst the second study had more than 170 000 employees in 162 countries.
His findings confirmed what the scholar often regarded as the father of modern management, Peter Drucker, had observed: Culture is central to management practice. ‘Management is deeply embedded in culture. What managers do in Germany, in the United Kingdom, in the United States, in Japan, or in Brazil is exactly the same. How they do it may be quite different’. Everywhere in the world managers control, plan, organise and lead but their approach is determined by the context of each country. They cannot use a single template!
In his study (conducted first in the 1970s) Hostede identified the six cultural differences that I talked about last week, being power distance, uncertainty avoidance, feminity-masculinity, indulgence-restraint, collectivism-individualism, long term-short term orientation. Later he added performance orientation, assertiveness and humane orientation. Below is an explanation of what these cultural variables really mean:
Power Distance: The degree to which people accept an unequal distribution of power and status privileges. In high power distance countries, there is respect for age and titles, people are expected to follow rules, and there is more tolerance for concentrated power. India, Mexico, and the Philippines have high power distance. The United States, Australia, and Israel have low power distance.
Uncertainty Avoidance: The degree to which people are uncomfortable with risk, change, and ambiguity is called uncertainty avoidance. In high uncertainty avoidance countries, there is a greater emphasis on rules, structure, order, and predictability. France, Japan, and Costa Rica, for example, are countries with high uncertainty avoidance. The United States, India, and Sweden have low uncertainty avoidance.
Performance Orientation: The degree to which innovation, high standards, and excellent performance are encouraged and rewarded. Countries with high performance orientation value materialism and competitiveness, and they expect to invest in training to promote performance improvements. The United States and European countries have high performance orientations; Argentina, Russia, and Greece have low performance orientations.
Assertiveness: The degree to which individuals are forceful, confrontational, and aggressive, as opposed to cooperative and compassionate. In high assertiveness countries such as the United States, Germany, and Mexico, communication is direct and unambiguous. Individual initiative is encouraged, and relationships are likely to be competitive. Countries with low assertiveness rankings are Switzerland and New Zealand. Managers in these countries are more likely to look for consensus and cooperative decision making.
Future Orientation: The degree to which delayed gratification and planning for the future are valued over short-term gains is called future orientation. Countries with high future orientation encourage investments for future payoffs over immediate consumption. It is similar to the ability of individuals to delay gratification. Canada, Switzerland, and Malaysia have high future orientation; Poland, Argentina, and Russia have low future orientation.
Humane Orientation: The degree to which fairness, altruism, generosity, and kindness are encouraged and valued is a measure of a country’s humane orientation. In nations with high humane orientation, individuals are responsible for promoting the well-being of others as opposed to the state providing social and economic support. The Philippines, Ireland, and Egypt have high humane orientation; France, Germany, and Singapore have low humane orientation.
Institutional Collectivism: The degree to which organizational and societal institutions encourage individuals to be integrated into groups and organizations. In high institutional collectivism countries, collective distribution of resources and collective action are encouraged. Group loyalty is encouraged, even if it undermines the pursuit of individual goals. Sweden, Japan, and Singapore are examples of countries that have high institutional collectivism; Germany, Argentina, and Italy have low institutional collectivism. In the United States, low institutional collectivism has resulted in debates on appropriate work-life balance.
In-Group Collectivism: The degree to which individuals express pride, loyalty, and cohesiveness in their organizations or families. In countries with high institutional collectivism, individuals identify with their families or organizations and duties and obligations determine behaviours. A strong distinction is made between individuals who are in a group and those who are not. India, Egypt, and China are examples of countries that have high institutional collectivism; Sweden, New Zealand, and Finland have low institutional collectivism.
Gender Egalitarianism: The degree to which male and female equality is actualized is called gender egalitarianism. Countries with high gender egalitarianism provide more opportunities for women and have more women in positions of power. Sweden, Poland, and Costa Rica have high gender egalitarianism. Japan, Italy, and Egypt have low gender egalitarianism. In these countries, women generally have lower status at work and in the culture (Adapted from: https://courses.lumenlearning.com/suny-principlesmanagement/chapter/dimensions-of-cultural-difference-and-their-effect/).
However I do not accept these cultural differences as an exhaustive list. They are just a useful guide. Each country of the world will have its own peculiarities. These differences reflect the way things are done in a particular country. They also reflect deep held beliefs, values and customs. In Botswana, for instance when doing business as a foreign you should know that a lot of people have little regard for time. Late coming is common. Having stayed in the UK and the US for an extended period of time I noticed huge differences. Even the one month I spent in China in 2017 enabled me to observe these differences. I am sure that if you interviewed a Chinese businessman about his experiences with Tswana customers or employees he will have an interesting story to tell! Actually there is a saying that ‘there is no hurry in Africa’. Another striking difference doing business in Botswana that is of interest to an expatriate businessman is that the upper working class Motswana man typically loves his cattle. Making appointment with him for a Friday afternoon may not be ideal. He will be off to the cattle-post!
In Mexico, a story is told how Pepsi once lost a large share of the market in South East Asia because they had changed their vending machine colours to light ‘ice’ blue, which is the colour of death and mourning. Another example is that of US retail giant Wal-Mart who had to provide shuttle buses for its customers who mostly accessed its shop through public transport. The company had used the US Model of building standalone shops surrounded by huge parking lots. Now customers were dropped far by the buses and had to walk a long distance through the parking lots, thereby limiting how much they could buy. You need to understand the cultural make-up of your market.
Former Royal-Dutch Shell employee and Fellow of the London School of Business Charles Handy also illustrates cultural dimensions to management in his famous book, ‘Gods of Management’ (1995). He identifies four different management cultures which he likened to four Greek gods: Apollo, Athena, Dionysus and Zeus. The Zeus organisation is the power culture one: It is centralised and manages top-down. Apollo organisations are bureaucratic, run by strict procedures, narrowly defined roles and clearly defined power.
Athena culture organisations comprise of small teams, are results-oriented, flexible, and adaptable and empower their people. They represent a task culture whilst Apollo people represent a role one. Dionysius on the other hand is the epitome of the person culture. Such organisations focus on the individual. Dionysius organisations are people-oriented, value-focused and are keen to see personal development of their employees.