Cultural Differences: It's More than Geography that Matters

Author: Mick Yates

It's taken for granted in a "globalized" world that "culture matters." Yet, the challenge for executives and managers is knowing where and how cultures vary. For example, Europe continues to move toward a united identity at the same time that differences between countries right next door can sometimes seem bigger than differences between Europe and the US.

To at least get one's head around variations in national/regional cultures, it helps to approach the subject with a mental framework in mind. One of the enduring standards is the work of Geert Hofstede, who conducted one of the largest scale cultural studies ever done. It spanned 66 countries with 117,000 respondents. Though his analysis was done in 1968 and 1970, and conducted in just one multinational corporation [IBM], it provided a deep look at rooted differences in social and work environment differences around the world. He published a follow-up study in 1991, and his work led to more recent classifications and theories from people such as Fons Trompenaars and Charles Hampden Turner.

The conceptual strength of Hofstede's approach for operating in a global world lies in his identification of four primary axes of similarity and difference. They are:

• "Masculinity/Femininity"
• "Uncertainty Avoidance"
• "Individualism /Collectivism"
• "Power distance"

Based on data in Hofstede's book: "Culture's Consequences: International differences in work-related values" (Sage Books, 1990), I offer managers (below) a way to explore and expand Hofstede's cultural framework with a reflection on the US, four major Western European nations - UK, Germany, France and Italy; the Netherlands - as an example of a "smaller" but influential country; and Mexico – given its critical role in a significant regional alliance – NAFTA.

1. Masculinity: the dominant values in society are material success [money and things] versus caring for others and the quality of life [Femininity]

High/Masculinity: Stress on equity, competition, and performance - Managers are expected to be decisive and assertive

Low/Femininity: Stress on equality, solidarity, and quality of work life - Managers use intuition and strive for consensus

USA ranked 13 of 39 – Moderate Masculinity
UK ranked 8 out of 39 – High Masculinity
Germany ranked 9 of 39 – High Masculinity
France ranked 29 of 39 – High Femininity
Italy ranked 4 of 39 – High Masculinity
Netherlands ranked 37 of 39 – High Femininity

Mexico ranked 6 of 30 – High Masculinity

Viewed within Hofstede's framework, the UK, Germany, Italy and Mexico are all more "masculine" than the US. This suggests that the US is more inclined toward equality and balance in a work environment – interesting given that we often associate the US with a hard-driving focus on goals, results and efficiency. On the other hand, France is "feminine" (suggesting emphasis on quality of life issues), and the Netherlands ranks the most feminine [read that "caring and nurturing"] in the world.

2. Uncertainty Avoidance: The extent to which people feel threatened by ambiguous circumstances and have created beliefs and institutions to avoid such conditions.

High Uncertainty Avoidance: Many rules & low tolerance of deviant ideas; resistance to change
Low Uncertainty Avoidance: Few rules & high tolerance of deviant and innovative ideas

USA ranked 31 of 39 – Low Uncertainty Avoidance
UK ranked 34 of 39 – Low Uncertainty Avoidance
Germany ranked 20 of 39 – Moderate Uncertainty Avoidance
France ranked 6 of 39 – High Uncertainty Avoidance
Italy ranked 16 of 39 – Moderate Uncertainty Avoidance
Netherlands ranked 25 of 39 – Moderate Uncertainty Avoidance
Mexico ranked 11 of 39 – Moderate Uncertainty Avoidance

Here, the famous US and UK "special relationship" seems understandable. Within this framework, we are reminded that people of neither country like rules being applied to them, so it is not surprising they would feel comfortable with each other's approaches to work. The French, on the other hand, want to really know where things stand (uncertainty avoidance), whilst other European countries seem to be in the middle.

3. Individualism applies to societies in which the ties between individuals are loose: everyone is expected to look after themselves and their immediate family.

Collectivism applies to societies in which people from birth onwards are integrated into strong, cohesive groups, which throughout people's lifetime continue to protect them in exchange for unquestioning loyalty.

High Individualism: Identity is based on the individual - Task prevails over relationship
High Collectivism: Identity is based on one's social grouping - Relationships prevail over task

USA ranked 1 of 39 – High Individualism
UK ranked 3 of 39 – High Individualism
France ranked 11 of 39 – High Individualism
Germany ranked 15 of 39 – Moderate Individualism
Italy ranked 7 of 39 – High Individualism
Netherlands ranked 5 of 39 – High Individualism
Mexico ranked 29 of 39 – Low Individualism

Despite Europe being the "birthplace of Socialism" (a collectivist ideal) Hofstede's results suggest that "individualism" is a value shared by the Americans, British, Dutch, Italians and French. The challenge, of course, comes in integrating "individualist" agendas together. Indeed, most of Europe ranks moderate or high on this count, in contrast to it Asia and Latin America, for example, where preferences and behaviour patterns are more "collectivist." The implication?: working in Europe still means working with a collection of States and cultures, rather than speaking to a "bloc."

Intriguing question: given that Mexico scores the lowest on individualism/highest on collectivism, what does this mean as organizations continue to work across borders under the auspices of NAFTA?

4. Power Distance: the extent to which the less powerful expect and accept that power is distributed unequally.

Low Power Distance: Manager should be a resourceful democrat - Hierarchy in organizations seen as exploitive
High Power Distance: Boss should be a benevolent autocrat - Hierarchy in organizations reflects natural differences

USA ranked 25 of 39 – Moderate Power Distance
UK ranked 30 of 39 – Low Power Distance
France ranked 8 of 39 – High Power Distance
Germany ranked 29 of 39 – Low Power Distance
Italy ranked 22 of 39 – Moderate Power Distance
Netherlands ranked 27 of 39 – Low Power Distance
Mexico ranked 2 of 39 – High Power Distance

Again, we see pronounced similarity between the US, UK, Germanhy, Italy, and the Netherlands – though one might question whether this means UK managers are clearly most "democratic". This is also an area where there a notable distinction with France, and Mexico is the "most extreme" ranking.

Conclusions?

There are differences between Europe and the US, but there are also intriguing differences inside Europe that must be studied and appreciated in order to successfully do business there. The same is true in North America, joined in an agreement, but still distinct in identity and style. Distinctions include those between:

• UK and mainland Europe
• the "Latin" countries of Europe (e.g. France and Italy), and others such as Germany and the Netherlands
• US and Mexico

Most notably, Europe is full of proud, individualistic states that have done what might be considered a miraculous job forming economic bonds within the construct of the EU. Nevertheless, European countries value the maintenance of their own unique identities – (even Scotland and England have different legal systems).

At least for the near- and medium-term, globalization continues more as a linking of parts to create a whole – than a whole in and of itself. Valuing globalization means honoring uniqueness too.

©Copyright October 2005, Mick Yates
For permission to use and or distribute, please contact: mick@growing-global.com