What effect does globalization have on managers?

Hofstede’s found that managers and employees vary on five value dimensions of national culture. They are listed and defined as follows:

1) Power distance: the degree to which people in a country accept that power in institutions and organizations is distributed unequally. Ranges from relatively equal (low power distance) to extremely unequal (high power distance)
2) Individualism versus collectivism: Individualism is the degree to which the people in a country prefer to act as individuals rather than as members of groups. Collectivism is the equivalent of low individualism.
3) Quantity of life versus quality of life: Quantity of life is the degree to which values such as assertiveness, the acquisition of money and material goods, and competition prevail. Quality of life is the degree to which people value relationships and show sensitivity and concern for the welfare of others.
4) Uncertainty avoidance: The degree to which people in a country prefer structured over unstructured situations. In countries that score high on uncertainly avoidance people have an increased level of anxiety, which manifest itself in greater nervousness, stress, and aggressiveness.
5) Long term versus short term orientation: People in cultures with long term orientations look to the future and value thrift and persistence. A short term orientation values the past and present and emphasizes respect for traditional and fulfilling social obligations.

What did Hofstede’s research conclude? Here are a few highlights. China and West Africa scored high on power distance; the United States and the Netherlands scored low. Most Asian countries were collectivist than individualists, and the United States ranked highest among all countries on individualism. Germany and Hong Kong rated high on quantity of life: Russia and the Netherlands rated low. On uncertainty avoidance, France and Russia were high. Hong Kong and the United states were low. And China and Hong Kong had a long term orientation while France and the United states had a short term orientation. Hofstede’s study ranked India high on power distance, and close to the median score on individualism vs. collectivism. However, later studies characterize India as a culture with high vertical collectivism orientation, which is a blend of collectivism and strong hierarchical orientation. This is consistent that Nurturant Task (NT) Leadership may be an effective leadership style in the Indian context, especially when employees prefer dependency and personalized relationships, and accept status differences. Such employees would accept leaders to care for the well being of subordinates, and the subordinates in return, refer to the leader, much like the benevolent father figure in Indian patriarchal family systems.

Although Hofstede’s work provides the basic framework for differentiating among national cultures, these data are nearly 30 years old. Undoubtedly, a lot has happened over the past several decades. For example, the Soviet Union has fallen, East and West Germany have merged, and apartheid has ended in South Africa. The GLOBE study provides an important update to these classic cultural dimensions.

Begun in 1993, the Global Leadership and Organizational Behavior Effectiveness (GLOBE) research program is an ongoing cross cultural investigation of leadership and national culture. Using data from 825 organizations in 62 countries, the GLOBE team identified the following nine dimensions on which national cultures differ

Assertiveness: The extent to which a society encourages people to be tough, confrontational, assertive, and competitive versus modest and tender.

Uncertainty avoidance: As defined in the landmark research, the GLOBE team defined this term as a society’s reliance on social norms and procedures to alleviate the unpredictability of future events.

Power distance: As in the original, research, the GLOBE team defined power distance as the degree to which members of a society expect power to be unequally shared.

Individualism / collectivism: Again, this term was defined similarly to the original research as the degree to which individuals are encouraged by societal institutions to be integrated into groups within organizations and society.

In-group collectivism: In contrast to focusing on societal institutions, this dimension encompasses the extent to which members of a society take pride in membership in small groups such as their family and circle of close friends and the organizations in which they ar6e employed.

Performance orientation: This dimension refers to the degree to which a society encourages and rewards group members for performance improvement and excellence.

Humane orientation: This culture aspect is the degree to which a society encourages and rewards individuals for being fair, altruistic, generous, caring, and kind to others.