Organizations: National and Organizational Cultures

The second Class of Organizations and Cultures was a sort of introduction of the subject. These week unit was the Organizations: National and Organizational Cultures.

As Bibliographical references we had:
Mead, Richard. 2004. International Management: Cross-Cultural Dimensions . London: Blackwell Publishing.
Millman, Gregory J. . 2007. "Corporate Culture: more myth than reality? ." The Free Library 23:44-47. Millman, Gregory J. (2007, July 1).

And a Compulsory Reading was suggested;

· Kogut, Bruce & Harbir Singh. 1988. The effect of national culture on the choice of entry mode. Journal of International Business Studies, 19(3): 411-32.

In their article, Kogurt and Singh analyze how cultural perceptions affect manager’s decisions all over the world.

There are 3 possible decisions in the entry mode:

1. Acquisition: purchase of stock in an existing company, gives high degree of control.
2. Joint Venture: merging assets of different firms, usually in a new and common organization, with shared control.
3. A wholly owned Greenfield investment: A new organization is created, but with capital coming from the company looking to enter the market. The company preserves the control.

In order to make a decision managers must asses all implications and costs of each entry. The authors explain in this part that culture affects the perception of managers in costs and uncertainty. In order to explain these they propose 2 hypothetical scenarios where Joint Ventures & Greenfield investments are preferred. Based on Hofstede Cultural Dimensions:

A. In this first scenario there is a high cultural distance so; Joint Ventures & Greenfield investments are preferred.
B. In the second one, the Uncertainty Avoidance is higher so; Joint Ventures or Greenfield investments are preferred over Acquisitions.Basically, the authors make use of two different sources of data:
In order to analyze and make the correct statements for these hypotheses, the authors review several papers and documents. Finally they have the basis to conclude that even if both scenarios are true, the second one is more convincing. However, its important to highlight that they make very clear that the results of the study may change within time, and it certainly has considering that the paper was written on 1988.
We now know that managers must be well trained and capacitated for an international responsibility. The decision of entering another culture must start with asking if we have the proper manager to enter another culture.

In order to succeed, Richard Mead suggests in his book that managers must master some skills associated with:

· The organization Culture
· Motivation and reward systems
· Recognizing and resolving disputes
· Establishing and implementing formal structures.
· Recognizing the significance of informal structures.
· Formulating and implementing plans for change.

In the other article, Gregory J Millman talks about the corporate culture and puts in doubt the impact on the success of the company. He also uses Hofstede framework to analyse culture and quotes him at the end when talking about having success. "In globalization, you need the opposite--people who make slow decisions, who think before they act, who don't immediately voice any opinions, who are prepared to go against established practice."

When finishing all 3 articles I was very amazed about the importance that the authors gave to Hofstede Dimensions, taking in account that they where published for the first time in 1980. My analysis this week its not very aligned with my other analysis, because my question fits more in the research methods unit perhaps.
As an almost, business negotiator it is very important for me to really get to know cultures and learn how to study markets, as an almost marketing specialist.

I always use Hofstede dimensions for my researches, but I tried to complement them with Hall’s Dimensions and Kluckholn and Strodtbeck's Six Dimensions. But when finishing this articles not only I asked my self if it was necessary to complement Hofstede but I also wonder why 3 of 4 total authors made their conclusions based almost “only” in Hofstede.

And what better way to answer my doubts that an answer from Hofstede.


I never claim that culture is the only thing we should pay attention to. In many practical cases it is redundant, and economic, political or institutional factors provide better explanations. But sometimes they don’t, and then we need the construct of culture.

To conclude, let me cite from a review of my work on culture by Malcolm Chapman, British like McSweeney, but an anthropologist, not an accountant:
. . . Hofstede’s work became a dominant influence and set a fruitful agenda. There is perhaps no other contemporary framework in the general field of “culture and business” that is so general, so broad, so alluring, and so inviting to argument and fruitful disagreement. . . . [1]

What are the practical applications for Geert Hofstede's research on cultural differences?

For those who work in international business, it is sometimes amazing how different people in other cultures behave. We tend to have a human instinct that 'deep inside' all people are the same - but they are not. Therefore, if we go into another country and make decisions based on how we operate in our own home country - the chances are we'll make some very bad decisions.

Geert Hofstede's research gives us insights into other cultures so that we can be more effective when interacting with people in other countries. If understood and applied properly, this information should reduce your level of frustration, anxiety, and concern. But most important, Geert Hofstede will give you the 'edge of understanding' which translates to more successful results.[2]


[1] Hofstede, Geert. 2002. Dimensions do not exist: A reply to Brendan McSweeney. Human Relation The Tavistock Institute ® SAGE Publications
[2] http://www.geert-hofstede.com/