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Cross Cultural Management: An International Journal

Models of national culture a management review


Tony Morden

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Tony Morden, (1999),"Models of national culture a management review", Cross Cultural Management: An International
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Volume 6 Number 1 1999

Models of National Culture - A


Management Review
Tony Morden

The Author
Tony Morden is a Principal Lecturer, School of Business and Management,
University of Teesside, Middlesbrough, UK

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Abstract
The purpose of this article is to summarise, analyse, and compare various
models of national culture; and to discuss their relevance to the study and
practice of local and international management.
The article defines national culture and describes the cross-cultural purpose of models of national culture. It summarises, analyses, and illustrates:
- single dimension models
- multiple dimension models
- historical-social models
of national culture and applies these on a polycentric basis within the context of the process and practice of management.
The article concludes with a summary comparison of the various models of national culture described in detail in it.
Introduction
This article defines national culture, and comments on the relevance of national culture to the study and practice of management. It describes the
cross-cultural purpose of models of national culture. It summarises, analyses, and illustrates:
- single dimension models
- multiple dimension models
- historical-social models
of national culture; and applies these within the context of the process and
practice of management.
National Culture Defined
Hofstede [1, 2] defines national culture as the collective mental programming
of the people of any particular nationality. Hofstede suggests that people
share a collective national character which represents their cultural mental
programming. This mental programming shapes the values, attitudes, competences, behaviours, and perceptions of priority of that nationality.
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National culture is defined by Fukuyama [3] as inherited ethical habit.
An ethical habit can consist of an idea or value, or of a relationship. Ideas,
values, and relationship patterns constitute the ethical codes by which societies regulate behaviour. They are nurtured by repetition, tradition, and example. They are reinforced through images, habits, and social opinions.

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The Relevance of National Culture to the Study and Practice of


Management
Morden [4] notes that a crucial implication of the work of Hofstede,
Hampden-Turner & Trompenaars and other contributors to the...developing
body of experience and knowledge about international culture and management is that (national) cultural interpretation and adaptation are a prerequisite to the comparative understanding of national and international
management practice. Such knowledge is, for instance, a prerequisite to the
effective entry into new markets and new countries, ... (or) to the establishment of effective programmes of international human resource development, and the development of appropriate skills and competences on which
the achievement of corporate success depends.
Hofstede [2, 5] comments that the author of any particular theory or
prescription is as much culturally conditioned as anyone else. Theories or
prescriptions reflect the cultural environment from which they originate.
Hofstede [2] states that not only organisations are culture bound; theories
about organisations are equally culture bound. The professors who wrote
the theories are children of a culture; they grew up in families, went to
schools, worked for employers. Their experiences represent the material on
which their thinking and writing have been based. Scholars are as human
and as culturally biased as other mortals (p.146).
Hofstede suggests, in consequence, that there can be no guarantee that
management theories and concepts developed within the cultural context of
one country can, with good effect, be applied in another. This implies that it
is not possible for such theories and concepts to be universally valid or applicable.
The Cross-Cultural Purpose of National Culture Models
Morden [4, 6] describes the widely documented view that it is unrealistic to
take an ethnocentric and universalistic view towards the principles and
practice of management as they are applied in other countries and other
cultures. What works well in one country may be entirely inappropriate in
another. In the face of cultural diversity and the need to view international
management from multiple perspectives (Hampden-Turner and Trompenaars
[7, p.17]), there is a need to understand, and to apply locally appropriate
models of national culture to the process and practice of management. This
logic has two implications. These are:
Best fit
Morden [4, 6] suggests that international managers and multinational companies may need to take a best fit or contingency approach to issues of organisation and management; and to developmental activities associated
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Volume 6 Number 1 1999


with them. The style of management must be appropriate to the prevailing
local contingencies. Any one ethnocentric style may be inappropriate elsewhere. Hence the need for:Polycentricity
Perlmutter [8] defines polycentricity in terms of the acceptance and use of
cultural diversity. Organisation and management are to an appropriate degree locally adapted according to the requirements of the prevailing national
culture. Other cultures are in turn free to take the best from any one locality
and to adapt it to their own circumstances (as in the case of Theory Z as a
style of management). Cultural diversity is accepted and encouraged. It is
not resisted as would be the case under ethnocentricity; nor is it homogenised into multinational geocentricity.

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Single Dimension Models


The national culture models described under this heading are based upon a
single dimension or variable. Three models are described and illustrated below.
High and Low Context Cultures
Hall [9, 10, 11] differentiates high context and low context cultures. Context
is defined in this case in terms of how individuals and their society seek information and knowledge.
People from high context cultures obtain information from personal information networks. Before such people make a decision, or arrange a deal,
they have become well informed about the facts associated with it. They
have discussed the matter with friends, business acquaintances, and relatives. They will have asked questions and listened to gossip.
People from low context cultures seek information about decisions and
deals from a research base. Whilst they will listen to the views of colleagues
or relatives, they place much emphasis on the use of reading, reports, databases and information sources. Information highways, the Internet, E-Mail
and other forms of the communication and information revolution may be
looked upon as an added bonus as sources of useful knowledge.
High and low context cultures are illustrated in Figures 1 and 2.
A suggested high context - low context demographic ranking is shown in Figure 3.
Monochronic and Polychronic Cultures
Lewis [12] differentiates monochronic and polychronic cultures.
Monochronic cultures act in a focused manner, concentrating on one
thing at a time within a set time scale. Lewis, for example, categorises the
Germans, the Finns, and some North Americans as being monochronic. To
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Figure 1: High Context Culture

Figure 2: Low Context Culture

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Figure 3: A Suggested High Context - Low Context Demographic Ranking


High Context
$ Japanese
$ Chinese
$ Italians, Spanish, Portuguese, French, Mediterranean peoples
$ Latin Americans
$ Arabs, Africans
$ Indians, and other Indian sub-continent
$ Koreans, South East Asians
$ Central Europeans
$ Slavs
$ Other American cultures
$ Benelux countries
$ British, Australians
$ Scandinavians, Finns
$ North Americans (US WASPs and Canadians)
$ New Zealanders, (white) South Africans
$ Germans, Swiss, Austrians
Low Context

such people time is a scarce resource which has its opportunity cost. There
may be a perception that time is money.
Polychronic cultures are flexible and unconstrained by concerns with
time. Polychronic people do many things at once, often in an unplanned or
opportunistic sequence. They may not be interested in time schedules or
concepts of punctuality. They consider that the reality of events and opportunities is more important than adherence to what they perceive to be
artificial constructs of planning, schedules, and appointments. Time is neither seen as a resource nor as an opportunity cost that equates to money.
Matters can always be settled tomorrow. Lewis suggests that, for example,
Indians, Polynesians, Latin Americans, and Arabs are polychronic.
Monochronic and polychronic characteristics are compared in Table 1.
Morden [6] suggests that the mixing of monochronic and polychronic cultures may give rise to constant culture clash and disagreement. It may call for
the establishment of agreed modes of co-operation and co-ordination.
On the other hand, the mixing of these two cultures may yield synergies
as features of each complement the other. For instance, the greater flexibility of the polychronic may facilitate ongoing developmental processes that
are subject to unpredictable external change, making it easier for the monochronic to modify plans and schedules in order to adapt.
A suggested monochronic - polychronic demographic scale is shown in
Figure 4.
Fukuyamas Analysis of Trust
Fukuyama [3] analyses the relationship between trust, social capital, and the
development of organisation and management. He identifies and compares
low trust and high trust societies. Fukuyama comments that a high trust society can organise its workplace on a more flexible and group-oriented basis, with more responsibility delegated to lower levels of the organisation.
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Table 1: Monochronic and Polychronic Characteristics


Monochronic

Polychronic

introvert
patient
quiet
minds own business
likes privacy
plans ahead methodically
does one thing at a time
follows systems
works fixed hours
punctual
dominated by timetables and schedules
compartmentalises projects

extrovert
impatient
talkative
inquisitive/interfering
gregarious
plans grand outline/"vision"
does several things at once
mixes systems
works any hours
unpunctual
timetable unpredictable
lets one project influence another

sticks to plans
sticks to facts
gets information from statistics,
reference books, database

changes plans
juggles facts
gets first-hand, oral information

job orientated
works within department
follows correct procedures
accepts favours reluctantly if at all

people orientated
goes round all departments
pulls strings
seeks favours

plays role within team


delegates to competent colleagues
completes action sequences
uses fixed agendas
focused communication, to the point
writes memoranda, uses written record
respects officialdom

plays as many roles as possible


delegates to relations
completes human transactions
inter-relates agendas
talks for hours
dislikes writing too much, prefers flexibility to commitment
seeks out (top) key person

Figure 4: A Suggested Monochronic - Polychronic Demographic Scale


Monochronic
* Germans, Swiss, Austrians
* Americans (White Anglo-Saxon Protestant or WASP)
* Scandinavians, Finns
* British, Canadians, New Zealanders
* Australians, (white) South Africans
* Japanese
* Dutch, Flemish Belgian
* Other American cultures
* French, Walloon Belgian
* Koreans, Taiwanese, Singaporeans
* Czechs, Slovakians, Slovenians, Croats, Hungarians
* Chinese
* Northern Italians
* Chile
* Other Slavs
* Portuguese
* Spanish, Southern Italians, Mediterranean peoples
* Indians, and other Indian sub-continent
* Polynesians
* Latin Americans, Arabs, Africans
Polychronic

Low-trust societies, by contrast, must fence in and isolate their workers with
a series of bureaucratic rules. Workers usually find their workplaces more
satisfying if they are treated like adults who can be trusted to contribute to
their community rather than like small cogs in a large industrial machine
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Volume 6 Number 1 1999


designed by someone else. The Toyota...manufacturing system, which is a
systematisation of a communally organised workplace, has led to enormous
productivity improvements as well, indicating that community and efficiency can go together. The lesson is that modern capitalism, shaped by
technology, does not dictate a single form of industrial organisation that
everyone must follow. Managers have considerable latitude in organising
their businesses to take account of the sociable side of...human personality.
There is no necessary trade-off...between community and efficiency; those
who pay attention to community may...become the most efficient of all
(p.31).

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Low trust societies


Fukuyama suggests that in familistic societies, the primary avenue to sociability and community is family or broader forms of kinship, such as tribes or
clans. Societies that have strong families but weak bonds of trust among
people unrelated to one another will tend to be dominated by family-owned
and family managed businesses.
Fukuyama suggests that Latin Catholic countries such as France, Spain,
and Italy exhibit a saddle-shaped distribution of organisations, with:
- strong families and family business sector;
- a strong state and state sector; or large foreign-owned companies;
- relatively little between by way of intermediate social groups or
organisations.
In particular, Fukuyama suggests that the relatively slow transition of
French family businesses into modern corporate structures with effective
professional management; and the influence of the state in developing large
scale enterprise, (and in rescuing failing private companies such as Renault), are due to:
* a low level of interpersonal trust amongst the French;
* a traditional difficulty in associating with others spontaneously in groups;
* a habitual preference for basing interpersonal relationships on formalised, centralised, and hierarchical rules within bureaucracies.
This is associated with a cultural distaste for informal, face-to-face relationships of the type required in new, more informal Theory Y or Theory Z
types of association (for instance of an Anglo-Saxon type); and a strong
preference for authority that is centralised, hierarchical, and formally/legally defined. Fukuyama contends that French people of equal status may
find it difficult to solve problems between themselves without reference to a
higher and centralised form of authority.
More generally, Fukuyama suggests a correlation between hierarchy and
the absence of trust that characterises low-trust societies. Hierarchies are
necessary because not all people within a community can be relied upon to
live by tacit ethical rules alone. They must ultimately be coerced by explicit
rules and sanctions in the event that they do not live up (p.25) to these
ethical codes.
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Cross Cultural Management


High trust societies
Fukuyama suggests that countries that have strongly developed associational life as manifest by vigorous private, non-profit, and communal organisations; professional associations; charitable institutions; (etc.) are
likely to develop strong private economic and business institutions that go
beyond the family.

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Such countries (Fukuyama quotes the USA and Japan) appear to possess the ability spontaneously to generate strong social groups/organisations in the middle part of the spectrum - that is, in the region between the
family on the one hand, and the state on the other. He suggests that this
ability is missing in such countries as China and Russia, and in the Latin
Catholic countries which he categorises as low trust in character.
In contrast with low-trust societies, high trust ones have strong organisations in the middle, rather than the saddle shaped distribution of organisations at the poles of family and state. In other words, there appears to be
a relationship between high trust societies with plentiful social capital, and
the ability to create large, private business organisations. Such societies can
be contrasted with familistic ones in that they are characterised by a high
degree of generalised social trust, and a strong propensity for the spontaneous sociability upon which middle range enterprise formation depends.
Fukuyama suggests that the most effective organisations are based on
communities of shared ethical values. These communities do not require extensive contractual or legal regulation of their relations and social architecture because prior moral consensus gives members of the group a basis for
mutual trust. Fukuyama comments that social capital has major consequences for the nature of the industrial economy that society will be able to
create. If people who have to work together in an enterprise trust one another because they are all operating according to a common set of ethical
norms, doing business costs less. Such a society will be better able to innovate organisationally, since the high degree of trust will permit a wide variety of social relationships to emerge. Hence, the...sociable Americans
pioneered the development of the modern corporation in the late nineteenth and early twentieth centuries, (whilst) the Japanese have explored
the possibilities of network organisations in the (later) twentieth. By contrast, people who do not trust one another will end up co-operating only under a system of formal rules and regulations, which have to be negotiated,
agreed to, litigated, and enforced (if necessary by coercive means). This legal apparatus, serving as a substitute for trust, entails what economists call
transaction costs. Widespread distrust in a society, in other words, imposes a kind of tax on all forms of economic activity, a tax that high-trust
societies do not have to pay (pp.27-28).
Within this context, Fukuyama makes particular reference to the syndrome of free riding. Fukuyama contends that societies manifesting a high
degree of communal solidarity and shared values may enjoy a more effective management process than their low-trust counterparts in that they may
lose less value from free riders. Free riders benefit from value generation
by an organisation or society, but do not contribute proportionately (or at
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Volume 6 Number 1 1999


all) to the effort by which that value is generated. The free rider problem is
a classic dilemma of group behaviour.
One solution to the problem involves the group imposing some form of
coercion or discipline on its members to limit the amount of free riding they
can get away with. This may involve the use of close and frequent monitoring and supervision (Theory X), which is expensive. Output or service quality may be unpredictable or unreliable.

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Alternatively (and more efficiently) the incidence of free riding may be


lessened if the group possesses a high degree of social solidarity. People become free riders when they put their individual interests ahead of the
group. But if they strongly identify their own well-being with that of the
group, or put the groups interests ahead of their own in the relative scale of
priorities, they may be less likely to shirk work or avoid their responsibilities. Supervision is replaced by identification, participation and commitment.
Multiple Dimension Models
The national culture models described under this heading are based on multiple dimensions or variables. Three models are described and illustrated below.
Hofstedes Model
Hofstede [1, 2] proposes that national culture and values, as they affect the
work environment and its management, could be categorised on the basis of
four variables, namely:
[1] Power Distance: which is how society deals with the fact that people are
unequal in a social and status sense; and how different societies deal with
this reality.
[2] Uncertainty Avoidance: which is how society copes with uncertainty about
the future, and deals with the reality of risk.
[3] Individualism - Collectivism: which indicates the relative closeness of the
relationship between one person and others. It anticipates fundamental
issues about individual motivation and place (and the management
thereof), and about the organisation and functioning of society as a
whole.
[4] Masculinity - Femininity: which identifies the sexuality of roles in society,
and the degree to which a society allows overlap between the roles of men
and women. It anticipates the issue of the relative values which society
places on the sexes, and on the roles that they carry out.
Hofstedes model is summarised by Morden [13], and illustrated in Figure
5.
Hampden-Turner & Trompenaars Analysis
Hampden-Turner & Trompenaars [7] suggest that the nature of enterprise
value systems, and the value judgments associated with them, appear to de27

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Figure 5: Cultures Consequences Summarised
Index Scores

Typical Countries

Symbolic Organisation and Characteristics

Power Distance
large;
Uncertainty
Avoidance strong

Latin-European;
Latin-American;
Japan; South Korea;
Arab countries

Pyramid of people; hierarchical unity of command; strong leadership; rules

Power Distance
small; Uncertainty
Avoidance strong

Germany; Austria;
Switzerland;
Israel

Well oiled machine; rules settle everything;


strong personal discipline

Power Distance
large; Uncertainty
Avoidance weak

African and Asian countries


(except
Japan and South Korea)

Power Distance
small; Uncertainty
Avoidance weak

Nordic and
Anglo Saxon;
Jamaica

Family; undisputed personal authority of patriarch/matriarch/leader; few formal rules; fatalism?


Village market; no decisive hierarchy; flexible
rules; problems solved by negotiation

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Source: Hofstede [1, 2]

pend on the resolution of seven value dilemmas. They contend that these dilemmas, and the varying solutions associated with them, permit the
manager to understand key cultural differences between the approach taken
by different nationalities to the process and practice of management. These
seven value dilemmas are:
[1] Making rules and managing exceptions (universalism versus
particularism). The enterprise must to some degree formalise, standardise, and codify its operations in order to ensure consistency and
continuity. There exists a minimum (or requisite) level of bureaucracy
without which enterprise activities cannot be reliable or systematic. At
the same time, however, the value system needs to be able to recognise,
and deal with exceptions, changes, and the need for innovation.
[2] Deconstructing and constructing (analysing versus integrating).
The management process may require either or both (i) the analysis of
concepts or phenomena into their constituent parts; and (ii) their integration into whole patterns, relationships, and wider contexts. Analysis and integration are the opposite ends of an intellectual process,
illustrated by the tendency of Anglo-Saxons to analyse (deconstruct);
and Eastern (and Germanic) societies to seek cohesive patterns (construct or integrate).
[3] Managing communities or individuals (individualism versus
communitarianism). Work organisations must support and motivate
the individual employee, looking to their personal motivation and career aspirations. At the same time, the contribution of the individual
must be seen within the wider context of the community that is the enterprise. How should the enterprise define the character of the relationship between the individual and the organisation; and how should it
manage that relationship? Ultimately, whose interests are defined
within the value system to come first? The relationship between the individual and the organisation provides a key dilemma, particularly in
societies identified by Hofstede as strongly individualistic.
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Volume 6 Number 1 1999


[4] Internalising the outside world (boundary management or
inner-directed versus outer-directed). The value system will determine
where direction and purpose originate.
Direction and purpose may on the one hand come from driving (or
entrepreneurial) forces within the organisation. Relationships with the
outside world will be perceived as having to be managed, whether
positively or defensively. There will be widespread perceptions of a finite boundary between the internal and the external environments,
and the strategic use of concepts of fit.

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Alternatively, the enterprise may operate in what it perceives to be a


symbiotic relationship with its environment, absorbing and adapting
from it as it moves through time.
[5] Synchronising time processes (time as sequence versus time as
synchronisation). The value system of the enterprise will determine
its attitude to time, and how it should use it. This dilemma poses two
questions. These are:
*

the length of time horizon. Enterprise management must decide what


the length of its time horizons will be, dependent on its definition of
mission and purpose, and dependent upon the demands of its stakeholders for results and returns. Typically, German, Japanese, and
South Korean corporations are able to take a longer term view of their
businesses than their Anglo-Saxon competitors.

speed or synchronisation. Enterprise management may have to choose


between doing things quickly, in the shortest possible sequence of
time; or achieving the synchronisation of events over time such that the
achievement of those events is co-ordinated, and co-ordinates with
other events which are related within a wider context. HampdenTurner & Trompenaars cite the example of the Toyota system of kanban (already referred to above) as an approach to manufacturing that
depends on the synchronisation of events rather than their speed. Once
synchrony has been achieved, speed may in any case follow, as in the
case of Just In Time (JIT), or accelerated systems of new product specification and design, reduced cycle time, (etc).

[6] Achieved status versus ascribed status. The value set of the enterprise needs to determine the basis for allocating status and reward.
The allocation of status may depend upon the achievement of certain
types of criteria directly associated with enterprise performance within
its market or operating context. Or, it may instead depend upon some
other characteristic important to enterprise management. Such criteria
might include age, seniority, length of service, education, family associations, or past service to the state.
[7] Equality versus hierarchy. Different corporate value sets will give
different emphasis to the establishment of hierarchical order and
authority, or the achievement of equality.
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The contribution of the individual, on the one hand, may be valued
highly. Mechanisms of empowerment, consultation, and participation
will be put in place. Decision making may be based on consensus, as in
the case of the Japanese nemawashi or the Korean sajeonhyupui. The
concept of management may itself be seen in terms of professional
equality and contribution, not hierarchy.

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Alternate cultures will emphasise the precedence of the authority


and judgement of the hierarchy of ownership and management. Individual members of staff must accept their place in the organisations
pecking order, and accept the judgement of those above them in the
hierarchy. Management may be conceptualised in terms of centralisation and control.
Hampden-Turner & Trompenaars model is summarised by Morden
[13].
Lessem & Neubauers Analysis
Lessem & Neubauer [14] analyse European management systems. They
categorise the impact of national culture under four inter-related criteria.
These are:
*

the tension between pragmatism and idealism/wholism that characterises European approaches to the theory and practice of management.
The Anglo-Saxons and the Dutch tend to take a more pragmatic line towards management issues than their more idealistic or wholistic German counterparts.

the tension between a rationalist approach to dealing with management issues, as for instance taken by the French; and the humanist or
people-oriented approach that is characteristic of the family companies
of Italy and Spain.

Lessem & Neubauers matrix is reproduced in Figure 6. Lessem & Neubauers four criteria are analysed below.
Pragmatism
Pragmatism is a dominant influence in the conceptualising of management
principles and practice, especially in the English speaking Anglo-Saxon
world. Pragmatism is:
*

empirically and experientially orientated.

competitively focused.

individualistic, and personality orientated.

action orientated.

Pragmatism focuses on the enterprise and on its capacity on an experiential


basis to develop into a learning organisation. Within this context, the indi30

Volume 6 Number 1 1999


Figure 6: Lessem & Neubauers Matrix
RATIONALISM

PRAGMATISM

THE EUROPEAN BUSINESS


SPHERE

IDEALISM/WHOLISM

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HUMANISM

vidual manager strives for self-development through the process of action


learning.
Hampden-Turner & Trompenaars [7] categorise a pragmatic approach
to management as being categorised by:
*

individualism rather than communitarianism, with a tendency towards egalitarianism.

the ability to combine universalism and particularism (that is to be able


to handle rules and exceptions at the same time).

scepticism about the value of structure and hierarchy.

a focus on achieved status.

a tendency to see time in practical terms as a sequence. Perceived patterns in time, or concepts of synchrony, may be rejected as being subjective or academic constructs.

a tendency to outer-directedness.

Rationalism
Rationalism is defined by the OED as a theory which regards reason, rather
than sense (or experience) as the foundation of certainty in knowledge.
Rationalism is typically French, but is also characteristic of much of Northern Europe. Rationalist management is characterised by:
*

a scientific and positivist outlook, and a logical mode of concept formulation.

a focus on the organisation through concepts of structure, role, hierarchy and requisite bureaucracy.

professional but depersonalised management.

a belief in the value of planning and dirigisme.


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Hampden-Turner & Trompenaars categorise a rationalist approach to management as being characterised by:
*

a belief in the structural and managerial value of formal organisation


and hierarchy.

a tendency towards universalism and the logical application of rules.

a tendency towards inner-directedness.

a tendency towards communitarianism. Individuals are seen as the inhabitors of roles.

a focus on ascribed status and the acceptance of inequality.

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Lessem & Neubauer suggest that, inter alia, rationalism is associated


with the work of Henri Fayol and Elliot Jaques.
Wholism/idealism
Wholism is defined by the OED as something made up of parts in combination; a complex unity or system. Websters Dictionary defines wholism as
a conception of something in its highest perfection; a theory that affirms
that mind, or the spiritual or ideal is of central importance in reality, asserting that the ideal element in reality is predominant.
Wholism/idealism is in particular associated with German speaking
countries; (for instance see Box 1). Wholistic management is characterised
by:
*

a systems orientated co-ordination and integration.

co-operation and co-determination.

developmental processes.

partnership between public and private interest.

a sensitivity towards the interdependence between the organisation


and its environment.

Lessem & Neubauer suggest that wholism stands directly opposed to


the brand of economic freedom embodied in Adam Smiths laissez-faire or in
Darwins survival of the individually fittest (p.40). The role of the organisation, its employees and its management must instead be seen in the context
of the needs of the greater whole or system of which it is a part.
Hampden-Turner & Trompenaars categorise a wholistic/idealistic approach to management as being characterised by:
*

an emphasis on integration (with the objective of constructing whole


concepts as the purpose of analysis/deconstruction), for instance
through the use of systems thinking.

a perception of time as synchronisation as well as sequence. People


seek wider patterns and cycles.
32

Volume 6 Number 1 1999


Box 1: The Aims and Principles of the Carl-Zeiss-Stiftung
Zeiss is a German company which has achieved an international reputation for quality and technological
innovation. The name of Zeiss is to be found worldwide on a range of high quality, high technology scientific and optical instruments.
The companys success was inspired by the precepts of one of its founders, Professor Ernst
Abbe, who was a partner of Carl Zeiss. Abbe believed that excellence derived from providing a secure,
supportive working environment for the companys workforce, and allowing individuals to develop their
talents to the full.

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The Carl Zeiss company was founded in 1846 by Carl Zeiss, a university technician who was born
in 1816. Its sister company, the Schott Glaswerke, was established with the assistance of Ernst Abbe.
Otto Schott carried out research into the dependence of optical and other properties of glass on its composition. The two companies achieved synergy by developing products which complemented each
other at the forefront of technology.
Ernst Abbe, a physicist, had become a partner of Carl Zeiss in 1875. Abbe sowed the seeds of future success in two ways. Firstly, he employed eminent scientists and was thereby able to expand the
product range. Secondly, he established the company as a foundation (stiftung) in 1889, following the
death of Carl Zeiss. The Foundation was to become the sole owner of both the Zeiss works and its sister,
the Schott Glaswerke.
The Foundation Statute, designed by Abbe, is summarised below:
Stated Aims
* to develop, produce and sell high-quality products in the fields of optics, precision engineering, electronics and precision glass technology for national and international markets.
* to provide employees with exemplary social benefits.
* to allow employees to develop their capabilities to the full.
* to promote important work in science and technology, and to participate in activities of general social
value.
Principles
* science and technology complement each other.
* science, technology and economic activity should serve mankind, and not vice versa.
* economic stability and progress safeguards jobs.
* the company and its employees are mutually dependent.
Science, progressive technology, and social responsibility are therefore the determinants of the activities of the Carl-Zeiss-Stiftung.

a tendency towards universalism and the use of rules. This application


of rules is internalised rather than being imposed externally by a hierarchy, and is facilitated by high levels of self-discipline and self-control.
(Hofstede categorises the Germans as having low Power Distance,
which is consistent with this internalisation of rules and self-control).

a tendency towards communitarianism. Individuals may be seen as


system components.

a tendency towards egalitarianism. Status is achieved through functional expertise and operational performance.

Humanism
Humanism is defined by Websters Dictionary as pertaining to the social life
or collective relations of mankind; devoted to realising the fullness of hu33

Cross Cultural Management


man being; a philosophy that asserts the essential dignity and worth of
man.

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Humanism is associated in particular with Italy. It is also a feature of


Spain, Greece, and Ireland. Humanism is characterised by:
*

an emphasis on the family group and the community.

a sense of personal obligation and duty.

enterprise based on family, community, or socio-economic network.

flexibility and adaptability; opportunism and change.

a personalised and convivial management style.

fashion, feeling, taste, and sentiment.

Humanism in business is developed by the family patriarch or matriarch; or


by the impannatore (defined by Lessem & Neubauer as designer, responsible for shaping and responding to fashion, as well as for organising production, also urging firms to experiment with materials and processes [14,
pp.214-215]). Each function as entrepreneur, leader, and social architect.
Hampden-Turner & Trompenaars categorise a humanistic approach to
management as being characterised by:
*

the management of communities of individuals (being both individualistic and communitarian).

a tendency to personal equality within the hierarchy of the family, the


community, or the socio-economic network. Each person has his or her
place, duties, obligations, and rights within that context. Some people
may also believe that whatever Fate has decreed the individual must
accept.

particularism: it is the managers job to deal with exceptions and individual cases as they arise. The universalistic application of rules may be
perceived as being synonymous with bureaucratic control by the state,
and with corruption by officials.

outer-directedness and opportunism.

the perception of time as short term sequence within longer term historical patterns or synchrony.

Historical-Social Models
The national culture models described under this heading are based on
historical-social dimensions or variables. Two models are described and illustrated below.
The Euromanagement Study
Bloom et als 1994 book Euromanagement [15] is based on a major study
which aimed to find out whether there are any common characteristics be34

Volume 6 Number 1 1999


tween European managers. The study sample comprised the Chief Executives and senior management from thirty five companies, in fourteen
countries across Europe, who were members of the European Round Table.
Bloom et al suggest that the basic characteristics of a European management model comprise the following:

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[1] The capacity to manage international diversity: a characteristic that binds


Europe together is the ability to handle diversity. Europeans are familiar
with, understand, and respect diversity. Europes history and trading
needs have taught its people how to deal with this diversity, and how to
integrate it within the work context. At the same time, this acceptance of
diversity has enabled European companies to develop the ability to work
successfully in other cultures and countries, and to make effective
polycentric use of the natural human talents found there.
Lessem & Neubauer [14] suggest that this capacity to manage diversity
includes coping with the fundamental tension between the pragmatic and
the wholistic/idealistic approaches to the nature of society that characterise different European cultures.
[2] An orientation towards people: in general terms, Europeans (like the Japanese) regard people as an integral part of business. There is less emphasis
on the American and Anglo-Saxon view of people as a resource whose relationship with the enterprise is purely an instrumental and a contractual
one.
Europeans tend towards individualism (in contrast to the communitarianism of Japan). They have a view that people are to be served by
progress - not the other way round. Nor are shareholders to be the only
beneficiaries of the activities of the enterprise. European companies may
reflect this belief in the security and quality of life offered to their workers, in their tolerance of individual differences, and in the styles of management they espouse.
[3]

Social responsibility: European companies tend to perceive themselves


to be an integral part of society. Bloom et al suggest (p.18) that this
means they:
- act in a socially responsible way;
- consider profits to be one of the main goals of the company but not
its raison dtre;
- opt for long-term thinking on strategic decisions and investments.
The view that institutions are a key part of the wider community is a
wholistic one. Wholism has already been described above. It derives
from the work of a wide range of European philosophers; and has been
encouraged by the success of the Japanese who hold parallel views
about the integrated nature of the development of society, its technology, and its institutions. The earning of profit by the enterprise is sim35

Cross Cultural Management


ply seen as a means to a larger and more important end associated with
that social development and technological progress.

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[4] Internal negotiation: the basis of many of the internal transactions of


European organisations, and of their internal relationships, is negotiative.
These relationships are in turn characterised by Kay [16] as relational,
that is essentially long-term and based on trust. Negotiative behaviour is
in general terms seen to be non-opportunist. On the long term both parties
to the negotiated relationship must receive mutual advantage; neither
should undertake activities that might damage the other.
[5] A degree of informality: many Europeans tend to be sceptical about the
value of formal management systems and written rules. The management
process may be informal and intuitive, with intense verbal communication and periodic negotiation. The distribution of power and the role of
leadership may therefore under such circumstances be of considerable interest to European managers, since they may not be able to rely on formalisation or hierarchy in order to exercise authority or make/frame
decisions.
Some Europeans have bitter experience of bureaucracies as tools of totalitarian oppression or vehicles of official corruption. This may help to sustain scepticism about the value of the well-organised and systematic
structures that their Anglo-Saxon or North European counterparts are instead happy to develop.
South East Asian Management
Chen [17], Cragg [18], and Seagrave [19] suggest that there are certain key
historical-social influences on the development of management practice in
South East Asia. These influences are mainly Chinese. They are summarised
below.
Taoism
Taoism is a wholistic philosophy that emphasises the inter-relationship and
interaction of every entity and everything in the world.
Each entity, in turn, will comprise varying (or opposing) internal elements or forces. These are the yin and the yang. Harmony must actively be
maintained between these elements in order to secure the wholeness and integrity of that entity. This will give the entity a character of one-ness.
Whilst everything has a character of one-ness, this one-ness is subject to
change, in accordance with the laws of nature. Nothing is static or immutable; change is natural and inevitable. The pursuit by managers of stability
is therefore a chimera; such a search is bound to fail.
Confucianism
Confucius (551-479? BC) was a Chinese sage. His doctrines became known
as Confucianism. Confucianism became a moral and religious system in
China, and more widely throughout much of South East Asia. In particular,
Confucianism became a structure of ethical precepts for the management of
society based upon:
36

Volume 6 Number 1 1999


* the concept of ren, which involves benevolence, humaneness, and patronage in the treatment of others.
* the achievement of social harmony and social order within a hierarchically
arranged society. Confucius taught that mankind was divided between
inferiors, whose task was obedience; and superiors, whose task was to
provide for the common welfare of all. The doctrine states that there is an
obligation (through ren) on those at the top of society to look after their
inferiors; and on those lower down in the strata of society to toil cheerfully in pursuit of the greater good.
The individual person is not perceived as an isolated entity or individual.
Man is a social being who is to interact with others under the guidance of
the ren of his leaders.

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The role of the mandarin


Chinese state functionaries were known as gwan. They became known as
mandarins from the Portuguese mander, which means to command.
The mandarinate became conceptualised as a professional meritocracy,
responsible to a higher authority for the quality and effectiveness of its performance. It became associated with a Confucianist perception that officials,
leaders, and managers should act in a diligent, hard-working, and ambitious
manner. It is their personal responsibility to bring forth a sustained effort
from their subordinates within a social or organisational context which
meets the needs and aspirations of the wider community of which it is a
part, and which may depend upon it for its livelihood and prosperity.
The development of such principles have become the basis of the work
ethic that is seen throughout the Tiger economies of South East Asia.
Personal relationship (guanxi)
Guanxi means cultivating, developing, and maintaining personal relationships on the basis of the continuing exchange of favours. Friendship and empathy between the two parties are of secondary importance (though they
are useful in reinforcing the relationship). The commitment that results
from the relationship is perceived in utilitarian terms, particularly if the surrounding social context lacked basic legal, constitutional, or associational
frameworks; or was positively hostile. The overseas Chinese communities of
South East Asia and the Pacific Rim have often been persecuted or denied
constitutional rights since they were first established. Strong interpersonal
bonds based on guanxi and shinyung (trust) hold together the plethora of
communities and trading links upon which the invisible empire of the overseas Chinese (Seagrave, [19]) is based.
Face
The achievement of harmony requires the maintenance of an individuals
face. Face is a persons dignity, self-respect, status, and prestige. If an individual loses face the effect is perceived to be the same as if he or she had
actually lost eyes, nose, or mouth. Social interaction or negotiation should
37

Cross Cultural Management


therefore be conducted so that nobodys face is lost. At the same time, face
can be given, as when respect or praise is paid to someone else.
The five cardinal relations

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Chen [17] notes that whilst Confucius identified many kinds of human relationships, the five cardinal relations are the most fundamental. These five relationships and their appropriate characters are:
-

sincerity between father and son

righteousness between ruler and subjects

distinction and separate functions between husband and wife

order between older brothers and younger brothers

faithfulness among friends.

Chen comments that these five cardinal relationships are based on differentiated order among individuals. This means that the Confucian concept of
these relationships emphasises the importance of differentiation in social hierarchical order. Hence, Confuciuss famous saying goes let prince be
prince, subject be subject, father be father, son be son.
The five fundamental relations can also be classified into predetermined
relationships (such as father-son and brother-brother) and voluntarily constructed ones (such as friend-friend relations)...in the first category (predetermined relationships), the self is underdeveloped, as individual behaviour
is more or less dictated by fixed status and responsibilities. For thousands of
years, it has been drummed into people that relationships, especially those
within the family, are very important and the individual per se is less important. A Chinese is enmeshed within a network from birth, whether it is the
family, the work unit, the government or the Party...in other words, a Chinese is not primarily an individual, rather, he or she is a member of a family. Children should learn to restrain themselves, to overcome their
individuality so as to maintain harmony in the family.
In the second category (voluntarily constructed relationships) the self
becomes much more dynamic...in building new relationships...the self takes
initiative and is active...it is the individual who is capable of defining roles
for himself and who is located at the centre of the relationship...the individual is the initiator of social interactions in the non-predetermined cardinal
relationships with others beyond the familial environment. The individual is
a true and sophisticated architect in relationships (pp.56-57).
The strategic thinking of Sun Tzu
Sun Tzu was an adviser to the Chinese Emperor Wu. His teachings, compiled in about 500 BC, are based on historical Chinese experience of fighting wars and handling the frequent conflicts that characterised the times.
Sun Tzus book, The Art of War, [20], describes effective and ineffective
strategies by which to fight wars or defeat the opponent. The Chinese ideo38

Volume 6 Number 1 1999

Be so subtle that you are invisible


Be so mysterious that you are intangible
Then you will control your rivals fate
Sun Tzu

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gram for strategy is the same as that for war, so it is natural for the Chinese (and other South East Asian adherents) to perceive the two concepts in
the same light. As a result, South East Asians tend to perceive the marketplace as a battlefield. Strategies for waging war have therefore been applied
to strategies for waging business. In terms of management style and process,
these strategies include the following:
[1] Strategic management (applying and implementing strategy): there is a
need for effective strategic planning and strategic management. Chen
[17] comments that with careful and detailed planning, one can win;
with careless...planning, one cannot win (p.42). The objective should be to
conquer by strategy; the most important thing is to avoid head-on conflicts.
[2] Moral influence: by which Sun Tzu meant the degree to which the people
are in good accord and agreement with their ruler, such that they will be
willing to accept the hardship and dangers of war. In a competitive business world, the manager should try as much as possible to establish corporate goals that are shared by all employees, so that all in the company
come to view themselves as members of the group crossing the river in the
same boat. They would be more likely (to) consider company affairs as
their own and be willing to make personal sacrifices when needed (Chen,
p.43).
[3] The ability of generals: a good general, according to Sun Tzu, should possess five key qualities. These are wisdom, sincerity, benevolence, courage
and strictness.
Chen suggests that these...qualities of generalship can be used to
measure corporate leadership. A corporation is not unlike an army in
terms of its organisation. A powerful and efficient leader is indispensable
to the success of a corporation. The five positive qualities of Sun Tzus
generalship are also those needed by chief executive officers (p.44).
[4] Regulation, delegation, and training: Sun Tzu stressed the need for formalised sets of rules and regulations; the designation of rank and status; the
proper allocation of responsibilities; and the establishment of appropriate organisation structure.
It is also necessary to delegate the appropriate power and authority to
subordinates; or rather to the most able subordinates. Chen comments
(pp.48-49) of Sun Tzus preconditions for victory (that) he whose generals are able and not interfered with by the sovereign will win. This is the
principle of not using the suspectable at all and using the trustworthy with
full confidence... he advised a good balance between an authoritarian
leader and unorganised decentralisation, as either of (these) extremes is
harmful to an organisation.
The implication is that in a highly competitive environment, corporate
managers should have sufficient authority and flexibility such that they
39

Cross Cultural Management


can formulate and implement their strategies in response to conditions of
change. Senior managers should have confidence in their chosen subordinates, and delegate them with enough power to carry out their work,
without the need for constant upward referral for decision-making or
sanction.
At the same time, Sun Tzu emphasised the need for effective training.
Training is a prerequisite to the achievement of organisational efficiency.
Sun Tzu commented that if soldiers do not understand or know how to
follow signals, they will not act correctly. Nor will they be ready for battle.
Chen comments that in a business context, companies with well-trained
employees can be managed with great efficiency. Successful business organisations all over the world have good...training programmes.

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The taipans
The taipan is defined by Cragg [18] as the supreme ruler or big boss.
The title of taipan is accorded in the east to those leaders considered worthy
of great respect, in the strictest of Confucian traditions. This respect is paid
to the taipans business acumen and achievement.
The first taipans were the British (and especially Scots) heads of the
Hong Kong trading companies. Cragg suggests that one of the most memorable of these original taipans was William Jardine...(who) was known locally as the Iron-Headed Old Rat ([18], p.2).
Taipans from a variety of nationalities are now to be found throughout
South East Asia. There are South Korean taipans, Malays, Thais and Philippinos. But many of these taipans are overseas Chinese.
Cragg describes the taipans of South East Asia as sharing such characteristics as being:
-

strongly autocratic in style.

strongly entrepreneurial and opportunistic.

risk-takers (for whom there is no shame in attempt or failure; only in a


failure to try).

exponents of rapid decision-making.

supreme users of networks and connections (for instance through


gquanxi).

keen to nurture creativity and encourage innovation.

persistent attenders to detail.

skilled at managing and manipulating face.

steeped in the ways of both East and the West; and being capable of
managing the cultural schizophrenia and dilemmas to which such a
dual focus gives rise.
40

Volume 6 Number 1 1999


Figure 7: National Culture Models Summarised and Compared
High/Low con-

Mono-

Trust (Fu-

text (Hall)

chronic/Poly-

kuyama)

Hofstede

chronic (Lewis)

Hampden-

Lessem and

Euromanage-

South East

Turner and

Neubauer

ment (Bloom et

Asian Manage-

Trompenaars

al)

ment (Chen,
Cragg and Sea-

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grave)

1. Seeking
information/knowledge
2. Single focus/concentrated behaviour
3. Multiple focus/diffused
behaviour
4. Low trust
5. Familism
6. High trust
7. Power Distance
8. Uncertainty Avoidance
9. Individualism Collectivism
10. Masculinity - Femininity
11. Making rules/managing
exceptions
12. Deconstructing/
constructing
13. Managing
individuals/
managing
communities
14. Boundary management
15. Conceptualising time
16. Achieved status/
ascribed status
17. Equality/hierarchy
18. Pragmatism
19. Rationalism
20. Wholism/idealism
21. Humanism
22. Managing diversity
23. Social responsibility
24. Negotiative/relational
behaviour
25. Informality
26. Taoism
27. Confucianism
28. The role of the
mandarin/professionalism/elitism
29. Work ethic
30. Personal
relationship/guanxi
31. Face
32. The five cardinal
relations
33. The strategic influence
of Sun Tzu
34. Leadership/leadership
qualities
35. Delegation and training
36. The role of the Taipan

X
X
X
X
X
X
X

X
X
X

X
X

X
X
X

X
X

X
X
X

X
X
X
X
X
X
X
X

X
X
X

X
X

X
X
X
X
X
X
X
X
X

X
X
X
X
X

X
X

41

X
X
X

Cross Cultural Management


Cragg comments that the domains of the taipans are typically characterised
by family involvement in which, for example, key financial and management
responsibilities are entrusted to relatives, relations, or long established
friends.
Summary Comparison

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The main features of the national culture models described and illustrated
in this article are summarised and compared in Figure 7.

42

Volume 6 Number 1 1999


References
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[5] Hofstede, G. (1990). Behaviour in Organisations in D.S. Pugh (ed.)


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Cross Cultural Management


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