CULTURAL-VALUE-DIMENSIONS-IN-A-STRATEGIC-DECISION-MAKING-CONTEXT

CULTURAL VALUE DIMENSIONS IN A STRATEGIC DECISION MAKING CONTEXT Susan Forquer Gupta, Monmouth University Contextualizing Culture Researchers have developed a variety of measures in order to explain the ways in with culture differs between national groups, (Hofstede 1980, 2001; Kluckhohn and Strodtbeck 1961, Rokeach 1973, Schwartz 1994; Trompenaars 1993) These measures include lists of values, value hierarchies, and value dimensions Much of cross-cultural marketing, as well as management, research has utilized the Cultural Value Dimensions (CVDs) identified in the literature (Hall 1976; Hofstede 1980, 1991; Kluckhohn & Strodtbeck 1961; McClelland 1961; Parsons & Shils 1951, 1962; Schwartz 1994) to explain cultural differences in behaviors, beliefs and preferences as expressed in the workplace Most existing measures of culture focus on societal culture (Dean 1961; Hui & Triandis 1986; Kluckhohn & Strodtbeck 1961; McClellend 1961; Rokeach 1972,1973; Schwartz 1994; The Chinese Culture Connection 1987) Few studies specifically recognize the differences that exist between cultural manifestations in a business environment and those in the broader societal environment Yet, it is generally believed that the manifestation of culture is context specific (Earley and Gibson 1998; Triandis 1980) As an individual exposed to a variety of cultural contexts throughout one's life, you must adjust your behavior to the various contexts in order to be able to successfully negotiate a given environment There are broad accepted norms for behavior that are learned as part of your acculturation or socialization into the broader society, but in-group behaviors will develop for those context in which a defined set of persons are involved Any individual will negotiate a variety of environmental contexts and so based upon their own personal value structure, yet may express different behaviors given the same stimulus in differing culture contexts This is explained by a paradigm described by Segal et al (1993), containing multiple culture sets, four of which they include in their model: National Culture, Regional/Familial subculture, Business Culture, and Business Firm Organizational Culture Successful interaction within each context requires a different set of expected behaviors There is a real cost associated with misunderstandings that can occur when the individuals involved not share the same behavioral expectation set or understand the values motivating the specific response It is difficult to build the trust required between two parties to form an exchange relationship (whether lasting or short-term in nature), and as a result, firms can suffer a reduction in sales; market share; and more importantly, failure to form lasting relationships that are important in successful strategic alliances It is quite difficult to repair a relationship once the miscommunications occur and over time mistrust can develop that result in relationship failure Cultural Values Defined in a Business Context Hofstede (1980, 2001) is the most recognized researcher to utilize measures of culture that were defined in a business context Hofstede was the first to provide strong empirical support for the existence of four previously theorized dimensions of culture; individualism/collectivism, masculinity/femininity, uncertainty avoidance, and power distance, utilizing data collected in 1967-1973 from a single multinational firm’s employees Later studies identified the long-term time orientation or Confucianism dimension, (Bond and Hofstede, 1988) Most of the subsequent studies in marketing and management utilizing CVDs not measure the dimensions in their collection of data, but rely on either Hofstede's (1980) placement of countries on his dimensions, or intuition, to choose samples for comparison Differences in behavior, beliefs, and preferences are then attributed to the country's position on the dimension in relation to the comparison country Care is usually taken to attribute only those behaviors that meet the definition of the dimension under study, however, few studies attempt to measure the degree to which the sample conforms to the dimensions themselves According to Earley and Gibson (1988), this practice is not acceptable We need to be able to precisely measure when cultural effects will manifest themselves in a specific work behavior There are some notable criticisms of the Hofstede studies Those criticizing Hofstede's research not fault the existence of the cultural dimensions Rather, they focus on: the representativeness of the sample (Hunt 1981; Shackleton and Ali 1990); the validity of the claims made by Hofstede concerning the application of the dimensions (Triandis 1980); and the ethnocentrism of the items used to measure the dimensions (The Chinese Culture Connection 1987) Most important is the recognition of the weakness of the items' ability to serve as a set of measures for the dimensions identified The most troubling criticism comes from Hofstede himself who states "Obviously, these items from the IBM questionnaire not totally cover the distinction between [the four identified dimensions] in society They only represent the issues in the IBM research that relate to this distinction", (Hofstede 1991 p 52) Given this, researchers recognize the usefulness of a set of culture measures, as well as data that will allow for the comparison of cultures Hofstede's measures continue to be used despite the problems associated with their use, because a viable alternative has yet to be developed Schwartz (1997) has developed a measure of culture that is gaining recognition in the literature, its' focus is on broad societal culture values, and does not define the behavioral expectations as those values manifest themselves in a given context A set of measures is needed that can capture cultural differences as they manifest themselves in a business environment The measures should be carefully constructed in order to provide even coverage of the dimension of study and distinguish between the dimensions This paper will present a framework integrating national culture value dimensions in a strategic decision making context Building on the previous empirical advances and existing theory, this paper will step by step lay out the process followed in the framework's development, and present sample propositions Cultural Value Dimensions Social-psychology research into the national character and modal personality of many countries has led to the identification of Cultural Value Dimensions (CVDs) within all cultures As a result of these findings, CVDs, or value orientations, are conceptualized as being universal in that they have meaning across cultures, albeit with varying levels of salience in each This allows for the comparison of cultures according to their relative positions on a particular dimension A literature search encompassing cultural anthropology, sociology, and social-psychology resulted in the identification of twenty empirically derived CVDs Table contains a complete listing of these CVDs and the source of their derivation A review of Table indicates that the CVDs cover a wide spectrum of human behavior Twenty address interpersonal interactions and three address time orientation The other four dimensions seem to be uniquely defined and narrowly focused Selection of the CVDs The goal of this study is to impart a business context to widely postulated societal CVDs, in order to better understand how culture manifests itself in a business setting Starting with the list of identified CVDs in Table 1, the second step in the process was to select a subset for further evaluation and operationalization Criteria proposed by Clark (1990) and originating with Inkeles and Levinson (1969) for the selection of dimensions were followed The dimension had to be important to strategic decision making, and business relationships, either those involving economic exchange or those involving multiple business units of the same organization Second, there had to be considerable evidence that the dimension was meaningful across cultures and susceptible to intercountry variation An extensive listing of the research that has been conducted utilizing cultural value dimensions was collected in order to establish evidence of the CVDs salience The studies chosen for inclusion are empirical and either establish the existence of the dimensions across cultures or focus upon measurement of the dimensions on managerial/worker populations They include work conducted in cultural anthropology, social psychology, and marketing and management disciplines and focus on measurement development of CVDs Most recently, work by Schwartz (1994); Schwartz & Ros (1995) and Steenkamp (2001) has provided strong empirical evidence (using a differing approach and methodology) of a set of dimensions overlapping those that resulted from Hofstede's (1980) research This research has shown that from a business context as well as societal context that the same set of CVDs has resulted Based upon the above stated criteria and supporting evidence the following five cultural value dimensions chosen for further study: Individualism/Collectivism, Logic/Emotion, Equality/Hierarchy, Uncertainty Avoidance, and Time Orientation The reason for this winnowing of CVDs was that it is not practical to develop and administer all of the cultural value dimensions in a single study However, it is important to include a number of dimensions in the study Researchers recognize the dangers of relying on a single dimension of culture (Hofstede 1980; Triandis 1994) In fact based upon the large number of studies focussing exclusively on the Individualism/Collectivism dimension, Earley and Gibson (1998) went so far as to recommend a moratorium on research on Individualism/Collectivism, and, that at a minimum, additional cultural factors be incorporated into research within an international context Placing CVDs in a Business Context The goal is to contextualize the CVDs in order to measure their effect upon decision making in a firm Traditional organizational culture variables include rituals, heroes, etc and are utilized to measure how certain behavioral expectations come to be utilized by a culture group The CVDs are not attempting to measure how culture is formed, or how it is utilized to control behavior within an organization The CVDs are attempting to identify how culture differentiates the manner in which a person would interact with an outsider to the organization or group, evaluate information, and make decisions important to him/herself or home organization As such, the variables need to measure the context of an individual and their decision making in regard to others and the information they provide Evidence collected in a literature review canvassing business, social psychology, and psychology journals was used to identify the findings of studies pertaining to the salience of the CVDs in a business decision making context The constructs selected had to be central in identifying the way in which decisions are made in a firm, persons interact with others (in- group or out-group), and relevant to the interaction of parties in an exchange relationship Second, the constructs had to have substantial support in the literature as to the salience of each of the five selected CVDs in explaining differences observed in the construct across cultural groups The resulting CVD indexes are unique in their context, method of measurement, and level of measurement They were operationalized in a business context instead of a broad societal context Each item addressed a particular business situation and required the respondent to answer according to his or her preferred behavioral action The responses allow a behavior pattern to be mapped for each individual respondent, or group of respondents The five CVD indexes are defined and operationalized in a comparative manner They each have seven items addressing the same seven business situations This lends some ability to view the five CVD indexes as a set of measures that define a culture's set of expected behaviors within a particular business context The process to develop the framework in the strategic decision making context can be applied to select and place a set of CVDs into any context defined by the researcher The strategic decision making CVD indexes provide a usable set of measures Many measures of culture cannot be measured at the level of the individual respondent Hofstede's measures, for example, are collected at the individual level but are calculated at the group level This results in every individual within the group receiving an identical cultural value score Theoretically, this approach has support as culture is a group phenomena However, it greatly limits the ability to identify sub-cultures or to evaluate the range of individual variation within a single cultural group, as culture groups must be decided a priori Other measures of culture rely heavily upon societal behavior situations instead of focussing the measurement upon a business context It is important to recognize the very different set of behavioral expectations that exist in a business context from the expected behavior of that same individual outside a business interaction The cultural value dimensions are grounded in theory This study provided a framework for item generation that resulted in focusing all five CVDs on the same specific context By focussing the items in this manner, it is possible to explain a complete set of behavior patterns within a particular cultural value orientation Viewing the five dimensions as a set provides depth of understanding that is often unavailable in studies focussing upon a single cultural value dimension The CVDs interact and behavior is a result of that interaction The framework can be used in the development of items to measure many other behavioral contexts It provides equal coverage of the context and equal emphasis on each dimension The development of these measures as well as the information they provide may prove to be a useful tool in understanding where cultural differences are occurring within a firm and between two partner firms The information could facilitate interaction as well as aid in the process of documenting change over time It is also possible that the measures could prove useful in defining environments for success within various industries or market conditions The measures can be calculated at the level of an individual allowing for cultural sub-groups to be readily identified, thus reducing reliance upon pre-determined geographic or organizational boundaries The CVD measures are early in their development The next step is testing the measures on known culture groups to begin the validating process for the measures TABLE 1: CATEGORIZATION OF CVD's IDENTIFIED IN THE LITERATURE Category Subcategory ORIGINAL CULTURAL VALUE DIMENSION SOURCE Relational Orientation Kluckhohn & Strodtbeck (1961 p 17-20.) Self-Orientation/ Collectivity Orientation Parsons & Shils (1962 p 248) Individualism/collectivism Hofstede 1980; 1991 p 51 Universalism/ Particularism Universalism/ Particularism Parsons & Shils (1962 p 248) Logic/Emotion Need for Affiliation McClelland (1961) Affectivity/ Affective Neutrality Parsons & Shils (1962 p 248) Masculinity/ Femininity Hofstede 1980; 1991 p.81-82 Specificity/Diffuse Diffuseness/ Specificity Parsons & Shils (1962 p 248) High/Low Context High and Low Context Hall (1976a) Equality/ Hierarchy Ascription/ Achievement Parsons & Shils (1962 p 248) Need for Achievement McClelland (1961) Need for Power McClelland (1961) Power Distance Hofstede 1980; 1991 p 28 Work Centrality England & Misumi 1987 p 402 Ambiguity Orientation Uncertainty Avoidance Hofstede 1980; 1991 p 113 Human Nature Orientation Human Nature Orientation Kluckhohn & Strodtbeck (1961 p 11-12.) Interaction With Nature Orientation Man-Nature Orientation Kluckhohn & Strodtbeck (1961 p 13) Time Orientation Time Orientation Kluckhohn & Strodtbeck (1961 p 13-15.) Monochronic/ Polychronic time Monochronic and Polychronic time Hall (1976b) Activity Orientations Activity Orientation Kluckhohn & Strodtbeck (1961 p 15-17.) 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