In the context of the increasing globalization and internationalization of business and trade, companies and organizations give high importance to international business negotiation as a way to reach new markets and develop their operations. An international business negotiation is defined as the purposeful or intentional interaction between two or more social entities (with a least one business structure) coming from different countries with the aim of setting or rearranging their interrelationship in a business matter such as B to B, company and government and interpersonal business relationships (Weiss, 1993:270).In this perspective, culture differences awareness is key to a successful negotiation: as culture determines the way of communicating of people, it determines by the same way their way of negotiating( Zhang and Zhou,2008). In this essay, I will try to cover the culture differences by reviewing Hofstede's theory and its limits and mirroring and comparing his ideas and insights to other authors.
Geert Hofstede is a Dutch psychologist who have worked for over 2 decades to figure out how cultural differences are able to impact cross-cultural negotiations. He conducted a research to see how values in the workplace are influenced by culture. He analyzed a database of answers to questions about values of employees of the multinational corporation IBM between 1967 and 1973.The data was collected from around 117000 surveys comparing the answers of 88000 respondents from 66 different countries and 50 different professions (Hofstede,1983a). Following his first study, Hofstede identified four main cultural dimensions distinguishing countries and that the bargaining parties should take into consideration in the process of an international business negotiation. They are power distance index, uncertainty avoidance index, individualism index and masculinity index (Hofstede,1980).
The power distance index measures the level of acceptance by subordinates of the existence of hierarchy in the power system and their tolerance degree of an unequal distribution of power. In high power distance countries like Arab countries, managers and subordinates are treated unequally while they deserve the same treatment in a low power distance country like Austria. Uncertainty avoidance, in the other hand, represents a nation tolerance to unpredictability and ambiguous situations or to what extent a country feels comfortable when the future is unknown. Thus, in high uncertainty avoidance countries like Greece, there are strict laws and rules while the low uncertainty avoidance countries like Singapore tend to be laxer and more lenient. The third dimension is the individualism index and represents the extent to which the individual is group oriented. In this perspective, a high individualistic society like the American society expect from the individual to only take care of himself and his immediate family while a collectivistic society like the Chinese one expects from the individual to give priority to the group interests over the personal interests and is based on a strong integration of the individual in the group. The fourth dimension that Hofstede talks about in culture's consequences is the masculinity index which measures the degree of a nation's valuing of masculine ideals such as individual achievements, competitiveness and material success over feminine culture which prioritize relationships and quality of life. (Hofstede,1980,2001)
Later, Hofstede proposed two other cultural dimensions in the 1990s in collaboration with Drs Michael H. Bond and Michael Minkov which are respectively long versus short term orientation and indulgent versus self-restraint dimensions.
The long versus short term orientation dimension was added as a result of criticism by Asian scholars because the IBM work didn't cover the differences of way of reasoning between Eastern and Western countries (West bias). Thus, Hofstede joined Bond in the Chinese value survey which collected data from 23 countries with the objective of embracing Confucius effect on Eastern countries. He defined this new dimension as follow : "Long Term Orientation stands for the fostering of virtues oriented towards future rewards, in particular, perseverance and thrift. Its opposite pole Short Term Orientation stands for the fostering of virtues related to the past and present, in particular, respect for tradition, preservation of 'face,' and fulfilling social obligations" (Hofstede, 2001, p. 359).
The sixth and last dimension resulted from the collaboration with the Bulgarian sociologist Michael Mingov and measures the degree to which a nation gives importance to human fundamental needs and the freedom to satisfy them. In this perspective, indulgent societies like in Mexico or Australia will highly value leisure time and freedom of expression and speech while restrained societies like Russia will tend to regulate this satisfaction of human desires by the use of rules.(Hofstede, Hofstede & Minkov, 2010: 281)
Hofstede work contributed a lot to explore the cultural differences that an international business negotiator should take into account in the negotiation process but the model has some flaws and limitations.
The methodology used by Hofstede was questioned by several authors such as McSweeney. The first survey used to identify the four original cultural dimensions was meant to examine IBM's employees' perception of their work place. Thus, it is inconsistent to use its results to analyze cultural differences of nations in a broader way. Moreover, the sample used is kind of poor because from the 66 countries that answered the survey, the data of only 40 countries was used and only 6 countries had over 1000 respondents. The response of a few people can't be representative of a whole country's population. Similarly, IBM's sample can't represent all the cultures opinions (McSweeney, 2002).
Some authors criticized Hofstede work by saying that he contributed to a hidden form of Western ethnocentrism. In fact, the cultural dimensions as defined by him establish a certain hierarchy of countries, a more favorable ranking to Anglo-Saxons countries who appear to be more modern and a less favorable position to Asian and African countries who appear to be lagging behind. (Fougí?re Moulettes 2005, Ailon 2008)
Moreover, it was argued that the use of nations to determine cultural differences is not relevant since a same country can have different cultures and ethnic groups and since culture is not limited to national boundaries (McSweeney,2000).
The choice of cultural dimensions is also subject to debate. In fact, apart from the six dimensions that he proposed, there are other levels and other factors of culture differences assessment (Ailon,2008). Scholars like Hall and Trompenaars came up with new cultural dimensions and the discussion of their academic contribution to the subject is interesting.
Hofstede and Trompenaars framework have some similarities. While Hofstede talks about individualism versus collectivism, Trompenaars talks in a more detailed way about individualism versus communitarianism and particularism versus universalism which respectively means importance of the individual over the group and vice versa and importance of the rules over the relationships and vice versa. But Trompenaars brought also the neutral versus emotional dimension as the degree of acceptance by societies of expressing emotions, the achievement versus ascription dimension ( what matters is your work and achievement or you as a person with a position), specific versus diffuse ( link or separate personal and professional life) measuring the degree of importance of a good relationship for a successful group work, sequential versus synchronous time(doing task by task versus human multitasking and flexibility) and inner-directed versus outer-directed or to what extent people think that they are dominating or being dominated by the environment. (Trompenaars & Hampden-Turner, 1997, pp. 8-10).
Similarly, Edward Twitchell Hall contributed with his own framework to determine cultural differences. As Trompenaars, he came up with the monochronic time versus polychronic time cultures which resembles sequential versus synchronous time dimension but also with two new cultural factors. High context versus Low context societies which stresses on the difference between cultures where the communication process is done in an indirect way and where the use of body language is dominant and cultures of low context where communication is done in an explicit and argumentative way and a lot of information should be given. He also developed the concept of high territoriality versus low territoriality to distinguish cultures where people are highly concerned about owning their personal space from cultures where people tolerate the sharing of space. (Hall E.T,1959,1966,1976,1983,1985,1990).
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