Lecture 3

Question 1

What is culture?

Answer 1

The collective programming of the mind which distinguished the members of one category of people from another

Question 2

What can a “category of people” in the definition of ‘culture’ refer to?

Answer 2

Nation, region, or ethnic group (national etc. culture)
Women versus men (gender culture)
Old versus young (generational culture)
A social class
A profession or occupation (occupational culture)
A type of business
A work organization or part of it (organizational culture)
Family

Question 3

What are 2 types of research and what do they entail?

Answer 3

Etic: quantitative, outside-in, “objective” –> comparativist researchers attempt to describe differences across cultures in terms of general, external standards (comparing cultures)
Emic: qualitative, inside-out, “subjective” –> ethnographic researchers strive to describe a particular culture in its own terms, focused on specific, “unique” characteristics of culture

Question 4

Etic research - Hofstede: what 4 ways do employees vary across cultures?

Answer 4

Dependence on superiors
Need for rules and predictability (associated with nervous stress)
Balance between individual goals and dependence on the company
Balance between ego values (need for money and careers) and social values (cooperation and good living environment)

Question 5

Etic research - Hofstede: what 6 dimensions can a culture be scored upon

Answer 5

Power distance
Uncertainty avoidance
Individualism - collectivism
Masculinity - femininity
Long-term versus short-term orientation
Indulgence versus restraint

Question 6

Explain power distance (Hofstede’s 6 dimensions)

Answer 6

The extent to which the less powerful members of organizations and institutions accept and expect that power is distributed unequally (Western world has low power distance = demand justification for inequalities of power)

Question 7

Explain individualism vs collectivism (Hofstede’s 6 dimensions)

Answer 7

Individualism: loosely-knit social framework in which individuals are expected to take care of only themselves and immediate family (Western world)
Collectivism: tightly-knit social framework in which individuals expect their relatives or members of a particular ingroup to look after them in exchange for unquestioning loyalty

Question 8

Explain masculinity vs femininity (Hofstede’s 6 dimensions)

Answer 8

Masculinity: societal preference for achievement, heroism, assertiveness, and material rewards for success (more competitive)
Femininity: societal preference for cooperation, modesty, caring for the weak and quality of life (more consensus-oriented)

Question 9

Explain uncertainty avoidance (Hofstede’s 6 dimensions)

Answer 9

The degree to which the members of a society feel uncomfortable with uncertainty and ambiguity
Strong: rigid codes of belief and behavior, and intolerance of unorthodox behavior and ideas
Weak: more relaxed attitude in which practice counts more than principles

Question 10

Explain long-term vs short-term orientation (Hofstede’s 6 dimensions)

Answer 10

Attitudes toward time, work, reward, and life
Long-term: focus on persistence, long-term future rewards (as opposed to immediate gains), and long-term relationship building
Short-term: values more on the past and present than future and focuses on achieving quick results/rewards and spending (rather than saving)

Question 11

Explain indulgence vs restraint (Hofstede’s 6 dimensions)

Answer 11

Indulgence: a society that allows relatively free gratification of basic and natural human drives related to enjoying life and having fun
Restraint: a society that suppresses gratification of needs and regulates it by means of strict social norms

Question 12

What are criticisms of Hofstede’s 6 cultural dimensions?

Answer 12

Data collection procedure and sample has been questioned on grounds of representativeness
Empirical work has shown individualism versus collectivism and power distance versus closeness are one factor, with individualism and power distance merging in one single pole
The temporal stability of the scores on Hofstede’s cultural dimensions is increasingly questioned
Is national culture the correct unit of analysis?

Question 13

What 2 dimensions did Inglehart find in his World Values Survey program? (etic research)

Answer 13

Traditional versus rational-secular authority
Survival versus self-expression values

Question 14

Beugelsdijk & Welzel summarize Inglehart and Welzel (2005) “revised theory of modernization” (think about maslow’s hierarchy of needs” - what do they find about people’s needs?

Answer 14

When both security and freedom are in short supply, people prioritize security
As people feel safe, they begin to prioritize freedom because freedom is essential to thrive

Question 15

In 2018, Beugelsdijk & Welzel review Hofstede and Inglehart’s studies. They find new dimensions. What are they?

Answer 15

Collectivism versus individualism
Duty versus joy (correlates with indulgence versus restrain and long-term orientation)
Distrust versus trust (reflect uncertanity avoidance)

Question 16

What of Beugelsdijk and Welzel (2018) latest dimensions are strongly correlated to wealth (GDP/capita)?

Answer 16

Collectivism versus individualism
Duty versus joy

Question 17

Over time, countries predominantly tend to shift towards which of Beugelsdijk and Welzel’s (2018) latest dimensions?

Answer 17

Individualism, joy, distrust

Question 18

What are benefits of cultural distance?

Answer 18

When organizations embrace cultural diversity they can:
- Overcome rigidities and inertia, develop unique and potentially valuable capabilities, and foster learning and innovation
- Pay greater attention to cultural sensitivities and be better prepared to navigate the cultural quagmires in the context of cross-border mergers and acquisitions
- Have heightened levels of creativity, greater adaptability, and higher quality of problem-solving

Question 19

What is Amae?

Answer 19

An emic concept in the Japanese culture, indicating a particular form of mutual dependency:
- Has important implications for hierarchical relations
- The superior has the moral obligation to indulge the subordinate under specific circumstances
- In return the subordinate is unquestionably loyal
- Can be seen as a safety valve in the strictly hierarchical Japanese society
- A particular manifestation of collectivism: without amae there cannot be a meaningful group in Japan
- Also related to power distance and paternalism

Question 20

What are institutions (institutional economics)?

Answer 20

Humanly devised constraints that structure human interaction, and these can be formal (e.g. rules and laws) or informal (e.g. norms of behaviors) –> “the rules of the game”

Question 21

What are institutions (neo-institutionalism view)?

Answer 21

Regulative, normative, and cognitive social structures that provide stability and meaning to social life

Question 22

What are institutions (Hofstede, Van Deusen, Mueller, and Charles)?

Answer 22

Crystallizations of culture, and culture is the substratum of institutional arrangements

Question 23

What is Zhou and Guillen (2016) view on institutional distance?

Answer 23

Institutional distance drives liability of foreignness, which is “all additional costs a firm operating in a market overseas incurs that a local firm would not incur” (product adaptation costs, discrimination costs, governance costs, appropriation costs)

Question 24

What is Zhou and Guillen (2016) view on the decision to invest internationally (3 dimensions)?

Answer 24

The decision to invest internationally and the impact of the investment reflect the joint effects of ownership (O-specific), location (L-specific), and internalization (I-specific) advantages

Question 25

Explain O-specific advantages, their corresponding cost, the corresponding distance, and the most important reason(s) for FDI/internationalization

Answer 25

O-specific advantage arises from multinationals’ ownership of, or access to, a set of income-generating assets, or capabilities to coordinate these assets, in a way that benefits them relative to their competitors (FSAs)
Product adaptation costs
Market-seeking
Cultural distance, economic distance, demographic distance

Question 26

Explain L-specific advantages, their corresponding cost, the corresponding distance, and the most important reason(s) for FDI/internationalization

Answer 26

L-specific advantages refer to specific resources and market conditions of a host country that are potentially available to all firms
Discrimination costs
Efficiency-seeking and strategic asset-seeking
Political distance

Question 27

Explain I-specific advantages, their corresponding cost, the corresponding distance, and the most important reason(s) for FDI/internationalization

Answer 27

I-specific advantage reflects the greater organizational efficiency or superior incentive structure of hierarchies, or the ability to exercise monopoly power over the assets under common governance
Governance cost and appropriation cost
Efficiency-seeking and strategic-asset seeking
Administrative distance, political hazard