A Cross Cultural Comparison of Business Goals Brett L. Scarlett

Working Paper Series A Cross Cultural Comparison of Business Goals Brett L. Scarlett School of Management ISSN 1038-7448 No.WP 99/1 (July 1999)

A Cross Cultural Comparison of Business Goals Brett L. Scarlett School of Management ISSN 1038-7448 No.WP 1/99 (July 1999) Brett Scarlett is currently doing his PhD in Business at the School of Management. He can be contacted as follows: Phone: 0416 108 222 Email: blscarlett@hotbot.com

Abstract The international coordination of this cross-cultural research project about business goals is being managed by Professor Geert Hofstede. Professor Hofstede designed the questionnaire and has assembled the data from all participating countries. The same questionnaire has been applied to groups in Australia, France, Germany, Hong Kong, the Netherlands and the USA. Using MBA students in each country for the survey has ensured the similarity of the populations in each country. The author of this working paper applied the survey instrument and tabulated the data for Australia where the population was RMIT University MBA students. This working paper compares the business goal data from each of the countries. This provides an opportunity to specifically focus upon a cross-cultural comparison of the importance given to particular business goals. The data for Australia, France, Germany, Hong Kong, the Netherlands and the USA is presented graphically for each business goal. The graphical presentation supports a discussion of the business goal data in relation to Hofstede s cultural dimensions: Power Distance; Individualism; Masculinity and Femininity; Uncertainty Avoidance; and Long-term Orientation. In addition, where appropriate, the data for particular business goals is compared with that for one or more of the other business goals. The comparison of each business goal with Hofstede s cultural dimensions and with other business goals develops potential cross-cultural interpretations and explanations for the business goal data. These interpretations and explanations are based on the cross-cultural standard score differentiations evident in the questionnaire survey data together with the ANOVA procedure outcomes for each of the business goals. The following research questions are addressed by the analysis: To what extent does national culture influence the importance placed upon specific organisational effectiveness objectives? Does national culture have a greater influence on the importance placed upon nonfinancial organisational effectiveness objectives than on financial organisational effectiveness objectives? To what extent does national culture influence the interpretation of organisational success? 1

Acknowledgements International Geert Hofstede Institute for Research on Intercultural Cooperation France Jean-Claude Usunier Univeristé Louis Pasteur Germany Anthony Lee European Business School Hong Kong Geert Hofstede Institute for Research on Intercultural Cooperation Netherlands Niels G Noorderhaven Tilburg University USA Robert Doktor University of Hawai i at Mãnoa 2

Introduction The objective of Enterprise Effectiveness: a cross-cultural study is to examine the impact of national culture on organisational effectiveness objectives and on the interpretation of success. The research questions are: To what extent does national culture influence the importance placed upon specific organisational effectiveness objectives? Does national culture have a greater influence on the importance placed upon nonfinancial organisational effectiveness objectives than on financial organisational effectiveness objectives? To what extent does national culture influence the interpretation of organisational success? This working paper reports on a cross-cultural comparison of business goals. The data is from Australia, France, Germany, Hong Kong, the Netherlands and the USA. An overview of the theoretical background Hofstede (1994) defines culture as "...the collective programming of the mind which distinguishes the members of one group or category of people from another". Clearly, he intends the definition of culture to imply that a differentiator between social groups can be found by contrasting each groups' learned representation of symbols, heroes, rituals and values. Hofstede's (1980) IBM study and his subsequent analysis of this landmark cross-cultural survey, developed and defined such differences as the dimensions of culture: power distance, collectivism versus individualism, femininity versus masculinity and uncertainty avoidance. Hofstede (1994) credits Michael Harris Bond and The Chinese Culture Connection with the identification of what Hofstede recognises as the fifth dimension of culture. That is, long-term versus short-term orientation. This latter dimension was only identified when Hofstede's research was reconstructed and administered with the extensive involvement of Chinese researchers deliberately creating a non-western bias (Hofstede & Bond, 1984; The Chinese Culture Connection, 1987). These five dimensions of culture are used by Hofstede (1994) to measure the differences between cultures. 3

Power distance Power distance reflects how a culture deals with the fact that people are unequal. The term power distance is derived from Mulder's (1976, 1977) research into the emotional distance between subordinates and their supervisors. Hofstede (1994) defines power distance as the: "...extent to which the less powerful members of institutions and organizations within a country expect and accept that power is distributed unequally". 70 60 50 40 30 20 10 0 Australia France Germany FR Hong Kong PDI score (100) Netherlands USA Figure 1 Cultural dimension: power distance High power distance (PDI) values indicate a national culture where there is a significant degree of dependence by subordinates on their supervisors and where there is a wide emotional gap between them. Occupation and education must be considered here. A country's power distance index applies most to middle and high status employees in national cultures where there is limited dependence of subordinates on supervisors. That is, where the emotional distance between subordinates on supervisors is relatively small. Lower status, lower educated employees almost always hold more authoritarian values and so are less affected by the power distance dimension of their national culture. 4

Individualism The cultural dimension of individualism versus collectivism reflects how a national culture deals with the power of the group over the individual. Hofstede (1994) defines individualism and collectivism as follows: "Individualism pertains to societies in which the ties between individuals are loose: everyone is expected to look after himself or herself and his or her immediate family. Collectivism as its opposite pertains to societies in which people from birth onwards are integrated into strong, cohesive groups, which throughout people's lifetime continue to protect them in exchange for unquestioning loyalty". 100 90 80 IDV score (100) 70 60 50 40 30 20 10 0 Australia France Germany FR Hong Kong Netherlands USA Figure 2 Cultural dimension: individualism High individualism (IDV) values indicate a national culture where there is a significant degree of individualism tolerated or even encouraged. In the work environment, highly individualistic cultures have an emphasis on personal time, freedom and challenge these cultures emphasise tasks over relationships. The cultural dimension of individualism versus collectivism can be particularly relevant to this research. For example, consider the importance of return on investment relative to the Indonesian concept of return on favours (Hofstede, 1994; Vroom, 1981). 5

Gender: masculinity versus femininity Gender role models are a cultural differentiator. Hofstede (1994) defines the masculinity versus femininity cultural dimension as follows: "...masculinity pertains to societies in which social gender roles are clearly distinct (ie, men are supposed to be assertive, tough, and focused on material success whereas women are supposed to be more modest, tender, and concerned with the quality of life); femininity pertains to societies in which social gender roles overlap (ie both men and women are supposed to be modest, tender, and concerned with the quality of life)". 70 60 50 40 30 20 10 0 Australia France Germany FR Hong Kong MAS score (100) Netherlands USA Figure 3 Cultural dimension: masculinity and femininity High masculinity (MAS) values indicate a national culture where there are significant distinctions between gender roles, one which stresses equity, competition and performance. The manager in the masculine culture will seek to resolve conflicts by fighting them out. Whereas the manager in the feminine culture will seek conflict resolution through compromise and negotiation (Hofstede, 1994). 6

Uncertainty avoidance Hofstede (1994) defines the fourth cultural dimension, uncertainty avoidance, as: "...the extent to which the members of a culture feel threatened by uncertain or unknown situations". 90 80 70 UAI score (100) 60 50 40 30 20 10 0 Australia France Germany FR Hong Kong Netherlands USA Figure 4 Cultural dimension: uncertainty avoidance High uncertainty avoidance (UAI) values indicate a national culture where there is a significant need by its members for predictability, for written and unwritten rules. The concept of uncertainty can be equated to diffuse feelings of anxiety. The need to avoid uncertainty leads people to seek structure in their organisations, to make events more predictable, to believe in experts and specialisation. Long- versus short-term orientation Long- versus short-term orientation is the fifth dimension of national culture identified by Hofstede (1994). Long-term orientation is also referred to by Hofstede as Confucian dynamism and a correlation between certain Confucian values and economic growth is suggested. Hofstede labels the Confucian values of persistence (perseverance); ordering relationships by status and observing this order; thrift and having a sense of shame as being representative of long-term orientation they have a sense of the future and a dynamism. Whereas, the opposite values, representative of 7

short-term orientation, have more of a sense of the past or the present and are more static: personal steadiness and stability; protecting one's face; respect for tradition; reciprocation of greetings, favours and gifts (Hofstede, 1994; Hofstede & Bond, 1984; The Chinese Cultural Connection, 1987). Hofstede (1994) believes that Confucian dynamism or long-term orientation can be interpreted as: "...dealing with a society's search for Virtue". 100 90 80 LTO score (100) 70 60 50 40 30 20 10 0 Australia France Germany FR Hong Kong Netherlands USA Figure 5 Cultural dimension: long-term orientation 1 High long-term orientation (LTO) values indicate a national culture where there is a significant sense of the future. The culture with a short-term orientation will be concerned with the possession of Truth what one believes. Concern with respecting the demands of Virtue societies where what one does is important are those considered to have a long-term orientation. 1 The Long-term Orientation score for France (31) used here is based on an estimate provided by Professor Hofstede. It is the same score as for Australia and Germany. 8

Layers of culture It is generally accepted that most people have several layers of culture they often belong to a number of different social groups or categories of people simultaneously. These cultural layers may be based upon national, regional, ethnic, religious, linguistic, gender, generational, social class or corporate affiliations. Hofstede's (1994) layers of culture are shown in Table 1. Cultural level National Sub-national Gender Generation Social class Corporate Description The culture of one's country or countries. The culture of one's geographic region, religion, ethnic or linguistic affiliation. The culture of one's sex, whether one was born as a girl or a boy. The culture of one's generation, that which separates grandparents, parents and children. The culture associated with one's education and occupation. The culture associated with one's socialisation at work. Table 1 Hofstede's (1994) Layers of culture According to Hofstede (1994), at the core of a culture are values. The more superficial aspects of a culture are its practices symbols, heroes and rituals. People acquire their values at a very early age, often one's values are learned implicitly and remain only within the unconscious. Hofstede (1994) defines values as "...broad tendencies to prefer certain states of affairs over others". He believes that values account for the main cultural differences between nations and that it is this fundamental basis that ensures that the impact of national culture is profound. An overview of the survey approach The international coordination of this cross-cultural research project about business goals is being managed by Professor Geert Hofstede. Professor Hofstede designed the questionnaire. This instrument was then applied to MBA groups in Australia, France, Germany, Hong Kong, the Netherlands and the USA. 9

The layers of culture, as discussed above, highlight the potential for variables other than national culture to influence the outcome of this business goals study. Using MBA students in each country for the survey has provided some similarity in the populations for each country-group. That is, the approach adopted has minimised the influence of variables other than national culture. In particular, population differences in gender balance, generation and social class are minimised. The survey questions (Appendix I) relate to particular business goals. Respondents were asked to indicate the importance placed upon each of the identified business goals: Continuity of the business. Creating something new. Family interests (like jobs for relatives). Game and gambling spirit. Growth of the business. Honour, face, reputation. Patriotism, national pride. Power. This year s profits. Profits 10 years from now. Respecting ethical norms. Responsibility towards employees. Responsibility towards society in general. Staying within the law. Personal wealth. The questionnaire is segmented into three parts: Questions 1-15 are the respondents perceptions of the typical successful business person in your country in relation to the identified business goals. Questions 16-30 represent a personal choice by the respondents in relation to the identified business goals. Questions 31-35 are the demographic questions. The author of this working paper applied the survey instrument and tabulated the data for Australia where the population was RMIT University MBA students. Professor Hofstede then assembled the data from Australia and the other participating countries: France, Germany, Hong Kong, the Netherlands and the USA. This working paper compares the data from all participating countries and specifically focuses upon a cross-cultural comparison of the importance given to particular business goals as represented by the personal choices made by the respondents. 10

An overview of the analysis The analysis is primarily based on the cross-cultural standard score differentiations evident in the questionnaire survey data together with the ANOVA procedure outcomes for each of the business goals. In the sections below, the data for Australia, France, Germany, Hong Kong, the Netherlands and the USA is presented graphically for each business goal. Hofstede s data for the cultural dimensions Power Distance; Individualism; Masculinity and Femininity; Uncertainty Avoidance; Long-term Orientation is compared with the data from this survey of business goals. The intent of this comparison is to consider the extent to which the cultural dimensions explain the differences in the importance given to particular business goals amongst the six country-groups. In addition, where appropriate, the data for a particular business goal is compared with one or more of the other business goals. 11

Characteristics of the respondents There are 670 respondents in total. This includes respondents from Australia, France, Germany, the USA, Hong Kong and the Netherlands. Age How old are you? Table 1 provides an indication of the age of the respondents. For the citizens of each country surveyed, the data is represented here as percentages showing those under 30 years of age. Overall, the data indicates that 55% of respondents are 31 years of age or older. However, there are notable differences. For example, most of the Australian respondents are 31 or older whereas all of the German respondents are less than 30 years of age. % Less than 30 years Australia 29 France 31 Germany 100 USA 75 Hong Kong 55 Netherlands 15 Total 45 Table 2 Age data 12

Gender Are you male or female? Table 2 provides an indication of the gender of the respondents. For the citizens of each country surveyed, the data is represented here as percentage male and percentage female. Overall, the data indicates that 76% of respondents are male. That the respondents are predominantly male is reasonably consistent for all the countries surveyed. However, the USA is close to a gender balance with 57% male and 43% female. % Male % Female Australia 73 27 France 82 18 Germany 69 31 USA 57 43 Hong Kong 77 27 Netherlands 85 15 Total 76 34 Table 3 Gender data Nationality What is your nationality and what was your nationality at birth? The survey gathered data based upon the respondents own view of their nationality and their nationality at birth. Clearly, these nationalities may be different due to relocation or formal change of citizenship. The total of 670 survey respondents includes 108 from Australia (93 Australian citizens, 15 other), 190 from France, 84 from Germany, 76 from the USA (61 US citizens, 15 other), 101 from Hong Kong and 111 from the Netherlands. 13

200 180 160 140 120 Number 100 80 60 40 20 0 Australia Australian citizens Australian others France Germany USA US citizens US other Hong Kong Netherlands Figure 6 Nationality data 2 The subsequent analysis of the survey data excludes respondents that claimed nationality other than for the survey country for which they responded. 2 Where respondents claimed nationality other than for the survey country for which they responded, the data has been represented here as citizens and others. This only applies for Australia and the USA. 14

A cross-cultural comparison of the respondents business goals Introduction The survey questions relate to particular business goals. In the first section of the questionnaire, respondents were asked about their views of a typical successful business person in their country. In the second section of the questionnaire, respondents were asked: Now suppose you will be a successful business person in a few years. How important will each of these [business goals] be for you personally? The cross-cultural comparison discussed below is based upon the respondents personal views in relation to the identified business goals 3. That is, based on the data gathered from the second section of the questionnaire. The data for each nationality for each of the identified goals is represented here as a standard score. The standard score has been calculated to eliminate response set: the tendency to rate all goals less or more important, or less or more extreme. As such, the standard scores can be compared across samples whereas the raw mean scores could not be. The standard score is calculated as the mean for the specific goal minus the overall mean for all 15 goals and divided by the standard deviation of the 15 mean scores around the overall mean. The most important score then has the lowest standard score (around -2.00). The signs have been reversed so as to be more intuitively acceptable for presentation here. So, the higher the score, the more importance placed on that goal. 3 The cross-cultural comparison of business goals discussed in this working paper is based upon the respondents personal views in relation to the identified business goals. That is, based on the data gathered from the second section of the questionnaire (Appendix I). The first section of the questionnaire asks respondents to rate the business goals for a typical successful business person. The Australian data for both the typical successful business person and the respondents personal views (ie both the first and second sections of the questionnaire) is presented and discussed in a separate paper (Scarlett, 1998). The extent to which either the respondents personal views or the respondents attributions to the typical successful business person better reflect national culture norms is a matter for consideration. Such consideration is outside the scope of this working paper. 15

Analysis of variance (ANOVA) The statistical significance of the cross-cultural differences in the business goal data for the 6 country-groups can be tested by an analysis of variance (ANOVA) procedure. The ANOVA procedure compares the variation among the means of the 6 countrygroups with the variation within the groups. The derived P-values are all very small and are stated here as being less than 0.0001. The derived F statistics are all greater than 18.44 and range up to 79.78. As such, since the variation in the means is much larger than expected by chance, the conclusion for all the business goals is that there is a statistically significant difference amongst the 6 groups. Table 4 below provides summary of the ANOVA procedure data. Business goal F Probability Value Ratio 4 Continuity of the business 18.44 4.13E-17 1.59 Creating something new 22.51 8.18E-21 1.51 Family interests (like jobs for relatives) 49.06 5.91E-43 1.24 Game and gambling spirit 26.73 1.47E-24 1.30 Growth of the business 30.20 1.45E-27 1.90 Honour, face, reputation 35.32 6.58E-32 1.49 Patriotism, national pride 79.78 6.63E-65 1.14 Personal wealth 31.42 1.28E-28 1.43 Power 38.44 1.78E-34 1.33 This year s profits 23.87 4.95E-22 1.20 Profits 10 years from now 35.02 1.16E-31 1.75 Respecting ethical norms 30.77 4.67E-28 1.45 Responsibility towards employees 29.01 1.54E-26 1.61 Responsibility towards society in general 30.27 1.26E-27 1.29 Staying within the law 30.34 1.12E-27 1.45 Table 4 ANOVA summary data 4 As the ratio of the largest standard deviation to the smallest standard deviation is less than 2 for all business goals, the statistical significance of the cross-cultural differences in the business goal data for the 6 country-groups can be tested by an analysis of variance (ANOVA) procedure. 16

The ANOVA procedure confirms that the score differences between the countrygroups, while small, are significant amongst the six populations for all 15 business goals. 17

Continuity of the business 1.6 1.4 1.2 Standard Score 1 0.8 0.6 0.4 0.2 0 Total Australia France Germany USA Hong Kong Netherlands Figure 7 Continuity of the business The data for the European countries of France, Germany and the Netherlands suggest somewhat more emphasis on continuity of the business than for the other countries: Australia, Hong Kong and the USA. This is most apparent for France and the Netherlands. Comparison of the data for this business goal with the data for Hofstede s cultural dimension of Uncertainty Avoidance indicates a similarity of scores. France, Germany and the Netherlands are more strongly risk averse than the other countries considered here. Professor Hofstede s country-level analysis 5 correlations by business goal with the cultural dimensions has confirmed there is a significant statistical correlation between Uncertainty Avoidance and the business goal of continuity of the business (Hofstede, 1998). 5 Here and throughout this paper, reference to Professor Hofstede s country-level analysis is a reference to his working papers for this business goals survey project (Hofstede, 1998). 18

Creating something new 1.2 1 Standard Score 0.8 0.6 0.4 0.2 0 Total Australia France Germany USA Hong Kong Netherlands Figure 8 Creating something new The data for creating something new does not appear to differentiate the European countries as much as does the data for continuity of the business. However, it is interesting to compare the data for continuity of the business with the data for creating something new. The data for France shows that the emphasis on continuity of the business is much greater than for creating something new. Whereas the data for the USA and the Netherlands indicate the reverse to be the case. For Australia, Germany and Hong Kong the continuity of the business and creating something new are given similar emphasis. Hofstede s Uncertainty Avoidance cultural dimension can explain, for France and both the USA and the Netherlands, the difference in emphasis on continuity of the business and the goal of creating something new. Hofstede s data for Uncertainty Avoidance indicates that France is far more risk averse than both the USA and the Netherlands. 19

Family interests (like jobs for relatives) 0-0.5 Standard Score -1-1.5 France Germany -2 Total Australia USA Netherlands -2.5 Hong Kong Figure 9 Family interests (like jobs for relatives) The data for France and Germany suggests some differentiation from the Netherlands, Australia, Hong Kong and the USA. However, generally, the data indicates that little importance is given to family interests (like jobs for relatives). Comparison of the data for this business goal with Hofstede s cultural dimension of Individualism indicates a similarity of scores with the stronger individualistic cultures of Australia, the USA and the Netherlands and also with the relatively less individualistic cultures of France and Germany. However, for Hong Kong, a comparison of the data for this business goal with Hofstede s cultural dimension of Individuality highlights an apparent inconsistency. That is, Hong Kong rates low for Individualism, or rather, is strongly collectivist; but the business goal data indicates that the Hong Kong respondents rate family interests (like jobs for relatives) of low importance. This apparent inconsistency for Hong Kong is discussed further in the context of the business goals responsibility towards employees and responsibility towards society in general. Professor Hofstede s (1998) country-level analysis correlations by business goal with the cultural dimensions has confirmed there is a significant statistical correlation between Uncertainty Avoidance and the business goal of family interests (like jobs for 20

relatives). His analysis neither confirms nor rejects the apparent correlation, as discussed immediately above, between Individualism and the business goal of family interests (like jobs for relatives) with Hong Kong as an exception. Appendix II has a series of tables comparing the rank order of importance of each business goal for each country. The business goal of family interests (like jobs for relatives) is consistently ranked last in importance. Three of the 6 countries have it last and the other 3 have it second last. This consistently low importance ranking belies the differentiation apparent in the cultural dimension of Uncertainty Avoidance. 21

Game and gambling spirit 0.4 0.2 Netherlands 0-0.2 Standard Score -0.4-0.6-0.8-1 -1.2 Total France Germany -1.4-1.6 Hong Kong -1.8 Australia USA Figure 10 Game and gambling spirit Generally, the data indicates that little importance is given to the pursuit of a game and gambling spirit. However, the data for France, Germany and the Netherlands suggests some differentiation from the other countries: Australia, Hong Kong and the USA. In particular, a comparison of Australia and the USA, both with standard scores of less than -1.6, with the Netherlands, which has a positive standard score of slightly more than 0.2, indicates a potentially significant differentiation. Comparison of the data for this business goal with Hofstede s cultural dimension of Uncertainty Avoidance indicates a similarity of scores, with France and Germany, the stronger Uncertainty Avoidance cultures. This comparison for the weaker Uncertainty Avoidance cultures of Australia, the USA and Hong Kong presents an interesting paradox: weaker Uncertainty Avoidance cultures appear to place less importance upon a game and gambling spirit than do the stronger Uncertainty Avoidance cultures. This is particularly evident in the case of Hong Kong. One possible interpretation for this is counter-intuitive: risk taking and risk avoidance are not mutually reciprocal. With Australia and the USA both being strongly individualistic cultures and both being neither strong nor weak in terms of Uncertainty Avoidance and both rating a game and gambling spirit to be of low importance appears to lend support to this interpretation. 22

Other possible interpretations of this paradox are that the stronger Uncertainty Avoidance cultures have a more considered approach to risk taking; or alternatively, for some, this goal is not so much about risk as it is about an adventuresome or pioneering spirit. Following this latter interpretation and comparing the data for this business goal with Hofstede s cultural dimension of Individuality indicates a similarity of scores with the low Individuality of Hong Kong and the strong Individuality of the Netherlands. 23

Growth of the business 1.6 Australia 1.4 France Standard Score 1.2 1 0.8 0.6 Total Germany USA Hong Kong 0.4 Netherlands 0.2 0 Figure 11 Growth of the business The data for Germany and the Netherlands suggests some differentiation from the other countries: Australia, France, the USA and Hong Kong. In particular, a comparison of Australia and France, both with standard scores of more than 1.2, with Germany and the Netherlands, which have standard scores of less than 0.6, indicates a potentially significant differentiation. Comparison with Hofstede s data for Long-term Orientation indicates that Hong Kong, with a much stronger Long-term Orientation than the other cultures considered here, rates the importance of growth of the business comparably with Australia, France and the USA. In fact, of slightly lesser importance than Australia, France and the USA. This finding, together with the fact that Germany and the Netherlands have comparably low Long-term Orientation to Australia, France and the USA suggests that the goal of growth of the business does not directly equate with Long-term Orientation. Comparison with Hofstede s data for Uncertainty Avoidance indicates that the both the weaker and stronger Uncertainty Avoidance cultures, Hong Kong and France respectively, place importance on growth of the business. The other countries considered here, Australia, Germany, the Netherlands, and the USA; are similar in terms of Uncertainty Avoidance but Germany and the Netherlands are differentiated 24

from Australia and the USA in relation to the business goal growth of the business. As such, the Uncertainty Avoidance cultural dimension does not appear to directly clarify this issue. Comparison of Figures 5 and 6 shows that, with the exception of the Netherlands, the business goals growth of the business and game and gambling spirit are given very similar, but inverse emphasis. If the desire for growth of the business is equated with some degree of risk taking, this inverse relationship suggests a paradox for those cultures where growth is strongly important but the game and gambling spirit scores low in importance: Australia, France, the USA and Hong Kong. The Netherlands is a culture with neither strong nor weak Uncertainty Avoidance; nor does it have a particularly strong Long-term Orientation. The business goal data for the Netherlands indicates a similarity of scores for the goals game and gambling spirit and growth of the business suggesting a desire for modest risk exposure and modest growth objectives. A comparison of Figure 6, growth of the business, with Figures 11 and 12, this year s profits and profits 10 years from now respectively, shows that both short- and longterm growth orientations underly the general goal of growth of the business. This is best illustrated by the data for Australia and the USA. Both have similar scores for all cultural dimensions and in particular, for both Long-term Orientation and Uncertainty Avoidance. Both place relatively high importance on the business goal growth of the business. However, Australia places much more importance on this years profits than on profits 10 years from now and the USA places much more importance on profits 10 years from now than on this years profits. A comparison of Figure 6, growth of the business, with Figure 9, personal wealth, does not appear to reveal any basis for suggesting that a desire for personal wealth underlies the goal of growth of the business. Similarly, a comparison of Figure 6, growth of the business, with Figure 10, power, does not appear to reveal any basis for suggesting that a desire for power underlies the goal of growth of the business. 25

Honour, face, reputation 0.6 Germany USA 0.4 Australia Standard Score 0.2 0-0.2 Total Hong Kong Netherlands -0.4-0.6 France Figure 12 Honour, face, reputation From Figure 7 it is clear that the data for the business goal of honour, face, reputation strongly differentiates France. Reference to the data for Hofstede s cultural dimensions does not immediately offer clarification. Considering the concept of honour, face, reputation in both collectivist and individualistic societies suggests that only the data for Hong Kong correlates. That is, Hong Kong s culture has low Individualism relative to the other countries considered here. However, another interpretation is that the business goal of honour, face, reputation is constrained in a strongly collectivist culture but not in cultures with moderate to strong Individualism. That is, cultures with moderate to strong Individualism may consider the business goal of honour, face, reputation to be important or unimportant. This is best illustrated here by comparison of France and Germany. These two cultures have a very similar sense of Individualism but have an inverted perception of honour, face, reputation. France with a standard score of less than -0.4 and Germany with a positive standard score of more than 0.4. Reference to Hofstede s data for the cultural dimension of Power Distance shows that both France and Hong Kong rate strongly on the Power Distance dimension but are clearly differentiated for the business goal of honour, face, reputation and for the 26

cultural dimension of Individualism. As such, lending some support to the interpretation discussed immediately above. Professor Hofstede s (1998) country-level analysis correlations by business goal with the cultural dimensions has confirmed there is a significant statistical correlation between the cultural dimension of Masculinity and Femininity and the business goal of honour, face, reputation. 27

Patriotism, national pride 0-0.5 Standard Score -1-1.5 Australia USA Hong Kong -2-2.5 Total France Germany Netherlands Figure 13 Patriotism, national pride The data for the European countries of France, Germany and the Netherlands suggests some differentiation from the other countries: Australia, Hong Kong and USA. However, generally, the data indicates that little importance is given to patriotism, national pride. Reference to the data for Hofstede s cultural dimensions does not immediately offer clarification. For example, France, Germany and the Netherlands give this business goal little importance relative to Australia, the USA and Hong Kong but both France and Hong Kong rate strongly for the cultural dimension of Power Distance. However, giving further consideration to the strongly collectivist culture of Hong Kong is interesting. Hong Kong gives little importance to this business goal but allowing that, as suggested above, there is a difference between France, Germany and the Netherlands when compared with Australia, Hong Kong and the USA; then it may be argued that strongly individualistic (Australia and the USA) and strongly collectivist (Hong Kong) cultures place somewhat greater importance on the business goal of patriotism, national pride than do cultures that have neither a strong nor weak sense of Individualism such as France, Germany and the Netherlands. 28

Personal wealth 0.7 Hong Kong 0.6 0.5 Standard Score 0.4 0.3 0.2 Total Australia France USA 0.1 0-0.1 Germany Netherlands Figure 14 Personal wealth From Figure 9 it is clear that the data for the business goal of personal wealth clearly differentiates Hong Kong. Reference to Hofstede s data for the cultural dimension of Long-term Orientation does notably distinguish Hong Kong from Australia, France, Germany, the Netherlands and the USA. However, it is not clear that this cultural dimension offers any basis for the relatively high importance placed upon personal wealth by the Hong Kong respondents when compared with those from the other countries. Nor does it offer any clarification of why the Germanic countries of the Netherlands and Germany are differentiated from Australia, France and the USA. To illustrate, for this business goal, Germany and the Netherlands have standard scores of less than zero indicating low relative importance on personal wealth. Australia, France and the USA have positive standard scores indicating a higher relative importance on personal wealth. That is, while all of Australia, France, Germany, the USA and the Netherlands have similarly low cultural Long-term Orientation. Hong Kong and France are notably differentiated from the other countries considered here by the cultural dimension of Power Distance. This suggests the interpretation that the Hong Kong respondents (and to a lesser extent, the French) may have merged the 29

concepts of personal wealth and Power Distance in responding to the business goals survey questionnaire. All the other countries considered here have a similar, low to moderate Power Distance cultural dimension. 30

Power 0.6 Hong Kong 0.4 0.2 Standard Score 0-0.2-0.4-0.6 Total Australia France Netherlands -0.8-1 Germany USA Figure 15 Power The data for the business goal of power clearly differentiates Hong Kong. Reference to Hofstede s data for the Power Distance cultural dimension also distinguishes Hong Kong, together with France. As above, the Hong Kong respondents also placed a high importance upon the business goal of personal wealth when compared with those from the other countries. As suggested above, this allows the interpretation that the Hong Kong respondents (and to a lesser extent, the French) may have merged the concepts of personal wealth and Power Distance in responding to the business goals survey questionnaire. All the other countries considered here have a similar, low to moderate Power Distance cultural dimension. Professor Hofstede s (1998) country-level analysis correlations by business goal with the cultural dimensions has confirmed there is a significant statistical correlation between the cultural dimension of Power Distance and the business goal of power. 31

This year s profits 1 0.8 Australia Standard Score 0.6 0.4 0.2 Total France Hong Kong Netherlands 0 USA -0.2 Germany Figure 16 This year's profits The data for the business goal of this year s profits clearly shows that it is least important for Germany, USA and Hong Kong. It is reasonable to expect that Hofstede s cultural dimension of Long-term Orientation would offer some basis for this finding. It does for Australia, France, Hong Kong and the Netherlands. But it does not for Germany nor the USA. Professor Hofstede s (1998) country-level analysis correlations by business goal with the cultural dimensions has confirmed there is a significant statistical correlation between the cultural dimension of Individualism and the business goal of this year s profits. However, a comparison of the data for Individualism with the data for the business goal of this year s profits shows this correlation for Australia, France, Hong Kong and the Netherlands but not for Germany or the USA. 32

Profits 10 years from now 1.2 Germany 1 Standard Score 0.8 0.6 0.4 Total France USA Hong Kong Netherlands 0.2 0-0.2 Australia Figure 17 Profits 10 years from now The data for the business goal of profits 10 years from now is consistent with the data for the business goal of this years profits. It is also somewhat, but not entirely, consistent with Hofstede s data for Long-term Orientation. If it is, for example, regarded as consistent for Australia then it is not for France, Germany, the Netherlands or the USA; all of which have a similar cultural dimension of Long-term Orientation. Further, Hong Kong has a strong Long-term Orientation but the Hong Kong data for the goal of profits 10 years from now indicates only low importance. This appears to be in conflict with Hofstede s data for the Long-term Orientation cultural dimension. It is interesting to consider the business goals of creating something new and personal wealth in the context of this business goal. The business goal of creating something new somewhat differentiates Germany and the goal of personal wealth clearly differentiates Hong Kong. This may open up the interpretation of the cultural dimension of Long-term Orientation in relation to this business goal. To illustrate, for Germany and Hong Kong respectively, creation of something new leading to profits in the longer-term as one view and personal wealth creation as another view. The latter being literally more personal than corporate and as such, suggesting the question for Hong Kong, is long-term orientation personal or corporate? 33

Respecting ethical norms 0.5 Germany USA 0.4 Netherlands Standard Score 0.3 0.2 0.1 Total Australia 0-0.1 France Hong Kong Figure 18 Respecting ethical norms Based upon Hofstede s data for the cultural dimension of Individualism, both Australia and the USA are strongly individualistic nations. Based on the same data, Hong Kong is strongly collectivist. However, the data for the business goal of respecting ethical norms appears to conflict with the cultural dimension of Individualism. To illustrate, compare Australia with the USA, France with Germany and Hong Kong with the USA: Comparing Australia with the USA. Both are strongly individualistic cultures but are differentiated by the business goal of respecting ethical norms. Comparing France with Germany. Both very similar for the Individualism dimension. Neither are particularly strong nor weak. However, France and Germany are clearly differentiated by the business goal of respecting ethical norms. Germany has a positive standard score of slightly less than 0.5 whereas France has a standard score of nearly -0.1. Comparing Hong Kong with the USA. Hong Kong and the USA are differentiated by the business goal of respecting ethical norms. The USA has a positive standard score of 0.5 whereas Hong Kong has a slightly negative standard score. 34

Paradoxically, the strongly collectivist culture of Hong Kong gives less importance to this business goal than does the strongly individualistic culture of the USA. Giving consideration to the other cultural dimensions in relation to the data for this business goal discloses something of a paradox. That is, both France and Hong Kong are strongly differentiated by the cultural dimension of Power Distance. For the business goal of respecting ethical norms, France and Hong Kong are the only countries to have negative standard scores. This is a counter-intuitive finding unless little importance is given to business goals that are underpinned by strong cultural values. Professor Hofstede s (1998) country-level analysis correlations by business goal with the cultural dimensions has confirmed there is a significant statistical correlation between the cultural dimension of Masculinity and Femininity and the business goal of respecting ethical norms. However, a comparison of the data for Masculinity and Femininity with the data for the business goal of respecting ethical norms shows that this correlation is not entirely consistent. For example, compare: Australia and Germany. Both Australia and Germany are strongly masculine cultures. However, Australia and Germany are clearly differentiated for the business goal of respecting ethical norms. Australia and Hong Kong. Both Australia and Hong Kong are strongly masculine cultures. However, Australia and Hong Kong are clearly differentiated for the business goal of respecting ethical norms. 35

Responsibility towards employees 1.2 1 Standard Score 0.8 0.6 0.4 0.2 0 Total Australia France Germany USA Hong Kong Netherlands Figure 19 responsibility towards employees The data for responsibility towards employees is relatively similar across all countries surveyed. However, the USA and Hong Kong may be exceptions. Differentiation of the USA for this business goal may be due to the USA s legislative emphasis on industrial and employee relations. For Hong Kong, an emphasis on family interests may be expected to outweigh the interests of (other) employees. However, the data for the business goal of family interests does not support this explanation for Hong Kong. One interpretation is straightforward. That is, the Hong Kong business person does not give much importance to industrial or employee relations. Alternatively, this is another case where the business goal is given little import when underpinned by strong cultural foundations. For example, Hong Kong is strongly collectivist and has a high Power Distance cultural dimension. This latter interpretation is supported by the data for the business goal of responsibility towards society in general. 36

Responsibility towards society in general 0.15 USA Netherlands 0.1 0.05 Germany 0 Standard Score -0.05-0.1-0.15 Total Australia -0.2-0.25 Hong Kong -0.3-0.35 France Figure 20 Responsibility towards society in general The data for the business goal of responsibility towards society in general differentiates Australia, France and Hong Kong all with negative standard scores. In particular, France with a standard score of slightly less than -0.3 is clearly differentiated from the USA and the Netherlands both of which have positive standard scores of slightly more than 0.1. Consideration of Hofstede s cultural dimensions reveals that France is notably differentiated from both the USA and the Netherlands for Uncertainty Avoidance and Power Distance. The Uncertainty Avoidance cultural dimension does not immediately offer an explanation for the differentiation shown here for the business goal of responsibility towards society in general. However, the cultural dimension of Power Distance does. To illustrate, both France and Hong Kong have negative standard scores for the business goal of responsibility towards society in general and both are clearly differentiated from the other countries, as considered here, by the cultural dimension of Power Distance. Comparison with the business goal of respecting ethical norms reinforces this interpretation. That is, the business goals show a similarity of scores. 37

Comparison of the business goal of responsibility towards society in general with the business goal of responsibility towards employees indicates some similarity of scores for Germany, the USA and the Netherlands but not for Australia, France or Hong Kong. For Hong Kong, with a standard score of nearly -0.2 for the goal of responsibility towards society in general, it is interesting to consider the relative influence of the cultural dimensions of Power Distance and Individualism and the notion that a business goal is given less import when underpinned by strong cultural traits. Germany and the USA are masculine cultures while the Netherlands is more feminine. All have positive standard scores for the business goal of responsibility towards society in general. Australia a masculine culture of similar strength to both Germany and the USA appears to be an exception; with a standard score of almost zero, Australians may be ambivalent about their responsibility towards society in general. 38

Staying within the law 1 Hong Kong 0.8 USA Standard Score 0.6 0.4 0.2 Total Australia Germany Netherlands 0-0.2 France Figure 21 Staying within the law The data for the business goal of staying within the law differentiates Hong Kong and the USA and the European countries of France, Germany and the Netherlands. France and Hong Kong are clearly differentiated on the cultural dimension of Uncertainty Avoidance France is strongly risk averse and Hong Kong is not and for the business goal of staying within the law less important for France and more important for Hong Kong. One potential interpretation is that a strong cultural foundation of Uncertainty Avoidance allows relatively less importance to be placed on the goal of staying within the law. This interpretation is supported by the data for both France and Hong Kong. Hong Kong is not culturally risk averse; and as such, more importance is given to the goal of staying within the law. France is culturally risk averse; and as such, less importance is given to the goal of staying within the law. Comparison of the data for the business goal of staying within the law with the goal of respecting ethical norms shows some similarity of scores for Australia, France and the USA. However, Germany, Hong Kong and the Netherlands differ. The implication here is that for Germany and the Netherlands ethical standards are given greater import than black-letter-law. Whereas for Hong Kong, black-letter-law is given more import than the business goal of respecting ethical norms. 39

Conclusions Cultural dimensions underpinning business goals The data for a number of business goals is clearly consistent with Hofstede s cultural dimensions. However, for many of the business goals, Hofstede s cultural dimensions do not directly nor consistently explain the differences for all the countries considered here. For some business goals Hofstede s cultural dimensions explain the differences for some of the countries but not for others. In some cases there is an apparent conflict and for others, it is an interpretation of one or more cultural dimensions that appears to provide the desired explanation. To illustrate this, refer to the following examples of where Hofstede s cultural dimensions do not directly or consistently explain the differences for all countries: For Hong Kong, the business goal of family interests (like jobs for relatives) is not explained directly by the cultural dimension of Individualism. The business goal of growth of the business is not explained directly by the cultural dimension of Long-term Orientation. The business goal of patriotism, national pride is not explained directly by the cultural dimension of Individualism nor by the cultural dimension of Power Distance. The business goal of respecting ethical norms is not explained directly by the cultural dimension of Individualism nor by the cultural dimension of Power Distance. For Hong Kong, the business goal of responsibility towards employees is not explained directly by the cultural dimension of Individualism. For Hong Kong, the business goal of responsibility towards society in general is not explained directly by the cultural dimension of Individualism. For Hong Kong, the business goal of responsibility towards society in general is not explained directly by the cultural dimension of Individualism nor by the cultural dimension of Power Distance. The business goal of staying within the law is not explained directly by the cultural dimension of Uncertainty Avoidance. This apparently critical finding has a most important aspect. That is, whilst one cultural dimension may not directly explain the differences for a specific business goal consistently for all countries, the consideration of a combination of cultural dimensions appears to afford a reasonable explanation. That is, it suggests that an understanding of the inter-play of the cultural dimensions and the relative strength of each is most 40