Cultures and Organizations - Software of the Mind: Intercultural Cooperation and Its Importance for Survival [Englisch] [Taschenbuch]

The third edition of Cultures and Organizations manages to significantly improve a great book. As a professor I have become deeply cynical of new editions -- I see shameless textbook producers make trivial changes every 18 months to kill off competition from used books. Fortunately this is not a text and the changes are real improvements from the previous edition.

If you are interested in globalization or comparative cultures you will want to buy and read this book even if you have already devoured the second edition. The most obvious changes: the expanded chapter (2) on studying cultural differences, the new proposed cultural dimension of indulgence (8), and the new chapter on evolution of cultures (12) are more than worth the time and effort of acquiring the new book.

This new edition resolves a dilemma for me: I was always torn between recommending Cultures and Consequences or Cultures and Organizations as an intro to Hofstede's ideas for someone who wanted a deep understanding of the research. I would now recommend that everyone, academic, business person, or curious reader, start with the third edition of Cultures and Organizations.

This entire book is dedicated to the statistical analysis of huge international surveys of people's of people's values, and an interpretation of the results of that statistical analysis.

Statisticians as a group are disdainful of people who use statistical products, and this would be no exception. The authors list the weaknesses of their approach in the beginning of the book, but then speak authoritatively, as if those limitations have been put behind them and could be safely ignored. Let's re-examine what they did:
1. They used massive surveys which depend on subjective questions such as, "on a scale of 1 to 7, where one is "love it" and two is "hate it," how do you feel about the employee appraisal process? These five or seven point scales are called "Likert" scales. They are the best possible instrument, but as the authors point out, they have significant limitations. In particular, respondents may be culturally driven to provide answers they think the researchers want to hear, and they may be culturally driven to either select extremes or avoid extremes.
2. The authors used a process called factor analysis to determine what they find to be five different factors that define different cultures values. When you add up the effect of all the different factors, you can statistically explain a certain fraction of the pattern in which the survey findings varies systematically among different groups of respondents. There is always some "unexplained variance" that cannot be attributed to any factor. The relative importance of the factors depends on the order in which you consider them, but no matter how you slice it, the fourth and fifth factors are not likely to explain very much of the variance. In other words, even though they are statistically significant, their real-world significance may not be that vast. A researcher has to have humility.
Once they identify the questions which make up each factor, they were able to compare responses from all of the countries one factor at a time. In doing this they took some liberties, such as splitting the five or seven value Likert scale in two, for strong and weak. Where you make the split influences how strong and affect you find. Researchers have been known to pick the split that best supports their theories.

The five factors they find are:
1. Power distance
2. Individualism and collectivism
3. Masculinity and femininity
4. Uncertainty avoidance
5. Indulgence versus restraint

The authors have normalized the findings of all countries, putting them on a scale of roughly 1 to 100. This provides a convenient graphic for showing relative differences. This is well and good. They do not, however, ever discuss how statistically significant differences are. Some of them are certainly more significant than others, and some of the differences are quite probably trivial... but the authors never deviate from their tone of certainty about their findings.

The book discusses the attributes of the two poles for each of their factors. Just as an example, a small power distance culture will believe the following:
* Inequalities among people should be minimized
* Social relationship should be handled with care
* Less powerful people in more powerful people should be interdependent
* Less powerful people are emotionally comfortable with interdependence
* Parents treat children as equals
* Students treat teachers as equals
The list goes on -- there are 17 entries in all. The opposites are rather predictable:
* Inequalities among people are expected and desired.
* Status should be balanced with restraint.
* Less powerful people should be dependent.
The supporting text belies the authors' studiously non-judgmental tone. They predictably take Americans to task for being bellicose and despoiling the environment, and the Austrians for being too masculine and warlike. One would judge from the tone of the book that the ideal people were Dutch. And what is the nationality of the authors? You got it.

Supporting the discussion of the factors is a series of two-dimensional plots laying out the distributions of the countries under study by two dimensions at a time. With five factors, 10 such combinations are possible and I think they are all present. It makes for pretty good graphics. The graph of power distance versus individualism shows that these two factors, although sufficiently independent to be considered separately, do have a relationship. In general, countries with less power distance show more individualism.

At this point you may wonder what power distance is. The authors defined it as the way that power or authority operates in a culture. In the country with a great power distance, subordinates to show deference to the boss and pretty much do what he says. The boss is into status symbols. In a low power distance country like Denmark or Holland the boss rides a bicycle and eats in the cafeteria with everybody else.

The authors correlate the factors that they find with non-subjective, measurable variables such as the geographic size of a country and the latitude of that country. These two seem rather arbitrary. More to the point might be national intelligence and temperament. Interestingly, they cite three books on national personality differences by Richard Lynn, a leading figure in psychometrics. Lynn, however, is best known for other works such as the unambiguously titled "Race and Intelligence." This book would like to attribute the Chinese success in fields such as statistics entirely to cultural factors. Not so - they are also smart. They express surprise that Africans can be so happy with so little material wealth. Other researchers such as Philippe Rushton have looked fairly deeply into brain chemistry and other factors that may explain it. As a bottom line, the authors appear to attribute too much of national differences to culture alone. It should be clear that human populations evolve in several dimensions simultaneously -- temperament, language, physical distribution, and genetics. Their work in culture is extremely valuable, but it is not the whole picture.

The discussion of the practical business problems that cultural differences pose is quite valuable. What should a company consider before undertaking a merger with a foreign partner? What goes wrong with a merger such as DaimlerChrysler? What should an expatriate manager know before going overseas, first in order to ensure his own adjustment to a new culture, and secondly, to ensure that he makes a positive contribution to the business in that culture.

"Cultures and Organizations" is a thoroughly worthwhile non-political, non-theoretical sociology text. The authors keep an open mind and allow social typologies to emerge statistically from international social surveys, such as the IBM survey of international employees, the World Values Survey and the Chinese Values Survey.

They had to find words and phrases that best described the "poles" that they found and usefully selected 1) power distance 2) masculinity 3) individualism 4) uncertainty avoidance 5) long term orientation and 6) indulgence. Each term deals with its opposite and can be mapped on a chart showing for instance a low power distance between managers and employees in Scandinavia (they're all together working on a project) or a high power distance in France (they are part of a table of ranks, giving and receiving orders).

The conclusions are very interesting, showing for example the historical tendency for individualism to grow in wealthy societies (a prediction for Asia?) and the clear link between long term orientation and economic development (most visible in the Chinese Value Survey).

The authors admit to having a harder job explaining the origins of cultural differences. In the last chapter they search for origins in the early history of mankind, particularly the appearance of high power distances in the first populous settled agricultural societies.

In the modern context, they see the dangers of a global marketplace that lacks a global village. They argue that it is essential to abandon tribalism and racism in favour a global village "all together in one world" and that this would be the next triumphant step in human cultural evolution. The new evolutionary path would benefit everyone in the long run and importantly protect the natural world.