a critical analysis of mainstream assessment models in a cross-cultural context

A Critical Analysis of Mainstream Assessment Models in a Cross-Cultural Context White Paper 1

Consulting Global Transformation Services

A Critical Analysis of Mainstream Assessment Models in a

Cross-Cultural Context White Paper

David Sult

February 2013


Table of Contents

Executive Summary ......................................................................... 3

Our Point of View ............................................................................ 4

Cross-Cultural Models ......................................................................... 5

GLOBE Framework for Assessing Cultures ............................ 5

Cultural Types – The Lewis Model......................................... 6

Trompenaars’ 7 Dimensions of Culture ................................ 7

Business Model of Intercultural Analysis (BMIA) .................. 8

Organizational Culture Model ......................................................... 9

Personality/Self-Assessment Models .................................................. 10

Facet5 – Five Factor Model ................................................. 11

Myers Briggs Type Indicator (MBTI) .................................... 12

Summary of Models ...................................................................... 13

Conclusion ..................................................................................... 14


Executive Summary Through the course of organization restructuring and global expansion

consulting assignments with clients in the field over the last 20 years,

ranging from Fortune 500 to mid-sized companies across a variety of

industries, we have seen time and again that a holistic approach to

organization design is required to achieve and sustain optimum business

performance. As globalization of companies from all regions of the world

(not just the United States) has increased through a variety of expansion

models (i.e., acquisition, joint venture, “greenfield” business

development), the importance of understanding and incorporating the

cross-cultural dimensions of different nations into the operating model

and organization design has become absolutely essential. Given the

depth of experience and empirical research that has been applied to this

topic, companies expanding their global footprint into new and different

geographies now have a choice of whether to “learn as you go” or

“anticipate and orchestrate.” For those companies concerned with

achieving their revenue and market share growth targets in the

timeframes forecast in their business models, minimizing organization

development cost, and minimizing human capital risk, the choice is in

most cases clear.

This white paper compares the major cross-cultural models and their

usability in a business context. There are several models to choose from,

but our research and work with clients in the field indicates that the

Universal Consensus Business Model of Intercultural Analysis (BMIA™)

has among the strongest applicability for enhancing global business

performance. Of all the models we have worked with and/or researched,

the BMIA™ framework is objective-centric, rather than ethno-centric,

addresses operational and communication issues, addresses both

individual and performance optimization across cultures, and is

purposefully results-driven. For this reason, we find it offers the most

value in a business-environment and has been adopted as an important

resource within our M&A and organization transformation consulting

methodology. The only other cross-cultural models that we rated as

“high” business applicability had flaws that are disconcerting or

complexities in usage that run counter to our pragmatic business

orientation. For example, the Lewis Model is somewhat limited in its

scope and applicability outside of its communications dimensions; and

the 7 Dimensions Model is very advanced, but lacks clarity and ease of

use necessary to be useful to most of our clients.


Our Point of View

Before moving on to the comparison of the major cross-cultural models

and their usability for the purpose of improving business performance, it

may be useful to provide the business context underlying our point of

view. Our Organization Transformation engagements align the

organization design of the company to achieve targeted and sustained

business results. Within the context of organization transformation a core

set of activities in a business are to design and align the organization

design to the strategy and operating model of the enterprise. Our holistic

model of organization design, well known to our clients but perhaps new

to other readers of this paper, is shown below:

Our talent centric point of view on organization design goes beyond the

“lines and boxes” to consider the inter-related elements of organization

structure, governance and decision making, information flow, business

processes, talent (leaders, managers, workforce), and culture. The

attributes and implications of company cultures in organization design

have been developed through years of work in the field. Our assessment

instruments, analytic tools, and high performing benchmark databases

are mature and quite effective in the context of M&A integration, joint

ventures, restructuring, and business model innovation. It is only in the

last several years that we have purposefully segmented culture and

implications to organization design and transformation into two

components: company culture and country culture.

The multi-cultural realities and challenges confronting organizations

when expanding into new regions and countries are significant. As this

dimension of organization performance has increased in frequency and

relevance, the imperative to systematically and effectively address these

attributes in organization design has increased. The balance of this paper

summarizes the findings of our field experience and research on this

specific dimension of organization design and performance.

Organization Structure

Govern-ance &

Decision Rights

Business Processes & Systems

Inform-ation flow

Talent

Situation

Analysis

Benefit

Analysis

Company’s External

Environment - Market Share /

Positioning - Customer Insight - Competitive

Dynamics - Gov. Influence - Sensitivity to

Economic Env.

Company’s Internal Factors

- Vision, Mission, Values

- Operating Principles

- Business Structure and Strategy C

ultu

re

Cultu

re

Culture Group

values & beliefs

Culture

(Country)

Increased / Improved

- Growth - Customer

Satisfaction - Integrated Ops

Quality - Efficiency - EE. Engagement

- Org. Structure that is effective in enabling the business strategy in an efficient manner

- Ensuring availability of the right talent for the right role at the right time

Business Drivers, Strategy &

Operating Context

Organization Design

and Alignment

Realize Business

Impact

Culture (Company)


Cross-Cultural Models Hofstede’s Cultural Dimensions

Description

Geert Hofstede, a Dutch cultural anthropologist, did a seminal cultural

study among 116,000 IBM employees in the early 1980s. He surveyed

employees across international IBM offices and found that he could map

national culture along four dimensions. Hofstede rated 40 countries on

each dimension on a scale from 1 to 100. The dimensions were:

- Power Distance (PDI) - Individualism versus Collectivism (IDV) - Masculinity versus Femininity (MAS) - Uncertainty Avoidance (UAI)

A fifth dimension, Long-Term Orientation (LTO), was added in 1991 based

on further research by Michael Bond who conducted an additional

international study among students.

Business Applicability

Hofstede’s model has significant scientific backing and a huge survey

population, but the work is very specific to IBM – the tech industry and

the corporate culture at IBM. Nearly 3 decades have passed since

Hofstede (1980) collected the data used to classify countries by their

underlying work-related structures, and much has changed in cultural

classifications. As an anthropological model, Hofstede’s research is the

basis for many subsequent models, but as a stand-alone tool, it provides

limited business relevant insight.

GLOBE Framework for Assessing Cultures

Description

Begun in 1993, the Global Leadership & Organizational Behavior

Effectiveness (GLOBE) framework is an ongoing research program using

data from 825 organizations in 65 countries. Rather than replacing

Hofstede’s model, it expanded it. The output is similar to Hofstede but

with more dimensions added – the dimensions were:

- Assertiveness - Future orientation - Gender differentiation - Uncertainly avoidance - Power distance - Individualism / collectivism - In-group collectivism - Performance orientation - Humane orientation


This is also a scientific and anthropological model, not necessarily tied to

business objectives and performance. It added some additional

dimensions and provided an updated measure of where countries rate on

each dimension.


Cultural Types – The Lewis Model

Background

Richard D. Lewis is a British linguist, cross-cultural communication

consultant, and author. He has developed a model that puts cultures on

three dimensions: linear-active, multi-active, and reactive.


Lewis’ model is relatively comprehensive and good for an initial overview

of where cultures fall on each axis. Unlike Hofstede and the GLOBE

model, it does not require reading of multiple uncorrelated dimensions. It

has most applicability in understanding cross-cultural communications,

but limited usefulness in other areas. Being high-level, it is somewhat

restrictive, which stops it from providing the full spectrum cross-cultural

factors, and it may be too limited to help provide useful business

optimization insight.


Trompenaars’ 7 Dimensions of Culture

Background

The Seven Dimensions of Culture were identified by management

consultants Fons Trompenaars and Charles Hampden-Turner, and the

model was published in their 1997 book, "Riding the Waves of Culture."

Trompenaars and Hampden-Turner developed the model after spending

10 years researching the preferences and values of people in dozens of

cultures around the world. As part of the study, they surveyed more than

46,000 managers in 40 countries.

The dimensions are:

- Universalism versus particularism - Individualism versus communitarianism - Specific versus diffused - Neutral versus emotional - Achievement versus ascription - Sequential time versus synchronous time - Inner direction versus outer direction


The model is very comprehensive with significant data to back it up.

Although the model was developed for business application, it is highly

complex. The model is most useful as a general guide when dealing with

people from different cultures. As with previous models, it distinguishes

the differences between cultures, but provides no recommendations on

how to solve cultural disconnects.


Business Model of Intercultural Analysis (BMIA)

Background

The BMIA model has been developed over the last two decades by

Denise Pirrotti Hummel, J.D., a cross-cultural business thought-leader and

the CEO of Universal Consensus, a cross-cultural management consulting

and training firm. The model is objective-centric (focused on the business

objective at hand), rather than ethnocentric. It has been developed,

empirically tested, rolled out, and honed by working with global

corporations and organizations globally. It assesses cross-cultural issues

on an individual and organizational level through six comprehension

lenses that are robust, interconnected, and result in sustainable

transformation. The model has an assessment, awareness, and

optimization component to it.

The lenses of the BMIA model are:

- Cultural Themes - Glocalization - Group Dynamics - Process Engineering - Time Orientation - Communication


The BMIA framework is in the top tier of business oriented cross-cultural

models of all those compared, as it focuses on both awareness and

business optimization. It is comprehensive yet easy to implement and

understand in its basic iteration. Added layers and continuums under

each lens make it more advanced, and adaptable, than other cross-

cultural models. It can be applied at the lowest echelon of a company

through the most strategic roles, based on the customization of the

assessment model and the training curriculum. It has applicability to

every departmental function and every industry.


Organizational Culture Model The Denison Model

Background

Daniel R. Denison is Professor of Organization and Management at IMD

Business School in Lausanne, Switzerland and the developer of the

Denison Model. The Denison Model is focused on organizational culture

change and provides a guide for organizational change through two

frameworks: The Organizational Culture Model and the Leadership

Development Model. The model is heavily tied to individual character

assessments. The Denison model of organizational culture is widely

known and used in academic research on organizational culture.


The model is easily understood yet comprehensive when it comes to

organizational culture change. It is both an academic and business-

focused model. It has proved effective in addressing company culture

attributes and informing organization design, but it has no national

culture component and, as such, its utility and specific usefulness in

addressing multi-national cross-cultural issues is limited.


Personality/Self-Assessment Models The Barrett Seven Levels of Consciousness Model

Background

Richard Barrett conceived the Seven Levels of Consciousness model in

1997; the model describes the evolutionary development of human

consciousness. It applies to all individuals and human group structures.

The model is an extension and adaptation of Maslow’s Hierarchy of

Human Needs. The model covers both the internal dimensions of

consciousness - the inner journey into self‐knowledge and meaning, and

the external dimensions of consciousness - the gradual expansion of

sense of identity.


It is a self-assessment and leadership model rather than an organizational

one. It can perhaps be utilized in a cross-cultural context, but the model

was not developed to enhance cross-cultural skills and has very limited

usability in a cross-cultural context.


Facet5 – Five Factor Model

Description

Facet5 uses the five-factor model of personality, which is a way of

describing the fundamental building blocks of personality. The five-factor

model is based in psychological research and used to give a

comprehensive description of personality and behavior. It is based on a

paper by WT Norman’s in 1963 that described how almost all of the

different personality factors identified by personality.


This model is excellent for understanding personal differences but it has

no cross-cultural background or component – it is an Anglo-centric model

for understanding personality traits and preferences.


Myers Briggs Type Indicator (MBTI)

Description

MBTI is probably the most widely used personality model in the world.

The MBTI assessment is a psychometric questionnaire designed to

measure psychological preferences and how it influences decision-

making. The model was developed by Isabel Briggs Myers in the 1960s

and is based on Carl Jung’s theoretical concepts of ‘preferences.’

The 16 MBIT types are typically referred to by an abbreviation of four

letters, for example:

- ESTJ: extraversion (E), sensing (S), thinking (T), judgment (J) - INFP: introversion (I), intuition (N), feeling (F), perception (P)


The MBTI was the most ground-breaking work on personality models, but

it has many inconsistencies and very limited usability in a cross-cultural

context.


Summary of Models

MODEL CONTEXT DESCRIPTION BUSINESS

APPLICABILITY

CROSS-CULTURAL MODELS HOFSTEDE’S CULTURAL DIMENSIONS

Anthropological Seminal cross-cultural model developed in the 1980s.

Medium

GLOBE Anthropological Expanded Hofstede’s model in the 1990s.

Medium

LEWIS MODEL Business Model mostly applicable to cross-cultural communication.

High

TROMPENAARS Business Very advanced model, which also makes it somewhat complex.

High

BMIA Business Most recent model that incorporates components from the others while taking it to the next step.

Very High

ORGANIZATIONAL CULTURE MODELS DENISON Business The most

comprehensive and business-focused organizational culture model.

Very High

PERSONALITY/SELF-ASSESSMENT MODELS BARRETT Anthropological

/Business Self-assessment and leadership model based on Maslow’s Hierarchy of Needs.

Low

FACET5 Business Self-awareness model based on personality and behavior.

Medium

MBTI Anthropological/Business

Personality type awareness model.

Low


Conclusion Our work with clients in the field, ranging from Fortune 500 to mid-sized

companies across a variety of industries, has shown that a holistic

approach to organization design is required to achieve and sustain

optimum performance. As globalization of companies from all regions of

the world has increased through a variety of expansion models (i.e.,

acquisition, joint venture, “greenfield” development, alliance), the

importance of understanding and incorporating cross-cultural dimensions

into the operating model and organization design has become

imperative. While there are pros and cons to every model of analysis, a

thoughtful comparison points to the use of the Universal Consensus

Business Model of Intercultural Analysis [BMIA ™] as one of the most

likely to yield advantageous business results for our M&A and

organization transformation clients.


Author

Contributors

David Sult

Practice Leader, Global Transformation Services

Seattle, WA

[email protected]

Khalid Ali Elias Dib

Washington, DC Dubai, UAE

[email protected] [email protected]

Edward Stanoch Karla Barrato

Warsaw, Poland São Paulo, Brazil


Audrey Widjaja Jaidev Murti

Shanghai, China Gurgaon, India


mailto:[email protected]








Press Release Aon Hewitt Partners With Leading Cross-Cultural Firm to Provide Advisory

Services for Global M&A Clients

Jan 24, 2013

LINCOLNSHIRE, Ill., January 24, 2013 – Aon Hewitt, the global human resource

solutions business of Aon plc (NYSE: AON), today announced it is collaborating

with Universal Consensus LLC, a leading cross-cultural management consultant

and training firm, to enhance Aon Hewitt’s cross-cultural advisory, integration

and business optimization services for its global mergers and acquisitions (M&A)

clients.

Headquartered in San Diego, Universal Consensus offers cross-cultural

assessments, advisory services, and training to hundreds of large organizations

around the world. Its proprietary framework, the BMIA™ (Business Model of

Intercultural Analysis), evaluates companies’ challenges and growth opportunities

of doing business across cultures, both internationally and domestically. Armed

with this data, Universal Consensus experts develop customized solutions

including assessments, strategic advising, training, executive coaching and other

programs to help companies improve how they integrate across cultures during a

merger, acquisition or joint venture.

“Culture is one of the big obstacles hindering deal success and is a driving force

behind many other immediate causes of deal failure, including delayed

integration or implementation. Some of the largest companies in the world pull

out or scale back in foreign target markets simply because they failed to

understand the impact of national cultures on the very factors they relied upon to

drive profitability,” said David Sult, senior vice president of Merger and

Acquisitions Solutions at Aon Hewitt. “Our partnership with Universal Consensus

complements our existing cultural capabilities, expands our global footprint and

brings us additional levels of insight, capabilities and tools to help companies

understand and manage the cross-cultural issues that impact the success of their

M&A transactions.”

“More and more companies realize the importance of evaluating and controlling

the impact of national cultures coming together during the M&A process,” said

Denise Pirrotti Hummel, CEO of Universal Consensus. “Failing to appropriately

identify, analyze and manage cultural differences can create significant problems

for organization and can often lead to the success or failure of a transaction. Our

partnership with Aon Hewitt enables us to combine our talent and expertise to

help companies find the most effective way to bring together diverse national

workforces and cultures.”

Aon’s M&A Solutions (AMAS) practice provides comprehensive services through

the entire M&A lifecycle including due diligence, integration planning and

implementation. For the past four years, AMAS has provided world-class thought

leadership and experience on more than 3,700 diligence assignments. The

practice’s expert team is comprised of over 300 dedicated M&A professionals

worldwide, including management consultants, attorneys, actuaries, human

capital specialists, brokers, underwriters, claims adjusters and investment

bankers.


About Aon Hewitt

Aon Hewitt is the global leader in human resource consulting and outsourcing solutions. The company

partners with organizations to solve their most complex benefits, talent and related financial challenges,

and improve business performance. Aon Hewitt designs, implements, communicates and administers a

wide range of human capital, retirement, investment management, health care, compensation and

talent management strategies. With more than 29,000 professionals in 90 countries, Aon Hewitt makes

the world a better place to work for clients and their employees. For more information on Aon Hewitt,

please visit www.aonhewitt.com.

Copyright Aon Hewitt 2013

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