comparative studies of international management...

Comparative Studies of International Management and Organizational Behavior

Aarhus School of Business, Aarhus University

BSc in Business Administration and International Management

The Relationship between International

Management and Organizational Behavior

A Comparative Study of the Theories and Ideas of Geert Hofstede, and

Christopher A. Bartlett and Sumantra Ghoshal

Author: Morten Søndermark Miltersen

Academic Advisor: Morten Rask

Department of Management

May 1st 2009


Abstract

The research of this thesis revolves around the interdisciplinary issue of comparing the ways of

applying theories in international management and organizational behavior. This leads to the

comparison of the methods and theories by Geert Hofstede in creating the theories in “Cultures

and Organizations (2003)” with those of Bartlett and Ghoshal in creating the theories for

“Managing Across Borders: The Transnational Solution (1998)”. The relationship between the

scientists is explained as a means to show how two sciences can be interrelated. A method of

directly comparing the quantitatively based theories of “human mental programming”, “the

onion diagram” and “the cultural dimensions” by Hofstede with those qualitatively based of

“administrative heritage”, “the organization models” and “the transnational solution” by

Bartlett and Ghoshal will be used to illustrate the relations between their ideas. These ideas are

put into perspective of the relative sciences of IM and OB to show how sciences can be in an

unusual yet tight relationship.

Keywords International management, organizational behavior, human mental programming,

administrative heritage, Geert Hofstede, Christopher A. Bartlett, Sumantra Ghoshal


Table of Contents 1. Introduction ............................................................................................................................. 5

1.1 Problem Statement .......................................................................................................... 7

1.2 Analytical Approach ......................................................................................................... 7

1.2.1 Method...................................................................................................................... 7

1.2.2 Limitation .................................................................................................................. 7

1.2.3 Definitions, Abbreviations and Assumptions............................................................ 8

1.2.4 Goals of Investigation ............................................................................................... 8

1.3 Theoretical Foundation and Literature Review ............................................................... 9

1.4 Structure......................................................................................................................... 10

2. The Theories of Hofstede, and Bartlett and Ghoshal ............................................................ 11

2.1 Background..................................................................................................................... 11

2.2 Geert Hofstede ............................................................................................................... 11

2.2.1 Human Mental Programming ................................................................................. 12

2.2.2 The Onion Diagram ................................................................................................. 13

2.2.3 The Cultural Dimensions ......................................................................................... 15

2.3 Christopher A. Bartlett and Sumantra Ghoshal ............................................................. 23

2.3.1 Administrative Heritage .......................................................................................... 23

2.3.2 Organization Models ............................................................................................... 27

2.3.3 The Traditional and Emerging Change Processes ................................................... 31

3. Similarities and Differences ................................................................................................... 34

3.1 Background..................................................................................................................... 34

3.2 Mental Programming versus Administrative Heritage .................................................. 34

3.2.1 Personality versus the Role of Leaders ................................................................... 36

3.2.2 Culture versus the Impact of National Culture ....................................................... 36

3.2.3 Human Nature versus the Influence of Organizational History.............................. 38

3.3 The Onion Diagram versus Organization Models .......................................................... 38

3.4 The Cultural Dimensions versus the Change Processes................................................. 39

4. Relationships between IM and OB ........................................................................................ 41


4.1 Methodological .............................................................................................................. 41

4.2 National Culture ............................................................................................................. 42

4.3 Knowledge Exchange...................................................................................................... 43

5. Solution to the Problem Statement....................................................................................... 44

6. Conclusion and Discussion..................................................................................................... 45

7. References ............................................................................................................................. 47


1. Introduction

As a result of constantly evolving organizational structures and a world steadily breaking down

its national borders, this thesis aims to, investigate the similarities and differences that arise

when international management (IM) meet organizational behavior (OB).

The goal will be to show how IM and OB correlates when compared to each other. To show this

correlation two independent scientists that are very prominent within each their field are

required and they need to deal with internationally managed organizational structures.

One of IM’s most prominent researchers has for a long time been Geert Hofstede and his

theories of cultural dimensions are relevant to almost any cultural case study. His ideas and

research results deal with clarifying the implications of IM in groups – nationally and

organizationally. The impact of IM on OB has been so thoroughly described in the cases

presented by Christopher A. Bartlett and Sumantra Ghoshal, where they investigate the forces,

structures and behaviors of internationally managed corporations.

As IM consider each nation to have distinct cultures that define them, Geert Hofstede presents

a division drawn between the national and organizational aspect of culture, these aspects and

the basis for these theories will be used to outline culture’s influence on OB. Furthermore, since

organizations consist of cultures of all categories, and national culture is a distinct part of this

definition, then the borders between national culture and organizational culture will be clarified

as seen from the perspective of Hofstede.

The main work of Bartlett and Ghoshal is based on cases from some of the world’s largest

corporations. These multinational enterprises (MNEs) operate on the international scene and

have, by means of integrating IM, a history of having developed some highly successful

organizational structures. They show us how IM can be converted to OB in modern

organizations. The impacts of IM that Bartlett and Ghoshal found throughout the course of

their research will be made clear.


To present a model that can illustrate the framework for the comparison of Hofstede, and

Bartlett and Ghoshal the following reasoning is used:

There seems to be a correlation between the scientists’ initial use of national culture as a part

of human and organizational origin, respectively. From here it expands to Geert Hofstede, and

Bartlett and Ghoshal defining the origins of individual and organizational behavior through

apparently similar models. They both have similar thoughts to the perception of behavior.

These origins and perceptions are used in defining the essence and processes of culture and

they lead the way for each scientist’s model.

Table 1 shows Hofstede as explaining IM and Bartlett and Ghoshal as investigating a merger of

OB and IM. This reasoning leads to the following overview of the comparative framework:

Hofstede Bartlett and Ghoshal

Origin Mental Programming Administrative Heritage

Perception The Onion Diagram Organization Models

Model Cultural Dimensions The Change Process

Sciences International Management Organizational Behavior in International

Environments

Tab. 1 – Comparative framework

It is through this model that the correlations between Hofstede (Representing IM), and Bartlett

and Ghoshal (Representing OB) will be clarified.

With a comparative study of the theories of Geert Hofstede, and Bartlett and Ghoshal, this case

is going to investigate how culture finds it way into the IM and OB theories. Following

Hofstede’s notion, from the title of the article that “the business of international business is

culture” (Hofstede, 1994), this case will clarify how this is related to both IM and OB. Through

the theories of Bartlett and Ghoshal it will be clarified how the similar or different use of IM can

have OB consequences.


1.1 Problem Statement

With respect to culture, what are the main similarities and differences in the theories of

Hofstede (Representing IM), and Bartlett ad Ghoshal (Representing OB)?

How did these similarities and differences originate?

What is, in this case, the relationship between IM and OB?

Specifically the case will investigate:

a. What are the main theories and models of Hofstede, and Bartlett and Ghoshal?

b. What are the similarities and differences between Hofstede, and Bartlett and Ghoshal?

c. What relationship does this create between IM and OB, with respect to the scientists?

a. How do the sciences, in this case, relate methodological?

b. Can their knowledge, in this case, be shared?

1.2 Analytical Approach

1.2.1 Method

This thesis will investigate IM and OB through the perspective of two scientists that individually

have provided each their area with empirical findings of great ingenuity. The thesis will discuss

each of the scientists’ theories and then conduct a comparative study of the two. The result of

the comparison will be used to illustrate the relationship between IM and OB.

1.2.2 Limitation

To stay within certain boundaries, the research will be limited to the theories considered the

most applicable in this case. It is the main intent of this case to compare Hofstede and Bartlett

and Ghoshal’s use of IM in OB, so the focus will be on the theories that are considered to be

most important to the two. Since the concepts of IM and OB are very large and broad, the

research will be limited to a comparison of ideas and theories stated by Hofstede in “Cultures

and Organizations: Software of the Mind (2003)” and Bartlett and Ghoshal in “Managing across

Borders: The Transnational Model (1998)”.

This thesis will only include the theories of Hofstede that are found to cover international

management in relation to MNE structures.


1.2.3 Definitions, Abbreviations and Assumptions

International Management (IM) – Is as the name implies the act of managing others in

international environments, but since this comparative study base its IM theories on Hofstede

the term IM will mainly reflect aspects of national culture.

Organizational Behavior (OB) – Is defined by Ian Brooks as “the study of human behavior in

organizational contexts, with a focus on individual and group processes and actions.” (Brooks,

2006 p. 2).

Sociology – Is in the Oxford Advanced Learners Dictionary defined as “the scientific study of the

nature and development of society and social behavior” (Oxford University Press, 2005 p.

1453).

Anthropology – Is in the Oxford Advanced Learners Dictionary defined as “the study of the

human race, especially of its origins, development, customs and beliefs” (Oxford University

Press, 2005 p. 55).

By the “application of theories” is meant when the theories are put into use and applied in a

real world situation.

The initial assumptions include:

That it is true that both IM and OB is indeed of high significance to MNEs.

That the results of Hofstede have not changed significantly, even though his research of

cultural differences were conducted, more than two decades ago, in the period 1985-7

(Hofstede, 2003 p. xiii).

That the ideas and theories of Bartlett and Ghoshal are still relevant, even though their

work is more than a decade old.

That the theories of Hofstede, and Bartlett and Ghoshal are in fact representative of the

sciences IM and OB, respectively.

1.2.4 Goals of Investigation

The goal of investigating this area, that have already been described so intensely, is to use the

similarities and differences, within the theories of Hofstede, and Bartlett and Ghoshal, to clarify

the relationship between the sciences IM and OB. These similarities and differences will be


used as a framework for considering correlations between culture and OB. With the

correlations clarified the research outcome should be able to provide as a base for further

studies in management.

1.3 Theoretical Foundation and Literature Review

The research in this thesis is based on literature by Hofstede, and Bartlett and Ghoshal which

are relatively old, but still produce a relevance to each their sciences. They each cover their side

of IM and OB respectively, and they both use culture in each their distinct and yet similar way.

The merging of IM and OB in the work of Bartlett and Ghoshal further creates a good basis for

comparing the IM in OB. It is because of this similar use of culture and merger of IM and OB

that they are interesting for investigation.

The specific main works referred to in this thesis are: “Cultures and Organizations – Software of

the mind – Intercultural Cooperation and its importance for survival” by Geert Hofstede

(Hofstede, 2003) and “Managing Across Borders: The Transnational Solution” by Christopher A.

Bartlett and Sumantra Ghoshal (Bartlett, et al., 1998).

Hofstede conducted extensive quantitative studies on the basis of an analysis of questionnaires

within IBM. He is perhaps the most widely quoted theorist on the subject of international

business culture and management. His findings are based on the meaning he conclude each

statistical clusters have and this conclusion is based on his notions on paradigms and are

therefore biased. Many others have attempted isolating the values that are culture specific, but

Hofstede was the first to do it quantitatively at such a large scale. Despite the discussions on

how he conducted his research, he has stated some of the most controversial and most

debated theories in a long time and is therefore generally considered relevant to studies in this

field and more importantly, to this thesis.

Bartlett and Ghoshal used qualitative studies to draw historical conclusions on the basis of

cases experienced by some of the largest companies in the world. They base their findings on

interviews of “236 managers in nine core companies” (Bartlett, et al., 1998 p. ix). Their findings

formed a model for organizational structures that they called: “The Transnational Solution”,


which “has proven robust and powerful in the years that have followed the publication of the

book” (Bartlett, et al., 1998). Since this is the authors own statement it should be considered

critically, but the model is interesting in the research of this thesis since it combines IM and OB

on the basis of transnational corporations. They did not statistically substantiate their findings ,

but base their conclusions on cases that happen to fit the models in question. Studying enough

cases would give anyone the means to present models, but Bartlett and Ghoshal argue well for

each of their theories and are among the few to present a “solution” to conducting IM in MNE.

These factors make them, in terms of methodology and nature of conclusion, opposites to

Hofstede. This makes the pair of scientists eligible for comparison as it will create a research

foundation based on the best of both quantitative and qualitative conclusions.

Neither of the two authors makes references to the other1, so the conclusions they present are

based on their individual findings and are assumed not to be directly connected. Since this

thesis is a comparative study of how two supposedly independent social sciences can be

merged and made dependent, this little detail becomes important as it will be possible to look

for correlations on the basis of to independent authors.

1.4 Structure

The structure of the paper follows the problem statement and goes through these sections:

Part 1 – Introduction

Part 2 – The Theories of Hofstede, and Bartlett and Ghoshal

Part 3 – Similarities and Differences

Part 4 – Relationship between IM and OB w.r.t. Hofstede, and Bartlett and Ghoshal

This structure is applied to create a logic overview that follows the problem statement. First the

theories are separately clarified, secondly they are compared by putting them up against each

other and thirdly the relationship that this comparison creates between IM and OB will be

described.

1 Bartlett and Ghoshal mention Hofstede onc e in their material (Bartlett, et al., 1998 p. 354), but since it is as an

irrelevant part of their notes, it is not considered of significance.


2. The Theories of Hofstede, and Bartlett and Ghoshal

2.1 Background

To get the best overview and to avoid confusion, each scientist’s theories will be described

separately. First the ideas of Hofstede and then Bartlett and Ghoshal will be discussed. This

order is chosen since it will show the natural evolution from, Hofstede’s very thorough

description of IM on the most basic level, to Bartlett and Ghoshal’s merger of IM in OB.

At the roots of IM and OB lies the national culture. Both scientists agree that national culture is

a vital foundation to what constitutes the individual human and individual organization. The

first similarities between the two scientists are their use of the concept of culture. They each

define culture with slight distinctions, but the initial similarities become quite obvious when

they are thoroughly investigated. Because of this importance it will be the starting point in

clarifying the distinctions between IM and OB.

2.2 Geert Hofstede

Culture has always been and still is a subject for discussion. Social scientists and researchers

have attempted to pinpoint the exact definition of culture, but where many have had an idea,

none have been able to figure out the exact formula of culture. Hofstede, and Bartlett and

Ghoshal are a part of this group, but culture is not the only focus of their studies. They each

present their ideas and assumptions of culture and use them as a framework for very separate

studies.

Because an individual can be a part of numerous cultural groups simultaneously, it leaves the

definition of culture in such a translucent state, that it is often up to the researchers to decide

how and what particular culture is to be used depending on what is under study. Hofstede

approach culture through the most widely used anthropological or values approach which is the

assumption that “core values shared by communities explain variation in behaviors” (Guirdham,

2005 p. 49). This approach is shared by Trompenaars, Boski and Schwartz(Guirdham, 2005 pp.

52-8), but if culture is left to be defined by the researcher studying it, it becomes dependent on


that individual researcher’s perceptions , assumptions and paradigms. Since culture can be

defined as an individual’s perceptions, assumptions and paradigms , then does this not leave

culture as a product of itself? The intention of this, clearly simplified, question is meant as an

illustration of the paradoxes of investigating culture. The particular paradox here will be a part

of the discussion of the first two theories of Hofstede, and thirdly his and IRIC’s research

findings will be explained and argued.

“Geert Hofstede is Professor of Organizational Anthropology and International Management”

(Hofstede, 2003 p. i) and has developed some of the most widely discussed and cited research

projects on the subject of national culture in international management. For the development

of his cultural dimensions, he stated some initial assumptions and definitions to serve as a

framework. The two most important ones were the theory of the human mental programming

and the onion diagram.

2.2.1 Human Mental Programming

Hofstede operates with different levels of human mental programming which are best

described by the following pyramid:

Hofstede divides the pyramid of human mental programming into three main levels with each

their characteristics. Human nature is an inherited trait that all humans have, culture is learned

qualities that are shared with a group or category (educational, occupational, national etc.) and

finally personality is the partly inherited and learned trait which is specific to the individual.

CULTURE

PERSONALITY

HUMAN NATURE

Inheri ted and learned

Learned

Inheri ted

Specific to individual

Specific to group or

category

Universal

Fig. 1 – Three levels of uniqueness in human mental programming (Hofstede, 2003 p. 6)


With this framework of mental programming divided so conveniently, it becomes relevant to

define exactly where one level of it changes to another. Although exactly where these borders

between the three levels lie is as Hofstede puts it: “a matter of discussion among social

scientists” (Hofstede, 2003 p. 5), he defines culture as what humans learn from their social

environment and human nature as “inherited from one’s genes” (Hofstede, 2003 p. 5). Inspired

by sociobiology he continues to clarify that “human nature is not as ‘human’ as the term

suggests, because certain aspects of it are shared with parts of the animal world.” (Hofstede,

2003 pp. 5-6 and 18). With this frame and by using the pyramid model, Hofstede’s ideas and

assumptions are clear, but are they sufficient? Since no one has been and probably will be able

to exactly define what constitutes the human mind then this idea for a model seems to serve

Hofstede’s purpose.

This leaves us with a model where the borders between personality, culture and human nature

can be said to be distinguished through individual opinions, group impact and a historic

environment. In the search for IM related theories the next question naturally becomes how

does one individual’s mental programming interact with another’s.

2.2.2 The Onion Diagram

Culture manifests itself through what Hofstede calls “the onion diagram”:

Symbols, heroes and rituals all play a vital role in creating our personal values, but they “have

been subsumed under the term practices. As such, they are visible to an outside observer; their

cultural meaning, however, is invisible and lies precisely and only in the way these practices are

Fig. 2 – The Onion Diagram: Manifestations of culture (Hofstede, 2003 p. 9)

Rituals

Heroes

Symbols

Values Practices


interpreted by the insiders.”(Hofstede, 2003 p. 8). With this assumption in mind, one’s values

plus others’ interpretation of ones practices equals your culture. The assumption that your

values are a product of others perception of your practices is illustrated by Guirdham’s

explanation of the term “non-verbal communication”. Guirdham lists and exemplifies

numerous characteristics that deal with all the aspects of a conversation that is communicated

by a look, a touch, a particular way of putting the stress to a word or phrasing a sentence

(Guirdham, 2005 p. 92). These all confirm Hofstede in his theory.

The notion, “Culture is learned, not inherited. It derives from one’s social environment, not

from ones genes”(Hofstede, 2003 p. 5), means that since culture is derived from your

surroundings, an organization can only alter or modify it to suit their needs. Hofstede agrees to

this point, but clarifies that “as soon as certain patterns of thinking, feeling and acting have

established themselves within a person’s mind, (s )he must unlearn these before being able to

learn something different, and unlearning is more difficult than learning for the first time.”

(Hofstede, 2003 p. 4). This leads to the suggestion that although a difficult and complex task,

culture is a part of your mental programming that can be learned, unlearned, s haped and

altered by organizations.

The reason Hofstede presents this model is to define exactly what he is investigating, which is

the underlying values. He states that the practices “are visible to an outside observer; their

cultural meaning, however, is invisible and lies precisely and only in the way these practices are

interpreted by the insiders.” (Hofstede, 2003 p. 8). This idea create an obvious validity problem

for his research, if he as the outsider observing the visible part of his research subject, is he

then, by before mentioned definition, able to identify the actual underlying values? And even if

he does come to an interpretation, this will be influenced by the values he place in the very

values he is to investigate. The scientific term for this paradox is bias and it is something all

scientists do their best at eliminating, but which they are all, to some degree, subject to.

Hofstede is aware of the paradox and does one of the only things he can, and defines his way

out of it by stating that he is distinguishing between two states: The desirable and the desired.

The desirable is how people consider things ideally should be and desired is how it actually


is(Hofstede, 2003 pp. 9-10). Again it is still hard not to suspect that this method could have

created misinterpretations. After all Hofstede himself admits that, not encountering the fifth

dimension was a result of bias with the researchers conducting the initial

investigation(Hofstede, 2003 p. 14).

The paradox that Hofstede’s onion diagram presents can be illustrated by applying one of

Edward T. Hall’s cultural dimensions. Hall also used a different approach and sought find the

differences in how cultures communicate(Guirdham, 2005 p. 61). One of the dimensions he

found was that of high and low-context cultures. Briefly explained, the dimension deals with

the amount of significance cultures add to what is said and what is not. High-context cultures

add significance to the context and vice versa(Brooks, 2006 p. 275). If you are from a high-

context society and you are presented with a questionnaire, there will be an inevitable

difference in how this individual will perceive the way questions are asked as to one from a low-

context society. These misunderstandings will lead to a difference in what high and low context

cultures will answer so the result will be misinterpreted. These circumstances and paradoxes,

created by Hofstede himself, set aside, he presented the following dimensions.

2.2.3 The Cultural Dimensions

Hofstede based his analysis on information gathered from “three different research projects,

one among the subsidiaries of a multinational corporation (IBM) in 64 countries and the other

two among students in 10 and 23 countries, respectively” (Hofstede, 1994 p. 1). By keeping the

investigation within the boundaries of IBM and by including occupation, the organizational and

occupational cultures were kept constant. He was then able to statistically identify clusters of

correlations between the answers which were inferred to belong to national culture

differences.

When looking at what research method is the better for describing cultural dimensions, Fons

Trompenaars present a different method than Hofstede. Trompenaars draws inspiration from

Hofstede, but is more concerned with “practical problems and solutions for managers dealing

with a cross-cultural environment.”(Brooks, 2006 p. 282). One of the things he discusses is


whether the correlations Hofstede found were based on the appropriate assumption that

culture can be defined linearly. Hofstede assumes that you can linearly see to what degree the

population of a country is inclined to prefer one situation over another, they are either A or

non-A(Trompenaars, et al., 1997 p. 150). Trompenaars present the dilemma approach, “By

posing dilemmas we oblige respondents to put one of two values first” (Trompenaars, et al.,

1997 p. 150). This approach, which creates a more complex response that contains more details

and do not exclude one option from another, provides the respondent with more integrity in

answers (Trompenaars, et al., 1997 p. 150). When asked a question by an authority, humans

can have a tendency to look for the answer that will please the authority. Both approaches

have their advantages and disadvantages; it depends on what you are looking for. To know the

simple underlying values you cut straight to the case, to create a manual for solving practical

problems you investigate several aspects from several perspectives.

Trompenaars continues the criticisms and states that Hofstede in particular lack the pointers to

business practice, his dimensions simply does not provide any solution to given

problems(Trompenaars, et al., 1997 p. 155). By adding this comment to the previous, again, the

main criticisms seem to originate from a difference in purposes. Simply put, Hofstede could use

his data to find the reasons for cultural differences and Trompenaars was interested in finding

the practical tools for dealing with these cultural differences. This does not make any of each of

the researchers work less correct, but when creating two different products, two different sets

of tools are needed. Despite the methods used, Nancy Adler argues that “most subsequent

research has upheld the validity of his *Hofstede’s+ analysis”(Adler, et al., 2008 p. 282), so let us

continue and look at the values that emerged.

2.2.3.1 National Cultures

With IBM working as a framework, it was possible for Hofstede to keep organizational and

occupational culture variables constant, so that the differences observed could be inferred to

come from national differences. The validity of the theories and research results of Hofstede

has been and still is widely debated, but they have undoubtedly provided us with one of the

most straightforward models for understanding and describing national cultures.


The idea about the “dimensions paradigm” presented by Hofstede has been widely adopted.

Among others such scientists as Edward T. Hall, André Laurent, Fons Trompenaars, and

Kluckhohn and Strodtbeck all use the idea of dividing culture into several dimensions. By

creating opposites in the dimensions, differences can be measured. The work of Hofstede might

not produce a solution for managing internationally, but in combination of one another, the

above theories, creates an extensive framework for understanding the aspects of IM. This

framework is not only valuable as a tool for doing group work and solving middle management

task. The dimensions can mean even more if a company is able to grasp this understanding of

cultures on either a divisional basis or even between whole corporations.

Hofstede’s analysis resulted in the formulation of the following five national dimensions. First

each dimension will be described and then on a general level the origin of the labels will be

discussed.

2.2.3.2 The Five Dimensions

1. Power Distance

2. Individualism versus Collectivism

3. Masculinity versus Femininity

4. Uncertainty Avoidance

5. Long Term versus Short Term Orientation or Confucian Dynamism (Adapted by

Hofstede, but was not found through his own research)

Power distance is defined by “the extent to which the less powerful members of institutions

and organizations within a country expect and accept that power is distributed

unequally”(Hofstede, 2003 p. 28) or simply put: “the way its society handles

inequality”(Hofstede, 2003 p. 23). The PDI score itself “inform us about dependence

relationships in a country.” (Hofstede, 2003 p. 27). This means that in a country labeled with a

small power distance there is “interdependence between boss and subordinate” and in a

country labeled with large power distance “there is considerable dependence of subordinates

on bosses.” (Hofstede, 2003 p. 27). To continue the first criticism of Trompenaars, the two


labels provide a comprehensive definition of the extremes, but a clear definition of the medium

values is missing. The nations positioned in the center of the rankings are Chile, Uruguay,

Portugal, Greece and South Korea in particular. Is this an expression of indifference for the

concept of power distance or is it an indication of the need for a third option on the

questionnaire? Either of the two could signify the need for defining a new dimension.

Individualism versus collectivism is defined by whether the emphasis is put on “the role of the

individual versus the role of the group.”(Hofstede, 2003 p. 50). “Individualism pertains to

societies in which the ties between individuals are loose” and “collectivism as its opposite

pertains to societies in which people from birth onwards are integrated into strong, cohesive

ingroups” (Hofstede, 1984 p. 51). The same criticism as before, what is in between the two

values? Is it nations that consist of neither individualism nor collectivism (a sort of assertive

Indian culture that is focused on filling out your caste in society) or is it a culture that contains

both (like a Chinese or Japanese mentality, where the people are ambitious on the behalf of the

whole society). Looking for a clue in the research output renders that China is not represented

in the survey, India score 48/100 and Japan is number 46/100, so the answer is either unknown

or both.

Masculinity versus femininity is defined by “the desirability of assertive behavior against the

desirability of modest behavior.” (Hofstede, 2003 p. 80). “Masculinity pertains to societies in

which social gender roles are clearly distinct” and “femininity pertains to societies in which

social gender roles overlap.” (Hofstede, 2003 p. 80). In order to reflect the underlying meaning

of this dimension more accurately, Adler changes this label to “career success” versus ” quality

of life”(Adler, et al., 2008 p. 51), which, giving the questions they were based on, captures the

dimension to a larger extent and avoids the inevitable value that readers will add to the gender

specific term.

Uncertainty avoidance is defined by “the extent to which the members of a culture feel

threatened by uncertain or unknown situations.” (Hofstede, 2003 p. 113). This means that in

countries with weak uncertainty avoidance an unknown situation is avoided and the population


is dependent on rules and vice versa for countries with strong uncertainty avoidance (Hofstede,

2003 pp. 113-5).

Long term versus short term orientation can be interpreted “as dealing with a society’s search

for virtue.” (Hofstede, 2003 p. 171). Michael Bond (The researcher discovering the dimension)

originally labeled the dimension “Confucian dynamism” due to its resemblance to the

extremely culturally rooted (For China) teachings of the Chinese philosopher Confucius

(Hofstede, 2003 p. 166). The dimension is comprised by two parts: long-term orientation and

short-term orientation. Long-term orientation is related to the values of persistence

(perseverance); ordering relationships by status and observing this order; thrift; and having a

sense of shame. Short-term orientation on the other hand is related to the values of personal

steadiness and stability; protecting your ‘face’; respect for tradition; and reciprocation of

greetings, favors, and gifts (Hofstede, 2003 pp. 165-6).

The dimensions were found through an analysis of clusters and the names Hofstede labels them

originate from anthropology and sociology(Hofstede, 2003 p. 13). In a literary discussion based

on methodology between Hofstede and Trompenaars, Trompenaars challenge the empirical

nature of Hofstede’s work. According to Trompenaars, in the “50”s and “60”s, “individual

questions are copyrighted, so to make your own questionnaire you simply alter the phrasings”

and with this in mind he states that it is simple to recognize the shadows of Hofstede’s labels in

a number of research projects and theories of other authors (Trompenaars, et al., 1997 p. 153).

Whether or not Hofstede to some extent got the inspiration for his labels from others, he

simply seems to have found those that covered his investigation the best and added these to

his own ideas. That he used previous studies increase the validity of his findings, as it creates a

solid theoretical foundation, more than it decrease it.

The dimensions are meant to cover the aspects in which human individuals differ from one

another. The aspects include power, individualism, masculinity, uncertainty avoidance and time

orientation, the question is then, is this the most covering description of cultural differences?

Since culture is such a multifaceted concept it is hard not expect that more values will turn up.


After all, the initial four dimensions were based on statistical clusters of questions that had

been asked before even thinking about probing, what if different questions had been asked?

Where the employees of IBM seemed to be covered by the initial four dimensions, different

questions to a different people yielded a fifth dimension.

Hofstede’s dimensions have been heavily discussed and criticized by numerous sources since

their publication, but Galit Ailon indicates to which extent the criticisms have reached. Ailon

uses Hofstede’s own dimensions to deconstruct the underlying values of each of the labels and

thereby she exposes a political subtext that covers two elements, devaluing (non-Western) and

overvaluing (Western) of countries (Ailon, 2008 s. 898-9). Without further discussing the

significance of Ailon’s results , it is the firm belief of this thesis that it is imperative not to see the

dimensions as more than they are: Indicators of cultural tendencies.

The paradigm of asking different questions to different people were used to find dimensions

that could explain organizational differences.

2.2.3.1 Organizational Cultures

The IRIC (Institute for Research on Intercultural Cooperation) drew their conclusions on the

basis of a mix of qualitative and quantitative studies of “20 organizational units in Denmark and

the Netherlands”(Hofstede, 2003 p. 184). The Netherlands were chosen as it was the home

country of the research institute and Denmark because of their similar national culture values.

It further turned out that they “found the roles of values versus practices to be exactly reversed

with respect to the national level”(Hofstede, 2003 pp. 181-2), which showed that what IRIC

measured were primarily the differences in organizational practices and not employee

values(Hofstede, 2003 pp. 187-8). These factors help to, in the same way as IBM previously kept

organizational culture constant, keep the national cultures constant and the organizational

cultures variable.


Since they constructed the dimensions like Hofstede, with two extremes and no clear

expression for the definition of medium values, the criticisms expressed with the national

culture is still apparent.

On this foundation they defined six dimensions that distinguish organizational

cultures(Hofstede, 2003 pp. 187-8). As with the national cultures first each dimension will be

described and then the origin of the labels will be discussed.

2.2.3.2 The Six Dimensions

1. Process-oriented versus Results-oriented Cultures

2. Employee-oriented versus Job-oriented Cultures

3. Parochial versus Professional Cultures

4. Open Systems versus Closed System Cultures

5. Loosely Controlled versus Tightly Controlled Cultures

6. Normative versus Pragmatic Cultures

Process-oriented versus results-oriented culture oppose means with goals. “In the process-

oriented cultures people perceive themselves as avoiding risks and making only a limited effort

in their jobs, while each day is pretty much the same.”(Hofstede, 2003 p. 189). “In the results-

oriented cultures people perceive themselves as comfortable in unfamiliar situations and put in

maximum effort, while each day is felt to bring new challenges .” (Hofstede, 2003 p. 189).

Employee-oriented versus job-oriented culture oppose concern for people with concern for

completing the job. “In the employee-oriented cultures people feel their personal problems are

taken into account… and that important decisions tend to be made by groups or committees .”

(Hofstede, 2003 p. 190). “In the job-oriented units people experience a strong pressure to

complete the job, they perceive the organization as only interested in the work employees do…

and important decisions tend to be made by individuals.” (Hofstede, 2003 p. 190).

Parochial versus professional culture oppose whether employees draw their identity from the

organization with their job. “Members of parochial cultures feel the organization’s norms cover


their behavior at home as well as on the job… and they do not look far into the future (they

probably assume the organization will do this for them).” (Hofstede, 2003 pp. 190-1).

“Members of professional cultures consider their private lives their own business… and they do

think far ahead.” (Hofstede, 2003 p. 191).

Open systems versus closed system culture oppose open to closed systems. “In the open system

units, members consider both the organization and its people open to newcomers and

outsiders” (Hofstede, 2003 p. 191) “In the closed system units, the organization and its people

are felt to be closed and secretive, even among insiders.” (Hofstede, 2003 p. 191).

Loosely versus tightly controlled cultures refer to the degree of internal structure in the

organization. “People in loose control units feel that no one thinks of cost, meeting t imes are

only kept approximately, and jokes about the company and the job are frequent” (Hofstede,

2003 p. 191). “People in tight control units describe their work environment as cost-conscious,

meeting times are kept punctually, and jokes about he company and/or job are rare” (Hofstede,

2003 p. 191).

Normative versus pragmatic culture deals with customer orientation. “In the normative units

the major emphasis is on correctly following organizational procedures, which are more

important than results.” (Hofstede, 2003 pp. 191-2). “In the pragmatic units, there is a major

emphasis on meeting customer’s needs” and “results are more important than correct

procedures.” (Hofstede, 2003 p. 192).

The main issue with the IRIC research is that it is a study of the corporate practices among

companies within two countries. The practices are interesting on a local country basis, but in

their relation to IM they only cover a specific area. In this respect their relevance for this thesis

might be in question, but they are included to show one of the different aspects of culture

which management have to consider. The local nature of the research makes it difficult to

establish whether it is possible to quantify internationally.


To statistically investigate national specific organizational cultures, the issue is to find

companies that are constant with respect to national, occupational and organizational cultures.

This means that we need a portfolio of companies with similar national culture, using the same

organizational practices industry and organizational practices which is very complex if not

virtually impossible.

2.3 Christopher A. Bartlett and Sumantra Ghoshal

Through qualitative research consisting of partly interviews and the studies of historical cases

from nine MNEs, Bartlett and Ghoshal resonate their way to a model for what causes the

successes and failures. Their conclusions are solely based on observing the present changes and

history of the companies of question.

Their studies show that the main problem large transnational companies face is to avoid the

“’structural-complexity’ trap”. Transnational management fail because they set up the physical

aspects of a matrix structure, instead of, as Bartlett and Ghoshal suggests, realizing that matrix

structures are more important to get implemented in their management culture rather than

structure (Bartlett, et al., 1990). This leaves their research an issue of investigating the creation

of organizational cultures that are able to support the development of structure.

With the importance placed on the management culture Ian Brooks further clarifies their

findings as: “top managers should concentrate less on finding the ‘ideal’ corporate structure

and concentrate more on creating the right attitudes and behavior in a high commitment work

climate.” (Brooks, 2006 p. 188). So, according to Bartlett and Ghoshal, attitudes, behavior and

wellbeing of the work climate are important factors in the success of MNEs operating globally.

Together, these three factors are covered by the “administrative heritage” of organizations.

2.3.1 Administrative Heritage

When Bartlett and Ghoshal define culture in an organization they describe it as a part of the

administrative heritage of an organization. This idea is shared by Lubatkin and Floyd who use it

to search for management models within Europe (Lubatkin, et al., 1997). What shapes an

organization’s administrative heritage is these three factors (Bartlett, et al., 1998 pp. 46-55):


1. The role of leaders

2. Impact of national culture (Influenced by Alfred Chandler) (Bartlett, et al., 1998 p. 46)

a. Family capitalism

b. Managerial capitalism

c. Group capitalism

3. Influence of organizational history

The role of leaders is related to the high significance a “company’s founder or another key

executive” has in the shaping of a company’s norms, values and common practices of an

organization. Bartlett and Ghoshal came to this conclusion through statements of managers

and further illustrated their point by the cases of Philips and Matsushita. For almost ninety

years Philips institutionalized the relationship of the founding brothers into the organizational

structure. Gerard Philips was an engineer and Anton Philips was a salesman, so each division of

the organization had this dual-headed management that shaped all key decisions.(Bartlett, et

al., 1998 pp. 46-7). In the case of Matsushita, fourteen years after founding the company,

Konosuke Matsushita presented the organization with a 250 year plan which is followed till

today. The plan presented was based on the ideas and values of Matsushita himself and is

called “the Seven Spirits of Matsushita” which managers refer to “constantly and use them to

help make even the most basic decisions” (Bartlett, et al., 1998 p. 47). Bartlett and Ghoshal are

neither the first nor the only to see the connections between and importance of leaders in

shaping organizations. William Tierney shares this idea of leaders’ importance to shaping

organizations cultures (Tierney, 1986).

The impact of national culture by Bartlett and Ghoshal is influenced by the Pulitzer price-

winning business historian Alfred Chandler whose research divided management practices into

three groups:

Family capitalism, which represented the trends of Britain. This capitalism emphasize

the importance of “personal relationships more than formal structures, and relied more

on broad-gauged financial controls than on coordination of technical or operational


details.” When the companies under the influence of this capitalism expanded abroad it

used either family members or company trustees (Bartlett, et al., 1998 p. 48).

Managerial capitalism, which represented the trends of the USA. The egalitarian nature

of this capitalism created a corporate meritocracy, which “fostered the development of

a new class of professional managers, to whom owners delegated the authority of

running the business”. The capitalism was systems-dominated and control oriented.

Group capitalism, which represented the trends of Japan. Emphasize group behavior

and value interpersonal harmony in a paternalistic structure and mentality. The

capitalism is known for its employee and employer life time commitments. (Bartlett, et

al., 1998 pp. 50-1).

Bartlett and Ghoshal then argue that depending on the capitalism it is very much involved in

shaping the administrative heritage of the organizations (Bartlett, et al., 1998 pp. 48-51). This

does, by far, provide us with a complete picture of the actual theoretical impact of national

cultures on organizations, but since Bartlett and Ghoshal only investigated companies based in

these areas the framework is sufficient for them. The three capitalisms are by definition firmly

rooted in the existing social environments e.g. cultures of where they originate and this once

more illustrate the connection between national culture and administrative heritage.

The influence of organizational history has always been a factor that MNEs had to adapt to, but

the very nature of its impact has been varying depending on the era. The large organizations

have been under the influence of volatile, economic, political and social forces that have been

out of their control (Bartlett, et al., 1998 pp. 51-5). Bartlett and Ghoshal describe these

contextual and environmental forces as fixed forces that the companies have to either adjust or

yield their operations to. In terming the force as “fixed” lies the consideration that it is only the

force that is fixed, the action the organization can take to respond to this force is not.

The administrative heritage is important for MNEs, but as the problem statement, for the book

“Managing Across Borders” by Bartlett and Ghoshal, revolves around the issue stated in the

sentence: “Most managers seemed to understand very clearly the nature of the strategic task


they faced; their main problem was developing and managing the organizational capability to

implement the new and more complex global strategies.” (Bartlett, et al., 1998 p. xviii). After all

when managing across borders it is insinuated that more than one administrative heritage is

involved and new practices have to be developed. This issue naturally raise another concern

that, the mechanisms of integrating administrative heritages to maintain headquarters-

subsidiary control in mergers, need a tested model covering “institutionally, culturally, and

historically” aspects for further studies (Lubatkin, et al., 1998).

The main objective for “Managing Across Borders” is to define and describe “the nature of the

forces of change” (Bartlett, et al., 1998 p. xvii) and the need for companies to have the ability to

identify “what responses were most appropriate, and, above all, how they could manage the

more complex strategies and operations on an ongoing basis.” (Bartlett, et al., 1998 p. xvii). To

create an overview of their ideas the following model is presented:

Case: Force: Need:

GE Global Integration Efficiency

Kao Local Differentiation Responsiveness

ITT Worldwide Innovation Learning

Tab. 2.1 – The relationship between force and need

The three cases of General Electric, Kao and ITT each illustrate the forces for global integration,

local differentiation and worldwide innovation, respectively. These forces create a need for

companies to be aware of their efficiency, responsiveness and learning. The needs produce

each their strategic capabilities: global-scale efficiency and competitiveness; national-level

responsiveness and flexibility; and cross-market capacity to leverage learning on a worldwide

basis (Bartlett, et al., 1998 pp. 4-15). Each force creates a need with the MNEs that require the

implementation of a specific strategic capability. To define a set of variables on the basis of one

case each is very simple and can hardly be said to lead to a model, so it is important to stress

that the three cases mentioned are only illustrative examples of the general cases.


2.3.2 Organization Models

In their studies Bartlett and Ghoshal found four different types of organizational models. These

were “each characterized by distinct structural configurations, administrative processes, and

management mentalities.” (Bartlett, et al., 1998 p. 55). The effectiveness of each model

depends on the situation (Needs, forces and capabilities) an organization is in; this means that

the model of an organization should be chosen depending on their current situation. They

described the following models, each able to meet their specific needs:

The multinational organization model is “the classic organizational pattern adopted by

companies expanding in the prewar period.” (Bartlett, et al., 1998 p. 55). Bartlett and Ghoshal

found these characteristics (Bartlett, et al., 1998 p. 57):

Decentralized federation – Many key assets, responsibilities, and decisions decentralized

Multinational mentality – Management regards overseas operations as a portfolio of

independent businesses

Personal control – Informal HQ-sub relationships overlaid with simple financial controls

Visualized through the following model:

Fig. 3 – The Multinational Organization Model(Bartlett, et al., 1998 p. 57).

The international organization model is “predominant in the early postwar decades.” (Bartlett,

et al., 1998 p. 56). Bartlett and Ghoshal found these characteristics (Bartlett, et al., 1998 p. 58):

Coordinated federation – Many assets, resources, responsibilities, and decisions still

decentralized, but controlled from headquarters


International mentality – Management regards overseas operations as appendages to a

central domestic corporation

Administrative control – Formal management planning and control systems allow

tighter HQ-sub linkage


Fig. 4 – The International Organization Model (Bartlett, et al., 1998 p. 58).

The classic global organization model is “one of the earliest corporate forms, adopted by such

pioneers of internationalization as Henry Ford and John D. Rockefeller.” (Bartlett, et al., 1998 p.

58). Bartlett and Ghoshal found these characteristics (Bartlett, et al., 1998 p. 60):

Centralized hub – Most strategic assets, resources, responsibilities, and decisions

centralized

Global mentality – Management treats overseas operations as delivery pipelines to a

unified global market

Operational control – Tight central control of decisions, resources, and information


Fig. 5 – The Global Organization Model (Bartlett, et al., 1998 p. 60).


2.3.2.1 The Transnational Solution

The integrated network or the structural framework of the transnational is an organizational

model that ensures that “increasingly specialized units worldwide were linked into an

integrated network of operations that enabled them to achieve their multidimensional strategic

objectives of efficiency, responsiveness, and innovation.” (Bartlett, et al., 1998 pp. 101-2).

Bartlett and Ghoshal found these characteristics (Bartlett, et al., 1998 p. 102):

Dispersion – Distributed, specialized resources and capabilities

Specialization – Complex process of coordination and cooperation in an environment of

shared decision making

Interdependence – Large flows of components, products, resources, people and

information among interdependent units


Fig. 6 – The Integrated Network (Bartlett, et al., 1998 p. 102).

The strength of the transnational organization model is that it, through its main characteristics:

dispersion, specialization, and interdependence, meets the strategic objectives of efficiency,

responsiveness, and innovation.

Bartlett and Ghoshal believe that for a global company to succeed it needs, in addition to a

global corporate manager for supervision of whether a synergy effect is achieved, three

different management styles: a business, country and functional manager. In the article “What

is a Global Manager?”(Bartlett, et al., 2003) the roles of each of these managers are described

as follows:


The Corporate Manager – Responsible for managing the complex interactions between

the three others(Bartlett, et al., 1998 pp. 246-7).

o Leader + Talent Scout + Developer

The Business Manager – Responsible for furthering the company’s global-scale

efficiency(Bartlett, et al., 1998 p. 233).

o Strategist + Architect + Coordinator

The Country Manager – Has to be sensitive and responsive to the local market (Bartlett,

et al., 1998 p. 238).

o Sensor + Builder + Contributor

The Functional Manager – Responsible for the global knowledge sharing and learning

(Bartlett, et al., 1998 pp. 242-3).

o Scanner + Cross-Pollinator + Champion

Each of these roles is rather self-explanatory, but the general idea is that with each of these

management types in place a management culture is created with the capabilities of coping

with both forces and needs, simultaneously. Specifically, the purpose of choosing the

transnational solution is that, when the companies need to react to all three forces, this

structure will build all three strategic capabilities to meet this need: global -scale efficiency and

competitiveness; national-level responsiveness and flexibility; and cross-market capacity to

leverage learning on a worldwide basis.

The three initial organization models have different strategic capabilities that are specialized in

meeting an environmental force: The multinational model allows companies to be extremely

responsive to local differentiated demands; the international model provides an effective

means for companies to share knowledge; and the global organization is most likely to create

global-scale efficiency (Bartlett, et al., 1998 p. 59). But as a result of inevitable industry changes

“instead of demanding efficiency, or responsiveness, or learning as the key capability to

success, these businesses now require participating firms to achieve all three strengths

simultaneously to remain competitive.” (Bartlett, et al., 1998 p. 62). Bartlett and Ghoshal’s


research lead to the conclusion that the transnational model is the only one that has been able

to capture all three of these capabilities.

The following table is based on table 2.1 on page 25 and is meant to show the incorporation of

forces, needs, management style with organization model:

Organization

Model

Global Multinational International Transnational

Force Global

Integration

Local

Differentiation

Worldwide

Innovation

Integration, Differentiation

and Innovation

Need Efficiency Responsiveness Learning Efficiency, Responsiveness

and Learning

Management

Culture

Business

Manager

Country Manager Functional

Manager

A collaboration of all four

styles

Tab. 2.2 – The relationship between forces, needs, management and organization model.

2.3.3 The Traditional and Emerging Change Processes

When transforming one organization model into the transnational Bartlett and Ghoshal noticed

two different models that organizations followed, either the traditional or the emerging change

process:

Model 1 – The Traditional Change Process (Bartlett, et al., 1998 p. 291):

Change in Formal Structure and Responsibilities (Anatomy)

↓ Change in Interpersonal Relationships and Processes

(Physiology) ↓

Change in Individual Attitudes and Mentalities (Psychology)

As the title implies, Bartlett and Ghoshal describe the traditional change process as the

reasoning most CEOs used when changing a company. The notion went that “changes in formal


roles and reporting relationships would force changes in the organizational linkages and

decision processes, which in turn would reshape the way individual managers think and act.”

(Bartlett, et al., 1998 pp. 290-1). ”This belief was particular strong in American-based

companies, whose heritage favored the formalization of management structures.” (Bartlett, et

al., 1998 p. 290).

Model 2 – The Emerging Change Process (Bartlett, et al., 1998 p. 292):

Change in Individual Attitudes and Mentalities ↓

Change in Interpersonal Relationships and Processes ↓

Change in Formal Structure and Responsibilities

The emerging change process is a similar but reversed version of the traditional change process;

this is, according to Bartlett and Ghoshal, due to a difference in heritage. The same way as the

American change process was influenced by the heritage of the company, so does model 2

shows the trends of the European and Japanese companies. The first objective for many of the

European and Japanese companies… was often to influence the understanding and perceptions

of individuals… followed by a series of changes aimed at modifying the communication flows

and decision-making processes. Only in a final stage were the changes consolidated and

confirmed by structural realignment.”(Bartlett, et al., 1998 p. 292).

Brooks describes the success of changes as somewhat dependent on whether the organization

is a single- or double-loop learner. Single-loop organizations are taught not to ask questions and

to do their task and thus oppose changes, where double-loop learners ask questions to what

they are taught and are encouraged to independently learn more and are thus more inclined to

be open to change(Brooks, 2006 p. 261). Through the idea of “creating readiness for change”

Armenakis et al support the view, but call to attention for setting the framework for change as

a process that goes before changing mentality and attitude, which is equally or more

important(Armenakis, et al., 1993). The whole issue is a science in itself (Waddel, et al., 2007)

and could be described to a much larger extent than Bartlett and Ghoshal have covered here.


The complexity of managing cultural change has many issues (Brooks, 2006 p. 258) which is not

nearly covered by Bartlett and Ghoshal’s two simple models , but it is important to mention that

Bartlett and Ghoshal themselves state that they are both “oversimplifications of the process

and overgeneralizations of national differences”(Bartlett, et al., 1998 p. 292). Their conclusion

was that it simply seemed that when “a company focuses first on modifications of individual

perspectives and interpersonal relationships before tackling the formal redistribution… the

process seems to have a greater chance of success.” (Bartlett, et al., 1998 p. 293).


3. Similarities and Differences

Based on the above mentioned ideas of Hofstede, and Bartlett and Ghoshal the framework of

comparison will revolve around the three main topics of investigation:


Origin Mental programming Administrative Heritage

Perception The onion diagram Organization models

Model Cultural dimensions The change process

Tab. 3 – Comparative framework

What is the comparison between their constitutions of individuals versus organizations, how do

they handle the concept of perception and what is the importance of cultural differences?

The thesis wants these questions answered on different grounds: a direct comparison of how

individuals versus organizations originate; a comparison of how individuals versus organizations

manifest informally and formally, respectively; and then the cultural dimensions of change

processes will be examined.

3.1 Background

With this presentation of the main ideas and models of Hofstede, and Bartlett and Ghoshal on a

theoretical level the apparent similarities and differences will be discussed. The comparison will

be initiated following the research overview from table 3 on page 34. Since their ideas start

with a definition of national culture as a part of, on one side mental programming and the other

administrative heritage this concept will be explored first.

The relative level, in the following table 4, is based on what each scientist consider the lowest

level of their research, not importance wise, but whether their meaning is addressed to

individuals, groups or universal aspect of humans and organizations.

3.2 Mental Programming versus Administrative Heritage

Fundamentally Hofstede, and Bartlett and Ghoshal agree on the importance of culture. Where

Hofstede use the title “The Business of International Business is Culture” (Hofstede, 1994),


Bartlett and Ghoshal state that “matrix structures are more important to get implemented in

their management culture rather than structure” (Bartlett, et al., 1990).

Hofstede deals with culture as a part of how individual humans are “programmed” and Bartlett

and Ghoshal look at the impact national culture has on the group or organization. Each set of

ideas are on two different levels, but the similarities are rather obvious when the models of

mental programming and administrative heritage are put up against each other:


Relative Level (Mental Programming) (Administrative Heritage)

Micro Personality The Role of Leaders Individual

Meso Culture The Impact of National Culture Group

Macro Human Nature The Influence of Organizational

History

Universal

Tab. 4 – Comparison of mental programming and administrative heritage

Their works start with a definition of what constitute a human culture and what shapes an

organization culture and Hofstede clearly states that the two terms are of a different

nature(Hofstede, 2003 p. 181), which leads to the idea of the relative levels.

Where Hofstede sees culture as a fixed part of international management, that you can acquire

knowledge about and be sensitive towards, Bartlett and Ghoshal are more concentrated with

the part of culture that is variable and which you can develop and implement as an

organizational culture.

Overall, the three traits described under mental programming and administrative heritage

seem to originate under similar circumstances. Hofstede makes a distinction between whether

a trait is inherited, learned or both, this idea that traits have different origins is, under their

influence of Alfred Chandler, shared by Bartlett and Ghoshal. Both mental programming and

administrative heritage are sets of software which are defined through studies of employees

and organizations, respectively. With Hofstede’s clarifies of the distinction between national

and organizational culture in mind, it can be said that national culture measure values and


organizational culture is measured through practices. With these initial clarifications explained,

each relating traits will be compared.

3.2.1 Personality versus the Role of Leaders

Hofstede explained personality as a trait of an individual that is not shared with any other

human being and it is partly inherited with the individual’s unique set of genes and partly

learned (Hofstede, 2003 p. 6). In the same respect Bartlett and Ghoshal found that the

influence of the company’s founder or another key executive is crucial to what shapes a

company’s norms and values. Again both values are based on an individual’s inherited and

learned influences.

The reason for these similarities seems to come from Hofstede’s investigative framework being

based on social anthropology and Chandler was a business historian “heavily influenced by

sociologists” (Silverthorne, 2007), but sharing the same values approach. Hofstede’s pyramid

model indicates that personality is a result of human nature and culture; Bartlett and Ghoshal

are along the same lines when defining the corporate “personality” as a product of the role of

leaders.

These similarities could lead to the conclusion that, since the national culture of an individual,

by Bartlett and Ghoshal, to a large extent are the shapers of organizational practices, you value

wise can equate national culture with organizational culture. This is not right, because even

though there are general tendencies towards certain behavior in national cultures, we are still

individuals with each our personality. But the similarities in construction do lead us toward the

possibility of, on a larger scale, to measure the tendencies of organizational values as a product

of national values.

3.2.2 Culture versus the Impact of National Culture

When it comes to the origins of Hofstede’s culture and Bartlett and Ghoshal’s national culture,

similarities are apparent. The notion of distinguishing between inherited and learned is shared

by Bartlett and Ghoshal that some organizational characteristics: “… can be built on and

leveraged, and others must be adapted or surmounted.” (Bartlett, et al., 1998 p. 40).


Without being specific Hofstede explains that when he had to define culture he based it on the

values approach which is common among social anthropologists. Where Hofstede use social

anthropology, Bartlett and Ghoshal do not spend as much time on the subject themselves but

are again inspired by the findings of Alfred Chandler. Chandler traced “the influence of the

cultural values and social structures on… management practice”(Bartlett, et al., 1998 p. 48).

Although not as elaborately described and more intuitively explained the development of the

“capitalisms”, used by Bartlett and Ghoshal, are comparable to the national dimensions of

Hofstede. By comparing the national scores found by Hofstede with the capitalisms for each of

the countries it proves an interesting point.

Country PDI IND MAS UAI LTO Capitalism

Great Britain 35 89 66 35 25 Family

USA 40 91 62 46 29 Managerial

Japan 54 46 95 92 80 Group

Tab. 5 – Comparison of Hofstede’s national dimensions and Chandler’s capitalisms

Table 5 shows two things, the national culture values of Great Britain and the USA are similar

but they are different capitalism or managerial wise. This means that Hofstede was right in

distinguishing between the two, because the differences in capitalisms or organization practices

are not explained by national culture. It is possible that or one of the scientists came to a wrong

conclusion, but assuming they did not clearly distinguish between organizational culture and

national culture.

It is important to mention that the capitalisms are in fact based on practices and the

dimensions on values so they should be different, but because of the notion that administrative

heritage is shaped by the values of their leaders this comparison is not perfect, but possible.

The framework merely proves that even though Great Britain and the USA are fairly similar on

the national dimensions there are significant differences in their organization practices.

Besides the fact that the capitalisms presented in this case are based on only three countries

and therefore cover a fraction of the possible managerial styles in the world they expose a


difference between national culture and organizational culture. This difference could be

explained by the capitalisms being a merger between national values and organizational

practices, but it is more likely that national cultures although similar can have very opposing

organizational practices. Whether either of them is a comprehensive descriptor of culture is

hard to prove, but table 5 shows that both models have both positive and negative inter-

correlations.

3.2.3 Human Nature versus the Influence of Organizational History

Hofstede take human nature for being inherited and out of the individual’s hands to change, it

is modified through culture and presented through personality. (Hofstede, 2003 pp. 5-7). In this

respect it shows similarities with Bartlett and Ghoshal’s influence of organizational history

described as an organizations “early choices about products, markets, and modes of operation

[which] are locked in through decisions about asset configuration and organization structure,

constraining future options.” (Bartlett, et al., 1998 p. 51). So the idea that both human nature

and organizational history is of a fixed nature that has to be adapted to is shared.

3.3 The Onion Diagram versus Organization Models

The onion diagram show how an individual’s practices are others perception of the individual’s

values, it is in other words a model for the manifestation of culture. The organization models

are the formal structure of an organization as defined by its management, this structure is

supposed to manifest through the employees of the organization.

The practices of an individual are meant to project one’s values.

The actions of an employee of an organization are meant to project the organizations form.

The similarity arise when it is realized that in the ideas of Hofstede there is a difference in what

is visible to an outside observer and what is interpreted by an insider. The same relation exists

in Bartlett and Ghoshal in the change process of organization models as seen from

management (the outsider) and employees (the insiders). There is a need for management to

recognize an employee’s interpretation of values instead of a management’s perception of


values. It leads us back to a question of finding “fit”, not between external demands and

internal capabilities, but internal employee demands and external management capabili ties.

Hofstede mentions one of the main differences between national cultures and organizational

cultures as the time span members spend in it. The limited time span diminishes the effect the

organization culture has on members (Hofstede, 2003 pp. 181-2). When an employee is hired

into a company this individual does not expect (Unless your Japanese) to spend the rest of their

life at the company.

3.4 The Cultural Dimensions versus the Change Processes

Most OB revolves around either exploiting synergy or limiting the issue of differences in culture,

especially when changing from one organizational structure to another there are conflicts of

interests and ties that needs to be reconsidered. Here the main similarities between Hofstede,

and Bartlett and Ghoshal arise, since the means to succeeding in one (the change process) is to

a large extent dependent on knowledge of the other (cultural dimensions).

The cultural dimensions, whether national or organizational, show similarities and differences

in cultures. This knowledge is of high importance to the success of a change process. Depending

on the organization model the impact of cultural dimensions has varying degrees. For example

since “in the transnational view, the national subsidiaries become strategic partners whose

knowledge and capabilities are vital to the corporation’s ability to maintain a long -term global

competitive advantage”(Bartlett, et al., 1998 p. 117), it is imperative to understand the cultural

dimensions to create this transnational mentality. Comparing this to the decentralization and

independence of a multinational model gives a good indication that there is a variation in the

requirement of cultural consideration. The correlation between sensitivity of cultural

dimensions and success in change processes seems to be apparent.

The emphasis on the importance of culture on change processes explains why Bartlett and

Ghoshal’s notion of the emerging change process, which initiated change through individual

attitudes and mentalities, had a higher success rate. This notion is not new, rather it is

described intensely by Waddel et al in the book “Organisation development & change (2007)”


which describe the many aspects of organizational changes. They distinguish whether the need

is for an organizational development (slow incremental changes of an organizations natural

planned development) or organizational transformation (short-term transformation of an

organization)(Waddel, et al., 2007 pp. 3 and 318-9). Bartlett and Ghoshal cover mixed aspects

of both changes as organizational development is an integral part of sustaining excellence in an

international environment (Bartlett, et al., 1998 p. Part III) and organizational transformation is

covered in the process of rationalizing, revitalizing and regenerating(Bartlett, et al., 1998 p. Part

IV). The relations between these two could be interesting to further investigate as they cover

relevant aspects of the same issues.


4. Relationships between IM and OB

After having studied the theoretical backgrounds of Hofstede, and Bartlett and Ghoshal and

their relations have been established, we can start exploring the relationship between their

sciences IM and OB.

Hofstede presents IM as the need to know cultural differences and acting accordingly. Bartlett

and Ghoshal present IM as a very integrated part of OB that consists of responding to the needs

of markets with a combination of fitting appropriate management to appropriate structure.

Both scientists place emphasis on the importance of culture in IM and OB. The basic connection

between the two is that Hofstede presents dimensions that explain IM. Bartlett and Ghoshal

explain the way to manage OB in the international setting. Their approaches are what

differentiate them the most.

We saw in the previous section the several similarities and differences which connect Hofstede,

and Bartlett and Ghoshal, but the scientists operate through each their method, on two

different levels and in two somewhat different fields. Despite the fact that IM and OB in an

international context, is naturally interrelated and share many aspects together, the connection

is still striking. The reason that, at least the author of this research paper, initially found

Hofstede, and Bartlett and Ghoshal to belong to each their science can very well be the result

of methodological approaches.

4.1 Methodological

The differences in methods between Hofstede, and Bartlett and Ghoshal can be illustrated as

two pyramids mutually inverted, but working towards the same conclusion.



Fig. 7 – Illustration of the relationship between methodologies.

The intersection is, through the formulation of this model, culture. With the intention of

creating an understanding of the international aspects of organizational behavior Hofstede

found culture to be the main issue. Starting out by defining culture as a part of the origin of

mental programming, he initially found the cultural dimensions and eventually the

organizational dimensions. Bartlett and Ghoshal dissected the history of MNEs to find the

reason for their success or failure, came to the conclusion that each organization model needed

different management cultures which lead them to the task of defining the origin of culture. So

even though they both originated from two different points of departure, the IM and OB, the

emphasis they put on culture make them both end up investigating two aspects of the same

issue, namely international management.

4.2 National Culture

In this study the main definition of culture has mainly been based on national culture, but OB

and to some extent IM deals with numerous more versions and aspects of culture than only

one. Every single group, we consider ourselves a part of, each has a culture that “programs”

individuals to become a part of our personality. A good example is the prevailing fight between

the functional and marketing entity of a production company that, with each their paradigms

and objectives, present management with yet another occupational culture issue. The

description of Hofstede’s organizational dimensions proves this point.

Whether national culture is the largest and most significant of these cultures is debatable, but it

has proven to be a root of conflict, synergy, barriers, creativity, misunderstandings and other

Organizational Dimensions

Cultural Dimensions

Mental Programming

Culture

Culture

Administrative Heritage

Organization Models

The Transnational

Solution


aspects. But all the other cultures each represent similar and different issues to management.

With each culture there is a different set of tools that has to be used for resolving the issues.

The relationship that Hofstede, and Bartlett and Ghoshal create, by agreeing on the dominant

position of national culture in international management, is that it is an important variable for

each to acknowledge as a vital part of their sciences.

4.3 Knowledge Exchange

Making uncritical assumptions can easily lead to the false pretence of merging theories.

Assuming that each nationality always comes with each their specific characteristics could make

it seem a possibility to pick out the perfect management teams just by looking at their

nationality. By combining Hofstede’s cultural dimensions with the roles Bartlett and Ghoshal

found needed for each management type, it could be possible to make a profile of what nations

members to which it, value wise, would feel the most natural to fill out each role. Unfortunately

it does not work that way, we are all individuals with each our independent values and

paradigms, after all it takes an unusual individual with special managerial experience to

translate company strategy into effective operations(Bartlett, et al., 2003 p. 108).

The national dimensions are made to show general statistic tendencies, so where we cannot

confidently apply them to an individual, they can, through cultural sensitivity, be used by

management teams to increase the success rate of their initiatives. This notion presents two

sides of IM that are important to remember, that even though there are general tendencies an

organization consists of individuals with differences and, secondly, that each organization

require each their organizational solutions. So when discussing the relationship between

Bartlett and Ghoshal’s “transnational solution” and OB, it is apparent that their solution is

specific to an organization influenced by particular forces and needs, and does therefore not

provide solutions to every case of constructing successful OB.

Through the descriptions of forces, needs, strategies and models Bartlett and Ghoshal

thoroughly cover the management of human behavior in an organizational context, with a

focus on group processes and actions on the organizational level. Their coverage of the details


of individual processes and actions are less extensive, but their relations hip to OB is still

extensive.

Through description and analysis of the national cultural dimensions Hofstede thoroughly cover

the reasons for differences among human behavior in an international context, with a focus on

individual processes and actions on the national and organizational level. His coverage of the

details of organization processes and actions are less extensive, but his relationship to OB is still

extensive.

5. Solution to the Problem Statement

Specifically the case has come to the following conclusion to the question:

The main similarities, between Hofstede, and Bartlett and Ghoshal, revolve around the way

they used culture. Hofstede defined culture, in terms of dimensions, to identify a way of

describing differences in human relations. Bartlett and Ghoshal defined culture to describe

differences in the way organizations behave.

The differences, between Hofstede, and Bartlett and Ghoshal, revolve around their goals of

investigation. Hofstede sought an explanation to describe human relations. Bartlett and

Ghoshal sought a solution to paramount coordination of human relations within organizations.

The similarities originated by the emphasis they placed on national culture and the differences

originate from their perspectives of investigation. Hofstede used a perspective that explained

the cultural differences from the bottom up. Bartlett and Ghoshal used a perspective that

investigated organizations top down.

IM was in this case very much related, partly per definition since the OB mainly covered IM. But

IM turned out to be, for MNEs, a vital part of understanding both the origin and current

situation of their organization’s behavior. It is not difficult to see why there is a relationship

between MNEs and IM, but the relationship that appeared between the two, through this

thesis, is still very relevant as it shows how many aspects of two sciences that are covered

simultaneously.


6. Conclusion and Discussion

Whether culture presents itself in terms of barriers, synergies or simple differences this thesis

has provided an overview of how this affects organizational behavior significantly. The two

results can not be a substitute for one another, but when they are compared it is interesting to

see how two different methodologies, that initiate research from two opposite angles, can

produce two results based on so many similar points. Not that one theorist automatically

explains the other, but to some extent the human differences have been found to be what

creates the need for organizations to change as they evolve.

Dimensions of power, individualism, masculinity, uncertainty and common sense, are the

dimensions Hofstede found that differentiate one human from another. They are obviously not

definite and other researchers will change them over time to fit their purpose better. The

question is whether they will be expanded, as they were in the GLOBE project(House, et al.,

2002), to cover every single aspect of human behavior or whether culture is so comprehensive

that it is necessary to make them simpler to be able to be more conclusive. The writer of this

thesis believes that both options are valid possibilities, but each comes with their own set of

obstacles. This comparative study showed that each method produces each their output, but

although different they still proved to be able to be compared.

The concerns around them revolves the fact, that as the known world has shifted leaders,

whether they were the Ming Dynasty, Assyrian, Roman, Incan, American or any other

nationality, the distribution of world domination seems to shift hands rather equally among the

nations and throughout history. This implies two things:

1. That even though we have dimensions to explain the differences among cultures they

do not explain why and how cultures shift. The results we got are static, a snapshot of a

current state (or as in this case the current state almost three decades ago). At the end

of each description of the dimension Hofstede does provide speculative thoughts of

their future development, but it still leaves a feeling of lacking a framework for

investigating culture and its development with an aspect of time.


2. The nationalities that have dominated the world are geographically distributed equally,

so perhaps the idea of culture defined as a geographic national entry needs to be

redefined. Not that culture should be defined to show what leads to a dominant

behavior or that geography is the only variable in national culture, but to restate Ailon’s

point (Ailon, 2008), perhaps culture needs to be redefined on a different basis of for

example occupation.

Hofstede states that the practices (symbols, heroes and rituals) are indeed merging across the

world(Hofstede, 2003 p. 181); it is the underlying values that remain. Then question then goes,

is this due to static national values or due to a static image of the current situation?

This conclusion leads to three main suggestions for further studies:

The aspect of qualitative versus quantitative research could be held against each other by using

the statistics of the IRIC’s research on companies representing Bartlett and Ghoshal’s four

organization models, to show if their qualitative conclusion could be proven quantitatively.

Not to idealize Ailon too much but the method she used to dig deeper into the ideas and

definitions of culture by its own means was interesting and especially, since it could somewhat

affirm Hofstede’s own concept of handling the difficulties of cultural relativism (Hofstede, 2003

p. 7). In relation to redefining the characteristics of Hofstede’s dimensions, the whole

construction of culture could be researched. Hofstede use the anthropological values approach,

but looking into what other methods are provided or could be created.

Where Hofstede to a large extent represented IM sufficiently, it might have been better to

make comparisons to scientists that go more into depth with OB. For this task a scientist such

as William Richard Scott could be more ideal, as he is more specifically minded on OB, than

Bartlett and Ghoshal. Bartlett and Ghoshal tested the OB in MNEs which is more a merger of IM

and OB, than it is solely OB. It can be conferred that this case looked for IM in Bartlett and

Ghoshal where Scott could have been the opposition and tested Bartlett and Ghoshal for OB.

This might give more insight to the relationship between IM and OB.


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