International Marketing – Giant Spreadsheet of Cultural Differences

Need a leg up on international campaigns? Use this giant interactive Excel to compare cultures, create ads that connect and avoid pissing money away.

Inspired by Finch’s hilarious “How not to crack an international market” post, I decided to share this juicy spreadsheet. I got it during my MBA, probably from one of the professors – I had never seen it before, and have never seen it posted since. The spreadsheet form comes from Neil Sandford who got permission from the original researcher, Professor Geert Hofstede.

Geert Hofstede excel data

What’s in it an how it was made

(Original simple article in Chinese)

These ideas were first based on a large research project into national culture differences across subsidiaries of a multinational corporation (IBM) in 64 countries. Subsequent studies by others covered students in 23 countries, elites in 19 countries, commercial airline pilots in 23 countries, up-market consumers in 15 countries, and civil service managers in 14 countries. These studies together identified and validated five independent dimensions of national culture differences:

Power distance, that is the extent to which the less powerful members of organizations and institutions (like the family) accept and expect that power is distributed unequally. This represents inequality (more versus less), but defined from below, not from above. It suggests that a society’s level of inequality is endorsed by the followers as much as by the leaders. Power and inequality, of course, are extremely fundamental facts of any society and anybody with some international experience will be aware that ‘all societies are unequal, but some are more unequal than others’.

Individualism on the one side versus its opposite, collectivism, that is the degree to which individuals are inte-grated into groups. On the individualist side we find societies in which the ties between individuals are loose: everyone is expected to look after him/herself and his/her immediate family. On the collectivist side, we find societies in which people from birth onwards are integrated into strong, cohesive in-groups, often extended families (with uncles, aunts and grandparents) which continue protecting them in exchange for unquestioning loyalty. The word ‘collectivism’ in this sense has no political meaning: it refers to the group, not to the state. Again, the issue addressed by this dimension is an extremely fundamental one, regarding all societies in the world.

Masculinity versus its opposite, femininity, refers to the distribution of roles between the genders which is another fundamental issue for any society to which a range of solutions are found. The IBM studies revealed that (a) women’s values differ less among societies than men’s values; (b) men’s values from one country to another contain a dimension from very assertive and competitive and maximally different from women’s values on the one side, to modest and caring and similar to women’s values on the other. The assertive pole has been called ‘masculine’ and the modest, caring pole ‘feminine’. The women in feminine countries have the same modest, caring values as the men; in the masculine countries they are somewhat assertive and competitive, but not as much as the men, so that these countries show a gap between men’s values and women’s values.

Uncertainty avoidance deals with a society’s tolerance for uncertainty and ambiguity; it ultimately refers to man’s search for Truth. It indicates to what extent a culture programs its members to feel either uncomfortable or comfortable in unstructured situations. Unstructured situations are novel, unknown, surprising, different from usual. Uncertainty avoiding cultures try to minimize the possibility of such situations by strict laws and rules, safety and security measures, and on the philosophical and religious level by a belief in absolute Truth; ‘there can only be one Truth and we have it’. People in uncertainty avoiding countries are also more emotional, and motivated by inner nervous energy. The opposite type, uncertainty accepting cultures, are more tolerant of opinions different from what they are used to; they try to have as few rules as possible, and on the philosophical and religious level they are relativist and allow many currents to flow side by side. People within these cultures are more phlegmatic and contemplative, and not expected by their environment to express emotions.

Long-term versus short-term orientation: this fifth dimension was found in a study among students in 23 countries around the world, using a questionnaire designed by Chinese scholars It can be said to deal with Virtue regardless of Truth. Values associated with Long Term Orientation are thrift and perseverance; values associated with Short Term Orientation are respect for tradition, fulfilling social obligations, and protecting one’s ‘face’. Both the positively and the negatively rated values of this dimension are found in the teachings of Confucius, the most influential Chinese philosopher who lived around 500 B.C.; however, the dimension also applies to countries without a Confucian heritage.

Scores on the first four dimensions were obtained for 50 countries and 3 regions on the basis of the IBM study, and on the fifth dimension for 23 countries on the basis of student data collected by Bond. Power distance scores are high for Latin, Asian and African countries and smaller for Germanic countries. Individualism prevails in developed and Western countries, while Collectivism prevails in less developed and Eastern countries; Japan takes a middle position on this dimension. Masculinity is high in Japan, in some European countries like Germany, Austria and Switzerland, and moderately high in Anglo countries; it is low in Nordic countries and in the Netherlands and moderately low in some Latin and Asian countries like France, Spain and Thailand. Uncertainty avoidance scores are higher in Latin countries, in Japan, and in German speaking countries, lower in Anglo, Nordic, and Chinese culture countries. A Long Term Orientation is mostly found in East Asian countries, in particular in China, Hong Kong, Taiwan, Japan, and South Korea.

The grouping of country scores points to some of the roots of cultural differences. These should be sought in the common history of similarly scoring countries. All Latin countries, for example, score relatively high on both power distance and uncertainty avoidance. Latin countries (those today speaking a Romance language i.e. Spanish, Portuguese, French or Italian) have inherited at least part of their civilization from the Roman empire. The Roman empire in its days was characterized by the existence of a central authority in Rome, and a system of law applicable to citizens anywhere. This established in its citizens’ minds the value complex which we still recognize today: centralization fostered large power distance and a stress on laws fostered strong uncertainty avoidance. The Chinese empire also knew centralization, but it lacked a fixed system of laws: it was governed by men rather than by laws. In the present-day countries once under Chinese rule, the mindset fostered by the empire is reflected in large power distance but medium to weak uncertainty avoidance. The Germanic part of Europe, including Great Britain, never succeeded in establishing an enduring common central authority and countries which inherited its civilizations show smaller power distance. Assumptions about historical roots of cultural differences always remain speculative but in the given examples they are quite plausible. In other cases they remain hidden in the course of history.

The country scores on the five dimensions are statistically correlated with a multitude of other data about the countries. For example, power distance is correlated with the use of violence in domestic politics and with income inequality in a country. Individualism is correlated with national wealth (Per Capita Gross National Product) and with mobility between social classes from one generation to the next. Masculinity is correlated negatively with the share of their Gross National Product that governments of the wealthy countries spend on development assistance to the Third World. Uncertainty avoidance is associated with Roman Catholicism and with the legal obligation in developed countries for citizens to carry identity cards. Long Term Orientation is correlated with national economic growth during the past 25 years, showing that what led to the economic success of the East Asian economies in this period is their populations’ cultural stress on the future-oriented values of thrift and perseverance.

Enjoy. If you are using Excel 2010 or higher, you’ll have to allow editing to be able to interact with the charts. Here’s the spreadsheet:

 

 

Prof. Geert Hofstede conducted perhaps the most comprehensive study of how values in the workplace are influenced by culture.

Geert Hofstede analyzed a large data base of employee values scores collected by IBM between 1967 and 1973 covering more than 70 countries, from which he first used the 40 largest only and afterwards extended the analysis to 50 countries and 3 regions. In the editions of GH’s work since 2001, scores are listed for 74 countries and regions, partly based on replications and extensions of the IBM study on different international populations.

 

Subsequent studies validating the earlier results have included commercial airline pilots and students in 23 countries, civil service managers in 14 counties, ‘up-market’ consumers in 15 countries and ‘elites’ in 19 countries.

 

From the initial results, and later additions, Hofstede developed a model that identifies four primary Dimensions to assist in differentiating cultures: Power Distance – PDI, Individualism – IDV, Masculinity – MAS, and Uncertainty Avoidance – UAI.

 

Geert Hofstede added a fifth Dimension after conducting an additional international study with a survey instrument developed with Chinese employees and managers.

 

That Dimension, based on Confucian dynamism, is Long-Term Orientation – LTO and was applied to 23 countries.

 

These five Hofstede Dimensions can also be found to correlate with other country, cultural, and religious paradigms