Culture and International Business

1. Power Distance : This refers to how a society handles inequalities and the extent to which the less powerful members of organizations and institutions (like family) accept and expect that power is distributed unequally. ex1) In the United States, for example, the power distance index score is 40, while in the Czech Republic it is 57. The higher the distance between normal folk and the upper classes, and in fact, the more that division is respected by the average citizen.

ex2) http://www.youtube.com/watch v=JZqX0z3g5bE&lr=1&feature=mhsn

2. Uncertainty Avoidance : This refers to the level of need for structure. Cultures with low uncertainty avoidance tend to accept risk and change and prefer implicit or flexible rules and guidelines. ex)  According the Hofstede's research, Greece is the most risk-averse culture-Generally older countries/cultures with a long history, the population is more ethnically homogeneous, Low tolerance for innovation, prefer to stick to traditional routines, Citizens are often critical of their own nation, People tend to be more superstitious, and Singapore the least- The population tends to be ethnically diverse, Frequent innovations, Citizens are proud of nation, Foreigners or minorities are encouraged to assimilate. 

3. Individualism versus collectivism : Behavior towards community. The degree to which individuals are integrated into groups or are expected to look after themselves and self-actualize. ex) USA (Individualism)-Promotes individual goals, initiative and achievement, Rules attempt to ensure self-importance and individualism, Relying or being dependent on others is frequently seen as shameful;Russia (collectivism)-Each person is encouraged to be an active player in society, to do what is best for society as a whole rather than themselves, Rules promote unity, brotherhood, and selflessness, The rights of families, communities, and the collective supersede those of the individual.

4.  Masculinity versus Femininity : Masculine cultures’ values are competitiveness, assertiveness, materialism, ambition and power, whereas feminine cultures place more value on relationships and quality of life. In masculine cultures, the differences between gender roles are more dramatic and less fluid than in feminine cultures where men and women have the same values emphasizing modesty and caring. ex) UK (Masculine culture country) strives for a performance society; Sweden (feminine country) for a welfare society.

5. Long Term versus Short Term Orientation : How much society values long-standing, as opposed to short term, traditions and values. Cultures with high long-term orientation place strong importance on family, discipline and social obligations. ex) China(LTO)-persistence, thrift, ordering relationships by status, having a sense of shame; USA(Short)-personal steadiness and stability, reciprocation of greetings, favors, and gifts.

ex2) http://www.youtube.com/watch?v=zeZHyFxlrFQ&lr=1&feature=mhsn

6. Indulgence versus Restraint : Indulgence stands for a society that allows relatively free gratification of basic and natural human drives related to enjoying life and having fun.  Restraint stands for a society that suppresses gratification of needs and regulates it by means of strict social norms. ex) Pakistan, which scored a zero, and Venezuela– a 100 http://www.youtube.com/watch?v=PVbkjobD8ao&lr=1&feature=mhsn