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strong to weak on the following three items: job stress, agreement with “company rules should not be broken – even when the employee thinks it is in the company’s best interest” and the intent to stay with the company for a long-term career (more than five years or until retirement). Cultures with a high UAI score use all kinds of structural or organisational measures to avoid risks and vague conditions. Typical aspects of cultures with weak or strong UAI are compiled in Figure 2-14.

      Figure 2-14: Key Differences between Cultures with Weak and Strong UAI¹⁷

      Countries with strong UAI values comprise Greece, Portugal and Guatemala whereas countries as Singapore, Jamaica, Denmark and Sweden display only weak UAI values. An overview of selected country scores concerning UAI offers Figure 2-15.

      Figure 2-15: Selected Country Scores for UAI¹⁸

2.2.7

Long-Term Orientation

      The fifth dimension was originally derived from the Chinese Value Survey (CVS) carried out by Chinese researchers in 1985 by asking students from 23 countries around the world. These researchers asked questions that contrasted values without any previous equivalent in Hofstede’s IBM study. Mainly based on Confucian values, these questions were simply not asked by Westerners before. This dimension indicates a societies’ time perspective and an attitude of persevering that means, overcoming obstacles with time, if not with will and strength. A high score on this so-called long-term orientation (LTO) index combined the values persistence, thrift, ordering relationships by status and having a sense of shame. People are respected for their willingness to subordinate themselves for a purpose and to foster virtues towards future awards. Consequently, the original study found high (LTO) scores for countries of the Far East like China (118), Hong Kong (96), Taiwan (87) und Japan (80). In contrast, countries with short-term orientation were Pakistan (0), UK (25), US (29), Germany (31) and Sweden (33). Interestingly, this dimension was found to be correlated with recent economic growth and to predict future economic growth. Typical characteristics of longterm versus short-term oriented cultures are shown in Figure 2-16.

      Figure 2-16: Key Differences between Cultures with high or low LTO¹⁹

      The analysis of the World Values Survey (WVS) enabled the researchers to expand the database of LTO considerably. A meticulous scouring of the WVS database unearthed items that were conceptually similar and significantly correlated with the items of the LTO found in CVS: thrift as a desirable trait for children, national pride and importance of service to others. Based on these, new LTO scores for 84 (later 93) countries were calculated. A selection of these new LTO scores (based on the WVS) is presented in Figure 2-17. It is quite clear that the ideas are close but still lead to different results. This could be illustrated by looking at the scores for Germany: the LTO-CVS score for Germany was 31 which equals a short-term oriented culture. In the LTO-WVS score Germany is listed with 83 which equals a long-term oriented culture. The WVS data fits very well to the extraordinary high savings ratio in Germany and the focus on long-term business relations that can be observed. This alteration underlines that the way certain ideas are phrased has an influence on the ratings given by survey participants and that through this the culture of the survey developers and their way of expressing and understanding certain aspects has a direct impact on the findings.

      Figure 2-17: Selected Country Scores for LTO (WVS)²⁰

2.2.8

Establishing Country Clusters

      When dealing with intercultural issues in internationalisation, the psychic distance of business partners is of high importance. According to the Uppsala Model for example, the internationalisation of enterprises follows a psychic distance chain. Generally speaking, an organisation first gains international experience on markets in foreign markets that were close to the domestic market in terms of psychic distance, meaning that on these markets exist less factors that make it difficult to understand the foreign environment. The organisations would then gradually enter others with a higher psychic distance.²¹ Some research suggests that the higher the psychic distance between business partners is, the more problems evolve in all aspects of cooperation from business setup to leadership. According to Holden and Burgess (1994)²² psychic distance is as a combination of cultural distance, mistrust und social distance. As the concept of cultural distance itself is still subject of an on-going scientific discussion it should be defined here very generally as a gap between the culture of two different groups or societies. Possible descriptions of cultural gaps are provided by Hofstede’s dimensions. Assuming that a very low cultural distance is helpful to avoid disruptive influences in management or leadership, the establishment of clusters of countries with high cultural closeness would be beneficial. In the 1991 edition of his book “Cultures and Organizations”, Hofstede included culture maps that formed cultural clusters of countries with quite similar values, each based on two dimensions of his framework. Studying these it becomes quite clear that some cultures are quite close to each other concerning two dimensions but are set widely apart in other dimensions. For example, Germany and Finland have quite similar scores on IND and PDI but differ tremendously concerning MAS – Germany being a masculine, Finland a feminine country. It is also problematic where to draw the line between clusters. A distinction of feminine cultures below a score of 50 and masculine cultures with scores above is quite academic, as this would divide countries with quite similar scores of 48 and 52. So the definition of clusters ends up to be quite subjective and should not involve the scores only but more knowledge about the expression of them in daily life in the respective countries.

      However, taking the original four dimensions into account, there are a few countries that show quite similar ratings in all four original dimensions (PDI, IND, UAI, MAS) and thus could be seen to form cohesive patterns. A very consistent cluster is formed for example by Germanic countries (Germany, Austria, Switzerland) with all being low PDI, individualistic, masculine, strong UAI and short-term (CVS) respectively longterm oriented (WVS) countries, as depicted in Figure 2-18.

      Figure 2-18: Cultural Cluster of Germanic Countries²³

      Further clusters that could be identified on this basis include a Nordic cluster (formed by Denmark, Finland, Norway, Sweden and in addition the Netherlands) and an Anglo cluster (Australia, Canada, Ireland, New Zealand, the United Kingdom, the United States and additionally South Africa). “Added” countries show a larger variation in one of the four dimensions. Figure 2-19 provides an overview of possible country clusters based on Hofstede’s original four dimensions. As these clusters fit quite closely to the country clusters proposed by Ronen and Shenkar in 1985²⁴, the same cluster denominations are used here.

      Figure 2-19: Country Clusters Based on the Four Original Hofstede Dimensions

       Exercise: Familiarise yourself with country clusters (online)

2.2.9

Adding a New Dimension: Indulgence versus Restraint

      The above mentioned World Values Survey (WVS) included items that dealt with happiness

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