Navigating Global Business:
A Cultural Compass
A Cultural Compass
Simcha (Simi) Ronen & Oded Shenkar
Cambridge University Press; Expected release: June 30, 2017
Cambridge University Press; Expected release: June 30, 2017
The book Navigating Global Business: A Cultural
Compass is the first book to offer a comprehensive and rigorous mapping of
cultural regions around the world and delineate their managerial consequences
at both the macro and micro levels. The book expresses cultural differences
between countries in a map of clusters, showing both the roots and correlates
of cluster formation and the managerial and business repercussions of operating
within, across, and in specific combinations of clusters. The resulting product
is a global atlas that provides navigation guidance to a wide spectrum of
readers, ranging from the layperson and student to the scholar and globally
seasoned executive.
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Click here to order on Amazon.
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Book Synopsis
The book Navigating Global Business: A Cultural
Compass is the first book to offer a comprehensive and rigorous mapping of
cultural regions around the world and delineate their managerial consequences
at both the macro and micro levels. The book expresses cultural differences
between countries in a map of clusters, showing both the roots and correlates
of cluster formation and the managerial and business repercussions of operating
within, across, and in specific combinations of clusters. The resulting product
is a global atlas that provides navigation guidance to a wide spectrum of
readers, ranging from the layperson and student to the scholar and globally
seasoned executive.
The book opens by describing the roots and logic
of cultural grouping and its role as a vital navigation tool in a global
environment. Pressures towards a “flat world” notwithstanding, the world
remains divided by numerous fault lines, not the least of which is culture.
Scholars as well as experienced executives know that global business activity
takes place somewhere between the two poles of homogeneity and heterogeneity,
which is where “cultural grouping”, or clusters, come in. The origin of cultural
grouping lies in the century old concept of "families of nations" that
was used in political science, sociology, and law and which at the time stirred
a raging debate among prominent social circles of the time. The concept implies
that civilizations and countries are grouped together on the basis of some
similarity, underpinned by antecedents such as language, religion, history,
customs, and institutions, as well as by subjective self-identification. In
business, cultural grouping is vital since culture and cultural differences
have been consistently found to correlate with various management phenomena
such as the process and outcome of cross-border alliances, mergers, and
negotiations, to name but a few.
Having discussed globalization process, the effects
and need of grouping, and the rationale for clustering country cultures, we now
turn to our own clustering process. Chapter two of the book describes in detail
the clustering methodology we employed and the dataset to which we applied it. Selecting
the dataset was no small task, and the specific characteristics and methodology
used by each of the studies we used as an input is described in detail as it
bears on the final outcome of our own clustering endeavor.
The synthesized three-layered cultural map we have
generated is at the heart of the proposed book. It is (a) a summary expression
of global cultural variation, (b) an independent aggregate explained by a
variety of predictor variables, and (c) a visual guide displaying variations in
organizational behavior and strategy.
As with a geographic atlas, we offer not only a
legend but also a guideline on how to read and interpret the displayed maps. We
present the world in three levels of country clustering, producing 11 Global
clusters, 15 Consensus clusters and 38 Local clusters while also pointing out
singletons and additional cluster information. These levels represent vertical
(inter-cluster) cultural evolution and cohesiveness within each cluster. At the same time, the map also shows cluster
adjacency, representing horizontal (intra-cluster) relationships and cultural
proximity. These three rigorously drawn elements – nesting (multi-level),
cohesiveness, and adjacency – are a first in the literature. Yet the enhanced
rigor does not come at the expense of readability and ease of use; on the
contrary, our map and its various spinoffs (shown in subsequent sections) offer
an easy to read, visual display of information accessible to the practitioner
as much as to the scholar.
To understand societies, values, beliefs,
attitudes, and behavioral propensities - mainly in the work environment as
analyzed - one may be directed to the major antecedes of a culture both in
terms of past history, geography, and present economic conditions. The
clustering solution provided in the previous chapter was based on cultural data
gathered in the organizational milieu. It shows how countries worldwide cluster
in that milieu alone. International businesses, however, do not operate in a
void, and for proper understanding of our results, as well as for any kind of
application, it is important to see the cultural antecedents that have
potentially affected them. Here, we take a longitudinal look at each of the
proposed eco-cultural antecedents and correlates, also comparing cluster
ratings on each separately. The meaning and importance of each of these correlates
is explained, providing a unique and inclusive outlook on cultural antecedents
in relation to cultural country clusters. Investigating these correlates will
yield deeper insights into the underlying formation of cultures. This
exploration also serves a secondary goal: that of future prediction for
countries that did not participate in our analysis or have not been
investigated specifically in the organizational milieu. Under the hypothesis
that similar scores on eco-cultural correlates reflect similar clustering
propensity, to the extent that the eco-cultural correlate discussed in this
book indeed correspond with our three-layered clustering map, it would be
possible to postulate the prospect assignment of countries beyond the scope of
our map.
The impact and causal effect of eco-cultural
correlates have been explored in the past, but these ventures are typically
limited in the number of correlates or the scope of countries. Overlapping
numerous correlates with our clustering map offers a regional perspective on
these data while showing which are more closely tied to organizational culture
and which have a lessened impact on the regional clusters. Results are explored
in both inter- and intra-cluster contexts further adding to cultural
preferences that characterize each cluster, as will be discussed subsequently.
Eco-cultural correlates explored in this part include geographic traits,
religion, language, GDP-PPP, economic freedom, democracy index, and human
development index.
To apply content to theory, one must be acquainted
with behavior propensities, beliefs, and attitudes of employees and managers. While
recognized as a crucial variable in organizational life (Cavusgil et al., 2004;
Gould & Grein, 2009; Leung et al, 2005), culture remains an elusive
construct, the complex, evolved product of multiple and diverse elements, ranging
from geographic landscape (Van de Vliert, 2008) to historical, religious,
economic (Peterson & Smith, 2008) and ideological (Ralston et al., 2008)
variables. A country clustering captures the minimization of within-group
variance and maximization of between-group variance (Bailey, 1994; Estes, 1994).
This is especially appropriate in our context, given that cross-national
variance in individual values is greater than within-nation variance (Hanges
& Dickson, 2006).
Comparative studies of culture seek underlying attitudinal
and behavioral dimensions with which to capture cultural variation (Smith et
al., 1996). The most recognized of those is Hofstede’s (1980), whose dimensions
have been consistently studied and often validated (Kirkman et al., 2006). The dimensions have been used to
measure cultural differences and their impact on organization behavior
constructs such as locus of control (Smith, Trompenaars, & Dugan, 1995) and
work-related guidance sources (Smith et al., 2002). Subsequently, alternative sets of attitudinal and behavioral dimensions
have been offered (e.g., House et al., 2004; Schwartz, 1992; 1994; Bond, 1988; Bond
et al., 2004). We follow Javidan et al. (2006) in viewing this abundance as an
opportunity as much as an obstacle. Our
analysis rests upon some sixty variables and dimensions, all rooted in
organization behavior and can therefore be considered to come from the same
“world of content” (Guttman, 1968) in addition to being partially overlapping. They
are interrelated by the dynamism of managerial and organizational processes. It
is this abundance of variables and dimensions that we investigate in this section.
Here, we take a longitudinal look at each of the participating
dimensions, also comparing cluster ratings on each separately.
