Sunday, January 13, 2013

IDV and how it affects outsourcing

Universalism vs. Particularism (Trompenaars)

Universalism is the belief in:
  • rules or laws that can be applied to everyone;
  • agreements and contracts are used as the basis for doing business;
  • rules are used to determine what is right;
  • contracts should not be altered;
  • ideas and practices can be applied everywhere without modification.
Particularism is the belief in:
  • placing emphasis on friendships and looking at the situation to determine what is right or ethically
  • acceptable
  • deals are made based upon friendships;
  • agreements are changeable;
  • different people hold different views about reality;
  • circumstances dictate how ideas and practices should be applied.

Individualism vs. Collectivism (Hofstede)

Individualism is the belief in: 

  • Everyone is supposed to take care of him- or
  • herself and his or her immediate family only
  • "I" – consciousness 
  • Right of privacy 
  • Speaking one's mind is healthy 
  • Others classified as individuals 
  • Personal opinion expected: one person one vote 
  • Transgression of norms leads to guilt feelings 
  • Languages in which the word "I" is indispensable 
  • Purpose of education is learning how to learn 
  • Task prevails over relationship 

Collectivism is the belief in:

  • People are born into extended families or clans which protect them in exchange for loyalty
  • "We" –consciousness
  • Stress on belonging
  • Harmony should always be maintained
  • Others classified as in-group or out-group
  • Opinions and votes predetermined by in-group
  • Transgression of norms leads to shame feelings
  • Languages in which the word "I" is avoided
  • Purpose of education is learning how to do
  • Relationship prevails over task

"The distinction between in-group and out-groups that is so essential in collectivist culture pattern has far-reaching consequences for business relationships, beyond those between employers and employees. In individualist societies the norm is universalist, treating everybody alike. Preferential treatment of one customer over others is considered bad business practice and unethical. In collectivist societies the norm is particularist. As the distinction between "our group" and "other groups" is at the very root of people's consciousness, treating one's friends better than others is natural  and ethical and sound business practice." p. 238, Culture's Consequences, G. Hofstede

"A consequence of particularist thinking it that in a collectivist society a relationship of trust should be established between two parties before they can do any business. Through this relationship, both parties adopt the other into their in-groups, and from that moment onward both are entitled to preferential treatment. This process of adoption takes time - depending on the situation, from several hours to several years.  A relationship is established with a person rather than with a company. To the collectivist mind, only natural persons are worthy of trust, and via these persons their friends and colleagues, but not impersonal legal entities like companies. So in the collectivist society the personal relationship prevails over the task and over the company and should be established first; in the individualist society, in contrast, the task and the company are supposed to prevail over any personal relationships. Naive Western businesspersons who try to force quick business in collectivist culture condemn themselves to negative discrimination as out-group members." p. 239, Culture's Consequences, G. Hofstede

According to Bulgaria with a score of 30 is considered a collectivist society. 

From Asia: India scores 48, but at a score of 20 China is a highly collectivist culture!

With a score of 46, also in this dimension Argentina sits in the middle rankings. As a consequence of the aforementioned migration waves and the early emergence of wide middle classes, Argentina is, by far, the most individualistic of all Latin countries.

For a comparison The United States, with a score of 91 on this dimension, is a highly individualistic culture. 

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