Cultural DifferencesMichael Richarme, Ph.D.

Senior Vice PresidentDecision Analyst, Inc.

Two Main Items of DiscussionHow are people doing economically around

the world?

How are people similar or different?

Monthly Economic IndexConducted in the last week of each month for

over 11 yearsSample of over 30,000 consumers each

monthNine economic indicators measuredResults in a forward-looking index of 9-12

months in the future

United States in February 2010Decision Analyst Economic Index

United States

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95

United States by Census Division

Decision Analyst U.S. Economic Index by Census Division (Three-Month Moving Average*)

Major Global EconomiesNorth America Index South America IndexCanada 100 Brazil 131

United States 95 Argentina 84

Mexico 90

Europe Index Asia-Pacific IndexGermany 97 China 139

Italy 95 India 117

Spain 88 Australia 99

Great Britain 87

France 81

Trading Blocks Suffer TogetherMajor trading blocks (North America,

European Union) are suffering similarly in this economic recession

Some areas of the world are countering that trend

The BRIC EconomiesBrazil, Russia, India, ChinaEconomic growth enginesAll but Russia doing very well in this

recessionChina and India are major exporters Brazil is heading toward energy self-

sufficiency and has a trading agreement with the EU

China Over the Past 3 YearsDecision Analyst Economic Index

China*

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140

Feb-07 Aug-07 Feb-08 Aug-08 Feb-09 Aug-09 Feb-10

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India Over Past 3 YearsDecision Analyst Economic Index

India

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100

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140

Feb-07 Aug-07 Feb-08 Aug-08 Feb-09 Aug-09 Feb-10

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Brazil Over the Past 3 Years

Decision Analyst Economic IndexBrazil

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A Study of Cultural DifferencesGeert Hofstede, the NetherlandsLarge scale study in the 1980’s

Over 116,000 questionnairesAbout 150 questions in lengthTwenty different languages50 countriesAdults

Fundamental Issues ExaminedWays in which organizations are structuredMotivations of people within organizationsIssues people face within their society

Four DimensionsPower DistanceUncertainty AvoidanceIndividualism/CollectivismMasculinity/Femininity

Power DistanceDefined as the degree to which power is

exerted in either an autocratic manner or a democratic manner

Autocratic – what the boss says, goesDemocratic – let’s discuss it before deciding

Typical PDI StatementsLow PDI – “Inequality in society should be

minimized; the system is to blame for things going wrong; cooperation among the powerless can be based on solidarity”

High PDI – “Everyone has his rightful place; power is a basic fact of society; the underdog is to blame for things that go wrong”

Countries PDICountry Power Distance Index World

Rank

Austria 11 1

Great Britain 35 10

Canada 39 15

United States 40 16

Japan 54 21

Korea 60 60

Chile 63 29

India 77 42

Philippines 94 47

Highly Autocratic Highly DemocraticLow scores High Scores

Uncertainty AvoidanceDegree of risk acceptance and tolerance for

uncertaintyLow Uncertainty – not a lot of anxiety about

the futureHigh Uncertainty – need reassurance about

what is going to happen

Typical Uncertainty StatementsLow UAI – “hard work is not a virtue; more

acceptance of dissent; authorities there to serve the citizens; belief in common sense”

High UAI – “Uncertainty is a continuous threat; time is money; strong need for consensus; ordinary citizens are incompetent compared with the authorities”

Countries UAICountry Uncertainty

Avoidance IndexWorld Rank

Austria 70 27

Great Britain 35 6

Canada 48 12

United States 46 11

Japan 92 44

Korea 85 34

Chile 86 36

India 40 9

Philippines 44 10

Highly Comfortable Highly AnxiousLow scores High Scores

Individualism/CollectivismIndividualism is the relative importance of

freedom, challenge, use of personal timeCollectivism is the relative importance of

training, use of skills, physical conditions, and benefits

This dimension indicates the degree to which a person “goes it alone as an entrepreneur” or “feels at home in the pack”

Typical Individualism StatementsLow IDV – “Belief in group decisions;

expertise, order, duty, security provided by organization or clan; identity is based on the social system”

High IDV – “Self-orientation; everybody has a right to a private life and opinion; belief in individual decisions; identity is based on the individual”

Countries IDVCountry Individual

Collectivism IndexWorld Rank

Austria 55 33

Great Britain 89 48

Canada 80 46

United States 91 50

Japan 46 28

Korea 18 11

Chile 23 15

India 48 30

Philippines 32 21

Highly Collective Highly IndividualLow scores High scores

Masculine/FeminineMasculine is the relative importance of

earnings, recognition, advancement, challenge, assertiveness, self-reliance

Feminine is the relative importance of cooperation, desirable living area, job security, nurturing, responsibility

This index shows the degree of the gender gap

Typical Masculinity StatementsLow MAS – “Service ideal; sex roles in society

should be fluid; small and slow are beautiful; differences in sex roles should not mean differences in power”

High MAS – “Money and things orientation; performance and growth are important; decisiveness; sex roles should be clearly differentiated; men should dominate”

Countries MASCountry Masculine Feminine

IndexWorld Rank

Austria 79 49

Great Britain 66 41

Canada 52 28

United States 62 36

Japan 95 50

Korea 39 13

Chile 28 8

India 56 30

Philippines 64 39

Highly Feminine Highly MasculineLow scores High MAS scores

Things to ConsiderDon’t make value judgments – it is OK for

people to have different cultural valuesThink about their cultural values before

trying to do business with themGo more than half-way to accommodate

differences between cultures

Questions or comments?

Michael Richarme, Ph.D.Senior Vice PresidentDecision Analyst, Inc.

604 Avenue H EastArlington, TX 76011

mrichar@decisionanalyst.com