GUAM AND SAIPAN'S BUSINESS CULTURE: DERIVING HOFSTEDE'S SCORES

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1 GUAM AND SAIPAN'S BUSINESS CULTURE: DERIVING HOFSTEDE'S SCORES Karri Perez, University of Guam Kathy Dote, Society for Human Resource Management, Guam and Saipan Region Juliet Damian, University of Guam Mitchell Taylor, Virginia Polytechnic Institute Allen Dickens, Radford University ABSTRACT The paper is an attempt to apply Hofstede s Model of Cultural to analyze the business culture on Guam and Saipan. This entails analyzing Guam and Saipan s business culture in the context of each of the five cultural dimensions in Hofstede s model, namely (1) individualism vs. collectivism; (2) power distance; (3) uncertainty avoidance; (4) masculinity vs. femininity; and (5) short-term vs. long-term orientation. Currently there are no data or estimates for how Guam and Saipan fare in each of these dimensions. Instead, only aggregate estimates are available and these are for the entire U.S. e.g.: Consequently, there is the obvious problem of assuming that these estimates apply readily to Guam and Saipan. Hence, the primary objective in this study is to conduct surveys of Guam and Saipan residents in order to derive the scores for Guam and Saipan. After doing so, it will be useful to compare these newly-derived scores with those available for various countries and worldwide, and see how similar or different the business cultures are in these locations. The secondary objective of this study is to assist in generating data on Guam and Saipan that present and future prospective business professional can use to build and evaluate their business plans and operations on Guam and Saipan, based on business practices that will be compatible with the cultural profile of the islands. OVERVIEW OF HOFSTEDE S MODEL OF CULTURAL DIMENSIONS Geert Hofstede has conducted research on more than 1, IBM employees in 53 countries. (Mathis & Jackson, 23) It is important to note that Hofstede s cultural dimensions related to businesses and business organizations (Ting-Toomey, 1999). Much of the work in culture and accounting is initially based on Geert Hofstede s pioneering research on the structural elements of culture, particularly those that most strongly affect behavior in the work situations of organizations and institutions (Daniels, Radebaugh, Sullivan, 27, page 641). Listed below for reference are Hoftede s 5 cultural dimensions which were used for data analysis (Hofstede, website): 1

2 Power Distance Index (PDI) is the extent to which the less powerful members of organizations and institutions (like the family) accept and expect that power is distributed unequally. This represents inequality (more versus less), but defined from below, not from above. It suggests that a society's level of inequality is endorsed by the followers as much as by the leaders. Power and inequality, of course, are extremely fundamental facts of any society and anybody with some international experience will be aware that 'all societies are unequal, but some are more unequal than others'. Individualism (IDV) on the one side versus its opposite, collectivism, that is the degree to which individuals are integrated into groups. On the individualist side we find societies in which the ties between individuals are loose: everyone is expected to look after him/herself and his/her immediate family. On the collectivist side, we find societies in which people from birth onwards are integrated into strong, cohesive in-groups, often extended families (with uncles, aunts and grandparents) which continue protecting them in exchange for unquestioning loyalty. The word 'collectivism' in this sense has no political meaning: it refers to the group, not to the state. Again, the issue addressed by this dimension is an extremely fundamental one, regarding all societies in the world. Ting-Tooney states: While there are many dimensions in which national cultures differ, one dimension that has received consistent attention from both intercultural researchers and cross-cultural psychologists is individualism-collectivism. Numerous cross cultural studies (Fiske, 1991; Gudykunst & Ting-Toomey, 1988, Hofstede, 198, 1991; Schwartz & Bilsky,199; Triendis, 1994a, 1995) have provided theoretical and empirical evidence that the value orientations of individualism and collectivism are pervasive in a wide range of cultures. (pp ) Masculinity (MAS) versus its opposite, femininity, refers to the distribution of roles between the genders which is another fundamental issue for any society to which a range of solutions are found. The IBM studies revealed that (a) women's values differ less among societies than men's values; (b) men's values from one country to another contain a dimension from very assertive and competitive and maximally different from women's values on the one side, to modest and caring and similar to women's values on the other. The assertive pole has been called 'masculine' and the modest, caring pole 'feminine'. The women in feminine countries have the same modest, caring values as the men; in the masculine countries they are somewhat assertive and competitive, but not as much as the men, so that these countries show a gap between men's values and women's values. Uncertainty Avoidance Index (UAI) deals with a society's tolerance for uncertainty and ambiguity; it ultimately refers to man's search for Truth. It indicates to what extent a culture programs its members to feel either uncomfortable or comfortable in unstructured situations. Unstructured situations are novel, unknown, surprising, and different from usual. Uncertainty avoiding cultures try to minimize the possibility of such situations by strict laws and rules, safety and security measures, and on the philosophical and religious level by a belief in absolute Truth; 'there can only be one Truth and we have it'. People in uncertainty avoiding countries are also more emotional, and motivated by inner nervous energy. The opposite type, uncertainty accepting cultures, are more tolerant of opinions different from what they are used to; they try to have as few rules as possible, and on the philosophical and religious level they are relativist and allow many currents to flow side by side. People within these cultures are more phlegmatic and contemplative, and not expected by their environment to express emotions. Long-Term Orientation (LTO) Long-term orientation versus short-term orientation: this fifth dimension was found in a study among students in 23 countries around the world, using a questionnaire designed by Chinese scholars It can be said to deal with Virtue regardless of Truth. Values associated with Long Term Orientation are thrift and perseverance; values associated with Short Term Orientation are respect for tradition, 2

3 fulfilling social obligations, and protecting one's 'face'. Both the positively and the negatively rated values of this dimension are found in the teachings of Confucius, the most influential Chinese philosopher who lived around 5 B.C.; however, the dimension also applies to countries without a Confucian heritage. THE SURVEY The survey began as a project by the University of Guam-Pacific Center for Economic Initiatives (UOG-PCEI) aimed at filling in the gaps in availability of reliable, current and relevant data on Guam and Western Pacific that will be helpful for planning and decision-making by policymakers, businesses and the local community. Originally proposed by Dr. Maria Claret M. Ruane, Associate Professor of Economics and Finance at the University of Guam-School of Business and Public Administration, the survey received endorsement from the UOG-PCEI s director, Dr. Anita Borja-Enriquez, in its application for approval by the Committee of Human Research Subjects on Guam. Dr. Enriquez also funded the setting up of the survey instrument on an online format. The survey was derived from the Values Survey Module 1994 (VSM 94) Questionnaire by Geert Hofstede. It can be found at: Once the online survey was set up by UOG-PCEI, the authors worked with the Society for Human Resource Management- Guam and Saipan Chapter to invite prospective respondents to participate in the survey. A mass was sent out inviting prospective participants, explaining the purpose of the survey, and providing the online address for the survey. Participants were asked to take the survey online between January 29 and February 13, 29. They were offered the opportunity to decline or accept the invitation to participate in the survey. The survey consisted of: The Informed Consent Form A Cover Letter explaining the rational for the survey and the survey composition A survey of 27 questions rated on a Likert Scale The surveys were distributed throughout Guam and Saipan through various professional and academic organizations and individuals via . RESULTS The researchers received a total of 312 surveys, 297 from Guam and 15 from the island of Saipan. Hofstede (29) notes the US as a comparative on his website, and we have compared Guam with the US, geographically proximate countries, Asia and the scores. Power Distance (PDI) The next lowest ranking for the United States is Power Distance (PDI) at 4, compared to the world Average of 55. This is indicative of a greater equality between societal levels, including government, organizations, and even within families. This orientation reinforces a cooperative interaction across power levels and creates a more stable cultural environment. 3

4 Guam and Saipan s Power Distance Index (PDI) is at 11, indicating that the Guam residents expect that power is distributed equally. Their PDI score low compared to all other countries, and is closest to Austria (current lowest score globally with a score of 11) and indicates a community that has very little distance between levels and groups within Guam society. Figure 1 Power Distance Index Individualism (IDV) Guam and Saipan s IDV dimension scores are at 86.51, which best matches Canada, the Netherlands and Hungary. It scored as the highest dimension of all the dimensions in the survey for Guam/Saipan. The high Individualism (IDV) ranking for the United States (91) indicates a society with a more individualistic attitude and relatively loose bonds with others. The populace is more self-reliant and looks out for themselves and their close family members. Guam s score also reflects these characteristics. There are only seven (7) countries in the Geert Hofstede research that have Individualism (IDV) as their highest : USA (91), Australia (9), United Kingdom (89), Netherlands and Canada (8), and Italy (76) (Hofstede, 29). Figure 2 Individualism

5 Masculinity (MAS) The next highest Hofstede for the US is Masculinity (MAS) with a ranking of 62, compared with a world average of 5. This indicates the country experiences a higher degree of gender differentiation of roles. The male dominates a significant portion of the society and power structure. This situation generates a female population that becomes more assertive and competitive, with women shifting toward the male role model and away from their female role. (Hofstede, 29) Guam and Saipan scored at on the MAS dimension. The closest country to Guam and Saipan on the MAS score is Denmark (scores of 16), with the US at a score of 62. Figure 3 Masculinity Uncertainty Avoidance (UAI) The last Geert Hofstede for the US is Uncertainty Avoidance (UAI), with a ranking of 46, compared to the world average of 64. A low ranking in the Uncertainty Avoidance is indicative of a society that has fewer rules and does not attempt to control all outcomes and results. It also has a greater level of tolerance for a variety of ideas, thoughts, and beliefs. (Hofstede, 29) Guam and Saipan s Uncertainty avoidance score is 55.37, with the closest country s UAI score being the Netherlands (at 53). The US has an UAI score of 46, indicating that the residents of Guam are more uncertainty avoiding than their counterparts in the US. Figure 4 Uncertainty Avoidance Index

6 Long Term Orientation (LTO) The United States was included in the group of countries that had the Long Term Orientation (LTO) added. The LTO is the lowest for the US at 29, compared to the world average of 45. This low LTO ranking is indicative of the societies' belief in meeting its obligations and tends to reflect an appreciation for cultural traditions. (Hofstede, 29) Guam and Saipan s LTO score is 39.75, closest to the Netherlands with their score of 44. Figure 5 Long Term Orientation CONCLUSIONS This preliminary research indicates that Guam and Saipan s business culture profile resembles neither the US, to which both islands have a close affiliation, nor the Philippines business cultural profile, a country from which a large portion of Guam and Saipan residents have close ties. Guam and Saipan s business culture profile more closely resemble countries of northern Europe. Further exploration through research is needed to determine the reason for these findings and to ascertain what factors have led to the profiles of two small Micronesian islands to match countries that are geographically distant and ethnically dissimilar. REFERENCES Daniels, J., Radebaugh, L. & D. Sullivan (27) International business: environments and operations (11 th Ed.) Upper Saddle River, NJ: Pearson Prentice Hall Hofstede, G. (29) Geertz-Hofstede. Retrieved on February 14, 29 from Mathis, R. & J. Jackson (23) Human resource management (1 th Ed.) Mason, OH: South-Western 6

7 Ting-Toomey, S. (1999) Communicating across cultures New York, NY: The Guilford Press 7