International Business Center Newsletter - Volume 2 - Issue 1
Volume 2 - Issue 1   

Welcome to this issue of the

   In this issue:

International Business Center Newsletter

Recent world events have created new challenges for those working in International Business:

  • The war in Iraq, with its worldwide terror alerts, placed additional limits on global business travel -
  • The World Health Organization issued a travel alert for Asia due to the new SARS respiratory illness - Over 1600 people have now been reported with this new virus and more than 60 deaths have occurred. The latest news includes an American Airlines flight into San Jose from Hong Kong with four passengers complaining of SARS symptoms.
  • The political dissent in the UN created a worldwide split. Now citizens in a number of countries are forming boycotts against long-term allies -
  • There is no sign that any major world economy is experiencing a sustained recovery -

- Focus Article - Religion and Culture

- Global Resource Spotlight

- International Success Tips
    by Kimberley Roberts

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The bottom line, it never hurts to work on business basics. That means either building or reinforcing a foundation for the inevitable recovery that will be taking place.

Yes, it is difficult to think about positive business results when so many challenging events are occurring around the world. But these problems will pass, and the astute business person that plans ahead will be ready to profit from the coming turn-around.

For help with intercultural education, training and development within your organization, please consider the worldwide services of The Sigma Two Group, international business management consultants and trainers.

the International Business Center Staff

IBC FOCUS ARTICLE: How do Hofstede's Dimensions correlate with the World's Religions?
by Stephen J. Taylor, Senior Partner in The Sigma Two Group and Director of the International Business Center

As the war proceeds in Iraq, there’s increasing discord throughout the Middle East, dissention in Europe, and potential conflict with North Korea in the Far East. Do these worldwide conflicts have anything in common?

This was a question recently proposed by several readers of the International Business Center Newsletter.

We will respond to that question through the application of Geert Hofstede’s research, along with the analysis of countries’ religious backgrounds, to determine if there is a correlation between religion and culture – and ultimately the attitudes, beliefs, and behaviors of people in the world.

An interesting recent observation is how various countries are responding to current world situations. Some Middle East leaders have called to their Muslim followers to thwart the infidels and Crusaders. This is a reference to the conflicts between the European Christian ‘Crusaders’, the Muslims, and the Jews that occurred in the Middle East during the 11th Century AD – over a thousand years ago! Yet other countries that fought each other just over fifty years ago (i.e. Japan, Germany, and the USA) are cooperative allies.

What are the cultural and religious factors that have created these two significantly different responses?

Over the history of civilization, millions of people have lost their lives under the auspices and banner of ‘religion’. Could these conflicts be based more on the cultural dynamics, or personalities of people, rather than their religious teachings or philosophies? In other words, are groups of people – cultural societies – more under the influence of their cultural heritage than by religion? Or, have the two merged indiscernibly?

In order to understand the centuries old discord between the World’s religions, we decided to explore the differences not based on dogma, but rather on the social-psychology of each religion to see how, or if, they correlate with the cultural dimensions researched and developed by Geert Hofstede.

The religions included in this study are Atheism, Buddhism, Catholicism, Christianity, Hindu, Jewish, and Muslim.

Recall briefly that Hofstede uses four primary dimensions to delineate a cultural grouping. They are Power Distance (PDI) the level of equality, or inequality, between people within society. Individualism (IDV) the degree the society reinforces individual or collective achievement and interpersonal relationships. Masculinity (MAS) the degree the society reinforces, or does not reinforce, the traditional masculine work role model of male achievement, control, and power; and Uncertainty Avoidance (UAI) or the level of tolerance for uncertainty and ambiguity within the society - i.e. unstructured situations. (Click here for more detail on Hofstede’s Cultural Dimensions)

Our methodology for this study was to identify the predominant religion (practiced by greater than 50% of the Country’s population) in each of the countries used in Geert Hofstede’s study. This data was obtained from the World Factbook 2002, and was compiled in Table 1 with the Hofstede dimensions for each country.

To view the Hofstede scores for each country visit:

The Table 1 data was integrated to create a logarithmic graph for each religion, and then analyzed for any correlation between that predominant religion and one or more of Hofstede’s Dimensions within the grouping. The final results are displayed in Graphs 1-7.

The result was a relatively close correlation between each of the World’s religions and one, or in some cases two, Hofstede Dimensions. Therefore, the hypothesis of this study is that a culture, society, or country is inextricably linked with its religious foundation, and these socio-religious links make change in any society very difficult. And, due to the subjective and esoteric nature of religion, it is not possible to make change based on logic or objectivity.

Here is a review of each of the World’s religions and the correlation results:

  • Atheist – China’s religion is officially designated as Atheist by the government. Some religious practice is acceptable in China; however, the government sets limits. Of the five Dimensions (includes LTO) for China, the closest correlation is with Hofstede’s Power Distance (PDI). (See Graph below)

The high Power Distance ranking of an Atheist society indicates a high degree of inequality between people in the country's population. This high Power Distance ranking reflects that an unequal balance of power and wealth have been allowed to grow within the society.

This means a greater likelihood the country follows a caste system that limits significant upward mobility of its citizens. Any culture with a large Power Distance suggests inherent inequality within the population, and the potential for exploitation.

  • Buddhist – Due to the close approximation of Buddhist and Shinto societies, these have been combined for this study. These countries have the closest correlation with Hofstede’s Uncertainty Avoidance Index (UAI), which is the same with Catholic countries. (See Graph below)

They also have an additional Dimension, that of Long Term Orientation (LTO). Geert Hofstede added this Dimension after the original study, and it has been applied to twenty-three of the fifty original countries in the study.

The Buddhist/Shinto Countries of Taiwan and Japan have LTO as the most closely correlating Dimension.

  • Catholic – In the countries that have over 50% of their populations practicing the Catholic religion we found the primary correlating Dimension to be Uncertainty Avoidance (UAI). There were two countries out of twenty-three that did diverge from this correlation, Ireland and the Philippines. (See Graph below)

Recalling the characteristics of countries with high UAI scores, they have a low tolerance for ambiguity. This creates a highly rule-oriented society that institutes laws, rules, regulations, and controls in order to reduce the amount of uncertainty within the population.

  • Christian – For this study, the definition for a Christian country indicates it has a population of over 50% that practice some form of Christianity, other than Catholicism. In this group, the primary correlation was a high Individuality (IDV) score from the Hofstede study. (See Graph below)

This indicates that predominantly Christian countries have a strong belief in individuality, with individual’s rights being paramount within the society. Individuals in these countries may tend to form a larger number of looser relationships.

  • Hindu - There is only one country with over 50% of its population practicing the Hindu religion – India. The Hofstede Dimension that correlates most with the Hindu religion is Power Distance (PDI), the same as the Atheists in China and the Muslims. (See Graph below) All three have a high level of Power Distance as the highest correlating cultural Dimension with religions.

  • Jewish - The Country of Israel’s closest correlating Hofstede Dimension is Uncertainty Avoidance (UAI), approximating the results for both Catholic and Buddhist/Shinto countries. (See Graph below)

  • Muslim – Again, we have identified a country as being predominantly Muslim if over 50% of its population are practicing Muslims. For this group, the Hofstede Dimensions for the ‘Arab World’ were utilized with a high correlation between the Muslim religion and the Hofstede Dimensions of Power Distance (PDI) and Uncertainty Avoidance (UAI) scores. (See Graph below)

The combination of these two high scores (UAI) and (PDI) create societies that are highly rule-oriented with laws, rules, regulations, and controls in order to reduce the amount of uncertainty, while inequalities of power and wealth have been allowed to grow within the society. These societies are more likely to follow a caste system that does not allow significant upward mobility of its citizens.

When these two Dimensions are combined, it creates a situation where leaders have virtually ultimate power and authority, and the rules, laws and regulations developed by those in power, reinforce their own leadership and control. It is not unusual for new leadership to arise from armed insurrection – the ultimate power, rather than from diplomatic or democratic change.

Here is a summary of the results:

Atheist = Power Distance
Hindu = Power Distance
Muslim = Power Distance

Buddhist = Uncertainty Avoidance
Catholic = Uncertainty Avoidance
Jewish = Uncertainty Avoidance

Christian = Individualism

Note: No religion correlates with the Masculinity Dimension.

What we see in this study is not surprising - there is a high level of correlation between a country’s predominant religion and one of the Hofstede Dimensions. This correlation is validated in non-associated countries around the world, i.e. comparing Catholic countries in Latin America to Catholic countries in Europe.

Therefore, for those individuals who work in international business, it is paramount to clearly understand and accept the deeply ingrained ideas, beliefs, and attitudes of each country and culture. For these are not based just on culture alone, but also on religion. And, religion is a belief system that cannot be challenged or changed with any form of logic, education, or training.

IF conflicts and disagreements are analyzed from the perspective of a combination of their cultural and religious foundations, the disagreements frequently become more understandable. It also becomes clear that resolution will be extremely difficult, whether on a world scale, or a business-negotiating table.

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Global Resource Spotlight?

Each month we Spotlight a free resource for readers that focuses on Global business.

International Success Tips by Kimberley Roberts

Doing business around the world has been streamlined with telephone calls, e-mails and video conferences. But the importance of a personal meeting with associates and clients will never be replaced by modern technology. At times the meeting will be between, or among, trusted colleagues who have done business together for years. At other times, a first meeting will be taking place with the hope of establishing a beneficial and rewarding relationship.

When a meeting is scheduled with people from other cultures, it’s wise to be cognizant of that culture’s protocol. To establish a professional tone for the meeting and make a good first impression, become familiar with the standard greeting for the country, or the cultural group within the country, you will be meeting.

The handshake is used as a greeting throughout the world. In western countries it’s the standard, and in other countries it has replaced the more traditional greeting. For countries that may use the handshake, in addition to a traditional greeting, it is nice to know both. Then, when greeting the other person, pause and wait for a clue as to which greeting you should use.

Men are safe in extending a hand to another man. However, the rules may change when a man greets a woman; or a woman greets a man, or even another woman. Following are several tips that will simplify the greeting and give you some helpful information.

- Germany and the United States have firm handshakes, with the German being very brief and the US being about three to four seconds

- France, Guatemala, and Japan have more limp handshakes

- Singapore has a longer handshake (10+ seconds)

- Women should be the first to offer a hand for a handshake in New Zealand, Singapore, South Korea, or Taiwan

- In South Korea, more respect is shown by cupping your left hand under your right forearm, as if supporting your right forearm during the hand shake

- A traditional bow may be used in China, Hong Kong, or Japan

- Traditional greeting in India is namaste -place the hands in a praying position, palms together with the fingers just beneath the chin, bow and say namaste

- Traditional greeting in Thailand places the hands, palms together, in front of the chin, bow the head to touch the top of the fingers, and say Wai

- Women may greet other women by patting the right forearm or shoulder in Chile, Costa Rica, El Salvador, Honduras, Mexico, Nicaragua, or Panama

- Countries with Hindu and Muslim religions forbid public contact between men and women. When in these countries, follow your host’s cue to determine if religious tradition will be followed.

- Women should wait for a man to offer his hand first in a Hindu or Muslim country, if a western handshake is going to be used

As you can see from this list, even people in countries that have religious beliefs forbidding public contact between men and women may use the handshake as a business greeting when meeting a businessman or businesswoman.

To be professional each time you meet with people from countries or cultures that have these strong religious beliefs, don’t assume the handshake will be the appropriate greeting. Anticipate the situation and what greeting options may be needed. Then in a relaxed and confident manner, follow the clue from the meeting’s host.

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The IBC Newsletter is sent monthly to international executives, managers, supervisors, and international business school students. The Newsletter focuses on issues, information, and trends of importance to conducting business on a Global perspective.

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