Transcript Context

Context
I. BACKGROUND & CULTURE
II. RESOURCES
I. Background & Culture
Link
Link
Culture
Hofstede “Cultural Dimensions” Theory
People’s behavior determined by:
• Human Nature - Universal
• Personality - Individual
• Culture - Local
– View of the world
Assess by measuring
values through surveys
– Habits of action
– Emotional response
Care with National Culture
• Avoid stereotypes – Whatever the truth of
national cultural tendencies, individual
character and human nature important too.
• Avoid lazy thinking – Culture imperfectly
understood, tempting to attribute everything
not understood to cultural differences.
World Values Survey
• WVS conducts international surveys to discover
attitudes and values at country level.
Ex.
Link
Link to Example Questionaire
Factor Analysis
• Many questions will be answered in similar ways across
questionaires. (i.e. people who answer “Mentioned” to
V13 will answer “Mentioned” to V18, etc.)
• Statistical Theory: There are a small number of
independent factors which determine systematic
correlations in answers to multiple questions.
(plants/chlorophyll) .
• Use statistics to construct clusters of questions and
related answers which can be predicted by these
factors.
• Use theory to interpret the dimensions
Cultural Values have two dimensions
1. Traditional vs. Secular
2. Survival vs. Lifestyle
Link
Atlas of
Cultural
Values:
Country
Averagesof
Dimensions
Link
• Show that factors are associated with
identifiable social outcomes.
Link
Theory of National Culture
Common Cultural Issues
Inkeles & Levinson, 1954
• Relationship to Authority
• Conception of Self
– Relationship of Individual to
Society
– Conception of Masculinity
and Femininity
• Modes of Conflict
Resolution
• Used to form theoretical
foundation of factors for
internal IBM study of values
of employees in many
countries.
• Additional work develops
additional dimensions.
Cultural Dimensions Theory
• Business researchers more likely to use Hofstede
“Cultural Dimensions” which looks at 5 dimensions of
national culture.
1. Power Distance (PDI)- Society’s comfort
with inequality or preference for
hierarchy.
2. Individualism versus Collectivism (IDV)
Preference for Self-sufficiency vs. Group
loyalties.
Cont.
3. Masculinity versus Femininity (MAS) Value
of Assertiveness vs. Nurturing.
4. Uncertainty Avoidance (UAI) s ‘threatened
by uncertainty and ambiguity and try to
avoid these situations’
5. Long-Term Orientation (LTO) Present vs.
Future
Link
Cultural Dimension of Asia
Link
Link
Culture and Business
Potential for Competitive Advantages
Power Distance Small
Workers Take Responsibility
Power Distance Large
Discipline
Collectivism
Employee Commitment
Individualism
Management Mobility
Femininity
Personal Services
Masculinity
Heavy Industry
Uncertainty Avoidance Weak
Basic Innovations
Uncertainty Avoidance Heavy
Precision
• Implications for Human Resources Management.
• Implications for Marketing
• Implications for Accounting
Masculinity vs. Femininity
Setting Job Targets
Set unilaterally,
Subject to Renegotiation
Link
Set by Consensus,
Subject to Renegotiation
Nordic
Set unilaterally,
No Renegotiation
France,
Italy
Set by Consensus,
No Renegotiation
US,UK
High Power Distance vs. Low Power Distance
Assessment & Management
Individualism Vs. Collective
Link
Direct Feedback perceived as
rude, Talent management
loyalty/paternalism based
Latin
America
Frank, direct, immediate
feedback
Individual assessment,
performance based
US,UK
High Power Distance vs. Low Power Distance
Culture and Branding
Link
Successful Brands associations:
• In high PDI cultures, “Prestige,”;
• in high UA cultures, “Trustworthy,”;
• Individualistic cultures: brands associate with
abstract concepts, individual products
emphasized.
• Collectivist cultures: brands associate with
concrete people, corporate identities emphasize.
Cultural Values and Accounting
Systems
Accounting Values
• PRO: Professionalism vs. Statutory Control: Judgement
vs. Legal control.
• UNI: Uniformity vs. Flexibility
• CON: Conservatism vs. Optimism- Prudence
Towards a Theory of Cultural Influence
• SEC: Secrecy vs. Transparency. S.J. Gray, 1988,
on the Development of Accounting Systems
Internationally
PRO
UNI
CON
SEC
PDI
-
+
?
+
UAI
-
+
+
+
IDV
+
-
-
-
MAS
?
?
-
-
Link
II. Resources
A.
B.
C.
D.
Natural Resources
Human Resources
Infrastructure
Technology
A. Natural Resources
Income from resource extraction can technically
lead to higher GDP per hour…..
Productivity per Hour
2010
Luxembourg
Norway
United States
78.60
70.52
60.50
Netherlands
Belgium
France
Germany
59.39
59.34
56.03
53.61
Link to CIA Factbook
Oil Reserves
Link to BP Statistical Review of World Energy 2012
Resource Curse
• Some scholars argue that countries “blessed”
with large endowment of mineral resources
suffer slow growth.
– Creates social conflict over control of natural
resources.
– Leads to unaccountable government.
• Ex 1. Conflict Diamonds Link
• Ex. 2 Nauru (pop. 8000) Link
Significant deposits of phosphates
and small population made this
one of the wealthiest societies in
world in 1970’s. But phosphates
ran out..
– Country never developed internal
sources of productivity
unemployment rate 90%
– National gov’t corrupt and wasteful,
bankrupt and completely dependent
on multinational aid
Is the resource curse true?
• Recent studies question these results, but
findings suggest that positive productivity
spillovers to non-resource industries are
questionable. (Link Requires registration)
B. Human Capital
• Measures skill, education level of the work
force.
• General (broad primary & secondary education
& health) or specific skills (technical skills
obtained at tertiary level).
By 2005, average in 25-29 cohort was 12.2 yrs
compared with 13.4 years in USA
Average Years of Schooling
14
12
10
Years
8
6
4
2
0
1950
1955
1960
1965
1970
1975
USA
http://www.barrolee.com/
1980
1985
1990
Singapore
1995
2000
2005
2010
Education
• Literacy Rates: WDI
• Years of Education Barro-Lee Dataset Link
• Quality of Education: OECD Programme for
International Student Assessment (PISA) Link
Summary Data
Completed Tertiary Education 25-29 Yo
35
30
25
%
20
15
10
5
0
USA
http://www.barrolee.com/
Singapore
Link Population by age, sex and urban/rural residence
Aging Population Structure
Age Distribution Japan
12000000
10000000
People
8000000
6000000
2010
1990
1970
4000000
2000000
0
Population Structure and Employment
Japan: Employment to Population Ratio
54.00%
53.00%
52.00%
51.00%
50.00%
49.00%
48.00%
47.00%
2010
2008
2006
2004
2002
2000
1998
1996
1994
1992
1990
1988
1986
1984
1982
1980
1978
1976
1974
1972
1970
1968
1966
1964
1962
1960
1958
1956
46.00%
The Classic Demographic Transition
Model
Link
Stage 1
Stage 2
Stage 3
Stage 4
Birth rate
Natural
increase
Death rate
Time
Note: Natural increase is produced from the excess of births over deaths.
Stages of Demographic Transition
1. Low Population Growth. High Birth Rates,
High Death Rates
2. Population Growth Explosion. Medical
Advances slow mortality rates, high
population growth.
3. Slowing Population Growth. Educational
Advances slow birth rates.
4. Low Population Growth. Low Birth Rates, Low
Death Rates
Japan
World Population Prospects, the 2010 Revision
Volume II – Demographic Profiles Link
Final Stage of Demographic Transition
25
20
per 1000
15
Birth Rates
Death Rates
10
5
0
1950
1960
1980
2000
2005
2010
2015
2020
2040
2060
2080
2100
Fertility Rates
• Age-specific fertility rate: Number of Births to
women of a specific age per women of that
age.
• Total Fertility Rates: Sum of Age-specific
fertility rates from 15-49
• Longer-term ratio of average number of
children
• Replacement Ratio:
– 2.1 Developed Economy,
– 2.3 Developing Economy
Country
Japan
Total
fertility
1.27
Age-specific fertility rates
15-19
20-24
5
36
25-29
82
30-34
86
35-39
38
40-44
45-49
5
0
1.26795
C. Infrastructure
http://data.worldbank.org/data-catalog/world-development-indicators
Air transport, freight
14000
13000
12000
(million ton-km)
11000
10000
9000
8000
7000
6000
5000
4000
2000
2001
2002
2003
2004
Singapore
2005
2006
2007
Hong Kong SAR, China
2008
2009
http://data.worldbank.org/data-catalog/world-development-indicators
Secure Internet servers
600
(per 1 million people)
500
400
300
200
100
0
2003
2004
2005
2006
Singapore
2007
2008
Hong Kong SAR, China
2009
2010
Link
D. Technology Capacity
• Capacity for scientific advance measurable along a
number of dimensions. UNESCO Data
Link
Expenditure on R&D as % of GDP
3
2.5
2
1.5
1
0.5
0
1998
1999
2000
2001
2002
2003
Hong Kong
2004
2005
Singapore
2006
2007
2008
2009
2010
Technical Workforce
Link
Technicians per 1000
1.2
1
0.8
0.6
0.4
0.2
0
1998
1999
2000
2001
2002
2003
Hong Kong
2004
2005
Singapore
2006
2007
2008
2009
2010
Utility Patents by Year
700
600
500
400
300
200
100
19
63
19
65
19
67
19
69
19
71
19
73
19
75
19
77
19
79
19
81
19
83
19
85
19
87
19
89
19
91
19
93
19
95
19
97
19
99
20
01
20
03
20
05
20
07
20
09
0
SINGAPORE
CHINA,HONG KONG S.A.R.
http://www.uspto.gov/web/offices/ac/ido/oeip/taf/reports.htm