What Goals Do Business Leaders Pursue? a Study in Fifteen Countries

what Goals Do Business Leaders Pursue? A Study in Fifteen Countries

Geert Hofstede* TtLBURG UNtVERSITY Cheryl A. Van Deusen** UNIVERSITY OF NORTH FLORIDA Carolyn B. Mueller*** STETSON UNIVERSITY Thomas A. Charles**** BALL STATE UNIVERSITY The Business Goals Network*****

GoalS'in-use of successful busi- Th e re la tive ordering of goals nesspersons were rated by over within these clusters suggested 1,800 junior managers and profes- seven different archetypal business sionals, attending evening MBA leader roles. Perceptions correlated courses at local universities in 15 significantly with national wealth, countries. A hierarchical cluster as well as with dimensions of na- analysis of perceived goals divided tional culture. the countries into seven clusters.

*Geert Hofstede is an Emeritus Professor of Organizational Anthropology and Interna- tional Management of Maastricht University and a Fellow ofthe Institute for Research on Intercultural Gooperation (IRIC) and of the Genter for Economic Research [CenlER) at Tilbnrg University, the Netherlands. *Cheryl A. Van Deusen is an Associate Professor of Strategic and International Manage- ment at the University of North Florida, Jacksonville. She is also a Research Associate at the Center for International Business Studies. UNF. *Carolyn B. Mueller is an Associate Professor of Strategic and International Management at Stetson University, DeLand, Florida. Her research interests include cross-cultural management issues and the influence of cuitiu-e on decision-making. *Thomas A. Charles is a Senior Research Analyst at the Bureau of Business Research, College of Business Administration, Ball State University, Muncie. Indiana •*consisting of Dharm Bhawiik ajid Rohert L. Doktor [University of Hawaii at Manoa); Joseph Christie (Saint Louis University, Mitisnuri): Wade Danis (Marquetto University. Milwaukee, Wisconsin); Herb Johnson (Nova Southeastern University, Fort Lauderdale, Florida); An- thony Lee (European Business School, Oestrich-Winkel, Germany): Niels G. Noorderhaven (Tilhurg tJniversity, the Netlierlaiids); Timotliy Reed (University of Colorado. Boulder); Brett L. Scarlett (Royal Melbourno Institute of Technology. Melbourne, AustraliaJ; janine Stiles (Henley Managemonl College. United Kingdom); Botaiiia Tanuro de Barros (Fundagao Dom Cabral, Belo Horizonle. Brazil); lean-Claude Usunier (Univorsite de Lausanne. Switzerland) and Heatlier I.M. Wilson (University of Auckland. New Zealand).

JouHNAL OF INTERNATIONAL BUSINESS STUDIES, 33, 4 (Fnuirru QUARTE'K 2002): 785-803 785 BUSINESS GOALS

: THE GOALS OF BUSINESS At tbe time such deals are concluded. those responsible tbink too often in Tbrougbout bistory, people from dif- terms of size and price only, sbowing ferent countries and different walks of naive optimism about tbe execution of life bave traded and made productive their decision. Wbile integrating people deals wbile pursuing tbeir own very dif- and operations from different countries ferent goals. Trading partners don't need is a difficult task, it can be and bas been to sbare goals and values. In interna- done successfully wbere tbe goals pur- tional trade, differences in goals are use- sued were clear to everyone. When tbis ful to know but not an impediment. is not tbe case, wbere leading persons Tbis situation changes when busi- involved bold different implicit goals, nesses from different countries enter into attempts at integration at lower levels sbared operations like strategic alli- will fail and tbe new venture is almost ances, joint ventures, acquisitions and certain to get into trouble. Sucb funda- mergers. Tbe management of sucb oper- mental goal disparities often go unrecog- ations needs parties to be of one mind nized or remain taboo. We believe this is about the goals tbe operation pursues. a main reason for tbe failures and disap- Not only do "too many cooks spoil tbe pointing results in international ven- brotb" but tbe success of most ventures tures. depends on interactions witb tbeir environment; and different environments THE NATIONAL COMPONENT IN hold different expectations. Thus global BUSINESS GOALS: A REVIEW companies acquiring local businesses or OF THE LITERATURE merging witb other global companies Tbe risks and disasters of international may find tbemselves acting as company ventures bave been known for decades. owner in a setting for wbich tbey are ill The road to internationalization is lined prepared. Tbeir new^ bost countries with wrecks. Tbe management literature present tbem witb different expectations prefers describing successes rather than about tbe goals tbey will pursue, wbicb failures, but business sections in daily newspapers continue to announce bro- does bave profound implications for ken dreanis. Some of tbese bave been tbeir relationsbips witb local stakebold- studied in deptb (Grunberg, 1981; Mann, ers like co-owners, sharebolders, em- 1989; Olie, 1996). ployees, unions, customers, suppliers and autborities. One hurdle to be overcome is different traditions of corporate governance. In spite of tbeir increasing frequency, Equally developed and sometimes neigb- international ventures do not bave a bigb boring coimtries maintain very different success rate. Strategic alliances, if tbey ownership and governance systems, witb do not already break down in tbe nego- little sign of convergence. Pedersen and tiation stage, often fall short of tbeir Tbomsen (1997), studying tbe owner- promises. Joint ventures remain costly ship of tbe 100 largest business corpora- drains on resources and eventually dis- tions in eacb of 12 European countries, appear. International acquisitions are re- reported that in Britain 61% of tbe 100 sold. Mergers announced witb great en- largest companies bad many small sharo- tbusiasm crasb after some years, leaving bolders, in Austria and Italy no large a trail of broken careers and even ruined companies at all bad tbis ownersbip personal bealtb of major proponents. type. Sucb differences are evidently bis-

786 JOURNAL OF INTERNATIONAL BUSINESS STUDIES HOFSTEDE, VAN DEUSEN, MUELLER, CILARLES, BUSINESS GOALS NETWORK torically rooted but they are maintained and Singh (1998), who in a set of for- by different conceptions about the goals eign acquisitions into and from Italy of business. These conceptions are part found the acquired companies' sales of national value systems, which belong growth in the two years after the acqui- to national cultures (Hofstede, 2001). Se- sition to be positively related to the menov (2000) analyzed differences in cultural distance of the partners. They economic governance among 18 devel- suggested that the variety may have led oped Western countries and proved di- to synergy. As the different studies rect links between systems of gover- used different success criteria, their re- nance and Hofstede's (1980) original sults are not fully comparable. In the four cultural value dimensions of Power majority of cases, cultural differences Distance, Uncertainty Avoidance, Indi- seem to spell trouble. vidualism and Masculinity. The literature on business ethics Kogut and Singh (1988) developed a shows extensive proof of the influence of measure of cultural distance between nationality on values, that is feelings of countries based on Hofstede's dimension right and wrong. For example, Schlegel- indices. Their measure has become pop- milch and Robertson (1995) showed that ular in studies of international business, both country and industry affected the for explaining differences in levels of in- ethical perceptions of senior executives vestment abroad and in mode of entry in the U.S.A. and Furopean countries. (like greenfield, joint venture or acquisi- Nakano (1997) found that Japanese and tion), but also for explaining differences U.S. managers differed strongly in their in success rates. Li and Guisinger (1991) ethics orientations. McDonald and Kan found that foreign entries in the U.S.A. from culturally distant countries were (1997) demonstrated differences in ethi- more likely to fail than were those from cal perceptions between expatriate and culturally close countries. Barkema, Bell local managers in Hong Kong. A world- and Pennings (1996) analyzed survival wide survey of business ethics by rates of foreign entries by Dutch compa- Enderle (1997) reported significant coun- nies and found these to decrease witb try differences. Whitcomb, Erdener and cultural distance, but more for joint ven- Li (1998) showed differences between tures and acquisitions than for greenfield Chinese and U.S. managers in scenario- starts, and more for partly owned than based ethical decision-niiaking exercises. for wholly-owned subsidiaries. They ex- Baker and Veit (1998) compared North plained this by the need for "double- American and Pacific Rim (i.e.. Hong layered acculturation" in the riskier Kong, Japan, Singapore and Thailand) cases. Barkema and Vermeulen (1997) in nations and found differences in the eth- an extended set of Dutch foreign entries ical principles of investment profession- found the failure rate of joint ventures to als. Priem, Worrell and Walters (1998) be related to differences in Uncertainty showed differences in moral judgment Avoidance and to Hofstede's new fifth betw^een respondents from ricb and from dimension of Long Term Orientation. poor countries. Stevenson and Bodkin Luo (1999) found the performance of foreign joint ventures in China to be nega- (1998) even found significant differences tively associated with the cultural dis- in a cross-national comparison of U.S. tance between the partners. A dissenting and Australian university students' per- voice was heard from Morosini, Shane ceptions of right and wrong in sales practices.

VOL. 33, No. 4, FOURTH QUARTER, 2002 787 BUSINESS GOALS

Cross-national differences in business METHOD AND DATA goals can also be traced in comparative The sbortest way towards finding out studies on entrepreneursbip, in spite of common traits of entrepreneurs across about the goals of business leaders borders (McGratb and McMillan, 1992). wonld be to ask them. Many of the stud- Bauni, Olian and Erez (1993) contrasted ies of business etbics cited above have the needs of entrepreneurs and managers followed this strategy. We cbose anotber in Israel versus tbe U.S.A. Holt (1997) approacb, not only because of tbe obvi- found both similarities and consis- ous problems of access to a sufficient tent differences between tbe values and number of business leaders, but also be- behaviors of entrepreneurs in China cause we did not want to fall into the and tbe U.S.A. Wildeman, Hofstede, trap of equaling "what they say" witb Noorderhaven, Tburik, Verhoeven and "wbat they do," (Deutscher, 1973) or of Wennekers (1999) reported large differ- taking "espoused theories" for "theories ences in the levels of self-employment in action" (Argyris and Scbbn, 1974). across 23 OECD countries, and related "Integrity" was one of tbe espoused and tbese to the goals of persons in these widely announced Corporate Values of countries starting tbeir own business. Enron! Our strategy was to use tbe sbared perceptions of well-informed Many comparative studies have shown tbird persons: Junior managers and pro- cross-national differences in individuals' fessionals working during the day and values (England, 1975; Hofstede, 1980, attending evening MBA classes at local 1997, 2001; Scbwartz, 1994; Smith, 1996). These affect people in business as mucb as universities. Of course the perceptions anybody else. For example, they affect we measured were in the eyes of the wbat is considered fair compensation beholders; but tbese bebolders were cul- (Pennings, 1993; Hundley and Kim, 1997). tural insiders, sbaring tbe national cul- Tbey also affect concepts of desirable lead- tures of tbe business leaders they re- ership traits (e.g. Koopman, Den Hartog ported on. and Konrad, 1999). We believe our strategy led to a more On tbe otber band forces of globaliza- realistic description of business leaders' tion of business, modern communication goals than direct questioning of the ac- services, ease of transportation and inter- tors would bave produced. We avoid the national education could reduce tbe im- "self-serving bias," which self-descrip- portance of local and national cultures, tions unavoidably produce. Wben asked as suggested by, for example, Kumar and about our own motives m^ost of us will Thibodeaux (1997) and Salk and Bran- implicitly answer as we think these mo- nen (2000). Being exposed to similar tives sbould be, not as they operate in business contexts, business people in our behavior. Nobody will know a busi- different countries migbt increasingly ness leader's "real" goals, not even the start embracing similar goals. actor ber/bimself; talking about "real" Tbe present study, based on data about goals is an idealistic fallacy. March and the goals of business leaders collected in Olsen (1976) used tbe "garbage can" met- tbe later 1990s, will sbow to what extent aphor for processes of decision making tbis "sbrinking world" has wiped out in organizations. In analogy, the process effects of national cultures, or whether of goal selection by business leaders is persistent national cultural differences anotber garbage can process, in wbicb bave so far survived globalization. many influences get mixed. Goals will

788 JOURNAL OF INTERNATIONAL BUSINESS STUDIES HOFSTEDE, VAN DEUSEN, MUELLER, CHARLES, BUSINESS GOALS NETWORK vary between individuals, based on their or no importance." The mean scores for personality, education, age, prosperity the total group were discussed in class. and experience. Hall and Williams The questionnaire offered an option of (1998), for example, found distinct dif- writing in additional goals, but this was ferences in the business value perspec- rarely used; the list was considered rea- tives of U.S. marketing versus finance sonably exhaustive. managers. But even for the same individ- In subsequent years colleagues at 20 uals they will fluctuate and shift over other locations around the world admin- time under tbe influences of political, istered the same questionnaire to their economic and market pressiues. What local evening MBA students, referring to we were after was to see what national "tbe typical successful businessperson components these goals, as perceived by in your country," and again to the re- insiders, contained. spondents personally. Eighteen of tbe lo- Our data were collected with a stan- cations used the original English lan- dard "Questionnaire about Business guage version; three European countries Goals," developed by the first author at (France, Germany, Netherlands) used the University of Hong Kong, where he careful translations checked by the iirst taught evening MBA classes in tbe Fall author. Intermediate comparative analy- of 1995. The issue of differences in val- ses for six and 11 locations, respectively, ues and ethics of business, comparing were presented at conferences. The East with West, was very topical in Hong present paper compares 21 groups from Kong at that time (as testified by the pub- 16 universities, with students from 15 lication of the reader "Whose Business countries. They are listed in Table 1. Values?", (Stewart and Donleavy, Eds., Tbe total number of respondents was 1995). Discussions in class w^itb the stu- 1,814. For all groups but one, only students, young and mature Hong Kong dents born and raised in tbe country of Chinese adults with full-time day jobs, study were included in tbe comparison. focused on the goals and values of entre- Tbe classes studied contained some im- preneurs and other businesspersons, and migrant and expatriate students, but if there was an evident variety of percep- grouped by country of origin they did tions. Scanning the managemeJit litera- not produce cell sizes over 20, which we ture, collecting suggestions from stu- chose as our minimum for analysis. The dents, and adding the author's personal one exception was formed by expatriate experience of 20 years in business pro- students from mainland China, of whom duced a list of 15 different relevant goals. a group of 23 could be composed, study- These were put in questionnaire format, ing at four U.S. and one Australian uni- and respondents were asked to score versity. Moreover, at the University of their importance twice. First, how im- Hawaii (U.S.A.), the 61 respondents portant tliey thought each of these goals were divided into 30 ethnic Caucasians was for "the typical successful busi- (Europeans) and 31 ethnic Asians, in- nessperson in Hong Kong"; next, how cluding some Pacific Islanders and per- important each goal would be for them sons of mixed ancestry. Business roles in personally, supposing they would "be a Hawaii are unevenly divided over ethnic successful businessperson in a few groups, which suggests that business ori- years." Importance was rated for each entation may be related to ethnic origin. goal separately, on a 5-point scale from As Table 1 shows, the size of tbe 21 "of utmost importance" to "of very little groups (from one country or ethnicity

VOL. 33, No. 4, FOURTH QUARTER, 2002 789 BUSINESS GOALS

TABLE 1 NUMBERS OF RESPONDENTS FROM 21 CoUNTRY/UNIVERSITy GROUPS

Respondents Country University

93 Australia (AUL) R.M.IT. Melbourne 38 Bahamas (BAH) Nova SoLithoastern U. - 96 ; Brazil (BRA) Fundagao Dom Cabral, Belo Horizonte 23 Cbina except Hong Kong (CHI) R.M.I.T. Melbourne U. of Hawaii Ball State U. (Indiana) U. of Colorado-Boulder U. of N. Florida 190 France (FRA) I.A.E.'s Paris, Grenoble, Lyon, Montpellier, Strasbourg 84 Germany (GER) European Business School 42 Great Britain (GBR) Henley Management Gollege 101 Hong Kong (HOK) U. of HK. Business School 105 Hungary (HUN) International Mgmt. Genter 99 India (IND) Goa Institute of Mgmt. . . , . 45 Jamaica (JAM) Nova Southeastern U. . , . 110 Netherlands (NET) Tilburg University 72 New Zealand (NZL) University of Auckland (AUK) 34 New ZeaUind (NZL) Henlfjy Management Gallege (HEN) 65 " Panama (PAN) Nova Southeastern U. 148 USA Ball State U.. IN (BAL) 191 USA ; U. of Golorado (GOL) 115 USA . , ; . , U. of North Florida (FLO) . . 102 . USA St. Louis U., MO (SLU) _ 30 Hawaii-Gaucasians (USH-GAU) University of Hawaii 31 Hawaii-Asians (USH-ASI) University of Hawaii 1.814 ALL GOUNTRIES ALL UNIVERSITIES and/or one university) ranged from 23 to ten respondents, it was supplemented 191. up to the number of ten with scares ex- The 21 respondent groups varied in trapolated from the opposite gender or gender composition and age distribu- opposite age category, by adding or sub- tion. The first author's research on val- tracting the score difference for this goal ues had shown that answers on this type between genders or age categories in the of value-related questions could vary sig- total population. nificantly between genders and age cate- Comparisons between groups were gories. For the comparison of country/ based on the relative importance of each university groups the influence of gender goal versus the other 14 goals in the and age had therefore to be controlled. questionnaire. This was done by com- This was done by basing the group puting standard scores across the 15 scores for each goal on the means of four goals. The standard score (or Z-score) is subgroups, wbicb were given equal the mean score for the single goal minus weight: All women, all men, all respon- the overall mean across the 15 goals, di- dents over 30 and all respondents up to vided by the standard deviation of the 15 30. If a subgroup contained fewer than mean scores around their overall mean.

790 JOURNAL OF INTERNATIONAL BUSINESS STUDIES HOFSTEDE, VAN DEUSEN, MUELLER, CIL\RLES, BUSINESS GOALS

This eliminates response set, that is the umn to the goals claimed for oneself. tendency in a group to rate all goals less Low ranks and positive scores stand for or more important, or less or more ex- "more important." treme. On scales of "importance" which The comparison between "tycoon" have no natural mid-point, standardiza- and "self" sbows tbat: tion is essential for making scores comparable across groups. Otherwise the 1. Growth and continuity of the busi- comparisons will be based on response ness are tbe leading goals both for set tendencies rather than on rated im- tycoon and for self, but more strongly portance. "Importance" is by its very na- for the tycoon. ture a relative concept; it only becomes 2. This year's profits, personal wealth meaningful by comparison with some- and power were rated as very impor- thing else. tant for tbe tycoon, but less so for the self. "Power" is the goal for which the RESULTS scores show the largest difference between tycoon and self. Comparing "Tycoon" with "Self" 3. Greating something new. profits 10 Table 2 shows the 15 goals in their years from now, staying within the overall order of importance across all 21 law, responsibility towards employ- country/university groups, giving equal ees, respecting ethical norms and re- weights to both genders and both age sponsibility towards society were categories. The "tycoon" column refers rated important for tbe self, but less to the "typical successful businessper- for the tycoon. son in your country" and the "self" col- 4. Gambling spirit, patriotism and fam-

TABLE 2 MEAN RATED IMPORTANCE OF 15 BUSINESS GOALS ACROSS 21 COUNTRY/ UNIVERSITY GROUPS

[standardized data; rank 1 = most important] For Tycoon For Self Rank Score Rank Score

growth of the business 1 1.26 1 1.00 .continuity ofthe business 2 1.05 2 .86 thi.s year's profits 3 1.01 9 .26 personal wealth ; ; 4 •83 10 .08 power . > , : 5 .68 12 -.62 honor, face, reputation - 6 .47 7 .48 creating something new • •• • ^7 .21 6 .49 profits 10 years from now 8 .15 S ^ .56 staying within the law 9 — .12 4 .59: rtisponsibility towards employees 10 -,30 3 .64 respecting ethical norms 11 -.52 8 .30 responsibility towards society 12 -.82 11 -.06 game and gambling spirit 13 -1.09 14 -1.57 patri{itism, national pride 14 -1.26 13 -1.28 femily interests 15 -1.56 15 -1.73

VOL. 33, No. 4, FOURTH QUARTER, 2002 791 BUSINESS GOALS

ily interests were ranked lowest for and differences among country/univer- both tycoon and self. sity groups were studied through a Hier- archical Cluster Analysis (available in So tile average respondent felt that: My the SPSS package), which shows the priorities will be with being responsible proximity of the groups on the basis of towards employees, staying within the their scores. It produces a "dendrogram" law and focusing on the long term, but ("tree diagram") reproduced in Tahle 3. my country's "tycoons" are mainly after The "rescaJed distance" horizontal scale the short term, wealth and power. We indicates the relative distance between interpret this as a self-serving bias wbich the scores. is a common trait of human perception: In the dendrogram we read that the Seeing one's own motives as noble, but two U.S. universities of Colorado and other people's motives less so. Among North Florida have produced the most business persons in the U.S.A. the same similar scores (one point distance on the phenomenon has been shown in a clas- horizontal scale). The other two main- sic survey study by Baumhart (1961), land U.S. universities and the ethnic confirmed in a follow-up 16 years later Caucasians in Hawaii have also pro- by Brenner and Molander (1977). The duced quite similar scores: The fiveU.S . self-serving bias was one of our reasons universities form one close cluster with for preferring perceptions by third per- no more than three points mutual dis- sons over self-descriptions, and our own tance. data prove the justification of our prefer- The two New Zealand groups also pro- ence. duced very similar scores, as shown by Further comparisons in this paper be- their tight clustering. None of the other tween countries and universities will ob- groups share the same nationality, and viously be based on the scores for "ty- none of them produced clusters as tight coon," not on the biased "self" scores. as the U.S. and New Zealand groups did. Humans are better judges of others than So the dendrogram proves that respon- of themselves, and we were interested in dents from the same countries scored (perceived) goals of present business more similarly than those from the same leaders rather than in future expecta- universities (like the Henley Manage- tions of present MBA students. ment College groups from New Zealand and Great Britain and the Nova South- Country/University Clusters eastern University groups from Baha- The present article focuses on the mas, Jamaica and Panama). comparison across country/university The similarity in scores between uni- groups. The analysis was based on the versities from the same countries proves standardized scores on the 15 goals for the reliability of the instrument used. Re- the "tycoons" as produced by the reliability means that the measurements spondents in the 21 groups, balanced (as are not dominated by random noise. The described above) for equal representa- reliability of rating single items from a tion of women and men, and of older and list, like was done in our instrument, younger respondents. The gender and cannot be measured by tests like Cron- age effects on perceptions are in them- bach alpha based on correlating multi- selves interesting, but outside the focus ple items. It can be proven by repeated of the present study; they will be treated testing. The fiveU.S . universities and the in a separate publication. Similarities two New Zealand universities can be

792 JOURNAL OF INTERNATIONAL BUSINESS STUDIES HOFSTEDE, VAN DEUSEN, MUELLER, CHARLES, BUSINESS GOALS NETWORK

TABLE 3 HIERARCHICAL CLUSTER ANALYSIS OF 21 GROUPS ON 15 BUSINESS GOALS FOR "TYCOON" DENDROGRAM USING AVERAGE LINKAGE BETWEEN GROUPS Rescaled Distance Cluster Combine

CASED 5 10 15 20 25 Ctry Univ + + + + + + la USA COL 1 USA FLO —1 USA SLU USA BAL USH CAU lb NZL HEN 1 NZL AUK GBR HEN • 2 IND GIM JAM NSU BAH NSU 3 PAN NSU AUL KMT 1 FRA ULP BRA FDC HUN IMC 4a HOK HKU USH AS I 4b GER EBS NET TXL 1 5 CHI VAK For abbreviations see Table 1 seon as providing independent tests on of less than ten points in Table 3 as be- samples from the same national popula- longing to a common cluster, five clus- tions. The similarity of answers deriving ters remain. Two of these can he logi- from the same country proves the reli- cally subdivided into political/geograph- ability of the goals list as an instrument ical subclusters (lab and 4ab). The for detecting country effects. clustering structure to be read from Ta- Groups from different countries also ble 3 becomes: clustered, albeit somewhat less tightly than groups from the same country. If we la. All U.S. universities except the consider groups with a mutual distance Asians in Hawaii.

VOL. 33, No. 4, FOLIRTH QUARTER, 2002 793 BUSINESS GOALS

lb. New Zealand and Creat Britain. ter we eliminated the overall attractive- 2. India, Jamaica and Bahamas (all ness of each goal. This was done by once three former parts of the British em- more standardizing the scores, this time pire). across the seven (sub)clusters. Our data 3. Panama, Australia, France, Brazil have thus been standardized twice, first and Hungary. Panama, France and across the 15 goals (eliminating response Brazil are the Latin countries in our sets of country/university groups), and population. Australia remarkably does second across 7 (sub)clusters (eliminat- not cluster with Britain and New Zea- ing the overall attractiveness per goal). land. Hungary is our only East Euro- The results are listed in Tahle 5. pean country. Table 5 reflects the full variety in the 4a. Hong Kong and the Hawaiian choices from different clusters. Even if Asians, both affluent groups with an certain goals, like family interests, were Asian ancestry. overall given lower priority than growth, 4b. Germany and the Netherlands, continuity and profits, their attributed non-Anglo West European countries. importance did vary considerably be- 5. The mainland Chinese expatriate tween country clusters, and this is what students in the U.S.A. and in Austra- Table 5 shows. lia. DISCUSSION Coal Priorities According to Country Clusters Archetypes of Business Leaders Tahle 4 lists the six most important Each of the (sub)clusters has its own goals attributed to business tycoons for profile of top-ranked business goals, ac- each of the clusters, in order of impor- cording to Tahle 5. Each of these profiles tance. At first sight the lists look rather reflects an "archetypal" business leader similar. Crowth of the business, continu- whom our MBA respondents thought of ity of the business and reputation are when scoring the questionnaire. In tbis mentioned in all seven cultures and sub- section we name and describe these clusters. This year's profits and personal seven archetypes. wealth occur six times, power four Cluster la in Table 5 is a tight group times, profits 10 years from now and cre- composed of all five U.S. universities, ating something new each two times, producing very similar rankings in spite and staying within the law once. of tbeir geographical distance (they were This apparent similarity is due to the located in Colorado, Florida, Hawaii, In- fact that tbe 15 goals in the list are of diana and Missouri). The only U.S. citi- unequal weight; in the MBA education zens not in this cluster are the ethnic programs from which our raters derived, Asian Americans in Hawaii. In the main- goals like growth and continuity have stream U.S. cluster, MBA students per- such a strong general appeal that they ceived their business leaders as focusing will figure high on any list. Other items on growth and this year's profits, on per- among our 15 are more specific and pro- sonal wealth and power, on staying duced larger differences between clus- within the law, and on respecting ethical ters, but this is not evident from the top norms. six goals in Table 4. These goals provide a shorthand de- The differences between the country scription of the U.S. business ethos. clusters become more clearly visible af- There is a focus on the "bottom line" or

794 JOURNAL OF INTERNATIONAL BUSINESS STUDIES HOFSTEDE, VAN DEUSEN, MUELLER, CHARLES, BUSINTESS GOALS NETWORK

TABLE 4 SIX MOST IMPORTANT PERCEIVED GOALS OF "TYCOONS" IN EACH OF SEVEN (SUB)CLUSTERS OF COUNTRIES

Cluster la (U.S.A.) Cluster lb (Britain, New Zealand) growth of the business this year's profits this year's profits ' . growth of the business personal wealth , continuity of tlie business « > power staying within the law continuity of the business personal wealth honor, face, reputation honor, face, reputation

Cluster 2 (India, Jamaica, Bahamas) continuity of the business growth of tlie business this year's profits personal wealth power honor, face, reputation

Cluster 3 (Latin countries, Australia, Hungary) growth of tlie business this year's profits continuity ofthe business personal wealth power honor, face, reputation

Cluster 4a (HKong. Hawaii-Asian) Cluster 4b (Germany, Netherl) growth of the business continuity of the business personal wealth growth of the business continuity of the business creating something new creating something new honor, face, reputation honor, face, reputation this year's profits profits 10 years from now personal wealth . .

Cluster 5 (China) growth of the business continuity of the business power honor, face, reputation this year's profits profits 10 years from now

short term, and getting higger is almost wealth is considered the prime measure synonymous to getting better; there is a of success and human worth; there is a general respect for wealthy persons and belief in power; there is a constant con-

VoL. 33, No. 4, FOURTH QUARTKR, 2002 795 BUSINESS GOALS

TABLE 5 SIX RELATIVELY MOST IMPORTANT PERCEIVED GOALS OF "TYCOONS" IN EACH OF SEVEN (SUB)CLUSTERS OF COUNTRIES

Cluster la (U.S.A.) "the Cluster lh (Britain, New Zealand) Executive" ; "the Manager" growth of the business Ihis year's profits this year's profits staying within the law personal wealth responsibility twds employees power continuity of the business staying within the law patriotism, national pride respecting ethical norms respecting ethical norms

Cluster 2 (India, Jamaica, Bahamas) 'the Family Manager" continuity of the business family interests patriotism, national pride personal wealth profits 10 years from now this year's profits

Cluster 3 {Latin countries, Australia, Hungary) "the Family Entrepreneur" family interests personal wealth power this year's profits game and gambling spirit growtli of the business

Cluster 4a (HKong, Hawaii-Asian) Chister 4b (Germany, Netherl) "tlie Entrepreneur" "the Founder" profits 10 years from now responsibility twds employees creating sometlaing new responsibility twds society game and gambling spirit creating sometliing new growth of the business game and gambling spirit lionor, face, reputation continuity of the business personal wealth honor, face, reputation

Cluster 5 (China) "the Mandarin" respecting ethical norms patriotism, national pride honor, face, reputation power responsibility towards society profits 10 years from now

796 JOURNAL OF INTERNATIONAL BUSINESS STUDIES , VAN DEUSEN, MUELLER, CHARLES, BUSINESS GOALS NETWORK cern with the law in a country with the ests, suggesting that business leadership highest per capita density of law^yers and in these countries is associated with fam- the largest number of lawsuits in the ily companies—which, in fact, are the world; and at the same time a concern dominant type of local businesses. As a with moral and ethical rectitude sup- unique term for describing the arche- ported hy a multitude of religious com- typal bnsiness leader in these former munities. All of these form part and par- British colonies we chose the Family cel of the U.S. national culture. Much of Manager. it was already described in the notes of a Cluster 3 in Table 5 contains the Latin Erench author who visited the U.S.A. in countries Brazil, France and Panama, as the 1830s (de Tocqueville, ig5B[l835|). well as Australia and Hungary. Com- As a unique term for describing the pared to Cluster 2 they lack the longer- archetypal U.S. business leader reflected term goals of continuity and propts 10 by these goals we chose tbe Executive. years from. now. To the family business Executives in this case are defined as goals of personal wealth and family in- high-status and well-paid professionals terests they explicitly add the goal of in charge of a business they run on be- power. Here, for the first time, game and half of anonymous shareholders, with- gambling spirit is also recognized as a oul forgetting themselves. prime goal of business tycoons. Australia Cluster lh in Table 5 unites the is the only Anglo country that did not U.S.A.'s Anglo cousins from Britain and cluster with its cultural sisters. The Aus- New Zealand. They share the U.S. con- tralian MBAs associated their country's cern for short-term profits, laws, and re- business tycoons no longer with tradi- specting ethical norms, but their politi- tional Anglo values but rather with the cal and industrial environment has been more cosmopolitan values mix of the new marked by strong labor parties and trade Australians immigrated from various unions. This accounts for the prominent other parts of the world. Himgary as the place of the goal responsibility towards only East-European conntiy hi our set also employees on their ranking, which was appears to fit into this values set. As a missing on the U.S. list. They stress con- unique term for describing the archetypal tinuity rather than growth, and success- business leader in tbis group of countries ful business is part of their national pride. we chose the Family Entrepreneur. As a unique term for describing the Cluster 4a in Table 5 combined the archetypal British/ New Zealand husi- Hong Kong Chinese MBA's with the ness leader reflected by this slightly dif- Asian American MBAs from the Univer- ferent set of goals we chose the Man- sity of Hawaii. The latter, as we saw, are ager. Tbe term manager rather than ex- the only U.S. citizen group outside the ecutive stresses the relationship with the tight five-U.S.-universities Cluster la. employees who are managed. The combining of these two groups into Cluster 2 in Table 5 contains three one cluster is remarkable: Both reside on non-Western members of the British the margin between "East" and "West" Commonwealth: Bahamas, India and la- in a part of the globe where "East" lies to maica. Their goals extend the British the West of "West", and vice versa. They stress on this year's profits, continuity combine Eastern and Western values, and patriotism to profits 10 years from usually very successfully. They take a now. They add personal wealth (like the long-term view, with profits 10 years Americans) but especially family inter- from now before this year's profits. Cre-

VoL. 33, No. 4, FOURTH QUARTER, 2002 797 BUSINESS GOALS ating something new and game and gam- ing the relative importance attached to bling spirit suggest a creative entrepre- the various husiness goals with the na- neurship. They are seen as focusing on tional culture dimension scores derived growth rather than continuity, and on from Hofstede's IBM study and its exten- face and wealth for themselves. As a sions (Hofstede, 1980, 1997, 2001): unique term for describing the arche- Scores for Power Distance, Uncertainty typal business leader in these groups on Avoidance, Individualism, Masculinity, the fringe hetween East and West we and Long Term Orientation. The first chose the Entrepreneur. four IBM scores are now some 30 years Cluster 4b in Table 5 combines two old, but validations in recent large cross- •on-Anglo European countries, Ger- national surveys proved them to be quite many and the Netherlands. The goals at- robust; they evidently succeeded in tap- tributed to their tycoons differ from ping historically stable components of those elsewhere hy a heavy stress on the national culture differences (Hoppe, social role of the business towards em- 1990; Shane and Venkataraman, 1996; ployees and towards society at large. At Helmreich and Merritt, 1998; De Mooij. the same time they share the creative 1998; Hofstede, 2001). Most recently entrepreneurship goals creating some- Mouritzen and Svara (2002) published a validation of country differences in thing new and game and gambling spirit Power Distance and Uncertainty Avoid- and the concern for honor and face with ance, as originally measured within IBM their colleagues from Cluster 4a at the in 1970, in data collected from public opposite side ofthe globe. They are seen administrators in local governments in as going for continuity rather than 14 Western countries in 1996 and 1997. growth. As a unique term for describing Van Nimwegen (2002) validated the the archetypal business leader in these scores on four of the five dimensions in industrial European countries we chose data collected from employees of a mul- the Founder whose goals are more di- tinational bank in 19 countries. rected towards the business empire to he created than towards personal wealth or Statistically significant and conceptu- power. ally meaningful correlations with the Cluster 5 in Tahle 5 contains one sin- Hofstede indices mean a validation of gle group, the comhined mainland Chi- our national business goal importance nese expatriate students studying in scores. They show that in spite of the Australia and the U.S.A. The goals they entirely different instruments, respon- attribute to their business leaders are no- dent populations, and time periods, the ble: Respecting ethical norms, patrio- two approaches partly cover the same tism, responsibility towards society- At basic concepts. the personal level their rewards are seen Culture dimension scores from the as face and power. Profit goals are 10 IBM database and a later extension were years from now. As an archetype for such available for 14 countries in the husiness a husiness leader we chose the classic goal study (all hut the Bahamas and the Chinese Mandarin. Hawaii Asians). Spearman rank correlations were usod in order to exclude the Correlations With Culture effect of extreme scores. They were com- Indices and National Wealth puted for each of the 15 perceived goals The relationship between business of "tycoons." To the four culture dimen- goals and culture was tested by correlat- sions we added the countries' national

798 JOURNAL OF INTERNATIONAL BUSINESS STUDIES HOFSTEDE, VAN DEUSEN, MUELLER, CHARLES, BUSINESS GOALS NETWORK wealth [1998 GNP/capita) to see whether purely economical factors might make TABLE 6 cultural considerations redundant. SIGNIFICANT CORRELATIONS OF Four of eight significant correlations GOAL IMPORTANCE SCORES FOR found were with the Power Distance In- "TYCOON" WITH CULTURE INDICES dex (PDI). Power Distance has been de- AND NATIONAL WEALTH fined as "The extent to which the less powerful members of institutions and or- 14 Overlapping Countries (12 for Long ganizations within a country expect and Term Orientation), Country Mean Scores accept that power is distributed nn- Controlling for Cender and Age Category, Standardized Acros.s the 15 Goals. Rank eqnally" (Hofstede, 1997, p. 262). Ac- Correlation Coefficients [Spearman) cording to Table 6 the countries' PDI scores were significantly positively cor- with Power Distance Index (PDI): related with the importance of power, of .60* Importance of "Power" .51* Importance of "Honor, face. honor, face, reputation and of family in- reputation" terests ascribed to the tycoons, bnt neg- .51* Importance of "Family interestis" atively w^ith the importance for them of -.69** Unimportance of "Staying staying within the law. within the law" Thus in countries in which culture re- with 1998 CNP/capita: search projects have consistently shown -.69** Unimportance of "Patriotism, national pride" that the less powerful members of in,sti- .54* Importance of "Game and tutions and organizations tend to expect gambling spirit" and accept that power is distributed un- with Uncertainty Avoidance Index (UAI): equally, business tycoons are perceived -.61* Unimportance of "Patriotism, to put higher value on power, honor and national pride" with Individualism Index (IDV): family interests, but to be less concerned — .50* Unimportance of "Profits 10 with staying within the law. In such years from now" countries, importaiit people enjoy more with Long Term Orientation Index privileges, literally meaning "private (LTO): laws." Being a business tycoon in such a .62* Multiple correlation with the culture is a different game from the one importance of "Profits 10 years from now" and the luiimportance of "This played in countries with smaller Power year's profits" Distances. The ascribed importance of patrio- Counlries: Australia. Brazil, Britain. China tism, national pride was negatively cor- (mainland and Hong Kong), France, Ger- related with national wealth (1998 GNP/ many, Hungary, India. Jamaica (not for LTO). Netherlands, New Zealand, Panama capita). Successful local businessper- (not for LTO) and U.S.A. Significance lim- sons were more likely to be seen as its *.O5, **.O1. driven by patriotism in poor countries than in wealthy ones. Independently of the correlation with national wealth, pa- stede, 1997, p.263), and among other triotism was also negatively correlated things it also stands for a relative distrust with the Uncertainty Avoidance Index between authorities and citizens. It ap- (UAI). Uncertainty Avoidance has been pears that respondents from strong Un- defined as "The extent to which the certainty Avoidance societies were less members of a culture feel threatened by inclined to perceive business leaders as uncertain or unknown situations" (Hof- patriots.

VOL. 33, No. 4, FOURTH QUARTER. 2002 799 BUSINESS GOALS

The two remaining correlations relate U.S.A., and consensus for the Nether- national wealth to the appeal of game lands. and gambling spirit (in a wealthy coun- The unique traditions of each country try one can afford more gambling), and have been maintained in their institu- Individualism negatively to the impor- tions like families, schools and forms of tance of profits 10 years from now (indi- government and they are also conserved vidualist countries were more concerned in differences in national cultures in the with the present). sense of "sofiware of the mind" (Hof- Scores for the new fifth dimension of stede, 1997), that is patterns of thinking, Long Term Orientation (Hofstede, 1997, feeling and acting that differentiate one Ch.7) were available for 12 countries (the country from another and continue to be previous set minus Jamaica and Pana- transferred from generation to genera- ma). For this dimension we would ex- tion. pect a positive correlation with the im- Nobel Prize laureate Douglass North portance of profits 10 years from now (1990), the father of institutional eco- and a negative correlation with this nomics, has classified cultural factors as year's profits. The correlations are in the "informal constraints" on societies, and expected direction hut not separately bas put them on an equal level with for- significant (.19 withprofits 10 years from mal constraints via institutions. We be- now, -.47 with this year's profits.] How- lieve that claiming either a priority or a ever, the multiple correlation (based on causality link between 'institutions' and ranks) of the Long Term Orientation In- 'cultures' is useless hair-splitting. Insti- dex with the two Profits goals together is tutions are the crystallizations of culture, a significant R=.62*. If business leaders and culture is the substratum of institu- in longer term oriented cultures are seen tional arrangements. For example, the as going for profit goals, it is in 10 years differences found in Table 5 in the rela- and not this year. tive importance attributed to family interests between and even within parts of the world are reflected in the role of fam- CONCLUSION ilies in business ownership. By describing the profiles of business The results of our comparative study leader goals in the past section as 'arche- of perceived goals of successful busi- types' we have already expressed our he- nesspersons show that the national com- lief in their deep historical roots. These ponent in goals is real and robust. There differences are not short-term and acci- are no globally universal business goals. dental. The historical origins of national Clobalization is often more a slogan and differences in management were dramat- wishful thinking than a reality. The na- ically illustrated by the French sociolo- tional origin of an enterprise continues gist Philippe d'Iribarne (1989,1994) who to matter; it matters precisely in one of compared work floor relations in techno- the most profound issues in the manage- logically identical aluminnm smelters in ment of the enterprise, the goals held by France, the U.S.A. and tlie Netherlands. its leaders. An appeal to a shared ratio- He related these to the social and politi- nality will not be enough. Nationality cal traditions of these countries dating constrains rationality. from at least the 17''' century and fonnd In decisions ahout international ven- three different basic principles: honor tures, this fact should be taken into ac- for France, the fair contract for the count more seriously than is usually the

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