Risk Averse? No. Uncertainty Avoidance? Yes.

Prologue

"One criticism of Hofstede’s (1980) original study was that the cultural dimensions were derived exclusively from the responses of IBM employees." p.345

"Culture, Leadership, and Organizations: The GLOBE Study of 62 Societies" (2004) represents a monumental achievement in cross-cultural leadership research. This groundbreaking work, led by Robert J. House and his esteemed colleagues, offers a comprehensive analysis of how cultural factors influence leadership practices and organizational effectiveness across diverse societies.

The GLOBE (Global Leadership and Organizational Behavior Effectiveness) project, spanning over a decade, involved nearly 200 researchers and surveyed over 17,000 middle managers from 62 cultures. The study challenges and expands upon Gerard Hendrik (Geert) Hofstede's seminal work. While Hofstede's research laid the groundwork for understanding cultural dimensions, the GLOBE study offers a more comprehensive and nuanced approach that addresses several limitations of Hofstede's work.

The GLOBE project's methodology, which involved nearly 200 researchers and surveyed over 17,000 middle managers across 62 cultures, provides a more robust and up-to-date dataset compared to Hofstede's original IBM-based study. Furthermore, the GLOBE study's distinction between societal practices ("as is") and values ("should be") offers a more sophisticated understanding of cultural dynamics, revealing complex relationships that were not captured in Hofstede's work.

The GLOBE project's identification of nine cultural dimensions, compared to Hofstede's original four, allows for a more detailed analysis of cultural variations. The study's findings have shown discrepancies with some of Hofstede's results, particularly in the correlations between cultural dimensions and their relationships with economic and social indicators, suggesting that some of Hofstede's conclusions may have been oversimplified or outdated.

As a result, the GLOBE study provides a more current and comprehensive framework for understanding cultural influences on leadership and organizational practices, effectively superseding Hofstede's work as the primary reference in cross-cultural management research.

"Hofstede reported the Japanese society to rank among the highest of his sample on UAI. GLOBE respondents from Japan reported significantly lower scores for both practices and values than did respondents from the United States, quite contrary to the Hofstede rankings. It should be recognized that in Japan the concepts of ambiguity and uncertainty do not necessarily have undesirable connotations, as they do in the United States (Pascale & Athos, 1983)."

💡Highlights and Key Takeaways

The GLOBE study offers invaluable insights for scholars, practitioners, and global leaders. Here are the key takeaways:

1. Cultural Dimensions: The study identifies nine cultural dimensions, including Power Distance, Uncertainty Avoidance, and In-Group Collectivism, providing a comprehensive framework for understanding societal differences.
2. Leadership Styles: Six global leadership dimensions are presented, such as Charismatic/Value-Based and Team-Oriented leadership, offering a nuanced view of effective leadership across cultures.
3. Methodological Innovation: The study's approach of measuring both practices and values at societal and organizational levels provides a more comprehensive understanding of cultural dynamics.
4. Universal vs. Culture-Specific Leadership: The research reveals both universally endorsed leadership attributes and those that vary significantly across cultures, challenging the notion of a single, globally applicable leadership model.
5. Practical Implications: The findings offer valuable guidance for multinational corporations (MNCs) in developing culturally sensitive leadership practices and organizational strategies.

🤩 Why Readers (and perhaps you can) Enjoy the Book

• "Culture, Leadership, and Organizations" is a must-read for anyone interested in global leadership and cross-cultural management. The book's comprehensive approach and rigorous methodology provide a solid foundation for understanding the complex interplay between culture and leadership.
• Readers will appreciate the rich, data-driven insights that challenge conventional wisdom about universal leadership practices. The book's structure, with detailed country-specific analyses, allows for both broad understanding and deep dives into particular cultural contexts. This makes it an invaluable resource for practitioners preparing for international assignments or researchers seeking to understand specific cultural nuances.

"Although modestly related, these comparisons indicate that Hofstede’s measure of uncertainty avoidance is not the same as that measured in the GLOBE study." p.626

🤓 My Favorite Bits

Overall, chapter 19 "Uncertainty Avoidance" was by far my most favorite chapter. Based on the GLOBE study's findings, the long-standing idea of Japanese as "risk-averse" is more accurately described as a high level of "Uncertainty Avoidance" rather than simple risk aversion. The GLOBE study distinguishes between different cultural dimensions, and

Uncertainty Avoidance is one of the nine dimensions they measure. Uncertainty Avoidance refers to the extent to which a society, organization, or group relies on social norms, rules, and procedures to alleviate the unpredictability of future events. It's important to note that Uncertainty Avoidance is not the same as risk aversion, although they are related concepts.

In the GLOBE study, Japan consistently scores high on Uncertainty Avoidance, both in terms of societal practices ("as is") and values ("should be"). This indicates that Japanese culture places a strong emphasis on reducing uncertainty through established norms, rituals, and bureaucratic practices. However, it's crucial to understand that high Uncertainty Avoidance doesn't necessarily mean avoiding all risks. Instead, it suggests a preference for:

1. Clear rules and structured situations
2. Formal procedures in organizations and institutions
3. Orderliness and consistency
4. Thorough planning and preparation before taking action

These characteristics help to minimize ambiguity and unpredictability, which can be perceived as threatening in high Uncertainty Avoidance cultures like Japan. It's worth noting that while the stereotype of Japanese as "risk-averse" persists, Japan has also been known for innovation and technological advancement, which inherently involves some level of risk-taking. The key difference is that in Japanese culture, risks are typically carefully calculated and mitigated through extensive planning and consensus-building processes.

😞 The Not-So-Great Bits

While the GLOBE study is widely acclaimed, some readers might find the sheer volume of data and analysis overwhelming. The complexity of the nine cultural dimensions and six leadership styles can be challenging to navigate, especially for those new to cross-cultural research.

Some critics have questioned the study's heavy reliance on middle managers as respondents, arguing that this might not fully capture the diversity of leadership experiences within societies. Additionally, the time lag between data collection and publication means that some cultural insights may require updating in light of rapid global changes.

📈 The Bottom Line

"Culture, Leadership, and Organizations: The GLOBE Study of 62 Societies" stands as a cornerstone in cross-cultural leadership research. Despite some limitations, its comprehensive scope, rigorous methodology, and rich insights make it an essential resource for scholars, practitioners, and global leaders seeking to navigate the complexities of leadership in diverse cultural contexts.

Finally, I highly recommend you also read the other volumes in this three book series to fully appreciate the cross-cultural topics and understanding of their relationship with leadership and management.

References

Ashkanasy, N. M., Trevor-Roberts, E., & Kennedy, J. A. (2000). Leadership attributes and cultural values in Australia and New Zealand compared: An initial report based on" globe" data. International Journal of Organisational Behaviour, 2(3), 37-44.

Baumgartner, E. (2009). Culture and leadership, across the world: The GLOBE book of in-depth studies of 25 Societies [review]/Chhokar, JS, Brobdeck, FC, & House, RJ. Journal of Applied Christian Leadership, 3(2), 56-62.

Hofstede, G. (2001). Culture's consequences: Comparing values, behaviors, institutions and organizations across nations. Thousand Oaks.

House, R. J. (2004). Culture, leadership, and organizations: The GLOBE study of 62 societies. Thousand Oaks, CA.

House, R. J., P. J. Hanges, M. Javidan, P. W. Dorfman, and V. Gupta. (Summer 2006) "Culture, Leadership, and Organizations: The GLOBE Study of 62 Societies."

House, R. J. (2013). Strategic leadership across cultures: GLOBE study of CEO leadership behavior and effectiveness in 24countries. Sage Publications.

Leung, K. (2007). The glory and tyranny of citation impact: An East Asian perspective. Academy of Management Journal, 50(3), 510-513.

McClelland, D. C. (1985). How motives, skills, and values determine what people do. American psychologist, 40(7), 812.

Smith, P. B. (2004). Acquiescent response bias as an aspect of cultural communication style. Journal of cross-cultural psychology, 35(1), 50-61.

House, R. J. (2004). Culture, leadership, and organizations: The GLOBE study of 62 societies. Thousand Oaks, CA.

Warner, M. (2012). Culture and leadership across the world: the GLOBE book of in-depth studies of 25 societies.

PROFESSIONAL: I conduct academic research by interviewing CEOs of small and medium-sized businesses (SMEs) in Japan, known as Japanese Global Niche Top (aka "Hidden Champion").

• I am also conducting a holistic four-year study that examines the growing entrepreneurial ecosystem in Japan, which includes interviews with startups, incubators, accelerators, studios, living labs, venture capitalists, and government officials (to date, individuals have been interviewed in Tokyo, Osaka, Kyoto, and Hiroshima).

PERSONAL: I am a polymath and love all types of topics typically reading 2-3 books each week. Now, I have a chance to share my insights with readers!

Fair Use Disclaimer:

This review includes excerpts from "Culture, Leadership, and Organizations: The GLOBE Study of 62 Societies" by Robert J. House, Paul J. Hanges, Mansour Javidan, Peter W. Dorfman, and Vipin Gupta. These excerpts are used under the doctrine of fair use, as outlined in Section 107 of the Copyright Act of 1976, for purposes of criticism, commentary, and education. All rights to the original content belong to the authors and SAGE Publications, Inc. Publishing. No copyright infringement is intended.