CULTURE DIFFERENCES IN DOING BUSINESS

CULTURE DIFFERENCES IN DOING BUSINESS

Dissertation submitted in partial fulfilment

of the requirements for the degree of

Master of Arts

November 2008

ABSTRACT

The purpose of this exploratory study was to empirically investigate the potential influence of uncertainty avoidance (UA) on hotel top managers' approach to strategy development. Scales were developed to measure managers' openness to strategic change, involvement of others, formality of strategic control, type of data used in strategic analysis, and strategic planning time horizon. Responses from 207 managers (50 Americans, 43 Malaysians, 70 Thai, and 44 Turkish) were analyzed using ANOVA. The findings indicated that UA had minimal influences on the managers' approach, as different managers from cultures with varied degrees of UA demonstrated noticeable similarities among the five variables investigated. Practical implications as well as suggestions for future research were provided.

Table of Contents

ABSTRACTii

LIST OF TABLESiii

LIST OF FIGURESv

CHAPTER 1: INTRODUCTION1

BACKGROUND OF THE STUDY1

PROBLEM STATEMENT2

PURPOSE OF THE STUDY4

RATIONALE OF THE STUDY4

SIGNIFICANCE OF THE STUDY7

RESEARCH QUESTIONS9

CHAPTER 2: LITERATURE REVIEW11

CHAPTER 3: RESEARCH METHODOLOGY51

Sample51

Instrument development52

Contextual variables53

Instrument validity and reliability54

CHAPTER 4: ANALYSIS/FINDINGS55

Demographic and professional characteristics of the respondents55

Statistical testing of the research hypotheses59

DISCUSSION72

CHAPTER 5: CONCLUSION & RECOMENDATIONS75

BIBLIOGRAPHY78

APPENDICES97

Questionnaire97

LIST OF TABLES

Table 1: Country status on uncertainty avoidance………………………………….…..51

Table 2: Respondents' demographic and professional characteristics………..……..55

Table 3: ANOVA, Levene's, and Tukey tests for the openness to

strategic change scale…………………...……………………………………………….60

Table 4: ANOVA, Levene's, and Tukey tests for the involvement of others

in the strategy development scale………………………………………………………..62

Table 5: ANOVA and Levene's tests for the type of data used in strategic

analysis scale………………………………………………………………………….…….64

Table 6: ANOVA, Levene's, and Tukey tests for the formality of strategic

control scale………………………………………………………………………………….65

Table 7: ANOVA and post hoc tests for the strategic planning time

horizon scale………………………………………………………………………………….67

LIST OF FIGURES

Fig. 1: Cultural Dimensions theory by Hofstede………………………………….…….…21

Fig. 2: Ansoff Matrix……………………………………………………………………….…25

Fig. 3: Porters Five forces model…………………………………………..…………….…37

Fig.4: PEST Model……………………………………………………………………………40

Fig. 5: BCG Matrix………………………………………………………………….…………44

Fig. 6: GE McKinsey matrix………………………………….………………………………47

Fig. 7: Onion Matrx/Theory………………………………………………………….……….49

CHAPTER 1: INTRODUCTION

BACKGROUND OF THE STUDY

Although top managers of individual business units are directly responsible for the overall process of strategic management of their businesses, the linkages between their personal characteristics and the approach toward strategy development are yet to be understood. Besides the influences of external and internal factors on strategy, many authors (e.g., Ansoff, 2005; Porter, 2005; Andrews, 2001; Mintzberg, 2007) have from the beginning of this area topic emphasized the role managers play in the development of strategy. Yet, most of the strategic management literature has focused on the analytical and normative aspects of strategic management. In more recent years, however, a growing interest among strategy researchers has emphasized the importance of behavioral explanations to strategy development. In addition to the processes through which the strategy itself develops, emphasis is being placed on those who develop strategies.

Of the potential behavioral factors, national culture has been receiving growing attention. Inspired by the findings of cross- cultural studies, especially those of Hofstede (2005), Trompenaars (2004), and Laurent (2003), strategy researchers have been paying more research attention to the role of cultural values and beliefs in shaping the strategic philosophies and orientations of managers around the world. Indeed, researchers and practitioners have long suspected that national culture ...