National Culture

^{Hofstede (1980)} carried out, in the 1970s, one of the most complete studies that had been made to that date on the cultural differences between countries. The research was of great impact in several spheres of sociology and administration, especially in negotiation, management of international teams, and in the configuration of international marketing strategies (^{Hofstede, 2001}; ^{Hidalgo et al., 2007}; ^{Manzur et al., 2012}). ^{Hofstede (1980)} analyzed 70 countries and simplified complex cultural behavior patterns in only four dimension (although currently Hofstede uses six cultural dimensions). The Hofstede's study has shown that there are cultural grouping at a national level that affect the behavior of societies and organizations.

According to ^{Hofstede (1991: 4)} , culture is always a collective phenomenon since it is shared with people who live, or lived, in the same social environment where such culture is acquired. Culture is acquired not inherited. This is derived from a social environment, not from genes. Culture can be differentiated from the human nature on one hand, and from the individual's personality on the other (see Figure 1 ¹). ^{Hofstede (1991: 5)} defines "culture" as the collective mental programming that distinguish members of a group, or category of people, from another.

^{Hofstede (2001: 2)} mentions that the mental programs can be inherited (transferred through our genes) or that these can be learned after being born; similarly, he defines three levels of mental programming: individual, collective and universal. Hofstede mentions that at an individual level, at least one part of the programming must be inherited; otherwise, it is difficult to explain differences in the abilities and temperament between the children from the same family and environment. At a collective level, ^{Hofstede (2001: 3)} mentions that most of our mental programming is learned; this is exemplified with the Americans, who are a multitude of genetic variations, but nonetheless, they show a collective mental programming which is clearly perceived by foreigners. ^{Hofstede (2001: 3)} indicates that the universal level of the mental programming is shared by all human beings and it is related to the human nature. This is inherited through the genes, determining our basic physical and psychological functioning. The human capacity of feeling fear, anger, love, pleasure, hatred, etcetera, belong to this level of mental programming.

^{Hofstede (1991: 5)} refers to group as the ensemble of people who are in contact with one another. A category of people consists on people who share something without being necessarily in contact. For instance, all executives, sportspeople, vegetarians, writers, philosophers, etc. This definition of culture refers more tangibly to consider the personal characteristics that are common and standard of a given society. Since there is a wide variety of individual personalities in any society, the one that is more frequently observed (statistically speaking) has been used to get closer to the national culture (^{Clark, 1990}; ^{Nakata and Sivakumar, 1996}). The term "culture", in this sense, can be applied to nations, organizations, occupations and professions, religious and ethnic groups, etc.

The concept of culture is more applicable to societies than to nations. However, historically, many nations have developed themselves together, even if this consists on clearly differentiated groups, and even if there are less integrated minorities. Moreover, there are also "forces" that make integration difficult. For instance, there are religious or ethnic groups that strive to achieve their own identity. Nonetheless, inside the nations there have been "forces" that make integration possible; a dominant national language, common mass media, national educational system, national army, national political system, national representations in sports events, national markets of products and services, etc.

According to ^{Hofstede (2001: 12)} , the origin of the cultural distances between two nations is rooted in the universal history; he mentions that in some cases, the explanations of the causes of these cultural distances can be possible. In many other cases, one could simply assume that small differences that occurred hundreds and thousands of years ago, and which were transferred from generation to generation, gave way, after growing and growing, to the current cultural distances among countries.

^{House et al. (2004)} study

^{House et al. (2004: 12)} , incorporating the cultural dimensions of ^{Hofstede (1980}; ²⁰⁰¹⁾ and using qualitative methods, identified and measured nine cultural dimensions for 62 countries. ^{House et al. (2004)} work is also known as the GLOBE (Global Leadership and Organizational Behavior Effectiveness Research) project or study. In this paper, in order to present a methodology to measure quantitatively and graphically represent the cultural distances among the Latin American countries, the scores of the aforementioned countries in the nine cultural dimensions measured by ^{House et al. (2004)}. In the ten Latin American countries included in ^{House et al. (2004)} study, a total of 1.527 medium level managers were surveyed (no Presidents nor vicepresidents and from two levels above workers). The interviewees were part of three business sectors: telecommunications, finance and the food processing industry.

The ten Latin American countries included and the total surveys applied by ^{House et al. (2004)} are the following: Argentina (153), Bolivia (99), Brazil (265), Colombia (302), Costa Rica (114), Ecuador (49), El Salvador (25), Guatemala (110), México (260) and Venezuela (150). ^{House et al. (2004: 11)} measured nine dimensions of the national culture through the answers from the Latin American managers on how they wanted their culture to be in each one of the nine cultural dimensions (see Table 1).

The use of a relatively homogeneous sample (i.e. managers from middle level from three different business sectors) allows capturing the cultural dimensions more clearly in comparison to using a more heterogeneous sample in the different countries. The cultural dimensions measured proved to be unidimensional, with an adequate Cronbach alpha coefficient and with a strong capacity of social aggregation (^{House et al., 2004}).

Cultural dimensions measured by ^{House et al. (2004})

The ^{House et al. (2004: 11)} measured nine dimensions of the national culture: assertiveness, power distance, humane orientation, future orientation, in-group collectivism, uncertainty avoidance, gender egalitarianism, institutional collectivism and performance orientation. Here are each of these nine dimensions briefly described:

Assertiveness. ^{House et al. (2004)} made a difference between societies where people are quite aggressive, affirmative, of strong opinions, dominant and that uses physical force to settle their differences, from other less aggressive societies. For the traditional values of the world, this has to do with male and female cultures (^{Hofstede, 1980}): being affectionate, soft, not aggressive is identified with the "feminine" temperament, and, on the other hand, more aggressiveness, dominant, physically present, opinionated, are identified with the "masculine" temperament.

Institutional Collectivism. This refers to the degree to which a society values group loyalty, the commitment to group regulations and collective activities, social cohesion and intense sociabilization above personal objectives, autonomy and privacy (^{Hofstede, 2001}; ^{Triandis, 2004}).

In-group collectivism. This dimension tries to identify the orientation toward collective values in the relation of parents and children, and the importance of the family within the society.

Power distance. This dimension is defined as the degree to which a society accepts unequal distribution of power in institutions and organizations (^{De Mooij and Hofstede, 2002}; ^{Hodgetts and Luthans, 1993}; ^{Ryan et al., 1999}). "Institutions", such as family, school and the community, are basic elements of a society. "Organizations" are social groups composed by people, tasks and administration that form a systematic structure of interaction relationships which usually produce goods or services or norms to satisfy a community's needs within an environment, and thus, achieve a distinctive purpose which is its mission ^{(Hofstede, 2001)}.

Uncertainty avoidance. This refers to the degree to which members of a society feel uncomfortable in non-structured situations (^{Hofstede, 2001}). ^{Hofstede (1991)} mentions that this dimension can also be defined as the degree in which people from a country prefer structured situations over non-structured situations. A society oriented to the reduction of uncertainty creates norms, laws, regulations and control measurements in order to decrease the amount of uncertainty (^{De Mooij and Hofstede, 2002}; ^{Lu et al., 1999}; ^{Shane, 1995}). These rules could be written rules, but they can also be unwritten and imposed through tradition (^{Stohl, 1993}). In these cultures, people strive for more structured situations, they want to know precisely what is going to happen, and therefore, forecasting of events is greatly valued (^{Ryan et al., 1999}; ^{Triandis, 2004}).

Gender egalitarianism. This cultural dimension tries to identify to which point people from a country prefer to minimize the role and status differences between men and women.

Performance orientation. It is about identifying the degree to which people are oriented towards excellence, continuous betterment, to the obtaining of outstanding performance and the achievement of results.

Future orientation. This cultural dimension tries to identify whether individuals are oriented towards the future, or if the criteria and values are centered in the present or in the past.

Humane orientation. This dimension tries to identify the degree to which a country's cultural values support and reward this country's population for altruist, just, compassionate, friendly and sensible acts towards their fellow countrymen.

Quantitative measurement of the cultural distances

In order to quantitatively measure the culture distances among the ten Latin American countries included in ^{House et al. (2004)} , in this study the methodology proposed by ^{Kogut and Singh (1988)} was used. They developed a cultural distance index for the cultural dimensions measured by ^{Hofstede (1980)} . ^{Kogut and Singh (1988)} combined the cultural dimensions of ^{Hofstede (1980)} in an added cultural distances among countries measure. Such measure has been widely used in other research projects in different areas of the social sciences (e.g., ^{Agarwal, 1993}; ^{Barkema et al., 1996}; ^{Roth and O'Donnel, 1996}). This index is created from the deviations average of the indexes (I) between country "X" and country "Y" in each one of the cultural dimensions "i", corrected by the variance "V" of each cultural dimension "i" ^{(Kogut and Singh, 1988: 422)}. Algebraically, the index of "cultural distance" between country "X" and country "Y" (Cultural Distance - CDxy) for the ^{House et al., (2004)} nine cultural dimensions study, it can be calculated with the following equation 1:

Table 2 shows the matrices of the cultural distances calculated in this study for the ten Latin American countries included in ^{House et al., (2004)} study. The cultural distances currently present in the ten Latin American countries are presented (matrix of current cultural distances) and also the cultural distances that these ten countries may have in the future (matrix of potential cultural distances).

Distancing- closeness of the national cultures

The differential of how people live and how they would like to live is a dissatisfaction factor, and therefore, of cultural change. Given the difference between how people live (matrix of current cultural distances) and how they would like to live (matrix of potential cultural distances) in Latin America, the efforts to decrease this differential will be an important cultural changes trend in the future (^{House et al., 2004}). Table 3 indicates the percentage of potential increment in the cultural distance among the ten Latin American countries. Positive values (negatives) indicate the existence of a potential cultural distancing (closeness) among the countries. For example, Brazil and El Salvador show a relevant cultural distancing potential (the cultural distance would increase in 421.3%, since Brazilians and Salvadorians differ in the national culture they would like to achieve in the future. On the other hand, the Ecuadorian and Venezuelan national cultures present a relevant potential closeness in the upcoming decades (the cultural distance would be reduced in 85.1%). As a consequence, it can be projected which national cultures will become more distant and which will become closer, this for each of the ten Latin American countries.

Graphic representation of the cultural distances

Using as entry variables the cultural distances calculated among the ten Latin American countries (current and potential cultural distances matrices; see Table 2), two multi-dimensional escalations were created (MDE) in order to represent graphically these cultural distances in maps. Figure 2 (MDE; Stress = .09417; RSQ = .95240; acceptable adjustment indices, ^{Malhotra, 2004}; ^{Hair et al., 2006}) presents the map of the current cultural distances among the ten Latin American countries, using data from the current cultural distances matrix.

Stress measures the maladjustment or the proportion of the data variance of an optimal scale that the MDE does not explain. A 0.20, or higher, Stress is considered as bad, 0.05 is considered as good, and 0.025 is seen as excellent. (^{Malhotra, 2004: 617-618)} . RSQ (square R) shows the proportion of the variance of the data of an optimal scale that can be explain using the MDE. Values of 0.60 and higher are considered acceptable ^{(Malhotra, 2004: 617)}. Figure 3 (MDE; Stress = .06359; RSQ = .97679; acceptable adjustments indices, ^{Malhotra, 2004}; ^{Hair et al., 2006}) present the map of the potential cultural distances found among the ten Latin American Countries, using the data from the potential cultural distances matrix.

In both cultural distances maps it can be observed that Brazil shows a small cultural difference with Argentina and Colombia. On the other hand, Brazil presents a great cultural distance with Mexico and Ecuador. In both cultural distances maps it can be observed that Mexico shows a small cultural difference with Ecuador. In contrast; Mexico shows a great cultural distance with Argentina and Brazil (see Figures 2 and ³).

Interpretation of the dimensions of the cultural distances maps

Later, the methodology suggested by ^{Fernández et al. (2003)} was followed to interpret the dimensions of the maps obtained in the MDE. As a consequence, a linear regression was done for each of the nine cultural dimensions, this is, the dependent variable is the index value (I) of the cultural dimension ("i") for each country "X" and the independent variables are the MDE (Dim1, Dim2) for each country "X" (see equation 2). According to ^{Fernández et al. (2003)}, the condition for a satisfactory interpretation lies in the fact that the coefficients (beta) are statistically significant (value -p < 0.01) and a square R of 0.70 is considered as acceptable.

For the current cultural distances MDE, the results of Table 4 indicate with a statistical significance that dimension 1 is explained mainly by the collectivism variables (negatively) and power distance, and dimension 2 is explained, principally, by the power distance variable (negatively). Therefore, it is possible to observe that the current cultural distance Costa Rica and Bolivia present in comparison to the rest of the Latin American countries can be explained by the little power distance as well as by the high collectivisms shown.

For the potential cultural dimensions MDE, the results of Table 5 indicate with a statistical significance that dimension 1 is explained mainly by the human orientation, future orientation and performance orientation, and dimension 2 is explained, above all, by the human orientation and genre egalitarianism. The adjustments for the future orientation (value-p = 0.012) were considered as acceptable and genre egalitarianism (R square = 0.697) when it was observed that these values are very close to the acceptable values (value-p < 0.01 and R square > 0.7), according to ^{Fernández et al. (2003}). Then, it is possible to observe that the individuals from Argentina, Brazil and Colombia present a stronger desire of having a human orientation and more genre egalitarianism, which would take these countries, in the future, to a potential cultural distancing from the rest of the Latin American countries.