Uncertainty Avoidance Index and Its Cultural/country Implications Relating to Consumer Behavior

Article excerpt

ABSTRACT

Geert Hofstede's (1980) seminal study of national cultures involving five dimensions of cultures laid the foundation for researchers to investigate this phenomenon in greater detail. Hofstede's study rated sixty eight countries on five cultural dimensions - power distance, uncertainty avoidance, individualism, masculinity, and long term orientation. This study uses one of these cultural dimensions - uncertainty avoidance index - and associates it to the behavior of consumers in different cultures/countries. The study proposes and tests five hypotheses involving uncertainty avoidance and its implication for consumers in sixty eight countries in six continents - North America, South America, Africa, Europe, Australia, and Asia. The study finds support for three of the five hypotheses.

THEORETICAL BACKGROUND

Culture has been defined as a shared set of values and beliefs by Hofstede (1980), and it is common to members of the group (Hall 1966) and separates them from other groups (Hofstede 1997). Cultural values define the self and personality of consumers in different cultures. The five dimensions of cultural values as proposed by Hofstede (1980, 2001), and Hofstede and Hofstede (2005) are - power distance (low vs. high), uncertainty avoidance (low vs. high), individualism (vs. collectivism), masculinity (vs. femininity), and long term (vs. short term) orientation. Countries with high power distance index have a great inequity between superiors and subordinates. Countries with high uncertainty avoidance index have a society where people do not like to take risks and prefer security and safety in everyday life. Countries that rank high in the individualism index have societies that promote self interest rather than the interest of the group. Finally, countries that score high on the masculinity index have societies where the gap between men and women is very wide.

Scholars have studied the influence of all of the cultural factors that were proposed by Hofstede (1980), and its impact on behaviors of people in different cultures (countries). However, there is conflicting viewpoint about the impact of culture on consumption. There are some who think that since the world is getting smaller, people are travelling more, cultures are getting more homogenous and thus their preferences are becoming similar (Elinder 1965, Ganesh 1998; Hannerz 1990; Levitt 1983). Walker (1996) thinks that the consumer culture has been homogenized by mass media while Jain (1989) concludes that the homogenization is the effect of socio-economic infrastructures and economic development. Companies have subsequently started using somewhat standardized marketing strategies for different cultures and countries (Zou and Cavusgil 2002), which has led companies to promote global brands (Aaker and Joachimsthaler 1999), and position their products to a global consumer culture (Alden, et al. 1999).

On the other hand, there are those who believe that there is not enough information that there has been any convergence of national cultures to a so called global consumer culture. Usunier (1997), Craig et al. (1992) think that the opposite is true, especially in industrialized countries where there appears to be some divergence in people's behaviors. This is because national cultural values are deeply influenced by a country's history (De Mooij 2000), and even after people are exposed to different cultures they hold on to their own values and do not necessarily change and start buying foreign products which may be cheaper (Kotier 1986; Suh and Kwon 2002).

This leads one to believe that cultural differences still play a dominant role (Clark 1990; Steenkamt et al. 1999; Hofstede 2007; Takada and Jain 1991) in determining the values of people in different cultures and ultimately their behavior (Markus and Kitayama 1991; Triandis 1989). Cultural differences have been linked to the differences in attitudes and persuasion (Aaker 2000; Aaker and Maheswaran 1997; Chang and Chieng 2006), emotions (Matsumoto et al. …