A Discussion of the Impact of Individualism and Collectivism on Employee Performance

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CHAPTER І

A DISCUSSION OF THE IMPACT OF INDIVIDUALISM AND COLLECTIVISM ON EMPLOYEE PERFORMANCE

Over the last 30 years there have been many comparisons of Japanese and American business practices. There has been much research done on the positive and negative effects of both practices and the root of such differences. Typically the Japanese culture is known as a collectivist culture that places higher value on harmony and group continuity rather than individual accomplishment. Americans are usually categorized as an individualistic society whose focus is on the individual and his accomplishments as being good for the group.

This paper is going to examine the definitions of collectivism and individualism in terms of behavior. The definitions of collectivism and individualism are sometimes ambiguous, and the ways we measure different levels of collectivism and individualism are ambiguous (Takan & Osak, 1999). Generally speaking, the two cultures are essentially opposites in terms of collectivism and individualism, but the terms need to be defined in terms of business psychology and the different ways they impact the way employees behave.

Given the assumptions made about the cultures, we would assume that stress and expectations would be higher in America, but DeFrank and Matteson (1985) compared CEOs’ attitudes and stress levels and found that Japanese CEOs were more stressed and less positive about their jobs and general happiness. DeFrank and Matteson hypothesized that the collective nature of the society required them to spend more time with work and to be more directly involved. This directly affects their happiness because it limits their personal and family time in comparison with their American counterparts.

Another factor we need to consider is that the practices of business are affected by the culture they are in but that ultimately it is the companies themselves that define the working dynamics. For instance, Shipper and Manz (1992) studied an American company that broke down all the characteristics of both individualism and collectivism. There was no hierarchy of management and no one to answer to, except the group. However, the group decided what an individual’s worth was to the company based completely on merit. Hence, if an individual did not embrace the freedom of choice and individual responsibility found within the group, he would not be successful. This example is extreme, but it does provide proof that companies do not have to follow the status quo, which may enable them to adapt their practices beyond the cultural norm and be more productive.

The next idea to be examined will be human nature and the role it plays across cultures. Assuming that the differences between American and Japanese culture are relevant, then the cultural universals must also be considered. Public goods games are a way to measure the behavior of people within a group. Many studies have been done in Western countries, but Ishii and Kurzban (2008) completed a study in Japan. The results for Japanese participants were similar to Americans in their behavior and the perception they had of others behavior. This indicates that regardless of culture, human nature is the primary driving force behind behavior given certain circumstances. Regardless of an individual’s cultural background there are certain behaviors that are universal across both individualistic and collectivist societies. If this is the case, then we could hypothesize that there is a business model that could be created that would undermine cultural influences.

The counterargument to such an idea would be that cultural values are deeply imbedded and that only certain circumstances can create cultural universals. The characteristics of culture embedded in individuals are sometimes difficult to ascertain, but an example would be the impact of groups on self-esteem. (Yamaguchi, Greenwald, Banaji, Murakami,...
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