Trade Culture Time Horizons
Long-Term Orientation Countries Encourage Large Savings
International consultants & lawyers from Norway, Canada, U.S. and U.K. must consider the longer-term orientation of cultures like China, Japan, Vietnam, Brazil & India.
Professor Geert Hofstede® has developed a fifth dimension called Long-Term Orientation for his country-specific model that differentiates cultural values and behaviors.
Long-Term Orientation is essential to understanding the mindsets of business negotiators from different countries, especially when international trade negotiations are time-sensitive.
Long-Term Orientation Defined
Cultures with high Long-Term Orientation scores value thrift and perseverance toward slow results. People are respected for their willingness to subordinate themselves for a purpose.
Because cultures with Short-Term Orientation focus on social and status obligations at any cost, overspending is common. Savings are not top priority.
Based on Hofstede’s statistics, the world average long-term orientation score is 45 points per country.
High Long-Term Orientation Countries
Countries with high LTO scores indicate more contemplative cultures that adapt their traditions to a modern context, with limited social demands and status pressures. Below is a list of countries with high Long-Term Orientation scores.
- China ... 118 points (162.2% higher than world average)
- Hong Kong ... 96 (113.3% higher)
- Taiwan ... 87 (93.3% higher)
- Japan, Vietnam ... 80 (77.8% higher)
- South Korea ... 75 (66.7% higher)
- Brazil ... 65 (44.4% higher)
- India ... 61 (35.6% higher)
- Thailand ... 56 (24.4% higher)
- Hungary ... 50 (11.1% higher)
- Singapore ... 48 (6.7% higher).
By far, China shows the highest Long-Term Orientation. International trade negotiators need to carefully consider the Chinese mindset that values perseverance and slow progress. Chinese business partners are often offended by Western businesspersons who try to impose tight deadlines and agendas on business decisions.
Low Long-Term Orientation Countries
Cultures with low Long-Term Orientation scores respect traditions, and prefer to solve problems as soon as possible. The following shows countries with low individualism scores from Hofstede’s study.
- Pakistan ... 0 (100% lower than world average)
- Czech Republic ... 13 (71.9% lower)
- West Africa* ... 16 (64.4% lower)
- Philippines ... 19 (57.8% lower)
- Norway ... 20 (55.6% lower)
- Canada ... 23 (48.9% lower)
- United Kingdom ... 25 (44.4% lower)
- East Africa** ... 25 (44.4% lower)
- Australia ... 26 (42.2% lower)
- United States ... 29 (35.6% lower)
- New Zealand ... 30 (33.3% lower)
- Germany ... 31 (31.1% lower)
- Sweden ... 33 (26.7% lower)
- Poland ... 37 (17.8% lower)
- Slovakia ... 38 (15.6% lower)
- Bangladesh ... 40 (11.1% lower)
- Netherlands ... 44 points (2.2% lower).
Pakistan, Czech Republic, West African countries - and even Canada - show a much lower Long-Term Orientation when compared with China.
*Ghana, Nigeria, Sierra Leone
**Ethiopia, Kenya, Tanzania, Zambia
Professor Hofstede’s website has an interactive graphing tool that compares bar line charts for home and host cultures. Researchers can go online to immediately see whether a cultural dimension like Long-Term Orientation among two countries match or clash.
References
This article presents independent calculations and insights based on geert-hofstede.com and research from International Management, Culture, Strategy and Behavior (6th edition, Hodgetts-Luthans-DOH).
