The conceptual difference really matters: Hofstede vs GLOBE’s uncertainty avoidance and the risk-taking behavior of firms
Cross Cultural & Strategic Management
ISSN: 2059-5794
Article publication date: 19 September 2019
Issue publication date: 22 November 2019
Abstract
Purpose
In spite of the common label, uncertainty avoidance (UA) across Hofstede and GLOBE models has been found to be negatively correlated and capture distinct concepts. Nevertheless, the empirical research focusing on the impact of UA on a variety of constructs has strongly neglected this conceptual difference, assuming them equivalent constructs and using one as an alternative for the other, or merely applying one for reasons other than conceptual relevance. Challenging this taken-for-granted assumption, the purpose of this paper is to show that their conceptual difference matters by showing that their causal impact on a given construct is not consistent given their conceptual difference.
Design/methodology/approach
Hypotheses are tested using hierarchical linear modeling analyses on firms from Compustat Global Database across 44 countries within the time span of 1990–2017.
Findings
The findings show that the causal effects of Hofstede UA index (UAI) and GLOBE UA society practices on the risk-taking behavior of firms are not consistent. Unlike Hofstede UAI, GLOBE UA (society practices) does not reduce the risk-taking behavior of firms.
Originality/value
This study is valuable in that it raises awareness on the conceptual differences between UA dimensions across Hofstede vs GLOBE and challenges one of the taken-for-granted assumptions in the empirical literature that the two are equivalent by empirically showing that their impacts on a given construct (i.e. the risk-taking behavior of firms) are not consistent.
Keywords
Citation
Alipour, A. (2019), "The conceptual difference really matters: Hofstede vs GLOBE’s uncertainty avoidance and the risk-taking behavior of firms", Cross Cultural & Strategic Management, Vol. 26 No. 4, pp. 467-489. https://doi.org/10.1108/CCSM-04-2019-0084
Publisher
:Emerald Publishing Limited
Copyright © 2019, Emerald Publishing Limited