11 12 06 Cultural Distance Assignment2

Topics: Arithmetic mean, Culture, The Culture Pages: 3 (985 words) Published: November 19, 2014
T.T. Kip 2702525Introduction to International Business.23-10-2014 J.N. van Wieringen 2758105
M.B.M. Ossel 2759616

Henk Ritsema | Group number 11, team number 6.

1. What is the formula developed by Kogut and Singh in 1988 in the Journal of International Business Studies (JIBS)? Explain the formula in your own words. In the formula CD means the culture difference between two countries. Iij is the country score in a certain cultural dimension. Vi is the Variance of the score of one of the 4 dimensions. If this formula is filled in, the CD between 2 countries will come out.

2. What is the difference between mean and variance? Can you explain the example given in the lecture in your own words? The mean is the weighted average of all the potential values of a certain variable, whereas the variance of a variable measures the spread or variability of the distribution. This is easier explainable by using it in an example, for instance the lecture example. When the mean increases, so the weighted average increases, the graph will move to the right. However, when the variance increases only the shape of the graph will change, because the values become more spread.

3. Calculate the distance on each dimension between Germany (our home country) and a specific host country using the Excel program. The country we decided to compare Germany with, is Spain.

4. The Kogut-Singh index of cultural distance also contains the variance of each dimension. Answer the following questions: a. In the bottom row of the columns you will find the variance for each culture dimension. What dimension has the highest variance? The Individualism/Collectivism has the highest variance. (IND dimension). b. What does a high variance mean?

It means that there is a high spread in the values of the variables calculated.

5. Calculate the cultural distance using Kogut and Singh formula while using Germany as the home country. The cultural...
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