Culture in International Business: An Examination of the Difference between the U.S. and Korean Cultural Differences and How it Informs Organization of Joint Ventures

Culture in International Business: An Examination of the Difference between the U.S. and Korean Cultural Differences and How it Informs Organization of Joint Ventures


Culture is one of the most critical determinants of the outcome of international business activities. More than ever before, culture is being mentioned as one of the most significant factors whose understanding informs the direction and outcome of international business undertakings. In other words, culture has become an essential consideration in a global business process whose mastery and understanding is linked to a successful organization and structuring joint venture business activities involving companies or individuals from two different cultures (Beamer, & Varner, 2001). Concerning culture and its places in global business, this article argues that culture should foremost form the heart and basis of processes involved in the organization and structuring of joint venture business processes involved Korean and U.S. companies.

The U.S. and Korean at Glance

With a population of about 330 million people, the United States is the third most populous country in the world. Unlike South Korea which is characterized by one distinct and dominant ethnic group, the Korean people, the U.S. is often described as the melting point of cultures. This characterization is based by the fact the population of the United States is characterized by people with different racial and ethnic origins, beliefs and languages. Though who trace their ancestry to European settlers who colonized the country back in the 15th and 16th Centuries are the single majority, the state is characterized by a significant percentage of people from African and Asian descent. Besides this, the U.S. is also home to the Native or American Indians people, the earliest populations to settle in the country. For this reason, the U.S. culture, unlike the Korean one, is more difficult to define due to this diversity. Nevertheless, using the Hofstede Cultural Insights, it is possible to characterize the U.S. culture and compare with Korean culture.

Power Distance

The power distance dimension is a critical cultural aspect which has a significant impact on the outcome of international business undertakings. Defines as the extent of to which less powerful individuals in a society or country expect and accept the distribution of authority, power distance has a significant impact on the outcome of international business activities (Hofstede, 2011). With a score of 60, South Korean can be described as a slightly hierarchical society meaning that people accept and are expected to accept hierarchical order. Concerning this, the decision-making process among Korean firms tends to be more centralized, and from top to bottom. On the contrary, the U.S. with power distance score of 40 means that power is not highly centralized in U.S. companies.




This cultural dimension deals with the degree of interdependence within society members (Kim, Pan, & Park, 1998). When looking at this cultural dimension, the critical question is whether the “I” or the “We” dimension significance in society. With an individualism score of only 18, South Korea is considered a collectivist society is meaning that decisions made are based on how favorable they are to the whole organization as opposed to specific individuals. Here, members of an organization are expected to exhibit a high level of loyalty, and healthy relationships. On the other hand, the U.S. culture with a score of 91 is highly individualistic meaning that the society expects members to respect individual rights, be more aggressive in agitating for their positions and views.


The masculine cultural dimension refers to the extent society is driven by competition, achievement, and success (Christie et al.,2003). With a score of 69, the U.S. is a masculine society where the emphasis is on personal achievement. On the contrary, Korean culture with a masculine score of only 39 can be described as being less masculine and more feminine. This implies that collective gain, as opposed to individual benefit, is a more important aspect of Korean society.

Uncertainty Avoidance

This cultural aspect deals with the extent to which members of a society feel insecure and ambiguous or unknown situations. With a score of 85, it implies that the Korean society is more rigid in acceptance of outside beliefs, a way of doing things and behavior (Škerlavaj, Song, & Lee, 2010). On the other hand, a score of 46 means that the country is more open to unclear but realistic ideas, beliefs and behavior. This also means the American society is more willing to accept new ideas.

Long Term Orientation

The dimension deals with how society tends to maintain links in their dealings. From the Hofstede cultural dimension, the Koreans tend to pay more attention to long term relationships as opposed to Americans who tend to focus on the outcome of the current dealings as opposed to the long term view.


This cultural dimension deals with the extent to which people tend to control their desires and impulses based on what they expect. With a score of 29, South Korean society is one where one will expect a lot of restraint. On the other hand, the U.S. with a score of 68 is less constraint meaning that individuals are likely to indulge in what they expect.


Concerning the above cultural dimensions differences between the U.S. and Korean cultures, it’s important to pay attention to how the differences might affect the outcome of joint venture organizational processes involving Korean and U.S. companies.




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