Although the United States is Venezuela's largest trading partner, the exchange of goods and services between the two countries is constrained by opposing business norms.

Geert Hofstede’s cultural dimensions model helps international trade consultants understand Venezuela’s underlying values and behaviours that influence how Venezuela’s distinctive business culture affects trade with the U.S.

Venezuela’s Low Individualism Score

Venezuelans scored a lowly 12 points on individualism, 87% lower than America’s score of 91. The highly individualistic American people tend to look after themselves and their immediate families only. In contrast, Venezuelans belong to groups or collectives and place much higher priority on looking after other members in exchange for group loyalty.

Similarly, Venezuela supports fewer individual initiatives with promotion based on seniority. Americans reward greater individual initiatives with promotion based on market value.

But lower individualism doesn’t preclude Venezuela’s profit motive.

Venezuela’s High Masculinity Score

Venezuela scored 73 points on masculinity, a cultural characteristic in which success, money and material possessions form the dominant values in society. That score is 15% higher than the American score of 62 for masculinity.

According to Hofstede’s model, Venezuelans place greater importance on earnings, recognition, advancement and challenge than even the notoriously profit-minded Americans.

Venezuela’s High Uncertainty Avoidance Index

Venezuela scored 76 points on Hofstede’s uncertainty avoidance index. This index measures the extent to which people feel threatened by ambiguous situations and have created beliefs and institutions to avoid such risks. Venezuela’s risk aversion score is 65% higher than the U.S. where Americans are much more comfortable with the uncertainties associated with change.

Thanks to their need for security, Venezuelan managers take fewer risks, govern with more written rules and experience lower labour turnover than their American counterparts.

Venezuela’s High Power Distance Index

Venezuela’s highest score was 81 points on Hofstede’s power distance index. This index measures the extent to which less powerful members accept that power is distributed unequally in Venezuelan institutions and organizations. This high score accounts in part for how Venezuelans accept Hugo Chavez’s dictatorial regime.

What this means is that Venezuela is a highly centralized society, with taller organizational structures and a comparatively high proportion of supervisors to ensure that workers comply with upper-level decisions.

Venezuela’s power distance index score is 103% higher than the U.S. score. In general, American businesses are decentralized, have flatter organization structures with a smaller proportion of supervisors.

Alfons Trompenaar has also identified three other key beliefs and values that explain conflicts between the U.S. and South America’s third-largest economy.

Particularism Versus Individualism

Venezuelans score high in particularism, the belief that circumstances dictate how ideas and practices should be applied. Particularism focuses more on formal rules than relationships.

At the opposite end of the scale, Americans value formal rules more than relationships. The U.S. is often cited an example of universalism, which is the belief that their ideas and practices can be applied around the world without modification.

Ascription Versus Achievement

In the Venezuelan culture, status is attributed based on a person’s age, gender and social connections. This approach causes conflicts particularly in international trade because America accords status to people based on how well people perform their functions. Thus, sending a brilliant young American programmer to negotiate a computer deal with a senior Venezuelan bureaucrat can have disastrous results.

Introverts Versus Extroverts

Trompenaar points to the U.S. as a more extroverted culture when compared to the more introverted Venezuela. So while Americans have a large public space they readily share with others, Venezuelans guard their public space carefully.

American trade negotiators should understand that Venezuelans’ work and private lives are much more closely linked than in the U.S. Entry into Venezuelans’ public space also affords entry into their private space as well.

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) as well as Charles Hampden-Turner and Alfons Trompenaars’ The Seven Cultures of Capitalism.