CULTURAL DIFFERENCES OF COUNTRIES WITHIN A REGIONAL ECONOMIC INTEGRATION AND THEIR IMPACT ON STAKEHOLDERS

The objective of this paper is to investigate whether national cultural distances can be calculated within a regional economic integration and how effectively can they be used by stakeholders.The formula to calculate the cultural distance of each country in a regional economic integration is derived from the computations developed by Kogut and Sigh. Hofstede’s cultural dimensions values for countries that belong to regional economic integration are used to get the national cultural distances and the average cultural distance of the region. The results were then interpreted in terms of different stakeholders (government, multinational organizations and human resource management). The formula to calculate the nations’ cultural distance was derived. The values for every country in the regional economic integration chosen were calculated. Graphical display of the results showed the regions that have similar culture and those with a variety of cultures. The research recommends that governments can use these values to predicate if a regional economic integration can be moved to the next level or not. Multinational organizations can use them for deciding the level of doing business in different countries within the region. Human resource management can use the national cultural distances to come out with suitable strategies for human management within an organization

Keywords:

Cultural distance, Regional economic integration Culture, Hofstede cultural dimensions,

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