# Collaboration strategies for a transition economy: measuring culture in Albania

**Authors:** Narasimha Rao Vajjhala (Computer Science Department, University of New York Tirana, Tirana, Albania) — ORCID 0000-0002-8260-2392; Kenneth David Strang (School of Business and Economics, State University of New York, New York, USA; and University of Phoenix, Phoenix, Arizona, USA) — ORCID 0000-0002-4333-4399
**Type:** Journal article
**Source:** Cross Cultural Management, 21(1), pp. 78–103
**Published:** 2014
**DOI:** https://doi.org/10.1108/CCM-02-2013-0023
**Canonical page:** https://www.narasimharao.net/research/albania-national-culture-hofstede-transition-economy/
**Indexing:** Web of Science · SSCI · Q1 · ABDC · ERA
**Keywords:** Confirmatory factor analysis; Albania; Collaboration strategies; Instrument validation; National global culture model dimensions; Transition economy

## Summary

**Question.** What is Albania's national culture profile on Hofstede's five dimensions, and how does it compare with other countries that foreign organizations might collaborate with?

**Finding.** Surveying 73 business professionals in Tirana and validating a five-factor multicultural model (CFI = 0.94, TLI = 0.93, RMSEA = 0.05, overall Cronbach's α = 0.76), the study estimated Albania's indexes as PDI = 78.7, ICI = 42.7, MFI = 72.9, UAI = 64.6 and LTI = 52.2. Albania was most similar to its Balkan and Turkish neighbors (Czech Republic, Slovakia, Turkey) rather than to Asian or Western cultures such as the USA.

**Why it matters.** The Albanian indexes give foreign governments, corporations and nonprofits general indicators of national beliefs, norms and values to benchmark against their own culture profile when collaborating in this emerging transition economy. Large gaps between two nations' indexes suggest the approaching entity must customize its approach, and the validated instrument can be reused to profile other countries.

## Key findings

1. The study measured Albania's national culture for the first time in the literature, surveying 73 business professionals in Tirana with a five-factor multicultural instrument adapted from Hofstede.
2. Exploratory factor analysis reduced the Albanian culture instrument from 55 to 35 items, with all loadings over 0.5 and the five factors capturing 50% (0.496) of variance (KMO = 0.61).
3. Confirmatory factor analysis supported the five-factor culture model for Albania (χ² = 567.5, DF = 377, CFI = 0.94, TLI = 0.93, SRMR = 0.05, RMSEA = 0.05), with all factor alphas over 0.70 and overall Cronbach's α = 0.76.
4. Albania's national culture indexes were power distance (PDI) = 78.7, individualism-collectivism (ICI) = 42.7, masculinity-femininity (MFI) = 72.9, uncertainty avoidance (UAI) = 64.6 and long-term orientation (LTI) = 52.2.
5. Albania was found to be collectivist (low ICI) and to accept hierarchy (high PDI) with high uncertainty avoidance, but contrary to the hypothesis its masculinity index was high rather than low.
6. Compared with China, the Czech Republic, Slovakia, Turkey and the USA, Albania was very close to China on power distance, similar to Turkey on collectivism, closer to the Czech Republic and Slovakia on uncertainty avoidance, and had least in common with the USA.
7. The authors attribute Albania's culture profile to 500 years of Ottoman Turkish rule, Balkan neighbors, a strict communist regime and the 1996–1997 pyramid scheme collapse.

## Study at a glance

| Item | Detail |
|---|---|
| Research question | How can Albania's national culture be measured and how does it compare with benchmark countries? |
| Design | Non-experimental, post-positivist survey replicating an a priori five-factor multicultural model adapted from Hofstede |
| Sample | 73 business professionals working in Tirana, Albania (mean age 32; 56% female), purposively selected from the Tirana business directory |
| Methods | Pilot focus group (n = 4), principal components exploratory factor analysis with varimax rotation (55 items reduced to 35), confirmatory factor analysis, and index calculation compared with Hofstede data |
| Main result | PDI = 78.7, ICI = 42.7, MFI = 72.9, UAI = 64.6, LTI = 52.2; Albania resembles the Czech Republic, Slovakia and Turkey more than China or the USA |
| Implication | Foreign organizations can use the indexes to benchmark and adapt collaboration strategies for Albania |

## Abstract

Purpose – The researchers in this study reviewed the literature to locate the most relevant multicultural theories, factors, and instruments in order to measure Albania’s national culture. The paper aims to discuss these issues. Design/methodology/approach – An innovative combination of exploratory and confirmatory factor analysis was used to fit the multicultural construct to the sample data and then estimate the national culture (n = 73). The multicultural indexes were calculated for five generally accepted national culture factors to compare with the benchmarks published in the literature. Findings – The multicultural indexes were calculated for five generally accepted national culture factors to compare with the benchmarks published in the literature. An asymmetric plot was created for critical comparison of Albania with five other theoretically selected countries, using the indexes for PDi, ICi, MFi, UAi, and LTi. Albania was found to be most similar to its Balkan and Turkish neighbors, as compared with Asian or Western cultures such as that of the USA. Research limitations/implications – The researchers discussed the implications of knowing Albania’s national culture profile with reference to how other countries might collaborate and transact with this emerging transition economy. Practical implications – From a business standpoint, the multicultural indexes for Albania provide general indicators of the national beliefs, norms and values, which foreign organizations may compare to their own cultural profile when interacting with professionals in this country. The best use for such indexes is for benchmarking and comparison. Foreign government, private corporations, or nonprofit organizations may compare their own culture profile with that of Albania to be aware of the similarities and differences. Originality/value – Albanian national culture was estimated for the first time in the literature, using a five-factor model adapted from the work of Hofstede.

## Key terms

- **National culture:** The distinctive shared values, beliefs and assumptions guiding the behavior of the inhabitants of a nation (Stonehouse et al., 2004).
- **Transition economy:** A country moving from a centrally planned (often former communist) system to a free market economy through liberalization, stabilization, restructuring, privatization and institutional reform.
- **Power distance index (PDI):** The extent to which less powerful individuals in a society accept inequality in power.

## Limitations

- The major limitation was the small sample size (n = 73), below the commonly recommended 100 for factor analysis, due partly to political constraints in Albania.
- Sampling was nonrandom: participants were purposively selected from the business directory of Tirana only, whereas a true national random sample would include other cities.
- The indexes are aggregated means of Albanian nationals rather than exact measures.
- The sixth Hofstede dimension (indulgence versus restraint) was not analyzed because no baseline existed for comparison.

## How to cite

Vajjhala, N. R., & Strang, K. D. (2014). Collaboration strategies for a transition economy: measuring culture in Albania. Cross Cultural Management, 21(1), 78–103. https://doi.org/10.1108/CCM-02-2013-0023

```bibtex
@article{vajjhala2014albania,
  title = {Collaboration strategies for a transition economy: measuring culture in Albania},
  author = {Vajjhala, Narasimha Rao and Strang, Kenneth David},
  journal = {Cross Cultural Management},
  volume = {21},
  number = {1},
  pages = {78--103},
  year = {2014},
  publisher = {Emerald Group Publishing Limited},
  doi = {10.1108/CCM-02-2013-0023},
  url = {https://doi.org/10.1108/CCM-02-2013-0023}
}
```