Chapter 24

Cultural dimensions (Hofstede)

The big picture

Hofstede’s cultural dimensions can be used to develop an effective strategy to cooperate with people from various countries. By studying survey data on the values of employees at IBM in over 50 countries, Hofstede concluded that there were big differences in these cultural values. In many countries, the challenges and problems around these cultural values seemed the same, but the interpretations and subsequent solutions differed strongly by country. His model is an aid to becoming more effective when interacting with people from other countries. The types of (different) values identified in the study represent the four dimensions of culture:

1 Power distance

2 Individualism/collectivism

3 Masculinity/femininity

4 Uncertainty avoidance.

However, based on the differences between western and eastern countries, a fifth dimension was added, namely:

5 Long-term orientation.

Knowing the differences between national cultures makes it possible to understand specific behaviour. Becoming aware of and recognising these differences is the first step to becoming more effective when interacting in multicultural environments (Figure 24.1).

When to use it

The chances are that most of us have business dealings with people from different cultural backgrounds on a daily basis. Internationalisation leads to more international clients, partners and suppliers, and may also result in hiring employees from all around the world. This trend increases the risk of cultural misunderstandings and failures. Hofstede’s cultural dimensions model and the scores of nationalities involved on these dimensions may help to prevent these frictions and to get off to a good start with potential clients or partners.

How to use it

Hofstede’s cultural dimensions model is not a guideline for interaction between people; it merely helps to understand certain behaviour:

• Power distance index (PDI) is the extent to which the less powerful members of organisations and institutions accept and expect power to be distributed unequally amongst individuals. If an Austrian and a Malaysian marketing manager working on the same hierarchical level within an organisation are compared, the difference in PDI becomes visible. The Malaysian manager (high PDI) has hardly any responsibility or power compared with the Austrian (low PDI). In a Malaysian organisation, power is much more centralised.
• Individualism (IDV) (and collectivism, on the other side of the continuum) describes the relationship between the individual and the collective that prevails in a given nation. Individualism pertains to societies in which the ties between individuals are loose; everyone is expected to look after themselves and their immediate family. Collectivism pertains to those societies in which people are integrated into strong, cohesive in-groups. The in-groups continue to protect these people throughout their lifetime in exchange for unquestioning loyalty. In US companies, for instance, people are more self-interested and less interested in the well-being of the whole team than is the case in Asian companies.
• Masculinity (MAS) is the opposite of femininity. These constructs refer to the differences between the sexes. In masculine cultures, assertiveness is the predominant characteristic, as opposed to personal goals and nurturing. In Japan, ambition, competitiveness and accumulation of wealth and material possessions are valued, whereas in Sweden relationships and quality of life are much more important.
• Uncertainty avoidance index (UAI) indicates to what extent a culture programmes its members to feel threatened by ambiguous situations. Uncertainty-avoiding cultures try to minimise the possibility of such situations by strict laws and rules and safety and security measures. In addition, these cultures are characterised by long-term employment. Others have a low UAI and are therefore more likely and relatively willing to take risks.
• Long-term orientation (LTO) vs short-term orientation. Values associated with long-term orientation are thrift and perseverance; values associated with short-term orientation are respect for tradition, fulfilling social obligations and protecting one’s ‘face’. Asian countries, such as China, Vietnam and Japan, score relatively high on the LTO index, whilst western countries, such as Australia, Germany and Norway, score relatively low.

The final analysis

Hofstede’s cultural dimensions model has been useful in creating awareness of the various cultural differences that become apparent when a firm starts to operate internationally. However, during the past few decades, distances have decreased, cultures have mingled and differences are often less visible. In addition, one could question the ratings of some countries, depending on whether all cultural groups within that country are represented or not. In either case, ratings on dimensions may vary amongst the inhabitants of that specific country. Finally, no two individuals are alike, and one must therefore realise that misunderstandings can still happen.

References

Hofstede, G., Hofstede, G.J. and Minkov, M. (2010) Cultures and Organizations: Software of the Mind, 3rd revised edn. London: McGraw-Hill.

Hofstede, G. (2001) Culture’s Consequences: Comparing Values, Behaviours, Institutions, and Organisations across Nations. Thousand Oaks CA: Sage Publications.