BMT: Hofstede's cultural dimensions

What is culture?
Culture is often described as "the way things are done here". It refers to the way of doing things
are done or how things are done within an organization, community, or country. Corporate
culture refers to a set of beliefs and work attitude that is accepted in an organization. It can
refer to the norms within an organization (such as the dress code within a business) and
national or regional cultures (and how these impact on the organizational culture). Culture
penetrates all aspects of Business Management, from how workers dress for work (business
attire), to how budgets are set and which leadership style is dominant in an organization.
Essentially, culture influences everything in a business, from how meetings are conducted to
how decisions are made. Culture influences individuals, and can be influenced by individuals.
Culture impacts all aspects of an organization. Essentially, culture is about:

 People (relationships between employees and managers)

 Processes (how things are done)

 Policies (what is important to the organization), and

 Past experiences (institutional knowledge).

National or regional culture is often described or explained using the 8 Fs:

 Fables

 Faiths

 Famous people

 Fashion

 Festivals

 Filmography

 Flags

 Foods

In addition to these eight Fs, the historical context of the country is important to
understanding culture, and how this impacts on businesses operating within the country.
For example, French colonies have included parts of modern-day USA, Canada, Vietnam,
Algeria, Congo, Mali, and Cameroon. Although French is not largely spoken in Vietnam any
more, it is still one of the most widely spoken foreign languages in Vietnam as part of the
legacy of colonial rule.

Similarly, cultural imperialism has impacted cultures in different areas of the world. This
refers to one nation imposing its culture on another through political and/or economic
influence. For example, Hong Kong was under British rule until 1997. Not surprisingly,
 perhaps, is that English is the official business language in Hong Kong, a special
administrative region of the People's Republic of China.

Hofstede's cultural dimensions

Geert H. Hofstede’s cultural dimensions is a situational tool used by managers to understand the
various aspects of cultures within and between organizations. It helps managers to recognize what
motivates the workforce, how and why employees behave in the way they do, what they value, and
how they make certain decisions.
This tool helps managers to understanding the cultural similarities and differences that exist between
and across different countries. This helps them to determine more appropriate ways to conduct their
operations given different national and international settings.
Hofstede’s research focused on managers and employees of IBM (the American technology
corporation) across different parts of the world to investigate how different cultures may exist within
the same organization. Hofstede developed his original model based on the results of a worldwide
survey of IBM employees between 1967 and 1973. The data from his initial research covered more
than 70 countries. This produced 4 cultural dimensions. He updated his model since, adding "long-
term vs short-term orientation" following his subsequent research work in Hong Kong, and then
"indulgence vs restraint" as the sixth cultural dimension in 2010. The DP Business Management
syllabus focuses on all six cultural dimensions of Hofstede's model:

 Power distance

 Individualism vs collectivism

 Masculinity vs femininity

 Uncertainty avoidance

 Long-term vs short-term orientation, and

 Indulgence vs restraint
Understanding alternative cultural dimensions can enable a business to create marketing strategies
that are specifically tailored to the cultural needs and preferences of its customers. The tool is
particularly valuable for multinational companies with operations in different regions of the world,
where cultural norms and values are different from those in the domestic country. It is also
particularly important when people from different regions or countries are working together within the
same organization.
Culture clashes and stakeholder conflicts can occur if managers do not understand cultural
differences within and between organizations, so fail to plan and adapt their corporate strategies
accordingly.
1. POWER DISTANCE
 Power distance refers to the extent to which a culture accepts and respects authority
and status. A high degree of power distance exists if an organizaton has centralized
decision-making, hierarchical structures, and high regard for position or ranking within
the organization, such as in the military (the Army, Navy, Air Force, Marines, and Coast
Guard). Those under such an organizational culture accept power differences or
inequalities, and show respect for authority. Decision-making is held by those with power
and authority, i.e., decision making is centralized.
  For example, in Japanese culture, there is a strong power distance with people
respecting their seniors and elders. Society acknowledges, values, and rewards a
person's age, seniority, status, and loyalty. Parents often make decisions on behalf of
their children, without any consultation or discussions. Students accept the power and
authority held by their teachers, and respect seniority in terms of older students in the
school. Employees tend not to leave the office or workplace before their line managers
do, out of respect. Promotion is often based on an employee's number of years of
service (loyalty) rather than selecting a candidate who might be the most suitable for a
job.
2. INDIVIDUALISM AND COLLECTIVISM

 This cultural dimension refers to the degree to which people are integrated into groups
in society. Individualism vs collectivism is about whether a society values the individual
over a team or collective group of individuals in a specific community. Hence, this
cultural dimension is sometimes referred to as the “I” vs “we” cultural dimension.
 Individualism refers to cultures that emphasise the needs of the individual over the
needs of the group as a whole. In individualistic cultures, people do not take
responsibility for others’ actions beyond themselves and their direct family. Instead,
such individuals focus on their own personal goals and achievements.
 By contrast, collectivism emphasises the importance of the group and social
cooperation over the needs of any individual. Collectivist cultures integrate relationships
in a community or society. From birth onwards, people in such cultures are integrated
into strong and cohesive groups, such as extended families (with uncles, aunties, and
grandparents), providing each other with support and protection. People are loyal to
their designated group and take responsibility and accountability for one another,
providing support to all members and acting in the best interest of the group. For
example, in such cultures, individuals should never provide negative feedback or
comments about their teams in public.
3. MASCULINITY VS FEMININITY
 Masculinity vs femininity is Hofstede's third cultural dimension, focusing on stereotypical
male and female traits and the roles they play in communities. In Hofstede's model, a
masculine community exists when men are assertive and competitive while women are
caring and nurturing.
 Masculinity refers to societies or cultures defined by a focus on achievement, competition,
status, power, and wealth. Society is generally more competitive and driven by material
rewards. Such cultures are highly competitive and may come across as overly aggressive by
others.
 On the other hand, femininity refers to societies or cultures that focus on cooperation,
relationships, modesty, cooperation, and overall quality of life. Society is generally more
consensus-oriented and driven by intrinsic rewards.
Table 1 - Features of masculinity and femininity (as a cultural dimension)

Masculinity Femininity
Achievement, accomplishment,
success Caring for others
 Assertiveness Consensual relationships

Competitive Cooperation and negotiation

Ego and heroism Modesty

Responsibility for the quality of

Material rewards and pride
life

Strong and domineering role Subservient role

Live to work (have to work) Work to live (want to work)

4. UNCERTAINTY AVOIDANCE

 The uncertainty avoidance cultural dimension of Hofstede's model refers to the rating
or index of a society’s tolerance for ambiguity, i.e. whether the community is generally
comfortable with uncertainty and ambiguity. It is about whether a society feels its should
try to control the future or just let it happen. Essentially, uncertainty avoidance measures
society’s tolerance for uncertainty or vagueness.
 Countries with a high uncertainty avoidance index have a rigid code of beliefs and
behaviour, so tend to be intolerant of unorthodox behaviour and ideas. Such societies
are structured, traditional, and rigid in nature. There is a low tolerance for risk-taking due
to the intolerance to uncertainty. i,e., society attempts to control as much of any
uncertainty as possible. According to Hofstede Insights, this includes countries like
Belgium, Colombia, France, Kuwait, Russia, and South Korea.
 By contrast, a high degree of tolerance for ambiguity means there are less strict rules in
society and a culture of openness to change. Countries exhibiting a low uncertainty
avoidance index have a more relaxed attitude. Practice is more important than principles
and policies. Titles do not have an important role, so individuals capable of dealing with
challenging situations are respected. There is a high tolerance for risk-taking, ambiguity,
and uncertainty. Such countries include China, Denmark, Sweden, and Vietnam.
 As an example, if a car manufacturer wants to expand into a country that has a high
uncertainty avoidance index (those that tend to be risk-adverse), then its production and
marketing teams will need to focus on aspects of safety. This will help to reassure
customers in these countries that the manufacturer's motor vehicles are of a high quality
and safety standard.
5. LONG-TERM VS SHORT-TERM ORIENTATION
 Long-term vs. short-term orientation is the cultural dimension that connects the past
with attitudes towards the future. All society maintain some links with their past in
reference to dealing with the challenges of the present as well as the future. Different
societies prioritize these two approaches in different ways.
 Short-term orientation means that cultures and traditions are kept. These societies
have a low index for long-term vs short-term orientationon, indicating that they prefer to
maintain time-honoured traditions and cultural norms. They focus on prioritizing the
present instead of the future. Societal change is viewed with caution and suspicion.
  Long-term orientation, with a high index or score, refers to societies that have more of
a focus on the future. These societies take a more pragmatic approach to prepare for the
future. Loyalty is valued and traditions are kept and honoured. People are willing to
tolerate short-term pain for long-term gain. They do not prioritize short-term successes
but focus instead on accomplishing long-term success. This relies on society's
endurance and persistence to achieve long-term and sustainable growth and prosperity.
 According to Hofstede Insights, high long-term orientation scores are typically found in
East Asia, in economies like China, Japan, South Korea, and Taiwan. Germany,
Lithuania, and Russia also has a high long-term orientation index. They are moderate in
Brazil, Croatia, and India. They are low (with countries focusing on the short-term) in
places like Angola, Australia, Iceland, Iran, Mexico, and Thailand.

6. INDULGENCE VS RESTRAINT
 An indulgent culture refers to a society or organization that fosters the natural human
drive to be free, to have fun, and to generally enjoy life. By contrast, a restraining
culture means there is a tendency for society to suppress people's personal needs and
desires by a system of strict social norms and self-regulation. As this sixth element of the
model was only included by Hofstede in 2010,there are less data about the indulgence
vs restraint cultural dimension of different nations.
 Countries with a high indulgence versus restraint index (so have an indulgent culture)
facilitate the free fulfilment of an individual’s desires or wants. These societies
encourage having fun, enjoying life, and freedom of speech. Such countries include
Australia, Canada, New Zealand, Sweden, the United Kingdom, and the United States.
 Countries with a moderate indulgence versus restraint index include Finland, France,
Greece, Japan, Luxembourg, Malaysia, Norway, the Philippines, Singapore, and
Thailand. Societies with a low indulgence versus restraint index (so have a restraining
culture) tend to put their onus on suppressing gratification (the pleasurable emotional
reaction of happiness in response to the fulfilment of a desire or goal). Success is not
widely and openly acknowledged or celebrated. Such economies include Bangladesh,
Bulgaria, China, Estonia, Hong Kong, Kazakhstan, Romania, and Russia.

Evaluating Hofstede’s cultural dimensions model

Like any model, there are both advantages and disadvantages of using Hofstede’s six cultural
dimensions as a Business Management tool.
Advantages of of Hofstede’s six cultural dimensions

 The tool provides managers with an overall view and a broad understanding of different
cultures. This can be extremely useful for cross-cultural communications and
international cooperation with customers, suppliers, and governments.
 Managers of multinational companies can use the tool to improve the motivation of
employees and to minimize potential conflicts. It will help improve the performance and
productivity of worker, which benefits the business organization, its employees, and
shareholders (thereby protecting shareholder value).
 It is valuable for international marketing as managers need to consider country-specific
values and not just internal corporate values.
 It enables businesses to modify their goods and services based on local preferences
and customs, thereby giving the business competitive advantages in highly competitive
international markets.

Limitations of Hofstede’s six cultural dimensions

 The original research methodology was limited to only employees and managers of IBM.
Therefore, critics argue that Hofstede’s cultural dimensions are based on
unrepresentative and inconclusive research, despite the research being extensive in
data.
 The world has changed in terms of political movements and cultural shifts. Globalization
and the international movement of labour has also blurred some cultural dimensions for
multinational corporations, such as individualism vs collectivism.
 It is not realistic for managers of multinational companies with expatriate workers from
across the world to cater for everyone's needs. There is no universal approach to all
cultural dimensions for all expatriate workers. Hence, businesses might find it
impractical to consider every unique culture in the workplace and develop appropriate
strategies for integrating them all in the organization.
 Technology has progressed, which has revolutionized the way people access
information and changed the way they think. In particular, technological advances have
enabled people to change the way they work, shifting the patterns of behaviour
worldwide, such as flex-time, working from home, and the gig economy. Hofstede's
research back in the 1960s and 1970s could not have accounted for such changes and
developments.

Source: https://www.thinkib.net/businessmanagement/page/42216/bmt-11-hofstedes-cultural-
dimensions-hl-only