Hofstede - Cultural differences in international management

Andreea Dicu – Carmen Neghina - Alina Oprea - Teodora Vasileva

International Management

Hofstede’s Study on Work Related-Values Concept, Methods, Results, and

Critique

2International Management / Andreea Dicu - Carmen Neghina - Alina Oprea - Teodora Vasileva

Agenda

Culture defined

Hofstede’s cultural dimensions

Implications for management

Criticism

1) Power Distance

2) Uncertainty Avoidance

3) Individualism

4) Masculinity

5) Long-term orientation

Andreea Dicu – Carmen Neghina - Alina Oprea - Teodora VasilevaInternational Management

Culture Defined


Culture defined

Hofstede’s dimensions

Implications

Criticism

1) Power Distance


3) Individualism

4) Masculinity


Culture and international business

Why culture is important? Impacts the way strategic moves are presented. Influences management, decision making, negotiations Culture makes international business difficult or easy


Culture defined


Implications

Criticism

1) Power Distance


3) Individualism

4) Masculinity


Culture

“There are truths on this side of the Pyrenees that are falsehoods on the other”

Blaise Pascal


Culture defined


Implications

Criticism

1) Power Distance


3) Individualism

4) Masculinity


Globalization


Culture defined


Implications

Criticism

1) Power Distance


3) Individualism

4) Masculinity


What is culture?

Main features of culture: Culture is shared Culture is intangible Culture is confirmed by others Culture

Beliefs

ValuesNorms


Culture defined


Implications

Criticism

1) Power Distance


3) Individualism

4) Masculinity


Levels of culture

National Culture

Business Culture

Organizational and Occupational Culture


Culture defined


Implications

Criticism

1) Power Distance


3) Individualism

4) Masculinity


Key Cultural Issues

• Cultural Etiquette – the manners and behavior that are expected in a given situation

• Cultural Stereotypes – our beliefs about others, their attitudes and behavior

– Ethnocentrism – looking at the world from a perspective shaped by our own culture

– Relativism – all cultures are good• Cultural sensitivity• Self-reference criteria


Culture defined


Implications

Criticism

1) Power Distance


3) Individualism

4) Masculinity


Contingency management

1) Determining the problem or goal in terms of home country culture, habits and norms.

2) Determining the same problem or goal in terms of host country culture, habits and norms.

3) Isolating the SRC influence on the problem and how it complicates the issue.

4) Redefining the problem without the SRC influence and solving it according to the specific foreign market situation.


Culture defined


Implications

Criticism

1) Power Distance


3) Individualism

4) Masculinity


Universal cultural variables

Kinship

Economy

Recreation

Religion

Politics

Education


Culture defined


Implications

Criticism

1) Power Distance


3) Individualism

4) Masculinity



Kinship

Economy

Recreation

Religion

Politics

Education


Culture defined


Implications

Criticism

1) Power Distance


3) Individualism

4) Masculinity



Kinship

Economy

Recreation

Religion

Politics

Education


Culture defined


Implications

Criticism

1) Power Distance


3) Individualism

4) Masculinity



Kinship

Economy

Recreation

Religion

Politics

Education


Culture defined


Implications

Criticism

1) Power Distance


3) Individualism

4) Masculinity



Kinship

Economy

Recreation

Religion

Politics

Education


Culture defined


Implications

Criticism

1) Power Distance


3) Individualism

4) Masculinity



Kinship

Economy

Recreation

Religion

Politics

Education


Hofstede’s Cultural Dimensions


Culture defined


Implications

Criticism

1) Power Distance


3) Individualism

4) Masculinity



“Culture is more often a source of conflict than of synergy.Cultural differences are a nuisance at best and often adisaster.”

Prof. Geert Hofstede


Culture defined


Implications

Criticism

1) Power Distance


3) Individualism

4) Masculinity



Conducted perhaps the most comprehensive study of how values in the workplace are influenced by culture

Analyzed a large data base of employee values scores collected by IBM (HERMES) 1967 – 1973 more than 50 countries

Developed a model that identifies four primary Dimensions to assist in differentiating cultures:

1) Power distance2) Uncertainty avoidance3) Individualism4) Masculinity

+ Long-term orientation (added later)

Prof. Geert Hofstede


Culture defined


Implications

Criticism

1) Power Distance


3) Individualism

4) Masculinity



Hofstede’s work


Culture defined


Implications

Criticism

1) Power Distance


3) Individualism

4) Masculinity


Power Distance

Power distance - The extent to which the less powerful

members of institutions and organizations within a

country expect and accept that power is distributed

unequally


Culture defined


Implications

Criticism

1) Power Distance


3) Individualism

4) Masculinity


Power Distance

High power distance

Inequalities among people should be minimized

Interdependence between less and more powerful people

Hierarchy in organizations means an inequality of roles

Decentralization is popular

Narrow salary range

Subordinated expect to be consulted

The ideal boss is a resourceful democrat

Privileges and status are disapproved

Inequalities among people are both expected and desired

Less powerful people should be depended on the more powerful

Hierarchy in organizations reflects the existential inequality

Centralization is popular

Wide salary range

Subordinated expect to be told what to do

The ideal boss is a benevolent autocrat or good father

Privileges and status are both expected and popular

Low power distance


Culture defined


Implications

Criticism

1) Power Distance


3) Individualism

4) Masculinity


Power Distance

High

Low

Orie

ntati

on to

war

ds a

utho

rity

MalaysiaArab CountriesMexicoIndiaFranceItalyJapanSpainArgentinaUSGermanyUKDenmarkIsraelAustria


Culture defined


Implications

Criticism

1) Power Distance


3) Individualism

4) Masculinity


Power Distance

Example

A company from Austria (low power distance) is considering entering the Mexican (high power distance) market.

Austria Mexico0

20

40

60

80

100

11

81

Power Distance Index


Culture defined


Implications

Criticism

1) Power Distance


3) Individualism

4) Masculinity


Power Distance

Example (cont.)

Communication tips for the Austrian manager:

1) Give clear and explicit directions to those working with him

2) Deadlines should be highlighted and stressed

3) Do not expect subordinates to take initiative

4) Be more authoritarian in his management style

5) Show respect and deference to those higher up the ladder


Culture defined


Implications

Criticism

1) Power Distance


3) Individualism

4) Masculinity


Uncertainty Avoidance

Uncertainty avoidance – The extent to which members of a

society feel threaten by uncertain or unknown

situations.


Culture defined


Implications

Criticism

1) Power Distance


3) Individualism

4) Masculinity



Strong uncertainty avoidance

Uncertainty: normal feature of life and each day is accepted as it comes

Low stress – subjective feeling of well-being

Aggression and emotions must not be shown

Comfortable in ambiguous situations and with unfamiliar risk

There should not be more rules than necessary

Precision and punctuality have to be learned

Tolerance to innovation

Motivation by achievement

Uncertainty : continuous threat that must be fought

High stress – subjective feeling of anxiety

Aggression and emotions may be shown at proper times

Fear of ambiguous situations and of unfamiliar risk

Emotional need for rules, even if they never work

Precision and punctuality come naturally

Resistance to innovation

Motivation by security

Weak uncertainty avoidance


Culture defined


Implications

Criticism

1) Power Distance


3) Individualism

4) Masculinity



High

Low

Desir

e fo

r sta

bilit

y

GreeceJapanFranceKoreaArab CountriesGermanyAustraliaCanadaUSUKIndiaDenmarkSingapore


Culture defined


Implications

Criticism

1) Power Distance


3) Individualism

4) Masculinity



Example

A company from France (high uncertainty avoidance) is considering investing in Denmark (low uncertainty avoidance)

France Denmark0

20

40

60

80

10086

23

Uncertainty Avoidance Index


Culture defined


Implications

Criticism

1) Power Distance


3) Individualism

4) Masculinity



Example (cont.)

Communication tips for the French manager:

1) Try to be more flexible or open in his approach to new ideas than he may be

used to

2) Be prepared to push through agreed plans quickly as they would be expected

to be realized as soon as possible

3) Allow employees the autonomy and space to execute their tasks on their own;

only guidelines and resources will be expected of him


Culture defined


Implications

Criticism

1) Power Distance


3) Individualism

4) Masculinity


Individualism

Individualism – The tendency of people to look after

themselves and their immediate family and neglect the

needs of society


Culture defined


Implications

Criticism

1) Power Distance


3) Individualism

4) Masculinity


Individualism

High individualism

Individuals learn to think in terms of “we”

High-context communication

Diplomas provide entry to higher status groups

Relationship employer- employee is perceived in moral terms, like a family

Hiring and promotion decisions take employees’ ingroup into account

Management is management of groups

Relationship prevails over task

Individuals learn to think in terms of “I”

Low-context communication

Diplomas increase economic worth and/or self- respect

Relationship employer-employee is a contract based on mutual advantage

Hiring and promotion are supposed to be based on skills and rules only

Management is management of individuals

Task prevails over relationship

Low individualism


Culture defined


Implications

Criticism

1) Power Distance


3) Individualism

4) Masculinity


Individualism

High

Low

AustraliaUSUKCanadaFranceGermanySpainJapanMexicoItalyKoreaSingapore


Culture defined


Implications

Criticism

1) Power Distance


3) Individualism

4) Masculinity


Individualism

Example

A company from UK (high individualism) is considering investing in Mexico (low individualism)

UK Mexico0

20

40

60

80

100 96

23

Individualism Index


Culture defined


Implications

Criticism

1) Power Distance


3) Individualism

4) Masculinity


Individualism

Example (cont.)

Communication tips for the UK manager:

1) Note that individuals have a strong sense of responsibility for their family

2) Remember that praise should be directed to a team rather than individuals

3) Understand that promotions depend upon seniority and experience

4) Be aware that the decision making process will be rather slow, as many

members across the hierarchy need to be consulted


Culture defined


Implications

Criticism

1) Power Distance


3) Individualism

4) Masculinity


Masculinity

Masculinity – The tendency within a society to emphasize traditional gender roles


Culture defined


Implications

Criticism

1) Power Distance


3) Individualism

4) Masculinity


Masculinity

High masculinity

Dominant values: caring for others and preservation

People and warm relationships are important

Sympathy for the weak

In family, both fathers and mothers deal with facts and feelings

Stress on equality, solidarity , and quality of work life

Managers use intuition and strive for consensus

Resolution of conflicts by compromise and negotiation

Dominant values: material success and progress

Money and things are important

Sympathy for the strong

In family, fathers deal with facts and mothers with feelings

Stress on equity, competition among colleagues and performance

Managers are expected to be decisive and assertive

Resolution of conflicts by fighting them out

Low masculinity


Culture defined


Implications

Criticism

1) Power Distance


3) Individualism

4) Masculinity


Masculinity

High

Low

JapanMexicoGermanyUKUSArabiaFranceKoreaPortugalDenmarkSweden


Culture defined


Implications

Criticism

1) Power Distance


3) Individualism

4) Masculinity


Masculinity

Example

A company from Denmark ( low masculinity) is considering investing in Mexico (high masculinity)

Denmark Mexico0

20

40

60

80

100

8

91M

asculinity Index


Culture defined


Implications

Criticism

1) Power Distance


3) Individualism

4) Masculinity


Masculinity

Example (cont.)

Communication tips for the Danish manager :

1) Be aware that people will discuss business anytime, even at social gatherings

2) Avoid asking personal questions in business situations

3) Take into account that people are not interested in developing closer friendships

4) Communicate directly, unemotionally and concisely

5) In order to assess others use professional identity, not family or contacts


Culture defined


Implications

Criticism

1) Power Distance


3) Individualism

4) Masculinity


Long- term orientation

Long- term orientation – A basic orientation towards time that values patience


Culture defined


Implications

Criticism

1) Power Distance


3) Individualism

4) Masculinity


Long- term orientation

Long-term orientation

Respect for traditions

Little money available for investment

Quick results expected

Respect for social and status obligations regardless of cost

Concern with possessing the Truth

Adaptation of traditions to a modern context

Funds available for investment

Perseverance towards slow results

Respect for social and status obligations within limits

Concern with respecting the demands of Virtue

Short- term orientation


Implications


Culture defined


Implications

Criticism

1) Power Distance


3) Individualism

4) Masculinity


Work Centrality

How important is work?

Japan

Israel

United States

Belgium

Netherlands

Germany

0 0.2 0.4 0.6 0.8 1 1.2 1.4 1.6 1.8

Work Centrality


Culture defined


Implications

Criticism

1) Power Distance


3) Individualism

4) Masculinity


What do people value in work?

Cultural Context

High power distance

High individualism

High uncertainty avoidance

High masculinity

Dominant Work Motivators

Conform to norms and rules

Meet moral obligations to leaders

Autonomy

Challenging work

Advancement

Security

Clear organizational hierarchy

Pay

Training opportunities

Achievement

Example Mexico United States Belgium Japan


Culture defined


Implications

Criticism

1) Power Distance


3) Individualism

4) Masculinity


Employees and Leaders

Leadership Issue Low Power Distance Medium Power Distance

High Power Distance

Subordinate’s Dependence Needs

Weak dependence on superiors

Moderate dependence on superiors

Heavy dependence on superiors

Consultation Strongly expected as part of superior’s role

Expect consultation, but will accept autocratic leadership

Expect autocratic leadership

Ideal Superior A democrat A moderate democrat An autocratic or a paternalistic father figure

Laws and Rules Apply to superiors and subordinates

Apply to all, but superiors have some privileges

Superiors are above the law and take advantages of privileges

Status Symbols Viewed as not appropriate

Accepted as symbolic of authority

Very important contributions to the authority of superiors


Culture defined


Implications

Criticism

1) Power Distance


3) Individualism

4) Masculinity


Employees and Leaders

Leadership Issue Low Power Distance Medium Power Distance

High Power Distance

Subordinate’s Dependence Needs

Weak dependence on superiors

Moderate dependence on superiors

Heavy dependence on superiors

Consultation Strongly expected as part of superior’s role

Expect consultation, but will accept autocratic leadership

Expect autocratic leadership

Ideal Superior A democrat A moderate democrat An autocratic or a paternalistic father figure

Laws and Rules Apply to superiors and subordinates

Apply to all, but superiors have some privileges

Superiors are above the law and take advantages of privileges

Status Symbols Viewed as not appropriate

Accepted as symbolic of authority

Very important contributions to the authority of superiors


Culture defined


Implications

Criticism

1) Power Distance


3) Individualism

4) Masculinity


Leadership Styles

Cultural Context Low PD & low UA

High PD & low UA

Low PD & high UA

High PD & high UA

Leader Type “The Democrat” “The Master” “The Professional”

“The Boss”

Recommended Leadership Styles

Supportive

Participative

Achievement

Directive

Supportive

Directive

Supportive

Participative

Directive

Example Great Britain China Germany France

Pow

er D

istan

ce



Culture defined


Implications

Criticism

1) Power Distance


3) Individualism

4) Masculinity


Leadership Styles


High PD & low UA

Low PD & high UA

High PD & high UA


“The Boss”


Supportive

Participative

Achievement

Directive

Supportive

Directive

Supportive

Participative

Directive


Pow

er D

istan

ce



Culture defined


Implications

Criticism

1) Power Distance


3) Individualism

4) Masculinity


Leadership Styles


High PD & low UA

Low PD & high UA

High PD & high UA


“The Boss”


Supportive

Participative

Achievement

Directive

Supportive

Directive

Supportive

Participative

Directive


Pow

er D

istan

ce



Culture defined


Implications

Criticism

1) Power Distance


3) Individualism

4) Masculinity


Leadership Styles


High PD & low UA

Low PD & high UA

High PD & high UA


“The Boss”


Supportive

Participative

Achievement

Directive

Supportive

Directive

Supportive

Participative

Directive


Pow

er D

istan

ce



Culture defined


Implications

Criticism

1) Power Distance


3) Individualism

4) Masculinity


Organizational Structures

1. Adhocracy Flat organizational pyramid People can tolerate ambiguity in organizational roles Less need for formalized rules and regulations Distance between management and workers tends to be

small

2. Professional Bureaucracy

3. Full Bureaucracy

4. Family BureaucracyPo

wer

Dist

ance



Culture defined


Implications

Criticism

1) Power Distance


3) Individualism

4) Masculinity



1. Adhocracy


Standardization of skills Centralized decision making Order and compartmentalization

3. Full Bureaucracy

4. Family Bureaucracy

Pow

er D

istan

ce



Culture defined


Implications

Criticism

1) Power Distance


3) Individualism

4) Masculinity



1. Adhocracy


3. Full Bureaucracy

The most formalized Organization dominated by rules, procedures and

hierarchical relationships Standardization of the work process Predictability & control

4. Family Bureaucracy Pow

er D

istan

ce



Culture defined


Implications

Criticism

1) Power Distance


3) Individualism

4) Masculinity



1. Adhocracy


3. Full Bureaucracy

4. Family Bureaucracy

Parallels an extended family: dominant father figure Small Less specialization of roles Control: personal supervision Direct contact Highly centralized decision making Po

wer

Dist

ance



Criticism


Culture defined


Implications

Criticism

1) Power Distance


3) Individualism

4) Masculinity


Criticism

Single company

Time dependent

Business culture, not values culture

Western bias

Non-exhaustive Partial geographic

coverage

Attitudinal rather than behavioral measures

Ecological fallacy


58

Discussion Questions


Culture defined


Implications

Criticism

1) Power Distance


3) Individualism

4) Masculinity



1. Do you notice any cultural differences among your classmates? How do those differences affect the class environment and your group projects?

2. Give some examples of cultural differences in the interpretation of body language. What is the role of such nonverbal communication in business relationships?


Culture defined


Implications

Criticism

1) Power Distance


3) Individualism

4) Masculinity



1. Do you notice any cultural differences among your classmates? How do those differences affect the class environment and your group projects?

2. Give some examples of cultural differences in the interpretation of body language. What is the role of such nonverbal communication in business relationships?


References


References

Cullen, J. (2002). Multinational Management, 2nd ed. Ohio: Sounth-Western Thomson Learning.

Deresky, H. (2003). International Management , 4th ed. New Jersey: Prentice Hall.

Harris, P. & Moran, R. (2000). Managing cultural differences. Houston: Gulf Publishing Company.

Hofstede, G. (1982). Culture’s Consequences. International Differences in Work-Related Values. Newbury Park: SAGE Publications.

Hofstede, G. (1997). Cultures and organizations: software of the mind. New York: McGraw Hill.

Intercultural Business Communication. Retrieved March 1, 2008 from Kwintessential Cross Cultural Solutions Website: http://www.kwintessential.co.uk/intercultural-business-communication/tool.php?culture1=17&culture2=17

http://www.kwintessential.co.uk/intercultural-business-communication/tool.php?culture1=17&culture2=17

http://www.kwintessential.co.uk/intercultural-business-communication/tool.php?culture1=17&culture2=17


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Thank you for your attention!