Hofstedes Cultural Consequences - Essay Example

? HOFSTEDE'S CULTURAL CONSEQUENCES Paul Tomko school Question 3 Geert Hofstede's (1993) work in cultural values has become the touchstone for academic studies in international business culture; however, significant research has subsequently refined his initial ideas (Kirkman, Lowe, & Gibson, 2006). Analyze the usefulness and limitations of Hofstede's work and the refinements. Synthesize an approach to diversity in WITHIN a given culture that an organization can use to understand and shape consumer behavior. Hofstede’s Cultural Consequences “Culture is more often a source of conflict than of synergy. Cultural differences are a nuisance at best and often a disaster” (Geet Hofstede, cited in Vance, Vance, and Paik, 2010, 42). In the context of the global economy and increasing transnational trade, retailers conducting international businesses must understand the values associated with different national cultures. The effects of cultural values on consumer behaviors are important for the success of the business organization (Hofstede & de Mooij, 2002). A perceivable shift has occurred in the concept of national markets as homogenous entities, characterized by certain specific and unique national cultural values; these markets are now referred to as heterogeneous entities. This change in perception has occurred mainly in the post-WWII era because of numerous cross-border movements and transnational migration. Even within national borders at the regional and local levels, differences in consumers’ attitudes can be observed, which can be explained by the cultural differences present even within a single country.(Sivakumar & Nakata, 2001). In the last few years, technological innovations have brought the world even closer, and people of various cultures are now co-workers with increased levels of communications between them. Establishing connections with people worldwide is only one aspect of the phenomena of globalization and cultural diversity. Various other associated issues include (a) inspiring the employees, (b) creating projects, and (c) formulating strategies within a global firm for successful international operations. Although some global sellers are still inclined to view national markets and cultures as homogenous entities, comprehending the importance of multicultural values within a single national entity is essential, especially if one produces consumer items and provides services for the consumption of the local population. (Armstrong, 2009).Using a cultural values perspective for marketing would allow the business leaders to have a competitive advantage within the regional and local markets of a country. In this paper, the cultural aspects of consumerism will be explored using Hofstede’s cultural framework to synthesize an approach to diversity within a given culture that an organization can use to understand and shape consumer behavior. Cultural Values Various researchers using different schemas over time have shown that the values associated with any national culture are generally associated with workplace attitudes, behaviors, and various auxiliary organizational occurrences (Hall, 1976; Hofstede, 1980; Schwartz, 1994). Among existing research, the most effective paper on cultural differentiation was that of Geert Hofstede, published in 1980. It was the first of its kind, with research conducted and conclusions derived from large-number samples collected from various parts of the world (Hofstede’s model was created from data collected in a major survey within the IBM corporation, which was located in more than 50 countries). Data was analyzed using a variety of modern and sophisticated research methods and statistical tools(ArAmstrong, 2009).From the research, Hofstede determined a synoptic series of “quantitative indices” for delineating and classifying various countries along several cultural boundaries. Hofstede provided a simple model that not only reflected the cultural variances but also allowed the reader to easily make direct cross-national cultural comparisons (Sivakumar & Nakata, 2001). Theoretical Overview of Hofstede’s Theory In his book Culture's Consequences: International Differences in Work-Related Values(1980), Hofstede (1980) defined the term culture as “the collective programming of the mind which distinguishes the members of one human group from another” (p. 25). He conceptualized that “people carry ‘mental programs’ that are developed in the family in early childhood and reinforced in school and organizations” while assuming that “these mental programs contain a component of national culture” (Hofstede, 2001, p. xix). He initially classified the variations in “mental programming” by delineating four cultural aspects, which are: (a) power distance (PDI); (b) individualism-collectivism (IDV); (c) uncertainty avoidance (UAI); and (d) masculinity (MAS)–femininity (FEM). Later, - Hofstede and Bond (1988) created a fifth dimension known as the Confucian dynamism or long-term/short-term orientation (LTO). Long-term orientation is pertinent to future values like thrift and persistence, and short-term orientation is related to past and present values like carrying out social duties and obligations, respect for one’s own heritage, and tradition (Bond, 2002). Based on the collected empirical data, Hofstede placed 50 “national cultures” on the five cultural dimensions. He primarily focused his studies on individual countries, as he believed that variations in cultural patterns were easily distinguishable and took on a holistic meaning at the national level. He associated the measured cultures of each country to their specific “historical roots” and to certain “mechanisms in societies that permit the maintenance of stability in cultural patterns across generations” (Hofstede, 2001, p. 11). These associations are shown in Figure 1 under Origins, Societal Norms, Outside Influences, and Consequences. Figure 1. Hofstede’s model of cultural associations. The model shows the stabilization of cultural designs through various aspects like ecological factors, societal norms, external factors, and institutional influences from family, political, educational, legal practices, and so forth. From Culture's Consequences: International Differences In Work Related Values by G. Hofstede, 2001, p. 12). Hofstede (2001) believed that institutions “reinforce the societal norms and the ecological conditions that led to their establishment” (p. 11). He further theorized that changes in one institution would not affect the national culture of a country, because the citizens who are the actual carriers/bearers of that particular culture would work towards “smoothing” out the institution’s modified structures and functioning, until the institution “again adapted to the societal norms” (Hofstede, 2001, p. 12). Within this perspective, Hofstede overlooked one major fallacy, since he did not consider the effects on local cultures of large numbers of immigrations during many years. Hofstede’s ((2001)year) definitions of the cultural dimensions are as follows: Power Distance. The “extent to which the less powerful persons in a society accept inequality in power and consider it as normal” (Hofstede, 1986, p. 307). In other words, power distance is a measure of the extent to which the subordinates within any organization are willing or reluctant to show their variance over an issue with their boss/supervisors, and do not expect their supervisors to involve them in the company’s decision making processes (Hofstede, 1980), because “powerless” members of the institutions accept and expect the unequal distribution of power. Hofstede believed that society defined inequality in the context of the followers more than the leaders Individualism. The “degree to which people in a country prefer to act as individuals rather than as members of groups” (Hofstede, 1994, p. 6). In a nation with individualist culture, the assumption is that an individual primarily will take care of his or her own interests, and the interest of his or her own family members. In a collectivist culture, through the occasion of one’s birth and subsequent other events, an individual becomes a closely attached member of one or more closed “in-groups,” from which the individual cannot loosen him- or herself. In such cases the in-group (comprised of the large extended family, tribe, clan, or any other organization) accords protection to the members’ interests, but in return assumes or demands the individual’s permanent allegiance (Hofstede, 1986). Masculinity. The “degree to which such masculine values as advancement, earnings, training, up-to-dateness and such feminine values as friendly atmosphere, position security, physical conditions, [and] cooperation are valued” (Hofstede, 2001, p. 281). This cultural index reflects how intensely the level of value on performance, assertiveness, competition, and success tend to predominate over values on good personal relationships, quality of life, solidarity, service for the society, and care for the socially weak (Hofstede, 1993). Uncertainty Avoidance. is the level The level “to which people are made nervous by situations which they perceive as unstructured, unclear, or unpredictable. These are situations that they try to avoid by maintaining strict codes of behavior and a belief in absolute truth” (Hofstede, 1986, p. 308). Uncertainty avoidance must be kept separate from the factor of risk avoidance. It does not reflect an individual’s tendency to avoid taking risks, but instead is an association with a choice for working under clear guidelines and rules (Hofstede, 2001, p. 149). Clear rules on human behavior were expressed in the structured situations; unwritten rules imposed through tradition however, were used to define the unstructured situation. In a community or nation that was high on uncertainty avoidance people demonstrated a nervous energy, whereas people in nations with low uncertainty avoidance scores were easy-going. A nation with strong or high score was considered rigid, but nations with low scores were considered weak, yet flexible. Long-Term Orientation (Confucian Dynamism). Countries belonging to the long-term orientation dimension showed the values of thrift and perseverance. Nations with a short-term orientation showed values that respected traditions, fulfilled social obligations, and utilized concepts of shame for self-protection. This dimension is said to be the original work of Confucius, although Hofstede included it in his analysis. Illustration Of Hofstede’s Cultural Dimensions Hofstede Within A Flight Industry Organization : Power Distance As the cultural dimension of power distance reflects the levels of inequality prevalent within an organization and the general society, it becomes an undetectable part of normal life (Hoecklin, 1995, p. 1). Individuals that possess a good deal of power distance have an inherent belief that they are the ultimate decision makers (the boss), and their imposed decisions must necessarily be followed by subordinates, with no scope for alternative options within the framework of this cultural dimension. For instance, in a flight crew comprised of a captain from Malaysia (a country with high power distance), a first officer from Austria (a country showing low power distance) may show hostility regarding cultural implications within the organizational framework (itim international, 2009). In this case, the captain would be more status conscious (because of his country’s cultural dimensions) than motivated by making actual decisions or giving opinions. On March 23, 1994, an incident occurred that involved Aeroflot Russian International A310-304 that had an accident and crashed near Mezhduretshensk, Russia, resulting in the death of the 75 passengers on board (ICAO Adrep Summary 2/94 #, 1994). in this incident the crash occurred, as per the investigation records, owing to the fact that the flight captain allowed his children to fly the aircraft; While flying the plane, his son mistakenly broke the connection between the autopilot and the ailerons. This led to the aircraft to fall sharply, at 90 degree. After several desperate attempts by the co-pilot to save the situation, it finally crashed causing deaths of people on board. This incident can be viewed from the perspective of the cultural dimension of ‘power distance.’ The decision to allow the children fly the plane can be attributed to the Russian cultural dimension of high power distance conformity,. Even though the co-pilot was aware that allowing chidren to fly the plane was against flight procedural norms, this instance of breaking the rule, can be associated with Russian cultural norms, where power distance has strong relevance within its society itim international, 2009),.Owing to this social norm it can be assumed that the co-pilot would feel pressurized owing to the higher status of his Flight Captain, and would automatically go with the Captain’s decision. This example is an illustration of how conformity to power distance values resulted in a terrible loss of lives, and also shows that cultural upbringing plays a major role within an organizational framework, which can influence workers’ on-the-job decisions. Uncertainty Avoidance Uncertainty avoidance is a scarce tolerance for ambiguity in which people need to have certain formal regulations and clear procedural guidelines (Hofstede, 1991). People of cultures that reflect high uncertainty avoidance tended to show higher risk-taking than those of cultures with low uncertainty avoidance. In many cases, this high index often leads to an increase in the risk errors made by the frontline employees in the context of airline industry. The SQ006 accident highlights the disastrous effects arising from a high uncertainty avoidance cultural dimension. The incident in Taiwan that involved the crash during takeoff of Singapore Airlines 747-400 on October 31, 2000 and resulted in the death of 82 people on board was deemed the result of tunnel vision (Boser, 2005). Taiwanese individuals tended to show high uncertainty avoidance (itim international, 2009) and have a high-risk cultural background. This cultural influence among Taiwanese airport workers may have allowed the aircraft take off without visual identification and assurance that the flight had halted at the correct runway, which was dark, and had been closed for construction (Boser, 2005). Individualism Individualism is the dimension used to measure concerns for one’s own self as set against concerns for the rules and priorities of the community that one belongs to; collectivism cultural norms refer to an emphasis on achieving team goals and being more group-oriented (Hoecklin, 1991). Chinese people, from collectivist cultural values, will function better within a group, whereas an American from an individualist cultural norm will find it problematic operating as a team, which could increase the risk of his errors, leading to choices to transgress the norms of operational safety. Without adequate training for instilling uniform cultural characteristics for the airlines, group work among crews could be hampered, owing to such cultural variances. On January 25, 1990, Avianca Flight 052 crashed while trying to make a second landing at JFK International Airport in New York (National Transport Safety Board [NTSB], 1990). , The National Transport Safety Board (NTSB) in its investigation reports later reported that the accident primarily occurred owing to -complete miscommunication or a lack of communication within the - crewmembers and their inability to communicate – correctly relate the seriousness of the entire situation, where the air fuel was near end-point. The investigations showed that communications were unclear, and that the captain did not ask the first officer to reiterate the received information loudly to him, even though he could not hear it. The fatal error in communication occurred when the first officer gave the captain wrong information, and asked the flight to move starboard (right), instead of port (left). With this wrong information, the B707-321B flew a longer loop and burned even more fuel. The First Officer assumed that ATC was aware of the low fuel emergency of Flight 052, but the ATC had received the wrong information as t sufficient fuel” ((Aviation Safety Network, (2004). The first officer failed to use key words such as “emergency” that would have been addressed immediately. Instead, the communication was wrongly interpreted to an unintended, disastrous outcome. This air crash displayed a lack of communication from flight crew members to ATC cregarding the graveness of the situation. The investigations also revealed that the flight crew was known to have limited-English speakers, and it has remained unknown as to why the flight captain did not take control. The report assumption was that U.S. pilots were well known for their sense of individualism, thus, the co-pilot did not repeat the emergency nature of the situation and ensure that ATC had fully interpreted the graveness of the situation, but simply assumed that the latter understood what he said initially (Aviation Safety Network, 2004) Again, cultural upbringing may have played a major role in the total breakdown of communication between the flight crew and the ATC, leading to a disastrous crash and loss of many lives (Aviation Safety Network, 2004).). Masculine or Feminine Dominance This cultural dimension refers to the gender based roles as perceived within a society, and the levels of decisiveness and success between the genders (Rodrigues, 1998). For example, in the Japanese aviation sector, flight employees have a tendency to assume that female employees are not as dominant or successful as their male counterparts. Gender role values are evident with even a cursory glance at the structure of Japanese airlines’ organizations (Rodrigues, 1998).  Here, as per Hofstede’s theory (1993) the masculine society is more assertive in nature, and where the members are ambitious and tend to excel in their work, and in the workplace the amount work done is given predominance, while in a feminine society the members are more caring. So we find that masculine society refers to assertiveness and feminine society refers to caring and being modest. Under a masculine society the female members thus would be more assertive, but less than their male counterparts, thus, reflecting a distinct difference in the male-female cultural values, in such societies (Hofstede, 1993). Confucian Dynamism As a unique cultural characteristic primarily found in East Asian countries, which inherently reflects the Confucian dictates and dynamism in their culture and religion, an amalgamation of collectivism exists within East Asian nations. cControls are an informaltype, and found within factors such as respecting and showing loyalty to the ruling authority, and , andto the community as a whole. Such cultural dynamism may again result in communication breakdowns or proficiency problems for the employees in such countries (Bond, 2002). For instance, under Confucian dynamism assumptions within the Chinese flight sector, in-flight trainee students will highly respect and admire the flight instructor. Such high levels of reverence for the teacher’s ,authority will inevitably result inan incorrect feedback as per about the teacher’s effectiveness as an instructor, and will be less questioning will occur in the class, out of inherent respect for the teacher’s knowledge. This reverence for the teachers, or anybody senior, or in the position of authority, is an inherent part of Confucian teachings that teach the virtues of prudence and tenacity. This Confucian heritage followed in China forms an integral part of the Chinese culture. Thus, it is inevitable that the Confucian dynamism which we find the virtues reflecting in the students’ attitudes towards their teacher that may lead to miscommunications is an instance of the cultural dimension affecting workplace processes, which are referred to as Confucian dynamism by Hofstede and Bond (1988). Limitations of Hofstede’s Model Hofstede’s cultural framework has been used widely in different contexts within behavioral science disciplines such as (a) management and marketing (Alden, Hoyer, & Lee, 1993); (b) employee retention and turnover (Abrams, Ando, & Hinkle, 1998); and (c) stereotypes in different cultures (Soutar, Grainger, & Hedges, 1999). In recent decades, Hofstede’s framework has in used in (a) advertising (Gregory & Munch, 1997; McCarty & Hattwick, 1992; Zandpour, Campos, Catalano, & Chang, 1994); (b) global brand strategies (Roth, 1995); and (c) in ethical decision making (Blodgett, Lu, Rose, & Vitell, 2001; Vitell, Nwachukwu, & Barnes, 1993). The coverage of Hofstede’s cultural values extends across academic and professional community because of the assumption that Hofstede’s cultural framework had been tested, verified, and established as valid. Review of the literature on Hofstede’s work, however, shows that the framework had not been subjected to tests for reliability and validity to ascertain the truthfulness of his framework. The apparent appeal of the framework as a conceptual model had hindered the psychometric tests in measuring the reliability and validity until recently (Soondergaard, 1994). Hofstede's work has been mainly criticized for limiting national culture to a simple concept of only four to five aspects (Sivakumar and Nakata, 2001). Points of criticism include that the study had samples limited to a single MNC (Multinational Corporation), thus, omitting the “malleable” nature of any culture as perceived over a long time period. Hofstede also did not account for the cultural heterogeneity perceived within a single country (Sivakumar & Nakata, 2001). While a review of literature shows that Hofstede’s work has been an acceptable concept in understanding culture and its role in an organization, many of those publications were written by authors who agreed with Hofstede’s work in earlier decades. The onset of globalization and the changing business environment are realities challenging Hofstede’s work. The assumptions about how national culture and cultural differences endure in the workplace may seem insignificant in the context of 21st century management. The development of business-related concepts on diversity include the work of Holden ( ) on cross-cultural management, who deliberately implied that culture may be unified, thus eliminating cultural differences in the workplace. For instance, one might assume that agents in call center companies outsourced to different countries would not have cultural values similar to their American counterparts. Recognizing the business advantage of gaining contracts with American companies however, many of the call center organizations exposed and trained their foreign agents in the mainstream culture of Americans. Although Hofstede’s catalogue of culture significantly contributed to the body of scientific knowledge, Hofstede’s cultural dimension model may now be considered outdated. A more in-depth exploration of Hofstede’s work reveals that his data were gathered 30 years ago and may not apply in 21st century organizations. Other than changes in the political environment, workplace values have changed as well. Emerging concepts such as (a) cultural diversity, (b) localization of plans and strategies, (c) knowledge-sharing, (d) gender equity, and (e) empowerment might replace Hofstede’s concepts of power distance, individualism, masculinity, uncertainty avoidance, and long term orientation. Despite criticisms, most “researchers have favored this five-dimension framework because of its clarity, parsimony, and resonance with managers” (Kirkman, Lowe, & Gibson, 2006, p. 286). Synthesized Approach to Use Hofstede’s Model for Shaping Consumer Behavior According to Lockwood (2005) ethnic diversity in the United States has been increasing since the 1960s. McGillivray and Golden (2007) stated that, “currently many companies with multinational operations have begun to consider diversity as a global initiative, have developed a global business model, and have extended some programs outside the U.S.” (p. 43). Dreachslin (2007) warned that when organizational leaders do not manage diversity, demographic diversity is more likely to hinder organizational teamwork. According to Dreachslin, balancing homogenization and customization of diversity is necessary. Homogenization leads to creating harmony and commonality in terms of diversity; customization reinforces American shared values and ethnic dynamics to optimize cultural competence. This organizational strategy is aimed to achieve development at the level of the internal stakeholders. Additionally, Hofstede (2002) determined that the psychological and socio-demographic factors prevalent in a nation could be used to distinguish variations in consumption patterns and behavior. For viewing business at a global level, Hofstede and de Mooij (2002) regarded the countries as “systems” that affect consumption patterns and behaviors, and in their experiments worked towards comprehending “the characteristics of the systems because of their impact on the behavior of individuals within these systems” (p. 64). While exploring the differences in consumption patterns, Hofstede (2002) conceptualized -that the analytical unit of all cultural dimensions is the is the nation-state, regarding of which the society and the culture, both form an integral part (Hofstede, 2002, p. 64; Inkeles, 1998). Hofstede observed that every aspect within a socio-cultural system, represented at the local and regional levels, is the entire system. He acknowledges the fact that “the number of people in the second half of the 20th century who left their native countries and moved to completely different environments [was] larger than ever before in human history” (Hofstede, 2001, p. 429). Hofstede assumed that it is the immigrants that go through the process interacting and imbibing the aspects of the host culture, that is, as per Hofstede’s claims, it is the immigrants that must integrate or amalgamate with the ‘majority culture’ of the country, and the situation is not vice versa (Hofstede 2001, p. 429). With the globalization of U.S. and other nations’ businesses, Hofstede’s (2001) observations and comments on the reactions of the host societies towards the arrival of the immigrants from foreign countries, become relevant and essential for global managers. Hofstede delineated these reactions into three major steps: 1. The locals are inquisitive about the culturally different foreigners (termed the “zoo” effect). 2. In the next step, “ethnocentrism” takes place, as locals start perceiving and believing in the superiority of their own culture to that of the immigrants’ cultural values. 3. Third, “polycentrism” arises as locals view the foreigners as being simply different, or having different standards, a condition that - cannot be in is not commonly observed in most of the societies. (p. 424) In the third step, the locals become neutral and stop judging whether the foreigners’ cultural norms are superior or inferior, and accept the fact that the two cultures are simply different. Those in retail businesses, even banks, must necessarily adopt a polycentric view while serving the local immigrant customers, thus allowing immigrants to use their services and products. A polycentric view would give these businesses a distinct competitive advantage over other retailers within a saturated domestic market. According to Hofstede and de Mooij (2002), instead of centering on the consumer similarities across nations, retailers must start focusing on the differences in the average consumer pattern differences across countries and globally. Although a rise in levels of income disparity has occurred in the last few decades within developed and developing countries, a rise in the buying power of the average consumer also has occurred. Various literature of this time period(1970s-1990s) shows one specific assumption, which is that if a rise and/or a convergence in global income levels occurs, correspondingly “homogeneous consumer needs, tastes and lifestyles” will arise (Hofstede & de Mooij, 2002, p. 61). Recent research by behavioral economists shows that even with accessible information about customers, managers make wrong or irrational choices which are a result of the social and cultural upbringing that shapes their minds right from an early age (Ariely, 2008) By using Hofstede’s definition of culture, managers might assume that motivations, certain level of expectations, social norms, and other unseen traits characterize the culture of a nation and an individual (Hall, 1990). Component traits that comprise a culture are heterogeneous in nature within national, regional, and local levels. At the national level, Hofstede and de Mooij (2002) suggested that when business firms ignored the cultural differences seen within the border by centralizing their marketing and functioning operations, profits tended to drop sharply. This trend is also perceived in the local levels (Hofstede & de Mooij, 2002, p. 62). Often while conducting international business, many retailers tend to forget that business is a highly “localized concept that requires great sensitivity to local tastes and habits” (Hofstede & de Mooij, 2002, p. 62). Retailers perhaps should assume convergence in consumer taste and behavior across national borders is “merely a persistent myth” (Hofstede & de Mooij, 2002, p. 62). Within local and regional levels, one must also take into account the immigrant cultural patterns that are different form the native cultural norms. Modern retailers must cater to the heterogeneous consumer behavioral pattern even within a single cultural context; to achieve success in business operations one must conform to the culturally deviant consumer patterns, instead of trying to mold consumer behavior and trying to create converging consumer behavior pattern throughout the world. Conclusion From a global perspective, as the number of nation-states is reaching 200, the number of people groups that are unified by (a) customs, (b) languages, (c) folklores and mythical tales, and (d) religions, is at an estimate near 2000 groups (Cohen, 1997, pp. ix-x). Modern businesses and retailers cannot afford to be ignorant of various cultures, and the variations in the consumer behavioral patterns based on cultural differences of the people, by simply centering on the culture of one’s own nationality. A larger part of Hofstede’s research was focused on this need for global business firms to adapt or modify strategies according to the varying national cultures while conducting business abroad. This same pattern of thinking, according to Hofstede, must be applied at the regional and local level markets also, to retain the existing consumers and gain new ones, or else the firms will miss their profits, and fail to survive in this era of global business and marketing. References Ariely, D. (2008). Predictably irrational: The hidden forces that shape our decisions. London, England: HarperCollins. Armstrong, D. (2009). Bringing Hofstede Home: Culture as an Impetus for Diverging Consumer Behavior in the Local Market. Submission for the IACCM Conference 2009, WU-Wien, 24-26. June 2009 on “Cross Cultural Competence: Knowledge Migration, Communication and Value Change.” Retrieved from  http://www.wu.ac.at/iaccm/files/iaccm09/pa/armstrong.pdf.  Bond, M. (2002). 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