Hofstedes Dimensions of Culture - Example

Critically consider Hofstede’s dimensions of culture. Evaluate the strengths and weaknesses of Hofstede’s theories and identify the practical limitations to the application of his ideas to specific areas of international human resource management practice. You should also consider whether alternative theories of cultural frameworks are more useful. Introduction Prof Geert Hofstede of Netherlands posits that management theories are not universally applicable. What they follow in the U.S.A and U.K. as management concepts are not acceptable in France, Germany or elsewhere. His conviction is that management concepts are influenced by respective culture in each country. Hence, to engage in international business, the companies must understand local cultures of their host countries. Before embarking on a big scale, they should train their employees to adapt to host country’s culture failing which; the business will end up in disaster. In the wake of increasing globalisation of business operations facilitated by development of communication and information technology, firms cannot simply remain in their home country for fear of cultural shocks they may experience. Hofstede’s dimensions of culture Geert Hofstede made extensive studies on how culture influenced values in the workplace. This resulted in his development of a model of five dimensions in order to understand how cultures are differentiated. The five dimensions are Power Distance, Individualism, Masculinity, Uncertainty Avoidance and Long Term Orientation respectively. The last one was added after his Chinese experiment (Hofstede, 2001) Power Distance Index (PDI) The term ‘power distance’ was borrowed from the Dutch Social Psychologist Mudler whose experiments related to interpersonal power dynamics. According to Hofstede, power distance is determined by the societal differences. He had designed three questions that dealt with how subordinates feared disagreeing with their superiors, their actual decision making styles and how the subordinates liked them. This was surveyed nearly among 100,000 individuals from 1967 to 1973 in 50 countries while he was with IBM as a psychologist. His view is that inequality, the root cause of power distance, is due to human physical and mental ability, social status and prestige, wealth, power, laws, rights and rules. He says inequality is as old as mankind and quotes Homer in his Odyssey as saying that servants do not care to work in their masters’ absence. He also quotes Plato as having said that even if it is proclaimed that master and slave shall have equal status, they cannot become friends. And that indiscriminate equality would result in inequality. In short, power distance index refers to the extent to which the less powerful people would compulsively agree with unequal distribution of power in organisations and institutions just as in families. The inequality is therefore endorsed by the followers as much as the leaders. For example, Germany has a PDI of 35 as per Hofstede’s analysis as against the PDI of 80 for Arab countries and 11 for Austria. This means that Austria has the least inequality while Arab countries have the highest inequality while Germany is at the middle level. Power Distance score for the U.S. is 40 which shows that the country has a more unequal distribution of wealth compares to Germany with a score of 35. (Hofstede, 2001) Within the context of HRM in the international business, the power distance index signifies that in countries with high PDI, employees are too much reluctant to express themselves against what their employers say. The employers there tend to be autocratic and paternalistic. The index also denotes the dependence of relationships in a country. Individualism It refers to people’s independence in that ties between individuals in a society are loose. It implies that individuals are expected to look after themselves individually or their immediate families. The U.S.A. has the highest score along with France with 1st and 10th rank respectively. These people are more self-cantered and they pursue their individual goals. They expect clarity in conversations and communications. Though Germans have the 15th rank signifying high individualism, their style of communication is different. The latter will discuss things in detail before coming to the point while the former (the U.S.A.) would tell the point first before their detailed explanation. This individualism is reflected in Americans whose tendency is to compete with one another for ascendancy in the job hierarchy. Similarly, in business they are calculative and their employees are forced to defend and promote their interests themselves. On the other hand, China is collectivistic culture ranking 37th. In Chinese companies, harmony and loyalty are very important. The relationship between the employer and employee or business partners is driven by trust and harmony with deep respect for values. By saying “no”, harmony will be lost. Experiment shows that Americans do their best individually and Chinese do their best collectively. (Hofstede, 1994) Masculinity It refers to the assertiveness, performance, success, competition associated with tougher values possessed by men in all societies as against the tender values like quality of life, compassion, warmth, service, caring for the weak and unity which are feminine like qualities associated with women in all societies. While men’s roles are different from that of women in all countries, the degree of differences are found to be larger in tough societies. (Hofstede, 1993) Uncertainty Avoidance This fourth dimension refers to the degree of compliance with rules in different cultures. Hofstede calls it people’s preference of structured and over unstructured situations. In the structured ones, rules are clearly defined for people’s behaviour in a given situation. These rules are written down and also removed or imposed by tradition. As such in countries with high scores of uncertainty avoidance, people have more nervous energy where as in the countries of low scores, they are easy going. As such, a society is said to be rigid with high uncertainty avoidance and flexible with low uncertainty avoidance. Where it is strong, people think it dangerous if things or situations are different from rules. Where there is weak uncertainty avoidance, they view them as curious. (Hofstede, 1993) Long Term Orientation. This fifth dimension is unique to Chinese values. Hofstede calls it as long term orientation and short term orientation referring to people’s out look. They look towards the future by being thrift and showing persistence in their endeavour in the case of long term orientation. They are to be short term oriented if they value past and future by giving respect for traditions and honouring social obligations. (Hofstede, 1993) Cultural element in management Hofstede after his tour around the world with the above observations concluded that management theories cannot be seen in isolation. They are tempered by cultural aspect of respective countries. They are interdisciplinary by interaction with family .school, politics, government and even religion and beyond the national borders they are even more interdisciplinary. Knowledge of the above dimensions prevailing in a country helps managers adapt to the local culture and make sound decisions which cannot go wrong. Hofstede chooses to call the culture as the result of collective programming of the mind that differentiates people of different nations. He states that culture cannot be directly observed but can only be inferred through the people’s verbal statements and non-verbal behaviour. He says there need be no strict following of these concepts and they can be bypassed if people’s behaviour can be predicted without them. (Hofstede, 1993) Criticisms of Hofstede’s theory A towering personality like great economists Malthusand and Keynes, Hofstede is also not without critics. Jones (2007) calls his work highly controversial. As for relevancy, his research methodology of questionnaire is not an instrument that can accurately measure cultural disparity as observed by Schwartz (1999) which according to him is a subjective and culturally sensitive variable. This has been countered by Hofstede that surveys are not the only method used by him. (Hoftede, 1998) Secondly, the assumption that local population is homogenous is difficult to accept since most of the nations are comprised of ethnic groups. (Nasif et al, 1991, 81 and Redpath 1997, 481) Hofstede’s work therefore appears to be a character analysis and some what of arbitrary outcomes. He does not also give importance of community and variations due to community influences. (Lindell and Arvonen, 1996) Thirdly, McSweeney (2000) states that nations are not suitable for cultural analysis as they transcend beyond borders. Besides culture is also fragmented within groups. (DiMaggio, 1997) This has been answered by Hofstede that the national identities are the only way of identifying and measuring cultural differences. (Hofstede, 1998:481) Fourthly, Hofstede’s masculinity and uncertainty avoidance theory scores may have been biased as a result of cold war in Europe and aftermath World War II still persisting at the time of his study.(Sonderguard,1994, 451-452) Further there were communist insurgencies in Asia, Africa & Europe. Hofstede’s sample lacks data from socialist and less developed third world countries due to political instabilities prevailing there. (Newman 1996, 775). Hofstede’s study based on one company cannot be assumed to represent a country’s culture.(Graves, 1986,14-15 , Olie 1995, 135 and Sondergaard,1994,449) Hofstede’s reply is that his study has measured differences in cultures and cross sectional analysis is only appropriate and that his measure is not in absolute terms.(Hofstede,1998,481). Besides, Hofstede points out taking one multinational employer for the study guards against the possibility of influencing behaviour differently by use of different companies having diverse management practices and corporate policies. Use of single company has ensured national culture alone as an explanation for cultural difference. (Hofstede, 1980) Now, the study has become quite outdated and may not be relevant in the wake of rapidly changing environments. This has been explained away saying that cultural outcomes are the result of centuries of indoctrination and therefore recent developments will not change the culture overnight. (Hofstede 1998, 481) Four or five dimensions alone are not sufficient to measure cultural differences which Hofstede admits saying that more dimensions will have to be added. (Hofstede, 1998, 481) Statistical integrity has also been questioned by Dorfman and Howell (1988). “Hofstede has, on occasion, used the same questionnaire item on more than one scale and several have significant cross-loadings. In fact, when closely observed, the analysis comprises 32 questions with only 40 cases or subjects (40 data points corresponding to 40 countries). An analysis built on so few ‘subjects’ takes great advantage of chance and increases the likelihood of sample error.” (Jones, 2007) In favour of Hofstede Hofstede’s research in the field has received 1036 citations whereas another highly regarded study by Miles and Snow on strategy received just 200. His work has been considered a pioneering one and at the time of his research not many companies had entered for want of proper feedback. Using his research, many companies have since entered the fray. His research methodology is also rigorous enough with systematic data collection though some have said that his sampling is flawed. As many as 61 replications have confirmed validity of Hofstede’s predictions except 15 only partially and 4 in its entirety. Many studies without being replications but on similar ways have confirmed Hofstede’s first four dimensions. (Jones, 2007) Recent cross-cultural theories Drawing from Hofstede’s work, Harry Triandis, a Greek-American social psychologist, studied individualism-collectivism. While individualism signifies rivalry, self-confidence and estrangement from the group, collectivism promotes family integrity, short distance within the group, extreme level of camaraderie and interdependence. Self –confidence is found in collectivism too but on a different footing in that a member of the group is confident enough not to be a burden to the group as against the individualist’s predisposition that he is capable of doing what he wants.(Triandis,1995) As individualism and collectivism are perceptions on the character of a person, Triandis delved deep into the combination and arrived at the concept of horizontal and vertical characteristics of individualism and collectivism which in turn led to his identification of four types of national cultures namely horizontal individualism, vertical individualism, horizontal collectivism and vertical collectivism.(Triandis,1995) Thus Sweden is known for horizontal individualistic culture, France, vertical individualistic culture, Israel, horizontal collectivistic culture and Russia, vertical collectivistic culture. However these are refinement of Hofstede’s dimensions. The vertical aspect is in fact the “power distance’ of Hofstede. Unlike Hofstede, Triandis did not consider individualism and collectivism as opposites. Triandis also stated that regulated and free societies are relative to Hofstede’s uncertainty avoidance. Triandis later introduced what is called “cultural syndrome” under three categories of “complexity-simplicity”, ‘rigid regulation-uncertainty’ and “individualism-collectivism” (Triandis, 1996) In the first one, information societies are opposed to elementary and primitive societies. The second one relates to strictly regulated society with lot of rules and regulations as against the free society with lesser norms. The third syndrome refers to maximum individualism in complex and free cultures and maximum collectivism in tightly regulated and simple cultures. Thus, Triandis simplified Hofstede’s several dimensions into individualism and collectivism and explained their influence on social interaction. (Guseva) Seven modern dilemmas Another theory in cross-cultural research is “Seven Modern Dilemmas” of .Trompenaars and Hampden-Turner (2000) towards the practical aspects of cultural differences modern day managers in globalized transnational companies come across. They are the specific solutions people can chose in their decision making, in cross-cultural relationship. The said scholars grouped cross cultural differences under three categories of relationship with people, attitude towards time and attitude towards environment of which the most important is relationship with people viewed in five dimensions namely universalism-partcularism, individualism-collectivism, neutral-emotional, specific-diffuse and achievement-ascription.(Trompenaars,1994) If the above said dilemmas are understood, managers can adjust cross-cultural differences in “company’s presentation, translation, contracting, preparation and organization visits of foreign delegations, to determining the company’s head office role, assessment of its efficiency, negotiating and other important aspects of the company’s activities in a new cultural environment.”(Guseva) Cross-Cultural Training The above are abstract theories to serve as guidelines in HRM practice. They can be meaningful only if the transnational organisations impart cross-cultural training to their employees. This will lead to sustained global competitiveness. Thus cross-cultural training must be designed to support the areas of performance, adjustment and development. Many training programmes concentrate only on adjustment and by doing so they miss the important areas of developing “ability to form positive, mutually respectful, trusting relationships with local nationals and people of diverse backgrounds.” (Bennet, Aston, Colquhoun, 2000) This is especially significant when cost of international assignments is three to five times costlier than home country levels. Already 60 percent of the U.S. companies are imparting cross cultural training to their employees deputed overseas. (Arthur Andersen & Bennett Associates, 1997) Conclusion Hofstede’s concepts are valid but the statistical methods he used to obtain scores are not considered accurate by some critics. Hence without denouncing Hofstede’s contributions, scores can be arrived at afresh adopting the statistical methodology appropriately. Since the culture is of evolving nature, Hofstede’s score need not be taken as permanent indicators. Hofstede should be honoured for his contributions to human resource management within the cross-cultural context and his contemporaries can improve upon the scores alone and make them foolproof by robust statistical methods. This is however not to reject the contributions of Triandis and Trompenaars who have only made refinements to Hofstede’s contributions. 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