Culture is defined as a system of values and norms that are shared among a group of people and that, taken together, constitute a design for living. Although values are abstract ideas and convictions about what people believe, norms are prescribed behaviours that are acceptable in a specific society. Both values and norms are influenced by many factors such as religion, language, social structures, education, and political system and so on. Values are more difficult to learn than norms because they are easily observable. Yet, it is essential for business managers to study values in order to understand the reasons and motivations behind specific behaviours and cultural norms. In this article, we will understand cultural model of Geert Hofstede.
1) Uncertainty Avoidance – This cultural dimension by Hofstede refers to the extent to which people feel comfortable when they are exposed to an ambiguous or uncertain situation. People in a low uncertainty avoidance society are more willing to take risks and appreciate flexibility and informality in the workplace. In contrast, people in a high uncertainty avoidance society tend to be risk averse and favour rigid and formal decision-making processes in the workplace.
Under high uncertainty avoidance, security is a strong motivator relative to achievement or self-fulfilment, and order and predictability are paramount. Rules are important and must be obeyed to avoid chaos. Communication is direct and unequivocal to avoid confusion. Often this directness in high uncertainty avoidance countries such as Germany is mistaken for rudeness, when in reality it is an effort to ensure the clarity of a message of rule observance to preserve order. It is no surprise that Germany is a world leader in precision engineering and manufacturing.
The USA culture of low uncertainty avoidance and tolerance for risk and change has often been mentioned as a main source of the country’s technological leadership in the world. Conversely, people who are culturally inclined to avoid the risks and uncertainties of life tend to think that developing a new technology from the ground up may be too risky. Accordingly, high uncertainty avoidance countries tend to represent a less favourable environment for technology development than low uncertainty avoidance.
Countries with culture of high-uncertainty avoidance – Germany, UAE, Saudi Arabia, Italy, Austria, France, Japan, Brazil
Countries with culture of low-uncertainty avoidance -India, China, South Africa, United Kingdom, Hong Kong, Singapore, Philippines
2) Power Distance – Power distance refers to the extent that people have an equal distribution of power. In a large power distance culture, power is concentrated at the top in the hands of relatively few people whereas people at the bottom are subject to decisions and instructions given by superiors. Conversely, in a small power distance culture, power is equally distributed among the members of the society. It is important to note that the particular predominant perspective on power distance is held and reinforced by most members of the society.
Managers in high power distance societies tend to believe in giving detailed instructions to their subordinates with little room for interpretation. Subordinates are supposed to respect the authority and superiority of upper management. Characteristics of high power distance cultures are – inequality among the members in the society, lack of free communication across different levels of the hierarchy and centralized control. These distinguishing traits of high power distance cultures often throttle employee creativity and new ideas. In contrast, the characteristic features of low power distance cultures, such as, lack of hierarchical authority and less centralization, tend to promote employee interaction, lateral communication, and less emphasis on the rules.
Countries with culture of high power distance – Arab Countries, India, Mexico, Philippines, Malaysia
Countries with culture of low power distance – Austria, Germany, United States, Israel, Denmark, Sweden, Ireland, Switzerland
3) Individualism vs Collectivism – Individualism means that people seek and protect their own interests over the common goal of the society and their role in the society. In an individualistic culture, people are comfortable with having the authority to make a decision based on what the individual thinks is best. In individualistic societies, employees are provided with great deal of personal freedom and autonomy. In collectivistic culture, people tend to belong to groups or collectives and look after each other in exchange for loyalty. Employees working in collectivistic culture are not allowed enough independence necessary for organizational members to think creatively and thereby, fail to cultivate an environment that fosters an innovative spirit.
Countries with individualistic culture – United States, United Kingdom, Australia, Netherlands, Italy, France, New Zealand
Countries with collectivistic culture – South Korea, China, Malaysia, Philippines, Venezuela, Thailand, Portugal
4) Masculinity vs Femininity – According to Hofstede, a masculine culture is basically a performance-driven society where rewards and recognition for performance are primary motivational factors for achievement. In masculine societies, people are supposed to be competitive, ambitious, assertive, and risk taking in order to achieve their goals. Such societies tend to give the utmost respect and admiration to the successful achievers who fulfil his or her ambition and demonstrate assertiveness and willingness to take risks in order to achieve goals.
On contrary, in feminine cultures people tend to emphasize the quality of the whole life rather than money, success, and social status, which are easier to quantify. They are willing to reach out to the underprivileged and share their wealth with them.
Countries that follow masculine culture – Japan, Hungary, Venezuela, Germany, Italy, Mexico, Switzerland, China
Countries that follow feminine culture – Sweden, Norway, Denmark, Netherlands, Thailand, Finland
5) Confucian Dynamism [Long-term orientation vs Short-term orientation] – This dimension describes how every society has to maintain some links with its own past while dealing with the challenges of the present and future, and societies prioritise these two existential goals differently. Long-term Orientation captures the following elements – adaptation of tradition to the modern context, high savings ratio driven by thrift, patience and perseverance towards slow results, and concerns with respecting the demand of virtue.
On the other hand, a short-term orientation contain following aspects – respect for tradition, lower saving rate, quick-results orientation and concern with possessing the truth.
Countries with culture of long-term orientation – China, India, Brazil, South Korea, Japan, Thailand
Countries with culture of short-term orientation – United States, Norway, United Kingdom, New Zealand, Germany
It might be incorrect to generalize culture of a country as many large countries such as India, United States, and China have more than one culture. Despite these criticisms, this research work by Hofstede still remains a seminal work and many scholars continue to apply his model to their cross-cultural studies in various disciplines, including international business and management.