Hofstede - Cultural differences in international management
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This document discusses Hofstede's study on cultural dimensions and how it can be applied to international business. It provides an overview of Hofstede's research analyzing IBM data from over 50 countries to identify 5 cultural dimensions: power distance, uncertainty avoidance, individualism, masculinity, and long-term orientation. Examples are given of how these dimensions impact leadership styles, organizational structures, and communication between cultures with differing scores. The document also notes some criticisms of Hofstede's study and poses discussion questions.
Hofstede - Cultural differences in international management
- 1. Hofstede’s Study on Work Related-Values Concept, Methods, Results, andCritique
- 2. Agenda2Culture definedHofstede’s cultural dimensions1) Power Distance2) Uncertainty Avoidance3) Individualism4) Masculinity5) Long-term orientationImplications for managementCriticism
- 4. Culture and international businessWhy culture is important?Impacts the way strategic moves are presented.Influences management, decision making, negotiationsCulture makes international business difficult or easy 4
- 5. Culture “There are truths on this side of the Pyrenees that are falsehoods on the other” Blaise Pascal5
- 7. What is culture?Main features of culture:Culture is sharedCulture is intangibleCulture is confirmed by others7
- 8. Levels of cultureNational CultureBusiness Culture Organizational and Occupational Culture8
- 9. Key Cultural IssuesCultural Etiquette – the manners and behavior that are expected in a given situationCultural Stereotypes – our beliefs about others, their attitudes and behaviorEthnocentrism – looking at the world from a perspective shaped by our own cultureRelativism– all cultures are goodCultural sensitivitySelf-reference criteria9
- 10. Contingency managementDetermining the problem or goal in terms of home country culture, habits and norms. Determining the same problem or goal in terms of host country culture, habits and norms. Isolating the SRC influence on the problem and how it complicates the issue. Redefining the problem without the SRC influence and solving it according to the specific foreign market situation. 10
- 18. Hofstede’s Cultural DimensionsProf. Geert Hofstede“Culture is more often a source of conflict than of synergy.Cultural differences are a nuisance at best and often adisaster.” 18
- 19. Hofstede’s Cultural DimensionsProf. Geert HofstedeConducted perhaps the most comprehensive study of how values in the workplace are influenced by cultureAnalyzed a large data base of employee values scores collected by IBM (HERMES)1967 – 1973 more than 50 countriesDeveloped a model that identifies four primary Dimensions to assist in differentiating cultures: Power distanceUncertainty avoidanceIndividualismMasculinity+ Long-term orientation (added later)19
- 20. Hofstede’s Cultural DimensionsHofstede’s work 20
- 21. Power DistancePower distance - The extent to which the less powerful members of institutions and organizations within a country expect and accept that power is distributed unequally21
- 22. Power DistanceHigh power distance22Low power distanceInequalities among people should be minimizedInterdependence between less and more powerful peopleHierarchy in organizations means an inequality of rolesDecentralization is popularNarrow salary rangeSubordinated expect to be consultedThe ideal boss is a resourceful democratPrivileges and status are disapprovedInequalities among people are both expected and desiredLess powerful people should be depended on the more powerfulHierarchy in organizations reflects the existential inequalityCentralization is popularWide salary rangeSubordinated expect to be told what to doThe ideal boss is a benevolent autocrat or good fatherPrivileges and status are both expected and popular
- 23. Power Distance23HighMalaysiaArab CountriesMexicoIndiaFranceItalyJapanSpainArgentinaUSGermanyUKDenmarkIsraelAustriaOrientation towards authorityLow
- 24. Power DistanceExampleA company from Austria (low power distance) is considering entering the Mexican (high power distance) market.24Power Distance Index
- 25. Power DistanceExample (cont.)Communication tips for the Austrian manager: Give clear and explicit directions to those working with him Deadlines should be highlighted and stressedDo not expect subordinates to take initiativeBe more authoritarian in his management styleShow respect and deference to those higher up the ladder25
- 26. Uncertainty AvoidanceUncertainty avoidance – The extent to which members of a society feel threaten by uncertain or unknown situations.26
- 27. Uncertainty AvoidanceStrong uncertainty avoidance27Weak uncertainty avoidanceUncertainty: normal feature of life and each day is accepted as it comesLow stress – subjective feeling of well-beingAggression and emotions must not be shownComfortable in ambiguous situations and with unfamiliar riskThere should not be more rules than necessaryPrecision and punctuality have to be learnedTolerance to innovationMotivation by achievementUncertainty : continuous threat that must be foughtHigh stress – subjective feeling of anxietyAggression and emotions may be shown at proper timesFear of ambiguous situations and of unfamiliar riskEmotional need for rules, even if they never workPrecision and punctuality come naturallyResistance to innovationMotivation by security
- 28. Uncertainty Avoidance28HighGreeceJapanFranceKoreaArab CountriesGermanyAustraliaCanadaUSUKIndiaDenmarkSingaporeDesire for stabilityLow
- 29. Uncertainty Avoidance29ExampleA company from France (high uncertainty avoidance) is considering investing in Denmark (low uncertainty avoidance)Uncertainty Avoidance Index
- 30. Uncertainty AvoidanceExample (cont.)Communication tips for the French manager: Try to be more flexible or open in his approach to new ideas than he may be used to Be prepared to push through agreed plans quickly as they would be expected to be realized as soon as possibleAllow employees the autonomy and space to execute their tasks on their own; only guidelines and resources will be expected of him30
- 31. IndividualismIndividualism – Thetendency of people to look after themselves and their immediate family and neglect the needs of society31
- 32. Individualism32High individualismLow individualismIndividuals learn to think in terms of “we”High-context communicationDiplomas provide entry to higher status groupsRelationship employer- employee is perceived in moral terms, like a familyHiring and promotion decisions take employees’ ingroup into accountManagement is management of groupsRelationship prevails over taskIndividuals learn to think in terms of “I”Low-context communicationDiplomas increase economic worth and/or self- respectRelationship employer-employee is a contract based on mutual advantageHiring and promotion are supposed to be based on skills and rules only Management is management of individualsTask prevails over relationship
- 34. Individualism34ExampleA company from UK (high individualism) is considering investing in Mexico (low individualism)Individualism Index
- 35. IndividualismExample (cont.)Communication tips for the UK manager: Note that individuals have a strong sense of responsibility for their family Remember that praise should be directed to a team rather than individualsUnderstand that promotions depend upon seniority and experienceBe aware that the decision making process will be rather slow, as many members across the hierarchy need to be consulted35
- 36. MasculinityMasculinity – The tendency within a society to emphasize traditional gender roles36
- 37. Masculinity37 High masculinityLow masculinityDominant values: caring for others and preservationPeople and warm relationships are importantSympathy for the weakIn family, both fathers and mothers deal with facts and feelingsStress on equality, solidarity , and quality of work lifeManagers use intuition and strive for consensus Resolution of conflicts by compromise and negotiationDominant values: material success and progressMoney and things are importantSympathy for the strongIn family, fathers deal with facts and mothers with feelingsStress on equity, competition among colleagues and performanceManagers are expected to be decisive and assertiveResolution of conflicts by fighting them out
- 39. Masculinity39ExampleA company from Denmark ( low masculinity) is considering investing in Mexico (high masculinity)Masculinity Index
- 40. MasculinityExample (cont.)Communication tips for the Danish manager : Be aware that people will discuss business anytime, even at social gatheringsAvoid asking personal questions in business situationsTake into account that people are not interested in developing closer friendshipsCommunicate directly, unemotionally and conciselyIn order to assess others use professional identity, not family or contacts40
- 41. Long- term orientationLong- term orientation – A basic orientation towards time that values patience41
- 42. Long- term orientation42 Long-term orientationShort- term orientationRespect for traditionsLittle money available for investmentQuick results expectedRespect for social and status obligations regardless of cost Concern with possessing the TruthAdaptation of traditions to a modern contextFunds available for investmentPerseverance towards slow resultsRespect for social and status obligations within limitsConcern with respecting the demands of Virtue
- 43. Implications
- 44. Work CentralityHow important is work?44
- 45. What do people value in work?45
- 48. Leadership Styles48Power DistanceUncertainty Avoidance
- 49. Leadership Styles49Power DistanceUncertainty Avoidance
- 50. Leadership Styles50Power DistanceUncertainty Avoidance
- 51. Leadership Styles51Power DistanceUncertainty Avoidance
- 52. Organizational StructuresAdhocracyFlat organizational pyramidPeople can tolerate ambiguity in organizational rolesLess need for formalized rules and regulationsDistance between management and workers tends to be smallProfessional BureaucracyFull BureaucracyFamily Bureaucracy52Power DistanceUncertainty Avoidance
- 53. Organizational StructuresAdhocracyProfessional BureaucracyStandardization of skillsCentralized decision makingOrder and compartmentalizationFull BureaucracyFamily Bureaucracy53Power DistanceUncertainty Avoidance
- 54. Organizational StructuresAdhocracyProfessional BureaucracyFull BureaucracyThe most formalizedOrganization dominated by rules, procedures and hierarchical relationshipsStandardization of the work processPredictability & control Family Bureaucracy54Power DistanceUncertainty Avoidance
- 55. Organizational StructuresAdhocracyProfessional BureaucracyFull BureaucracyFamily BureaucracyParallels an extended family: dominant father figureSmallLess specialization of rolesControl: personal supervision Direct contactHighly centralized decision making55Power DistanceUncertainty Avoidance
- 56. Criticism
- 57. CriticismSingle companyTime dependentBusiness culture, not values cultureWestern bias57Non-exhaustivePartial geographic coverageAttitudinal rather than behavioral measuresEcological fallacy
- 59. Discussion QuestionsDo you notice any cultural differences among your classmates? How do those differences affect the class environment and your group projects?Give some examples of cultural differences in the interpretation of body language. What is the role of such nonverbal communication in business relationships?59
- 60. Discussion QuestionsDo you notice any cultural differences among your classmates? How do those differences affect the class environment and your group projects?Give some examples of cultural differences in the interpretation of body language. What is the role of such nonverbal communication in business relationships?60
- 61. References
- 62. References62 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
- 63. Thank you for your attention!63
Editor's Notes
- #5: Culture is very important to the practice of international business.Impacts the way strategic moves are presented.Influences decisions.The lens through which motivation occurs. Management, decision making, and negotiations are all influenced through culture. Culture influences nearly all business functions from accounting to finance to production to service.To understand the others To develop better negotiation and business strategiesTo gain business advantageThe desire to consume and enjoy foreign products and ideasAdopt new technology and practicesGrowth of cross-cultural contactsThe achievement of free circulation by people of all nationsCulture is what makes international business practice difficult or easy, depending on how similar or different cutures are. Culture is both divisive and unifying.
- #6: The diversity of values and truths All businesses ultimately comes down to transactions or interactions between individuals. The success of the transaction depends almost entirely on how well managers understand each other
- #8: Norms + Values+ Beliefs= CultureCulture = the pervasive and shared beliefs, norms, and values that guide the everyday life of a groupCultural norms = prescribed and proscribed behaviors, telling us what we can do and what we cannot doCultural values = values that tell us such things as what is good, what is beautiful, what is holy, and what are legitimate goals for lifeCultural beliefs = our understandings about what is trueCultural symbols = these may be physical (national flags, holy artifacts/ office size, cultural symbols) Cultural rituals = ceremonies, such as baptism, graduation, or the tricks played on a new worker, or the pledge to a sorority or fraternityCultural stories = these include such things as nursery thymes and traditional legends.
- #9: National culture is the dominant culture within the political boundaries of the nation-state. It usually represents the culture of the people with the greatest population or the greatest political or economic power.Business culture represents norms, values and beliefs that pertain to all aspects of doing business in a culture. Business cultures tell people the correct, acceptable ways to conduct business in a society.Business cultures are not separate from the broader national culture. The national culture constraints and guides the development of business culture in a societyBusiness culture affects all aspects of work and organizational life: how managers select and promote employees, how they lead and motivate their subordinates, structure their organizations, select and formulate their strategies, and negotiate. Corporate Culture is the culture adopted, developed and disseminated in an organization. Corporate culture can deviate from national norms, but that depends upon the strength of culture and the values and practices tied to it. Occupational and organizational cultures are distinct cultures of occupational groups such as physicians, lawyers, accountants and craftspeople. They are the norms, values, beliefs and expected ways of behaving for people in the same occupational group, regardless of what organization they work for.