Final Group Project OB

Masters of Management (MOM)Fall Semester 2011

613-Managing EmployeesManagement Theory-Critique (Group Project)

Hofstedes Theory of Cultural Dimensions Prepared by:Aswathy Mary Mathew Rabia Tahir Saeid Hassanvand Xin Zhao Zhenjie Yang

Prepared for:Dr. E.M. (Ted) Vokes

Group Project Deadline: November 7, 2011

This particular paper briefly summarizes the Cultural Dimensions Theory of Hofstede and provides its concise background, origins as well as its founder. In addition, it also explains the effectiveness and ineffectiveness of the entire concept; along with its applicability and future as a global management practice. Introduction The Cultural Dimensions Theory proposed by Geert Hofstede is a powerful model. It has been used for several decades as a global management practice and recognized as an internationally distinguished standard. In Dr. Hofstedes research, he interviewed employees of IBM Corporation that were working in more than 40 countries around the globe. Then he used the said collected data to apprehend the similarities and differences among various cultures and created the five dimensional model. At present, it is also known as The Cultural Dimensions Theory (Hosftedes Cultural Dimensions, 2011, Para 8). Scholars, researchers and academics around the world have studied the theory to establish adequate understanding with the various behaviour patterns elucidated by Hofstede. While, some intellectuals highly regard his theory and use it as a reference point for understanding various cultural differences; others strongly criticise it for being based on flawed assumptions. Hofstedes five dimensions theory of culture Include the concepts of Power Distance Index (PDI); Individualism (versus Collectivism); Masculinity (versus Femininity); Uncertainty Avoidance Index (UAI) and Long Term Orientation (versus Short Term Orientation). All five dimensions of his theory are respectively and briefly discussed as follows: Power Distance Index (PDI) The way in which societies handle the problem of human inequality and power is known as power distance. It can be also identified as the gap between a subordinate and his/her superior authority or a boss. For instance, countries with a lower power distance index believe that inequalities between people should be minimised. Superiors and subordinates regard each other as equal people with equal rights. While higher power distance countries accept and encourage inequality in entities. (Chris Patel, 2002) In the organizational management, power distance always is mentioned along with the degree of centralisation. In a low PD organisation, the subordinates and superiors can maintain informal relations and may actively get involved in decision making process regarding their overall organisational functionality. On the contrary, in the high PD organisation the subordinates often rely on superiors. Therefore, the supervisors and managers usually play key and principal role in making all decisions and their subordinates only follow orders (Stephen Bochner, 1994). Individualism V.S. Collectivism This bipolar dimension evaluates the level of bond-strength among the members of various cultures. According to Hofstedes findings, the cultures with higher individualism (scores) have weaker intentions to connect to a community to share responsibilities. On the other hand, the people with lower individualism prefer solid group unity, where sharing each others responsibilities to attain welfare is highly considered (Hosftedes Cultural Dimensions, 2011, Para 10).

Besides, the said dimension seems true for various cultures, but some scholars still argue that when cultures have both elements of individualism and collectivism, this dimension appears to be flawed. As Dr. Brendan McSweeney suggests, Hofstede depicts his dimensions of national culture as bi-polar in the sense that each is composed of contrasting positions, for instance individualism versus collectivism. This is also problematic - the two can coexist (McSweeney, 2011, Para 21). Likewise, Nigel Holden criticised this dimension stating, even if it is assumed that this dimension existed in national cultures, the data was gathered few decades ago and is no longer valid, thus the information cannot be utilized as a reference point for current management practices (Critique of Hofstedes Approach 2011). Masculinity/Femininity This dimension explains that people tend to have masculine and feminine characteristics that influence their everyday life. A highly masculine country will put sound emphasis on ambition, acquisition of wealth, and differentiated gender roles. Conversely, a low masculinity country will confer high significance to caring/nurturing behaviours, environmental awareness, gender equality, and more fluid gender roles (Hofstede Masculinity / Femininity Traits, (n.d.)). A person on an individual level can be more or less masculine, feminine, a mixture of both, or neutral. Whereas, on a national level, a countrys culture can be classified as either of the two predominant extremes, masculine or feminine. . (Rushing, Mueller (2004), para 22) This dimension has a limitation of being influenced by another dimension, Individualism/ Collectivism factor. For instance, if a country is more individualistic, then it may also be more masculine (Rushing, Mueller (2004), para 21). Likewise, a more collective nation, may demonstrate to be simultaneously feminine. For example, this limitation is held true for many countries including Canada, United States of America, and South Africa. However, couple of countries such as Japan and Norway are exceptions to this dimension and contradicts its findings. Uncertainty Avoidance Index (UAI) Uncertainty Avoidance is another dimension of the Cross Cultural-Theory and explains a societys acceptance for ambiguity and uncertainty. It can be explained as to what extent a culture influences the perception of its members against random and spontaneous events (Cultures and Organizations Intercultural Cooperation and its importance for survival Hofstede, Geert (1994) page 263). These scenarios are different from usual, as they can be innovative, surprising, unknown and new (Hofstede uncertainty Avoidance, (n.d.)). The various cultures that support Uncertainty Avoidance (UAI) try to lessen their risk of being exposed to such events by using different religious/philosophical ideas, legal/judicial infrastructure and safety/security protocols. There could be only one truth and we have it. Cultures with the higher level of Uncertainty Avoidance (UAI) are more emotional and are more likely to be inclined towards internal nervousness. Conversely, societies with lower degree of Uncertainty Avoidance (UAI) are flexible, less traditional, with few rules and more open to change and new ideas. They prefer logic over dogmatism and religiously/philosophically more open and multicultural.

Intellectually they are more pondering and emotionally independent of their environment. However, the above said ideas have various limitations. It is not possible to generalize nations with two opposite extremes of high or low UAI as cultures are influenced by individual attributes of their members. In addition UAI not always considers differences between attitudes and preferences of various individuals, who together form a particular society or a nation. Long Term Orientation (LTO) It describes societys time horizon. Long term oriented societies attach more importance to the future. They foster pragmatic values oriented towards rewards, including persistence, saving and capacity for adaptation. In short term oriented societies, values promoted are related to the past and the present, including steadiness, preservation of ones face, reciprocation and fulfilling social obligations (Minkov, Michael, 2007). Again, LTO dimension includes various limitations. Like, Hofstede's data were collected more than 40 years ago and it seems to be outdated now because cultures are always changing. For example, Hofstede categorized China as highest LTO ranking country, where maximum number of people prefers to save money. Ironically, a new survey indicates that in Beijing and Shanghai the family debt ratio has respectively reached to122 % and 155 %; which is even higher than USA, with 115 % (2003), whilst being a ShortTerm-Orientation society. As in todays China the economic development has changed people and their values, particularly, among young people; as many of them reject the traditional values that their former generations held in the past (Chou, Bin, 2008). Conclusion/Recommendations: In conclusion, the Hofstedes five dimension theory gives fair guidelines to comprehend broad and basic cultural infrastructure of any particular nation. However, it can be misleading if applied to an indepth analysis of cultural characteristics because of its various limitations. In the light of the above discussions, dimensions can simultaneously coexist and overlap rather than being two different extremes. The sample size used in Hofstedes study is only based around 40 countries out of 196 countries of the world, which is reasonably small considering the level of diversity among various nations. Time is the most significant limitation, Hofstede's data were collected more than 40 years ago and it seems to be outdated now, many cultures have considerably changed overtime and are ever changing. Another major weakness of the said theory is that it ignores the participation of people with their individual attitudes and preferences contributing towards the overall outcome of the entire research. Therefore, it is highly recommended to have appropriate understanding with the limitations of the entire theory along with its general framework to develop clear, better and more practical understating to avoid misleading results. Similarly, every nation has subcultures within cultures that may exist on its organizational, occupational and gender level. Hence, without the unique understating of its subcultures that may be relevant to any specific research, it is hard to formulate adequately sound and practical conclusion, in regard to the any required research.

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