Hofstede's cultural dimensions

"How can there be peace without people understanding each other, and how can this be if they
don't know each other?"
- Lester B Pearson, 1957, Canadian Prime Minister

Geert H. Hofstede’s cultural dimensions is a situational tool used by managers to understand

the various aspects of cultures within and between organizations. It helps managers to
recognize what motivates the workforce, how and why employees behave in the way they do,
what they value, and how they make certain decisions.

This tool helps managers to understanding the cultural similarities and differences that exist
between and across different countries. This helps them to determine more appropriate ways
to conduct their operations given different national and international settings.

Hofstede’s research focused on managers and employees of IBM (the American technology
corporation) across different parts of the world to investigate how different cultures may exist
within the same organization. Hofstede developed his original model based on the results of a
worldwide survey of IBM employees between 1967 and 1973. The data from his initial research
covered more than 70 countries. This produced 4 cultural dimensions. He updated his model
since, adding "long-term vs short-term orientation" following his subsequent research work in
Hong Kong, and then "indulgence vs restraint" as the sixth cultural dimension in 2010. The DP
Business Management syllabus focuses on all six cultural dimensions of Hofstede's model:

 power distance
 individualism vs collectivism
 masculinity vs femininity

 uncertainty avoidance
 long-term vs short-term orientation, and
 indulgence vs restraint

The tool is particularly valuable for multinational companies with operations in different regions
of the world, where cultural norms and values are different from those in the domestic country.
It is also particularly important when people from different regions or countries are working
together within the same organization. Culture clashes and stakeholder conflicts can occur if
managers do not understand cultural differences within and between organizations, so fail to
plan and adapt their corporate strategies accordingly. 

1  Power distance
A power distance culture is found in the army

1. Power distance refers to the extent to which a culture accepts and respects authority and
status. A high degree of power distance exists if an organizaton has centralized decision-
making, hierarchical structures, and high regard for position or ranking within the organization,
such as in the military (the Army, Navy, Air Force, Marines, and Coast Guard). Those under such
an organizational culture accept power differences or inequalities, and show respect for
authority. Decision-making is held by those with power and authority, i.e., decision making is
centralised.

For example, in Japanese culture, there is a strong power distance with people respecting their
seniors and elders. Society acknowledges, values, and rewards a person's age, seniority, status,
and loyalty. Parents often make decisions on behalf of their children, without any consultation
or discussions. Students accept the power and authority held by their teachers, and respect
seniority in terms of older students in the school. Employees tend not to leave the office or
workplace before their line managers do, out of respect. Promotion is often based on an
employee's number of years of service (loyalty) rather than selecting a candidate who might be
the most suitable for a job.

Senior citizens are treated with respect in Japan

Organizations with a high or strong degree of power distance are suitable for people who want
to avoid conflict at all costs and do not  like to engage in unproductive competition. However,
such a culture can be frustrating for younger and ambitious workers who strive to get
promoted quickly within an organization.

On the other hand, a low degree of power distance exists if there is decentralized decision-
making, delegation, job empowerment, and flatter organizational structures. In such cultures,
senior managers are expected to work harder so workers are not accustomed to working longer
hours than their bosses.

According to Hofstede Insights, the power distance index shows very high scores for Latin
American and Asian countries, as well as areas of Africa and the Arab world. In such cultures,
people inherently accept a hierarchical structure and do not require further justification. On the
other hand, many European countries (including Austria, Denmark, and the UK) have a low
power index. In these countries, people strive for a more equal distribution of power and
therefore demand justification for inequalities of power in society.

2  Individualism vs Collectivism

This cultural dimension refers to the degree to which people are integrated into groups in
society.

2. Individualism vs collectivism is about whether a society values the individual over a team or
collective group of individuals in a specific community. Hence, this cultural dimension is
sometimes referred to as the “I” vs “we” cultural dimension.

Individualism refers to cultures that emphasise the needs of the individual over the needs of
the group as a whole. In individualistic cultures, people do not take responsibility for others’
actions beyond themselves and their direct family. Instead, such individuals focus on their own
personal goals and achievements.

By contrast, collectivism emphasises the importance of the group and social cooperation over
the needs of any individual. Collectivist cultures integrate relationships in a community or
society. From birth onwards, people in such cultures are integrated into strong and cohesive
groups, such as extended families (with uncles, aunties, and grandparents), providing each
other with support and protection. People are loyal to their designated group and take
responsibility and accountability for one another, providing support to all members and acting
in the best interest of the group. For example, in such cultures, individuals should never provide
negative feedback or comments about their teams in public.

Individualism vs Collectivism can be applied to the business of competitive sports. For example,
in certain sports, the individual determines the outcome, whereas in other sports the outcome
is totally dependent on the team working together. Without using the Internet, can you think of
five or more different sports that do not rely on teamwork, i.e., the success depends purely on
the individual?

Without using the Internet, can you think of five or more different sports that rely on teamwork
for success, i.e. the team is more important than any individual?

This cultural dimension will affect employees’ behaviour at work. In some organizations and
occupations, such as the gig economy, workers focus on themselves. Examples include self-
employed couriers, ride-sharing taxi drivers, and food delivery cyclists. Teamwork is relied upon
in other organizations and occupations, such as marketers, film production, and

Table 1 - The differences between individualism and collectivism

Individualism
Uniqueness is valued
Speaking one's mind is important
Self is defined by individual achievement
Freedom and autonomy are valued
Discomfort working as part of a team
Everyone has a right to privacy
Rule-breaking leads to guilt and loss of self-
respect
Competition and taking credit are highly
valued
Centralized decision making, without any
delegation
Self-reliance is seen as the norm
Self-actualization is a goal
Collectivism
Social harmony is valued
Modesty is important
Self is defined by group membership or
acceptance
Support and protection are valued
Comfort working as part of a team
Privacy is not expected
Rule-breaking leads to shame/loss of face
Cooperation and collaboration are highly valued
Decentralized decision making, with delegation
Shared responsibility and interdependence are
the norm
Advancing the interests of the group is the goal

According to Hofstede Insights, individualism is high in Australia, Italy, the US, and the UK.
Contrarily, Costa Rica, Guatemala, Malaysia,  Portugal, Serbia, Taiwan, and Venezuela are
considered to be collectivist societies.

 Theory of Knowledge (TOK)

"Children should be seen and not heard"

This 15th Century English proverb means that children are allowed to be present (seen) during
a conversation or gathering, but should not be allowed to speak (not heard) unless they are
spoken to first. It is about keeping quiet and having manners (regarded as good behaviour)
when adults talk.

How can we know whether children should be seen and not heard? Who determines the
meaning of "should"?

 ATL Activity 1 (Research and Thinking skills) - Culture and international mindedness
Often, when people in "Western cultures" talk about "Eastern cultures", the role of “saving
face” is seen as a key difference between the two cultures. The importance is placed on not
lowering one’s status, and not being embarrassed by failure.

1. Is the fear of “losing face” exclusively an Eastern trait? Does it ever appear in Western
culture?

2. How could the need not to lose face affect an individual’s behaviour?

 ATL Activity 2 (Thinking skills) - Are you an "I" or a "We"?

 Watch this short video and consider whether you tend to fall into the category of individualism
or collectivism.

What about your school? What evidence is there to back your answers?vs Femininity

3. Masculinity vs femininity is Hofstede's third cultural dimension, focusing on stereotypical

male and female traits and the roles they play in communities. In Hofstede's model, a
masculine community exists when men are assertive and competitive while women are caring
and nurturing.

Masculinity refers to societies or cultures defined by a focus on achievement, competition,

status, power, and wealth. Society is generally more competitive and driven by material
rewards. Such cultures are highly competitive and may come across as overly aggressive by
others.

On the other hand, femininity refers to societies or cultures that focus on cooperation,
relationships, modesty, cooperation, and overall quality of life. Society is generally more
consensus-oriented and driven by intrinsic rewards.

Table 2 - Features of masculinity and femininity (as a cultural dimension)

Masculinity Femininity
Achievement, accomplishment,
Caring for others
success
Assertiveness Consensual relationships
Competitive Cooperation and negotiation
Ego and heroism Modesty
Responsibility for the quality of
Material rewards and pride
life
Strong and domineering role Subservient role
Live to work (have to work) Work to live (want to work)
Recall that Hofstede's original research took place back in the 1960s and early 1970s, so times
have certainly changed since. In the modern business context, Masculinity versus Femininity is
sometimes also referred to as as “tough versus tender” cultures, as these are not necessarily
gender-specific. Neither of these cultures are dominant in determining success. As stated by
Jacinda Arden, New Zealand's Prime Minister, “We’ve placed over time so much emphasis on
notions of assertiveness and strength that we have assumed it means you can’t have those
other qualities of kindness and empathy.”

According to Hofstede Insights, femininity is extremely high in Nordic countries, like Denmark,
Iceland, Norway, and Sweden. In contrast, masculinity is very high in Japan, Venezuela, and in
some European countries like Austria, Hungary, and Switzerland.

World leaders of 2021

4  Uncertainty avoidance

4. The uncertainty avoidance cultural dimension of Hofstede's model refers to the rating or
index of a society’s tolerance for ambiguity, i.e. whether the community is generally
comfortable with uncertainty and ambiguity. It is about whether a society feels its should try to
control the future or just let it happen. Essentially, uncertainty avoidance measures society’s
tolerance for uncertainty or vagueness.

Countries with a high uncertainty avoidance index have a rigid code of beliefs and behaviour, so
tend to be intolerant of unorthodox behaviour and ideas. Such societies are structured,
traditional, and rigid in nature. There is a low tolerance for risk-taking due to the intolerance to
uncertainty. According to Hofstede Insights, this includes countries like Belgium, Colombia,
France, Kuwait, Russia, and South Korea. A high degree of tolerance for ambiguity means there
are less strict rules in society and a culture of openness to change.

Countries exhibiting a low uncertainty avoidance index have a more relaxed attitude. Practice is
more than principles and policies. Titles do not have an important role, so individuals capable of
dealing with challenging situations are respected. There is a high tolerance for risk-taking,
ambiguity, and uncertainty. Such countries include China, Denmark, Sweden, and Vietnam.

As an example, if a car manufacturer wants to expand into a country that has a high uncertainty
avoidance index (those that tend to be risk-adverse), then its production and marketing teams
will need to focus on aspects of safety. This will help to reassure customers in these countries
that the manufacturer's motor vehicles are of a high quality and safety standard.

 Key concept - Creativity

Does creativity have any role in a society with a high degree of uncertainty avoidance?rm vs
Short-term orientation

5. Long-term vs. short-term orientation is the cultural dimension that connects the past with
attitudes towards the future. All society maintain some links with their past in reference to
dealing with the challenges of the present as well as the future. Different societies prioritize
these two approaches in different ways.

Short-term orientation means that cultures and traditions are kept. These societies have a low
index for long-term vs short-term orientationon, indicating that they prefer to maintain time-
honoured traditions and cultural norms. They focus on prioritizing the present instead of the
future. Societal change is viewed with caution and suspicion.

Long-term orientation, with a high index or score, refers to societies that have more of a focus
on the future. These societies take a more pragmatic approach to prepare for the future.
Loyalty is valued and traditions are kept and honoured. People are willing to tolerate short-
term pain for long-term gain. They do not prioritize short-term successes but focus instead on
accomplishing long-term success. This relies on society's endurance and persistence to achieve
long-term and sustainable growth and prosperity.

According to Hofstede Insights, high long-term orientation scores are typically found in East
Asia, in economies like China, Japan, South Korea, and Taiwan. Germany, Lithuania, and Russia
also has a high long-term orientation index. They are moderate in Brazil, Croatia, and India.
They are low (with countries focusing on the short-term) in places like Angola, Australia,
Iceland, Iran, Mexico, and Thailand.

 Key concept - Change

Discuss the extent to which the pace of change can impact on long-term versus short-term
orientation.estraint

6. Indulgence vs restraining: An indulgent culture refers to a society or organization that fosters

the natural human drive to be free, to have fun, and to generally enjoy life. By contrast, a
restraining culture means there is a tendency for society to suppress people's personal needs
and desires by a system of strict social norms and self-regulation. As this sixth element of the
model was only included by Hofstede in 2010,there are less data about the indulgence vs
restraint cultural dimension of different nations.

Countries with a high indulgence versus restraint index (so have an indulgent culture) facilitate
the free fulfilment of an individual’s desires or wants. These societies encourage having fun,
enjoying life, and freedom of speech. Such countries include Australia, Canada, New Zealand,
Sweden, the United Kingdom, and the United States.

Countries with a moderate indulgence versus restraint index include Finland, France, Greece,
Japan, Luxembourg, Malaysia, Norway, the Philippines, Singapore, and Thailand. Societies with
a low indulgence versus restraint index (so have a restraining culture) tend to put their onus on
suppressing gratification (the pleasurable emotional reaction of happiness in response to the
fulfillment of a desire or goal). Success is not widely and openly acknowledged or celebrated.
Such economies include Bangladesh, Bulgaira, China, Estonia, Hong Kong, Kazakhstan, Romania,
and Russia.

Evaluating Hofstede’s cultural dimensions model

Like any model, there are both advantages and disadvantages of using Hofstede’s six cultural
dimensions as a Business Management tool.

Advantages of of Hofstede’s six cultural dimensions

 The tool provides managers with an overall view and a broad understanding of different
cultures. This can be extremely useful for cross-cultural communications and
international cooperation with customers, suppliers, and governments.
 Managers of multinational companies can use the tool to improve the motivation of
employees and to minimize potential conflicts. It will help improve the performance and
productivity of worker, which benefits the business organization, its employees, and
shareholders (thereby protecting shareholder value).
 It is valuable for international marketing as managers need to consider country-specific
values and not just internal corporate values.
 It enables businesses to modify their goods and services based on local preferences and
customs, thereby giving the business competitive advantages in highly competitive
international markets.
Limitations of Hofstede’s six cultural dimensions

 The original research methodology was limited to only employees and managers of IBM.
Therefore, critics argue that Hofstede’s cultural dimensions are based on
unrepresentative and inconclusive research, despite the research being extensive in
data.
 The world has changed in terms of political movements and cultural shifts. Globalization
and the international movement of labour has also blurred some cultural dimensions for
multinational corporations, such as individualism vs collectivism.
 It is not realistic for managers of multinational companies with expatriate workers from
across the world to cater for everyone's needs. There is no universal approach to all
cultural dimensions for all expatriate workers. Hence, businesses might find it
impractical to consider every unique culture in the workplace and develop appropriate
strategies for integrating them all in the organization.
 Technology has progressed, which has revolutionized the way people access information
and changed the way they think. In particular, technological advances have enabled
people to change the way they work, shifting the patterns of behaviour worldwide, such
as flex-time, working from home, and the gig economy. Hofstede's research back in the
1960s and 1970s could not have accounted for such changes and developments.