Hofstede’s Cultural Dimensions

Welcome friends to a course of on International Business. So, today we are coming to
the last part of the fourth unit in which we will be talking about Hofstede’s Cultural
Dimensions. So, before this we have spoken about we have discussed about the business
environment.
The factors affecting it largely the political, economic, then social, technology legal all
these different factors and how they affecting business. But, by the time I am standing
here today I am very happy to say that India has moved up one rank by one rank in the
human development index.
So, it has moved from 130 to now 129 although it is not a very very great record, but still
there is something to be happy upon. So, what is Hofstede’s cultural dimensions and how
it has an impact on the business? So, what it basically says and it was you know this
study is named after Dr. Geert Hofstede as you can see here right.
(Refer Slide Time: 01:31)
Who Professor Hofstede and his associated associates conducted a very large scale
research project in the year 67 to 73 and they conducted a survey among the IBM
International Business Machine IBM employees involving 1,16,000 participants in more
than 70 countries.
So, as you must be knowing IBM is called as the Big Blue it is called as the Big Blue.
So, it has operations in several countries a very globally known company. So, Hofstede
did a survey in this time frame on 1,16,000 employees and it found out 4 dimensions that
could distinguish one culture from another. Now, in the earlier classes lectures we have
discussed how culture effects business right.
So, this also helps in adding a dimension to understand [FL] what how one culture varies
from another and what are the major components or major dimensions that affect it.
Later on he added the fifth and sixth dimensions in cooperation with Dr. Michael H
Bond and Michael Minkov right.
So, these 2 researchers later on joined hands and from their work Michael Geert
Hofstede added 2 more dimensions which is called the fifth and the sixth dimensions
which we will be discussing right. So, earlier he started with four dimensions and then
towards the end he had six dimensions.
So, the cultural dimensions represent independent preferences for one state of affairs
over another that distinguish countries rather than the individuals from each other. So, it
says on these parameters or this dimensions one can differentiate one country from the
other. As I said today India stands at 129 on the human an index.
So, India has a different kind of a culture what kind of a culture India has, how India’s
culture is different from countries like for example Norway, how what is the difference
between culture of India and let us say Japan.
Now, the cultural differences as we have seen in the past they have a very large profound
impact on the business. So, it becomes very important and this that is why Hofstede
study is considered to be one of the most profound studies than in the area of
international cultural culture and you know related areas.
So, Hofstede defines culture as the collective programming of the mind distinguishing
the members of one group or category of people from others. So, he says it is the it is a
collective programming. Obviously, it is a collective programming of the mind because a
culture has several dimensions and all these dimensions taken together then decide and
can be given as a name called culture.
So, if one has to understand one cannot understand it from a you know by understanding
in a discrete manner rather it has to be taken or understood from a holistic manner taken
taking all the points together right. So, preferences, traditions, habits all of them together
right.
(Refer Slide Time: 04:52)
So, it says that is why the collective programming of the mind right. Now, Hofstedes
dimensions are something like this. So, power distance right. So, it could be small power
distance or big power distance, but what is the first factor is the power distance. Then it
talks about individualistic societies versus collective societies.
Then on basis of gender is it masculine in nature or feminine in nature right. Avoiding
uncertainty is it high or is it low right. So, these where the initial 4 that Hofstede had
generated, but later on from the other 2 researchers work, he added these 2 you know
dimensions. One is the long term orientation versus short term orientation and the last
being indulgence or restraint right. So, we will see all of them in detail. So, let us start let
us move ahead.
(Refer Slide Time: 05:49)
So, when we move to the first one power distance index high versus low. Now, let us
look at this diagram if you see what do you understand from this diagram. There is one
person sitting at a very at the top and all others are looking upon looking up to him.
Similarly, it is seems like you know somebody is trying to order a person and there is a
huge one person has a lot of power and the other has absolutely no power. So, power
distance this dimension expresses the degree to which the less powerful members of a
society accept and expect that power is distributed unequally. The fundamental issue
here is how a society handles inequalities among people.
So, if there is the if the power distance is high; that means, we will say we will
understand that there is a lot of gap among the people. So, some it is understood that
there is huge unequality or inequality among the people right. So, in societies with high
or large power distance they accept a hierarchical order in which everybody has a place
which needs no further justification right.
That means, somebody is superior and somebody is inferior right. So, the person higher
up on the order you know in the hierarchy has a lot of power immense power and he can
you know he can do something in the society whatever he wants to right, but on the other
hand a person with the low power distance is somebody whose voice is not heard right.
So, countries which follow in which a high power distance is observed is are countries
like Malaysia, Mexico, Panama, Philippines, Singapore and even India I would add right
India right. India has a high power distance that is why you will see that there is a lot of
difference between a bureaucrat and person a common man right the power that one
exercises.
Even a person who is in the a member of the legislative assembly or a member of the
parliament the kind of power he holds is quite you know high and very much above a
common man right. In societies with low power distance or small power distance people
strive to equalize the distribution of power and demand justification for inequalities of
power right.
So, here what happens when there is a small or low power distance everybody is
considered to be more or less equal. So, people strive to equalize the distribution of
power. So, you see all the you know generally if I observed good countries like Austria,
Denmark, Finland, Israel, New Zealand these countries have got a low power distance.
So, that means, the gap between one person to the other is very less; that means, you are
free to go and talk to the other person you are not afraid of talking to somebody. But, in a
country where there is the power distance is high you will be even scared may be to get
into the room of or the office of another person because of he is of on a higher authority.
(Refer Slide Time: 09:13)
So, the differences as observed by Hofstede. So, this has been taken from Hofstede’s
paper Dimensionalizing cultures right. So, here what he talks about small and small
power distance versus the large power distance. So, he says use of power should be
legitimate and is subject to the criteria of good and evil.
So, when there is a small power distance this is what is the thought process and in case of
countries where large power distance is there power is a the you know the thought
processes power is a basic fact of the society antedating good or evil it is legitimacy is
irrelevant. What you feel what you know people in such countries feel is that it is a basic
fact of the society. Somebody will be less powerful and somebody will be more powerful
it you have to accept it the way right that way.
But, in other places where there is a small power distance you say power should be
legitimate. You cannot say somebody is more powerful somebody is less power should
be equally distributed. Parents treat children’s as equals in countries with small power
distance right.
Older people are neither respected nor feared. For example, in India we will see that
when there is a senior person comes we tend to touch their feet fine that is good very
good where nobody is denying. But, there is either a respect or there is a fear it could be
out of anything right. So, this is a case where there is a large power distance you have
such kind of high respect or high fear, but in those countries you do not see this.
Student centered education here teacher centered education. So, the teacher dictates what
is to be taught right in the class room. Hierarchy means inequality of rules established for
convenience right. This is in the small power distance and in the large it says hierarchy
means existential inequality right.
So, there is a hierarchy and that would be some inequality. Subordinates expect to be
consulted in this case. Subordinates expect to be told what to do. They cannot do
anything on their own they have to be told. So, they expect something to be told ordered
they have to be directed. Pluralist governments based on majority vote and changed
peacefully. Here, autocratic governments based on co-optation and changed by
revolution.
So, when there is a high power distance obviously the person with the highest authority
in the you know let us say for example, the highest people in the government they would
do something whatever they like. And when for example, let me I do not know how far
this example would be correct, but then today India has there is a you know revolution
going on.
Students in different universities and colleges are talking about one important law that
has come up the citizenship amendment bill. Now, there is a huge up roar in the society
and people are you know talking about it and there have been lot of agitations and
revolutions. Now, to stop this there is there is an ultimate use of force. Now, that is
something you know is an example of a large power distance right. Corruptions are rare
scandals and political careers.
So, today the President of America is going to be impeached right. So, is the third case in
the American history? So, on the other hand when the power distance is high the
corruption is very frequent, scandals are just covered up and India we have seen so many
different scandals so many scams right.
So, the you know helicopter scam, the fodder scam you name it. There are so many
scams in India and they have been covered it. So, there is nothing that is not a very great
thing to have.
Income distribution in society rather even and here it is very uneven. Religions stressing
equality of believers, religions with a hierarchy of priests. For example, again let us look
at India and we have the cast system which distributes or divides the people on basis of a
hierarchy. Somebody thought to be at the top most level which has been a curse for this
country for so many hundreds of thousands of years right.
(Refer Slide Time: 13:33)
So, this is how the power distance map world map looks like. So, as you see when there
is a small it is more or less white or light green and when it is large it is dense. So, this
portion is highly dense, this portion is dense, this is dense, this is dense. So, you can look
at the colors and some like for example, this part is not very dense, so light. So, there is a
small power distance right. So, this has the this is how the world power distance map
looks like.
(Refer Slide Time: 14:01)
The next is individualism versus collectivism. Now, if you can again see here there is a
me versus we right. So, in this we say it is a collectivist society collectivist society and
this is a individual society right. This refers to the strength of the ties that people have to
others within their community right.
A high individualism score right indicates weak interpersonal connection among those
who are not part of a core family. Here people take less responsibility for others actions
and outcomes. So, when there is an high individualism people are more focused on
themselves or they are very close immediate family members or close friends and they
do not take responsibility of the society where they leave.
So, some of the examples are Australia, Canada, Great Britain, Netherlands, USA
etcetera. On the other hand in a collectivist society people are supposed to be loyal to the
group and not an individual to which they belong and in exchange. The group will
defend their interests the group itself is normally larger and people take responsibility for
one another’s well being.
So, Panama, Pakistan, Ecuador, Guatemala, Venezuela, etcetera. Now, that is very
interesting if somebody wants to compare all though when we see the say the word
individualism versus collectivism it looks as if you know individualism is not a very
good thing and collectivism is very good.
But, if we look at the kind of examples we have here most of the developed countries
have this individualistic society and other hand these country which are not doing
economically well rather have a collectivist society. Now, that is a point of research or
argument which is better and why otherwise it is happening.
Otherwise if you look at from a point of view and you might think that collectivist
society is better because people are taking each others responsibility. But, then the result
does not figure out in the same way because most of these countries that I can see are
either under developed countries or poor countries.
(Refer Slide Time: 16:19)
So, what are the differences? Everyone in individualism is supposed to take care of him
or her and is their immediate family only. Here, people are born into extended families
which protect them in exchange for loyalty. Here, I here is we right of privacy is high
stress on belonging right. Speaking once mind is healthy harmony should always be
maintained. Others classified as individuals others classified as in group or out group
right. Personal opinion expected one person one vote opinions and votes predetermined
by the in group.
So, in a collectivist society for example, let us look at society like India or Pakistan
where the religious leaders have a lot of fan following and gathering and they can even
change the government. They can you know support a government or go against a
government and can even change the policies of the government just because they have a
large fan following or a large followers with them.
So, this is one thing that the collectivist society gives right. So, these are some of the
points right. Purpose of education is learning how to learn. Purpose of education is
learning how to do. So, these are some of the things that comes in the difference between
individualism and collectivism.
(Refer Slide Time: 17:45)
So, this is how the world map again looks right. So, the darker it looks for example, these
places this is a individualist society and the lighter it looks. For example, these places or
these places these are the ones which are more of a collectivist society ok. So, where is
India? India is here right. So, how does India look like you can find out it is neither very
dark nor very light so in between. So, this is a range right.
(Refer Slide Time: 18:17)
The next thing is as Hofstede found out was the gender. On basis of gender he
differentiated the he understood the culture masculinity versus femininity. So, now, this
is whether you can see this is like you know 2 sides and there is a man or a woman you
know and symbolizing man and woman and now it shows an equal balance, but in most
of the cultures it is not true.
So, it could be towards it could be you know weighing towards the male or very rarely in
some societies we say very very rare I think it would be you know weighing towards the
feminine gender.
So, masculinity and femininity revolve around the emotional role distribution between
genders. In masculine societies, the roles of men and women overlap less right and men
are expected to behave assertively because they are men right masculine demonstrating
success and being strong and fast are seen as positive characteristics. So, success is
considered to be a masculine criteria and being strong.
In masculine cultures, differences between gender roles are more rigid. So, examples
Italy, Austria, Japan, Switzerland, etcetera. Its opposite is the femininity stands for a
preference for cooperation, modesty, caring for the weak and quality of life. In feminine
cultures, difference between gender roles are less rigid and seen as positive
characteristics right.
So, some examples are Costa Rica, Denmark, Netherlands, Norway, Sweden, etcetera.
So, you know the differences if you can see though whatever you associate with the
feminine softness, calm, you know patience are when it is high then those societies or
cultures as called as feminine cultures. When it is more aggressive, trying to be
dominants, only wining these are called the masculine cultures.
So, I have seen in many for example, in India also we have a lot of masculinity still
existing. People believe in lot of you know success wining and these things, but there is
femininity also in India. But, there are few countries which can be categorically clearly
discriminated right as we have written over here. So, we have not written about India that
is one reason could be.
(Refer Slide Time: 20:53)
So, how what are the major differences femininity and masculinity. Minimum emotional
and social role differentiation between the genders. So, not much difference maximum
emotional and social role differentiation between the genders in case of masculinity. Men
and women should be modest and caring.
Both men and women should be modest in feminine cultures. Men should be and women
should may be assertive. Men should be assertive women may be and ambitious ok.
Balance between family and work right. Work prevails over family. So, its success work
that comes over family in a masculine culture. In feminine culture, it is a balance
between family and work.
Sympathy for the weak. Admiration you know admiration for the strong right. Somebody
is strong we tend to admire. So, both father and mother deal with facts and feelings.
Fathers deal with the facts mothers with feelings right.
So, I wonder if I would be saying India would surely fall into this right because for years
we have seen how fathers have been dealing with facts and mothers with feelings my
personal opinion. Both boys and girls may cry, but neither should fight. Girls cry boys do
not. I think you must have all heard thousands of times in India boys should fight back
girls should not fight.
So, this is how our you know the a brains mapping has been has happened. Mothers
decide on the number of children. Fathers decide on the family size. Many women in
elected political positions few women.
Religious focuses on fellow human beings religious focuses on gods or goddesses
whatever. Matter of fact attitudes about sexuality sex is a way of relating. Moralistic
attitudes about sexuality. Sex is a way of performing. So, this is all the difference
between a feminine and a masculine culture right.
(Refer Slide Time: 22:59)
So, this is again how the world looks like. So, you see India is slightly towards the more
towards the masculine and these places Russia or that zone that cold belt right is towards
the you know more of the towards the feminine as it shows from this map right. But,
more or less the world is more towards the masculine itself if I am not wrong right.
(Refer Slide Time: 23:21)
The next is the uncertainty avoidance index. It could be high versus low. So, what is
uncertainty avoidance. It is the extent to which the members belonging to the society are
capable of doing with future uncertainty without going through stress or members of the
culture feel threatened by uncertain or unknown situations.
So, there can be 2 things. There could be a situation to which you are not very much
aware or clear. So, how much stressed are you when there is something uncertainty in
front of you. So, how and how much do we avoid uncertainty. So, this is what we will
discuss here in this point. The uncertainty avoidance dimension expresses the degree to
which the members of a society feel uncomfortable with uncertainty and ambiguity.
The fundamental issue here is how a society deals with a fact that the future can never be
known. Should we try to control the future or just let it happen. I will give you a very
interesting insight. You must have seen that many a times when a food is offered to us
right sometimes although we do not feel too much hungry we tend to over eat right.
Why is that? In some or the other way if you see it is connected with our fear. The fear of
not getting food in the future time period right. That means, I am scared that once I go
out of my home may be I will get food or not get food. So, this fear because of this fear I
am trying to eat more and store more energy in me.
So, countries showing strong uncertainty avoidance index maintain rigid codes of belief
and behavior and are intolerant of unorthodox behavior. So, if there is no flexibility it is
quite rigid people attempt to make life as predictable and controllable as possible
Belgium, Greece, Gautemala, Portugal, Uruguay etcetera. People in low uncertainty
avoidance index countries are more relaxed, open or inclusive right and indicates high
tolerance towards differing opinions and behaviors.
Now, for example, there is a controversy going on right that India is changing. Now,
some people say I do not know I am not getting into this argument, but people say that a
tolerance levels are going down.
And India at one point of time although I was reading an article where it says that India
at one point of time might not have been a very great economy right just few years back
the 2 3 decades back. But, it was surely a very tolerant country, but that you know
measure is coming down with time. So, these are kind of changes that happens with
cultures ok.
(Refer Slide Time: 26:25)
So, how is it different let us see. Weak uncertainty avoidance strong uncertainty
avoidance. The uncertainty inherent in life is accepted and each day is taken as it comes.
So, weak here means that means less weak or less uncertainty avoidance. So, one is not
very much worried.
The uncertainty inherent in life is it is felt as a continuous threat that must be fought.
Ease, lower stress, self-control, low anxiety. High stress, emotionally emotionality,
anxiety, neuroticism right. Higher scores on subjective health and well being. Lower
scores on subjective health.
So, the point is what we are doing here is we our way of thinking is more on is more
stressed it is we are trying to make our future more predictable. That is no wonder I see
lot of numerologist and you know palmist in India because we all want to know our
future so that we can control our future.
Otherwise, if that would not have been true we would not have been interested to go to a
palmist and know our future right. Why should we know the future until unless we want
to control it. So, this is what our thought processes are right. Comfortable with ambiguity
and chaos need for clarity and structure.
Teachers may say I do not know. Teachers are supposed to have all the answers right,
but that is changing with slightly with more education and you know intermingling of
cultures it is changing slowly. Dislike of rules written or unwritten. Emotional need of
rules even if not obeyed right. So, in religion, philosophy and science relativism and
empiricism. In religion, philosophy and science belief in ultimate truth and grand
theories right.
(Refer Slide Time: 28:13)
So, these are some of the differences and this is how the world looks like and this is
where is India right.
(Refer Slide Time: 28:18)
The next 2 parameters that Hofstede took and added was one is long versus short term
orientation. So, what is this? The last 2 dimensions were found later and in different
studies than the first 4. These maps have been taken from the 2007 book why we are
different and similar by Michael Minkov in the first slide I showed you.
This dimension was originally described as pragmatic versus non-normative. It refers to
the time horizon people in a society display. Countries with the long term orientation
tend to be pragmatic, modest and more cautious and encourage thrift or that means to
move away right and efforts in modern education as a way to prepare for the future right.
Example in short term oriented countries on the other hand people to place more
emphasis on the principles, consistency and truth and a typically religious and
nationalistic. This is an example today I am not very happy when the word nationalist is
being attached with every and you know with every moment, every feeling of yours in a
country and may be your asked to stand up during even watching a movie or even you
know you are asked to think in a way otherwise you will be criticized to be anti national.
So, these are some of the worries that I have and no wonder this is this falls in this
category. In the business context, this dimension is referred to as normative versus
pragmatic. In the academic environment, the terminology monumentalism versus
flexhumility is sometimes also used right.
A poor country that is short term oriented usually has little to know economic
development right short term. So, this is the short term and we should not fall prey to
such kind of thoughts right. So, but anyway I is this is not the right forum to talk about it.
So, while long term oriented countries continue to develop to a point so right ok.
(Refer Slide Time: 30:33)
So, these are some of the differences again short term and long term. So, short term.
Most important events in life occurred in the past or take place now. Most important
events in life will occur in the future. So, the future is more beautiful, personal steadiness
and stability. A good person is always the same.
A good person adapts to the circumstances. These are universal guidelines about what is
good and evil. What is good and evil depends upon the circumstances traditions are
sacrosanct. So, what is the tradition? You have to follow the Taliban’s were very you
know plundered, they destroyed the countries because they had they felt they had a
tradition which they have to follow it whatever the cost may be.
So, such kind of talibanistic thoughts are not very great right. Traditions are adaptable to
change circumstances. So, these are long term oriented orientations and countries which
fall into this category will do better obviously. Family life guided by imperatives guided
by shared tasks.
So, we can go through the points. Social spending and consumption. Large savings
quote, funds available for investment. Student attribute success and failure to luck
whereas, here success and failure is attributed to effort and failure to lack of effort. Slow
or no economic growth of poor countries. Fast economic growth of countries up till a
level of prosperity.
(Refer Slide Time: 32:00)
So, the last 2 dimension. So, this is how the you know this looks like right the different
colors are given and you can go through it right.
(Refer Slide Time: 32:11)
So, last point is indulgence versus restraint. So, it says indulgence stands for a society
that allows relatively free gratification of basic and natural human drives related to
enjoying life and having fun. It describes happiness and the importance of leisure
controlling your own life and freedom of expression.
Restraint stands for a society that suppresses gratification of needs and regulates it by
means of strict social norms. So, now, are we in a transitional face? Are we moving from
a indulgence to a restraint society? We do not know right. How are they different?
(Refer Slide Time: 32:53)
Higher percentage of people declaring themselves very happy. Fewer very happy people.
A perception of personal life control. A perception of helplessness. What happens to me
is not my own doing. It is all I must have done something in my last life. So, this is what
we say right. Who has seen last life? Nobody, but then we have nothing else to blame.
So, we say I must have done something wrong in my last life. Freedom of speech seen as
important. Freedom of speech is not a primary concern right. Higher importance of
leisure. Lower importance of leisure. More likely to remember positive emotions. Less
likely to remember positive emotions. More people actively involved in sports. Few
people actively involved in sports. In wealthy countries, lenient sexual norms. In wealthy
countries, stricter sexual norms right in wealthy country here.
So, the sexual norms for example, India or I am giving the example of India because
obviously, I am an Indian. So, we have seen how sexual freedom has been curved to a
such a large extent till now homosexuality has been you know was being punished.

So, cultural differences we have seen do impact businesses occurring in cross cultural
contexts. A lot of problems arise in th