Sample Management Report Paper on Hofstede Analysis

Hofstede Analysis

Executive Summary

Hofstede work remains one of the most cited works in dealing with issues relating to culture. The observations and analysis reported by Hofstede provide important information on the dynamics of cross-cultural relationships. Nevertheless, such kinds of kinds do not escape different forms of criticism, especially in the current modern corporate world. Some academics have partly disagreed with most of the findings noted by Hofstede while others have been in total agreement with the findings.  This paper takes an in-depth look at Hofstede arguments and discusses both sides of the argument before applying the findings to the modern corporate world.

Hofstede Analysis

Introduction

 For the past few years, business practices have placed more interest in issues dealing with culture. Hofstede initiated the study of business in culture after the successful illustration of the landmark study on IBM. Other important parties that provided more information on how cultures affected businesses practices included Peters and Waterman with the famous “In Search for Excellence” studies (Jones 2007).  Before all these other parties such as Bartels had illustrated the importance of culture in determining business ethics and decision-making concepts.  Bartels identified specific areas of interest about the identification of cultural differences. Some of the areas included respect for individuality, law, nature of power and authority, the concept of deity, rights of property, national identity and loyalty and the relation between individuals and state.

Culture remains one of the fundamental aspects of business life in the modern era. All forms of business units directly interact with people of different cultures. Be it the customers, suppliers or stakeholders, their cultural practices may be varying significantly (Jones 2007). Cross-cultural research provided an opportunity for modern management practices created by the likes of Hofstede. However, more criticism states that it has not achieved its purpose of managing the diverse workforce.

Literature Review

Culture

 Different definitions of the term culture exist in different literature. Olie states that there are more than 164 definitions of the term culture making it quite impossible to decipher the meaning of the above word.  Hofstede defines culture as “A collective programming of the mind which distinguishes one group from another”. In other sets of academic literature, culture is defined as “Mental Programming … patterns of thinking and feeling and the potential acting”. Culture as a word includes several important constituents.  Culture is not directly acquired among different people rather it is something that develops gradually (Minkov and Hofstede 2011). It includes the several important aspects. These aspects are learning values which can essentially be classified as dominant beliefs and attitudes, partaking in collective activities or rituals, having role models or modelling against individuals regarded as heroes in different companies or organisations and understanding different symbols (Jones 2007). Most of the ingredients that make up any culture are normally acquired from birth and are subject to influence from various external factors such as family, religion, school and many others.  

Hofstede Cultural Dimensions

Hofstede cultural dimensions took route after conducting a study in more than 40 different countries on individuals who were working in IBM. Hofstede came up with unique cultural dimensions that could account for differences in people working in different countries across the world (Hofstede 2011).  Such differences need to be controlled if any organisation is to move forward. The employees and the management team needs to take some of the factors discussed by Hofstede into consideration while making changes in the cultural, organisational practices (Hofstede 2011). From the analysis conducted out on IBM, Hofstede concluded that most organisations in today’s corporate world were deeply culturally bounded on five major areas. The five different areas came later to be known as the five cultural dimensions. These dimensions were believed to determine the behaviour of employees coming from varying multicultural workforces. According to Hofstede and Minkov (2010) the different dimensions directly related to how individuals from different nationalities behave.

Power Distance

According to Hofstede, power distance is the degree in which there is acceptable inequality among employees with power and those without power. That is the difference between the leaders of an organisation and those being led. A high power distance means that there is an unequal distribution of power within an organisation and those without this form of power understands their place in the current system (Merkin 2006). If on the other hand, the power distance degree is low, it means that all individuals within a given organisation consider themselves as being equals meaning that power has been equally shared among different individuals (Merkin 2006). Nationalities or countries where there is low power distance means that their supervisors and those being supervised regard themselves as being equals but are only separated by factors relating to opportunity, luck, and chance (Merkin 2006). In such countries, people have a belief that tomorrow will be a better day. However, societies with large differences in power distance have large gaps in remuneration, and respect and authority. Additionally, they have strong power hierarchies, and there is a clear dividing line between the employees of an organisation and the subordinates staff present in the company or organisation (Ahmed, Mouratidis and Preston 2009). These forms of organisation with high power capabilities tend to be flat. A good example involves corporate companies from Malaysia, which ranks lowly on the Hofstede scale (Ahmed, Mouratidis and Preston 2009). The communication chain follows all hierarchies. At the end of the other scale, there are companies in countries such as Israel where the communication is direct between the manager and the subordinate.

Individualism

It refers to the strength or connection between different individuals in the society. Hofstede (2001) notes that high scores in individualism show that there is a lack of interpersonal connection between individuals in the society, and therefore there are high risks that there is very little sharing of responsibilities in different society or business units. In such cases, socialism has been left to family members (Shi and Wang 2011). People show high levels of freedom in such societies and prefer to engage in lone business practices.  In societies where individualism has been scored quite highly, people are more interested in attaining self-fulfilling goals or individual work (Shi and Wang 2011). Societies or business units that have delved in low forms of individualism are greeted with harmony honesty. The majority of the people are interested in working for the good of the business unit rather than on individual good. Such business units prefer a form of supervision, and there is a high preference for team assignments where members of different teams are easily identified and rewarded.

Uncertainty Avoidance

Uncertainty avoidance refers to the extent in which people of a given society are insecure when they are confronted with issues that are unknown. In business terms, these refer to the risks associated with certain ventures. Societies or organizations where the uncertainty avoidance levels are high fear the unknown and therefore issues relating to the ambiguity of different scenarios is more common (Reimann, Lünemann and Chase 2008). Such organizations are more likely governed by rules and orders that allow for what is commonly referred to as collective truth.  Low uncertainty societies have fewer rules guiding the movement of different people with business units. Uncertainty avoidance is the lowest score in countries such as Greece where people are more likely to make decisions based on very structured work routines (Tsoukatos and Rand 2007).  On the other hand, Swedes, prefer living a life without any form of structure and ambiguity.  

Long Term Orientation

This refers to how an organization is concerned about the future benefits.  This means that the organization is interested in knowing what certain practices and there for them at present and is the future (An and Kim 2007). Long term oriented organizations regard small business units as the focal point of their operations. This can be likened to the strength of individual families. Members of a small business unit have strong ethics and would work together to fulfill their goals in life (An and Kim 2007). They would value aspects such as job training and education to improve the skills of its members so that shortly they may become better placed in actualizing their long term goals. Business units that are less inclined with long term goals promote aspects of self-equality in the achievement of their individual’s goals.

Masculinity

 It refers to the extent in which the organization maintains the conservative, traditional male and female roles. Higher masculinity is associated with male based practices. Such practice includes assertions and use of unquestionable authorities (An and Kim 2007). Low assertive means that the roles of different individuals are blurred, and there are some aspects of equality within a given organization. Female like characteristics include quality of life, persona; relationships, welfare and another form of services. Hofstede scale showed that most of the business units tend to be male dominated. Most workplaces tend to be autocratic (An and Kim 2007). Japan is a good example ranking very low on this scale meaning that most of its corporations are male oriented. Sweden and Norway provide examples of countries operating in the other form of scale. Most people working in the above countries are more likely to show high levels of empathy towards other people in the same society (Dartey-Baah 2013).

Discussion and Analysis

From the information collected above, different corporate firms across the world still utilize most of the principals that are proposed by Hofstede. Individuals coming to different companies have to learn the cultural aspects of the different cultures so that they could fit. Failure to learn the other culture is associated with lack of adaptability and the subsequent moving out from one region back to the home country (Minkov and Hofstede 2011). One fundamental point is that cultures among different individuals working in different nationalities differ.

An individual is in a country such as Malaysia they be forced to learn some of their cultural practices since the business units largely fall under high PDI. In such corporate companies, individuals will be forced to accept the status of different leaders and would only engage in any task that has been assigned by the leaders of the specific group. There are also high chances that if the leaders are absent, then most of the tasks will not be conducted (Minkov and Hofstede 2011). An individual working in corporate companies in such areas will be required to go to the top most hierarchy levels to seek on certain matters that may be affecting the business units. In the case of individuals working in Israel corporate companies, the culture will be totally different. Most of the jobs will be delegated to an individual, and the most of the decisions made shall affect individuals at a personal level.

When it comes to individualism or collectivism different corporations will behave differently depending on their cultures. Cross-cultural practices become more important for foreign individuals (Oyserman 2006). Companies in the United States are said to have low scores when it comes individualism which means that more people in such forms of countries have very high rates of individualism. It also means that more people like becoming independent from a very young age (Oyserman 2006). A look at companies located in Guatemala reveals the exact opposite. Most of these companies in this region prefer people working hard in groups towards the achievement of specific goals (Hofstede 2010). The lifestyle in companies like Guatemala is based on close family ties and stronger community support and practices. In countries such as Guatemala, corporate companies function quite differently compared to those present in the United States. People working in the corporate field in Guatemala are supposed to suppress any feeling or emotions that may affect the working of companies (Oyserman 2006). Additionally, they are expected to act positively and portray a good company image irrespective of the surrounding conditions. In the United States, individuals working in the corporate world are expected to keep their lives private from matters relating to the company (Oyserman 2006). All individuals are expected to be achieving the highest scores on an individual basis and at the same time engage other people in the expression of their ideas.

When it comes to matters dealing related to masculinity different cultural aspects will also be expected. In countries where the masculinity values are low, it is expected that success of any project is supposed to be acquired through aspects such as negotiation, input from all levels and collaboration (Hofstede 2010). Additionally, male dominance is supposed to be left behind, and aspects relating to workplace flexibility and work-life balance take centre stage (Hofstede 2010). Some of the companies in the corporate world exhibiting the above behaviour are located in Sweden. In the end, masculine dominated societies largely look at money and achievements.

It is clear that the Hofstede model provides one of the best methods that could be used to analyse cross-cultural differences especially for business units operating in different countries (Hofstede 2010). However, there are several important limitations that the Hofstede model fails to address.  Some of the criticism states that the research conducted by Hofstede might have been culturally bound since the team that conducted the research largely came from Europe and America and might have intentionally influenced the answers from western point perspective (Minkov and Hofstede 2011). Secondly, many countries have more than one culture and therefore any individual working in the corporate world may not necessarily end up in learning all the cultures present at a specific location (Dartey-Baah 2013). A good example is the United States where the country has different ethnic groups meaning it will be more difficult to learn all their associated behaviours (Minkov and Hofstede 2011). Thirdly some of the findings made by Hofstede might have lost significance over time since most cultures are never static (Minkov and Hofstede 2011).

Recommendations

Different cultures change over time in the process incorporating new aspects. The Hofstede model has formulated more than decades ago and should be revised to include new aspects that might have changed over time.  Secondly, the model is restricted in five major areas though there are other areas that have arisen in the corporate world that still fit under the Hofstede model.  Such areas should also be incorporated.  More research is also needed to understand the culture in the current contemporary world in which most business functions are operating within. Lastly, research is needed to explore other important new dimensions that would be important for the Hofstede model.

Conclusion

 Multinational companies in the corporate sector are quickly opening up their sub-branches in other parts of the world.  Analysis of the difference in the cross-cultural interactions among different nationalities is one of the most important aspects of management that ensures that the new company being operated in an office way from the original company containing foreign individuals can survive in such conditions. One of the best approaches is by learning their cultures using the Hofstede model. Making cultural changes may never be easy though when aspects such as culture hybridization are incorporate the process becomes much better. A different way of adapting to the new environment would be through the adoption of their different cultures. The Hofstede scale provides the above information.

References

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Dartey-Baah, K., 2013. The Cultural Approach to the Management of the International Human    Resource: An Analysis of Hofstede’s Cultural Dimensions. International Journal of          Business Administration, 4(2), p.39.

Hofstede, G., 2010. Geert hofstede. National cultural dimensions.

Hofstede, G., 2011. Dimensionalizing cultures: The Hofstede model in context. Online readings  in psychology and culture, 2(1), p.8.

Hofstede, G., Hofstede, G.J. and Minkov, M., 2010. Cultures and organizations: Software of the  mind (Vol. 2). London: McGraw-Hill.

Hofstede, G.H. and Hofstede, G., 2001. Culture’s consequences: Comparing values, behaviors,   institutions and organizations across nations. Sage.

Jones, M.L., 2007. Hofstede-culturally questionable?.

Merkin, R.S., 2006. Power distance and facework strategies. Journal of intercultural         communication research, 35(2), pp.139-160.

Minkov, M. and Hofstede, G., 2011. The evolution of Hofstede’s doctrine. Cross Cultural            Management: An International Journal, 18(1), pp.10-20.

Olie, R., 1995. The’culture’factor in personnel and organization policies. International Human       Resource Management. London: Sage.

Oyserman, D., 2006. High power, low power, and equality: Culture beyond individualism and     collectivism.

Reimann, M., Lünemann, U.F. and Chase, R.B., 2008. Uncertainty avoidance as a moderator of   the relationship between perceived service quality and customer satisfaction. Journal of      Service Research, 11(1), pp.63-73.

Shi, X. and Wang, J., 2011. Interpreting hofstede model and globe model: which way to go for    cross-cultural research?. International journal of business and management, 6(5), p.93.

Tsoukatos, E. and Rand, G.K., 2007. Cultural influences on service quality and customer  satisfaction: evidence from Greek insurance. Managing Service Quality: An International  Journal, 17(4), pp.467-485.