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Hofstede - Cultural differences in international management

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Andreea Dicu, Carmen Neghina, Alina Oprea, Teodora Vasileva …

Andreea Dicu, Carmen Neghina, Alina Oprea, Teodora Vasileva

Hofstede’s Study on Work Related-Values Concept, Methods, Results, and
Critique

Culture defined
Hofstede’s cultural dimensions
Implications for management
Criticism

Published in: Education, Technology, Business

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  • Thank you
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  • EXCELLENT WORK FOR STUDENTS & INSTRUCTORS WORLDWIDE
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  • Wow... a thoughtful work done!. I was looking for a detailed explanation of Hofstede´s work and found them no where. This is a great knowledge sharing...
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  • awesome work! really helpful
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  • Dear Carmen and other contributors,

    First of all, I would like to thank you for a good representation of Hofstede´s work. As one of two officially endorsed consultancies seeing people apply his knowledge in a correct manner is great.

    Please do realize that Hofstede´s work can be defined in both national cultural differences and organisational cultural differences. In a work-life situation you can not look at one or the other: The combination is what matters.

    For more information you can visit www.geert-hofstede.com, our official website where we also provide additional information about applying the model in a business setting.

    Or contact us directly via info@thehofstedecentre.com /info@itim.org

    With kind regards,
    Egbert Schram
    Managing director of the Hofstede Centre and itim international
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  • 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.
  • 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
  • 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.
  • 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.
  • Transcript

    • 1. Hofstede’s Study on Work Related-Values Concept, Methods, Results, and
      Critique
    • 2. Agenda
      2
      Culture defined
      Hofstede’s cultural dimensions
      1) Power Distance
      2) Uncertainty Avoidance
      3) Individualism
      4) Masculinity
      5) Long-term orientation
      Implications for management
      Criticism
    • 3. Culture Defined
    • 4. Culture and international business
      Why culture is important?
      Impacts the way strategic moves are presented.
      Influences management, decision making, negotiations
      Culture 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 Pascal
      5
    • 6. Globalization
      6
    • 7. What is culture?
      Main features of culture:
      Culture is shared
      Culture is intangible
      Culture is confirmed by others
      7
    • 8. Levels of culture
      National Culture
      Business Culture
      Organizational and Occupational Culture
      8
    • 9. Key Cultural Issues
      Cultural Etiquette – the manners and behavior that are expected in a given situation
      Cultural Stereotypes – our beliefs about others, their attitudes and behavior
      Ethnocentrism – looking at the world from a perspective shaped by our own culture
      Relativism– all cultures are good
      Cultural sensitivity
      Self-reference criteria
      9
    • 10. Contingency management
      Determining 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
    • 11. Universal cultural variables
      Kinship
      Politics
      Economy
      Religion
      Recreation
      Education
      11
    • 12. Universal cultural variables
      Kinship
      Politics
      Economy
      Religion
      Recreation
      Education
      12
    • 13. Universal cultural variables
      Kinship
      Politics
      Economy
      Religion
      Recreation
      Education
      13
    • 14. Universal cultural variables
      Kinship
      Politics
      Economy
      Religion
      Recreation
      Education
      14
    • 15. Universal cultural variables
      Kinship
      Politics
      Economy
      Religion
      Recreation
      Education
      15
    • 16. Universal cultural variables
      Kinship
      Politics
      Economy
      Religion
      Recreation
      Education
      16
    • 17. Hofstede’s Cultural Dimensions
    • 18. Hofstede’s Cultural Dimensions
      Prof. Geert Hofstede
      “Culture is more often a source of conflict than of synergy.
      Cultural differences are a nuisance at best and often a
      disaster.”   
      18
    • 19. Hofstede’s Cultural Dimensions
      Prof. Geert Hofstede
      Conducted perhaps the most comprehensive study of how values in the workplace are influenced by culture
      Analyzed a large data base of employee values scores collected by IBM (HERMES)
      1967 – 1973
      more than 50 countries
      Developed a model that identifies four primary Dimensions to assist in differentiating cultures:
      Power distance
      Uncertainty avoidance
      Individualism
      Masculinity
      + Long-term orientation (added later)
      19
    • 20. Hofstede’s Cultural Dimensions
      Hofstede’s work
      20
    • 21. Power Distance
      Power distance - The extent to which the less powerful members of institutions and organizations within a country expect and accept that power is distributed unequally
      21
    • 22. Power Distance
      High power distance
      22
      Low power distance
      Inequalities among people should be minimized
      Interdependence between less and more powerful people
      Hierarchy in organizations means an inequality of roles
      Decentralization is popular
      Narrow salary range
      Subordinated expect to be consulted
      The ideal boss is a resourceful democrat
      Privileges and status are disapproved
      Inequalities among people are both expected and desired
      Less powerful people should be depended on the more powerful
      Hierarchy in organizations reflects the existential inequality
      Centralization is popular
      Wide salary range
      Subordinated expect to be told what to do
      The ideal boss is a benevolent autocrat or good father
      Privileges and status are both expected and popular
    • 23. Power Distance
      23
      High
      Malaysia
      Arab Countries
      Mexico
      India
      France
      Italy
      Japan
      Spain
      Argentina
      US
      Germany
      UK
      Denmark
      Israel
      Austria
      Orientation towards authority
      Low
    • 24. Power Distance
      Example
      A company from Austria (low power distance) is considering entering the Mexican (high power distance) market.
      24
      Power Distance Index
    • 25. Power Distance
      Example (cont.)
      Communication tips for the Austrian manager:
      Give clear and explicit directions to those working with him
      Deadlines should be highlighted and stressed
      Do not expect subordinates to take initiative
      Be more authoritarian in his management style
      Show respect and deference to those higher up the ladder
      25
    • 26. Uncertainty Avoidance
      Uncertainty avoidance – The extent to which members of a society feel threaten by uncertain or unknown situations.
      26
    • 27. Uncertainty Avoidance
      Strong uncertainty avoidance
      27
      Weak uncertainty avoidance
      Uncertainty: normal feature of life and each day is accepted as it comes
      Low stress – subjective feeling of well-being
      Aggression and emotions must not be shown
      Comfortable in ambiguous situations and with unfamiliar risk
      There should not be more rules than necessary
      Precision and punctuality have to be learned
      Tolerance to innovation
      Motivation by achievement
      Uncertainty : continuous threat that must be fought
      High stress – subjective feeling of anxiety
      Aggression and emotions may be shown at proper times
      Fear of ambiguous situations and of unfamiliar risk
      Emotional need for rules, even if they never work
      Precision and punctuality come naturally
      Resistance to innovation
      Motivation by security
    • 28. Uncertainty Avoidance
      28
      High
      Greece
      Japan
      France
      Korea
      Arab Countries
      Germany
      Australia
      Canada
      USUK
      India
      Denmark
      Singapore
      Desire for stability
      Low
    • 29. Uncertainty Avoidance
      29
      Example
      • A company from France (high uncertainty avoidance) is considering investing in Denmark (low uncertainty avoidance)
      Uncertainty Avoidance Index
    • 30. Uncertainty Avoidance
      Example (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 possible
      Allow employees the autonomy and space to execute their tasks on their own; only guidelines and resources will be expected of him
      30
    • 31. Individualism
      Individualism – Thetendency of people to look after themselves and their immediate family and neglect the needs of society
      31
    • 32. Individualism
      32
      High individualism
      Low individualism
      Individuals learn to think in terms of “we”
      High-context communication
      Diplomas provide entry to higher status groups
      Relationship employer- employee is perceived in moral terms, like a family
      Hiring and promotion decisions take employees’ ingroup into account
      Management is management of groups
      Relationship prevails over task
      Individuals learn to think in terms of “I”
      Low-context communication
      Diplomas increase economic worth and/or self- respect
      Relationship employer-employee is a contract based on mutual advantage
      Hiring and promotion are supposed to be based on skills and rules only
      Management is management of individuals
      Task prevails over relationship
    • 33. Individualism
      33
      High
      Australia
      US
      UK
      Canada
      France
      Germany
      Spain
      Japan
      MexicoItaly
      Korea
      Singapore
      Low
    • 34. Individualism
      34
      Example
      • A company from UK (high individualism) is considering investing in Mexico (low individualism)
      Individualism Index
    • 35. Individualism
      Example (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 individuals
      Understand that promotions depend upon seniority and experience
      Be aware that the decision making process will be rather slow, as many members across the hierarchy need to be consulted
      35
    • 36. Masculinity
      Masculinity – The tendency within a society to emphasize traditional gender roles
      36
    • 37. Masculinity
      37
      High masculinity
      Low masculinity
      Dominant values: caring for others and preservation
      People and warm relationships are important
      Sympathy for the weak
      In family, both fathers and mothers deal with facts and feelings
      Stress on equality, solidarity , and quality of work life
      Managers use intuition and strive for consensus
      Resolution of conflicts by compromise and negotiation
      Dominant values: material success and progress
      Money and things are important
      Sympathy for the strong
      In family, fathers deal with facts and mothers with feelings
      Stress on equity, competition among colleagues and performance
      Managers are expected to be decisive and assertive
      Resolution of conflicts by fighting them out
    • 38. Masculinity
      38
      High
      Japan
      Mexico
      Germany
      UK
      US
      Arabia
      France
      Korea
      PortugalDenmark
      Sweden
      Low
    • 39. Masculinity
      39
      Example
      • A company from Denmark ( low masculinity) is considering investing in Mexico (high masculinity)
      Masculinity Index
    • 40. Masculinity
      Example (cont.)
      Communication tips for the Danish manager :
      Be aware that people will discuss business anytime, even at social gatherings
      Avoid asking personal questions in business situations
      Take into account that people are not interested in developing closer friendships
      Communicate directly, unemotionally and concisely
      In order to assess others use professional identity, not family or contacts
      40
    • 41. Long- term orientation
      Long- term orientation – A basic orientation towards time that values patience
      41
    • 42. Long- term orientation
      42
      Long-term orientation
      Short- term orientation
      Respect for traditions
      Little money available for investment
      Quick results expected
      Respect for social and status obligations regardless of cost
      Concern with possessing the Truth
      Adaptation of traditions to a modern context
      Funds available for investment
      Perseverance towards slow results
      Respect for social and status obligations within limits
      Concern with respecting the demands of Virtue
    • 43. Implications
    • 44. Work Centrality
      How important is work?
      44
    • 45. What do people value in work?
      45
    • 46. Employees and Leaders
      46
    • 47. Employees and Leaders
      47
    • 48. Leadership Styles
      48
      Power Distance
      Uncertainty Avoidance
    • 49. Leadership Styles
      49
      Power Distance
      Uncertainty Avoidance
    • 50. Leadership Styles
      50
      Power Distance
      Uncertainty Avoidance
    • 51. Leadership Styles
      51
      Power Distance
      Uncertainty Avoidance
    • 52. Organizational Structures
      Adhocracy
      Flat organizational pyramid
      People can tolerate ambiguity in organizational roles
      Less need for formalized rules and regulations
      Distance between management and workers tends to be small
      Professional Bureaucracy
      Full Bureaucracy
      Family Bureaucracy
      52
      Power Distance
      Uncertainty Avoidance
    • 53. Organizational Structures
      Adhocracy
      Professional Bureaucracy
      Standardization of skills
      Centralized decision making
      Order and compartmentalization
      Full Bureaucracy
      Family Bureaucracy
      53
      Power Distance
      Uncertainty Avoidance
    • 54. Organizational Structures
      Adhocracy
      Professional Bureaucracy
      Full Bureaucracy
      The most formalized
      Organization dominated by rules, procedures and hierarchical relationships
      Standardization of the work process
      Predictability & control
      Family Bureaucracy
      54
      Power Distance
      Uncertainty Avoidance
    • 55. Organizational Structures
      Adhocracy
      Professional Bureaucracy
      Full Bureaucracy
      Family Bureaucracy
      Parallels an extended family: dominant father figure
      Small
      Less specialization of roles
      Control: personal supervision
      Direct contact
      Highly centralized decision making
      55
      Power Distance
      Uncertainty Avoidance
    • 56. Criticism
    • 57. Criticism
      Single company
      Time dependent
      Business culture,
      not values culture
      Western bias
      57
      Non-exhaustive
      Partial geographic coverage
      Attitudinal rather than behavioral measures
      Ecological fallacy
    • 58. Discussion Questions
      58
    • 59. Discussion Questions
      Do 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 Questions
      Do 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. References
      62
      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