1. Culture and Management
A Precis of Geert Hofstede’s Ideas about Culture and Organizations
Culture’s Consequences: International Differences in Work-Related Values, Beverly Hills, CA: Sage Publications, 1980.
Cultures and Organizations: Software of the Mind. London: McGraw-Hill, 1991.

2. Agenda Why Culture and Management? Hofstede’s Method
The Four Dimensions
Later Refinements
Critique

3. Why Culture and Management?
Managers are humans and exist in cultures
They make decisions, have rituals, heroes, and use and understand symbols.
Hence they must be influenced by something other than mere instinct or biology

4. “Culture” Patterns of thinking, feeling and acting
Mental software, “Software of the Mind.”
Source is social environments, almost certainly from childhood
Culture is learned, not inherited

5. Concept Ladder Behavior Personal Definition Knowledge Opinions
Reality
Personal Definition
Knowledge
Experience
Malleability
Opinions
Experience
Attitudes
Relationships
Beliefs
Peers, Heroes
Values
Parents

6. Hofstede’s View of Culture
Symbols
Practices
Heroes
Rituals
Values

7. Hofstede’s Question
What are the components of culture, a small set of dimensions or characteristics, that enable us to classify culture-in-the-large (at a national level)? And do nations differ and can they be clustered into culturally-similar nations?
What he didn’t ask: Can we capture culture in a small set of dimensions? Is culture stable? Is it a characteristic of individuals? Do people enact culture or have it set on them?

8. Hofstede’s Method
Late 60s, questionnaires were distributed to thousands of IBM employees worldwide.
They answered the questions about work modes, methods, and meanings on desirable and desired situations and characteristics
The results were subjected to factor analysis.
Questions were based on prior work on culture by Inkeles and Levinson (a sociologist and psychologist)

9. Factor Analysis
Goal is to reduce, statistically, the number of dimensions it takes to describe a phenomenon completely while losing as little information as possible.
The following example shows how factor analysis would reduce what looks like a two dimensional distribution to only one dimension:

10. How Much Money are you worth?
Age+Wealth=?
Age and Worth are closely related, so much so that if you know one, you can estimate the other…
How Much Money are you worth?
How OLD are you?

11. Age+Wealth=ONE Dimension
In other words, there is only ONE dimension called “agewealth” that captures most of the information about both.
The red lines indicate the errors that using one dimension brings about. The longer the sum of these lines, the less well one dimension captures these two dimensions

12. The Four Dimensions And a fifth was added later… Power-Distance
Uncertainty Avoidance
Masculinity
Individualism
And a fifth was added later…
Temporal Orientation

13. Interpreting the Dimensions
Range is generally 0 to 100, although some countries were surveyed later and hence ended up with scores > 100*
Mean value is 50; consider the standard deviation to be about 15, so the bulk of countries are between 35 and 65.
Hofstede was more interested in ranks rather than ratings; he later grouped countries in several dimensions…

14. Power-Distance
How a culture handles notions of equality and power (US=40; ZA=49; Thailand=64)
High Low
Malaysia Austria 11
Guatemala 95 Israel 13
Panama 95 Denmark 18
Philippines 94 New Zealand 22
Mexico 81 Ireland 28
Arab Countries 80 UK 35

15. Uncertainty Avoidance
How a culture handles risk and uncertainty(US=46; ZA=49; Thailand=64)
High Low
Greece 112 Singapore 8
Portugal 104 Jamaica 13
Guatemala 101 Denmark 23
Uruguay 100 Sweden 29
Belgium 94 Hong Kong 29
Japan 92 UK 35

16. Masculinity
How a culture handles assertiveness vs. modesty (US=62; ZA=63; Thailand=34)
High Low
Japan 95 Sweden 5
Austria Norway 8
Venezuela 73 Netherlands 14
Italy Denmark 16
Switzerland 70 Costa Rica 21
Mexico 69 Yugoslavia 21

17. Individualism
How a culture handles the individual vs. the group (US=91; ZA=65; Thailand=20)
High Low
USA 91 Guatemala 6
Australia 90 Equador 8
UK Panama 11
Canada 80 Venezuela 12
Netherlands 80 Colombia 13
New Zealand 79 Indonesia 14

18. Latin America, SE Asia UK US
Power-Distance
Uncertainty Avoidance
Masculinity
Individualism
Israel SE Asia, Latin America
Singapore, Jamaica Japan
Nordic Countries Japan
Latin America, SE Asia UK US
High
Low

19. Extensions Later Hofstede added temporal orientation
basically, how a culture treats time.
Currently Hofstede’s four (or five) dimensions are the basis for almost all organizational and national business culture studies.

20. Critique Is the conceptualization valid?
Is the measurement technique valid?
Is the measurement technique reliable?
Can individual measures tell us anything about a culture at large?
Does the culture at large tell us much about individual beliefs and behavior?
Is it politically correct to characterize large groups with small numbers of descriptors? Isn’t this the basis of bias and prejudice? Shouldn’t we treat people as individuals?

21. Some Interesting Questions
Aren’t managers’ perceptions shaped as much by what others perceive as what they perceive?
Aren’t managers’ expressions of their perceptions shaped by what they think others expect of them?
What does this mean for multinationals and NGOs with expatriate management and for global outsourcers with global workforces?

22. Beyond Hofstede Low Uncertainty Avoidance High Uncertainty Avoidance
Low Power Distance
Market (US)
Machine (Germany)
High Power Distance
Family (India)
Pyramid (Mexico)