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Discuss the impact and implications of hofstede s cultural dimensions on mnc s today

Between 1967 and 1973, he executed a large survey study regarding national values differences across the worldwide subsidiaries of this multinational corporation: He first focused his research on the 40 largest countries, and then extended it to 50 countries and 3 regions, "at that time probably the largest matched-sample cross-national database available anywhere.

As Hofstede explains on his academic website, [3] these dimensions regard "four anthropological problem areas that different national societies handle differently: In 1984 he published Culture's Consequences, [4] a book which combines the statistical analysis from the survey research with his personal experiences.

In order to confirm the early results from the IBM study and to extend them to a variety of populations, six subsequent cross-national studies have successfully been conducted between 1990 and 2002.

  • In fact, as we are generally not aware of other countries' cultures, we tend to minimize cultural differences;
  • Hereby, primary data have been gathered from ten employees of Grameen Phone a multinational working in Bangladesh;
  • And this is also valid for written communication as explained in William Wardrobe's essay "Beyond Hofstede;
  • All the levels in communication are affected by cultural dimensions:

Covering between 14 and 28 countries, the samples included commercial airline pilots, students, civil service managers, 'up-market' consumers and 'elites'. The combined research established value scores on the four dimensions for a total of 76 countries and regions.

In 1991 Michael Harris Bond and colleagues conducted a study among students in 23 countries, using a survey instrument developed with Chinese employees and managers. The results from this study led Hofstede to add a new fifth dimension to his model: In 2010 the scores for this dimension have been extended to 93 countries thanks to the research of Michael Minkov who used the recent World Values Survey.

Finally, Minkov's World Values Survey data analysis of 93 representative samples of national populations also led Geert Hofstede to identify a sixth last dimension: A higher degree of the Index indicates that hierarchy is clearly established and executed in society, without doubt or reason. A lower degree of the Index signifies that people question authority and attempt to distribute power.

These in-groups are laced with undoubted loyalty and support each other when a conflict arises with another in-group. Societies that score a high degree in this index opt for stiff codes of behavior, guidelines, laws, and generally rely on absolute truth, or the belief that one lone truth dictates everything and people know what it is. A lower degree in this index shows more acceptance of differing thoughts or ideas.

Society tends to impose fewer regulations, ambiguity is more accustomed to, and the environment is more free-flowing.

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In feminine societies, they share modest and caring views equally with men. In more masculine societies, women are somewhat assertive and competitive, but notably less than men. In other words, they still recognize a gap between male and female values. This dimension is frequently viewed as taboo in highly masculine societies.

A lower degree of this index short-term indicates that traditions are honored and kept, while steadfastness is valued. Societies with a high degree in this index long-term views adaptation and circumstantial, pragmatic problem-solving as a necessity. A poor country that is short-term oriented usually has little to no economic development, while long-term oriented countries continue to develop to a point. This dimension is essentially a measure of happiness; whether or not simple joys are fulfilled.

On the other hand, Anglo and Germanic countries have a lower power distance only 11 for Austria and 18 for Denmark. For example, the United States has a 40 on the cultural scale of Hofstede's analysis. Compared to Guatemala where the power distance is very high 95 and Israel where it is very low 13the United States is in the middle. Germany scores a high UAI 65 and Belgium even more 94 compared to Sweden 29 or Denmark 23 despite their geographic proximity.

  • If applied properly, an understanding of cultural dimensions should increase success in negotiations and reduce frustration and conflicts;
  • A lower degree of this index short-term indicates that traditions are honored and kept, while steadfastness is valued;
  • So, for professionals who work internationally; people who interact daily with other people from different countries within their company or with other companies abroad; Hofstede's model gives insights into other cultures;
  • Societies that score a high degree in this index opt for stiff codes of behavior, guidelines, laws, and generally rely on absolute truth, or the belief that one lone truth dictates everything and people know what it is;
  • Contribution of the thesis;
  • In other words, they still recognize a gap between male and female values.

However, few countries have very low UAI. Masculinity is extremely low in Nordic countries: Norway scores 8 and Sweden only 5. In contrast, Masculinity is very high in Japan 95and in European countries like Hungary, Austria and Switzerland influenced by German culture.

In the Anglo world, masculinity scores are relatively high with 66 for the United Kingdom for example. Latin countries present contrasting scores: However, there are less data about this dimension. There are even less data about the sixth dimension. Correlations of values with other country differences[ edit ] Researchers have grouped some countries together by comparing countries' value scores discuss the impact and implications of hofstede s cultural dimensions on mnc s today other country difference such as geographical proximity, shared language, related historical background, similar religious beliefs and practices, common philosophical influences, identical political systemsin other words everything which is implied by the definition of a nation's culture.

For example, low power distance is associated with consultative political practices and income equity, whereas high power distance is correlated with unequal income distribution, as well as bribery and corruption in domestic politics.

Individualism is positively correlated with mobility and national wealth. As a country becomes richer, its culture becomes more individualistic. Another example of correlation was drawn by the Sigma Two Group [10] in 2003. They have studied the correlation between countries' cultural dimensions and their predominant religion [11] based on the World Factbook 2002.

On average predominantly Catholic countries show very high uncertainty avoidance, relatively high power distance, moderate masculinity and relatively low individualism, whereas predominantly atheist countries have low uncertainty avoidance, very high power distance, moderate masculinity, and very low individualism. Coelho 2011 found inverse correlations between rates of specific kinds of innovation in manufacturing companies and the percentage of large companies per country as well as the employment of a specific kind of manufacturing strategy.

The national culture measure of power distance is positively correlated with the ratio of companies with process innovation only over the companies with any of the three types of innovation considered in the country determinant of correlation: Hence in countries with higher power distance, innovative manufacturing companies are somewhat more bound to resort to process innovations. The quantification of cultural dimensions enables us to make cross-regional comparisons and form an image of the differences between not just countries but entire regions.

For example, the cultural model of the Mediterranean countries is dominated by high levels of acceptance of inequalities, with uncertainty aversion influencing their choices. With regard to individualism, Mediterranean countries tend to be characterized by moderate levels of individualistic behavior.

The same applies to masculinity. Future orientation places Mediterranean countries in a middle ranking, and they show a preference for indulgence values. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. November 2014 Learn how and when to remove this template message "Culture is at times at the interface of a source of conflict, but it is increasingly synergistic in our current and future social contract. Cultural differences are a nuisance at best, sometimes a disaster, but always present like the air we breathe.

In fact, as we are generally not aware of other countries' cultures, we tend to minimize cultural differences. This leads to misunderstandings and misinterpretations between people from different countries. Instead of the convergence phenomena we expected with information technologies availability the " global village culture"cultural differences are still significant today and diversity tends to increase.

So, in order to be able to have respectful cross-cultural relations, we have to be aware of these cultural differences. With this model, Geert Hofstede shed light on these differences.

Hofstede's cultural dimensions theory

The tool can be used to give a general overview and an approximate understanding of other cultures, what to expect from them and how to behave towards groups from other countries. Practical applications of theory[ edit ] Geert Hofstede is perhaps the best known sociologist of culture and anthropologist in the context of applications for understanding international business. Comparing Values, Behaviors, Institutions and Organizations Across Nations [14] which is an updated version of his first publication [4].

The five dimensions model is widely used in many domains of human social life ,[ citation needed ] and particularly in the field of business.

Practical applications were developed almost immediately. International communication[ edit ] In business it is commonly agreed that communication is one of the primary concerns. So, for professionals who work internationally; people who interact daily with other people from different countries within their company or with other companies discuss the impact and implications of hofstede s cultural dimensions on mnc s today Hofstede's model gives insights into other cultures.

In fact, cross-cultural communication requires being aware of cultural differences because what may be considered perfectly acceptable and natural in one country, can be confusing or even offensive in another. All the levels in communication are affected by cultural dimensions: And this is also valid for written communication as explained in William Wardrobe's essay "Beyond Hofstede: Cultural applications for communication with Latin American Businesses". If applied properly, an understanding of cultural dimensions should increase success in negotiations and reduce frustration and conflicts.

In Middle Eastern countries much negotiation takes place leading into the 'agreement', signified by shaking hands. However, the deal is not complete in the Middle Eastern culture. In fact, it is a cultural sign that 'serious' negotiations are just beginning.

Decisions taken have to be based on the country's customs and values. Hofstede's dimensions offer guidelines for defining culturally acceptable approaches to corporate organizations. As a part of the public domain, Geert Hofstede's work is used by numerous consultancies worldwide. Marieke de Mooij has studied the application of Hofstede's findings in the field of global brandingadvertising strategy and consumer behavior.

As companies try to adapt their products and services to local habits and preferences they have to understand the specificity of their market. Cell phone marketing is another interesting example of the application of Hofstede's model for cultural differences: The variety of application of Hofstede's abstract theory is so wide that it has even been translated in the field of web designing in which you have to adapt to national preferences according to cultures' values.

The most cited critique is McSweeney. Hofstede replied to that critique [25] and Ailon responded.

There are other levels for assessing culture. These levels are overlooked often because of the nature of the construction of these levels. There is sampling discrepancy that disqualifies the survey from being authoritative on organizations, or societies, or nations as the interviews involved sales and engineering personnel with few, if any, women and undoubtedly fewer social minorities participating Moussetes, 2007.

Even if country indices were used to control for wealth, latitude, population size, density and growth, privileged males working as engineers or sales personnel in one of the elite organizations of the world, pioneering one of the first multinational projects in history, cannot be claimed to represent their nations.

September 2015 Learn how and when to remove this template message Hofstede acknowledges that the cultural dimensions he identified, as culture and values, are theoretical constructions.

They are tools meant to be used in practical applications. Generalizations about one country's culture are helpful but they have to be regarded as such, i. They are group-level dimensions which describe national averages which apply to the population in its entirety.

Hofstede's cultural dimensions enable users to distinguish countries but are not about differences between members of societies. They don't necessarily define individuals' personalities.

National scores should never be interpreted as deterministic for individuals. For example, a Japanese person can be very comfortable in changing situations whereas on average, Japanese people have high uncertainty avoidance. There are still exceptions to the rule.

Hofstede's theory can be contrasted with its equivalence at individual level: