Hofstede's Cultural Dimensions in Business: A Critical Analysis

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Table of Contents
Introduction................................................................................................................................3
Assignment-1.............................................................................................................................4
Conclusion..................................................................................................................................5
Bibliography...............................................................................................................................6
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Introduction
In this study, the discussion will be focused on the cultural dimension model proposed by
Geert Hofstede. According to him, an organisation consists of four main cultural dimensions
to measure the different aspects of that organisation. In this context, the study will provide
incorporation of these four dimensions into a business environment. Hofstede’s cultural
model mainly concerns about the fact that culture is a key aspect of the growth of an
organisation. Moreover, the term Cross-Cultural Environment (CCM) was later introduced
as an extension of this model, where people from different cultural backgrounds are
appointed to do work in a single workplace. His model is now used to apply on different
examples of businesses where it can help them to incorporate a particular business plan.
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Assignment-1
Hofstede’s cultural model states that there can be four different cultural dimensions possible
that can be aligned in a business scenario. According to this model, the four dimensions are-
individualism and collectivism, avoidance of uncertainty, masculinity and femininity and
power distribution (Hofstede, 2010).
Figure-1: Four Cultural Dimensions of Hofstede’s Model
(Source: Created by the learner)
The individualism or collectivism dimension of culture means how self-oriented individuals
in a cultural community behave in an organisation. Individualism refers to the work culture
where working at an individual level is emphasised. The United States is one example,
where the business policies follow individualistic approaches to achieve a point of self-
interest. Collectivism refers to the cultural dimension where a teamwork or group work is
preferred over self-oriented work. For example, Mexico follows collectivism approach to
achieve cultural values working towards collective goals. Several countries in Asia also
follow more collectivistic business principles. The second dimension of Hofstede’s cultural
model describes the discrimination of masculinity and femininity. The discrimination
between masculine and feminine empowerment reveals the inequality of gender (Minkov,
2018).
The power distribution is explained in this model as a power distance dimension, which
reveals “power inequality” between superiors and subordinates. For example, The United
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States possesses a comparatively lower power distance culture. The power flow regarding
participative management is preferred over there. Higher power distance means that business
tends to be more hierarchical. Uncertainty avoidance measures how the individuals of a firm
react to an uncertain scenario. For example, Great Britain is an example higher uncertainty
dimension, where the businesses avoid taking risks. On the other hand, Canada is an
example of less uncertainty dimension, where they prefer to take risks and innovation.
Hofstede’s cultural model reveals its first dimension about the individualism and
collectivism. Individualism prefers more on an individual’s contribution towards a particular
job, whereas, collectivism is a measure of teamwork, such that working in a group. It is
always a better to approach to work as a team rather as an individual. Team work can give
better outcomes and problem-solving abilities. Each of the individuals may have different
techniques and approaches for resolving a particularly problematic issue, but in a business
scenario, one company can face different kind of adverse situations which will require
different methodologies or techniques to avoid that challenge. That is why it is preferred to
choose collectivism over individualism, where a particular scenario can be discussed along
with its team members before going for solving it. This gives an overall framework and
proper planning before the execution. Hence, it would be more relevant to choose the
collectivism culture over individualism (Beugelsdijk et al., 2017).
Hofstede also stated discrimination between men and women empowerment. The aspects of
masculinity and femininity were given a priority over there. It is not convenient that this
discrimination will not provide a productive environment in a business prospective.
Moreover, masculinity and femininity should not be judged as two different aspects. Both the
female and male employees should be empowered with an equal division of power. This will
help in reducing internal conflicts in an organisation and resulting in a more productive
business situation. Therefore, this dimension based on the discrimination between
masculinity and femininity is irrelevant. Here also lies the importance of power distribution.
The power distribution should be maintained according to a simple hierarchical form of
command flow from the superiors to the sub-ordinates. This will help in maintaining a
systematic business and organisational structure and will make a business strong internally.
Hence, this dimension of power distance is relevant (Cateora et al., 2011).
Finally, the fourth dimension of Hofstede’s cultural model talks on the avoidance of
uncertainty. This fact is not convenient at all. A business should always work at lesser
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business uncertainties for a new start up or small business so that it can expose itself in a
risky business environment. However, a company which can afford risks in its business
policies is in a good position to implement innovative ideas into expansion. Comparatively
higher uncertainty avoidance measures a risk-free environment but does not provide scopes
for innovative ideas (Ferrell and Fraedrich, 2015).
After thoroughly analysing the cultural dimension model proposed by Geert Hofstede, it can
be suggested that a business should follow only the cultural dimensions of this model that can
improve the cultural values and behaviours. Different aspects of culture that can be associated
with the Cross-Cultural Management (CCM) will be proved to be beneficial. Rather it can be
suggested that comparatively small or start up businesses should follow a lesser rate of
uncertainty avoidance as they can come up with innovative ideas in the remote future. It is
possible for a well reputed or larger business to follow the higher rate of uncertainty as they
are supposed to possess an economically strong backbone to cope up with the risk-free
business environment, where no more innovative business plans will be demanded from the
market. Moreover, it can be recommended that businesses should not follow the
discrimination between two genders in order to maintain a smooth flow of command and
power distribution as well. Collectivism is the reason behind the success of international
brands like KFC, Subway or McDonald. So, further it can be suggested that the business
firms should follow the collectivism approach in order to avail the benefits of Cross-Cultural
Management (Mazanec et al., 2015).
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Conclusion
In this study, Hofstede’s cultural model is explained. There are four different dimensions in
cultural aspect proposed by Geert Hofstede. According to this model, it can be concluded
that, all of these four dimensions work as a cultural driver for a business. Culture is a key
aspect in a business context and Hofstede extended his work on their applications in different
organisations. His proposed model is now used as a measuring scale for modern business
analysis. The importance of culture in a business context can be also explained using this
model. Hofstede’s work leads to the invention of a new concept called Cross-Cultural
Management (CCM) which is also mentioned here in this essay.
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Bibliography
Beugelsdijk, S., Kostova, T. and Roth, K., 2017. An overview of Hofstede-inspired country-
level culture research in international business since 2006. Journal of International Business
Studies, 48(1), pp.30-47.
Cateora, P. R., M. C. Gilly,, and J. L. Graham (2011). International Marketing, 15th edition.
New York, NY: McGrawHill/Irwin.
Ferrell, O.C. and Fraedrich, J., 2015. Business ethics: Ethical decision making & cases.
Nelson Education.
Hofstede, G., 2010. Geert hofstede. National cultural dimensions.
Matzler, K., Strobl, A., Stokburger-Sauer, N., Bobovnicky, A. and Bauer, F., 2016. Brand
personality and culture: The role of cultural differences on the impact of brand personality
perceptions on tourists' visit intentions. Tourism Management, 52, pp.507-520.
Mazanec, J.A., Crotts, J.C., Gursoy, D. and Lu, L., 2015. Homogeneity versus heterogeneity
of cultural values: An item-response theoretical approach applying Hofstede's cultural
dimensions in a single nation. Tourism Management, 48, pp.299-304.
Minkov, M., 2018. A revision of Hofstede’s model of national culture: old evidence and new
data from 56 countries. Cross Cultural & Strategic Management, 25(2), pp.231-256.
Taras, V., Steel, P. and Kirkman, B.L., 2016. Does country equate with culture? Beyond
geography in the search for cultural boundaries. Management International Review, 56(4),
pp.455-487.
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