Hofstede's Cultural Dimensions: Impact on International Business

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Introduction
The theory of cultural dimension was developed by Greet Hofstede after examining the outcome
of his observation based on the worker values of IBM around the globe from 1967 to 1973. The
actual theory was based on 4 dimensions which included individualism/collectivism, power
distance, uncertainty avoidance, and masculinity/femininity. The theory of cultural dimension is
largely used as an example in the case of cross-cultural communication, cross-cultural
psychology, and international management. He first conducted his survey on some 40 countries
which is supposed to be the largest countries and then continued with his survey on 50 other
countries and 3 regions.
Hofstede’s Cultural Dimension
Hofstede has developed 6 cultural facets that stand as a structure for a cross-cultural dimension
which includes:
Individualism/Collectivism
Individualism is the prioritization of one’s own goals and preferences. It values the desires and
purposes of one and enjoys the liberty of independence and self-reliance in work where he
functions for the achievement of the individual achievements whereas, Collectivism refers to the
opposite of individualism (Yacout and Hefny, 2014). Here people work in harmony towards the
achievement of a common goal.
Power Distance
Power Distance refers to the measurement of the difference in power between the organization
and its workers appointed.
Uncertainty Avoidance
Uncertainty Avoidance refers to the extent to which an organization is tolerant towards the
uncertainty and the steps taken by them to avoid the unknown (Beugelsdijk and Welzel, 2018).
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Masculinity/Femininity
According to Hofstede’s survey on the theory of cultural dimension, it says that the values in
women are less differentiable belonging to different regions than in men. In some countries, they
are more modest and caring and those countries are called feminine countries whereas in some
countries the women are more competitive though less than the men and are called the masculine
countries.
Long-Term vs. Short-Term Orientation
While the long term orientation focuses on how the society must be in blind towards looking for
virtue, the short term orientation works as to how societies are inclined towards revealing the
absolute truth in any concept.
Indulgence vs. Restraint
This particular factor focuses on happiness. This discusses a society that makes use of
indulgence giving enough space for free gratification of the factors that drive nature and basic
human traits. In simple words, this pertains to involving fun and joy in life. On the other hand,
the quality of restraint shows the society holding back and how much it needs gratifications.
These societies control everything by implementing strict social norms thereby neglecting the joy
of life.
Business Perspective
As far as international business is concerned, the dimension in the cultural perspective is an
important aspect. The knowledge of the methods in which the business processes and features
are being perceived by people of different cultures is vital for a business owner or a brand
manager to understand and enhance the flow of business in various countries (Beugelsdijk,
Kostova and Roth, 2016). Without an understanding of the cultural perspective especially in the
regions that are culturally driven, it is not quite possible to establish a successful business branch
there.
Significance of the Framework
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The theory of Hofstede cultural dimensions focuses on a Framework that naturally turns around
cross-cultural information. The perspective focuses on portraying the result of how culture is
instilled in society and determine the preferences of the members present in the same society. On
the other hand, discourses on the relationships between these values and behaviors by making
use of factor analysis (Eringa et al., 2015). In simple terms, this theory provides a significant
aspect of culture and rates these factors by comparing it with its implementation in different
societies.
Hofstede’s work is considered as a foundation for other research papers that focus on cross-
cultural psychology and in this paper, the researchers have given different aspects of the cultural
environment in the international business and communication. Such dimensions are deeply
illustrated by the fixed values of distinct cultures as said by Hofstede. The values not only impact
the cultural background but also impact the success of the business when placed in a professional
context. Cultural differences do have a strong impact on the businesses that plan to extend their
business globally (Minkov, 2018). If the business owner is able to analyze the problems with the
help of the six cultural dimensions as discussed earlier, he could come up with different
perspectives to address the problems and take action accordingly.
For example, Ireland has a power distance score of 28 which represents the belief that displays
reject inequalities amongst the citizens. On the other hand, a score of 70 has been maintained by
Ireland when it comes to individualism which shows that it is an individualist nation self-reliant
people. On the masculinity aspect, a score of 68 has been maintained which indicates the people
being competent (Lee and Herold, 2016). Also, 35 so is there score on uncertainty avoidance that
shows Ireland is not resistant towards change. With a long term orientation score of 24, the
importance of tradition and value stability can be accessed as well. As an intelligent society,
Ireland stands in the score of 65.
Conclusion
Likewise, any nation can be assessed with these six factors as proposed by Hofstede. The ability
to compare two nations without having a greater knowledge of the set of values in those regions
helps us to gain insights on the practices followed in these regions. Especially for businesses, this
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same work saves a lot of time in coming up with the strategies that work on a global perspective.
The framework needs to be established more for businesses to gain benefits.
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References
Beugelsdijk, S. and Welzel, C. (2018). Dimensions and Dynamics of National Culture:
Synthesizing Hofstede With Inglehart. Journal of Cross-Cultural Psychology, 49(10),
pp.1469-1505.
Beugelsdijk, S., Kostova, T. and Roth, K. (2016). An overview of Hofstede-inspired
country-level culture research in international business since 2006. Journal of
International Business Studies, 48(1), pp.30-47.
Eringa, K., Caudron, L., Rieck, K., Xie, F. and Gerhardt, T. (2015). How relevant are
Hofstede's dimensions for inter-cultural studies? A replication of Hofstede's research
among current international business students. Research in Hospitality Management,
5(2), pp.187-198.
Lee, K. and Herold, D. (2016). Cultural relevance in corporate sustainability management: a
comparison between Korea and Japan. Asian Journal of Sustainability and Social
Responsibility, 1(1), pp.1-21.
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.
Yacout, O. and Hefny, L. (2014). Use of Hofstede’s cultural dimensions, demographics, and
information sources as antecedents to cognitive and affective destination image for
Egypt. Journal of Vacation Marketing, 21(1), pp.37-52.
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