The Impact of Hofstede's Cultural Dimensions on Business Strategy

This report delves into Hofstede's cultural dimension theory, examining its significance in cross-cultural communication and international business. The introduction establishes the theory's foundation, developed by Geert Hofstede, and its role in measuring cultural values. The main body explores the five dimensions: Individualism vs. Collectivism, Power Distance, Uncertainty Avoidance, Masculinity vs. Femininity, and Long vs. Short-Term Orientation. Each dimension is defined, and its impact on organizational behavior and business practices is discussed. The report highlights the importance of understanding these dimensions for global business expansion, emphasizing their role in strategy formulation and relationship management. The report suggests improvements to the Uncertainty Avoidance dimension, offering recommendations to make the theory more effective. References to relevant books and journals are also included.

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Table of Contents
INTRODUCTION.....................................................................................................................................3
MAIN BODY............................................................................................................................................3
1.Hofstede’s cultural Dimension theory.................................................................................................3
2. Importance of Hofstede’s cultural dimensions on international business...........................................4
3. Suggestions on Hofstede’s cultural dimensions.................................................................................5
CONCLUSION..........................................................................................................................................5

INTRODUCTION
Hofstede’s cultural dimension theory refers to researches in cross-cultural
communication. This theory is founded by Geert Hofstede. It is developed and updated in
between 1967 and 1973. It is included in top list for measuring cultural values. It calculates
cultural value of society members in terms of their attitude and behavior. This value quantifies
cultural dimensions of people which will recognize their effective and efficient participation in
growth and success of international business. This report signifies about hofstede’s culture
dimension and its importance for achieving business objectives. It outlines suggestions or
recommendations for changes in theory to make it more effective and specific.
MAIN BODY
1.Hofstede’s cultural Dimension theory
Hofstede’s cultural dimension theory refers to culture of people and their behavior towards
work in organization. It represents that people attitude in thought process of their working
nature and how they react accordingly (Beugelsdijk, Kostova and Roth, 2017). This theory says
about norms and value of people behavior which will affect both individual and organization
performance. This theory has different dimensions for measuring norms and value which are
described below:
1. Individualism Vs Collectivism: - This dimension indicates that people are represented
in group or individual in societies. High score represents individualism which outlines
that self individual is focused on achieving self goals. It indicates loose connections with
members and responsibility of sharing information is little. Low score represents
collectivism and it shows the tight integrated relationship between people in a group
who have strong trust on each other. In this employee is ready for sacrificing their
achievement for self but in benefit for others like for group or whole organization.
2. Power distance: - This dimension measures about the powerfulness of people in society
and also expects that power to people should be distributed equally. Low power distance
represents that power is not distributed equally in society due to which they fight for
their rights. In this, owner of business always questions by its employee due to which
they are unsuccessful in achieving business objectives. High power distance represents

that power is distributed equally. It indicates respect for high authorities of business
which lead to great success in achieving business objectives.
Uncertainty avoidance- This index indicates the level of anxiety that a member can cope with.
It shows the tolerance on people behavior for ambiguity. Low uncertainty avoidance refers to a
situation where people are ready for change or innovation. It helps them to make decisions
comfortably or openly (Deephouse, Newburry and Soleimani, 2016). It leads to informal
attitude of people which helps in welfare of organization. High uncertainty avoidance is also a
situation where people avoid uncertain situations. Expressive people are present in this index
that shows anger or emotions whenever necessary. People know what the truth is and they know
this truth will dictates everything.
3. Masculinity Vs Femininity: - Under this index, roles of men and women are described.
In masculine, role of men overlaps women whereas in femininity, role of women
overlaps men. It recognizes the gap between male and females. High MAS score expects
in society that men to be tough, understanding, healthy and wealthy. It is supposed by
society that in mastery of job, more value is by men. Low MAS score refers that women
are found to be caring, modest, a way to cooperation. In societies, men are considered to
be more powerful and intelligent. Women are realized to be competitive and assertive.
Long Vs Short term orientation: - This dimension refers to the past connection with the future
achievements. Low score of orientation represents short term orientation. In this people are past
oriented and they believe in live in present only. They maintain traditions and norms honor
according to time. In this, people are more focused on finding absolute truth (Khlif, 2016). High
score of orientation represents long term orientation. In this people are pragmatic about future
decisions. They encourage new ideas and efforts based on modern world for future planning. In
this, people are more aligned to find virtue.
2. Importance of Hofstede’s cultural dimensions on international business
To expand business globally, it is necessary to analyses culture dimensions of different
people of different countries. This helps company to set a factory or project in other countries in
effective and efficient manner (Tekeş, Hoe and Özkan, 2018). It decreases the chances of
mistakes and helps in making strategies against other business by knowing people culture,
attitude and behavior. It helps to maintain relation between managers and customers by
understanding their desires well effectively by measuring their society culture. It helps to spread
the distribution and manufacturing network worldwide in efficient manner.

3. Suggestions on Hofstede’s cultural dimensions.
I disagree with uncertainty avoidance dimension because in this, high score shows too
much emotions and anger can lead to harmony in endanger. They sometimes avoid important
things which helpful in growth of organization that becomes a loss afterwards. There should be
some criteria or conditions should be made for avoiding information because it can be truth or
lie. Everyone has not the capability to identify the truth and reciprocate accordingly. Some
people just follow others. In this, individual capacity goes down. They have to be dependent on
others for analyzing the true information (Mazanec, Gursoy and Lu, 2015). As per my
suggestions, people must avoid to give negative points or feedback in public because it can
disappoint others and lead to false decision. And for low uncertainty index people, I want to
suggest that to do not mix personal life with professional life because it can lead to unsatisfied
information which results in fighting. Otherwise it affects relations and leads to mind stress
which affect growth of organization or business. Also, individual should encourage themselves
to have debate and increase their expressive nature for finding true information.

REFERENCES
Books and Journal:
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.
Deephouse, D.L., Newburry, W. and Soleimani, A., 2016. The effects of institutional
development and national culture on cross-national differences in corporate
reputation. Journal of World Business, 51(3), pp.463-473.
Khlif, H., 2016. Hofstede’s cultural dimensions in accounting research: a review. Meditari
Accountancy Research, 24(4), pp.545-573.
Mazanec, J.A., 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.
Tekeş, B., Hoe, C. and Özkan, T., 2018. The Relationship Between Hofstede’s Cultural
Dimensions, Schwartz’s Cultural Values, and Obesity. Psychological reports,
p.0033294118777965.