Hofstede's cultural dimensions theory

Hofstede’s cultural dimensions theory is a systematic model for understanding cross-cultural social differences in the context of international business relations. First proposed in 1980 by Dutch social psychology researcher Geert Hofstede (1928–2020), the theory uses a six-point analysis to evaluate the ways in which differing values impact business dealings between disparate cultural groups. The points cover concepts including power distance, collectivism versus individualism, uncertainty avoidance, femininity versus masculinity, short-term versus long-term orientation, and restraint versus indulgence.

Developed during an era of increasing globalization and economic interdependence, Hofstede’s theory proved influential almost immediately. It became one of the twentieth-century’s most widely used and cited social models, in part because of its ability to generate quantitative expressions of cultural differences. The theory allows for each of the six factors to be scored, facilitating easy cross-country comparisons.

Background

Born in the Netherlands in 1928, Hofstede launched an engineering career in the years following World War II (1939–1945). Landing in a management role, he developed an increasing interest in the ways in which the human element influences processes. He enrolled at Groningen University and completed a social psychology doctorate in 1967. Hofstede then joined IBM Europe as a researcher. There, he established a personnel research department and conducted surveys to learn more about the values and opinions of IBM’s large international workforce. The insights Hofstede gained by analyzing the survey data would go on to become the basis of his cultural dimensions theory.

During the 1970s, Hofstede left private industry to accept academic research positions and professorships at several European institutions, including the International Institute for Management Development (IMD), the European Institute for Advanced Studies in Management (EIASM), and INSEAD, a world-renowned business school based in France. During this period, Hofstede developed and refined his cultural dimensions theory, which he described in a manuscript originally titled Culture’s Consequences: International Differences in Work-Related Values. According to Hofstede’s personal website, the work was rejected by seventeen publishers before it was finally accepted. Initially released in 1980, Culture’s Consequences made an immediate impact and went on to become an international bestseller.

The first iteration of Hofstede’s cultural dimensions theory included only four points of analysis, covering power distance, collectivism versus individualism, uncertainty avoidance, and femininity versus masculinity. In explaining the model, Hofstede referenced his work at IBM Europe, indicating that he analyzed the data generated by thirty-two questions related to values and principles, which were distributed to an initial focus group of employees from forty countries. Novel perspectives and contributions from other researchers prompted Hofstede to further refine his theory. In the 1980s, he added a fifth point of analysis covering short-term versus long-term orientation. Hofstede imported the sixth and final aspect of the model, restraint versus indulgence, in the 2000s after collaborations with other scholars and additional international survey data revealed new insights.

Hofstede died on February 12, 2020, at the age of ninety-one.

Overview

Hofstede’s model considers societies on a national level, assigning each of the six analysis points a relative score from zero to one hundred to reflect cross-cultural and inter-country differences. The first point covers a dynamic Hofstede calls the power distance index, which evaluates the extent to which a country’s social structure displays inequality dynamics as well as the degree to which its citizens tolerate unequal power relationships between various groups. Countries with low power index scores favor egalitarian values. Decision-making duties are decentralized and shared by as diverse a collective of participants as possible. Conversely, countries with high power index scores feature centralized power structures, with decision-making authority concentrated in the hands of a relatively small group of people who occupy a high hierarchical rank. Such countries tend to favor bureaucratic operational structures and accept inequality as an innate social feature.

The collectivism versus individualism factor looks at the degree to which a country organizes people into homogenous groups that have specific duties and obligations within the social structure. Countries with high collectivism scores place greater emphasis and importance on the greater good of groups and de-emphasize the importance of individual achievement. Those with high individualism scores prioritize individualistic pursuit ahead of group structures and collective functions. Reduced to simple terms, collectivism orients the society toward “we,” while individualism orients it toward “I.”

Uncertainty avoidance reflects general levels of risk tolerance. Countries with high uncertainty avoidance scores show high levels of risk aversion. They tend to create rigid rules and regulatory structures to mitigate the potential influence of the unknown and unexpected. Those with low uncertainty avoidance scores eschew such rules and regulations, accept risk, and do not generally favor the implementation of onerous checks and balances that endeavor to reduce it.

The masculinity versus femininity factor evaluates societal tendencies regarding gender roles, gender equality, and traditional gender values. Societies with high masculinity scores (or low femininity scores) value goal-oriented behavior, encourage wealth accumulation and materialism, and favor strong and clearly defined gender roles. Those with high femininity scores (or low masculinity scores) tend to be more concerned about collective quality of life than individual material wealth, and favor flexible gender roles that allow males and females to interchange their contributions to social and economic systems.

Short-term versus long-term orientation considers the degree to which a society acts to further short-term objectives at the expense of long-term goals and vice versa. Countries with high short-term orientation scores value immediate gratification ahead of immediate sacrifice that could lead to greater gratification in the long-term future. These societies tend to favor policies and strategies that generate fast results. Countries with high long-term orientation scores display a greater willingness to forego instant results and short-term success for the greater long-term good, valuing determination and diligence ahead of instantaneous fulfillment.

The sixth and final factor assesses indulgence versus restraint. Countries with high indulgence scores value life enjoyment, entertainment, luxuries, and showy displays of socioeconomic status. Those with high restraint scores embrace social values that emphasize the perceived importance of modesty, suppression, and self-control.

Despite its easy applicability and commercial relevance, Hofstede’s cultural dimensions theory displays several noteworthy limitations. Some have argued that the entire model is based on an outdated and narrow definition of culture that oversimplifies complexities down to general trends that may or may not apply to a particular representative sample from a given country. Others believe that its applicability is diminishing as globalization and multiculturalism continue to facilitate increasing degrees of intercultural exchange.

Bibliography

“Biography.” Geert Hofstede, geerthofstede.com/geert-hofstede-biography/. Accessed 4 Nov. 2024.

Bing, John W. “Hofstede’s Consequences: The Impact of His Work on Consulting and Business Practices.” Academy of Management Executive, vol. 18, no. 1, 2004, pp. 80-87, doi.org/10.5465/ame.2004.12689609. Accessed 4 Nov. 2024.

Christiansen, Bryan and Harish C. Chandan. Handbook of Research on Organizational Culture and Diversity in the Modern Workforce. IGI Global, 2017.

Hofstede, Geert. Culture’s Consequences: Comparing Values, Behaviors, Institutions, and Organizations Across Nations (Second Edition). Sage Publications, 2003.

Hofstede, Geert. “Dimensionalizing Cultures: The Hofstede Model in Context.” International Association for Cross-Cultural Psychology, vol. 2, no. 1, 2011, doi.org/10.9707/2307-0919.1014. Accessed 4 Nov. 2024.

Hofstede, Geert. “An Interview with Geert Hofstede.” By Michael H. Hoppe. Academy of Management, vol. 18, no. 1, 2004, doi.org/10.5465/ame.2004.12689650. Accessed 4 Nov. 2024.

Nedelko, Zlatko and Maciej Brzozowski. Exploring the Influence of Personal Values and Cultures in the Workplace. IGI Global, 2017.

Sima, Violeta. Organizational Culture and Behavioral Shifts in the Green Economy. IGI Global, 2018.