Hofstede's Cultural Dimensions

As the Vice-President of International Sales, I must plan ahead to manage the diverse group of managers that will be working with me in the near future. When thinking about diversity, we must all understand the need to learn about the different cultures, values, and norms of the different countries we will be working with. Just as every individual has different DNA, every country has their own set of beliefs. What is seen as normal here in the United States may mean something completely different in another country. Therefore, it is important for our managers in PM Company, to understand the importance of diversity and how management decisions will be influenced.

Geert Hofstede's research will assist us to properly manage the diversity issues that may happen. Hofstede's cultural dimensions include power distance index, individualism, masculinity, uncertainty avoidance index, and long-term orientation ("Geert Hofstede Cultural Dimensions," 2003). The power distance index "focuses on the degree of equality, or inequality, between people in the country's society" (International Business Center, 2007). If a country has a low power distance index, they will be more open for equality and opportunity among everyone (International Business Center, 2007). Where as, with a high power distance index, they will be more likely to oppose any attempt for upward movement or equality (International Business Center, 2007).

Individualism focuses on whether or not the country leans more towards individualism or groups ("Geert Hofstede Cultural Dimensions," 2003). A country that has low individualism rank will be more collectivist and have strong group and family ties (International Business Center, 2007). What this means are those countries that have a low ranking for individualism, as a group, everyone is held responsible for everyone else's actions (International Business Center, 2007). If they are on the higher end of individualism, then they will be more based on an individual's actions, instead of group actions (International Business Center, 2007).

Masculinity focuses more on the males' roles in society. If the country is high masculinity ranked, there will be a defined difference between males and females in the country (International Business Center, 2007). For example, men control society, and the women are controlled by those men (International Business Center, 2007). Where as, in a low masculinity based society, equality happens between men and women (International Business Center, 2007).

The uncertainty avoidance index focuses on the country's acceptance of unknown situations (International Business Center, 2007). If the country has a high uncertainty avoidance index, the country does not like uncertainty and imposes laws in order to eliminate the uncertainty factor (International Business Center, 2007). If they have a low uncertainty avoidance rank, they are more apt to accept change (International Business Center, 2007).

Long-term orientation focuses on the country's acceptance of long-term commitment to its values and traditions (International Business Center, 2007). A country that has a high long-term orientation ranking respects long-term commitments and is "thought to support a strong work ethic where long-term rewards are expected as a result of today's hard work" (International Business Center, 2007). Because of this, they are more resistant to outside change, and the business might take more time to expand (International Business Center, 2007). If the country is on the other end, they are less resistant to change, and this change can come about quite rapidly (International Business Center, 2007).

In order to better understand the Hofstede system, let us compare the United States to Japan. The following chart shows the difference between the two countries on the Hofstede system.CountryPower Distance IndexIndividualismUncertainty Avoidance IndexMasculinityLong-Term Orientation

United States

40

91

46

62

29

Japan

54

46

92

95

80

("Hofstede's Dimension of Culture Scales," n.d.).

As you can see by the figures in the chart, the United States has less of a power distance index rating, a higher individualism ranking, a lower uncertainty avoidance index ranking, a lower masculinity ranking, and a lower long-term orientation ranking. Japan is about the same in the power distance index column, which means that they are very similar to the United States. Japan is lower on the individualism ranking. Therefore they would be more focused on group activity as to individual activities. Japan has a very high uncertainty avoidance ranking. Because of this they would be more likely to have strict laws that would eliminate or reduce the uncertainty factor and might be harder to complete business activities within this country. Therefore, trust is important. Japan is high in the masculinity ranking, so when doing business there, we would be more likely to address the men, as opposed to the women. Japan's long-term orientation is much higher. This means that they would be resistant to another country's business and change would take more time.

PM Company can use Hofstede's work to understand the cultural differences of each country. The difference will affect management decisions in many ways. We, as managers, will have to make the important decisions of how to tackle each country in a different way. One example will be Japan. If we are completing a business evaluation and plan of Japan, we will need to look into Hofstede's dimensions and find out the key differences between them and the United States. In order for us to do business in Japan, we would most likely have to build their trust first, and understand that their long-term commitment to us would in fact take time. We would have to be readily prepared to deal with the country for a substantial amount of time if we want to be successful.

In understanding each of the dimensions, it is important to respect each country as an individual. Hofstede's work helps us to be more readily acceptable to cultural differences between the United States to a different country. We cannot do business on assumptions that another country is identical to ours. If we do try to complete business the same way we do in the United States, countries will be swift to turn down our products and also to the whole trading industry between us. Therefore, it is important to do the proper research of any country that we are looking to offer our product line to.

In order to manage the diverse team of managers, the first thing I will do is training. "The training of managers varies somewhat, depending on whether the candidate is from the home country, the host country, or a third country" (Ball, McCulloch, Frantz, Geringer, & Minor; 2007, p. 549). With the management of these individuals it is important to understand the difference in their cultures, just like when we are doing business with another country.

Compensation will also be different for all the managers depending on experience. Salaries will be relatively equal for every one if they are in the same experience bracket because we are taking an equal-pay-for-equal-work concept (Ball et al, 2007, p. 555). In order for me to be an effective manager to the other managers, it is important that I take account for the cultural dimensions.

References

Ball, McCulloch, Frantz, Geringer, & Minor (2007). International business: The challenge of global competition. (10^th ed). McGraw-Hill

Geert hofstede cultural dimensions. (2003). Retrieved March 12, 2007, from http://www.geert-hofstede.com/

Hofstede's dimension of culture scales. (n.d.). Retrieved March 12, 2007, from http://spectrum.troy.edu/~vorism/hofstede.htm

International Business Center. (2007). Geert hofstede analysis. Retrieved March 12, 2007, from International Business Center Web site: http://www.cyborlink.com/besite/hofstede.htm