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Hofstede Dimensions - National Culture

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on 19 February 2015

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Transcript of Hofstede Dimensions - National Culture

Is the argument that national culture lies at the root of economic competitiveness highly-persuasive or fundamentally flawed?
Modern Business in Comparative Perspective
Today we are focusing on:
Power Distance
Uncertainty Avoidance
Individualism vs Collectivism
Masculinity vs Femininity
Hofstede's Dimensions
Power Distance demonstrates the extent to which people in
society accept that power is distributed unequally
(Hofstede & Bond, 1988).

Some societies allow small differences between individuals to grow into inequalities in power and wealth, for instance countries such as Japan (Rao, 2013).

The inequality is measured by a Power Distance Scale called the PDI (Power Distance Index) which ranges from 0 to 100. which relates to the difference between small/lower power distance compared to the larger/higher power distance (Hofstede & Bond, 1988).

Power Distance
“The extent to which people feel threatened by ambiguous situations.”
(Hofstede and Bond, 1984: 419).
Uncertainty Avoidance
Individualism vs Collectivism
(High PD = Dramatic difference in authority)
(Strength of avoiding uncertainty)
(Independent Responsibility vs Team Work)
(i.e. Assertiveness vs Attentiveness)
Max Webber
Sociology of Religion
Calvinist religious ideas, which are mainly protestant, were one of the main reasons for the economical development of the west (Weber and Kalberg 2001).
Max Webber's 'Bureaucratic Model'
Cultural values
Psychological motivations
Religious beliefs
Society structure
(Hodson and Sullivan, 2008)
Fons Trompenaars
(Trompenaars and Woolliams 2003)
Country Comparison on
Power Distance
(The Hofstede Centre, 2015)
UK (AstraZeneca)

Low Power Distance
Innovation is a Key Success Factor
AstraZeneca demonstrates how the role of the creative individual is essential by taking advantage of access to new developments.
Germany (Boehringer Ingelheim)

Low Power Distance
Deliver Value through Innovation.
Carry out Annual Employee Engagement Survey.
Focus on Work-Life balance – key driver to overall success.
(Styhre & Börjesson, 2006) | (Boehringer Ingelheim, 2015)
The Pharmaceutical Industry
The Pharmaceutical Industry
Japan (Daiichi-Sankyo)

Higher power distance.
Encourages Diversity.
Promote Innovation through teamwork, acknowledge individual strengths and weaknesses.
However, in japan, some issues are not resolved at work and instead in social settings ‘behind the scenes’ due to a more centralized approach (DIA, 2010).

(Daiichi-Sankyo, 2015)
UK (Bentley)

Low power distance
All business functions work together.
Committed to their staff.
Names as one of Britain’s Top Employer’s in 2012.

The Automotive Industry
Germany (Audi)

Low power distance
Open communication
Fair treatment policy for employees at all levels of the hierarchy.
SMMT, 2013
Audi, 2015
The Automotive Industry
Japan (Toyota)

Higher power distance.
Continuous improvement Culture.
90% of ideas generated by employees are actually implemented (Zarbo, 2012).

However, the national of culture has affected Toyota as employees feel obligated to carry out maximum levels of work because of goodwill and determination (Holt, 2010).

Pharmaceutical industry Vs. Automotive Industry.

The Automotive Industry is explored in two stages, power distance is higher in the first stage, sales force and lower in the second stage, craftsmanship (Dekkers, 2009).

The Pharmaceutical industry has a lower power distance. This industry has the greatest desire for change as both managers and employees prefer a more decentralized approach.
(Gupta et al., 2005).

Power Distance Summary
Weak uncertainty avoidance at Bentley. “We want people to join our team who are flexible." (Bentley, 2015)
The Automotive Industry
The United Kingdom of Great Britain like the United States of America indicate unions of entities brought together through processes of federation and conquest representing the achievements of a harmonious combination working fluidly.
Germany thrives with independent regulations, rules and policies to shape the resolution of conflict. (Tinsley, 1998; Huczynski and Buchanan, 2007:649) Working hard in Germany is drawn from an inner urge as a way of relieving stress and creating clarity (Hofstede, 1980; Freud, 1977).
“Keeping consequences in mind when making every decision” (Audi, 2015)
Strong uncertainty avoidance at Audi,
“For Audi, corporate responsibility means keeping the consequences in mind when making every decision.” (Audi, 2015)
The Automotive Industry
Japan =New economy
Role of management at Daiichi Sankyo states that the vision of management should be fostered by all leaders (Toyota, Japan. 2015).

The national norm of Japan is comfortable with high power distance and strong uncertainty avoidance. This is where a superior can both praise and blame in order to satisfy the strong need for avoiding uncertainty (Hofstede, 1980).
“Always be practical and avoid frivolousness.” And “Honor the language and spirit of the law of every nation and undertake open and fair business activities to be a good corporate citizen of the world.” (Toyota Japan, 2015)
An extraction from the Index Values and Ranks of fifty countries and three regions on four Cultural Dimensions – Hofstede and Bond (1984)
The Automobile Industry
“This well-structured change process will help and support all employees to better understand the common Boehringer Ingelheim culture, values and the overall corporate vision.”(Boeringer Ingelheim, 2015)

The Pharmaceutical Industry
Germany has a need for clarity and structure, motivated by their inner nervous energy.
(Smith, McSweeney, Fitzgerald, 2008).
The Pharmaceutical
“It’s about taking smart risks, learning from successes as well as challenges and having the courage to push boundaries.” (AstraZeneca, 2015)
“The management of the Daiichi Sankyo group of companies commits to the vision of the HR Management Philosophy and fostering an understanding of the Philosophy to all leaders of the company.”
Daiichi Sankyo, 2015
The Pharmaceutical Industry
Hofstede’s cultural variables, such as uncertainty avoidance, are seen as fixed from a country’s historical development and its national institutions where the characteristics of a country are inherent and unchanging. (Hofstede, 1988)
Uncertainty Avoidance Summary
Masculinity vs Femininity
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