13.2 Cultural Differences in the Workplace

Hofstede’s Cultural Dimensions

As the world becomes more global, employees will likely face someone from another country at some point in their careers, companies will negotiate with companies from other countries, and even employees of domestic companies will likely encounter someone from another country.

Furthermore, trends suggest that immigration—the movement of people from their home country to other countries—will continue to grow worldwide, a process that will contribute to making a company’s workforce increasingly diverse. Additionally, many multinational companies rely on expatriates to run their local operations. An expatriate is a foreign employee who moves to and works in another country for an extended period of time. All of these trends mean that during one’s career, one is likely to encounter someone from a different culture. The potential for cross-cultural tensions is high. It is, therefore, important to understand the culture to better prepare for dealing with such tensions.

While there are many contributing researchers to the topic of occupational-related values and cultural variety, the work of Geert Hofstede is the most extensive and renowned. Hofstede’s work and research were specifically on the topic of culture and organizations. He also studied work-related values. The work was initially rooted in the study of organizational culture and has had broader implications by assisting scientists in understanding national cultures. Hofstede started his study in the 1960s and utilized the International Business Machines (IBM) employees. This is a multinational corporation with branch offices and subsidiaries around the globe. The original report released in 1980 included data collected from workers in 40 countries.

During his 1984 study, Hofstede reported collecting data from 10 additional countries. As recently as 2001, Hofstede has reported on data from 72 countries, covering the responses of over 117,000 employees of a multinational business organization across 20 different languages, 7 different occupational levels, and 63 work-related value items.

Through his research, Hofstede identified four major dimensions of work-related values and then computed overall scores for each country in each respective dimension.

The Four Major Dimensions of Work-Related Values

Hofstede’s Six Dimensions of Organizational Culture (YouTube)

The four dimensions are power distance, uncertainty avoidance, individualism-collectivism, and masculinity-femininity. Each dimension relates to concrete differences in attitudes, beliefs, opinions, and organizational behaviors. Each plays a part in creating the basis for understanding societal norms in the countries covered in Hofstede’s studies. The four dimensions have consequences for organizational structure and inter-organizational behavior as well.

Power distance refers to the degree to which members of a society accept differences in power and authority. In societies with high power distance, people are more likely to accept that power inequality is good and acceptable. People in high power distance societies are more likely to accept that some powerful people are in charge and that these people are entitled to special benefits. In contrast, societies with low power distance tend to consider all members equal.

Many regions in Asia and Latin America, such as India, Brazil, and Mexico, all have high power distance scores. In such countries, the concern for hierarchy and inequality in organizations is rooted in early socialization in the family and school. In these countries, children are expected to obey their parents and elders. When these children enter school, teachers assume the dominant role. Children must show respect, and they seldom challenge a teacher’s authority. As these individuals take on work roles, the allegiance to teachers is transferred to bosses. Thus, people in high power-distance societies will seldom question their supervisors. In contrast, Anglo countries such as the United States, Canada, and the United Kingdom have low power distance. In these countries, people do not expect power differences; everyone is seen as equal.

In high power distance societies, the belief is that vertical and hierarchical relationships are necessary for organizations based on status and power. Differentiating people according to their roles, positions, and functions is important to the organization’s successful operation. There is a concept referred to as “chain of command.” It identifies the players within an organization and their roles. The basic relationship is between a boss and his or her immediate subordinate. In many cases, an individual has a hierarchical relationship with someone of a higher status and those of a lower status in the chain of command. People within organizational cultures develop ways of interacting with others based on status differentials existing between the individual and the person with whom he or she is interacting.

Uncertainty avoidance describes the degree to which different cultures and societies develop ways to cope with the anxiety and stress of uncertainty. People in high uncertainty avoidance societies tend to want to avoid uncertainty and unpredictability. As a result, work environments in such countries try to provide stability and certainty through clear rules and instructions. In contrast, societies with low uncertainty avoidance are comfortable with risk, change, and unpredictability. In these countries, risky and ambiguous situations are less likely to upset people.

Uncertainty is a fact of life. This is true for both individuals and organizations. Profitable days can quickly be followed by days of financial losses. Some factors influencing this could be how a market reacts to a new product, old product revisions, mergers and acquisitions, corporate restructuring, and all the other changes that can occur within organizations in the business world, and industry is a major source of uncertainty. The future of churches, schools, community centers, and sports teams depends heavily on membership and performance, all of which involve uncertainties. This can raise confusion, stress, and anxiety.

Every society and organization, hence, creates its own ways of dealing with the anxiety and stress triggered by uncertainty. Many times, the development of rituals, informal or written, can occur. These can involve a code of conduct among employees, such as intracompany policies regarding communication or interpersonal relationships. These rules may also be expanded to govern behavior between companies across cultures or within a society.

Cultures high on uncertainty avoidance tend to develop highly refined rules and rituals and are viewed as rule-oriented. These are often mandated and become part of the company’s rubric and the normal way of operating. In Hofstede’s research, Greece, Portugal, Belgium, and Japan were the four countries that scored highest in this dimension. Cultures low on uncertainty avoidance are less concerned with rules and rituals to cope with the stress and anxiety paired with uncertainty. Companies in these cultures tend to have a more relaxed attitude regarding uncertainty and ambiguity. They tend to mandate fewer rules and rituals for employees. In Hofstede’s study, Sweden, Denmark, and Singapore had the lowest scores in this dimension.

As you’ve learned, individualism refers to the degree to which a society focuses on the individual’s relationship to the group. Collectivism refers to the degree to which a society focuses on the relationship of the group as a whole.

Individualistic cultures tend to foster less sacrifice for the group and prioritize individual wishes, goals, and desires. On the other hand, collectivist cultures tend to foster increased compliance with company policies. They encourage a greater degree of reliance on group work and orientation to organizational tasks. Harmony is a key value of collectivist cultures. Therefore, individuals in a collectivist environment will tend to stay away from behaviors that threaten harmony.

In societies with high individualism (or low collectivism) scores, individuals are valued for their achievements and are rewarded and recognized accordingly. In contrast, people who live in societies with low individualism (high collectivism) scores are seen as being part of a wider group, known as the in-group. The in-group includes the family, team, or social class, and how individuals relate to such wider groups is seen as important to their success. In other words, people’s success is gauged by how others in their groups view and support them.

Hofstede’s research results indicated that the U.S., Great Britain, Australia, and Canada have high levels of individualism. In contrast, Asian, Latin American, and many emerging countries tend to have cultures that are either on the medium or low range of the individualism dimension.

However, there are some implications of individualism for management. The effects of most management practices are determined by whether they are done at a group or individual level. For example, in countries with low individualism, one will find that employees are hired and promoted mostly based on association with a larger group, such as a university or high school. In such societies, emphasis is placed on loyalty, seniority, and age. Companies need to appreciate the importance of the larger social group to operate smoothly in such societies.

Additionally, care should be taken in terms of how rewards are distributed. Rewarding individual team members in low individualism societies can result in tensions because the individual team member may become stigmatized. In such cases, rewards done on a group level may work best.

Masculinity in the workplace can be described as the degree to which a society emphasizes traditional masculine qualities such as advancement and earnings. In high masculinity societies, work tends to be very important to people; gender roles are clear, and work takes priority over other aspects of a person’s life, such as family and leisure. In addition, masculine societies emphasize earnings and achievements, and employees tend to work very long hours and take very little vacation time.

Anglo cultures, such as the U.S. and Canada, tend to have high masculinity. This is not surprising given that both the U.S. and Canada tend to have some of the highest numbers of hours worked. In contrast, some European countries, such as France and Spain, have much lower masculinity, which is reflected in the importance of leisure in these societies. Scandinavian cultures also reflect low masculinity, a characteristic consistent with the preference for quality of life in such countries. We also see that many of the emerging nations have medium to high masculinity.

There are various expressions of gender as related to gender identity that workplaces should consider, as masculinity is fluid and not easily defined. Historically, the norm in American culture has been that men are expected to be more assertive, dominant, and the primary wage earners. Meanwhile, women have been held to the expectation that they need to be more nurturing and caring, mainly focused on family and childcare issues. Luckily, these roles are shifting, and these expectations are no longer easily defined. Equity and equality values have infused the workplace, leaving many U.S. companies transitioning toward providing gender equity in the workplace. More will be covered in the following module on this topic.

Hofstede’s work originally included the above-mentioned four cultural dimensions of work-related values. He has since added a fifth dimension: long-term versus short-term orientation.

Long-term versus short-term orientation can be defined as the degree to which a culture encourages delayed gratification of material, social, and emotional needs among its members. Of the countries he researched, China, Hong Kong, and Taiwan scored the highest in this dimension, meaning they were the most long-term oriented. Meanwhile, Poland, West Africa, and Spain scored the lowest, hence, they were the most short-term oriented.

Hofstede found that cultures having long-term orientations are strongly based upon two principles:

1. Unequal status and relationships lead to a stable society.
2. The family is typical of all social organizations.

These principles can seem abstract, yet they play a key role in both interpersonal relationships in business and also contribute to organizational goals and principles. For example, cultures and organizations high in this dimension tend to differentiate more between elders and youngsters, and between brothers and sisters. They tend to believe humility is a valuable human virtue and focus on building relationships and market position instead of bottom-line profits. These cultures also tend to integrate business and family lives, coordinating more hierarchically.

Other Research

Other research has been consistent with Hofstede’s findings. This would be the work of Smith et al. (1996), who have reported two universal value orientations in their work in organizations. The work of House et al. (2004) has reported nine value orientations related to leadership. Finally, the work of Inglehart (1997) has reported two attitudinal belief-value orientations. While there are other contributing researchers to this field of study, Hofestede’s body of work is arguably the largest and has been the most influential in the field.

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