1. Hofstedecultural dimensionsMade by: Elena Bezborodova, Eleonora Viktoria Horbenko, Lam HueThanh, Lena Gerding, Jenni Korhonen, Foong Hwee Li, Riina29.09.14 Saarenp 1

2. Introduction Gerard Hendrik (Geert) Hofstede(born 2 October 1928 in Haarlem) Dutch social psychologist,former IBM employee, andProfessor Emeritus ofOrganizational Anthropology andInternational Management atMaastricht University in theNetherlands For his cultural dimensions studyhe interviewed 117,000 IBMemployees in 23 countriesinitially29.09.14 2 3. Table of contents1. Power Distance2. Individualism / Collectivism3. Masculinity4. Uncertainty avoidance5. Long term orientation6. Indulgence / Restraint7. Video8. Conclusion29.09.14 3 4. Power Distance (PD)Hofstede 1st DimensionThis refers to the degree of inequality that existsand is accepted among people with and withoutpower29.09.14 4 5. ComparisonHigh PD Low PD Centralized companies Strong hierarchies Large gaps incompensation, authority,and respect Flatter organizations Supervisors andemployees areconsidered almost asequals29.09.14 5 6. ExampleFinland?Malaysia?29.09.14 6 7. Finland (33) Malaysia (100) Equal rights Superiors accessible Power is decentralized Managers count on theexperience of their teammembers Attitude towards managersare informal and on firstname basis People accept a hierarchicalorder Power is centralized Subordinates expect to betold what to do The ideal boss is a respectedautocrat29.09.14 7 8. Challenges as an international manager Finnish manager hasSolutions:marketing project withFinnish manager shoulda CEO from Malaysialearn in details aboutFinnish managercompanys hierarchy,receives less respectresponsibilities of eachthan top managersdepartment beforehandfrom the sameFinnish manager shouldcompanyshow great respect toMalaysian CEO refusedMalaysian CEO despiteto provide any answersany misunderstandingson marketing field29.09.14 8 9. Individualism &Collectivism (IND)Hofstede 2nd DimensionThis dimension focuses on the relationshipbetween the individual and larger socialgroups. The way in which people definethemselves and their relationship to others.29.09.14l 9 10. ComparisonIndividualist Individual is mostimportant Independence overdependence Rewards individualachievement Values uniqueness ofindividualCollectivist Views of group mostimportant High obligation to the group Self is defined in relation toothers Cooperation, notcompetition29.09.14 10 11. ExampleUSA?South Korea?29.09.14 11 12. United States (90) People taking care of themselves Identity based on individual Decisions based on individualneeds Emphasis on individual initiativeand achievement Everyone has a right to a privatelifeSouth Korea (18) Expect absolute loyalty to group Decisions based on group Identity based on social system High dependence on organizationand institutions Emphasis on belonging Private life invaded by institutionand organizations29.09.14 12 13. Masculinity (MAS)Hofstedes 3rd DimensionThe degree of masculinity indicateswhether a society leans moretowards masculine values, ortowards feminine ones. 14. ComparisonMasculinity values a high importance ofachievement material gain competitionsuccess is being the bestExpect women to havedifferent roles than menFemininity values relationship building equality a good quality of lifesuccess is enjoying whatyou doSocieties differentiate lessbetween genders 15. ExampleSweden?Japan? 16. Sweden (5) the manager should support the employees managers strive for consensus, conflicts aresolved by compromising people value equality & solidarity incentives : free time & flexible working hours important to include everyone no sense of superiority 17. Japan (95) long working hours, extremely hard working(hard for women to participate) life is a constant competition people are motivated if they are fighting witha winning team drive for excellence and perfection 18. Challenges as an international manager The Japanese want to work longer hours than theSwedish onesa lack of motivation among Japanesefelt pressure and lack of motivation among Swedish Solution: show Japanese the company is successful anyway draw up work schedule to reduce pressure of stayinglonger 19. Uncertainty avoidanceindex (UAI)Hofstede 4th Dimension 20. Uncertainty Avoidance Index The degree of anxiety that society members feelwhen in uncertain or unknown situations Focuses on the level of tolerance for uncertainty andambiguity within the society.29.09.14 20 21. ComparisonHigh uncertainty Very formal businessconduct with lots of rulesand policies Need and expect structure Sense of nervousnessspurns high levels of emotionand expressionLow uncertainty Informal business attitude More concern with longterm strategy than what ishappening on a daily basis Accepting of change andrisk29.09.14 21 22. ExampleUSA?Japan? 23. USA (46) Acceptance for new ideas and innovation Do not require many rules High trust in the state Thoughts are shared with colleagues / boss Feedback and criticism are accepted29.09.14 23 24. Japan (92) Japanese taught to prepare for any uncertainsituation avoid any risk Ceremonies for all aspects of life Much emphasis on etiquette It is not accepted to have a disagreement withyour employer Questions only answered if the answer isabsolutely certain29.09.14 24 25. Challenges as an internationalmanager International team, US team members express an ideafor innovationUS team members want to go ahead immediatelyJapanese team members wish to take their time to makeabsolutely sure that all details are knownSolution: Create a detailed project plan which is efficientbut also has relatively low risk29.09.14 25 26. Long term orientationversusshort term normative(LTO)Hofstede 5th Dimension 27. Long Term Orientation & Short TermNormative 5th dimension Added in 1990s Confucian philosophy Different culture different decision Society long term orientation / short termnormative. Long term orientation also defined as pragmatism. 28. ComparisonLong Term Orientation Prepare for the future Thrift and effort islargely encouraged Ability to adapttraditions in changedcondition Perseverance inachieving resultShort Term Normative Tradition and norms aremore important View the societal changewith suspicion Focus on achieving quickresults instead of longterm benefit 29. ExampleSouthKoreaEgypt 30. South Korea (100) Society is more pragmatic and long termorientated Almighty God is not familiar to South Koreans People guided by virtues and practical goodexamples Serve the durability of the companies. Serve the stakeholders and society at large formany generations to come. 31. Egypt (7) Indicates that the society is very normative Strong concern with establishing the absoluteTruth Normative in their thinking Exhibit great respect for traditions Small propensity to save for the future Focus on achieving quick results 32. Challenges as an international manager Challenges Egypt company Profit in three months South Korea company Increase in market shareafter three years Cooperation fail No same objective Understand the culture and come up with an win-winproposal to satisfy both objective is important. 33. Indulgence vs. Restraint (IVR)Hofstede 6th DimensionAdded as sixth dimension in 2010.Less data, fewer countries.Not yet fully adopted within the intercultural trainingand management.Is the data valid? (Asking participants how happy areyou?.)24.09.14 33 34. ComparisonIndulgenceFree gratificationIndividual happiness andleisure time are importantHigher % of peopledeclaring themselves veryhappyPositive emotions freelyexpressed andrememberedLoose gender rolesRestraintStrict social normsLower % of happy peoplePositive emotions not freelyexpressedA perception ofhelplessness: what happensto me is not my own doingLeisure time not given muchimportance24.09.14 34 35. Sweden?South Korea? 36. Sweden (78) Employees cannot easily be motivated with materialrewards Enjoying the moment rather than use time to compare toothers No need for status objects Employees encouraged to speak up Incentives like free time, flexible work hours and placesare effective 37. South Korea (29) Material reward is expected Employees easily feel treated unfairly Status objects are important Very hierarchical working environment, lower employees donot voice their own opinions People live to work, employees are expected to work as lateas the boss Indulging and using too much money on yourself is thoughtof as wrong 38. Challenges as an international manager South Korean organization in Sweden expectsemployees to work overtime frequently forhigher pay High employee turnover rate Solution: Hire more employees so that overtime is notnecessary flexible working hours and free time29.09.14 38 39. VideoPresentation of Hofstede's dimensions29.09.14 39 40. Conclusion Cultural norms play a large part in the mechanics andinterpersonal relationships of the workplace. Hofstede study has general approach, not individual one As a international manager, we need to know the culture thatadopt by the society where the company located. This allow us exercise our decision more easily and other willbe more willing to accept and recognized us as a managerwhen the decision we made is synchronized with theirculture.A country comparison tool can be found at the Hofstede Center.29.09.14 40 41. References http://geert-hofstede.com/dimensions.html http://www.mindtools.com/pages/article/newLDR_66.htm http://geert-hofstede.com/countries.html http://www.communicaid.com/cross-cultural-training/blog/indulgence-vs-restraint-6th-dimension/#.VCQmNk0riUk29.09.14 41 42. Thank you!29.09.14 42