In Partial Fulfilment of the Requirements in
Executive Summary
Introduction
Globalization is one of the major factors that influence the way people and groups such as organizations go about their lives today. Essentially, globalization refers to the integration of people, organizations, cultures, and sectors around the world. Progress and development, particularly in technology, facilitate globalization in that it creates small communities that interact and brings about various outcomes. In the business sector, globalization has made possible the development of the multicultural or diverse workplace. As organizations transition into multinational companies and as they acknowledge the advantages and contributions of diversity to their business, businesses look for foreign investments to establish commercial presence abroad and hire people of diverse cultural backgrounds. Establishing businesses abroad and hiring personnel or employees from different cultures necessitate adjustments or changes in the way that management deals with human resources. Essentially, these adjustments or changes are necessary due to the impact or influence of culture on the behavior, interests, preferences, and priorities of individuals. Consequently, culture would affect employee performance and affect overall organizational performance.
Since culture affects operations and outcomes in the organization, it is highly important that managers look for ways to deal with human resources especially in the multicultural setting. One of the ways that organizations may address cultural issues is to explore and apply existing theories, concepts, models, and frameworks that help in dealing with these issues. Geert Hofstede’s five dimensions framework, for instance, helps organizations understand culture in different countries and consequently determine the potential effects of culture on foreign investments and the performance of human resources. The succeeding explores Hofstede’s framework including its practical application in the organizational setting, and a set of recommendations for managers in organizations aiming to address cultural issues in the workplace.
Discussion and Analysis
Hofstede developed the five dimensions framework of culture following a research study involving IBM, a multicultural organization. Hofstede surveyed 160,000 employees at IBM in different countries. Hofstede aimed to determine the similarities and differences of existing values and culture in various IBM organizations. Based on the results of the research study, Hofstede identified power distance, uncertainty avoidance, individualism versus collectivism, masculinity versus femininity, and long-term versus short-term orientation as five cultural dimensions (Rosenhauer, 2009, p. 20) that defines aspects and characteristics of culture.
Power Distance Index (PDI) refers to the level of equality or inequality in cultures. In some cultures, power is distributed equally which means that men and women, people of different ages or from different socio-economic conditions, among others, view each other as equals. In other cultures, power is distributed unequally which means that some people such as adults or elders, men, and those in respectable positions are more influential than others. Individualism (IDV) refers to the values of people in various cultures. In some cultures, people are individualists and set goal or objectives for themselves. In other cultures, people are collectivists, which means that they work together with others for shared goals or objectives. Masculinity (MAS) refers to the influence of gender in society. Cultures may either by masculine or feminine. Uncertainty Avoidance Index (UAI) determines the way that people perceive and manage conflicts and differences. Some cultures avoid conflict while others are more open to it. The fifth dimension is Long-Term Orientation (LTO), which determines how people in society set goals and go about accomplishing them (Paul, 2008, p. 156). Overall, Hofstede’s five dimensions of culture prove that cultures have different qualities. Some cultures observe one aspect of the five dimensions while others observe the opposite aspect of these dimensions. In the organizational setting, Hofstede’s five dimensions may be applied to organizations. International business organizations, especially those that succeed and benefit from considerable growth through global expansion eventually change to cope with the changes and unique nature of the business environment in foreign markets. For this reason, applying Hofstede’s five dimensions is highly important because it would allow organizations to handle the challenges of multiculturalism.
As formerly noted, our objective in this task is to describe Hofstede’s Five Dimensions framework and to determine how it applies in the workplace. Hofstede’s framework includes five dimensions of culture that describe or define distinct characteristics of culture. After conducting extensive research on various multicultural organizations around the world, Hofstede designed the framework to create cultural categories that define culture. The five dimensions are as follows: power orientation, social orientation, masculinity, uncertainty avoidance, and long-term orientation. Table 1 below illustrates the five dimensions and what it means when it comes to using them to describe and explore culture.
Power distance is one of the five dimensions, which refers to the level of social acceptance of unequal distribution of power. In the organization, for instance, management and the people may either accept or reject unequal distribution of power. Some companies prefer to maintain the gap between people in low, mid, and high positions in the organizational structure while other companies aim to achieve equality in the workplace. Power orientation also determines a culture’s views and perspectives when it comes to power and its distribution within the organization. Hence, we may categorize organizations as either power tolerant or power respectful (Ajami & Goddard, 2006, p. 213). Specifically, Hofstede defined these categories as low power and high power distance cultures. Low power distance cultures include European countries such as Denmark, Germany, Israel, the Netherlands, and the United Kingdom, the United States in North America, and Australia and New Zealand. Most organizations in these countries grant employees the privilege to bypass authority when necessary. Regardless of people’s position in the organization, whether one is a supervisor or a subordinate, companies in low power distance cultures consider managers and employees as equals in the workplace. High power distance cultures include most countries in developing regions such as Asia, Eastern Europe, Latin America, and West Africa. Organizations in these countries value power distance. People in high positions such as managers and supervisors expect their subordinates to respect them. Moreover, these cultures value the opinion and acknowledge the authority of elders, parents, teachers and other influential people in society (Nunez, Mahdi & Popma, 2007, p. 46). Overall, “A High Power Distance ranking indicates that inequalities of power and wealth have been allowed to grow within the society” (Paul, 2008, p. 156). On the other hand, “A Low Power Distance ranking indicates the society de-emphasizes the differences between citizen’s power and wealth. In these societies, equality and opportunity for everyone is stressed” (Paul, 2008, p. 156).
Social orientation, another dimension in Hofstede’s framework, concerns the views or attitudes of people about social interaction. In the organization, social orientation essentially refers to people’s level of belongingness. Hofstede categorizes cultures and organization as either individualists or collectivists. In cultures where people value individualism, they value personal achievements and aim for self-actualization. Furthermore, individualistic societies acknowledge and recognize the rights of individuals and value their freedom or liberty (Paul, 2008, p. 156). On the contrary, collectivist cultures focus on the quality of the group dynamic, and therefore, values consensus as a means to make decisions, set goals, and go about accomplishing them. Furthermore, collectivist cultures focus on developing and strengthening interpersonal relationships especially close ties among members of the community (Paul, 2008, p. 156).
Uncertainty avoidance is another dimension hat may by basing descriptions on Hofestede’s Uncertainty Avoidance Index (UAI). Uncertainty as a dimension refers to “the feelings that people tend to have regarding uncertain and ambiguous situations” (Ajami & Goddard, 2006, p. 214). In some cultures, some people accept uncertainty and ambiguity. In other cultures, however, people try to avoid uncertainties. People avoid uncertainties primarily because they are fearful of unknown outcomes especially when faced with change or transition. On the other hand, in other countries where tolerance to uncertainty is low, they are very much concerned about the implementation of laws, rules and regulations, and policies. The proper implementation of these ensures control and foster discipline among the people. Hence, in organizations where tolerance to uncertainty is low, people work better under circumstances where the management is in control and sets limitations or boundaries for people. Implementing rigid laws and encouraging discipline prevent conflicts, uncertainties, and chaos (Paul, 2008, p. 156). On the contrary, in cultures where there is high tolerance of uncertainty, people are more open to risks and conflicts. High tolerance to uncertainty means that “the country is less concerned about ambiguity and uncertainty and has tolerance for a variety of opinions” (Paul, 2008, p. 156).
Another dimension in Hofstede’s model is long term or goal orientation. Long term or goal orientation refers to “the manner in which people are motivated to work toward different goals” (Ajami & Goddard, 2006, p. 214). Differences in long term or goal orientation may be observed from the way that cultures or people set goals or make plans. Some cultures exhibit aggressiveness when it comes to planning and setting goals. People in other cultures, however, do not care much for planning and achieving long term goals and objectives. Cultures that exhibit long term or goal orientation are highly concerned about the future. As a result, people in long term and goal oriented cultures make decisions based on their predictions of their future. Since people in these cultures set long term goals, they are also hard working people. People in these cultures value perseverance and commitment because they view these characteristics as essential in achieving long term goals. Countries in Asia, particularly South and Southeast Asia are long term and goal oriented cultures. People in most Asian countries adhere to the principle of long term orientation, which means that they value future outcomes. In these countries, people prepare for the future by anticipating change and making investments to secure future outcomes (Paul, 2008, p. 156). On the contrary, countries that exhibit low long term or goal orientation do not value stability and therefore do the opposite (Paul, 2008, p. 156).
Hofstede used the foregoing model or framework to illustrate dimensions of culture and highlight how these dimensions affect organizations and the workplace setting. Hofstede’s (1980b) analysis of outcomes in the research studies differentiated the shared values and unique values of people in organizations that consequently define national cultures where IBM established its business (Enz, 2010, p. 688). Understanding an organization’s internal culture and how much it is influenced by the local culture in other countries will help multinational corporations identify possible risks and threats and determine and apply effective solutions, business strategies and practices to mitigate the impacts of those risks and threats. Moreover, the capacity of business organizations to link internal culture to business strategies and practices in a foreign environment is instrumental in organizational success (Bowie & Buttle, 2009, p. 87).
Conclusion
Based on the foregoing discussion, we are able to establish the nature of Hofstede’s five dimensions framework. The five dimensions refer to characteristics of culture that may also manifest in organizational culture. Hofstede’s five dimensions include the following: power distance, social orientation, masculinity, uncertainty avoidance, and long term orientation. The five dimensions define the way that cultures or organizations view the unequal distribution of power, the nature of social interactions, the dominance of gender, acceptance or tolerance to uncertainties, and long term goal setting. Using Hofstede’s five dimensions is necessary in understanding cultures especially in a world that is continuously becoming multicultural and diverse. Hence, the five dimensions help organizations determine their culture and assess cultures in potential locales for expansion to determine or establish compatibility or suitability of upcoming foreign ventures. Moreover, organizations may also use Hofstede’s five dimensions framework to assess cultural values of human resources and understand how to deal with people in the organization.
Recommendations
21st Century managers may take advantage of Hofstede’s five dimensions by using it primarily for assessment or evaluation. First, organizations looking to expand internationally should use Hofstede’s five dimensions framework to assess cultures in potential locales for expansion. This strategy must go in hand with the second recommendation, which is to use Hofstede’s dimensions to assess the organization’s culture. By assessing the organization’s culture and cultures in various potential locales, management would be able to determine existing organizational culture and determine which cultures in other countries match the former. It is important to establish compatibility between the organization’s culture and culture in locales for expansion in order to ensure effective transition and development in foreign investments. Branches or subsidiaries abroad must be able to carry out the organization’s goals and objectives and part of doing so is by abiding by organizational culture. Third, organizations may use Hofstede’s five dimensions by assessing culture of human resources. Most organizations nowadays understand the importance of adopting diversity in the workplace. To select employees or personnel that would work best for the organization, managers may also use Hofstede’s five dimensions to assess the compatibility of a potential hire’s cultural values to organizational culture. In this way, human resources management would be able to hire people from various cultures that would support and follow organizational culture. Finally, organizations may use Hofstede’s five dimensions to assess cultural issues and to prevent negative or undesirable outcomes after evaluation. The management may use Hofstede’s dimensions as basis for determining cultural values or characteristics that would help the organization grow. Through assessment, management would be able to determine its strengths and weaknesses in terms of organizational culture. For instance, an organization would be able to determine if its avoidance of uncertainty that disallows it to take risks also hinders organizational growth. Within this context, the management should assess organizational culture against practices, operations, outcomes, and performance. In doing so, organizations would be able to determine if their culture, which affects performance and operations help the company achieve its short and long term goals.
References
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Bowie, D. & Buttle, F., 2012. Hospitality marketing. New York, NY: Routledge.
Enz, C. A., 2010. The Cornell School of Hotel Administration Handbook of applied Hospitality strategy. Thousand Oaks, CA: SAGE.
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Paul, J. 2008. International business. New Delhi: PHI Learning Pvt. Ltd.
Rosenhauer, S., 2009. Cross-cultural business communication. Berlin: GRIN Verlag.
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