INTERNATIONAL BUSINESS

Cultural Considerations
- Hofstede

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updated 2015 May 25
 
 
INTRODUCTION In most International Business textbooks there is some reference to terms which originally were developed by the cultural anthropologist Dr. Geert H. Hofstede. Hofstede is not specifically mentioned in the former C44 text so we will provide information about him below.

Dr. Geert H. Hofstede, born 1928 in the Netherlands. He is famous for having done a study of the  international cultural aspects of the employees of a large corporation - the intention was that we  would be able to find some generalizations about particular cultures that would help us  understand them, even if we did not have the time to become experts on all aspects of the  particular culture. 

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"Between 1967 and 1973 Professor Geert Hofstede surveyed over 100,000  IBM employees in 49 different countries about their preferences in terms of work-related values. The result was a number of seminal works on cultural values and differences published during the 1980s and 1990s. These have had a profound influence on the field and practice of international management - in any undergraduate course or management seminar on the challenges of cross-national management there will be substantial reference to Hofstede."
 http://geert-hofstede.international-business-center.com/gooderham.shtml
© 2003 - 2004 international-business-center.com - all rights reserved 
- in Jan 2005, the email contact link on their website was not working

Hofstede's four dimensions of cultural variability, commonly referred to as "Hofstede's Dimensions." These include: Uncertainty Avoidance, Power  Distance, Masculinity-Femininity, Individualism-Collectivism, Confucian Dynamism. These dimensions were first discussed in his 1980  publication, "Culture's consequences: International differences in work-related  values." 
 
 

Hofstede was described on a web site of the University of Hawaii 
http://www2.soc.hawaii.edu/com/resources/intercultural/Hofstede.html 
the link is not working in 2005

see instead  http://geert-hofstede.international-business-center.com/index.shtml 

An example of Hofstede mentioned in the context of research on cultural diversity and the fact that national
 culture influences how companies think about things   http://blue.temple.edu/~eastern/florin.html
scroll about 2/3rds of the way down the document to the section re: Hofstede

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These are Hofstede's 4 dimensions with which one may analyze the culture of a region
 1.Uncertainty Avoidance 
 2.Power Distance 
 3.Masculinity-Feminity 
 4.Individualism- Collectivism 
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1. Uncertainty Avoidance "This refers to the degree to which a society prefers predictability, security and stability. In societies with high scores on this index there is an emotional need for rules, written and unwritten."
http://geert-hofstede.international-business-center.com/gooderham.shtml

What this means:
You may categorize a culture based on the degree to which they avoid uncertainty. If the culture is very afraid of uncertainty then they will create many laws, rules and regulations to control people's behaviour - on the opposite would be a culture that values freedom and has few laws because the people believe they can take care of themselves and are not uncertain. A good example would be Texas Vs. Ontario

A culture that is very afraid of uncertainty can also be sold things based on a different blend of images in print and TV commercials. For example, tires may be sold in one region based on their safety rating and ability to brake in bad weather, in another region they may be marketed based on their "cool looks" and aggresive tread pattern for SUVs.

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2. Power Distance "This dimension indicates the extent to which a society expects and accepts a high degree of inequality in institutions and organisations. In a country with a large Power Distance, organisations are characterised by formal hierarchies and by subordinates who are reluctant to challenge their superiors. The boss is very much the boss."
http://geert-hofstede.international-business-center.com/gooderham.shtml

What this means:
You may categorize a culture based on the degree to which the upper class is separated from the lowest class. If this distance is small, like in Canada, the there might not be a lot of domestic conflict which is "class based", if the distance is large, like in India, then there may be strong class based tensions.

For people selling consumer products internationally, knowledge of the Power Distance in a country may apply to who you select as actors to feature various consumer products and the words you use to decribe them - particularly if a product may be considered to be used by the lower class of people, or upper class. These considerations would apply to products such as luxury electronic consumer items or expensive watches or high priced vehicles.

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3. Masculinity-Feminity "Masculine societies value assertiveness, competitiveness and materialism as opposed to the ‘feminine’ values of relationships and the quality of life." 
http://geert-hofstede.international-business-center.com/gooderham.shtml

What this means:
In some cultures, like Afghanistan, the difference between the men and women is quite extreme as it relates to clothing, job oportunities, religious regulations, language, human rights etc. In other countries, like Sweden or Norway, the difference between men and women are minimal. In many Scandinavian countries women occupy senior positions in government in high percentages, they attend university unrestricted, they hold a wide range of jobs with no discrimination.

For people selling consumer products internationally, it is important, when you are adapting your promotional mix, to take in to account the degree to which the people in the target market are similar to, or different from, the Masculinity-Feminity distance you have in your home market.

For example, it may be acceptable for a women in a short dress and bare arms to caress the leather seats in a Cadillac TV commercial in North America, but you would not be advised to use this in an Arabic speaking country that had a large Muslim population since the appearance of the women's clothing would be considered contrary to their cultural norms.

For example, it may be attractive to have a female actress posing as a lawyer in a IT commercial marketing some IT product, but this would not be "believable" in some regions were female access to post-graduate university education is still not common.

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4. Individualism- Collectivism "This dimension relates to the extent to which people prefer to take care of  themselves and their immediate families rather than being bound to some wider collectivity such as the extended family or clan. In terms of organisational life, in highly individualistic societies there will be a sharp distinction between work and personal life."
http://geert-hofstede.international-business-center.com/gooderham.shtml

What this means:
In some countries like Japan, which has a high degree of Collectivism for historical / agricultural reasons, it would be recommended that marketing consumer products would be more successful if groups of people were in the ad, as compared to individuals.

For example, if you wanted to market a new cell phone feature in Beijing, you would create a TV commercial showing how the person shared this with all their friends, if you wanted to market a new cell phone feature in New York, you'd show an individual and how they used it to save time or money.

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Hofstede Outdated? "There are critical reasons to argue that Hofstedes model is dated and may be inapplicable to the contemporary international business environment. The first reason is globalization the broadening geographical inter-linkages of products, markets, firms and production factors, with a large portion of each derived, generated, or available in more countries and regions according to Papaconstantinou, G.(1995)."

http://www.ukessays.com/essays/business
/arguing-that-hofstedes-model-is-outdated-and-obsolete-business-essay.php#ixzz3bBvdXNoO

1. Hofstede's study and conclusions were based on studying the employees of IBM operating in many countries in 1980.
The world of international business in 2015 is MUCH different than the business world 35 years ago in 1980 - for example, consider the development of business in China, India, South Korea etc.

2. The "Technological Environment' and the World Wide Web have made significant differences in the way people find out information about international business and conduct it.

3. Power Distance - the existence of the WWW has allowed people to communicate quickly and extensively through all levels of rankings in an organization. The people who work in I.T. and e-commerce and social media have a different way of regarding rankings and levels of authority which is very egalitarian compared to the deferential way people communicated in the 1980's and earlier.

4. Gender issues in 2015 are significantly different than 35 years ago in 1980.
 

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Hofstede is perhaps the best known cultural anthropologist (in the context of applications for understanding international business) but he is not the only person who dealt with these issues. Dr. P.S. Raju, who serves as a Professor at University of Louisville, Kentucky also developed a way of looking at the way culture effects behaviour.
The role of culture, in Int'l Consumer Behaviour
The A-B-C-D paradigm was developed by
Dr. P.S. Raju.

Published in the Journal of Consumer Marketing in 1995, Dr. Raju suggested that we could look at international marketing in terms of the consumption process and how that is effected by cultural considerations.
 
 

 

http://204.179.122.51/embimages/mlh/cy/07712EC2.PDF

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permissions

In this page, some sections are quoted from
http://geert-hofstede.international-business-center.com/gooderham.shtml
the authors were PAUL N GOODERHAM, and ODD NORDHAUG,Norwegian School of Economics and Business Administration
© 2003 - 2004 international-business-center.com - all rights reserved
- in Jan 2005, the email contact link on their website was not working

permission to quote Dr. Raju was given in an email from Dr. Raju dated 2005 Jan 6th
 
 
 
 
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