The Business Book

(Joyce) #1

107


place”). In Russia, for example,
employees have little access to
executives (power distance is high).
Conversely, in low power-distance
cultures, such as many companies
in Australia, decision making is
distributed more evenly throughout
the organization.
Anthropologists have long
theorized that collectivist cultures
control members through external
societal pressure (shame), whereas
individualistic cultures control their
members more through internal
pressure (guilt). In his second
dimension, Hofstede proposed that
this tendency toward collectivism
or individualism can be most
clearly seen in the difference
between Asian and US companies.
When problem-solving, US
businesses tend to look to the
individual for a solution, whereas
Asian companies prefer to pose
the problem to a group.


Masculinity and femininity,
Hofstede’s third cultural dimension,
are viewed differently from one
organization to another. Some place
great emphasis on masculine traits
(such as status, assertiveness, and
advancement), while others accord
feminine traits (such as humanism,
cooperation, collegiality, and
nurturance) greater value. Italian
organizations, for example, tend to
have assertive, competitive cultures.
The fourth of Hofstede’s
dimensions is known as
uncertainty avoidance. This is the
extent to which workers feel
threatened by ambiguous
situations. The more uncomfortable
people are with “not knowing” how
to react in a certain scenario, the
more rules and policies the
company will need to introduce to
reduce that uncertainty. Companies
with a low degree of uncertainty
avoidance are likely to thrive in

more uncertain and ambiguous
situations. British organizations, for
example, are considered fairly at
ease with unstructured and
unpredictable situations.
Hofstede’s fifth dimension, long-
vs. short-term orientation, is the
extent to which organizations
privilege the short-term (profit) over
the long-term (value generation). ❯❯

See also: Creativity and invention 72–73 ■ Gods of management 76–77 ■ Hubris and nemesis 100–103 ■ Avoid groupthink
114 ■ Balancing long- versus short-termism 190–91 ■ The learning organization 202–07 ■ Creating an ethical culture 224–25


LIGHTING THE FIRE


The thing I have learned
at IBM is that culture
is everything.
Louis V Gerstner Jr
US businessman (1942–)

120

100

80

60

40

20

0
Power
distance

Individualism
vs. collectivism

Masculinity vs.
femininity

Uncertainty
avoidance

Long-term vs.
short-term
orientation

Hofstede’s five cultural
traits can be measured
across companies in
different countries.
Hofstede’s research
allocated a score between
1 and 120 for each trait.
For example, companies
in China received the
highest score—118—for
long-term orientation,
while companies in the
USA had a much
shorter-term focus,
receiving a score of 25 (in
Russia, data for this trait
was unavailable).

Brazil
Russia

China
USA
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