Gerard Hendrik Hofstede (Geert) a Dutch social psychologist, IBM employee, Maastricht University Professor Emeritus of Organizational Anthropology, and International Management, and the first Director of the Institute for Research on Intercultural Cooperation. He is highly recognized for his ground-breaking research on cross-cultural organizations and is credited with creating one of the first and widely used models for evaluating cultural dimensions in a global context.

Hofstede established Hofstede’s cultural theory as a foundation for cross-cultural communication. Cross-cultural communication consists of two forms: cross-cultural comparisons of how people from various cultures communicate, and communication dynamics that involve interactions between people of different cultures (Chen & Wang, 2020). Hofstede’s cultural theory uses a structure drawn from component analysis (an analysis of two or more independent variables) to highlight the impacts of a society’s culture on its members’ values and how these values connect to behaviors.

Between 1967 and 1973, Hofstede created his conceptual model using factor analysis (a process where values of observed data are expressed as functions of a number of possible causes in order to find which are the most important). He analyzed the results of an IBM (International Business Machines) global survey of employee values. Four dimensions were identified in the original theory along which cultural values may be examined. The four dimensions are power distance, uncertainty avoidance, individualism-collectivism, and masculinity-femininity. This model has been revised (Geert Hofstede, 2022).

Based on independent research in Hong Kong, Hofstede added a 5th component (long-term orientation) to capture elements of values not included in the original paradigm. In 2010, Hofstede added a 6th component to his theory (indulgence vs. self-restraint).

Hofstede’s work established a major research tradition in cross-cultural psychology, and it has been used by consultants and researchers in a wide range of sectors related to communication and international commerce. The theory has been widely applied as a study paradigm in a variety of domains, including cross-cultural communication, international management, and cross-cultural psychology. To this day, it remains a valuable resource in cross-cultural disciplines (Geert Hofstede, 2022).

Hofstede and his research team conducted an extensive study focused on national cultural preferences rather than personal preferences, which formed the basis of Hofstede’s Cultural Factor Analysis. In the comparison scales used by Professor Hofstede, he included 6 major elements: IVR (indulgence versus restraint), LTO (long-term orientation vs. short-term orientation), UAI (uncertainty avoidance index), MAS (masculinity vs. femininity), IDV (individualism vs. collectivism), and PDI (power distance index) (Hofstede’s Cultural Dimensions Theory, 2022).

In 1980, when Hofstede’s model for describing national cultural differences and their implications was first published. It was at a time when cultural disparities between societies were becoming more significant for both political and economic reasons.

Following the publication of his 1991 book: Cultures and Organizations: Software of the Mind, many management practitioners embraced the approach after analyzing his survey data and claims. In 2001, Hofstede released the second edition of Culture’s Consequences which was completely rewritten. In 2010, Gert Jan Hofstede and Michael Minkov co-authored the third edition of Cultures and Organizations: Software of the Mind (Hofstede’s Cultural Dimensions Theory, 2022).

The 6 Key Dimensions of Hofstede’s Cultural Theory

1.Power-Distance Index

• The power distance index measures how less powerful members of a group or organization accept and anticipate power to be divided unequally.
• Although all cultures have some degree of inequality, Hofstede observes that some societies have higher levels of equality than others.
• In cultures with a high degree of power distance, individuals accept hierarchies in which everyone has a position in a ranking without explanation.
• While cultures with a low power distance strive towards an even distribution of power. This implies that cultures that value and demand more egalitarian or democratic relationships are more likely to do so (Nickerson, 2022).

2. Individualism Versus Collectivism (IDV)

• The relative importance of individual versus group interests is the subject of this dimension.
• Individualism, the high end of this scale, is characterized as a preference for a loosely woven social structure in which people are expected to look out for themselves and their immediate family.
• Collectivism, on the other hand, is a preference for a close-knit social structure in which people may expect their relatives or members of a certain in-group to look after them in exchange for unwavering allegiance.
• Whether people’s self-image is defined in terms of “I” or “We” reflects a society’s perspective on this dimension.
• The United States of America is regarded as one of the most individualistic countries worldwide (Bruin, 2017).

3. Uncertainty Avoidance Index

• The uncertainty avoidance index measures how much ambiguity and uncertainty are accepted. This dimension looks at how people react to uncertain situations and unexpected events.
• A high uncertainty avoidance index suggests a limited tolerance for risk-taking, ambiguity, and uncertainty. The uncertainty is mitigated by enforcing stringent rules, regulations, and other guidelines.
• While a low uncertainty avoidance index suggests a heightened tolerance for risk-taking, ambiguity, and uncertainty. The unknown is more readily accepted, and there are fewer laws, regulations, and other restrictions (Corporate Finance Institute, 2022).

4. Masculinity vs. Femininity

• This dimension is also commonly known as gender role differentiation. It examines how much conventional masculine and feminine roles are valued in a society.
• In a masculine society, competition, strength, courage, and assertiveness are valued.
• In a feminine society, quality of life, nurturing, and cooperation are valued.
• A high femininity score suggests that in that society, traditionally feminine gender roles are more recognized; a low femininity score indicates that those roles are less significant (Nickerson, 2022).

5. Long-Term Orientation vs. Short-Term Orientation

• This dimension evaluates how society interprets its time horizon.
• Long-term orientation focuses on the future and the willingness to forego instantaneous gratification to attain long-term success. Persistence, tenacity, and long-term growth are the hallmarks of long-term orientation.
• Short-term orientation emphasizes the present over the future and focuses on the immediate future, short-term success, or fulfillment. Short-term orientation highlights immediate results and adherence to tradition (Corporate Finance Institute, 2022).

6. Restraint vs. Indulgence

• This dimension is a relatively new addition to the model. It is described as how far people try to moderate their urges and impulses as a result of their upbringing. Indulgence is a term for a lack of control, while restraint is a term for firm control. This means cultures might be classified as either indulgent or restrained.
• Indulgence refers to a culture that provides for the relatively unrestricted satisfaction of basic and natural human desires such as enjoyment of life and fun.
• Restraint denotes a society that suppresses and regulates the satisfaction of desires through stringent social rules (Bruin, 2017).

Human Resources Dealing with Cultural Differences

Like all other departments, human resources departments are increasingly confronted with the issues posed by the global interconnection of markets. When a single culture dominates, personnel management is not complex since everyone has a similar idea of what is reasonable, wrong, and appropriate conduct. Major misunderstandings might occur when teammates come from different cultural backgrounds or when the manager’s and team’s experiences are not the same (Belyh, 2019).

1. Recruiting – Distinct people have very different ideas about what makes a good candidate. Individualism macho cultures value people who have strong convictions, are outspoken and are self-assured.  In collectivist feminine civilizations, modest and ‘well connected’ candidates are advantageous (Belyh, 2019).

2. Target Setting – In Germany, the Netherlands, the United Kingdom, the United States, and other low power distance cultures, objectives are set by senior managers; however, in high power distance cultures like Italy, France, and Belgium, targets are set by senior managers (Belyh, 2019).

3. Training – Trainer-centric learning is shared in elevated cultures, whereas trainee-centric learning is highly interactive and familiar in low-power-distance cultures (Belyh, 2019).

4. Appraisal – Most evaluation methodologies were established in the US or the UK, with high levels of individuality and low power distance. In the end, such nations think providing straight; constructive feedback is the best way to enhance performance. Nevertheless, direct feedback is considered unpleasant and insulting in countries with significant power distance and collectivistic traditions (Belyh, 2019).

No community is uniform, and no individual is the same. On the other hand, the Hofstede model Hofstede model may assist employees to be less fearful of the unknown, avoid making mistakes, and gain much-needed courage when working in a foreign nation (MindTools, n.d.).

Class of 2022 Contributions:  Pooja Solanki, Jyotika Mishra, Shaily Joshi