HOFSTEDES CULTURAL DIMENSIONS

Hofstedes Cultural Dimensions within

the Business World
Kelly Dolph
Spring Hill College

Hofstedes Cultural Dimensions within

the Business World

HOFSTEDES CULTURAL DIMENSIONS

In 1980, Geert Hofstede developed a theory of culture by gathering statistical data from
100,000 IBM employees around the world and determining the values on which cultures vary
(Dainton/Zelley, 2015, p. 97). His findings resulted with four dimensions which could be used to
explain, differentiate, and rank cultures. These four dimensions are individualism-collectivism,
uncertainty avoidance, power distance, and masculinity-femininity, with a later addition of the
fifth dimension long-term and short-term orientation.
Hofstedes first dimension, individualism-collectivism, addresses how people define
themselves and their relationships with others (Dainton/Zelley, 2015, p. 97). More specifically it
is the extent to which cultures value and privilege individuals success over the groups success
or vice versa. Individualism is the belief that the individual is the essential unit of society. It
focuses on independence, achievement, and uniqueness (Dainton/Zelley, 2015, p.235).
Collectivism, on the other hand, is a belief that the views, needs, and goals of the group are
more important than any individual views, needs, or goals. It focuses on obligation, connection,
and cooperation (Dainton/Zelley, 2015, p.230). One can decipher an individualistic culture from
a collectivistic culture by the four characteristics that are found in individualistic cultures and the
four characteristics that are found in collectivistic cultures. The first characteristic is that
individualistic cultures consider the individual to be the most important in any social setting.
Second, independence is stressed rather than dependence. Third, individual achievements are
rewarded. Lastly, individual uniqueness is valued in individualistic cultures. The first
characteristic found in collectivistic cultures is that views, needs, and goals of the group are more
important than any individual views, needs, or goals. Second, obligation to the group and
behaviors guided by duty are the norm. Third, the self in collectivistic cultures is not as distinct
from others because it is defined in relation to others. Lastly, there is a focus on cooperation over

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competition in collectivistic cultures. It is here that we see that collectivistic cultures tend to use
a high-context communication. Whereas individualistic cultures tend to use a low-context
communication. As you can see these two types of cultures differ from each other in many ways,
which is why certain cultures usually lean more towards one end of the continuum to operate
over the other.
The second dimension of culture, uncertainty avoidance, deals with cultural preferences
for the extent to which ambiguity is tolerated (Dainton/Zelley, 2015, p. 242). Ambiguity is the
possibility of multiple interpretations (Dainton/Zelley, 2015, p. 229). So in other words,
uncertainty avoidance is referring to the extent to which people within cultures can tolerate a
situation until they perceive it as unstructured, unclear, or unpredictable. Cultures that are high in
uncertainty avoidance avoid ambiguity, maintain strict codes of behavior, and support a belief in
absolute truths. Cultures that are low in uncertainty avoidance accept ambiguity, are more
inclined to take risks, innovate, and value thinking outside of the box (Dainton/Zelley, 2015, p.
99).
The third dimension of culture is power distance, which is the extent to which people
with little power in society consider inequity normal and acceptable (Dainton/Zelley, 2015, p.
99). High power distance cultures accept power as a scarce resource and low power distance
cultures value minimization of power distances. With that being said, there is a great importance
placed on status and rank in high power distance cultures and in low power distance cultures,
people higher in hierarchy are not assumed to be superior to people lower in the hierarchy (99).
Hofstedes fourth dimension, masculinity-femininity, has to do with the correlation of
biological sex and what behavior is considered sex-appropriate. Masculine cultures rely on
distinct sex roles for men and women. In masculine cultures, men are expected to be assertive,

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ambitious, and competitive; women are expected to be supportive, nurturing, and deferent
(Dainton/Zelley, 2015, p.100). The United States falls under the category of a masculine country.
On the other hand, feminine cultures have fewer rigid roles for behavior based on biological sex,
meaning men and women have equal rights. Instead of rigid sex roles, the focus in feminine
cultures tends to be on the facilitation of interpersonal relationships and concern for the weak
(Dainton/Zelley, 2015, p.100).
Even though Hofstedes original research resulted in the first four dimensions, after
responding to accusations of a Western bias to his work (Dainton/Zelley, 2015, p. 100) and
collecting additional data, he added the fifth cultural dimension, long-term and short-term
orientation. This is the extent to which cultures value a long-term or short-term approach to
planning the future. A long-term orientation is associated with thrift, savings, and perseverance.
A short-term orientation is associated with desire for immediate gratification.
Najla Podrug, Jurica Pavicic, and Vjekoslav Bratic researched how understanding
Hofstedes cultural dimensions can have a positive impact on businesses management and
decision-making skills. As P. Drucker said and is stated in the paper, what managers do is the
same in the whole world, but how they do it can be entirely different (Podrug/Pavicic/Bratic,
2006, p. 1). That is why it is essential to have a basic understanding of other cultures and
behaviors, especially businesses your business may be working with. In other words, recognizing
the differences among cultures helps managers understand their international partners and
competitors, which then improves the managerial skills. Also, because management practices
that may be normal to one culture, may be offensive to another.
The paper states the following about Hofstedes cultural dimensions: These dimensions
representing cultural differences empirically have confirmed in many occasions that they are

HOFSTEDES CULTURAL DIMENSIONS

related with numerous aspects from the management and organizational domain
(Podrug/Pavicic/Bratic, 2006, p. 2). So a business can identify the basic differences in cultures
by using Hofstedes five cultural dimensions, which are power distance, uncertainty avoidance,
individualism/collectivism, masculinity/femininity, and long-term/short-term orientation. By
using the dimensions one can rank cultures from high to low with each one.
So in all, the best way to do something depends on that cultures values, beliefs,
attitudes, and behavioral patterns of the people involved (Podrug/Pavicic/Bratic, 2006, p. 6).
Therefore, culture influences the way managers and businesses make decisions and solve
problems. Also, most importantly, by understanding the cultural dimensions a business can
increase their knowledge of management thinking, practices, and styles across cultures.
In 2014, Morten Brante researched the impact of culture on sales incentives and sales
performance using Hofstedes cultural dimensions with multiple countries.
As noted many times throughout Brantes dissertation, sales incentives such as
commissions, sales contests and Sales Promotion Incentive Funds are used to drive sales
performance (Brante, 2014, p. vi). Other studies have also said that culture and Hofstedes
cultural dimensions impact marketing in businesses. For example, Hewett, Money, and Sharma
found that the relationship between industrial buyers and sellers is moderated by national culture
(Brante, 2014, p. vi).
According to Brante, since compensation is used fundamentally as a tool to motivate a
sales force, acceptance of the compensation plan is important. Therefore, relating to Hofstedes
first dimension, power distance, the relationship between sales incentives and sales performance
is moderated by the degree of power distance, with low power distance cultures impacting
performance more than high power distance cultures (Brante, 2014, p. 37). That is because

HOFSTEDES CULTURAL DIMENSIONS

since employees in high power countries seem to accept being paid unequal and are expected to
emphasize negotiations and outcomes, they are also negatively impacting the level of their sales
performance.
Next discussed, was the uncertainty avoidance dimension, where people living in a
culture with high uncertainty avoidance have more anxiety and stress than people living in a low
uncertainty culture. Research has shown that economic decisions associated with forms of
rewards systems are influenced by the acceptance level of risk. In a culture with high uncertainty
avoidance it is essential to have clarity and certainty, which is why sales people in these cultures
experience more anxiety than those in low uncertainty cultures. One way suggested to lower
their anxiety is by having a high base pay compensation package, which will then decrease
variable commission and lower the risk of uncertainty. Therefore, the relationship between sales
incentives and sales performance is moderated by the degree of uncertainty avoidance, with low
uncertainty cultures impacting performance more than high uncertainty cultures (Brante, 2014,
p. 42).
As for individualism/collectivism, it was proposed that the relationship between sales
incentives and sales performances is moderated by the degree of individualism, with high
individualism cultures impacting performance more than low individualism cultures (Brante,
2014, p. 46). It is individualists short-term orientation that makes their performance better
because it causes them to assess opportunities using cost-benefit analysis. Since they aim for
short term sales spikes and higher short term compensation, this analysis may lead sales people
to take advantage of price promotions and discounts in a more aggressive manner. Sales people
in high individualistic cultures gain higher individual profits when behaving in individualistic

HOFSTEDES CULTURAL DIMENSIONS

ways, whereas sales people in low individualism cultures may experience longer selling cycles
because of the increase in participation of decision makers.
When it comes to the fourth dimension, masculinity/femininity, masculinity was found to
have more of an influence on sales. This because cultures with masculine characteristics, such as
the United States, appreciate achievement and advancement more. Since these cultures prefer
merit-based rewards, as opposed to feminine cultures that prefer reward allocations according to
need, sales people in masculinity countries are more driven towards succeeding. The
relationship between sales incentives and sales performance is moderated by the degree of
masculinity, with high masculinity cultures impacting performance more than low masculinity
cultures (Brante, 2014, p. 50).
Long-term and short-term orientation, which is the fifth dimension, was found to be more
appreciated in cultures with long-term orientations. This is because people and businesses in
long-term orientation cultures work towards long-term goals and have less expectations for
immediate results. Whereas, people in short-term orientation cultures want immediate
gratification and work for recent results. Therefore, the relationship between sales incentives
and sales performances is moderated by the degree of long-term orientation, with low long-term
orientation cultures impacting performance more than high long-term orientation cultures
(Brante, 2014, p. 57).
The sixth dimension, which was later added my Hofstedes coauthor Minkov, is
indulgence versus restraint. Indulgence is defined as cultures that allow relatively free
gratification of basic and natural human desires related to enjoying life and having fun (Brante,
2014, p. 57). Restraint is defined as a culture that controls gratification of needs and regulates it
by means of strict social norms (Hofstede, 2011). Since happiness has been found to correlate

HOFSTEDES CULTURAL DIMENSIONS

with successful sales performance, the relationship between sales incentives and sales
performance is moderated by the degree of indulgence versus restraint with indulgence cultures
impacting performance more than low indulgence cultures (Brante, 2014, p. 62).
Brante stressed in his paper how important it is that since businesses are increasingly
being handled at a global level, they must learn how to navigate cultural differences. This is
because studies have proved that since culture impacts human behavior, it also impacts business
performance. By customizing sales incentive programs in individual regions or countries based
on a cultural dimension framework, multinational corporations may be able to grow their
revenue by improving their sales performance (Brante, 2014, p. 4). In other words, according to
Brante, by using Hofstedes cultural dimensions, a business can predict and optimize the
performance of sales at a global level. A business should aim to be low in power distance, low in
uncertainty avoidance, high in individualism, high in masculinity, low in long-term orientation,
and high in indulgence.
Lastly, not long ago Frederick Kohun, Vladimir Burcik, and Robert Skovira researched
Hofstedes Thesis. Their focus is to use Hofstede as a basis for explaining change in patterns of
socio-cultural perspectives (Kohun/Burcik/Skovira, 2012, p. 990) and to further build on
exploring cultural connections to curriculum, business education, and decision making.
First this essay included a description and discussion of Hofstedes cultural dimensions. It
first states how power in relationships, ambiguity of life, influences of groups, and nurturing
perspectives, and a temporal view of human affairs are problems that are common to all
societies. They are cultural norms that have become embedded in society as well as each
individual without conscious design (Kohun/Burcik/Skovira, 2012, p. 990). Next it stated that
the five dimensions were a theory-in-use about power, and relationships (PDI); a theory-in-use

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about the uncertainty of situations, affairs, and trust of people (UAI); identification of self with a
group or as an individual (IDV); awareness of relationships as nurturing or aggressive (MAS),
and long-term or short-term orientation (LTO). They also touched a little bit on the sixth
dimension, indulgence versus restraint. ... Indulgence is a tendency to allow relatively free
gratification of basic natural human desires related to enjoying life and having fun restraint,
reflects a conviction that such gratification needs to be curbed and regulated by strict social
norms (Hofstede, Hofstede & Minkov, 2010, p. 281). For the purpose of the research discussed
in this paper, the base gathering tool used in this study did not include this new dimension, just
the first five dimensions.
Finally, the last part this essay discusses is about the research from a sub-population of
students and faculty in the Slovak Republic that was collected annually from 2008 to 2012. This
is discussed in the context of global change, Information and communications technology (ICT)
infrastructure, and cultural context. The data was collected through a hard or technological copy
questionnaire of a survey from Hofstede regarding his five cultural dimensions. It is states that
the reason the research started in 2008 is because it is the year that the world went into a
financial crisis that began in the United States and it was the first time the first generation in the
Slovak Republic has grown up under democracy.
While power distance was found to be fairly consistent over these four years, the data
revealed that it indicates opportunity and optimism while the Hofstede data can be interpreted to
indicate skepticism and cynicism. With respect to individualism-collectivism, the data reflected
more consistency in an individualistic orientation reflecting an attitude of self-determination as
possibly affected by global knowledge made available to them from ICT access and a usage
comfort level. The femininity-masculinity dimension for the data indicate a feminine nurturing

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10

social orientation, which is in contrast to the Hofstede aggregate data that interpreted masculine
attributes as the socio-cultural norms of the past. The uncertainty avoidance dimension reflected
the increasing stress and uncertainty in the world. Lastly, the long-term and short-term
dimensions can be interpreted to focus more on stability and shorter term results. However, the
data from 2010 and 2012 showed a slight movement for the acceptance of change and flexibility.
This is also in contrast of Hofstedes data, which stressed the concern for stability and the here
and now. However, this research suggests that even though we live in an ICT driven global
environment, Hofstedes cultural dimensions still exist, even though cultures rankings may vary
from when Hofstede first developed these dimensions.
Having an in depth understanding of how different cultures operate is advantageous to
management in helping them determine the style of management to use in various settings. For
example, when greeting in a business setting in Japan the Japanese will bow to each other versus
in the U.S. where they will shake hands. Understanding these cultural differences, prepares you
to alter your behavior to certain customs of different cultures. Also, with Japan being advanced in
technology, a business can use this to their advantage to better appeal to them and optimize their
performance. Advances in technology and logistics are enabling new and different markets for
businesses, which impacts the execution of marketing and management strategies (Brante,
2014, p. 13). In conclusion, Hofstedes cultural dimensions are useful in everyday life today for
many reasons, but within the business industry they are because with them businesses can
increase their management and decision-making skills, use them to appeal to cultures through the
use of technology, and optimize their business performances at a global level.

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11

References
Brante, M. (2014). Sales Incentives and Sales Performance: The Moderating Effect of Cultural
Dimensions. Retrieved July 30, 2015.
Dainton, M., & Zelley, E. (n.d.). Applying Communication Theory for Professional Life: A
Practical Introduction (Third ed.). Thousand Oaks, Calif.: SAGE Publications.
Hewett, K., Money, R. B., & Sharma, S. (2006). National culture and industrial buyer seller
relationships in the United States and Latin America. Journal of the Academy of
Marketing Science
Hofstede, G. (2011). Dimensionalizing cultures: the Hofstede model in context. Online Readings
in Psychology and Culture
Hofstede, G., Hofstede, G. J., & Minkov, M. (2010). Cultures and organizations: Software of the
mind. New York: McGraw-Hill.
Kohun, F., Burcik, V., & Skovira, R. (2012). Research into Hofstede's Thesis. Retrieved July 30,
2015, from http://issbs.si/press/ISBN/978-961-6813-10-5/papers/ML12_213.pdf
Podrug, N., Pavicic, J., & Bratic, V. (2006, October 1). Cross-Cultural Comparison of Hofstede's
Dimensions and Decision-Making Style within CEE Context. Retrieved July 30, 2015,
from https://bib.irb.hr/datoteka/268819.Podrug_Pavicic_Bratic_Sarajevo.pdf