5Th Dimension Hofstede

International Business Cultures

Working with international colleagues and clients

© All rights reserved. International Works 2004

International Works

§ Specialists in improving effectivity of international organizations

§ Bp office: active in Europe & “Emerging markets”

• Clients Bp office: e.g. Akzo Nobel, Exxon Mobil, GE Medical, Rába

§ Int’l clients: Deutsche Bahn, DSM (NL), EuroNext, St. Gobain (FR)


International Works Team

• Philippine Waisvisz (Netherlands), senior consultant

• Ida Makra (Hungary), junior consultant

• International Works specializes in

improving efficiency in international organizations

Why is it more difficult to work internationally?


Case 1:

• Swedish organisation settles down in Moscow.

• Team:

− 15 Swedish

− 10 Germans

− 30 Russians

• Two sides: Westerners vs. Russians.


The Russians: “The Swedes and Germans are incapable managers, without proper leadership.”

Swedes / Germans vs. Russians

The Swedes and Germans:“Russian colleagues are passive and not able to act independently”


Case 2

• US company takes over Polish company.

• US and Polish managers like one another, but …

• Working together is difficult.


Americans:“The Poles can take all initiative to achieve their targets. So what’s the problem?”

Polish:“The Americans are so vague. Why don’t they just say what we should do and how to do it?”

Case 2


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Culture: Central tendency in

society about what is ‘normal’, and ‘rational’


How can we explain this?

• Key issue: the different cultural backgrounds

• Culture determines

− the way we live,

− the way we think,

− the way we behave and act in daily life,

− and even the way we die.

• Don’t underestimate implications of cultural differences for

− management and

− leadership

• Hofstede’s research:

− very good insight into the secrets of cultural differences


When you ‘re a kid, you don ‘t have much variety ofexperience

You live with your parents and that ‘s all you know. You grow up thinking whatever they do is“normal “


• Use of first/last name

• Disclosure of feelings

• Paying for others, repaying

• Birth/name days

• Social visits

• Swearing

• (Discussing) religion

• (Discussing) sex

• (Discussing) politics

• Joking

• Obedience

• Handshake

• Touching

• Material and emotional support

• Public criticism

• Stand up for yourself

• Discussing confidentials

• Family invitations

• Personal advice

• Appearance

• Self-presentation

• Time-taking

• Discussing finances

• Positive regard

• Informing of schedule

• Sharing news

• Privacy

• Eye contact

Source: Argy le , Hendersen, Bond, I i zuka & Contare l lo, 1986


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How quickly should you express your disagreement in public?

Normal distribution - mainstream culture

“The average people”


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Normal distribution - mainstream culture

How quickly should you express your disagreement in public?


How do you recognize culture?

• Symbols, like:

− Objects: cars, dress style(s)

− Language: jargon, slogans

− Environment: logo, office furniture, etc.

• Behavior and habits, e.g.:

− Who is succesful and why?

− How do we deal with outsiders?

− How do we work: communication style, meetings, team work, planning


How is culture developed and maintained?

• Whenever people are together, they have to find a way to co-operate

• It starts directly after birth: parents, etc.

• “Culture” is acquired in an indirect way

• Social pressure: you have to comply or you don’t fit in

• Culture is everywhere


How to fill the gap between cultures?

• Change yourself

• Change the client

• Adjust your strategy


Listen and observe - find out...

• Recognize how people think, see the world.

• Find out how they relate to social expectations.

• Anticipate their attitudes, mentality.

• Be aware of your own guiding principles for behavior.

Hofstede Model

A theory turned into practice

to effectively manage internationally


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Culture: Central tendency in

society about what is ‘normal’, and ‘rational’


International Business Culture Model

• Study on IBM over 50 subsidiaries worldwide by

Prof. dr.Geert Hofstede (IBM, Insead, Maastricht)

First published first in 1980, updated in 1991 and 2001

• Created database of tendencies in societies

Database: 116.000 returned questionnaires

Far beyond one single individual management experience

• Since 2000 in the top-10list of most quoted scientific researchers


Hofstede’s 5-D model helps to ...

• Detect underlaying processes

• Set priorities: change when necessary, let go when possible

• Develop new alternatives

• Utilize managerial skills in international settings

• Improve productivity & atmosphere


How can you apply it?

• 4 or 5 characteristics of culture

• Meaning of each of them,

• How do they interact,

• Apply to business situations.


Some aspects of the Hofstede model

• Neutral, descriptive, not judgmental,

• Subtle scale 0 - 100,

• Based on solid research,

• Analytical tool providing key-insights,

• Correlations with other research.


Individualism

Power distance

Achievement/Moderation

Uncertainty avoidance

100

100

100

100

00

0 0


Individualism

Power distance




Staff expects very precise instructions

Staff expects only general guidelines


Individualism

Power distance





Questions on Uncertainty Avoidance

• Where is registration of products most time consuming?

• “It’s good to bring conflicts out in the open.”

• “We need to involve an expert on this issue.”


Power distance

IndividualismUncertainty avoidance


100

0

Managers shouldbe decisive

Managers shouldcreate concensus


Questions on Achievement/Moderation

• Where would ‘pay for performance’ work best?

• Where is it most important for managers to be ‘liked’ by their staff?

• Where will people be more flexible in changing their opinion?


Individualism

Power distance



People tend to be indirect

People tend to be direct


Questions about Individualism

• “It’s the only price that counts.”

• Where are people most likely to make exceptions?

• “If you criticise the work, you hurt the person, too.”


Individualizmus

A tekintély tisztelete

Sikerre való törekvés/ Mértékletesség

Bizonytalanság elkerülése100

100

100

100

00

0 0


Individualism



Power distance

100

0

Staff expects to be ordered

Staff expects to be asked


Questions on Power Distance

• A company should always be led by a very senior person.

• “Boss, I have a problem!”

• If my boss does’t inspect my job, he doesn’t care about it.


Individualism

Power distance



control systems(in)dependence

standing out risk taking


Individualism

Power distance



USAIndia

Hungary

FranceChina


Confusian Dynamism (CDI)

The extend to which a society exhibits a pragmatic perspective oriented on survival in the far away future, rather than a normative perspective that pays of quick results.


Normative (low CDI)

• Absolute truth

• Normative

• Near term orientation

• Acceptance of change

• Quick results expected

• Conventional/traditional

• Spending for today

• Reciprocation of greetings, favors, gifts

Pragmatic (high CDI)

• Many truths (time, context)

• Pragmatic

• Long term orientation

• Concern for stability

• Perseverance

• Traditions adapted to context

• Saving for tomorrow

• Reciprocation based on ability


Values associated with Confucian Dynamism

• Personal steadiness and stability

• Protecting your ‘face’

• Respect for tradition

• Reciprocation of greetings, favors and gifts

• Persistence (perservance)

• Ordering relationships by status & observing this order

• Thrift

• Having a sense of shame


Questions on CDI

• Quick results are motivating.

• Changing your mind is immature.

• The choice between good and bad is essential.

Questions?

Some combinations


Individualism

Power distance



Power distance

Achievement/ModerationUkraine

Slovakia

Romania

Poland

Czech Republic

Croatia

Hungary


Individualism

Power distance



Power distance


Ukraine

Romania

Croatia


Individualism

Power distance



Power distance


Poland

Czech Republic

Hungary

Southern Europe


Individualism

Power distance



Belgium


Individualism

Power distance



Belgium(Dutch speakers)


Individualism

Power distance



Belgium(French speakers)


Individualism

Power distance



France


Individualism

Power distance



Italy


Individualism

Power distance



Spain

“SCANDINAVIA”


Individualism

Power distance



Denmark


Individualism

Power distance



Estonia


Individualism

Power distance



Finland


Individualism

Power distance



Netherlands


Individualism

Power distance



Norway


Individualism

Power distance



Sweden

NEAR EAST


Individualism

Power distance



Arab countries(average)

EASTERN EUROPE


Individualism

Power distance



Russia


Individualism

Power distance



Belarussia


Individualism

Power distance



Lituania


Individualism

Power distance



Ukraine


Individualism

Power distance



Slovakia

South Eastern Europe


Individualism

Power distance



Albania


Individualism

Power distance



Bulgaria


Individualism

Power distance



Croatia(Zagreb)


Individualism

Power distance



Greece


Individualism

Power distance



Montenegro


Individualism

Power distance



Romania


Individualism

Power distance



Serbia (Beograd)


Individualism

Power distance



Turkey

CENTRAL EUROPE


Individualism

Power distance



Austria


Individualism

Power distance



Czech Republic


Individualism

Power distance



Germany


Individualism

Power distance



Hungary


Individualism

Power distance



Poland

SOME ASIAN COUNTRIES


Individualism

Power distance



China


Individualism

Power distance



India


Individualism

Power distance



Indonesia


Individualism

Power distance



Japan


Individualism

Power distance



Korea


Individualism

Power distance



Philippines Islands


Individualism

Power distance



Singapore

ANGLO-SAXON COUNTRIES


Individualism

Power distance



Australia


Individualism

Power distance



Canada


Individualism

Power distance



Canada(French speakers)


Individualism

Power distance



Great Britain


Individualism

Power distance



Ireland


Individualism

Power distance



USA

The End

Questions?

Good Morning!