Cultural Dimensions and Their Impact on Business Practices

Topics: Geert Hofstede, Cross-cultural communication, Culture Pages: 9 (2300 words) Published: October 31, 2012
Content Page
Power distance
Uncertainty avoidance
Individualism/ Collectivism
Feminine/ Masculine
Low context cultures/ high context culture

TROMPENAARS DIMENSIONS 4 Universalism/ particularism

Individualism/ collectivism
Achievement/ ascription
Neutral/ affective
Specific/ diffuse
Internal/ external

Individual rewards vs. group rewards
Centralized decision-making vs. decentralized decision-making: Informal procedures vs. formal procedures.
High organization loyalty vs. low organization loyalty:
Cooperation vs. competition
Short terms horizons vs. long-term horizon
Stability vs. innovation:





Nowadays, the interaction among people from different countries is more diffused compared to three decays ago. Different cultures interact together especially in the field of work where the same company can host employees from every part of the globe. This has been possible thank to the improvements in technology. Today emails take the place of letters; social networks work as a way of communication that replaces phones. In this way a big company for example can have employees working in different areas that carry out the same job. This interface makes possible for cultures to meet and to share believes, attitudes, behaviors, creating advantages such as new ideas for innovation, different perspectives on the same matter and it helps having a faster response to changes. However, there are also some disadvantages; cultural diversity provokes problems in an organization. These kinds of problems are related to communication; it is hard to establish an agreement and diversity increases misunderstandings and confusions leading to a “cultural shock”.

First of all it is important to identify what a culture is. Culture is the characteristics of a particular group of people, defined by everything from language, religion, cuisine, social habits, music and arts .


In order to establish to which culture an individual or a population comes from, during the course of the decays, anthropologists came up with different key dimensions of culture. The most known psychologists are Hofstede and Trompenaars. These are two academics that spent most of their lives working on the effects of culture in business. Hofstede is a researcher and psychologist who conducted a research on the employees of the IBM Company. He prepared a survey of about 1500 questions, in 20 different languages where he mainly asked about the employees’ value in achieving goals. Once he got the results he came up with four main cultural dimensions:

-Power distance
-Uncertainty avoidance
-Individualism/ Collectivism
-Feminine/ Masculine
Later on conducting another study, he also found a fifth dimension:

-Low context cultures/ high context culture

-Power distance refers to the level of hierarchy in institutions and organizations. There are countries where the boss has total power of the organization and others where the distribution of power is equal. For example in India, Venezuela there is a high power distance, every decision is taken by the boss, decision making is centralized; in Israel USA and Denmark instead, the command is in the hand of the employees. These are countries with a LPD.

-Uncertainty avoidance refers to the level of risks that institutions and organizations are willing to take. High uncertainty avoidance cultures are Japan, Greece where lifetime employment is more common, whereas in Singapore and Hong Kong there is low uncertainty avoidance and therefore higher job mobility.


Bibliography: Book
Schneider, Barsoux, susan C., Jean-Loius, 2002
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