Culture’s Consequences1 People carry “mental programmes” which are developed in the family in early childhood and reinforced

in schools and organisations. IT is these mental programmes that contain a component of national culture. The book “Culture’s consequences” identifies four main dimensions along which dominant value systems in 40 countries can be ordered and which affect human thinking, organisations, and institutions in predictable ways. The book is based on a large research project on national culture differences across subsidiaries of a multinational corporation in 64 countries. The four dimensions surveyed and discussed are: Power Distance, Uncertainty Avoidance, Individualism and Masculinity. 1. Power Distance

The first of the four dimensions of national culture is called Power Distance. This dimension is about the extent to which the less powerful members of organizations and institutions accept and expect that power is distributed unequally. Thus, the basic issue involved, to which different societies have found different solutions, is human inequality. Inequality can occur in areas such as prestige, wealth, and power; different societies put different weights on status consistency among these areas. Inside organizations, inequality in power is inevitable and functional. This inequality is usually formalised in hierarchical boss-subordinate relationships. According to Mulder’s Power Distance Reduction theory, subordinates will try to reduce the power distance between themselves and their bosses and bosses will try to maintain or enlarge it. The present study, however, suggests that the level of power distance at which both tendencies will find their equilibrium is societally determined. Given on the following page is a summary of connotations of power distance index (PDI) differences found in the survey research by Hofstede. Summary of Connotations of PDI Differences Low PDI Countries Parents put less value on children’s obedience. Students put high value on independence. Authoritarian attitudes in students are a matter of personality. Managers seen as making decisions after consulting with subordinates. Close supervision negatively evaluated by subordinates. High PDI Countries Parents put high value on children’s obedience. Students put high value on conformity. Students show authoritarian attitudes as a social norm. Managers seen as making decisions autocratically and paternalistically. Close supervision positively evaluated by subordinates.


Excerpted by Prof. Madhavi Mehta from “Culture’s consequences” by G. Hofstede (1980) for classroom discussion.


Low PDI Countries Stronger perceived work ethic; strong disbelief that people dislike work. Managers more satisfied with participative superior. Subordinates’ preference for manager’s decision-making style clearly centered on consultative giveand-take style. Managers like seeing themselves as practical and systematic; they admit a need for support. Employees less afraid of disagreeing with their boss. Employees show more cooperativeness. Managers seen as showing more consideration. Students have positive associations with “power” and “wealth”. Mixed feeling about employees’ participation in management. Mixed feelings among managers about the distribution of capacity for leadership and initiative. Informal employee consultation possible without formal participation. Higher-educated employees hold much less authoritarian values than lower-educated ones.

High PDI Countries Weaker perceived work ethic; more frequent belief that people dislike work. Managers more satisfied with directive or persuasive superior. Subordinates’ preference for manager’s decision-making style polarised between autocraticpaternalistic and majority rule. Managers like seeing themselves as benevolent decision makers. Employees fear to disagree with their boss. Employees reluctant to trust each other. Managers seen as showing less consideration. Students have negative associations with “power” and “wealth”. Ideological support for employees’ participation in management. Ideological support among managers for a wide distribution of capacity for leadership and initiative. Formal employee participation possible without informal consultation Higher-and lower-educated employees show similar values about authority.

Consequences of National Power Distance Index Differences for Organisations • • • • • • Low PDI Less centralisation Flatter organisation pyramids Smaller proportion of supervisory personnel Smaller wage differentials High qualification of lower strata Manual work same status as clerical work • • • • • • High PDI Greater centralisation Tall organisation pyramids Large proportion of supervisory personnel Large wage differentials Low qualification of lower strata White-collar jobs valued more than blue-collar jobs.



Uncertainty Avoidance

The second dimension of national culture has been labelled “uncertainty avoidance.” This dimension deals with a society’s tolerance for uncertainty and ambiguity. Uncertainty about the future is a basic fact of human life with which we try to cope through the domains of technology, law and religion. In organizations these take the form of technology, rules and rituals. The pervasive share of ritual behaviour in organizations is only rarely recognised, and most organization theories, except those of March, have no place for it. The data indicate that the tolerance for uncertainty varies considerably among people in subsidiaries of the same organization in different countries; the three indicators used are rule orientation, employment stability, and stress. The three together produce a country Uncertainty Avoidance Index. Theories assuming rational behaviour tend to be normative. They include (1) theories of decision-making under uncertainty, (2) contingency theories, and (3) theories of strategic behaviour. In the case of decision-making under uncertainty, operational research offers statistical tools to put certainty back into decisions, by making one certain of how uncertain one is. This presupposes, however, a continuity of events – that is, a relatively certain environment. The contingency theories consider uncertainty as an input which should affect the structure and functioning of the organization (Burns and Stalker, 1961; Lawrence and Lorsch, 1967). What I called theories of strategic behavior (strategic planning, strategic management) are normative approaches to the management of organizations in very un-certain environments; environments that are called “turbulent” or “discontinuous” (Ansoff, 1978). Theories allowing for non-rational behaviour tend to be descriptive rather than normative. Important contributions to theories about non-rational ways of dealing with uncertainty have been made over the past 20 years by James G. March and his colleagues. In March and Simon (1958) it is recognised that “in the case of uncertainty, the definition of rationality becomes problematic.” This same study suggests that organizations maintain an environment which looks relatively certain to their members by “uncertainty absorption”: they absorb uncertainty through a limitation of the concepts available for analysing and communicating about the organization’s problems: The world tends to be perceived by the organization’s members in terms of the particular concepts that are reflected in the organization’s vocabulary (March and Simon, 1958:165). Cyert and March, in their Behavioural Theory of the Firm (1963), use the expression “uncertainty avoidance.” Organizations avoid uncertainty in two major ways. First, They avoid the requirement that they correctly anticipate events in the distant future by using decision rules emphasising short-run reaction to short-run feedback rather than anticipation of long-run uncertain events. They solve pressing problems rather than develop long-run strategies.


Second, they avoid the requirement that they anticipate future reactions of other parts of their environment by arranging a negotiated environment. They impose plans, standard operating procedures, industry tradition, and uncertainty-absorbing contracts on that situation by avoiding planning where plans depend on prediction of uncertain future events and by emphasising planning where the plans can be made self-confirming by some control device. The greater popularity of ideological thinking which I attribute to higher UAI countries also means that the tolerable size of discrepancies between the desirable and the desired and between the desired and actual behaviour is larger in high UAI countries than in low ones. Consequences of National Uncertainty Avoidance Index Differences for Organizations • • • Low UAI Less structuring of activities Fewer written rules More generalists or amateurs Organizations can be pluriform • • • High UAI More structuring of activities More written rules Larger number of specialists Organizations should be as uniform as possible (standardisation) Managers more involved in details Managers more task-oriented and consistent in their style Managers less willing to make individual and risky decisions. Lower labour turnover Less ambitious employees Higher satisfaction scores More power through control of uncertainty More ritual behaviour

• • •

• Managers more involved in strategy • Managers more interpersonal oriented and flexible in their style • Managers more willing to make individual and risky decisions • High labour turnover • More ambitious employees • Lower satisfaction scores • Less power through control of uncertainty • Less ritual behaviour 3. Individualism

• • • •

The third dimension of national culture is called Individualism. It describes the relationship between the individual and the collectivity, which prevails in a given society. It is about the degree to which individuals are integrated into groups. It is reflected in the way people live together – for example, in nuclear families, extended families, or tribes; and it has all kinds of value implications. In some cultures, individualism is seen as a blessing and a source of well-being; in others, it is seen as alienating. Sociology has provided us with a variety of distinctions associated with the individualism dimension, of which the best known is probably Tonnie’s Gemeinschaft (low individualism) versus Gesellschaft (high individualism).


Computation for each of the 40 countries of a country Individualism Index (IDV) is done based on the survey data. It opposes in particular the importance of time for personal life on the high IDV side versus the importance of being trained by the company on the low IDV side. The Individualism Index is negatively correlated with the Power Distance Index, but some countries (the Latin European ones) show both high individualism and high power distances. Consequences Organizations of National Individualism Index Differences for

Low IDV Countries Involvement of individuals with organizations primarily moral. Employees expect organizations to look after them like a family and can become very alienated if organization dissatisfies them. Organization has great influence on members’ well being. Employees expect organization to defend their interests. Policies and practices based on loyalty and sense of duty. Promotion from inside (localism). Promotion on seniority Less concern with fashion in management ideas. Policies and practices vary according to relations (particularism). 4. Masculinity

High IDV Countries Involvement of individuals with organizations primarily calculative. Organizations are not expected to look after employees from the cradle to the grave. Organization has moderate influence on members’ well being. Employees are expected to defend their own interests. Policies and practices should allow for individual initiative. Promotion from inside (cosmopolitanism) and outside. Promotion on market value Managers try to be up-to-date and endorse modern management ideas. Policies and practices apply to all (universalism).

The fourth dimension along which national cultures can be shown to differ systematically has been called masculinity, with its opposite pole femininity. The duality of sexes is a fundamental fact with which different societies cope in different ways; the issue is whether the biological differences between the sexes should or should not have implications for their roles in social activities. The sex role distribution common in particular society is transferred by socialisation in families, schools, and peer groups, and through the media. The predominant socialization pattern is for men to be more assertive and for women to be more nurturing. In organizations, there is a relationship between the perceived goals of the organization and the career possibilities for men and women; business organizations have “masculine” goals and tend to promote men; hospitals have more “feminine” goals and, at least on the nursing side, tend to promote women. A review of survey data on the importance of work goals shows near consistency on men scoring advancement and earnings as more important,


women scoring interpersonal aspects, rendering service, and the physical environment as more important. Consequences organization of National Masculinity Index Differences for

Low MAS Countries Some young men and women want careers, others do not. Organizations should not with people’s private lives. interfere

More women in more qualified and better-paid jobs Women in more qualified jobs not particularly assertive Lower job stress Less industrial conflict Appeal of job restructuring permitting group integration

High MAS Countries Young men expect to make a career; those who don’t see themselves as failures. Organizational interests are a legitimate reason for interfering with people’s private lives. Fewer women in more qualified and better-paid jobs Women in more qualified jobs are very assertive Higher job stress More industrial conflict Appeal of job restructuring permitting individual achievement

Values of the four indices for 4 countries Country Denmark India Japan USA Cut-off PDI 18 77 54 40 44 UAI 23 40 92 46 56 IDV 74 48 46 91 50 MAS 16 56 95 62 50

Connotations of the Four Combinations of Power Distance and Uncertainty Avoidance Levels
(4) Small Power Distance Weak Uncertainty Avoidance Countries : Anglo, Scandinavian, Netherlands Organisation type : implicitly structureda Implicit model of organisation : market (3) Small Power Distance Strong Uncertainty Avoidance Countries : German-speaking, Finland, Israel Organisation type : workflow bureaucracy Implicit model of organisation: Well-oiled machine (1) Large Power Distance Weak Uncertainty Avoidance Countries : Southeast Asian Organisation type: personnel bureaucracy Implicit model of organisation : family (2) Large Power Distance Strong Uncertainty Avoidance Countries, Latin, Mediterranean, Islamic, Japan, some other Asian Organisation type : full bureaucracy Implicit model of organisation: pyramid



For the Aston types of organisation see Pugh (1976:70). 5. Organization Design The combination of power distance and uncertainty avoidance typical for a country’s culture affects the structure of organizations that will work best in that country – next to the demands of technology and the traditions of the kind of activity that the organization exercises: whether it be a shoe factory, a municipal administration, a school, or a hospital. Several times in this book referred to the Aston Studies of organisation structure. The Aston studies found the two main dimensions in the structure of a variety of organizations (but within one country, Great Britain) to be concentration of authority and structuring of activities. The first relates to power distance: Where subordinates are more dependent on superiors and superiors on their superiors, we get unavoidably greater centralization of authority. The second relates to uncertainty avoidance; in fact, the Aston results were one of the theoretical arguments that made me look for an Uncertainty Avoidance dimension. Structuring of activities implies formalization (the need for written rules) and specialization (the assignment of tasks to experts). We find this translated into different preferred organization types, and different implicit models in people’s minds: (1) For Southeast Asian countries: the “personnel bureaucracy” in which relationships among people are hierarchical, but the workflow is not codified to the same extent; with the “family” as its implicit model. (2) For the Latin and Mediterranean countries, plus Japan: the “full bureaucracy” in which both relationships among people and work processes are rigidly prescribed; with the “pyramid” as its implicit model. (3) For the German-speaking countries and Israel: the “workflow bureaucracy “in which work processes are rigidly prescribed but less the relationships among people; with the “well-oiled machine” as its implicit model. (4) For the Anglo and Nordic countries plus the Netherlands: the “implicitly structured” organization in which neither work processes nor relations among people are rigidly prescribed, with the “village market” as its implicit model. That societal norms affect organization structures even surreptitiously is shown by the following small case: An American-based multinational business corporation has a policy that salary increase proposals should be initiated by the employee’s direct superior. In its French subsidiary, this policy was interpreted in such a way that the superior’s superior’s superior – three levels above the employee – was the one who initiated salary proposals. This way of working was seen as natural by both superiors and subordinates in France. Laurent showed that statements expressing tolerance for ambiguity in hierarchical structures are accepted more by managers from some countries than from others; the need for clarity in hierarchy appeared to be correlated with uncertainty avoidance. Matrix organizations implying a multiple hierarchy should thus be less acceptable in more uncertainty-avoiding cultures, even if


people in these cultures feel at the same time that their present structures are ineffective. However, we can expect different types of problems for matrix organizations in high uncertainty avoidance, high power distance cultures and in high uncertainty avoidance, low power distance cultures. In the former, matrix organization violates the principle of unity of command, which is holy. We find this clearly expressed in Fayol’s negative comments on Taylor’s propositions of eight functionally specialised superiors for one person – a kind of supermatrix organization. In high uncertainty avoidance, low power distance countries a matrix organization will be acceptable as long as roles in it can be defined without ambiguity. As avoiding ambiguity is not always possible, this will detract from the popularity of the matrix system. Laurent has suggested that to make matrix organization work in a high uncertainty avoidance, high power-distance country like France it is desirable to translate it in hierarchical terms: that is, to leave the formal hierarchy intact and define the additional linkages in the system as non-hierarchical communication. This is, again, a way of “cultural transposition.” Another objection to matrix organization – or rather, to temporary organization systems – was mentioned, where I (Hofstede) quoted Hjelholt’s plea for the importance of group identities, which points to differences with the United States on the dimension of Individualism. In less individualistic countries, the feasibility of temporary systems will depend to a large extent on whether organization members possess a sufficient basis for identity – for example, it will be likely to work well for groups of professionals, who, regardless of the organizations structure they are in, identify with their professional reference group; less effective for non-professionals.


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