Managing with Culture Reykjavik, 10th May, 2007 Geert Hofstede
Managing a multicultural workforce
3 meanings of culture 1. Literally: tilling the soil, cultivation 2. Training or refining of the mind: civilization 3. Collective ways of acting, thinking, and feeling: collective programming of the mind distinguishing the members of one group or category* of people from another *) nation, occupation, corporation, gender
Levels of mental programming
Values Values are the stable core of culture. They are strong emotions with a minus and a plus pole, like evil-good, abnormal-normal, dangerous-safe, dirty-clean, immoral-moral, indecentdecent, unnatural-natural, paradoxicallogical, ugly-beautiful, irrational-rational What is rational is a matter of values
How culture is transferred age 0 10 values culture level gender, national occupation, social class 20 practices business, organization
Values are learned early in life and often unconscious We were born incompletely programmed: during our first 10 years our minds were able to absorb lots of complex information This programming came from our social environment and included all our basic values After puberty, our ways of learning changed but our basic values remain the same First-generation migrants carry their home values with them National cultures are rooted in basic values
Practices are learned and unlearned lifelong and nearly always conscious Similar practices can be learned by persons with very different values Practice learning is also provided by our social environment Organizations function through shared practices, rarely shared values Corporate values are window dressing Organizational (corporate) cultures are rooted in changeable practices
Cultures in organizations National cultures influence social processes: motivation, leadership and organization National cultures also influence relationships between a firm and its social environment Organizations also have cultures of their own, but our research showed that national and organizational cultures are very different things Differences between national cultures are anthropological; between organizational cultures sociological
Comparison of national cultures: stereotypes and prejudices Inhabitants of the World, William Darton 1790
Comparison of national cultures Culture s Consequences, Hofstede 1980 and 2001 Based on answers to questions about values, by matched samples of people from many countries Showed that the diversity of values among countries follows a pattern, based on 5 basic problems that each society resolves differently: (1) Inequality, (2) Need for security, (3) Relationship with others, (4) Gender roles, and (5) Time horizon
Comparison of national cultures 5 problems provide 5 independent dimensions 1. Inequality: Power Distance, large or small 2. Need for security: Uncertainty Avoidance, strong or weak 3. Relationship with others: Individualism or Collectivism 4. Emotional gender roles: Masculinity or Femininity 5. Time horizon: Long- or Short-term orientation
Scores show relative position on each dimension of 76 countries and regions Initially based on employees of IBM subsidiaries in 40 countries around 1970 Until 2002, 6 major replications (elites, employees of other corporations, airline pilots, consumers, civil servants) Results very stable even if cultures shift, countries shift together so relative scores remain valid (Scores on 5th dimension so far for 42 countries)
National culture dimension : Power Distance Extent to which the less powerful members of institutions and organizations expect and accept that power is distributed unequally Transferred to children by parents and other elders
National culture dimension : Uncertainty Avoidance Extent to which the members of a culture feel threatened by ambiguous and unknown situations Not to be confused with risk avoidance: risk is to uncertainty as fear is to anxiety. Uncertainty and anxiety are diffuse feelings anything may happen
SMALL PD, WEAK UA LARGE PD, WEAK UA NORDIC CTRS ANGLO CTRS, USA NETHERLANDS CHINA INDIA GERMAN SPK CTRS BALTIC STATES HUNGARY LATIN AND ARAB CTRS EAST AND SE EUROPE JAPAN, KOREA SMALL PD, STRONG UA LARGE PD, STRONG UA
SMALL PD, WEAK UA market NORDIC CTRS ANGLO CTRS, USA NETHERLANDS GERMAN SPK CTRS BALTIC STATES HUNGARY Implicit LARGE PD, WEAK UA organization models family CHINA INDIA LATIN AND ARAB CTRS EAST AND S-E EUROPE JAPAN, KOREA machine SMALL PD, STRONG UA pyramid LARGE PD, STRONG UA
National culture dimension : Individualism vs. Collectivism Individualism: A society in which the ties between individuals are loose: everyone expected to look after self and immediate family Collectivism: A society in which individuals from birth onwards are part of strong in-groups that last a lifetime and oppose other in-groups
National culture dimension : Masculinity vs. Femininity Masculinity: A society in which emotional gender roles are distinct: men are supposed to be assertive, tough and focused on material success, women on the quality of life Femininity: A society in which emotional gender roles overlap: both men and women are supposed to be modest, tender, and focused on the quality of life
COLLECTIVIST,FEMININE THAILAND, KOREA COSTA RICA, CHILE RUSSIA, BULGARIA PORTUGAL COLLECTIVIST,MASCULINE CHINA, JAPAN MEXICO, VENEZUELA ARAB WORLD GREECE SPAIN, FRANCE NETHERLANDS BALTIC STATES NORDIC COUNTRIES INDIVIDUALIST, FEMININE CZECHIA, POLAND HUNGARY, ITALY GERMAN SPK CTRIES ANGLO COUNTRIES, USA INDIVIDUALIST,MASCULINE
COLLECTIVIST,FEMININE COLLECTIVIST,MASCULINE THAILAND, KOREA ingroup COSTA RICA, CHILE relations RUSSIA, BULGARIA PORTUGAL SPAIN, FRANCE NETHERLANDS individual BALTIC STATES relations NORDIC COUNTRIES Motivation patterns CHINA, JAPAN ingroup MEXICO, VENEZUELA performance ARAB WORLD GREECE CZECHIA, POLAND HUNGARY, ITALY individual GERMAN SPK CTRIES performance ANGLO COUNTRIES, USA INDIVIDUALIST, FEMININE INDIVIDUALIST,MASCULINE
National culture dimension : Long-term vs. Short-term Orientation Long Term Orientation is directed at the future and seeks future rewards through adaptation, perseverance and thrift Short Term Orientation is directed at the present through concern for face, social obligations, and immediate rewards, and at the past though seeking guidance in tradition
Origin of the 5th dimension Found in cross-national research with questionnaire designed by Chinese researchers (M. Bond s Chinese Value Survey); reappeared in study of African culture (African Value Survey) Long term: China, Japan, other East Asia, India Medium to short term: Europe, other industrial countries Short term: Britain, U.S.A. Very short term: most Muslim countries, black African countries
Validations of country scores against over 400 measures from other sources Power distance: Respect for elders; corruption; polarization and violence in national politics Uncertainty avoidance: Religiosity; xenophobia; identity card obligation; faster driving Individualism: GNP per capita; faster walking; weak family ties; frequency of using the word I Masculinity: Assertiveness; performance versus solidarity; fewer women elected; homophobia Long Term Orientation: economic growth; good at mathematics; fewer prisoners; no fundamentalism
Studying organizational cultures Comparison of different organizations within same country(ies): IRIC 1986, 20 organizations in Denmark and Holland Conclusion: organizational cultures cannot be described with national culture dimensions Found 6 dimensions of organizational cultures based on different practices, not different values
Dimensions of organizational cultures 1. Process vs. results oriented 2. Employee vs job oriented 3. Parochial vs. professional 4. Loose vs. tight control 5. Open vs. closed system 6. Normative vs. Pragmatic No good or bad poles desirable profile is a matter of strategic choice
Mergers and acquisitions often fail because of organization culture conflicts Even domestic mergers and acquisitions are more likely to fail than to succeed merged companies do worse than sum of the parts
Managing (with) Culture Top management task National cultures are given facts to work with Organizational cultures can be developed Strategic choices Match strategy and culture(s) What changes are feasible, given the resources? Adapt structures, controls and personnel policies Leadership and inspiration Create network of change agents Right people in key positions
Student-level book, 2005 Academic book, 2001
Book for trainers, 2002 www.geerthofstede.nl www.gertjanhofstede.com (beware of pirates!)