CHAPTER 4 VALIDATION OF HOFSTEDE S CULTURAL DIMENSIONS: A QUALITATIVE ANALYSIS

CHAPTER 4 VALIDATION OF HOFSTEDE S CULTURAL DIMENSIONS: A QUALITATIVE ANALYSIS This chapter describes the exploratory and validation phase which helped in arriving at the basic framework of culture that could be meaningful and relevant to the Indian regional context and that can possibly influence the performance of micro, small and medium entrepreneurs in India. The previous chapter made an extensive review of the relationship between entrepreneurial behaviours and the respective region s cultural environment. It also analyzed some of the major theories that define cultural dimensions of a region or country from where the six cultural dimensions of Hofstede have been considered as the most appropriate for the Indian context. A qualitative survey, based on semi-structured questionnaire, of forty experts was undertaken to validate the relevance and adequacy of Hofstede s framework for India and also to bring out a cultural dimensional framework relevant to the micro, small and medium entrepreneurs in India. 4.1 Etic and Emic approaches to cross-culture research Hofstede s framework has been considered as the baseline and an attempt is made to understand how relevant they are in the Indian regional context. The framework as derived by Hofstede had used an Etic (global and scientific) approach. As these dimensions are used in India it was felt necessary to take an insider view: an Emic (insider or bottom up) approach could be used to assess whether these factors were sufficient to define the various cultural outlooks across the various regions of the country. In this context it was necessary to understand the significance of etic and emic approaches to cross-culture research. An emic approach looks at the insider perspectives of the native members of the culture whose beliefs and behaviours were being studied (Lett, 1990, p. 130). This approach gives importance to the local 53

viewpoints. An etic approach, on the other hand, is often termed as outsider or deductive or global and its comparisons across countries and contexts and facilitates debate on cross-cultural concepts (Morris et al, 1999). The etic vs. emic dichotomy in research has often been attributed respectively to the distinction between global or universal vs. the native culture specific approach; the distinction is also due to quantitative vs. qualitative approach (Buckley et al, 2014). As Morris et al (1999) contemplated, the divide between emic and etic could be explained with respect to field work done by Rohlen (1974) as compared to the cross country culture studies done by Hofstede (1980). In the emic approach to this study, views were sought from Indian experts to understand the fitment of Hofstede s cultural dimensions in the Indian context and also to examine if there were other important dimensions that could influence the performance of micro, small and medium entrepreneurs which ought to be looked into. 4.2 Hofstede s findings of Indian cultural traits The Indian country level cultural dimensions as viewed though the six dimensional framework of Hofstede is given in Fig. 4.2.1. Fig. 4.2.1: Hofstede s Cultural Dimensions India Source: http://geert-hofstede.com/india.html 54

The scores provided by Hofstede (Fig.4.2.1) was a comparative index and the high, intermediate and low rating was as per his comparison with those of various other countries of the world. Power Distance (high vs. low): India has a high score of 77 indicating that the people have a relatively high level of adherence to power hierarchies and where employees expect to be directed by their bosses. Collectivism vs. Individualism: The score is an intermediate value of 48 which indicates that both collectivism and individualism exist in almost equal measures. Masculinity vs. Femininity: The score in this case is high at 56 which indicates that the Indian society is majorly driven by achievements, success and competitive spirit which are perceived to be masculine attributes. Uncertainty Avoidance (high vs. low): India scores a medium to low score of 40 in this case. Indians have the medium to low preference for uncertainty avoidance. Long Term (Pragmatic) vs. Short Term (Normative) Orientation: The score is a relatively high score of 51 which shows a reference for a long term and pragmatic culture. Indulgence vs. Restraint: India has a low score of 26 for this dimension which indicates a low preference for Indulgence and that it is a predominantly Restraint culture. 4.3 Interactions with experts: A Qualitative Approach A study was undertaken to validate the six cultural dimensions for India and also to see whether there were any additional dimensions beyond what Hofstede had envisaged for India. Semi-structured questionnaires were administered to a panel of forty experts from different regions and professions. The panel of experts consisted of micro, small and medium entrepreneurs, professionals from private industrial sector, professionals from academics, legal, arts & culture, banking and non-banking financial sectors and Indian bureaucracy and public services undertakings. 55

Table 4.3.1 provides the descriptive statistics of the panel of experts considered for the structured interview and Table 4.3.2 provides the details of the structured questions put forth. Care was taken to include experts from every section of the society. Effort was also taken to include people hailing from various regions of the country. Table 4.3.1: Descriptive statistics of panel of experts Age Range Expertise Profile Count Min Max Micro, small and medium Entrepreneurs 3 45 55 Professionals from Private Industrial Sector 10 42 65 Professionals from Academics, Legal, Arts & Culture 15 42 70 Professionals from Banking and Non Banking Financial 7 57 68 Sector Professionals from Indian Bureaucracy and Public Services Undertaking 5 52 70 The questions (Table 4.3.2) put forth to the forty experts had one common thread: to identify the behaviour of each of the six dimensions of Hofstede in the Indian context. Along with the questionnaire a brief description of these cultural dimensions as promulgated by Hofstede was provided to each of these experts. A succinct paper by Hofstede (2010) was also provided for better understanding of these dimensions. The expected responses included those on the expert s impression about the applicability of Hofstede s postulates on culture: are they valid for Indian micro, small and medium entrepreneurs, and if so how much. Secondly they were expected to give their views on any additional dimensions which Hofstede had not conceptualized in his framework but could be important in the study of Indian culture as applicability to micro, small and medium entrepreneurs. The responses received were qualitatively analysed to validate the relevance and adequacy of Hofstede s cultural framework for the Indian context. An analytical cultural framework was then arrived at for further studies on the cultural determinants on the entrepreneurial efficiency in the case of Indian MSMEs. 56

Table 4.3.2: Interview Questions put across to the Experts Questions 1 Do less powerful members of the Indian society accept unequal distribution of power 2 1. According to you what type of societal orientation (collectivism or individualism) is practiced in the various Indian regions? 2. Do you think collectivism brings about social network and social reciprocity? 3 Are the people in various part of India strongly uncomfortable to uncertainties? 4 Are masculinity and femininity traits relevant in the cultural composition of people in the various regions of India? If so, which is the more dominant trait? 5 What type of orientation do the people of various regions of India subscribe to? Are they pragmatic (long term oriented)? Or are they normative (short term oriented)? 6 Are people from different regions of India Indulgent or Restraint? 7 Do any other cultural values or characteristics which do not figure in the above framework, but according to you assume importance in the Indian, regional context? If so, what are those characteristics? 4.4 Findings and Analysis The experts had distinct views on the applicability of Hofstede s dimensions. Table 4.4.1 summarises the experts evaluation of Hofstede s dimensions. Hofstede s latest evaluation of Indian culture provides a high score of 77 (Fig. 4.2.1) indicating that the Indian society has a higher level of acceptance of power hierarchies. The experts also opine that Indians have a relatively high level of acceptance of power hierarchies except that this level of acceptance varies across regions based on gender, literacy levels, social and ethnic orientations. People of certain regions especially in South and North East India tend to go beyond the power inequalities and aspire for interdependence and collaborative working style as against hierarchical power structures. The experts opined that both Collectivism and Individualism were practiced in the country collectivism was practiced more by the business communities. This was more in agreement with Hofstede s intermediate score of 48 (Fig 4.2.1) which indicated the presence of both individualism and collectivism. The experts also observed that while collectivism in many cases could lead to social networking and 57

reciprocity there were instances when collectivism triggered by political and communal reasons turns sectarian which need not necessarily lead to social welfare. These types of collectivism could often unsettle and disrupt the social and group objectives as well as efforts taken to achieve social objectives. Similarly, certain cases of individualistic practices could also be unsettling or disruptive. This was one major input which went beyond Hofstede s findings in the Indian context. Uncertainty avoidance as a cultural attribute received a low score of 40 in Hofstede s evaluation (Fig. 4.2.1). This score was in line with the experts view that Indians were generally tolerant to uncertainties. Majority of the Indians were economically and socially backward and did not have the choice or capability to take measures to avoid uncertainty. They were forced to face uncertainties and could foresee or control very little. People in the villages are more tolerant to uncertainties while those in the urban areas are relatively less tolerant to uncertainties. The experts also opined that low levels of uncertainty avoidance were seen among the business communities which amount to their higher risk-taking propensity. Hofstede s score for Masculinity was a moderate 56 (Fig. 4.2.1). This means that while there was a simple majority of people who prioritize on competition, achievement and success, there were enough people in the country who were caring and who uphold the quality of life. The experts observed that in many parts of the country the same person was found to have elements of both Masculinity and Femininity, especially when the person was from the lower echelons of society. They also stated that the two traits were spread across the country with certain regions accounting for a predominance of masculine behaviour while the other parts show higher levels of feminine behaviour. The experts observed that Indian culture was a mix of pragmatic and normative behaviours and that the reasons were historic and linked to a person s religious and personal beliefs, traditions and her/his social and ethnic identity. The level of adherence changes based on factors like literacy, nature of social groups, adherence to religious beliefs, traditions etc. Hofstede s high score of 51 for long term or pragmatic orientation (Fig. 4.2.1) on the other hand indicated that the Indian culture was long term and pragmatically oriented. 58

Table 4.4.1: Summary of Experts evaluation of Hofstede s dimensions for India Hofstede s Dimension 1 Power Distance (Acceptance of the unequal distribution of power by the less powerful members of the society) 2 Collectivism vs. Individualism 3 Uncertainty Avoidance 4 Masculinity vs. Femininity Synthesis of Experts views 1) Relatively higher levels of acceptance of power hierarchies, but the extent varied from region to region, based on gender, level of literacy, social and ethnic groups 2) Acceptance of hierarchical power structures might help entrepreneurial efficiency in certain regions. 3) There was a growing trend where the younger generation of India did not prefer to go by power hierarchies and believed in collaborative interactions both in social life and at work which according to them increased entrepreneurial efficiency 1) Both existed and could lead to social networking 2) Collectivism borne out of sectarian reasons could be disruptive and unsettling 3) Individualism practiced for sectarian reasons could also be disruptive 4) Non disruptive collectivism could lead to positive performance which was the landmark quality of trading (Vaish) communities and certain ethnic and social groups in India 1) Lower levels of uncertainty avoidance intensity varied from region to region 2) Trading and business communities had low levels of Uncertainty Avoidance (higher Risk-taking Propensity) 3) Majority of the Indians were economically and socially backward and were forced to face uncertainties 4) Rural population was more tolerant to uncertainties while people from urban areas had high Uncertainty Avoidance. 1) Both groups were present across various regions 2) Masculinity could be more dominant 5 Long term (pragmatic) orientation vs. short term (or normative) orientation 6 Indulgence vs. Restraint Both present; level of occurrence based on literacy levels, ethnicity, traditions and customs etc. Mix of both indulgent and restrained social groups with the level of acceptance varying across regions. Social and economic backwardness restrains people from being indulgent Younger generation was found to be more indulgent 59

According to Hofstede, the score available for Indulgence was only 26 (Fig. 4.2.1). It indicated that majority of Indians exhibit Restraint. The experts also opined that India had both indulgent and restrained social groups and this attribute varied across regions. Many of them felt that it was also age based as the younger generation tend to be more Indulgent. Again, economic and social backwardness were reasons for a society to be restrained as they cannot afford to be indulgent even if they choose to do so. One important contribution by the experts was the proposal of an additional cultural dimension beyond those promulgated by Hofstede, namely, Ethnic Orientation. The ethnicity of an individual, according to them, created a distinct cultural identity as he belongs to a certain community, race, minority social groups etc. 4.5 Discussion The experts assessment of the validity of Hofstede s cultural dimensions as applicable to the Indian context converged fully on two aspects: Power Distance (Acceptance of the unequal distribution of power by the less powerful members of the society), and Masculinity (vs. Femininity). Both agreed that majority of the Indians acknowledged and abided by power hierarchies. Both masculinity and femininity existed in the Indian society with masculinity being the relatively dominant attribute. However these convergences were without prejudice to the experts view that the level of adherence varied significantly across various regions of the country and were also dependent on factors like literacy levels, religious influences, and traditions. The experts had divergent views on the remaining four dimensions of Hofstede. According to them, Indian society had a mix of both long term (pragmatic) and short term (normative) orientations. Hofstede s assessment indicated that Indians were predominantly pragmatic and long term. On collectivism and individualism they asked the question as to what type of collectivism. They were of the opinion that both collectivism and individualism existed in India in different formats. There was collectivism which united people together for socially beneficial processes. A good example of this type of collectivism was that practiced by the business communities of India. There was individualism which led to positive leadership which many times complements positive collectivism. On the other hand there were instances of people 60

being constrained to join groups which were ordained by triggers borne out of religious, caste social or political reasons. The experts inputs helped to bring out several manifestations of both collectivism and individualism (Fig.4.5.1). Majority of the Indians, being economically backward, did not have the means to protect themselves under various measures to avoid uncertainties. They were constrained to face all the unexpected vagaries of nature and unpalatable economic consequences. But it was also true that continuing exposure to uncertainties over and again helped the Indian people build up an intrinsic immunity to unforeseen calamities and hardships. This was different from the innate business risk appetite (borne out of low levels of uncertainty avoidance) which many entrepreneurs in India were endowed with and a large part of these came from the business communities who were known for higher standards of entrepreneurship. The fourth divergence was on Indulgent vs. Restraint orientations. Although the Indian society was found to be characterised by restraint as proposed by Hofstede s studies, it was again not a dimension borne out of choice, at all times, stated the experts. The high levels of economic and social backwardness of the vast majority of people prevent them from being indulgent. Their life was more of a struggle against different types of inequalities and they tended to be restrained as a matter of chance. 61

Table 4.5.1: Comparison of Hofstede s Dimensions and the Experts views on Indian culture Cultural Hofstede Vs. Indian Experts Dimension Acceptance of unequal distribution of power by the less powerful members of the society Collectivism vs. Individualism Uncertainty Avoidance Masculinity vs. Femininity Pragmatic vs. Normative orientation Indulgence vs. Restraint Convergence Relatively higher level of acceptance Both co-exist in India Lower level of uncertainty avoidance Both were present NIL NIL Divergence Level of acceptance varied across the country Lower level of acceptance by the younger generation Level of adherence not the same across various regions of India and it varied across regions and communities. Existence of both disruptive and disruptive collectivism as well as disruptive and non disruptive individualism Level of Uncertainty Avoidance varied across regions. For majority of Indians uncertainties were facts of life due to social and economic backwardness; they didn t have a choice or capability to avoid it. Thus people in rural areas had lower levels of Uncertainty Avoidance whereas those in urban areas had a higher level of Uncertainty Avoidance From an entrepreneur perspective his risktaking propensity was to be looked at. The level of adherence varying across regions and also communities People in the northern regions of India showed more of masculine features thank those in the southern regions Both existed. Varied across regions and communities based on literacy levels, religious influences, and traditions Both existed. Many communities showed more penchant for Indulgent behaviours The level of Restraint or indulgence was also based of economic and social reasons Ethnic Orientation NIL A significant attribute which also varied across regions. The cultural identity caused by social or community associations gave a unique behavioural and performance characteristic to the people 62

As discussed earlier in Chapter 2, many researchers have brought out the close relationship between culture and entrepreneurship on the one hand and that between culture and economic development on the other (Naude, 2013; Hofstede & Bond (1988); Thomas & Mueller, 2000; Weiss 1988; Maysami and Goby 1998). So the various cultural dimensions promulgated by Hofstede et al and now by the experts have a great significance in the study of micro, small and medium entrepreneurship. The significant contribution of this study is the identification that there could be a seventh dimension in the Indian context beyond what Hofstede et al had proposed, namely, Ethnic Orientation. Every community or caste (or religion) based association could have an overwhelming influence on the grooming of its members. This is mainly due to the cultural influences that the practices, conventions or belief systems these associations could instil in human beings, controlling and deciding upon their behavioural patterns. One of the best examples of these cultural instincts could be seen in the Vaish communities of India. The other interesting findings from the study are related to Collectivism (vs. Individualism), Uncertainty Avoidance and Indulgence (vs. Restraint). There were four situations for Collectivism vs. Individualism and three situations each for Uncertainty Avoidance and Indulgence vs. Restraint as illustrated in Fig. 4.4.1, Fig. 4.4.2 and Fig. 4.4.3. In an ideal situation there could be high collectivism or high individualism or a mix of the two. Here based on inputs received from the Indian experts there could be least eight different possibilities of occurrences which are (see Fig: 4.4.1): 1) High occurrence of Non Disruptive Collectivism 2) High occurrence of Disruptive Collectivism 3) High occurrence of Non Disruptive Individualism 4) High occurrence of Disruptive Individualism 5) Combination of Non Disruptive Collectivism and Non Disruptive Individualism 6) Combination of Disruptive Collectivism and Disruptive Individualism 7) Combination of Non Disruptive Collectivism and Disruptive Individualism 8) Combination of Disruptive Collectivism Non Disruptive Individualism 63

Fig. 4.4.1: Possibilities for Collectivism vs. Individualism In the case of Uncertainty Avoidance three possibilities are suggested (Fig: 4.4.2): 1) Low Uncertainty Avoidance by Choice (Risk-taking Appetite or Propensity) 2) High Uncertainty Avoidance by Choice 3) Low Uncertainty Avoidance due to economic and social backwardness Fig. 4.4.2: Possibilities for Uncertainty Avoidance 64

In the case of Indulgence and Restraint, experts point out three possibilities (Fig: 4.4.3): 1) High Indulgence (and low restraint) by choice 2) High Restraint (and low indulgence) by choice 3) High Restraint (and low indulgence) due to economic and social backwardness Fig. 4.4.3: Possibilities for Indulgence vs. Restraint Fig. 4.4.4: Ethnic Orientations 65

The essence of the experts inputs brought out the fact that any cross cultural study might need to consider ethnicity or ethnic orientations to fully understand an individual s behavioural and attitudinal aspects. Ethnic means connected with or belonging to a nation, race or people that share a cultural tradition and ethnicity means the fact of belonging to a particular race (Oxford Advanced Learner s Dictionary, 2015). Ethnicity in India, according to Manor (1996), could be based on identities grounded on religion, language, tribal and also Aryan and Dravidian orientations. Ethnicity associated with a group means that the members are aware of a common origin and culture and there are a set of connections and regular interactions among the members sharing common national background or migratory experiences (Aldrich & Waldinger, 1990, p. 112) Every ethnic group has their own intrinsic social and cultural inheritance which shapes an individual s behaviour and attitudes. Ethnic Orientation, therefore, could influence an individual s attitude to entrepreneurship as well just like any other cultural dimension. There were three major components for Ethnic Orientation (see Fig. 4.4.4): they were Religion or Caste based, Trading practices based, or based on any other minority sub groups like displaced, refugee, scheduled tribes etc. 4.6 Outcome from the Exploratory Study The exploratory study brought out various cultural dimensions relevant for Indian society and which could possibly influence entrepreneurial performance in the MSME space. The baseline for this study was Hofstede s six dimensions and the latest value of the scores as provided by Hofstede. His study of national cultures was based on a global and scientific approach or a neutral observer s perspective (Etic approach). Here an attempt is made to moderate these views though an Emic approach using the inputs received from forty Indian experts who provided native insider perspectives. The experts concluded that people s adherence to Hofstede s cultural attributes were dependent on the various regional factors like historic and cultural backgrounds, literacy levels, level of political and social awareness, and social orientations as summarised in Table 4.5.1. Their views highly converged on two of the dimensions, namely, Power Distance, and Masculinity and Femininity subject to the fact that the 66

levels of acceptance varied across regions and also based on literacy, economic and social aspects. The experts views were divergent in the case of the other four dimensions, namely, Long Term or Pragmatic (vs. Short Term) orientation, Collectivism (vs. Individualism), Uncertainty Avoidance and Indulgence (vs. Restraint). Both Collectivism and Individualism could also be disruptive and unsettling due to sectarian, doctrine and group based loyalties. In the case of Uncertainty Avoidance, Indians generally had low levels. One reason for this was due to economic and social reasons in which case they were destined to face uncertainties year after year and soon got used to these uncertainties. This was without prejudice to the fact that there was an emerging group of business entrepreneurs in India who were endowed with low levels of uncertainties which led to higher business and entrepreneurial risk-taking propensity. Similarly it was found that that Indulgence could be a choice only for the people who could afford it and there was a majority of people in India who could not afford Indulgence as a matter of choice. Restraint behaviour was found predominant in the country as most of the population was constrained to be so due to economic and social backwardness. The study also brought out a seventh cultural dimension called Ethnic Orientation which was significant in the Indian context. The social, race or caste based orientation primarily gave a specific social and cultural identity for the people. The study supported the view that having an ethnic identity borne out of religion, race, language or minority groups led to superior performance. 4.7 Revisions in the hypotheses based on the outcome from the exploratory and validation phase Three main outcomes of the exploratory study affected the statements of hypotheses. One was the identification of the seventh dimension, namely, Ethnic Orientation, which needed to be included in the set of cultural dimensions considered for this research. Secondly, from the perspective of entrepreneurial performance Risk-taking Propensity had to be considered instead of Uncertainty Avoidance which seems to be super set as it is seen now. The incorporation of these outcomes would thus revise the hypotheses. 67

The revised hypotheses are listed below with revisions highlighted in bold print. Table 4.7.1: Revised Hypotheses Hypotheses Set-01 H0.1 There is zero variance in the performance of MSME entrepreneurs across the states, location types, enterprise types, business types and across the various hierarchical interactions between state, location, enterprise, and business types Hypotheses Set-02 H0.2.1 There is zero variance in Power Distance of entrepreneurs managing H0.2.2 There is zero variance in Risk-taking propensity MSMEs across the two states, H0.2.3 There is zero variance in Collectivism the two locations, the two H0.2.4 There is zero variance in Masculinity enterprise types, the two H0.2.5 There is zero variance in Pragmatic Orientation business types and across the H0.2.6 There is zero variance in Indulgence scores of various hierarchical H0.2.7 There is zero variance in Ethnic Orientation interactions between state, location, enterprise, and business types Hypotheses Set-03 H0.3.1 Power Distance dimension H0.3.2 Risk-taking propensity dimension H0.3.3 Collectivism dimension H0.3.4 Masculinity dimension H0.3.5 Pragmatic Orientation dimension H0.3.6 Indulgence dimension H0.3.7 Ethnic Orientation H0.3.11 Power Distance H0.3.12 Risk-taking propensity H0.3.13 Collectivism H0.3.14 Masculinity H0.3.15 Pragmatic Orientation H0.3.16 Indulgence H0.3.17 Ethnic Orientation does not influence MSME entrepreneurs across the various hierarchical combinations of location types, enterprise types, and business types in Kerala does not influence MSME entrepreneurs across the various hierarchical combinations of location, enterprise, and business types in Maharashtra 68

4.8 Summary The validation of the six dimensional framework of Hofstede has led to the conclusion that these cultural attributes are applicable for India except that the degrees of adherence vary across various states of the country. The study also came up with a seventh cultural dimension called ethnic orientation. In Chapter 5, an attempt is made to discuss how these hypotheses and attributes would be tested in an empirical setting. In the process the development of the questionnaire, choice of regions for the study, pilot testing and sample survey based empirical investigations are all discussed. 69