Hofstede Analysis

Hofstede Analysis:

Hofstede’s cultural dimension analysis is based on his research conducted on ‘how values in the working environment are affected by culture’. He defined as the ‘collective programming of the minds which distinguishes people of one group from others’. The research focussed on value scores collected from 116,000 questionnaires in IBM (a large multinational) to analyse the national cultural differences from 1967 to 1973. (Hofstede 1984). The data was collected from 70 countries of which first 40 countries were used which had the highest response rate. The model consists of 6 dimensions which are briefly describes below:

1. Power Distance: It reflects on how the society reacts to inequality.

2. Individualism – collectivism: Relates to how people

3. Masculinity – femininity: How society reacts to achievement or success as opposed to caring, cooperation, modesty.

4. Uncertainty avoidance: The degree to which people feel threatened due to ambiguity and uncertainty.

 5. Long-term orientation: how society deals with challenges of the present and the future.

 6. Indulgence v/s Restraint: Reflects on the social life of the people.

The bar graph below shows the values of these dimension with respect to USA and China:

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Figure: Hofstede cultural dimensions: USA and China

Source: https://geert-hofstede.com/countries.html

In this Report, we have analysed the Starbucks company with respect to these dimensions and applied the theory to distinguish the national cultural differences between USA and China with regards to following points:

Adjusting to the Concept:

The way in which ‘Coffee’ is perceived in both the countries in quite different. This will provide a better understanding of the important with regards to products and values of Starbucks. Factors. For example, at 7.45 am, people in Seattle, USA just want to grab a cup and have it on their way to work. In Hong and China on the other hand, drinking coffee is kind of a social event rather than a necessity. People come to meet relatives and friends over a coffee. (Michael Wu 2011). To cater to this need, Starbucks has now increased the stores in Hong and China to about 2000 square feet. Since its arrival 10 years ago in Hong Kong, Starbucks is now viewed as a restaurant more than a coffee chain. That is why China (20) has a lower Individualism value compared to USA (91).

Conflict Management:

The Chinese and the Americans differs in the ways in which they resolve conflicts. Chinese people come from a high collectivism in which emphasis is given on harmony and personal relationships. That is why they tend to resolve conflicts by using authority or try to settle things in private. Individualistic and masculine Americans try to face problems head on and bring things out in open. They confront people by using factual evidence and rational arguments (Ting-Toomey, 1985). This is evident from the low power distance of USA (40) as compared to China (80).