The Hofstede Framework

Tutorial 11 – Discussion Questions: The Hofstede Framework

The Hofstede framework compares cultures along five dimensions. Dutch psychologist, Geert Hofstede, developed the framework from a study of more than 110,000 people working in IBM subsidiaries in 40 countries in 1970s, and a follow-up study of students in 23 countries in 1980s. Using the Hofstede framework, discuses the following questions:

Q1. How would the dimension “power distance” affect te sale of luxury items in a country?

1. Power distance: The psychological and social distance between superiors and subordinates.

A nation with large “power distance” accepts greater inequality among its people and tends to have a wealthy upper class that can afford luxury goods.

Thus companies marketing products such as expensive jewelry, high-priced cars, and yachts could find wealthy market segments even within relatively poor nations.

Q2. A Danish manager works in Japan for a European car manufacturer and his peer colleagues are mostly Japanese. What will be his challenge in making risky decisions together with his colleagues?

1. The Danish manager may become frustrated with the time needed to make decisions and take action. The main cause for his frustration is that the “uncertainty avoidance” index for Japan is much larger than that in his native Denmark.

Uncertainty avoidance measures the extent to which different cultures socialize their members into accepting ambiguous situations and tolerating ambiguity.

In japan, a greater aversion to uncertainty leads to the need for a greater number of consultations than would be needed in Denmark.

Q3. In Hofstede’s study, Hong Kong was classified as “collectivistic” (Slide 31 of Lecture 2: Cross-cultural business). Do you think the classification is still appropriate in the twenty-first century?

1. Individualism represents a desire for personal freedom, time, and challenge.

Collectivism represents a dependence on the organization as well as a need for a safe environment.

Because of the higher degree of westernization of younger generation and the change of family structure (the proliferation of “nuclear families” in Hong Kong), young people may become more “individualistic” than their parents.