Cultural Difference in Decision Making: Hofstede and his Critics

Introduction

Organizational culture significantly influences the process of decision making in many dimensions. It encompasses the behaviors and values that create a unique to the social and psychological business environment. Culture, in particular, is a changing trend in contemporary society because societal norms have been clashing with personal views and ideas. Understanding the cultural differences between countries is also a good step for companies to work together. The cultural dimensions theory by Hofstede describes how culture influences the values of society members.

Hofstede uses this cultural dimension theory to explain further how the values of society members relate to their behavior through factor analysis. To achieve this, he creates a new paradigm of studying cultural differences by using four dimensions, which he critically analyzes in his article. Despite this cultural dimension theory by Hofstede offering a breakthrough to the new organization, he has received a lot of critics from other scholars with all their arguments revolving around cross-cultural communication.

Hofstede described five cultural dimensions that make up his theory.

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The first cultural dimension that he describes is referred to as power distance (Minkov & Hofstede, 2012). According to Hofstede, this cultural dimension explains the extent to which the less powerful members of an organization believe that power is not distributed equally. This is termed as inequality, and in the social context, it means that some members of the society are considered more potent than others hence ending up benefiting more (Khlif 2016 p. 546). “A community that has a vast power distance is characterized by autocracy in leadership, a centralized society, and power difference and inequality”(Hofstede 1983 p.

547). Decision-making is problematic in an organization whose power distance is wide.

Individualism refers to the level in which members of the society are integrated and organized into groups. According to Hofstede, communities, and organizations that are individualists have loose ties, and everyone is only concerned with his/her wellbeing (Minkov & Hofstede 2012 p. 134). In this theory, Hofstede adds that: “Individualistic organizations don’t perform well because the managers do not put into consideration the welfare of other employees” (Hofstede 1983 p. 76). Collectivism, on the other hand, entails the maintenance of social harmony among people and that collective rather than individual benefits are sought. Hofstede informs us that it is more beneficial for one to be part of a specific group of people instead of being alone (Mazanec et al., 2015). Regulation of behavior is made in line with the group norms.

Masculinity and its opposite, as discussed by Hofstede, refer to the manner in which gender roles are distributed, and this is a very fundamental issue in today’s society.  It is important to note that the values of women in society differ from those of men (Khlif 2016 p. 550). “Many organizations have also undertaken a division of labor and specialization, whereby they have separated the roles of men from those of women”(Hofstede 1983 p. 51). Hofstede claims that this cultural dimension has brought a sense of inequality in both societies and in business organizations where men have been considering themselves more superior than women (Dimitrov 2018 p. 87). Men in society are expected to be harsh and confident and should put their concentration on material achievement (Minkov & Hofstede 2012 p. 136). Women, on the other hand, society expect women to be modest, tender, and should focus more on the quality of life.

Uncertainty avoidance is the extent to which members of society are can cope with the uncertainties of the future without having to go through stress. Hofstede wants us to distinguish between strong and weak uncertainty and how it influences society and its people (Hofstede 1983 p. 54). Weak avoidance of risks is characterized by the avoidance of hazards, flexibility, and society members being tolerant towards differing behaviors and opinions (Khlif 2016 p. 563). Strong uncertainties, on the other hand, are associated with aspects such as the tendency to avoid risks, a strong requirement for members especially during decision-making in an “Organization and respect for authority (Hofstede 1983 p. 102). The last cultural dimension that is described by Hofstede in his theory is the long –term versus short-term orientation. Under this, unequal relationships that exist among people ensure that society is stable (Mazanec et al. 2015 p. 302). Hofstede writes that in every social organization, there are a well-defined prototype and guides members in acquiring new skills.

Criticism of Hofstede’s theory of cultural dimension

There are various criticisms that have been put forward about Hofstede’s theory of cultural dimension. First, Galit Ailon, in his research, writes that Hofstede’s theory lacks relevancy (Dimitrov 2018 p. 89). He claims that the research done by Hofstede is not suitable for determining and measuring cultural diversity in society. He adds that the universal aspect that Hofstede studies are values, yet it cannot be culturally subjective and sensitive (Khlif 2016 p. 566). Due to lack of relevancy, this criticism adds that it is challenging to apply Hofstede‘s theory because it doesn’t differentiate culture, methodologies, and its dimensions (Hofstede 1983 p. 43). To address this criticism, Hofstede says that, “Surveys are only one method”.

Cultural homogeneity is a criticism of the theory of cultural dimension. According to this criticism, Hofstede’s approach is based on the assumption that the population in most countries is alike, yet most nations have ethnic units (Minkov & Hofstede 2012 p. 145). It means that most of Hofstede’s outcomes have a possibility of unpredictability since it's only constrained to the individual being studied. Additionally, the theory has been criticized on the basis that Hofstede does not put into consideration the importance of community (Mazanec et al. 2015 p. 305). Political divisions are yet another criticism of Hofstede’s theory of cultural dimension which postulates that nations are not proper units of analyzing cultures, yet Hofstede responds by saying; “That those are the only identities” (Hofstede 1983 p. 65).

Political influences denied Hofstede's data for building up his research. According to Hofstede (2003 p. 39), the study was contacted at the time when Europe was undergoing through the period of the cold war hence making it difficult for Hofstede to get data from socialist countries. The theory is also criticized for relying too much on one company only and ignoring the information from other countries. “It is not possible to research an entire market by using only one company because enough information will not be obtained”(Hofstede 1983 p. 87). Hofstede responds by saying that using only one company is important for the elimination of corporate policy effects that affects many companies (Minkov & Hofstede 2012 p. 150). This criticism makes the theory of cultural dimension to be termed as outdated.

Conclusion

In conclusion, cultural differences have impacts on businesses that occur in cross-cultural contexts. Many problems arise in matters of participation, communication, and other aspects that affect decision-making in an organization. It is, however, essential for business leaders to understand issues about the six dimensions of Hofstede’s theory. Following them will make it possible for the leaders to take the necessary steps in addressing the problems that are facing them. Finally, globalization has led to the mixing of cultures, thus making it difficult for such cultures to maintain their original characteristics. More research is therefore needed to address this challenge for the benefit of the whole society.

References

Dimitrov, K. (2018): Geert Hofstede et al's set of national cultural dimensions-popularity and criticisms. arXiv preprint arXiv:1810.02621.
Halkos, G., Petrou, K. N. (2018): ‘Waste culture’ assessment using Hofstede’s and Schwartz’s cultural dimensions–an EU case study.
Hofstede, G. (1983): The cultural relativity of organizational practices and theories. Journal of international business studies, 14(2), 75-89.
Hofstede, G. (2003): Culture's consequences: Comparing values, behaviors, institutions, and organizations across nations. Thousand Oaks, Calif: Sage Publications.
Khlif, H. (2016): Hofstede’s cultural dimensions in accounting research: a review. Meditari Accountancy Research, 24(4), 545-573.
Mazanec, J. A., Crotts, J. C., Gursoy, D., Lu, L. (2015): Homogeneity versus heterogeneity of cultural values: An item-response theoretical approach applying Hofstede's cultural dimensions in a single nation. Tourism Management, 48, 299-304.
Minkov, M., Hofstede, G. (2012): Is national culture a meaningful concept? Cultural values delineate homogeneous national clusters of in-country regions. Cross-Cultural Research, 46(2), 133-159.