Hofstede’s Cultural Dimensions in Global Business

Hofstede’s Cultural Dimensions

In a bid to explain the culture, anthropologists, sociologist as well as psychologists use theories as guidelines in developing their arguments about culture. There are many theoretical models of culture, depending on the aspect of culture being explained or investigated. One of the theoretical models which have been widely used in explaining cultures for different countries is the Hofstede’s five cultural dimensions. These are explained below.

Power Distance

Power Distance Index (PDI) focuses on the equality or inequality between people in social institutions and the extent to which the citizens embrace or do not embrace it. High PDI means that there are a lot of inequalities in wealth and power distribution within the society as well as that the society endorses such inequalities. A low PDI signifies that there are minimal inequalities in the distribution of power and wealth within a society. It also means that the citizens do not embrace inequality but fight for equality instead (Singh171).


This looks at how citizens emphasise individual or collective success and achievement. A high ranking in IDV signifies that individuality is paramount in that society and that the citizens tend to form very loose interpersonal relationships. A low ranking in the same means that the people are more cohesive and that they value collective success more than individual success. These societies are mostly found in those communities which still value extended families in which everything, work and success included is perceived as a responsibility and a product of the collective effort of the people.


This looks at the extent to which gender differences affect the distribution and control of power and wealth among citizens of a country. It also looks at the extent to which men embrace feminine roles and values as well as how women embrace masculine roles and values. In countries where MAS rankings are high, roles are highly differentiated along gender lines whereby there are those roles and jobs which are performed by women and those which are performed by men. On the other hand, a country with a low MAS ranking means that both men and women perform similar roles.

Uncertainty Avoidance Index (UAI)

Uncertainty Avoidance Index (UAI) focuses on the degree to which a society can tolerate any ambiguous or uncertain situation or event. A high UAI ranking means that the country is guided by clear rules and laws which are known to everyone. Such a country, therefore, does not tolerate any ambiguous situation, unclear or uncertain issue. A low ranking in UAI means that the country is open to different opinions which may not be rules, regulations or laws governing that country.

Long Term Orientation

The fifth dimension for cultural differentiation is Long Term Orientation (LTO) which looks at the extent to which a society emphasises or fails to emphasise long term dedication to forward-thinking, traditions and values. A country with a high ranking in LTO implies that it acknowledges hard work and traditions as a basis for the establishment of long term benefits. On the other hand, a low ranking in LTO means that the country does not embrace traditional values which may impede change. This means that the country is open to new ideas and innovations which may make a business thrive even for an outsider (Hofstede and Minkov 45).

An example of a company which operates in more than one country is Tesco which operates in the United Kingdom and China. It operates in various cities and towns of China such as Shanghai, Weifang andTaizhou, where it deals with imported wines and beers as well as cheese products especially from Italy, Netherlands and France. In terms of Hofstede’s cultural dimensions, the UK ranks higher than Chia in individualism. According to Hofstede, a high ranking in individualism is a threat to teamwork in organisations. Tesco Company takes advantage of China’s low ranking in individualism to ensure teamwork among the employees of the Chinese stores.

Communication across cultures

This is the ability of a person to convey information effectively in various cultural contexts. When employees work as expatriates, they usually have a feeling of disorientation due to the experience brought about by their relocation to their new places of work. This feeling is what is referred to as culture shock. It manifests itself differently in terms of time and intensity among different employees, meaning that some employees experience it immediately while others do so after some time.

In order for expatriate managers of Tesco Company to be able to communicate effectively across cultures, they undergo a cultural orientation program before they begin their expatriate assignments. This is aimed at equipping them with a general overview of various cultures for various countries to be in a good position to manage a culturally diverse workforce. They are specially trained on the five dimensions of cultural differentiation, as explained by Dr Geert Hofstede.

Situational theory

An example of a theory which is applied in expatriate management is the situational theory. According to the theory, it is not possible to have a universal approach to all situations and that different situations require different guidelines and modes of intervention. Organisations should, therefore, consider every culture as unique and come up strategies for integrating various cultures (Deresky 14).

Expatriate managers for Tesco Company working in China make a point of interacting freely with employees from China with a view of learning and understanding the Chinese culture. Through the interaction, they learn how to transform the similarities and differences between the United Kingdom’s culture and the Chinese culture (Holden 16).

Conclusion and recommendations

Hofstede came up with five dimensions for cultural differentiation. They include power distance, individualism, masculinity, uncertainty avoidance index and long term orientation. For expatriate employees to communicate effectively across cultures, they undergo cultural orientation programs before they begin their foreign assignments. The situational theory is very useful for expatriate employees to function optimally. My recommendation to Tesco Company is that it should consider using Chinese managers instead of sending managers to form the UK to China. This would increase efficiency and effectiveness in service delivery.

Works Cited

Deresky, Helen. International Management: Managing across Borders and Cultures. New Jersy: Pearson, 2011. 14. Print.

Hofstede, Jan, and M. Minkov. Cultures and Organisations: Software of the Mind. New York, NY. McGraw-Hill, 2010. 45. Print.

Holden, Nigel. Cross-Cultural Management. A Knowledge Management Perspective. London: Prentice Hall, 2002.16. Print.

Singh, Ekta. Caste System in India: A Historical Perspective. Gyan: New Delhi Books, 2005.171. Print.