Speaker 1: Hello, everyone. Welcome to Business School 101. Nowadays, cultural diversity is important because our workplaces, schools, and other areas of our lives increasingly consist of various cultural, racial, and ethnic groups. We can learn from one another, but we must first have a level of understanding about each other in order to facilitate collaboration and cooperation. Learning about other cultures helps us understand different perspectives within the world we live. It also helps dispel negative stereotypes and personal biases about different groups. Additionally, cultural diversity makes our world a more interesting place to live, as people from diverse cultures contribute different ways of thinking, new knowledge, and various experiences. In order to better understand different cultures, scholars have tried various methods to analyze and categorize them. Today, we are going to study one of the most applicable approaches to understanding cultures, Hofstede's Cultural Framework. Geert Hofstede is a Dutch social psychologist. He formerly worked for IBM for many years. Due to that experience, he had a chance to conduct a cross-cultural study of more than 110,000 employees working in IBM subsidiaries in 40 different countries. That study provided the fundamental empirical support for his cultural framework. The Hofstede Cultural Framework consists of the following six dimensions. 1. Power Distance Index Power distance refers to how openly a society or culture either accepts or rejects differences between people like hierarchies in the workplace, in politics, and so on. High power distance cultures openly accept that a boss is higher and therefore deserves more formal respect and authority. Examples of these cultures include Japan, Mexico, and the Philippines. In Japan and Mexico, the senior person is like a father figure and is automatically given respect and usually loyalty without question. In Southern Europe, Latin America, and much of Asia, power is an integral part of this social equation. People of these cultures tend to accept relationships of servitude. An individual's status, age, and seniority command respect because they are the ones who give orders to lower-ranked people. Subordinates expect to be told what to do and won't take initiative or speak their minds unless a manager explicitly asks for their opinion. At the other end of the spectrum are low power distance cultures in which superiors and subordinates are more likely to see each other as equals. Countries who practice this culture include Austria and Denmark. Not all cultures view power in the same way. In Sweden, Norway, and Israel, for example, respect for equality is a warranty of freedom. Subordinates and managers alike often have freedom to speak their minds. 2. Individualism vs. Collectivism The individualism vs. collectivism dimension considers the degree to which societies are integrated into groups as well as their perceived obligations and dependence on groups. It can also refer to people's tendencies to take care of themselves and their immediate circle of family or friends, perhaps at the expense of the overall society. In individualistic cultures, what counts most is self-realization. Initiating alone, sweating alone, and achieving alone are what win applause. Competition is the fuel for success under the individualism culture. The United States and Northern Europe societies are often labeled as individualistic. Other examples of high individualism cultures include Australia and the United Kingdom. On the other hand, group goals take precedence over an individual's goal in collectivist societies. Basically, individual members render loyalty to the group, and the group takes care of the individual members. Rather than prioritizing me, the us identity prevails. The most important part of being in a collectivist society is pursuing the common goals, beliefs, and values of the group as a whole, so much so that in some cases it's nearly impossible for outsiders to join the group. Cultures that prize collectivism over the individualism include Singapore, Korea, Mexico, and Arab nations. 3. Uncertainty Avoidance Index The Uncertainty Avoidance Index considers the extent to which uncertainty and ambiguity are tolerated. This dimension considers how unknown situations and unexpected events are dealt with. People who have high uncertainty avoidance generally prefer to steer clear of conflict and competition. They tend to appreciate very clear instructions. In the workplace, sharply defined rules and rituals are used to complete tasks. Stability and what is known are preferred to instability and the unknown. Company cultures in these types of countries may show a preference for low-risk decisions, and employees in these companies are less willing to exhibit aggressiveness. Japan and France are often considered clear examples of such societies. In countries with low uncertainty avoidance, people are more willing to take risks. Companies may appear less formal and structured, and thinking outside of the box is valued. Examples of these cultures include Denmark, Singapore, Australia, and to a lesser extent the United States. Members of these cultures usually require less formal rules to interact. 4. Masculinity vs. Femininity The masculinity vs. femininity dimension is also referred to as tough vs. tender, and it considers the preference of society for achievement, behavior, attitude towards gender equality, etc. In masculine-oriented cultures, gender roles are usually crisply defined. Men tend to be more focused on performance, ambition, and material success. They maintain tough and independent personas while women cultivate modesty and quality of life. Areas like Japan and Latin America are examples of masculine-oriented cultures. By contrast, feminine-oriented cultures are thought to highlight feminine values such as concern for all, emphasis on the quality of life, and a focus on relationships. In these cultures, both genders swap roles with the focus on quality of life, service, and independence. The Scandinavian cultures rank as feminine as do cultures in Switzerland and New Zealand. The United States is actually more moderate. Its score is ranked in the middle between masculine and feminine classifications. 5. Long-Term Orientation vs. Short-Term Orientation The long-term orientation vs. short-term orientation dimension considers the extent to which society views its time horizon. Long-term orientation focuses on the distant future by delaying short-term success in order to achieve long-term success. In other words, long-term orientation emphasizes perseverance and growth. In contrast, short-term orientation focuses on the near future by delivering short-term success and emphasizing the present. This dimension was added by Hofstede after the original four we just covered. It resulted in an effort to understand the difference in thinking between the East and the West because certain values are associated with each orientation. The long-term orientation values perseverance, thriftiness, and having a sense of shame. These are evident in traditional Eastern cultures. Based on these values, it's easy to see why a Japanese CEO is likely to apologize or take the blame for a faulty product or process. In addition, you can also use this to explain why Asian American families generally have a significant higher saving rate than American families of other ethnicities. Short-term orientation values tradition only to the extent of fulfilling social obligations or providing gifts and favors. These cultures are more likely to be focused on the immediate impact of an issue. Not surprisingly, the United Kingdom and the United States rank low on the long-term orientation scale. Number 6. Indulgence vs. Restraint. This dimension was added in 2010 in order to capture more recent research conducted around themes of happiness. Indulgence indicates that a society allows relatively free gratification related to having fun in life. Conversely, restraint indicates that a society suppresses gratification of needs and regulates it through social norms. In other words, an indulgent society is one that values the satisfaction of human needs and desires. In contrast, a restrained society sees a value in curbing one's desires and withholding pleasures to align more with societal norms. In a country with a low indulgence rating, citizens are more likely to feel powerless, as if their experiences are not determined by their own actions, but rather by situations that happen to them. In a high indulgence country, freedom of speech is highly valued and people are more likely to experience positive emotions. In a low indulgence country, however, there is often a more visible police force and maintaining national order is a higher priority. Countries in Eastern Europe including Russia and some Asian countries have low indulgence ratings, indicating a restrained culture. Often in these countries, there is a pervading idea that indulgence is somewhat wrong. While much of Western Europe falls in the middle, most Anglo-Western nations have a high indulgence rating, indicating that individuals in these countries tend to place a higher importance on leisure. In other words, they tend to act and spend money as they please. Although Hofstede's cultural framework is very useful to us in understanding the different cultures of the world, it also suffers some limitations. Here are the three major restrictions. First, Hofstede assumes there is a one-to-one correspondence between culture and a nation-state. But as we all know, many countries have more than one culture, especially in countries with multiple ethnic groups. Hofstede's model does not capture this distinction. Second, Hofstede's research may have been culturally bound. The original research team was only composed of Europeans and Americans. The questions they asked IBM employees and their analysis of the answers may have been shaped by their own cultural biases and concerns. So it is not surprising that Hofstede's results confirm Western stereotypes because it was Westerners who undertook the research. Third, Hofstede's informants work not only within a single industry, the computer industry, but also within one company, IBM. At the time, IBM was renowned for its strong corporate culture and employee selection procedures, making it possible for the employees' values to be different than the values of the cultures from which the employees came. Also, certain social classes such as unskilled manual workers were excluded from Hofstede's example. Now let's do a quick review of today's topic. Understanding the cultural diversity of the world allows for a better chance of successful communication and relationship management. It is important to be flexible in social encounters, as people from different cultures demonstrate different preferences. Although Hofstede's cultural framework suffers many limitations, it is still considered one of the most valuable and practical tools for us to understand the cultural differences in the world. So, what do you think about Hofstede's cultural framework? Which of these dimensions is the most interesting to you? Please leave your thoughts in a comment below. 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