Maintaining Corporate Culture to ensure Productivity

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What is culture? In the simplest form culture can be defined as "the way a group of people prefer to behave." <Donald. T Tosti (Jan 2007) Performance Management, Vol. 46, Issue 1, pg 21.PDF available>. Broadly it can be said that "effects of culture are witnessed or manifested in employee attitude and behaviour, such as communication, leadership, performance, motivation and satisfaction" towards a particular work/task. <Flora Chiang (2005), International Journal of Human Resource Management, Routledge, PDF available > .Today, due to globalization, it has become necessary for companies to establish and maintain their own corporate culture, which would support their strategies for a longer time. The development of a particular product is not only affected by the process of manufacturing but also the attitude & behaviour of the employees or people involved directly or indirectly in that product. One of the biggest challenges for contemporary international business leaders is to ensure that the employees of the company have a common attitude towards the company, and thus its products, so that they can contribute towards the successful implementation of the company strategy and create a good brand image of the company in the consumer's/customer's mind. Creating a strong corporate culture is one of the ways to draw a common attitude in the employee's behaviour. To create a strong corporate culture it is necessary to understand the ways in which cultures can be measured. To serve this purpose, Kluckhohn & Strodtbeck (1961) and Hall (1976) attempted to identify the categories by which culture can be described. But the most successful theory till date has been the Hofstede's Model on cultures (1980). In this paper we will start with a bird's eye view of the Hofstede's model and then:

try to understand why the model is biased and dated with respect to its dimensions

discuss the extent to which contemporary international business executives can apply this model to the current business dynamics.

In 1980, Hofstede introduced the first version of his model describing the research comparing work related values across different branches and establishments of IBM. The model was of quantitative nature and based on data accumulated from 50 different countries and three regions. <Richard Mead & Tim Andrew: International Management, April 2010, Edition 4, p35 >. Using this model, Hofstede proposed the existence of four (later five) dimensions that influence values and thus culture (Refer Table 1).

Table 1:

1

Power Distance

manner in which individuals accept and expect the levels of hierarchy

2

Uncertainty Avoidance

tolerance to uncertainty

3

Individualism vs. Collectivism

degree of belongingness to a group(s)

4

Masculinity vs. Femininity

Career prospects - fair or unfair?

5

Long Term vs. Short Term Orientation

Hofstede's theory of Confucianism

Reference: Mead R. & Andrews T.(2010) International Management, 4th edition, West Sussex: John Wiley & Sons Ltd.

How far Hofstede's model biased & dated:

Hofstede's model is being criticized - after its first publishing (Goodstein, 1981; Hunt, 1981; Robinson, 1983) and in the last few years (Baskerville-Morley, 2003; 2005; Holden, 2002; McSweeney, 2002).

There are 3 main parameters under the critic:

1. Method of surveying:

Hofstede's survey contained members of only one American company (IBM) and its subsidiaries, worked in a single industry (Mead and Andrews, 2010). People recruited by IBM, belonged mainly to the middle-class and were trained internationally. The industry for which they worked (high-tech or computer), wasn't typical for the time, when the survey was conducted.

All the respondents having worked for IBM shared a single monopolistic 'organizational culture' within every IBM subsidiary. 'As they were matched on an 'occupational' basis, each matched group also shared a common occupational culture'. (McSweeney, 2002) This may mean that these members do not share the same cultural characteristics as the other members of nation, because they are not the majority, but a minority of the whole nation.

Another point is that the size of survey varied from country to country. Like, more than 1000 of respondents were in 6 countries and less than 200 respondents in 15 countries (McSweeney, 2002).

Moreover, informants knew in advance about the survey and expected that the company leaders may use its results to develop new systems for taking corrective measures. This creates an element of biasness in the way the survey was answered by the employees. The employees might have responded with a view to shape the results in the desired manner than responding it in a natural way. Questionnaire responses may be considered as bias, also because "administration of the survey and the ownership of its results were IBM's and some of the questionnaires were completed within groups and not individually" (McSweeney, 2002 - p.103) -

2. Theoretical logic of surveying:

Culture in the survey was reviewed as part of state national borders, but culture group and group, living within one state, are not the same, because decisions about national borders are more political than cultural (Baskerville-Morley, 2003). Homogeneity assumption was criticised as there are also significant difference across group within any single country (huge ones, like Russia, China, India and also small ones like Belgium and Switzerland) or within single culture (mainstream culture and subcultures) (Mead and Andrews, 2010). Also people, born in one country and grown in other, behave themselves in different way.

As McSweeney (2002, p.93) argued:

"By the term national culture Hofstede means the culture of a country or state and not necessarily of a nation. For example, although the state 'Great Britain' is composed of at least three nations - England, Scotland and Wales - Hofstede treats it as a single entity with a single 'national' culture."

The same situation is, for example, with Canada and its French-speaking Quebeq or with south states of the USA, where majority of people speak Spanish.

In Trompenaars and Hampden-Turner's (1997) work it was noticed that working environment may dictate models of behavior, and they can differ very much from respondents' models in personal lives and families. However, Hofstede's findings about a culture were made on a basis of values and preferences of respondents in their field of work. In addition, the main object of Hofstede's research was respondents' opinions, not their behavior.

As Hofstede's theory was more west-oriented (especially before the fifth dimension - 'Confucian dimension'- reflecting Asian cultures was designed) inherent Western bias may appear (Mead and Andrews, 2010).

Gelfrand, Triandis and Chan (1997) while studying individualism, collectivism and authoritarianism have found that individualism and collectivism may apply in one culture at the same time.

3. Limits of use of Hofstede's model:

Decades have passed since the first Hofstede's survey was conducted. Thus, his indexes have become outdated. (Sondergaard, 1994; Holden 2002)As world has changed and developed fast, traditions are getting weaker and knowledge spreads away faster. Therefore, culture doesn't remain the same too.

Hofstede's research results are mostly about corporate culture of IBM itself than about culture of a nation. Thereby, his model applies more for large companies, than for small ones.

Culture itself is much more complex phenomenon than Hofstede's model of first four and later five, dimensions. His model is very static and it is mostly about a culture at a particular time than culture in general). The world today has become far more similar. People's cultures change while they are interacting and one culture influences other.

Power Distance (PD)

This Dimension of Hofstede defines "the extent to which the less powerful members of organizations and institutions (like the family) expect and accept that power is distributed unequally' (Hofstede, 1991: 28; Hofstede & Peterson, 2000: 401).

It analyses how the inequalities in society and workplace are affecting the national culture. Basically, Hofstede tries to prove that the countries with lower power distance always try to reduce the uncertainties and they do accept the differences in the social and organizational setup while the countries with the wider power distance accepts the difference where higher officials tend to take the decisions on their own and the rich gets an easy access to all the social services.

One of the arguments over Hofstede's model is that, this dimension is now out-dated as decades have passed since its inception in 1980. Hofstede argues that "……the cross-cultural outcomes were based on centuries of indoctrination, recent replications have supported the fact that culture will not change overnight" (Hofstede 1998, 481). But it should be noted that he has arrived at his cross-cultural report by developing a Power Distance Index only for fifty countries during the 1970s. Thus, if the same Power Distance Index is calculated for 195-200 countries today with "rapidly changing global environments, internationalisation and convergence" (Michael Jones, 1997), there will be wide disparity with the results pre-achieved.

Uncertainty Avoidance (UA)

This Dimension is defined as 'intolerance for uncertainty and ambiguity' (Hofstede, 1991: 113; Hofstede &Peterson, 2000: 401).

Uncertainty Avoidance analyses the extent to which people are aware or socialised in tolerating the unpredictable future. Hofstede argues that the members of cultures where need to avoid uncertainty is low - experiences lower levels of job stress and tension; vice versa in cultures where the need to avoid uncertainty is high. Those with a lower UA are comfortable with a pre-organized working setup but people within the higher UA levels prefer to make decisions of their own. (Mead R. & Andrews T.(2010)  International Management, 4th edition, West Sussex: John Wiley & Sons Ltd.)

In one of the papers, Galit Ailon has brought to notice that racial discrimination/inequality was not covered under Power Distance dimension and redefined as Uncertainty Avoidance. For instance: in South Africa, due to apartheid, a very high power distance-with respect to racial discrimination-existed. Also, all the respondents to Hofstede's model were whites. In spite of this, both South Africa and Great Britain achieved a moderately low power distance score. (Galit Ailon, 1980). In an attempt to explain this viewpoint Hofstede argues "Even rulers like the British, who practiced democracy and lower power distance society at home, did not practice equality between themselves and the colonial populations.... The Power Distance Index definitely does not measure tolerance toward other races, religions, and so on; this is rather a matter of Uncertainty Avoidance" (Hofstede, 1980:129). Thus, it becomes evident that there were some biases in Hofsede's considerations of uncertainty avoidance as well as power distance;

Hofstede himself admits that the survey was managed by putting to use confined and predetermined answer pools. He also admits that out of 66 countries where the survey was conducted, data from only 40 countries was used for analysis "for reasons of stability of data" (Hofstede, 1980: 54) and thus avoid the actual complexities pertaining to the research (Galit Ailon, 1980). It seems as the value of 'uncertainty avoidance' has played a crucial role in forming the fundamentals of Hofstede's research. (Galit Ailon, 1980)

Individualism vs. Collectivism (IC)

This dimension defines 'the extent to which individuals are integrated into groups' (Hofstede, 1991: 51; Hofstede & Peterson, 2000: 401). In this model, it is not only a measure of whether people of certain cultures preferred to work alone rather than work in groups, but also pointed out the degree of social/community integration. According to this dimension, cultures which are more individualist (and less collectivist) would stress individual identity and vice versa in the more collectivist (and less individualist) cultures (Richard Mead & Tim G. Andrew, 2009).

Individuals are not so polarized. In reality individualist cultures are always self-interested, greedy, and collectivist being somebody for group-interest (Jeffrey T. Polzer, 2002). In individualist cultures people have their personal goals and aspirations. To achieve these aspirations they associate themselves to groups of people. Their relationship with such groups is superficial. (David C Thomas, 2008). One particularly good example of this is politicians who want to be in a group of activists of a powerful party. Humden-Teurner and Trompenaars (1997) have brought up an important criticism against Hofstede that if someone is an individualist he or she cannot be a collectivist. Perhaps some people who seem very individualistic at work, however, are still collectivistic with their family and friends. It is difficult to separate these dimensions clearly. Despite the cultural background people usually demonstrate a mix of socially integrated behavior. Thomas (2008: 62)

Hofstede also claimed that technology transfer is hindered by collectivist cultures. For instance, through Japan, Singapore, Hong Kong and Taiwan these four collectivist cultures, which labeled collectivist by Hofstede, can incorporate Western technology remarkably (Kedia & Bhagat, 1998)

The Individualism vs. Collectivism can also be found in most models of cultural analysis. (Mead & Andrews, 2009). It is difficult to define cultures being individualistic or collectivistic, as some economic and history factors also affect the culture. Shkodriani and Gibbons conducted a research in 1998 on Individualism and Collectivism based on Hofstede's model helps account for the result. The research is collecting responses concerning social integration from Mexican and American students. According to Hofstede's model, those students in Mexico would be more collectivistic than students in America in their relationships. The result showed significantly higher collectivism among the Mexican students than among American students, which supporting Hofstede's model still useful (Shkodriani, 2001).

Masculine vs. Feminine (MF)

Masculinity-Femininity 'assertiveness and competitiveness versus modesty and caring' (Hofstede, 1991: 82-3, 1998b; Hofstede & Peterson, 2000: 401). Hofstede uses the terms "masculine" and "feminine" in technical senses. He claims that in the more masculine cultures sex roles are sharply differentiated. On the other hand, sex roles are less sharply distinguished in the more feminine cultures, and both genders have more equal access to the same job at all levels (Richard Mead & Tim G. Andrew, 2009). Masculinity is usually defined as a situation where the values in a society are success, money, and business, and Femininity is clarified as society having values such as thoughtfulness for others and the quality of life (Hofstede, 1984: 176; Hofstede & Bond, 1984: 419-420). This dimension and opinion is problematic in several ways. For one thing, it will create a masculine bias in their responses (Orr, 2008). IBM employed mostly males at the time of survey is one such example. What is more, this opinion were built upon dated gender roles, many people perceived the term "Masculinity-Femininity" in the survey as being sexist (Chiang, 2005).

In most of the cultures, today, the business world has changed and females share a considerably larger space in the business scenarios. It is a mistake to base our views on broad generalizations about the characteristics of men and women as such stereotypes are often inaccurate. Hofstede should have changed the title of this dimension from "Masculinity-Femininity" to "Career Success/Quality of life to avoid perplexity. (Alder 1997)

Long term vs. Short term Orientation

Long term vs short term orientation otherwise known as Confucian Dynamism was introduced by Hofstede and Bond in 1991. It was the result of a study which was an attempt to fit the uncertainty avoidance dimension into the Asian culture (Hofstede, 1991)

Hofstede didn't arrive at this fifth dimension from the IBM questionnaire but with help of questionnaire developed by M. H. Bond. Hofstede says that people with long term orientation tends to value actions considering the future effects while the people from short term orientation gives importance to past or present while actions are valued

Cala´s (1992: 213) claims, while representing an attempt to correct the cultural bias, the fifth dimension is merely presented as an add-on to the original four and does not lead to a re-examination of their underlying logic. Also he argues that this add-on to the cultural dimensions is subordinated to the Western Dichotomy. As a result the inferior ranking of the Western culture is recast.

Answering Question

Even though Hofstede's model has been criticised by many researchers, there are still many people who refer to his work as the map to approach, what they call, the national culture (Latifi, 2006). As a result they expect to gain basic idea and prediction on culture behaviour for business studies (Kook et al, 2008). Since his research finding had been launched in 1980, it was not only an alert in the field of Human Resource Management but also of wide use in other business practices for example, Marketing, Decision Making and Organization's strategy planning. Whatsoever aspects, there must be some advantages on his finding that could overcome biases and outdated.

In business practices, there are quite a number of directors who appreciate Hofstede's finding. They find it is a very useful and impressive research where he creates the conceptual leap by comparing at cross-culture level, which somehow appropriately explain the situation from their past experiences (Hoppe, 2004). Those managers see as the groundbreaking study by quantified this type of research and make a comparison (Bing. 2004).

Several applications are based on Hofstede's framework. For instance; ITAP International, a business consultant firm, has adapted this model to into their practice both for their employee and their clients in many areas in order to be more understanding and develop well competency in business practices. Bing (2004) also saw the theories as a great fundamental understanding to other business engaging cross-broader transaction, like Merger & Acquisition of firms, Joint Venture, and Multinational Company etc. In addition, there is an analysis shows that British Airways (Britain based) and Sabena Airlines (Belgium Based) design their web pages according to the theory of Uncertainty avoidance by using difference level of complexity. The British, who have low rating of Uncertainty avoidance, contain more complex content than the Belgium's web page.

How much could International Managers rely on Hofstede's framework? The question on his accuracy has been risen for business executives and other relevant members since there are evidences from other researches testing on the model's validity and reliability show that the reality is not always in consistence with Hofstede's model (Blodgett et al, 2008). The tests were on varieties of examination group, such as US and New Zealand MBA students and Iranians etc., which apparently belong to the different society status apart from his original sources. And that could be one of the factors driving results into inconsistency. Those argue researches remind business executives of how to use the tool efficiently.

First of the things managers should keep in their mind is that "a universal measurement tool which can be adopted by every aspect does not exist" (Chiang, 2005). Therefore; Hofstede's model might not be able to represent all character in a certain culture. In some particular section of a culture, there could be a big difference between the reality and his result, while some other group could contain similar result with Hofstede's. Secondly, people do change over the period of time. Globalization and convergence are some of the vital factors of culture adaptations, which rapidly integrated culture to one another. As a result there is significantly risen number of Conglomerate firms as the record taken by WTO (2008) in the past three decades. Those figures could indicate the sign of transitiveness from culture to culture.

Conclusion

As to a contemporary implementation, we grant that Hofstede's study has contributed greatly in understanding the various cultures in comparison at national level in a better way, more or less giving a basic orientation of each national norm and value. And those make his model valuable as a one of the fundamental theories ever made even today. However; it will be appropriated only by the user's carefully application to their particular objectives and be aware of the constraints that are involved within his study. Furthermore, those five dimensions might not be enough to evaluate a culture, some other important influences such as political, value and mindset etc., (Ailon, 2008) should also be considered at the same time. Together with in-depth study for their particular research areas in order to get the most accurate result before making any decisions.

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