Power distance

So you want to do business abroad and actually make a profit? Don’t forget to ask yourself this: What do I know about the culture?

To explain the biggest differences between cultures in this essay we are going to use a method developed by Geert Hofstede (geert-hofstede.com) using his four dimensions; Power distance, masculinity/ femininity, individualism/ collectivism and uncertainty avoidance.

With this we will explain the difference between the Dutch culture and the cultures of India and Italy when doing business.

Power Distance

What Is Power Distance?

Power distance measures how much the less powerful members of institutions and organizations expect and accept that power is distributed unequally.

In cultures with low power distance, people expect and accept power relations that are more consultative or democratic.

In cultures with high power distance, the less powerful accept power relations that are autocratic or paternalistic.

Power Distance In India And The Netherlands

With a population of over 1 billion it is hard to describe life in India because the Indian people have many different religious, regional, cultural, social, and educational variations in structural and functional patterns of family life, making it hard to generalize. However because the majority of Indians are Hindu, we will primarily focus on the Hindu way of life.

India has a high power distance; it scores a 77 on the index. While the Netherlands only scores a 38 with around 16 million people.

India is a very interesting country to look at because they have ‘used’ the caste system¹ for a long time. With that, they automatically create a massive distance between the highest members of the caste: Brahmins (priests) and the lowest members of the caste the pariah (outcasts, “untouchables”) there are a total of 5 levels in the caste system and each of the people in a lower caste listen to members of the caste above their own. This makes equality, like in the Netherlands, impossible. This because the social position of a person is determined by heredity, for example if you are born a pariah you will never be a Brahmin and you are expected to life your life in the caste, making it your social group as well.

Although the system was officially abolished it continues to play a crucial role in Indian society.

Family Life

A Joint Family is an extended family arrangement prevalent among Hindus of the Indian subcontinent, consisting of many generations living under the same roof. All the male members are blood relatives and all the women are mothers, wives, unmarried daughters, or widowed relatives. However in the last couple of years the people in the urban areas of India seem to have been shifting more towards a nuclear family household (consisting of 2 parents and children)

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School/ Education

In India higher education’s are more like the western European way of teaching, so the power distance is not extremely large in the schools, Teachers are however expected to lecture the students. It has been like this since India was a British colony and it keeps improving towards the level of equality which we are experiencing in Holland right now. However, in India the respect for most of the teachers is higher than the respect students in Holland show towards the teachers.

Work/ Business

As said before the Indian culture prefers a high power distance, in business there will be a large structural difference between the boss of a company and an employee, splitting them by so many layers that they will rarely or never actually talk to each other. And if they do it would be very formal. Also it’s necessary to avoid forum like situations where you as a manager ask the ‘lower ranking’ employee’s for feedback or advice because this will be seen as weak leadership. Opposed to Holland where we consider it a good thing when managers come to us for our opinions.

The State

The state consists of many layers in India though it is somewhat similar to the political system in the UK. In India, a person’s time is valued based on power. A high-power individual must never be kept waiting. In India, a high-power individual can and will demonstrate their power by keeping a lower power individual waiting. In the Netherlands this is just not acceptable.

Power Distance In Italy And The Netherlands

Italy scores a 50 on the power distance index of Hofstede which puts it somewhere in the middle worldwide. According to Hofstede’s dimensions Italy looks a lot like Germany in.

Italy was the pinnacle of European development in the early days (Roman Empire).

Italians still seem to expect a lot of differences in power between people.

They would say the boss in a company should act like he/she is the boss.

Family Life

The Italian family is important. Grandparents, aunt’s uncles and cousins are often invited to share family celebrations and Sunday dinners. The family members do not usually live near each other. When children grow up, they usually live in the house until they marry. Sometimes the children would move in to help their parents. The father is always the head of the family.

Friends of the family are also a very big part of Italian society.

School/ Education

In Italy the schools are even more similar to Holland, you are allowed to question the teachers as long as you do it with the proper amount of respect.

The teachers will however have a lecture prepared.

Work/ Business

Power distance in Italian companies is not extremely really high because a lot of the businesses there are family businesses, nonetheless communication at the office is formal and subordinates are rarely allowed to call their superiors by their first name. The boss of the company is really the boss and he/she should be treated with a lot of respect. Good manners and courtesy are prized qualities in Italy. When doing business in Italy ensure your conduct is always polished. There are etiquettes and protocols for many social and business situations; however, it is important to remember that Italians rate considerateness above behavioral formulas. When you are meeting and departing, always shake hands. This is valid for both individuals and groups. When you do business in Italy, you dress to impress. It is no coincidence that Versace, Gucci, Prada and Dolce & Gabbana are all Italian fashion houses. Italians like to make an impression with their clothes.

What you wear speaks volumes about the kind of person you are.

The State

Italians are often cynical about persons in positions of authority. Italians love to ridicule authority and people in positions of power. Breaking petty rules is a source of amusement for many Italians.

Individualism And Collectivism

What Is Individualism And Collectivism?

In relation to Hofstede’s cultural dimension study, Individual/ Collectivism will be determined.

The meaning of individualism expresses exactly a nation, which do care for him/ herself and his/ her direct family. The word “I” is a very important factor in this form of life, which is completely different in a form of collectivism. This attitude to life shows that these people care about their whole in-group which includes family, friends, uncles, aunts and grandparents. The word “we” has obviously a higher meaning to them.

Hofstede’s charts visualize that countries with high power distance (PDI) belong to the collectivists and countries with low power distance belong to the individualists. According to Hofstede individualism countries have the tendency to be a rich. Countries in a collectivism country have most likely the opposite tendency.

Individualism And Collectivism In India And The Netherlands

A comparison between India and The Netherlands gives a good impression and shows the differences between those two countries. First of all it is important to have a look at Hofstede’s charts. India scores, according to Hofstede’s, power distance (PDI) as its highest points for cultures, with a ranking of 77 compared with a world average of 56.5. This fact shows a clearly result of a collectivism country, which India is. It makes itself felt in terms of friendships, which were chosen by their parents, not having conflicts, by being indirect or sharing the income if someone has a good job for example. It absolutely represents the loyalty of the in-group members.

As a counter-example The Netherlands will be represented. In opposite to India, Holland scores its highest points in the category individuality (IDV), which is 80 points and ties Canada as the fourth highest worldwide IDV ranking. Some examples to clarify the culture are being very direct, let the children choose friends whoever they want or spend their money however they think it will be right. These facts enunciates that Holland doesn’t have this in-group attitude like India but rather the absolutely priority to their immediate family.

At school children from India see the teacher as a higher person, whatever the teacher says is right without to question it, which shows that they are depending on their teacher. Furthermore it is normal to focus on a social network, where the synonym “we” more important than “I”.

Dutch children are joining a completely different way of getting taught in school. It is more important to learn how to develop their own abilities, to be independent and learn how to discuss problems. They also expect the teacher to know everything with every detail.

The next part relates to work and business in India. Since they have in-groups it is not normal to work with people who are not part of their in-group. It is very common that the children from India start to work in their father’s, or uncle’s business. Otherwise they won’t find another job because in a collectivist country they are so depended on their in-group.

Dutch people raise their children to work at a place wherever and whatever they like. It’s more important for them to let them pick up their own experience and realize their dreams. This is the logical way of thinking for individual countries. In addition it promotes the economy to have people who are independent.

The final aspect is about the states in individualism/ collectivism countries. Since India is a part of collectivists it is to say that there are more differences between poor people and rich people. Further the human rights are lower than those ones from individualist countries. In contrast The Netherlands which belongs to the individualists are more equal regarding the differences between poor and rich people. It is very important to have the same human rights like every single person in the country. Equality has different meaning for those two mentioned countries.

Individualism And Collectivism In Italy And The Netherlands

The comparison between Italy and The Netherlands will show the differences between those countries. It is important to take a closer look at Hofstede’s charts. It shows Italy’s highest score, which is about 71 points “Individualism” and shows the similarity between Holland and Italy. Italy is an individualist country, like The Netherlands, but its Power distance (PDI) is also high.

Family life is important for Italians, not just the immediate family, but also uncles, aunts and grandparents play a big role in the children’s life, which shows the differences to comparing to Holland. Sons from Italy leave their parents house in their 20s which is pretty much same like in The Netherlands. Furthermore children are supposed to tell the truth, even if it hurts. This is a typical attribute of individualist thinking countries, which Dutch and Italian people are. They also get raised as independent children with personal opinion because this could useful for a successful life.

In those two mentioned country the school and education is pretty much the same. Pupils or students have to be independent, competitive and they are supposed to determine their own goals. It is very common to discuss issues in the class without being silent, so they can develop their skills.

Work and business is also a similar matter between Italy and The Netherlands. They are highly educated business people and make business with foreign countries. Employees and employers are committed to contracts which show the human rights, but there is law that people can get laid off, or they could quit the job.

The last aspect is about the state and in this point those two countries are also pretty much similar. Human rights are very high, education is important and everyone has his privacy. In conclusion individualist countries appreciate the individual interests and do not deal with collectivism.

 Masculinity And Femininity In India and The Netherlands

Hofstede’s dimension masculinity pertains to societies in which gender roles are clearly distinct. That means, men has to be assertive, competitive and have to air toughness while women stand for nurturance. They are responsible for the household and the children. High earnings and status symbols present a certain social standing for the man. One gets the recognition deserved while doing a good job and is allowed to reach a higher level in his job.

In feminine societies these gender roles overlap. Both, men and women are suppose to be modest (both, men and women have the same rights but also the same duties) both parts focus on their relationship and they are also more concerned to the quality of life.

With a ranking at 56, the masculinity of India is with the world average just slightly lower at 51. A high rank means that the country is a masculine country. The lower it is, the lower is the masculinity and goes more to femininity. You also can see that India is a masculine country on different examples in

Family Life

The man is the head of the family. He is the one, who makes the decisions. Who says what to do. Children are obedient towards their parents. Younger children have to listen to the older children. The man is more dominant than the woman. The woman takes care of the household and the children. Whereas women are going to shop for food, household and clothes, the men are looking for cars, a house or things and objectives, which are standing for status.

Even when the trend goes more femininity, step by step, traditions like a marriage portion are still common, in rural areas. The woman has to give money which depends of the family earning to marry the man. However, not always the woman (wife) has to do what the husband says. India consists of a lot traditions and one of them is, that the wife has to follow the instructions of the mother of her husband for the first few years. Even when both genders are equal, rightly, the woman is still undervalued. It is not rare that the girls get less or qualitative less food than the boys because the boys have to get strong for hard work, which a girl is not able to do. That is the reason why girls get more jobs like home helpers and get married early.

In comparing to the Netherlands which occupy a score of 14 points rank 72, this country is very feminine. Men and woman are modest and focus on their relationship. Both shop for food and both discuss which car to buy. They do not have one dominant “leader” of the family both act non- dominant.

School/ Education

India’s school-systems are free for the grades from one till five. However, more boys go to school than girls. Girls are going to marry early, so they let them work and send the boys to school. An example what makes it visible is, that 48% of the Indians over fifteen cannot read and write. 62, 3% of women and 34, 5% of men are illiterates.

The education is also more masculine because the pupils or students try to make them visible in class and compete openly with each other. Job choices are strongly guided by perceived career opportunities. The best student is the norm; failing in school would be a disaster. The atmosphere of ego boosting is exiting, the best one wins. Indian children try to learn jobs where they can make money. The Netherlands have more students which present the average. Failing in school is not the end of the world and they learn jobs, basic on their talent and what they like. They underrate their own performance, they do not want to appear too eager and it is okay when the teacher is also just a “human” and do not know everything.

Work/ Business

Most of the time, even when it changes in the big cities and step by step also all over the country, the men are working and earn the money for their families. One fourth of the population lives under the poverty line. They live for the work whereas in the Netherlands the people work to live. That means that money and status are not so important like the leisure time. The Indians work in a competitive atmosphere, the higher the position, the better is the money and their status. Only the best are successful in the hard business.

The State

The state is a performance society. You will be paid for that what you accomplish. The more you can the higher is the earning. The higher the earning is the higher is your status in society.

In the Netherlands it is quite different, the community is more important. The solidarity is higher; people help more each other and also the weaker ones. India focuses a lot to the growth in economy, more than in the Netherlands.

Masculinity And Femininity In Italy And The Netherlands

Italy counts over 60 points and stands on rank 52 in the index from Hofstede but only for the European countries.

Italy is also a masculine society but not so high like India. Italy is less masculine but more feminine than India but not so feminine like the Netherlands.

Family Life

Women expect men to get the leadership in family life and earn the money for the family. Gender roles are also clearly distinct here. The woman is responsible for the family and especially for the household and the man is making career. Children suppose to be obedient, whereas the boys should be tough and the girls more emotional. Most of the time the father is dominant but it is not unusual when there are non-dominant partners in a relationship. Family is very important and children are their future. Parents try to give their children the best perspective and are always around them; often the “bambini’s” sit on the table till late in the evening. The parents take very care of the children and control them also a lot what they are doing. It is normal, that fights are sometimes loud and the Italians also like to make jokes and do not care when the neighbor or strangers hear it whereas love is not shown to the outside. Often a fight between a man and woman sound hard for a non-Italian but that is their mentality and normally after five minutes all is forgotten. Men are often seen like machos but it is unusual that parents have a divorce.

School/ Education

The teachers are authority persons to the students but the communication is still friendly and the teachers also make jokes. It is very important that the Italian students pass school with high grades. Often they learn till late in the evening and the parents still control them to repeat the homework and if they understand well. The education is more masculine than in the Netherlands, failing in school or not passing a test is a disaster whereas the Dutch students are more comfortable and they just need to pass, independent from the grade.

According to this fact, teachers in the Netherlands, take more attention to weaker students and try to push them by giving them attention, than openly praise the good students.

The students are decent in their CV’s, whereas in Italy, they sell themselves in interviews to show they are the best. The Netherlands are a permissive society in which the environment should be preserved as small is beautiful. Furthermore the government depends on a coalition between different parties and women are more often elected than in Italy and India.

Work/ Business

Usually the woman take care of the family and the men is going to work. However women also work, but the earnings of the men are most of the time higher and the high positions are often occupied by the men. Money is important, men like to show their status with cars for example but leisure time and spending time with their families is also important. You cannot really define if it is more masculine or more feminine. It is more feminine than in India but still more masculine than in the Netherlands.

The State

The community is important, Italy has solidarity. They care about the weak people in the population and aid also a lot of financially help to poor countries. The country is a community and they represent it to the outside.

Uncertainty Avoidance

What Is Uncertainty Avoidance?

The term uncertainty avoidance denotes how members of a culture deal with unknown or ambiguous situations. Cultures with high uncertainty avoidance try to avoid such uncertainties. Members of other cultures maybe experience equal situations as uncertain or chaotic as well, but respond more relaxed and unstressed. Each country has got own rituals and values how they deal with punctuality, formalities and religious affairs. Cultures with a high certainty avoidance index (UAI) are more prepared to evade risks than cultures with a low UAI. The higher the score of the UAI is, the higher the need of people to have laws and regulations which give them a guideline and a feeling of private and public security. High uncertainty avoidance sentiment can be summarized as “What is different is dangerous.” However, the weakest uncertainty avoidance sentiment can be summarized on the contrary as “What is different is curious.”

In Italy the uncertainty avoidance and individualism/ collectivism are the highest scores, adequate the four dimensions of Geert Hofstede with a value of 75 on the index. It is clear to see that Italy has one of the highest scores at all. On the other hand there are the Netherlands with a relative low UAI amount of 53 which is almost the mean of 39 countries.

Uncertainty Avoidance Italy And Netherlands

Family Life

Because of the high score Italy has achieved, one can see that the family life seems to be as more stressful as in the Netherlands. In the early stages Italian children learn the difference between dirty and clean and between safe and dangerous. They make more experiences with law and rules and know soon what they are allowed to do and what not. Italian mothers and nannies would never allow to see their children in dirt or danger. It is common that family has a very great significance in Italy. In contrast to Italian families Dutch families are quite different. They are more relaxed about that and let their children make experiences on their own. Dutch don’t care about their health as the Italian do.

Example:

Dutch people don’t ask for a doctor or a medical certification if they are ill. Often they are already satisfied with the view of a nurse.

Religion plays a pretty important role in the Italian family life. 90% of all Italian inhabitants are Roman Catholic. This huge number shows one that they have great Christianity. Religion gives them some sort of security, confidence and for several people a guideline. Health and keeping good are also important things Italian care about. Unlike Italy Holland is not that religious. Nearly half of all Dutch people are atheists.

School / Education

In Italy there is high uncertainty avoidance. In such countries it is pretty important for the students to believe in that a teacher knows almost everything. The students want to know right answers in detail and the teachers are supposed to have all the answers. In the Netherlands it is quite different. Teachers are rather considered as advisers. The students just want to have good conversation and discussion with the teacher and they don’t have problems if a teacher says “I don’t know”. Italians are almost the same as the German and favored a structured and detailed assignments.

Work / Business

In work life one can see that Italian employees and managers look for long-term employment. In contrast to Italy the Dutch people are short-term orientated and more flexible. If they are dissatisfied with their job they have no problem with looking for another job. Besides the Italian employees and managers favor a well structured and organized work process that they would not confronted with any problems. Many Italian prefer to do business they already know.

Example:

Italians prefer to know something about an individual before they speak with the person on the phone. Thus, in business one should send an introductory fax and follow-up with a phone call.

The State

One reason why Italy is scared of the unknown is because it is a very old cultural country that has survived many economical changes, wars and political upheavals. These facts might have bred in Italians a greater anxiety of the unknown. In Italy a mass of laws and rules are the result of uncertainty avoidance. It gives a feeling of security and also it can be seen as a guideline. In Holland there are not that much laws and rules. They think that laws and rules should be established just in case of necessity. Furthermore they believe that many problems can be solved without any laws. The Netherlands have just a few laws and rules to avoid the uncertainty, although the government and the regulation system is very well developed. If there is a law that is not working, the Dutch government would change or withdraw it easily and quickly. The fact that Italy has so many laws and regulations is that many people are not interested in politics. In contrast the Dutch people are very interested in politics, because there not many laws, so they are not overloaded by them. For example, Dutch people ask, why there is a change in ordinance.

Uncertainty Avoidance India And Netherlands

Family life

Based on Hofstede’s scale India’s UAI is the lowest of the three countries we have to compare. India scores a 40 on the index. This value makes clear that the inhabitants have the least fear of the uncertain. But it’s quite hard to generalize, because there are many variations in the different patterns of life. One reason for this fact may be that a large part of the inhabitants grow up under the poverty line. Indian are born in the caste system which forms their guideline, therefore they have another way of feeling of losing a job. Mostly they live with a large amount of family members in one house. Their religion, beliefs and rituals are important attempts to avoid uncertainty in the present and in the oncoming life. Approximately 80% of all Indian inhabitants are Hindu. But in Holland it is very different. In Holland religion is not that import as in India or in Italy because there are almost 45% atheists.

School / Education

Indians who live under the poverty line probably don’t fear to have no school education because the most of them grow up without education at all. But for middle class parents it is important that their children get an academic achievement, because it’s a direct step to achieve prestige and a better status. Another point is that the dutch pupils don’t mind what credits they get. They are just interested in whether they passed or not.

Work / Business

In countries like India people only work hard if there is a need for it, but they also love to relax. So time is not an ever-present concern for them. Furthermore they live day to day, so one can see that they are very similar to the Dutch because they are both short-term orientated. Day to day can also mean that they fight to survive day after day.

The State

Indian politics are nearly the same as the British. Since its a bicameral system there are multiple parties. A big difference between the British and Indian system is that in India there are political parties that address, only certain groups in the caste system. And with that they create a certain kind of certainty for the people in the caste.

Conclusion

After our detailed investigation, about how the four dimensions of Hofstede affect the different countries, we can give some marketing and general advices for doing business in India, Italy and the Netherlands.

In contrast to The Netherlands, India and Italy are both masculine countries.

For example someone wants to publish a new product especially for woman like a magazine.

In the Netherlands it wouldn’t be difficult to bring such product on the market because it’s a feminine society. Nobody would have a problem with the content mentioned in the magazine. In India or Italy it might be more problematic. In India the men would object against magazines like this because the society is directed to male’s being the higher authority. The men have a big influence on decisions being made. The society status is very important for the family.

In The Netherlands it doesn’t matter who makes the decisions mainly its good for the family.

Generally you have to invest a lot of time and effort in order to build up serious and long-term business relationships in Italy but even more in India. Therefore you (as a business man from abroad) should never try to talk about business straight from the beginning. But rather focus on building a relationship, in most cultures on the world people need to trust each other first before they can do business with each other. Work on that relationship and you will have a good business partner who will always prefer you over the loud screaming cheaper company.

In the end, the failure to communicate on the intercultural market will result in the failure of your business as an international company. Always take cultural differences into account.

Sources

Cultural and Organizations – Software of the Mind

http://www.globalvolunteers.org/italy/italy_people1.asp

http://www.geert-hofstede.com

http://www.wikipedia.org/

clearlycultural.com

http://www.cyborlink.com/besite/italy.htm

Uncertainty avoidance table

Caste System india

Hofstedes Dimensions for each country