Hofstede’s Cultural Dimensions (DP IB Business Management)

Power Distance

• Power Distance is defined as the extent to which the less powerful members of institutions and organisations within a country expect and accept that power is distributed unequally

• Low-scoring countries include Australia, the USA and Finland

• High-scoring countries include Mexico, Russia and Philippines

Individualism

• The degree of interdependence a society maintains among its members

  • In Individualist societies people are supposed to look after themselves and their direct family only

  • In Collectivist societies people belong to 'in groups' that take care of them in exchange for loyalty

• Low-scoring (collectivist) countries include China, Pakistan and Malaysia

• High-scoring (individualist) countries include the UK, South Africa and Italy

Motivation Towards Success

• A high score (Decisive) on this dimension indicates that the society will be driven by competition, achievement and success

• A low score (Consensus-oriented) on the dimension means that the dominant values in society are caring for others and quality of life

• Low-scoring countries include Norway, Portugal and Chile

• High-scoring countries include Germany, Japan and Australia

Uncertainty Avoidance

• The extent to which a society tolerates or avoids uncertainty and ambiguity

  • The extent to people feel threatened by unknown situations and have created beliefs and institutions that try to avoid these are reflected in this score

• Low-scoring (tolerant) countries include Sweden, Tunisia and Namibia

• High-scoring (avoiding) countries include Spain, Turkey and Ecuador

Long-term Orientation

• The extent to which society has to maintain some links with its own past while dealing with the challenges of the present and future

  • Low score countries prefer to maintain traditions and norms

  • Those with high scores encourage modern education as a way to prepare for the future

• Low-scoring (long-term) countries include Ukraine, Latvia and Norway

• High-scoring (short-term) countries include Venezuela, Morocco and Saudi Arabia

Indulgence

• The extent to which people try to control their desires and impulses based on the way they were raised

• These are defined as restrained and indulgent societies

• Low-scoring (restrained) countries include Poland, Indonesia and Estonia

• High-scoring (indulgent) countries include Argentina, Ireland and New Zealand

Power Distance

• In low power countries AirBnB considers the needs of a broad range of people whose focus is on elements of a product that make their tasks easier
  

• In high power countries AirBnB focuses on meeting the needs of key decision makers by emphasising their products benefit the whole family or company and how products can make their leadership a success

• In Australia AirBnB's promotional activities focus on the convenience and ease of booking/paying for stays in properties
  

• In Mexico promotional activity focuses on financial returns for property owners and possible cost savings for users of the platform

Individualism

• In countries with high individualism AirBnB's recruitment and selection processes emphasise the personal success that recruits could achieve by working within the business
  

• In low individualism countries AirBnB emphasises the social and collective aspects of working for the business 

• Advertisements for senior roles in AirBnB's London office emphasise the performance-related pay and bonus rewards the business offers
  

• Host recruitment policies in Malaysia emphasise the wealth that groups of AirBnB properties in areas that lack hotels can generate for communities

Motivation Towards Success

• In decisive societies AirBnB has set challenging targets for growth into new markets
   
  

• AirBnB's approach in consensus-oriented societies' is less target-driven, emphasising quality and the minimisation of negative impacts of short-term lets on populations

• In the US AirBnB has established regional sales headquarters in major cities which operate independently and compete to attract large volumes of hosts and bookings
  

• In Norway AirBnB has developed its Airbnb Plus and Beyond by Airbnb schemes which focus on encouraging hosts to offer high-quality, premium priced properties

Uncertainty Avoidance

• In countries with high tolerance to uncertainty AirBnB market tests many of its new services and encourage hosts to make more unusual properties available to rent
  

• In countries with low tolerance to uncertainty the range of properties available for rent is relative narrow and standardised

• In Sweden AirBnB lettings include a former military hut, a lighthouse and several treehouses!
  

• In Spain all AirBnB hosts are encouraged to provide standard facilities in their properties such as a private entrance

Long-term Orientation

• In long-term outlook countries AirBnB may emphasise its commitment to social responsibility by encouraging its hosts to adopt environmentally friendly practices in its properties
   

• In short-term outlook countries AirBnB's focus is more profit- or sales-focused 

• In Latvia AirBnB hosts receive extensive guidance and practical support on achieving carbon neutral status for their rental properties
  
   

• In Chile the availability of low-cost housing has significantly worsened since AirBnB's successful marketing campaigns to recruit hosts in major cities

Indulgence

• In restrained societies products may be designed to appeal on the basis of logic, common sense or good value
  

• In indulgent societies AirBnB encourages its hosts to offer aspirational properties that appeal to people's desire to 'treat themselves'

• Polish citizens take fewer holidays than many European counterparts - AirBnB's properties in Poland tend to be large and are aimed at longer family stays 
  

• In New Zealand AirBnB has a growing selection of very short-term, super-luxury 'experience' properties

• Structured framework makes comparison easy 

  • It is a structured framework for understanding and comparing cultures which improves awareness

• Generalisation

  • Culture is complex and dynamic - reducing it to a set of dimensions can reinforce stereotypes

• Credible model

  • Research into the model involved thousands of respondents from different countries 

• Lack of nuance

  • It treats a country as if all its people share the same characteristics - this is often not the case especially in very large countries such as the US

• Clear and simple

  • The small number of dimensions makes the model  accessible and easy to apply

• Ethnocentrism

  • Hofstede's model is rooted in Western cultural values so may not capture the true nature of non-Western cultures

• Practical application

  • Understanding cultural dimensions can help with adapting strategies and communication so they are effective in different countries

• Changes over time

  • Cultures shift due to various factors, including globalisation and generational shifts