International Business Center

IBC FOCUS ARTICLE: Why Don't We All Just Get Along Together?
by Stephen Taylor, Director of the International Business Center

As the war in Iraq winds down and the reconstruction begins, there continues to be a high level of disharmony among Nations. Last month’s IBC Newsletter gave an overview of how religion and Geert Hofstede’s Dimensions correlate. In this month’s Focus Article we will look more closely at the World’s people in terms of cultural ‘groupings’, and how this may play a significant role in international disagreements.

For the purpose of this article, we will analyze the delta, or difference between Geert Hofstede’s Power Distance Index (PDI) and Individualism Index (IDV). We designed this comparative analysis to determine what, if any, distinguishing ‘grouping’ characteristics may be observed. (for scores of Geert Hofstede and his landmark IBM study on cultural diversity in the international workplace go to SCORES)

These two Dimensions were selected based on their combined contributed impact on a society or culture. However, before examining the results, let’s briefly review these two Hofstede Dimensions:

- Power Distance (PDI) focuses on the degree of equality, or inequality, between people in the country's society.

- High Power Distance ranking indicates that inequalities of power and wealth have been allowed to grow within the society. These societies are more likely to follow a caste system that does not allow significant upward mobility of its citizens.

- Low Power Distance ranking indicates the society de-emphasizes the differences between citizen's power and wealth. In these societies equality and opportunity for everyone is stressed

- Individualism Index (IDV) focuses on the degree the society reinforces individual or collective achievement and interpersonal relationships.

- Low Individualism ranking typifies societies of a more collectivist nature with close ties between individuals. These cultures reinforce extended families and collectives where everyone takes responsibility for fellow members of their group.

- High Individualism ranking indicates that individuality and individual rights are paramount within the society. Individuals in these societies may tend to form a larger number of looser relationships.

By subtracting the IDV ranking from the PDI ranking we generate either a positive or negative number, i.e. a country with high Power Distance and low Individualism will produce a higher net score. While a country with low Power Distance and high Individualism produces a lower net score. The actual positive or negative number is relative and has no correlation to good or bad, better or worse, in terms of this analysis.

Therefore, a high score on this combined index indicates a culture that is collectivist with inequality among the population. On the other end of the scale, a low score indicates a culture that is individualist with equality within the population.

The combination of these two Dimensions highlights the unequal and collectivist nature of the country.

By creating a ranking continuum, each country becomes ‘grouped’ near similar cultures, thereby more clearly differentiating each one.

TABLE REMOVED AT THE REQUEST OF GEERT HOFSTEDE

Country listing begins in upper left with Guatemala, then read across each row from left to right. Lowest score is New Zealand.

We have taken the results and created four groups of countries based on the combine PDI and IDV scores, as follows:

In reviewing the four 'groupings' above, Group I countries have a very strong Collectivist nature with a great deal of inequality among the members of the population. Groups II is more Collectivist with a moderate level of inequality, while Group III trends toward Individualism and equality. Finally, Group IV is predominantly Individualist and supports a higher level of equality between members of the population.

Based on this analysis, it could be anticipated that countries within a "Group" would tend to relate to each other more effectively than with members of other 'Groups' due to their basic beliefs about equality and social structure. It could also be anticipated that 'groupings' farther away from their own (i.e. Group IV relative to Group II or Group I) would have greater divergence and more difficulty in "understanding" each others cultural values - equality and social structure - Collectivism versus Individualism.

The purpose of this article is help international business people become more effective when working with people from other cultures. Having an understanding and appreciation for sometimes extreme differences is a critical first step in building better rapport and understanding.

As with all social-psychological studies and analysis, care must be taken when applying the results to any specific business or social interaction, as this information is based on generalized studies.

Send your comments to ask-us@ibc-mail.com

New Geert Hofstede site now Online

Now we have taken one of the favorite components of the International Business Etiquette Website, the Hofstede graphs, and made them better, added more countries, and incorporated new information with a new site design.

The new Geert Hofstede site is Geert-Hofstede.com

We encourage schools, organizations, and businesses to link to this new site and its great resources. If you're a business school student, talk to your professor about this new site and incorporating it into the lesson plan resources.

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