Hofstede Cultural Model of Ipe Limited

Posted by Matthew Harvey on Aug-26-2021

At EssayPandas, we specialize in providing professional help in MBA and EMBA degree programs. We help students in completion of Management theoretical frameworks like the Hofstede Cultural Model and more. For example, Hofstede's Cultural Model of Ipe Limited consists of six dimensions, i.e., Power Distance, Individualism & Collectivism, Muscularity & Femininity, Uncertainty Avoidance, Long Term vs. Short Term Orientation, and Indulgence vs. Restraint.

Hofstede's Cultural Model mainly describes the effects of a society's culture on the values of its members and how these values relate to behavior. Simply put, it focuses on six key dimensions of cultural differences that must be understood and followed in a cross-culture business initiative. Managers at Ipe Limited want to explore these six cross-cultural dimensions to better plan and strategize their organizational culture. Here below is a demonstration of how Hofstede's Cultural Model can be written step-by-step. Acquire our expert help for the completion of a custom Hofstede's Cultural Model here.

Model Introduction

In order to understand how organizational values are impacted by national culture, Professor Greet Hofstede, along with other notable researchers such as Gert Jan Hofstede, Michael Minkov, introduced the six dimensions of national culture.

This model was created after extensive research, and Professor Hofstede analyzed a large database of value scores of IBM’s employees between the years 1967 and 1973 (Hofstede Insights, 2021a).

This data consisted of employees from more than 70 countries. Initially, Hofstede focused on 40 countries, and later on extended his research to 50 other countries, along with 3 regions. He collected data through 116,000 questionnaires from more than 60,000 participants and finalized 5 dimensions to measure culture.

Afterwards, he assigned indexes for each dimension to be measured across every nation. Therefore, the country scores on for all the dimensions are based on the comparison between different nations (Hofstede Insights, 2021a).

This framework provides a scale of 0 to 100 points, and each country has a specific position on each scale, that is relative to other countries. Initially, this model consisted of four dimensions, and two more were added later on (Mooij & Hofstede, 2010).

Various researchers have validated Hofstede’s dimensions, by using similar questionnaires and with different populations (Hofstede, 2011).

The six dimensions mentioned in this model are: power distance, masculinity versus femininity, individualism vs. collectivism, long-term orientation versus short-term orientation, uncertainty avoidance index, and indulgence versus restraint (Hofstede Insights, 2021a).

Hofstede’s framework is widely implemented in management, psychology, sociology, and marketing studies. This framework is extremely useful in conducting cross-cultural studies, and to compare cultures across different nations. Hence, this framework can also be applied to international marketing and consumer behavior studies (Soares, Farhangmehr, & Shoham, 2007).

Application of Model on Ipe Limited

Power Distance

This dimension refers to the unequal distribution of power, and the measures the acceptance of this power distance faced by weak members of the society. In countries with a large power distance culture, each individual has their rightful place within the social hierarchy (Mooij & Hofstede, 2010).

Power distance can be defined as the degree of inequality that exists between a less powerful and more powerful individual, and the level of hierarchal inequality that exists in the society (Bochner & Hesketh, 1994).

It also explains how much of this inequality these individuals are willing to accept, and consider it to be proper. This depends on the society’s norms within its institutions, along with its practices. These practices may include the distribution and prevalence of class and caste system, differences in social status, prestige, wealth, and rights (Bochner & Hesketh, 1994).

For countries with a large power distance, individuals are more likely to be submissive to their managers and higher authorities. They may be afraid to disagree with their superior, and may avoid doing anything which is against the will of their boss (Bochner & Hesketh, 1994).

On the contrary, individuals living in countries with a lower power distance may behave differently. They would want a subordinate that is participative and consultive, rather than an autocratic one (Bochner & Hesketh, 1994).

This means that societies with a low power distance do not accept hierarchal structures; rather they prefer an equal distribution of power and do not consider their superiors to be more powerful in any way (Hofstede Insights, 2021a).

Power Distance at Ipe Limited

Ipe Limited is headquartered in the United States; hence its cultural dimensions will be analyzed through this model in order to understand the cultural values and norms of Ipe Limited. USA scores low on power distance (Exhibit 1), which means that it focuses on equal rights within the society and the government (Hofstede Insights, 2021b).

Therefore, it can be claimed that Ipe Limited has a loose hierarchal structure, and there is less difference in terms of power and authority between subordinates and superiors. Information sharing and consultations are regular, whereas informal communication, which is more direct and participative, is common in the organization.

Furthermore, the structure of the organization is more democratic rather than autocratic, and employees are encouraged to pitch in their thoughts and ideas. There is less fear among employees for their bosses, and a conducive environment is prevalent to enhance idea generation and collaboration. Subordinated and superiors consider each other to be equal members of the organization, and believe that they have equal rights.

Individualism versus Collectivism

Individualism refers to a preference towards a society wherein individuals are more inclined to looking after themselves and their immediate families rather than the society at large.

On the other hand, collectivism describes a society in which individuals consider themselves integrated into groups. They can rely on these groups to take care of them. Simply put, it is the “I” versus “we” approach in a society (Hofstede, 2011).

Cultures that incorporate the individualist approach are more likely to think about themselves and their close families only.

Whereas cultures with a collectivist approach are prone to have strong, cohesive in-groups, that are commonly filled with extended families. These groups protect each other, in exchange for unquestionable loyalty and harmony. These groups prioritize strong relationships, and stress on belonging and closeness (Hofstede, 2011).

Individualism can be considered to be a part of emotional independence and freedom, while thinking of the well-being of self and immediate family. An individualistic person may not associate itself with groups, and think about its own personal accomplishments rather than thinking about the organization (or the in-group) (Gouveia & Ros, 2000).

On the other hand, nations with a high rank in collectivism may focus more on factors like group trainings, having a sound working condition, and may think about the organization as a whole rather than the individual (Gouveia & Ros, 2000). Hence, collectivist individuals may be emotionally dependent on their groups, and have a feeling of “us” rather than “I”. This dimension is inversely related to power distance (Gouveia & Ros, 2000).

Individualism in the Ipe Limited

The USA scores the highest on the individualism scale (Exhibit 1), 91 out of 100. This means that the society is loosely-knit, with minimal expectations from ingroups. Individuals tend to look out for themselves and do not rely on their extended families or the authorities for support.

Employees within Ipe Limited also display similar characteristics; they are expected to be self-reliant and take initiative. They value their independence and self-expression, and exhibit an increased drive for achievement, while focusing more on their personal goals rather than organizational goals (Blodgett, Bakir, & Rose, 2008) (Hofstede Insights, 2021b).

Furthermore, employees of the Ipe Limited have a strong work ethic, and tend to highlight individual achievement, and have strong individual goals. Individualism has been encouraged within American society through its democratic structure and laws and rights are given to the society (Kulkarni, Marchev, Ramamoorthy, & Goergieva-Kondakova, 2010).

Hence, Ipe Limited is also considered to be skewed towards individualism rather than collectivism, and employees consider themselves to be more independent and self-reliant.

Masculinity versus Femininity

This dimension describes the acceptance of male or female values in a culture. A society that embraces masculine values focuses more on success, personal accomplishments, and wealth; whereas a society where feminine values are dominant, places emphasis on the element of care and a better quality of life (Blodgett, Bakir, & Rose, 2008).

A society where male values are prioritized is typically more competitive and shows aggression as well as they strive to succeed (Blodgett, Bakir, & Rose, 2008). On the other hand, a feminine society prioritizes quality of life, modesty, caring for others, and having a humble attitude are more valued and prevalent in this society (Blodgett, Bakir, & Rose, 2008).

Furthermore, in masculine cultures, men are expected to be ambitious, assertive, competitive, and hardworking. In these cultures, women are expected to serve and care for their family, to improve their quality of life (through care).

On the contrary, feminine cultures expect overlapping roles for both genders, and neither of them are expected to be extra ambitious or competitive (Vitell, Nwachukwu, & Barnes, 1993).

This dimension suggests that individuals in masculine cultures are more likely to engage in unethical behavior at the organization. Since these cultures encourage males to be ambitious and competitive, hence, it is likely that these individuals may be inclined towards unethical behavior (Vitell, Nwachukwu, & Barnes, 1993).

The United States and Japan are considered to be masculine cultures, whereas Sweden is considered to be a feminine culture (Vitell, Nwachukwu, & Barnes, 1993).

US scores high on the masculinity scale, with a score of 62 out of 100 (exhibit 1). Hence, Americans exhibit masculinity values, which are to strive to be the best versions of themselves, and work hard to achieve success (Hofstede Insights, 2021b).

Masculinity Values at Ipe Limited

Similarly, Ipe Limited also exhibits masculinity values in its organizational culture. Employees are highly competitive; each of them is motivated to outperform their counterparts. These individuals are driven by success, and are not afraid to show off their success.

They are focused on improving their social standards and celebrate monetary rewards rather than non-monetary ones. Naturally, these individuals are aggressive and ambitious, and don’t let anything get in the way of their success.

These values are appreciated and rewarded by the organization, and are considered as important attributes which should be displayed by all employees. Hence, the organization’s culture is competitive, and this drives success for the organization as well.

Uncertainty Avoidance

Uncertainty avoidance can be described as the extent to which people become uneasy and try to avoid situations that are unclear, unpredictable, and out of the ordinary, through strict codes and norms of belief and behavior. Cultures with strong uncertainty avoidance are unwilling to accept new intercultural relationships (Merkin, 2006).

According to this model, countries that are ranked higher on this dimension are more likely to go against any deviations that are made from organizational norms. Countries like the USA and Canada have weak uncertainty avoidance whereas Japan has a strong uncertainty avoidance (Vitell, Nwachukwu, & Barnes, 1993).

Hence, Japanese individuals are likely to be less tolerant of any deviations and changes from their organizational norms, and expect outsiders to adapt to these norms. These firms have consistent norms within their cultures and rely on trust intimate associations of individuals (Vitell, Nwachukwu, & Barnes, 1993).

On the contrary, American firms have to deal with factors like mistrust, and may accept unethical behavior in the absence of a set code of rules and regulations.

Furthermore, this dimension is also tied with the belief that the actions of individuals belonging to a social unit are predictable. This means that societies that rank higher on uncertainty avoidance may exhibit a similar behavior among all of its members (Vitell, Nwachukwu, & Barnes, 1993).

However, it is important to note that uncertainty avoidance is not associated with risk avoidance, a common error made by management authors and researchers. Hence, cultures that have strong uncertainty avoidance do display risky behaviors (Minkov & Hofstede, 2014).

According to the model, uncertainty avoidance is higher in Central and East Europe, Japan, and countries that speak German, and Latin countries. Countries having a low score on the uncertainty avoidance scale include Nordic and Chinese culture countries, and English-speaking nations (Hofstede, 2011).

The US scores below average on the uncertainty avoidance scale, meaning that individuals are comfortable with unpredictable scenarios and outcomes. Hence, they are more likely to accept new ideas, and are focused on innovation in order to come up with new solutions to problems. These individuals display freedom of expression, and are tolerant of different opinions, and do not require strict rules and regulations (Hofstede Insights, 2021b).

Uncertainty Avoidance at Ipe Limited

Therefore, the culture of Ipe Limited displays openness towards new ideas and opinions. There is a high tolerance of deviant ideas that go against the norms of the workplace.

Employees do not get stressed out when faced with uncertain situations, rather, they take it as a challenge and opportunity to do better.

Furthermore, they are more likely to come up with innovative ideas and new processes for business operations. These creative and innovative suggestions are welcomed by the organization.

Long Term Orientation vs. Short Term Orientation

Long-term orientation can be defined as the nurturing of virtues like perseverance and thrift, that are aligned towards future rewards.

On the other hand, short-term orientation is defined as those virtues that are related to past and current rewards, like fulfilling social obligations, respect for traditions, and preservation of face (Venaik, Zhu, & Brewer, 2013).

According to the model, organizations that have a long-term orientation approach are more focused on their future goals, and do not expect to see immediate results and quick wins. They work towards long-term success (Venaik, Zhu, & Brewer, 2013).

Studies have suggested that long-term orientation organizations are more likely to have innovation adoption and develop long-term HR strategies for international joint ventures (Venaik, Zhu, & Brewer, 2013).

On the other hand, organizations that have adopted a short-term orientation approach are more focused on factors like rights, freedom, achievement, and individualistic thinking.

These employees tend to focus on short-term success and have a short-sighted approach; they are mostly concerned with achieving the quarter’s profits rather than thinking about the organization’s long-term growth and profitability (Hofstede & Minkov, 2010).

Countries that scored higher on this dimension include South Korea, Hong Kong, China, Taiwan, Japan, Brazil, and India, along with other East Asian countries. These countries have achieved fast economic growth in the last decades of the twentieth century (Hofstede & Minkov, 2010).

Countries that scored lower on this dimension include the Philippines, Nigeria, and Pakistan. United States, Great Britain, Australia, Germany, New Zealand, and Canada are also towards the short-term orientation side (Hofstede & Minkov, 2010).

Nations having a short-term orientation are more likely to be focused on social spending and consumption, whereas nations having a long-term orientation are inclined towards thrifting and saving for the future (Hofstede, 2011).

Countries with a short-term approach are less likely to experience rapid economic growth, however, countries with a long-term approach enjoy fast economic growth.

Furthermore, individuals in short-term orientation societies focus on personal steadiness and stability, and believe that a good person always remains the same, regardless of the circumstances.

However, societies with a long-term approach believe that people can change as they adapt to different circumstances (Hofstede, 2011).

American culture scores low on this dimension, which means that individuals are more likely to analyze new information to check whether its true or false.

Americans are considered to be extremely practical, but American businesses usually have a short-term approach, as they analyze their performance on a quarterly basis.

Hence, individuals strive to achieve fast results at the workplace, and are not concerned with the long-term growth of the organization (Hofstede Insights, 2021b).

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Short Term Orientation at Ipe Limited

Ipe Limited also follows a more short-term approach, as do other businesses within the nation. This is also due to the frequent changes in the external environment and business issues.

Although businesses are geared towards future growth, they are aware that the external environment may evolve quickly; hence they should be agile enough to deal with the changes to achieve a competitive advantage.

Indulgence vs. Restraint

Indulgence vs. restraint is a new dimension that was added in 2010, and is based on the recent World Values Survey items. It is weakly negatively connected with long-term and short-term orientation. An indulgent society is one that allows its members to enjoy life by free gratification of natural human desires (Hofstede, 2011).

On the other hand, a society that practices restraint does not allow its members to indulge in instant gratification, and has strict norms in place to control and regulate this (Hofstede, 2011).

In an indulgent society, there are a higher number of happy individuals, as compared to a restrained society, in which there’s a lower number of happy people. In an indulgent society, an individual feels more in control of their life, but in a restrained society, a perception of helplessness persists (Enkh-Amgalan, 2016).

Leisure time is enjoyed and prioritized in an indulgent society, but it is not considered to be important in a restraint one. Gender roles are loosely prescribed in an indulgent society, and they are strictly prescribed in a restrained society. Further, freedom of speech is important in an indulgent society, and it is disregarded in a restraint society (Enkh-Amgalan, 2016).

The US is considered to be an indulgent society, whereas most East Asian countries like China, South Korea, and Japan are considered to be restraint societies (Enkh-Amgalan, 2016).

The United States is known to be an indulgent society, as displayed by its scores for this dimension. The nation is known for its “work hard and play hard” approach. Individuals living in this society believe in going after their goals in an aggressive manner, but also spend time to relax and indulge in leisure and activities (Hofstede Insights, 2021b).

Indulgent Culture at Ipe Limited

Similarly, the culture at Ipe Limited is also an indulgent one. Employees receive benefits such as flexible working hours as well as the option of remote working, as long as it doesn’t affect the quality of work.

There are various facilities present for employees within the premises such as a gym, recreational center, movie theatre, a daycare center, and many more.

They are allowed to bring their children to work, and pets too, on some days. Furthermore, employees are allowed paid leaves for up to 2 months, and the cost of their higher studies is sponsored by the organization.

Conclusion

Hofstede’s cultural model is a powerful tool to analyze the cultural dimensions prevalent in different nations. This analysis can be useful to understand the cultural values and norms, rules and regulations, and helps managers in making correct business expansion decisions.

It is extremely useful for international businesses to understand cultural norms and codes of conduct of different nations, in order to understand international organizations and consumers in a better way.

Ipe Limited’s culture is aligned with the cultural norms of the nation it is headquartered in. By understanding these cultural norms and values, the organization can analyze its competitors as well and make sound business decisions.

The company can also understand its employees’ cultural values in a better manner, and create a better workplace environment in order to motivate its employees to perform in a more efficient manner.

By introducing an organizational culture that is aligned with the employees’ personal belief system, the organization can greatly reduce employee turnover, and increase intrinsic motivation within its employees.

Lastly, the insights from this analysis can also be used to make decisions regarding business expansion, and analyzing which countries have similar cultural values and norms. By analyzing these dimensions in other nations, managers can assess which nations are closer in terms of cultural norms and acceptance levels.

Hence, expanding its operations into such nations will be easier which have similar dimensions as the Ipe Limited.

Exhibit 1: Country Comparison - USA

Source: Hofstede Insights, 2021

Bibliography

Blodgett, J. G., Bakir, A., & Rose, G. M. (2008). A test of the validity of Hofstede’s cultural framework. Journal of Consumer Marketing, 25(6), 339-349. doi:10.1108/07363760810902477

Bochner, S., & Hesketh, B. (1994). Power Distance, Individualism/Collectivism, and Job-Related Attitudes in a Culturally Diverse Work Group. Journal of Cross-Cultural Psychology, 25(2), 233-257. Retrieved from https://d1wqtxts1xzle7.cloudfront.net/40928880/JCCP1994_power_distance__individualism-collectivism-with-cover-page-v2.pdf?Expires=1628348739&Signature=XAnEtET9nOjvL82O8rsBGP-yk~wINaLF0uXcRHNTXV2vyW~fCyeuz2v05gS8HuiDznQHC678~uigtBnOSpwWwAAy9sCyhcKi-tENgmR9

Enkh-Amgalan, R. (2016). The Indulgence and Restraint Cultural Dimension: A Cross-Cultural Study of Mongolia and the United States. Undergraduate Honors Theses, Paper 329. Retrieved from https://dc.etsu.edu/cgi/viewcontent.cgi?article=1354&context=honors

Gouveia, V. V., & Ros, M. (2000). Hofstede and Schwartz’s models for classifying individualism at the cultural level: their relation to macro-social and macro-economic variables. Psicothema, 12, 25-33. Retrieved from https://www.redalyc.org/pdf/727/72796004.pdf

Hofstede Insights. (2021a). National Culture. Retrieved from Hofstede Insights: https://hi.hofstede-insights.com/national-culture

Hofstede Insights. (2021b). Country Comparison. Retrieved from Hofstede Insights: https://www.hofstede-insights.com/country-comparison/the-usa/

Hofstede, G. (2011). Dimensionalizing Cultures: The Hofstede Model. Online Readings in Psychology and Culture, Unit 2. Retrieved from http://scholarworks.gvsu.edu/orpc/vol2/iss1/8

Hofstede, G., & Minkov, M. (2010). Long- versus short-term orientation: new perspectives. Asia Pacific Business Review, 16(4), 493-504. doi:10.1080/13602381003637609

Kulkarni, S., Marchev, A., Ramamoorthy, N., & Goergieva-Kondakova, P. (2010). Dimensions of individualism-collectivism: A comparative study of five cultures. Current Issues of Business and Law, 5, 93-109. doi:10.5200/1822-9530.2010.03

Merkin, R. S. (2006). Uncertainty avoidance and facework: A test of the Hofstede model. International Journal of Intercultural Relations, 30(2), 213-228. doi:10.1016/j.ijintrel.2005.08.001

Minkov, M., & Hofstede, G. (2014). A replication of Hofstede’s uncertainty avoidance dimension across nationally representative samples from Europe. International Journal of Cross Cultural Management, 14(2), 161-171. doi:10.1177/1470595814521600

Mooij, M. d., & Hofstede, G. (2010). The Hofstede Model. International Journal of Advertising, 29(1), 85-110. Retrieved from https://cpb-us-w2.wpmucdn.com/sites.gsu.edu/dist/4/1635/files/2015/07/8-Hofstede-CulturalDimensions-1pur3x7.pdf

Soares, A. M., Farhangmehr, M., & Shoham, A. (2007). Hofstede's dimensions of culture in international marketing studies. Journal of Business Research, 60(3), 277-284. doi:doi:10.1016/j.jbusres.2006.10.018

Venaik, S., Zhu, Y., & Brewer, P. (2013). Looking into the future: Hofstede long term orientation versus GLOBE future orientation. Cross Cultural Management: An International Journal, 20(3), 361-385. doi:https://doi.org/10.1108/09670730610663187

Vitell, S. J., Nwachukwu, S. L., & Barnes, J. H. (1993). The Effects of Culture on Ethical Decision-Making: An Application of Hofstede's Typology. Journal of Business Ethics, 12(10), 753-760. doi:doi:10.1007/bf00881307

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