A framework used to distinguish between different national cultures and cultural dimensions, and their impact on a business setting
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What is the Hofstede’s Cultural Dimensions Theory?
Hofstede’s Cultural Dimensions Theory is a framework used to understand the differences in culture across countries and the ways that business is done across different cultures. In other words, the framework is used to distinguish between different national cultures, the dimensions of culture, their impact on etiquette and to facilitate communication in areas ranging from business to diplomacy.
Hofstede’s Cultural Dimensions Theory was created in 1980 by Dutch management researcher Geert Hofstede who carried out an extensive survey during the 1960s and 1970s, investigating variations in values within different sectors of IBM, a global computer manufacturing company.
The study comprised over 100,000 employees from 50 countries across three regions.
Hofstede’s Cultural Dimensions Theory
Hofstede identified six categories that define culture:
Power Distance Index
Collectivism vs. Individualism
Uncertainty Avoidance Index
Femininity vs. Masculinity
Short-Term vs. Long-Term Orientation
Restraint vs. Indulgence
Power Distance Index
The power distance index considers the extent to which inequality and power are tolerated.
A high-power distance index indicates that a culture accepts inequity and power differences, encourages bureaucracy, and shows high respect for rank and authority.
A low power distance index indicates that a culture encourages flat organizational structures that feature decentralized decision-making responsibility, a participative management style, and emphasis on power distribution.
For example, in countries with high power distance, parents may expect children to obey without questioning their authority. Conversely in countries with low power distance there tends to be more equality between parents and children, with parents more likely to accept children arguing or challenging their authority.
Individualism vs. Collectivism
The individualism vs. collectivism dimension considers the degree to which societies are integrated into groups and their perceived obligations and dependence on groups.
In individualistic societies, the emphasis lies on personal achievement and rights, prioritizing the needs of oneself and one’s immediate family.
Collectivism indicates that there is a greater importance placed on the goals and well-being of the group. A person’s self-image in this category is defined as “We” and individuals from collectivist backgrounds often prioritize relationships and loyalty more prominently than those in individualistic cultures.
Uncertainty Avoidance Index
This dimension considers how unknown situations, uncertainty, and unexpected events are dealt with.
A high uncertainty avoidance index indicates a low tolerance for uncertainty, ambiguity, and risk-taking. The unknown is minimized through strict rules, regulations, etc. Both the institutions and the individuals in these societies strive to reduce uncertainty by employing vigorous rules, regulations, and similar measures.
A low uncertainty avoidance index indicates a high tolerance for uncertainty and ambiguity. The unknown is more openly accepted, and there are lax rules, regulations, etc. Individuals and cultures with low uncertainty avoidance embrace and feel at ease in situations lacking structure or in fluctuating environments.
Masculinity vs. Femininity
The masculinity vs. femininity dimension is often referred to as gender role differentiation and examines the extent to which a society values traditional masculine and feminine roles.
Masculinity includes the following characteristics: distinct gender roles, an appreciation of assertiveness, courage, strength, and competition.
Femininity includes characteristics such as fluid gender roles, modest, nurturing, and concerned with the quality of life.
A high femininity score suggests that traditional feminine gender roles hold significant value within that society and for example, a country with a high rating would probably offer improved maternity benefits and more accessible childcare services.
On the other hand, a country with a lower femininity score is likely to highlight increased female representation in leadership roles and a higher prevalence of female entrepreneurship.
Long-Term Orientation vs. Short-Term Orientation
The long-term orientation vs. short-term orientation dimension considers the extent to which society views its time horizon.
Societies that emphasize long-term orientation prioritize future outcomes, postponing immediate success for achievements over the long term. In these cultures, values like persistence, endurance, frugality, savings, sustained growth and adaptability take centre stage.
Short-term orientation shows focus on the near future, involve delivering short-term success or gratification, and place a stronger emphasis on the present than the future. Short-term orientation emphasizes quick results and respect for tradition.
Indulgence vs. Restraint
The indulgence vs. restraint dimension considers the extent and tendency for a society to fulfill its desires. In other words, this dimension revolves around how societies can control their impulses and desires.
Indulgence indicates that society allows relatively free gratification related to enjoying life and having fun.
Restraint indicates that society suppresses gratification of needs and regulates it through social norms.
In a society characterized by high indulgence, you may see individuals allocating more funds to luxuries and relishing greater freedom in their leisure pursuits. Conversely, within a restrained society, the inclination leans towards thrift, savings, and practical necessities.
Advantages and Disadvantages
While Hofstede’s Cultural Dimensions Theory provides a framework to help in understanding etiquette and communication across cultures, considerations are needed when recommending its application.
Enhances cultural insight: It helps understanding of diverse cultures, fostering an appreciation for diversity.
Promotes global collaboration: It supports informed management of individuals from diverse cultures to reduce misunderstanding and conflict while optimizing communication and collaboration.
Dated dimensions: It could be argued that the dimensions of power distance index, masculinity/ femininity, individualism/ collectivism, short term versus long term orientation and uncertainty avoidance do not fully capture the intricacies of various social cultures.
Cultures not individuals: Although the model aims to define cultures and not individuals, every individual is still ultimately unique, shaped by personal experiences that influence their values throughout life.
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