HOFSTEDE’S CULTURAL AND ORGANIZATIONAL MODELS AND NATION’S SERVICE GROWTH
2.1Hofstede’s Cultural Dimensions
According to Hofstede (2001), culture is formed by the collective mental programming of a group, tribe, minority, or a nation. It can be viewed as the aggregate of individual personality traits (Bagchi, 2003). He classified countries along mainly four dimensions: power distance (PD), uncertainty avoidance (UA), individualism/collectivism (IC), and masculine/feminine (MF). These cultural dimensions are used to rate each of the 53 countries by Hofstede (Hofstede, 2001). These dimensions can be used to delineate leadership types or management practices.
2.1.1 Power Distance (PD)
This measure refers to the extent to which a society accepts …show more content…
Shane, Venkataraman and Macmillan (1995) investigated the role of innovation and PD. They found that in high PD societies, a greater need of approval from hierarchy was needed for innovative activities. So a strict hierarchy can stifle the innovation activities of a firm. High innovative activities such as invention patents are positively associated with low PD (Shane 1992).
Calculated risk taking in innovative activities is a standard way of doing business in many nations. Implementing any innovation involves risks, especially the new ones. Hofstede notes that a weak UA score leads to more basic innovations (Hofstede, 2001, p. 443). Shane et al. (1995) found that in high UA nations, innovators felt more constrained by rules and regulations. They found that innovative activities outside existing organizational norms, rules and procedures were more common in low UA societies. They also observed an association of higher innovation in terms of trademarks granted with low UA values. Thus, a low value of UA is associated with high innovative …show more content…
448, 2001). In developed nations, more opportunities exist among consumers to select from a range of products and services. As De Mooij (2001) observed, culture influences a customer’s social needs which in turn is satisfied by use and ownership of innovative products. Two cultural dimensions, UA and MF, for example, are even shown to be unaffected by the influence of personal wealth and are important in influencing many product and service demands (e.g. buying of new car or a new service created by Internet/Web). A high MF society defines success as a status symbol. Any service that can increase the status symbol of a user in a high MF society will be successful. A low UA society stresses the need for purity and expert knowledge (Hofstede, p. 449, 2001).
Innovation in service activity is often a “hidden dimension” which is playing an increasing role in stimulating change and supporting growth in the European economy (Royal Society Report, 2006). For example, the EU average for the share of services in business R&D expenditure had risen to 13% by
2.1Hofstede’s Cultural Dimensions
According to Hofstede (2001), culture is formed by the collective mental programming of a group, tribe, minority, or a nation. It can be viewed as the aggregate of individual personality traits (Bagchi, 2003). He classified countries along mainly four dimensions: power distance (PD), uncertainty avoidance (UA), individualism/collectivism (IC), and masculine/feminine (MF). These cultural dimensions are used to rate each of the 53 countries by Hofstede (Hofstede, 2001). These dimensions can be used to delineate leadership types or management practices.
2.1.1 Power Distance (PD)
This measure refers to the extent to which a society accepts …show more content…
Shane, Venkataraman and Macmillan (1995) investigated the role of innovation and PD. They found that in high PD societies, a greater need of approval from hierarchy was needed for innovative activities. So a strict hierarchy can stifle the innovation activities of a firm. High innovative activities such as invention patents are positively associated with low PD (Shane 1992).
Calculated risk taking in innovative activities is a standard way of doing business in many nations. Implementing any innovation involves risks, especially the new ones. Hofstede notes that a weak UA score leads to more basic innovations (Hofstede, 2001, p. 443). Shane et al. (1995) found that in high UA nations, innovators felt more constrained by rules and regulations. They found that innovative activities outside existing organizational norms, rules and procedures were more common in low UA societies. They also observed an association of higher innovation in terms of trademarks granted with low UA values. Thus, a low value of UA is associated with high innovative …show more content…
448, 2001). In developed nations, more opportunities exist among consumers to select from a range of products and services. As De Mooij (2001) observed, culture influences a customer’s social needs which in turn is satisfied by use and ownership of innovative products. Two cultural dimensions, UA and MF, for example, are even shown to be unaffected by the influence of personal wealth and are important in influencing many product and service demands (e.g. buying of new car or a new service created by Internet/Web). A high MF society defines success as a status symbol. Any service that can increase the status symbol of a user in a high MF society will be successful. A low UA society stresses the need for purity and expert knowledge (Hofstede, p. 449, 2001).
Innovation in service activity is often a “hidden dimension” which is playing an increasing role in stimulating change and supporting growth in the European economy (Royal Society Report, 2006). For example, the EU average for the share of services in business R&D expenditure had risen to 13% by