The Geert Hofstede’s theory is a framework that helps in understanding cultural differences in different countries and identify ways to do business in different cultural contexts. People use it to differentiate various national cultures, cultural dimensions, and their effect on a company/business 1 . The theory was developed in 1980 by Geert Hofstede to establish different cultural dimensions. Hofstede developed six categories that explain culture. The cultural dimensions affect various management functions depending on the culture. The management functions affected include control, leading, organization, and planning 2 . In the context of international business, cultural dimensions are crucial. Understanding how different aspects of a business are present in various cultures can assist a manager in understanding and being effective in international business. The paper discusses four of the six categories and their effect on management. These include the power distance index, collectivism versus individualism, uncertainty avoidance index, and short-term versus long-term orientation.
Power Distance Index
This dimension considers inequality and power from below 3 . It refers to the extent to which a company and societies embrace power differences. Societies that have large power distances are characteristic of autocracy, centralized leadership, paternalism, different power ranks, embracing privileges that accompany power, a lot of supervision, and expectation of variations in power and lack of equality 4 . However, cultures with small power index show that culture promotes organizational designs that are flat, not centralized, promote responsibility in making decisions, and emphasize the dissemination of power. The power distance index affects leading. In countries that have a high power distance, leaders should be directive. Besides, in such countries, people expect that rule is properly defined. On the other hand, in low power distance countries, leaders are expected to be collaborative and can be questioned on rules. Also, the power distance index can affect how an organization operates. Countries with a large power index leaders who are authoritative and more directive are most likely to be effective than those who are participative 5 .
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Individualism versus Collectivism
This cultural dimension refers to the extent to which a society incorporates into groups and the expected duty and reliance on groups 6 . In individualism, people place more value on achieving individual goals. Also, in individualistic cultures, there is an emphasis of self-sufficiency, and the focus is on individual interests. Such cultures do not value responsibilities and societal norms. In collectivism, the emphasis is on goals and the good of groups instead of an individual. Individualism and collectivism affect the way people manage an organization. In such cultures, individuals share resources and are ready to forego individual interests. They emphasize harmony and conduct in a group is regulated by societal norms 7 . Countries inclined towards institutional collectivism, creating teams and groups in firms would be effective than having individual work allocation. For countries with more individualism, hierarchical designs with clearly defined boundaries of authority and responsibilities would be effective.
Uncertainty Avoidance Index
Uncertainty avoidance as a cultural dimension focuses on the degree to which people can tolerate a lack of certainty and ambiguity 8 . It puts into consideration how unknown circumstances and situations that managers cannot handle. An uncertainty level that is high shows that there is less tolerance of events that are not expected and therefore reduced the likelihood of taking risks. Leaders reduce unknown things by implementing strict rules. A reduced uncertainty avoidance level, on the other hand, shows that there is a high likelihood of tolerating unexpected circumstances and taking or risks 9 . People embrace unknown situations and there are fewer rules. Uncertainty avoidance has a major effect on the firms to plan their businesses. In cultures with high levels of uncertainty avoidance, the planning process is highly deliberate. Besides, people consider only those plans with a reduced probability of failing and a bigger certainty of results. For low uncertainty avoidance cultures, planning in firms is very flexible. Plans in such cultures embrace the fact that the future is not predictable. They believe that people should handle problems as they surface.
Long-term orientation versus Short-term Orientation
This cultural dimension refers to the level to which a culture sees its time horizon 10 . For long term oriented cultures, people give attention to the future. In such cultures, persons delay success in the short term to realizes it in the long term. It emphasizes being persistent, endurance, and growth on a long term basis 11 . Also, there is the emphasis of thrift, and individuals witness a positive relationship with economic development in such cultures. In cultures oriented towards the short term, people give all attention to the near future. As a result, persons sought short term achievement after, and value the present more than the future. Also, people emphasize quick outcomes and honor tradition in such cultures. Also, mentality in such cultures is more conventional and they aim at attaining stability. Long term orientation and short term orientation affect planning in a firm/business. Cultures characteristic of more future orientation assess the prevailing situation of the firm, and people implement plans according to the changes required to achieve goals in the future 12 . In countries with a reduced future orientation, managers place a firm's history into perspective and implement plans to maintain traditions.
To sum up, management skills are culturally specific. A management method that is appropriate in one culture may not be appropriate in another culture. The cultural dimensions developed by Geert Hofstede influence management in different ways depending on culture. These dimensions include power distance index, individualism versus collectivism, uncertainity avoidance index, and long-term orientation versus short-term orientation. People develop firms depending on their values. In addition, societies are made of organizations that show the main values in their cultures as seen in th cultural effects on business management.
References
Demmler, M., Ayala, R. O., & Solís, A. U. (2018). Comparing Corporate Cultural Profiles Using the Cultural Dimensions of Hofstede. Journal of Business and Management Sciences , 6 (2), 28–35. doi: 10.12691/jbms-6-2-1
Mootz, J. (2013). Dimensions of Culture (Geert H. Hofstede) - Long- and Short-Term Orientation. The Encyclopedia of Cross-Cultural Psychology , 403–404. doi: 10.1002/9781118339893.wbeccp583
Taras, V. (2017). Cultural Dimensions, Hofstede. The International Encyclopedia of Intercultural Communication , 1–5. doi: 10.1002/9781118783665.ieicc0100
