Hofstede Case Study

1. Introduction

The globalization which has taken place in the past decade has had a large effect on almost any type of business. The globalization embodies the entire movement from local oriented business to a wide spread, cross-regional or cross-national market. (Oxford Dictionary, 2013) The largest challenge which accompanies the trend of globalization is the issue of cultural differences and variety in leadership which arises in cross-national companies. When the question is asked: ‘What is the biggest barrier in doing business in the world market’, cultural differences ranks first. (Zigang, 2004) A quote by Hofstede states "there is something in all countries called 'management', but its meaning differs to a larger or smaller extent from

The most commonly known and used is the study by Geert Hofstede, which was created in 1993. In the Hofstede study all countries are assigned a value per cultural dimension, which enables the user to compare the countries amongst each other. The question whether the study of Hofstede is still viable in the 21ste century is difficult to answer. Critique on the study has been formed over the years, with the main criticism being that Hofstede's study has become out-dated and old fashioned. (Piepenburg, 2011) Other well-known culture related studies which were based upon the study of Hofstede were created by Schwartz (Schwartz, 1994), Smith (Smith, 1995) and Inglehart (Inglehart, 1997). All these studies are the same in essence, because of their use of values and dimensions the assess the various

The main factor is the value the countries score in the mentioned dimensions. The countries which lie closest to each other are in these dimension and have similar leadership styles are combined in the same region below. The clustering of the countries has as a result that the theory is less accurate and is difficult to be used as a definitive form of measuring. The countries which are in the same region still have minor differences in their leadership styles leads to a reduced degree of utilization when used for comparing specific countries. The importance of small differences is less of importance when less equal countries are compared, such as China and the Netherlands. The general larger aspects are still comparable due to the larger difference. As can be seen in the graph below, China belongs to the Confucian region and the Netherlands belongs to the Germanic region.

Figure 2: Societal Clusters and Leader Styles (Hoppe, 2007)

Figure 2 indicates the various leadership and management aspects and where the regions stand, on a scale from high to low. These so called “social clusters” have large differences in their leadership and management styles, which could lead to tension on the work floor. Germanic (the Netherlands)

• High performance oriented

• High team oriented

• High participative

• Middle humane

• High