In an increasingly global world, the role of framewors and universally recognized best practices has become more important. More over this affects companies facing its internationalization strategy through acquisitions and mergers. Also this applies when companies simply incorporate international investors among its shareholders.
Many years ago, IBM hired a Dutchman, Gerard Hofstede, to help them to improve efficiency in a wide global organization. As a result of his research work, he developed a great impact on many areas of management, especially in negotiating, managing and developing multicultural teams of internationalization strategies.
The 5 cultural dimensions of the Hofstede model
Power Distance Index (PDI)
The index of power distance refers to the degree of acceptance in the less powerful members of a culture, the differences in power or inequality. The PDI will be greater to the extent when such differences in social or hierarchical structures (such as companies, institutions or families) are more pronounced and generally accepted.
The IDV defines the degree to which individuals are integrated into society and the sense of belonging to the group. In a society with high IDV, for example, people tend to worry about themselves and their immediate family, while a very collectivist society, group ties are wider and the family unit is much larger (includes uncles, cousins and grandparents).
This indicator defines the tendency of a culture towards behavior patterns of greater masculinity or femininity. Hofstede’s study revealed that female values were similar between different cultures than masculine values. Masculine societies were more assertive and competitive with regards to women, generally more modest and empathetic. In masculine societies there is a greater gap in male and female values, and women tend to be more competitive and assertive.
Uncertainty Avoidance Index (UAI)
The IAU is the societal acceptance of uncertainty and ambiguity versus absolute truth. According to Hofstede, a country with high UAI tries to avoid risks, unstructured situations, or get out of the usual. These countries are more emotional, often reinforce security with strict laws, and philosophical and religious level, believe in absolute truth. By contrast, countries with low UAI are usually more thoughtful, tolerant and relativistic.
Long Term Orientation (LTO)
This last dimension, added later, refers to the long-or short-term culture. The long-term orientation societies suggests thriftiness and perseverance. And for the short term, Hofstede talks about more traditional societies, which are concerned with social obligations, characterized by greater diplomacy, and tact in dealing (avoiding bluntness in speech, for example, and speak more bluntly).
Countries map based on Hofstede intercultural management
Hofstede intercultural management applied to service management
The combination of Intercultural Management with a GSMO and a Service Model based on ITIL best practices are key to success in a global world.
Thus, the mission of a GSMO is to catalyze the “Corporate Culture” in Insourcing/Outsourcing operations, in order to facilitate the governance and management methods needed for proper performance/operation of Global Services.
Do you think is it important to recognize, develop and exploit our Intercultural Management skills?