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Vol. 27, No. 1 Eckhardt Reviews HOFSTEDE Review:

Culture’s Consequences: Comparing Values, Behaviors, Institutions and Organisations Across Nations by Geert Hofstede, 2001, Second Edition, (Sage, Thousand Oaks, CA) US$97.95, hardcover, pp. 596.

he publication of this second edition of Culture’s Consequences marks an important moment in the field of cross-cultural studies. The first edition of this book, published in 1980, launched what some have called a revolution within the social sciences. Researchers who previously had not questioned whether their theories of human behaviour were applicable to all people were suddenly confronted with a systematic framework of cultural dimensions suggesting that not only behaviour but the processes and mechanisms governing behaviour could fundamentally vary based on four cultural dimensions. The first edition of this book brought the field of cross-cultural studies to the forefront (or at least the front) of social science research. But Hofstede’s framework has come under intense scrutiny since its first publication, and, although this second edition makes many needed changes and additions, it will be significant to see whether the intellectual community still finds simplistic frameworks, even as influential as Hofstede’s, to still be relevant to cross-cultural research. T

The second edition is an appropriate place for business researchers interested in doing cross-cultural work to get an introduction to the field, as it includes a (limited) survey of much cross-cultural work within the past twenty-five years, as well as introducing the above mentioned framework. Yet, if new researchers are inspired to engage in cross-cultural research, they must go beyond this framework to adequately represent the dynamic and complex nature of culture on psychological processes and behaviour. Hofstede’s framework is perhaps most appropriate as a teaching aid for introducing the notion of cultural differences to business students, as it provides an easy-to-understand framework with numerous examples of their practical applicability. Having studied under Hofstede during my undergraduate study-abroad days at Maastricht University, I have successfully followed his lead many times with my global marketing students in teaching such topics as intercultural marketing communications. Although Hofstede’s framework for understanding national differences has been one of the most influential and widely used frameworks in cross-cultural business studies, in the past ten years or so it has also become one of the most widely criticized. Detractors contend that his dichotomised way of representing cultural differences leads to unjustifiable generalizations and ignores the subtleties and frequent contradictions inherent in many national cultures. Many social scientists contend that there is in fact no such thing as national culture, since subcultures within a country can vary so greatly in their values and beliefs. Moreover, the original data Hofstede presented in 1980 in the first edition of this book, from which he derives his framework, have been misunderstood and applied

AUSTRALIAN JOURNAL OF MANAGEMENT June 2002 in inappropriate ways, which has also led to criticisms of the framework from a methodological stance.

In this second edition, Hofstede does not present new data (the data presented are the same original data collected from IBM employees in the late 1960s and early 1970s), but includes in his discussions of each identified dimension of culture the findings from numerous studies which have subsequently used his framework, includes some additional countries, removes dated material, redoes calculations, and responds to his critics head on.

Impact of the First Edition of Culture’s Consequences in Business Research Although Hofstede’s work has largely fallen out of favour with many business scholars for a variety of reasons that will be mentioned shortly, it is still widely used in business research. And there is no denying the huge impact his work has had on business thinking in the past twenty years. Hofstede himself describes his impact as paradigm shifting (p. 73), and indeed his work was what made many business scholars first question the universal applicability of some of the most common business models—models that have since been shown to be culturally variable, such as the diffusion of innovation model and the advertising effects model.

The data published in the first edition as well as this second edition of Culture’s Consequences were collected during a 53–country project to try to systematically understand cultural similarities and differences around the world, although in this edition 19 more countries are added, using data collected subsequently by Hofstede, as well as by other researchers. Using IBM employees in each of the 53 countries because they are similar to each other on almost all dimensions except culture, Hofstede measures cultural values relating to spheres such as interpersonal relationships and hierarchies. Four dimensions of culture that helped explain the differences among the respondents emerge:

1. Uncertainty avoidance—a society’s tolerance of the unpredictable;

2. Power distance—a society’s acceptance of the unequal distribution of power;

3. Individualism/Collectivism—the extent to which the interests of the

individual prevail over the interests of the group within a society; and

4. Masculinity/Femininity—the relative strength of masculine vs. feminine

values in a society.

Since the initial publication of these four dimensions, numerous other researchers have ‘confirmed’ these dimensions in various cultures around the world and utilized them to analyse a number of business issues, such as variations in consumer behaviour, management practices, and portfolio management.

In 1987, a group of researchers based in Hong Kong and headed by Michael Bond published results from a Chinese Value Survey they had administered in 23 countries (Chinese Culture Connection 1987). This survey replicated three of the original four cultural dimensions that Hofstede had reported on, but their fourth dimension was different, as the survey was prepared based on Eastern values rather than Western values. They termed this dimension long-term/short-term orientation, and when Hofstede re-published his results in a textbook version of the first edition

Vol. 27, No. 1 Eckhardt Reviews HOFSTEDE of Culture’s Consequences entitled Cultures and Organizations in 1991, he included this dimension as a fifth dimension of culture. It is also included as an added chapter in this second edition of Culture’s Consequences.

Each country receives a score within a range of about 0–100 on each of the five dimensions. It is important if utilizing these scores in research to note that the scores place each country in a relative, not an absolute, position.

Hofstede notes that his cultural scores are indicative of a proclivity across the entire country that he has measured; the scores are not variables to be used to predict individual behaviour. Of course, within countries there is variation in levels of all the variables, and his measures do not account for this. This has been a primary area in which his data and framework have been misunderstood within business research—one cannot predict individual behaviour using his framework. Rather, the unit of analysis is at the countrywide level, and thus predictions can be made only at this generalized level.

This second edition includes a chapter on all five of the above dimensions, explaining at length what they mean and represent, and incorporates findings from the 1980s and 1990s into the discussions of each dimension.

Notable Additions to the Second Edition

The second edition emphasizes the reporting of the many ‘validations’ of Hofstede’s framework that have occurred since the first edition was published. But this seems to be somewhat tautological, as he primarily includes only the studies that have confirmed his original framework. He neglects to include the many empirical studies that have occurred wherein results have challenged his framework, and he explains away the minor empirical variations that he does report on that have appeared in the literature.

Another marked addition to this second edition is that Hofstede openly acknowledges to a large degree the Western bias of the entire research project, to the extent of outlining his own history, beliefs, values and scores on all dimensions, so they can be taken into account by the reader when evaluating and interpreting the results he presents.

In a widely expanded introductory chapter on the nature of values and culture, Hofstede flags the ecological and reverse ecological fallacies early on. The ecological fallacy is when data collected at a countrywide level (e.g. Hofstede’s data) are used to predict individual behaviour. Hofstede’s data have been used in this manner numerous times in business research, and as mentioned earlier this is highly inappropriate. There will be a diversity of, for instance, people who score higher or lower on the masculinity scale in any given country. When a country scores high on the masculinity index, it implies there are more people in that country who subscribe to masculine values, but it does not say anything about how to determine whether any given individual will score high on these values. Without confirming at the individual level whether a person indeed subscribes to the values indicated at a countrywide level, a researcher cannot assume an individual will act in the way ascribed to his/her country in general. Because his data have been misused so often in this manner, Hofstede is careful to explain these units of analysis issues in detail.

AUSTRALIAN JOURNAL OF MANAGEMENT June 2002 The reverse ecological fallacy occurs when variables correlated at the individual level are then used to explain countrywide data. Although this error occurs less than the ecological fallacy, he cautions that this is also highly inappropriate (p. 16). Most importantly, he points out these issues are not merely measurement issues, but paradigm issues. Within psychology, a special issue of Journal of Cross-Cultural Psychology has recently been published in which just these paradigm issues of how to conceptualise and measure differences purportedly based on national culture should be handled are explored. (See Singelis 2000 for a summary.)

In response to those critics who have contended that his data are stale, Hofstede notes (p. 66) that there is no one set of measures or items on a measure that will always account for national differences throughout time. He explains, for example, that the original questionnaire used to measure masculinity in the 1970s has been modified in more recent studies, since the meaning of this construct in various societies has changed since then. Having acknowledged this, though, Hofstede still has a tendency to rationalize variations in the replication studies that he discusses rather than openly discussing whether his five cultural dimensions are still meaningful in the way they were envisioned.

With reference to the long-term/short-term orientation dimension, it is interesting to note that the other four dimensions tend to divide in an East–West division, and this dimension does not. Hofstede, however, claims in this second edition that the existence of this value ‘proves’ that there is a cultural basis for the economic growth of the so-called Asian dragon countries (p. 368), as there is a correlation between countries that scored high on this dimension and their unexpected growth during the 1990s. Of course, growth of the dragon countries has dramatically slowed since the recent Asian economic crisis, and Hofstede admits the relationship between this dimension and economic growth could be temporary. Many scholars have pointed out, however, that attributing the dragon countries’ growth to culture is spurious, as the same cultural traits were often used in the past to justify why they were economically ‘backwards’.

In the final applications chapter (intercultural encounters), Hofstede recognizes that his results suggest a relativism with respect to such macro-level concepts as democracy (he argues it is not necessarily the correct political system for all countries), capitalism (same as above) and human rights (a goal such as the UN has of coming up with universal human rights would not be supported by his data). While arguing for an increased relativism with respect to political, economic and moral systems may be a laudable goal, it also serves to illustrate one of the primary drawbacks of this second edition: making sweeping statements where they are not justified by the data, and relating the framework to literally every aspect of human society and behaviour. For instance, Hofstede cites archaeological evidence that 4,000 years ago there were centralized governments in the Middle East and democracies in Scandinavia as evidence that the power distance variable has been at work for millennia (p. 117). It would appear that Hofstede subscribes to the view that all historical, political, economic, social (or any other) events that have ever happened throughout history, in the present, or in the future are related to and can be explained by his national culture dimensions. While his framework may be appropriate for accounting for certain observable behaviours (i.e. the differences in rates of eating out in various countries), most business and cultural researchers

Vol. 27, No. 1 Eckhardt Reviews HOFSTEDE would hardly buy into the argument that his framework of values can account for all world occurrences.

Summary

Hofstede outlines what he believes to be the five primary criticisms his original work has received (p. 73): that surveys are not a suitable way to measure cultural differences; that nations are not the best units for studying culture; that studying the subsidiaries of one company is not representative of national cultures; that the data are old and obsolete; and finally that five dimensions are not enough to represent the complexity of culture. He answers each of these criticisms with a reply along the lines of, ‘things could be improved and changed, and I hope they are, but this research is a valid and important start’. He insists his work was a paradigm shift, and argues throughout this second edition that the cultural tendencies he has tapped into are centuries old, and thus his data are not outdated. Hofstede firmly maintains throughout this edition that cultural tendencies and values are inherently stable, a stance many anthropologists would take umbrage at. Most social science researchers, including in the business disciplines, now use a dynamic constructivist model of culture when engaging in cultural analyses, and this development in cultural studies seems to have passed Hofstede by.

Another weakness of this second edition, which has been alluded to already, is his tendency to only review literature that supports his framework rather than a representative sample of the literature that has employed his framework. In discussing the marketing applications of his framework in chapter 9, for instance, he exhibits a particularly limited review, citing primarily the work of de Mooij (1998), a former associate of his, when in fact his work has been used by multiple marketing researchers, and a more balanced review would illustrate both the impact his work has had on the field as well as the inappropriate uses of his framework within the field.

Overall, the main problem with Hofstede’s research program, including its representation in this second edition, is that Hofstede holds onto a static vision of culture, a view no longer tenable in light of decades of social science research suggesting otherwise. He uses historical occurrences to tautologically justify his five dimension scores, which implies that almost all behaviour and indeed historical conflicts are value-based, another contention argued against in many business and social science disciplines.

In the end, the results of Hofstede’s research program can be useful to business researchers if their goal is to compare actual behaviour (not processes or motives) at the countrywide level. For example, Houston and Eckhardt (2001) use Hofstede’s categorizations to cross-culturally investigate a wide variety of observable behaviours relating to food consumption such as brand choice and brand loyalty in a wide variety of Asian countries. Such observable measures are descriptive accounts of phenomena that reveal themselves in a similar manner across cultures. Thus using a framework such as this is appropriate and can help to identify patterns of similarity in a global context. If one is going to use a framework like this, Hofstede’s is the most comprehensive and validated. Even then, the results of studies using his framework typically suggest new areas of inquiry: they are not conclusive. Hofstede himself acknowledges that one of the

AUSTRALIAN JOURNAL OF MANAGEMENT June 2002 primary contributions of his research is to stimulate researchers to think in a different way, and to stimulate other researchers to come up with more sophisticated cultural models.

I would encourage business researchers interested in cross-cultural issues to use this second edition of Culture’s Consequences as a starting point for thinking about and categorizing cultural differences (and similarities), but to go beyond Hofstede’s model and investigate and represent the dynamism and complexity of culture in their own research.

References

Chinese Culture Connection, 1987, ‘Chinese values and the search for culture-free dimensions of culture’, Journal of Cross-Cultural Psychology, vol. 18, no. 2, pp. 143–67.

De Mooij, M. 1998, Global Marketing and Advertising: Understanding Cultural Paradoxes, Thousand Oaks, Sage, CA.

Hofstede, G. 1980, Culture’s Consequences: International Differences in Work Related Values, Beverly Hills, Sage, CA.

Hofstede, G. 1991, Cultures and Organizations: Software of the Mind, McGraw-Hill, London. Houston, M.J. & Eckhardt, G.M. 2001, ‘Culture’s consequences on consumer behaviour toward food in Asia’, Asian Journal of Marketing, vol. 8, no. 2, pp. 33–54.

Singelis, T.M. 2000, ‘Some thoughts on the future of cross-cultural social psychology’, Journal of Cross Cultural Psychology, vol.31, no. 1, pp. 76–91.

Giana Eckhardt

Australian Graduate School of Management