International Strategic Management

Hofstede culture dimension model

Contents
Part 1: Introduction.....................................................................................................................................3
Hofstede culture dimension model.........................................................................................................3
Power distance....................................................................................................................................4
Individualism and collectivism.............................................................................................................4
Uncertainty avoidance.........................................................................................................................4
Masculinity and femininity..................................................................................................................4
Long term and short-term orientation.................................................................................................4
Indulgence and restraint......................................................................................................................4
PART 2: Comparative analysis.....................................................................................................................5
UK and Norway....................................................................................................................................5
Power distance....................................................................................................................................5
Individualism vs collectivism................................................................................................................6
Masculinity vs femininity.....................................................................................................................6
Uncertainty avoidance.........................................................................................................................6
Long term vs short term orientation....................................................................................................6
Indulgence vs restraints.......................................................................................................................6
Singapore and United Kingdom...............................................................................................................7
Powe distance......................................................................................................................................7
Individualism vs collectivism................................................................................................................7
Masculinity vs femininity.....................................................................................................................8
Uncertainty avoidance.........................................................................................................................8
Long term vs short term orientation....................................................................................................8
Indulgence vs restraints.......................................................................................................................8
Task 3: Comparison.....................................................................................................................................9
Masculine vs Feminine........................................................................................................................9
Uncertainty Avoidance......................................................................................................................10
Power Distance..................................................................................................................................10
Long Term- Orientation......................................................................................................................11
Individualism vs Collectivism.............................................................................................................11
Task 4: Conclusion.....................................................................................................................................13
References.................................................................................................................................................15
 Part 1: Introduction

Hofstede culture dimension model

The following report will be regarding the company Peninsula and how they will be applying the
Hofstede culture dimension model between Norway and Singapore as they are targeting to enter the
market. The purpose of this report will be to make analysis of both countries mentioned and how the
working environment are in those countries.

The model was created by Dr. Geert Hofstede to have in-depth analysis of how working culture operation
in different countries. Main reason for the distinction is to understand how culture and its dimensions
impacts the business environment. The main components of the models is to understand the following,

1- Power distance
2- Collectivism – Individualism
3- Uncertainty avoidance
4- Femininity – Masculinity
5- Short- and long-term orientation
6- Restraint – Indulgence
7- Power distance index
Power distance
The power index is mostly used to determine to which degree injustice or inequality is tolerated. There
are 2 main parts to measure this high-power distance and low power distance. High power distance is
telling the culture accepts inequality and orders from authority should be obeyed without any questions
asked. When it comes to low power distance, the culture is usually encouraging, and authority is mostly
decentralized.

Individualism and collectivism

For this index, it shows how much societies prefer either individualism or collectivism. When it comes to
individualism, in such society’s personal growth and importance of oneself is prioritized. For collectivism,
societies prefer to make decisions in groups, and families are prioritized.

Uncertainty avoidance
The uncertainty avoidance index tells what extent ambiguity is tolerated. In a high uncertainty society,
rules are strictly followed, and authorities cannot be questioned. When it comes to low uncertain
societies, people prefer getting clearer answers and do not accept high ambiguity.

Masculinity and femininity

This index shows how societies the sexually equality. A highly masculine society mainly focuses on
making wealth, having distinct gender roles, and focusing mostly on the final results. A feminine society
focus is quality of life Improvement, having gender fluid roles and being acceptable.

Long term and short-term orientation

This index shows how societies plans their foreseeable future. Long term orient societies mostly focus on
far future and better lives for the upcoming generations of people to come. For short term orient
societies mostly focus on the near future and short-term plans, their focus is on present issues rather
than planning for the future.

Indulgence and restraint

The index focus is how societies around the world gratify themselves and control their desires. When it
comes to indulgence it shows how societies gratify themselves and for restraints it shows how societies
restricts gratification.

Taking all the mentioned indexes into account, the report will show when entering a new market how
the various dimension is studied and how businesses decided which market to enter based on the data
gathered. The report will focus on 2 main countries Singapore and Norway and see which market is more
feasible for peninsula to enter.
 PART 2: Comparative analysis

UK and Norway
The following part of the report will be a comparison between United Kingdom and Norway. The
comparison will be done using the Holsten culture dimension model. The following chart below shows
the comparison between the 2 countries, for the report the chart will be analyzed and then will be
showing given peninsula company culture which country is more leaning towards the company culture
and which country will be the best place to start the new business in.

Power distance
As the data present in the chart, when it comes to Norway the country score (31) is little on the low
power index, meaning that power is mostly decentralized and people in that society have higher chances
of self-improvement, questioning the authority, having equal rights, and management in work place is
very open to new ideas and ways of working, and they encourage the employees and people around
them to do the same.

When it comes to United Kingdom, the score is also towards the lower side (35), meaning that people in
the workplace don’t like to be controlled, attitude of authority towards their employee and people
around them are uplifting. Overall given the power index both countries are on the lower side and
encourage their people to improve themselves.

Individualism vs collectivism
Given the history of western societies, they are mostly individualistic, people focus on improving
themselves, do not rely on others and make decisions autonomously. The score when it comes to
Norway when it comes to individualism is (69) which shows that they give importance of self,
individualism, and like to express themselves without any consequences. On the other hand we have
United Kingdom, which has a score of (89) and the society when it comes to individualism is similar to
that of Norway. Both countries have working environments which encourages individuals to bring forth
their ideas, management is mostly focused on enhancing individual competency level at every stage
possible.

Masculinity vs femininity
For masculinity vs femininity, given the history of western countries they have shifted more towards the
femininity index comparing to masculinity. The index score when it comes to masculinity in Norway is (8)
meaning the society is soft in various aspects when it comes to culture, caring and work environments.
They encourage people to care for each other and want the best output for everyone. When it comes to
the United Kingdom, the score is (66) which means that the culture is little tough, people are held
responsible for their actions and work environments are mostly focused on generating more wealth and
are less forgiving.

Uncertainty avoidance
Norway has a score of (50) in the index as the society does not take the index into consideration
comparing to other countries. When it comes to United Kingdom (35) the people want to avoid
uncertainty and prefer knowing more about what is happening when it comes to economy and
management decisions.

Long term vs short term orientation

In this index, Norway has a score of (35) which shows that the society is mostly rational, they want full
disclosure on what the authority has planned and how they will be moving forward. For United Kingdom,
the score is on the higher side ( 51) as the nation is building it self for the next generation to make sure
all their needs are met and the authority is very open about it.

Indulgence vs restraints
For the index, Norway has a score of (55) in this case individuals do not look for short term gratification
rather they focus on long term. For United Kingdom the score is (69), again the society focuses mostly on
long term gratification and do not prefer small wins in short term.
Singapore and United Kingdom
In the analysis done, we first compared United Kingdom and Norway and now for this section of the
report we will investigate how Singapore and United Kingdom compare with each other.

Powe distance
On this index Singapore has a score of (74), this means that the country is more on the authoritarian
side. Singapore is a multi-ethnic country and when it comes to religious belief, they are strict. The key
teaching on the authorities in the society is stability, they focus on the well being of everyone present
there. The authorities are well respected and cannot be questioned as given their beliefs they want the
best for everyone present. In workplaces powers is mostly centralized and decision making is in hands of
the chosen people.

On the other hand, UK is the complete opposite as discussed earlier comparing to Norway that United
Kingdom power index is most de centralized.

Individualism vs collectivism
Singapore has a score of (20) given the index. Society prefers to live in collectivism rather than focusing
on individualism. Society lives mostly in families and prefer the head usually takes the decision for
everyone. When it comes to business environment, the result is no different as they are mostly
centralized and most of the decisions are coming from selected few. Communication is mostly indirect,
and groups has to be well maintained.
Given United Kingdom, the societies are more individualistic, and people prefer self-growth and open
communication between themselves and authorities.

Masculinity vs femininity
Singapore score for the index is (48), which is considered in the middle of both it being a masculine or
feminine society. There are several aspects of their culture which are more on the softer side such as
encouraging others, being consensus, and respecting people around them. When it comes to workplace,
they tend to avoid conflicts and resolve issues in mannerly way to make sure that parties and work place
is not affected by it. Community respect and support is a key variable for Singapore.

United Kingdom is mostly on the more masculine side, as people are held responsible for their actions
and main goal of the society is to move forward with wealth generation.

Uncertainty avoidance
The score for Singapore for this index is (8) which is very low as society has to obey the law and authority
and are not to question decisions made both as country and its business environment.

Long term vs short term orientation

In this index Singapore has a score of (72) which is on the higher side of long-term orientation. They
focus on long term planning, sustainability, and using resources to efficiently. Such is applied in the
business sectors of the country as well; companies tend to focus on longevity and enhancing of their
products and services they are offering.

For United Kingdom, comparing it to Singapore it is on the lower side as the country has different values
and the communication gap between people and authorities is not restricted.

Indulgence vs restraints
Singapore has a score of (46) in this index and given the data the country does not prefer short term
gratification. When it comes to workplace people are ready to put into the effort and get the best results
for themselves and the firm they are working for, same is applied for business owners.

United Kingdom on the other hand is Indulgent as well, as the country works for long term planning and
delay gratification for better success rate for the future. It is applied to both societies and the business
environment.
 Task 3: Comparison

In the previous task, we compared the differences between cultural dimensions using the Hofstede
theory to understand where each cultural index of the countries mentioned in this report falls in. Firstly,
the differences between Norway vs Uk.

Firstly, we must understand that in every place on the globe, it is the cultural values that determine the
behavior of individuals residing in those parts of the world (Arasaratnam, 2011, p. 45). This means that a
method that works well in one country might have a chance of failure in another as it does not
correspond to the cultural values of the people.

In relation to what we’ve discussed about the importance of cultural values, we can observe that the
biggest difference between Norway, Singapore and the Uk falls into the masculinity, uncertainty
avoidance long-term orientation, power distance and individualism.

Masculine vs Feminine
The masculinity index is explained by understanding the values of men & women in society and how
their roles differ in a cultural overview. Masculine led cultures have men who are more driven,
competitive, and assertive whereas the latter is more supportive and play the role of nurturing those
values in men (Dainton & Zelley, 2011, p. 186). Uk is one example of a society that is based on
masculinity whereas Norway falls more into the feminine category (Chen & Starosta, 2005, pp. 53- 54).

A masculine driven society management style drives on working hard, being better than the competition
to achieve the rewards and results that are required to achieve success. This kind of work culture drives
us to always stay 5 steps ahead with every task that an individual undertakes, this is because everyone is
fighting for a promotion or a job title. In societies where competition is fierce, it becomes common place
for people to be less empathic towards one another. On the other hand, in a society where the norm is a
feminine approach, such countries prefer to have a work culture of equality and fairness and
competition is less. As they are more focused on treating their employees equally. This way the drive to
achieve and be better than the rest is dulled down and the drive to understand your fellow colleagues is
amplified.

Peninsula can implement certain traits of a feminine work culture where empathy is shown to
employees while at the same time keeping their traditional masculine values at the core of operations.
This will be the best of both worlds, where those who want to compete for better positions can work
towards that while those who are content with their current roles can continue as such with support
from their peers.

Uncertainty Avoidance
The second difference between Norway and Uk is the uncertainty avoidance criteria. Uncertainty
avoidance can be explained as being a factor where a country leans towards traditional rules or is more
risk driven when it comes to dealing with uncertain decisions (Chen & Starosta, 2005, p. 52). The higher
a country’s score is in UA, the more the country would stick to the methods that are known to them. In
this case, we see that Norway has a score of 50 whereas UK is below at 35 on uncertainty avoidance and
Singapore is at a score of 8 compared to both. This shows that the UK market in general has 15% more
leniency to making risky decisions compared to the latter, but Singapore is a more lenient market. UA
countries with a high score show that people tend to feel risk more apparently compared to countries
with a lower score which results in those people to stick to their jobs and rules that have been tried and
tested. These individuals don’t have the urge to look for better opportunities and are content working in
the same workplace for longer periods of time (Hofstede,2001).

Countries with high stats in UA, prefer living lives in a routine base where the outcome is known and
clear. They find the idea of risk, a new notion to be frightening and avoid such thoughts altogether. On
the other hand, countries with a low stat in UA believe that draconian rules to control uncertain
outcomes is not a necessity, they prefer to free flow in their daily lives and in work (Matusitz and
Musambira, 2013). Such countries encourage more entrepreneurial behavior were creating something
new and innovative is seen to be a great step forward while high uncertainty avoidance markets prefer
continuing work that has already been built upon (Ozgen, 2012).

Peninsula has more advantage of trying new methods and strategies in the Singaporean market as they
are more welcoming to accepting change as compared to Norway which is more of a market where
traditional laws work best. The company can learn the work culture values of Norway and implement
those strategies to Norway but can implement some of their market values from their existing markets
across the globe in Singapore to know what the employees and consumers feel is the best fit for their
market.

Power Distance
Power distance is the interaction between two individuals from different ranks on the hierarchy. In a
higher stat power distance country, these ranks are respected and seen as something critical where
these relations are treated very formally and respect given accordingly, whereas in a lower stat on the
power distance index, relations tend to be free flowing, and respect is shown by the way there is a
fluency in speech between two parties of different levels. In this case, Singapore ranks 75 for power
distance whereas UK ranks at 40. This means that the authority levels are to be respected more in
Singapore where in UK it is important but not seen as a major thing that must be implemented in every
working space.

Peninsula can implement a chain of command through which communications go through, this will
preserve the respect of the authority in a company and as well serve to maintain the work culture in the
Singaporean market while keeping the relationship between employees informal to a certain degree.

Long Term- Orientation

Long term orientation can be summed easily in two ways, firstly countries with a higher stat in LTO are
more stable in terms of savings and live in a controlled environment of self-desire, whereas countries
with short term orientation live on the moment (Dainton & Zelley, 2011, p. 187). The values of both
aspects are opposites of one another for example countries with a higher orientation for long term plans
believe strongly in future, mortality, achieving through hard work whereas the latter more orientated
into patriotism, luck, and the past (Hofstede, 2011). The difference between Singapore and UK is vast,
Singapore ranks at a stat of 72 in long term orientation whereas the UK ranks at 26. This shows that
these countries and their work cultures run on different criteria. One is focused on the future results of
their actions whereas the latter is more focused on their past.

In our case here with the comparison between Singapore and UK, we can extract wisdom from the way
the Singaporean work culture behaves as it drives itself towards innovation and is not afraid to try new
methods and strategies that would elevate them to further success. As compared to Singapore,
Peninsula in the UK now seems a bit restrictive with a score of 26, this shows that the roots of the
company are imbedded in the past and current scenarios. Opening operations in Singapore will help
push Peninsula to the next step by implementing the innovative work style of the local market.

Individualism vs Collectivism
A society where the achievement of a singular person is recognized and praised, is one where that
society has a high individualistic score on the cultural dimension scale whereas societies that are rooted
in teamwork and collectively working together fall on the lower stat of individualism on the cultural
dimension scale. Societies with a low score on individualism are taught to live amongst one another as
one person; such societies have high loyalty rates and respect amongst one another (Hofstede, 1994, p.
51).

In this case, Singapore ranks at only 20 points in individualism whereas the UK ranks to 91 total score
which is a great difference between these societies. The method that Peninsula can implement to
eliminate any possible hurdles is to promote individual achievements but at the same time have group
projects and brain storming sessions for its employees to make them feel like their values and traditions
are being respected even though it is a foreign company that is operating in their market. This will help
Peninsula instill some values of collectivism into its work culture, which is always a good thing, as when
employees feel safe with their team, they tend to work better as they are usually in better moods
overall. Adding to this point would be, employees helping one another completing the task of their
fellow team out of care and kindness, this kind of work culture creates loyal employees and hard-
working people in the process.
 Task 4: Conclusion

When firms decide to operate in new markets they are faced with several challenges and ethical issues
when it comes to culture, rules and regulations, policies, and procedures, social and pollical issues, and
business environment procedures. Such is the case when it comes to Peninsula when they decide to
operate in a country such as Singapore. Given the results from Holofsed culture dimension model, it
shows us how Singapore various from western countries in the aspect of masculine vs feminine, power
distance, and individualism vs collectivism indexes.

For the power index, Singapore is known to have centralized power structure in the society, the issue
peninsula will face is how they will centralize the authority matrix to get the best results in the business
vertical they are in. For that training cost of manager is expected to be on the higher side as the
authority is used to the power index of United Kingdom which is mainly un centralized. To over come to
issue of power distance, staff and management will have to hire team members from within the country
as they are aware of how the business environment mostly operates. Another issue which will prevail is
the masculinity vs feminine index, in Singapore given the power structure and authority matrix the focus
of its business environment is wealth generation, assigned proper role for members and in such cultures,
responsibility is taken up to high standards and margin for error is very less. The final index will be the
individualism vs collectivism, for a country where authority is not questioned and decisions are
respected, when it comes to peninsula the challenge will be to make decisions based on several chosen
authority, in such cases at times the team members are usually left to follow the decisions which has
been bestowed upon them.

When we move on to the next part, the discussion will be based on ethical issues which can be a
challenge for peninsula when operating in Norway. Firstly, we can observe that Norway and the UK have
a lot of similarities when operating in a working environment, this could be a reason that UK used to be
part of the EU union. Even though Norway is also not considered to be part of the EU, but it is still
registered under the EEA which stands for European Economic Area. This can make it easier for Penisula
to operate in Norway as compared to Singapore as the changes in societal cultures are not vast.

However, a major difference in these two countries is the masculinity vs femininity aspect in a work
culture. Norway focuses heavily on equality for staff and have a culture of providing a helping hand,
restricting the competition within the organization. This, however, is different from the UK which is a
highly masculine society where every individual has something to prove. The ethical issues that might
arise would be are the employees being treated equally, are the employees being paid fair wages, is the
communication between employees in an informal manner on all general criteria. These things make up
the Norwegian work culture and are embedded in society. This would be the major challenge for
Peninsula to overcome, as the company would have to balance their hierarchy that they are using in the
UK. Another ethical challenge would be the security tax which has a rate of 14.1% in Norway. This means
that companies should be willing to offer competitive salaries to be able to have a high retention rate of
employees. The company also has to offer pension plans as a form of attracting potential candidates to
work for them as a form of retention.

This would cause a financial blow on peninsula, as they will be spending large amounts of recruiting the
right talent for the right jobs, or they could transfer employees from the UK to Norway for managerial
positions. Training cost will also play a factor when operating in Norway. The company has to determine
which training methods to implement and for what positions. As stated earlier, Penisula could transfer
some of their existing employees from the UK to perform training for new staff that’ll be hired in the
Norway to cut down on some of the cost. This method however requires special permit for the
employees that come from overseas to be registered as skilled workers, and no individual would be able
to start working without getting their permits accepted by the Norwegian government. These are some
of the ethical issues Peninsula would face when operating in Norway. Overall it would not be a great
change as most of the work culture aspects are similar, the only thing to consider would be the
communication, equality and pay of the employees in Norway.
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