Socio Cultural Environment

A nation’s culture includes the shared knowledge, beliefs, and values as well as the common modes of behavior and ways of thinking among members of a society. Cultural factors can be more perplexing than political and economic factors when working or living in a foreign country.

Social values:

Culture is intangible, pervasive and difficult for outsiders to learn. One way managers can comprehend local cultures and deal with them effectively is to understand differences in social values.

Research done by Geert Hofstede on 116,000 IBM employees in 40 countries identified four dimensions of national value system that influenced organizational and employees working relationships. Examples of how countries rate on the four dimensions are shown below:


Australia: Power distance – 7, Uncertainty Avoidance – 7, Individualism – 2 , Masculinity – 5

Costa Rica: Power distance – 8 (tie) Uncertainty Avoidance –2(tie) Individualism — 10 Masculinity — 9

India : Power distance – 2, Uncertainty Avoidance – 9, Individualism –6 Masculinity – 6

France: Power distance – 3, Uncertainty Avoidance – 2 (tie) , Individualism – 4 , Masculinity –7

West Germany: Power distance – 8 (tie), Uncertainty Avoidance- 5, Individualism — 5, Masculinity – 3

United States: Power distance – 6, Uncertainty Avoidance – 8, Individualism – 1 , Masculinity — 4

Power distance: The degree to which people accept inequality in power among institutions organizations and people.

1) Power distance: High power distance means that people accept inequality in power among institutions, organizations and people. Low power distance means that people expect equality in power. Countries that value high power distance are Malaysia, the Philippines and Panama, Countries that value low power distance are Denmark, Austria and Israel.
2) Uncertainty avoidance: High certainty avoidance means that members of a society feel uncomfortable with uncertainty and ambiguity and thus support beliefs that promise certainty and conformity . Low uncertainty avoidance means that people have high tolerance for the unstructured, the unclear and the unpredictable. High uncertainty avoidance countries include Greece, Portugal, and Uruguay. Countries with low uncertainty avoidance values are Singapore and Jamaica
3) Individualism and collectivism: Individualism reflects a value for a loosely knit social framework in which a preference for a tightly knit social framework in which individuals look after one another and organizations protect their members interest. Countries with individualist values include the United states , Canada, Great Britain and Australia. Countries with collectivist values are Guatemala, Ecuador, and China.
4) Masculinity / femininity: Masculinity stands for preference for achievement. Heroism, assertiveness, work centrality (with resultant high stress) and material success. Femininity reflects the values of relationships, cooperation, group decision making and quality of life. Societies with strong masculine values are Japan, Austria, Mexico, and Germany. Countries with feminine values are Sweden, Norway, Denmark and France. Both men and women subscribe to the dominant value in masculine and feminine cultures.

Long term orientation: A greater concern for the future and high value on thrift and perseverance.

Short term: a concern with the past and present and a high value on meeting social obligations.

Hofstede and his colleagues later identified a fifth dimension of long term orientation versus short term orientation. The long term orientation found in China and other Asian countries includes a greater concern for the future and highly values thrift and perseverance. A short term orientation fund in Russia and West Africa is more concerned with the past and the present and places a high value on tradition and meeting social obligations . Researchers have continued to explore and expand on Hofstede’s findings. For example in the last 25 years more than 1,400 articles and numerous books have been published on individualism and collectivism alone.

Source: Richard L Daft