Making the most of management theory of Geert Hofstede can help business owners gain a better understanding of management principles in different countries. Born in 1928 in the Netherlands, Hofstede is a widely known international organizational management theorist.

Geert Hofstede first tested his cultural dimensions management theory on IBM, a multinational company, which, at the time of the study, had subsidiaries in 64 countries. Based on his findings, Geert Hofstede concluded that there isn't any management method that can be applied universally. Consider the following tips when making the most of management theory of Geert Hofstede.

1. Learn more about the Geert Hofstede five cultural dimensions affecting management principles.

2. Determine how the Hofstede theory links a country’s culture with its management principles.

3. Read more about the Hofstede theory on conducting business across different countries.

Action Steps
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Research the principles behind the Hofstede management theory

The Geert Hofstede theory outlines five primary perspectives that vary across countries. These perspectives include: the degree of inequality among the population; the extent to which people believe they are to be caregivers or cared for by others; how the culture views femininity versus masculinity; the percentage of the population that prefers structured versus unstructured situations; and the preference of long-term versus short-term orientation among the population.

I recommend: Gain advanced knowledge about Hofstede management theories by checking out the Business Coaching website. Learn more about Geert Hofstede theories by visiting itim International.

Evaluate how the Hofstede theory links society with management principles

Just as the definition of management changes from country to country, so does plausible principles according to Geert Hofstede. His theories are built on the belief that management principles interact with other processes that occur in society and therefore, are directly related to a country's specific culture and governmental and political perspectives.

I recommend: Learn to make the most of Hofstede's theory by visiting the Geert Hofstede website. You can read through summaries of his theories and purchase a number of books he's written on the topic to gain further knowledge. You can also visit ClearlyCultural to find out more about Hofstede’s theory.

Learn to effectively conduct business overseas with the Hofstede theory

The Hofstede management theory suggests that to truly understand management in a particular country, an individual must fully understand the culture and way of life in that country. Therefore, to successfully conduct business globally, business professionals must understand the societal differences between their base country and the other countries in which they conduct transactions.

I recommend: Learn more about the Hofstede management theory and cultural dimensions by reading the information provided by 12Manage. Check out Ed Batista's Executive Coaching & Change Management website to obtain more information about Geert Hofstede and his theories.

Tips & Tactics

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• •  Using the Hofstede theory is a great way to analyze a country's culture, but there are drawbacks to using Hofstede management principles. The Hosftede management theory doesn't really account for exceptions to the rule and relies solely on the perspectives of the general population. Secondly, because data is collected under the Hofstede theory using questionnaires, there are some limitations that could skew the accuracy of the data.

Geert Hofstede developed a theory of management that recognizes the differences between diverse cultures. In an increasingly global economy, Hofstede's theory is perhaps even more relevant to businesses today than it was when he first developed it. The Hofstede theory asserts that, because of intrinsic cultural differences between nations, no universal management method exists which can be considered globally valid. For any company that deals in international commerce, Hofstede management theory can mean the difference between failure and success in the international marketplace. Even companies which only deal locally or nationally can benefit from an understanding of the management theory of Geert Hofstede, as they attempt to effectively motivate and optimally utilize a culturally diverse workforce, many of whom are immigrants.

Geert Hofstede's theory presents five dimensions, or value perspectives, in which national cultures differ, each of which profoundly affects the business management methods that will succeed with any specific national group. As you read the list, think about how each cultural difference operates in your own company and how you might use Hofstede's theory to better understand your employees and thus improve the management methods you currently use so as to increase employee engagement, loyalty, productivity and success.

1. Power distance: the degree of inequality between people that a culture considers normal

2. Individualism vs. collectivism: the cultural belief that the concerns of the individual or the concerns of the group take precedence

3. Masculinity vs. femininity: the culturally based preference for achievement or relationship

4. Uncertainty avoidance: the degree to which a culture is comfortable with ambiguity

5. Long-term vs. short-term orientation: the culturally based tendency to value either perseverance, preparation and saving or traditions, present obligations, etc.

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Build a thorough understanding of the theories of Hofstede and how they can benefit your company

Numerous workshops and other types of training, which are readily available online, can provide the knowledge you need to understand the value of Hofstede theory and how it impacts your business.

I recommend: Prism International offers conferences in Hofstede theory, and Alliance Training and Consulting, Inc. offers cultural diversity seminars and workshops, as well as online and on-site training.

Consult an expert to make Geert Hofstede management theories a reality for your business

Using the wisdom of Geert Hofstede to implement a new culture of diversity for your company might require a bit of guidance at first. A consultant experienced in Hofstede's theories and general diversity issues can help make your transition a smoother one.

I recommend: In addition to the training mentioned in the previous Action Step, Alliance Training and Consulting, Inc. provides consulting services which can help you effectively apply Hofstede's theories to your business. Cultural Competence Online also provides consulting in multicultural skills, and Cook Ross offers consulting, along with various types of diversity training.

Take advantage of resources designed to help you make the most of Hofstede's theories

Numerous websites offer a wide array of tools and resources that will make it easier for you to handle the nuts-and-bolts application of Hofstede theory in the day-to-day running of your business.

I recommend: ITAP International offers a comprehensive list of questionnaires and other tools to help you with cultural assessment and strategy for your business. Diversity Central, ODT and Prism International also offer a variety of products, through their online stores, which can add to your knowledge of Hofstede theories and help you use cultural diversity theory to benefit your business.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  International businesspeople have long understood the value of the theories of Hofstede to their businesses' bottom lines. Unlike many companies involved only in domestic markets, they've had little choice but to adapt to the customs of the foreign nationals with whom they've done business, since their profits have depended on understanding their cultural differences. While these issues may not be quite as prevalent in the domestic marketplace, every company with a multi-cultural workforce can benefit from a clearer understanding of Hofstede's theories. So find the learning method most compatible to your company's needs and take advantage of the wide array of diversity training tools and resources that can help your company succeed.

Geert Hofstede is a management guru who developed what a management theory based on diversity. The management theory of Geert Hofstede is applicable to international market theories because it takes into consideration cultural differences between countries and how these differences affect doing business together.

Learning about the Hofstede theory will help you think about diversity as a management theory within your organization or between your company and another company you're working with. Understanding how your employees think about power and authority will help you work with them.

1. Hofstede's theory on culture and management has continued to gain acceptance due to the globalization of commerce.

2. Applying Hofstede's theories to managing your employees or non-US partners will keep you from making mistakes that could harm your business.

3. Studying Hofstede's theories is necessary because more and more businesses will be applying them to their own operations.

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Get an introduction to Geert Hofstede

Get a sense of who Geert Hofstede is by reading an introduction on his works and life.

I recommend: The University of Western Ohio devotes a page of its business website to the management theory of Geert Hofstede with a short essay on the essence of his work. After you get a better sense of his management theory you can download essays and papers for a fee. The Economist supplies a profile of the man and the essentials of Hofstede management.

Catch up on expert analysis of the Hofstede theory

You can learn a lot by reading commentary on Hofstede's management theory by other management experts.

I recommend: Ed Batista discusses Hofstede management and you can also download Hofstede's original article. Brendan McSweeney offers his analysis, which takes issue with some of Hofstede's management theory.

Learn how to use the management theory of Geert Hofstede

You can see how Hofstede's theory is applied in different cases by looking at different studies. When you understand how the theory's applications work, you can analyze your own business.

I recommend: The Geert Hofstede theory of Cross Cultural Differences is used in this case to compare 10 different countries. Another approach is using Hofstede's theory to analyze cross-cultural communication. In this last example of using the management theory of Geert Hofstede, this article by Hofstede himself discusses the cultural differences of China and the US.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Management theory of Geert Hofstede education and training can be found in countries outside the US. Geert Hofstede holds seminars on his work but has yet to open an office the US.

Geert Hofstede developed a way to analyze a society's culture based upon five cultural dimensions. Many organizations and businesses later applied this analysis to their companies in order to determine where they stood as a whole and what needed to happen in order to change unfavorable results.

As you look at the elements of the Five Cultural Dimensions created by Geert Hofstede, it's important to keep in mind that the results only pertain to a culture or group as a whole, not to individuals within that culture. Thus, you should only apply this analysis to your business as a whole, and not let the results reflect upon any employee.

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PDI

PDI stands for Power Distance Index, the first in Hofstede's Cutural Dimensions. A high power distance index emphasizes a connection between power and wealth, while a low power distance index emphasizes equal opportunities for everyone to succeed.

I recommend: Visit Business Coaching for more details on how PDI determines power.

IDV

IDV, or individualism, focuses on society's influence on the individual. A high individualism ranking means that individuals don't form strong bonds with each another. A low individualism ranking indicates they tend to operate under the 'it takes a village' principle.

I recommend: Clearly Cultural explains Hofstede's IDV dimension in more detail.

MAS

The Masculinity (MAS) dimension shows how much a society augments the traditional masculine role in the work place. Societies with a high MAS ranking tend to be more discriminating toward women, while a low MAS ranking sees genders more equally.

I recommend: Access 12manage for more information on the masculinity dimension.

UAI

UAI stands for Uncertainty Avoidance Index. It measures how well a society handles uncertainty and the uncontrollable. Rule-oriented societies have a high UAI, while societies that accept change more easily and tend to take greater risks have a low UAI.

I recommend: Ed Batista's Executive Coaching and Change Management blog provides a brief description of the UAI dimension.

LTO

Geert Hofstede added the fifth dimension, LTO (Long-Term Orientation), after conducting additional international research. LTO measures how willing a society is to persevere over an extended amount of time. A high LTO ranking indicates a society that will remain steadfast for the long haul. A low LTO society is more short-term oriented and steeped in traditions.

I recommend: The International Business Etiquette and Manners website provides more information on the LTO dimension. Read more on all five cultural dimensions on The Economist website. See where your culture ranks through ITIM International.

HERMES

In Geert Hofstede's research conducted around 1966, he sent surveys to more than 115,000 employees of a multinational corporation that he referred to only as HERMES. Due to the fact that the company spread out over 60 nations, the results of his questionnaires made a large contribution to Hofstede's research efforts. It was later discovered that HERMES referred to IBM.

I recommend: Read an article depicting how the Five Cultural Dimensions impact businesses provided by ITAP International.