Analysis of Culture Using Hofstede Dimensions
Hofstede Insights: Country Comparison
Table 1 – United States Versus Finland Cultural Dimensions
Power Distance
The dimension addresses the idea that not all people in society are created equal and describes how people view social inequality. It denotes the degree to which less powerful individuals within a nation expect and accept that power is not distributed fairly. Finland reported a low score of 33 on this metric, which was close to 40 posted by the US (Hofstede Insights, n.d.). The scores suggest that Finland’s culture is characterized by autonomy and equal rights, while Americans place a strong emphasis on liberty and justice for all.
The Finnish people prefer a convenient hierarchical structure with access to superiors, coaching leadership, and management practices that facilitate and empower employees. A similar trend is observed in the US, where the government serves as a sign of the power gap, and bosses in companies are still accessible to subordinates, as hierarchies are maintained mainly for convenience. Employees prefer consultation to control and maintain a casual, first-name relationship with their bosses, and communication is open and participatory.
In the US, company managers prefer to employ specific workers and teams for their skills (Leonaviciene & Burinskiene, 2022). Information is routinely exchanged, and both managers and staff anticipate being consulted on matters. Communication is also informal, direct, and participative. In this loosely knit society, it is expected that people would take care of themselves and their close families and will not (overly) rely on the government for assistance.
Individualism / Collectivism
Individualism reflects the degree of interdependence among the constituents of a given society. It is characterized in terms of “I” or “We” based on how individuals perceive themselves. Sachsenmaier and Guo (2019) suggest that individuals in individualist cultures are expected to prioritize their own care and that of their immediate family. However, in collectivist societies, people are members of “in groups” that provide for them in exchange for allegiance. Both Finland and the US emerge as individualist societies based on their scores of 63 and 91, respectively (Hofstede Insights, n.d.). However, the US had a much higher score, signaling that it is one of the most individualist countries in the world.
The score suggests that the Finnish people are expected to care for themselves and their immediate families, much like in the US. In organizations, employer-employee relationships are defined by contracts based on mutual benefit, and recruitment and promotion decisions are made based on merit alone.
On their part, Americans are accustomed to conducting business or engaging with people they do not know well. They can freely approach potential competitors to ask questions or gather information. Yang et al. (2022) indicate that employees must be independent and show initiative to succeed in the corporate sector. Decisions regarding hiring, promotion, and other organizational matters are made based on merit or other evidence of a person’s past performance or potential.
Femininity / Masculinity
The domain’s fundamental concern is what drives people, which entails competing to be the greatest (masculine) or enjoying what you do (feminine). A society that values rivalry, success, and performance is indicative of traditional masculinity and tends to score high on this dimension (Wang et al., 2020). Low scores indicate femininity, suggesting that quality of life and the well-being of others are the prevailing social ideals.
In a more feminine society, living well is viewed as a sign of success rather than being unique. This is a characteristic of Finland’s culture, as it received a score of 26 on this metric (Hofstede Insights, n.d.). Its citizens prioritize their careers through which they earn a living. Managers seek consensus, and employees desire fairness, camaraderie, and excellence in the workplace. Compromise and negotiation are used to resolve conflicts, and rewards such as flexibility and free time are often preferred. A supportive manager makes informed decisions, and participation is key to effective decision-making.
On the other hand, the US emerges as a masculine society based on its high score on this dimension. The combination of a strong desire toward masculinity and a strong sense of individualism can be used to explain the high score of 62 (Hofstede Insights, n.d.). Americans prefer to display and discuss their personal life accomplishments openly. They consider that being successful in and of itself does not serve as a powerful drive. American workers can demonstrate their success in performing a task through various assessment techniques used in the country, which focus on precise target setting.
Uncertainty Avoidance
The component pertains to how a society copes with the reality that the future is always uncertain. Deciding whether to influence the future or let it unfold is a difficult choice for people. However, different civilizations have discovered various strategies to cope with this uneasiness.
Finland has a high propensity for avoiding ambiguity, as evidenced by its score of 59 on this metric (Hofstede Insights, n.d.). However, US culture is inclined toward being more receptive to novel and cutting-edge concepts, such as those in technology, business, or food, as it posted a lower score of 46 (Hofstede Insights, n.d.). The score further suggests that Americans have a greater tolerance for the thoughts and beliefs of others and uphold the right to free speech.
On the contrary, the Finnish people may be intolerant of unconventional behavior and ideas, but the nation upholds strict moral and behavioral standards. There is an emotional need for rules, time is money, and people have an inner urge to be busy and work hard (Alqarni, 2022). Precision and punctuality are the norm in Finland; the citizens can resist innovation, and security is an essential element in individual motivation.
Indulgence / Restriction
The dimension denotes the degree to which people make an effort to restrain their urges and desires. Indulgence and restraint are terms for comparatively strong and weak controls, respectively. The comparatively high score of 57 indicates that Finland is a relatively indulgent society (Hofstede Insights, n.d.). Its citizens are willing to satisfy their emotions and wishes in enjoying life and having fun, have a cheerful disposition, and are highly optimistic. People behave as they please, spend money as they please, and place a higher value on leisure time. With a score of 88, the US is also an indulgent society (Hofstede Insights, n.d.). This can be reflected by the Americans’ ability to work and play hard.
National Culture and Organizational Culture
Language, religion, traditions, art, music, and social customs are only a few of the many components that make up culture. It refers to the common ideas, practices, standards, attitudes, mannerisms, and artifacts that define a community. Thinking patterns are influenced by culture, which also significantly shapes personal identities and societal functioning (Manwani & Jhunjhunwala, 2022). The world is diverse and rich in different cultural experiences due to the wide variations in culture that exist between different regions or groups.
According to Ansah and Louw (2019), national culture refers to a group of people who were raised within a particular nation and who frequently share ideals and expectations about how things should be done. A company’s organizational culture describes how its employees interact with one another, their jobs, and the outside world (Hofstede Insights, 2023). It is the consequence of numerous causes, but it is typically easier and more accurate to quantify than national culture by examining organizational behaviors and how they differ from those of other entities. The national culture significantly influences an organization’s culture by shaping its ideals, communication styles, and management procedures.
Imposing Corporate Culture
Toivonen Paper, a Finnish company that is acquiring a subsidiary (Treelin) in the US, carries the right to impose its corporate culture on the acquisition in the US. Evidence from the framework shows that Finland and the US share more cultural similarities. Both nations have a low score on power distance, are individualistic, avoid uncertainty, and are indulgent. The only difference is observed in the level of masculinity, where Finland is considered feminine, and the US is a more masculine society.
Therefore, imposing the culture would be appropriate, considering that when a company acquires a subsidiary, it typically does so to achieve specific strategic goals. According to Ye (2023), the imposition can ensure that the company’s goals are met efficiently and effectively. For instance, if the parent company values customer-centricity, instilling this culture in the acquired subsidiary can lead to improved customer satisfaction. At the same time, the parent company will achieve consistency, which will aid in integrating the subsidiary into the larger corporate structure more smoothly.
However, Toivonen would have to observe several cultural factors, including the dimensions of Hofstede’s cultural framework. Chen (2022) suggests that the process should be culturally sensitive and consider the unique cultural norms and values in the US. This will help in ensuring that the company is not perceived as being disrespectful or insensitive, which can lead to resistance from employees and poor work morale that could affect productivity and retention. Ultimately, the successful integration of cultures in Toivonen will enhance operational efficiency and improve overall financial performance.
Puerto Rico and the US Culture
If Toivonen were to acquire a plant in Puerto Rico, the managers would face similar cultural conflicts as those in the US. Puerto Rico is a territory of the US and is exposed to the same cultural influences as those in the mainland, which means that the Hofstede dimensions are the same. However, the two regions may have some minor cultural differences, especially in religion, cultural heritage, cuisine, identity, and language (Szydło & Grzes-Bukłaho, 2020). Nonetheless, the differences are overshadowed by a significant amount of cultural exchange and overlap between Puerto Rico and the US, given their close ties and shared history.
Conclusion
The Hofstede cultural framework illustrates how different cultures shape the identity of various nations. On certain framework elements, Finland and the US have a lot in common. Toivonen has an excellent chance to impose its culture on its purchase in the US thanks to the circumstances. However, the choice should be based on the particular facts, cultural sensitivity, and strategic objectives. Successful cultural integration would require the company to evaluate its cultural characteristics thoroughly. This should involve considering a balanced strategy that combines components of the parent and subsidiary cultures.
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