Hofstede's Analysis

Topics: Geert Hofstede, People's Republic of China, Purchasing power parity Pages: 6 (1722 words) Published: October 28, 2011
Hofstede’s framework:
Dutch sociologist Geert Hofstede undertook a pioneering task between 1967 and 1973 in the field of organizational behavior. Working for IBM at the time, he collected and analyzed data from more than 116,000 individuals in 40 countries, who were mainly working for IBM and its subsidiaries, to develop his Cultural Dimensions model for analyzing variations among cultures. He found that managers and employees vary on five value dimensions of national culture. They are listed and defined as follows: i) Individualism (IDV)

ii) Power distance Index (PDI)
iii) Masculinity (MAS)
iv) Uncertainty Avoidance Index (UAI)
v) Long-Term Orientation (LTO)
With respect to the above dimensions we will be having a closer look at China vis-à-vis other countries such as Japan, Russia, India, Pakistan and the USA. We will also compare it with the findings for Asia and the World as a whole. On the basis of this study we will also explore the possibility of entering the processed food market in China. China and its socio-economic condition:

The People’s Republic of China (PRC) was established on October 1, 1949. The population of china is the largest in the world with an approximate figure of 1.37 billion. China has a single party government i.e. government of Communist party of China. Growth story of china is quite unique in the world. In 1930s, small industry revolution occurred in china but due to great depression and then internal and external troubles, China’s economic growth hampered very much. The great leap movement of 1958-1961 was the first movement for economic revolution in the country but it ended in very catastrophic manners. Afterwards 1966, Cultural Revolution was carried out in china which was fundamentally aimed at restoring socialism in china by removing/prosecuting capitalist elements. But the economic situation of masses remained same there since 1030s to 1970s. From 1978, economic reforms were carried out in the china. Since then, it has been on the path of transformation from soviet style socialism to state capitalism. The Initial reforms were carried out in the field of agriculture. These reforms helped in uplifting of lives of farmers there. In 1997-1998, large scale privatization happened and most of the state enterprises had been liquidated. According to Central intelligence agency of US, China’s Gross Domestic Production in terms of purchasing power parity was $10.09 trillion in 2010. According to some estimates, ‘Socialist market economy’ of china is supposed to supersede USA before 2040.It is not a harangue to say china as the engine of world growth today. However China still remains country having high power distances and lots of restrictions on the rights of its population.


Individualism is the degree to which people in a country prefer to act as individuals rather than as members of groups. Collectivism is the equivalent of low individualism. The Individualism (IDV) Dimension for China had a score which was much below the score for Americaand lower than the world average. At the same time comparing with its neighbors in Asia it is comparable with its close ally Pakistan while it’s much lower than India, Russia and Japan which shows why China’s orientation is different.

 | China | World| Asia| India| Japan| Pakistan| Russia | United States| IDV| 10| 43| 20| 48| 46| 14| 39| 91|

This low score on the dimension of individualism is indication that the society places great emphasis on interpersonal relationships.These relationships manifest themselves in the form of family and work teams. The Chinese people value loyalty in relationships and strive for building strong relationships This characteristic of their culture has some important implications for anyone trying to set up a business there. People tend to stick to the same people (e.g.) for doing business.


The degree to which people in...
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