China has a history that reaches back farther than four thousand years and a culture that permeates every aspect of the Chinese way of life. It is a country that lead the world in innovation for much of its existence and has the potential to have that authority once again. As China continues to mature and grow into the modern age the rest of the world has begun to shrink, making it nearly impossible to avoid one another on the world market. It is of the utmost importance that businesses who wish to compete on the global field understand and respect each other’s diverse cultures and practices.
In the realm of cultural studies there are few players larger than Geert Hofstede and his son, Gert Jan. In the 1970′s Geert Hofstede worked closely with IBM to gather information on the values of the companies diverse employees from around the world; it was an interesting and enormous amount of data. Although not the initial intent of IBM’s study, Geert was able to find interesting correlations among the answers of the surveys. The IBM employees were similar in every way around the world except in nationality, which Geert hypothesized was the cause of the variance. Several common problems were found in the initial study:
- Social inequality, including the relationship with authority
- The relationship between the individual and the group
- Concepts of masculinity and femininity: the social and emotional implications of having been born as a boy or a girl
- Ways of dealing with uncertainty and ambiguity, which turned out to be related to the control of aggression and the expression of emotions. [1]
From these observations Geert Hofstede created his cultural dimensions which stand a base for cultural understanding. Although critics argue that they are broad generalizations about entire countries, “…Hofstedes’s work should not be dismissed either. It represents a starting point for managers trying to figure out how cultures differ and what that might mean for management practices.”[2]
Cultural Dimensions
Hofstede broke down his dimensions into five categories: Power Distance Index (PDI), Individualism vs. Collectivism (IDV), Masculinity vs. Femininity (MAS), Uncertainty Avoidance Index (UAI), and Long-Term vs. Short-Term Orientation.
Power Distance Index (PDI)
This is the continuum of equality that exists between bottom and the top of power in a society, measured from the bottom as opposed to the top. “It suggests that a society’s level of inequality is endorsed by the followers as much as the leaders.” [3]
Individualism vs. Collectivism (IDV)
This particular dimension deals with how integrated a person is into a strong cohesive group. In an individualistic society people have loose ties to one another and are expected to watch out for themselves. A collectivist society, on the other hand, creates strong ties to groups, such as families, that require unquestioning loyalty and protection of its members. It should be noted that collectivism refers to a group and not any particular political stance. [4]
Masculinity vs. Femininity (MAS)
International Management by Helen Dereskey best describes this dimension:
The [third] value dimension, masculinity, refers to the degree of traditionally “masculine” values – assertiveness, materialism, and lack of concern for others – that prevail in a society. In comparison, femininity emphasizes “feminine” values – a concern for others, for relationships, and for the quality of life. In highly masculine societies (Japan and Austria), women are generally expected to stay at home and raise a family. [5]
Uncertainty Avoidance Index (UAI)
This index deals with each culture’s ability to deal with the unknown. Nations that strive to avoid all uncertainty will often implement strict rules and laws in order to deal with any situation what may arise. The people within these cultures become anxious and nervous when faced with ambiguity. On the other hand countries that are able to handle uncertainty are often contemplative and will strive to have as few rules as possible. This also allows them to be more accepting and understanding of others opinions and practices.[6]
Long-Term vs. Short Term Orientation
This is also known as the “Confucian work dynamism,” because of the dimension’s roots in a study called the Chinese Value Survey conducted by Hofstede and his colleagues. Long-Term orientation is defined as “the extent to which a culture programs its members to accept delayed gratification of their material, social, and emotional needs.”[7] On the other hand, traits that are associated with short-term oriented societies are “respect for tradition, fulfilling social obligations, and protecting one’s ‘face.’”[8] The values of both short and long term cultures can be found in the teachings of Confucius, hence the original name. This dimension can apply to cultures outside those influenced by the Chinese philosopher.
China’s Cultural Dimensions
Graphs provided by www.geert-hofstede.com
Geert Hofstede analysis for China has Long-term Orientation (LTO) the highest-ranking factor (118), which is true for all Asian cultures. This Dimension indicates a society’s time perspective and an attitude of persevering; that is, overcoming obstacles with time, if not with will and strength.
The Chinese rank lower than any other Asian country in the Individualism (IDV) ranking, at 20 compared to an average of 24. This may be attributed, in part, to the high level of emphasis on a Collectivist society by the Communist rule, as compared to one of Individualism.
The low Individualism ranking is manifest in a close and committed member ‘group’, be that a family, extended family, or extended relationships. Loyalty in a collectivist culture is paramount. The society fosters strong relationships where everyone takes responsibility for fellow members of their group.
Of note is China’s significantly higher Power Distance ranking of 80 compared to the other Far East Asian countries’ average of 60, and the world average of 55. This is indicative of a high level of inequality of power and wealth within the society. This condition is not necessarily forced upon the population, but rather accepted by the society as their cultural heritage.[9]
Personal Analysis
Hofstede’s cultural dimensions are not without their critics, but as a student and future business professional they provide an excellent gateway into cultural learning in the global economy. Reflecting upon personal experiences within China and the dimension’s scores, there is considerable evidence both supporting and opposing the aforementioned analysis.
As varied as the presentations were between all the companies and universities while in China each came with their own observations and feelings about the country and the culture. Jari Tukia, a Profit Center Director of ABB, had an entire slide devoted to little notes he found important for any foreigner doing business in China, among these were:
- Relationship are key: Guanxi
- The country is hungry to get to the level of living as much as the rest of the world
- “I don’t understand, but I trust.”
- The way of doing things is not linear
- “You don’t know China.” means they disagree
- “New regulations.” means they’re avoiding something
- Everything can change in an instant
From these little notes made by an Finnish ex-pat it becomes clear that some of Hofstede’s scores are correct. The importance of Guanxi, “the network of relationships among various parties that cooperate together and support one another, goes to strengthen the argument that China is a highly collective society.[10] Much of the reason for having strong relationships, especially professionally, comes from the Chinese desire to save “face.” Mr. Tukia also states that the Chinese will avoid saying the word “no,” and instead will say things such as “You don’t know China,” and “There are new regulations.” This hinders the Chinese from actually talking directly and in turn talking behind the other person’s back. “Thus, Chinese tend to believe only their closest friends and relatives.”[11] Tukia’s other note “The way of doing things is not linear,” further supports China’s long-term orientation. One of the main factors of a LTO culture is that people are willing to stave off instant gratification in order to pursue a grander outcome. In linear thinking there would be benchmarks showing progress. Small temporary goals to obtain, satisfying the moment. If the goal is truly long term than the need for small victories and accomplishments are negated.
There is an interesting contradiction within the Chinese society and Hofstede’s analysis. The major defining factor of China on Hofstede’s dimension is their LTO, ranked fourth behind S. Korea, Taiwan, and Japan. After having spent as little as week in China both factors of short term and long term thinking are obvious. The term “face” was used earlier, it specifically, “describes the proper relationship with one’s social environment, which is essential to a person (and the person’s family) as the front part of his or her head.”[12] Face, or more accurately losing face, is also one of the major factors prevalent within a collective society. To lose face means you bring shame upon yourself, and your family or close knit group in a collectivist culture. China or its citizens never wish to lose face. Even China’s government has been concerned about losing face for generations, ” The country [China] begins to feel that Government consented to arrangements by which China has lost face; the officials have long been conscious that they are becoming ridiculous in the eyes of the people” wrote Sir Robert Hart about the concerns of face in Chinese society, even as far back as 1876.[13] “Concern with face,” as Hofstede states is a symptom of a short term society, but “having a sense of shame” is the concern of a LTO.[14]
Perhaps this distinction between concerns of face and shame serve as a metaphor for the transition in which China is currently going through. It is no secret that since the late 1970′s China has started opening itself up to economic and social reforms. In modern China 64% of the nations GDP comes from the coast alone, which hold 51% of the population, and the pay four times higher for workers in urban areas; which has only developed over the last 30 years.[15] Usually change within society happens gradually, evolving slowly to become something new, but China’s modernization has happened so quick the social consequences could not be predicted. Perhaps with the shifting times the people of China are no longer worried about shaming the family or group, but rather maintaining face, regardless of what goes on privately.
There is an intriguing chart of the perceived business goal priorities in China:
|
MORE IMPORTANT
|
LESS IMPORTANT
|
| Respecting ethical normsPatriotism, national pridePowerHonor, face, reputation
Responsibility toward society |
Family interestsGame and Gambling SpiritThis year’s profitsPersonal Wealth
Staying within the law[16] |
It should be noted that all of these are all priorities of Chinese business professionals, but the goals on the left were ranked higher in a recent survey. It is interesting that there seems to be little correlation in Chinese perception between “honor, face, and reputation” and “staying within the law. ” This again illustrates China’s own contradiction. Another example of this contradiction comes in the form of China’s low rating in UAI, with a score of 30, meaning the Chinese do not try to avoid ambiguity. “A low ranking in the UAI dimension is indicative of a society that has fewer rules and does not attempt to control all outcomes and results. It also has a greater tolerance for a variety of ideas, thoughts, and beliefs.”[17] Yet when looking at many of the traits of high ranking UAI countries China seems many similarities that would raise their score.
The People’s Republic of China has been known to quash any protest or uprising; stop any movement against the state. Mr. Chak of O& M stated that in China people are able to criticize, but not mobilize.[18] This is a defining trait of society what wishes to avoid uncertainty.[19] Another piece of information given to us from Dr. Peng of the Chinese Futures Exchange stated that in order for a person to enter the stock market in China they must have minimum capital of ¥500,000, they must pass an investment test, have previous experience in commodity or mock trading, and a good credit record.[20] That does not sound like a system that welcomes ambiguity. Perhaps that is the distinction, there is a fundamental difference between how the system and citizens of China operate. Dr. Peng stated that most investors wish to handle their own trading and things such as mutual funds have yet to become popular investment tools. The turnover rate for the Chinese Stock Market was twice as high as the United States in 2008 at 570%.[21] Gambling, in turn, is also very popular among the Chinese because “results are attributed to a person’s own ability,” a trait of weak UAI. [22]
Is it very easy for an outsider to confuse the traits of the Communist government and the people of China. They most certainly are not one in the same. Although the government may wish to have a highly controlled environment where stability reigns true, the people within its borders live in an entirely different way.
China is an anything but a simple country filled with anything but simple people. They are rooted in tradition while at the same time quickly changing their own society. Take for example China’s high masculine score. In general terms a country with a high PDI and MAS index “stand for a norm of a dominant, tough father and a submissive mother who, although also fairly tough, is at the same time the refuge for consolation and tender feelings.”[23] Currently there is a surplus of 40 million men in the country mostly because of the perception that baring boys is preferable to baring girls in the countryside. From both our female tour guides it was related that this perception is changing quickly within the major cities throughout coastal China. It would be safe to assume that as China develops the MAS index will fall as perceptions change further.
Through China’s quickly growing society Hofstede’s initial finds could eventually start to shift as the perceptions of the population evolve. China’s high scoring PDI is no different; studies have shown that 70% of the countries citizens undoubtedly trust the government.[24] This lends itself to the idea that the power distance index is actually run from the bottom up; this is what people are willing to accept. On the other hand, there is 30% of the population that has become wary of Beijing; this percentage consists of those under the age of 25, the wealthy, urban dwellers, and educated citizens. In essence it is the people who will hold China in the future are those who are most distrustful. “Public demands for more political rights and civil liberty tend to increase rapidly once socioeconomic development reached high levels…. [leading itself to] value changes that result in distrust of government … this effect is starting to manifest itself in China” comments one researcher at the China Policy Institute of Nottingham University.[25]
In the conclusion of Prof. Zhao’s presentation he stated that in order to understand China’s newly founded securities market, their hybrid economic system, or their evolving political system we must first understand its people. He then said, “try to understand why we are who we are, and why we are where we are.”[26] The cultural dimensions exist as a starting point for this exact purpose.
The future of China is yet to be determined, they have developed to so quickly that there is little precedent to set any expectations. What this means for outsiders trying to enter the Chinese market and those already participating is that, as Jari Tukia of ABB said, “Everything can change in an instant.” This is not necessarily a negative; instead it should be seen as opportunity. In an environment where everything can change, “anything can happen!”[27]
Works Cited
Chak, M. (2011, June 16). Chief Planning Officer for O&M China.
Chen, M. (2007). Cultural Dimensions of HR. Retrieved July 2011, from The China Business Review: http://www.chinabusinessreview.com/public/0707/chen.html
Dereskey, H. (2008). International Management: Managing Across Borders and Cultures. Upper Saddle River: Pearson Prentice Hall.
Ford, P. (2010, September 15). China’s Public Opinion Gap: Chinese Youth are Starting to Mistrust Beijing. Retrieved July 2011, from The Christian Science Monitor: http://www.csmonitor.com/World/Asia-South-Central/2010/0915/China-s-public-opinion-gap-Chinese-youth-are-starting-to-mistrust-Beijing
Guanxi, An Important Chinese Business Element. (n.d.). Retrieved from Los Angeles Chinese Learning Center: http://chinese-school.netfirms.com/guanxi.html
Hill, C. W. (2007). International Business: Competeing in the Global Marketplace . New York: McGraw-Hill Irwin.
Hofstede, G. (2010). Geert Hofstede Cultural Dimensions: China. Retrieved July 2011, from Geert-Hofstede.com: http://www.geert-hofstede.com/hofstede_china.shtml
Hofstede, G., Hofstede, G. J., & Minkov, M. (2010). Cultures and Organizations: Software of the Mind. McGraw Hill.
Lim, R. (2011, June 17). Business Challenges in China: Facts and Myths.
Martin, G. (2010). Lose Face – Save Face. Retrieved 2011, from The Phrase Finder: http://www.phrases.org.uk/meanings/lose-face.html
Peng, D. Z. (2011, June 13). Bringing Financial Futures to China.
Zhao, P. L. (2011, June 16). Capital Market in China: History and Development of the Stock Market in China.
[1] (Hofstede, Hofstede, & Minkov, p. 30)
[3] (Geert Hofstede Cultural Dimensions: China)
[4] (Geert Hofstede Cultural Dimensions: China)
[6] (Geert Hofstede Cultural Dimensions: China)
[8] (Geert Hofstede Cultural Dimensions: China)
[9] (Geert Hofstede Cultural Dimensions: China)
[10] (Guanxi, An Important Chinese Business Element)
[12] (Hofstede, Hofstede, & Minkov, p. 110)
[14] (Hofstede, Hofstede, & Minkov, p. 243)
[16] (Hofstede, Hofstede, & Minkov, p. 324)
[17] (Hofstede, Geert Hofstede Cultural Dimensions: China)
[19] (Hofstede, Hofstede, & Minkov, p. 223)
[22] (Hofstede, Hofstede, & Minkov, p. 208)
[23] (Hofstede, Hofstede, & Minkov, p. 151)
in green, 
in green, 
in red. I chose 
