Australia vs. Saudi Arabia --

Australia vs. Saudi Arabia -- Power Distance

Using Hofstede's "Power Distance" Dimension to a Case Involving Australian and Saudi Arabian Business Executives

In today's globalized world there is no denying that the importance of culture must be taken into account in any intercultural communication or business dealings involving different countries. Due to the differences in cultural perceptions, attitudes, views, and expectations, misunderstandings may arise when representatives of different countries try to strike a deal. It is therefore imperative that business theorists and scholars of intercultural communication studies understand potential cultural differences that may jeopardize business negotiations otherwise likely to succeed and benefit both parties. Geert Hofstede's theory on cultural dimensions, though flawed on many grounds, can be helpful in analyzing various case studies involving intercultural business negotiations. The purpose of this paper is to review Hofstede's cultural dimensions and analyze a case scenario involving Australian and Saudi Arabian business executives by employing Hofstede's "power distance" dimension. The argument of this paper is that Hofstede's cultural dimensions can be too general and lead to false assumptions at times, but it is still useful in understanding intercultural communications thanks to the critiques and refinements of his theories that will be discussed in the following pages.

Hofstede's theory grew out of a research done in IBM in late 1960s and early '70s. Hofstede headed the research team and their purpose was to conduct a survey among IBM employees in different countries to understand "job attitudes." The surveys were longitudinal and cross-national. They wanted to investigate differences among IBM employees in different countries. The extensive data compiled by the team prompted Hofstede to conclude that they reflected cultural differences. He thought the job attitudes expressed in the surveys could be used to understand specific attitudes within cultures. So, he began to work on a framework that would allow him and other researchers to distinguish between cultural dimensions and values that can affect "thinking, organizations, and institutions in predictable ways" (Blodgett, Bakir, & Rose, 2008, p. 340).

In his framework, Hofstede came up with four cultural dimensions that would characterize a nation. He defines culture as "the collective programming of the mind which distinguishes the members of one category of people from those of another" (Hofstede, 1984, p. 389). The first of these dimensions is individualism/collectivism. Hofstede argues that in individualist cultures persons tend to look after themselves only, while in collectivist cultures, people emphasize collective concerns and group welfare. The second dimension is uncertainty avoidance, which refers to the tendency of certain cultures -- the ones with higher levels of uncertainty avoidance -- to place greater value on security. In contrast, cultures with low levels of uncertainty avoidance are risk-takers and tend to resist formal rules. The third dimension is masculinity/femininity, suggesting that a culture can be described either as masculine or feminine. Masculine societies tend to be aggressive, ambitious, and competitive, respecting "whatever is big, strong, and fast," while feminine societies "expect women to serve and to care for the nonmaterial quality of life, for children, and for the weak" (Hofstede, 1984, p. 190).

The fourth dimension -- and this is most important for us -- is power distance. This dimension refers to the tendency of less powerful persons to accept power inequality. In cultures with higher levels of power distance, less powerful persons are reluctant to challenge the authority of those in power; while in societies with less power distance, less powerful persons tend to be assertive with their superiors (ibid). The power distance index is based on three items: percentage of those who consider consultative leadership as the ideal form leadership, percentage of those who prefer directive or autocratic leadership, and mean response to "how often subordinates are afraid to express disagreement" (Merritt, 2000, p. 286). Hofstede later added the fifth dimension -- Confucian dynamism -- to the framework, but his first four dimensions laid the foundation of his work.

His work has been extremely influential in business and management studies and scholars from psychology and sociology have also commented on his definition of cultural dimensions. His framework has been applied in a wide range of consumer marketing contexts, including studies in advertising, complaint behavior, brand strategies, impulsive buying, persuasion, acceptance of new innovations and products, service quality expectations, ethical decision making (Vitell, Nwachukwu, & Barnes, 1993), consumer behavior (Milner, Fodness, & Speece, 2003), and much more. The framework "has provided the foundation upon which most cross-cultural marketing and consumer behavior research has been based" (Blodgett, Bakir, & Rose, 2008, p. 339). Although many researchers find Hofstede's analysis still applicable and that new empirical studies can confirm his framework (Hofstede, 2006; Bu, 2008), Hofstede has nevertheless been criticized on various grounds. Some of the criticisms have been constructive but others argue that Hofstede's framework is deeply flawed.

Stedham and Yamamura (2004), for instance, acknowledge the importance of Hofstede's framework but suggest that its discussion of gender -- due to changes in education, legislature, and workforce participation of women in recent decades -- has become obsolete. Gerhart and Fang (2005) argue that evidence on national variance explained estimates weaken Hofstede's assumptions. In a study of individual consumer levels, Bdodgett, Bakir, and Rose (2008) concluded that Hofstede's power dimensions lacked face validity and that their reliabilities were low. The authors surveyed 97 MBA students and 60 faculty members from behavioral sciences, and in their responses, only 41.3% correctly matched the underlying dimensions of Hofstede's framework. Interestingly, while the individualism/collectivism, masculinity/femininity, and uncertainty avoidance items were correctly classified 43.1, 30.4, and 26.0% of the time, the power distance index items were correctly classified 63.1% of the time, suggesting that the power distance dimension is probably more accurate than others.

The most scathing criticism of Hofstede's framework came from Brendan McSweeney, describing Hofstede's analysis "a triumph of faith and a failure of analysis" (McSweeney, 2002a). McSweeney argues that there are a series of methodological problems, involving the reliance on unproven and sometimes improvable assumptions in Hofstede's research on national culture. He also argues that Hofstede relied upon sweeping generalizations and used a survey conducted by IBM in a few dozens of countries as representative of national opinion polls. McSweeney rejects Hofstede's assumption that culture is "territorially unique," and argues that the data used by Hofstede was not enough to make such assumptions. For example, out of the 117,000 questionnaires used in 66 countries, Hofstede used data for only 40 countries to characterize their national cultures. In only six of the countries surveyed, the number of respondents was over 1,000. Although those surveyed were employees of the IBM, Hofstede used the data to speak of "national samples" (ibid, p. 95). McSweeney also states that Hofstede ignored the "elusiveness" of culture in his analysis: "what Hofstede 'identified' is not national culture, but an averaging of situationally specific opinions from which dimensions or aspects of national culture are unjustifiably inferred" (ibid, p. 108). In a subsequent follow-up, McSweeney offered further criticism of Hofstede's framework (McSweeney, 2002b).

These criticisms notwithstanding -- and some of them are indeed justified -- Hofstede's model can still be useful. Some of the criticisms may actually be incorporated into the model to understand cultural dimensions better and with greater accuracy levels. To understand the relevance of Hofstede's dimensions, let's consider the following scenario. And we will use the power distance dimension for the case. In a huge oil company in Saudi Arabia, a newly recruited young adult is assigned to work for future projects. Since he is young and enthusiastic and understands contemporary business realities, he has better plans for the successful implementation of the projects. But since Saudi Arabia is a high power distance society, he cannot tell his superiors directly that he has better plans than they had suggested. How can he push for his plans without being penalized? If the same thing happened in Australia, a place with lower power distance index, the junior project manager would have a better chance of challenging his superiors' early plans.

Hofstede's framework can generally explain this type of management behavior in countries like Australia and Saudi Arabia. But as the critics suggested, one should be careful not to generalize totally. Australia may have some rigid management leadership in some companies, while Saudi Arabia may also have enlightened leaders. The realities of global business have in recent decades significantly affected countries with high power distance indexes. But let's consider that as a general rule Saudi Arabian top management still acts according to Hofstede's model. How should the junior manager act then? He must understand the reality and find a smart way of convincing his superiors by appealing to their conservative and authoritarian values. Even authoritarian leaders want to hear their subordinates' opinions but they want to make sure that they are the decision makers. The junior manager should present his alternative plan for the implementation of the project in such a language that superiors must conclude that the junior is simply following their lead and wisdom.

But the situation gets more complicated when we consider cross-national encounters involving Saudi Arabia and Australia. In this scenario, two companies, one from Saudi Arabia and the other from Australia, send their top representatives to discuss business matters. The Australian company is represented by a highly professional and young woman, whereas the Saudi Arabian company is being represented by one of their directors (twice the age of the Australian representative). Due to numerous cultural differences, the business negotiations may be jeopardized. According to Hofstede's framework, the Saudi representative would expect his Australian negotiator to follow his lead for two reasons: he is older and he is a man. But the Australian representative would consider her Saudi negotiator her equal because she grew up in a low power distance society and rejects old masculine gender ideas. How can potential conflicts be avoided in this scenario?