From building a perfect organizational culture to getting the right fit, there have been unending discussions, trying to figure out what creates a great organizational culture. Organizational culture is no more limited to internal stakeholders; it also about interactions with external stakeholders such as consumers and stockholders. Organizational culture builds the face of the brand, and it is always juxtaposed against the values offered by the business to identify the credibility and nature of services and products served by the organization.
Professor Geert Hofstede identified six dimensions to define different cultural settings. It’s a comparison model wherein two contradictory properties are determined, and the most suitable property is selected after comparing the two properties. Let’s take a look at the six dimensions and how it can be applied in the organizational context to identify the right culture by employees or to establish an appropriate culture by business leaders.
Power Distance Index
This dimension focusses on evaluating the power distribution in a particular cultural setting. Unequal distribution of power signifies high power distance, and low power distance means equal power distribution. In an organizational context, this can be identified by the hierarchical model of the organization. For example, organizations with stringent hierarchies and who prefer top-down decision-making process will have high power distance as the authority to make decisions lies with the top-level executives and the bottom has no or barely any decision making power. Whereas organizations with a flat hierarchy or with no particular hierarchical model will have an equal distribution of power. They might at least take into consideration everyone’s views before making crucial decisions.
Individualism versus Collectivism
In this dimension, we assess the ‘We’ versus ‘I.’ Whether a culture promotes more individualistic approach where you are just responsible for yourself and for your group of people or collectivism wherein all the groups are expected to help each other out with an unspoken clause of loyalty. Organizations that are rigidly divided into departments and where there’s no or less interaction between different departments follows individualistic approach whereas organizations which have no particular department and people are expected to participate in all the tasks regardless of their role, are said to follow collectivism approach. Nowadays organizations have brain-storming sessions to generate new ideas wherein all the employees in the organizations can give their inputs irrespective of their roles and seniority status which signifies the collectivist approach. Not all the organizations will benefit from keeping a purely one dimension and hence, it is imperative to maintain a balance of both individualistic as well as collectivism approaches.
Masculinity versus Femininity
Masculinity stands for achievement, assertiveness, and material rewards whereas femininity stands for cooperation, modesty, and care. In the corporate context, the two are often intermingled to form a great culture. For example, being cooperative is essential to achieve results. The two cannot exist without the other because either of the two stringently will make the organizational culture too hard or too lenient for the employees.
Uncertainty Avoidance Index
This index highlights the ability to handle the uncertainty and unpredictability of outcomes. In some contexts, it can also be a measure of conservatism, i.e., a high index will show high conservatism and resistance to accept new ideas whereas a low index will show a little resistance and high acceptance. In organizational context both the approaches of the index can be applied. For instance, employees’ willingness and ability to handle the uncertainty of projects in their job and tasks can be evaluated by uncertainty index whereas conservative approach of an organization in dealing with projects, clients and employees can also be defined by this index.
Long-term orientation versus short-term orientation
Also called as, long-term pragmatic and short-term normative, this dimension analyses the group’s ability to adapt to changes or willingness to change according to the given situations. Cultures with the long-term pragmatic approach are more open to accepting changes in their way of operating, keeping in mind the long-term welfare and circumstances whereas short-term normative implies an unwillingness to let go of the traditional practices and accept new ones. In an organizational context, this is an incredibly important dimension as the ever-changing markets and disruptive trends require a business to be agile in keeping up with the changing times.
Indulgence versus Restraint
This dimension characterizes a culture's openness to accepting the gratification of enjoyments and having fun. Startup culture these days promotes indulgence over restraint as it is now considered as a means to keep the employee happy at work and prevent burn-out. Even big corporations like Google are promoters of indulgence over restraint, spoiling their employees with excellent food, sleeping pods, and much more.
Hofstede’s dimensions elaborately explain various traits that constitute a culture. By studying and evaluating your organizations’ culture against six dimensions you can figure out the effectiveness of organizational culture and its ability to retain and encourage employees. It is imperative to set up a clear culture because an unclear ethos might lead to management issues and conflict in the organization causing serious damage to its image and productivity.