VU University Amsterdam Faculty of Economics and Business Administration

Course: ! European Integration and Network Development Title:!! Date:! ! Name:! Cultural comparison between Great Britain and the Netherlands 27-05-2011 Aleksandr Karev (2120763)

Table of contents
Introduction: What is culture and why it matters?! ......................................1
Power distance!................................................................................................................1 Uncertainty avoidance!.....................................................................................................1 Individualism!....................................................................................................................2 Masculinity! .......................................................................................................................2 Long-term orientation! .......................................................................................................2

Conclusion! ......................................................................................................3 Bibliography !...................................................................................................4

Introduction: What is culture and why it matters?

The purpose of this essay is to analyze cultural differences between Great Britain and the Netherlands and to discuss the impact it has on the business enterprises. Geert Hofstedes cultural dimensions will be used to study these differences. The word culture comes from the Latin cultura, which is related to cult or worship (Fred Luthans, 2009). Today, culture can be dened as an acquired knowledge that people use to interpret experience and generate social behavior. This knowledge forms values, creates attitudes, and inuences behavior (Fred Luthans, 2009). In todays world of globalization organizations and managers increasingly need to deal with multiple ethnic groups with very different cultures. It is therefore important to recognize that people from various cultures differ in a variety of ways, including: the way of looking at things, expressing personality and the way of thinking. If international managers do not possess sufcient knowledge about the cultures of the countries or people they deal with, the results can be quite disastrous (Fred Luthans, 2009). For example, in Britain not bad can actually mean "very good" and "not bad at all" might be the highest praise you ever get from a British person (Harzing, 2006). These cultural differences have a great impact on the way that international management should be performed. There has been a lot of research done in the area of the cultural differences and one the most wellknown and widely used studies in this eld has been performed by a Dutch researcher Geert Hofstede, who identied ve cultural dimensions that help explain how and why people from various cultures behave as they do. The ve cultural dimensions he has identied are: power distance, uncertainty avoidance, individualism, masculinity and time orientation. In this essay we will use these dimensions to explain cultural differences between Great Britain and the Netherlands.

Hofstedes Cultural Dimensions

Power distance Power distance is the extent to which less powerful members of institutions and organizations accept that power is distributed unequally (Geert Hofstede, 1984). In other words, countries in which people unthinkingly follow the orders of their superiors have high power distance. The Geert Hofstede analysis indicates that Great Britain scored 30 out of 100 for the power distance dimension. This is a relatively low score and therefore, it can be said that people from Great Britain value equality and minimize the importance of power and status differences. The Netherlands on the other hand, scored 38 out of 100. This shows that people in the Netherlands value equality and tolerance within the groups to lesser degree than people from Great Britain. Uncertainty avoidance Uncertainty avoidance is the extent to which members of a culture learned to feel comfortable (or uncomfortable) in unstructured, unknown situations (Carlos Nunez, 2007). Countries with high uncertainty avoidance tend to have a high need for security and a strong belief in experts and their knowledge (Fred Luthans, 2009).On the other hand, countries, which score low in uncertainty avoidance, tend to have more people who are willing to accept risks. In terms of the uncertainty avoidance, Great Britain once again scores 30. Therefore, Great Britain can be classied as a country with low uncertainty avoidance. This means that people from Great Britain are open for the new experiences and changes and are willing to accept risks. In the
1

meantime, the Netherlands scores 53 for the uncertainty avoidance, compared to a World average of 64. A moderate uncertainty avoidance score may signify a cultural tenancy to minimize or reduce the level of uncertainty within the population (Hofstede, 2009). Individualism Individualism is the tendency of people to look after themselves and their immediate family only (Geert Hofstede, 1984). The opposite of individualism is collectivism, which is dened as: the tendency of people to belong to groups or collectives and to look after each other in exchange for loyalty (Geert Hofstede, 1984). In general Hofstede found that wealthy countries have higher individualism scores, for example, Great Britain scores 86, which means that it is a country where individuals are expected to look after themselves and their family only, caring very little about anyone who is not considered as a family member. The same applies to the Netherlands, where the highest Hofstede dimension is Individualism with the score of 80. Masculinity Masculinity is dened by Hofstede as a situation in which the dominant values in society are success, money, and things. The opposite of masculinity is femininity, which is dened by Hofstede as a situation in which the dominant values in society are caring for others and the quality of life. For this dimension, Great Britain scores 60, which indicates that this country experiences a high degree of gender differentiation. This means that in Great Britain males dominate a signicant portion of the society and power structure, with females being controlled by male domination. On the other hand, in the Netherlands the score for masculinity is 14, which indicates that there is a low level of differentiation and discrimination between genders (Geert Hofstede, 1984). In the Netherlands, females are treated more equally to males in all aspects of society. In addition, Hofstede (xxxx) argues that this low masculinity ranking may also be displayed as a more openly nurturing society. Long-term orientation Long-term orientation is the fth Hofstede dimension, which was included after the rst four to try to identify the difference in thinking between the East and West (Frank J. Landy, 2007). Long-term orientation focuses on the degree society embraces, or does not embrace, long-term devotion to traditional, forward thinking values (Hofstede, 2009). Great Britain scores 20 for the long-term orientation dimension. This suggests that this country does not fortify the concept of long term, traditional orientation. In this culture, change can occur much quicker, because long-term traditions and commitments are not considered as barriers to change (Hofstede, 2009). On the contrary, the Netherlands has a score of 45 for the long-term orientation dimension, which is more than double compared to Great Britain. This means that in the Netherlands, population prescribes to the values of long-term commitments and respects the traditions of their country.

Conclusion
Todays global market presents a tremendous opportunity for organizations around the world, but is also a challenge that needs to be addressed. Cultural difference between countries is one of the challenges organizations face when trying to do business abroad. In this report we have looked at ve major factors, which have been proposed by Geert Hofstede to analyze cultural differences between countries, and applied them to identify the differences between the cultures of Great Britain and the Netherlands. Our analysis has shown us that both Great Britain and the Netherlands are very much alike in terms of the power distance and individualism dimensions. According to Hofstede, the average power distance score is 55 points per country. Both Great Britain and the Netherlands score below this value, with Great Britain scoring 30 and the Netherlands 38. This is particularly important for companies that come from countries with much higher power distance, and who want to do business in either Great Britain or in the Netherlands. When you are going to work with a country where power distance is lower than yours, then you should expect not to be treated with the same respect or deference you may be used to. Also, in this situation it is important to remember not to judge people on their appearance, privileges or status symbols. It is also important to note that there is a huge difference between the Netherlands and Great Britain in terms of the masculinity dimension of Hofstede. For this dimension, Great Britain scores 60, whereas the Netherlands scores only 14 on Masculinity versus Femininity (MAS) scale. According to the ratings, the scores suggest a high degree of gender differentiation in Great Britain, where males control a signicant part of the society and power structure. On the contrary, in the Netherlands there is a low level of differentiation and discrimination between genders. As an organization, we can infer that in Great Britain men will always try to inuence women and their decisions, which in turn could have a signicant impact on the performance of organization. For instance, a number of missed opportunities could be overlooked as a result of women not being heard or not given a chance to speak up. Moreover, Great Britain and the Netherlands have different scores for the Uncertainty Avoidance dimension i.e. 30 and 53 respectively. This suggests that in Great Britain people are more likely to take risks, which of course could lead to huge costs and other potential problems for an organization. Oppositely, in the Netherlands, people are much less likely to accept risks. This has two major impacts for international organizations. First, there should be fewer costs, because employees will only get involved with low risk business. Second, this might suggest that local organizations will be reluctant to compete with international organizations if they perceive it risky. This of course can be benecial for international organizations who are willing to accept risks.

Bibliography
Carlos Nunez, R. N. (2007). Intercultural Sensitivity: from denial to intercultural competence. Assen: Royal Van Gorcum. Frank J. Landy, J. M. (2007). Work in the 21st Century: An Introduction to Industrial and Organizational Psychology. California: McGraw-Hill. Fred Luthans, J. P. (2009). International Management. New York: McGraw-Hill. Geert Hofstede, M. B. (1984, December). The Need for Synergy Among Cross-Cultural Studies. Journal of Cross-Cultural Psychology , 419. Harzing, A.-W. (2006). British culture. Retrieved May 24, 2011, from Research in International Management: http://www.harzing.com/ukculture.htm Hofstede, G. (2009). Geert Hofstede: Cultural Dimensions. Retrieved May 24, 2011, from Hofstede Scores: http://geert-hofstede.com/hofstede_netherlands.shtml