Hofstede's Culture Dimensions and the Case of John Miller: An Analysis of Individualism vs. Collectivism

A reflection on the Hofstede study. Kirkman et al. acknowledge the significance of Hofstede's culture dimensions but note that future research should take the following issues into consideration:

• Inclusion of cross-cultural differences: cultures should not be considered homogenous - specific intracultural variance should be taken into consideration.
• Inclusion of theoretically relevant moderator variables: culture should not be measured as the only influencing factor - other variables like sex, class affiliation, etc. should be taken into account.
• Effects of interaction between culture variables: there is a lack of empirical evidence about the interplay of individual culture variables and their interaction, which should be taken into account.

A German company has been operating in the US electrical industry for two years. The CEO, Peter Hansen, is satisfied with their current performance: market share for important products has increased significantly, and progress has been better than anticipated. The workforce has grown, including a significant number of local American managers in senior positions - a situation quite unusual in the early development stage for a German multinational subsidiary. From the very beginning, the CEO aimed to avoid an ethnocentric approach to his company's US activities and adopted a polycentric approach, supporting the recruitment of local managers.

One of these local American managers is John Miller, the company's marketing director. Over the past two years, he has been well-prepared for his job. The company has sent him to various advanced training programs at top business schools and provided him with a long-term career plan, including short-term vertical career development. While Peter Hansen wanted to support the development of American management styles, he still tried to transfer some of the human resources practices highly valued in Germany - particularly investment in training and a long-term internal career perspective. While some US companies have adopted this approach, these ideas are not as widely accepted in the US as they are in Germany. However, Peter Hansen assumed that these policies would be appreciated by the company's new American employees and would provide significant incentives for employee retention.

One morning, Peter Hansen was shocked to learn that John Miller was about to resign. A competitor had offered John a challenging position - in large part because he had systematically built up a knowledge and experience base with the support of his German employer. How would you explain Peter Hansen's surprise from a cultural perspective?

Questions:

1. Relate the described situation to one of Hofstede's identified cultural dimensions. Can you use this theory to explain Peter Hansen's surprise?

2. How does this situation compare to a comparable situation in your home country? What are the limitations of cultural explanations?

Content:

1. The described situation can be related to Hofstede's cultural dimension of individualism vs. collectivism. In individualistic cultures, such as the United States, individuals value personal achievement, independence, and autonomy. On the other hand, collectivistic cultures, like Germany, prioritize group harmony, loyalty, and cooperation.

Peter Hansen, the CEO, adopted a multi-centered approach by hiring local American managers, including John Miller, the marketing director. However, Peter was surprised by John's decision to resign for a challenging position offered by a competitor. This surprise can be attributed to the individualistic culture of the United States, where individuals prioritize personal advancement and career opportunities. Peter, coming from a collectivistic culture like Germany, may have expected John to value the long-term career development and training opportunities provided by their company.

2. In comparison to my home country, the limitations of cultural explanations are evident. Every culture is diverse, and it is important to consider intracultural variance within a country. Just as Kirkman et al. mentioned, cultures should not be considered homogeneous. Also, it is crucial to consider other variables like sex, class affiliation, and other relevant moderator variables that can influence behavior and decision-making.

The cultural explanation in this scenario may not fully capture the complexity of the situation. Other factors such as personal ambition, career opportunities, and individual preferences could also play a significant role in John's decision to leave the company. Therefore, it is important to consider multiple factors and avoid overgeneralizing cultural explanations.