Hofstede worked with IBM’s HR department at European Headquarters in 1970s. Between 1967 and 1973, he executed a large survey study regarding national value differences across the worldwide subsidiaries of IBM: he compared the answers of 117,000 employees samples on the same attitude survey in different countries.

Hofstede argued that cultures can be important benchmark to understand how individual behave and work in an organizations. It also measured how employees reacted to authority or even ambiguity for their day-to-day tasks.

As IT firms in India move away from cost-focused model to value-focused model , they should be aware of cultural influences blocking digital path they wish to pursue.

Let us look at how India fares across Hofstede’s dimensions as compared to China and USA.

Hofstede India1

Source – https://geert-hofstede.com/india.html

Power Distance

This dimension indicates power distribution across organization and how people react to it.

Power Distance is defined as the extent to which the less powerful members of institutions and organisations within a country expect and accept that power is distributed unequally.

India scores high on this dimension, 77, so are other countries in Asia-Pacific region including China. It indicates appreciation for hierarchy and a top-down structure in society and organizations. Typically Indians are dependent on superior to provide direction for work. We accept such power relationship, as they give meaning to the work. People are rewarded based on loyalty to the superior rather than actual contributions.

Relationship with manager is often formal. In case of reporting issues (negative feedback), coming from people down the ladder is often seen negatively, thus avoided.

What it means for IT Companies in India ?

As you focus on getting ready for ‘Digital Economy’, you should consider easing up your organization structure. Most of the ideas come from people working on the ground working close to the customer. Reward them as often as you should. Ideally, you need smart managers who could understand technology and cultures alike. Keep them on the front lines, rather than deeply shielded by the multitudes of  hierarchy.

Individualism

It is defined as  the degree of interdependence a society maintains among its members.

It is about how people identify themselves – “I” or “We”. In Individualistic societies (for example – USA) , people tend to look after themselves, rather than dependent on social structure. Since they require to be self-dependent, they instinctively collaborate more.  In collectivist societies , people expect that organizations will take care of them in exchange of loyalty. So, people are restricted to organizations/working groups and do not collaborate outside close networks.

India, with a rather intermediate score of 48, is a society with both collectivistic and Individualist traits. Our actions are influenced by opinion of one’s family, extended family, neighbors, work group and other such wider social networks. The employer/employee relationship is one of expectations based on expectations – Loyalty by the employee and protection by the Employer. Promotion decisions are often made based on relationships rather than performance.

The Individualist aspect of Indian society is seen as a result of its dominant religion/philosophy – Hinduism. The Hindus believe in a cycle of death and rebirth, with the manner of each rebirth being dependent upon how the individual lived the preceding life. People are, therefore, individually responsible for the way they lead their lives and the impact it will have upon their rebirth.

What it means for IT Companies in India ?

New age IT skills for digital economy are heavily tilted towards collaboration (thus individualism). It also means that most of these skills need to be developed from scratch or sourced from outside. Collaboration mechanisms need to be strengthened across organization. It also means that some of the hierarchies have to be demolished to allow better collaboration and faster decision-making. You will need leadership tuned to new age economy, not just the ones who still wish to play by old rules.

Masculinity

Masculinity is defined as ways in which society is treating competition, achievement and success/power.

A high score (Masculine) on this dimension indicates that the society will be driven by competition, achievement and success, with success being defined by the winner. A low score (Feminine) on the dimension means that the dominant values in society are caring for others and quality of life. A Feminine society is one where quality of life is the sign of success and standing out from the crowd is not admirable.

India scores 56 on this dimension and is thus considered a Masculine society. India is actually very Masculine in terms of visual display of success and power. It means people like to flaunt power/ success in the organizations in terms of clout/ gadgets or flashy cars. While, rampant display of success is often derided due to spiritualism inherent in Hindu culture, it is still highly pursued.

What it means for IT Companies in India ?

It depends on how IT companies in India define internal success/performance benchmarks. If you promote employees by number of people managed, rather than actual value added to the clients, you get what you measure. IT Clients are now looking for ‘value-focus’ rather than ‘cost-focus’, so you should re-align performance metrics driven by value than cost savings.

Uncertainty Avoidance

The dimension Uncertainty Avoidance has to do with the way that a society deals with the fact that the future can never be known: should we try to control the future or just let it happen? This ambiguity brings with it anxiety and different cultures have learnt to deal with this anxiety in different ways.

Uncertainty avoidance is the extent to which the members of a culture feel threatened by ambiguous or unknown situations and have created beliefs and institutions that try to avoid these.

India scores 40 on this dimension and thus has a medium low preference for avoiding uncertainty.

In India, we think that nothing has to be perfect nor has to go exactly as planned. We are generally tolerant towards the unexpected.  Rules are generally meant to be broken. We tend to ‘adjust’ as per the situation – whether it means ‘Jugaad’ – inventive (rather short-term) solution to the problem or ignoring the rule-breakers assuming its normal to circumvent rules anyways.

What it means for IT Companies in India ?

Attitude of ‘Juggad’ might actually come handy for Indian IT companies stepping into Digital world. With so much uncertainty around digital models, inventive approaches will be useful and in fact a boon. Again, they should not forget that ‘Jugaad’ is always short-term solution. As digital economy matures, they should resort to structured approaches to build solutions/add value to clients. With history of circumventing rules, industrializing innovation might be difficult to achieve.

Long Term Orientation

This dimension describes how every society has to maintain some links with its own past while dealing with the challenges of the present and future, and societies prioritize these two existential goals differently. Normative societies. which score low on this dimension, for example, prefer to maintain time-honoured traditions and norms while viewing societal change with suspicion. Those with a culture which scores high, on the other hand, take a more pragmatic approach: they encourage thrift and efforts in modern education as a way to prepare for the future.

With an intermediate score of 51 in this dimension, there is no dominant preference for India. Dominated by religion, we are generally open to new ideas and understand that there are many ways (solutions) to one problem. It also means that we are open to changing plans mid-way and believe in discovery as we go along, rather than disciplined approach to the solution. It means that we will see flashes of brilliance rather than industrialized innovation process as Western countries have adopted.

What it means for IT Companies in India ?

‘Industrialized Innovation’ is very important concept as it breaks down individual tasks of entire creative process and makes it repeatable. We seems to be lacking in what’s called ‘Original Thinking’, that’s why there are not many product companies originated out of India. Digital economy is all about creative & technology enabled solutions to the clients. While IT companies can rely on ‘rock-stars’ to manage customer facing tasks/solutions, they still have to spread culture of innovation across. That means ‘Design Thinking’ is not just a philosophy, rather it is to be applied to everyday tasks. Instead of providing lip service, they will need to make innovation an ‘everybody’s job’.

Indulgence

This dimension is defined as the extent to which people try to control their desires and impulses, based on the way they were raised. Relatively weak control is called “Indulgence” and relatively strong control is called “Restraint”. Cultures can, therefore, be described as Indulgent or Restrained.

India receives a low score of 26 in this dimension, meaning that it is a culture of Restraint. While we are power/success worshipping nation, we also restraint (rather hate) display of it. We also do not put much emphasis on leisure time and delay gratification of the desires. Social norms enforce general viewpoint that indulgence is wrong in general.

What it means for IT Companies in India ?

Popular culture of slogging in IT companies means long-term employee engagement/wellness issues. Innovation culture comes in environment which treats people with respect and do not put un-due pressure to deliver. Innovation or learning new skills in digital economy does not come via force, rather via collaboration. It is also true that training by thousands in digital skills does not ensure success. Culture of treating employee as ‘resource’ has to be changed. So, it is ok to indulge or provide employee benefits (at par with their onshore counterparts) than stick to old school mentality of cost cutting everywhere. It means that you do not need to cramp your indian employees in shared car while onshore folks avail best of car services 😉

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