Hofstede Analysis Comparison Between the USA and China

The success of any business depends on how it addresses the stakeholders’ needs. To that end, stakeholders’ cultural background influences their needs. In the global era, multinational companies consist of employees drawn from different cultural backgrounds; hence, the need for multinational companies’ leaders to research and understand these cultural influences before making critical decisions. Hofstede’s cultural dimensions framework offers insights into key cultural dimensions among different countries, a tool that organizational leaders may leverage to plan work as they expand to different countries: Hofstede Analysis Comparison Between the USA and China.

Understanding cultural dimensions has become even more critical in the digital age as the Internet allows individuals from different countries with varying cultural dimensions to work together. By using tools such as video conferencing applications, teams with varying cultural backgrounds collaborate in the workplace. Since cultural dimensions impact communication, interpersonal relationships, behaviors, morals, and office etiquette, organizational leaders and employees must understand the differences to work together effectively. This paper delves into the cultural differences and similarities between the US and China, and the implications for US businesses planning to expand into China.

Research Question 1: From the Perspective of a Hofstede Analysis, What Are the Differences and Similarities between China and the USA?

Differences

Power Distance Relationships

The power distance index refers to the degree to which less powerful team members expect and accept power to be distributed unequally in the team. Based on Hofstede’s insights, leaders and followers endorse the extent of power inequality, indicating that the power concept is deeply rooted in people’s culture. Hofstede’s cultural dimensions model indicates that there is a great disparity between the US and China as far as the power distance index is concerned (Zhang et al., 2022).

While the US has a low power distance index score (40), China has a significantly high power distance index score (78) (Zhang et al., 2022). Based on these scores, the Chinese people readily accept inequalities, while Americans loathe power inequalities in an organization. In a contemporary organization, power distance affects relationships between managers and employees.

According to Zhang et al. (2022), the Chinese culture promotes tolerance of hierarchical structures, unlike the US, where even junior members may wish to negotiate with their seniors or even question them. Notably, the influence of power distance extends beyond the workplace into family relationships. While Chinese parents have greater control over their children due to the uneven power distribution, children in the US feel free to engage with their parents, not necessarily as absolute leaders but as partners in decision-making.

With the high tolerance for hierarchical relationships in China, employees are more receptive to top-down instructions issued by managers since they view them as being deservedly powerful. Such power is derived from work experience, position, and individual workplace achievements.

Individualistic versus Collectivist Characteristic

The individualistic cultural dimension refers to the extent to which individuals are integrated into groups. According to Hofstede’s cultural dimensions, the US is a highly individualistic country, with a score of 92. On the other hand, China has a low score of 21 as far as the individualism dimension is concerned, implying that the Chinese people are collectivists and prefer harmony, cohesion, and loyalty (Liu & Zhang, 2020).

At the workplace, this dimension manifests in different forms. One of the impacts of the individualism dimension is how employees view competition. In a highly individualistic country like the US, employees are highly competitive as they attach significance to personal achievements over team accomplishments. On the other hand, Chinese employees celebrate team achievements due to their collectivist culture.

China’s long history of collectivism dates back many years, and it is the foundation of the country’s cultural background. Due to the Chinese people’s willingness to sacrifice, the country embraced communism, which has facilitated the redistribution of wealth from the rich to those living in poverty. One of the common philosophies associated with the Chinese culture includes “To worry before the common people worry; to enjoy only after the people can enjoy,” an indication of the sacrifices people are ready to make for the collective welfare of others (Liu & Zhang, 2020).

However, in the US, the primary goal of an individual is personal development geared toward achieving personal freedom. While Chinese employees put more effort into helping the organization achieve its objectives, US employees pursue individual accolades and personal development. For instance, it is normal to see employees pursuing further education, not necessarily to help their organizations attain objectives but in preparation to be promoted in the future.

Uncertainty Avoidance versus Acceptance

The uncertainty avoidance index refers to a team’s tolerance for uncertainty, indicating the degree to which a culture programs its people to be uncomfortable in unstructured situations. The US has a moderate uncertainty avoidance score of 45, while China’s uncertainty avoidance index score is slightly lower than the US at 30 (Liu & Zhang, 2020). To that end, Americans are less tolerant of novel opinions or developments, especially if it is something they are not used to. On the other hand, with a score of 30, it is clear that the Chinese appreciate learning new things even if they are not familiar with such new insights.

The impact of uncertainty avoidance or acceptance in business cannot be overstated. For instance, the online marketplace is characterized by significant uncertainty (Al-Adwan et al., 2022). After making an online transaction, a customer becomes uncertain as to whether the goods will be delivered (Al-Adwan et al., 2022). Other concerns include the quality standards, delivery waiting time, and the possibility of products being tampered with while in transit.

With an uncertainty avoidance of 45, Americans are moderately uncertainty-avoidant, but their Chinese counterparts seem to be accepting of uncertainty. This dimension impacts the models that business organizations adopt as they expand to other countries. Firms operating in China can freely experiment with different business models since customers have shown that they can easily adapt to changing methods. On the other hand, firms operating in the US have to conduct market research to measure customers’ willingness to accept a new way of doing things before introducing new methods.

Long-Term Orientation

The long-term orientation cultural dimension offers insight into the extent to which people are committed to sticking to their past and traditions and how they deal with challenges now and in the future. Based on Hofstede’s insights, different cultures approach the two goals differently based on their cultural orientation. Normative societies, which score low on long-term orientation, value time-honored traditions while viewing changes in society with suspicion.

Eastern countries such as China score highly on the long-term orientation dimension, with China scoring highly at 118. On the other hand, Western countries have low scores when it comes to long-term orientation, with the US scoring a paltry 29. Long-term and short-term cultural orientation dimension offers insights into family relationships and values that are instilled into children at a young age, and transferred into the corporate world once the children become adults.

In a short-term-oriented culture like the US, people crave acknowledgment of their personal achievements. Besides, values are defined as autonomy, freedom, and the pursuit of rights. People tend to set short-term goals so that they can derive gratification once they achieve these goals (Lin, 2024). The desire for short-term goals in short-term-oriented cultures is reflected even in how organizational objectives are set.

In the US and other short-term-oriented cultures, company performance is measured within short time intervals, like quarterly and annually. Another cultural characteristic associated with long-term orientation is the tendency to “keep up with the Joneses,” which refers to the desire to fit into specific groups.

On the other hand, people in long-term-oriented cultures, like China, value family, with a commitment to real affection and care for children. In China, children learn thrift instead of expecting gratification from short-term achievements.  Also, people in long-term-oriented cultures value harmonious relationships and support each other’s desires (Lin, 2024).

Since China is a long-term-oriented society, the values children are taught in their developmental stages emerge once these children grow and begin to work in the corporate world. Also, unlike the US, which values freedom, the Chinese derive pleasure from working and consider leisure work not to be important.

Indulgence

The indulgence cultural dimension measures the extent to which members of a culture seek to control their impulses and desires. The dimension also offers insights into how children from different cultures are socialized. Based on Hofstede’s cultural dimensions model, China has a low score of 24, while the US scores highly at 68 (Chudnovskaya & Millette, 2023). This shows that Americans are more indulgent, while the Chinese approach issues with restraint.

Indulgent societies tend to seek the gratification of desires, having fun, and enjoying life. Besides, members of indulgent cultures are characterized by a sense of entitlement as they feel that they should be treated better than others. On the other hand, members of restrained cultures, such as the Chinese, are more reserved and curbed in the way they behave. Even when such individuals are elated after attaining certain objectives, they are less likely to exhibit positive emotions outwardly.

The extent to which members of a culture are indulgent is relevant in a workplace setting since it influences employees’ expectations of organizational leadership. While American employees may prefer rewards and other employee motivation incentives, Chinese employees may demand less from the organization in terms of incentives and outdoor engagements.

Similarities

Masculinity

Based on Hofstede’s cultural insights, the Chinese and the US are similar when it comes to masculinity. Masculinity refers to the extent to which a culture orients people to be driven by success and competition, with success being defined by the ultimate winner (Wang et al., 2024). This dimension gives an insight into how people perceive social sex roles and how this perception impacts their self-concept.

In highly masculine societies, people consider standing out from a crowd as admirable. Besides, highly masculine societies uphold the winner-takes-all mentality, with those emerging on top of the rest viewed as the most competent and deserving to lead (Wang et al., 2024). Therefore, masculinity shows performance in society. In highly masculine societies, men perform better than women.

On the other hand, feminine societies value quality of life as the standard for success. Instead of people pursuing material wealth first, as is the case in masculine cultures, the feminine culture orients people to pursue comfort first (Wang et al., 2024). In an organizational setting, managers negotiate with their employees and tend to care for the weak, an indication of welfare, harmony, and advocacy for the most vulnerable people. To that end, one can differentiate a masculine culture from a feminine culture by considering people’s motivation to be the best and the social sex roles present.

With China and the US being highly masculine, specific behaviors and cultural norms are present in both cultures. For instance, men dominate relationships in the workplace. In a team made up of both women and men, the latter have the upper hand in making key decisions in the group. Also, high masculine orientation influences managers to value the pursuit of organizational profits over employee welfare.

In other words, there is a likelihood that organizations from highly masculine societies will have a poorer employee welfare record than those from a feminine culture. However, other factors, such as legal guidelines that exist to ensure employee rights are upheld, may force organizations to change how they approach employee welfare.

Research Question 2: What Are the Implications for USA Businesses that Wish to Conduct Business in China

Innovation Management Challenges

China’s cultural orientation impacts foreign businesses that operate in China. One area that companies seeking to expand to China should pay attention to is the limited innovation opportunities in China. As firms expand to other countries, they establish partnerships with local firms to innovate, hoping to retain intellectual property rights once innovations are made. In countries with a collectivist cultural orientation like China, intellectual property rights are not protected because the government wants to encourage innovative efforts by citizens and firms (Froese et al., 2019).

By implementing intellectual property rights protection, the government may limit innovation capabilities to a few individuals or firms, potentially negatively affecting wealth and knowledge distribution throughout the economy, an attribute that discourages economic growth. Therefore, American companies seeking to conduct business in China should avoid sharing their core innovation with their Chinese counterparts because this will compromise sensitive information.

Influence on Customer Decision-Making

Companies seeking to tap into the broad Chinese customer base must consider how Hofstede’s cultural dimensions affect customer behavior. One of the most influential cultural dimensions that affects customer behavior is customer orientation. With a score of 80 in Hofstede’s cultural dimensions model, the Chinese people exhibit characteristics associated with long-term orientation. A notable behavior associated with long-term culturally oriented customers is a preference for craftsmanship (Ho, 2021).

Once the Chinese identify with a brand based on its craftsmanship, they will stick with the brand in the long term. This behavioral pattern is particularly relevant to US fashion companies moving into China. Besides, this orientation implies that the Chinese do not easily shift loyalty from one firm to another (Ho, 2021). Therefore, if a company is moving to compete with a company that has already established its brand name, there is a need to reconsider the decision because it will be difficult to edge out such a company from the market.

Besides, the indulgence dimension also influences customer behavior. The US is a highly indulgent society, which means that Americans define luxury brands as being exclusive and prestigious (Taylor & Zhou, 2019). American firms dedicate time and resources to come up with exclusive products, knowing that their American consumers will positively receive these products once they enter the market. On the other hand, the Chinese are restrained, with a limited preference for luxury products.

The Chinese view spending on luxury products as being conspicuous and extravagant (Taylor & Zhou, 2019). While there are Chinese consumers who may still purchase luxury brands, American firms expanding to China may find it difficult to attain mass sales. For instance, although Apple’s primary production operations occur in China, most Chinese go for Huawei brands because of their modest cost.

Impact on Business Negotiation

The power distance index, one of Hofstede’s cultural dimensions, affects how business negotiations occur. Since China scores highly in terms of the power performance index, it implies that they accept power inequality. Besides, with high power distance, the Chinese respect individuals who hold authoritative positions.

A leader of an American organization that has established a business in China should not expect followers to question them or offer unsolicited perspectives on different organizational matters (Gonzalez, 2021). Since Chinese employees consider providing direct feedback as disrespectful, it is crucial for American organizational leaders to actively seek out insights from followers by reassuring them that their viewpoints matter.

Another application of the power distance index that affects foreign entities operating in China is business negotiations. Members of low power distance cultures like the US press for quick decisions while negotiating and may grow impatient if decisions are delayed (Gonzalez, 2021). This is attributed to low power distance, which means negotiators are free to make decisions without necessarily consulting organizational leaders. Besides, the individuality culture means that American negotiators do not desire to consult others to reach collective decisions.

On the other hand, the Chinese who are members of a high-power distance culture prefer a slower decision-making process, partly because they have to seek approval from those in authority before reaching a decision (Gonzalez, 2021). Besides, due to their collectivist cultural orientation, Chinese negotiators vouch for collecting the input of other organizational stakeholders before reaching the ultimate decision. To that end, as American companies expand to China and negotiate for partnerships, they should not rush the negotiations, lest they risk losing the trust of their Chinese counterparts.

Conclusion

In summary, companies expanding to foreign locations must consider Hofstede’s cultural dimensions before making a move. An analysis of Hofstede’s insights for China and the US shows that the two societies are varied in most aspects. Apart from the two countries having a masculine culture, the other five dimensions vary. American firms seeking to expand to China must consider how the Chinese cultural orientation will influence their success.

As identified, Chinese cultural dimensions influence customer behavior. Since the Chinese are restrained, they tend to avoid luxury products; hence, US firms moving to China should consider how this dimension will affect the type of products in which they specialize. Also, the Chinese people’s long-term orientation means that they are loyal to specific brands; thus, influencing them to switch may be difficult. Also, the high-power distance orientation in Chinese society implies that American negotiators must be patient because Chinese negotiators have to consult those in authority before reaching a decision.

References

Al-Adwan, A. S., Alrousan, M. K., Yaseen, H., Alkufahy, A. M., & Alsoud, M. (2022). Boosting online purchase intention in high-uncertainty-avoidance societies: A signaling theory approach. Journal of Open Innovation: Technology, Market, and Complexity, 8(3), 136. https://doi.org/10.3390/joitmc8030136

Chudnovskaya, E. V., & Millette, D. M. (2023). Understanding intercultural experiences of Chinese graduate students at U.S. universities: Analysis of cross-cultural dimensions. Journal of Intercultural Communication, 23(1), 01–12. https://doi.org/10.36923/jicc.v23i1.81

Froese, F. J., Sutherland, D., Lee, J. Y., Liu, Y., & Pan, Y. (2019). Challenges for foreign companies in China: Implications for research and practice. Asian Business & Management, 18(4), 249–262. https://doi.org/10.1057/s41291-019-00084-0

Gonzalez, N. (2021). The impact of culture on business negotiations. Honors Projects, 839. https://scholarworks.gvsu.edu/cgi/viewcontent.cgi?article=1838&context=honorsprojects

Ho, N.-K. M. (2021). Luxury values perceptions in Chinese and English: Deviation from national cultures. Journal of International Consumer Marketing, 34(3), 1–15. https://doi.org/10.1080/08961530.2021.1950094

Lin, S. (2024). A study on the differences between Chinese and American concepts of face based on cultural dimensions theory—Taking the American film The Farewell as an example. Lecture Notes on Language and Literature, 7(2). https://doi.org/10.23977/langl.2024.070214

Liu, Q., & Zhang, Q. (2020). A study of the differences between Chinese and Western cultures from the perspective of Hofstede’s cultural dimension theory. East African Scholars Journal of Education, Humanities and Literature, 3(4). https://doi.org/10.36349/EASJEHL.2020.v03i04.006

Taylor, C., & Zhou, J. (2019). How does culture affect international business between the United States and China? Journal of Marketing Development and Competitiveness, 13(3). https://doi.org/10.33423/jmdc.v13i3.2243

Wang, G., Mai, J., & Wei, B. (2024). East meets West in “BEEF”: A Hofstede-inspired analysis of Sino-American cultural dimensions. Economic Society and Humanities, 1(8), 61–68. https://doi.org/10.62381/e244809

Zhang, Y., Liu, S., & Jun, J. (2022). A Comparative study on the cultural dimensions and health perception of the COVID-19 pandemic between China and the United States. Healthcare, 10(6), 1081. https://doi.org/10.3390/healthcare10061081

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Hofstede Analysis Comparison between the USA and “…” Assignment Instructions

Overview

The purpose of this research project is for you to write a professional, graduate-level research paper in current APA format. Competency in current APA format is required of all Business graduates of Liberty University, as set forth by the policy of both the graduate faculty and the administration.

Instructions

You will conduct a Hofstede Analysis of the nation you selected for the Business Cultural Dimensions Analysis Assignment and compare that with a Hofstede Analysis of the USA.

After reading your paper, the reader should be able to comprehensively answer the following research questions. Thus, the research questions form the major aspects (APA Level 1 headings) of your outline.

1. From the perspective of a Hofstede Analysis, what are the differences and similarities between <the selected nation> and the USA?
2. What are the implications for USA businesses that wish to conduct business in <the selected nation>?
   

   Hofstede Analysis Comparison Between the USA and China

Important Points to Consider

• Length of assignment: 10 pages minimum
  • 10 pages are approximately 2,500 words of content, which does not include the Title Page, Table of Contents, Abstract, or References. Tables, figures, or columns will not count toward the 10 full pages [2500 words] minimum – only written content will earn credit.
• Format of assignment: APA Format
• Number of references: Minimum 10 peer-reviewed articles (under 5 years old) from Jerry Falwell Library | Liberty University and reputable professional and/or scholarly journals and/or business/trade journals. References must have a Digital Object Identifier (DOI) number. Additional references can be from informational venues that deal with the content of the course. Do not get references from blogs, Wikipedia, newspapers, etc.
• Use the following as the exact title of your paper:
  • “Hofstede Analysis Comparison between the USA and <insert nation name>.”
• The paper must consist of only 2 sections, as indicated above. Do not add sections or revise the research questions. You must integrate a minimum of one biblical principle in each section.
• Make sure to introduce your paper and conclude your paper using current APA style.
• Three levels of current APA headings must be used throughout the paper, as this is a graduate-level research paper.
• The paper must be submitted as a Microsoft Word Document.

Some students do not fully understand the difference between plagiarism and paraphrasing. Paraphrasing is when you take a source or someone else’s idea and say it in your own words. When you paraphrase, you must still give the author’s name, date, the title of the source, the scholarly journal from where it came, and the exact website address or book from where it came. However, when you directly quote a source, it must have quotation marks around the quote, or (if 40 words or more) it must be set in block-quotation format. Give detailed information about where you acquired the quote.

For the purpose of this paper, adhere to the following rules when quoting or using a source:

• Do not directly quote more than 120 words from any 1 source.
• If the source is 2,000 words or less, do not directly quote more than 50 words from it.
• Do not use the same source more than a total of 3 times within the whole document for quoting or paraphrasing.
• Quotes must contain the section (if provided) and paragraph or page numbers of the quote, and this information must be included in the reference.
• In all instances, use current APA guidelines for citations and references.

Note: Your assignment will be checked for originality via the Turnitin plagiarism tool.

• Complete the assignment per the attached instructions.
• The country used for the Business Cultural Dimensions Analysis Assignment was China (60046 attached as well).
• -Use the following textbook for reference:
  • Liberty University Custom: Satterlee, B. (2023). International business with biblical worldview (2nd ed.). McGraw-Hill.
• -The 10 sources must be peer-reviewed scholarly journal articles (under 5 years old)