Use specific and real examples of differences between countries to evaluate the usefulness and limitations of a model of cultural differences.

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1.0 Introduction

This report aims to investigate the cultural differences between Indonesia and Australia using the Hofstede's Model of Cultural Differences. It will consider the usefulness of the model and look into other theories and thoughts of others.

2.0 Hofstede's Model of Cultural Differences

Dr. Geert Hofstede researched on how values in the workplace are influenced by culture. During his period of working at IBM he gathered and studied data from 100,000 individuals that he collected from forty countries. The results from his findings helped him develop a model of cultural differences with four main dimensions: Power Distance Index (PDI), Individualism (IDV) Vs. Collectivism, Masculinity (MAS) Vs. Femininity and Uncertainty Avoidance (UA). Later he added a fifth dimension called Long-term Outlook. Hofstede scored national cultures on each of these dimensions.


The PDI dimension deals with how inequality and hierarchy are accepted in the culture. It deals with the fact that individuals are unequal to others in physical and intellectuals ways.

Countries with high PDI let inequalities grow, and signs of status and wealth are highly evident. There is a gap between subordinates and superiors since each consider the other as unequal. The subordinates tend not to initiate contact with superiors and often wait to be given instructions.

Countries with low PDI tend to play down on inequalities and subordinates and superiors view each other as equal. There is a higher rate of interaction and communication, with subordinates frequently expressing their ideas to superiors.

The PDI plays a big part in organisational behaviour. High PDI organisations will tend to be more centralised with superiors making all the decisions with no input from subordinates. Low PDI organisations will be more decentralised with information being shared, subordinates want to show their capabilities to superiors by using their initiative.

Comparison between Australia and Indonesia

Indonesia's PDI is high: Rank, power and status is very important, the workplace is formal, professional decorum is necessary in meetings and when addressing elderly and those superior. When addressing someone, they must use the person's full name and title.

Australia's PDI is low: Australians are friendly and open; opinion is respected and is candidly used for friendly discussion. Men wear casual trousers for meetings. One's status, position and title does not impress others.


IDV focuses on the relationship of a person's concern for belonging into a group. Attributes of those with high individualism indicate a high dependence for personal space, large and loose relationships. Countries with a high collectivism (low individualism) have closer ties between individuals; everyone looks out for those in their group. An organisation with a high collectivism rate has a culture with the desire for training, clean, comfortable and safe work place.

Comparison between Australia and Indonesia

Indonesia's IDV is low whereas Australia's IDV is high. Noesjirwan (1997, 1998) researched the difference between Australia and Indonesia; it supports Hofstede's findings on IDV. He found that people behaved differently with strangers, for example, people in Indonesia would talk to others while waiting for the bus or in a waiting room whereas Australians would not. Also colleagues in Indonesia would eat together at lunch whereas the Australians would eat separately.


Masculine values are those concerned with work, achievement and power. A masculine culture would create a high degree of gender discrimination, with male dominance and greater conflict. A more feminine culture would indicate a low level of gender discrimination and males and females are treated equally.

Comparison between Australia and Indonesia

Indonesia's MAS is medium whereas Australia's MAS is high medium. Indonesians dislike personal confrontation with their superiors, they would rather quit their job than to address a problem; this shows more masculinity than femininity and also reinforces the PDI dimension of Indonesia. Australians tend to be more direct and straightforward and place more significance on who took action than to what happened.


UA is concerned with how cultures accept ambiguous situations and the level of tolerance for uncertainty. A high UA ranking implies that the country has a low tolerance for uncertainty and ambiguity, these places an emphasis on rules and regulations that sets to control the level of uncertainty. A lower UA ranking implies that the country has a greater readiness to take more and greater risks with less emotional resistance to change.

Comparison between Australia and Indonesia

Indonesia and Australia both have similar scores for UA.

3.0 Cross Cultural Difference between Australia and Indonesia

Looking a Hofstede's model, there is a clear difference between the two cultures; they contrast in three out of the four dimensions. A study carried out by the Australian Studies Centre of the University of Indonesia in 2001 ( discovered obstacles that Australians faced when operating in the Indonesian business environment, they found that all Australian managers have a totally different outlook to the working environment, communication and relationships with colleagues compared to Indonesian managers. The chief findings from the research concluded that there is a consciousness difference between Western and Eastern values.

4.0 The Usefulness of Hofstede's Model

Culture is such a complex subject, so how can it all be summarised by a few scores which determines what a countries culture is like? Hofstede's model seems to discriminate and put countries into classes and stereotype individuals, since not all individuals are the same. So, when looking at culture, things to consider are that even though we are all human beings everyone is different and will act differently to different situations. Culture describes the way society operates and is not based on an individual, although the more people in the same culture strengthens the attributes of that culture.

Hofstede conducted his research between 1968 and 1972, so does his model and scores still relate to this generation and is it still up to date? At the time of his research at IBM he based it on a data bank which monitored motivation; he later had access to 40 other data banks which confirmed his findings. Hofstede's thoughts and concepts were not new, it had been discussed by previous academics; he just developed the concept further. The question of whether his research is outdated lies on the repeated research in the 1980's though the use of the Chinese mind frame; it validated his dimensions and later resulted in the development of his fifth dimension, the Long-term Outlook. Additionally other models such as Trompenaars and Schwartz indicated a high level of parallelism with Hofstede's model, these parallels would not have been found if Hofstede's scores were outdated. Hofstede's model has been validated against more data banks than other models; this makes it more reliable due to its strength.

Some might wonder whether it is necessary to look into the national culture as opposed to just the corporate culture of a company since that in international business management corporations are only interested in dealing with national organisations. Hofstede argues of two concepts: National culture is the collective programming of the human mind by which one nation distinguishes itself from another nation. Organisational culture is the way people in an organisation relate to each other, the way they relate to their work and the way they relate to the outside world (ITIM). There are different dimensions in Hofstede's model because there are distinct concepts for culture. A nation is more diverse than a company and a national culture in some aspects reflects the way an organisational culture is built on due to what the people in the organisation grew up to believe in by national influences.

5.0 Trompenaars's Model

Similar to Hofstede, Trompenaars also identified a set of dimensions of culture. Based on Trompenaars findings, culture differed on universalism Vs. particularism, neutral Vs. affective and achievement Vs. ascription.


Universalism is the way people see ideas and practices can be effective for all situations. High universalism indicates that a set of rules and standards can be applied to mostly everyone in every situation, the use contracts and procedures are used to suggest what they expect. Low universalism indicates that expectation is deduced through knowing the person and their relationship. Australia has a high universalism whereas Indonesia has a low universalism.


Affective cultures are those who openly express their feelings and emotions to others, these people are more likely to smile, greet each other kindly. Neutral cultures are those who hide their feelings and do not express it naturally, these people still have the same emotions as those in an affective culture but they express them more subtlety. Australia is a highly affective culture whereas Indonesia is more neutral.


In a high achievement culture, status is attained through personal achievements. In a high ascription culture status is attained through age, wealth, class and social connections. Australia has a high achievement culture whereas Indonesia has a high ascription culture

6.0 Conclusion

Hofstede's model proves to be of usefulness and in relation to Trompenaars's model there are strong similarities. They both infer that Australia and Indonesia are highly dissimilar, both score opposite on the dimensions, with the exception of UA in Hofstede's model.

Its gives knowledge to organisations that they must identify the countries culture before they aim to operate in it, or they will be taken aback by the cultural differences and possibly fail in that country. An organisation must not purely base the compatibility with itself and another country if they share the same score on Hofstede's model, they must also consider external factors such as political, like government differences, laws and conflicts between countries; economical, whether it is financial beneficial to operate in that country; social, this is the population of the country, the number of market size; and last but not least the technological side, whether the country has the technology in which the organisation needs to operate.

7.0 Reference

Text Books

Daniels, Radebaugh & Sullivan (2003) International Business Environments and Operations, 10th edition, New Jersey, Prentice Hall Pearson Education Limited.

Gooderham & Nordhaug (2003) International Management, Blackwell, Oxford

Case Studies

William H. Murphy (1999), 'Hofstede's National Culture as a Guide for Sales Practices Across Countries: The Case of a MNC's Sales Practices in Australia and New Zealand', Australian Journal of Management, 24(1) p37-58

Fletcher, Olekalns, 'Cultural Differences in Conflict Resolution: Individualism and Collectivism in the Asia Pacific Region', The University of Melbourne, Department of Management

Burrows (1999), 'Cultural differences - Dimensions to aid understanding', News from the Indonesia-Australia Business Council [Accessed: 05/11/2003]


'National Cultures', ITIM: Consultants in Business and International Management [Accessed: 05/11/2003]

'Frequently asked Questions', ITIM: Consultants in Business and International Management [Accessed: 05/11/2003]

'Geert Hofstede Analysis' [Accessed: 05/11/2003]

'Impact of Hofstede's Cultural Dimensions on Management Issues' [Accessed: 05/11/2003]

'Culture - Power Distance' [Accessed: 05/11/2003]

'Appreciating Culture Diversity' [Accessed: 05/11/2003]

'Indonesia' [Accessed: 05/11/2003]

'Australia' [Accessed: 03/11/2003]

'Exploring Cross Cultural Management in the Indonesian- Australian Business Context' [Accessed: 05/11/2003]