Researchers have explored value differences between nations to identify national cultural.
G. Hofstede, the Dutch social scientist, through a survey of 116,000 employees of IBM from 72 countries and in 20 languages between 1967 and 1973 has identified four (and later on extended to five) dimensions of national cultural values as follows:
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i. Individualism (A Focus on Self) / Collectivism (A Focus on Welfare of Group or Subordination of Individual Interests to Those of the Group):
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High individualism (normally associated with economically advanced countries) leads to preference to work independently and high collectivism leads to a greater preference to work in a group. In terms of family life, individualism is associated with nuclear families; whereas collectivism is associated with extended family. This dimension is concerned with social orientation.
ii. Power Distance (the degree of inequality):
All societies are unequal but some are more unequal than others are. In a caste ridden society, like that of India (high power distance) there is an inherent belief that some people are born to rule and others to be ruled (power respect). However, in a country like the US (low power distance), difference between individuals are based on the roles. High power distance is related with autocracy and low power distance is associated with democracy (power tolerance). This dimension is concerned with power orientation.
iii. Uncertainty Avoidance (the degree to which people prefer certainty in their lives):
Nations, high on uncertainty avoidance, feel comfortable with novel, surprising and different from usual situations and prefer formal and clear rules and regulations. While those, on low uncertainty avoidance have less anxiety at work, more risk taking, and few rules.
“Strong UA: What is different is dangerous! Weak UA: What is different is curious!”
iv. Masculinity /Faminity (preference for things versus people):
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In a masculine society, the dominant values are “success, money, and things.” On the other hand, faminity emphasizes quality of life values, relationships, caring for others in society. It must be noted that masculinity or faminity as such have little to do with sex roles per se. This dimension is referred to as goal orientation.
v. Time Perspective:
This dimension is rooted in Eastern culture (a subset of Confucian values) rather than Western culture. Hofstede has labelled time perspective as long-term orientation (future oriented, savings, and hard work – Japan, South Korea, Taiwan, etc) versus short-term orientation (past and present oriented, emphasizing respect for tradition and fulfilling social obligation – Pakistan and West Africa). The US and Germany have an intermediate time orientation.
In Table 4.9 ten nations have been shown as to where do they stand on these five dimensions of national culture values. In terms of Hofstede’s cultural values framework, India is a large power distance and medium collectivist culture, masculine and of relatively weak uncertainty avoidance.
Table 4.9: Culture Dimension Scores for 10 Countries:
| Country | Power Distance | Individualism | Masculinity | Uncertainty Avoidance | Long-term Orientation |
| USA | 40 L | 91 H | 62 H | 46 L | 29 L |
| Germany | 35 L | 67 H | 66 H | 65 M | 31 L |
| Japan | 54 M | 46 M | 95 H | 92 H | 80 H |
| France | 68 H | 71 H | 43 M | 86 H | 30 L |
| Netherlands | 38 L | 80 H | 14 L | 53 M | 44 M |
| Hong Kong | 68 H | 25 L | 57 H | 29 L | 96 H |
| Indonesia | 78 H | 14 L | 46 M | 48 L | 25 L |
| West Africa | 77 H | 20 L | 46 M | 54 M | 16 L |
| Russia | 95 H | 50 M | 40 L | 90 H | 10 L |
| China | 80 H | 20 L | 50 M | 60 M | 118 H |
Many researchers conducted thereafter have verified that values of national culture are important influences on consumer behavior and that they are expected to remain of importance, or even become more important with converging income levels. Along with globalisation and modernisation, countries may be converging with respect to income levels, but they are not converging with respect to values of national culture.
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The application of the Hofstede model to international operations is a powerful tool to compare cultures with respect to product usage, needs, and motives and subsequently to adapt marketing activities and advertising approaches to the similarities and difference found On the basis of values, experts have tried to classify the world into seven cultures.
On the basis of these dimensions of culture, it is possible to identify differences in management styles, organisational preferences, and motivation patterns.