When internationally renowned academics or business professionals choose the large lecture hall of the Maastricht University School of Business and Economics (SBE) as their stage for a speech, the room usually is full. In the case of Professor Geert Hofstede, the level of anticipation was so high that students could be seen talking about the event at the library days ahead and seats were gone faster than free waffles on a cold autumn day.
Students, academics and business professionals all gathered on 28 October to hear what the imminent professor had to say in his lecture titled “Business goals for a sustainable world economy: beyond growth, quarterly results, and greed.”
In a short foreword, Prof. Mark F. Peterson, holder of the Geert Hofstede Chair in Cultural Diversity amusedly announced that “obviously I don’t need to introduce Professor Hofstede too much, since apparently many of you know who he is.” Indeed, the majority of the people who attended the lecture that evening came across his work in one way or another.
The Dutch social psychologist Gerard Hendrik Hofstede, Professor emeritus in Organisational Anthropology and International Management at Maastricht University, is best known for the pioneering research of cross-cultural groups and organisations that he conducted with IBM in the early 1970s.
Using a data sample of unprecedented size, Hofstede for the first time measured significant differences between organisational cultures across countries.
By contemplating these findings on a broader scope, Hofstede devised a multidimensional framework to categorise national cultural features. Dubbed the ‘cultural dimensions theory’, this framework identifies cultural differences on four main dimensions: power distance (PDI), individualism (IDV), uncertainty avoidance (UAI) and masculinity (MAS). Later, a fifth and sixth dimension were added: long term orientation (LTO) and indulgence versus restraint (IVR).
By now, Hofstede’s work has been published in books translated into 23 languages across the globe. With over 9,000 citations in peer-reviewed journals, Hofstede is one of Europe’s most cited social scientists.
During my work as a teaching assistant for the first year Business and Economics Bachelor’s course ‘Management of Organisations and Marketing’, I reacquainted myself with Hofstede’s model when discussing cross-national values with students in and outside of the business context. My focus was refreshed on the issue and I realised how fundamental and contemporary his work is.
What drives successful business leaders?
Hofstede started off his lecture by describing a research study he conducted in the 1990s. Young professionals (i.e. MBA graduates) in 17 different countries were asked to rank a list of personal goals for successful business leaders. The top five traits turned out to focus on business and personal achievements such as growth of business while the middle five traits stressed the social role of business (such as honour and reputation) and the bottom five emphasised special interests, such as respect of ethical norms, among others.
Hofstede pointed out that a simple analysis of these mainly business-centered goals of young MBA graduates, who would become the business leaders of the early 21st century, could have predicted the economic turmoil that set off the crisis of 2008. The professor’s voice took a gruff intonation when he admitted that he too had missed the signs. “I didn’t see, and very few people at that time saw, that [their] business goals were an explosive mix which would lead to the financial crash.”
A passion for organisational anthropology
Hofstede continued by stressing that all companies face the same basic problems but that each culture has its own answers, due to the role of national culture on business decision-making.
By transferring insights from his studies to the real world business context, Hofstede managed to effortlessly make the transition to his famous cultural dimensions theory. Taking his time to walk the audience through his model, Hofstede explained particular high/low values of countries, illustrating the red thread of his lecture with philosophical stances: “Risk is to uncertainty what fear is to anxiety. Uncertainty and anxiety are diffuse feelings – anything may happen.”
During the course of his presentation, the professor occasionally had to take some time to collect his thoughts, possibly on account of his progressed age. Yet, he captivated the audience by letting his fire and passion for the topic shine through in the form of anecdotes and jokes. A suitable example was his rigorous opinion towards short and long term business goals which he qualified as being “nonsense”. “Anybody who has ever been responsible for a business knows that results are not made quarterly. (…) [Quarterly figures are] only a way of getting the stock prices up and down,” he stated.
The end of the American era
Before concluding, the emeritus professor shared a look into the future. In his opinion, the new economic power will be shared by various parts of the world, rather than a single super power. Furthermore, future cultural value systems will become a variable in the new order, which will depend on the national value system that we will take as basis for decision making.
When outlining European business goals for the 21st century, Hofstede emphasised a continuing stress on matters such as Corporate Social Responsibility (CSR), sustainability and technical and social innovation. However, he noted, there will be a reduced importance on aspects such as personal wealth, growth, exploiting resources and global arrogance.
“The MBAs (…) should have learned to be servants of society,” Hofstede said, jokingly adding: “This is my one-liner of the day.”
Claiming that the American era is over, the Professor called upon academia to collect their wisdom worldwide. He challenged the audience to take into account the cultural pitfalls of globalisation for businesses in smaller economies (such as the Dutch) and to focus on the long-term perspective. Only by understanding the importance of business goal alignment with present stakeholders such as employees, customers and local society, will the business leaders of the future prevail.
The Q&A session that followed the lecture proved to be as diverse as the audience, touching upon economic and business related issues to European and global policy making. Despite his academic prominence, the professor remained approachable, not only throughout this session but also when he mingled with the audience in the ensuing reception sponsored by the SBE Alumni office.
After a long and interesting evening, one thing was certain: I have seldom seen the lecture hall so loudly applaud a single guest speaker.
Further information on Geert Hofstede can be found at http://geert-hofstede.com/
By Alex Mundt
Alex Mundt is a Master’s student in International Business at SBE, currently working as a teaching assistant in Marketing.
Lecture review: A sustainable economy demands business commitment, by Darina Bacheva
“I don’t give a damn about rankings!”, The Diplomat
The American era is over, Observant
Goals and strategy, Bob Wilkinson blog