Overview

For the anonymous case model, a council member at a big bank that also operates worldwide was interviewed. The ethnicity and the culture he grew up in is the Netherlands. This source was used to find the cultural differences that arise from the bank and how these cultural differences are managed when dealing with cultural diversity.

During the interview, we asked the interviewee questions when it comes to cultural differences inside of the bank, prohibitive/inhibitive issues, and regarding the Hofstede dimensions. Some of these questions include: What could be perceived as either prohibitive or inhibitive issues that the organization addresses and How is the masculinity vs. femininity rate at the organization? The answers will be analyzed in this case and we will go over the Hofstede dimensions of the Netherlands and the bank, and continue on to the outcome, and possible solutions.

Hofstede Dimensions

Geert Hofstede created the theoretical framework known as Hofstede’s cultural dimensions theory. The Power Distance Index, Individualism vs. Collectivism, Masculinity vs. Femininity, Uncertainty Avoidance Index and Long Term vs. Short Term Orientation dimensions are the model’s five main aspects. Based on Hofstede’s research on the attitudes and conduct of IBM employees between 1967 and 1973, the initial model was developed (Dewiyanti, 2021). The model, therefore, illustrates how a society’s culture affects its citizens’ values and how these values connect to behavior.

Power Distance Index

Hofstede’s power distance dimension deals with the fact that all individuals are not equal, both in society and in companies. The precise definition of power distance reads “the extent to which the less powerful members of institutions and organizations within a country expect and accept that power is distributed unequally” (Hofstede-insights, n.d.). This may translate into leaders having a lot more authority than the typical person in a social situation. This corresponds to a hierarchical, centralized structure within a firm that places the power of decision-making in the hands of a select few people. Rarely is this authority shared with or assigned to subordinate personnel.

The Netherlands has a rather low rating on this dimension (38 out of 100) as a nation. This indicates that favoring equality for everyone is the goal. Low power distance is primarily characterized by independence, accessibility of leaders, coaching, and hierarchy established for personal convenience. High levels of monitoring and control are despised, whereas direct, honest, and participatory communication is preferred. The power distance varies depending on the firm branch and industry at the company we interviewed. When it comes to the council of the bank, collaboration is encouraged, and the individual and their supervisor have a tight, unhurried connection. This clearly explains the link between the bank and the power distance in the Netherlands.

Individualism Vs. Collectivism

Individualism is the practice of being self-sufficient and independent; it holds that rather than teamwork and shared responsibility, each person’s freedom of thought and action is the most significant aspect of a community (Hofstede-insights, n.d.). On the other hand, collectivism is the practice or concept of prioritizing a group over each member within it. If an individual builds their self-image on “I” or “We,” then this dimension concerns “the level of dependence a society maintains among its members” (Hofstede-insights, n.d.).

The Netherlands has a very high score of 80 on this dimension, making it a nation that values individualism over all else. This results in a stretchy social structure where the individual is given priority and is solely required to look out for themselves and their close family members. In the business environment, this indicates that the person is urged to realize their full potential and try to advance themselves. The basis of the relationship between the employer and the employee is likewise one of prosperity and mutual benefit.

While reflecting upon his experience at the bank, the interviewee surprisingly reports a high level of collaboration, collectivism, and collectivistic behaviors being exhibited which is understandable since a council usually promotes teamwork. The council members commonly “work together” to accomplish shared objectives. With specific areas and duties that allow for individual work, there are also possibilities to be individualistic. Even if this does not totally support the characteristics that a business operating in The Netherlands ought to have, this may be explained by the corporation’s nature. the bank may feel the need to promote collectivism as a business in a cutthroat industry in order to foster innovation and sustainability and provide it with a competitive edge. It’s also possible that specialists or higher-ups who are thought to be better competent at working alone and making important judgments without guidance or assistance from others are given more responsibility for making tasks and decisions.

Uncertainty Avoidance Index

Uncertainty avoidance represents the way that society deals with the fact that the future is unknown according to Hofstede-insights. In a business setting, this can contribute to the amount of risk taken or being deemed acceptable. With The Netherlands having a score of 53, there is a slight preference for avoiding uncertainty. This corresponds to what the interviewee has reported.

With that being said, looking at this specific dimension, there is a clear level of bidirectional ambiguity involved which the interviewee also mentioned; it is unclear whether the low risk is due to the cultural dimensions, or due to the nature of the industry itself. The banking and finance industry is generally strictly regulated and has a number of measures in place to calculate and assess risk. The structure of a banking company itself is very centralized – decision-making power, which includes planning and risk management, typically lies within a few chosen individuals, which minimizes the amount of risk that each individual employee can take.

Furthermore, the external environment plays a substantial role within this specific dimension; following the events of 2008, where banks took on a significant amount of risk with subprime mortgages, people who are employed at banks may be naturally resistant or weary of risk. This may thus cause the uncertainty avoidance index to be even higher within the banking industry, especially at the lower levels of management, among inexperienced or entry-level employees.

Masculinity Vs. Femininity

In the following Hofstede dimension, masculinity is the trait that emphasizes ambition, acquisition of wealth, and differentiated gender roles. Femininity is a dimension that prioritizes caring and nurturing behaviors, equality, environmental awareness, and gender-fluid roles. The Netherlands scores very low on masculinity (14/100), which makes it a Feminine society. In the work environment, high masculinity usually translates into a larger gender wage gap, fewer women in management, and a preference for higher pay and rewards. Low masculinity, or femininity, results in the opposite effects.

The bank has a quite diverse workforce, particularly with regard to gender representation on its council. The bank also actively promotes gender equality and has implemented policies to ensure that women are well-represented at all levels of the organization. Overall, the dimension at the bank corresponds with the level in the Netherlands. This is verified through the interview where the employee mentioned a myriad of characteristics associated with a feminine society: long-term vision, specifically concerning the environment and sustainability, equal wages, and equal rights and treatment of the genders.

Long-Term Orientation Vs. Short-Term Orientation

Long-term orientation is defined within this dimension as “the cultivation of virtues directed towards future benefits, particularly persistence and thrift” (Hofstede-insights, n.d.). In other words, societies that are long-term oriented place a strong focus on the future, especially on perseverance. Contrarily, short-term orientation places a strong premium on immediate results.

Within the business environment, this translates into the importance of relationships and market positioning, and the bottom line respectively. The Netherlands is categorized as a culture focused on the long term. This means that it has a pragmatic nature and individuals are likely to easily adapt to traditions and show a strong propensity to save and invest. During the interview, it has been revealed that, due to the sheer size of the company, there are multiple operations and projects occurring simultaneously. There are “a lot of short-term projects” at the bank however, in general, due to the nature of the banking industry, most operations are focused on the long term. Currently, there are also projects in place related to the environment and sustainability which falls under long-term orientation.

Outcome

The company implements a comprehensive diversity policy that encompasses both the composition of teams and the cultivation of an inclusive corporate culture. Specifically, the bank strives to achieve diversity among its employees regarding factors such as gender, cultural background, and age, alt- hough it mostly leans more on Dutch norms and values. Additionally, it creates an environment in which all employees are encouraged to embrace and respect the backgrounds of their colleagues, thereby ensuring that no one is excluded.

According to the interview, the bank is indeed quite diverse, with a mix of different cultures present. However, everyone speaks the same language. This may be an issue for potential new employees, as they will need to be fluent in this language in order to effectively function within the company.

No significant prohibitive or inhibitory factors were reported in the interview, which would make it easy for many other cultures to work with the bank. Additionally, the power distance within the council is relatively low, with the director and secretary having the most power, but the overall power difference is not significant.

The bank also stated that they are working towards achieving a balance between men and women, with some departments having more women than men. This indicates that the company is making progress in terms of the masculinity rate.

Possible solutions

As we were able to observe through the interview carried out and a bit of research, we observed that the bank is a company with a very good culture, since the interviewee tells us that the company pro- motes a lot of equality and respect among employees, in addition to fighting for so many men and women have the same opportunities, which caught our attention.

One of the few problems we found is that most of its council members only speak one language (Dutch) in the Dutch offices, since being a multinational company this could be a communication barrier between employees, council members, and even when closing deals or agreements. The possible solution that we propose is that employees must at least know basic English, which is a language used throughout the world so that the language does not be more of a communication barrier.

Another problem identified is that in the interview it is mentioned that most of their projects are short- term, for which one might believe that they are small projects, something that could be implemented is to create SMART objectives and thus be able to define large long-term projects.

Authors

Jasper Singh (LinkedIn)
Student: International Business, Amsterdam University of Applied Sciences Block 2, Semester 1, 2022

Tim Heus
Student: International Business, Amsterdam University of Applied Sciences Block 2, Semester 1, 2022

Joanna Szadkowska (LinkedIn)
Student: Financial Management, Kozminski University Block 2, Semester 1, 2022

Fransisco Javier Valdez Perez
Student: Marketing Tecnológico de Monterrey Block 2, Semester 1, 2022