Hofstede's Framework

  

A theory developed to rate a country’s culture.

It’s useful for companies looking to expand globally, as it gives somewhat of a peep into what to expect. Of course, the general advice is to expect the unexpected. There are five parts to the framework:

Power Distance: How well people deal with the disparity of wealth and power. There are hierarchies. Some cultures aren’t thrilled with big gaps; others deal with gaps so big we should just call them a disparity abyss.

Individualism vs. Collectivism: On one end of the scale, people are free to be themselves. On the other end, everyone is the Borg. Usually, cultures fall somewhere in the continuum.

Masculinity vs. Femininity: The name is a little misleading. It’s how much a culture recognizes equalities between men and women…socially, at work, and legally.

Uncertainty Avoidance: A culture that doesn’t like uncertainty will stack up pages and pages of laws and regulations to try to control it. If a culture doesn’t care all that much, they basically say, “Hey, whatever, we’ll figure it out.”

Long-term vs. Short-term Orientation: Whether or not there is cultural ADHD. Long-term cultures are future-oriented; short-term cultures are “right here, right now, forget everything else.” Countries with short-term cultures tend to rack up debt to solve immediate problems and kick the can of paying it back as far down the road as possible.

Find other enlightening terms in Shmoop Finance Genius Bar(f)