Sunday, May 4, 2014

Power distance and social business

It is becoming more widely accepted that culture is fundamental to the creation of a social business. It’s the behavioural glue that binds everything together. Suffice to say, culture is something that has received an awful lot of attention over the years, as the study of humanity has delved into what makes us who we are.

It’s probably not that far of a stretch however to recognize many of the characteristics from the small power distance column in the kind of social businesses we’re aspiring towards. Indeed, Hofstede describes various workplace characteristics in small and large power distance societies.

Geert Hofstede proposed various dimensions along which culture can be analyzed, one of which is the power dimension. He created a Power Dimension Index, along which countries would be placed, from small to large. The index contains various characteristics that typically pertain to cultures at either end of the scale, and I’ll outline some below.

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Hofstede’s Power distance Index measures the extent to which the less powerful members of organizations and institutions (like the family) accept and expect that power is distributed unequally. This represents inequality (more versus less), but defined from below, not from above. It suggests that a society’s level of inequality is endorsed by the followers as much as by the leaders.

For example, Germany has a 35 on the cultural scale of Hofstede’s analysis. Compared to Arab countries where the power distance is very high (80) and Austria where it very low (11), Germany is somewhat in the middle. Germany does not have a large gap between the wealthy and the poor, but have a strong belief in equality for each citizen. Germans have the opportunity to rise in society.

On the other hand, the power distance in the United States scores a 40 on the cultural scale. The United States exhibits a more unequal distribution of wealth compared to German society. As the years go by it seems that the distance between the ‘have’ and ‘have-nots’ grows larger and larger.

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