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Monday, April 16, 2012

Cultural Distance Calculator

Today, I want to present work from Geert Hofstede, one of most influential persons in the research of national and organisational culture.
He came up with the idea to describe typical characteristics of cultures by only a few "cultural dimensions".
The Hofstede's cultural dimensions are described here, I will just quote very short descriptions of the dimensions (quotes from Hofstede's website).

1. Power distance index (PDI):
  • This dimension expresses the degree to which the less powerful members of a society accept and expect that power is distributed unequally.
2. Individualism versus collectivism (IDV)
  •  The high side of this dimension, called Individualism, can be defined as a preference for a loosely-knit social framework in which individuals are expected to take care of themselves and their immediate families only. Its opposite, Collectivism, represents a preference for a tightly-knit framework in society in which individuals can expect their relatives or members of a particular in-group to look after them in exchange for unquestioning loyalty.
 3. Masculinity versus femininity (MAS)
  • The masculinity side of this dimension represents a preference in society for achievement, heroism, assertiveness and material reward for success. Society at large is more competitive. Its opposite, femininity, stands for a preference for cooperation, modesty, caring for the weak and quality of life. Society at large is more consensus-oriented.
4. Uncertainty avoidance (UAI)
  • The uncertainty avoidance dimension expresses the degree to which the members of a society feel uncomfortable with uncertainty and ambiguity. The fundamental issue here is how a society deals with the fact that the future can never be known: should we try to control the future or just let it happen? Countries exhibiting strong UAI maintain rigid codes of belief and behaviour and are intolerant of unorthodox behaviour and ideas. Weak UAI societies maintain a more relaxed attitude in which practice counts more than principles.
 5. Long-term versus short-term orientation (LTO)
  • The long-term orientation dimension can be interpreted as dealing with society’s search for virtue. Societies with a short-term orientation generally have a strong concern with establishing the absolute Truth. They are normative in their thinking.
6. Indulgence versus Restraint (IVR)
  • Indulgence stands for a society that allows relatively free gratification of basic and natural human drives related to enjoying life and having fun.  Restraint stands for a society that suppresses gratification of needs and regulates it by means of strict social norms.

Fortunately, Hofstede provided values for the first 4 dimensions of 98 countries (in some cases he provided 5 dimensions) on his website.

Similar to genetic distance calculations based on genetic components, I calculated the distance of different societies based on the first 4 dimensions. You can download it here. The spreadsheet can be found here.

Update of this post can be found here.

27 comments:

  1. Thanks for the excel sheet on cultural distance. if you have any similar excel sheet to calulate economic distance based on GDP per capita for different years then plese mail it to jayantrk2004@gmail.com or jayantrk2004@rediffmail.com

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  2. For the cultural distance calculator I used four pieces of information (4 dimensions). The more dimensions the more accurate the result.

    "GDP per capita" is just one dimension. How about these dimensions:
    1. Dimension GDP per capita
    2. Unemployment rate
    3. Inflation rate
    4. Budget surplus
    5. Export/Import
    6. Median age of population

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  3. Hello,

    Good afternoon. I am having some problems in calculating cultural distance with the kogut and singh´s formula because of the variance concept. I am not a mathematic.

    Do you have any spreadsheet to calculate cultural distance?

    Keen regards,

    Nuno Pinto
    nunoarpinto@gmail.com

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  5. Hi,

    thank you so much for this very useful excel! LOVE IT. Is there not an issue in the excel formula for cultural distance? Why do you not divide the index difference by the variance of the dimension?

    What I did. I added the variance for each dimension in the cells I1, J1, K1 and L1 respectively, then use the following formula.

    =(($B$1-B3)^2/$I$1+($C$1-C3)^2/$J$1+($D$1-D3)^2/$K$1+($E$1-E3)^2/$L$1)/4

    To cross check if you got it right, according to the paper "Tourists’ intention to visit a country: The impact of cultural distance" in the Tourism Management Journal, you should get the cultural distance between US and Norway as 0.02. If you get that value, you did it correctly

    thanks

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    1. Dear Prof. Marc Fetscherin,
      could you provide your excel sheet? I am currently writing my master thesis about the culture shock and I need to compare the cultural distance between Germany and other countries. I want to consider the variance but am obviously to stupid to find out how to calculate the variance.. If you do not want to provide your excel sheet, an explanation (or even better: sample calculation) would be fine with me as well! You would really made my day!
      Thanks in advance, your desperated thesis writer, Jen

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    3. Prof. Marc Fetscherin could you please tell me how you calculated the variance.

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    4. Not sure if it still helps you, but you can calculate the variance with excel and its =var function.

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    5. Not sure if it still helps you, but you can calculate the variance with excel and its =var function.

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  6. " Why do you not divide the index difference by the variance of the dimension?"
    I tried to treat all dimensions as equally important. Using the variance of the each dimension is basically "weighting" the importance of each dimension. Dimensions with lower variance would be weighted as more important. The dimension "Masculinity versus femininity" (MAS) has the lowest variance, so, the cultural distance would be mostly determined by the MAS dimension.

    I would say that the culture distance between two countries is more determined by the dimension "Individualism versus collectivism" (IDV).

    "To cross check if you got it right, according to the paper "Tourists’ intention to visit a country: The impact of cultural distance" in the Tourism Management Journal, you should get the cultural distance between US and Norway as 0.02. If you get that value, you did it correctly"

    Thanks, I checked the paper. Using the provided formula I am getting a cultural distance between US and Australia (not Norway) of 0.024. The distance between Japan and Sweden is 9.028.

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  7. Are the values 31, 69, 8, and 50 the variances?

    Where did these come from? Is there a source I can cite?

    Thanks!

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  8. The data are from Hofstede's cultural dimensions. You see the values of Norway here:
    http://geert-hofstede.com/norway.html
    I only focused only on the first 4 dimensions because for most countries only 4 dimensions were determined.

    There is also a summary for Norway.

    Power distance
    This dimension deals with the fact that all individuals in societies are not equal – it expresses the attitude of the culture towards these inequalities amongst us.
    Power distance is defined as the extent to which the less powerful members of institutions and organisations within a country expect and accept that power is distributed unequally.

    Norway scores low on this dimension (31) which means that the following characterises the Norwegians style: Being independent, hierarchy for convenience only, equal rights, superiors accessible, coaching leader, management facilitates and empowers. Power is decentralized and managers count on the experience of their team members. Employees expect to be consulted. Control is disliked and attitude towards managers are informal and on first name basis. Communication is direct, participative and consensus orientated.

    Individualism
    The fundamental issue addressed by this dimension is the degree of interdependence a society maintains among its members. It has to do with whether people´s self-image is defined in terms of “I” or “We”.
    In Individualist societies people are supposed to look after themselves and their direct family only. In Collectivist societies people belong to ‘in groups’ that take care of them in exchange for loyalty.

    Norway with a score of 69 is considered an individualistic society. This means that the “Self” is important and individual, personal opinions are valued and expressed. Communication is explicit. At the same time the right to privacy is important and respected. There are clear lines between work and private life. Job mobility is higher and one thinks in terms of individual careers. The employer-employee relationship is based on a contract and leaders focus on management of individuals. Feedback is direct and nepotism is not encouraged.

    Masculinity / Femininity
    A high score (masculine) on this dimension indicates that the society will be driven by competition, achievement and success, with success being defined by the winner / best in field – a value system that starts in school and continues throughout organisational behaviour.
    A low score (feminine) on the dimension means that the dominant values in society are caring for others and quality of life. A feminine society is one where quality of life is the sign of success and standing out from the crowd is not admirable. The fundamental issue here is what motivates people, wanting to be the best (masculine) or liking what you do (feminine).

    Norway scores 8 and is thus the second most feminine society (after the Swedes). This means that the softer aspects of culture are valued and encouraged such as leveling with others, consensus, “independent” cooperation and sympathy for the underdog. Taking care of the environment is important. Trying to be better than others is neither socially nor materially rewarded. Societal solidarity in life is important; work to live and DO your best. Incentives such as free time and flexibility are favoured. Interaction through dialog and “growing insight” is valued and self development along these terms encouraged. Focus is on well-being, status is not shown. An effective manager is a supportive one, and decision making is achieved through involvement.

    ...

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  9. Hi,

    I need to find out the cultural distance between china and japan, and between china and the usa. I have pasted the scores for china at the to. so does it mean that the distance is 77,7 china-japan and 83,1 china-US?
    And would that mean that they are actually both quite distant from china?
    Many thanks for your help!

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  10. Hi,

    I'm struggling immensely to calculate the cultural difference between the UK and Poland, the UK and Slovenia and the UK and Czech Republic. A working example for one of these to show exactly what needs to be would be amazing, so then I can complete the others. Any help/guidance/advice would be extremely beneficial and much appreciated, as I am seriously stumped by this!

    Many thanks - please can someone help and reply to andrew-clymer@hotmail.co.uk

    Andrew Clymer (a useless mathematician)

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  11. Hi all,
    I tried to find out about how to calculate this correctly far too long now. I'm really happy, that I obviously found some experts here!
    So if I want to use the Kogut and Singh index correctly, I have to use the variances of the score of each dimension. My question is: where/how can I get the variance? Is there a formula for it? I need it for my master thesis and I desperately need help! I would really appreciate it, if somebody could help me!!!
    Thanks in advance,
    Jen

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    Replies
    1. Hi, Please help me . i have no idea how to get V. Is "V" the variance of all dimensions of one item?

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    2. Hi, i'm in the same situation. I have to calculate the kogut singh index for my master thesis as well but i'm not able to calculate the variance. What are the values that i need to take into account?please help me!thanks

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  12. varianz:
    you have to look at each criteria one at a time
    find out the average of the criteria.
    subtract the average from each value of each country and square it (^2)
    form the sum
    divide it by the number of countries included
    - this is the Varianz
    do so for the remaining criterias 2-5 (5 if taking LTO into account)
    add those sums together
    divide by the number of criterias you took into account (4 or 5 probably)
    - this is the cultural distance index
    keep in mind its just an index. higher is not better or worse

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  13. Hope this helps everyone!

    https://docs.google.com/file/d/0BwVZU9mN1R6lY3NCdVQtZjJER1E/edit

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  14. Pls educate me how to interpret dimensional values?

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  16. Dear Prof. Marc Fetscherin,
    I am a Phd candidate and I need to calculate cultural distance between home and host countries of expat. I would really appreciate if you could provide me your excel sheet? Many thanks.

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  17. Hi,

    it`s nice to meet some experts in cultural distances, since I`m writing my master thesis with a related topic.
    I was wondering: where did you get the data of the Hofstede Dimensions, because they are different to the data of Hofstede's calculation? For example Angola supposed to be 83/18/20/60 and not 80/25/45/70. I was also wondering where you got data for "arab world" and "east- " and "west africa", especially because there are more then one culture in these groups. Is there another (secondary) source for the dimension data?
    It would also reccomend “An improvement to Kogut and Singh measure of cultural distance considering the relationship among different dimensions of culture” by Yener Kandogan, 2012. It tries to solve the intercorrelation problem of the Kolgut and Singh Index.

    please answer on andre.rinke@gmx.de

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  18. Dear Prof. Marc Fetscherin,
    I am a master student and I need to calculate institutional distance between remaining countries and the countries MNEs expect to entry. I would really appreciate if you could provide me your excel sheet which include the design of the calculator for cultural distance? I am not a mathmatic and I desperately need help. Many thanks. duxuanangela0926@gmail.com

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  19. Dear Prof.

    I need to calculate Cultural (and Institutional) Distance between countries. However I am struggling with calculating the variance. Could you provide me an example?? I desperately need help with this!

    busrabiyik1990@gmail.com

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  20. Dear prof.
    i need to calculate cultural distance . the earlier formula was having only four factors so whether after addition of two more factors, formula for cultural distance has changed?? also the score of first four is readily available but how & from where i can get score for the other two factors i.e long term orientation and indulgence. please do reply!

    anivesh100@gmail.com

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