Power Distance in a global economy

In an increasingly globalised economy, businesses are operating in an environment no longer bound by borders.

Thus, making international operations and expansion into foreign markets more of a probability than ever before. Add the COVID-19 pandemic in the picture, and international borders have become even less of a hurdle, whilst the global talent pool continues to grow.

There are many implications of this shift into a truly global workforce, the most valuable being increased cultural diversity.

The benefits of a culturally diverse workforce cannot be overstated. Teams from diverse backgrounds bring together a broad range of talents, experience, and skill sets. Diversity fuels creative and inventive solutions.

Intercultural awareness; the ingredient for success in a culturally diverse workplace.

We understand the importance of ‘translation’ for effective communication, and the resulting intrinsic value in removing language barriers.

Translation is just as important in business. Cultural norms, for example are highly underrated, if at all considered. A better understanding and appreciation for cultural norms presents an opportunity to adapt business processes to ensure improved efficiency, productivity and overall job satisfaction.

Hofstede’s 6 Cultural Dimensions

Dutch Social Psychologist, Geert Hofstede, proposed 6 basic dimensions that society needs to come to terms with, in order to truly organise itself.

1. Individualism
2. Power Distance
3. Masculinity
4. Uncertainty Avoidance
5. Long-Term Orientation
6. Indulgence

The dimensions, when measured on a national level, correlated to the results gathered when measured at an organisational level. His research has become invaluable to the world of business, change management, psychology and more.

One important dimension, often overlooked until it is too late (especially in a global market) is “Power Distance”.

The definition of “Power Distance”:

"The extent to which the less powerful members of organisations accept and expect that power is distributed unequally..."

(Hofstede, 2001)

So, where does the problem exist?

The issue develops and does so quickly, when we try to integrate two opposing Power Distance cultures, expecting that there will be no friction.

Using Hofstede’s model, an organisation or a national culture has a single score on each of the dimensions listed above. For example, Australia has a low score for Power Distance - scoring 36. On the other end of the scale is India, scoring 77 (on a scale of 0 – 100).

This difference is not only national. Organisational culture becomes immediately apparent in the following example;

A manager has been brought in from a High-Power Distance culture such as India, expecting that their new team would have more of an appreciation for a top-down hierarchy. The manager counts on an un-questioning obedience and order from their team.

However, the team they are now leading are from a Low-Power Distance culture. Both parties may find the transition challenging due to differences in core values and belief systems.

How do we avoid potential conflict in a culturally diverse workplace?

There is no ‘one-size fits all’ solution, and nor should there be. There are benefits and detractors for both a High-Power Distance, and a Low-Power Distance management style.

Perform a Culture Audit

Rather than simply working towards one or the other (High-Power Distance vs Low-Power Distance), the ideal first step is to perform a simple ‘Culture Audit’. This can help to understand:

1. What type of culture currently exists?
2. What issues or conflicts are there?
3. What type of culture are you trying to create?
4. What resistance might you face?

Use Culture Audit insights to support hiring decisions and promote positive organisational change.

Think about this; as an organisation, how can you make more balanced or appropriate hiring decisions based on the knowledge gained from this culture audit? How can you minimize the conflict it may create to attempt a merging of the two differing styles, while still creating a diverse environment?

No matter the structure within an organisation, there will likely be some form of conflict, especially as our teams are becoming more culturally diverse. When it comes to Power Distance, it is critical to use resources and research to better understand national, societal, and therefore as a reflection, organisational culture.

An organisation armed with these crucial insights has the ability to adjust and evolve to achieve cultural diversity success.

Blog Photo by Fernando @cferdo on Unsplash