application of hofstede

Application of Hofstede’s Principle on Goldman Sachs in U.S.A and China :

Based on Hofestede’s principle, we can differentiate between the work culture of G.S in

countries like China and the work culture of G.S in the U.S.A. The different postulates on

which the comparison can be made are –

Power Distance - Power distance means the distribution of power amog the different

members in the organization. It means basically the degree of importance associated

with each employee. Low power distance means equal distribution of power, whereas

high power distance means there is an unequal distribution of power among the

members. In G.S, U.S.A, all the employees had equal powers, equal opportunities to

grow, equal access to the leaders of the organization, which was not the case in GS,

China.

Uncertainty Avoidance - Uncertainty avoidance refers to the degree of tolerance to

changes , risks and uncertainties of people of various cultures. High uncertainty

avoidance means people are averse to any changes in the routine, taking risks, and

dealing with uncertainties, thereby minimizing the scope of innovation. People with

low uncertainty avoidance are those who are willing to take risks in life, who are

willing to adapt to the changes in the routine, and hence are very innovative. In G.S,

U.S.A, the uncertainty avoidance of its employees is very low, whereas in China, the

uncertainty avoidance of the employees of G.S is very high.

Individualism – Collectivism - This refers to the degree to which individual people

can integrate themselves into groups and teams. U.S.A is one of the most

individualistic countries in the world, whereas in China, people tend to work in small

groups and remain loyal to the group more than their personal self. This trait is

evident among the employees of G.S, U.S.A, and G.S, China.

Masculinity – This is one of the major differences prevalent across cultures. In the

U.S.A, men and women are given the equal status, that is both are expected to work in

office, to cook food, to do the household jobs, etc. But in Asian countries like China,

men are expected to be the bread-earner of the family, whereas the woman has to take

care of the household. Therefore, we see that the ratio of male is to female employees

in G.S , U.S.A is almost 1 : 1, with 48 % of the employees being women, but in G.S,

China, the ratio of male is to female employees is very high, about 9% of the

employees in G.S , China are women.

Orientation – The people of U.S.A have long term orientations, that is their interests

are long term, they look to develop long term relations with their clients, which was

prevalent in G.S, U.S.A. But people of Asian countries maintain short – term

relationships with their clients, if they are otherwise unknown to them. This trait was

existent in G.S, China.

Application of Maslow’s theory on Goldman Sachs in U.S.A and China :

Maslow’s hierarchy of needs states that the needs of human beings develop in a particular

order. People first look to satisfy their physiological needs and then gradually go on

satisfying their other needs. In G.S, U.S.A, the employees were motivated to work for the

respect which Goldman Sachs had, as an organisation. The employees in the U.S.A worked to

maintain the reputation of Goldman Sachs. In China, the employees worked to satisfy their

physiological needs, as normally the Asian people are motivated in the satisfaction of their

social needs.

Thus, the work culture of Goldman Sachs, in U.S.A and China is shown based on the

Hofestede’s principles, and on Maslow’s hierarchy of needs. As Goldman Sachs is a multi-

national, multi-cultural organisation, there will be differences across countries, nations,

cultures in the working of the employees of Goldman Sachs.