Business culture: Denmark vs. USA vs. Guatemala

It’s obvious that business culture is different in different countries – but different how? How much is myth and prejudice and how much is fact? Are Americans really brash and superficial? Are the Germans really punctual and humorless? Or as I heard one stand-up comic say once: “Laughter is a wonderful thing. Where would we be without laughter? [pause]. Germany!”

Gerd Hofstede to the rescue. Hofstede is a Dutch Sociologist who has been analyzing business culture in different countries for over 40 years.

He also quantifies the prevailing business culture in 4 dimensions:
Power Distance Index (PDI). This is the extent to which the less powerful members of organizations and institutions accept and expect that power is distributed unequally.

Individualism (IDV). The degree to which individuals are integrated into groups. On the individualist side we find societies in which the ties between individuals are loose: everyone is expected to look after him/herself and his/her immediate family. On the collectivist side, we find societies in which people from birth onwards are integrated into strong, cohesive in-groups, often extended families (with uncles, aunts and grandparents) which continue protecting them in exchange for unquestioning loyalty.

Masculinity (MAS). Masculine cultures are very assertive and competitive, feminine cultures are modest and caring.

Uncertainty Avoidance Index (UAI). This deals with a society’s tolerance for uncertainty and ambiguity. It indicates to what extent a culture programs its members to feel either uncomfortable or comfortable in unstructured situations.

Here, for example, is Denmark:

As you can see, Danish business culture has a very low power distance. This is typical for Danish workplaces, where employees will always call managers by their first names and you rarely see a manager giving a direct order. The Culture in Denmark tends towards the individualistic rather than collective and is very feminine. This means that even though Danes don’t see themselves as integral parts of a collective, there is still a huge focus on other people’s emotional state. Finally, uncertainty avoidance is very low, meaning Danish workplaces can take uncertainty. Indeed, a typical Danish attitude would be “Don’t tell me how to do my job, I’d rather figure it out for myself.”

Let’s compare that to the US:

Power Distance is higher and the culture is more masculine but what really sticks out is individualism. As you might expect, American workplaces are characterized by high levels of individualism and less of a sense of belonging to a collective.

Finally, the reason I’m writing this blog post: Guatemala. I’m writing this in my hotel room in Guatemala City, and tomorrow I’m keynoting at a conference for 200 HR managers. So of course I wanted to know what the business culture here is like. Take a look at this:

Check out that Power Distance! As Hofstede writes:

Guatemala has the highest Uncertainty Avoidance (UAI) Hofstede Dimension ranking of all Latin countries, indicating the society’s extremely low level of tolerance for uncertainty. In an effort to minimize or reduce this level of uncertainty, strict rules, laws, policies, and regulations are adopted and implemented.

Guatemala is tied with Panama for the highest Power Distance (PDI) ranking among Latin countries with a 95, compared to an average of 70. This is indicative of a high level of inequality of power and wealth within the society.

The question I have to ask is (of course) this:

What business culture is most conducive to happiness at work.

Unsurprisingly, my answer is: The Scandinavian (which is almost identical to the one shown above for Denmark). Indeed, when you look at studies comparing happiness at work in different countries, the Scandinavian nations are always at the top (and #1 is usually Denmark).

And I think that Hofstede’s work gives us part of the reason why this is so:

  • Low power distance means employees typically have control and influence over their own work situation.
  • A tendency towards the individualistic means that each individual is free to pursue their own happiness, but is still connected to the group.
  • A feminine culture means that people care about each other.
  • Low uncertainty avoidance is a must in an ever-changing world.

So I believe that companies who pursue a culture and a set of core principles that are in line with this will be happier workplaces – and, as studies show, happy companies make more money. On the other hand, companies that go for masculine cultures with high power distance will end up being very unhappy and will ultimately have their butts kicked by their happy competitors!

Your take

What’s the culture like in your country? You can look up your own country’s culture here. Let me know what you find and whether or not you agree :o)

11 thoughts on “Business culture: Denmark vs. USA vs. Guatemala”

  1. Great article! And relevant for anyone dealing with different cultures, away or at home. As an expat (living in the US at the moment, originally from the Netherlands) I became aware of my own culture by learning about new cultures. And recently I am finding myself dealing with things like work ethics and commercial practices that are totally different from what I am used to. Looking at Hofstede’s comparison, it seems to be the difference in masculinity. Quite a difference. Dealing with it. :-)

  2. Hey Alex,

    Early in the morning still but I completely disagree with the findings.

    And certainly you would expect that work culture is reflected in group culture. Now I cannot speak as a native of Denmark being an American, but what I find from my experience here is that I was working with people who were on the whole hiding their real intentions. There was not a larger whole of which I was a part on the projects, and only when I had trusted personal relationships with an individual would the work aspect follow suit with transparency. In the US my experience is that even if you are not part of the group, issues are more transparent and people feel compelled to be straight up about where they stand, thus giving me the opportunity to remain part of the whole by adjusting accordingly. It may be that as a foreigner I was treated differently but this has to be taken into account in such international economies. Denmark seems to be shooting itself in the foot by blocking relationships and transparency with people who are not from Denmark. Certainly in private life the whole summer house “cozy” culture is rarely extended to people beyond one’s inner circle who have been there from the beginning (again in my experience). In the US we may ask “how are you” or invite you to dinner very quickly, but there is an opportunity for inclusion that I see (as an American) that I do not in Denmark. Many internationals I know (if not all) have said the same thing, that it takes years and years to break through into a social network at any functional level…be it workwise or personal. Again…this is something I think is critical to look at in such a global world where Denmark’s population is half that of New York City. In 10 years if globalism continues you will likely be doing most of your business in another language…I don’t think Danes can afford to maintain their “Danish ways are the best and only Danes understand” mentality. It is the Achilles heel of your culture. Far and away the most competent, sympathetic, and productive Danes I meet are ones that have lived abroad.
    I hope that is helpful…and opens debate on the issue in a useful way. But Danes are happy at work in my opinion because they have isolated themselves from engaging with the rest of the world and all the tensions other cultures and beliefs bring in. I would say this applies to much of the US as well and if you look at our isolationist anti immigrant factions I would say they are riding the same boat. In Boston, New York, Miami, San Fransisco….you cannot afford to take on this attitude because you are surrounded by people from such diverse backgrounds that you must be flexible to be able to engage productively and happily. In that sense…happiness at work cannot arise from individualism, but a massive flexibility to include sometimes drastically different understandings and belief systems that are not just about work, but about personal belief structures and identity.

  3. Very interesting and thanks for pointing us to Hofstede’s site! While he’s famous in the world of Recognition In The Workplace, I didn’t know about this site yet!

    And may I just say that the German sense of humor might be the best kept secret in the world… :)


  4. I might leave my thoughts later once I’ve had some time to think on this post. But one quick question: what is “LTO” in the US graph? Hofstede defines it as “Long-Term Orientation”, but I see no elaboration there.

    Also, it may help if you include a quick clause in your descriptions that describes what higher/lower numbers along each measure mean. KF

  5. Edit: Found elaboration on LTO, but the description is a bit lacking:

    “this fifth dimension was found in a study among students in 23 countries around the world, using a questionnaire designed by Chinese scholars It can be said to deal with Virtue regardless of Truth. Values associated with Long Term Orientation are thrift and perseverance; values associated with Short Term Orientation are respect for tradition, fulfilling social obligations, and protecting one’s ‘face’. Both the positively and the negatively rated values of this dimension are found in the teachings of Confucius, the most influential Chinese philosopher who lived around 500 B.C.; however, the dimension also applies to countries without a Confucian heritage.”

  6. I came across your site while re-writing my resume to state, “my carrer goal is happiness”. I was born with a hard work ethic and nature to “be nice to people” in the workplace, but something is very wrong when you keep working and realize that you are their object of hate, wanna-be, or “let’s tale her down”. Workplace reality tells the story; which is employees do not like or trust each other and either hate management or kiss management ass! . As for women, I have only this to say. “women are vicious:” toward other women. Give most of these creatures an ounce of power and you have instant unhappiness and lack of success. Do not get me wrong,many men also are whining little spoiled babies with plenty of diaper rash available for kissing. . My statement was formed by observing oil rich family members dealing with employees that loved my grandpa and my mother in any way possible.. However, observing my Arkansas raised “dirt poor” grandpa I heard his straight forward question for “ass kissers’,” why am I better than workers”. The answers were always degrading accusations of fellow worker. His management technique consisted of telling ass kissers, mad people, lazy, crazy, and drunk people to go home and get better. I am a woman who has a happiness goal thanks to her grandpa’s no nonsense life style, hard work ethics, and no b.s. allowed in the workplace~just happiness. Loe your siite!

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