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GEERT HOFSTEDE MODEL

ANALYSIS OF ROYAL DUTCH


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GEERT HOFSTEDE MODEL ANALYSIS OF ROYAL DUTCH


SHELL

Topic: Hofstede
Cultural Model
National Culture

Professor Geert Hofstede


conducted
most

one

of

the

comprehensive

studies of how values in


the

workplace

are

influenced by culture. He
defines

culture

as

the

collective

programming

of

the

mind

distinguishing the members of one group or category of people from

others.
The six dimensions of national culture are based on extensive
research done by Professor Geert Hofstede, Gert Jan Hofstede,
Michael Minkov and their research teams.

Dimensions of national culture

GEERT HOFSTEDE MODEL ANALYSIS OF ROYAL DUTCH


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The model of national culture consists of six dimensions.


1.
2.
3.
4.
5.

Power Distance Index (PDI)


Individualism versus Collectivism (IDV)
Masculinity versus Femininity (MAS)
Uncertainty Avoidance Index (UAI)
Long Term Orientation versus Short

Orientation (LTO)*
6. Indulgence versus Restraint (IND)

Term

Normative

GEERT HOFSTEDE MODEL ANALYSIS OF ROYAL DUTCH


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GEERT HOFSTEDE MODEL ANALYSIS OF ROYAL DUTCH


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What about the Netherlands?

The Netherlands Dutch : Nederland is

country " (Dutch : land) of the Kingdom of the Netherlands .


It is a small, densely populated country located in Western

Europe with three island territories in the Caribbean .


The European part of the Netherlands borders Germany to

the

main

"constituent

the east, Belgium to the south, and the North Sea to the
northwest,

sharing maritime

borders with

Belgium,

the United Kingdom and Germany.


Netherlands
Nederland (Dutch )

Flag
Capital

Coat of arms
Amsterdam

and largest city


Offi cial languages

National: Dutch
Regional:

Recognized regional languages

Limburgish
Dutch Low Saxon
Kingdom of the Netherlands

Sovereign state
Government

Monarch
Prime Minister

West Frisian
English
Papiamento

Unitary parliamentary
constitutional monarchy
Willem-Alexander
Mark Rutte

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Legislature

Upper house

Lower house
Independence from Spain

Proclaimed

Recognised

Kingdom established

Constituent country

States General
Senate
House of Representatives
26
30
16
15

July 1581
January 1648
March 1815
December 1954

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Hofstede Cultural Model of Netherlands:


If we explore the Dutch culture through the lens of the 6-D Model, we can
get a good overview of the deep drivers of Dutch culture relative to other
world cultures.

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 organizations within a

GEERT HOFSTEDE MODEL ANALYSIS OF ROYAL DUTCH


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country

expect

and

accept

that

power

is

distributed

unequally.

Low Power Distance in Netherlands:


The Netherlands scores low on this dimension (score of 38) which
means that the following characterizes the Dutch style:

Being Independent
Hierarchy For Convenience Only
Equal Rights
Superiors Accessible Coaching Leader
Management Facilitates
Empowerments.
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 and participative.

Remarks About Netherlands:

As a Brazilian general manager living in the Netherlands remarked, "I


am happy that my Dutch personnel did not throw me out of my offi ce
the first week I worked in Amsterdam. As top manager in Rio, I barely
spoke to my lower personnel. I was used to giving orders and being
served.
"In Amsterdam I learned to exchange some words daily with the
cleaning lady, to discuss all the work with my managers and to kindly
ask my secretary what phone calls came in for me. I am now used to
making my own photocopies and coffee. Once you know the rules

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here it is very pleasant and productive to work in such an open
society."

A visiting Japanese CEO asked, "If the CEO is pouring his own coffee,
what kind of power can he hold in the company?"

Individualism Versus Collectivism

The fundamental issue addressed by this dimension is the degree

of interdependence a society maintains among its members.


It has to do with whether peoples self-image is defined in terms of

I or We.
In Individualist

themselves and their direct family only.


In Collectivist, societys people belong to in groups that takes care

societies

people

are

supposed

to

look

after

of them in exchange for loyalty.

Individualism in Netherlands:
The Netherlands, with the very high score of 80 is an Individualist society.
This means there is a high preference for a loosely-knit social framework in
which individuals are expected to take care of themselves and their
immediate families only. So the Dutch Society is characterized as:

The employer/employee relationship is a contract based on mutual

advantage.
Hiring and promotion decisions are supposed to be based on merit

only.
Management is the management of individuals.
Dutch society is egalitarian , individualistic and modern. The people
tend to view themselves as modest, independent and self-reliant.

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They value ability over dependency. The Dutch have an aversion to
the non-essential.
Egalitarian society

The Netherlands has an egalitarian society. Status and respect are


obtained through study and work and not through family ties or old
age. Every person is equal and should be treated accordingly, which
may be diffi cult for foreigners to understand.

The global Traveler:

The contrary takes place when Dutch businessmen and women


travel. They usually have the individual authority to close deals on
the spot without consulting the home offi ce.

Dutch global traders are much more flexible abroad than at their
home offi ce.

Masculinity Versus 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 organizational life.


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.

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Feminine Society in Netherlands:

The Netherlands scores 14 on this dimension and is therefore a

Feminine society.
In Dutch society, it is important to keep the life/work balance and

you make sure that all are included.


Manager is supportive to his/her people, and decision making is

achieved through involvement.


Managers strive for consensus and people value equality, solidarity
and

quality

in

their

working

lives.

Conflicts

are

resolved

by

compromise and negotiation and Dutch are known for their long

discussions until consensus has been reached.


They concentrate on developing a favorable climate for work,
relationships between employees; teamwork the means orientation is
common.

Consensus

The Dutch are famous in the Western world for the many hours a
week

they

spend

in

meetings.

Decision-making

processes

are

complex.

Everyone involved needs to be heard. In the end a compromise will


be reached in which everyone agrees. Once agreed upon the work
can

progress

steadily.

Therefore,

changes

are

usually

lengthy

processes.

Many Americans think the Dutch way of working is time-consuming


as no one can be given a quick order without explaining why.

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Uncertainty Avoidance

The dimension Uncertainty Avoidance has to do with the way that 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?


This ambiguity brings with it anxiety and different cultures have

learnt to deal with this anxiety in different ways.


The extent to which the members of a culture feel threatened
by ambiguous or unknown situations and have created beliefs
and institutions that try to avoid these is reflected in the
score on Uncertainty Avoidance.

Uncertainty Avoidance In Netherlands:

The Netherlands scores 53 on this dimension and thus exhibits a

slight preference for avoiding uncertainty.


Dutch Society is exhibiting high Uncertainty Avoidance and maintains
rigid codes of belief and behavior and is intolerant of unorthodox

behavior and ideas.


With all this planning and structuring, little is left to the unexpected.
Therefore Dutch people do not excel in improvising. However, they
have an adventurous mind and dare to take risks in business, which

requests flexibility.
In Dutch culture, time is money, people have an inner urge to
become free from work as soon as possible but work hard during
their

working

hours,

precision

and

punctuality

are

the

norm,

innovation may be resisted, security is an important element in

individual motivation.
In order to deliver good work, the Dutch like to consider the risks and
consequences of everything they do, well in advance. They want to
have detailed information. In the case something does go wrong, the

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Dutch individual will take full responsibility for the consequences. In
the case of success, of course, they will take the full credit.
Dutch directness

The Dutch directness in the communication with foreigners regularly


causes

misunderstandings.

Unable

to

make

things

understood

through context and unable to read context, the Dutch express


themselves verbally.

They speak in a friendly tone in rather short, clear, sober sentences


lacking any form of politeness or courtesy.

The Dutch are distrustful of very polite conversations, afraid that an


unpleasant message may be hidden which they are unable to detect.

Being very nice may awaken the suspicion that one is in need of a
special favor. Politeness may also cause irritation as it is considered
a waste of time.

Loss of face

The Dutch expect others to be open and direct like them. They will
tell you what they think of you and criticize your work indifferent of
your status if you are a superior or a subordinate.

In some cases, they expect you to be honest and direct in return. If


you detect mistakes in their work and you do not inform them about
these mistakes, they might get disappointed with you.

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The Dutch do not necessarily feel ashamed when you inform them of
a mistake, and can appreciate that you give them the opportunity to
correct and thus improve themselves. The Dutch feel that in the end,
one learns from his mistakes.

Loss of face is a rather unknown concept in Dutch society when


compared

to

other

cultures.

However, expatriates have reported that being direct back to the


Dutch doesn't always sit so well.

Long Term Versus Short Term


Orientation

This dimension describes how every society has to maintain


some

links

with

its

own

past

while

dealing

with

the

challenges of the present and future, and societies priorities

these two existential goals differently.


Normative societies which score low on this dimension, for example,
prefer to maintain time-honored traditions and norms while viewing

societal change with suspicion.


Those with a culture which scores high, on the other hand, take a
more pragmatic approach: they encourage thrift and efforts in
modern education as a way to prepare for the future.

Pragmatic Approach in Netherlands:


The Netherlands receives a high score of 67 in this dimension, which
means that it has a pragmatic nature.

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In Dutch society with a pragmatic orientation, people believe that


truth depends very much on the situation, context and time. They
show an ability to easily adapt traditions to changed conditions, a
strong propensity to save and invest, thriftiness and perseverance in
achieving results.

Indulgence versus Restraint


One challenge that confronts humanity, now and in the past, is the degree
to which small children are socialized. Without socialization we do not
become human. This dimension is defined as the extent to which
people try to control their desires and impulses , based on the way
they were raised. Relatively weak control is called Indulgence and
relatively strong control is called Restraint. Cultures can, therefore, be
described as Indulgent or Restrained.

Indulgence in Netherlands:
With a high score of 68, the culture of the Netherlands is clearly one of
Indulgence.

People in Dutch society, Indulgence generally exhibit a willingness


to realize their impulses and desires with regard to enjoying life and

having fun.
They possess a positive attitude and have a tendency towards
optimism. In addition, they place a higher degree of importance on
leisure time, act as they please and spend money as they wish.

Time of

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The Dutch love time off to spend with their partner, kids and friends,
for vacation or to study. Therefore they will prefer to reduce working
hours instead of having an increase in salary.

Vacation days, depending on the labor contract, run from 21 to as


many as 35 working days a year. Expatriates on foreign workcontracts in the Netherlands often complain they are always in the
offi ce while the Dutch are on vacation.

As work is very well structured within organizations, much work is


done during regular working hours. Except for those at management
level, employees are reluctant to work overtime.

Concept of time

Being very organized and time conscious, one may have to plan
business appointments up to four weeks ahead, with bosses, clients
and colleagues.

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Hofestede Cultural Dimensions in Royal Dutch


Shell

Low Power Distance


Collectivism
Feminity

Low Un-certainity
Avoidance
Long Term Orientation
Retraint
Low Power Distance in Royal Dutch Shell

Shell is a world 4 th largest oil & gas company that has formulization
and complex management hierarchy. Despite of this, they are
employee oriented and value their employees and give them equal
importance in their carrier development.

Shell companies recognize employees as their responsibility.

To give respect is the basic human rights of our employees and to


provide them with good and safe working conditions, and competitive
terms and conditions of employment.

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To promote the development and best use of the talents of our


employees; to create an inclusive work environment where every
employee has an equal opportunity to develop his or her skills and
talents.

To encourage the involvement of employees in the planning and


direction of their work; to provide them with channels to report
concerns.

We

recognize

that

commercial

commitment of all employees.

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success

depends

on

the

full

GEERT HOFSTEDE MODEL ANALYSIS OF ROYAL DUTCH


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Collectivism in Royal Dutch Shell

They believe in collectivism. Because Shell employees share a set of


core values that are based on collectivism:

Honest
y

CORE
VALUES
Respe
ct For
People

Integri
ty

We also firmly believe in the fundamental importance of trust,


openness, teamwork and professionalism, and pride in what we do.

Our people are central to the delivery of our strategy and we involve
them in the planning and direction of their own work.

We create a work environment that values differences and provides


channels to report concerns.

We value communication and consultation with our employees,


directly or via staff councils or recognized trade unions.

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Eni says that a part of Eni's culture is the central importance of the
individual and their welfare, the development of their capabilities
and skills, the fulfillment of potential through the full expression of
their energy and creativity, creating a work environment that gives
everyone the same opportunity on the basis of common standards of
merit and without discrimination.

Feminine Culture in Royal Dutch Shell

Royal Dutch Shell says in his vision statement:


We seek a high standard of performance, maintaining a
strong long-term and growing position in the competitive
environments in which we choose to operate. We aim to work
closely with our customers, our partners and policymakers to
advance more effi cient and sustainable use of energy and
natural resources.

Shell has feminine culture because they care for their society and
have concerns for their all stakeholders as depicted in their business
principles.

LOCAL COMMUNITIES

Shell companies aim to be good neighbors by continuously improving


the ways in which we contribute directly or indirectly to the general
wellbeing of the communities within which we work.

We manage the social impacts of our business activities carefully and


work with others to enhance the benefits to local communities, and
to mitigate any negative impacts from our activities.

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In addition, Shell companies take a constructive interest in societal


matters, directly or indirectly related to our business.

RESPONSIBILITIES
Shell companies recognise five areas of responsibility. It is the duty of
management continuously to assess the priorities and discharge these
inseparable responsibilities on the basis of that assessment.

To
sharehol
ders

To
Society
Responsibiliti
es of Shell

To whom
We do
Business

To
customer
s

To
employee
s

1) To shareholders:

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To protect shareholders investment, and provide a long-term


return competitive with those of other leading companies in the
industry.

2) To customers:

To win and maintain customers by developing and providing


products and services which offer value in terms of price,
quality, safety and environmental impact, which are supported
by the requisite technological, environmental and commercial
expertise.

3) To employees

To respect the human rights of our employees and to provide


them with good and safe working conditions, and competitive
terms and conditions of employment.

To promote the development and best use of the talents of our


employees; to create an inclusive work environment where
every employee has an equal opportunity to develop his or her
skills and talents.

To encourage the involvement of employees in the planning and


direction of their work; to provide them with channels to report
concerns.

We recognize that commercial success depends on the full


commitment of all employees.

4) To those with whom we do business

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To seek mutually beneficial relationships with contractors,


suppliers and in joint ventures and to promote the application
of

these

Shell

General

Business

Principles

or

equivalent

principles in such relationships.

The ability to promote these principles effectively will be an


important factor in the decision to enter into or remain in such
relationships.

5) To society

To conduct business as responsible corporate members of


society, to comply with applicable laws and regulations, to
support fundamental human rights in line with the legitimate
role of business, and to give proper regard to health, safety,
security and the environment.

Low Un-certainty Avoidance in Royal


Dutch Shell

Shell group of companies has low tendency towards avoiding risks


rather they go for taking risk because they associate high risk with

high return and like taking threat of competition to excel them.


Their core strategy shows the level of their eagerness towards
innovations and risk taking activities by managing both internal and

external environment.
But we believe our
operational

excellence

technology,
will

project-delivery

remain

businesses.

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key

capability

differentiators

for

and
our

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In Upstream we focus on exploration for new liquids and natural gas


reserves and on developing major new projects where our technology

and know-how add value to the resource holders.


Meeting the growing demand for energy worldwide in ways that
minimize environmental and social impact is a major challenge for the

global energy industry.


We aim to improve energy effi ciency in our own operations, supporting
customers in managing their energy demands, and continuing to
research and develop technologies that increase effi ciency and reduce

emissions in liquids and natural gas production.


Our commitment to technology and innovation continues to be at the
core of our strategy. As energy projects become more complex and
more technically demanding, we believe our engineering expertise will

be a deciding factor in the growth of our businesses.


Our key strengths include the development and

application

of

technology, the financial and project-management skills that allow us


to deliver large field development projects, and the management of

integrated value chains.


We aim to leverage our diverse and global business portfolio and
customer-focused businesses built around the strength of the Shell
brand.

Long Term Orientation in Royal Dutch


Shell

Royal Dutch Shell has pragmatic approach towards future because


they focus on future orientation and development and consider
innovation and healthy competition key to success.

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SUSTAINABLE DEVELOPMENT:

As part of the Business Principles, we commit to contribute to


sustainable development. This requires balancing short- and longterm

interests,

integrating

economic,

environmental

and

social

considerations into business decision-making.

Long-term profitability is essential to achieving our business goals


and to our continued growth.

It is a measure both of effi ciency and of the value that customers


place on Shell products and services.

It supplies the necessary corporate resources for the continuing


investment that is required to develop and produce future energy
supplies to meet customer needs. Without profits and a strong
financial

foundation,

it

would

not

be

possible

to

fulfil

our

responsibilities.

Criteria for investment and divestment decisions include sustainable


development considerations (economic, social and environmental)
and an appraisal of the risks of the investment.

Restraint Culture in Royal Dutch Shell

Shells organizational culture has intense control and business


principles, values and code of conduct are formulated systematically
to abide by it strictly without any leniency. because they have high

formulization with respect to management delegation and


Shell companies manage these matters as critical business activities,
set standards and targets for improvement, and measure them on

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continuous

basis.

Any

illegality

will

subject

to

penalties

and

punishments as per laws.

Conclusion

Organizational culture is a vital component for the performance and


the success of any company, big or small. Without a strong
organizational culture, a company has few chances to be competitive
and to survive in a global market which is growing every day and
where the competition is tough, the competitors are sharks, the
companies have to develop strong organizational cultures or else the
sharks will eat them alive.
Each company develops an authentic culture. Still it is important to
know what are the key cultural commune values that are linked with
the company success.
The results of the study emphasized that the multinational
companies have strong and some fundamental cultural values that
are shaped to some extent by national culture.

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