Table of Contents

1.0 The Hofstede Model of Cultural Dimensions................1

1.1 Description of the model................................................................................... 1
1.2 Cultural criteria................................................................................................. 2
1.2.1 Power distance............................................................................................... 3
1.2.2 Individualism vs. collectivism.........................................................................3
1.2.3 Strong or weak uncertainty avoidance...........................................................3
1.2.4 Masculinity vs. Femininity..............................................................................3
1.2.5 Long term Orientation.................................................................................... 4
2.0 Comparison between Two Countries...........................5
2.1 Comparison between U.A.E and UK...................................................................5
2.1.1 Power distance............................................................................................... 6
2.1.2 Individualism vs. collectivism.........................................................................6
2.1.3 Strong or weak uncertainty avoidance...........................................................7
2.1.4 Masculinity vs. Femininity..............................................................................8
2.1.5 Long term Orientation.................................................................................... 8
3.0 Evaluate of The Model...............................................9

3.0 Evaluate of The Model...............................................9

4.0 Conclusion..............................................................10

5.0 References..............................................................11
1.0 The Hofstede Model of Cultural Dimensions
1.1 Description of the model

Culture is a first term by the pion eer English Anthropologist Edward B. p

Tylor in hi s book in where he sa id that cult ure is complex in which consist of

n p p

knowledge, belief, art, law, morals, custom, and any other ability and behavior
obtain by m an as a me mber of soc iety" (O'Neil, 2006).
p p p

For the example, Accounting principle in the Peoples Republic of China

refo rm th eir accou nting ru les and the theory and the princ iples fam iliar in
o p o o n n

the m ost adv anced economies are a part of the Chinese regulations and laws
n n

(Graham and Li, 1997).

There are various cult ural aspe cts that have influe nced accounting. Hofestede (1984) and
m o o

Gray (1988) condu cted stud ies and observations of the cultural dimensions and valu es that
o o o

contributing to culture and ac counting research. o

According to Professor Hofstede, he believed that culture is the combination program of

the mentality which distinguishes the members of one individual of group from another
(Hofstede, 1980). Vulture will influence the organizational structure, decision making process
and also accounting and disclosure choices of the individual in the companies. Hofstedes model
is more rep resentative and homo geneous. In his study of interviewed 116,000 of IBM-employees
i t i i i

in more than 50 countries who works in the same sector and position were having a similar social
status. In the view of that, he raised five cultural criteria.

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1.2 Cultural criteria

These criteria are able to clarify differen ces cultural in diffe rent nations (Hofstede, 1980).
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Hofstedes work has been use d by many resear chers in account ing and management. Hofstede
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allowing the researc her used his re ports spe cific number as inputs into further sta tistical analysis
n n n n

and testing. Most studies of accou nting depend on the works of Gray and Hofstedes, because
n

Hofstedes model provides qu antified mea sure for a ran ge of countries and his work helps us to
i o m

understand diff erences in accoun ting inte rnationally. This paper will study the comparison of
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accounting system between UK and UAE in Hofstedes culture dimension.

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1.2.1 Power distance

Power distance is defined as the degree of which the less powerful members of
organizations and institution tend to expect and accept that power is distributed unequally. This
affects the behaviors of the less powerful also the more powerful society.

1.2.2 Individualism vs. collectivism

In Hofstede cultural dimension, individualism has the most direct relevance to

accounting. Individualism or collectivism is where pe ople lo oking after themselves and their
p p i

immed iate family only vs. people belon ging to in-groups that look after them in e xchange for
y s i l i o

loyalty (De Mooij, 2010). An individual culture is loosely knit in where every member
generally interested in his/herself or immediate family. Furthermore, this culture is focusing on
personal achievements and loyalty toward themselves. A collectivism culture is a tightly knit
population where every person within their cultural group is conclusively loyal to one another.
In more simplistic terms, the individualistic versus collectivistic culture is focused on I versus
we in their thoughts and daily decision making (Hofstede, 1984).

1.2.3 Strong or weak uncertainty avoidance

The degree of member of society feels uncomfortable, threatened by doubt and unknown
situation. The elementary issues deal with how societies react to the fact that the future is
unknown, whether they try to control or to let it happens in the future. Uncertainty avoidance has
direct relevance to accounting.

1.2.4 Masculinity vs. Femininity

The masculinity/femininity dimension is the dominant values between

the masculinity society and feminine society. In high masculine societies,
performance and accomplishment are important and it must be revealed to
show ones success such as status brands or products (jewellery) (De Mooij,
2010 & Hofstede, 2002). In femininity societies, the society emphasis on
relationship, taking care of the weaker member and focusing on the quality
of life.

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1.2.5 Long term Orientation

Long term dimension explain how every society need to keep up a few
connections or links with its own past while managing the difficulties of the
present and future, and so cial pri oritise t hese two exist ential goal s
n n n n n

differ ently. Norm ative societi es wh o score l ow on this dimension, for

n n n n n

example, prefer to maintain time-honoured tradi tions and no rms while

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vie wing societa l ch ange with suspicion. In conversely, those culture which
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score higher, they are encourage t hrift and eff orts in mod ern education as a
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way to prepare for the future.

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2.0 Comparison between Two Countries
2.1 Comparison between U.A.E and UK

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2.1.1 Power distance

Based on the hofstedes scores, it shows that UK score 35 and UAE score 90. This shows
that UAE is having higher score in power distance.

UAE: The societies are most likely to follow caste system and the power is distributed
unequally. In order to reduce the amount of uncertainty, the societies are highly rule-oriented
with laws, rules and regulation by the authority. Arab countries are characterized by authoritarian
form of governments which including dictatorship. Arab country respect position of power and
people and there is also a formality between leader and follower. Inequality of power and wealth
in the society is considered normal. There is wide gap between rich and poor in societies in
wehre few societies control the oil are extreamly wealth. Arab leaders are expected to have
privileges that others may not. Leaders are seen as knowledgeable and strong and are depended
on to make decisions.

UK: The societies believe that inequalities between groups should be minimized and a sense of
fair play drives a belief that group supposed to be treated in some way as equals. In UK, the
employees are expecting to be consulted rather than being told of what to do and independence is
important.

2.1.2 Individualism vs. collectivism

According to Hofstedes score, UAE score 25 which considered a collectivism society

whereas UK is 89 which high in individualism society.

UK: High in individualistic cultures. The British people are very individualistic, more assertive
and personal people. The societies are more I sel f-actu alization, tough and task-oriented. In the
i l

early age they were taught to think for themselves to find out what their uniqueness and how
their uniquely contributes in society. In individualism culture it is necessary to put work as
priority and relationship comes second. The style of communication is specific.

UAE: UAE culture tends to be more collectivism in where UAE society are w e-cons cious and
i h

apparently in a close long-term commitment to family, extended family and relationship.

Moreover, they value teamwork and collaboration more and less likely to act independently.

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UAE societies are more modest, caring and concerned with relationship. Collectivistic cultures
are high-cont ext com munication with an indi rect style of communication in where they are
i o p

talking straight to the point. Loyalty is param ount and over -ride. The style of communication is
i i

shorter and not specific.

2.1.3 Strong or weak uncertainty avoidance

Based on the Hofstedes score, UK has lower on uncertainty avoidance compare to UAE.

UK: Generally UK have weak uncertainty avoidance, so there are not too many rules in society
and the rules that exist will be more possibly to have option and more relying on general
principle, thus the societies are happy and less facing stress and anxiety. Moreover, the societies
are adhered to work not in detail oriented and flexible to emerge and adopted faster in changing
environment.
UAE: Is a high uncertainty avoidance country. The rules, regulations and policies will be likely
to be clear and dictatorial and they tend to be detailed, all have been implemented and strict. All
these rules leads the societies are increasing level of stress and anxiety. Arab nations are
predominantly Muslim (over 90%). Moreover, belief and behavior are narrow-minded behavior
and idea in where what is different for the societies is dangerous. The societies have an internal
urge to be busy and w ork har d.
u e

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2.1.4 Masculinity vs. Femininity

Both countries are having high in masculinity; UK, 66 and UAE, 50.

UK: UK is a masculine society in where the society highly success oriented

and determined.
UAE: UAE is considered can be neither masculine nor feminine. In term of
male oriented society, UAE is Islamic countries that follow the laws and
values of Islam. Men occupy more authority positions than women in the
work field. In UAE, it is norm for a man to be head of the house.

2.1.5 Long term Orientation

UK: With an in-between score of 51 in this dimension, a dom inant preference in British culture cant
o

be find out.

UAE: Long and short term orientation of Arab countries were excluded in
Hofstedes 1985 analysis, thus, there is no score available for the UAE on this
dimension.

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3.0 Evaluate of The Model

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4.0 Conclusion

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5.0 References
References

Lumby, S. and Jones, C. (2011). Corporate Finance Theory & Practice. 8th ed. Hampshire, UK:
Cengage Learning

Lumby, S. and Jones, C. (2003), Corporate Finance: Theory and Practice, 7th ed,
Thomson Learning, London.

Williamson, D. (2002). Forward from a Critique of Hofstede's Model of National

Culture. Human Relations, 55(11), pp.1373-1395.

Graham, L. and Li, C. (1997). Cultural and economic influences on current

accounting standards in the People's Republic of China. The International Journal of
Accounting, [online] 32(3), pp.247-278. Available at:
http://www.sciencedirect.com/science/article/pii/S002070639790011X [Accessed 3
May 2015].

O'Neil, D. (2006). Human Culture: What is Culture?. [online] Anthro.palomar.edu.

Available at: http://anthro.palomar.edu/culture/culture_1.htm [Accessed 3 May
2015].

-de Mooij, Marieke, and Geert Hofstede. 'The Hofstede Model: Applications To Global
Branding And Advertising Strategy And Research'. International Journal of
Advertising 29.1 (2010): 85. Web. 20 Apr. 2015

Waterstraat, Silke Klara. 'Cultural Significance On Accounting: Challenging Hofstede's Uncertainty

Scale In The Hofstede-Gray-Framework'. SSRN Journal n. pag. Web.

Geert-hofstede.com, (2015). United Arab Emirates - Geert Hofstede. [online] Available at:
http://geert-hofstede.com/arab-emirates.html [Accessed 6 May 2015].

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