Hostede’s framework for assessing culture has various dimensions of measure that clusters cultures around definable traits. One of them is small versus large power distance, which describes how individuals and organizations view power distribution amongst its members.
Western cultures typically have smaller power distances, i.e. people of lower ranks enjoy more equality in terms of rights and opinions as their superiors, and eastern cultures typically have larger power distances, i.e. bosses command far more respect and authority relative to their subordinates.
You might’ve heard of the story of Korea Air in the 80s that had crash rates multiple times of industry norm, and much of it attributed to a high power distance culture. The reasoning behind it was that if pilots were always held in the highest esteem, whose decisions could not be challenged because subordinates were not expected to speak up, then a culture that lacks communication and collaboration attributed to higher human errors, simply because there were not enough checks and balances in the process.
Since then, the general consensus has been: small power distance cultures good, large power distance cultures not as good.
Two problems with this.
First of all, even within various western cultures all with relatively low power distance scores, the difference can be enormous. In Anglo business environments, people enjoy generally low power distances, so informality is the common denominator. However, authority and organizational hierarchy is very much an accepted and entrenched aspect of both British and American business culture.
What that means in practice is that, in more situations than one, decisions are taken at the top, and carried out throughout the organization with little fuss. More and more businesses are incorporating various feedback mechanisms that (attempts to) gather fruitful input from various layers of the organization. But in a corporate environment, the kind of town-hall setting, where everybody with a stake in the business gets a voice, is rarely an acceptable process of finding solutions.
In German and French work environments, the power distance is also very distinct and present, compared to, say, the Dutch work environments. Which takes me to the second point, which is, low power distance is not always good.
Low power distance means that everyone sees each other as equals, in every way possible. This kind of value system is not always conducive for expedient and agile decisions-making processes in corporate setting. For expats and foreigners, the Dutch consensus-driven culture, carried out through countless meetings where everyone whines on company times, it can become maddening.
This, out of the excellent UnDutchables, pretty much sums up how things are done here.
In the office, meetings drag on endlessly since so much attention is given to the right to fully express one’s personal opinion. A discussion is not complete unless everyone present has had his or her full say. The impression that something was actually settled in a meeting will be proven wrong when workers later remark, “We didn’t agree to anything yet. We only discussed it.”
This famously frustrating phrase prompts many to exclaim, “Let’s stop talking about it and do something!” and is summed up by the classic maxim, “It is better to debate a question without settling it than to settle a question without debating it.”
This drawn-out method of comprehensive consultation (overleg) non-stop negotiation, compromise and consensus, when applied to economic and industrial relations, is called the “polder model” (poldermodel). When combined with the strong Dutch economy of the closing 20th century, cloggies claimed their formula to be worthy of worldwide emulation … until the economy flopped. Suddenly, the polder model sank under a tidal wave of wage demands with little or no negotiation, compromise and/or consensus, and the locals immediately launched into full-tilt debate over its demise.
In the meantime, government discussion and debate on such wide-ranging topics as blasphemy and taxation levels became so unruly that in 2004 the Prime Minister announced a new communications policy to stop ministers from belching out their opinions. In return, unions, employers and other power figures started to make secret decisions in backrooms. Both sides are now locked in discussions and debates about the lack of discussion and debates.
From 2002, the Economist ran a series of special reports that questioned the credibility of the Polder model, and whether it had anything to do at all with the country’s economic success in the 80s and 90s. It also laid out a series of economic challenges that remains unresolved, now almost 10 years later.
Just like those economic problems, the Polder model and the culture of low power distance culture, seems to linger on.