Hofstedes Cultural Dimensions in Family Owned

Businesses
Power distance index: As family owned businesses (FOB) usually have a patriarchal
system where the founder, owner and CEO is the one who sets the rules and takes the
decisions, FOBs tend to have a very high PDI. They have the power and the
organization recognizes it, allows it and conforms to this situation. The hierarchies are
very well defined, typically mimicking the familys structure.
Individualism vs collectivism: As a result of the previous high PDI, people in FOBs tend
to be more individualistic than collectivistic. It is important in such organizations to
shine to the eye of the boss, because he is will have the ultimate decision regarding the
individuals advancement within the organization. In the majority of the FOBs, an
outsiders growth is topped to the extent that the family members are interested in
belonging to the management team and the degree of institutionalization of the FOB,
this implies that an individual in this organization will try to please not only the boss,
but also at some point will be set in a position where he will have to take a side with
another (a secondary) family member.
Masculinity vs femininity: It is very difficult to categorize every FOB somewhere in this
dimension. I believe that each organization will tend more towards the personal
propensity of the owner. In FOBs where the owner is tough and results driven, the
organization as a whole will tend to be more masculine; on the contrary, if the owner
regards the organization as an extension of himself and his family, the culture may
tend more towards femininity. This would explain why there are FOBs where the
employees tend to be related with one another (fathers and sons as operators and
mechanics) and others where it is not allowed to join if there is someone related
already in.
Uncertainty avoidance index: FOBs tend to have a rather high UAI. Many times, the
enterprise began with the efforts of the founder and at the expense of some suffering
of him and his family. Therefore, in the face of uncertainty, which could lead to the
disappearance of the company, this organizations would tend more to the safe side of
the decision.
Time orientation (normative vs pragmatic): This dimension would depend more on the
stage of the organization than in the ownership and government structure. A newer
enterprise will tend to be more pragmatic (long-term), and a more established
company will tend to be more normative, respecting the positions and the statu-quo
reached by the family and the long-time employees (relationships based mostly on
trust and time).
Indulgence vs restraint: A FOB will tend more towards restraint. It would be to expect
that the employees regard the companys resources as the boss resources, therefore
resources squandering would be frowned upon and maybe even regarded as a theft to
the patrn.