What is the Distance Strength Index (PDI)?
The Power Distance Index (PDI) is a measure of acceptance of a hierarchy of power and wealth by individuals who make up the general population of a nation, culture, or company. Developed by Dutch social psychologist Geert Hofstede, PDI ultimately provides insight into the extent to which ordinary citizens, or subordinates, accept or challenge the authority of the person or persons responsible.
Hofstede's PDI is lower in countries and organizations where reference figures work closely with subordinates. PDI is higher in places with strong hierarchy.
forex trading signals Understanding the distance strength indicator
Highly organized companies, societies, and organizations often have high scores. A high index indicates that the hierarchy is clearly defined, present and without objection.
A low index indicates a less strict or authoritarian regime. People in a community or group with a low index are willing to challenge authority and easily interact with authority figures in the expectation that they will be able to influence decisions.
PDI and the theory of cultural dimensions
The Force Distance Index is a component of Hofstede's cultural dimensional theory, which was the first attempt at identifying differences between cultures. This theory is now widely applied in a number of fields including cross-cultural psychology, intercultural communication, and international business.
free forex trading signals Based on factor analysis, cultural dimensional theory was based in its original form on the results of the Hofstede Global Survey of IBM Employee Values. The test was administered and the results collected between 1967 and 1973.
Based on these and other findings, Hofstede determined that there are six distinct dimensions to each culture: power distance, uncertainty avoidance, individualism versus collectivity, short term versus long term, masculinity versus femininity, and restraint versus indulgence.
free forex signals PDI of the United States
(The original model only had four dimensions but was subsequently expanded to six. Long versus short term was added after Hofstede conducted independent research in Hong Kong, and leniency versus restraint was added in 2010).
https://www.freeforex-signals.com/ Business and PDI
Hofstede's theory gained great fame for its analysis of cultural and national differences. He has been particularly influential in the business world. As the global economy grows, the PDI and the factors that contribute to it have been used to enhance understanding of cultural differences and how they affect international business transactions.
Differences in perception of power appear to be particularly relevant during trade negotiations. For example, Austria has a power distance index of around 11, while most Arab countries have indices close to 80. The use of Austrian business practices or management methods in an Arab country may be counterproductive, or at least it can produce a degree of culture shock.