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Consequences of Power Distance Orientation in Organisations

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 CONSEQUENCES OF POWER DISTANCE
ORIENTATION IN ORGANISATIONS

Naresh Khatri

The cultural milieu has a profound influence on employee behaviour in the organisations. In an increasingly
diverse workplace and in a more globalised business world, managers, to be effective, need to appreciate
behavioural implications of cultural values that employees, organisations, and societies hold. One of the
most cited frameworks to understand behaviour of people across the national cultures was proposed by
Hofstede (2001). In this paper, we take a look at the behavioural implications in the organisations of power
distance (status differences), which is one of the five cultural dimensions in Hofstede’s framework. Specifically,
we explore the impact of power distance orientation on employee participation, nature of job descriptions,
organisational communication and decision-making, discipline and control, deference to senior employees,
management development, and organisational structuring and adaptation. We conclude that: (1) employees
in a high power distance context are unwilling to participate in decisions and are content with their managers
making decisions and giving them instructions, which they follow passively. (2) jobs are narrowly and tightly
specified, giving the employees limited discretion. (3) communication takes place vertical downwards, with
no or little horizontal communication. Overall communication is anemic. A large communication gap exists
between superiors and their subordinates because it is hard for the subordinates to air their views. (4) power
distance gives managers unlimited power and control over subordinates. Employees, in turn, have an
unquestioning, submissive attitude. (5) older and senior employees get respect from junior employees not
because of former’s competence but because of age and long tenure in the organisation. (6) in a high power
distance culture, decisions are made by a few at the top autocratically. Further, because of little resistance
from lower level employees, decisions are made and implemented faster in a high power distance organisation.
However, because of lack of input from lower level employees as well as poor communication and information
sharing, quality of decisions is poorer in a high power distance organisation. (7) high power distance
organisations are prone to unethical behaviour. This is because top managers have not to justify or defend
their decisions to lower level employees or to the larger organisation. Unethical behaviour gets covered up
or goes undetected. And (8), in a high power distance organisation, managers tend to micromanage and
even minor decisions go to the top. Thus, higher level managers are inundated with routine decisions.

Key Words: Power Distance, Cultural Dimensions, Organisational Communication,

Micromanagement, Unethical Behaviour, Employee Participation

INTRODUCTION impacts organisational behaviour has become a strategic

necessity rather than mere scientific curiosity (Sagie and

M
ANAGEMENT scholars have recognised
Aycan, 2003).
socio-cultural environment as one of the most
important factors affecting behaviours of In the last two decades, the number of studies
individuals and groups in the organisations. In an examining cross-cultural management issues has grown
increasingly diverse workplace and in a more globalised exponentially. These studies while documenting some
business world, understanding the ways in which culture universality in the management theories developed in the
2 Khatri
●

West show that organisational behaviour and was based on numerous laboratory and field experiments
effectiveness of management practices vary significantly with simple social structures. The experiments examined
from one cultural context to the other. Despite its the emotional distance that separates subordinates from
limitations, there is perhaps no other contemporary their bosses. Mulder (1977) defined power distance as
framework in international management that is so widely ‘the degree of inequality in power between a less
cited as the cultural framework proposed by Hofstede powerful individual and a more powerful other, in which
(1997; 2001). In this paper, the author has synthesised individual and other belong to the same (loosely or tightly
the findings from a vast array of research studies done knit) social system’ (pp.90). Hofstede (1997) extended
on one of the cultural dimensions, power distance, in Mulder’s notion of power distance from a dyadic, social-
Hofstede’s framework. psychological concept to a broader, cultural concept by
defining power distance as ‘the extent to which the less
Since its publication in 1980, Hofstede’s Culture’s
powerful members of institutions and organisations
Consequences (revised and expanded in 2001) has had
within a country expect and accept that power is
a profound influence on the development of cross-
distributed unequally’ (pp.28).
cultural studies within psychology, in organisation
studies, and in the social sciences more generally (Smith, In this paper, we subscribe to the view that
2002). Hofstede identified five cultural dimensions: individuals and organisations within a national culture
individualism versus collectivism, high versus low may vary in their value orientations (Earley and Gibson,
power distance, masculinity versus femininity, strong 1998; Triandis, 1995). That is, although, one may expect
versus weak uncertainty avoidance, and long-term versus most individuals and organisations in a high power
short-term orientation. The long-term versus short-term distance culture to hold high power distance values, it is
orientation dimension is also known as Confucian possible to find some individuals and organisations that
dynamism. It was added after conducting additional may not share these values. Much of our treatment of
research (Hofstede and Bond, 1988) using a survey power distance orientation in this paper is at the
instrument developed in the Chinese culture. The organisational level and we substantiate our arguments
individualism-collectivism dimension has received by using the findings of studies from various national
far the most attention (Hui and Triandis, 1986; Sinha and cultures which are high on power distance since there is
Tripathi, 1994; Triandis, 1995; Schermerham and Bond, dearth of studies examining power distance orientation
1997; Krokosz-Krynke, 1998). Power distance, which at the organisational level of analysis. Moreover, we have
is perhaps as important a dimension as individualism- used culture and organisation interchangeably as we
collectivism in the way it influences employee believe that organisations like nations have unique
behaviours and organisational structure and processes, cultures, and, like nations, can be high or low in their
has attracted relatively much less attention. Several power distance orientation.
books and review articles have appeared on the
individualism-collectivism dimension but none we know
Consequences of High Power Distance Orientation
of on power distance (e.g., Earley and Gibson, 1998;
Triandis, 1995). In this paper, we attempt to develop a What is most important for me and my department is not
coherent set of arguments on the behavioural, process, what I do or achieve for the company, but whether the
and structural consequences of power distance in Master’s favour is bestowed on me…This I have achieved
organisations. By adopting a contingency perspective by saying ‘yes’ to everything the Master says or does…To
(e.g., Sully de Luque and Sommer, 2000), we argue that Contradict him is to look for another job (Negandhi and
organisational behaviour in a high power distance Prasad, 1971, pp. 128).
context will be different from that in a low power distance The above quote captures the essence of the
context. supervisor-subordinate relationship in a culture
Next, we provide a brief definition of power distance characterised by high power distance (in this case India).
and then develop propositions on its implications for a The quote shows the profound influence cultural milieu
number of organisational behaviour issues, followed by can have on employee behaviour. Members of a culture
discussion and conclusions. share certain mindsets that cause them to interpret
situations and events in generally similar ways, while
Hofstede adopted the term ‘power distance’ from the persons from other cultures and mindsets are likely to
research done by a Dutch experimental social interpret them differently. Culture in this sense is a
psychologist, Mauk Mulder. Mulder’s research (1977)
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 Consequences of Power Distance Orientation in Organisations 3 ●

powerful force that shapes and influences the cognitions (1985) note that, in Hong Kong, employees hold high
and behaviours of people (Erez, 1994). In this section power distance values and organisations are highly
of the paper, we would like to examine the implications centralised. Employees, mainly Chinese, are more
of power distance, an important cultural dimension, for satisfied working in a centralised rather than in a
several organisational behaviour issues, such as decentralised structure. Since the value governing
employee participation, job descriptions, organisational hierarchical power relations is the core of the Chinese
communication, decision-making, management control, culture in Hong Kong, when variations in practices
ethical behaviour, and organisational structuring and among the organisations were incongruent with this core
adaptation. value, employees were dissatisfied. But when value
incongruence involved those values that were not core,
Employee Participation employees’ work satisfaction and performance were not
affected.
Employee participation is the process of giving
employees the authority to make decisions relating to Proposition 1a: The amount of employee participation
their work processes and encouraging them to take in an organisation will be inversely related to the
responsibilities of their decisions. Most of the research power distance orientation of the organisation.
on employee participation has been done in the West. The Proposition 1b: Employees with high power distance
evidence suggests that employees view supervisors who orientation will be more satisfied and productive in
give them more freedom to do their work more a high power distance organisation than in a low
favourably (Marchese, 2001). However, the influence of power distance organisation.
employees’ participation on work outcomes may vary
across cultures (Córdova, 1982). This is especially true
of high and low power distance cultures (Lincoln, Job Descriptions
Hanada and Olson, 1981). Studies by Brockner et al., Tsui et al., (1995) note that, in highly centralised
(2001) and Gomez, Kirkmann, and Shapiro (1999) show organisations, a job-focused employment relationship is
that employees with high power distance values prefer more common. The authors describe job-focused
lower level of participation as compared to those with employment relationship as concerned mainly with
low power distance values. Erez (1994) and Triandis encouraging a high level of task performance from
(1994) suggest that the idea of employee involvement is employees, without requiring their commitment to the
somewhat awkward to contemplate and difficult to overall organisation’s success. In this relationship, the
implement in a high power distance organisation. This expectations of the employer in terms of output required
is perhaps so since employees with high power distance of the employees are clearly specified. McKenna (1998)
values are more likely to prefer decisions made by points out that the major managerial concern in a high
managers to participatory decision-making; employees power distance organisation is limited to ensuring that
expect to be told what to do and do not like to take on subordinates carry out their jobs exactly the way they are
additional responsibilities. Hofstede (1984) suggests that told, no more and no less.
members of high power distance cultures (holding high
Proposition 2: Job description will be more tightly
power distance values) often feel lost in a low power
specified in a high power distance organisation than
distance organisation because of the lack of dependable
in a low power distance organisation.
superiors to give them clear instructions.
Lachman (1988) suggests that early socialisation
affects core values and late socialisation affects only Communication
peripheral values. When faced with pressures to comply In organisations operating in a high power distance
with organisational requirements and managerial cultural milieu, a superior is expected to make decisions
policies, employees’ peripheral values may change while without consulting his or her subordinates, because
their core values may not. Holland (1976) also argues subordinates may view their involvement in decisions
that employees tend to modify organisational role by their superiors as a sign of incompetence or weakness
requirements if they are incongruent with their core on the part of the superior (Francesco and Chen, 2000).
values. In fact, if the role requirements are incompatible Subordinates are also unwilling to express their opinions
with core values of employees, employees may change and disagreements openly due to fear of losing face or
their jobs rather than their values. Birnbaum and Wong making someone else loses face. Unsurprisingly, such
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4 Khatri
●

behaviour results in a major communication gap. Senior Decision Formulation

management becomes disconnected from what is
In a high power distance organisation, open challenge
happening at lower levels in the hierarchy and lower
to formal authority is rare as employees have a built-in
levels employees become uncertain about the
sense of legitimacy of superior-subordinate relationship
management’s expectation of them (Mintzberg, 1993).
and a decisive and authoritarian decision maker is
This communication gap may lead to decisions made
expected (Redding, 1990). This enables top management
based on incomplete and untimely information.
to reach decisions much more rapidly since superiors do
Kim (1999) found that the communication within a not need to consult subordinates for their inputs and
high power distance culture like Korea displays a vertical views.
pattern. Formal communication is largely top-down,
Proposition 4b: Strategic decision-making process in a
flowing through the designated pyramidal chain of
high power distance organisation is quicker and
command. Also, voluntary feedback from the bottom is
shorter than in a low power distance organisation.
less. In a typical encounter between a superior and
subordinate, a superior does most of the talking and
subordinate merely nods his or her head in affirmation. Decision Implementation
Khare (1999) points out that, due to the organisation’s
spatial configuration in Indian organisations (India is a Subordinates are generally afraid and unwilling to
high power distance culture), the communication express disagreement with their superiors in high power
between superiors and subordinates is limited to formal distance organisations (Hofstede, 2001). They prefer to
channels. Moreover, detailed and tight job descriptions work for superiors who make decisions (and take
for each employee give rise to a compartmentalisation responsibilities) and then tell them what to do (Erez,
of work. This results in few informal interactions 1994; Triandis, 1994). Such an unquestioning attitude
between superiors and subordinates. Hofstede (2001) too (Graf et al., 1990) of subordinates enables decisions
argues that organisations and cultures characterised by made by top management to be carried out much faster
high power distance lack informal communication across in a high power distance organisation than in a low one.
levels in the hierarchy and favour the concentration of On the other hand, employees in a low power distance
authority and decision-making in a few hands at the top. organisation may resist implementation of decisions
which are made without consulting them (Brockner et
Proposition 3: In a high power distance organisation, the al., 2001).
communication gap between superiors and
subordinates will be greater than between superiors Proposition 4c: The implementation of decisions by top
and subordinates in a low power distance management is faster in a high power distance
organisation. organisation than in low power distance
organisation.

DECISION MAKING Decision Effectiveness

Centralisation In a high power distance organisation, the problem of
communication gap between the superiors and the
Sinha and Tripathi (1994) found autocratic decision-
subordinates as discussed in the previous section tends
making in most of the Indian organisations in their study.
to hamper the reaching of effective decisions (Mintzberg,
In a similar vein, Lachman, Nedd, and Hinings (1995)
1993; Khatri, 1996). Senior managers are always ‘right’
argue that decision-making process in high power
even when they are wrong, and usually take it affront
distance organisations is one of the non-participative type
when contradicted (even correctly) by their juniors; and
and hierarchical. Hofstede (2001) also suggests that, in
the best way for employees to survive is to say the
high power distance organisations, decision-making
expected thing (Prendergast, 1993). Managers who are
processes are centralised in a few hands and the superiors
surrounded by ‘yes men’ are unable to benefit from the
are expected to lead and make decisions autocratically.
diverse perspectives, experience, and knowledge of their
Proposition 4a: Decision-making process is more subordinates. Worse still, with stress on conformity, ideas
centralised in a high power distance organisation are unlikely to be refined and improved through group
than in a low power distance organisation. discussion and debate.

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 Consequences of Power Distance Orientation in Organisations 5 ●

Proposition 4d: Quality of decisions in a high power Management Development

distance organisation will be poorer than the
Writers on Chinese social psychology and organisational
decisions in a low power distance organisation.
behaviour (Bond and Hwang, 1993; Redding and Wong,
1993) have highlighted that managers in a high power
Management Control distance Chinese culture have a tendency to favour
direction over delegation. Besides, the Chinese managers
Discipline and control are essential elements of an
are also reluctant in sharing information with their
organisation, especially the large ones. Nasierowski and
subordinates (McKenna, 1998). This may inhibit growth
Mikula (1998) note that close supervision may be
and development of managers and employees in the
accepted (tolerated) by subordinates in a high power organisation.
distance organisation. This allows greater control of the
subordinates in a high power distance organisation as Walder (1983) argues that top management in
many are afraid to give comments and unwilling to Chinese organisations (mostly high in power distance)
express disagreements. Further, as discussed above, there is flexible in the distribution of organisational resources,
is a much tighter description of working procedures and largely according to their personal preferences. Similarly,
rules. This high level of specification of jobs and rules Kim (1999) argues that promotions in Korean
enables managers to control their subordinates fully organisations are usually ‘determined by discriminatory
(Krokosz-Krynke, 1998). personal relationship’ (pp.97). Thus, one would expect
opportunities for management development to be limited
Proposition 5: There is greater control over employee to a few favoured by the management.
behaviour in a high power distance organisation than
in a low power distance organisation. Proposition 7: The management development
opportunities will be restricted to a favoured few
(elite) in a high power distance organisation than in
Deference to Senior Employees a low power distance organisation.
Kim (1999) argues that the West places more emphasis
on autonomy and equity. The East, on the other hand, Ethical Behaviour
places more emphasis on hierarchical order and in-group Nasierowski and Mikula (1998) point out that work
loyalty. Beer and Marsland (1983) suggest that, in a high ethics is weak in a high power distance culture. Similarly,
power distance organisation, a person gains respect by Kedia and Bhagat (1988) argue that it may be difficult
virtue of his or her age and position; juniors are expected to foster work ethics in a high power distance culture. In
to obey and show respect to the seniors. In return the later addition, people from high power distance cultures are
display benevolence, generosity and paternalistic care to more likely to view a questionable business practice more
the former (Kim, 1999). ethical than people from a low power distance culture
Khare (1999) argues that, in Japan, a high power (Cohen, Pant, and Sharp, 1996). In a high power distance
distance culture, when a new employee starts working culture, superiors do not have to justify their decisions
in an organisation, the last thing he or she would think to the members lower in hierarchy, which insulates them
of is to compete with his or her seniors in the from being exposed or reprimanded for wrong doings
organisation. His or her thankfulness and respect for the (Khatri and Tsang, 2003).
seniors stops him or her from pursuing his or her own Hofstede’s (1997) description of a power distance
individualistic goals. As such, competition between culture suggests that, in a high power distance culture,
juniors and seniors in Japanese organisations is the existing power structure and the established
uncommon and the senior-junior relations are not easily hierarchical order are less likely to subject to challenge.
interrupted. Similarly, Lockett (1993) states that older People in a high power distance culture live with
superiors generally receive more respect than younger institutionalised injustice and consider hierarchical order
ones in a high power distance culture. to be normal and even desirable and accept the
inequalities of power.
Proposition 6: Junior employees show greater respect to
senior employees in a high power distance La Porta et al., (1997), Husted (1999) and
organisation than in a low power distance Lambsdorff (1999) note that hierarchies play part in
organisation. corruption. There is considerable dependence of

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6 Khatri
●

subordinates on their superiors in a high power distance differentiation of activities, as in the proliferation of staff
culture. This leaves sizeable room for corruption in the sections, combined with inadequate integrative
form of favouritism and nepotism, as decisions are not mechanisms lead to efficiency problems. The poor
made on the basis of merit but favour and loyalty integration in a high power distance organisation occurs
(Husted, 1999; Khatri, Tsang, and Begley, 2006). Takyi- because of anemic communication and low employee
Asiedu (1993) found that, in a high power distance participation as discussed earlier.
organisation, ‘scandals involving people in authority are, Proposition 9b: The differentiation of organisational
almost always covered up as long as they remain in activities will be greater in a high power distance
power’ (pp.92). These cover-ups are a result of organisation than in a low power distance
subordinates’ loyalty. organisation.
Proposition 8: Unethical behaviour will be greater in a Proposition 9c: Integration of organisational activities
high power distance organisation than in a low power will be lower in a high power distance organisation
distance organisation. than in a low power distance organisation.

ORGANISATIONAL STRUCTURE Inertia

Micromanagement In order to be competitive in today’s ever-changing

environment, it is important for an organisation to adapt
By micromanagement, we mean managerial emphasis on to changes in its environment. However, the
routine, operational aspects of management at the centralisation of power in a high power distance
expense of broader, strategic management issues. In a organisation often poses formidable barriers to change
high power distance organisation, there is a tendency in and little incentives for innovation (Hage and Aiken,
senior managers to micromanage organisational 1970; Hofstede, 1980; Shane, 1993). Redding and
activities (Kim, 1999; Redding, 1990). Even relatively Baldwin (1991) suggest that high power distance
minor and routine decisions are taken to the enterprise’s generally leads to a stable organisational structure, the
top for resolution. This happens because everyone wants subtleties of which are often visible only to its members.
to run things, but does not want the responsibility (Zhou, Indeed, because of subordinates’ submissiveness and
1981). A result is that senior managers in a high power unquestioned acceptance of unequal distribution of
distance organisation find themselves overloaded with power, key personalities who are in control face little or
routine decisions, some of which border on triviality no threat (Blunt, 1993; Khatri, Tsang, and Begley, 2006).
(Lockett, 1993). For example, in a high power distance In other words, stability is ensured through little turnover
culture, it is not uncommon that an expense of a few of those who are in power.
dollars goes all the way to the top for approval. Using
Korean organisations as an example, Kim (1999) While centralised control and obedience from
highlights that one of the characteristics of Korean subordinates provide political stability to the
managerial system is its authority structure. It displays organisation, they also give rise to organisational inertia
a high concentration of decision-making at the top. The (Khatri and Tsang, 2003). Indeed, owing to overemphasis
delegation of authority and empowerment of the middle on conformity and a high level of incompetence, growth
and lower levels of management is low. of the organisation and its full potential to adapt to
changes will be restricted. Stress on conformity and
Proposition 9a: Senior managers in a high power distance centralised control prevents an organisation from
organisation have greater overload of routine learning by limiting initiative and innovation from below
decisions (micromanagement) than their (Redding, 1990; Stata, 1989). Information collected by
counterparts in a low power distance organisation. subordinates who are in touch with the customers,
suppliers and other outside stakeholders may fail to reach
Differentiation and Integration of Organisational their superiors. Thus, while high power distance serves
Activities to strengthen the grip of a few at the top of the
organisation, it imposes a constraint on the organisation’s
A key feature of the high power distance organisation is ability to learn and adapt to changes.
the high level of differentiation of activities, in particular
division between staff and line functions (Laaksonen, Proposition 9d: Organisational inertia will be positively
1984). Lockett (1993) contends that extensive associated with high power distance.
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 Consequences of Power Distance Orientation in Organisations 7 ●

CONCLUSION lack of any check or accountability, there is no pressure

on top managers to behave ethically.
In this paper, we have reviewed literature on power
distance orientation and its impact on a variety of Finally, we argued that power distance orientation
organisational behaviours such as employee affects organisational structure. In a high power distance
participation, nature of job descriptions, organisational organisation, managers tend to micromanage
communication and decision making, discipline and organisational activities. Even minor decisions go to the
control, deference to senior employees, management top of the organisation for resolution. Consequently,
development, and organisational structure. We have higher level managers are inundated with routine
argued that there will be less employee participation in decisions. We also noted that there is a greater
a high power distance organisation than in a low power differentiation of organisational activities. However,
distance organisation. Employees, in a high power because of poor communication, coordination, team
distance context, over time, develop a mindset of work, and information sharing, integration of
unwillingness to participate in decisions. They are organisational activities is inadequate. Further, because
content with their managers making decisions and giving the top managers want to hold on to the power as long
them instructions, which they follow passively. Jobs are as they can afford to combined with little resistance from
narrowly and tightly specified, giving employees little lower level employees, high power distance
discretion. Communication takes place vertically organisations show greater inertia than low power
downwards; informal and horizontal communication is distance organisations.
quite limited. A greater communication gap is likely
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Naresh Khatri (KhatriN@health.missouri.edu) is a PhD from State University of New York at Buffalo and MBA from Indian Institute
of Management, Ahmedabad. He is an associate professor at the University of Missouri. His research focuses on strategic human resource
management, leadership, healthcare management, strategic decision making and cross-cultural management. He has authored a scholarly
book and published over 40 research articles and book chapters. His research is cited widely by the scholars across the globe. Three of
his research papers have received nominations for the Best Paper Award at the Academy of Management Annual Meetings. He also
received the ‘Teacher of the Year Award’ in the Department of Health Management at the University of Missouri in 2006.

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