ECONOMIC RESEARCH CENTER DISCUSSION PAPER
J u n e 2003

No. 143
CHANGING DIMENSIONS OF NATIONAL CULTURE
IN JAPAN:APPLYING THE HOFSTEDE FRAMEWORK

byJeanne H. YAMAMURA ∗Michimasa SATOH * *Yvonne STEDHAM **** Visiting Research Fellow (From January 2003 to April 2003), Economic ResearchCenter, School of Economics, Nagoya University; Associate Professor, Department of
Accounting and Information Systems, University of Nevada Reno.
** Professor, Graduate School of Economics, Nagoya University.
*** Professor, Department of Managerial Sciences, University of Nevada Reno.

Changing Dimensions of National Culture in Japan:
Applying the Hofstede Framework

Dr. Jeanne H. Yamamura
Associate Professor
Department of Accounting and CIS / 026
University of Nevada Reno

Dr. Michimasa Satoh
Professor
Graduate School of Economics
Nagoya University

Dr. Yv onne Stedham
Professor
Department of Managerial Sciences / 028
University of Nevada Reno

Abstract

In 1980, Hofstede (1980; 2001) introduced a national cultural
framework based on data collected in two survey rounds between 1967 and1973. The cultural dimensions identified in that framework, i.e.,
individualism (IDV), masculinity (MAS), power distance (PDI) and
uncertainty avoidance (UAI), have since become a standard forcross-cultural research and are widely used to predict differences between
members of different national cultures (Lonner and Berry 1998;
Sondergaard 1994).
Hofstede believed these national cultural characteristics to beenduring and relatively stable over time. Changes, if they were to occur,would result from outside forces causing changes in a country’s ecologicalfactors, which, in turn, would slowly change values and institutions. In
addition, as such outside forces would commonly affect more than one
country, changes would occur synchronously among countries, maintaining
the differences among them.
Among the fifty-three countries and regions included in Hofstede’s
study, Japan was distinctive. In clustering these countries on the basis of
their scores on IDV, PDI, MAS, and UAI, Japan remained separate, theonly country that did not group with another country. Interestingly,
Japan did not cluster with other Asian countries such as China, Taiwan,
Korea, Malaysia, Thailand, Singapore, or Hong Kong. During the 1800’s
and 1900’s, Japan has faced considerable outside forces. Were theseforces of sufficient strength and duration to affect the cultural uniquenessof Japan as measured by the Hofstede dimensions?
Data were gathered for matched samples from a single industry segment,
accountants working for public accounting firms in Japan, in 1985 and in 2002,
and used to compute the Hofstede indices as of both time periods. The two
samples were matched in terms of location, gender, occupation, level, andeducation to control for the potential influences on culture from other sources.
The results show significant change has occurred for two of the four
dimensions between 1985 and 2002.
Our research makes a unique contribution because it enables theexamination of the relative stability of the Hofstede indices while controllingfor other factors. The paper discusses possible reasons for the changes aswell as the potential impact on cross-cultural research.

Introduction
The globalization of the world economy continues at a rapid pace and is mirrored in
the academic settings in terms of the increasing number of cross-cultural research studies oninternational business topics. For example, Samiee and Athanasio u (1998) note that the
number of international business strategy studies doubled in the last eight years whencompared to the preceding ten years. The foundation utilized for much of this research has
been Hofstede’s cultural framework. In 1980 Hofstede (1980; 2001) introduced four national
cultural characteristics based on data gathered from 1967 to 1973. His work was
groundbreaking in its conceptualization of differences among national cultures and remains
unsurpassed in the sheer number of observations and countries examined. As a result,
Hofstede’s dimensions have become a dominant and widely used framework in cross-culturalresearch (Chandy and Williams 1994; Lonner and Berry 1998; Redding 1994; Sondergaard1994). Researchers report that the use of the Hofstede framework is increasing. Sivakumar
and Nakata (2001) determined that 134 studies utilizing Hofstede’s framework werecompleted during a 17 ½ year period from 1981 to 1998. Over 70% of those studies
appeared after 1993.
Its popularity notwithstanding, controversy exists regarding the manner in which the
Hofstede dimensions were derived and how they are applied. For example, the use of only
IBM employees limited the number of dimensions to four when, in fact, more than four may
exist (Triand is 1982; Yeh 1988). Similarly, the depiction of the dimensions as bipolar may
be the result of a “western mindset” and not necessarily appropriate for evaluation of nonWestern countries (Sama and Papamarcos 2000). Despite these weaknesses, the existence
and conceptual validity of the Hofstede dimensions have generally been confirmed by related
cross-cultural research efforts.
Efforts to propose alternative frameworks (e.g., Schwartz 1992, Smith et al. 1995,
Trompenaars 1993) confirmed one or more of the Hofstede dimensions while recognizing1that other dimensions also exist. Similarly, efforts to replicate and validate Hofstede’s
findings (e.g., Barkema and Vermeulen 1997; Hofstede and Bond 1984; Hoppe 1993;
Kagiticbasi 1997; Shane 1993, 1995; Smith et al. 1994; Sondergaard 1994) have provided
additional support. As a result, Hofstede’s work is expected to continue to be utilized
extensively in cross-cultural research.
Thirty years have passed since the original data were collected. Although Hofstede
believed the national dimensions to be enduring and relatively stable over time, questions
have arisen as to the possible obsolescence of these measures due to their age. Krumbholz etal. (2000), for example, did not find expected national differences in examining theimplementation of enterprise resource planning software among subsidiaries in different
countries. They speculated that the Hofstede measures used to predict the differences might
be outdated. Sivakumar and Nakata (2001) also cite a need to update the cultural scores dueto the impact of global movements of people and products and advances in communication
technologies. Others have proposed that cultures are converging over time (Ohmae 1985,
O’Reilly 1991). Given the continued and widespread popularity of the Hofstede dimensions,an examination of the stability of these measures is not only useful but necessary.
In accordance with Hofstede’s (2001) recommendation, our study offers an
examination of changes in the Hofstede dimensions over a 17- year period. Recent efforts tomeasure the Hofstede dimensions have been hampered by a failure to utilize matchedsamples (e.g., Spector et al. 2001). Our study utilizes samples matched on gender, location,
education, level, and occupation, thus providing a strong basis for examining whether
changes in the measures have occurred. Changes, if they are indeed present, have important
implications for the continually expanding field of cross-cultural research and must be taken
into account in planning such studies.

2The following sections describe the Hofstede framework and utilize the Hofstede
dimensions to identify Japan’s unique position especially among the Asian countries withwhich it is commonly grouped. The outside forces of change and their impact on Japan’s
ecological factors are also presented.
Background
Hofstede’s Dimensions of National Culture
Hofstede defined culture as “the collective programming of the mind that
distinguishes the members of one group or category of people from another” (2001: 9).
These “mental programs” are manifested in both visible and invisible forms. Outsiders mayview a society’s symbols, heroes, and rituals. The cultural meanings of these practices,
however, are found only in the manner in which they are interpreted by members of thatsociety and this interpretation reflects the society’s values.
Societies are self-perpetuating. A society’s values develop as a result of various
factors affecting the society and its people. Such factors, termed “ecological factors” by
Hofstede, include geography, history, demography, hygiene, nutrition, economy, technology,
and urbanization. Institutions such as educational, political, and legislative systems are thencreated and maintained to reinforce both societal values and ecological factors. As a result,the society enters stasis and change will occur only as a result of outside forces (e.g., forcesof nature, trade, scientific discovery) causing shifts in ecological factors. Given theinterrelated and self-perpetuating nature of a society, change would occur only gradually, if atall.
Hofstede’s research interest was primarily in country-level comparisons. His focus,
therefore, resided in national culture. His original study included 53 countries and regions
and more than 116,000 observations obtained from IBM employees from 1967 to 1973.
Analysis of the data revealed four distinct and statistically independent dimensions. These3

national cultural dimensions, individualism (IDV), masculinity (MAS), power distance (PDI),
and uncertainty avoidance (UAI), were verified both empirically and through correlational
analysis with over 140 other cross-cultural studies. While later research resulted in
identification of a fifth dimension, long-term orientation, our study focuses on the initial four
dimensions. The four dimensions are described in detail in the following section.
Individualism: This dimension addresses the degree to which members in a country
define themselves in terms of group membership. The dimension is bipolar with collectivism
at its opposite end. Markus and Kitayama (1991) note that this dimension impacts theindividual’s self-construal, the manner in which the individual views him/herself. In highly
individualist countries, the individual views the self as independent, separate, and selfcontained. Members look after themselves and their immediate families only.
In comparison, in highly collectivist countries, the individual views the self as
fundamentally connected to others, i.e., as part of a group. In this interdependent construal,
the self is defined in terms of its relationships with others. Members of collectivist countries
become members of cohesive in- groups from birth onward that protect and support themthroughout their lifetimes.
In the workplace, members of highly individualistic countries seek to distinguishthemselves through individual achievements and successes. The employer-employee
relationship is a negotiated transaction in the labor market. Members of highly collectivist
countries, in contrast, are invited to join employers as members of an in- group. They, in turn,give the group their unquestioning loyalty and act to benefit the group through theirachievements and successes.
Masculinity: This dimension describes the degree to which gender roles are clearly
differentiated within a country. In a highly masculine country, men are expected to beassertive, competitive, and tough while women are tender, nurturing, and gentle. Men deal4

with facts while women handle emotions. Men go out to work and support the family andwomen maintain the home.
At the other extreme, in a highly feminine country, the gender roles overlap. Bothmen and women may be assertive, caring, tough or emotional. Thus, the values that men andwomen hold are very similar and family and home responsibilities are likely to be shared.
In the work place, members of masculine societies rate material success andadvancement as most important. To those members, work is a central component of theirlives and they suffer from higher job stress. In feminine countries, quality of life and people
and relationships are most highly valued while work takes a decidedly lesser role. As a result,career ambitions are optional for either sex.
Power distance: The degree to which members of a society differ in their acceptanceof inequality is captured in this dimension. In low power distance countries, equal
distribution of power is the norm; it is expected and accepted that everyone should be equaland any inequalities should be minimized.
In high power distance countries, an unequal distribution of power is accepted as
appropriate and clear distinctions are expected to exist between classes. Powerful people areentitled to privileges and those with less power are in their rightful place.
In the work place, high power distance reveals itself in the form of centralized
decision structures and concentration of authority. The ideal boss is a well- meaning autocrat
or paternalistic leader. Subordinates expect to be closely supervised and directed. Low
power distance is seen in a decentralized decision structure with fewer supervisors and aflatter organization pyramid. The ideal boss consults subordinates and relies on their support.
Uncertainty avoidance: This final dimension addresses the manner in which asociety faces uncertainty. Societies differ in terms of their ability to deal with the unknown.

5In high uncertainty avoidance societies, uncertainty is viewed as a threat that must be
controlled via conservatism, law and order. Risk-taking is avoided and change is resisted.
Countries with low uncertainty avoidance find uncertainty less threatening. As aresult, they are more open to change, more willing to take risks, and more tolerant ofdiversity. Fewer rules are needed and tolerance for ambiguity and novelty is higher.
In the workplace, members of high uncertainty avoidance societies try to reduce theoccurrence of ambiguous situations through investments in technology, adoption of clearly
defined rules, and implementation of uncertainty-reducing rituals such as detailed planning.
Seniority and company loyalty are highly valued. In comparison, members of low
uncertainty avoidance societies establish workplaces that are less formal and structured.
Employees feel comfortable changing employers and company loyalty is not necessarily avirtue.
Japan
Huntington (1993) described Japan as “a society and civilization unique to itself” andnoted cultural differences existing between Japan and its Asian neighbors large enough toinhibit efforts to integrate regionally. Why is Japan considered unique? Use of the Hofstede
scores enables us to identify specific areas of both cultural difference and “uniqueness.”
Efforts to cluster similar countries and regions on the basis of their scores on the four
dimensions resulted, in Japan’s case, in a cluster of one (Hofstede 2001). No other country
was similar to Japan. Especially surprising was that Japan was not similar enough to other
Asian countries to be clustered with them. Its singular standing arose for several reasons
including Japan’s extremely high masculinity score. This section describes Japan’s national
cultural dimensions and the differences leading to its unique position.
Japan’s scores and rank ings on the four national cultural dimensions appear in Table 1
below. Discussion of the Japan’s dimensions follows.

6

TABLE 1: Dimensions of National Culture for Japan (Hofstede 2001)
Dimension

Mean Score*

Index Score

Rank

Individualism

43

46

22/23

Masculinity

49

95

1

Power Distance

57

54

33

Uncertainty Avoidance

65

92

7

* 53 countries and regions

Note that the mean score is included in Table 1 because Hofstede used the mean to determine
whether countries that score around the scale midpoint should be grouped with the high or
low scoring countries.
Table 2 includes relevant Hofstede scores for Asian countries. The scores areincluded for reference purposes related to the following discussion.

7

TABLE 2: HOFSTEDE (2001) NATIONAL CULTURAL DIMENSIONS – ASIA
Country

IDV

MAS

PDI

UAI

China

20*

66*

80*

30*

Hong Kong

25

57

68

29

Japan

46

95

54

92

South Korea

18

39

60

85

Taiwan

17

45

58

69

Indonesia

14

46

78

48

Malaysia

26

50

104

36

Philippines

32

64

94

44

Singapore

20

48

74

8

Thailand

20

34

64

64

Vietnam

20*

40*

70*

30*

Bangladesh

20*

55*

80*

60*

India

48

56

77

40

Iran

41

43

58

59

Israel

54

47

13

81

Pakistan

14

50

55

70

Turkey

37

45

66

85

East Asia

SE AsiaWest Asia*Estimated

N/A = Not available

With a score of 95 Japan ranked #1 on the masculinity scale, placing it at the forefrontof masculine societies. The second highest masculine country, Austria, scored 79, a full 16
points below Japan. The result finds Japan with “probably the most absolute gender roledivision of any country in the world” (Hofstede 2001: 310). Men are expected to be
dominant and tough while women are tender and address emotional needs. Both men andwomen value achievement, assertiveness, and material success and learn to be ambitious and8competitive. Women, however, may direct their ambition toward their brother’s, husband’sor children’s achievements.
Japan also ranked among the higher scoring countries, #7, on uncertainty avoidancewith a score of 92. Interestingly, though, this ranking placed Japan among a group of Latin
and Mediterranean countries (e.g., Greece, Uruguay, Salvador). Recall that this dimension
focuses on the extent to which members of a society are threatened by unstructured or
ambiguous situations. Societies high in uncertainty avoidance emphasize rules, laws, andcodes of conduct in order to better ensure a stable and orderly life. Japan’s East andSoutheast Asian neighbors noticeably differed from Japan in terms of uncertainty avoidance.
Most fell into the low uncertainty avoidance category.
On the individualism measure, Japan’s score of 46 placed it just above the mean of 43
or in the individualist category as opposed to the collectivist category. Other countries
scoring as moderately individualist included Arge ntina, India, and Spain. Hofstede’s
classification of Japan as individualist is shared by other Asian countries. Only Westerncountries perceive Japan as collectivist (Hofstede 2001).
On the last dimension, power distance, Japan (with a score of 54) fell just below themean of 57, placing it in the low power distance category. This categorization again
separated Japan from its neighbors. All other East and Southeast Asian countries appeared in
the high power distance category.
As a result of these scores, Hofstede’s efforts to cluster similar countries resulted inJapan being classified by itself, the only country so designated. Clearly, Japan presented aunique case. For Westerners, it may be surprising that Japan was noticeably different fromthe other Asian countries, e.g., China, Taiwan, South Korea, Singapore, Hong Kong,
Malaysia and Thailand. While recognizing, for example, that the Korean culture differs fromthe Japanese culture, more similarity than dissimilarity would be expected among Asian9cultures, particularly in terms of individualism and power distance. Asian cultures are
generally noted for their collective and hierarchical nature.
Hofstede expected that “culture change basic enough to invalidate the country
dimension index scores will need either a much longer period – say, 50 to 100 years – orextremely dramatic outside events” (Hofstede 2001: 36). Particularly relative to many othercountries, Japan has experienced drastic changes in external forces since the mid-1800’s that,in turn, have impacted Japan’s ecological factors. We propose that these outside events andthe resulting effect on Japan’s ecological factors may have been dramatic enough to impact
its cultural dimensions.
Outside Forces of Change
History in Japan has been presented as a series of “openings”, each with dramatic andlong- lasting effects on Japanese culture (e.g., Kusayanagi 1992; Maeno 2001; Satoh 2002).
The “first opening” occurred in the form of the Meiji Restoration of 1868 when the Emperor
was restored to ostensive power. A primary impetus for the Restoration was the existence ofa series of forcibly and externally imposed trade treaties with foreign countries. In a series ofedicts beginning in 1635, the Tokugawa Shogunate closed Japan to foreigners, a period of
National Seclusion that lasted for over 200 years (Itasaka 1996). During this time, theJapanese people were forbidden to travel overseas and foreign trade was limited to twocountries (the Netherlands and China) and a single port in Nagasaki (Itasaka 1996).
Increasing pressure during the early 1800’s from Russia, Britain, and the U.S. culminated in
the 1853 appearance of Commodore Matthew Perry’s “black ships” in Edo Bay and thesigning of a treaty in 1854 granting the United States the right to provision their ships andestablish a consulate in Japan (Nakano 2003; United States Library of Congress 1994). A
series of similar one-sided treaties with the Netherlands and other European countries quickly
followed (Maison and Caiger 1997). The combination of the unequal treaties, the opening of

10

the ports, and the shogunate’s inability to “expel the barbarians” began a chain of events
culminating in the overthrow of the shogunate and the restoration of the emperor (Japan:
Profile 1999).
The first opening thus resulted from outside forces in the form of both domination andtrade. Japan was forced to re-open its borders to foreign trade after 210 years of self- imposed
isolation. Foreign trade, in turn, changed the ecological factors of “economy, technology,
and urbanization.” The first opening also created a drastic change in the ecological factor,“nutrition.” In 676 AD, Emperor Tenmu had banned the eating of meat, a prohibition thatlasted twelve hundred years (from the Nara period to the Meij i restoration). During the late1800’s and the Meiji restoration, State Shinto was established as the official national religion,
headed by a divine leader, the Emperor. In exercise of his divinity, the Emperor approved theeating of meat, proclaiming that even Buddhist priests would be allowed to eat meat
(Daijokan Fukoku No. 133, April 25, 1872). Meat thereafter became an accepted andincreasingly common part of the local diet.
The “second opening” occurred in 1945 following Japan’s defeat in World War II.
Again in response to outside forces of domination, changes occurred in numerous ecologicalfactors, including economy, nutrition, technology, and urbanization. Changes were also
imposed in institutions including education, religion, political systems, and legislation. For
example, a new constitution and a new educational system were adopted. One change isparticularly noteworthy, the change in spiritual factors. “State Shinto,” Japan’s nationalreligion, was abolished. State Shinto was created during the Meiji period as an official creed
intended to unify the population behind the government and to provide support for thegovernment’s ambitious agenda to modernize the nation. It accomplished these goals by
establishing the Emperor as the divine descendent of the Sun Goddess and the high priest of11

Shinto. In 1945 the Emperor renounced his divinity and all state support for Shinto wasremoved (Japan: Profile 1999). Japan has been without a state supported religion since then.
Finally, in response to trade forces, the “third opening” began in 1996 with Prime
Minister Hashimoto’s announcement of the “Big Bang” financial deregulation plan. A major
component of this plan was approval of foreign investment in Japanese banks (Japan’s Bank
Mergers 1999; Japan Ministry of Finance 2000). Although efforts to promote foreign direct
investment in Japan had begun in the 1960’s, foreign investors had been effectively “lockedout” of the domestic financial market. In December 1998, the Financial System Re form Law
was enacted as part of a “Big Bang” financial deregulation plan. The Law not only enabledforeign investors to acquire Japanese banks, it also sought to remove other impediments suchas restrictions on sales of securities and broker commissions (Japan Ministry of Finance2000). As a result, foreign investment in the financial sector quadrupled between 1997 and1999 (Tett 2000a). The striking increase in foreign investment into once-closed markets has
led some Japanese to call them the “Black Ships” of the modern era and to speculate that the
impact of these investments will be severe and shocking to the corporate world (Tett 2000b).
Thus, the ecological factor of “economy” was again impacted.
We suggest that the combined effect of these changes in Japan’s ecological factors
was dramatic enough to now be reflected in a rather abrupt change in Japan’s culture.
Perhaps, although the ecological changes in Japan occurred at different points in time, thecombined effect of these changes on culture has only now become considerable enough to beobservable and detectable. Anecdotal evidence, for example, shows that Japan’s traditional
emphasis on conformity and homogeneity may be diminishing. Younger Japanese seek todifferentiate themselves from their peers through creative dress and appearance. Also, theJapanese approach to education has changed in an effort to emphasize creativity andentrepreneurial spirit over emphasizing conformity and fitting in (Role of Education 1998;

12

Fujisawa 1999). We propose that these individual- level and institutional- level changes arereflections of fundamental changes in values and norms. Our study will explore whether
change in the cultural dimensions for Japan has occurred over time. To date, no other studiesof this kind have been conducted.
Hypotheses
Our data consist of two sets of measurements taken in 1985 and in 2002, respectively.
The 1985 data were kindly provided to us by Jamie Pratt and Phil Beaulieu who collected thedata in Japan as part of a larger project involving professional accountants in the UnitedStates, United Kingdom and Australia (see Pratt et al. 1993).
Although Hofstede noted that the national cultural dimensions were enduring, wesuggest that Japan has experienced changes in its ecological factors that combined to be
severe enough to impact its culture. As a result, we expect the measures of Japan’s national
cultural dimensions to have changed and to have changed rather recently and abruptly.
Our data enable us to determine whether Japan has maintained its cultural uniquenessby comparing cultural dimension index scores for 1985 and 2002. The matched samples
utilized in this study allow a direct comparison minimizing potential confounding from otherfactors.
H1: IDV scores for Japan changed from 1985 to 2002.
H2: MAS scores for Japan changed from 1985 to 2002.
H3: PDI scores for Japan changed from 1985 to 2002.
H4: UAI scores for Japan changed from 1985 to 2002.
Methodology
Sample: Survey questionnaires were distributed through contacts to participants at
all levels employed by large public accounting firms in Tokyo, Osaka, and Nagoya in 1985
and in 2002. Responses were returned by 87 and 235 accountants in each year, respectively.

13

The survey instrument incorporated previously translated and validated questions from
Hofstede’s Value Survey Module 1982 (VSM82) that allow computation of the four
dimensions of national culture.
Hofstede noted that factors other than nationality could potentially influence thecultural measures, such as age, educational level, gender, kind of work, and industry. To
reduce such potential contamination as well as to better enable interpretable results, such
extraneous variables should be minimized (Adler 1984). The two samples were reduced toenable matching on location, gender, position, and kind of work as well as industry andcompany size. The resultant samples (75 subjects for 1985 and 98 subjects for 2002)
consisted of Japanese men below the partner level working primarily as auditors for large
public accounting firms in Tokyo and Osaka (see Table 3). Hofstede (2001) noted thatsample sufficiency required at least 20 but preferably 50 subjects. This requirement is amply
met by our samples.
The majority of the respondents were in their 20’s and 30’s and had completed abachelor’s degree. The samples were comprised of accountants working at staff, senior, andmanager levels. However, using a sample from one organization enabled control for factorsthat may affect responses to the survey but are related to organizational differences rather
than cultural differences.

14

TABLE 3: SAMPLE
Category

1985

2002

24 and below
25 to 29

4
21

43
26

30 to 3422

19

35 to 39
40 and over

22
5

6
4

Total

74

98

16 years
17 years

67
3

75
6

18 years or more

5

11

Total

75

92

Staff
Senior

25
35

37
16

Manager

15

42

AGE

EDUCATIONPOSITION

Total
75
95
Totals differ as complete information was not always provided.

Measures: Hofstede (1994) revised his original questionnaire in 1982 (VSM82) andagain in 1994. The Values Survey Module 1994 Manual (Hofstede 1994) includes questions
for both versions and notes that indices must be calculated based on the same version to becomparable. We utilized the 1982 version to compute the indices. It includes three or fourquestions for each of the four dimensions as well as various demographic questions (gender,
age, experience, and nationality).

15

Table 4 provides a summary of the variables and measures.

TABLE 4: VARIABLES AND MEASURES
Variable

Variable Name

MeasureIndividualism/collectivism
Masculinity/femininity

IDV82
MAS82

VSM82 items and computation
VSM82 items and computation

Power distance

PDI82

VSM82 items and computation

Uncertainty avoidanceControl Variables:

UAI82

VSM82 items and computation

Age

AGE

2 = 24 and below; 3 = 25 to 29; 4= 30-34; 5 = 35 to 39; 6 = 40 andoverEducation

EDUCATION

Level

POSITION

7 = 16 years; 8 = 17 years; 9 = 18
years or more
1 = Staff; 2 = Senior; 3 = Manager

Independent Variables:

Analysis: Frequency and correlational analysis and mean comparisons were utilized
to match the samples in terms of gender, location, position, type of work, and education. To
compare the cultural dimensions between 1985 and 2002, the indices were calculated for1985 and 2002. Mean comparisons and t-tests were then employed to evaluate the statisticalsignificance of changes in the indices from 1985 to 2002.
Results
Table 5 provides descriptive statistics.

TABLE 5: DESCRIPTIVE STATISTICS
Variable
1985

N

Mean

Std. Dev.

Range

IDV82

74

37.23

87.82

-134.00 to 263.14

MAS82
PDI82

74
75

89.73
138.93

74.83
23.81

-112.57 to 279.57
91.60 to 191.60

16

UAI82

75

45.03

48.83

-49.50 to 159.07

AGE
EDUCATION

74
75

4.04
7.17

1.04
.53

2 to 6
7 to 9POSITION

75

1.87

.72

1 to 3

IDV82

98

67.50

66.99

-63.00 to 274.00

MAS82
PDI82

98
96

28.03
145.36

91.15
23.73

-299.00 to 241.00
106.30 to 206.30

UAI82

97

54.96

42.89

-63.60 to 146.40

AGE
EDUCATION

98
92

3.00
7.30

1.12
.68

2 to 6
7 to 9POSITION

95

2.05

.92

1 to 32002

The average age category of sampled Japanese accountants was 30-34 in 1985 but had
dropped to 25-29 in 2002. As the difference in age between the two samples potentiallyaffects comparison of the indices, an ANOVA analysis was performed. No significant
differences among the age groups were found in any of the dimensions. The 1985 and 2002
samples did not significantly differ in education and level (position) (See Table 7).
Tables 6a and 6b summarize Pearson correlations among the study variables. In the1985 sample, only one significant correlation appeared – between age and position. As
would be expected, older accountants have higher level positions. In the 2002 sample, thesignificant age-position correlation was duplicated. In addition, several other significant
relationships appeared. IDV was negatively correlated with MAS and education. Thus, lesseducated and lower MAS scoring individuals displayed higher individualism scores. PDI
was negatively correlated with level, i.e., lower-ranked accountants had higher PDI scores.

17

TABLE 6a: PEARSON CORRELATIONS - 1985

Variable

1

2

3

4

5

6

1. IDV82
2. MAS82.225

3. PDI82

.032

-.118

4. UAI82

-.053

.062

.188

5. AGE

.065

.092

-.079

.026

6. EDUCATION

.115

-.091

-.097

-.027

.185

7. POSITION

.089

.176

.018

.161

.714**

Control Factor.202* = Significant at p < .05; ** = Significant at p < .01

TABLE 6b: PEARSON CORRELATIONS - 2002

Variable

1

2

3

4

5

6

1. IDV82
2. MAS82-.211*

3. PDI82

-.088

.063

4. UAI82

-.010

-.060

.122

5. AGE

.136

-.065

-.045

.058

6. EDUCATION-.224*

.003

.158

-.121

-.120

7. POSITION

.007

.036

-.243*.034.623**

Control Factor* = Significant at p < .05; ** = Significant at p < .01

18

.019

Table 7 presents the results of the mean comparisons. As predicted, significant
changes appeared in the individualism and masculinity dimensions. However, contrary to
prediction, no change occurred in the power distance and uncertainty avoidance measures.
Thus, Hypotheses 1 and 2 were supported while 3 and 4 were not supported.

TABLE 7: T-TESTS OF THE CHANGE BETWEEN 1985 AND 2002
1985

2002

CHANGE

Variable

N

Mean

S.D.

N

Mean

S.D.

Diff.

p value

IDV82

74

37.23

87.82

98

67.50

66.99

30.27

.011

MAS82

74

89.73

74.83

98

28.03

91.14

-61.70

.000

PDI82

75

138.9323.81

96

145.36

23.73

6.43

.081

UAI82

75

45.03

48.83

97

54.96

42.89

9.93

.159

AGE

74

4.04

1.04

98

3.00

1.12

1.04

.000

EDUCATION

75

7.17

.53

92

7.30

.68

-.13

.162

POSITION

75

1.87

.72

95

2.05

.92

-.19

.141

Note: The change was calculated as follows for each country: (2002 measure – 1985 measure).

Discussion
The primary purpose of this study was to explore the stability of the Hofstede’s
national cultural dimensions. We were able to evaluate stability over a 17- year time period
from 1985 to 2002. Given the severe changes in ecological factors experienced by Japan
since the late 1800’s, we expected the measures to change. Significant changes appeared in
two of the measures while two remained unchanged (see Table 8).

19

TABLE 8: SUMMARY OF HYPOTHESES RESULTS
H1: IDV scores for Japan changed from 1985 to
2002.
Increase

Supported

H2: MAS scores for Japan changed from 1985
to 2002.
Decrease

Supported

H3: PDI scores for Japan changed from 1985 to2002.
No change

Not supported

H4: UAI scores for Japan changed from 1985 to2002.
No change

Not supported

As the potential reasons for these results differ by dimension, we discuss each dimension
separately.
Individualism
Individualism increased significantly from 1985 to 2002. Why did individualismchange?
Hofstede (2001) noted that individualism was positively correlated with national
wealth (GNP/capita) with wealthier countries exhibiting greater individualism (r = .82; p< .0001). Similarly, the changes found four years later in his follow- up study revealed
significant shifts correlated with changes in national wealth. The countries with increasing
wealth also displayed increasing individualism scores while countries with decreasing wealthdisplayed decreasing individualism scores.
Japan has experienced increases in national wealth since Hofstede’s study wascompleted. In 1970, Japan was ranked #9 with GNP of U.S. $1,920 per capita. Between
1970 and 1985, Japan’s GNP per capita grew steadily, hitting U.S. $11,300 by 1985 (WorldBank 1986). After 1985, however, Japan’s economy became the wonder of the industrialized
world. In 1988, Japan’s GNP per capita (U.S. $21,020) exceeded that of the U.S. (WorldBank 1989). Although problems began to appear in 1990, the economy continued its steadyrise and by 1996, GNP per capita had reached a high of U.S. $40,940 (World Bank 1997).

20

The end of the 90’s, however, brought an end to Japan’s spectacular growth. Although Japan
has remained among the world economic leaders, the country’s continuing economic
problems were a primary concern in 2002.
From 1970 to 1985, Japan’s economy grew steadily. This period of stable growth was
followed by over a decade (from 1985 to 1998) of rampant and widely proclaimed economic
growth. The Japanese thus experienced increasing national wealth for more than a quarter ofa century. Based on the results of this study, it appears that individualism also increased inconjunction with national wealth.
This result also provides support for Hofstede’s belief that changes, if any, would
appear gradually. The increased individualism in 2002 fails to reflect Japan’s current
economic problems, despite their apparent severity. As such problems did not appear until
the 1990’s, they may be too recent in origin to be reflected in the individualism measure.
Note that these results may be unique to the accounting profession and may not reflect
the Japanese culture in general. Aono and Daniel (1992) observed that Japanese accounting
firms attracted more independent personalities. That characteristic may be indicative of amore individualistic nature on the part of those who chose to become accountants.
McKinnon (1984) found that Japan’s emphasis on relationships made independent auditors aforeign concept prior to their introduction in 1948. Those who select the accounting
profession must overcome cultural constraints in order to do their jobs. That, in itself, may
require a higher degree of individualism for accountants.
Masculinity
The 2002 masculinity score significantly decreased from that found in 1985. This
increase coincided with the introduction of relatively large numbers of women into theworkplace and into the public accounting profession specifically. In 1985, only two womenappeared in the total sample of 87 (2%), both at the staff level. By 2002, that number had

21risen to 37 out of 235 (16%) distributed proportionately among the staff, senior, and manager
levels. The Japanese Institute of Certified Public Accountants (JICPA) reported that womenmade up 8.54% of the total CPAs in Japan in 2002 (JICPA 2003). Our 2002 sample had
approximately twice that number. Anecdotal evidence indicates that women make up a
greater percentage of the auditing divisions of the large accounting firms due to theirtendency to study languages (primarily English) while in school.
Although this study restricted the sample to men, the working environment for men in
2002 would have differed substantially from that found in 1985. Perhaps simply the presenceof women in the public accounting workplace has resulted in a change in business practices,
including a change from the emphasis placed on high earnings and advancement to one
focusing on cooperation and group decisions.
As in other developed countries, women are increasingly found in the workplace. As
they become integrated in the workforce, their views may be reflected in business practices.
The end result is increased emphasis on “feminine” values such as improved working
conditions, protection of employees, and environmental protection. Developed countries may
be transitioning to become less masculine societies. This argument receives further support
from recent research showing possible declines in masculinity scores in Japan among pilots,business professionals and advanced business students (e.g., Fernandez et al. 1997, Merritt
2000, Spector et al. 2001).
Power Distance
Hofstede (2001) also found power distance to be correlated with na tional wealth (r = .65; p < .001). Wealthier countries had lower PDI scores. Power distance refers to theemotional dependence of less powerful individuals on more power individuals. As national
wealth and access to resources increase in a country, inequities in power distribution arelikely to disappear. Based on Japan’s steadily and sometimes dramatically increasing22

national wealth, if change were to occur, the PDI scores should have decreased. Our results,
however, show the PDI scores unchanged from 1985 to 2002. Given the significant increasein IDV, also correlated with national wealth, the lack of change is puzzling.
In considering possible explanations for these somewhat contrary results, weconsidered Hofstede’s original 1970 scores and changes in the components of the PDI
measure. Although a direct comparison between the IBM sample and our sample is notpossible due to the different populations utilized, consideration of the 1970 scores is helpful
for discussion purposes.
Japan’s PDI measure in 1970 was 54 and it ranked 33rd out of 53. Our results
indicated PDI measures of 139 and 145 in 1985 and 2002, respectively. Hofstede noted thatthe theoretical range for the power distance measure was -90 to 210. He further noted that in1970 the high power distance countries were “pushing” against the normal ceiling of 100. It
appears that our sample of Japanese accountants belongs in the high power distance group as
opposed to the low power distance category. The lack of change from 1985 to 2002 reflected
the continuation of a high power distance working environment for accountants during thattime period.
Our examination of the components of the PDI measure revealed the following:•

The perception that employees are afraid to disagree with their bosses increased from
3.11 to 3.44 from 1985 to 2002 (with 5 = very frequently). The value for 1970 was
2.84.

•

The percentage of respondents viewing their boss as autocratic or paternalistic
increased from 50.6% in 1985 to 65.5% in 2002. This percentage was 44% in 1970.

•

The percentage of respondents preferring a boss with a consultative decision- making
style was 69% (in both 1985 and 2002). This percentage was 46% in 1970.

23Based on the differences in the responses to the dimension’s component questions, it appears
that the work environment for Japanese accountants was much more authoritarian than was
the case for IBM employees in 1970. Further, it appears that the authoritarian environment
remained intact, or perhaps became slightly more authoritarian, from 1985 to 2002.
We speculate that these differences reflect changes in the public accounting
profession rather than in the nation as a whole. Other researchers (e.g. Merritt 2000,
Yamamura and Stedham 2002) have found little or no apparent change in PDI among
Japanese pilots and advanced business students. The profession grew rapidly from 1970 to
2002, more than doubling in size (JICPA 2001). As the nation’s companies rapidly expanded,
the demands placed on public accountants increased. Highly publicized audit failuresincreased demands on the profession to perform more extensive audits and to increase quality
control standards (Balancing 2000; Opening Up 1999; Sakagami et al. 1999). The
combination of the need for greater control and the large influx of new and relatively
inexperienced staff to handle the increasing work load may have resulted in a more rigid
authority structure.
This shift to a more authoritarian structure was also emphasized by the change in thenature of accounting firms. The first audit corporation did not appear until 1967 (JICPA
2001). Prior to that time, Japanese CPAs operated as sole proprietorships as audit firms were
not allowed (McKinnon 1984). In 1970, the accounting firms in existence were limited bothin number and size (JICPA 2001). In addition, such firms were largely formed by merging
existing proprietorships and the resultant firms were not highly integrated or standardized(McKinnon 1984). The rapid growth of the Japanese economy, however, placed continuingpressure on the accounting firms to expand and to maintain quality control while providing
required auditing services. By 1985 as well as 2002, large audit corporations were theprimary providers of auditing services in Japan and the largest were affiliated with the big

24international accounting firms.

The more relaxed, small firm environment of 1970 would

thus have been replaced by a more structured, large firm environment in 1985 and 2002.
The final point to be made with regard to power distance pertains to audit proficiency.
Becoming proficient in auditing requires on-the-job experience. As entry- level auditors
begin their professional careers, they discover how much they need to learn and rely heavily
on those with more experience to guide and train them. As a result, new accountants find it
increasingly difficult to question the judgments of those above them, thus effectively
supporting a more authoritarian structure. The significant negative correlation between
power distance and position found in the 2002 sample provides further evidence for thisrationale. The continued addition of large numbers of younger staff members (as seen in thedrop in the average age level from 1985 to 2002) would maintain or possibly increase thehigh power distance measure.
Uncertainty Avoidance
Of the four dimensions, uncertainty avoidance raised the greatest question with regard
to stability. Hofstede’s (2001) subsequent examination approximately four years later noted
apparent changes but without specific direction. He noted that uncertainty avoidance wassubject to fluctuations on a 25 to 40 year cycle. Similarly, Sondergaard (1994) found that theuncertainty avoidance measure appeared to be sensitive to the timing of the survey. Ourfinding of no change in the measure from 1985 to 2002 would appear to be fortuitous.
The results, however, provide an opportunity for further analysis and discussion. In
1970, Japan ranked #7 on the uncertainty avoidance measure with a score of 92. In our study
the UAI scores appear much lower with values of 45 in 1985 and 55 in 2002. It appears that
although UAI did not change from 1985 to 2002, it was far below the 1970 levels of IBM
employees found by Hofstede. Consideration of the causes of these lower UAI values may
be found by examining the components of the measure as shown below.

25

Uncertainty avoidance consisted of three questions as follows:•

The belief that company rules should not be broken increased from 2.80 in 1985 to
3.37 in 2002 (with 5 = strongly agree). This value was 2.95 in 1970. A strong belief
that rules should not be broken increases the uncertainty avoidance measure.

•

The percentage of respondents planning to remain working for the firm for five years
or less increased from 39.5% to 53.6% from 1985 to 2002. This percentage was 15%
in 1970. An increased willingness to leave the firm decreases the uncertainty
avoidance measure.

•

The stress level (feeling nervous or tense at work) increased from 3.01 in 1985 to 3.19
in 2002 (with 5 = always). This value was 3.45 in 1970. High stress levels increase
the uncertainty avoidance measure.

We believe these differences potentially reflect changes in the Japanese society as well aschanges in the work environment for Japanese accountants.
The lower uncertainty avoidance measures exhibited by our sample of Japanese
accountants in 1985 and 2002 reflect the general prosperity of the nation and the well-beingof its citizens. Despite the current economic slowdown, Japan remains an extremely wealthy
country with a high standard of living. Sales of luxury goods, e.g., Hermes and Gucci, arestrong (Wolf 2002). In 1970 Japan was a relative newcomer to international markets. By
1985 and even more so in 2002, Japan had been a leading economic figure for decades. The
combination of changes in the ecological factors of economy, technology, and urbanization
occurring during those decades may have reduced the nation’s uncertainty avoidance measure
below the level found in 1970.
Furthermore, the increase in UAI from 1985 to 2002, although statisticallyinsignificant, may be an indicator of an increasingly difficult work environment foraccountants. The first lawsuit against a Japanese CPA firm was filed in 1998 against Chuo

26

Audit, the Cooper & Lybrand Japanese affiliate (Auditors 1998). A year later, three lawsuits
were in process and approximately twenty cases were being investigated by the Ministry of
Finance (Liability Net 1999). Suing accounting firms for audit failures is a very recent
occurrence in Japan, a society in which lawsuits are relatively uncommon. At the firm level,
the increasing severity of audit failure consequences would have created greater emphasis on
auditing practices. As a result, auditors would feel increasing pressure to follow the auditing
rules under all circumstances.
In Japan, plans to work for a firm for five years or less indicate relatively short-term
employment. The Japanese CPA firms, like many of their industry clients, are noted for“permanent” employment in which employees, once hired, remain until retirement. The
steady increase in employees planning only a “short-term” stay with the firm may reflect boththe larger number of job opportunities available to Japanese CPAs and the desire to seek
more satisfying positions. As noted above, the stress level increased from 1985 to 2002.
Anecdotal evidence indicates that turnover in Japanese CPA firms may be on the increase.
Like their U.S. compatriots, Japanese accountants are tiring of the heavy work demands
placed upon auditors, including both overtime and pressure. They are leaving the CPA firms
for positions in industry and government, involving less overtime and presumably lesspressure.
Hofstede suggested that accountants as a group had a greater need to avoid
uncertainty and thus would tend to demonstrate higher UAI scores. We did not findaccountants to demonstrate higher uncertainty avoidance. In particular, their scores insupport of the belief that company rules should not be broken appeared somewhat neutral(around 3.0 on a 5.0 scale). In light of recent highly publicized audit failures in the U.S. (e.g.,
Enron, WorldCom), higher uncertainty avoidance levels would have been more comforting.
As auditors are responsible for ensuring that generally accepted accounting principles

27

(GAAP) have been properly applied and for performing such work in accordance withgenerally accepted auditing standards (GAAS), their strong agreement with “company rules
should not be broken” would seem automatic. If our results indicate a tendency to allow
clients to bend the rules, this may indicate future problems for the business community andthe accounting profession.
Limitations
In interpreting these results, some caveats must be considered. First, the data werecollected by survey and thus are subject to the usual limitations of such data. Second,
generalization issues are also present. We began with the belief that the values of Japanese
accountants reflected those of the society as a whole. Our results indicate that while Japanese
accountants reflect the changes occurring in their society, they also represent a uniqueindustry group that may differ from the rest of the Japanese society. Efforts to generalize
results to other Japanese professions or industries must first take the unique characteristics ofJapanese accountants into consideration. Third, we examined only one country. Hofstede
noted that the dimensions were primarily intended for comparative purposes. Thus, extensionof our work to accountants in other countries is needed. Finally, we utilized only four
dimensions in attempting to capture both Japan’s uniqueness and changes over time. Other
dimensions that are present and unmeasured may have contributed to our results.
Implications and Future Research
Despite these limitations, this study has important theoretical and practical
implications. We presented Japan as unique and examined the stability of the culturaldimensions utilizing the Hofstede measures in an effort to see if Japan’s unique culture had
been affected by the dramatic changes in ecological factors which have occurred since themid-1800’s. Our results indicate that Japan has increased in individualism and decreased in
masculinity. Both changes push Japan further toward the “western” group which has

28historically exhibited high levels of individualism and has experienced decreasing
masculinity. These changes may indicate that Japan’s culture has not been able to retain its“uniqueness” and may now be clustered with other countries unless other countries haveexperienced similar cultural changes. The change in masculinity is particularly striking asJapan’s extremely high masculinity scores were a strong factor in its unique position in
Hofstede’s 1970 analysis.
An immediate impact of these cultural cha nges may appear in Japan’s efforts to adopt
and implement international accounting standards (IAS). Adoption of IAS was included in
the “Big Bang” financial deregulation plan as an element essential to attracting international
capital to Japanese companies and the Japanese markets. The corporate sector, however, has
not been supportive and has successfully resisted prior government efforts related to theadoption of unwanted accounting standards. This resistance may be related to the “western”
nature of IAS. IAS were developed primarily by “western” countries and are not necessarily
easy to implement by other cultures. Japan’s cultural changes, the increase in individualismand decrease in masculinity, may facilitate IAS adoption by providing a more “western”
outlook for Japanese accountants that enables them to better understand and perhaps accept
IAS.
Gray (1988) identified four dimensions of professional accounting, professionalism,
uniformity, conservatism, and secrecy, related to national culture. Eddie (1990) later verified
Gray’s predicted relationships between national cultural dimensions and the professional
accounting dimensions. Our research indicates that changes in individualism and masculinity
may have occurred in Japan. Future research examining changes in the Hofstede dimensions
as well as changes in professional accounting dimensions may provide valuable input tocountries attempting adoption of IAS.

29

Hofstede’s presentation of the national cultural dimensions as relatively stable andenduring is not entirely supported by our results. It appears that Japan has significantly
changed in two of the national cultural dimensions. Extension of our research to accountantsin other countries is needed to determine if other countries ha ve moved in a synchronous
fashion as predicted by Hofstede.
Similar to Merritt’s (2000) analysis of airline pilots, the effects of the respondents’occupational context significantly impacted the scores obtained for the national culturaldimensions. Fut ure research needs to consider potential industry effects in applying the
Hofstede dimensions to identify differences in national culture and their resultant effects.
Further, the interaction between national culture and the professional culture also presents anarea of future research interest as performance is known to be impacted by both factors aswell as other influences such as the historic and economic context (Helmreich and Merritt
1998). For example, extension of our research to other accounting groups in Japan and toprofessional and other accountants in other Asian countries would enable consideration of theinfluence of professional culture as well as national culture.
The popularity of the Hofstede framework is expected to remain high. Sivakumar andNakata (2001) note that number of studies incorporating Hofstede’s dimensions has shownsteady increases since the 1980’s with most appearing in the 1990’s. They proposed a meansof better selecting countries in comparative research involving the use of Hofstede’s national
culture dimensions. We expect Japan’s popularity as a research country to continue due to its
economic prominence and the uniqueness of its national character. Our study provides some
support for as well as identifying certain limitations related to the use of the Hofstede
dimensions.

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