10 minutes with Geert Hofstede on Long versus Short Term Orientation 01032015
Summary
TLDRThe video discusses the concept of long-term versus short-term orientation, introduced as the fifth dimension of societal differences by the speaker in 1991. Initially based on data from 23 countries, this expanded to 93 with Dr. Michael Minkov's discovery of a correlating dimension in the World Value Survey. Long-term oriented societies emphasize future rewards like perseverance and thrift, while short-term societies value traditions and social obligations. The Long-Term Orientation Index (LTO) measures this on a scale from 0 to 100. Examples of societal factors correlating with LTO include educational performance, savings rates, investment preferences, and economic growth, particularly in poorer countries.
Takeaways
- 📊 Long-term vs. Short-term orientation is a cultural dimension introduced by the speaker in 1991, initially based on data from 23 countries.
- 🌐 This dimension was later expanded to 93 countries with the help of Dr. Michael Minkov, who found a significantly correlated dimension in the World Value Survey data.
- 🌱 Long-term orientation is characterized by fostering pragmatic virtues such as perseverance, thrift, saving, and adapting to change for future rewards.
- 🌪️ Short-term orientation emphasizes virtues related to the past and present, including national pride, respect for tradition, preservation of faith, and fulfilling social obligations.
- 🔄 Long-term oriented societies view good and evil as relative and changeable, while short-term societies see them as absolute and constant.
- 🧘♂️ In long-term cultures, a superior person is one who adapts to circumstances, whereas in short-term cultures, they are consistent and unchanging.
- 🏦 Long-term oriented societies tend to have higher savings rates and are more focused on long-term profits and market share, unlike short-term societies that prioritize short-term results.
- 📈 The Long-term Orientation Index (LTO) measures societal values on a scale from 0 (short-term) to 100 (long-term), with notable differences among countries.
- 🏫 In long-term oriented societies, secondary school students perform better in mathematics but tend to underestimate their abilities, contrasting with short-term societies.
- 💹 Economic growth in poor countries is faster if they have a long-term orientation, whereas short-term oriented poor countries often experience slower growth.
- 🌟 Long-term orientation scores are relatively stable over time and are influenced by values passed down from parents to children, showing little change even with technological advancements.
Q & A
Who introduced the concept of long-term versus short-term orientation?
-The concept of long-term versus short-term orientation was introduced by the speaker in 1991.
What was the initial number of countries for which data was available when the long-term versus short-term orientation dimension was first introduced?
-Initially, there was data available for 23 countries.
How did the number of countries with available data increase for the long-term versus short-term orientation?
-The number of countries with data increased to 93 when Dr. Michael Minkov discovered a significantly correlated dimension in the World Value Survey data from 1995 to 2004.
What does long-term orientation represent in a society?
-Long-term orientation represents the fostering of pragmatic virtues oriented towards future rewards, such as perseverance, thrift, saving, and adapting to changing circumstances.
What are the characteristics of short-term orientation in a society?
-Short-term orientation is characterized by fostering virtues related to the past and present, such as national pride, respect for tradition, preservation of faith, and fulfilling social obligations.
How does the perception of good and evil differ between long-term and short-term oriented societies?
-In long-term oriented societies, good and evil are seen as relative and can change over time, whereas in short-term oriented societies, they are viewed as absolute and always the same.
What is the difference in how superior individuals are perceived in long-term versus short-term oriented societies?
-In long-term oriented societies, a superior person is someone who knows how to adapt to circumstances, while in short-term oriented societies, a superior person is someone who is always the same.
How does long-term orientation influence economic growth in poor countries?
-Long-term oriented poor countries tend to have faster economic growth compared to short-term oriented poor countries, which often stagnate.
What is the Long-Term Orientation Index (LTO) and how is it measured?
-The Long-Term Orientation Index (LTO) is a scale from 0 to 100 where 0 stands for short-term orientation and 100 stands for long-term orientation, used to measure the differences between societies.
How does the educational performance in mathematics of secondary school students differ between long-term and short-term oriented societies?
-In long-term oriented societies, secondary school students tend to score higher in mathematics but rate their own results lower, while in short-term oriented societies, they perform relatively poorly but tend to overrate their own math results.
Do the LTO scores change over time, and if so, how?
-LTO scores reflect values transferred from parents to children and tend to remain consistent over time. Research shows that values acquired in childhood rarely change in later life, and there are no significant worldwide shifts or changes in the relative positions of countries over time.
Outlines
🌟 Introduction to Long-term vs. Short-term Orientation
The concept of long-term versus short-term orientation was introduced by the speaker in 1991 as a fifth dimension of cultural difference. Initially, data was limited to 23 countries, but it expanded to 93 countries with the discovery of a correlated dimension in the World Value Survey. Long-term orientation is characterized by fostering pragmatic virtues aimed at future rewards, such as perseverance, thrift, saving, and adapting to change. Conversely, short-term orientation emphasizes virtues related to the past and present, including national pride, respect for tradition, preservation of faith, and fulfilling social obligations. The speaker explains the societal implications of these orientations, such as views on good and evil, adaptability, self-perception, learning from others, and the treatment of traditions. The video also touches on the correlation between long-term orientation and practical outcomes like economic growth in poorer countries and educational performance in secondary school students.
📊 Measuring Long-term Orientation Index (LTO)
The Long-term Orientation Index (LTO) is a scale from 0 to 100, where 0 represents short-term orientation and 100 represents long-term orientation. The speaker provides examples of countries with high and low LTO scores, such as East Asian countries like Japan and China, and Western countries like Germany and Russia on the higher side, and countries like the United States, Mexico, and Australia on the lower side. The LTO index correlates with various societal factors, including academic performance in mathematics, savings rates, investment preferences, and corporate focus on market share versus short-term profits. The speaker also notes that in poorer countries, long-term orientation is associated with faster economic growth, while in wealthier countries, the relationship between LTO and economic growth diminishes. The video emphasizes that LTO scores are stable over time and are influenced by values passed down from parents to children.
🌐 Impact of Long-term Orientation on Economic Development
The final paragraph emphasizes the role of long-term orientation in the economic development of poor countries. It suggests that poor countries with a long-term orientation tend to develop faster economically compared to those with a short-term orientation, which often face stagnation. The speaker concludes by highlighting that despite significant technological advancements and global information systems, the use of technology varies between societies based on their pre-established values. This implies that while technology can influence private habits and business practices, it does not necessarily lead to uniformity in values or practices across different cultures.
Mindmap
Keywords
💡Long-term vs. Short-term Orientation
💡Pragmatic Virtues
💡National Pride
💡Adaptability
💡Thrift
💡World Value Survey
💡Economic Growth
💡Relative Virtues
💡Superior Person
💡Fundamentalism
💡Long-term Orientation Index (LTO)
Highlights
The concept of long-term versus short-term orientation was introduced in 1991 as a fifth dimension of cultural differences.
Initial data was limited to 23 countries, expanding to 93 countries with the discovery of a correlating dimension in the World Value Survey.
Long-term orientation is associated with fostering pragmatic virtues like perseverance, thrift, and adaptability.
Short-term orientation emphasizes virtues related to the past and present, such as national pride and respect for tradition.
Long-term oriented societies view good and evil as relative and changeable, unlike the absolute view in short-term societies.
In long-term societies, a superior person is one who adapts to circumstances, contrasting with the consistent superior person in short-term societies.
Long-term orientation promotes humility and learning from other countries, in contrast to the self-pride and nationalism of short-term orientation.
Traditions are seen as changeable in long-term societies, while they are sacred and unchangeable in short-term societies.
Long-term orientation values integrating opposing truths into something new, whereas short-term orientation sees a clear contradiction.
Long-term societies prioritize common sense and the middle way, while short-term societies may lean towards fundamentalism and extremism.
The Long-Term Orientation Index (LTO) measures societal orientation on a scale from 0 (short-term) to 100 (long-term).
East Asian countries like Japan and China score high on long-term orientation, while the United States and Australia score low.
Long-term oriented societies tend to have higher savings rates and more funds available for investment.
In long-term societies, companies focus on market share and long-term profits, unlike short-term societies that emphasize quarterly results.
Investor preferences in long-term societies lean towards family businesses and real estate, contrasting with a preference for shares and mutual funds in short-term societies.
In poor countries, long-term orientation correlates with faster economic growth compared to short-term oriented countries.
LTO scores reflect stable values passed from parents to children and show little change over time, even with technological advancements.
Long-term orientation plays a crucial role in the economic development of poor countries, with those scoring high developing faster.
Transcripts
[Music]
the dimension longterm versus short-term
orientation was introduced by me in
1991 for a fifth dimension of difference
between National
societies I had found four
dimensions but there was a research
project by Professor Michael bond from
Hong Kong who had researched with a
questionnaire made by Chinese Scholars
and that questionnaire produced a
dimension which we didn't have yet and
this Dimension I introduced as The Fifth
and I called it long for a shortterm
orientation
we only had data for 23 countries and it
was only in
2010 when Dr Michael minkov my
collaborator discovered in the world
value survey 1995 till 2004 data a
dimension which was significantly
correlated with this long-term versus
short-term data we had already for the
countries which we had in both studies
and now suddenly the number of countries
for which we had data jumped to 93 more
than four times as many and those are
the scores we use
now now long-term orientation stands for
the fostering in a society of pragmatic
virtues oriented to Future rewards in
particular
perseverance same as persistence Thrift
saving and adapting to changing
circumstances and the opposite poll
shortterm orientation stands for the
fostering in the Society of Virtues
related to the past and the present such
as national pride respect for tradition
preservation of faith and fulfilling
social
obligations what it relates to long-term
orientation what relates to short-term
orientation uh by the data we got from
the world value survey we could extend
our list of the correlates of long-term
and short-term orientation and we found
that on the long-term side the feeling
is that good and evil are
relative they can change over time what
is good and what is evil whereas on the
shortterm side the feeling is that good
and evil are absolute and always the
same which means that on the long-term
side which Norms apply depends on the
situation whereas on the shortterm
orientation side fixed Norms always
apply whatever the
circumstances in long-term oriented
societies a superior person is somebody
who knows to adapt to the
circumstances in the shortterm oriented
Society the Superior person is someone
who is always the
same in the long-term orientation we
should be humble about ourselves whereas
on the shortterm orientation we seek
positive information about
ourselves in the long-term side we want
to learn from other countries on the
shortterm side we are proud of our own
country on the long-term side Traditions
can be changed on the shortterm side
tradtions are sacr
San on the long-term side when two
truths oppose each other they may be
integrated into something new in the
shortterm orientation there is always an
contradiction between A and B if they
are not the
same and finally long-term orentation
you can say that what is very very
important to resolve a problem is common
sense and certainly choosing the middle
way in the shortterm side we find more
fundamentalism which is choosing the
extreme and there there could be
religious fundamentalism but also
ideological fundamentalism political
fundamentalism how do we measure long
and shortterm
orientation there is again no absolute
standards we can measure the differences
between
societies and the position is measured
in an index the long-term orientation
index
lto and we have scores for this index on
a scale from 0 to 100 where 0 stands for
shortterm orientation and 100 stands for
long-term orientation
let me give you an example again from
the 93 countries for which in this case
we have data a picked again uh 14
countries seven on the high side seven
on the low side and uh on the high side
we find first of all East Asia Japan and
China but also relatively high is
Germany and
Russia uh somewhat lower but still on
the higher side we find the Netherland
and France and Italy and on the brink
Sweden now on the low side but
relatively close to the higher side we
find Britain we find India and shortterm
orientation we find Israel the United
States Mexico
Australia Nigeria and other African
countries and finally very short Egypts
and other Islamic countries
what can we do with this long-term
orientation index what does it correlate
with well I'll give you some examples of
societal factors that can be measured
elsewhere and that do correlate with
long-term short-term
orientation and first of all there is an
interesting difference between the
performance of secondary school students
at mathematics which are regularly
measured in UNESCO research in long-term
oriented societies Secondary School
students tend to score higher at
mathematics but to rate their own
results
lower in the shortterm oriented
societies Secondary School students
perform relatively poorly at mathematics
but they tend to overate their own math
results on long-term oriented Society I
is there is a larger savings quote and
funds are available for investment and
the short-term oriented societ is there
is a smaller savings quotes and there is
little money for
investment on the long-term oriented
side companies seek market share and
long-term profits on the shortterm side
the companies report quarterly results
and very important is the bottom line
which is the results in that particular
period in the longterm oriented
societies investors prefer family
business and real estate in the
short-term oriented societies there is
more preference for shares and mutual
funds and finally uh but this is only
true for poorer countries uh we found
that in uh poor countries that are
long-term oriented economic growth go
goes faster in poor countries that are
short-term oriented economic growth goes
slow and this is no longer true when
countries become wealthy because then
there is no difference anymore don't
these lto scores change over time scores
again reflect values transferred from
parents to children there has been a
research project where the same values
were studied for 15 year olds across a
number of countries and we discovered
that we get the same country differences
for 15y olds as we got for the entire
population values acquired in childhood
change rarely in later
life we have looked at the research by
Professor burgl who compared answers to
the same questions for two age cohorts
30 years apart from the world value
serve
but for this Dimension there was no
worldwide shift and there were no
changes in the relative position of
countries now this is true in spite of
the enormous technological changes that
we have seen in the past period with the
introduction of Global Information
Systems which do affect private habits
and which do affect business practices
but the way they do so tends to vary
between societies according to the
pre-established values so same
technology does not mean that it is used
in the same way and
finally uh long-term orientation plays
an important role in the economic
development of poor
countries poor countries with a
long-term orientation develop
economically faster than poor countries
with a shortterm orientation which more
often stagnate
[Music]
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