Power Distance, Collectivism and Corruption: An Analysis Using Hofstede’s Cultural Dimensions Index and Corruption Perception Index

Power Distance, Collectivism and Corruption: An Analysis Using Hofstede’s Cultural Dimensions Index and Corruption Perception Index

Purpose – Among the many factors affecting corruption, cultural factors cannot be overlooked. This study examines if there is any relationship between culture and corruption. For this purpose, Hofstede’s cultural dimension index and the Corruption Perception Index (CPI) for 116 countries were used. Design/Methodology/Approach – This study used secondary data published by two institutions: Hofstede Insights and Transparency International. First, the latest Power Distance Index (PDI) and Individualism Index (IDV) of 116 countries were obtained from Hofstede Insights. Second, the latest 2021 CPI of 116 countries was gained from Transparency International. Two hypotheses were developed. To examine the relationship between the variables, a correlation analysis was adopted. Findings – According to the analysis results, hypothesis 1 received statistical support indicating more corruption tends to occur in countries with high power distance culture. Hypothesis 2 is also accepted that more corruption occurs in countries with a strong collectivism culture. Research Implications – The result of this study implies that centralization of power into the higher echelons may hinder effective communication within organization, and often leads to strategic decision-making errors and even corruption. In addition, excessive in-group collectivism is an obstacle to monitoring and blocking internally generated corruption and sometimes demands individual sacrifice.