Power-Distance Index - PDI

DEFINITION of 'Power-Distance Index - PDI'

An index developed by Dutch sociologist Geert Hofstede that measures the distribution of power and wealth between people in a nation, business or culture. The power-distance index seeks to demonstrate the extent to which subordinates or ordinary citizens submit to authority. The power-distance index figure is lower in countries or organizations in which authority figures work closely with those not in authority, and is higher in countries or organizations with a more authoritarian hierarchy.

BREAKING DOWN 'Power-Distance Index - PDI'

Some consider the power-distance index an example of a comparison between the "haves" and "have nots". Strict societies and organizations - those with high PDI values - rely on authority figures to make decisions and clearly separate the roles of authority figures from those governed. For individuals and businesses from low PDI organizations working with clients from organizations with high PDI values, it is important to take into account that a more authoritarian role may be required in the decision-making process.

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