2. Power Distance. Organizations need hierarchies based on status and power, and differentiating people according to roles, functions and positions is vital to the successful operation of any organization. Status afforded to individuals within a hierarchy come with certain benefits, rights, privileges, and power;

the “chain of command” within an organization identifies the players and their roles. In most cases, employees are involved in hierarchical relationships with others of both higher and lower status. People within each organization develop ways of interacting with others according to status differentials that exist between the interactants. Organizations high on power distance are hierarchical;

they develop rules, mechanisms, and rituals that serve to maintain and strengthen status and power dynamics among members; organizations low on power distance are more egalitarian, minimizing rules and customs.