Cross Cultural Management Between China And Australia

In today’s high tech global community, it is not uncommon to have companies in one country doing work with others clear across the world. It is important to keep in mind that understanding the role of culture, in the international business setting, is key to success and prosperity. It is essential and know that each nation has their own set of values and ways of interacting. For example, although the United States and China frequently do business together and are equally seen as leaders on the global market, they still have very apparent differences in cultural norms. These contrasting characteristics are grouped under Geert Hofstede’s six dimensions of culture. They include, the level of uncertainty avoidance, masculinity versus femininity, individualism versus collectivism, power distance, long-term versus short-term orientation, and indulgence versus restraint (Hofstede, 2001). Once one is able to properly distinguish cultural differences, can they then successfully communicate, thrive, and potentially lead in the global economy.

     Cultures are varying among different parts of the globe. People with different cultures have different characteristics and viewpoints on the subjects due to diverse understanding and method of learning. During the past few decades, the international trade grows in a very rapid rate due to the advantages that it provides; “increased sales, operational efficiencies, exposure to new technologies and broader consumer choices” (Heslin). Therefore, when considering the culture aspect to current business world, it is crucial for business to understand the culture aspect because of the tremendous growth of international business as well as utilize the international market to its maximum

When a business decides to venture internationally into different countries with its products, services, and operations, it is very important that the company gains an understanding of how the culture of the different societies affects the values found in those societies. Geert Hofstede conducted one of the most famous and most used studies on how culture relates to values. Hofstede study enabled him to compare dimensions of culture across 40 countries. He originally isolated four dimensions of what he claimed summarized different cultures — power distance, uncertainty avoidance, individualism versus collectivism, and masculinity versus femininity (Hill, 2013, p.110). To cover aspects of values not discussed in the original paradigm Hofstede has since added two more dimensions — Confucianism or long-term orientation and indulgence versus self-restraint (Hofstede, n.d.). Because of the way Hofstede’s cultural dimensions are given an index score from 0-100, it is easy for a company to get a general comparison between the cultures they are expanding into and the culture they are already in.

Although we may not notice it, differences in culture affect our everyday lives including business. In the business world, it is inevitable that you will cross paths with people of differ from you. Understanding these differences can play a major factor to being successful in business. Improving your level of knowledge of international cultural difference in business can help in building international skills as well as empowering you to increase competitive advantage. Hofstede’s theory allows for statistical comparison of cultures through various studies. His extensive work gives an insight of the culture and how its impacts business strategies of members of that society. Hofstede studied and categorized cultures into 5 different sections; Uncertainty Avoidance, Individualism, Long-term orientation, Masculinity and Power index. There are always a few generally clear signs you should notice that shows how a country cultural and business are created. Hofstede’s study results show vast differences between the United States and Japan’s culture and business. A clear majority of Americas population is made up and individuals who have fled their countries to explore new options in a new land.

Hofstede's cultural dimensions theory is a framework for cross-cultural communication. It describes the effects of a society's culture on the values of its members, and how these values relate to behavior, using a structure derived from factor analysis.( Organizational Culture Introduction. 2016)

Hofstede’s dimension of culture offers a gauge to measure the similarities and differences that are dominate among people of different cultures. Therefore, the three countries selected for this analysis are China, India and the United Kingdom (UK), as Hofstede’s dimensions of culture examines individualism/collectivism, high/weak uncertainty avoidance, masculinity/femininity, power distance and long-term orientation, associated with the management culture in these nations.

The United States and China boast the two largest economies in the world but, despite this fact, these two countries have very little in common. At first glance, this may seem very obvious to most people but, what exactly is it that makes these two countries so different? How is it that such different perspectives and approaches can both lead to great success? Hofstede’s six dimensions of culture are an attempt to answer these questions and more. Dr. Geert Hofstede, studied employees of the computer firm IBM in over fifty different countries. When he examined his findings he found “clear patterns of similarity and difference along the four dimensions” (Manktelow, Jackson Edwards, Eyre, Cook and Khan, n.d.). The fact that he focused his research on solely IBM employees allowed him to eliminate company culture as a differentiating factor and “attribute those patterns to national and social differences” (n.d.). He used his findings to originally identify four dimensions, later expanded to six, that could “distinguish one culture from another” (n.d.). The six dimensions all on a scale from 0 to 100 are:

Culture is a predominant social aspect of society, which guides the way people think and act in their environment. Culture develops differently for all the various nations of the world, and in the context of international business, the challenge that arises for today’s managers is managing across these varied cultures effectively enough to render positive growth and productivity for the business organization. The influential factors such as individualism versus collectivism and masculinity versus femininity amongst others help categorize and identify cultural differences. The manager of international business has to be well aware of these differences and show consideration and care in dealing with cultural disparities that may be

The power distance index (PDI) determines how much a culture is willing to accept and expect an inequality of power. Societies with high PDI are more willing to accept powerful authority figures, such as a hierarchy, and comply with their rules without justification. Societies with low PDI work to equalize the distribution of power and demand justification for inequalities of power. Societies categorized with large PDI expect for their elders to be both respected and feared, parents always teach children obedience, subordinates expect to be told what to do, they have frequent corruption scandals which are covered up and income distribution in society is very uneven. Meanwhile societies categorized with

Understanding the culture in the target market is essential for managing a subsidiary efficiently because the client will be part of that culture and will be subject to daily cultural interaction. Thus, the more the client is aware of the other culture, the higher the chances to succeed in managing the subsidiary. One way to understand the differences in a culture is through Hofstede’s country comparison. Even though Hofstede’s model and theory are subject to a lot of criticism, they are widely accepted by academic researchers and professionals as a mean to understand cultural differences (for a better understanding of Hofstede’s cultural dimensions please visit: https://www.geert-hofstede.com/).

The Hofstede model of culture can be used to give the wide-ranging outline and the estimated in the understanding of other cultures, on what one can anticipate from them and how one can act upon groupings from other states. Hampden-turner and trompenaars model expands the core level of the basic model of two layers instead of outer level. Edward hall’s model of cultures is among the dominant theoretical frameworks for interpreting the communication of intercultural. His model develops the perception of social cohesion in relating how people behave and respond in various types of culturally definite personal space.

In times of rapid globalisation and economic development growth, the environment of business has become more and more complicated as a huge number of firms want to globally expand their businesses. Subsequently, the managerial implications of cross-cultural management is the challenge of this development. As Abbe (2007) states, cross-cultural leadership has developed as a way to understand leaders who work in the global markets. Culture is the “software of mind” that can influence people’s patterns of thinking and behaving.

Cultural differences and dimensions are very important when it comes to the corporate world. There have been numerous studies done on individual differences that are seeking out to identify the reasons why people behave in which the way they do. In the United States, it is important to understand each dimension and which cultural dimension we focus on most. In this paper, the five cultural dimensions and how they are implemented in the corporate world will be discussed.

This report consists of the issues on whether it can or cannot be argued that culture shapes the way business is done in a country. The country that is focused in this report is America. It also discusses on the major distinguishing features of American culture and business culture in comparison to current Australian culture. The impact that culture has on business performance is also taken into consideration and how this affects the performance of the staff members and their work. In addition, this report also includes concepts where Australia as a country could maybe adopt ways of American business culture or develop on the existing culture. The purpose of this report is to develop a fair understanding on various cultures

Since culture is a fundamental problem-solving in a particular environment. Therefore, having a sense of culture and its related skill is essential for effective management of emerging global corporations for further beneficial world trade and exchange (Robert, et al., 2014).