3.3.1.4 Cultural Differences Indictors
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/).
Figure (6) below shows that the UK and Germany are exactly the same in power distance and masculinity but they are different in all other dimensions. It is worth mentioning here that the client should expect strong cultural bias in Germany toward German firms and language (Business Culture, 2014d) Source: The Hofstede Centre (2016)
Figure (7) below shows that Germany, Austria and Czech Republic have a similar culture, and it is worth mentioning here Austria and Czech Republic are culturally biased toward German firms (Santander trade Portal, 2016a). Source: The Hofstede Centre (2016)
Figure (8) below shows that Spain and UK are different in all culture dimensions except for the “long-term orientation”. Furthermore, it is difficult to find
In one article I read a German citizen came to America for some time to work. He tells of the differences he noticed between the two countries business styles. He tells of how the company he worked for in Germany wanted to hire more women and how their efforts did not succeed. A colleague of his told their boss exactly why their efforts did not succeed and that they had not tried everything they could have.
The Geert Hofstede cultural dimensions seek to explain the culture of a country along five dimensions power distance, individuality, masculinity/femininity, uncertainty avoidance and long term orientation. Power distance reflects the degree to which a culture is accepting of differences in power. The higher the score, the more the country accepts inequalities among the people in the culture. The United Kingdom scores 35 and Japan 54. This means that the UK is in particular a low power distance culture, in that the people in the culture generally do not tolerate inequality in the society. For a society that has historically been class-based, this is an interesting finding, but Britain has also been home to many Enlightenment thinkers and their ideals about equality. Japan is a mildly hierarchical society with its score, and Japanese people are generally conscious of their hierarchical position. Japan tends to be fairly hierarchical in a business
It is this gap in cultural understanding and increase in globalization that makes cultural models, such as Hofstede’s, that much more important to learn and apply during business relations. Many companies that try to expand beyond their current borders end up failing due to refusing to recognize the differences between cultures. An American company that expands into foreign markets, yet tries to run their operations and marketing as they would in America, is going to have a difficult time. Products and well as company practices need to be adapted to suit the country’s business culture, current market climate, taste/preferences of the citizens, etc.
Making business abroad can be risky, but it can also be profitable for a company as well; thus the necessity to study in deep the country where the company will bring the business to. International companies are faced with many cultural challenges, when doing business across and inside of different borders. Identifying the significant cultural issues involved when evaluating the attractiveness of a particular location as a place for doing business can be crucial for a business. Aspects to consider when studying culture in a new place
Based on Hofstede’s cultural index is appreciated that the similarities between British and German culture is high.
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
On the Masculinity/Femininity (MAS) dimension, Germany and the US are fairly close, scoring within 4 points of each other. Both societies are considered fairly masculine, and the people tend to prefer to “live to work” not “work to live”. Americans place more importance on personal successes, as this tends to be a sign of merit among co-workers, yet Germans draw their merit from their own personal sense of achievement, and don't rely on the praising of their co-workers. Status symbols are similarly prevalent in both societies and can improve ones status rather quickly.
With the unstoppable trend of globalisation, it becomes extremely significant for international businesses to have a thorough understanding of different cultures. Hofstede (1980, pp. 21-23) defines culture as ‘the collective programming of the mind distinguishing the members of one group or category of people from another’. This essay examines Hofstede’s cultural framework and suggests that Hofstede’s cultural framework is an outstanding and authoritative tool to analyze culture differences. In this essay, cultural frameworks will be discussed firstly, following by a discussion of my cultural scores and background. Finally, recommendations on cross-cultural management between China and Australia will be provided.
Culture and the environment affect a business in many ways. Culture is not simply a different language, a different shade of skin, or different styles of food. Culture, and the environment in which you are a part of, affect the running of day to day business operations of all companies’ day in and day out. This paper will assess how Linda Myers, from the article, “The would-be pioneer,” (Green, S., 2011) was affected by the huge culture shock of working for a global conglomerate from Seoul, South Korea. We will discuss what went wrong with Ms. Myers approach to business, Hofstede’s five dimensions of culture as it
In 2004, the pubs reduce the amount of alcohol in its cocktail pitchers and create the new product which is beverage with alcohol. This is a better way to developing the pubs well (Quain, 2009).
Geert Hofstede is an influential Dutch researcher in the fields of organizational studies and more concretely organizational culture, also cultural economics and management. He is a well-known pioneer in his research of cross-cultural groups and organizations and played a major role in developing a systematic framework for assessing and differentiating national cultures and organizational cultures. His studies demonstrated that there are national and regional cultural groups that influence behavior of societies and organizations.
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.
Our four bordering cultures clearly all have very different business orientations. Though German business culture might anticipate explicit instructions from their management concerning what their roles and functions involve, the French business culture might prefer an implicit understanding of their roles´ function and the responsibility attached to it. The Italian culture would appreciate a manager with whom they can have a reciprocal relationship in an environment where responsibility, obligation and loyalty are needed within working relationships. Last, British business culture would value indirect and diplomatic communication, along with the qualities of modesty, reservedness and fair play.
Organisational cultures are created by people. An organisation’s culture is also created and maintained by the organisations leadership. Organisational culture is important to alphabet games because the culture of the workplace shapes the way the employees act and relate to others both internally and externally. This can have a significant effect on the way the organisation operates. The culture is the feel we get when we walk into an organisation, made up of assumptions, values and norms. The attitude, behaviour and traits that dominate the organisation can affect the way we act with other individuals. Every organisations culture varies.
Understanding the influence of culture in business practices and managerial decision-making requires explaining the differences between cultures. This is why, Hofstede (appendix 1) presents a well-known model based on four dimensions of culture: