International business essay
Title: International business
Geert Hofstede claims that people tend to share collective national character which identifies their cultural mental programming. Such programming, in turn, predetermines our individual beliefs, values, assumptions, approaches, expectations, attitudes and behaviours. Hence, Hofstede’s cultural dimensions vary within national cultures and are also a subject to ratings for world countries (Gong et al., 2007).
Power distance is the cultural dimension which determines an extent to which members of society accept and perceive the power. At that different societies have different perceptions of status. In particular, corporations apply the system of hierarchy and therefore power sharing is unequal due to boss-subordinate relationships. In other words, power inequality largely predetermines our social status. At that, the power is globally distributed between the leaders and the followers (Hofstede, 1980; Hofstede, 1991). At that, in accordance with the Hofstede’s high power distance, a particular society puts a particular emphasis on power and wealth, whereas ‘low power distance ranking’ presupposes that a particular country does not care much about power and wealth differences (Gorman, 2006). In particular, considering power distance dimension, such countries as Norway, Sweden, USA, Israel and Great Britain and Israel are regarded as small power distance countries. Conversely, numerous researches indicate that South American and Asian cultures are known as large power distance ones. At that, large power distance is featured by overwhelming centralization and less transparent or/and participative decision-making. To support this particular dimension it is important to emphasize that every organization has its own unique culture or value set; at that, most organizations do not consciously try to create a certain culture since the latter is created unconsciously, based on the values of the top management or the founders of an organization. Hence, senior management sets out definite rules and regulations to be followed by all the employees within the organization. For instance these typically include: mutual respect, a sense of community, and professional commitment to one’s duties (Hofstede, 1980; Hofstede, 1991).
On the other hand, however, small power distance is characterized by decentralization and open decision-making procedures. At that, appropriate human resource strategy enables to ensure that leaders have the skills, knowledge, confidence and support to fulfil their responsibilities; ensure that leaders develop and deploy the organizations corporate objectives via departmental plans and engage in a process for measurement, review and improvement of performance at an organizational, team and individual level, encourage leaders to review and improve the effectiveness of their own leadership, promote effective communication between members, managers and employees with opportunities to challenge in both directions, communicate and consult with leaders on issues that affect them, research and promote best management practice and to ensure that this is reflected in all policies and procedures (Hofstede, 1980; Hofstede, 1991).
For instance, the Thai culture significantly affects business transactions. In spite of the fact that Thai people are tolerant to different behaviours, the optimal approach is to remain polite and respect others without losing one’s temper or raising one’s voice. At that, ethical standards, openness, transparency, and accountability are being established in Thai society since Asian crisis of 1997. Thus, it is apparent that the Thai culture is quite complicated and differs from the Western business culture. At that, the Thai culture significantly affects business transactions. In spite of the fact that Thai people are tolerant to different behaviours, the optimal approach is to remain polite and respect others without losing one’s temper or raising one’s voice. Moreover, direct personal questions are common and not inappropriate. Though, overall people tend to be indirect while dealing with others and go around an issue rather than directly to the key point; hence, tasks may be accomplished less efficiently and less quickly than with a direct approach. (Tilleke & Gibbins International Ltd, 2003). Thus, management practices in compliance with centralization methods are more effective in large power distance countries since in centralized organizations management control remains on a high organizational level, limiting or even excluding any delegations. At that, managers are restricted in their decision-making capacity. Consequently, measures that focus on following procedures and plans are more likely to be accepted in companies operating in large power distance countries (Lere and Portz, 2005). On the other hand, decentralized practices will bring more benefits in organizations dealing in small power distance countries. As a matter of fact, decentralized organizations presuppose that managers should perform in an independent manner by self-developing and applying their leadership qualities, as well as decision-making and problem solving skills (Lere and Portz, 2005).
Uncertainty avoidance indicates that we try to avoid those situations where expectations and results are not clear to us. Such situations are featured by poorly defined or ambiguous conditions. Thus, employees prone to high uncertainty avoidance will never break corporate rules, even if it is necessary under certain conditions, and will remain loyal to the same company during decades. Such people totally avoid any changes, either temporary or permanent, and therefore would rather work with people they know for a long time, rather than strangers (Gannon, 2001).
Individualism refers to an individual-group interaction. In broader terms, Griffin and Pustay (1998) claim that individualism puts every person on the first place, and therefore our own interests naturally overtop those of others. At that, individualism permanently opposes collectivism. At that, we are able to understand whether individual or collective values are mainly shared by a particular country or society within certain achievements and interpersonal relationships. In addition, individualism determines the extent to which individuals are likely to integrate into groups. Regarding individualism versus collectivism, Hofstede studied 53 countries, out of which the United States gained the highest score, which means that the country should be regarded as the most individualistic compared to other world countries in accordance with individualism cultural dimension. Other countries prone to individualism were Australia, Great Britain, Canada, and the Netherlands. On the other hand, collectivism-oriented countries were Panama, Ecuador, Guatemala, El Salvador, Costa Rica, Colombia, and Portugal, Indonesia, Taiwan and Pakistan (Lere and Portz, 2005).
Hofstede’s masculinity or ‘goal orientation’ predetermines materialistic and aggressive behaviour to reach one's goals and/or ambitions (Firoz et al, 2002). Overall, in Hofstede’s terms, masculinity is focused on the extent to which society is able to reinforce the conventional masculine role model of male attainment, power and control. At that, masculinity distributes the socio-cultural roles between genders. In due context, Hofstede states that women’s values are different from men’s among various societies. Moreover, men’s values are mainly competitive and assertive, whereas feminine values are caring and modest (Hofstede, 1980; Hofstede, 1991).
Long-term orientation determines our outlook on life, work, family and other important socio-cultural issues. To this end, Asian cultures, for example, are rather long-term oriented with an emphasis on dedication, perseverance and hard work, whereas other cultures focus much on their past experiences and present conditions while respecting their traditions and fulfilling present-day commitments (Firoz et al, 2002). Finally, according to Hofstede, long-term orientation bears relation to the virtue regardless of truth. For instance, thrift and perseverance are the values particular to long term orientation, whereas short-term orientation is featured by fulfilling social obligations, respecting traditions, and saving face. Therefore, cultures with high long-term orientation ranking most value thriftiness and perseverance, whereas a high short-term orientation ranking most value traditions and social obligations. However, many experts regard this Hofstede’s dimension as the least convincing compared to the first four.
Personality as an important psycho-emotional subject is widely researched by psychologists within the framework of academic agenda and empirical investigations. Over the past decade, personality is vastly tested to invent “one-size-fits-all” approach for better work performance. This necessitates an in-depth examination of personality in work behaviour. Therefore, a diverse workforce is a reflection of changing world and market place. Demographics are not the only things changing, individual mindsets are changing dramatically, with more emphasis on being accepted and respected as individuals. Diversity management will benefit workforce by creating a fair and safe environment where everyone has access to opportunities and challenges (Hofstede, 1980; Hofstede, 1991).
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