Business Across Cultures: Challenges Faced by Tata Steel in UK

BUSINESS ACROSS
CULTURES

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Contents
Introduction............................................................................................................... 1
Hofstede’s model of national culture................................................................................1
Cultural challenges faced by Tata Steel............................................................................. 3
Dimensions of national culture...........................................................................3
Organisational Culture Inventory.................................................................................6
Conclusion................................................................................................................ 9
References................................................................................................................ 9

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Introduction
In the time when the companies are crossing borders it has become necessary for the
organisations to understand the challenges that they are facing in managing the cross-border
cultural changes. Nation’s cultural difference will have direct impact on the culture within the
organisation. In this regards the use of effective change management models can be effective.
The nation’s culture also has impact on the behaviour and actions of the people working
inside the firm (Hofstede, 2011). The perfect example of it can be seen in the case of Tata
Steel acquiring steel producing giant from UK named Corus. This was one of the biggest
deals for this company but they faced challenges in maintaining their business due to change
in culture. This report analyses the hofstede model for the national culture and the influence
of the nation’s culture on the behaviour and actions of the organisation and individual’s
associated with it. It also discusses the challenges faced by Tata Steel while doing business in
UK.
Hofstede’s model of national culture
Hofstede cultural dimensions theory is a framework for understanding the culture on the bass
of six dimensions. These dimensions have severe impact on the way an organisation does its
business. Initially this framework was developed with four dimension but later research
added fifth and sixth element to it. The six dimensions are uncertainty avoidance,
individualism-collectivism, masculinity-femininity, power distance, long term orientation and
indulgence versus self-restraint. All these cultural elements define the effect of culture of the
society and values of people in it. It also illustrates the way in which these values relate to the
behaviour, utilising the structure derived from the factor analysis. Hofstede’s work
established a major research tradition in the cross-cultural psychology and has been used by
the researchers and consultants in different field related to international business and
communication (Lee, Trimi and Kim, 2013). In the international management and cross-
cultural communication, this is a highly effective model. Hofstede developed this model as a
result of utilising factor analysis to examine the outcomes of a worldwide survey of employee
value by IBM between 1967 and 1973.
This model also faced significant criticism for many researchers. The first criticism was the
fact that the sample that he collected comprised of employees only from one company. At the

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same time how can one company’s employee represents the whole culture of the country is
also a matter of argument. In deciding the nation’s cultural difference, there was use of
irrelevant factors like occupation and gender (De Mooij and Hofstede, 2010). This model was
not representative as it was drawn from one particular middle-class.
It is also criticised according to the modern day business as the complexities in the business
model is increasing day by day. The first criticism about the dimensions used in the model is
that it is over-simplistic and does not explain about the diversity of culture within that
country. For example the areas such as training opportunities, satisfactory working conditions
and possibility of fully utilising skills and abilities on the job in the collectivism was not
enough to obtain accurate nation’s score for a construct (Gaygısız, 2010). It is also a bilateral
model where the influence is understood because of two country’s difference in culture which
is not appropriate in the case of multi-national organisations where individuals are influenced
by multiple cultures. On the basis of the masculine and feminine dimension it is hard to
recommend the domination of sexual category and this indistinct labelling of the dimension
might create confusion. Since in the globalised world, there are larger numbers of factors that
are influencing the behaviour of the individual and that of the organisation hence
understanding the actual nation’s culture can be difficult for the firm. These criticisms are
genuine and illustrate the fact in the modern day business it is not easier for the organisations
to define the nation culture on the basis of such simplistic models (Venaik and Brewer,
2013).
There are many other models for understanding the national culture. Trompenaars cultural
framework has 7 dimensions which includes Universalism versus Particularism,
Individualism versus communitarianism, neutral versus emotional, specific versus diffuse,
achievement versus ascription, sequential versus synchronous time, internal direction versus
external direction. Hall cultural dimension include Locus of control and attribution for
failure, overtness of messages, use of non-verbal communication, expression of reaction,
cohesion and separation of groups, people bonds, level of commitment to relationships,
flexibility of time (Argote and Miron-Spektor, 2011). “The world value surveys” was
designed to test the hypothesis that technological and economic changes are changing the
basic motivation and values of the publics of the industrialised societies. Globe research
model can also be used by the companies to understand the culture and leadership study
among people. In these alternative models the use of hall and trompenaars cultural models
can be very much persuasive. These two models give more detailed analysis about the