Understanding the Relevance of National Culture in International Business

Portfolio template
Cover page
Your name
Student ID
Project title
Countries investigated/organisation focus

Table of content

Finding Section
Based upon the findings derived from the above, it is important for the organizational leaders to
understand the relevance of the national culture on the international business. As per the Hosfstede cultural
dimensions, when MNCs operate in high power distance will most likely to hire manager who can depict
greater leadership skills and characteristics and employees will expect more explicit direction
(Kristjánsdóttir and et.al., 2017). In addition to this, MNCs might also need to send their old and senior
personnel’s for negotiating with the other side in respect to the high power distance societies. This
dimension has a huge implication over the decision-making pertaining to the international negotiations.
The uncertainty avoidance provides that the MNC is required to provide structure and order in case it
operates in the high uncertainty avoidance. This results into making employees less anxious along with
reducing ambiguity in respect to the job expectation.
Background
In this presentation Next Plc is taken as an organization which is a British
Multinational retail company headquartered in England UK, looking for expansion in
Ghana. The purpose behind the selection of this organization is that the company has
faced various problems in the past pertaining to the establishing the new venture or
expansion of the business in other nation. There are various factors which can impact
the successful establishment of the business entity (Next still facing UK retail
challenges amid weak consumer demand, analysts caution. 2017). The company has
been facing various challenges in issues in regard to maintaining its position in UK
retail market as there is a huge competition in the UK retail market as there are
number of top brands competing with one another resulting into making it tough for
other firms. Thus, this topic seems to be the right choice since it will provide an
insight into the critical factors which can pose as a threat to the oversea business
Open a new subsidiary overseas
Methodology Section
For the purpose of
effectively analysing the
topic, the secondary sources
of information will be utilized.
It will involve the published
articles, journals, articles,
books, business magazines
and the online sources for
gathering the information. The
articles will be selected which
is done on the similar topic
which will help in gaining
accurate and relevant data.
Theory Section
In this section, the national culture theory of Hofstede (1980) is
analysed in regard to the planning the oversea expansion of the business.
The author identified 4 dimensions pertaining to national culture which
every organization should account for. All these factors along with their
impact over the workplace (What is the Hofstede’s Cultural Dimensions
Theory? 2020).
 The first dimension is individualist, it states that the same value
standards are applied to the all the within the organization and the
task prevails over the relationship in contrast to it, is the
collectivism which refers to difference in values for in group and
out group. It is considered as the moral model of employer and
employee relations (Lee, Lin and Lin, 2017).
 Next is Large power distance, in which subordinates are told what
is to be done and the hierarchy is depicts pertaining to the
inequality in roles, on the other hand, is the small power distance,
which accounts for subordinates are expected to be consulted and
democratic management style is followed.
 Another is weak uncertainty avoidance, this results into lack of
formalization and standardization of the work along with
readiness to change while in case of strong uncertainty avoidance,
there is more need of rules and leads to formalization but
reluctance to change.
 The last dimension is the masculinity (aggressive goal behaviour)
which accounts for the assertiveness is apprehended, stress on
careers along with decisiveness. But in respect to the Femininity
(passive goal behaviour), it puts more stress over the life quality
and intuition.
Explaining Possible challenges that
organizational leaders will
face in the overseas
subsidiary and how they
could be resolved
There are various issues that oversea
subsidiary face that may result in
barrier of attaining success which are
as follows:
 Foreign Laws and
regulation
 Currency rates
 Political risk
 Supply chain complexity
REFERENCES
Biresselioglu, M. E. and et.al., 2020. Individuals, collectives, and energy transition: Analysing the motivators and barriers of European
decarbonisation. Energy Research & Social Science. 66. p.101493.
Hallikainen, H. and Laukkanen, T., 2018. National culture and consumer trust in e-commerce. International Journal of Information Management. 38(1).
pp.97-106.
Kaminski, M., 2020. Are Data Privacy Laws Trade Barriers?. Jotwell: J. Things We Like. p.1.
Kristjánsdóttir, H., and et.al., 2017. Hofstede national culture and international trade. Applied Economics. 49(57). pp.5792-5801.
Lee, I. C., Lin, C. Y. and Lin, T. Y., 2017. The creation of national intellectual capital from the perspective of Hofstede’s national culture. Journal of
Intellectual Capital.
Online
Next still facing UK retail challenges amid weak consumer demand, analysts caution. 2017. [Online]. Available
Through:<https://www.proactiveinvestors.co.uk/companies/news/183994/next-still-facing-uk-retail-challenges-amid-weak-consumer-demand-analysts-
caution-183994.html>.
What is the Hofstede’s Cultural Dimensions Theory? 2020. [Online]. Available Through:<https://corporatefinanceinstitute.com/resources/knowledge/
other/hofstedes-