Understanding Business Culture: Hofstede Model and Challenges Faced by Tesco

Business Across
Culture

BUSINESS CULTURE 1
Contents
Introduction................................................................................................................................2
Hofstede Model..........................................................................................................................2
Criticism of the Hofstede Model................................................................................................6
Alternatives................................................................................................................................6
Challenge face by the organisation............................................................................................7
Role of the Hofstede Model.......................................................................................................8
Role of Corporate Culture..........................................................................................................9
Conclusion................................................................................................................................11
References................................................................................................................................12

BUSINESS CULTURE 2
Introduction
Culture is a key component in the business due to which it affects the strategic direction. It
influences the management, decision and all the activities of the business from counting to
production. The business culture of the company includes terms such as behaviours, etiquette
and ethics in order to develop a positive environment (Business Culture, 2018). The business
culture of the company states the values, vision, working style, belief and habits. Nowadays,
globalisation is increasing day by day due to the expansion of companies into other areas.
Expansion of business helps to achieve the objective of the company. Enter into the new
market arises the cultural challenges for the company. Each and every nation has its own
culture and it is essential for the company to adopt the culture and tradition as per the host
country (López‐Duarte, Vidal‐Suárez, and González‐Díaz, 2016). International companies
face cultural issues as it operates in a different nation and follows the different culture. In this
report, Tesco has been taken into consideration in order to analyse the challenges, which are
faced by the company. Hofstede model is a method, which helps to evaluate the culture of a
different nation.
At the beginning of the report, the Hofstede model of national culture will be discussed in
order to understand its use. Later on, the discussion is made on the dimension of national
culture that affects the actions and behaviour of the business. In the end, the role of
organisational culture will be analysed in the success of the organisation.
Hofstede Model
Hofstede’s cultural dimension theory is a framework for cross-cultural communication. It was
developed by Geert Hofstede, which helps to compare the culture of the different nationalities
in the specific terms. It describes the impacts and effects of a society culture on the value of

BUSINESS CULTURE 3
its members and it also describes the values related to behaviour. It is an original model that
helps to analyse the factors that affect the business and the employees. This model describes
the culture on the basis of six dimensions such as power distance index, Individualism versus
collectivism, Masculinity versus Femininity (MAS), Uncertainty Avoidance Index (UAI),
Long Term Orientation versus Short Term Normative Orientation (LTO), Indulgence versus
Restraint (IND) (Hofstede Insights, 2019). The culture of the countries is compared with
these dimensions in order to analyse the culture of the nation. The dimensions are briefly
described by comparing the two countries culture such as China and the UK.
Power Distance
This dimension states that all individual in society is not equal in terms of power. It expresses
the culture of the company towards equality and inequality. As per the analysis, it is observed
that China adopts the inequalities among the people. It means the manager of an organisation
gives the order to their subordinate and also abuses them for their work. Subordinate does not
have the power to stand against their managers for their rights (Geert Hofstede, 2018).
People of the United Kingdom follow the policy of equality in society. It accepts that every
individual of the society has equal power to represent his or her point of view. In the UK,
people are treated equally by giving them the same importance as the powerful people have
importance.
Individualism versus Collectivism
The degree of interdependence defines the degree of interdependence a society maintains
among its members. This dimension classifies into two categories such as individualism and
Collectivism. Individualism refers that an individual will take care of themselves and their
family only. It believes in doing the business along with its own capacity and ability.