Business Across Cultures !

The paper discusses the impact of national culture on businesses and how to manage cultural differences. It explores Hofstede's dimensions and practical examples. The paper also presents a case of Sony Ericsson, which had a joint venture but experienced difficulties in operations due to cultural differences.

Running head: BUSINESS ACROSS CULTURES 1
Business across cultures
Name
Institution

BUSINESS ACROSS CULTURES 2
Business across cultures
Introduction
In global economies, culture contemplation is neither unusual nor new. Culture
contemplation is something which is essential for any successful business endeavor. Companies
spend most of their money and time studying their culture when in need of forming mergers or
alliances or even when they want to move into the global market. But researchers have
discovered that understanding culture is challenging. It is therefore essential to study national
culture in business to enhance success for that business willing to invest in the international
market. Organizations move to global markets through practices such as acquisition, mergers or
organic growth and many more. The paper will discuss more on business across culture by using
relevant theoretical model and practical examples.
Hofstede dimensions
Hofstede dimension is a model which was developed by Professor Geert Hofstede.
Professor Hofstede conducted comprehensive research on how culture influences workplace
values. According to Hofstede, philosophy is the collective mind programming which
distinguishes group members or a class of individuals from others. Hofstede developed six
models which have a broad application on professional and academic management setting.
Hofstede theory on cultural dimensions has a framework which revolves around the
communication across cultures (Whalen, 2016). These dimensions portray the cultural impacts in
an ingrained society. It is evident that culture influences the values of different people in the
community. The aspects also demonstrate the behavior and benefits because they are based on

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the analysis of various factors. In simpler terms, this assumption studies important cultural
aspects which allows the ratings on assessment scale.
International businesses are concerned with cultural dimensions as an essential facet.
Different cultures view business features in different ways because cultures have distinct
influence in organizations’. The knowledge can help managers to sail and understand concepts
magnificently across the universal business market (Hofstede, 2011). The six dimensions include
power distance, avoidance of uncertainty, individualism versus collectivism, masculinity versus
femininity, short-term versus long-term orientation and indulgence versus restraint.
Hofstede dimensions
Power distance explains about the degree in which less powerful society members accept
and expect inequality in the circulation of power. Uncertainty avoidance expounds on the scope
in which individuals in the community fail to take uncertainty and ambiguity easily (Hofstede,
2010). Individualism versus collectivism focusses on the question of whether individuals prefer
to stay in a knitted network or stay on their own. Masculinity versus femininity implies on the
community’s preference for heroism, attentiveness, material reward, and achievement for
attaining victory (Javidan, House, Dorfman, Hanges, and De Luque, 2006). On the other hand,
Femininity refers to the preference for cooperation, life quality, caring and modesty for those
who are weak. Lastly, Indulgence versus restraint expounds on the extent to which communities
can practice authority over their desires and impulses.
Explanation
Power distance

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Power distance explains about inequality which comes from below rather than above. It
can also refer to how societies and organizations’ accept the differences in power. There are
different features which lead to the differences in power including autocracy in management,
paternalistic management methods, the presence of centralized authority, different hierarchy
levels, having much supervisory staff, the expectation of inequality and differences in power, and
accepting privileges associated with power (De Mooij and Hofstede, 2011). Societies, however,
have small distances characterized with features such as the flat arrangement of organizations’,
unacceptance and questioning of the authority, an inclination towards egalitarianism,
decentralized power, and decision-making responsibility among others.
Uncertainty avoidance
It refers to the degree to which societal members can cope with forthcoming uncertainties
without undergoing stress. Having a poor avoidance of doubt comprises of different features
including flexibility, tolerance towards conflicting behaviors or opinions and undertaking of risks
(Tabibi, Nasiripour, Kazemzadeh, & Ebrahimi, 2015). Active avoidance of uncertainty has
aspects such as the strong need for consensus, minimal or absence of tolerance among deviants,
respect for management, promotions according to seniority or age and tendency to prevent risks.
Individualism as opposed to collectivism
Individualism versus collectivism defines the association defines how people tend to
remain in groups or act individually. Individualistic beliefs are described by factors such as:
value independence and self-sufficiency besides the placement of individual’s interest over joint
interests; stress on vertical rather than horizontal relationships; the notion that individuals have
unique beliefs; Emphasis on fun, pleasure and personal enjoyment over social norms and duties;

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and the concentration on the family and near people or self and emphasis on behavioral
relationships and also own interests, needs and goals (Rarick & Han, 2015). On the contrary,
different aspects characterize collectivism including a focus on hierarchy and harmony within the
group; increased concern about in-group members; favoring some members in the group
including family and friends; and having an influence on the groups you participate in among
others.
Masculinity against femininity
Femininity and masculinity explain the emotional part of distribution between different
sexes which is a critical problem in different societies. Masculine cultures have different
characteristics such as distinct gender responsibilities, understanding, health and wealth are
desired characteristics of a man by women and the act of benevolence has no significance
(McSweeney, 2002). Feminine cultures have traits such as the preferred characteristics of a
husband, or a boyfriend is the same, overlapping of public gender roles, and that both women
and men should be tender, modest on focus on their lives.
Short-term against long-term orientation
These concepts are based on Confucian dynamism. Confucius argues that life has
different aspects including unequal relationships which exist among individuals can help in
sustaining stability in the community; family prototypes live in every society; virtue
encompasses working hard, spending wisely, education, and also demonstrating patience and
perseverance; besides treating people equally. Long-term orientation reflects on aspects like
dynamic, futuristic mentality, emphasis on persistence and persistence, emphasis on thrift, and
positive relationship with economic development (Marcus & Gould, 2000). Then short-term

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orientation has characteristics such as concentration on stability, respect for culture, and
orientation towards present and past, and antagonistic relationship with economic development.
Indulgence against restraint
The dimension mostly focuses on the wellness of the society in regards to happiness
(Kirkman, Lowe, & Gibson, 2006). Tolerance allows free gratification of necessary and natural
human drives relating to pampering in life enjoyment and fun. The restraint value describes a
community which holds back requires satisfaction and attempts to manage it by developing
stringent communal norms.
Country comparisons
The comparison provided is the national score rated in the scale of 1-20 (1 is the lowest
while 20 is the highest. African, Asian, Latin and Arab countries have a considerable power
distance while Anglo and Germanic countries have a lower mark. For example, Israel has 13
while Guatemala has 95 while the United States has is between these two countries with 40
marks. In regards to individualism, a significant gap exists between the less developed and
Eastern states and developed countries and western countries also have a difference (Taras,
Kirkman, & Steel, 2010). North America and European countries are incredibly individualistic
while Africa, Asia, and Latin America possess strong collectivist traits. East-Asia has a Long-
term high orientation in Western it is moderate while it is low in Africa and Latin America.
Lastly, Anglo, certain African countries, Latin America and Nordic Europe score high in
indulgence while East Asia and Eastern Europe display more the restraint.
Criticisms of this model

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Hofstede model is often criticized by some researchers especially in regards to the
modern world context despite its good explanations of national culture (Reisinger and Turner,
2012). The model is often complimented and criticized the depth, import, and breadth of the
study about philosophy. The study is somehow controversial, and some economists argue that it
the theory has some antagonists and protagonists. Some say that the approach is not relevant
because the measurements used by Hofstede cannot be used to give accurate results when
measuring and determining cultural disparity. In the modern world, there are different ethnic
groups, but Hofstede focuses on the homogeneous country as a whole (Jones, 2007). The model,
therefore, ignores the essence of societies and the influence of community variations. During the
survey, Europe had memories of World War 2, and the cold war was still being experienced, and
community insurgence existed in Africa, Europe, and Asian countries. There was, therefore, a
lack of information due to these instabilities meaning that it is not practical to apply them in the
current world. Lastly, most economists suggest that this model is outdated because it is ancient.
They argue that it is not right to use such an old model because of the current business
environment because internationalism, convergence and the global setting is rapidly changing.
I think the critiques are valid because there are changes in the business environment and
there are different ethnic groups in every country. But the model can still be applied because
Hofstede based his results on national culture on indoctrination centuries and beliefs cannot
change overnight. But there are other models which can be used instead of Hofstede such as
Globe research and Trompenaars to give better results.
World values research

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World values survey (WVS) is an investigation model focusing on political change and
sociocultural changes. The model also hypothesis the notion that systems are advancing in
different ways leading to political, social and economic consequences. The project has
representatives from different regions in the world to help in giving accurate values on national
cultures. The model can be used instead of Hofstede because it uses current information and
understands that the world is rapidly changing which is not recognized by Hofstede.
Trompenaars model
The model explains the differences in national culture, and it can be applied in general
management and businesses. The model involved surveys from many managers across different
regions. The model can, therefore, be more reliable because it includes a large number of
managers and countries while the Hofstede model seems like it is focusing on a single entity. It
also has seven dimensions while Hofstede has six dimensions meaning that it has a broader
scope.
Globe research
The model also researches on cross-culture and is better than the Hofstede model in many
ways. Globe research is better than Hofstede in depth, duration, sophistication, and scope making
better to apply than the Hofstede model.
Impacts of national cultural differences
National principles refer to a convent of behaviors, beliefs, customs, and norms that are
present in a sovereign nation’s population. These cultures determine how managers develop
practices and other activities in international markets (De Mooij and Hofstede, 2010). According

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to Hofstede, cultural differences can lead to misunderstandings among the business and those
stakeholders such as job applicants. It is difficult to measure and observe cultural differences but
it something very vital (Safi, 2010). Failure to account for such things and appreciate them can
cause embarrassing blunders, drag down the company’s performance and strain relationships.
Let’s look at an illustration of a business affected by national culture.
Sony Ericsson
The paper will present a case of Sony Erickson which had a joint venture but experiences
some difficulties in operations due to cultural differences. Once companies form a joint venture,
they have to share ownership and assets, knowledge and pool of skills, join management and mix
employees. Companies come together with the aim of specific goals which cannot be achieved
by one company. Sony Ericsson was formed by a telecom giant in Swedish called Ericsson and
consumer electronics producer in Japan called Sony.
Japan and Sweden have very different cultural backgrounds meaning that the two had to
take care of these different market segments. The differences in culture and organizations have a
significant impact on cross-cultural collaboration, but these problems can be managed to get the
desired outcomes. Ericsson proposed this venture, but the company was unable to sustain the
market due to competition with Nokia. The company, therefore, joined with a Japanese firm to
increase its sales. The headquarters of this company in London, and Europe is relationship
oriented; Short-term oriented, masculine and individualistic meaning that these factors can affect
the performance of the company. Regarding the dimensions developed by Hofstede, various
cultural challenges are experienced by the joint venture between Sony and Ericsson.

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The company is developed by Japan and Sweden which countries with very different
national cultures. The differences can be stated as follows: Ericsson is process oriented while
Sony is result oriented; Ericsson is employee oriented while Sony is job oriented; Sony believes
in professional orientation while Ericsson believes in parochial alignment; Sony has a closed
system while Ericsson has an open system, and Sony is pragmatic while Ericsson is normative.
SonyEricsson, therefore, had to change accordingly so that the two can be able to work together.
Cultural challenges for the organizations
The international venture involved two distinct cultures, and this would affect the
collaboration of these companies. The two had a different organization and national cultures
which was a great challenge when forming a single entity. The culture lead to the changes in
management and organization formation of this venture because they had to change accordingly.
The two use different languages also, and this would lead to further complications in the mode of
communication used by the company. Hofstede argues that societal norms build a national
culture and it includes aspects such as values shared by the different populations. The venture is
based in the UK meaning that national culture in the UK determines how the organization
performs. The enterprise is said to be characterized by low avoidance of uncertainty, focusses
more on individualism, long-term orientation, high masculinity, and little authority distance.
National culture, therefore, allows Sonyericsson to have a flat and a decentralized structure.
In cases where companies form mergers or joint ventures, one company has to adopt the
culture of the other or establish a different culture. The company has to an emphasis on national
culture to ensure that its performance is not affected by the different cultures. The company
focused on cultural change, management of a new culture and cultural awareness (Dumetz,

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2016). The venture started by considering the views and opinions of management and employees
to develop goals, strategy, and values for the new company. In its formation, the undertaking
also changed its culture through capitalization of evolving and new values, practices, and
knowledge. The company also takes care of problems which arise in the performance to ensure
that issues do not occur because of culture.
Using Hofstede theory, it is evident that there is a big difference between the cultures in
these two countries. For instance, it is evident that Japan like many other Asian countries
focusses on collectivism while Sweden focusses on individualism. These differences make it
challenging for companies to, form, a successful alliance and dealing with these challenges can
help in establishing a successful venture. The two countries are expected to face various when it
comes to coordination and communication as described by Hofstede due to the different cultures.
There is also a notable difference when it comes to organizational culture when comparing Sony
and Ericsson. As discussed in this paper, it is evident that professional orientation and open
management systems are the only things which are similar when comparing the two companies.
Sonyericsson adopted the culture of Ericsson because its headquarters are in the UK which is a
European country. It indicates that the state believes in Sweden are not so different from that of
London because they are all European based. National culture and parent organizations,
therefore, influence the company's culture.
The different models of national culture have different impacts on the success of any
cross-cultural business venture (Ford, Connelly, & Meister, 2003). For instance, the cultural
distance between Japan and Sweden have a significant impact on the business model and can
hamper with knowledge on the business. The differences in social distance and the orientation in

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a country can affect how the decisions in the country are made (Helmreich and Merritt, 2017).
Some factors such as communication are essential in the performance of entities, and poor
communication can contribute to the underperformance of companies. Companies, therefore,
have to understand the different national cultures before forming alliances and form a different
perception to adapt to the existing lifestyles to avoid conflicting with customers or employees
(Grant, 2016). Sonyericsson has been successful because it has adopted the local culture and
most of its workers initially worked with Ericsson meaning that they are conversant with the
national ethos.
Corporate culture is another thing which can contribute to the failure or success of an
organization. Different organizations have different cultures which guide them (Mackie, 2018).
For instance, Sony is said to have a closed system while Ericsson has an open system and this
will affect the decisions made by the companies. The companies have to develop a culture which
will govern the venture considering both organizational cultures. Both companies need to gain
equal shares by providing same services and getting equal shares. It means that the success of the
company depends on the parent companies cultures (Beamish, 2013). Companies can form
ventures from the same continent, and this will not require a lot of changes because they may
have similar national cultures meaning that their investment may perform well. But others such
as Sony and Ericsson formed their joint venture from different continents meaning that the two
companies have very different corporate cultures (Yan & Luo, 2016). They, therefore, had to
decide on which corporate to adapt to ensure that they beat their competitor which is Nokia
(Ahmed and Pang, 2009). The company managed to become among the top electronics seller due
to the joint venture meaning that it was successful (Elenkov and Manev, 2009). Considering the

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dimensions of culture was, therefore, essential for the company because it managed to build a
reasonable basis and develop its corporate culture which was could fit in the country where it
was located.
Conclusion
The paper has instrumental data for companies willing to form joint ventures especially
those which belong to countries with diverse cultures. It is apparent that corporations should
focus on organization and national cultures when building joint ventures to enhance their
success. In this context, we can see that the Hofstede model is beneficial for companies because
it allows the different national cultures. Different countries have different cultures, and this
determines the performance of companies in foreign lands. Companies should, therefore, try to
apply this model just like Sony Ericson so that they can boost their performance and avoid
failures. Failures are very dangerous because they can lead to massive losses and even destroy
relationships with locals.

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