Business Across Cultures: Assessment of Hofstede Model and Impact on Cross-Border Business Development

Running Head: Business Across Cultures
Business Across Cultures

Business Across Cultures 1
Contents
Introduction......................................................................................................................................2
Assessment of Hofstede Model of National Culture.......................................................................2
Background of Hofstede Model...................................................................................................2
Dimensions of National Culture..................................................................................................2
Commonly Held Criticisms of Hofstede’s Model.......................................................................4
Opinion and Responses to the Criticism of Hofstede Model.......................................................5
Example of Cross- Border Business Development that is impacted by National Cultural
Differences.......................................................................................................................................6
Adaption of Individual Behavior for Enhancing and Improving the Chances of Success in Cross-
Border Business Development........................................................................................................8
Personal Adaptations for working in Cross- Cultural Teams......................................................8
Enhancement of effectiveness of people through the understanding of national culture
dimensions...................................................................................................................................9
Use of Competency Model by International Companies for guiding Individual Behavior.......10
Conclusion.....................................................................................................................................11
References......................................................................................................................................13

Business Across Cultures 2
Introduction
Hofstede has developed a framework for cross- cultural communication in the form of cultural
dimensions theory. The theory provides how the values of the members of a society get impacted
by the society’s culture. It also demarcates the relation between behavior and values through
factor analysis. The theory established by Hofstede is utilized in various fields including cross-
cultural psychology, cross- cultural communication and international management. The cultural
dimensions theory by Hofstede has acted as an inspiration for a number of cross- cultural studies
correlated with values and culture.
This assignment is focused on the cultural dimensions model of Hofstede and highlights its
background, cultural dimensions and commonly held criticisms along with the examples of
business expansions that can be described by the characteristics of national culture of the
involved companies. The assignment also focuses on the adaption of individual behavior for
enhancing and improving the chances of success in cross- border business development.
Assessment of Hofstede Model of National Culture
Background of Hofstede Model
Professor Geert Hofstede is a Dutch researcher who has presented a comprehensive study about
the influence of culture on the values in the workplace. Culture is defined by Hofstede as the
mind’s collective programming through which distinction is made between the individuals of one
group or category of people from others.
Professor Geert Hofstede conducted extensive research and formulated six dimensions of
national culture with the help of his research team including Gert Jan Hofstede, Michael Minkov
and others. This research is widely used in various academic settings and professional
management. Independent preferences are signified by these cultural dimensions that lead
towards the creation of differences between countries (Adam & Westlund, 2013).
Dimensions of National Culture
Following are the six dimensions of national culture developed by Hofstede-

Business Across Cultures 3
Power Distance Index (PDI) - This dimension of national culture provides the degree to which
unequal power distribution is anticipated and acknowledged by the less powerful members of the
society (Hu, Erdogan, Jiang, Bauer & Liu, 2018). The most important issue of this dimension is
how the inequalities are handled among the members by the society. Members of the society
accept a hierarchical order through which a great degree of Power Distance is exhibited.
Everyone has a defined place in such hierarchical order. In societies with low power distance,
public struggle for equal power distribution and demand the justification of inequalities of power
(Hofstede, 2003).
Individualism versus Collectivism (IDV) – a fondness of loosely- knot social framework
constitutes the upper side of this dimension and is called individualism. Such framework requires
individuals to ensure the well-being of their immediate relatives and their own selves. The lower
side of this dimension is known as collectivism which specifies the choice for a tightly- knit
society framework (Favaretto, Dihl, Barreto & Musse, 2016). People here expect that their
relatives or individuals belonging to a particular group will ensure their well- being in reaction of
whole- hearted faithfulness. Society’s position is reflected in this dimension by the self- image of
people which is either demarcated by “I” or “we” (Kwon, Kim & Koh, 2016).
Masculinity versus Femininity (MAS) – the masculinity side of the dimension represents the
preference for heroism, assertiveness, achievement and solid reward for achievement in the
society. Competition is considered to be an important aspect of society. The other side of this
dimension represents feminism by demarcating preference for cooperation, modest, quality of
life and caring for weak. Such society is largely consensus- oriented. With regard to businesses,
masculinity versus femininity is also known as “tough versus tender” cultures (Hofstede Insights,
2018).
Uncertainty Avoidance Index (UAI) – the degree to which the individuals in a society feel
uneasiness with uncertainty and ambiguity is represented by uncertainty avoidance dimension.
Countries exhibiting strong UAI maintain rigid codes of belief and behavior. The significant
issue of this dimension of the individuals in the society handles the fact that future is always
uncertain. Societies having weak uncertainty avoidance index generally maintains a more relaxed
attitude and are intolerant of behavior and ideas that are orthodox (Minkov & Hofstede, 2014).