A Study on Cross Culture Business - Desklib

Running head: A STUDY ON CROSS CULTURE BUSINESS
A STUDY ON CROSS CULTURE BUSINESS
Name of the Student
Name of the University
Author Note

1A STUDY ON CROSS CULTURE BUSINESS
Introduction
Due to globalization the international borders have opened up for business opportunities.
Because of this there has been a growth in the academic research in this field. Business
organisations have realised their scope and potential in the international market, however there
are also several problems and challenges that are faced by the managements in order to manage
and understand the dynamics of people who are from a completely different background.
Globalisation has been gaining boost due to the improvement of the technological infrastructure
and acceptance of diversity among the people. These are the areas that have been explored in the
research studies. In this assignment Hofstede’s model of cultural dimensions are going to be
discussed.
Section 1: Hofstede’s model of cultural dimension
Geert Hofstede developed a model to help organisations understand cultural differences
and level of compatibility by conducting a survey. He chose to survey the employees of IBM and
this was to be undertaken across several countries. Developing this model was a lengthy process
and several successive researches have taken place in order to develop the six dimensions which
are used today.
The study will discuss the way in which each of these dimensions are conceptualised and
explained by Hofstede. The six dimensions that are explained in the model are Power Distance,
Uncertainty Avoidance, Individualism/Collectivism, Masculinity/Femininity, Long/Short Term
Orientation and Indulgence/Restraint (Hofstede-insights.com 2018). There are 76 countries that
are scored out of 100 in each of these dimensions. Information regarding this model and any of

2A STUDY ON CROSS CULTURE BUSINESS
the listed countries can be easily available on the official website (Hofstede-insights.com 2018).
Organisations can easily check the differences in culture before deciding upon the expansion
strategy of the company.
According to Hofstede, culture can be defined as “the collective programming of the
mind distinguishing the members of one group or category of people from others”. The
dimensions that are described in the model represent the factors that differentiate one nation state
from another.
Power distance
The focus of this dimension is based on the ways in which society of the country deals
with inequalities among the population. It explains the ways in that the people of a society who
are comparatively less powerful than others recognize and expect that power is distributed
unequally. The societies win which this dimension has higher level of score understand the
importance and accepts hierarchy and there are few areas of justification in this case. Vies versa
is true for the society which has a lower degree of power index. Depending on the values and the
principles as well as the structure of the organisation decisions can be made based on this
dimension (Hofstede-insights.com 2018).
For example, if the company already have a hierarchal form of organisation structure can
be comfortable in expanding in a country where this structure is easily acceptable. At the same
time if the countries have a low power distance index then there are chances for internal
disturbance and issues in the country.

3A STUDY ON CROSS CULTURE BUSINESS
Individualism versus collectivism
The nature of the social framework and the ways in which the society functions as a unit
is the concept that is used in this dimension. The concern of the society for oneself and one’s
family is the priority in the individualism dimension (Minkov and Hofstede 2011). The
individual society is characterised by choices which are not be biased by anyone and hence there
will be a chance for the emerging brands or foreign brands to make a place in the market. The
focus of this dimension is how the society represents them as “I” or “WE” (Hofstede-
insights.com 2018).
This dimension is also significant for an organisation trying to expand as in the individual
society there are chances that the people are not opting for the new trends and are going for the
lasting brands and companies in the market. At the same time if the nations are collectivism
followers then there are high chances that if an individual selects the companies brand then the
mass will also select that brand and that will increase the company profit in a single step.
However, the same risk is also there that if a single customer has disliked the product then there
are chances that the mass will also drop the product and thus the company will face a huge loss
in the market (Minkov and Hofstede 2011).
Masculinity versus femininity
The importance of assertion and recognition are the basis of this dimension. The
masculine society is competitive in nature; people in the society want to be recognised as heroes
and to be distinguished from another. On the other hand, a feminine society works with
corporation and has a sense of care and responsibility towards others. This dimension is also
known to be “Tough versus Tender”. This can represent as an extension of the dimension that
has been discussed above (Hofstede-insights.com 2018).

4A STUDY ON CROSS CULTURE BUSINESS
A company while expending will like to work in a society where there is understanding,
as it is essential to have a connect with the people while expansion, if people try to outshine one
another there will be more chances of conflict. However, due to competitiveness, there are
opportunities of achieving a higher performance form the people as well. This is because the
people are mostly motivated and are driven to deliver the work (Minkov and Hofstede 2011).
Uncertainty avoidance index
Based on the acceptance of uncertainty and ambiguity, this dimension tackles the issue of
the ways a society accepts the fact that the future is unknown; as well as the approach of the
society to deal with the situation. The countries where there is high UAI score is observed there
is very specific rules and regulations are maintained regarding people’s believe changes and
unorthodox methods are discouraged in such a society. It is the opposite for a society where the
degree of UAI is low. In this society practice gets precedence over principles (Hofstede-
insights.com 2018).
The business in countries with strong UAI will be easier if the customers get customised
with the product and have already become familiar to the product types. The countries do not
tend to change their choice and tastes and thus stick to the lasting companies and brands. It is
safe to trade in this company only if the company already has a position in the company. If the
company has not made any benchmark in these companies then it is better to keep an alternate
trade place as there can be a high risk to get rejected from these orthodox societies ( Chhokar et
al. 2013). Thus it can be said that the countries with low UAI is more beneficial for international
trade as they readily accept new trends and business types in their culture and the companies also
find a better scope for transaction. However, there are also opportunities in terms of the ways a
company establishes the strategies according to this dimension (Chhokar et al. 2013).

5A STUDY ON CROSS CULTURE BUSINESS