This paper analyzes the difference in business culture in Australia and China using Hofstede's six dimensions of culture. It explores the power distance, individualism, masculinity, uncertainty avoidance, long-term orientation, and indulgence in both countries.
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Running head: MANAGEMENT IN THE GLOBAL ENVIRONMENT Management in the Global Environment Name of Student: Name of the University: Author note:
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1MANAGEMENT IN THE GLOBAL ENVIRONMENT Business culture of a country is defined as the style of business operations within companies in a particular country (Schmiedel, vom Brocke and Recker 2015). It is the culture of the business in a country that will determine how employees should interact with each other, along with how these same employees will interact with the customers or clients. Culture differences are able influence international business proceedings in three areas, which are, communication, etiquette and the hierarchy in the organization. This paper will be analysing the difference in business culture in Australia and the China using Hofstede’s six dimensions of culture. This method will be able to identify the differences that lie in the businesscultureofbothcountries.Thesixculturaldimensionsarepowerdistance, individualismversuscollectivism,masculinityversusfemininity,uncertaintyavoidance index,long-termversusshort-termorientationandfinally,indulgenceversusrestraint (Beugelsdijk, Kostova and Roth 2017). This paper will first look at the business culture present in Australia. It will be useful to remember that Australians usually possess a strong sense of self- reliance and their business culture accurately reflects this characteristic. Australian businesses have increasingly been trying to adopt a more international outlook both economically and politically. This is because there is a great lacking of demand from the domestic markets along with an overall geographical isolation that Australia is experiencing (Nordstrom et al. 2017). Using Hofstede’s cultural dimensions, the first dimension that will be focused on is the power distance present in Australian businesses. It has been found that the power distance in Australia is considered very low. A low power distance indicates that the power is very spread out in businesses in Australia instead of it only being assigned to a selective few people (Burson et al. 2017). This means that the Australian people believe that hierarchy shows an inequality of roles which are only established for convenience. Using Hofstede’s analysis, Australia has reflected very high levels of individuality, which is deeply rooted in its
2MANAGEMENT IN THE GLOBAL ENVIRONMENT culture. Australia’s individualism score is the second highest score calculated for any other country. It was calculated that in Australia, majority of the population is male dominated and so according to Hofstede’s masculinity analysis it shows that females are still not considered to be of equals in business. This is not to undermine the fact that femininity equality and women’s rights are increasing in Australia. It was found that Australia scored very low on the scale for uncertainty avoidance because they do not prefer uncertainty in any situations and always require stability from the people they are interacting with. Long-term orientation in Australiahasscored very low ascompared to other countrieswhich showsthat the Australians are keen towards short term orientation. For someone who intends to do business in China, they will need to make sure that they are well versed with how people do business there, because failure to do so could ruin business relationships. Using Hofstede’s cultural dimensions, it will be easier to see how different the business culture is here than the one in Australia. China’s power distance index sits at a higher value than most other countries (LaBrie et al. 2018). Chinese people believe that inequalities between people due to hierarchy is acceptable. They are discouraged to aspire beyond their rank, and are heavily influenced by formal authority figures. According to theseconddimension,Chinaisconsideredacollectiveculturewherepeoplebehave according to the interests within the group, while not paying attention to their own personal needs. The society in China scores highly on the Masculinity scale, which indicates that the Chinese society is strongly motivated by competition, high level of achievement and success. There is an innate need to ensure that the success of an individual should prevail regardless of the wellbeing of the individual’s personal and family life (Block and Walter 2017). China scored a low score of uncertainty avoidance, which indicates that the Chinese are very comfortable with ambiguity because they are consideredadaptable and entrepreneurial. On the terms of long and short term orientation, China scores very highly in this dimension. This
3MANAGEMENT IN THE GLOBAL ENVIRONMENT indicates that the Chinese people are able to adapt very well to changed conditions while putting important on saving and investing. Finally, China is seen to be a very restrained society that does not put much emphasis on time spent to relax, and think that indulging themselves in their likes is wrong proving China to be labelled as having a restraint culture.
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4MANAGEMENT IN THE GLOBAL ENVIRONMENT References: Beugelsdijk, S., Kostova, T. and Roth, K., 2017. An overview of Hofstede-inspired country- level culture research in international business since 2006.Journal of International Business Studies,48(1), pp.30-47. Block, J.H. and Walter, S.G., 2017. Hofstede’s cultural dimensions and modes of entry into entrepreneurship. InExploring the Entrepreneurial Society. Edward Elgar Publishing. Burson, J., Ritchey, L., Hurori, H., Fallah, S. and Lane, S., 2017. CROSS CULTURAL DIFFERENCES IN AUSTRALIA, THE UNITED STATES OF AMERICA, AND THEUNITEDKINGDOM.Copyright2017byInstituteforGlobalBusiness Research, Nashville, TN, USA, p.91. LaBrie, R.C., Steinke, G.H., Li, X. and Cazier, J.A., 2018. Big data analytics sentiment: US- Chinareactiontodatacollectionbybusinessandgovernment.Technological Forecasting and Social Change,130, pp.45-55. Nordström, H., Laukka, P., Thingujam, N.S., Schubert, E. and Elfenbein, H.A., 2017. Emotion appraisal dimensions inferred from vocal expressions are consistent across cultures:acomparisonbetweenAustraliaandIndia.RoyalSocietyopen science,4(11), p.170912. Schmiedel, T., vom Brocke, J. and Recker, J., 2015. Culture in business process management: how cultural values determine BPM success. InHandbook on Business Process Management 2(pp. 649-663). Springer, Berlin, Heidelberg.