Applying Hofstede's Cultural Dimensions Theory to Uber's Strategy

This essay examines the influence of national culture on Uber's operations in Australia, India, and the United Kingdom, utilizing Hofstede's Cultural Dimensions Theory. It discusses how cultural factors such as power distance, individualism vs. collectivism, masculinity vs. femininity, uncertaint...Read More

RUNNING HEAD: HOFSTEDE’S CULTURAL DIMENSIONS THEORY
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UBER
Fundamentals of International Management
Student
6/12/2019

HOFSTEDE’S CULTURAL DIMENSIONS THEORY
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Executive Summary
Culture plays an important part in society. It influences the value and norms of society. In
the same way, every nation has its own culture, which influences the activities of an
organization. It helps in developing a healthy relationship not only with the employees but also
with the customers. By understanding the culture of the employees, the company with integrity
can make a positive impact on society. However, while establishing a business in another nation
cultural differences do arises. These cultural differences can be observed in the operations of
Uber, which is the most popular app of booking a ride. This app has started its journey from San
Francisco and today is it is providing its services to many countries like Australia, India, and the
UK. Therefore, the focus of the report will on how the culture of these three countries influence
is the working environment of Uber.
Contents

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Introduction............................................................................................................................................3
Importance of Culture in the Organizational Activities....................................................................3
UBER- Everyone’s Private Driver....................................................................................................3
Hofstede Cultural Dimensions Theory:.............................................................................................4
I. Power Distance:.......................................................................................................................5
II. I v/s We...................................................................................................................................6
III. Masculinity and Femininity.....................................................................................................6
IV. Uncertainty Avoidance............................................................................................................7
V. Long Term orientation plans:..................................................................................................7
VI. Indulgence:..............................................................................................................................7
Conclusion.............................................................................................................................................8
Bibliography..........................................................................................................................................9

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Introduction
Importance of Culture in the Organizational Activities
In the day-to-day activities of an organization, Culture plays a prominent role in the
decision-making process of an organization while making an influential decision. To make a
powerful impact and to give a competitive edge to the peers, top management and HR managers
are working together to analysis the different cultural factors that urge the behavioral pattern,
transformation and innovation in the services (The 6 dimensions of national culture, 2019).
Culture displays how work can be conducted in a particular environment. It drives the
energy of the employees for the common purpose and unites their efforts in the persuasion of the
goals. However, while coordinating the activities culture difference do arises (Kalpan, Dollar,
Melian, & Durme, 2016).
The differences can be identified in the working of the larger entities like Uber. As the
company is focusing on the expansion of the services on the global level, therefore through the
report it can be analyzed that the how the culture and norms of Australia, India and United
Kingdom influence the operations of the company (The Impact of Organizational Culture on
Organizational Performance: A case study of Telecome sector , 2014).
UBER- Everyone’s Private Driver
Dreams can only be accomplished when we move ahead to achieve them and with the
good driver, every path evolves into a beautiful journey. Today with one tab, People can go
wherever and whenever they want, whether it is a local place or any outstation. Now people of

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both generations and business class can meet their friends and family to whom they were not
able to meet easily. Such transformation has been brought by Uber, which has won billion of
hearts, has created a number of memories by making the people more independent, and has
helped them to reach their destination (A letter from Dara Khosrowshahi, Chief Executive
Officer, 2019).
This trend of cabs was started ten years ago in California when the demand for
smartphones was on the rise and people were becoming familiar with the system of Android
mobile devices. At that time, there were no such exposures regarding taxis and the fare was not
economical. Hence, Uber realized the need for taxies and launched an app with the application of
the innovative technology in the system of booking a car. Consumers want to attain services at
reasonable prices, therefore, the company has launched a range of cabs like pool cabs and bike.
Moreover, like a Zomato - food delivery app, it also entered in the food and beverage industry,
thus giving cut throat competition to other apps. It has fostered a unique standard in the category
of consumer services and today has outreach to many countries.
Hofstede Cultural Dimensions Theory:
Professor Geert Hofstede, Gert Jan Hofstede and Michael Minkov proposed this cultural
theory. To understand the influence of culture on the business environment, they have concluded
various theories that affect the workplace of Uber in Australia, India, and the United Kingdom.

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Source: (Country Comparison , 2019)
I. Power Distance:
Power distance means when the member of the organization operating within the nations
realizes the fact there will be discrimination in the distribution of the authority.
In this theory, Australia represents low statistics by 36% as the institutions adopt
flexibility in the system; together they build trustworthy relationships as well as the manager
delegate power to the subordinates. However, in 2019, it was observed that Uber employees are
not giving any allowances (A new survey of Uber drivers in Australia finds the vast majority are
unhappy with what they're being paid, 2018), and there are rigid and poor leave policies like no
sick pay, and annual holidays. Nevertheless, Uber encourages the drivers to take the decisions
and delegate responsibility and an authority to control their job according to their potential
(Patty, 2019). In India 77% of the organization is following this system and the same structure is
adopted in Uber also as they believe that superior managers are the leaders that give directions.

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In this, Employees are assigned their responsibilities. With the lowest score of 35%, the UK
opposes acts of inequality and believes that society must fight together with integrity against
such unethical behavior. In the UK, Uber drivers are considered as an employee in contrast to
Australia culture. However, they have the authority of their work but they are also entitled to
receive minimum wage and allowances.
II. I v/s We
The theory indicates that how society supports each other. It fosters the level of
dependency among the members of the organization. In Uber Australia, the ideology of
uniqueness is adopted where members focus on individual goals and serves to their customers
rather than dividing the customers according to the areas. In India, Uber Company is a hybrid of
individualism and collectivism. Uber drivers can give their rides to another driver if they are
stuck in some situations. In British countries like Europe, 89% of the company believes to be
indulging in the activities of individualism.
III. Masculinity and Femininity
This theory supports the idea of a competitive world who is striving hard to achieve their
personal and professional goals. In Australian Culture, there are about 61% of both masculine
and feminine societies. In 2015, Uber Australia has collaborated with the government to provide
20,000 new jobs to empower the female society. However, employees while working over there
are troubled due to the assault they are facing. Between July to October they are around 1000
cases have been reported against such violence. Such types of cases are not only happening in a
particular country but it is also seen in India and the UK (Jacks, 2018).

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IV. Uncertainty Avoidance
They are the type of unexpected calamities, which can arise and threatens the entire
working environment. Such menace has been noticed when the Uber drivers in the UK
protested and went on strike. The reason behind such frustration was a minimum wage and poor
working conditions. However, in India, the same issue has been observed. Due to the changes in
the policy of Uber India, around 1, 00,000 driver partners went on strike as their earnings were
collapsed from Rs 80,000 to Rs 30,000. To deal with such a situation company that they will
strive hard to improve the experience of the driver- partners with them, as they know that their
employees are the asset of the firm.
V. Long Term orientation plans:
There are those plans where the society plans futuristic goals and challenges keeping in
view their past and present decisions. Uber Australia’s futuristic objective is to develop
innovative Uber Vouchers so that businesses can support its customers by providing them rides.
VI. Indulgence:
It is the way, through which people work on their desires to achieve their goals. This
system is followed in the organizations of Australia. Their workers attain goals with an
optimistic attitude. However, in India where the population is much higher, Uber drivers still
work with the pessimistic attitude. Fare cuts, wrong promises and high rate of the commission
have put the people in depression. In the UK, Uber drivers are leading a pathetic life because on
the average basis they are only earning 5 euros per hour, which is less than any taxi jobs.

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Conclusion
From the above study, this can be inferred that the culture of different countries is one of
the main factors, which influences the value, practice, and norms of the organization. It has
helped the organization to understand the behavior of the employees so that with solidarity, the
company can attain its goals. To understand the impact of a different culture, the analysis of the
most popular app (Uber) is conducted. Therefore, this analyzation has been with the help of the
Hofstede Cultural Dimensions Theory.

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Bibliography
The Impact of Organizational Culture on Organizational Performance: A case study of Telecome
sector . (2014). Global Journal of Management and Business Research: A Administration
and Management, 1 to 28 .
A new survey of Uber drivers in Australia finds the vast majority are unhappy with what they're
being paid. (2018, October 24). Retrieved 2019, from Business Insider Australia:
https://www.businessinsider.com.au/a-new-survey-of-uber-drivers-in-australia-finds-the-
vast-majority-are-unhappy-with-what-theyre-being-paid-2018-10
A letter from Dara Khosrowshahi, Chief Executive Officer. (2019). Retrieved 2019, from Uber:
https://investor.uber.com/a-letter-from-our-ceo/
Country Comparison . (2019). Retrieved 2019, from Hofstede- Insights : https://www.hofstede-
insights.com/country-comparison/australia,india,the-uk/
The 6 dimensions of national culture. (2019). Retrieved 2019, from Hofstede- Insights :
https://www.hofstede-insights.com/models/national-culture/
Jacks, T. (2018, July 19). Female ride-share drivers campaign for safer working conditions.
Retrieved 2019, from The Sydney Morning Herald:
https://www.smh.com.au/business/workplace/female-ride-share-drivers-campaign-for-
safer-working-conditions-20180718-p4zs96.html
Kalpan, M., Dollar, B., Melian, V., & Durme, Y. V. (2016, Febuary 29). Shape culture Drive
strategy. Retrieved 2019, from Deloitte:

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https://www2.deloitte.com/insights/us/en/focus/human-capital-trends/2016/impact-of-
culture-on-business-strategy.html
Patty, A. (2019, June 7). Uber's Australian drivers are not employees, Fair Work watchdog
finds. Retrieved 2019, from The Sydney Morning Herald:
https://www.smh.com.au/business/workplace/uber-s-australian-drivers-are-not-
employees-fair-work-watchdog-finds-20190607-p51vhn.html
VanderMey, A. (2019, May 8). Uber Drivers Protest Across the U.K. and U.S. But $9 Billion
IPO Rides On. Retrieved 2019, from Bloomerg:
https://www.bloomberg.com/news/articles/2019-05-08/uber-protests-planned-in-u-s-u-k-
and-australian-cities