Business Across Cultures

Business Across Cultures

Introduction

The key purpose of this study is to critically discuss the Hofstede Model in the context of cross-cultural communication within the organization. In this way, the discussion is done on the culture of the Australian and the UK. While concerning about it, there are many social viewpoints within the cultures of Australia and the UK.

In addition, with the final goal of this paper, the effect of culture on working together is considered. The initial segment promptly represents the perspectives about global organizations as well as culture (Nowrin et al., 2019). In that viewpoint, there is a subject in order to examine the social angles during working together in Australia, and another business which works in the UK.

Australia and the UK are investigated with the help of Hofstede (2001) measurements which measure the social difference. More insights concerning these measurements on subject six. At long last, the conclusion brings up the essential role that the culture plays in worldwide business.

1. Critically assess the Hofstede model of national culture

Demonstrate the understanding of the 6 Hofstede dimensions

In concern of the cross-cultural business, Phan (2017) defines that the Hofstede’s cultural dimensions model is identified as the framework in concern of the cross-cultural communication that was developed by the Geert Hofstede.

Moreover, this model defines society’s culture effect on the values of its members. Similarly, it is also discussed how the member’s values are related to the behavior with the help of the structure that is derived from the factor analysis. In a similar manner, Filimonau & Perez (2019) reflects that it is also defined that the Hofstede model related to the national culture contains the six dimensions.

These cultural dimensions reflect the independent preferences in concern of the one state of the affairs over another which distinguishes countries from each other. In this way, these cultural dimensions in concern of the differences between the UK and Australia are mentioned below:

Business Across Cultures

(Sourced: Hofstede Insights, 2019)

Power Distance:

The Power Distance Index defines the facts by which all the individuals in society are not similar. This reflects the attitude of the people’s culture towards the inequalities among the people. In this concern, Halkos & Skouloudis (2017) defines that while using the Hofstede’s cultural dimension model, Australia’s index is 36 whereas the UK’s index is 35. It means there is a low ranking of PDI and it defines the society believing that the inequalities between the people must be minimized. In this situation, managers and the employees both rely on each other and the information is exchanged between them frequently (Hofstede Insights, 2019).

Individualism:

With the help of the individualism dimension, the degree of the interdependence which is maintained by the society among the members is explained. In this manner, people’s self-image is examined in terms of “I” or “We”. Moreover, in Australia, the individualism score is 90 that is a highly individualistic culture instead of this, the UK has 89 individual score (Hofstede Insights, 2019). In this concern, Venaik & Brewer (2016) reflects that the people of Australia are highly individualistic as well as private and the children are studied to think about themselves from an early age.

Masculinity:

The masculinity dimension reflects the domination of the masculine or the feminine within the particular country in which the Hofstede’s cultural Dimensions model is used. In this manner, Kąkol et al., (2018) defines that Australia has masculinity score 61 whereas the UK has high masculinity score i.e. 66 in comparison to Australia. In this concern, having the high score (Masculine) on this dimension, the society of UK is driven by the competition, achievement as well as the success that is being defined with the help of “Winner” and the “Best-in-the World”. In oppose to above, with the low score (Feminine) on the dimension, the Australian society’s dominant values are caring towards others as well as the quality of life (Hofstede Insights, 2019).

Uncertainty Avoidance:

Under the uncertainty dimension, it has to deal by the way that a particular country’s society believes that the future cannot be known so it can try to control the future or just let it happen. This ambiguity brings the anxiety and in this situation, the different cultures learn to deal with the anxiety with the help of a different manner. In this way, Noort et al., (2016) defines that the Australian has uncertainty avoidance score 51 while the UK has uncertainty avoidance score 35 that is low in comparative to Australia. In means, people in the UK take less worry and these are comfortable in the ambiguous situations (Hofstede Insights, 2019).

Long Term Orientation:

The long term orientation defines that how each society has to manage some links along with its own previous situations in part during handling the challenges related to the present and the futures as well as the two existential goals are prioritized by the societies. In this way, Minkov (2018) reflects that Australia has the LTO score 21 while the LTO score of UK is 51 that is more in comparison to Australia. In this way, it can be mentioned that Australia prefers to maintain time-honored, traditions as well as norms during taking the societal changes with the suspicion.

Indulgence:   

Under the indulgence dimension, it defines the degree by which the children get socialized. Moreover, it also determines as the extent for which persons try to control desires as well as impulses that are based on the way by which they were grown. In this, if the relative control is weak then it is called “indulgence” and if the relative control is strong then it is called “Restraint”. In addition, Ugrin et al., (2018) depicts that the UK has 69 indulgence score that reflects the UK’s indulgence culture. Instead of this, Australia has 71 indulgence score that is high in against of UK. This defines that the people within the Australian society are classified with the high score within the indulgence that generally exhibit a willingness in order to realize their desires and the impulses along with the concern to enjoy the life as well as having fun (Hofstede Insights, 2019).

Define how the model was developed

The Hofstede’s cultural Dimensions model was introduced by Geert Hofstede in the form of framework that is used to understand the cultural differences in whole the countries.  It is also adopted in order to discern the ways which are done within different cultures. Moreover, Deephouse et al., (2016) defines that Hofstede’s Cultural Dimension model was developed in 1980 by the Dutch management research who was Geert Hofstede, with the aim of determining the dimensions under which cultures vary. At this time, he knew that several barriers to the communication can be acted by the cultural differences and these barriers create an impact on the ability to build the connections as well as motivate the people. So, this model was introduced with people from different cultures to understand these differences as well as work effectively (Kim, 2017). However, the Hofstede’s cultural Dimensions model is more effective especially for the organizations which expand their business cross-culturally by crossing the border of countries.

Examine the criticisms of the model, especially in concern of the modern world the general view of these criticisms

In concern of the Hofstede’s cultural dimension model, the critique of McSweeney refuses to accept it and determines national culture implausible like a systematically casual factor in concern of the behavior. In addition, the critique is evaluated in concern of its useful warning in order for those who adopt the Hofstede’s study as well as for its logical consistency. In a similar manner, Flory et al. (2016) supports and mentions that in concern of the culture, a paradigmatic perspective reflects that at which place McSweeney argues in against of Hofstede’s logics and at which place, the Hofstede’s paradigm as well as premises are rejected.

Instead of above, while developing the Hofstede’s model, Hofstede selected staff only from the one company as a sample in order to examine the measurement of a country’s culture. So, Ugrin et al. (2018) defines that it is not a representative model because it involved only middle call workers. In a similar manner, it is also reflected that there are several varieties of factors that affect the culture by the modern way including non-cultural factors. In the words of Beugelsdijk & Welzel (2018), Hofstede neglected the importance of community and by which it is determined that Hofstede adopted a traditional way of study in against of modern way.

Description of the alternative models and the research which are more persuasive

As per the research study, it is mentioned that after introducing the Hofstede’s cultural dimension model, some theorists reflected that Hofstede did not cover all the areas related to the national culture that is essential to understand the barriers of the cross-culture within a particular country in which any organization is going to expand its business.  In this manner,……….represents that the Trompenaars, Hall the World Value Survey and the Globe research, etc are the alternative for the Hofstede’s cultural dimension model as these studies are also effective in order to analyze the factors or barriers related to the cross-culture in a country.

2. Identify a specific example of a cross-border business development that is impacted, positively and/or negatively, by national cultural differences

Demonstrate an example of the cross-board business expansion, at the level of the individual organization

There are different companies who expand its business across other countries Tesco, the UK is among those companies who had expanded its business across 11countries. Here, in this report there is a discussion of Tesco, the UK expanded its business to Australia. This is a good example in terms of cross-border expansion of one company to another country for business growth.

Outline briefly the context of the example venture

Tesco, the UK is one of the retail companies that is operating its business across the world. Its headquarter is situated in England. It has its stores in approx 11 countries and it is considered as one of the main leaders of the grocery market (De Mooij, 2015). Further, it has expanded its business to the Australian market for business growth. While expanding its business in Australia it has to face cross-border challenges and there are different competitors like Woolworth and Cole in Australia. this is the major challenge as these two companies are already available in Australia who is the leaders of an Australian supermarket. These both are holding a share of 75% in an Australian supermarket.

2a. Explain how national culture may have influenced the actions and behaviors of the organizations in the chosen example

Define the cultural challenges for the organizations involved

At the time of expansion of business of Tesco, the UK to Australia it has faced different challenges. This is explained through the Hofstede dimension model. It is the model that is helpful in comparing one country from another country. It includes six dimensions such as power distance, individualism, masculinity, uncertainty avoidance, long-term orientation, and indulgence (Noort et al., (2016).

It can be seen in the graph given below in terms of power distance the UK has a score of 35 and Australia has a score of 36. This depicts that in the UK the people believe that inequalities should be minimized and all should be treated equally. In Australia, due to the high score, there are major differences in the skills of the people (Hofstede Insights, 2019). So, this is a major challenge for Tesco, UK while expanding its business in Australia. The company has faced difficulty in hiring the Australian people in the organization as their skills and the way of doing work is quite different from the UK people. This was the major challenge for the company Tesco, UK while expanding its business to the Australian market (Taras et al., 2016).

Moreover, in terms of individualism, Australia has a high score than the UK. It can be seen in the graph given below the UK has 89 scores and Australia has 90 scores. This depicts that Australian people are more independent as compared to UK people. This has created a challenge for Tesco at the time of hiring of Australian people. As they may not be comfortable in doing work in the team due to their nature of being independent and work individually rather than in a team. Apart from this, in terms of masculinity score of UK is higher i.e. 66 as compare to the score of Australia i.e. 61. So, this is also a challenge for the company of the UK doing business in Australia (Hofstede Insights, 2019). As in Australia Men are less dominating than women as compare to UK males. When the males and females hired in Australia by Tesco, UK then they face a challenge as there was discrimination among the males and female. This is a major cultural difference. The company hires the people in Australia by the perception of man dominant but there are women dominant in Australia. This creates discrimination among the people working in Tesco. In addition, in terms of uncertainty avoidance UK has low score i.e. 35 as compare to Australia i.e. 51. This depicts that UK people are not worried about future uncertainty as compared to the Australian people (Minkov, 2018). So, this was a challenge for the Tesco, the UK expanded its business to Australia. As the people hired in Australia are more active about uncertainty than the UK people. This creates conflict among them as the people of Australia working in Tesco predict more and UK employees are less worried about future uncertainty. The major difference is the way of thinking due to which clashes occurred among the Australian as well as UK employees working together in the same organization.

In terms of long-term orientation, it can be seen that Australia has low score i.e. 21 as compared to the UK i.e. 51. It depicts that Australian people follow traditions, value, and belief as compare to the UK people. Tesco, the UK has faced a challenge while hiring the Australian people. They are not able to adapt to the culture of the UK and it creates differences among the people. The last dimension is indulgence where the UK has low score i.e. 69 than the Australia i.e. 71 (Hofstede Insights, 2019). It means that Australian people are more socialized than UK people. This was the challenge for the Tesco, the UK as the employees working with Australian employees were not able to interact or socialize themselves. This created problem while working in a team in the workplace as there would be a lack of communication and this affected the project.

Describe the outcomes of these cultural challenges

As per the challenges discussed above due to the cultural differences, the conflicts were raised among the Australian as well as UK employees working together in the same organization. This results in bringing out a solution to the challenges faced by both the employees (Venaik & Brewer, 2016). This was sorted through the regular interaction of Australian employees as well as UK employees. The adjustments were made by implementing non-discrimination policies in Tesco. At last, there was a positive outcome as these challenges were overcome by Tesco, UK.

Importance of Hofstede’s model to explain successes or failure in the venture

Hofstede’s model plays a significant role in comparing one country culture with another country culture. With the help of this model, the company is able to know the difference in culture before expanding their business in another country (Burson et al., 2017). It has also been determined that this model is helpful in knowing whether the company will have failure or success. Moreover, it also helps the company in knowing the exact situation of the country where it is going to expand its business. The perception of people is known in terms of purchasing products or services. It benefits the organization in expanding the business to the international level without any kind of obstacle.

2b. explain how organizational culture may have played a role in the success or failure of the venture for example

Discuss the learning in concern of the organizational culture

While discussing Tesco, the UK expanding its business to Australia certain challenges were faced by the company. It has been analyzed that Tesco, organization culture is different from the culture of Australian people. This has been determined from the Hofstede model that there is a culture difference that creates a challenge among the Australian people and UK people working together in the same organization. In addition, it has also been examined from the Hofstede model that the people of Australia are more socialize rather than the people of the UK (Fan et al., 2017). This is the challenge for Tesco, the UK working with Australian people in Australia. Moreover, Tesco expanded its business in Australia faced difficulty as they had to analyze the whole market of Australia and had to gain knowledge about the customer’s needs. Apart from this, on the basis of the Hofstede model, it has been determined that Tesco organization culture in Australia that males in the UK are more dominating than the Australian males. This has created challenges while doing business in Australia as there was discrimination among males and females. Due to this, conflict was raised among the employees. Tesco focuses on providing good quality products and services to the customers of Australia as well as other countries people. This is quite good in terms of organizational culture (Watson et al., 2019).

Role of the corporate culture in the successes or the failure of the venture

Corporate culture can be termed as the values, beliefs, standards, attitude that categorize organization members and nature is defined. It is rooted in organization strategies, goals, approaches, customer, and investors (Khan et al., 2016). In terms of Tesco, it plays an important role as with the help of corporate culture reward, expectation, objectives, and goals can be set in all the departments such as human resource, finance and etc. If there is any negative impact it affects directly the hiring process. This is also adopted to grow the business effectively.

Conclusion

On the basis of the discussion, it can be concluded that the main focus area of the Hofstede Model’s six dimensions is related to the cross-culture.  In this, Culture is defined as the perception as well as the behavior of an individual for the world. In this way, family, friend, work colleagues, and school peers would make standards, ceremonies, legends, even images, and because of these practices in public activity. Hence, it turns into the essential for the people to find out regarding the social difference principal within a society. Nowadays, the multinational organizations are growing universally at a fast pace, and these provide a large scope to all in order to discover different existing cultures. 

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