Essay Regarding How That Dilemma Would Be Explored And Resolved In Different Cultures Using The Hofstede Cultural Dimensions

Table of Contents
1. Introduction
2. Main body
2.1 Explanation of issues
2.2 Resolving strategy by Hofstede’s cultural dimensions
3. Conclusion
References

1. Introduction 

Aim of the study is to identify critical issues faced by organizations as well as solve all problems with the help of Hofstede cultural dimension. The organization has faced both internal and external stakeholder pressure for a few days. Therefore, corporate social responsibility (CSR) of organizations has faced many challenges regarding this. The company has also faced decreased revenues and profits as well as decreased market position for this. Hofstede’s cultural dimensions is a practice that helps to constitute culture along with solving management based issues and conflict of organization. Individualism versus Collectivism and Uncertainty Avoidance Index is chosen in this study that help to increase employee retention and encourage all employees to work better. 

2. Main body

2.1 Explanation of issues

The organization has faced pressure due to its internal and external stakeholders. Therefore, the company has faced decreased profit and revenues as well as, the sustainability and popularity of organization is decreased much. As narrated by Tahajuddin et al. (2021), the employee turnover rate is increased due to the toxic environment of the company. As well as production and product quality is decreased. The company has faced low customers due to decreasing product quality as well as the bargaining powers of the suppliers are increased. Operation costs along with production cost of global firms have increased due to excessive stakeholder pressure.  

Internal pressure 

The internal stakeholder is closely related to business products and it has a huge impact on business organization. The company has faced a prompt management system due to excessive stakeholder pressure. Besides that, the competitive advantage has been lowered by excessive stakeholder pressure. Almost 80% of the activities of the company are based on the manager; however, pressure from manager changes entire environment of the organization. As narrated by Herold et al. (2019), employees are the human capital of the company and increased employee turnover rate creates pressure on the organization and this leads to decreased growth of organization. 

Market pressure 

Market pressure comes from the external stakeholder of the company and the marketing pressure includes pressure in supply chain management and market competition. The competitors of organization are also external stakeholders of the organization and this is responsible to decrease market share of the company. As opined by Ioannou & Serafeim (2019), more than 60% of production cost and operation cost depends on the supply chain management of company. Various issues as well as, risks regarding supply chain management have been faced by organizations due to increasing external pressure of the company. On the contrary, the organization has also faced pressure from customers due to a collective boycott and lawsuit. 

Figure 1: Issues

(Source: Beugelsdijk & Welzel, 2018)

Coercive pressure  

Government, legal policies and regulators are placed as external stakeholders of company and company has faced coercive pressure from them. As suggested by Beugelsdijk & Welzel (2018), administration power and sustainability are hampered due to this type of external stakeholder pressure. Legal policies decrease annual revenues of companies; therefore, companies cannot innovate something new. 

 2.2 Resolving strategy by Hofstede’s cultural dimensions

Hofstede’s cultural dimensions is a framework by which organization can understand the differential culture of organization as well as helps to solve issues and conflicts that are faced by the company. Besides that, this framework helps to assess the impact of a different culture on business. As per this study, this framework helps to solve issues as well as the dilemma faced by the organization due to both external and internal pressure.

Individualism versus Collectivism

Individualism versus collectivism can help a company to divide the department of organization. Therefore, it is beneficial for company to manage all stakeholders successfully as well as the production of the company can be improved by this. As mentioned by Dihl et al. (2017), the company can generate new ideas with the help of this dimension in order to manage the entire job roles of employees. In addition, collectivism can help to set the goals and objectives of the company as well as collectivism can motivate all employees by giving rewards and compensation. The relationship between suppliers and organization can be managed by this stage of Hofstede’s cultural dimensions. This dimension can play an important role to increase employee retention as well as it can encourage all employees to work better. Unclear management can lead to stakeholder problem and this dimension can help to control the management practices of the organization (Ilieș & Zahid, 2019). 

Figure 2: Resolving strategy by Hofstede’s cultural dimensions

(Source: Xu & Cheng, 2021)

Uncertainty avoidance index 

It can assist companies to manage the uncertainty and unpredictable outcomes of the company. An uncertainty avoidance index is considered as a measure of conservatism. In the word of Xu & Cheng (2021), high index indicates high conservatism as well as, low index indicates low resistance and high acceptance. Both internal and external stakeholders can be measured by the uncertainty avoidance index. Furthermore, the company can handle suppliers as well as uncertainty of projects with the help of Hofstede’s cultural dimensions. The pressure from clients, legal issues, government policies can be measured by organization with the help of this cultural dimension. 

3. Conclusion 

It has been concluded from this study that the company has faced stakeholder pressure and as a result, corporate social responsibility of the company has faced many problems regarding this. The company has faced low profits and revenues due to the pressure of stakeholders. Besides that, employee turnover of organization is increased and the productivity of the company is decreased due to stakeholder pressure. On the contrary, legal issues and problems from government have faced by company and this has also affected company negatively. 

Hofstede’s cultural dimension is a framework that helps company to overcome and issues all types of problems. Usually, individualism versus collectivism can help to solve all problems regarding stakeholder by improving the decision-making process of organization. Besides that, the uncertainty avoidance index can increase the ability to handle all projects and suppliers. Furthermore, projects, clients, employees all of both internal and external stakeholders can be managed by this stage of Hofstede’s cultural dimensions.

References 

Beugelsdijk, S., & Welzel, C. (2018). Dimensions and dynamics of national culture: Synthesizing Hofstede with Inglehart. Journal of Cross-Cultural Psychology49(10), 1469-1505. https://journals.sagepub.com/doi/pdf/10.1177/0022022118798505

Dihl, L., Testa, E. S., Knob, P., da Silva, G. L., Favaretto, R. M., de Alcântara, M. F., & Musse, S. R. (2017, March). Generating cultural characters based on hofstede dimensions. In 2017 IEEE Virtual Humans and Crowds for Immersive Environments (VHCIE) (pp. 1-5). IEEE. https://repositorio.pucrs.br/dspace/bitstream/10923/14143/2/Generating_Cultural_Characters_based_on_Hofstede_Dimensions.pdf

Herold, D.M., Farr‐Wharton, B., Lee, K.H. & Groschopf, W., (2019). The interaction between institutional and stakeholder pressures: Advancing a framework for categorising carbon disclosure strategies. Business Strategy & Development2(2), pp.77-90. https://epub.wu.ac.at/6726/1/BSD_Carbon_Disclosure_Herold_et_al_2018.pdf

Ilieș, A., & Zahid, R. A. (2019). The Impact of Europe’s Individualism/Collectivism on the International Trade. European Journal of Marketing and Economics2(1), 6-20. http://journals.euser.org/index.php/ejme/article/view/4281/4151

Ioannou, I. & Serafeim, G., (2019). Corporate sustainability: A strategy?. Harvard Business School Accounting & Management Unit Working Paper, (19-065). https://www.eticanews.it/wp-content/uploads/2019/07/SSRN-id3312191.pdf

Tahajuddin, S., Xin, Z., Kassim, A. W. M., & Noordin, R. (2021). Social Stakeholders’ Pressure on Environmental Accounting Reporting in Small and Medium Enterprises–Evidence from China. International Journal of Research in Engineering, Science and Management4(1), 82-87. https://www.journals.resaim.com/ijresm/article/download/470/444

Xu, J. & Cheng, C., (2021). Uncertainty avoidance, individualism and the readiness of Business-to-Consumer E-commerce. The Journal of Asian Finance, Economics, and Business8(1), pp.791-801. https://www.koreascience.or.kr/article/JAKO202100569450346.pdf

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