...is a process of international trade, investment among people, organisations and governments from different countries (Chen, 1999). This process has effects on the environment, culture, political systems, and economic development around the world (Deresky, 2008). Due to globalization, the international dimension of management has become a major challenge to countries, institutions and people. International management is becoming more important within the academic setting. International management is a process of developing strategies, designing and operating systems, and working with people around the world to ensure sustained competitive advantage (Sepehri, 2010, as cited in Lecture notes 1). This essay identifies the challenges of operating in different national cultures for international managers by using Hofstede’s theory. In addition, the essay explains international skills and knowledges required by managers to be successful in different countries. Cultural Value Dimensions Culture in a global economy is one of the most important factors in global economy. In international management research, Hofstede defined culture as "…the collective programming of the mind which distinguishes the members of one group or category of people from those of another" (Hofstede, 1991, as cited in Jones, 2007). Within the context of international management, culture involves different dimensions. Four major dimensions provide frameworks for identifying international differences in culture...
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...Journal of Business Research 60 (2007) 277 – 284 Hofstede's dimensions of culture in international marketing studies Ana Maria Soares a,⁎, Minoo Farhangmehr a,1 , Aviv Shoham b,2 a School of Economics and Management, University of Minho, 4710-057, Braga, Portugal b Graduate School of Management, University of Haifa, Haifa, 31905, Israel Received 1 March 2006; received in revised form 1 August 2006; accepted 1 October 2006 Abstract Growth of research addressing the relationship between culture and consumption is exponential [Ogden D., Ogden J. and Schau HJ. Exploring the impact of culture and acculturation on consumer purchase decisions: toward a microcultural perspective. Academy Marketing Science Review 2004;3.]. However culture is an elusive concept posing considerable difficulties for cross-cultural research [Clark T. International Marketing and national character: A review and proposal for an integrative theory. Journal of Marketing 1990; Oct.: 66–79.; Dawar N., Parker P. and Price L. A cross-cultural study of interpersonal information exchange. Journal of International Business Studies 1996; 27(3): 497–516.; Manrai L. and Manrai A. Current issues in the cross-cultural and cross-national consumer research. Journal of International Consumer Marketing 1996; 8 (3/4): 9–22.; McCort D. and Malhotra NK. Culture and consumer behavior: Toward an understanding of cross-cultural consumer behavior in International Marketing. Journal of International Consumer Marketing...
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...Journal of Business Research 60 (2007) 277 – 284 Hofstede's dimensions of culture in international marketing studies Ana Maria Soares a,⁎, Minoo Farhangmehr a,1 , Aviv Shoham b,2 a School of Economics and Management, University of Minho, 4710-057, Braga, Portugal b Graduate School of Management, University of Haifa, Haifa, 31905, Israel Received 1 March 2006; received in revised form 1 August 2006; accepted 1 October 2006 Abstract Growth of research addressing the relationship between culture and consumption is exponential [Ogden D., Ogden J. and Schau HJ. Exploring the impact of culture and acculturation on consumer purchase decisions: toward a microcultural perspective. Academy Marketing Science Review 2004;3.]. However culture is an elusive concept posing considerable difficulties for cross-cultural research [Clark T. International Marketing and national character: A review and proposal for an integrative theory. Journal of Marketing 1990; Oct.: 66–79.; Dawar N., Parker P. and Price L. A cross-cultural study of interpersonal information exchange. Journal of International Business Studies 1996; 27(3): 497–516.; Manrai L. and Manrai A. Current issues in the cross-cultural and cross-national consumer research. Journal of International Consumer Marketing 1996; 8 (3/4): 9–22.; McCort D. and Malhotra NK. Culture and consumer behavior: Toward an understanding of cross-cultural consumer behavior in International Marketing. Journal of International Consumer Marketing 1993;...
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...Cultural differences among U.S. and International Businesses Businesses that choose to compete internationally will face many barriers in their operations abroad. Success on a global scale requires knowledge of cultural differences, which may include languages, customs and values even holidays. These differences among nations are vast, ranging, and absolutely vital to understand. When business people understand and respect these social and cultural differences it creates an avenue where international business can be successful. A lack of understanding and sensitivity to cultural differences across cultures can lead to business failures. Culture is a potential stumbling block for many organizations thus the knowledge and understanding of its ins and outs should remain a top priority. In 1980, Hofstede created a model of cultural dimensions, which has become very popular and widely referenced. He identified five cultural dimensions differentiating people based on their country of residence. His cultural dimensions included power distance, uncertainty avoidance, individualism, masculinity, and long-term orientation. (Hofstede, 1980) Power distance dimension is subject to the distribution of power within the culture. High power society represents a small minority of the citizens, maintaining significant portions of power and prestige. Thus, power and prestige are more equally distributed in a low power distance culture. Uncertainty avoidance is the degree to which members...
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...In your opinion, what is the most relevant macro-environment factor (legal, political, cultural and economic differences) for an international business when choosing to internationalise into an emerging/developing market? Discuss any international business concepts or theories that could be used to help justify your answer. In the past few decades internationalisation has been a phenomenon in being a main subject in international business research. Globalisation has allowed countless commercial opportunities to occur over the border of their national country by maintaining competition and the continuing growth of international firms (Tikhonova, 2012). In foreign countries, legal and political systems as well as the economy are essential to have knowledge in as it explains how political systems, laws and regulations and economic differences affect international business opportunities. Although these factors are vital in understanding the foreign environment, it is not as broad as culture. Culture is a factor that includes several aspects that range from different dimensions which on a broad level includes linguistic, regional, religious and ethnic dimensions (Reference for Business’s website, 2014). Fundamentally for an international firm to endure success in emerging markets it is relevantly important to have full understanding of consumers and their cultural differences. In order for a firm to reach their full potential and succeed in an emergent market they need to have...
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...National Cultural Differences and Multinational Business The eminent Dutch psychologist, management researcher, and culture expert Geert Hofstede, early in his career, interviewed unsuccessfully for an engineering job with an American company. Later, he wrote of typical cross-cultural misunderstandings that crop up when American managers interview Dutch recruits and vice versa: “American applicants, to Dutch eyes, oversell themselves. Their CVs are worded in superlatives…during the interview they try to behave assertively, promising things they are very unlikely to realize…Dutch applicants in American eyes undersell themselves. They write modest and usually short CVs, counting on the interviewer to find out by asking how good they really are…they are very careful not to be seen as braggarts and not to make promises they are not absolutely sure they can fulfill. American interviewers know how to interpret American CVs and interviews and they tend to discount the information provided. Dutch interviewers, accustomed to Dutch applicants, tend to upgrade the information. To an uninitiated American interviewer an uninitiated Dutch applicant comes across as a sucker. To an uninitiated Dutch interviewer an uninitiated American applicant comes across as a braggart.”1 Cultural differences, while difficult to observe and measure, are obviously very important. Failure to appreciate and account for them can lead to embarrassing blunders, strain relationships, and drag down business performance...
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...implication on the international business management. Introduction Today, problems associated with global business management have been identified as factors that negatively impact the performance and productivity of multinational corporations and in turn, adversely affect regional and national economic growth The goal of this paper is to analyze the influence of culture in international business. The globalization of the world economy has intensified international relationships, increasing the importance of cultural dimension. The world is being affected by the globalization of the economy. This phenomenon is bringing movement of companies, assets, services, capital and people. Analyzing globalization this process is taking the world to major changes in the economic, technologic and social areas, which are having consequences in all organizations and societies that participate in this globalized market. It is a process that does not bring equal benefits to all participants. The globalization concentrates more of its actions in some sectors of economic activity and some regions and countries, rather than acting everywhere. With the world getting flatter doing business anywhere in the world is easier today, because of major changes in technology, global politics and expanded educational opportunities. But it is not only businesses that are affected. Governments, NGOs and society itself is changing at a fast pace. Nevertheless going forward can only happen if business managers understand...
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...National Cultural Differences and Multinational Business The eminent Dutch psychologist, management researcher, and culture expert Geert Hofstede, early in his career, interviewed unsuccessfully for an engineering job with an American company. Later, he wrote of typical cross-cultural misunderstandings that crop up when American managers interview Dutch recruits and vice versa: “American applicants, to Dutch eyes, oversell themselves. Their CVs are worded in superlatives…during the interview they try to behave assertively, promising things they are very unlikely to realize…Dutch applicants in American eyes undersell themselves. They write modest and usually short CVs, counting on the interviewer to find out by asking how good they really are…they are very careful not to be seen as braggarts and not to make promises they are not absolutely sure they can fulfill. American interviewers know how to interpret American CVs and interviews and they tend to discount the information provided. Dutch interviewers, accustomed to Dutch applicants, tend to upgrade the information. To an uninitiated American interviewer an uninitiated Dutch applicant comes across as a sucker. To an uninitiated Dutch interviewer an uninitiated American applicant comes across as a braggart.”1 Cultural differences, while difficult to observe and measure, are obviously very important. Failure to appreciate and account for them can lead to embarrassing blunders, strain relationships, and drag down business performance...
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...Explain the utility of dimensions of national culture to an international manager. International University College, Dobrich, Bulgaria Cardiff Metropolitan University, UK International Business Management BA (Hons) International Business & Cultural Difference Assignment 1 Philippe Bergonzoli Bergonzoli.ph@gmail.com Content Introduction 2 Hofstede’s dimensions 2 1-The Power Distance Index 2 2-Individualism versus Collectivism 3 3-Masculinity versus Femininity 4 4-Uncertainty Avoidance Index 4 5-Long Term-Orientation versus Short Term Orientation 5 6-Indulgence versus Restraint 6 Comparison Overview 7 Others theories 7 Schwartz’s dimensions 7 Inglehart’s dimensions 9 GLOBE dimensions 10 Culture Measurement 10 Culturally endorsed implicit leadership (CLT) 11 Conclusion 12 References 13 Introduction The globalization has been the key which allowed the exchange and diversification of different culture. Nowadays, the proper understanding of cultural differences has become a daily matters for businesses because employees, products, services,… are located, are sold and bought across the world (Mirja Ivonen, Diane H. Sonnenwald, Maria Parma, Evelyn Poole-Kober, August 1998). The subject is not new and has been discussed and analyzed for the past four decades (Xiumei Shi, Jinying Wang, 2010). Geert Hofstede, a Dutch social psychologist and professor emeritus of organization anthropology and international management is one of the pioneer...
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...International Business Management Chapter Two Understanding the Role of Culture __________________________________________________ What is meant by the culture of society, and why is it important for international managers to understand it? What is meant by the culture of society, Explain how culture affects all aspects of international management? Culture A set of shared values, understandings, assumptions, and goals that are learned from earlier generations, imposed by present members of a society, and passed on to succeeding generations. A critical skill for managing people and processes in other countries is cultural savvy that is, a working knowledge of the cultural variables affecting management decisions. Managers have often seriously underestimated the significance of cultural factors. According to numerous accounts, many blunders made in international operations can be attributed to a lack of cultural sensitivity. Examples abound. Scott Russell, senior vice president for human resources at Cendant Mobility in Danbury, Connecticut, recounts the following An American company in Japan charged its Japanese HR manager with reducing the workforce. The Japanese manager studied the issue but couldn’t find a solution within cultural Japanese parameters; so when he came back to the Americans, he reduced the workforce by resigning—which was not what they wanted.. Cultural sensitivity, or cultural empathy, is an awareness and an honest caring about another...
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...Mexico: Cultural Analysis This paper is a cultural analysis of the Mexican culture through the lens of the 5-D Model developed by Professor Geert Hofstede. The five dimensions of the model include: Power Distance (PDI), Individualism versus Collectivism (IDV), Masculinity versus Femininity (MAS), Uncertainty Avoidance (UAI), and Long term versus short term orientation. In recent years a sixth dimension named Indulgence versus Restraint has been added. There are no rankings for this dimension as it has only been recently added and researched (Hofstede, 2012). This Model gives one an important tool for gaining insights into given cultures which can improve business opportunities and interactions (International business etiquette, manners and culture, 2012). Power Distance Index (PDI) is the degree to which the less powerful members of a society accept and expect that power is distributed unequally. The issue is how a society handles inequalities. Mexico, ranking 81on the PDI, is a hierarchical society. Regionally, Mexico ranks higher on PDI than the United States (rank 39) and Canada (rank 40), whose ranks indicate that their cultures strive to equalize the distribution of power and demand justification for inequalities of power. Globally, however, countries vary greatly in PDI, (average PDI rank of 60; Clearly Cultural, 2012). One must consider the PDI rank when doing business with a given country in a certain region. For example, Mexican businesses hoping to successfully...
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...effect of cultural distance on entry mode choice: the moderating effect of language diversity Name: Rajae El Aiachi Student number: 10202773 Teacher: Dr Johan Lindeque MSc. In Business Administration – Theories of International Management Date: 27-09-2015 Abstract (50 Words) Previous studies have shown that the choice of entry mode depends on various types of aspects, containing also cultural distance between countries (Arora and Fosfuri, 2000). However, there is not a lot of consensus among these articles. A few articles mentioned the effect of language distance on entry mode choice. Keywords: Cultural distance, entry mode choice and language distance 1. Introduction In this time of globalization a lot of companies are expanding their international business activities in overseas market. The ways in which firms are expanding their business in overseas market differ per enterprise and country. The hierarchical model of market entry modes by Pan and Tse (2000) shows that there are different choices of entry modes. Entry modes can be seen as equity-based versus non-equity based. Within equity-based modes, there is a division between equity joint ventures and wholly owned operations. Within nonequity based modes, there is a division between export and contractual agreements. Prior research demonstrated that the choice of entry modes rely upon different types of components. Especially, a lot of previous studies focused on the effect of cultural distance ...
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...Rania Harb International Negotiations As the world becomes more globalized, this has put increasing pressure on companies and employees to become proficient in conducting business within their culture and more importantly, with other cultures as well. Indeed, cultural differences pose difficult challenges to international negotiations, however, these may present instrumental opportunities for both parties if conducted properly. There are various elements that impact international communication and decision-making such as Hofstede’s dimensions of culture, cultural intelligence, leadership and negotiation. This paper will discuss these characteristics in relation to how an employee should prepare when joining a team of international negotiators. Leadership is an essential ingredient in effective international agreements. Leadership makes a difference by establishing a “relationship of influence in which one actor guides or directs the behavior of others toward a certain goal” (Underdal, 1994). Leadership provides a model to others and removes uncertainty about whether the leader is actually devoted to meaningful action. It is important for any employee entering an international agreement to exercise leadership skills. Some universal skills include having charisma and being autonomous and a team player. It is important to enter a business agreement with some authority to ensure seriousness and portray a vision. Hofstede`s cultural dimensions have been extensively used...
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...Human Resource Management: Module 2 Reaction Paper Global Human Resource Management in contrast to Hofstede’s five dimensions Changes in technology, social and economics have led to many organizations expanding their business into international markets. Business exchanges between various countries have become a common thing today. However, expanding their enterprise globally will bring new legal and ethical challenges due to differences in cultural view. HR professionals must increase their knowledge and skills in the international environment to keep their organizations competitive in this challenging global marketplace. It means that HR related problems different countries solve in different ways. Hofstede suggests that culture influences business related practices. Many HR representatives working in an international business a global business world face the same difficulties, but also face other new challenges that relate to cultural convergence in business practices. There are many characteristics to identify a countries culture. When dealing with HR issues, culture plays a major role in how an organization handles personnel issues. We can best understand this if culture is defined. Culture is the common ideas, beliefs and values shared by the members of a group of individuals (Hofstede 1984). Each group is defined by specific family traditions, common languages, ethnic diets, notions, and dress. It is best stated by “culture is everything that people have...
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...A, 2015). As a global company, Wipro’s European sales, marketing and project management staff were exclusively Indian expatriates with a short time in Europe (Wipro Technologies Europe A, 2015). These staffs couldn’t build good relationships with the local communities compared with its competitors (Wipro Technologies Europe A, 2015). So Nandy took some measures to deal with these issues such as the Unreasonable staff structure and inadequate relation network. 2. The Analysis of some measures adopt by Nandy from three perspective of three culture framework This part will analyze the measures applied by Nandy from three perspectives of Hofstede cultural dimensions and Hall cultural dimensions in order to evaluate whether these measures are effective. 3.1 Hofstede Cultural Dimensions Hofstede cultural dimensions mainly consist of five aspects containing Power distance, Uncertainty avoidance, Femininity vs. masculinity, Individualism vs. collectivism and Confucianism vs. long-term orientation (Dowling, Festing & Engle, 2013). First, in the power distance Indian is a country with higher power distance compared with the America and Western countries (Hamza, Reza, Gholam & Meghdad, 2011). In this part Nandy hired the local people engaged into the Europe in order to make the team easily communicate with the European consumers and lower the power distance...
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