Culture In Global Era Business Essays



The current era has enforced everyone to view the world as a global village, under the view of globalization. However, this Increase in global culture does not echo the similarity in global customers ( Holt et al. 2004), rather the needs of international customers vary (Yalcinkaya et al. 2007 ; Dwyer et al. 2005; Suh and Kwon 2002). Though basic believes about life are shared by all humans, yet there are several differences that needs to be well-thought-out by organizations going global (Craig et al. 2005; Yalcinkaya et al. 2007). When a firm enters foreign markets it faces several challenges and makes numerous decisions, determining its success or failure in the global market. Out of those challenges, cultural differences are always in lime light. This is because the culture not only determine the behaviors of customers but also play an important role in determining the way an organization should operate in a particular country.

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This paper starts with a focus on understanding the importance of culture in the current era of globalization, followed by a discussion on work of two main contributors in cross cultural study, namely Hofstede and Schwartz. Finally concluding with some criticism on Hofstede's work, believed to be most suited for understanding and evaluating national culture (Yalcinkaya 2008; Kumar and Krishnan 2002; Tellis et al. 2003; van den Bulte and Stremersch 2004; Yaveroglu and Donthu 2002; Yeniyurt and Townsend 2003).

Literature Review:

Globalization has not only affected the businesses but also has touched politics, technology and national culture (Daniels et al. 2007; International Monetary Fund 2007; Osland 2003). Moreover, the assumption that globalization is effected by and has effect on culture (Schaeffer 2003) makes the understanding of culture obligatory for organizations planning to stretch their legs globally. Extensive literature exists highlight the importance of culture in process of globalization, with few researchers quoting the increased magnitude of Western culture in order to elaborate the relation of culture with globalization (Cavusgil et al. 2008; Schaeffer 2003), whereas others studying international communication in order to enlighten the relation and effect of globalization on culture (Ghauri and Cateora 2006).

Different elements of culture like values, customs, attitude, beliefs, language, education and religion etc. have been identified and studied over time (Akaah 1991; Aydin and Terpstra 1981; Ghauri and Cateora 2006; Daniels et al. 2007; Hill and Still 1984; Steenkamp 2001; Wild et al. 2005) and these values are said to be the factors that determines the behavior of and the decisions made by people in foreign markets (Hofstede 1980; Tayeb 1994). Wind and Douglas (1972) explains how family structures can affect the promotional campaigns to be adapted by organizations. For this reason cultural elements and their importance in eyes of managers effect the decisions managers take while going global (Katsikeas et al. 2006; Wild et al. 2005). Correspondingly studies relating the negotiation style, a business must adapt, with culture could also be found (Graham 1985). In addition, religion has been an important cultural factor under observance; with few scholars studying its influence in food industry (Hill and Still 1984; Wild et al. 2005; Wind and Douglas 1972), while others looking at its effect on business hours and even on different aspects of marketing mix (Wild et al. 2005; Boddewyn 1982).

Aesthetic element of culture have also been researched (Wild et al. 2005) as they seem to have effect on managerial decision making (Daniels et al. 2007; Ghauri and Cateora 2006; Hill and Still 1984). Language is another important aspect of culture and research has been conducted on spoken (Ball et al. 2008; Wild et al. 2005) and unspoken elements of language in order to evaluate strategies for organizations involved in globalization (Wild et al. 2005). One way or the other, the success of strategies is believed to be affected by cultural variables (Jain 1989; Katsikeas et al. 2006; Keegan et al. 1987; Jain 1989; Wild et al. 2005).

National culture determines the market opportunities (Yalcinkaya 2008) and literature reveals that though culture has been defined in several ways (Clark 1990), yet it remains an ambiguous concept . However, one thing is clear that culture largely determines our behavior. Oxford Dictionary, 2010 defines culture as "ideas, norms and values, customs and social behavior of a particular group of people and society".

Among all others, the most important contribution in cross-cultural study is by Hofstede (1980) who identified cultural dimensions at the country-level. However, his study did not come-up with such dimensions at individual-level. Another important scholarly contribution in cross-culture study is by Schwartz (1992), who was able to identify different sets of values at both the country as well as at the individual-level. Schwartz (1992) identified 10 values at individual-level, and proposed that these values, hypothesized for individual-level cultural measurements, are different from those applicable for comparing societies (Schwartz 1994b) thus Schwartz also proposed a set of 7 cultural values for country-level analysis. This all was represented in a model by Schwartz (1994a) which is called the "circumplex". Analogous values in the circumplex appear contiguous to each other, while contradictory ones appear opposite to one another. The high order values in the circumplex are; conservation (consisting of security, conformity and tradition) vs. openness to change (consisting of self-direction, stimulation and hedonism) which relates with individuals impulse to either follow their own interest or follow the interest of society. Self-enhancement (power, achievement and hedonism) and self-transcendence (universalism and benevolence) make up the next dimension, demonstrating the level to which individuals augment their own comforts at the cost of others compared to the values making individuals enhance the welfare of society by surpassing their own interests (Schwartz 1992; 94a b)

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Nevertheless, Hofstede's (1980;2001) cultural framework is considered to be the most used one. Several academics have used this model in their research (Yalcinkaya 2008; Kumar and Krishnan 2002; Tellis et al. 2003; van den Bulte and Stremersch 2004; Yaveroglu and Donthu 2002; Yeniyurt and Townsend 2003). Hofstede's research could be traced back to 1980s and is considered to be one of its kinds. After the study of culture of 50 countries Hofstede came-up with four dimensions of national culture namely; Power Distance, Masculinity/Feminity, Individualism/Collectivism and Uncertainty Avoidance (Hofstede 1980; d'Iribarne 1996), however, to make it more comprehensive a fifth dimension (Long/Short Term Orientation) was also added (Hofstede 1991b; Hofstede and Bond 1984; Hofstede and Bond 1988; Hofstede 2001). This model of cultural dimension is considered to be one of the most inclusive and cited models when understanding different cultures (Chandy and Williams 1994; Yalcinkaya 2008 ).

The first dimension of Hofstede model is power distance which deals with the unequal distribution of power in and there acceptance by societies (Hofstede 2001; Yalcinkaya 2008 ). Societies having high power distance consists of people, less innovative in decision making and thus, valuing authority and status more (Hofstede, 2001; Yalcinkaya 2008 ; Yeniyurt and Townsend 2003). Whereas culture with low-power distance tend to have individuals with more sovereignty (Dwyer et al 2005; van den Bulte and Stremersch 2004; Yalcinkaya 2008).

The second dimension of Hofstede (2001) model is Individualism/collectivism. Individualism refers to the magnitude to which individuals fancy their interest over a groups', such individuals prefer their personal accomplishments over the group interest (Hofstede 2001; Yalcinkaya 2008). In Contrast, individuals belonging to collectivist culture prefer group tasks over the individual ones (Hofstede 2001).

Hofstede's next dimension, namely Masculine/feminine discusses the sex role configuring in culture (Tellis et al 2003), as masculinity relates to culture with career oriented and ambitious individuals (van Everdingen and Waarts 2003), who want to show their success by acquiring unique products (Stremersch and Tellis 2004). Consequently, recognition and high earnings are better motivators in such cultures (Hofstede 2001; Stremersch and Tellis 2004; Yalcinkaya 2008). In contrast feminine culture has care, consideration, and sensitivity as its essentials (Hofstede 2001; Tellis et al. 2003; Yalcinkaya 2008).

Uncertainty avoidance which makes the fourth dimension of Hofstede's model tends to deal with the extent to which a society can handle ambiguous situations. Low uncertainty avoidance reflects the ability to tolerate improbabilities and take risk ( Hofstede 2001; Yeniyurt and Townsend 2003; Tellis et al. 2003), whereas the case is opposite with high uncertainty avoidance cultures (Stremersch and Tellis 2004; Yaveroglu and Donthu 2002). Uncertainty avoidance has effect on the way people response to innovation (van den Bulte and Stremersch 2004; Yalcinkaya 2008).

The final dimension for cultural evaluation of Hofstede model is the Long-term/short-term orientation. This dimension deals with whether a culture has long-term orientation or short-term orientation at its heart (Hofstede 2001). Culture with short-term orientation focuses on slow results and hence is cautious to abrupt changes (Dwyer et al. 2005). By contrast cultures with long-term orientation are open to novelty (Yalcinkaya 2008). It could also be put as cultures scoring high in long-term orientation emphasizes more on future whereas the culture with short-term orientation concentrate more on present (Nakata and Sivakumar 1996).

Although Hofstede model of cultural evaluation has been quoted frequently by researchers, never the less it carries voluminous debates over its validity. As Cross-cultural research is a challenging task (Cavusgil and Das 1997) and many definitions of the word culture can be found (Olie 1995) for this and many other reasons criticism on Hofstede work exists. Few scholars even indict his work as imprudent effort to measure culture, where as in their opinion culture is something that can't be measured ( Smelser 1992). Whereas, several critics claim that the sample used by Hofstede was faulty and unfairly distributed (McSweeney 2000).

As already discussed some critiques of Hofstede, like Schwartz (1994), have been able to come up with different dimensions of culture. McSweeney (2002) discussed that Hofstede unintentionally used illustrative stories to justify his findings, but these stories do not authenticate his findings. He further talks about Hofstede model and take a deeper look into the dimensions and the way they were analyzed. Questions Hofstede at several stages McSweeney (2002) tried to prove that Hofstede's model is not appropriate, as culture could not be understood by just few dimensions, especially when these dimensions are not thought of and collected properly. He starts with the question of whether Hofstede took the correct meaning of culture or not, as he argues that boundaries can't define culture and there are sub-cultures within culture which are ignored in Hofstede's model.

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Emphasizing his point McSweeney (2002) argues that same words could have different meanings in different cultures and sub-cultures, hence raising a question on survey and technique used for data collection. Likewise he questioned the validation of the sample used by Hofstede for model construction. McSweeney believes the sample used by Hofstede to be deceiving and not a proper representation of the population, and for this reason questions the generalization of results as he believed that Hofstede's sample represented only small segment of a very big nation. Hence McSweeney (2002) questions Hofstede on several grounds. Even with all this criticism it could be concluded that, Hofstede was able to provide a comprehensive and compact model for cultural evaluation and hence remains the most cherished one.


This paper seeks to understand the importance of culture in the present era when more and more organizations are going global. An effort is made to understand Schwartz's and Hofstede's revolutionary work on culture. Last but not the least this piece of work also encompasses argument against Hofstede's work. Nevertheless it could be said quite confidently that cultural understanding, in the process of globalization, is of immense importance and Hofstede model provides the most comprehensive study for this purpose. However, it could be argued that more research is needed in order to understand the cultural variables identified by Hofstede as well as by Schwartz and to see if they fit in this changing paradigm of values and culture.

Managerial Implication:

Globalization has occurred at a very fast pace during last few decades. Along with this, the change in communication, technology and economic conditions are bringing with it a new era where numerous cultures are merging in to one and either new cultures are evolving or the old ones are changing. Globalization is not only effected by but also effects culture, for this reason it is very important for organizations, planning to serve foreign markets, to understand the Cultural differences that they might face. And plan their strategies accordingly. Managers could use either Hofstede's or Schwartz's dimensions to evaluate the culture of countries their organizations plan to target and determine strategies that are most suitable for those cultures so as to achieve long lasting success.


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