Growth In The Functioning Of Multinational Companies Commerce Essay

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Past two decades have seen an extraordinary growth in the functioning of Multinational Companies in the different parts of the globe. This increase is not restricted to capital investment or industrialized operations and has been extended progressively more towards marketing activities. However, this development of marketing movement is not been accompanied by any logical study to the differences in buyer natures from the various countries around the world. (Sheth and Sethi, 1977)

In cultural dimensions, When people from different Nation , Background ,Culture and race come together to work and live, it tries to know that how people from dissimilar nations and their diverse cultures work, commune and notice the world around them. There are total Four cultural frameworks and they are as follows:-

Hofstede cultural frameworks,

Trompenaars cultural frameworks,

Schwartz cultural frameworks

Globe Study cultural frameworks

Out of these four I'm speaking about two Cultural frameworks. And they are as explained below:-

1) Hofstede Cultural dimensions:-

Geert Hofstede, A Dutch management researcher made drastic changes in the organisation literature and made it more sophisticated. Geert Hofsted's literature is broadly considered as a most preferred model for cultural differences in the business organizations. (Bhagat and Steers, 2009)

Professor Hofstede's model was based on a study conducted by huge number of employees of different countries working at IBM Company between year 1967 and 1973. In this period he covered more than 70 countries. (

At the same time it was based on the supposition that diverse cultures can be differentiated together based on the differences in the value they are. Sometimes cultures will get higher value based on the equality they have as individual and other while will get high value based on power distance or hierarchies among people in it. Other nation's cultures value assurance stands on its day to day life. In situation like this culturally it finds trouble in coping with unexpected events, while other cultures may have a better patience for ambiguity and seem to relish change. Taken together, Hofstede argues that it is possible to gain considerable insight into organized behaviour across cultures based on these value dimensions. (Bhagat and Steers, 2009)

2) Trompenaars cultural frameworks:-

Fons Trompenaars is an author from Netherland. Free university of Amsterdam is the university where Trompenaars studied Economics. Few years later he did his dissertation on the subject of Differences in Conceptions of Organisational structure in different Culture. Based on this dissertation Fons earned his Doctorate or Ph.D from the Wharton School under Pennsylvanian university. Fons trompennars shook hand with British Dilemma enthusiast named Charles Hampden-Turner. They talk these days not so much of country stereotypes as the need to understand individuals.

Trompenaars experienced cultural differences first time at home. He has grown in the family where both Dutch and French language used to be spoken. Later in his professional life Trompenaars worked as a consultant for Shell. He entered shell in year 1981. He was moved into personnel division in Shell's Rotterdam division. Fons worked for nine years and that too in nine culturally different countries.

In the year 1989 Trompennars founded the Centre for International Business Studies. It was a organisation for International management who used consult as well as train people in it. Since year 1998 the centre is operated as Trompenaars Hampden-Turner.

Fons Trompenaars wrote a book called "Riding the Waves of Culture, Understanding Cultural Diversity in Business". Book was critically acclaimed with 120000 copies were sold. It was translated into various languages around the world. Languages like Korean, French, Danish, German, Hungarian, Turkish, Dutch, Chinese and Portuguese were the languages into which the book was successfully translated.

Fons is co-author of a book call Seven Cultures of Capitalism, Building Cross-Cultural Competence and 21 Leaders for the 21st Century. The book is Co written by British Dilemma enthusiast named Charles Hampden-Turner.

Review of literature:-

In the introduction I have mentioned both theories whose theories and history is mentioned above. Here in the literature review I will explain both theories dimensions.

1) Dimensions of Hofstede's cultural frameworks:-

The theory of Nationalised culture or national nature has suffered from indistinctness. There has been little agreement on what represents the national culture. For example: - Mexicans, Japanese, French or Americans.

We appear to be short of even the terms to explain it. Ho found four such criteria, which I label dimensions: these are Power Distance, Uncertainty Avoidance, Individualism-Collectivism, and Masculinity-Femininity.

A) Power Distance Index (PDI)

This Hofstede's dimension is completely depends upon the level to which the Less Influential members of business organizations and institutions allow and anticipate that power is circulated unevenly.

This act represents difference between more and less. But this define surprisingly from below not from above. It clearly suggests us that a society's level of dissimilarity is allowed by the group of followers as much as influential leaders in the society. Power and dissimilarity, of course, are extremely basic truth of any society. And any person with a few or more global awareness will be conscious that 'may be all societies are uneven, but some are more than others'.

 B) Individualism (IDV)

Two sides opposite to each other is collectivism. That is the level to which individuals are incorporated into groups. On the nonconformist side we find society is tie between individuals but they are loose. Everybody is expectes that he or she will be look after him and herself.

On the collective side, we find societies who are cohesive, strong in groups from the birth onwards. They are often extensive families with grandparents, aunts and uncles. They keep protecting them in replace for absolute faithfulness. 'Collectivism' in this sense as a word has no political mean. It only refers to the group and not to the state. Again, this matter is being spoken or addressed by this dimension is an enormously basic one, concerning all societies in the earth. 

C) Masculinity (MAS):-

Against its contradictory, womanliness refers to the allotment of roles among the genders. This is another basic issue for any society to which a variety of solutions are found.

The IBM research have exposed that

(A) A Women's values are differing fewer between societies than men;

(B) Men's values beginning from one country to other country contain a dimension from self-confident and competitive, something drastically different from women's nature and values like honest, hardworking and modesty.

The self-confident role is called as 'masculine'. Women's in womanly countries have the same humble, gentle values as men's. In the masculine countries they are rather confident and bloodthirsty, but definitely it is not at all as much men. This clearly indicates that these countries have a wide gap between men values and women values. 

D) Uncertainty Avoidance Index (UAI)

This deals with a society's patience for improbability and ambiguity. It is ultimately referring to man's hunt for reality. It cleverly indicates that to what level a culture operates its members to experience either painful or secure in formless conditions. Shapeless situations are fresh, unidentified, unexpected, and dissimilar from the usual.

Improbability keep away from cultures attempt to reduce the prospect of such circumstances by harsh laws and policy, security and safety measures and on the idealistically and spiritual level by a faith in total Truth. People in doubt keep away from the countries that are more emotional and encouraged by internal anxious energy. The contradictory type, doubt tolerant cultures sometime becomes more tolerant of opinions. Drastically different from what they have been standing on; they always try to have as much less rules as it is possible. And on the idealistic and spiritual level is being maintained as lower as they can keep as they are relativist who allows a lot of current to People from these cultures are more unconcerned and thoughtful, and not usual by their surroundings to state their emotions.

2) Dimensions of Trompenaars cultural frameworks:-

Fons Trompenaars and Hampden-Turner during their cross cultural studies defined a different set of dimensions. Their data base was containing more than Thirty thousand survey results. The dimensions defined by Trompenaars and Hampden-Turner (2005) have been summarised by Fons Trompenaars and James. P. Williams (2003). They are being classified below:-


A) Universalism versus particularism -

The first dimension set Trompenaars and Turner tells us that How people evaluates the behaviours of their office colleagues. People from all over the world regardless from which culture they belongs to, focus more on rules. They are more specific when defining contracts. They have a tendency to describe International standards for the company policies as well as human resources.

Speaking more particularly about national cultures then their focus is more on the associations. Contracts for company can be custom-made to please new demands in particular situations. And local management of the company as well as human resource policies are made according to different requirements. (Trompenaars, 2003)


B) Individualism and Communitarianism -

The second dimension of Fons and turner is classified countries to the degree that it can maintain the balance between personal interest and collective interests. Commonly, Team members with individual mindsets are the one who see improvements of their group as it is related to the means to pull off their own individual objectives.

Drastically, Communitarian culture's team members have their own view to see things. They see improvements according to personal ability as a step forward towards the group success than individual success.

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C) Achievement versus ascription -

The third dimension, presented in Trompenaars and Turner studies is very parallel to Hofstede's power distance theory. People from successful goal oriented countries admire their colleagues based on their previous achievements and their way of displaying knowledge. They show their job title only when it is necessary.

On the other hand, people from Recognised oriented cultures use their job titles heavily and regularly respect their seniors and superiors hierarchy wise.

D) Neutral versus affective -

According to Trompenaars and turner, people from similar cultures respect cool and self-confident conducts. They often control their emotions, which can suddenly may burst out through tense situations. While working with stakeholders from neutral countries, you prefer to avoid warm, communicative or passionate natures. You in advance prepare to concentrate on the topics being discussed. You look carefully for tiny but important cues guessing that the person is fuming or satisfied. People from High cultures affectivity use all their forms of gesturing while chatting with their colleagues. Gesturing such as smiling, carefully listening and present their body language to an openly voice.(Trompenaars & Turner, 2001)


E) Specific versus diffuse -

Trompenaars has studied the differences in how much people from the same office engage their colleagues in particular or several areas of their lives. This way it helps classifying people into two sets of groups:

People from more particular cultures are tend to remain secret and business agenda separate. They have a completely dissimilar relation of influence in every public group.

In spread oriented countries, the authority rank at job can reflect into social areas. And employees of the company will have to adopt a subordinated approach while meeting their seniors in non office hours.


Hofstede cultural frameworks and Trompenaars cultural frameworks compared:-

Their accomplishment/ascription value direction, which explains how position is accorded, happen to be associated to Hofstede's power distance index. At least if one admits that rank is accorded by nature rather than accomplishment, and that this mirror a better enthusiasm to admit power distances.

It is nevertheless, not a total equivalent to Hofstede's power index does not only share to how standing is accorded, but also to the satisfactory power distance within a society, an region that is not handled upon.

Trompenaars's other dimensions looks like to focus more on some consequential effects of fundamental value dimensions. For example, their unbiased/emotional dimension explains the level to which feelings are openly spoken, i.e. a behavioral portion rather than a value in it.

Their universalism/particularism value orientation, describing a preference for rules rather than trusting relationships, could be interpreted as part of Hofstede's uncertainty avoidance dimension on the one side, and to some extent the collectivist/individualist dimension.

Their diffuse/specific value orientation, describing the range of involvement, seems to have no direct link to any of Hofstede's dimensions.

Human-Time relationship is closely related, if not identical, to Hall's polychromic and monochromic time observation. The Human nature association appears to be closely connected to the Human Nature association in Strodbeck and Kluckhohn's (1969) Value orientation.

An examination reveals broad consistency in the respective classifica­tions of countries. For example, Japan and India are both relatively weak in terms of individualism according to both Hofstede and Trompenaars, while Denmark, the UK and the USA are relatively individualistic. However, many countries appear to be more individualistic according to Trompenaars than Hofstede's research indicates. This is particularly the case for countries such as Mexico, Greece and Spain. Differences of this kind cannot be entirely explained away by pointing to the differences in the items employed by Hofstede and Trompenaars.

Hodgetts and Luthans (.2000) have suggested that what is possible is that the differences may be due to the different time frames of the two studies, indicating that cultural change has taken place. In turn this implies that Hofstede's findings are becom­ing out of date. For example Mexico's integration into the global economy may be generating a move away from communitarian values. In other words, 'Cultures. do not stand still; they evolve over time, albeit slowly. What was a reasonable characterization in the 1960s and 1970s may not be so today' (Hill, 2000: 100).

It is also interesting to note that Trompenaars' findings indicate that former communist countries such as Russia, Hungary and the Czech Republic are relat­ively individualistic despite their communist past.

Trompenaars has also extended his research by examining corporate cultures by nationality. In order to do so he introduced yet another dimension: equality versus

hierarchy.The hierarchical corporate culture is one that is power-oriented in which the leader has considerable authority and knows best. This dimension is akin to Hofstede's Power Distance dimension. Furthermore, there are a number of similarities in their findings: the Scandinavian countries.

North America and the UK have relatively egalitarian cultures according to Trompenaars, and are low in terms of Power Distance according to Hofstede. France and Spain figure as hierarchical according to Trompenaars and relatively high in terms of Power distance in Hofstede's research.

There are, however, pronounced disagreements not least in regard to Germany. Trompenaars' findings suggest that German corporate culture is decidedly hierarchical, whereas Hofstede identifies Germany as relatively low in terms of Power Distance.


Of these seven value dimensions, two mirror closely the Hofstede dimensions of Collectivism/Individualism and to a lesser extent power distance. Trompenaars and Hampden-Turner's Communitarianism /individualism value orientation seems to be virtually identical to Hofstede's Collectivism/Individualism.

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