Increasing Demands Of The Globalized World Commerce Essay

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The increasing demands of today's globalized and liberalized business environment, has lead researchers and practitioners to pay more attention to the study of a range of explanatory variables responsible for organizational success (K'Obonyo and Dimba, 2007; Aycan et al,.2000). Extant literature (Aluko, 2003; K'Obonyo and Dimba, 2007) suggests that of all the country-specific factors that drive organizational success and contemporary workplace practices in a country, culture is the most potent; as it the base of people's behaviors.

In an attempt to explain the basic concept of culture, Hofstede (1980) defines culture as "the collective mental programming of the mind which distinguishes one group or category of people from another." K'Obonyo and Dimba (2007) reiterated that this collective mental programming shared by a country (culture), forms the basics of their national character which makes them distinctly different from other nations. Hofstede (1980) further pointed out that this shared culture is even more obvious to foreigners than to the nationals themselves. According to George and Jones (1996), the concept of 'National Culture' encompasses the economic, political and social values that characterize the way people live and work in a particular nation. Ali et al. (2009) however cautioned that national culture should be differentiated from organizational culture. He (Ali et al., 2009) noted that whilst organizational culture distinguishes similar organizations within a specific country; national culture distinguishes the similar type of people, organization and countries worldwide.

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Pioneer research works of Hofstede (1984,), identified five dimensions along which national cultures can be explained in relation to its degree of influence in business activities. They are listed and defined as follows: Collectivism versus individualism, Power - distance, Femininity versus masculinity, Uncertainty avoidance and Long-term versus short-term time orientation. Consequently, comparative research has asked "How do the Hofstede's national cultural values affect workplace practices in different countries?" (K'Obonyo and Dimba, 2007).

The premise of this paper is to critically analyse Hofstede's key dimensions of national culture in Nigeria, a developing country. This paper will consider the typical Nigerian work place environment in organizations and Hofstede's cultural dimensions are discussed with regard to their applicability to the Nigerian situation in comparison with a developed country like the United Kingdom. The challenges of Hofstede's dimensions will be highlighted. Finally this paper will reflect on the dimension which poses the most challenging problem in the Nigerian society and recommendations on how to cope are taken into consideration, in a view to improving the organizational performance.

2. The Nigerian Experience

Nigeria is a rapidly growing developing economy with a growing population and one of the worlds' largest oil producers. Nigeria also has a potential for continuous development in various economic sectors and this has earned it a position amongst the 54 developing countries considered to be emerging economies by the International Finance Corporation (IFC) in 1999 (Anakwe 2002; Hoskisson et al., 2000). Thus Nigeria has opened its market to international investors, attracting multinational corporations and becoming a credible player, very well associated with the international market.

The indigenous Nigerian workplace system exhibits the traditional elements of the fundamental organizational principles underlying the African system of work organization as identified by Ahiazu (1989). Thus Anakwe (2002) notes that the Nigerian society considers 'modern' organisations (e.g. MNCs) and their contemporary practices as 'foreign' and 'imported', and as a result, the Nigerian worker will interpret and implement these practices within existing societal context. This is because the Nigerian culture influences every aspect of their work behaviour.

In an attempt to better understand concepts of national culture in Nigeria, cross-cultural researchers have concentrated on the cultural value dimensions developed by Hofstede (K'Obonyo and Dimba, 2007). Hofstede's (1980) cultural dimensions are thus discussed below in regards to their applicability to the Nigerian situation.

2.1 Collectivism versus Individualism

The cultural dimension of Collectivism versus Individualism describes the nature of the links between individuals in a society (Ali et al., 2009). Pioneer works of Hofstede (1984) defined "Individualism as the preference for a loosely knit social framework in society wherein individuals are supposed to take care of themselves and their immediate families only. While Collectivism refers to the preference for a tightly knit social framework in which individuals can expect their relatives, clan, or other in-group to look after them in exchange for unquestioning loyalty".

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Empirical research by Hofstede (1984) on individualism showed that West African countries like Nigeria scored 20 on the index; while on the other extreme, Great Britain (UK) scored 89. This reflects Nigeria as a collectivist country where issues are viewed from the perception and consideration of group. Ogbonna (2010) explained that this collectivist culture is tied to the extended family social fabric concept in Nigeria and like other African societies. Thus K'Obonyo and Dimba (2007) argued that Nigerian employees expect organizations to look after them like a family member and defend their personal interests. This is on line with Nzelibe (1986) who asserts that individuals is not alone in African communities, but belongs to the larger community.

Several perspectives have been presented in relation to the collectivist dimension in Nigerian and other African countries. The salient findings of Anakwe (2002) suggest that the collectivist orientation of Nigeria is consistent with the principle of the traditional system of organization described by Ahiazu (1986) where employees would expect organizations and managers to be responsible for their welfare whether contractual or not. Thus consistent with the collectivist culture, multinational organizations like Shell and Exxon-Mobil in Nigeria provide for their employees car advances, housing, subsidized cafeteria and transportation, salary advances in times of need, vacation pay, company doctor, company car, pension and gratuity (Anakwe, 2002). Similarly, the Niger-delta region, oil and gas companies like Shell and Exxon-Mobil conduct specific recruitment campaigns for people who are from that region; because the local population believe they are being marginalised. Okpara and Wynn (2008) concur as they gave instances that reflect the influence of the collectivist dimension of the Nigeria culture on performance appraisals in Nigeria. In some cases an employee can be appraised as a high achiever than others if they are from same tribe with key persons in top management Okpara and Wynn (2008) further noted that the collectivist dimension which encourages group work also shadows individual employees input in projects executed as sometimes employees work as a group without specified job description in contrast with the western individualistic culture with specified job descriptions.

K'Obonyo and Dimba (2007) and Kanungo (1995) reported the effect of collectivism on training and development in organizations in African countries. K'Obonyo and Dimba (2007) gave instances where scholarships are granted to employees as per their request, not based on organizational need in a view to reward them for their loyalty and long service to the company. Findings of Baddar Al-Husan et al (2009) explain the issues of personal favoritism in the allocation of training resources. The right person may not be sent for the right training or to the right place. This also reflects a scenario where the collectivist culture and high power distance relationship creates room for nepotism which breeds socio-cultural and political factors affecting training and development in Nigeria (Anakwe, 2002).

2.2 Power - Distance

Hofstede (1984) defined Power Distance as the extent to which the individuals in a society accept and expect power to be distributed unequally in their organizations and institutions. K'Obonyo and Dimba (2007) added that power distance pertains to how cultures deal with inequality. While people in large power distance societies accepts a structured hierarchical order which depicts inequality, people in small power distance societies strive for power equalization, rejecting every ounce of inequalities when they occur (Hofstede 1984).

Pioneer research works by Hofstede (1984) showed that West African countries like Nigeria scored 77 on power distance analysis while the Great Britain (UK) scored 35. This suggests that Nigeria and other African countries are seen to have high power distance culture where there is a strong belief in unequal distribution of power between each citizen and a large gap between the wealthy and the poor with the distance between the 'have' and 'have-not' growing larger. Grzeda and Assogbavi (1999) reiterated that African cultures are characterized with high power distance stating that "authority is assigned on the basis of age and experience; and is enforced by a political system that centralizes power." This is in line with Ahiazu (1989) study on the fundamental organizational principles underlying the indigenous Nigerian workplaces. He (Ahiazu, 1989) noted amongst other Nigerian workplace principles, the recognized status differences between the head of the group and the members, and the principle of the use of age as a determining factor in the choice of persons for leadership positions. Both principles reflect the cultural dimension of high power distance in Nigeria.

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Comparative studies by Anakwe (2002) and Okpara and Wynn (2008) highlighted the impact of the cultural dimension of power distance on performance management and the recruiting and selection process in the Nigerian context. For example, in the Nigerian financial services industry, appraisal is based on amount of customers or funds brought in by an individual, but low achievers can still get away with non-performance if they are favoured by top management, thus line managers who are responsible for appraisal will respect the power distance culture, and perhaps class the individual as 'untouchable'. This can be linked with what Ifidon (2000) called "godfatherism" or "son of the soil" syndrome.

The cultural dimensions of power distance also seems to provide the rationale for the top management involvement in making final selection decisions in Nigerian organizations as hierarchy is respected and not questioned, thus the final selection decisions is often influenced by top management (Anakwe, 2002; Okpara and Wynn 2008).

Furthermore, in line with high power distance, most organizations in Nigeria are characterized by hierarchical organizational structure and downwards flow of information (Ogbonna, 2010). Power distinctions are welcomed as hierarchy is unquestionably respected and seniors are obeyed (Dorfman and Howell, 1988). K'Obonyo and Dimba (2007) noted that this high power distance within organizations in Nigeria creates a sense of segregation between managers and employees which breeds a dependency attitude, high functional barriers and a potential hindrance to horizontal communication.

2.3 Femininity versus Masculinity

Darley and Blankson (2008) defined Femininity-Masculinity, also called goal orientation as "the extent to which 'traditional' male orientations of ambition and achievement are emphasized over 'traditional' female orientations of nurturance and interpersonal harmony." Hofstede (1984) aligned masculinity to a "preference in society for achievement, heroism, assertiveness, and material success while femininity to a preference for relationships, modesty, caring for the weak, and the quality of life."

The early work Hofstede (1984) suggests a slight tilt in favour of a feminine culture for Nigeria, as West Africa (including Nigeria) scored 46 on the analysis index on masculinity compared with 66 for Great Britain (UK). This view of femininity in the general African culture is also supported by Grzeda and Assogbavi (1999), Kiggundi (1988) and Hasan and Ditsa (1999). Grzeda and Assogbavi (1999) explained that Africa in general has femininity culture in view of its orientation and interpersonal relationship as shown in its collectivist characteristics.

Ogbonna (2010) also added that care for each other is an integral virtue which is part of Nigerian culture exhibited even unconsciously by Nigerians resulting in cultures with predominately feminine dimensions. He (Ogbonna, 2010) gave instances in some Nigerian villages where if somebody dies, the villagers do not go to farms or markets, they stay indoors with the bereaved family and most times even contributes money for burial rites. Thus an individual's misfortune is a community affair as argued by K'Obonyo and Dimba (2007). Kashima and Triandis (1986) referred to this effect femininity in the Nigerian culture as "collective coping", making the burden of coping with unpleasant life events easier for individuals. This feminine dimension is also seen in Nigerian governmental organizations, when members of the organization make personal financial contribution to assist another member in difficulty (Ogbonna, 2010).  Grzeda and Assogbavi (1999) and Hasan and Ditsa (1999) in support of this view argued that in most African countries, characteristics such as the quality of life, the priceless value attached to personal time and positive interpersonal relationships as well as the strong desire to gratifying social needs, depicts predominately feminine cultural dimensions.

2.4 Uncertainty avoidance

The cultural dimension of "Uncertainty Avoidance is the degree to which the members of a society feel uncomfortable with uncertainty and ambiguity" (Hofstede 1984). Ogbonna (2010) explained that this cultural dimension highlights how individuals accept or perceive threats of a new situation and its uncertainties. According to Hofstede (1984), cultures have either high or low uncertainty avoidance. High or strong uncertainty avoidance societies hate and are resistant to change, as they rather stick to old and regular routine. On the other hand low or weak uncertainty avoidance cultures react positively to change, as they see change as constant and an avenue for opportunities (Hofstede 1984).

In Hofstede's (1984) survey on cultural dimensions, West African countries (including Nigeria) scored 54 on uncertainty avoidance in comparison to Great Britain (UK) that scored 35. Studies by Kiggundu (1991) also suggested that African countries have strong uncertainty avoidance as they are resist change and prefer routine, stability and little managerial direction. Thus Ogbonna (2010) suggested that the current struggles and underdevelopment in some parts of African can be partially linked to the fact that the African culture is afraid of trying new things.

Some studies have highlighted the implications of the cultural dimension of high uncertainty avoidance in Nigeria. Ogbonna (2010) noted that the rejection and neglect of Government policies for effective change and improvement in the country can be attributed to the Nigerian society's high uncertainty avoidance. El-Kot and Leat, (2008) also explains that developing countries with strong collectivist dimension and uncertainty avoidance tend to explore informal mechanisms of advertising like 'word of mouth' and internal referrals not just because they are relatively cheap and but because it mollifies uncertainty and ambiguity through prior knowledge and referral. This is assertion reflects the implication of high uncertainty avoidance on recruitment processes of small companies in Nigeria as suggested by extant studies (Anakwe, 2002; Okpara and Wynn 2008).

2.5 Long-Term versus Short-Term Time Orientation

Long term orientation is characterized by virtues orientated towards future rewards like perseverance, thrift and a sense of shame. While on the other hand, short term orientation is characterized by virtues related to respect for tradition, preservation of 'face' and satisfying social obligations (Ali et al., 2009; Mbeta, 2007). This fifth dimension in Hofstede's model of cultural dimensions was created after the original four, using a survey designed by Chinese scholars in 23 countries (Hofstede, 2001). Hofstede and Bond (1988) also referred to this dimension as 'Confucian Dynamism'.

Findings of Hofstede (1991) show that Nigeria scored 16, suggesting a very short-term orientation dimension while like other European countries, Great Britain (UK) scored 25, also suggesting a short term orientation. The top positions are occupied by China and other East Asian countries, reflecting their long term orientation dimension.

Hofstede and Minkov (2010) highlighted several correlations between the long/short term orientation dimensions, studies of family life and business world. In Nigeria, the respect for tradition as shown in the close family social relationship reflects her inclination of been short term oriented. This is also in line with the Nigerian collectivist culture as described by Anakwe (2002) and Okpara and Wynn (2008). In Nigeria children respect codes, expect immediate gratification, have social pressure towards spending as they are sensitivity to social trends in consumption in what Hofstede and Minkov (2010) referred to as 'keeping up with the Joneses'. These suggest that the national culture leans towards a short term orientation. Hofstede and Minkov (2010) further argued that in the business world, the short term orientation of Nigeria aligns her to main work values of freedom, rights, achievement, and thinking for oneself. Managers and workers do not psychologically share the same aspirations as the workers focus are mainly on short term self interest thus questioning personal loyalties (Hofstede, 2001; Hofstede and Minkov, 2010).

3. Challenges of Hofstede's Cultural Dimensions

Although Hofstede's legendary model of cultural dimensions are of great use in the analysis and better understanding of national culture in a country, some studies have challenged and questioned the plausibility of crucial assumptions which underlie his claims (Fang, 2003; McSweeney, 2002; Jones, 2007). McSweeney (2002) argued that Hofstede's measurement methodology of using 'data obtained from a single multinational corporation cannot uncover the secrets of entire national cultures'. Jones, (2007) legitimately ask, "Does the averages of a country related to individuals of that country?"

Fang (2003) in his study on Hofstede's fifth dimension argued that there is an 'inherent philosophical flaw' which puts a caveat on other methodological weaknesses and the overall usefulness of the dimension. He (Fang, 2003) based his criticism on the philosophical violation of the concept of Chinese Yin Yang principle and redundancy among the 40 Chinese values in the Chinese Value Survey (CVS) upon which Hofstede's fifth dimension is based. Are the opinions of student population on cultural values representative of the average cultural values held by people? Compared with the first four dimensions, does the different sampling background of the fifth dimension (students vs. IBM employees) reflect a valid factor analysis to validate its results? (Fang, 2003).

Jones (2007) however concluded that "after weighing the evidence as well as observing a dialogue between Hofstede and his antagonists, a greater argument exists which support Hofstede than exists which dispute his work." It is thus the opinion that Hofstede's model, though quite often applicable to general population should be used as a guide for better understanding the cultural differences between countries and not as a law set in stone as exceptions to the model always exist (Clearlycultrual, 2009).

4. Conclusion

"Hofstede's work on cultural dimensions remains the most valuable piece of work on culture for both scholars and practitioners and a greater argument exists supporting Hofstede." (Jones, 2007)

Extant and allied literature has made distinct impressions on the dimensions of national culture in Nigeria and implications for organizations. Studies and evidence from Exxon-Mobil and Shell show that incorporating the national culture of Nigeria into the organisation strategies, will lead to successful implementation of their organizational strategies (Anakwe, 2002; Okpara and Wynn, 2008). Thus the arguments put forward suggests that an understanding of the key dimensions of national culture is vital for multinational corporations (MNC) to implement standardised policies and practices in a host country like Nigeria as organizational practices of multinational corporations in Nigeria reflect a cross-vergence perspective which is a blend of western practices influenced by traditional Nigerian workplace organizational pattern.

More importantly, this paper reflects that of all the dimensions of nature culture in Nigeria, the collectivist culture and high power distance relationship are the key influential dimensions of all organizational practices in Nigeria. Thus this should be taken into consideration by MNCs in Nigeria with organizational practices built on western individualist cultural dimension as it will provide insights and long lasting solution to the insistent conflicts and disputes MNCs, especially those in oil and gas industry are contending with in Nigeria.