The Finding Of The Hostede Theory Commerce Essay

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The term culture generally comprises language, religion, customs and manners, material goods, aesthetics and education. However, Greet defines culture as members of the organization of thought set. In the business world, cross-cultural means interaction of people from different backgrounds. Cross-cultural exchange is an important concern in international business, especially in the area of ​​international trade. Currently, many companies spend much time on training their employees to communicate effectively in different cultures (Investopedia,n.d. [Online]). Hence, cross-cultural and adaptability is a key factor in the global business world.

The finding of the Hostede theory will be provided in more detail throughout next paragraphs. He collected the personal and cultural value of 116,000 IBM company staff in 1984 (Duncan, 2011), and covered more than forty countries. The five dimensions are Power Distance, Individualism, and Uncertainty Avoidance, Masculinity with Feminism and Long-term orientation and Short orientation (Lowman, 2002).

First is power distance that links with centralization degree, leadership and decision-making in the organization management. For example, the subordinates often rely on their leaders in the high power distance situation. And the managers often make decisions. Nonetheless, in the low power distance between managers and subordinates, who are more comfortable with and demand the right to contribute to and critique the decision making of those in power.

Second is Individualism and collectivism and they can reflect different social attitude toward collectivism. In collectivism, everyone must consider the interests of others, members of the organization have a moral obligation and loyalty. And for example, managers encourage employees to participate in decision-making. Individualistic society, everyone focus only on own interests so that everyone is free to choose their own actions.

Third is Uncertainty Avoidance. In high uncertainty avoidance organizations, organizations need to establish more regulations or process to cope with uncertainty. Management is also relatively point mainly based on the work and tasks. Therefore, manager's decision is made by programmed. However, in small uncertainty avoidance organizations, that is rarely to emphasis on the regulations and process standardization and the degree of standardization.

Fourth is Masculinity with feminism. That point out that the men and women of the dimension to the manager's decision-making is also affected to different degrees. Men represent the cultural values ​​of competitiveness, self-confidence, and ambition and wealth accumulation of material wealth. Contrary, women cultural value relationships and quality of life. Take some examples, Japan is considered Hofstede is the most masculine culture, Sweden the most female and Anglo - Culture moderate male.

Fifth is long-term orientation and short-term orientation. Long-term oriented culture is focus on savings and thrift. For example, Japanese like the long-term national investing. Because they prefer yearly progress than the annual profits. By contrast, in the short-term oriented culture, the most important in the management of the profits in a shorter time. Subordinate performance appraisal cycle is shorter. For instance, the American company is more concerned about the outcome of the quarterly and annual profits.

The strengths of Hofstede theory are that the data of collection from IBM employees can be compared because the employees were scattered in different countries. Although some respondents are over 30 years old, but the scope of the investigation and the data are huge (116,000 respondents). This force can promote the learning of different cultures. While learning from a different culture is difficult. Five cultural dimensions of comparison are between different nations and culture. Also it mined the deep value of the culture. The respondents are the international experience or personnel. Therefore, the data are relevant highly. The data is very reliable; the value of the research is very large.

There are potential problems with Hofstede's theory because this theory was limited because it was no taking into account all of the culture. Furthermore, this theory ignored culture's complexity, as well as the diversity. Focus on seeking the size generally applicable, which instead of grasping specifically what led to normative culture (Harrison McKinnon, 1999). Lastly, some people might accept the purpose of the study, whereas some might offend (Barrick & Schmidt, 2003). Might some people may question their organization or country they live in. Another problem for the study was that built some changes during the process. So not all people can accept or willing to accept the sudden change in a very short time.

There are many other culture theories in the world. Some of them are similar with Hofstede's, such as GLOBE culture and leadership study and Trompenaars theory, which were based on the Hofstede's framework. On the other hand, some of them differ with Hofstede's, like Hall's cultural study. The following sections will be presented some of them. 878

GLOBE aimed to discover how differences in cultures and how to leadership (Northouse, 2007). This model initiated by Robert House in 1991. Expanding on Hofstede's work, GLOBE researchers developed nine dimensions based on others' work (e.g. Hofstede, 1980, 2001; McClelland, 1961). The nine cultural dimensions identified as power distance, independent variables, group collectivism, uncertainty avoidance, future-oriented, institutional collectivism, gender egalitarianism, assertiveness, performance orientation, and humanistic orientation. The scope of GLOBE study was a major strength. Because it had collected a large number of data. It also was the only study to analysis how leadership of dissimilar cultures in the world. The GLOBE researcher measurement culture different levels of practices and values ​​that exist in the industry level, such as financial services and telecommunications (Northouse, 2007). Nonetheless, this theory was limited because it did not taken into account all of the factors. In additional, some of terms are difficult to interpret, for instance, future-oriented. Compared GLOBE with Hofstede's models, although there some dimensions were based on Greet's early work (Northouse, 2007). House and his colleagues (2004) increased further culture dimensions. Whereas, Hofstede just has five dimensions. For this study, Adler (2002, [Online]) claims it is the most elaborate cultural study in all available culture theory. House thinks that GLOBE will be the most up-to-date national culture study because it addressed a number of important limitations (Hofstede study). 226

The Seven Dimensions of Culture was created by Charles Hampden-Turner and Fons Trompenaars (1997; 2000; 2004), who is a theorist in the field of cross-cultural communication. This model includes seven dimensions, which describe how people in foreign cultures interact with each other. The seven dimensions are universalism and particularism, individualism and collectivism, achievement and ascription, neutral and emotional, sequential and synchronic, specific and diffuse, and internal and external control. Trompenaars (1997) states that in every national culture, each reaction of dimension is corresponding to the deep values ​​deeply rooted in the different cultures. That is useful in different cultural exchanges. And can give guidance, such as expatriate management tasks in different cultures. Hofstede has a database of 30,000 managers on questionnaires. Trompenaars did not have a large number of databases. Hofstede use IBM employee to survey, Trompenaars conducted a questionnaire survey of a large number of organizations' executives. Hofstede's work is to assess values. Whereas Trompenaars let respondents to select the option of first impression (Sitaram & Prosser, 1998). 169

Hall's cultural model was another national cultural theory. Hall was an anthropologist who made early discoveries of key cultural factors. In his cultural framework, there were three parts, which are context, time and space. Many factors were included in the three sections. Context includes high context and low context, the two factors similar with Trompenaars' universalism and particularism. Time includes monochronic time and polychronic time. High territoriality and low territoriality were undertaken in Space section. If working in cross-cultures, businessman should beware high and low cultures through others' behaviors. Such as, if a person is late for meeting it may be due to polychronic, not because impolite or lazy. Hall's multi-phase single time the concept of time orientation of the culture and how to build your own time. Hofstede's famous culture comes mainly from his rich anthropological research, culture and regions can be very different in each country. 148

Bing (2004) considers that Hofstede's theory was very useful for business organisations. His argument was convincing because there is a real example can interpret. Hofstede theory has a lot of strengths. Firstly, it can help senior leaders to discover the cultural barriers, and then establish communication and trust new bridges in the management of cross-border mergers. The culture dimensions can be used to predict and reduce cultural conflicts. A KPMG's study, eighty-three percentages of merger and acquisition (M & A's) did not produce any benefits, even destroyed half the value of shareholders. Cultural differences have been identified is an often overlooked obstacles in the implementation of the process of mergers and acquisitions (Benoliel, 2011). Besides the combined company's different approaches must be unified. Secondly, to assist partners create effective results of taking advantage of their similarities and dissimilarities in the joint enterprise. Thirdly, ensure all employees' work is more objective because of different cultural background. Fourthly, to help negotiators comprehend all aspects of details in the negotiation within different culture. Lastly, it is useful for understanding how the cultural impact of the financial, legal and related business areas. Through the study of Hofstede's cultural value dimensions. Tang and Koveos (2008) believe that economic conditions changes are the sources of cultural power, and provide a basis for cultural stability. Culture is the wealth of the country that measured by per capita gross domestic product (GDP), which has a curvilinear relationship with individualism, long-term direction and power distance scores. 247

In the business organisations, GLOBE theory contributes to analysis the problem of the company. Then, find solutions in a short time. At first, leaders have to know how to influence subordinates and let them work together. Leaders also must control technique about communication. They can help the company achieve goals. Purpose of GLOBE study is to prove that transformational leadership can be an outstanding leader. Generally, good leaders have common characteristics, such as integrity and charisma, etc. Trompenaars' theory shows the possible advantages of competitions. In business organizations, explain how to manage the complexity of cultural differences. In addition, it can help international managers or business leaders to obtain long-term success by cultural differences. It can foresee different cultural business behaviour, e.g. business settings. In business behaviours, if leaders understand the personal, national or organizational culture very well. Hall's model helps business leaders seeking and building coalitions with staff, who from different culture. 153

To sum up briefly, the essay has introduced the basic knowledge of Hofstede theory of national cultural differences. After that, it analysed the strengths and weakness of this theory. Furthermore, it has introduced the GLOBE, Trompenaars and Hall's cultural models. Then, compared them with Hofstede theory. From previous introduction, Hofstede theory includes five dimensions; each of them has different contribution on business organisations. For example, employees are encouraged involve in the decision-making in individualism environment. It will improve the employees' positivity, and then improve the work effectiveness. Through the comparison of these theorises, found that there dissimilar. Even though, these theories also have some commons. Like all of them are used to measure culture differences in business. As a consequence, people should take the application of the different models in dissimilar areas and different culture, a quantitative method. 134