BUSSINESS AND CULTURE
Culture can be defined as a Peoples way of life that encompasses the totality of the following phenomena; language- as a medium of communication, The Arts and sciences -as a refined forms of expression(high culture), cognitive perception and interpretation-as a way through which we think and understand concerning the earth and world, spiritually- as a way of the inner and psychological well being of the human being, social interaction-as away of a shared pursuits undertaken within a community in various events and activities, interaction through a set of shared attitudes, belief, values and goals that involve human contact through socialization, lobbying, rules and codes of conduct and protocol regarding conventions, group and institutions. The 21st century is generally a capitalistic world where globalization- a stage in capitalism development- is a major phenomenon. Globalization is characterized by the world economies increasingly becoming intergraded through a global a network of communication and trade that has resulted in the fusion of economies, culture and societies. It entails the notion of free market economies, spread of western culture and values, the proliferation of information communication technology and the movement towards the world being a global village. The major agents of globalization are the multinational corporations.
These are international enterprises that have business in several countries around the world (host country) but they are managed from the home country where the head quarter is. The need to operate business abroad successful entails understanding various issue that transcend the socio-political, economic and cultural settings, hence the notion of international business management. The global commercial environment necessitates the understanding and knowledge of the impact of cultural difference as prerequisite of success. By improving the level of cultural awareness a company can build formidable international reputation and competitiveness making its employees to be internationally sensitive. For an international business executive the understanding of a host country culture gives him/her a chance of interacting successfully within a host country thus having a chance to influence or change it.
Geert Henrik Hofstede, an influential Dutch sociologist studied the link between the national and organizational cultures. He defined culture as “Culture is the collective programming of the human mind that distinguishes the members of one human group from those of another. Culture in this sense is a system of collectively held values.” His views are central in understanding culture and business in international settings. He found five dimensions of culture in his studies. To him culture must deal with issues raised and which can be resolved through a series of dimensions that result in a gestalt for a given society. Individualism/collectivism dimension, where people see themselves at very deep idiosyncratic level as a group or a single independent actor a way from the larger group. Such groups are natural one e.g. a family or clan. Its how a member of the group defines themselves apart from the group membership. These groups are natural ones and members don't necessarily like to be in the group. In individualistic societies, people develop and display their own personalities plus choose their own affiliations. In collectivist societies, people tend to act along long term groupings e.g. the family or religious group or profession. As the national wealth increases, individuals moved towards the individualist spectrum and vice versa.
The second dimension concerns weak and strong uncertainty avoidance. It relates to the degree of anxiety that members of a society feel when in unfamiliar or ambiguous situations. In some cultures, people prefer to have every detail spelt out to avoid surprises here members of a society deal with anxiety by minimizing uncertainty. They prefer explicit rule as well as formal and structured activities. Employees in these societies tend to remain longer with one employer. In others where the uncertainty avoidance is low, people tend to have a relaxed expectation/ approach to life and will not be anxious when something unfamiliar stems up. They prefer implicit and flexible rues as well as informal activities, tolerate value difference and people are encouraged to find their own truths. Third dimension relates to small and large power distance i.e. the degree of inequality that exists among the people between who have power and those who don't, plus the level that these is accepted in the society.(social hierarchy). In some culture the gap between high and low is wider and accepted making people to respect wealth, and power. People know their place in the stratified society and there is low expectation between the movement in the class or caste. Power relations are autocratic and subordinate respects seniors by virtue of their position. For culture with low power distance, those in powerful position and wealthy have earned it rather than gaining it through position and the society reveres that.
Power relations here are more consultative and democratic whilst the position of women is increasingly more equal to men in all spheres including work. People relate to one another as equals while subordinates are more comfortable with seniors. Long term short term orientation refers to how much a society values long held traditions as opposed to short term traditions and values. Long term planning and hard work to achieve the goal are valued cultures with long term orientation. It values the future more than the past. Short term end of the continuum entails concerns for today. They value actions and values that are affected by the past or present. E.g. normative statements, immediate glorification and stability etc. the last dimension is about masculinity versus feminity. How much does a society values and sticks with convectional male and female roles. In masculine culture both male and female value competition, ambition and confidence leading to accumulation of wealth and materials. Men are expected to be tough and be he providers while women have separate profession. In feminine cultures people value relationships and quality of life. Women and men work equally across spheres of life and in different professions. These five dimensions are critical in providing knowledge to a new business entity that wants to invest in a new cultural setting.