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Comparison of Hofstede’s Cultural Dimensions for Tourism Business

2964 words (12 pages) Essay in International Business

08/02/20 International Business Reference this

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The name of my company is Sunny Holidays. Sunny Holidays is based in the UK, provides package holidays around the world, locations include China, Japan, Germany, Spain and India. Within this essay I will recommend how a UK employee of Sunny Holidays must adapt their behaviour to achieve maximum success in each given country, while undertaking their given activities of managing a local team, marketing, dealing with local clients/potential clients.

The first country I will study is Spain. First, I will list Hofstede’s given scores of Spain in relation to the scores of the UK. Hofstede’s scores are given in 6 main categories, Power distance, individualism, masculinity, uncertainty avoidance, long term orientation and indulgence. PDI 57 (UK 35), IDV 51 (UK89), MSC 42 (UK 66), UNA 86 (UK 35), LTO 48 (UK51), IND 44 (UK 69)

Firstly we can recognise that Spain is the world’s second largest incoming destination for tourism, which immediately shows the potential for strong business and investment links between Sunny Holidays and Spain. However cultural significance in Spain is not only in the size of the national economy but also in its relationships with other markets. In terms of Spain’s power distance score of 57; compared to the UK 35. We can recognise that the Spanish people accept a hierarchal order, in which Hofstede states “in which everybody has a place and which needs no further justification, centralisation is popular,” G H, Hofstede, G J & Minkov, M (2010),  which result in inherent inequalities in Spanish business. As a result, we can recognise that in order for a UK employee to succeed in Spain, the employee must adapt the recognised hierarchical structure that is far more used in Spain than in the UK. 

Spain has an individualism score of 51; compared to a score of 35 in the UK. As a result of this we can recognise that Spain strongly represents individualism, individualism can be defined as ‘those who look after themselves and their direct family only’. On the other hand, most of Europe is collectivist, therefore a UK employee of Sunny Holidays must consider this large difference in business culture in order to survive. However, it is recognised that in Spain, employees tend to work in this way with no need for strong motivation from management. Therefore, a UK manager should adopt a more laissez faire management style in order to see his/her employees maximise their potential.

Spain has a low Hofstede score in terms of masculinity, 42; compared to a score in the UK of 66. As a result of this we can recognise that in terms of the UK, Spain does not approve of excessive competitiveness in the workplace, therefore polarization is frowned upon. A UK employee representing Sunny Holidays should consider this while marketing their holidays. In the UK masculinity and polarisation of women is more widely accepted than in Spain. Therefore, as a result without careful consideration of Spanish culture, Sunny Holidays could potentially face troubles in Spain. 

In terms of uncertainty avoidance Spain has a very high score of 86, compared to a UK score of 35. This is due to the fact that in Spain people have rules for everything change causes stress, while at the same time they are obliged to avoid rules and laws. Confrontation is typically avoided as it causes further stress and scales up to a personal level very quickly. For example, 75% of young Spanish people wanted to work in the civil service; a job for life. Whereas only 17% of young people in the USA feel the same. In order for a UK employee of Sunny Holidays to fully take advantage of this culture, they should adapt their management style to consider uncertainty avoidance, as is done in Spain. Methods in which a manager could undertake this task could be included during meetings with potential Spanish clients or Partners, managers should ensure that all proposed business plans are fully risk assessed and solid for the future of the business relationship.

The second country I will study is Germany; as with my analysis of Spain I will list Germany’s Hofstede score compared with the UK. PDI 35 (UK 35), IDV 67 (UK 89), MSC 66 (UK 66), UNA 65 (UK 35), LTO 83 (UK 51), IND 40 (UK 69).

Germany is the UK’s second largest export market after the USA, almost 1000 UK companies have subsidiaries in Germany. Germans take leisure time seriously and are keen to make full use of their vacation allowance, as a result Germany is the UK’s second most important market for volume of visits, and third for the amount spent by visitors, for example, every year more than 350,000 Germans visit Cornwall spending more than £130 million.

In terms of power distance, Germany shares the score of 35 with the UK, therefore representing a highly decentralised economy supported by the middle class. As a result, a UK employee representing Sunny Holidays in Germany must consider co-determination rights and represent management expertise. Therefore, it is recommended that Sunny Employees send a highly commended and knowledgeable manager to Germany in order to maximise success and ensure correct business culture adaption.

Germany has an individualism score of 67; compared to the UK score of 89. Similarly, to the UK there is a strong belief in communication, German communication can be characterised as among the most direct in the world, far more direct and serious than in the UK. As a result, a UK employee representing Sunny Holidays in Germany should ensure that directness is not confused for rudeness as it would be in British culture and British humour. Furthermore, as in the UK, Germans tend to have small families that focus on strong relationships, which are more inclined to look after themselves than the greater society. For a UK employee in Germany representing Sunny Holidays this must be considered while meeting with potential clients or partners.

Germany shares a masculinity score of 66 with the UK, making it a masculine society. Competitiveness is encouraged from an early age and performance is highly valued within business. Similarly, to the UK managers are expected to be decisive and assertive, with an individual’s status often being clear and followed. Therefore we can recognise that in order for a UK employee representing Sunny Holidays to excel in Germany they must manage similar to the general style in the UK, monetary incentives should also be used to maximise motivation in a German workforce.

Germany scores 65 in uncertainty avoidance; compared to a UK score of 35. As a result, there is a strong preference for deductive rather than inductive approaches, a systematic overview has to be given in order to proceed. Furthermore, this means that Germans tend to compensate for higher uncertainty by strongly relying on expertise in their hierarchical society, which can be recognised by Germany’s low power distance score. In contrast for a UK employee representing Sunny Holidays in Germany, they must push for high quality products and services in order to satisfy the German business culture, products should also be marketed as high quality in order to appeal toward German society as a whole, furthermore, confirming that Sunny Holidays should hire their best employees to work in Germany.

The third country I will study is India, the Hofstede scores for India compared to the UK are, PDI 77 (UK 35), IDV 48 (UK 89), MSC 56 (UK 66), UNA 40 (UK 35), LTO 51 (UK 51), IND 26 (UK 69). India has a population of 1.2 billion people according to the 2011 census, 50% of which are under 25. India is also multilingual and multireligious with over 22 languages and 40 dialects. India has been described by Budhwar, P.S. and Verma, A. (2011) as a “panorama which has absorbed diverse languages, cultures, religions and people of different social origins”.

In terms of power distance India has a high score of 77; compared to a UK score of 35, this represents that business in India operates a hierarchical top down structure. With vast differences to the UK, there is vast acceptance of unequal rights in business. However in order for a UK employee representing Sunny Holidays in India to maximise their potential, they could adopt a paternalistic management style when dealing with local employees, as a result there is a stronger meaning to an employees work life, rendering optimum motivation from local employees, as this generates a feeling of power, while power is still held by the individual at the top of the hierarchy.

India has an individualism score of 48, far lower than the UK score of 89. As a result, India represents both individualist and collectivist traits. Therefore, we can recognise that for a UK employee representing Sunny Holidays in India, they must build strong relationships with their employees. The employee-employer relationship must be strong in Indian business, due to the fact that hiring, and promotion decisions are made based on relationships, which are almost key to most aspects of life in a collectivist society. Representing vast differences in the individualism culture in the UK, in which personal success overcomes group success in most cases.

India has a masculinity score of 56; compared to a UK score of 66. In terms of competitiveness India represents a very masculine business culture, Indians tend to advertise one’s success. However, on the other hand, India is also a very cultured country which teaches vast lessons in the value of humility. Therefore, as a result, work is the centre of an employee’s life and success in the workplace is important. We can recognise that in order for a UK employee representing Sunny Holidays in India to be successful, they must use this competitive to achieve goals, monetary incentives should be offered to employees in order to maximise productivity and motivation, in turn maximising the company’s profits. Furthermore, marketing products as high value will in turn, maximise Sunny Holiday’s performance, due to visible symbols of success being popular in India.

In terms of uncertainty avoidance India has a Hofstede score of 40; compared to a UK score of 35. As a result of this we can recognise that India is a patient country, nothing has to be perfect or go exactly as planned. Business leaders in India often do not feel compelled to take action-incentives. There is a saying in India that ‘nothing is impossible as long as one knows how to adjust’, for example, turning a blind eye to rules or bypassing the system. Therefore, for a UK employee representing Sunny Holiday’s in India they must not become engrossed in future performance or face stress and backlash from local employees. Instead the UK manager should find the most efficient way of breaking their goal in order to maximise success in the region.

The next country I will study is Japan. The Hofstede scores for Japan compared to the UK are, PDI 54 (UK 35), IDV 46 (UK 89), MSC 95 (UK 66), UNA 92 (UK 35), LTO 88 (UK 51), IND 42 (UK 69). Japan has the third largest economy in the world by GDP, with a population of 126,440,000.

In terms of power distance Japan operates a borderline hierarchical society, however not as hierarchical as other Asian cultures. Japanese society states Chie, N. (1970), “Japanese society is a series of social relations between two individuals, one who is senior and one who is junior.” All decisions must be made by each hierarchical layer and then by top management. Therefore in order for a UK employee representing Sunny Holidays in Japan need to make sure they build strong relationships with those above them in the hierarchical chain, in order for decisions to be made smoothly and quickly.

In terms of individualism Japan scores 46; compared to a UK score of 89. As a result of this we can recognise that Japan is a collectivist society, business in Japan puts harmony of the group above the expression of individual opinions and people have a strong sense of shame about losing ‘face’. ‘Face’ represents how one is perceived publicly or their reputation. In contrast a UK employee representing Sunny Holidays in Japan must not lose their ‘face’ strong reputations need to be built within Japans collectivist business culture. A loss in ‘face’ could pose threats to  the companies success in Japan, in order to ensure this the employee must use strong Japanese marketing to maintain reputation with the people.

Japan is a very masculine country with a score of 95, compared to a scores of 35 in the UK. However individual assertive and competitive behaviour is not common, instead in business, employees are motivated when they are fighting on the winning team against their competitors, resulting in a drive for excellence and perfection in production and services. Therefore for a UK employee representing Sunny Holidays in Japan they must provide a high quality product in order to be successful, if product quality is low Sunny Holidays would cease to be competitive and ultimately have demotivated employees, therefore Sunny Holidays should invest heavily in high quality marketing in order to maximise their profits in Japan.

In terms of uncertainty avoidance Japan scores 92, compared to a UK score of 35. Due to circumstances in Japans geographic location uncertainty avoidance is written into Japanese culture. In business a lot of time and effort is put into feasibility studies before any project can start production, uncertainty avoidance is the biggest reason why changes are difficult to utilise in Japan. In Japan there is a priority for steady growth over quarterly profits in order to build durable business for generations to come. In order for a UK employee representing Sunny Holidays in Japan to maximise success, large priorities need to be made in the feasibility of each product before it is put on the market, any problems with the product will severely decrease the company’s durability in the long run, leading to minimal success.

The last country I will study is China, the Hofstede scores for China compared to the UK are, PDI 80 (UK 35), IDV 20 (UK 89), MSC 66 (UK 66), UNA 30 (UK 35), LTO 87 (UK 51), IND 24 (UK 69). China has the world’s biggest population at 1.386 billion, China has also benefited from extradentary economic growth in the past 30 years making it an up and coming economic power.

In terms of power distance China scored 80, compared to a UK score of 35. China operates a strongly hierarchical culture that has been deeply imbedded for generations. Power implies responsibility and not privilege, in turn guaranteeing responsible leadership and stability. Confucius believed hierarchical relationships were vital for society to be stable and functional. Lewis, R D (2006). As a result a UK employee representing Sunny Holidays in China must follow the Chinese hierarchical structure or face complete disillusion from local employees, furthermore the manager must not mistake power for privilege with the workplace in order to maximise success.

In terms of individualism China scores 20, compared to a UK score of 89. China has a highly collectivist culture, people typically act in the interests of the group instead of themselves. Overall employee commitment to the organisation is low, whereas relationships with colleagues are co-operative. Therefore, it can be recognised that for a UK employee representing Sunny Holidays in China must build strong social relationships with their employees before their employees can be expected to give their best, in order to maximise success, strong relationships should also be build with potential clients or partners.

In terms of masculinity China shares the same score of 66 with the UK. This is due to the fact that China can be recognised as a success orientated and driven masculine society. The Chinese are widely known to sacrifice family and leisure priorities overwork in order to be successful. This culture is similar to that in the UK making the Chinese adaptable and entrepreneurial. In order for a UK employee representing Sunny Holidays to make the most of the masculine culture, success should be awarded particular to working groups, as a result motivation is maximised, driving success.

Lastly in terms of uncertainty avoidance China scores 30, compared to a UK score of 35. The Chinese show an ability to adapt to their culture, as a result there is a strong push to save and invest in business for the future, in order to minimise uncertainty in business. However, China does not commit as much as other countries such as Japan. Therefore in order for a UK employee representing Sunny Holidays in China to be successful, they must publicly market the companies interests in the Chinese economy through nationwide marketing, in order to maximise success in the region.

All in all, challenges are always going to be high when a UK company attempts to diversify into 5 different countries. Asian countries such as Japan and China have strict hierarchical structures that have to be obeyed, it can be particularly straining for a foreign business to imply these. Furthermore, countries such as Spain who have individualistic cultures can also be hard to manage due to employees care for themselves over the business. In conclusion I believe that if Sunny Holidays was to be successful in any of my chosen countries it would most likely be Germany. This is due to the fact that not only is German business culture very similar to the UK but Germany is also the UK’s second most important market for volume of visits in the world, therefore favouring the tourism industry.

References:

  • Budhwar, P.S. and Verma, A. (2011) Doing Business in India: Building research-based practice, Routledge, Abingdon.
  • Chie, N. (1970) Japanese society. Japan: Pelican.
  • Hofstede, G H, Hofstede, G J & Minkov, M (2010) Cultures and organisations: Software of the mind. Intercultural cooperation and its importance for survival. New York: McGraw-Hill.
  • Lewis, R D (2006) When cultures collide: Leading across cultures. Boston, London: Nicholas Brealey.
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