There is no need to elaborate on the fact that there are many countries in the world. There are many different people and different groups with their own unique identity and culture. It can be argued that culture is both invisible and visible. The visible part is the expression of culture which can include how people prepare and consume food, how people build societies. This also includes the way they celebrate weddings as well as other rituals in life such child dedication or infant baptism or burials.
But more importantly culture is seen in the way they conduct business. It is therefore important to remember the principle embedded in a statement made by a business guru who said that, āThe business of international business is cultureā (Hofstede, 1994, p.1). If an investor is willing to go overseas and establish a company it is important to understand differences in culture. Hofstede’s The Five Dimensions of Culture is a helpful guide for multinational companies, corporate leaders, and even employees working overseas.
The invisible part of culture is something that could not be captured with a picture or a painting. But those who are living within a particular culture are well aware that there is something in that society that makes it different from the rest of the world. The invisible side of culture dictates not only the social norms but also how people within that culture tend to perceive the outside world and how they relate to each other.
Understanding Cultural Differences
The importance of having an awareness of cultural diversity is very important in the 21st century. They say that the world is getting smaller and that more and more people are interacting through the use of technology such as the Internet (Steger, 2009, p.1) But still there are many regions that are in conflict and to some extent this is also true when it comes to international business.
A company will set-up a factory or an office half-way around the world and experience problems when it comes to managing the people. It is important to have some kind of a guide to help navigate the complex world of international business. This is why Hofstede’s research is an important tool that businessmen, investors, and even employees will find helpful when it comes to dealing with other people with a different worldview than their own.
The Five Cultural Dimensions
Holfstede’s five cultural dimensions is an amazing framework that is very helpful in the context of international business. This is because the five dimensions cover important aspects of business operations such as corporate leadership, teamwork, how to deal with employees and how employees will interact with their supervisors. It is even helpful when it comes to gender issues.
It also give leaders the ability to develop systems and company policies based on the local culture and not on what they believe is true according to their own culture. The framework developed by Hofstede is a helpful tool when it comes to devising strategies for developing human resources.
The first dimension labeled as power and distance is an important contribution in the study of international business. This is because for the first time ,someon was able to measure the effect of the perception of power when it comes to the interaction between two people.
In the United States it is not a major issue if a subordinate will talk to a boss and relate to him without considing age differences and social status. If the same thing is done in a country like Japan where there is a high score in the Power/Distance dimension, then the boss will be offended by the lack of respect from the subordinate.
The second dimension which is Individualism is also an important contribution to the study of international business in the context of culture because it is now possible to measure the āstrenght of the ties people have to others within the communityā (MindTools, 2011, p.1). This means that in Asian countries the workers will chose harmony over confrontation.
They will do everything not to rock the boat so to speak. This can be frustrating for a Westerner when it comes to dealing with problems in the company but find no one will speak out and talk about the issues that are hounding the company.
The third most important insight that Hofsted contributed to the study of international business in the context of culture is the idea that there is a way to measure long term orientation. This is very critical when it comes to introducing something new to the company.
If corporate leaders are not aware that this particular cultural dimension does exist then they will be bewildered when they encounter resistance when it comes to a policy or regulation that they believe will benefit a lot of people in the company. This is because what they are trying to do may be the norm in Western societies but not from an Asian perspective.
Conclusion
Corporate leaders, managers and even employees sent overseas will have to learn the truth behind Hofstede’s pronouncements that international business is all about culture. If a business leader is unaware of cultural differences then he or she will encounter problems and unable to find solutions. In other words, business leaders working abroad will have to know about the culture of a particular country. This is especially true when it comes to the five dimensions of culture developed by Hofstede.
This system was developed to increase the chances of success in a foreign land. If culture is ignored in favor of tried and tested methods perfected in the West, then problems will crop up and worse of all, the leaders will be unable to prescribe an effective solution. But those who are well-aware of cultural differences can overcome challenges better than those who are ignorant about these things.
References
Hofstede, G., (1994). The business of international business is culture. International Business Review, 3(1): 1-14.
MindTools, 2011. Hofstede’s cultural dimensions. Web.
Steger, M., 2009. Globalization. New York: Sterling Publishing.