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National Cultures: Profitable When Recognised Report (Assessment)

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Updated: Jul 7th, 2021

Because of cultural varieties, conducting business on a multi-national level becomes an extraordinary endeavour to achieve profit through finding mutual understanding. According to Geert Hofstede, a Dutch researcher specialising in both management and psychology, the culture of the people who are doing business affects the drafted deal directly (“Hofstede’s cultural dimensions theory,” n.d.). It is necessary to understand cultural differences and similarities as proposed by the cultural dimensions theory, which aims to facilitate business practices, to analyse Hofstede’s work critically through real-life business examples.

Countries do not need to be disconnected geographically or historically for their cultures to be different. America and the UK have differences regarding goal setting, earning 26 and 51 points respectively, while Canada and Australia agree on how close power-holders should be to society, with 39 and 36 points (“Country comparison,” n.d.). This concept of power distance is similar for all four countries, just like the concept of indulgence: 71 points for Australia, 68 for Canada, 69 for the UK, and 68 for the United States (“Country comparison,” n.d.). Ranking them from lowest to highest by a predisposition to being comfortable when faced with uncertainty results in a list started by the UK (35), followed by the US (46), Canada (48), and Australia (51) (“Country comparison,” n.d.). Additionally, the masculinity scores of the UK (66), the US (62), and Australia (61) are opposed by Canada’s femininity (52) (“Country comparison,” n.d.). Similar ratings should mean that British and American businesspeople should not perceive each other differently, which, however, is not true.

Understanding these metrics could be simple if one is open to the idea of a scale deciding the cultural face of each country. Thus, Hofstede’s theory bases itself on four dichotomies and two indexes that reflect the culture of each country (Browaeys & Price, 2015). Indices of Power Distance and Uncertainty Avoidance, collectivism vs individualism, femininity vs masculinity, short-term vs long-term orientation, and restraint vs indulgence are Hofstede’s conceptions, which rank countries from zero to one hundred (“Hofstede’s cultural dimensions theory,” n.d.). These metrics indicate that, overall, “the USA can have a tough time while working with… Mexico, Russia or Pakistan,” without, however, analysing situational non-cultural influences (Khan & Panarina, 2017, p. 18). Additionally, Hofstede’s theory does not take into account the personal factor, outlining people as propagators that exist in a homogenous culture (Touburg, 2016). Thus, applying Hofstede’s work to British American Tobacco’s (BAT) Brazilian-born CEO, Nicandro Durante, could lead to delineating culture clash, not the whole tobacco sector’s decline, as causing the company’s current shortcomings.

While Hofstede’s theory may present a rough outline of a country’s overall culture, living people may be more than the product of their surroundings. Using BAT as one example of a multinational company, independent of one single country’s cultural structure allows anticipating the extent of the modern world’s disparity. Today culture may be more extensive than national or ethnic brackets, making flexibility a timeless skill for a businessperson, rather than adherence to a rulebook definition.

References

Browaeys, M. J., & Price, R. (2015). Understanding cross-cultural management (3rd ed.). London, UK: Pearson.

(n.d.). Web.

(n.d.). Web.

Khan, M. A., & Panarina, E. (2017). The role of national cultures in shaping the corporate management cultures: A four countries theoretical analysis. Journal of Eastern European and Central Asian Research, 4(1), 1-25. Web.

Touburg, G. (2016) National habitus: An antidote to the resilience of Hofstede’s “national culture”? Journal of Organizational Change Management, 29(1), 81-92. Web.

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IvyPanda. 2021. "National Cultures: Profitable When Recognised." July 7, 2021. https://ivypanda.com/essays/national-cultures-profitable-when-recognised/.

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IvyPanda. (2021) 'National Cultures: Profitable When Recognised'. 7 July.

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