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Comparing China with the West: What Hofstede taught us about Cultural Consequences Essay

The world today is a smaller place than it has ever been, thanks to the rapid and ongoing development of the global economy; we have become a borderless and cyber-connected community (Hofstede 2001; Kottak 2008; Mead, 2009). This has resulted in greater links and more and more interchanges between different nationalities. The ease at which we can physically communicate and travel has allowed for the free movement of goods and services across borders increasing trade and investment in foreign countries.

International commerce, travel, migration and the media are the forces behind globalisation (Kottak, 2008; Craig and Douglas, 2006). Globalisation has a phenomenal effect on the business world; it opens up businesses to potential new markets, allowing them to increase their supply of consumers. Setting the stage for international collaboration (Hofstede, 2003) and while doing so, it is reshaping the global economic outlook (World Investment Report, 2005). In despite of this, Osland (1990) points out, that one of the barriers to international business success ‘Is the one erected by culture’ (p.4). Each civilization breeds its own social-political-economic systems.

Essentially, each culture has its own method to conducting business. Such methods are intrinsically cultural bound. In order to understand how the different systems work one must first understand the values that underlie it. Thus, managers, employees, business partners and other corporate stakeholders must recognise that the methods they use, to make their decisions, solve their problems and deals with other people are all done by reflecting on their cultural backgrounds and perspectives (Mead, 2009; Mott, 2004; Hofstede, 2005).

As acknowledged above, globalisation leads to problems in cross-cultural communication. We live in a world where a cultural competency is essential for global business profitability. Over the years there have been many studies conducted on culture. In the 1950’s Kroeber and Kluckhohn, where one of the first scholars to provide a theoretical framework for explaining culture as a system of integrated values they wanted to characterize differences between national cultures (Kroeber & Kluckhohn, 1963).

Since then, many scholars have focused their attention on how national differences affect the decision-making practices of professionals and have produced some tangible guidelines for cross-cultural understanding (Hofstede, 1980; Adler & Graham, 1986; Black & Mendenhall 1989; Trompenaars, 1994; Triandis, 1994; House et al, 2004). One of the first of these studies, and perhaps the one which has had widespread implications in helping scholars and professionals interested in cultures, is Hofstede’s Five Dimension model (5-D). Its primary innovation is to class national cultures along a number of dimensions.

The underlying thesis in these studies is that there are nationally influenced differences in work placed values (Hofstede, 2001; 2005). This presented scholars with insight into the composition of national culture and according to Hofstede culture-focused research is becoming more prominent, and understanding culture is becoming increasingly vital (Hofstede, 1994). Even though, Hofstede was not the first study on cross-cultural research, his study succeeded in putting cross-cultural research at the forefront of international business research (Hofstede, 2001).

It is considered valuable in international business and management and due to the growing interdependence among nations; the need for a better understanding of cultural influence on organisational practices has never been greater (House et al, 2004). A cross-cultural understanding is a prerequisite to an effective entry into an international market (Morder, 1999) as businesses operating in different cultures must maintain a multifaceted approach, developing appropriate skills and compromising the interacting cultures, adjusting their norms, practices and perspectives to work within another culture’s border (Morder, 1999; Selmer, 2009).

There have been many documented cases of cultural incompetence, (Selmer, 1999; 2000; Hutchings, 2005), outlining how a lack of cultural competence can have devastating effects to the success of business ventures. Thus as we move to a more connected world some might expect a convergence on a cultural level, to match the significant business transactions that globalisation has inspired by the fact that trade, travel and education has helped facilitate the global economy (Scarborough, 1998). Nonetheless, one must concede that there remains a gulf between cultures created by the different nationalities in the world today.

The roots of culture are so deep that they have produced highly divergent values systems, (Scarborough, 1998) and without reconciling these differences and working around them then there is no hope of successful business relationships between the ones cultural counterparts (Uniser & Lee, 2005). Through the literature, it is suggested that a comparison be conducted between cultures helping to promote better working relationships (Torres and Jones, 2011; Tsang, 2011) The focus of this paper is the People’s Republic of China (PRC), as it is emerging as a particularly dominant player in the global economic market and the process of globalisation brings us in a global community China will play a central role in this. Thus, understanding it is of the greatest importance.

Over the last three decades, China has positioned itself in the epicentre of the global market and the world is paying close attention to this new economic giant. (Detert et al, 2000; Scarborough 1998; Dent et al 2000) More references. Before this prosperous period began, China’s business environment and economic stability had been predominately controlled by the state. More recently, the country has seen a tremendous surge of economic success due to the relaxing of the state in relation to foreign direct investment (Euromonitor, 2012).

Leading to the increase of the number of foreign business people working within China, resulting in an unprecedented growth in Sino-foreign joint ventures and wholly owned foreign firms (Selmer, 1999; Detert et al, 2000). Currently there is an opportunity for growth and prosperity in China, which seems endless and has attracted businesses and professionals to move to China to live and work.

The country is now considered the ‘new hub’ in the international migration order (Pieke, 2011, 40). All this force in the Chinese Business environment has engendered much scholarly attention in exploring and understanding how the Chinese operate in a business manner, (Detert et al, 2000). Thus, those involved have become acutely aware of the great divide between the Chinese cultures and other cultures. The differences in the way one thinks, one’s beliefs and how one behaves (Scarborough, 1998).

A basic understanding of the core component of China’s culture is particularly noteworthy given the magnitude of China as a trading partner to the rest of the world (Pieke, 2010). Until recently, China was viewed as a mysterious nation that was literally impenetrable (Lightfoot & Almeida, 2007), because they draw their culture from a distinctive, indigenous and philosophical cultural heritage, that dates back thousands of years consequently it is unlike any other economic giant in the global market (Rinder and Starbuck, 1997; Selmer, 2009).

Thus, they can bewilder other nationalities that encounter them (Chen, 2001) because they do not identify with the Chinese practices and cultural traditions. It has been suggested that from, a Western perspective, China can be considered ‘the most foreign of foreign places’ (Selmer, 2009, 42). Thus, in order to infiltrate this dynamic market, one must learn to accept and adapt to, the distinctive business culture that makes China unique (Bond, 1991). China

China is the oldest empire in recorded history; it has a continuous recorded history of about 5000 years (Hofstede, 2005) and it is one of the world’s earliest and thus oldest civilisations. It is now one of the fastest growing and vibrant economies in the world, (Wang et al 2008) and the world is now paying close attention to this gigantic influential country. The People’s Republic of China (PRC) was founded on October 1st 1949. (National Bureau of Statistics, 2012a) Below are some facts about the enormous and enigmatic county.


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