In today’s global market place there is one issue that is increasingly becoming critical to the success of Multinational Corporation’s. The issue is culture differences between countries and how these differences could affect the performance of a firm.
More specifically how employees assigned to manage subsidiaries or conduct business with managers of subsidiaries in foreign countries cope with cultural differences. The importance of cross-cultural management is fundamental to the success of a firm. There are several cross-cultural theories that highlight basic differences in culture which can aid the manager in a cross-cultural situation.
One of the most prominent and discussed theories is the international study conducted by Geert Hofstede on cultural values in the workplace and their importance to managers. Hofstede’s is not the only theory available; another popular cultural theory was developed by Fons Trompenaars and Charles Hampdon-Turner which shall also be discussed. One of the more modern cross-cultural theorists Nigel Holden will also be used as a comparison.
To limit the scope of the report the theories will be analysed with particular attention to their relevance and aid in distinguishing between Spanish and English business cultures.
Introduction Cross-cultural management is important even essential to the well being and success of an enterprise. According to Hoecklin (1995:23) these differences in culture if managed inappropriately could lead to “management frustration, costly misunderstandings, and even business failures,” and these are serious misfortunes indeed. However the first aim of this report is not to highlight the importance of cross-cultural management but to examine some of the most important theories and their relevance as an aid to international managers.
The theories to be discussed are those of Geert Hofstede, Fons Trompenaars and Charles Hampdon-Turner and Nigel Holden. Geert Hofstede has been under much scrutiny and criticism of his work but remains to be one of the leading theorists who has given practical guidelines with a sound framework. For this reason his theory will be analysed in detail, with particular regard to the way business is conducted and the way managers operate in Spain and England. The author of this report conducted a miniature replica of Hofstede’s work as an experiment with comparison potential.
The results are inconclusive but shall be analysed. Trompenaars and Charles Hampdon-Turner have developed a framework similar to hofstede’s about culture values. A more modern theory of knowledge management developed by Nigel Holden shall be examined as well. The second aim of this report is to attempt to highlight the cultural differences that may arise in a business transaction between Spain and the United Kingdom. The author of this report conducted a miniature replica of Hofstede’s work to provide original data of the differences between Spanish and British business culture.
The results will be analysed, discussed and then compared with Hofstede’s results as a validation. The difference between Spanish and English values and attitudes to life and work may be interesting to analyse from a distance but in the business world these cultural differences if ignored could cause serious harm. The differences can be small such as the English tendency to arrive ten minutes early for any important appointment compared with the Spanish tendency to arrive ten minutes or more late. Such minor misunderstandings as that and others could lead to problems in the working relationship.
The cultural differences in Spain and England according to the theories shall be discussed in further detail. 1 – Literature Survey The majority of cross-cultural management theories focus on the cultural part of that expression. They illustrate how culture values vary from country to country. They will dissect the culture into various dimensions to help differentiate values that are important to societies (Hofstede 2001, Trompenaars 1993). It will be shown that differentiating cultures is not the only way to approach cross-cultural management.
Holden (2002) investigates and conceptualises a refreshing new way of a approaching the subject. Instead of visualising cultural differences as terrible company destroying objects, Holden approaches the area from a knowledge management perspective. With emphasis on knowledge and management as opposed to cross-cultural. 1. 1 Geert Hofstede Prof. Geert Hofstede conducted what is considered by many to be a comprehensive study of how values in the workplace are influenced by culture. Hofstede analysed value scores from IBM employee’s obtained by questionnaires.
The study conducted between 1967 and 1973 covered more than 70 countries, from which he used the 40 largest countries. Since 2001 however Hofstede has continued and extended his work and value scores are now listed for 74 countries and regions. From the results, Hofstede developed a model that identifies four primary Dimensions to assist in differentiating cultures: Power Distance – PDI, Individualism – IDV, Masculinity – MAS, and Uncertainty Avoidance – UAI. Hofstede added a fifth dimension after conducting an additional international study with a survey instrument developed with Chinese employees and managers.
That Dimension, based on Confucian dynamism, is Long-Term Orientation – LTO and was applied to 23 countries. There is not a LTO index for Spain and for that reason the LTO dimension shall not be focused on in great depth. These five Hofstede Dimensions can also be found to correlate with other country, cultural, and religious paradigms. The dimensions try and illustrate different cultural values found in the workplace. To avoid confusion and ambiguity the original terminology has been used to describe the dimensions. (www. geert-hofstede. international-business-center.com)
Power Distance Index (PDI) focuses on the degree of equality, or inequality, between people in the country’s society. Its suggests the level of a cultures inequality is endorsed not only by the leaders or the people above but by the people below as well. All societies contain power and inequalities but each has different levels of them. A High Power Distance ranking indicates that inequalities of power and wealth have been allowed to grow within the society. These societies are less likely to allow significant upward mobility of its citizens.
A Low Power Distance ranking indicates the society de-emphasizes the differences between citizen’s power and wealth. In these societies equality and opportunity for everyone is stressed. Individualism (IDV) focuses on the degree the society reinforces individual or collective, achievement and interpersonal relationships. The opposite of individualism is collectivism. A High Individualism ranking indicates that individuality and individual rights are paramount within the society. Individuals in these societies may tend to form a larger number of looser relationships.
In effect this means that an individual should look after themselves and their close family because no one else will. A Low Individualism ranking or collectivism typifies societies with close ties between individuals. These cultures reinforce extended families and collectives where everyone takes responsibility for fellow members of their group. Masculinity (MAS) focuses on the degree the society reinforces, or does not reinforce (feminism), the traditional masculine work role model of male achievement, control, and power.
A High Masculinity ranking indicates the country experiences a high degree of gender differentiation. In these cultures, males dominate a significant portion of the society and power structure, with females being controlled by male domination. A Low Masculinity ranking indicates the country has a low level of differentiation and discrimination between genders. In these cultures, females are treated equally to males in all aspects of the society. Uncertainty Avoidance Index (UAI) focuses on the level of tolerance for uncertainty and ambiguity within the society.
It illustrates how comfortable or uncomfortable members of a society fee in unstructured situations. Unstructered situations are any situation that might be different from usual or unknown. A High Uncertainty Avoidance ranking indicates the country has a low tolerance for uncertainty and ambiguity and tries to reduce the possibility of such situations arising. To achieve this a society will create laws, rules, regulations, and controls in order to reduce the amount of uncertainty.
On a religious level they are more likely to focus on one true religion only. A Low Uncertainty Avoidance ranking indicates the country has less concern about ambiguity and uncertainty and has more tolerance for a variety of opinions. This is reflected in a society that is less rule-oriented, more readily accepts change, and takes more and greater risks. On a religious level there will appear a greater variety of religion flowing side by side. Members of this type of society are likely to be calm, reflective and not express their emotions.
Long-Term Orientation (LTO) focuses on the degree the society embraces, or does not embrace long-term devotion to traditional, forward thinking values. This dimension is based on the teachings of Confucius, an extremely influential Chinese philosopher who lived around 500 B. C. High Long-Term Orientation ranking indicates the country prescribes to the values of long-term commitments and respect for tradition. This is thought to support a strong work ethic where long-term rewards are expected as a result of today’s hard work.
However, business may take longer to develop in this society, particularly for an “outsider”. A Low Long-Term Orientation ranking indicates the country does not reinforce the concept of long-term, traditional orientation. In this culture, change can occur more rapidly as long-term traditions and commitments do not become impediments to change. We will now examine the value scores for the countries relevant to this report, England and Spain and how these values affect may affect an international business relationship.
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Spanish and English business culture. (2020, Jun 02). Retrieved from https://studymoose.com/spanish-and-english-business-culture-new-essay