Cultural Dimensions Effect on International Business

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Table of Contents

Russia
Japan
Hong Kong
India
France
Thailand
Germany
Reference List

From a global business perspective, understanding culture of various communities is critical. This is because culture plays a critical role in business transactions and operations. Yamagishi (2003) identified various aspects that define culture.

They are heritage, norms of reciprocity and rules, way of life, societal norms, psychological orientations, regulation of human life, common beliefs, community symbols such as language, history and artifacts as well as religious beliefs (Yamagishi, 2003).

Granchev and Mobina (2006) reported that there are nine cultural dimensions identified by the GLOBE namely; power distance, uncertainty avoidance, institutional collectivism, in-group collectivism, assertiveness, gender equality, future orientation, performance orientation, and humane orientation.

However, cultures of different people may converge or diverge in one way or another. In this paper, the various cultural dimension issues in Russia, Japan, India, Hong Kong, France, Thailand, and Germany that can affect international business are discussed.

Russia

Three divergent factors determine the modern societal culture in Russia. They include the traditional backgrounds that have been developed historically over the centuries, totalitarian regimes of the 20^th century, and the 1990s and early 2000s rapid changes in value systems, beliefs, and behavior (Granchev, 2004).

Granchev and Mobina (2006) analyzed findings of a cross-cultural research program conducted by Global Leadership and Organizational Behavior Effectiveness (GLOBE). Researchers categorically emphasized the organizational leadership in Russia and collected data on leadership and culture.

Russians proved to have extreme scores on various parameters of cultural dimensions, according to the analysis (Granchev and Mobina, 2006). Their uncertainty avoidance, future orientation, performance orientation, and humane orientation were low. On the contrary, their scores on power distance were high.

This implies that they may be considered as risk averse and thus a business manager would consider venturing into short-term businesses developments in this country. In such a case, visions should be reviewed continuously and should be short targeted. Since Russians have shown to have low performance orientation and humane orientation (Granchev and Mobina, 2006), it would not be advisable to invest long term on human resource development in this country.

Japan

Compared to the Americans, the Japanese were shown to be less cooperative. As demonstrated by Yagamishi (2003), Japanese are cooperative especially when there is a mechanism of checks and balances, which include sanctions. When it comes to negotiations, Japanese are known for seeking consensus and harmony by ensuring smooth social relations (Yagamishi, 2003). Thus, cultural norms that are embedded in their social networks influence individual, group, and situational characteristics.

Hong Kong

A study to investigate the “influence of individual cultural orientation on the effectiveness and demand for auditing” carried out by Kachelmeier and Shehata (1997) revealed that, in situations of low anonymity, self-interest is likely to be challenged by collective cultural values.

People from Hong Kong can pursue self-interests if the existing mechanism does not implicate collective actions of members of a group. This demonstrates to us that in Hong Kong, group membership and responsibility is more vital in ensuring accountability. Thus for a global business manager in this country, it would be important to focus on collective responsibility of individuals in human resource management and accountability issues rather other than focusing on an individual.

India

Stylusinc, (2012) showed that the caste system in India has promoted hierarchical interactions that are well respected at the work place. Aggressiveness in this country is a sign of disrespect and it should therefore be minimized. In fact, even when Indians disagree with their bosses, they only keep quiet and they do not contradict opinions of their seniors (Stylusinc, 2012).

This therefore call for managers to understand that even in discontent, Indians who consider themselves juniors in hierarchy will not contradict their bosses, even if they feel the decision is wrong.

Additionally, Indians are good hosts and from time to time, they invite individuals to their home and even indulge in personal talks (Stylusinc, 2012). Furthermore, Indians respect women at the work place (Stylusinc, 2012). As such, women from foreign countries will find easy it to adapt here. Nonetheless, there is need to bear in mind the conservative dressing code in this country. Generally, gender equality and humane orientation are the cultural issues in this country (Stylusinc, 2012).

France

One has to understand that the French tend to view themselves as being special in the field of international business (Yamagishi, 2003). The author further noted to them, a negotiating table is a venue for solving issues and it becomes more of a debate where adjustments and accommodations are intended solely for agreement’s sake. They depict institutional collectivism, humane orientation, and assertiveness all of which could affect business. Thus, a manager working in France will have to bear this in mind.

Thailand

Leung et al. (2005) indicated that the culture of the Thai’s is strongly group oriented. Therefore, a sense of belonging to a group is more important than having individual preferences and to them, before closing any dealing, there is need to build long lasting and trusting personal relationships (Leung, et al, 2005).

Thus, unless a manager is sure that people in this country are comfortable with him/ her, one should not discuss business with them since they only do business with the people they know and respect. Among the Thais, ‘saving face’ is very important (Leung, et al, 2005). When working with the Thais, one has to keep control his/her emotions and be friendly at all times.

In Thailand, respect is based on age and rank (Yamagishi, 2003). Individuals have to show their status since knowledge of whether one is superior or lesser influences behavior greatly (Yamagishi, 2003). Among the Thais, non-verbal communication is very important and therefore understanding gesture and other non verbal communication is key.

For instance, except for handshakes, physical body contact should be minimized (Yamagishi, 2003). Another aspect of non-verbal communication to be learnt is smiles and laughs. Here, laughs and smiles do not always infer amusement or approval. Sometimes they are used to cover feelings of distress (Leffler, 2000). These demonstrate in-group collectivism, assertiveness, and humane orientation (Leffler, 2000).

Germany

In-group collectivism is a cultural dimension that is important to understand in Germany. A comparative study of leadership styles and cultural values among managers and subordinates in four former Soviet Union countries, Germany and the US revealed that there exist a lot of similarities between the US and Germany (Leung, et al, 2005). However, these two greatly differed from the other four countries. Germany and the US deferred on the extent of individualism where the US ranked high.

This implies that the Germans have an orientation towards individualism and not the community. Thus, at the expense of order, responsibility, and protection, the Germans place emphasis on individual’s decisions and enterprises, individual and not collective identity, as well as norms of independence (Ardichvili and Kuchinke, 2002).

In summary, global business managers should understand that culture is more than cultural dimensions. Culture is holistic as it encompasses many concepts. It is therefore multifaceted, multilayered and thus its analysis should be contextual and broad based. The concept of culture dynamism makes one not to assume that cultures are static.

Moreover, cultures may either diverge or converge over one or more things, therefore different cultural settings should be approached differently, and there should be no blanket recommendation on cultural orientations about communities. Consequently, it is the various aspects and issues of cultural dimension in the mentioned countries that will dictate whether an individual will succeed working in these countries.

Reference List

Ardichvili, A., & Kuchinke, K. P. (2002). Leadership styles and cultural values among managers and subordinates: a comparative study of four countries of the former Soviet Union, Germany and the US. HRDI, 5 (1): 99-117

Granchev, M. V., & Bobina, M. A. (2006).Russian organizational leadership: lessons from the GLOBE study. International Journal of Leadership, 1 (2): 67-79.

Granchev, M. V. (2004). Cultural attributes of Russian management. Advances in International Management, 15: 159-177

Kachelmeier, S. J., & Shehata, M. (1997). Internal auditing and voluntary cooperation in firms: a cross-cultural experiment. The Accounting Review, 72 (3): 407-431

Leffler, K. (2000). Critical Incidences in Management. London: Pearson Custom Publishing.

Leung, et al. (2005). Culture and international business: recent advances and their implications for future research. Journal of International Business Studies, 36: 357-378

Stylusinc, S. (2012). Doing Business in India: A cultural perspective. Web.

Yamagishi, T. (2003). Cross-societal experimentation on trust: A comparison of the United States and Japan. New York: Russel Sage Foundation.

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