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Geert Hofstede was a sociologist in a multinational corporation (Hofstede, 1991; Hofstede and Peterson, 2000). He had analyzed and defined the culture into five parts which would help in understanding other cultures well. They are given below: Individualism and Collectivism: In some culture, they emphasize on staying individually whereas in some other groups, they prefer staying in groups. If an organization plans to expand in a country which is individualistic in nature, then the group behaviour of the organization might get negatively affected by the cultural behaviour of the nation.
Power Distance: The part of the culture which deals with the distribution of the organizational power is known as power distance. It is the extent to which the organizational members with lesser authority accept the fact that power is distributed unequally. If the new employees, who would be hired in the business after its expansion, could not accept the unequal distribution of power, then it might lead to reduced work efficiency or increased employee turnover rate. Uncertainty avoidance: It is the tolerance for the uncertainty or ambiguity.
It represents the extent to which the members cope-up with the anxiety by minimizing uncertainty. People belonging to cultures with very high uncertainty avoidance tend to be highly emotional. . The long term oriented societies generally focus on the long term future while making any plans. On the other hand, the short term orientation societies focus on the short term future during decision making. As culture is described as the inherited concepts, values or ways of living that are shared by the individuals of same social group, it holds an importance in every aspect of the business performance.
The culture of a nation builds the individual cultures of the people belonging in it. Any business which expands its operations in another nation is bound to face different cultural values. This cultural diversity might negatively as well as positively impact the performance of the business. The culture is said to be dynamic in nature as it changes with the time. This change in the culture might lead to the rise of several conflicts. The field associated with management is changing and evolving in a continuous manner with emergence of new ways and techniques of managing the organizations and their employees (Abo, 1994).
Myriad methods and theories of management have been established for increasing the operational efficiency of the organizations and their employees. Most of the modern management theories or models are derived from the cultural aspects (Hofstede, 1980). These theories have been designed for establishing and maximizing the success as well as the productivity of the managers, employees and also, the organizations. These theories and methodologies represent the cultural identity of the employees and managers.
Many researchers suggest that attempting to establish or implement management practices without considering the organizational culture, often leads to failure of such practices. In such cases,
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