The Advent Of Globalization And Business Cultures - Essay Example

The Advent Of Globalization And Business Cultures Introduction With the advent of globalization in the 21st century, China is increasingly gaining attention of several countries of the West as an appealing market for investment. Surveys have revealed that the problem of cultural differences rank first, among all other problems like, law, language, delivery and foreign currency (Zhang 81-91). So, bridging the cultural gap between the east and the west is important in order for businesses to perform well. These differences if not handled in a professional and clever manner, can lead to labour unrest and subsequent failure of the venture (Harrison and Samuel 10-16). It has been seen that major failures occur due to disregard for the cultural values of a nation (Gold, Guthrie and Wank 63-77). There has been a rush of international companies vying for entry into the Chinese market to further explore the business opportunities. The current paper attempts to put forward a basic understanding of the differences between the English and Chinese cultures with the help of Hofstede’s five dimensions of culture. It also explains ways to bridge the gap present between the cultures of these two countries and conduct business accordingly. 1. Hofstede’s Five Dimensions of Culture with respect to UK and China "There is something in all countries called 'management', but its meaning differs to a larger or smaller extent from one country to another" (Hofstede 81). Amongst many researchers, Hofstede is one who has provided a pragmatic solution to this problem of relating culture to management (Simon 23-30). According to the author, culture based value systems have five dimensions that are explained below. Power Distance: This deals with acceptance of the less powerful sections of an organisation pertaining to the uneven distribution of power therein. Britain is a country that ranks low in PDI, indicating that it is a society that believes in minimising the inequalities among people. However, China is a top scorer in PDI, which implies that inequality in the distribution of power is acceptable in there and that power abuse is prevalent. Individualism: The issue addressed by this dimension is related to ways in which the society portrays itself, implying whether it is an inter-dependant society or an individual one. The UK is a country with a high individualistic approach, where children are taught to think and fend for themselves from a young age (Tanielian 90-96). Hence, personal fulfilment is a topmost priority in such societies. China appears to have a rather collectivistic approach, where people strive as a team and perform tasks that cater to the interest of a group or an organisation. Masculinity: This dimension explains dominant values of the society. A masculine or high-score on this dimension would indicate towards a society that is driven by achievement and success. A low-score (feminine) on this dimension would mean that the society is more inclined towards living a quality life and caring for others. Both China and the UK are strongly masculine societies, where people are ready to sacrifice family life in order to achieve success in the professional life. Leisure takes a backseat in such societies. Uncertainty Avoidance: This dimension is rather interesting as it delves into the emotional range of a society as to how the people of a certain society deal with uncertainty and the unknown. Future cannot be known and the British with a low score in this dimension has proven to be a race that is able to deal effectively with the present and plan accordingly for the future, thereby exhibiting creativity and dynamism. China as a nation also has a low score and the Chinese people appear to be quite comfortable with ambiguity, which is why they tend to be adaptable and entrepreneurial (Geert-Hofstede, “What about the UK?”). Pragmatism: This dimension deals with the very basic need in people to define everything that is happening in our surroundings. Societies with a pragmatic orientation do not feel the need of explaining every act and choose to accept circumstances and move on. China scores high in this dimension, meaning individuals living therein are pragmatic in nature and are able to adapt to changing conditions easily. They also have a strong propensity to save and invest, along with exhibiting perseverance to achieve the results. The UK, however, has an intermediate score and thus the dominant preference is difficult to be determined (Geert-Hofstede, “What about China?”). 2. Underlying Problem A certain British food company in order to tap the huge potential of the Chinese market decided to sell coffee therein. Setting up a cafe is a great way to tap the market potential. Nowadays, the youth tend to spend a considerable amount of time in coffee shops as they mainly desire to have a good time. With rise in the purchasing power of a nation and changing tastes and preferences of consumers, tendency to spend leisure time increases. A person would rather want to spend some quality time with a friend than sit back at home. Interviews are at times held in such places instead of the dreary insides of an office building. Following this trend, the particular company had planned to open its branches in the cities of China. However, the company soon started facing problems and incurring huge losses as the coffee was not selling as expected and people hardly visited their shops. As a result, officials from the UK were brought over to manage the situation. The British company officials decided on conducting a market research in order to identify problems that the company was facing and the reason behind the sudden fall in their coffee sales. After extensive research, it was found that China being primarily a tea-drinking nation, the Chinese people were not visiting the cafe as it sold only coffee. Hence, it was decided that the company needs to diversify as well as incorporate a market-based approach. The Chinese people prefer that a certain amount of respect is given to their culture precisely because they have a deep-rooted sense of culture. Alongside that, they believe that tea is a healthier drink compared to coffee and that the high caffeine content in latter is not good for health. Consequently, they prefer tea over coffee. China is also a major producer of tea, which has over the years led their taste-buds to be developed in a certain manner. China is also a masculine nation, where they give preference to work and not leisure. In order to attract the Chinese people into the shops, the company had to cater to their taste buds. Also, the seating arrangement around the shop was changed from small tables to big ones to suit the mentality better. The Chinese are also a race that believes in collectivistic approach. Loyalty to the team is of foremost importance to them. It was noticed that groups of individuals visited the shops either to spend some leisure time after work or to brainstorm ideas. Therefore, considering the suggestions of the teams, the work restarted and the problem was solved. 3. Recommended solutions After analysing the case study, it has been seen that China is a country, where it is imperative for one to know and fully understand their culture and mindset so as to conduct business. China is a large country compromising a gamut of cultures (Kermeliotis, “Doing business in China: Five tips for success”). In order to tap the Chinese market, one needs to have a market based and dynamic approach. There is no single consumer profile and a company must take into account numerous variables. Being a pragmatic race, the Chinese respect and expect the same. Also, certain amount of knowledge regarding their culture and taste palette is needed so that a company can accordingly sell its products. In this particular case, given that the Chinese individuals are primarily tea-drinking people, coffee shops exclusively selling coffee did not prove to be successful. Hence, to attract consumers into cafes, the company would do well if they started selling tea, which will effectively attract the target market to visit the cafes and subsequently trigger in them the will to taste coffee. Additionally, in order to expand the market, the company may try selling different flavoured teas. The present trend among the youth is that of staying healthy. Due to different lifestyle related disorders, people are becoming more health conscious. Consequently, selling green tea is quite a lucrative option. Here the company might even consider introducing different flavours of green tea like, Tulsi, Lemon, Jasmine and Fruit. China is a country that experiences the extremes of both the types of climate – ranging from bitter cold to excruciating heat. As a result, introducing Ice-tea on the menu is also a smart way of luring customers and enhancing sales. Since the company has already been branded as a coffee selling company, it should start making smart and eye-catching advertisements stating their new addition of tea. 4. Conclusion The western countries are already mired in their own economic troubles with several European economies crashing almost every day (Dong and Ying 223-243). On the other hand, rapid market transformation, solid economic expansion and business-friendly government reforms have made China the perfect market not only for low-cost manufacturing of items, but also for foreign investors to make huge investments (Christopher 57-77). However, challenges remain as there are several cultural and language barriers. This gap has to be bridged by those who aim to conduct business in the Chinese markets (Cheng, Ding-Yu and Jean 313-334). Table of Contents 1.Hofstede’s Five Dimensions of Culture with respect to UK and China 1 2.Underlying Problem 3 3.Recommended solutions 4 4.Conclusion 4 Works Cited 6 Works Cited “What about China?” Geert-Hofstede. Geert-Hofstede, No Date. Web. 10 July 2014. “What about the UK?” Geert-Hofstede. Geert-Hofstede, No Date. Web. 10 July 2014. Cheng, Bor‐Shiuan, Ding‐Yu Jiang, and Jean H. Riley. "Organizational commitment, supervisory commitment, and employee outcomes in the Chinese context: proximal hypothesis or global hypothesis?." Journal of Organizational Behavior 24.3 (2003): 313-334. Print. Christopher, David. British culture: an introduction. United Kingdom: Routledge, 2002.Print. Dong, Keyong, and Ying Liu. "Cross-cultural management in China." Cross Cultural Management: An International Journal 17.3 (2010): 223-243. Print. Gold, Thomas, Doug Guthrie, and David Wank, Social connections in China: Institutions, culture, and the changing nature of guanxi. Cambridge: Cambridge University Press, 2002. Print. Harrison, Lawrence E., and Samuel P. Huntington. Culture matters: How values shape human progress. New York: Basic Books, 2000. Print. Hofstede, Geert. "Cultural constraints in management theories." The Academy of Management Executives, 7.1 (1993): 81-94. Print. Kermeliotis, Teo. “Doing business in China: Five tips for success.” CNN, Cable News Network, 21 October 2011. Web. 11 July 2014. Simon, Charlotte. Advertising in a cross-cultural environment: a study of French and Chinese consumers. UK: University of Nottingham, 2007. Print. Tanielian, Adam. "Arbitration Still Best Road to Binding Dispute Resolution." Journal of Legal Affairs and Dispute Resolution in Engineering and Construction, 5.2 (2012): 90-96. Print. Zhang, Zigang. “Cross-cultural challenges when doing business in China.” Singapore Management Review, 26.1 (2004): 81-91. Print. Read More