Hofstedes Cultural Framework - Assignment Example

Hofstede’s Cultural Framework INTRODUCTION: Eminent Dutch writer Geert Hofstede has presented his cultural framework which is highly effective in respect of developing hypothesis and making analysis regarding cross-cultural researches. He has distributed the cultural differences into five categories and revealed the effects of these differences in social, political, economic and commercial activities. Hofstede has inspired a great improvement in the discipline by specifying a theoretical model which serves to coordinate research efforts. (Redding, 1994: p 345) Electronics, science and technology based on and concerned with the controlled flow of electrons or other carriers of electric charge, especially in semiconductor devices. (Answer.com) Air conditioner, refrigerator, tube-lights, bulbs, electric fans, heaters etc also come under the same definition. Since the contemporary age is the age of technological advancement, computerization, automation and mechanization, electronics goods and items have become an essential part of everyday life during the modern age and are used in offices, residences and all other institutions at large all over the world. Company Background: Japan based world’s renowned electronic entrepreneur Hitachi Consumer Electronics Company is one of the supreme electronic organizations of the world, which maintain a wide range of products including air conditioners, refrigerators, heaters, switch-boards, juicers, grinding machines, domestic equipments, medical equipments, allergy diagnostics, automotive components and long list of electronics spare parts. Their consolidated sale is estimated around 10,248 billion Japanese Yen during the fiscal year 2006-07 (wikipedia.org) Recently, it has also introduced computer accessories to provide the customers with high quality products related to information technology. “Hitachi Ltd. is pulling out of the household computer business in the latest shift among Japanese electronics makers to refocus their sprawling operations.” (GMA News TV) The Company has hired the services of nearly 400,000 employees working in hundreds of its branches in all parts of the globe, which work very hard from dawn to dusk for the good name and fame of the company. It is therefore the products of Hitachi Consumer Electronic Company are thought to be the sign of high quality and the consumers in different countries of the world demand its products for office, domestic, commercial and industrial use. “The global parts procurement capability of Hitachi, coupled with its state-of–the-art manufacturing facilities, allows to realize the goal of offering low-cost, high-quality products. The strength of Hitachi’s manufacturing and world-wide logistics helps to better address the needs of the target carrier market.” (Cucamonga, 01/30/2007: quoted in emrise.wordpress)) Power Distance (Japan vs. North America) Hofstede’s Power distance Index measures the extent to which the less powerful members of organizations and institutions (like the family) accept and expect that power is distributed unequally. This represents inequality (more versus less), but defined from below, not from above. It suggests that a society’s level of inequality is endorsed by the followers as much as by the leaders. (Hofstede’s Power Index: retrieved from www.clearlycultural.com) Country Power Distance Index Japan 54 North America 40 Hofstede’s cultural index evaluates the level of differences between various classes and groups of societies belonging to different states of the world. Since Hitachi Consumers Electronics Company has exercised its operations all over the globe with main offices in Japan and North America, Hofstede’s index reveals the very fact that Japan maintains higher degree of class and cultural differences in comparison with North America (54:40). Hence, social injustice and economic inequality is somewhat expected and accepted for the individuals belonging to both these countries, though the Japanese have comparatively higher degree of acceptance in this regard. Thus, North America is among the low power distance countries and inequality among the individuals can be stated as minimum to some extent. “In low power distance nations, decentralization of activities is more likely, subordinates expect to be consulted by superiors, and privileges and status symbols are less evident. Conversely, in high power distance nations, inequalities among people are considered desirable.” (Hofstede, 2001: quoted in Chartered Management Institute, published in 01/03/2002. Retrieved from http://www.accessmylibrary.com/coms2/summary_0286-25331788_ITM) Taking the Hofstede’s power distance, it becomes obvious that the management of Hitachi Company has to consult the staff members and employees in the North America to take decisions and introduce new policies regarding strategy-making, sales and others; on the other hand, the administration of Hitachi is far more free in Japan region in this regard, because the Japanese look more co-operative and complying in respect of accepting inequalities and divergence in behavior and status within their culture, society as well as commercial activities and merchandise. Hence, Hitachi will have to undergo more opposition in North America in comparison with Japan while taking any great decision in respect of their corporate activities. Uncertainty Avoidance (Germany vs. Singapore): Uncertainty avoidance index refers to the power of the individuals to endure any uncertain and tentative situation. Countries make rules and regulations, and introduce laws for the implication of such rules and principles, which is highly supportive in respect of evading and escaping uneven, unexpected and ambiguous state. While making an analysis of German and Singapore with reference to uncertainty avoidance index, it becomes clear that Germans are more law abiding people and do not like to break the prevailing norms, values and laws. “Germany, which has a relatively high uncertainty avoidance index, is a society which relies on rules and regulations and tries to reduce its risks to the minimum.” (Chadbourn: No Elves in Greece 11/8/2007) The scores of both the above-described states reveal the very fact that Hitachi Consumers Electronic Company has to rely on applying basic rules of the company to enhance the volume of its sales on the one hand and operate its commercial and administrative activities within its business culture on the other. Furthermore, there are brighter chances of growth of the Company in the law-abiding Germany in comparison with uncertain situation of Singapore, where policies are not observed to the greater extent. A highly cultured organization like Hitachi can obtain and hire the services of more devoted and truthful staff in Germany to exercise its business engagements and activities. In the same way, the German consumers will be more brand-oriented and passionate than the Singapore ones and always prefer one and the same brand if they are treated and welcomed properly. Country Uncertainty Avoidance Germany 65 Singapore 40 Individualism versus Collectivism (Israel vs. Pakistan) Individualism and collectivism are the terms used in the Hofstede’s Cultural Index as two parallel situations revealing the integrity and strength of the groups of the individuals in different cultures and societies. The people belonging to advanced and technological countries maintain individual triumph and achievement on priority and lack collectivism and unity. They rely on personal and individual efforts and accomplishments as well as as care for themselves only rather looking after other members of their society; it is therefore, class structure and collective behavior is weaker in such countries and materialism and selfishness are at their peak. On the contrary, the third world and developing countries witness their masses bound in the ties of collectivism and “we” feelings. While looking into the two countries of Asia i.e. Israel and Pakistan, both of which came into being on the name of religion, it becomes evident that individualism in Israel is very high in comparison with Pakistan (54:14). Hence, collectivism is very strong and deep-rooted in Pakistan, and is comparatively very weak in Israel according to the Hofstede’s cultural index. It is therefore, marketing strategy of Hitachi shows that the collective effort of the staff members of Hitachi Company is more valid while manufacturing and displaying the material in Pakistan. In the same way, if a specific product of Hitachi has got approval of few people of Pakistan, it may win applause and obtain popularity all over the country. On the contrary, individualism of Israel does not let the products sell en mass like Pakistan, and the marketing staff has to work hard to win the hearts of the Israeli population which sustains variance and divergence in choice and selection. In the same way, the advertising staff concentrates on showing the collective behavior while displaying its various products in Pakistan. It is therefore, Hitachi develops its advertisements in such a way where many family members are found sitting together enjoying the cooling of the Hitachi air conditioner at the retiring room or TV lounge of the house in Pakistan. On the other hand, these products observe the display of the same air conditioner with one single individual working at his office under the cool performance of Hitachi AC. Country Individualism Israel 54 Pakistan 14 Masculinity vs. Femininity (Hungary vs. Portugal) Masculinity and femininity refer to gender roles, not physical characteristics. Hofstede focuses on the traditional assignment to masculine roles of assertiveness, competition, and toughness, and to feminine roles of orientation to home and children, people, and tenderness. (Paulhegyi, 2006: Masculinity vs. Femininity Defined: Retrieved in ) The positive aspects of masculinity include hard work, decision power, courage, boldness and innovation. On the other hand, the positive aspects of femininity include compassion, care, devotion and concentration. Hofstede’s cultural index shows scores 88:31 in Hungary and Portugal respectively, the two countries of Europe. It reflects that masculine culture prevails in Hungary to a great extent in comparison with Portugal. The marketing personnel of Hitachi must have looked into the very fact that male stratum always considers objectivity and is quick to take decisions. It is therefore, precise and prudent marketing campaign is beneficial for the sales enhancement of Hitachi products in Hungary. Country Masculinity Hungary 88 Portugal 31 Hofstede aims at portraying the impact of unequal distribution of wealth, resources and opportunities on the poor strata, and difference in socioeconomic status among individuals, groups and nations on the basis of inequality. The framework views that different groups existing in all human societies observe differentiation in status, among which few are so powerful and dominating that they can regulate the activities of less powerful individuals and groups by applying their deep-rooted effects on their cultural activities and social behavior. Since the influential states and groups maintain sufficient powers to influence the weak, their activities are dependent of the attitude of the influential countries. Long term vs. Short term orientation (Hong Kong vs. Germany) Hofstede has introduced fifth dimension of cultural difference in his Index, according to which there exists divergence between the eastern and western countries and this difference is based on their culture, vision, traditions, technological achievements and others. Hofstede states these factors as long and short term orientation; he views determination, carefulness and austerity as the factors behind long term orientation, while individualism, opposition of change, personal attachments and other maters as short term orientation. Making a comparative analysis of two countries belonging to east and west, it becomes clear that eastern country scores 96, while western state Germany obtains only 31 in respect of long and short orientation. It clearly reveals the very fact that the markets and business communities of Hong Kong believe in long term orientation and Hitachi Company may launch its corporate campaign on long term basis. On the contrary, the Company may have to mould its corporate strategy on short term basis in Germany. Country LTO Hong Kong 96 Germany 31 CONCLUSION Hofstede's cultural index aims at portraying the impact of unequal distribution of wealth, resources and opportunities on the poor strata, and difference in socioeconomic status among individuals, groups and nations on the basis of inequality. The framework views that different groups existing in all human societies observe differentiation in status, among which few are so powerful and dominating that they can regulate the activities of less powerful individuals and groups by applying their deep-rooted effects on their cultural activities and social behavior. Since the influential states and groups maintain sufficient powers to influence the weak, their activities are dependent of the attitude of the influential countries. SUGGESTIONS: Sociology of development lays stress upon the alterations in strategies to make progress according to the changing cultural scenario. Cultural divergence drives the companies revise their policies according to the cultural traits where they are exercising their services. Theory of cultural change emphasizes on the inclusion of innovative ideas and introduction of products and equipments most demanding in various cultures. The multinational companies like Hitachi Consumers Electronic Company should articulate their strategies and make great overseas business plans by thoroughly analyzing the cultural values, ground realities and basic information of different countries in order to launch their plans and introduce their products in a successful way in all parts of the world containing various socioeconomic situation and different cultural values, norms and traditions. REFERENCES Hitachi Ltd. (Quoted in http://en.wikipedia.org/wiki/Hitachi Ltd.) Redding, S. G. (1994) Comparative Management Theory: Jungle, Zoo, or Fossil Bed? Organization Studies, 15(3), pp 232-359. GMA NEWS TV. Hitachi Pulls Out of Home Computer Business: published on 10/23/2007 (Quoted in www.gmanews.tv/story/65553) Cucamonga, Rancho (2007) Manufacturing Agreement with Hitachi Computer Products Europe January 30, 2007. (Quoted in emrise.wordpress) Retrieved from http://emrise.wordpress.com/2007/01/30/emrise-corporation%E2%80%99s-cxr-anderson-jacobson-subsidiary-signs-manufacturing-agreement-with-hitachi-computer-products-europe/) Culture's consequences: comparing values, behaviours, institutions and organizations across nations, 2nd ed London: Sage, 2001 (Retrieved in http://www.accessmylibrary.com/coms2/summary_0286-25331788_ITM) http://www.clearlycultural.com/geert-hofstede-cultural-dimensions/power-distance-index/ Chadbourn, Mark. (2007) No Elves in Greece. (www.jackofravens.com/2007/11/08/no-elves-in-greece/) November 8, 2007 Paulhegyi, Krisztina (2006) Masculinity vs. Femininity Defined: A balance between roles and relationships. (Quoted in kriszta.typepad.com/hungary/2006/01/masculinity_vs_.html) Read More