Geert Hofstedes Cultural Dimensions - Case Study Example

Introduction: The world of today is often referred to as a global village due to the advancement of communication, the facility to travel and increasing globalization. But in spite of all this apparent cohesiveness, there are many factors that still pose a major problem to the concept of a global village becoming a reality. The diversity of culture that pervades the social and business world is one of the main reasons for this discomfort in an era of a globalized world. This is also compounded by the high levels of migration of immigrant workers to better developed economies in search of a livelihood that cannot be achieved back home. This paper is a study of national cultures with particular reference to the work habits and practices that exist in Germany and Spain. It will specifically look at the Martinez Construction & Konstruction Drezehn case study in the process and analyze how differences in national culture had resulted in the particular situation that came about there. National culture: The term national culture denotes the shared values, beliefs and practices that are common to the people belonging to a particular country or region. Often a subject in anthropological and social studies, many definitions and view points about culture and national culture have evolved through the ages. “The term culture has various meanings, all derived from Latin meaning “which is cultivation of the soil.” (Jais, 27). Due to increasing diversity in the workplace, the concept of national culture has now become a part of business studies as well. A review of literature on the subject leads almost universally to the studies done by Professor Geert Hofstede on his studies on national identity in the workplace. Before going into detail on the cultural dimensions as conceived by Hofstede and other theorists, it would be pertinent to look at the factors responsible for the evolving of a work culture. “Culture is a metaphor which can be used to explore the identity of a business. It is about how others see the business, but also how the individuals who work there understand it. Culture offers us a powerful insight into the business and what it is like to work within it.” (An Introduction to Business Cultures). It should be noted that these factors are apart from those that have influenced individual culture through family and social interactions. The influence of leadership and vision that exists within a particular organization will be a dominant factor that helps a particular culture to evolve. The company tradition (depends on how long the company has been in existence) or ‘how things were always done been done here’ is another factor. Each area or type of business (or service) will have its own style and culture and will influence the behavior of the employees. Customers of a business can also be a factor here. Other factors include company policies and procedures, the level and type of communication within the organization, the compensation and reward systems, and organizational goals and values. Geert Hofstede’s Cultural Dimensions: Professor Geert Hofstede is the pioneer (and most quoted) among researchers in the field of national culture with reference to the work place. About the study, he explains that “These ideas were first based on a large research project into national culture differences across subsidiaries of a multinational corporation (IBM) in 64 countries.” (A Summary of my Ideas about National Culture Differences). Subsequent follow ups were made covering students, commercial airline pilots, upper middle class and elite consumers, and managers in civil services. Even though not without criticism, these studies are universally used as a foundation to measure the differences in national cultures that exist within organizations. The end result of the study was five measures or dimensions which are explained below. Each of these dimensions will be analyzed with reference to the national cultures that exist in Germany and Spain. The five dimensions are Power Distance, Individualism, Masculinity, Uncertainty Avoidance Index and Long Term Orientation. (Geert Hofstede Analysis). A graphical depiction of the five dimensions in the two countries and the whole of Europe are also given here for reference. The Long Term Orientation (based on Confucian values) index which came later in the studies is not available for Spain and Europe in the charts. (Geert Hofstede Cultural Dimensions: Germany). (Geert Hofstede Cultural Dimensions: Spain). (Geert Hofstede Cultural Dimensions: European Countries). Power Distance: Power is a phenomenon that is universally seen and exercised across all societies worldwide. “This dimensions focuses on the nature of human relationship in terms of hierarchy.” (Roberts). But the level and extent of power varies from culture to culture. Power distance is measured by how the less privileged and powerful members of the society view their superiors with regard to power. In some cultures, they are viewed as wielding more power by virtue of certain characteristics like position, age and knowledge. This power is less evident and lower in some other cultures. It is evident that power is viewed differently in the two cultures. In other words, Spanish workers view their superiors as having more power when compared to their German counterparts. The index shows that Spain has a Power Distance of nearly 52 (out of 100) whereas the figure for Germany is only 30. Spanish managers and supervisors have a stronger hold on their workers when compared to the Germans. Europe as a whole is slightly higher than Germany with an index of nearly 40. Individualism (as opposed to collectivism): This dimension refers to the level of independence that is practiced by people living in a country. In other words “Individualism is the one side versus its opposite, collectivism, that is the degree to which individuals are integrated into groups.” (Individualism). In highly individualistic societies people tend to live without too many social and family contacts. Social, cultural and religious gatherings are far lesser when compared to societies where individualism is low. Western societies tend to be more individualistic whereas Asian societies are more collective in nature. In this case, there is a difference between the two countries, even though both are western economies. Individualism in Germany is high (approximately 62). In Spain the figure is much lower at 45. This indicates that Spanish workers tend to be more family and socially oriented. German workers tend to mind their own business and not inclined to form social groups within the organization. The European index closely matches with that of Germany at about 65. Masculinity (as opposed to femininity): In countries with high masculinity, there is a dominance of the male over the female. “Masculinity, for Hofstede, refers to a culture in which men should be assertive and focused on economic success, while women should be modest and focused on quality of relationships.” (Rich, p.1). In this context, Germany is highly masculine where as Spain possess a little bit of femininity also with an index of 38. German men and women are more equal with regard to work, and the women show more masculine tendencies of assertiveness and aggression. Europe has a higher index of around 53. German workers and management are more orderly. They need to clearly lay out tasks and work procedures. This could be true of other aspects of employment like job description and employment terms and conditions. Uncertainty Avoidance: Some societies have low tolerance for unclear and ambiguous things. In a more profound sense, it “deals with a societys tolerance for uncertainty and ambiguity; it ultimately refers to mans search for Truth.” (A Summary if My Ideas About National Culture Differences). Such societies have a passion for order and will also have strict laws and regulations that clearly spell out what to do and what not to do. In other words, they have a high uncertainty avoidance index. Germany displays this tendency with an index of nearly of 70. Spanish workers have a much higher index at 80 while Europe shows the same index as Germany. On the whole, this index is high in all three regions. Long Term Orientation: “It can be said to deal with Virtue regardless of Truth. Values associated with Long Term Orientation are thrift and perseverance; values associated with Short Term Orientation are respect for tradition, fulfilling social obligations, and protecting ones face.” (A Summary of my Ideas about National Culture Differences). Hence German management and workers are more focused on thrift and perseverance. As mentioned earlier, this dimension only came up later in the studies and hence the value for this is not available for Spanish or European workers. A review of the actual German and Spanish management and work culture is given below. It can be seen that it more or less agree with what has been seen from the Cultural Dimensions mentioned above. German management and work culture: German business culture is quite formal and less inclined towards small talk and social interaction. “In German business culture, for example, this is reflected in adherence to prescribed rules and, consequently, a low degree of flexibility and spontaneity.” (German Culture-Key Concepts and Values). This is also true for business meetings as well. Even though Germans are hardworking, the average employee gives a lot of importance to his or her family and values the time spent with them. There is clear separation of work and life away from work. Working hours are followed strictly and workers tend to go home once their time is up. But German managers are expected to put in longer hours than what their official schedules demand. On the job praise and encouragement is not common and a job well done is considered a duty. Planning and detail are quite an obsession and a project will only be approved after a careful and long study. Germans are more long term planners and stress more on the proper way things are done and not on the time period. Once a project is begun, it is difficult to change or drop it even if things do not go as planned. Compartmentalization is quite high in the country in the sense that there is “less interaction with colleagues in the German work environment.” (Hedderich). Communication is detailed and takes a long time to complete especially is meetings. Spanish management and work culture: The most common factor that one associates with Spanish work culture is the afternoon siesta that is a natural habit in the country. A break from work for two or three hours in the afternoon is common and people go home to take a nap. During the First Congress to Rationalize Spanish Working Hours. “Many speakers criticized what they called “chair-warmers” - employees who work late but who do very little. Spain, along with Greece and Portugal, has the longest working hours, but is among the EU’s least productive nations.” (Siesta Work Culture in Spain Needs Changing). If the office and home is situated at a distance, a long lunch hour is the alternative. But otherwise, the Spaniards are hard workers also. The Spanish manger has high authority and power and decisions are made solely by him or her. Suggestions and ideas are welcome, but the boss is expected to be strong and knowledgeable and the ultimate decision maker. “Spanish managers have been described as benevolent autocrats and this can be difficult to accept for outsiders who are more used to a consensual approach from superiors.” (Spanish Management Style). Like in Germany communication is detailed and orders are specific and clearly laid-out. The manger will criticize mistakes on the spot and will not refer to it again unless repeated. The system of work appraisal common in many countries is quite a recent phenomenon and not very welcome yet. Official meetings between employers and employees are also not very common. Even if they take place, it is more of an instruction session to employees. Views in business meeting are expressed freely and animatedly. Agendas are more of a formality and it needs patience and skill (for a manger) in keeping the meeting on track. Martinez Construction and Konstruction Dreizehn case study: It is clear from the case study that many of the features mentioned about German and Spanish management and work culture match with what has been mentioned in the study. The facts of the case study will be given in brief before proceeding to the analysis of the scenario. Martinez Construction is a reputed firm in Eastern Spain and has been existence for the past 68 years. The economic slowdown in the local economy forced the company to expand internationally and the method to be followed was an acquisition of a suitable construction firm in the now united Germany. At the time of acquisition, the unification process was under way and the work and management culture of the erstwhile Communist part of the country was quite different from its German counterpart in certain respects. The main players in the case study are Konstruction Dreizehn (management and labor), the Treuhandanstalt (THA), Juan Sanchez (brother-in-law of the current owner of Martinez Construction and chief negotiator of the acquisition, and Miguel Martinez (nephew of the current owner and the designated manager of the new acquisition). The THA was the body formed to sell off to potential investors, the many business operations that were in existence in East Germany so that the economy can benefit from the additional flow of investment. It was this organization that identified Konstruction Dreizehn as an ideal acquisition for the Spanish Company. Review of the case: The formal nature of the mangers of THA is in close conformity with the German work and management culture. As mentioned in the case study text “He (Juan) felt pressured by the THA representatives. The Germans were all business. They didn’t seem to have the time to get to know Juan personally.” (Provided by student). German punctuality did not seem to have been understood by Juan and Miguel and they arrived fifteen minutes late for their 9 O clock appointment which evidently irritated the Germans. They were not given any refreshments and the discussion proceeded straight into the matter without any small talk. The Germans also did not take the suggestion that the guests be taken a tour around the city. The contract as expected was extremely detailed. But here the work culture difference between East and West Germany is evident. Very little detail was provided of the actual financial position and potential problems with regard to Konstruction Dreizehn. Juan reacted strongly to this lack of detail in very emotionally and in an animated manner which can be expected of a Spanish manager. This again surprised the German official Helga (in charge of the contract), but eventually agreed to provide a phased contract which can be reviewed again after a period of two years. But this presented a new issue for the Germans since it needed a redrafted contract for which the details (as needed by the German culture was not available). But to the relief of Juan, the contract went ahead as negotiated with a review clause added. More association with the THA and Helga impressed Juan about their eye for detail, and the knowledge of rules and procedures. Helga in turn was quite uncomfortable with Juan’s relaxed manner, even though she found his guidance and practical outlook very valuable. Further problems soon appeared for Miguel as the actual management became operational. The financial position of the German company was far from satisfactory. The attitude of the workers (reduced from 350 to 100 by THA) surprised the Spanish managers who had been sent to assist Miguel and appeared quite lax (lack of initiative and responsibility) when compared to the West Germans. The compartmentalization that exists in the German mindset was evident here because of the lack of active participation with the Spanish team in the formulation of ideas and implementation of policies and procedures. Spanish preparedness in handling potential problems in negotiation: It is quite evident that Juan, Miguel and the Spanish team were quite unprepared for the way the Germans operated their businesses. They were surprised even by the strict formality, the apparent lack of the need for personal understanding, the detail obsessed mentality and other matters. . It also shows the lack of detail and planning that is a part of the Spanish work culture. The Spanish also did not take into account that the East Germans were more dominated by the communist mentality. The main characteristic here is the top down approach where orders were to be followed with little scope for participation and even suggestions. It also shows that lack of experience of a national company like Martinez Constructions with regard to national work and management cultures. They must have assumed that being a European country, there would not have been much dissimilarity in attitudes between Germans (East and West) and the Spanish ones. What they had to do in the first place was to conduct a preliminary study using research on the topic first. A visit to the country to understand this first hand should have taken place instead of just jumping in and acquiring a company. What the company had done was to rely on the attitude of tourists and German businessmen doing business in Spain. This was not sufficient enough to get a correct picture as is evident from the cases study. Since they are a minority, the Spanish side should adjust in part to the German way of thinking and also take a lot of effort in changing the attitudes found in East German work and management culture. If they can manage the cash flow for some more time, it will be possible to turn around the situation even though it will be a slow and patient effort. The alternative is to redraft the contract after two years or abandon the project altogether. Works Cited An Introduction to Business Cultures. The Open University. 4 Jan. 2009. . A Summary of my Ideas about National Culture Differences. 4 Jan. 2009. . A Summary of My Ideas About National Culture Differences. 5 Jan. 2009. Geert Hofstede Cultural Dimensions. Itim International. 2003. 4 Jan. 2009. . Geert Hofstede Cultural Dimensions: Spain. Itim International. 2003. 4 Jan. 2009. . Geert Hofstede Cultural Dimensions: European Countries. Itim International. 2003. 4 Jan. 2009. . German Culture-Key Concepts and Values. Communicaid. 2007. 5 Jan. 2009. . Hedderich, Norbert. Typically German. 1999. 4 Jan. 2009. . Individualism. Clearly Cultural: Making Sense of Cross Cultural Commission. 5 Jan. 2009. . Jais, Sebastian-Dominik. The Successful Use of Information in Multinational Companies an Exploratory Study of Individual Outcomes and the Influence of National Culture. Wiesbaden Dt. Univ.-Verl. 2006. 4 Jan. 2009. . Rich, Grant Jewell. Masculinity and Femininity: The Taboo Dimension of National Cultural. Journal of Sex Research. 2000. 5 Jan. 2009. . Roberts, Kimberley. Geert Hofstede Analysis. International Business Center.org. 2008. 5 Jan. 2009. . Siesta Work Culture in Spain Needs Changing. Barcelona Reporter.com. 2009. 5 Jan. 2009. . Spanish Management Style. 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