Applying Hofstedes Cultural Dimensions Theory - Essay Example

Applying Hofstede’s Cultural Dimensions Theory Introduction: G. Hofstede (1994) has proposed five primary dimensions of culture on the subject of national values and practices on the work front. These are (a) power distances: the distance or the degree of inequality among people which is considered normal (b) individualism vs collectivism – the extent to which people take care of others or expect others to take care of them (c) masculinity v feminity – the extent to which a culture predisposes towards gender dominance (d) uncertainty avoidance - the extent to which people prefer a structured work environment to an unstructured one and (e) long term v short term orientation – whether values are long term, i.e, savings and persistence or short term, i.e, respect for tradition and social obligations. This report will apply this cultural dimensions framework proposed by Hofstede in the case of the international company, Old Chang Kee which currently operates out of Singapore. The purpose of this report is to interpret how this framework is operating in this company and how the Company has adjusted its management and marketing to appeal to the international market. Background description of Old Chang Kee: Old Chang Kee originated as a small stall in a coffee shop outside a cinema in 1956. The seeds were however sown, for the business to emerge as an international organization when it was taken over in 1986 by a Han Keen Yuan, an employee of a multinational organization (www.oldchangkee.com). The first steps he took were to modernize operations and focus on quality controls to make the organizational products – curry puffs and other savories – Singapore’s leading brand. In the year 1992, he invested in a 20,000 sq feet modern factory in Woodlands – these were a part of the constant upgrades he introduced into his business to make it competitive. This allowed for the expansion of the business, with an expanded range of products being sold through several outlets including kiosks, supermarkets and shopping malls. The Company progressed further when William Lin, a young Australian graduate joined the Company, to provide it with the vision needed for the Company to establish the company as a recognizable brand in Singapore. Initiatives have been introduced to enhance the popularity of the organization’s products and appeal to international customers. One of these is the introduction of halal certification on the products to appeal to Muslim customers. Culture: Hofstede has defined culture as the “collective programming of the mind which distinguishes the member of one group or category of people from another.” (Hofstede, 1994:5). He explains that collective programming could be determined as lying somewhere between general human nature which is not programmed or programmable, and the individual personality. The underlying factor at the root of Hofstede’s model of culture is values, which he describes as “broad tendencies to prefer certain states of affairs over others.” (Hofstede, 1994:8). People in a particular culture have underlying beliefs, about how things should be and these beliefs strongly influence an individual’s behavior. Old Chang Kee is established in Singapore, where the cultural dynamics are different from those that exist in western countries such as the UK and USA. On a general basis, the degree of individualism existing in Singapore may be much lower compared to the United States, while traditional gender roles still exist to a large extent in Singaporean society. Singapore seceded from Malaysia in 1965 and is small, prosperous state, albeit tightly controlled by stringent Government regulations. The population of Singapore is predominantly Chinese, with other major ethnic groups being Malays and Indians. Power distance: Hofstede defines power distance as “the extent to which the less powerful members of institutions and organizations within a country expect and accept that power is distributed unequally.” (Hofstede, 1994:28). This power distance is reflected in the structural organization of the companies; a more hierarchical structure reflects a greater distance among organizational members, while informal networking is characteristic of those organizations where power distances are low. In the case of Old Chang Kee, the business functions through franchisees who market the branded products of the Company. While the cultural structure in Singapore tends to support a more bureaucratic form of organization, with primary decision making power being concentrated in the hands of its CEO, Yuan and the new leader, William Yin, the Company has not strictly adhered to this structure. Through its franchisee network, the organization has developed a lower degree of power distance, by allowing its franchisees decision making power and retaining control only in a few areas such as quality controls on the product. This management style allows the Company to expand its operations to an international level, with the required degree of flexibility in terms of finance options and responsiveness to local markets. Individualism v collectivism: Hofstede defines individualism and collectivism as follows: “Individualism pertains to societies in which the ties between individuals are loose; everyone is expected to look after himself or herself and his or her immediate family. Collectivism as its opposite pertains to societies in which people from birth onwards are integrated into strong, cohesive in-groups which throughout peoples’ lifetime continue to protect them in exchange for unquestioning loyalty.”(Hofstede, 1994:51). This is the factor that is most often evident in intercultural interactions. Begin(1997) has examined human resource practices in six different countries, of which Singapore was also one. He places Japan and the United States at opposite ends of the spectrum, where the United States is a culture with a high degree of individualism while Japan is one of collectivism. Singapore falls between these two extremes. Han Keen Yuan,’s concern for his employees and their opinions, as well as their long term future shows that collectivism may be the guiding framework. This is aiding the organization, because it is able to garner loyal employee support in adhering to brand quality and ensure good performance of employees, through the progressive human resource practices. However, individualism has also played a role in the company’s progress in the international markets. This is evidenced in the franchisee structure of the organization, where each franchisee is expected to function as a relatively independent unit and manage its own finances and operations. Masculinity v Feminity: Hofstede defines the masculinity vs feminity definition as follows: “masculinity pertains to societies in which social gender roles are clearly distinct (i.e, men are supposed to be assertive, tough and focused on material success whereas women are supposed to be more modest, tender and concerned with the quality of life; feminity pertains to societies in which social gender roles overlap (i.e, both men and women are supposed to be modest, tender and concerned with the quality of life.” (Hofstede, 1994:82-3). In the case of Old Chang Kee, the old leader was Han Keen Yuan, while the new leader is William Lin, both male. Women have not yet advanced to significant executive positions within the organization. This indicates that the cultural aspects inherent in Singaporean society, i.e, the notion that men are to be strong and involved in business, which is not the sphere for women, may still be prevalent. In this aspect, the Company could improve its management style to include higher representation of women, which would enhance its reputation and international image as an organization. Uncertainty avoidance: Hofstede defines uncertainty avoidance as “the extent to which members of a culture feel threatened by uncertain or unknown situations.”(Hofstede, 1994:113). In the case of Old Chang Kee, one of the challenges that Han Keen Yuan had to face was the resistance of his employees to the introduction of modern machinery and processes which were introduced to speed up the manufacturing process. Yuan had to convince them that the purpose of introducing the machinery was not to replace them, but to streamline the production and permit the maintenance of stringent quality standards. The resistance of the employees was directly caused by the uncertainty about their own jobs which they experienced at the prospect of machinery being introduced. However, the progress that the organization is making in terms of expanding its operations shows that the actual degree of uncertainty avoidance may be lower than other far eastern countries such as Malaysia or Taiwan, where there may be attempts to manage the future due to high uncertainty avoidance (Chen et al, 2007). This has introduced a more receptive attitude to innovative measures being introduced by the new leader, Lin. One of these for example is the development of halal products to appeal to a much wider, international Muslim audience, which has aided the company’s growth. This lower level of uncertainty avoidance may perhaps be explained by the government of the country which pursues a disciplined economic policy, so that people are more secure about the future and do not fear new factors that change the organizational environment all that much. Long term orientation: The last dimension, i.e, the long term orientation dimension, is especially relevant in the Chinese/oriental context because it is also linked to the work of Confucius. Long term orientation is typically characterized by persistence, the existence of status in relationships which is also associated with a sense of shame. Short term orientation on the other hand, is typically characterized by stability and steadiness, with a respect for tradition and protecting of “face” and also includes reciprocating favors, gifts and greetings (Hofstede, 1991). In the case of Old Chang Kee, there is a respect for tradition because the original products – puffs and savories are being preserved. The Company is making an effort to preserve the qualities of the original products, which were handmade and sealed to lock in flavors, thereby attracting customers to the distinctive products. (www.oldchangkee.com). This has aided its expansion and the marketing of its products as typical Singaporean products with a distinctive heritage. Bibliography * Begin, J, 1997. “Dynamic human resource systems: Cross-national comparisons”, Berlin: Walter de Gruyter. * Chen, Hsueh-ju, Huamn, Shaio-Yan and Barnes, Barry F, 2007. “A cross cultural study of auditor risk assessment in emerging capital markets”, Journal of Applied Management and Entrepreneurship, Retrieved April 7, 2008 from: http://findarticles.com/p/articles/mi_qa5383/is_200704/ai_n21288992/pg_2 * Hofstede, G, 1994. “Cultures and organizations: software of the mind: intercultural”, London: Harper Collins * Hofstede, G, 1991. “Cultures and organizations: software of the mind”, McGraw Hill * Old Chang Kee: The origin. 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