The aim is to demonstrate understanding of key concepts in strategic management and ones capacity to craft a professional document. Part One (approx 3000 words) 1.Choose a concept/model in strategic...

The Relevance of the Contribution of Hofstede
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Key Concepts in
Strategic Management
The relevance of the Contribution
of Hofstede to Our Understanding
of the Influence of Culture on
Global Organisational Practices
The Relevance of the Contribution of Hofstede
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Contents
Executive Summary .............................................................................................................. 3
Part – One ............................................................................................................................ 4
Introduction ........................................................................................................................... 4
The Hofstede’s Theory ...................................................................................................... 4
The Background: Culture and Global Organisational Environment .................................... 5
Examination of the Concept – The Hofstede’s Contribution .................................................. 6
Power Distance ................................................................................................................. 6
Individualism Vs. Collectivism ............................................................................................ 7
Uncertainty Avoidance ....................................................................................................... 8
Masculinity Vs. Femininity ............................................................................................... 10
Long-term Vs. Short-term Time Orientation ..................................................................... 11
Relevance in Today’s Time – Hofstede’s Dimension in Organisational Context .................. 13
Process Oriented Vs. Results Oriented ........................................................................... 14
Job Oriented Vs. Employee Oriented .............................................................................. 14
Professional Vs. Parochial ............................................................................................... 14
Open Systems Vs. Closed Systems ................................................................................ 14
Tight Vs. Loose Controls ................................................................................................. 15
Pragmatic Vs. Normative ................................................................................................. 15
Part – Two .......................................................................................................................... 16
Introduction ..................................................................................................................... 16
Organisational Overview ................................................................................................. 16
The Organisational Situation – Issues and Resolutions ................................................... 17
Improving the Hofstede’s Theory ..................................................................................... 19
Conclusion ...................................................................................................................... 19
References ......................................................................................................................... 21
The Relevance of the Contribution of Hofstede
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Executive Summary
In the current competitive era, there exist a number of different approaches and
theories that are essential for the organisations for attaining long term success,
sustainability and competitive edge. These are in strict alignment with the growing
business complexity, changing market trends as well as constantly altering needs
and demands of the customers.
With this in consideration, this paper attempts at understanding the concept and
theory of Hofstede’s approach along with its application in real life business settings
to address various different types of culture related issues.
The Relevance of the Contribution of Hofstede
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Part – One
Introduction
With constantly increasing demands and needs of global organisations and
liberalised corporate environment, a number of research scholars have been paying
more attention to explore and study the aspects related to organisational success
(Aycan et. al., 2000). According to K’Obonyo and Dimba (2007), out of the various
nation-related factors, which drive global organisational and workplace practices,
culture is the most critical as it directly related to people’s behaviour and attitude. In
today’s competitive era, success of organisations to a large extent depends upon the
understanding the culture of business.
The Hofstede’s Theory
As per Hofstede (1980), culture is nothing but combined mental encoding of the
mind, which aids in differentiating one category or group of individuals from others.
K’Obonyo and Dimba (2007) second that such a combined psychological
programming collectively existing in culture of any nation, acts as the unique
differentiating aspect from other countries. Moreover, all these shared cultural
principles are more visible to foreigners as compared to national individuals
themselves. According to Hofstede (1980), success in the globalised market
depends chiefly on comprehending the culture of the society where business is
conducted. This is one of the reasons for high number of studies being conducted
related to work and culture. As per George and Jones (1996), the term culture
includes the political, social and economic values that categorise and differentiate
the way individuals live and work in any country.
Further, work of Hofstede (1984) has helped identify five key dimensions, which can
help in understanding culture based upon its degree of influence on global business
processes and activities. These five dimensions are Power-Distance, Collectivism
and Individualism, Uncertainty Avoidance, Femininity versus Masculinity and lastly,
Long-term versus Short-term Time Orientation. Further, the most challenging task is
to investigate the way Hofstede’s cultural values affects organisational processes
(K’Obonyo and Dimba, 2007).
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Similarly, the strategic aim of this paper is to critically evaluate the relevance of the
contribution of Hofstede to our understanding of the influence of culture on global
organisation practices. The paper focuses upon the key dimensions of the
Hofstede’s model and examines the relevance of the same.
The Background: Culture and Global Organisational Environment
Culture is a complex concept, which can be explained in several ways. It can also be
interpreted as a combined programming of minds that helps distinguish people
belonging to one group from others. It is a collective phenomenon but it can be
linked to several collectives and within each collective there are several kinds of
individuals. If characteristics of people are imagined as fluctuating as per bell curve,
then the variations amongst the different cultures can be taken as shift of the bell
curve as and when someone moves from one society to another (Hofstede, 2001).
As per the present literature, the concept of culture commonly links to ethnic groups
and tribes (based upon anthropology), organisations (based upon management and
society) and lastly, nations (based upon sociology, political science and
management). Further, the field of culture of occupations such as academics,
engineers etc are still relatively new and unexplored (Hofstede, 2001). The term
culture can even be applied to generations, genders and social settings.
In simple words, culture is basically a set of shared assumptions and principles,
which a group of individuals follow to attain a specific goal. Culture when linked to an
organisation, is termed as “organisational culture”, which acts as a differentiating
factor for attaining long term success and competitive edge (K’Obonyo and Dimba,
2007). Organisational culture is also associated with internal integration and external
adaptation. Within any organisation, culture is perceived from three main
perspectives i.e. differentiation, fragmentation and integration (Hofstede, 1984).
Further, it can be seen within the firms that different groups of people practice
different culture based upon their ethnic origin, nationality, language, educational
background, economy, religion as well as political and legal systems (Hofstede,
1984). This is known as national culture. Despite of the fact that national and
organisational culture, are different concepts but overall both have significant impact
on global organisational practices. As said before, this paper attempts to analyse the
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implications of national and organisational culture based upon the Hofstede’s
contribution.
Examination of the Concept – The Hofstede’s Contribution
National culture is a very powerful force especially in Multinational Corporations
(MNC’s). Based upon the results of a survey conducted by Hofstede amongst the
employees of IBM in approximately 50 nations, there exist five main dimensions
where national culture impacts organisational culture. The concept holds its origin
back from the year 1965 and the key dimensions include power distance,
individualism/collectivism, uncertainty avoidance, masculinity and femininity and
lastly, long-term versus short-term time orientation. All of these five dimensions are
structured around key issues prevalent within the human society. These dimensions
symbolise the chief elements of basic structural system of the different nations.
According to Smith et. al. (2002), Hofstede’s model is critical to understanding
employee’s perception of any organisation as well as the roles and responsibilities of
its members. Moving ahead, the paragraphs below will focus upon each of these
dimensions individually.
Power Distance
Power and distance relate to the extent of individuals in a specific society on the
basis of equality and inequality. In such a structure, less powerful people are bound
to accept that power is distributed unequally. Usually, a nation with higher power and
distance scores is open to accepting and perpetuating inequality amongst the people
(Smith et. al., 2002). It represents a society where extent of inequality is endorsed by
followers to almost the same extent it is imposed by the leaders. This dimension
relates to power and inequality existing within the society and states that all the
societies are not equal and few of them are more equal as compared to others
(Smith et. al., 2002).
Further, taking the case of the United Kingdom in specific, the level of upward
mobility is extremely limited as there is highly any emphasis upon differences within
the people based upon power, status and wealth. Further, corporations may be
functional in two distinct nations with different set of power dimensions (Smith et. al.,
2002). The broad level impact within the organisational environment is that the
The Relevance of the Contribution of Hofstede
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functions are altered and adjusted to meet and reflect the needs of different
countries. However, the managerial authority in...