Usefulness of Hofstedes National Culture Model in Understanding and Leading Business Organization - Essay Example

The usefulness of Hofstede’s National Culture model in understanding and leading business organizations in the 21st century? 1. Introduction Currently, modern businesses have changed significantly. The business environment of the present times cannot be compared to that which existed some decades ago. First, the advancements in information and technology heave meant that businesses develop new approaches to utilize these resources for their success. The emergence of these advancements means that businesses are supposed to develop new strategies and approaches for effective management. In the same way, human resource practices have also changed significantly. Businesses organisations in these present times are expected to ensure that their management strategies are those that promote teamwork and staff development in order to help individuals be productive and effective in their work place (Mead and Tim, 35). Research has shown that businesses in these times are being faced with multiple challenges than those of some decades ago. The external business environment has continued to change drastically, with new legal policies being enacted, the ever-changing economic environment among many others that have led to broad changes in the methods of product development and general management options. This paper examines the Hofstede’s National Culture model in understanding and leading business organizations in the 21st century. 2. The picture of businesses in the 21st Century Approximately two decades ago, no one had an idea or concept of the world’s global economy. In those times, international trade was the term commonly used in the description of businesses that happened across borders (Mead and Tim, 41). Currently, the fact that people have shifted, referring more often to global economy indicates the drastic shift that has happened in the economic reality. About three decades ago, the economy outside a county’s border was always left to multinationals. This is because; the concept was widely ignored when emphasis was placed on the understanding of the internal or domestic economy. This lead to development of many micro economic policies and other aspects that were thought to be essential in strengthening these domestic economies (Chanlat and Eduardo, 35). Today, this is no longer the case; countries have realized the advantages of monitoring the economic activities happening beyond their borders. The international and domestic economies are all very significant in the growth of economic activities in a country (Mead and Tim, 41). These two spheres have been thought to have social, political, cultural and psychological realities in modern times, which cannot be ignored or left unattended. It has become a common understanding that participation in the global economic activities plays a big role towards the growth and development of the economy in country. Additionally, another important trend that cannot be overlooked in these times is the collapse of the communism aspect of business and economic governance as well as the command economy, which played a big role in sustaining it. Irrespective of the imperfections that still exist in the present models, the new approaches in business management in these times has received wide acceptance as being the most reliable and effective way of promoting the economic growth and other aspects of social progress (Chanlat and Eduardo, 37). The 21st century has also led to the decline and complete loss of faith in governments’ ability to operate industries in the most efficient and effective way. In this case, it is a cliché to point out that the dynamics and complexity of modern economies overcome the capacities of many of the skilled and actively dedicated planners. Most of the central planning decisions, following their political characters tend to be the creatures of diverse special interests. In most cases, this concept has been effectively elaborated with experience on a regular basis. Similarly, most state-owned enterprises have been receiving different models of management in the aim of making the more productive and effective. In some countries, privatization has been thought of as the most effective way in which state-owned enterprises can be effective in their approaches. With the concept economic globalisation, businesses in the 21st century have seen the need to increase and expand their businesses in order to take advantage of the opportunities that exist in many countries. This has seen this businesses change their approaches to human resource management and recruitment. Most businesses have been trying to develop and adopt multicultural approaches to management so that they can accommodate all the people working in these organisations from other parts of the world (Chanlat and Eduardo, 39). The adoption of multicultural aspects of management is said to be effective in helping businesses understand the new business environments they are trading in order to gain acceptance. In this approach, the need to have an organisational culture that embraces and accepts all people from different parts of the world has become common. Businesses going global often decide to hire people from those countries they are reaching in order to make them get acceptance in the market (Chanlat and Eduardo, 39). This is a very effective approach since it plays a big role in recognizing the business on the local front. It is important to understand that without this acceptance, it is often hard for businesses to be successful in their expansion activities despite of the resources and efforts they put into active use. For this reason, most businesses are expected to ensure that they research and establish the best practices that can be effective in ensuring that they effectively create competitive advantage sin the new business environments that they decide to join. Additionally, these businesses are expected to ensure that they adopt effective communication strategies, which is very essential towards understanding the different ways of executing strategies and other important aspects of management. 3. The current state of international businesses In the recent times, research activities in the functioning of international businesses have intensified in the wake of the fact growing economic globalisation. It is believed that this new development is bound to continue for a long time as we head into the future. In many of these activities, businesses have shown a great interest in conducting a culture focuses research, which is thought to be an important competitive strategy in the globalization process of business activities. Cultural models play an important role towards defining the fundamental problems and challenges, which might have repercussions for the effective functioning of individuals and groups (Peterson, 54). For instance, relations with authorities, conceptions about, the self, which include ego identity as well as the basic dilemmas relating to conflict and ways of dealing with. In order to have a firm understanding of the various cultural aspects, different models have been developed by many people, like that by Hofstede. Many people in different incidents have relied on the Hofstede Model in order to understand some of the effective ways of managing businesses in the 21st century. 4. The Hofstede Model While at IBM, Prof. Hofstede realized that in as much as the company boosted of a complete and functional corporate culture. There was a huge variation in the cultural differences among the different workers in the company, most of who had come from other parts of the world. these differences were very much in the company, something that had certain impacts in the way service was delivered in the course of working. This realization made Hofstede to develop some curiosity in understanding some of the differences in the social actions, which were present among the company workers and many other nations across the world. This made him to conduct a research in most of the countries that IBM had reached, focusing on the cultural differences and how they impacted effective business functions and processes. From this research, Hofstede managed to develop a model that highlights four fundamental dimensions that can aid in distinguishing cultures in many international businesses across the world. The first among the dimensions was the aspect of Power Distance, then the concept of Individualism, Masculinity and finally Uncertainty Avoidance. However, after making a further analysis, he managed to come up with a fifth dimension after considering the various aspects of interactions between the Chinese managers and their employees. This fifth dimension was largely depended on the Confucian dynamism. This dimension, before coming to accept it as important to the understanding of international business cultures was tested on about 23 countries, in the different international businesses that existed in them. This fifth dimension was referred to as the Long-Term orientation The five dimensions, as proposed by Hofstede are very correlational with other countries’ religious and cultural paradigms. Hofstede’s work has become an important tool used in shaping the management and leadership aspects of most businesses. In fact, this model has been thought to be the most effective tool that can be used by businesses in order understand how to manage businesses in the 21st century, a period characterized by a lot of globalization of businesses activities and several aspects of economic globalisation in most countries across the world. It is by believed that by integrating this model in their activities, businesses in the 21st century can create organisational cultures that effectives understands the differences existing in their employees who come from different parts of the world. 5. The Dimensions of Culture Measurement in organisations using this model According to the Hofstede’s model of culture management, organisations are expected to understand the differences in their employees from the different countries they are coming from. This is important in creating a work environment that effectively understands and appreciate the multicultural dimension of its employees. The Hofstede’s model provides a distinction of various cultures across the world in five main dimensions. Additionally, the model provides scales that range from 0 to 100, for all the identified dimensions. Every country has been allocated a special position on each index and scale in the model with respect to other countries. In the first place, Hofstede has identified four dimensions but after thorough research (Kienhuis, 73), he added a fifth dimension in which the cultures of countries differ considerably as shown in the statistical analysis and theoretical reasoning of the different employees in different organisations. These kinds of analyses often present the fundamental problems that any kind of society across the world has to try to solve in the most effective way. These dimensions can be verified empirically, with each country getting a special position between poles as shown in the table below. Additionally, the statistics were independent and happened in many of the possible combinations, in as much as some combinations became persistent that others. Dimensions of culture measurements in Hofstede’s model (Hofstedeb, 2001) The Hofstede’s model is a very essential and effective research that provides was of leadership and management of international businesses. As pointed out earlier, it is important that the 21st century continue to witness a lot of business growth and expansions in the process of identifying and exploiting the various business opportunities that exist in different countries across the world. In the 21st century, it is evident that the need for an effective understanding of the cultural influences on leadership and management as well as the different organisational practices has continued to be great. Hofstede collected and analyzed data from an individual multinational company with its 53 subsidiaries located regionally, arriving at the various dimensions of how national culture can be essential in understanding the different ways of managing international businesses and other organizations. Hofstede’s model has been instrumental in most of the wholly-owned subsidiaries that have been developing in the Chinese republic. The Hofstede’s model has been effective in helping these business organizations towards understanding the best entry modes in the republic (McSweeney, 91). Those businesses that have incorporated the research findings in this model have often found it easier to compete effectively, not only in the Chinese environment, but also in many other countries across the world. This development simply underpins the fact that an understanding of cultures is essential towards creating multicultural leadership and management aspects of businesses across the world (McSweeney, 92). One of the things that business managers in international businesses have had to understand is how to create an organisational culture that encourages effective performance from all its employees. Most of the employees that get opportunities to work in multinational organisations are often needed to integrate in the organizational culture already created. The human resource department plays a big role in organizing an effective orientation program for these workers so that they can understand some of the major core values that the organisation stands for and values (Mead, 61). Additionally, it is important for them to develop an understanding of how to undertake their roles according to the laid down procedures and practices in the organisation. All these things are provided for the department, so that their employees can feel welcomes and appreciated, ready to offer their knowledge and skills for the success of these organisations in the new business environment. 6. Conclusion In this 21st Century has brought much awareness to businesses about the vast opportunities that are existing in various countries across the world. All these developments have been facilitated by advancements in information and technology. In this regard, businesses have found the need to find effective ways of managing and leading their human resources towards achieving the set goals and objectives in these organisations. The Hofstede’s model has been effective in providing information about ways of creating effective and reliable organisational cultures that can accommodate all the employees, most of whom come from different countries across the world. Businesses that have been expanding internationally have found the need to accommodate a multicultural work environment in order to effectively manage operations in the new country and create competitive advantages (Mead, 62). In all these aspects, culture management in international businesses has been found to be an important concept that can help these businesses compete effectively or fail in their growth and development. The ability to create work practices that recognize these cultural differences are essential towards helping international business organisations to be effective and successful in their practices (Hofstedea, 289). In this case, the Hofstede’s model can be the most effective tool that can be used towards understanding various aspects of the international business environment. Works Cited Chanlat, Jean, and Eduardo Davel. Cross-Cultural Management. Hoboken: Taylor and Francis, 2013. Print. Hofstedea, Geert et al. Measuring Organizational Cultures: A Qualitative and Quantitative Study Across Twenty Cases. Administrative Science Quarterly. 35. 2. (1990). 286-316 McSweeney, Brendan. Hofstede’s model of national cultural differences and their consequences: A triumph of faith a failure of analysis. Human Relations. 55.1. (2002). 89-118. Hofstedeb Geert. Cultured consequences (2nd ed.). Thousand Oaks, C.A: Sage. 2001. Print Kienhuis, Nicole. Out of the Boxes: A Critical Study into Hofstedes 4D Model of Culture. Nijmegen: CIDIN, Centre for Development Issues, 2000. Print. Mead, Richard. Cases and Projects in International Management. Oxford: Blackwell, 2000. Print. Mead, Richard, and Tim Andrews. International Management: Culture and beyond. 4th ed. Chichester, England: John Wiley & Sons, 2009. Print. Peterson, Mark. Foundations of Cross Cultural Management. Thousand Oaks, CA: Sage Publications, 2008. Print. Read More