Discuss about the Cross Cultural Management for National Culture Profile.
Culture, in simple words, can be defined as the basic morals, ethics, beliefs, religion, cuisines, clothes, etc. that a particular social group follows. Culture can differ from people to people and it has become very important for business organisations to manage the cultural differences as they can prove to be very harmful for the overall productivity and efficiency. In this assignment, we will discuss the cultural preferences in Iran with an objective of starting a new business venture of tourism in the country. We will carefully analyse the cultural profile and identify two risks that the business would face while being operated in Iran.
National Culture Profile
Iran, also known as Persia and officially known as the Islamic republic of Iran, is located in the Western Asia. The country is a major religion and middle power and has an abundant reserves of fossil fuels (Commisceo-global.com, 2016). Let us now analyse the cultural profile of Iran based on the model suggested by Geert Hofstede.
Power distance à Iran scores 58 on the power distance index. The intermediate score of Iran on power index implies that the country prefers a hierarchical society. The country accepts differences in power that are given to individuals and is distributed in a hierarchical order. Every person in the society has a place and the distribution of power does not require any kind of justification (Geert-hofstede.com, 2016).
Individualism à this particular culture dimension deals with the feelings of togetherness or separated. Iran scores 41 on the individualism index, which implies that the country prefers a collectivist society. In Iran, people show a long term commitment to groups, whether the group is a family, a relation or an extended family. The country shows a high degree of loyalty towards the society. Similarly, an unethical offence leads to shame and loss of respect in the society.
Masculinity à with a score of 43 on the masculinity index, the country depicts a society which is more feminine rather than masculine. In Iran, the quality of life that a person keeps is an indicator of success while standing out from the crowd is not considered to be admirable. In Iran, people have a high preference for equality and quality of their work lives. In Iran, the society believes in working in order to live (Geert-hofstede.com, 2016).
Uncertainty avoidance à with a score of 59 on the uncertainty avoidance index, Iran shows a highly uncertainty avoiding society. In such a society, there is a high preference to maintain rigid codes and behaviour. The society emotionally requires rules and regulations eve if they don’t seem to work in the long run. Precision and punctuality are given a lot importance in the society and security needs are the prime reason for employee motivation (Persians Are Not Arabs, 2016).
Long term orientation à this particular dimension deals with the preference of the society to e connected with the past and at the same time dealing with the issues or challenges that the future will bring along. The country scores 14 on this cultural dimension and shows a strong normative culture. People in Iran have a preference to establish the absolute truth. Iranian society has a great respect for traditions while the propensity to save for the future is relatively low. The society also has a great focus towards the achievement if quick results (Geert-hofstede.com, 2016).
Indulgence à this particular cultural dimension defines the extent up to which the society can control its desires and impulses. The country has a score of 40 in this dimension and shows a restraint culture. Further, the society also has a less tendency towards spending leisure time and can easily control their desires.
Risk 1 Terrorism
One of the biggest risks that haunts business organisations operating in Iran is the terrorism that the country experiences. The United States of America has recognized Iran as the most active state sponsor of terrorism and has been accusing Iran for terrorist activities since 1984.
One of the best examples that shows the extent to which terrorism can be damaging in the country is the hostage crisis of 1979. On November 4, 1979, 500 Iranians entered the American embassy in Iran and took 90 employees and victors captive. The Iranians left the non-Americans and held 52 employees for 444 days. The demands put forward by the Iranians was the unblocking of Iran’s frozen assets in the United States. They also demanded a U.S based Shah of Iran to be arrested and given back to the Iranians. As a result, US had to pay $8 billion in frozen assets in exchange of the hostages. Further, the country has also experienced a number of assassinations in the past. Some noticeable assassinations were that of the Prime ministers Mohammad Javad Bahonar, Shapour Bakhtiar, Amir-Abbas Hoveida, etc.
The above mentioned cases clearly show the instability that exists in the country and the extent to which terrorism can damage things. For a tourism venture, it is highly possible that the terrorist activities can have an effect on the tourists that visit the country. Even though Iran is being potentially considered as the best tourist destination for this year, terrorism still poses a great threat to the tourism industry in Iran.
Risk 2 Corruption
Corruption is defined as the unethical misuse of power bested in a person in order to achieve some personal gains (Corruption-agenda.org, 2016). Particularly in Iran, corruption is the way of life for the people. Only a few people in Iran have openly criticised the existence of corruption in the country also suggesting the social unrest that can be caused by corruption. Recently, a billionaire tycoon based in Iran, Babak Zanjani, has been sentenced to death for corruption. The 41-year-old business tycoon has been accused of fraudulent pocketing of $2.8 billion (The Huffington Post, 2016).
The government of the country is large. The presence of the government of the country can be visibly seen in all corners of life. The corrupt behaviour demonstrated by the employees working in the government and public sector can be attributed to the lower pay which they are offered, which also makes it difficult for the employees to meet their own or their family’s needs (Middle East Eye, 2016).
The existence of corruption in the country is a great risk for any business organisation that wants to expand its operations in Iran. The fact that the venture is being run by an outsider makes the venture even more vulnerable to corruption (Eulerhermes.com, 2016).
It is important that the owners of the new business venture should carefully undertake strategies that can help them in overcoming the risks that are posed by corruption and terrorism. The business venture should, first of all, recruit a lot of employees from Iran itself as they would be better aware about the ins and outs of the business. They should be having a thorough knowledge about the ways in which the business can easily take all the permissions that it requires to operate in Iran. Even some of the high positions in the company should be offered to the Iranian employees as they have better understanding of their country and they would make it easier for the company to deal with the risks identified in the above sections. Further, the company should also establish relations with the governmental organisations and offer them high tourism incomes in exchange of security for the delegates or the foreign victors that visits Iran through the company. It should also be ensured that the tourists are adequate insured against natural and man-made disasters while they visit Iran while the business venture should also ensure that the security of the tourists is in the hands of the government of Iran.
Iran has a stable cultural profile, as discussed in the beginning, which makes the country a potential opportunity for business organisations while the country is also preparing for a tsunami of foreign visitors. Further, the county has also started to lose its visa rules which is making it easier for the tourists to get visa and visit the country. Therefore, the country is one of the best countries that offers tourism opportunities to localities as well as business organisations.
Iran is a country that has a lot of potential for being selected as the best tourist destination in the present times but the risks of corruption and terrorism makes it difficult for business organisations to start new business ventures in the country. If business organisations come up with the right approach to deal with terrorism and corruption, Iran can offer a lot of business opportunities to them. Therefore, the business organisations should carefully assess the risks to their ventures and use appropriate strategies that can help them in mitigating the risks that exist in the country.
Commisceo-global.com. (2016). Iran - Language, Culture, Customs and Etiquette. [online] Available at: https://www.commisceo-global.com/country-guides/iran-guide [Accessed 29 Oct. 2016].
Corruption-agenda.org. (2016). What is Corruption?. [online] Available at: https://www.corruption-agenda.org/getting-started/what-is-corruption [Accessed 29 Oct. 2016].
Eulerhermes.com. (2016). Country risks analysis | Euler Hermes Group. [online] Available at: https://www.eulerhermes.com/economic-research/country-risks/Pages/country-reports-risk-map.aspx [Accessed 29 Oct. 2016].
Geert-hofstede.com. (2016). Iran - Geert Hofstede. [online] Available at: https://geert-hofstede.com/iran.html [Accessed 29 Oct. 2016].
Middle East Eye. (2016). Corruption a way of life in Iran. [online] Available at: https://www.middleeasteye.net/columns/corruption-has-become-way-life-iran-1127296548 [Accessed 29 Oct. 2016].
Persians Are Not Arabs. (2016). Persian Culture. [online] Available at: https://www.persiansarenotarabs.com/persian-culture/ [Accessed 29 Oct. 2016].
The Huffington Post. (2016). [online] Available at: https://www.huffingtonpost.com/majid-rafizadeh/irans-corruption-and-huma_b_8382140.html [Accessed 29 Oct. 2016].