This module will introduce you to the principal challenges facing international organisations in the 21st century in respect of intercultural issues. It will offer an in-depth insight into cultural dimensions in the workplace, drawing on and critically evaluating the work of Hofstede, Minkov and Trompenaars.
Lectures will be contributed to this module by an academic with intercultural expertise and two senior executives with extensive experience in intercultural problems and intercultural training. We will guide you through the demands and complexities of intercultural interactions, negotiations and conflicts in organisations, using actual examples, scenarios and case studies from multi-national business organisations.
A central focus of the module will be on building your own analytical and problem solving skills in studying these cases and developing critical awareness of your own personal cultural dimensions and practices.
Organization culture can be stated as a method by which various members of a firm can be related to each other, work and lastly the outside culture (Bachmann, Engelen and Schwens, 2016). It can be easily used for enabling or even changing the strategy of an organization. The multi-focus model of this organization focused on the organizational culture which is a strategic tool for helping organizations. It will mainly help them to become much more effective by gathering some detail information (Beugelsdijk and Welzel, 2018). The coming pages of the report deal with professor greet Hofstede and his research team analyzed the culture-specific values. It was mainly created for understanding the 6 dimensional of National culture or 6- D model of national culture. In the late 1960s, Hofstede’s initial began the research also focused on the global research of IBM. Hofstede created a research department at IBM personnel. The workplace values and its methods were manifested which might vary from one organization to another (De Mooij, 2015). But there are some other values which can easily vary from one place to another. Instead of that, Hofstede and his team focused on values which are based on human behavior.
In the coming pages of the report, an idea has been provided regarding Hofstede dimension of national culture has been discussed in details. After that, criticism of the model with respect to present world has been discussed in details. Apart from this, various model-like world value survey, globe research has been discussed in details. The second part of the assignment mainly deals with two parts that are Starbuck fail in Israel and successful entry of McDonald in China has been discussed in details. After that organizational culture of McDonald and culture impediments has been discussed in details.
Hofstede dimension of National Culture
Organizational culture can be stated as one of the methodologies which focus on ideas, beliefs and lastly practice of an organization. It is mainly used for differentiating an organization from others (Bitran, 2016). The workplace of an organization mainly decides the fact that how the given employees behave with each other or even external practices. It mainly requires involvement in the production of new task. Hofstede can be also stated as Greet Hofstede focused on national and along with regional factors which can easily contribute to the culture of the organization. Apart from this, it also affected the behavior of employees in any organization. There are mainly six parts of this model like
Power Distance Index (PDI): As per this model, power distance index or PDI generally focus on the hierarchy of workplace and also uneven distribution of power (Brewer and Venaik, 2014). Workplace hierarchy of an organization is mainly inclusive of staff at the bottom and each of the ascending is inclusive of supervisor, managers, directors and lastly leadership. In many cases, it is seen that the employee even accepts PDI or even culture within an organization (De Mooij, 2018). While in high PDI, employees look for approval in the given high levels. It does not have any kind of choice but to defer the high level of various employees.
Individualism vs Collectivism (IDV): Hofstede theory highlighted both kind of workers that is independent and team focused. Individualism focus on employee that work independently of co-workers on the contrary collectivism highlighted interdependency among various employees (Chan et al. 2016). It mainly highlights the team members which are acting in some collective ways. It can easily highlight the organizing methods which is needed for addressing pay or even benefits.
Masculinity vs Femininity: Behavior of employee under Masculinity and Femininity culture can be easily manifested in the domain of actual roles or even position (Hauff, Richter and Tressin, 2015). It is done in such a way that various employees can easily conduct themselves in a given workplace.
Uncertainty Avoidance Index (UAI): There is a large number of employees which are mainly affected by uncertainty (Goss, 2015). It can easily have very weak uncertainty of avoidance of index. The UAI dimension of culture focus on the fact that how employees are comfortable with the change.
Long-term orientation vs Short-term orientation: Bureaucrats are especially those employees which are employed by various government employees. It mainly tends to have lower value of score on long term vs short term (González, 2015). The position should focus on election which can easily result due to change in the given political administration.
Indulgence vs restraint (IND): A well balanced is considered work life is mainly for describing behavior of employee. It is mainly used for describing culture index score (Kim, 2017). A high score of this index highlights the fact that employers can have a lifestyle which has values for personal endeavors and personal accomplishment.
Fig 1: Hofstede’s Cultural Dimension for United States and China
(Source: Leduc, 2017)
Hofstede work culture mainly focuses on the culture which is in wide existence. The observation and analysis focused on some scholar and practices which provided a high value of insight (He et al. 2018). It mainly focused on dynamics of some cross-culture relation. However, this model does not escape the criticism. This particular model has been dogged by various academic discrete in the workplace for their work. Most of the scholar belongs to the pro-Hofstede which does not quote on the given work (Lee and Kramer, 2016). It mainly focused on the unlashed confidence which is mainly inclusive of findings and assumption. There are mainly three assumptions for understanding the domestic population of various countries which is homogenous as a whole. A large number of countries are considered to be collage of different culture. Hofstede focused on the nation of each and every particular unit of cultural analysis. It mainly highlights the culture of fact in various groups and national lines. It focused on the overlapping of various national boundaries (Liu, Meng, and Fellows, 2015). The overall research of this model is very much west-centric in nature. It mainly highlights to make use of alternative framework for use.
Different organization all over the globe are encountering a wide variety of cultures. Cultural difference aims to create a much better understanding of the given reality (McDonald, Chen and Mair, 2015). For the given insight, it mainly deals with much better difference and how the given organization are mainly affected by the differences. Fons Trompenaars come up with a cultural model which distinguished into seven dimensions of culture. It mainly comes up with seven dimensions of cultural dimension like
- Universalism vs particularism
- Individual vs communitarianism
- Neutral vs emotional
- Specific vs diffuse
- Achievement vs ascription
- Sequential vs synchronous time
- Internal direction vs external direction.
Why did Starbucks fail in Israel?
In the globalized economy, cultural sensitivity is important for any organization. Having a proper understanding regarding the culture difference is considered to be an important factor for success in any business (Buckley et al. 2014). Having a proper understanding with respect to language and cultural time management can be considered to be important for navigating complex interaction. There are mainly five reasons for the failure of failure of Starbucks Israel like
- Starbuck Israel did not become successful in implementation of some special buying experience at Starbucks (Choi, Im and Hofstede, 2016). It is more specifically for some local customers. The customer was very disappointed and after that feeling spread to large number of people.
- The whole invested group were mainly limited to patients and vision. It was not provided for strong support for new initiatives. They might not have appreciated as around 30 shops were needed for achieving the critical mass. It can be sated as a result of any kind of lack of expertise in the whole business of coffee shop (de Mooij, 2017). Both the implementation plan and strategy are found to be wrong. There are some chances that success would be much higher with more patience and certain implementation for any kind of improvement.
- Senior management of Starbucks Israel does not have certain experience for any kind of running for running a coffee shop in the high competition market (Eisend, Evanschitzky, and Gilliland, 2016). The marketing strategy is considered to be incorrect and was not updated according to the initial difficulties. One of the biggest obstacles of SI is mainly due to lack of understanding of respective position for competitive. One of the biggest examples was about proper decision which is needed for branching Arcaffe. The most successful of coffee was mainly identified by customer as they tend to have high quality. This particular step was mainly perceived by various customer due to weak confidence in the strength of the brand.
- There are large number of customers in Israel who did not like the taste of Starbuck coffee and it was perceived by various customer due to weak confidence in terms of brand strength.
- Before the arrival of Starbucks, there are many local competitors who prepared themselves in such a way that they can easily have prominent, location, improving the menu, upgrading the services and lastly making the seat much more comfortable.
According to Hofstede, there is certain number of values and ways which can be manifested and easily vary from one location to another. But this particular team were based on values of human behaviors. The given variance is very light so the given dimension can be used for understanding the academic values. The application is mainly managed by various professional of academic studies and professional management consultant.
Fig 2: Starbucks Israel
(Source: Noort et al. 2016)
McDonald’s (US) market entry into China: A cultural success
McDonald is considered to be as one of the largest fast food company. It tends to operate around thirty-two restaurants which serve more than sixty million consumers on daily basis (McDonald, 2016). On 23 April 1992, McDonald was opened in Beijing that attracted more than 40,000 customers. The opened restaurant was about 28,000 square foot in size. It comes up with equipped register station for handling the flow of cash. The restaurant was located one of the busiest districts of shopping. On daily basis, the restaurant has huge number of customers. There have been joint venture between McDonald and general corporation of Beijing Agriculture, industry and commerce (Zhao, Shen and Collier, 2014). There has been continuous effort in establishing network with the local farmers, manufacturers and other suppliers of the restaurant. McDonald growth strategy is totally based on three elements that are
- Increasing the number of restaurants.
- Maximizing the sales and profit in the present restaurant
- Improving the overall profitability.
Increasing sales and profit in present restaurants can be improved through better operation, reinvestment and lastly development of product. McDonald is very focused on long-term sustainability and increases in the number of stakeholders (Noort et al. 2016). The stakeholders comprise of suppliers and customers. Increased international profit can be easily understood through economies of scale which is individual markets. The organization can gain benefits through global infrastructure. McDonald is gaining profit from two major sources that are new and within markets. It can be used for gaining long-term aspect of various markets.
McDonald has developed a unique strategy for globalization (Reader et al. 2015). The organization comes up with mainly four characters for making perfect business strategy like
- Thinking globally but taking every step on local basis.
- The price of goods
- Advertising the adopted strategies.
- Social responsibility
Thinking globally but acting locally: The ultimate goal of McDonald corporation is to focus locally along with local strategy (McDonald, 2016). It mainly checks and supplies all the needed operation of the given local factors. It always tries to focus for fit in the local condition, society and lastly culture. McDonald corporation on certain number of factors in mind taking into business strategy. It focuses on certain number of action for requirement of various business markets. McDonald large number of resources for developing and creating large number of products which is as per the demand and required tradition.
Pricing: It can be stated as the second most important feature for differentiating with the competitors (McDonald, Chen and Mair 2015). The pricing of McDonald corporation is very much reliable and unique in nature. At the time of fixing price McDonald focus on certain number of factors like income, lifestyle and lastly location. Time of fixing products also focus on prime target of the organization along with lower and level of power.
Advertising: It is considered to be another good platform of organization which helps the organization in introducing their product and boasting their product (Lee and Kramer, 2016). Each and every organization comes up with unique and own strategies for promotion. Each and every organization comes up with a unique and own strategy for promotion.
Social responsibility: In the present world of business, society is considered to be one of the vital aspects of society (Liu, Meng and Fellows, 2015). Social responsibilities aim to create positive image in the mind of the various customers. It mainly makes use of various social events, sponsored charity. McDonald organization tends to create huge amount of local opportunity. McDonald provides equal amount of opportunity to the employers (Noort et al. 2016). It mainly provides huge amount of chances for the local employer at the given management position.
Organizational culture at McDonald's
McDonald Organizational culture aims to support positioning goal of firm. In the domain fast food industry, McDonald makes use of organizational culture for attracting customers and qualified employees (Reader et al. 2015). An organization mainly defines habits and values for influencing the behaviors. For ensuring the efficiency in the production and its services, McDonald emphasizes learning. It is a method by which continuous evolution of the organization reflects on the effectiveness of the whole organization (Zhao, Shen and Collier, 2014). It is mainly used for applying the corporate culture for achieving the required level of human resource capabilities. This particular state highlights the need of organizational culture which is a success factor for McDonald. The organization culture focus on human resource development along with efficiency. It focuses growth of business and success in the international market of fast food (Hauff, Richter and Tressin, 2015). The organization culture comes with large number of characteristics like people-centric, individual learning, organizational learning and diversity.
People-Centric: The organizational culture of McDonald focus on prioritizing the employee’s requirement and development. The core value and standard of business impact focus on supporting people (Bachmann, Engelen and Schwens, 2016). It is understandable taking into account the McDonald Business services. It is mainly used for supporting people and the organizational culture which encourages the employee for engaging management. It will ultimately help in improving the methods and procedures.
Individual Learning: The organizational culture of McDonald emphasizes the need for lifelong learning (Beugelsdijk and Welzel, 2018). The particular belief focus on promoting productivity, effectiveness of business and lasting quality. It aims to focus on individual learning as the organization provides option through various university programs. The given efforts mainly focus that McDonald can easily maintain the organizational culture which tends to motivate their employees for continuous learning.
Organizational learning: The organizational culture of McDonald focus on organization learning. The organization makes use of individual learning for developing organizational knowledge which is needed for pushing the business to a new height of required performance (Bitran, 2016). McDonald focuses to make use of this feature that is organization culture through policies and meeting which emphasize knowledge sharing and feedback.
Diversity and Inclusion: The official human resource management policy of McDonald focus on diversity and inclusion for the organization culture (Brewer and Venaik, 2014). The organization understands the importance of diversity and inclusion for optimizing the capabilities of HR. It is mainly used for dealing with the increased divergence in the market. For providing support to diversity and inclusion, the organization culture emphasizes the employees, suppliers, and customers for providing feedback (Buckley et al. 2014). It is engaged in some meaningful activity which is needed for improving the overall business.
Fig 3: Organization Culture of McDonald
(Source: Chan et al. 2016)
Although McDonald is considered to be as one of the fastest growing and strong performing organization (Choi, Im and Hofstede, 2016). It is considered to be immune from the given concern of other business. In the matter of business management, McDonald is focusing on overcoming the hardness of the organization by addressing a number of hardness like
Staff turnover rates: Although the official figure has not been collected, there are recent articles which suggest the turn of McDonald (De Mooij, 2015). McDonald aims to employ a large number of temporary and seasonal workers.
Giving much less effort for training Human resource like Multitasked: McDonald focuses to aim at the functionality of team instead of individual one (Eisend, Evanschitzky, and Gilliland, 2016). The organization does not any kind of highly integrated teamwork instead of that it is unable to deliver its product or services. It is done without unity and cooperation (de Mooij, 2017). Team members need to focus on one area at the shift. If they intend to leave their given post and not even productive. Then other lines of post are not productive in nature. It will not be able to accomplish the job and their production line will tend to suffer.
From the above pages, it can be stated that this report is all about Hofstede model of national culture. An idea has been provided regarding the method of development of this model. A range of criticism with respect to the given model has been discussed in details. Various alternative models like Trompenaars, Hall, World Value Survey and lastly globe research has been discussed in details. In above pages, the failure of Starbucks in Israel has been discussed in brief. After the successful entry of McDonald in China has been discussed in details. The organization culture of McDonald and its cultural impediments has been discussed in brief. Organization culture comes up with many advantages for McDonald for improving the quality of service. It is mainly done through individual learning, organizational learning and people- centricity. Excellence and high quality are not considered to be effective in nature which is covered in corporate culture. McDonald focuses on learning and support for the people of this organizational culture. There is not much focus on excellence in individual performance. So, there can be possible improvement for McDonald for emphasizing excellence and high quality of input for organizational culture.
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