National Culture And Profit Reinvestment - A Comparison Between USA And Canada

Geert Hofstede's 6-D Model

Discuss about the National Culture and Profit Reinvestment.

The set of behaviors, customs, norms, and beliefs that are present in the population of an independent nation is known as the culture of a nation. The interaction of people coming from various backgrounds in the business, world is known as cross culture. In international business cross culture is a vital issue, as the success and the progress of the international trade are depended on the fluent cooperation and communication of employees coming from different cultures and regions. Every country has its own customs and cultures that they follow and prefer that the companies entering the market should also keep in mind the cultural diversity and try not to disobey it (Brewer, 2008).  Therefore, it is necessary for an organization to get an impression of the cultural beliefs of the country, and accordingly plan the setup before entering the market. Today, traders in the United States and Canada are concentrating on “multicultural marketing operation”, that is the marketing efforts are targeted to specific ethnic populations. When concentrating on progressing in setting business in another country it becomes important to know about the other country’s cultural differences. Here in this essay, the comparison between the two leading countries of the business world USA and Canada is discussed in order to explore the topic cross-cultural management (El Ghoul and Zheng, 2016).

A well-known professor Geert Hofstede has led one of the most extensive studies of values of an organizational structure that is influenced by the culture. As per his definition of the culture, it is a mutual programming of the mind differentiating the members of one category or a group of people from others. Based on Professor Geert Hofstede’s extensive study on national culture which says that it is consists of six different dimensions. Independent preferences are represented by the cultural dimensions over one state of affairs to another that differentiate countries from each other. As humanly is unique same goes with a country, its scores on the dimensions are relative (de Mooij and Hofstede, 2010). Here, the comparison between the dimensions of the national culture of Canada and the national culture of United States of America is done. The culture of USA and Canada is explored here through the 6-DModel lens that could give a good overview of the driving factors of the Canadian and American culture. The dimensions of each country are explained and compared here (El Ghoul et al., 2015).

Power Distance Index

Fig 1:- The score of the USA in 6-D Model of Hofstede

Source: - hopeinterculturalcomm.weebly.com                                

Fig 2:- The scores of Canada in 6-D Model of Hofstede

Source: - kevigoeh.files.wordpress.com

Power Distance Index (PDI) which implies on the fact that everybody is unique thus, individuals are not equal in the societies. The length to which country associates of institutions and organizations those who have less power they accept and expect that power which is unequally divided is known as power distance. It is the degree of power to which the other person’s ideas and behavior can be influenced. Canadian culture has a score of 39 in this dimension which marked by interdependence and equality of its inhabitants. This score reflects the short-comings of high- status and class differences in the Canadian society. It also shows that in Canadian companies hierarchy is formed for convenience, managers depend on particular workers and teams for their expertness; leaders are all the time accessible (Figiel, 2011). To consult each other and share information is a common habit for managers and staff members. Communication is a straightforward exchange of information as per the Canadian value. When talking about the USA the score is 40 which just a single point more than Canada which reflects that in the USA also has the inequality of the individuals in the society. Managers, teams, and individual staff members everyone go hand in hand by consulting each other and using a straightforward communication method. The second dimension individualism is the extent of association maintained by a society amongst its members. It is related to the self-image of the people regarding “I” and “We”. In the society of individuals members are expected to take care of themselves and only their own family. Where people associated to a group and take care and take some loyalty in exchange is known as collectivist societies (Fontaine, 2007). The score Canada scored in this dimension is 80 which characterized the Canadian culture as the individualist culture. This reflects the loosely-knit society where members are supposed to look after themselves and their own family. In the same way, in the world of business also employees are supposed to show action and self-reliant. In this world that is based on exchange where hiring, promotion and work verdicts are based on proofs and merits of that one can do or already done. Whereas, when USA’s score is considered then it is more than Canada that is 91. This score shows the most individualist culture in the world. Some examples that prove this point is like the American promise of “justice and liberty for all”, that explain the emphasis of American society and government on the equal rights. Superiors are always accessible, a hierarchy is established, and managers depend on individual workers and teams for their expertise in the American organizations. Information is frequently, shared and consultation is taken by both the managers and employees. This is done with the help of direct informal and participative form of communication. The expectation here is just to look after themselves and their direct families only, and support of authority is not relying too much upon. The United States has a high degree of geographical mobility. American joins the different societies of the world very easily, but they face difficulty in developing a deep friendship. American does not feel shy in approaching someone to obtain information. This is because they are accustomed to interacting and getting into business with someone they even don’t know well enough. As Canadian, the Americans also expect their employees to be self-reliant and display initiative (Hofstede, 2011).

Individualism

Masculinity dimension is about the society that is driven by competition, success, and achievement. This competition starts from school level and continues throughout the life- both in leisure and work pursuits. A high-score in this dimension is called to be masculine and low-score is taken as feminine. Scoring less means the leading values in the society is all about nurturing others and quality of life. The Canada’s score in this dimension is just 52 which make it a moderate masculine society. Canadian aims to achieve high-performance levels in work and play both, the impact of cultural strength is more subtle on success, winning, and achievements when it is compared with the USA. Canadians also prefers to have a work-life balance where they take time out to enjoy with their family. Canadians are hard workers also; they strive to attain high standards in their work along with their personal life. When talking about America the score of masculinity is higher in comparison with Canada, and that is 62. This masculinity is very much visible on the American behavioral patters. It is explained by the combination of the high masculinity drive of American along with the individual drive of Americans in the world. American society’s masculinity can be explained through some points discussed here (Hofstede and Fink, 2007). The behavior of a person in school, play, and work is positioned on the values shared that one should aim to be a winner as it takes all. This is the reason that Americans express and freely talk regarding their achievements and successes. Success is not an important motivation for an American society, but being able to display one’s success is. To show how well a job is done by them, most of the American assessment systems are based on absolute target setting. An American always believe that there is always a way to reach the target they have set. There “can-do” mentality gives the society a lot of dynamism. American have a tendency of live to work which is reciprocated in the form of monetary rewards and higher status (Jackson, 2014).

The dealing of the society with uncertainty of the coming future as to what is going to happen next and should anything need to be done to try to control it let is just happen is the dimension called the Uncertainty avoidance. The different cultures deal in a different way with the anxiety of this uncertainty. The score of uncertainty dimension reflects the length to which the members of the society feel frightful by uncertain and forthcoming situations and have formed beliefs to side-step them. The score of Canada in the third dimension is just 48 that reflect that Canadians accept uncertainty easily. They accept the innovative ideas easily along with the new products, and readiness is found in them to try something new or different. It could be related to the technology, consumer products, or business practices. They are also receptive to opinions and ideas from someone and permit the freedom of expression. Canadians are not oriented by rules, and they express less regarding emotion (Barbour, 2015). When taken into consideration the score of USA then it is below average, and that is just 46. This result in the perceived context that Americans will be impacted more by the uncertainty of future than any other culture. The acceptances of new products and innovative ideas are accepted by the Americans up to a fair degree, whether it is related to business practices, food, or technology. As Canadians, Americans are also tolerant of ideas and opinions coming from anyone and they also does not follow a number of rules and they also express less emotionally than other higher-scorers. This is also true that the incident of 9/11 has developed a lot of fear in the American Society which makes them take efforts to monitor everybody with the help of NSA and other security organizations (Jennifer Henderson and Pauline Wakeham, 2009).

Masculinity

The long-term orientation dimension describes the maintenance of links that the maintenance o the past has to be done by the society itself to deal with the future and present challenges. There two approaches on this dimension one are normative societies that prefer to maintain the honored norms and traditions and do not adapt the new society changes easily. On the other hand, the second society that scores higher score in this dimension is pragmatic society who prefers and encourages efforts and thrifts in latest education to prepare for the upcoming future. Canada’s score in this dimension is just 36 which make them a normative society. Members of these societies have a strong worry with the establishment of the absolute truth (McCaughey, Duxbury and Meisner, 2014). These societies respect traditions and show a relatively less inclination toward saving for the future. Their target is on attaining quick results. The United States of America scores a mere 26 in the fifth dimension that is uncertainty avoidance that makes the American societies normative societies. Analysis of new information regarding its truth is a habit of an American. Therefore the culture doesn’t make American pragmatic, but they are very practical too as reflected in the previous dimensions by their “can do” mentality. The usage of euthanasia, drugs, weapons, and abortion are common in American societies. They know their legal rights too. This shows that Americans has a very clear idea of good and evil. The visitation in churches has increased in America since the beginning of the 20^th century that makes America the only Caucasian country in the world where this happened. Americans level their business performance for a small period with the help of profit and loss statement. Like Canadians, they also like to get quick results of their action (Planet, 2016).

Fig 3: - The increased ratio the Church Visitors in America

Source: - icons.wxug.com

The challenge that societies are facing at present and in the past is the value to which children are mingled. One becomes human due to the socialization. Indulgence is the dimension that can be defined as the height desires and impulses of people are tried to be controlled. This is based on the way they are raised. An effective control of wishes and impulses is known as restraint, and approximately less control on impulses and desires is known as an indulgence. Therefore, cultures can be defined as either indulgent or restrained. The Canadians score a 68 in this dimension which makes them indulgent (Jackson, 2016).  The members of the societies who are classifying the high score in indulgence are generally exhibiting their willingness to feel their desires and impulses. This led them enjoy their life and have fun. These society members’ posses the positive attitude and they tend to be optimistic. A higher degree of importance is given by them to the leisure time, the pleasure of their acts, and the expenditure they made. America on the other hand also scores the same score that 68 in the sixth dimension that is an indulgence. Thus, America is also an indulgent society. They work hard and play harder. The fight against drugs is continuously going on in the states but still the usage of drugs is higher than other wealthy countries. These people also prefer to use their leisure time to the maximum and have fun in their life (Jackson, 2016).

Conclusion

Fig 4:- Canada vs America

Source: - blog.simplyhired.com

The culture of a country is the best way to know about a country. The culture of a country includes the norms, beliefs, taboos, and customs that country follows and prefers to be followed by the people coming to the country. At present the businesses are focusing on the cross cultural management as now the businesses has no limits, it is has spread in the whole world. Before going to the other country for the establishment of the business, one needs to know about the cultural diversity of that country. In this essay, the comparison between the cultures of two countries is discussed through a model given by Geert Hofstede that 6-D Model. This model has taken six different dimensions of both the countries and scored them which later on have been compared in the essay (Usa.gov, 2016).While comparing the six dimensions that is the individualism, power distance, masculinity, long-term orientation, uncertainty avoidance, and indulgence the cultures of the two countries were made clear and also how each dimension reflects the society and culture of the country is also added. After the comparison the gathered conclusion is that the cultural diversity between the two countries are not much. Thus, the cross-cultural management in both the countries will be easier as compared to any other country and its culture (Canada.ca, 2016).

References

Barbour, C. (2015). When Captain America Was an Indian: Heroic Masculinity, National Identity, and Appropriation. J Pop Cult, 48(2), pp.269-284.

Blog.simplyhired.com. (2016). Canada vs USA. [online] Available at: https://blog.simplyhired.com/wp-content/uploads/2014/08/canadavUS.png [Accessed 20 Aug. 2016].

Brewer, P. (2008). Crossâ€Âcultural transfer of knowledge: a special case anomaly. Cross Cultural Management, 15(2), pp.131-143.

de Mooij, M. and Hofstede, G. (2010). The Hofstede model: applications to global branding and advertising strategy and research. Int. J. Adv., 29(1), p.85.

El Ghoul, S. and Zheng, X. (2016). Trade credit provision and national culture. Journal of Corporate Finance.

El Ghoul, S., Guedhami, O., Kwok, C. and Shao, L. (2015). National Culture and Profit Reinvestment: Evidence from Small and Medium-Sized Enterprises. Financial Management, 45(1), pp.37-65.

Figiel, V. (2011). Culture: National, Organizational And Occupational: The Case Of Honda Of America Manufacturing, Inc. Journal of Business & Economics Research (JBER), 1(12).

Fontaine, R. (2007). Crossâ€Âcultural management: six perspectives. Cross Cultural Management, 14(2), pp.125-135.

Hofstede, G. (2011). Dimensionalizing Cultures: The Hofstede Model in Context. Online Readings in Psychology and Culture, 2(1).

Hofstede, G. and Fink, G. (2007). Culture: organisations, personalities and nations. Gerhard Fink interviews Geert Hofstede. EJIM, 1(1/2), p.14.

Hopeinterculturalcomm.weebly.com. (2016). America's 6-D Model. [online] Available at: https://hopeinterculturalcomm.weebly.com/uploads/1/5/2/5/15254988/4285209.png?331 [Accessed 20 Aug. 2016].

Icons.wxug.com. (2016). The ratio of Church Visitors in America. [online] Available at: https://icons.wxug.com/hurricane/2016/daily-high-daily-low-ratio.jpg [Accessed 20 Aug. 2016].

Jackson, T. (2014). Is cross-cultural management studies morally mute? Cross-cultural management and ethics. International Journal of Cross Cultural Management, 14(3), pp.267-269.

Jennifer Henderson, and Pauline Wakeham, (2009). Colonial Reckoning, National Reconciliation?: Aboriginal Peoples and the Culture of Redress in Canada. ESC: English Studies in Canada, 35(1), pp.1-26.

Kevigoeh.files.wordpress.com. (2016). [online] Available at: https://kevigoeh.files.wordpress.com/2015/08/screen-shot-2015-09-03-at-4-22-15-pm.png [Accessed 20 Aug. 2016].

McCaughey, C., Duxbury, N. and Meisner, A. (2014). Measuring cultural value in Canada: From national commissions to a culture satellite account. Cultural Trends, 23(2), pp.109-119.

Sokol, D. (2008). Conclusion: National Identity and Visual Culture in America. J American Culture, 31(1), pp.98-101.

Vecchi, A. and Brennan, L. (2009). Quality management: a crossâ€Âcultural perspective. Cross Cultural Management, 16(2), pp.149-164.

Wood, P. (2014). Neoliberalism and National Culture: State-Building and Legitimacy in Canada and Quebec. Contemporary Sociology: A Journal of Reviews, 43(3), pp.344-345.

Yuan, F. and Zhou, J. (2015). Effects of cultural power distance on group creativity and individual group member creativity. Journal of Organizational Behavior, 36(7), pp.990-1007.

Broughton, C. and Walton, T. (2006). Downsizing Masculinity: Gender, Family, and Fatherhood in Post-Industrial America. Anthropology of Work Review, 27(1), pp.1-12.

Fosshage, J. and Hershberg, S. (2014). Epilogue: Specialness, Grandiosity, Omnipotence, Entitlement, and Indulgence: Changing Theories of Narcissism, Attitudes, and Culture. Psychoanalytic Inquiry, 34(5), pp.513-522.

Rindfleisch, B. (2012). “What it Means to Be a Man”: Contested Masculinity in the Early Republic and Antebellum America”. History Compass, 10(11), pp.852-865.

Smith, B. (2014). Never Take Kinship Personally: Confronting Slavery, Masculinity, and Family in Revolutionary America. Quaker History, 103(1), pp.17-35.

Canada.ca. (2016). Canadian Heritage - Canada.ca. [online] Available at: https://www.canada.ca/en/canadian-heritage/index.html [Accessed 20 Aug. 2016].

Jackson, K. (2016). The Journal of American Culture - Wiley Online Library. [online] Onlinelibrary.wiley.com. Available at: https://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1542-734X [Accessed 20 Aug. 2016].

Planet, L. (2016). USA - Lonely Planet. [online] Lonely Planet. Available at: https://www.lonelyplanet.com/usa [Accessed 20 Aug. 2016].

Usa.gov. (2016). Indian Tribes and Resources for Native Americans | USAGov. [online] Available at: https://www.usa.gov/tribes [Accessed 20 Aug. 2016].