business values, convergence, core values, crossvergence, divergence, global presence, Hofstede, international business, international management, local presence, multicultural management, national culture, organizational culture, universal symbols, universal values
Ralston (2008, pp.28,29) defines convergence and divergence as opposites tendencies when it comes to values formation and evolution. I do not believe those theories would be as efficient as the crossvergence theory in explaining complex relationships between headquarters and subsidiaries. Convergence and divergence assume extreme positions, in which a given society would or would not be influenced by factors such as technology and that technology itself would reshape values. Let’s compare Ralston’s convergence theory with economics convergence theory or The Catch Up Effect. The catch up growth consists of poor economies growing faster than rich economies and eventually converging with regards to per capita income. However, not every poor country would benefit from it. In order to achieve an income convergence a given country should have the abilities of absorbing new technology, attracting foreign direct investment and participating in global markets. Thus, I strongly believe that more complex variables shape and reshape values; technology might be one factor influencing people and consequently relationships, but surely not the only one. Abramovitiz & David (1994,pp.4)
With regards to crossvergence theory, it considers several important macro and micro predictors of values development. In other words, socio cultural aspects and business ideology would play significant role when it comes to values formation and evolution. Ralston (2008, pp. 35).
The author’s framework is based on many aspects of Hofstede’s cultural analysis model such as individualism versus collectivism dimensions. It is of fundamental importance the analysis of national culture in order to bring about more effective and efficient integration between headquarters and subsidiaries. However, the industry standards, business environment situation and organizational culture must also be carefully taken into account in order not only to have a successful integration process but also minimize risks.
I would consider applying Hofstede’s cultural analysis framework and Oosthuizen’s “The Core Value” framework during headquarter and subsidiary integration process. I find Oosthuizen’s Framework very helpful when it comes to core values and learned values observations and comparisons. For instance, a manager could use those two dimensions in order to identify and compare his/her core and learned values with the core and learned values of the members of the subsidiary where he is conducting business.
According to Oosthuizen (2004, pp.68) core values are universal. Therefore, exercising core and learned values self-awareness could help managers to align more efficiently organizational and individual’s goals. In addition, when marketing a product, Oosthuizen’s Core Value Model helps to effectively establish local and global presence through the incorporation of local and universal symbols, generating multicultural communication empathy. Hofstede’s framework provides important parameters of analysis that can be converted into strategic information inside an organization, facilitating the relationship between headquarters and subsidiaries.
Abramovitiz, M. David, P. (1994) ‘Convergence and deferred catch up: Productivity Leadership and the Waning of American Exceptionalism.’Stanford University [Online] Available at :http://www.merit.unu.edu/publications/rmpdf/1994/rm1994-027.pdf (Accessed: August 17 2013)
Hofstede, G. (2013) The Hofstede Centre [Online] Available at: http://geert-hofstede.com/italy.html (Accessed: 17 August 2013)
Oosthuizen, T. (2004) ‘In marketing across cultures: are you enlightening the world or are you speaking in tongues?’, Design Issues, 20 (2), 61–72, MIT Press Journals [Online]. DOI: 10.1162/074793604871293 (Accessed: 17 August 2013).
Ralston, D.A. (2007) ‘The crossvergence perspective: reflections and projections’, Journal of International Business Studies, 39 (1), pp. 27–40, Palgrave Macmillan [Online]. DOI:10.1057/palgrave.jibs.8400333 (Accessed: 17 August 2013).