Hofstede’s 5 D Model – University of Liverpool

Examining China and the USA through Hofstede’s 5D Model one can find huge discrepancies between the two countries with regards to Power Distance, Individualism and Long-Term Orientation. The US has a low Power Distance score which is very much a manifestation of the American premise of “ liberty and justice for all”. On the other hand, China has a high Power Distance score, which can be explained through the influence of religion and the notion of acceptance believed by the population. The US has a high Individualism score and China has a low individualism score. That means that China, being a collectivist society will have groups that take care of people in exchange for loyalty. This collectivist characteristic besides being explained by the influence of communism, also has the influence of the traditional Chinese agriculture, in which is communal. Also, there is the notion of a fat government in societies with communist or/ and socialists ideologies. Graham and Lam (2003) 

Talking about Long Term Orientation, the US has a low score  and it is seen as a society in which its business people measure their performance on a short term basis. As opposed to, China has a high Long-Term Orientation score, which means that the society has a persevering attitude towards time and difficulties. Negotiating with people from another culture or the same culture requires adjustment and flexibility.

Personally, I would not rush the negotiation in order to accomplish a contract with a Chinese company. Before even starting, I would research about the national culture, in this case China, the organizational culture and the people I would be negotiating with. When already in contact with them, I would try to establish a relationship, exchanging ideas, having small talks, observing the Chinese business’ etiquette and listening to carefully the other party. Maybe one of the most important adjustments I would have to do, is not delegate the continuous negotiation process to the sales or purchase team and if done, I would definitely empower them. As Hupert (2013) highlights American front lines should be given more power when negotiating with Chinese. They should not only try to accomplish a recent signed contract, but also make efforts to establish network growth and relationship growth . One should not incur great mistakes such as taking a negotiation for granted just because the company has a contract signed or taking the risk of arising conflict and mistrust between the enterprise and the counter-parties. The negotiation approach is quite different from what one would do in the US due to all the cultural differences mentioned above and the notion of time. One should have to be more patient when negotiating with a Chinese company, trying to forge a long term relationship. 

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Convergence, Divergence or Crossvergence ? University of Liverpool Forum.

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. 

Adriana Kaye

 

References:

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).

http://search.ebscohost.com.ezproxy.liv.ac.uk/login.aspx?direct=true&db=hlh&AN=13269965&site=ehost-live&scope=site

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).

http://dx.doi.org.ezproxy.liv.ac.uk/10.1057/palgrave.jibs.8400333