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How Culture of a Company Impact its Business? Hofsted Theory

374 Downloads1 I Published: 02 Dec ,2019

Introduction

Culture of a company provides a specific direction or guide associated people, in what manner they have to behave. It consists five major factors that are- values, symbols, beliefs, rituals and though process, that impact profoundly on business organisation (Touburg, 2016). Present report is based on a article, that defines concept of National cultural dimensions Hofsted Theory. In this regard, critical evaluation is done on this article and further suggestions are also made, to increase its effectiveness.

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Critical evaluation on the suggestions made in article on Hofstede’s cultural dimensions

According to Jindal-Snape and Rienties (2016), it has analysed that there are various organisational factors present in a business, that impact on working procedures, both in negative manner. It includes culture, values of employees and organisation, level of communication and more. Among these internal factors, organisation culture which is completely different from employees on individual basis, is considered as main aspects. It consists of values of business and workers, positive or negative nature, norms and behaviour (The Importance of Hofstede’s Dimensions of Culture,2019). Here, norms are defined as rules and regulations of a company, under which every employee is bounded to work as per requirement. While, behaviour shoes ways how people works and acts in different situation of a company. Therefore, any changes in business activities impact directly on entire working pattern. As per article given by Geert Hofstede, organisational culture can be classified into four dimensions, that impact on business environment. It includes uncertainty avoidance, power distance, individualism/ collectivism and masculinity/ femininity.

Individualist culture is placed as a high value in business, which based on self-interest and individual achievement. US, hereby, is perfect example of this individualistic culture. While in Mexican and Asian countries, organisations adhere to collective principles of culture, that focuses more towards collecive goals and group harmony. Other than this, nations such as Great Britain and Canada, tends to avoid risk therefore, they adopt uncertainty avoidance of culture dimensions (Hallikainen and Laukkanen, 2018). This culture focuses on how employees of a particular group respond towards ambiguity or uncertainty. Present article mainly focuses on Hofstede's framework that influence purchasing behaviour of customers in terms of clothing, smartphone or more. In this regard, discussion is made on difference between organisational and individualistic culture. As organisational culture is based on own values as per mission statement, which mainly focuses on developing relationship with stakeholders. These values are selected by leadership to ensure that everyone understands what business is stands for, that includes ethical behaviour and social responsibility.

Justification of Hofstede’s cultural dimensions theory as per this article

Through this article of Hofstede' theory, importance of culture has been analysed that it plays an important role in running a business successfully. As companies today, has expanded their businesses in many countries that creates diversity at their workplaces. Therefore, it affects organisational culture, values and beliefs both in negative and positive manner (Hassan, Shiu and Parry, 2016). Apart from this, here, difference of culture as per national boundary is also highlighted that assist organisations, in making modification as per different behaviour and demand of customers. For instance, countries like Asia, Canada, US and Britain, all have adhered different-different culture like uncertainty avoidance, power distance, individualism/ collectivism and masculinity/ femininity. Here, score in power distance which shows that associated people of organisations like McDonald, KFC and Subway, prefers effective effective leadership style such as autocracy to lead their team. This would state that culture of a nation influences existing cultural values of a business. Therefore, companies focuses more on bringing diversities to deal with demand of domestic and international customers.

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Furthermore, under this article of Hofstede theory, it has also evaluated that organisational culture which is based on values, norms, and behaviour, have a high degree of specificity and clarity. In order to gain success, company require desirable behaviours in the form of policies and procedures by implementing specific culture at workplace (Helmreich and Merritt, 2017). Along with this, through accelerating change in communication, such as social media and social sharing, also considered as main factor in changing nature of culture. These factors impact on values of both individuals and organization either in negative and positive manner. In addition to this, national culture is also important in marketing for organizations, that helps in understanding different behaviour of customers.

Suggestions

In order to gain cooperation and contribution of workers for attaining success in global market, it is recommended to international organisations, to develop effective culture at workplace. They must analyse that values and norms of business do not harm self-interest of employees. In this regard, to influence workers having different culture, it should be essential for management to adopt effective leadership style. This would help in motivating and encouraging such to adopt organisational culture and give performance accordingly, for achievement of business objectives. Along with this, by fulfilling desires and building effective culture like uncertainty avoidance, companies also enhance productivity of employees on individual level and achieve higher competitive advancement.

Conclusion

From this given article of Hofsted Theory, it has concluded that culture of a company plays an important part in growth and success of a business. It directly impact on working pattern of organisation and guide people how top behave, for achievement of business objectives and goals. Along with this, increasing diversity at workplace consider as main factor that makes dynamically changes in business culture.

References

Books and Journals

  • Hallikainen, H. and Laukkanen, T., 2018. National culture and consumer trust in e-commerce. International Journal of Information Management. 38(1). pp.97-106.
  • Hassan, L. M., Shiu, E. and Parry, S., 2016. Addressing the cross‐country applicability of the theory of planned behaviour (TPB): A structured review of multi‐country TPB studies. Journal of Consumer Behaviour. 15(1). pp.72-86.
  • Helmreich, R. L. and Merritt, A. C., 2017. Culture at work in aviation and medicine: National, organizational and professional influences. Routledge.
  • Jindal-Snape, D. and Rienties, B. eds., 2016. Multi-dimensional transitions of international students to higher education. Routledge.
  • Touburg, G., 2016. National habitus: an antidote to the resilience of Hofstede’s “national culture”?. Journal of Organizational Change Management. 29(1). pp.81-92.
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