Business Across Cultures Essay

8 Section 2…………………………………………………………………………………………. 9 BMW success in China………………………………………………………………………. 9-12 Wal-Mart’s failure in Germany………………………………………………………………13-15 Conclusion………………………………………………………………………………………16 References……………………………………………………………………………………18-20 Introduction People from different countries do things differently depending on the different cultures people in each country believe in. The variations in behavior between people of different countries can be clearly explained in the idea of culture. The concept of culture is very different and different scholars define culture differently. The main focus on Hofstede in his study of culture was work-related values in which he gathered data from IBM workers from 40 nations and then conducted an analysis of data from over 116, 000 employees. At first, Hofstede extracted four dimensions of values with the aim of explaining the differences among cultures. Later on, Hofstede added two other dimensions making the model have a total of six dimensions which are highly used today to explain the impact of culture on values and behaviors in the workplace.

According to the framework by Hofstede, culture is generally compared and also classified on the basis of six different dimensions which are the main factors that affect behavior, social practices, and also organizational practices (Treven, Mulej, and Lynn, 2008). The six dimensions are; Power Distance, Uncertainty Avoidance, Individualism vs. Uncertainty avoidance is concerned with the dimension of pressure in a community in relation to an obscure future. It communicates how much individuals in a specific society feel easy or uneasy with vulnerability and ambiguity based on the shape by their culture. It’s concerned with mainly how people deal with the unknown future (Hofstede, 2011). Individualism vs. Collectivism relates to the combined dimensions of people into essential teams. Long-term vs. short-term orientation is identified with the decision of the endeavors by the general population identifying with the future, the present, and the past.

Every society highly maintains ties with its past while in the meantime dealing with the difficulties in the present and furthermore what's to come. Societies with low scores generally lean toward keeping up time-respected customs and standards and they see the adjustments in the general public with heaps of doubt. On the other hand, societies with a culture of high score encourage changes in the society such as modern education as they believe it’s a way of preparing for the future. Another criticism of the Hofstede model is in relation to cultural homogeneity. The study assumed that the residential populace is a homogenous whole, yet truly, the majority of the nations are gatherings of ethnic units. This prompts the possibility of arbitrariness as the analysis is limited by the character of the individuals being assessed.

What’s more, scholars argue that the study by Hofstede ignored the value of society and the changes in the societies influence (Dorfman and Howell, 1988). Additionally, the study is critiqued based on the argument that countries are not the most proper units of investigation in relation to culture simply because cultures are not really limited by nations. Hall categorized cultures on a high-to-low context scale in relation to communication style. Different countries are categorized under the high-content scale where data is either in the physical setting or disguised in the individual, while others are under the low-context scale where the mass of the data is vested in an unequivocal code (Treven, Mulej, and Lynn, 2008). World Values Survey The Worlds Values Survey is generally a global research network that conducts studies on the trends as well as variations in political, social and cultural values.

Since the year 1981, the study has been carried out in over 100 nations which consist of approximately 90% of the total world population. The survey provides data on socio-cultural as well as political change globally. BMW signed a joint-venture concurrence with Brilliance China in 2003 which enabled BMW to create autos locally. The joint-venture highly contributed to the significant rise of BMW in the Chinese auto market. Actually, BMW sold more than 450,000 cars in 2014, and the number still continues to grow year by year with the sales rising to 560,000 cars in 2017 (Galea-Pace, 2018). b). Cultural challenges and outcomes based on the national dimensions of national culture The national culture in China had great influences on the actions as well as the behaviors of BMW in the China market.

The company developed this strategy to prepare for the challenges of the future and therefore BMW is nor fearful of the unknown (Stark, 2011). Individualism vs. Collectivism. China has an exceedingly collectivist culture where the general population follows up on the interests of a group and not just themselves. This highly influenced the hiring and promotion practices at BMW as well as employee commitment. Even though it posed a challenge for BMW through the “wait and see” strategy, BMW was able to build a strong foundation in the religion which has greatly helped on a long-term basis. The Chinese clientele was mainly about conspicuous consumption and thus BMW had to build brand value in the region which was greatly achieved through brand awareness and reputation activities through advertisements in different channels.

BMW ensures transparency and truth about its advertisements which helped the company build its strong foundation. Indulgence vs. restraint. However, the efforts of Wal-Mart to expand to Germany in the year 1997 was abandoned in 2006, cultural differences and norms being the major reason for the failure. At the time, the market in Germany was oligopoly with stiff competition among organizations with similar low-price strategy as Wal-Mart. Therefore, the low-price strategy of Wal-Mart failed to work in German yielding no competitive advantage for the company. b). Cultural challenges and outcomes based on the national dimensions of national culture Below is an analysis of the reasons for the unsuccessful practices of Wal-Mart in Germany in relation to the dimensions of national culture. Collectivism The people of German work with high levels of Collectivity when it comes to achieving their targets and goals.

However, since Wal-Mart’s environment in German did not support team building due to factors like the fact that the workers were compelled to utilize English as the formal language in the stores leading to communication gap and also the fact that subordinates feedback was completely ignored, led to the failure of Wal-Mart in Germany. This is because it led to de-motivation and consequently increased rates of employee turnover (Hamza and Nizam, 2016). Masculinity vs. Femininity Masculinity is a large determinant of success in both German and the US with a score of 66 and 62 respectively. Restraint. Germany has a low score on indulgence as compared to the United States which means that Germany highly relies on social norms and favors to control their own interests.

Since Wal-Mart was only focused on its outcomes in the short-run, it failed to put into consideration that the Germans favor to control their interests and thus could not be so attracted to adopt the American culture fast. This contributed to the failure of Wal-Mart in Germany (Javid, 2016). c). Hofstede developed six dimensions which are used to explain different behaviors across cultures. However, other models like Hall’s cultural model and the World Values Survey have also been developed with the aim of understanding how cultural differences influence pour behaviors. Based on the case of BMW, the company succeeded in the China market due to its efforts to address its issue to match the Chinese culture and its recognition of the importance of a local partner which made the company enter into a joint venture with Brilliance Automotive Holdings Ltd.

The company also developed a “wait and see” strategy in which it did not rush into the China market and focused on its long-term outcomes. Wal-Mart, on the other hand, failed in the Germany market due to several reasons among them its focus on short-term outcomes which did not work in German, its creepy corporate culture of morning exercises changing the company’s name, and also it's ethics code which was not well accepted in German. P. Howell (1988). "Dimensions of National Culture and Effective Leadership Patterns: Hofstede revisited. " Advances in International Comparative Management 3: 127-150. Galea-Pace, S. G. & Minkov, M.  Cultures and organizations: software of the mind: intercultural cooperation and its importance for survival. Hofstede, G. Dimensionalizing Cultures: The Hofstede Model in Context.