Abstract
The international business area has played a major role in opposing countries belonging to different cultural clusters. Countries in different clusters will not conduct business in the same way. Some differences will come about following a number of factors such as laws and rules. This paper majors more on sociocultural aspects. Figures of the cultural aspects differ, depending on the where the country is located, and its cultural beliefs. This paper has looked at two countries, the US and Italy. Figures of the cultural dimensions are shown, similarities and differences are also brought out. There is a brief discussion on how the aspects affect business (Hofstede 2003).
Introduction
Qwest Communications Company is a company based in California, US. It was ranked among the top ten America’s most admired companies in the year2006. A number of attributes were used to rank it. These include innovation, employee talent, use of corporate assets, social responsibility, among other attributes. In the field of international business, competition is mostly among countries from different cultural clusters. Social-cultural factors are used to rank the countries business-wise. The model of Geert Hofstede is used to make the comparisons and make out the similarities between the countries in opposing cultural clusters (Hofstede 2003), (Hofstede, Gert-Jan 2004).
Literature Review
a. Power Distance Index (PDI) - a dimension that checks on the degree of equality or inequality in a country’s society. A low Power Distance Index means that the differences brought about by power and wealth are de-emphasized. In such countries, there is equal opportunity for everybody.
b. Masculinity (MAS) - this one focuses on the traditional masculine role in wealth, achievement, control and power. A high MAS means that the society has a high degree of gender discrimination.
c. Individualism (IDV)-this one checks on the collective and individual achievements, as well as the interpersonal relationships. A high IDV means that there is a lot of individuality in the society, and that relationship ties are loose. A low IDV means that there is more of collective nature and responsibility. In such cultures, the family relationships, extended families are highly valued and emphasized.
d. Uncertainty Avoidance Index (UAI) – this deals with the levels of tolerance for uncertainty and ambiguity in a society. A high UAI means that the society has no room for uncertainty, and instead, there are rules, laws, and regulations.
e. Long Term Orientation (LTO) – checks on how a society is devoted or committed to traditional values or forward thinking values. A low LTO indicates that the society does not commit to long term commitments and traditional society, and is more flexible to change.
Long term orientation- the average ranking for the LTO is 45 and that of the US is recorded at 29. This is low and hence the country is considered to less appreciate its traditional values, but is very flexible to change.
Power distance index- the recorded ranking for the PDI of the US is 40, with the average ranking being 55. This means that there is relative equality among the citizens, despite the power and wealth differences.
Uncertainty avoidance- the UAI of the US is at 46, and the world average is 64. This shows that the country has fewer rules and regulations to control outcomes.
Uncertainty avoidance- the record is at 70. This is a very high ranking and so it means that the country has stringent rules and regulations that help control outcomes.
Methodology
The above data was collected from ready findings of Geert Hoftede.
Results
The results were recorded as being similarities or differences.
Similarities
The IDV and MAS for both countries recorded at very high rankings.
Both countries have low rankings of the PDI.
Differences
The UAI for Italy is very high compared to that of the US.
The US is among the 26 countries in which the LTO was calculated. This was not done in Italy.
Discussion
The four main dimensions that Geert Hofstede uses are used to differentiate different cultures, helping the business people to understand better the intercultural differences in different countries. With the understanding, a company is able to understand what kind of business to set up. This could be in term of products or services offered. The understanding also helps one to know how to handle the business associates involved.
Conclusion
It is advisable to have an understanding of the potential business region, what the society would accept or shun off. However, special attention should be taken since the above model also has its own limitations.
References
Hofstede, G. H. (2003). Culture's consequences: comparing values, behaviors, institutions,
and organizations across nations. California: SAGE.
Hofstede, G. H., Gert-Jan (2004). Cultures and Organizations: Software of the Mind.New
York: McGraw-Hill.
Hofstede Geert H. The Geert Hofstede Cultural Dimensions. Retrieved May 25, 2011.
http://www.geert-hofstede.com.
