Hofstede’s theory is strong to some extent, because it explores main cultural aspects of organisations and people, especially those who are involved in contemporary businesses. Hofstede’s theory has provided in-depth analysis on four dimensions, which include power distance, individualism, masculinity, uncertainty avoidance, and long term orientation (Hofstede 2001, p.59).
However, the theory has analysed power distance in a different dimension, especially in Saudi Arabia and Spain. In Saudi Arabia, there is large power distance due to the nature of the kingdom. The monarchy is in power, and citizens have no strong political voice according to cultural and traditional peculiarities. All the powers belong to both the queen and the king, who decides the governing rules of the kingdom (Hofstede 2005, p. 76). This culture had spread up to the places of work, where the Saudi people expect the manager or the boss to make all the respective decisions while they participate only in the implementation process.
Moreover, the theory has given wide analysis on the concept of masculinity. It is a masculine culture; hence, there is a strict adherence to the gender roles where men are dominant. This means that performance, achievements, and success are important in this society. In addition, both men and women have got various family roles to perform. For example, Saudi people have got high percent of uncertainty avoidance (68%), especially if the unknown can be avoided (Nina 2003, p. 37). This implies that employees in the company are always resistant to any changes in the procedural matters. The Saudi people in Contemporary business organisations work better under many rules, which guide their operations, and due to this, employers usually put many rules in order to actualize the expected work output (Schneider & Louis 2003, p. 124).
Even though the theory analysed the concept of long term orientation, it was not a detailed theoretical research, since only limited information could be gathered. For example, some countries, such as Saudi Arabia, were reported to a have strong respect for the elders, but they lay more emphasis on long term goals than short term goals. The theory failed to emphasise that age is valuable, and the elders must be shown respect at all times. When someone is told to do anything by an older person, the task must be just done effectively.
Critical analysis on the role of Hofstede’s framework used is that, through this evaluation, the national cultural analysis is effectively undertaken, and this ensures that possibilities of cultural integration are assessed. In uncertainty avoidance, it considers the tolerance by the society and general non acceptance of any managerial changes. This helps in the indication of how best a given culture can be used to obtain the required or designed projects. Uncertainties will always try to minimize any possibility of that situation through strict laws and security measures on both philosophical and religious levels (Christopher 2002, p. 63). Therefore, this enables the business management to introduce changes gradually until the full implementation is achieved. The rules and policies that guide business operations should be drafted in advance, and the management should set a target to be met by both parties.
In the long term perspective, because contemporary business organisations and counties emphasise on social order, the cultural take is that instructions given by the elderly are more likely to be followed than ones given by the young. This recognises the fact that in any business activity, appointments on the managerial positions should be intentionally made in favour of the old people (Harvey 1997, p.138). In this case, efficient business activity will be achieved automatically. Some of the characteristics of this dimension include persistence, thrift, relationships ordered based on the status, and sense of shame of the people. This shows that persistency in the cultural custom is reflected through the analysis of the whole system in order to achieve the best business outcome. The sense of shame comes as a result of disrespecting the elderly as the cultural customary practice require that these elders must be given maximum respect and following their orders effectively.
Moreover, “Masculinity versus femininity” is the distribution of gender roles to both sides, and this is culturally brought into Contemporary business organisations. This is one of the greatest fundamental issues in any given society where a range of solutions is found. Previous studies have shown that values of women are lower than men’s values. In Contemporary business organisations, masculinity was favoured more than femininity. Masculinity was rated at 52 %, and this shows that men were the dominant group between the sexes (McSweeney 2002, p. 92). The societal achievements, performances, and success are very crucial issues that play a role in such considerations. Even in the business environment, men are considered more aggressive than women, and this is a common idea in most cultures. Self-centeredness, strength, and power are some more validation measurements in most cultures on the gender roles.
Individualism and collectivism measure the levels in which individuals are integrated in a given societal group. The fact that contemporary business organisations’ workers share responsibilities and their individualism measure is about 38 %, shows that they have the collectivism culture (Rourke & Tuleta 2008, p. 65). Their responsibilities and belonging are based on group influence but not individual perspective. The basic culture that the Hofstede’s framework is reflecting shows that people regard clans and families as their fundamental roots that they must always respect (David 2004, p.73). In contemporary business organisations, this measurement should be applied accurately, because these people value culture and collectivism with higher responsibility. Hofstede’s scale is a good reflection of cultural collective grouping that must be enhanced by business organisations (Gerhart & Fang 2005, p.976).
Hofstede’s framework on the power distance index is measuring an extent to which less powerful organization members and family institutions accept and expect how unequally the power is distributed. The inequality index is obtained where we have more compared to less. The inequality level is mostly endorsed by leaders and its followers. This is the case in contemporary business organisations or countries’ culture where the society favours this imbalance due to the assumption of powers by leaders (David 2008, p. 98). Leaders and common people only believe that there must be some gap between them. In this regard, the inequality index has risen up to around 80%, because of the gap (Ailon 2008, p. 102).
The Usefulness of Theories of National Cultural Difference, Such as that of Hofstede, to Contemporary Business Organisations
These theories are necessary for business organisations since they facilitate management. Managerial aspects of businesses are based on policy issues and structural reforms, which ensure that contemporary business organisations perform effectively. For example, the management strategy often involves creating a brand name for the business and new reforms enable good business environment aiming at obtaining profit. Management style has seen various companies organized in business groups that boost their performance (Hofstede & Gert 2005, p.38). There are also certain marketing strategies that ensure the proper sales are made in the contemporary business organisations.
The strategies ensure sustainable business relationship and are achieved through several procedures. Firstly, the market is reviewed constantly to ensure product adaptation and any change. Secondly, there is a regular supply of products with regulated prices that enhances business performance by elimination of supply fluctuation. Thirdly, and lastly, the products to be exported are branded properly and labelled according to different cultural styles (languages).
Moreover, the theories of national cultural differences are important in conducting business between two or more countries, because they facilitate environmental analysis. For example, hierarchy and position are crucial for business culture in Spain. For instance, people from Spain would rather operate their businesses with people of equal ranks than with individuals whose business status is low. Employees do not always have strong influencing voice, and the boss is expected to make all the business decisions alone (Clinton 2002, p. 39). This implies for the business investors and managers that it is necessary to evaluate issues before making a specific implementation of any given policy (Ting 2001, p.98). Business marketing, financial, and management strategies should just be conformed to the provisions of the set standards and regulations.
In conclusion, national cultural differences management is based on the societal cultural believes, and this is the basic factor that determines the relations and management of such cultural differences. For example, theories of national cultural differences, such as Hofstede’s framework, can be used in the study of the cultural management in a particular country. It is evident that, based on Hofstede’s theory as one of the cultural analysis tool, the culture of business organisations or countries have certain variations, which are based on power distance, long term orientation, masculinity, uncertainty avoidance, and individualism (Hofstede & Pedersen 2002, p.63).
Understanding ones culture creates a strong connection between the parties involved. In addition, businesses conducted in an environment where there is a cultural understanding are successful most of the times. In this regard, countries and societies have different cultural believes that are used as benchmark in steering organisations’ daily business operations. Finally, it would be the best interest of the people in understanding other cultures for knowledge expansion so that proper decisions were made that can strategically benefit for the success of individuals.