National Business Cultures - Research Paper Example

Are National Business Cultures Affected by Changing Environments LEARNING OUTCOMES I. Introduction - Rationale for choice of countries. HOFSTEDE ANALYSIS: TAIWAN According to Geert Hofstede1, Taiwan culture described as having a philosophical similarity to the Buddhist and Shinto societies. These countries have the closest correlation with Hofstede's Uncertainty Avoidance Index (UAI). This is the same correlation that the most of the Catholic countries have displayed. Appearance. The formerly conservatively dressed men have changed rapidly to the modern open style. This is what the younger generation are doing in protest or rebellion to the old style of living. The Women dress conservatively with a simple skirt and blouse. During causal activities the women prefer to display modest dress. The appearances of the youth are both neat and clean. The youth find it unethical to touch another person's shoulders. Winking is taboo in any situation. It is also unethical to touch a child's head because children are held in high respect in Taiwan. Another characteristic of the Taiwan culture is that the feet should not be used for pointing because it is classified as dirty. The Taiwanese are hardworking people. Hofstede Analysis will help the foreign based national in his or her decision making processes because different cultures react differently in the same situation. HOFSTEDE- Finland, According to Hofstede, the Hofstede scores of Finland shows that It is low Powered, above average uncertainty avoidance, average masculinity and very low long term orientation2. Power distance measures how well the low power cultures like Finland feel and act when they fact high power cultures. The Hofstede analysis shows that the low power cultures easily accept the high powered cultures. The less powerful members of a culture can easily accept the unequal distribution of power. The Arabic-speaking nations, Latin America, Russia, and nearly all of Asia (especially India and China) are high in power distance. Most of Europe, Canada, Australia and Israel are low in power distance. Japan and Mediterranean-Europe fall in the middle range. In a culture of high power distance, it's okay for a department head to display his authority because most superiors rarely give their subordinates important work And if anything goes wrong, the subordinates are usually blamed for not doing their proper job/role by the supervisors. In this culture, managers rarely interact or socialize with workers and the school teachers are treated with respect. The local politicians feel comfortable with totalitarianism. In this society, class distinction is emphasized. class distinctions are emphasized. Low power distance culture. This unique culture is described as the supervisors expected to treat employees respectfully. This culture is characterized by a few selected subordinates doing important work. There is a strong opportunity to get promoted quickly. However, if something ever unintentionally goes wrong, the department head is usually blamed for having unrealistic expectations or being too strict managers socialize and interact with workers. Also, the teachers are simply regarded as employees and parents are identified as merely people. Uncertainty avoidance. Uncertainty avoidance measures a nation's preference for strict laws and regulations over ambiguity and risk. According the Hofstede's research, Greece is the most risk-averse culture, and Singapore the least. The Protestant, Buddhist, and Hindu cultures rank relatively low; Catholic and Islamic countries tend to score high in uncertainty avoidance. Likewise, high uncertainty avoidance cultures tend to have a less efficient infrastructure than low uncertainty avoidance cultures. Hofstede Analysis will again help the foreign based national in decision making processes because different cultures react differently in the same situation. BODY II. Recent environmental influences (important PEST factors) in the 2 countries. TAIWAN Political. A. According to Gethin Chamberlain (2006) he stated that "China has spelled out the political price of its massive new investment in Africa, reminding the leaders of 48 of the continent's nations gathered in Beijing of the importance it places on reunification with Taiwan. China has pledged $5 billion (2.8 billion) in loans and credits and a doubling in aid by 2009. President Hu Jintao yesterday called for trade between the two blocs to reach $100 billion by 2010." This shows that China has not given up hope that China will be reunited where its "province" Taiwan defiantly does not agree. President Hu Jintao stated in the China- Africa summit it affirms support for Africa's liberation and pursuance of development for Africa's full support to restore the lawful rights of the People's Republic of China in the United Nations. B. According to Guy Wittich (2006) he stated that Chief Executive Officer Guy Wittich of the European Chamber of Commerce Taipei (ECCT) " explained that he hopes Taiwan will march in a more liberal direction after the Dec. 9 mayoral elections in Taipei and Kaohsiung. Wittich made the remarks at a monthly luncheon meeting held yesterday. He said although the mayoral races in Taipei and Kaohsiung are just local elections and won't much affect the issues which ECCT is concerned about, such as the policies governing cross-strait trade, investment and transportation, the results of the elections will affect the future development direction for Taiwan." Wittich is hoping the government here will step up its liberalization pace in various aspects after the elections. Wittich shared his opinions at a meeting, where the ECCT invited two prominent political analysts to share with members with their insights into Taiwan's political scene and the impact of mayoral election results in Taipei and Kaohsiung. C. Daily Telegraph. (UK). Margaret Macmillan, stated that "The United States' rapprochement with China in the 1970s was one of the turning points in the history of the last century. For more than 20 years, from the Communist victory in China in 1949, there were no relations between Beijing and Washington. At the United Nations Taiwan held the China seat. As the Americans saw it, dtente with the Soviet Union was possible, but China was beyond the pale, irredeemably hostile. American prejudices were confirmed by the experience of the Korean War and, as the US became bogged down in Vietnam, by Chinese aid to the North Vietnamese. The prospect of China acquiring nuclear weapons was seen in Washington as particularly alarming and in the 1960s President Kennedy went so far as to consider the possibility of a joint strike with the Soviet Union on Chinese nuclear installations." During 1968, Richard Nixon and Henry Kissinger were skillful in handling foreign affairs especially the bay of pigs or missile crisis in Cuba. Nixon acknowledged the necessity to have diplomatic relations with China. Both talked like realists. They talked, and thought, in terms of national interests and equal balance of power. Economic. According to Peter Pallot, (2006) he stated that "Westerners who suffer an accident or illness in a Third World country can find themselves at the mercy not only of poor medical services - but bureaucracy as well. Medical assistance companies contracted to expat insurers are expected to do more than advise a patient as to the nearest hospital with the appropriate staff and equipment, or even as to which individual surgeon should be used." The medical staff here have to know how to get the patients to the doctor safety and fast. China and Taiwan have not been seeing each other eye to eye for over fifty years because China feels that Taiwan is one of its provinces. Social. Daily Telegrapy (UK). Liz Gill stated (2006) "Taiwan's economic growth has resulted in some unprepossessing urban landscapes but look beyond these, and you will find an island of beautiful coastlines and countryside, steeped in ancient traditions. Liz Gill reports." In Taiwan's ghost festival, it is believed by some Chinese residents that it is at this time that the people in hell are allowed to visit the living and take part in the festival. The houses are pushed to the beach line and burned. A 4.5 billion dollar tunnel expansion burrows eight miles through the mountains in a magical feat of modern engineering. It also has the world's fastest elevator to the top of the world's highest building. The contrast between ancient and modern can be seen throughout the whole of the Far East. Techonological. The Sun, Dec 8, 2006, Mr. Abrams (2006) "stated that the world's fastest lift today opened its doors for business in the world's tallest building. Made by Toshiba, it can travel at an incredible 37mph in the Taipei 101 building in Taipei, Taiwan. The hi-tech lift has a special control system to stop passengers' ears from popping as the plummet to the earth or soar to the top of the building." This Taipei, Taiwan towering giant elbows the neighboring Malaysia Petronas Twin Towers in the busy district of Kuala Lumpur. It is one of the tallest buildings in the world. Technology has doubled the speed of business that travels from one place to another. FINLAND Political. A. Mike Sullivan stated (2006) Dec 8, 2006 that " DINERS at a sushi bar where a former Russian spy was possibly poisoned have been offered medical help. Urine tests will be offered to clients at the Itsu restaurant in Piccadilly, central London, who fear they came into contact with ex-Russian spy Alexander Litvinenko." The Health Protection Agency investigated who had gone to the Pine Bar restaurant in the Millenium Hotel, Grosvenor Square because Mr Litvinenko believes this is where he got the poison on November 1. Litvinenko blames Russian president Vladimir Putin for having a major part in the poisoning incident. Litvinenko was a former KGB colonel. He died in a London hospital from a radiation mist secretly sprayed on to his food. Russian President Vladimir Putin, in a meeting with European Union Representatives in Helsinki, Finland, denied such accusations. B. BBC news (2006) dated Dec 6, 2006 stated that "Around two-thirds of Finland is covered in forest and about a tenth by water. In the far north the White Nights, during which the sun does not set, last for around 10 weeks of the summer. In winter the same area goes through nearly eight weeks when the sun never rises above the horizon. This wild northern landscape inspired Finland's greatest composer Jean Sibelius. His work came to symbolise the country's struggle for independence in the early 20th century after centuries under the domination of its neighbours." This shows that for more than a hundred years the Swedish rule was replaced by Russian might. The country gained its independence in 1917. The dissolution of the USSR also gave the Finnish people the chance to get out of the shadows of the cold war with its next door neighbor Russia. Finland was forced to give up ten percent of its land area to the giant Russian army. Finland became a member of the European Union in 1995 and used the European dollar as its medium of exchange. Economic. According to BBC News, Nov 30, 2006 it is stated that "European growth figures are showing a mixed but steady picture Eurozone economic growth slowed in the three months to the end of September, according to revised official figures. Third-quarter growth fell to 0.5% from 0.9% in the previous three months, said Eurostat. The annual rate was unchanged at 2.7%, 0.1% higher than forecast." The financial analysts believe that the growth rate, though slowing, was still strong enough to prompt an interest rate increase. Meanwhile, the European Commission raised growth targets, while higher rate of inflation was also forecasted in November. The commission forecasted that the European Union economy would grow by a faster-than-expected rate of between 0.3% and 0.7% in the three months to the end of December. It is also estimated that inflation will be slow in the coming year 2007. Social. A. Jonny Dymond (2006) stated that "A Finn has translated Elvis Presley songs and sings them in Latin. Finland is one of the quieter members of the EU. But now its turn at the EU presidency has thrust it into the spotlight - and exposed an unusual passion." Dymond further stated that the Finn is likened to a boy who has cheese straws stuck to his nose doing something unique which is biding his time trying to master Latin. Latin is sometimes called the eternal language. B. Martin Etonge (2006)stated that "Cameroon are in Asia to prepare for the Beijing 2008 qualifiers Cameroon's Olympic team held Finland to a goalless draw in their second match in the ongoing BV Cup in Vietnam on Friday. Strikers Christian Bekamenga, who scored in the opening 2-0 defeat of Indonesia, and Enama Okouda kept the Finnish defence busy but without finding the net." Soccer is such a big sport in Finland. This is because Finland's open space is full of snow. But again, the famous soccer player, Pele, is an African American. In Ho Chi Minh City in Vietname, Finland adopted a slow pace which helped them at the end of the match. But the Finnish striker Vuorinen Hermanni had failed to take advantage of the opportunities that came his way in the second half. Technology. BBS News stated in October 24, 2006 that "It is hoped that text message tickets will reduce station queues Train passengers will soon be able to buy tickets on their mobile phone. Chiltern Railways, which operates from London through Buckinghamshire and Oxfordshire to the West Midlands, plans to deliver tickets to mobile phones." This new technology that sends bar code to a cell phone through message texting is now a reality. People can buy tickets using this technology in order to increase the work job. Passengers can now buy tickets by using cell phones and the long lines to buy tickets will be eliminated. III. Critical evaluation - Describe, compare and contrast the chosen countries' national business cultures according to theoretical opinion of taught theorists and supplemented by other theorists. Use the evidence in the portfolio of newspaper reports to support or challenge this theory according to your interpretation of the events. Taiwan. Hofstede stated that Taiwan is almost identical to the model for China. Long-term Orientation is the highest-ranking factor. As with other Asian countries, relationships are a primary part of the culture. Individualism is the lowest ranking. Like the Chinese, the Taiwanese are a collectivist society" This is because of the philosophical similarity of the Buddhist and Shinto societies., These countries have the closest correlation with Hofstede's Uncertainty Avoidance Index (UAI). This is the same correlation that the most of the Catholic countries have displayed. Taiwan has changed its culture by adopting some of the current cultures like the clothes that they wear. Finland. According to Lewis, R D (1992), Finland has a Culture of a Lone Wolf - Consequences in International Business, (Helsinki : Richard Lewis Publications)). Finland has a monochromic culture which is characterized by focused attention and concentrates on accomplishing one thing at a time. They also work within the time allotted. According to Hofstede, the Hofstede scores of Finland shows that It is low Powered, above average uncertainty avoidance, average masculinity and very low long term orientation3. Power distance measures how well the low power cultures like Finland feel and act when they fact high power cultures. Finland has adopted to the current cultures of today in order to keep up with the competitors and survive. IV. Conclusion - Identify the degree of change in recent years in the national business cultures of the chosen countries and the reasons for the change (if any). Identify the critical factors for successful and effective international management and potential problems related to doing business in or with the chosen countries. Taiwan. The citizens of Taiwan have adopted the modern cultures in terms of dress and behaviour. They have to do so in order to adapt to the ever changing environment. In return, the people of Taiwanese survive the competition until the next century. Finland. The citizens of Finland have accepted the modern cultures in terms of dress, thinking and behaviour. They have to do so in order to adapt to the ever changing environment. In return, the people of Taiwanese survive the competition until the next century. Low power distance culture. The managers should now understand the different and unique cultures and traditions of people from different places around the world. The supervisor must treat employees respectfully. This culture is characterized by a few selected subordinates doing important work. There are cultures where the employees prefer constant increase in salary. The people like to work hard if there is a strong opportunity to get promoted quickly. But, if something unintentionally may wrong, the department head is usually blamed for having unrealistic expectations or being too strict managers socialize and interact with workers. Also, it is truth to the story that the teachers are simply regarded as employees and parents are identified as merely people. But the teachers must strive to teach their students well because one of his or her students may be the next president of the United States. Uncertainty avoidance. Some countries prefer uncertainty avoidance measures. Some Nation prefer to obey harsh laws. For strict laws and regulations over ambiguity and risk. According the Hofstede's research, The managers must study the culture of Greece in order to get the feel of the situation;is the most risk-averse culture, and Singapore the least. Some religious cultures including the Protestant, Buddhist, and Hindu cultures rank relatively low; Catholic and Islamic countries often have high scores in uncertainty avoidance. Likewise, high uncertainty avoidance cultures tend to have a less efficient infrastructure than low uncertainty avoidance cultures. Hofstede Analysis will again help the foreign based national in decision making processes because different cultures react differently in the same situation. V. Recommendations- To managers of your own country recommend how they should approach cross-border activity in the chosen countries having taken into consideration your critical evaluation and conclusions. In the recommendations section we have to make our own recommendation not from a textbox. Taiwan. The managers( American) must study the different cultures of the foreign country (Taiwan) that they have to manage. A slight unintentional error on the part of the foreign based manager could spell disaster in terms of unwilling workers and lazy employees. The managers must incorporate the Hofstede and the PEST analysis for tomorrow. Finland. The managers must also study the different cultures of the foreign country that they have to manage. A slight unintentional error on the part of the foreign based manager could spell disaster in terms of unwilling workers and lazy employees. The managers must incorporate the Hofstede and the PEST analysis for tomorrow. Bibliography Chamberlain, G., China puts a continent in hock to its ambition to reclaim Taiwan, The Sunday Telegraph, Dec 8, 2006 Wittch, G., hopes , Hopes Taiwan will march in a more liberal direction, The China Post staff, December 8, 2006. Macmillan, M., Sir Percy Cradock reviews Seize the Hour: When Nixon Met Mao Daily Telegraph,(UK) Nov 12, 2006. Pallot, P., Assistance firm makes history with Taiwan airlifts, Daily Telegraph (UK). Gill, L., Ghosts in the machine, Daily Telegraph (UK), October 5, 2006. Abrams, C., World's fastest lift opens, The Sun (UK), Dec 8, 2006 Sullivan, M., Peake, Alex, Deathbed spy accuses Putin Doomed ... the ex-spy days before his death, BBC News, Nov 25, 2006 No author, Country profile, Finland, BBC News, December 6, 2006 Eurozone growth rate slowing down, BBC News UK. Thursday, 30 November 2006 Dymond, J., Finland makes Latin the King, BBC News, UK, Oct 24, 2006. BBC News, Helsinki Etonge, M., Finland hold Cameroon in BV Cup, BBC Sport News, Nov 17, 2006 Train firm to issue phone tickets, BBC News (UK), Oct. 24, 2006 http://www.geert-hofstede.com/geert_hofstede_resources.shtml Deadline: 2006-12-07 00:09 Style: APA Language Style: English UK Grade: 2:1 Pages: 12 Sources: 13 Read More