Effects of Technology
Considerable work has been conducted on defining cultural dimensions. Two of the projects were discussed in your textbook. Describe the cultural dimensions identified as a result of the research conducted by GLOBE and Hofstede. Explain how these dimensions can be used to help build a cultural profile
According to Hofstede`s original research work in the area, culture has some effects on the management of business. The works of Hofstede make him the pioneer researcher in cultural affects on business. His early work involved surveys which have been based on the investigation using a large number of employees of prominent companies such as IBM cross-different regions and countries (Hofstede, 2001). In his work, Hofstede revealed and used a set of dimensions, which are measurable using survey instruments. They include power distance, uncertainty avoidance, individualism, masculinity, and long-term orientation.
The Globe is one of the largest studies conducted in the 1990’s. This study involved 127 researchers working in 62 different countries and regions. The aim of this study is to check and prove the findings of Hofstede`s works (Guiso, Sapienza, & Zingales.2005). The sample size was about 17,000 managers in approximately 951 different organizations, in different industries. The study yielded several cultural dimensions, which include performance orientation, future orientation, gender egalitarianism, assertiveness, institutional collectivism, in group collectivism, power distance, humane orientation, and uncertainty avoidance.
Uncertainty avoidance refers to the shocks of society to put up with uncertainty and ambiguity. It is a direct reflection of society’s demands to minimize uncertainty. The general observation proved by this research is that communities that have high uncertainty avoidance tend to be more emotional than those with normal or low levels. The hard task of such communities is to reduce and minimize the occurrence of the unknown and unfavorable circumstances and carefully accommodate changes through a systematic and well-planned approach (Barkema, Bell, & Pennings, 1996, p. 152). To achieve this, the society needs to develop and implement rules and regulations in the planning stages. On the other hand, low uncertainty avoidance societies readily accept and are able to survive comfortably in unexpected and unstructured situations due to changeable environments and circumstances. Such societies and cultures have remarkably few and limited laws and regulations in the planning of their operating processes. Another general observation in these cultures is that people become pragmatic and portray tolerances to change.
Uncertainty avoidance is a key determinant in market transactions between firms. This is in line with the transaction cost theory developed by Williamson. Uncertainty also plays a pivotal role in international business decisions. This dimension directly affects the management of any business, especially the international business (Hofstede, 1984, p. 19). This dimension is expressed in the overall national cultural level, in the levels of prejudice, resistance and dogmatic beliefs, rigidity and lack of intolerance to different opinions, traditionalism supported by superstition, racism, and ethnic favoritism. In the global study uncertainty, avoidance is described as the level at which a collective group seeks orderliness, flow or consistency, structure and framework protocols that will allow and provide for given situations in their daily lives.
The impact of uncertainty avoid on international business is more significant than local business. This is because, the tendency for high societies in this dimension to avoid ambiguity and uncertainty presents itself more strongly in international business transactions than in local trading (Hassel, & Cunningham, 2004)
Power distance refers to the level of expectation by the less powerful members of a given organization or institution that power will be distributed unequally. This translates to the general observation that, cultures accepting low power distance have high expectations of accepting power relations that are decentralized and more of consultative than central or dictatorial (Berry, Guillén, & Zhou, 2010, p. 1). The relationship between people is horizontal regardless of the difference in formal positions in organizations. On the other hand, organizations or groups that have high power distance, the reverse is true and tends to be autocratic and paternalistic. The relationship between these classes is based on the hierarchical level in the grid.
Individualism refers to the level of group integration. It can also be referred as collectiveness. There is a great difference in the impact of individualism or collectivism levels on the overall performance in business and research. Societies that are more individualistic apply more stress on personal and individual achievement and their right than the general population (Minkov, 2007). The choice whether on family issues, business, or affiliation, is the responsibility of the individual. The impact of individual choice, in cultures that function in collectivism, can only be felt through the functions of a member group. These groups are usually lifelong and cohesive such as ethnic groups or large families.
Masculinity is a general distribution of male gender in a larger community. This, on the other hand, affects the distribution of emotional roles attached to these genders. The opposite of masculinity, femininity, is also a determinant factor (Hick, 2003). These genders have created values that are gender-specific and, therefore, influential on the inclination of gender. For example, the masculine culture portrays the following values; competitiveness, assertiveness, materialism, ambition, power among others. On the other hand, feminine cultures focus on the values of relationships including collectivism and quality of life. The difference between these two cultures is what is essential on the impact of dimensions of culture and its effect on business. Masculine culture has fewer differences in gender roles making them more dramatic and less fluid than in feminine cultures that emphasize on caring and modesty.
Long-term orientation is a description of the society’s time horizon. It is sometimes called Confucian dynamism. Societies and cultures that have long-term horizon place more value on the future than short-term oriented cultures. The long-term society’s foster pragmatic values focused towards achievements and rewards such as persistence, saving and capacity adaptation among other positive values (Dichtl, Koeglmayr, & Mueller, 1990). In contrast, short-term oriented cultures have values that are attached to the recent past and the present, such as steadiness, respect for the tradition, preservation of one’s status quo, reciprocation and obedience to social calling and obligation.
The utilization of these values in building cultural profile is dependant of several variables; this is because of the differences in cultures contributed by both environment and nature of the people in the region (Ailon, 2008). In the study, this variable showed significant variation in the indexed responses or scores that can be used to frame the qualities of a given culture. For example, power distance index showed high scores in Latin America, Asian, African and Arab world regions, and low scores in the regions of Anglo and German countries. This statistics shows how these dimensions can pick differences in cultures.
The individualism index depicted a difference based on the level of development and civilization. The well developed groups are separating them from the less developed regions and countries. For example, the Northern America and Europe scored more of being individualistic than collectivistic (Brewer, 2007, p.115). On the other hand, Africa and Latin America showed high scores of collectivistic values, another characteristic that can give a demarcation in the development of cultural profile using cultural dimension values. The value on uncertainty is also characteristic in differentiating cultures. For example, regions such as Latin America, Southern, Eastern Europe, Japan, and Germany indicated high scores for these values, while countries like Nordic and China showed low score. The division in this value is purely on cultural and traditional background which is not influenced by status of the region’s development.
How has globalization affected different three world regions? What are some of the benefits and costs of globalization for different sectors of society (companies, workers, communities)?
Globalization is defined as a process of increasing integration of global economies to allow free transfer of products, finances, ideas, technology, and information. Globalization in Africa has resulted in both benefits and costs. For instance, liberalizing economies has led to development of trade giving consumers and producers a variety of products and raw materials to pick from, which often tend to be cheaper than locally manufactured goods, because big corporations employ advanced technologies to manufacture their products (Kieh 2007).
Globalization has provided countries an opportunity to exploit their comparative advantages; hence, they are able to compete in the international markets, not forgetting that increased competition from foreign products forces local industries to improve the standards of local products in order to remain competitive (House-Soremekun & Falola 2011).
On the other hand, it is argued that globalization has promoted human dignity and rights, because Africa, like other continents, is open to scrutiny making it difficult for governments to impose tyranny in their respective countries. Moreover, the continuous watch on government activities has promoted transparency, democracy, and good governance in several African countries.
According to Mensah (2008), Africa also continues to attract capital inflows in the form of foreign direct investment; thus, increasing the pace of development in the continent as foreign companies increase job opportunities for the local people in tradable and non-tradable goods, facilitates knowledge and technology transfers, as well as through the taxes multinationals pay to the respective governments.
Studies show that majorities of African nations have lost their sovereignty as far as economic and financial aspects are concerned because of globalization. It is argued that World Trade Organization, the World Bank, and the International Monetary Fund impose strategies, policies, and models on African countries that are believed to favor the West rather than improve the lives of the African people.
Studies show that even though globalization promotes democracy and good governance, it is argued that these principles are applied subjectively and selectively by Western countries. This promotes a culture of rewarding cronies; hence, reversing the gains of transparency. In addition, study shows that globalization rarely establishes necessary economic conditions to promote lasting democracy and good governance.
Studies show that Western countries have more benefits from globalization than any other region. In the case of America, studies show that a majority of American companies have shifted most of their manufacturing work to foreign countries to take advantage of cheaper raw materials and labor. There is also an emerging trend of offshoring and outsourcing skilled and unskilled labor.
Globalization has some associated benefits. For instance, it has led to migration across the globe in search of better livelihoods for the working class and casual workers. There is evidence that people continue to migrate to developed nations in search of employment opportunities that will afford them better lives than the opportunities in their home countries (Craig, 2003). Consequently, the host countries benefit through the availability of cheap labor, which attracts more foreign investors, because cheap labor lowers the cost of operations. On the other hand, the migrants get an opportunity to earn a decent livelihood that they so much need.
Lane (2006) found that companies could outsource cheaper labor because of globalization that has led to increased migration in search of employment. Moreover, globalization provides companies with an avenue to purchase raw materials at reduced prices; thus, reducing the operational costs ultimately increasing their profitability. Liberalization of economies has led to the development of offshoring activities whereby skilled and qualified labor is free to move to other countries for better wages. Offshoring provides opportunities for technology and knowledge transfers as people interact in the workplace.
Free economies have contributed to migration across national boundaries, which lead to cultural diversity as people from different cultures interact with each other (Porter, 1998). Studies have shown that cultural diversity promotes innovativeness, creativity, problem-solving skills, among other skills. Companies also benefit from setting up operations abroad, which increases their international presence leading to a wider market for their products. Ultimately, companies enjoy massive profits from selling their products internationally.
There are apparent costs to globalization. For instance, globalization promotes unequal economic liberalization to favor developed countries at the detriment of the poor countries. Research shows that the biggest gainers of globalization are the world’s leading economies and corporations, which are all based on developed nations. For instance, six leading global corporations have combined revenues greater than the total incomes of the globe’s poorest economies (Craig, 2003). Furthermore, the leading 200-world corporation’s sales revenues are about 20 times the combined yearly income of the globe’s 1.3 billion poorest people, because they open up markets in underdeveloped nations for their products.
Lane (2006) found that third world countries continue to experience rising poverty levels, because majorities of the migrants who relocate to developed nations continue to be employed as casual laborers; hence, they have limited capability to improve their living conditions back at home. Moreover, developed nations continue to push debt on third world countries; thus, burdening their economies and ultimately increases poverty levels in these countries as a significant proportion of the export earnings goes into repaying the debt. Studies have shown that globalization has contributed to ethnic tensions in the weak states by undermining the economic and political systems of these states. Consequently, Western nations are witnessing interstate migration that has led to political and fascist movements.
As mentioned earlier, globalization leads to increased migration, which has led to increased child labor as families from third world countries continue to send their children abroad in search of income to sustain their families (Sahoo, 2006). Child labor denies children opportunities to get education, which could offer them an opportunity to improve their lives. Moreover, these children lack access to proper healthcare and education, because they are considered as aliens in the countries of residence.
Skilled employees are able to move from one nation to the other in search of better job opportunities and wages. This has negatively affected some nations, since they are unable to hold to their best workers. It is noted that, when skilled workers arrive in the foreign nations of their choice, they get jobs often displacing other workers. The “new” and skilled workers take the jobs with lower wages as the old workers become displaced and jobless.
Companies are not able to embrace clean technologies rather they tend to use more of non-renewable energy. This has led to pollution and destruction of environmental diversity. Companies have also been able to increase their margins of profit because of free relocation to nations where production costs are lower. Other companies are able to hire illegal, but skilled immigrants who are paid lower wages than the citizens of that nation. In conclusion, the companies are able to pay less thus increasing their profit margins. On the contrary, companies, which lose skilled workers, have to spend more in hiring and training of new ones. Globalization has reduced cultural diversity in the communities where some companies are located. One of the key results of globalization is hegemony, which narrows cultural diversity.