“Internationalisation of operations is critical to a company’s success in today’s competitive environment”
Internationalisation of operations is a huge issue which has faced many companies in today’s competitive business environment. With the increase in communications and ability to reach other countries being cheaper and easier in the 21st century, many companies have chosen to internationalise and expand on the domestic market in order to generate greater profits and become household names internationally. This essay will look at how American born company Wal-Mart Stores, Inc has grown and seen successes and failures in the international environment. It also will look at reasons ...view middle of the document...
Hofstede later came up with a fifth dimension, Short and long term Orientation. Below are these five dimensions explained in greater detail.
Power distance is the acceptance of hierarchy among an organisation or institution. In an organisation the formal role is not critically important as people are treated as equals. The individuals in an organisation accept the fact that they do not need to make decisions that our outside their ‘pay bracket’ or power range. Alternatively, subordinates want the right to ask questions and analyse the way those in power make decisions that affect not only them but the organisation as a whole. Hofstede works on people perceived ideas of power distance rather than the distance of power in a literal sense. In high power distance society individuals and or organisations of less power are deemed and accept the fate of being autocratic. (Hofstede, 2001)
Individualism vs Collectivism defines the amount that a given or certain individual is integrated into a society. In collective societies people are working towards the goal of the ‘greater good’ and tend to follow the patterns set out for them in terms of collectivist molds. In individualist societies people are more in touch with their primal roots fending for themselves and their families and the people and things that matter to them. (Hofstede, 2001)
Uncertainty avoidance is a concept in which people define how comfortable they feel with levels of uncertainty. People often feel that a safety in monotony approach helps them feel more certain and at peace with goings on in their lives. People in cultures with high uncertainty avoidance are often more in touch with their feelings and emotional, they also feel comfortable and secure with laws and regulations. In cultures with more low uncertainty avoidance people tend to be more comfortable with changes, they are comfortable to a degree with the unknown and they are easily malleable to different ideas and situations. (Hofstede, 2001)
Masculinity vs Femininity looks at the distribution of roles between genders. Masculine cultures focus on values like competitiveness, materialism, ambition, assertiveness and power. Feminine cultures on the other hand look at and place more value on quality of life and the building and upkeep of relationships. In masculine cultures, differences in gender roles are seen as less fluid and more dramatic than in feminine cultures where both males and females have the same values emphasising a kind, caring and modest nature. (Hofstede, 2001)
Long term vs Short Term Orientation was originally called “Confucian dynamism”, it describes a cultures ability to see the long term goal or future of the culture. Often issues of reciprocity and building things in advance for the future generations are more relevant for these societies. These societies are willing to take a short term gain in order to maintain prosperous in the long term. (Hofstede, 2001)