According to the original website www.youtube.com/watch?v=VMwjscSCcf0
where this video is uploaded from, the speaker Valerie Hoeks is presenting on
understanding cultural differences when doing global business. The video main
points specifically focused on the speaker’s personal and business experiences
while being in China. As such, as a European, the speaker was able to show the
listeners differences in doing business in China, Asia versus doing business in
Western countries, particularly in Europe.
The video pointed out three
main cultural points to be made aware when dealing with Chinese and especially
“Guanxi” (??)- the importance of warm,
long lasting relations of mutual trust based on Confucianism, with a thinking
of “Reciprocal Favors”.
Harmony-the video states this is “the preference
of smooth running of a society or group”. This is similar to their Asian
neighbors Japan, having the term “Nihon wa,” which means Japanese Peace and
Harmony in the society.
Face Reputation-according to the video, this
“determines position in the social network” in China, as it relates to one’s
skills, connections, finances and so on. The speaker also further explained
that Face Reputation is so important in China because “making a mistake in
public is one of the most difficult things in life”.
Comparing the cultural differences between
western cultures and China, from the above points relationship and connection
seem to be one of the major differences. For example, in the western hemisphere
when doing business, there is the tendency to focus on content, like in the
case of working out a contract, or when negotiating there is the focus on
“winning the deal”. However, the Chinese would rather initially consider
greatly “Guanxi” (??),
Harmony and Face interaction before finalizing a deal.
There is a simple definition of Global Business by http://www.yourdictionary.com/global-business as “corporate or economic activity
that takes place across different countries”. Based on the
website http://www.global-strategy.net/what-is-global-strategy/, in order for a
company to be successful in global business, it has to pursue a global strategy
“that covers three areas:
global, multinational and international strategies”. The website clearly defines these three areas
and their significance to global strategy as follows:
the organization’s objectives relate primarily to the home market.
However, we have some objectives with regard to overseas activity and
therefore need an international strategy. Importantly, the competitive
advantage – important in strategy development – is developed mainly for
the home market.Multinational
the organization is involved in a number of markets beyond its home country.
But it needs distinctive strategies for each of these markets because
customer demand and, perhaps competition, are different in each country.
Importantly, competitive advantage is determined separately for each
the organization treats the world as largely one market and one source of
supply with little local variation. Importantly, competitive advantage is
developed largely on a global basis”.
of these three areas include, McDonalds having an international strategy of
seeking to gain competitive advantage in entering the Japanese market by going
up against the Japanese Moss Burger company, or Pepsi having a multinational
strategy trying to enter the Jamaican market by creating distinctive Caribbean
tastes for the islanders, or Apple having a global strategy where their IPhones
are enjoying a global competitive advantage with little or no local market
Hofstede on Cultural Dimensions and
Awareness while pursuing a Global business
designed a model based on his theory of cultural dimensions cross borders
business and communication. The website, https://www.cleverism.com/understanding-cultures-people-hofstede-dimensions/
explains, “The dimensions collectively portray the impact of the culture
ingrained in society on the values of the members of that society. They also
describe the relationship between these values and behavior, with the help of a
structure based on factor analysis”. Here is a summary of the cultural dimensions presented by
This dimension explains the extent to which members who are less powerful
in a society accept and also expect that the distribution of power takes
It is a dimension that describes the extent to which people in society are
not at ease with ambiguity and uncertainty.Individualism
The focus of this dimension is on the question regarding whether people have
a preference for being left alone to look after themselves or want to
remain in a closely knitted network.Masculinity
Masculinity implies a society’s preference for assertiveness, heroism,
achievement and material reward for attaining success. On the contrary,
femininity represents a preference for modesty, cooperation, quality of
life and caring for the weak.Long-Term
vs. Short-Term Orientation: Long-term orientation describes the inclination of a
society toward searching for virtue. Short-term orientation pertains to
those societies that are strongly inclined toward the establishment of the
This revolves around the degree to which societies can exercise control
over their impulses and desires”.
Knowledge and understanding
of these cultural dimensions for a global business is of practical importance
for the senior management, investors, staff, and other stakeholders of the
prospective international enterprise. Using the information of these cultural
dimensions helps to facilitate a smooth transition for everyone involved as it
moves into different markets and cultures.
In conclusion, as the presenter shows
examples of the importance of understanding the differences between eastern and
western cultural background in doing international business, it is the hope
that all who desire to engage in cross cultural business activities, would use
this video as a warning so as not fail due to cultural unawareness. ?In
addition, if one learns to listen to and observe, before, during and after, the
society in which we endeavor to do global business, then the challenges which
accompanies such dealings can be reduced, and greater success for the global
enterprise can be achieved. From this video and background research of Hofstede
Theory of Cultural Awareness, it is evident that cultural differences do impact
global businesses. If these global businesses can make use of Hofstede’s
cultural dimensions studies, then matters surrounding international
communication, international marketing, international management and
international negotiation can be solved.