Essay on the Application of Cultural Dimensions Theory in International Marketing Strategies

Introduction

Hofstede’s Cultural Dimensions Theory is a model that explains the differences that exist between cultures throughout various countries basing his model on the cultural changes. The theoretical framework evaluates cultures among different countries and associates each level of the model with certain prescribed cultural foundations.

Hofstede’s Cultural Dimensions Theory

The theory, developed by Dutch management researcher Geert Hofstede in 1980, was the result of a cross-country study on various cultures that develop within a multinational company over several countries. He identified six main levels in which culture can be defined, including: Power Distance Index, Collectivism vs. Individualism, Uncertainty Avoidance Index, Femininity vs. Masculinity, Short-Term vs. Long-term Orientation, and Restraint vs. Indulgence.

In his book Culture’s Consequences, Hofstede describes the Power Distance Index theory based on the hierarchical systems of organizational management framework. In his definition of large power distance index, he explains that a large PDI shows that “subordinates and superiors consider each other as existentially unequal; the hierarchical system is based on this existential inequality…” (Hofstede 2001); while in the same pages, describing small power index as a situation where the subordinates and the superiors consider themselves existentially equal and in hierarchy, as employees playing similar roles (Makambe & Pellissier, 2014, p.94). He further adds that small PDI countries exhibit cultures where employees believe that hierarchies are created for management purposes which are flexible (Ferreira & Claudia, 2014, p.379). Hence, a subordinate today may become superior tomorrow. However, this definition by Hofstede contradicts the following pages within the same chapter where he explains that “less powerful members of institution and organizations within a country expect and accept that power is unequally distributed” (Hofstede 2001). Hence, if a nation’s organization culture already accepts that there is inequality of power and therefore a robust hierarchical system, then a small power distance index for countries has minimal impact on the view of hierarchy and power within the organization.

Hofstede employs a homogenous samples of IBM employees across various countries. In his study, he chooses a sample of employees working within the same company under similar occupations and with similar backgrounds. The employees chosen were sales representatives and service people who had the same educational background and ranked as middle class in the economy index (Makambe & Pellissier, 2014, p.96). However, in his results, Hofstede argues that the results can be extrapolated to explain the organizational culture of any nation in its entirety. This concept developed by Hofstede can be implemented in organizations that employ similar company policies and operational procedures as IBM. However, when the theories are employed to explain national cultures, three major challenges arise.

One, the employee sample chosen was homogenous while nations generally tend to have heterogeneous populations. For instance, the educational requirements for sales people in IBM compared to start-ups and Small-medium enterprises (SMEs) are diverse. Additionally, Hofstede homogenized the sample by selective elimination whereas the population of a country would provide many outliers to distort the results since educational, religious and working backgrounds of the people are highly differentiated (Ferreira & Claudia, 2014, p.380). Two, employees within a nation will have different sets of values. Hofstede’s sample of employees included IBM employees working as sales people with some level of college education. However, empirical studies contradict Hofstede’s theory by showing that organization culture is different in different business settings. For instance, sales people, chefs, nurses and engineers will have different sets of cultures. Hofstede (2010) explains the point by stating that cultures should be compared by nationality because the resulting cultural theories describe the organization cultures of nations. However, by ignoring the subcultures caused by occupational differences and focusing on national congruence, it is still illogical to assume cultures will be similar within a nation where occupation plays a significant role. For example, German doctors and German construction workers have different sets of values based on educational background and economic variations; and this cannot be explained from a study with similar samples. Lastly, the sample is not representative of any national average. IBM is a high-technology and business-related company that employs highly qualified personnel and does not therefore represent the average worker population in a country (Ferreira & Claudia, 2014, p.380). Additionally, Hofstede generalized the cultural dimensional theory to cover all nations without considering economic differences or cultural diversification.

Schwartz’s Theory of Basic Cultural Values

Schwartz presents seven cultural orientations that merge into three main cultural dimensions that are finely tuned and offer an enhanced characterization of cultures. Schwartz developed the theory from an analysis of data collected from 73 countries from which a validation of seven cultural orientations was done and an inter-relational structure was developed. Based on the seven cultural orientations, Schwartz produced 76 national cultures traversing 7 transnational cultural groupings, which are the West European, English-speaking, Latin American, East |European, South Asian, Confucian influenced, African and Middle Eastern groupings. The cultural orientations that were developed are Harmony (unity with nature and world at peace), Embeddedness (social order, obedience and respect for traditions), Hierarchy (Authority and Humility), Affective Autonomy (Pleasure), Intellectual Autonomy (Broad mindedness and curiosity) and Egalitarianism (social justice and equality) (Drogendijk & Slangen, 2006, p.363).

In broad terms, Schwartz covers the whole spectrum of cultural values across all nations by using 56 values thereby explaining inter-country cultural variations. Brett and Okumura (1998) note that Schwartz developmental structure of cultural theories bears greater significance because it covers cultural values, the basis of all cultures (Drogendijk & Slangen, 2006, p. 365). Also, the study utilized secondary school and college teachers who make up a significant population in most countries and represent he average populations in majority of nations. Therefore, in extrapolating the relevance of the data, Schwartz sample provides substantial closeness to the average, although limited empirical evidence exist towards the claim (Drogendijk & Slangen, 2006, p.363). Additionally, Schwartz uses data from the 1990s, which is more recent than the data used by Hofstede.

Trompenaars and Hampden-Turner’s Seven Dimensions of Culture

The ‘Seven Dimensions of Culture’ theory was postulated by Fons Trompenaars and Hampden-Turner in 1997 to explain inter-country cultural differences in business organizations and to highlight the challenges that face international managers in heterogeneous business environments. Trompenaars and Hampden-Turner (1997) undertook a 10-year study that evaluated basic values in employees by providing the respondents with a dilemma and two possible answers. The study used 15,000 managers in 28 countries and collected 500 sample answers per country. The results were used to assess the values held by managers from the specific countries; and the dilemmas were contracted into seven distinguishable national cultures. The seven dimensions of culture identified were: Universalism vs. Pluralism, Individualism vs. Communitarianism, Specific vs. Diffuse, Affectivity vs. Neutrality, Inner Directed vs. Outer Directed, Achieved Status vs. Ascribed Status, and Sequential Time vs. Synchronic Time.

Trompenaars and Hampden-Turner (1997) based their study on the benefits of understanding cultural values from the perspective of national managers; and how to use the knowledge in establishing principles and policies that promote national cultural values within business organizations. The level of detail that the prescribed values explore shows that the authors identified values based on personal opinions of business managers; incorporating the influence of cultural diversities and organizational policies.

However, the Seven Dimensions of Culture fails to incorporate the influence of personal traits and principles on organizational behavior. The study used dilemma questions that prompted for either one of two answers; thereby constraining the respondents to either one of two choices that they may not be entirely willing to choose (Beugelsdijk et al., 2018, p.94). The model describes organizational cultures in detail through combining the concepts of cultural diversity among countries and among regions, and values that are associated with every cultural system. This combination helps to provide a deeper understanding of cultural differences among nations but does not provide any solutions to managers on how to deal with the challenges identified. The authors explained seven dimensional cultures based on values and value systems (Beugelsdijk et al., 2018, p.99). The theory, however, does not provide the basis for choosing the specific seven theories instead of more; and does not explain how exhaustive nature of the list.

Critiquing cultural dimension theories

Hofstede, Schwartz, and Trompenaars and Hampden-Turner focused on studying national cultural theories and values to understand the effects of cultural differences of organizational cultures within countries. The theories used studies drawn from single nations (Hofstede 1980) and cross-country (Schwartz (2006) and Trompenaars and Hamden-Turner (1997)). However, the studies fail to acknowledge the changing organizational structures in the 21^st century. Multinationals and internet/online businesses are playing a major role in influencing cultures across borders. Multinationals employ similar principles and policies across several countries, often incorporating minimal cultural aspects in host countries.

Additionally, online businesses that employ remote workers and video conferencing have limited employee-employee interaction and this has caused cultural diversification to become slow. The resulting effect is mixed cultures within the same organization in a nation, mixed cultures in multinational corporations and exchange of cultures among employees from different cultural backgrounds resulting in the development of new cultures that may not have been defined in any of the theories thus far postulated.

Adaptions to Marketing Strategies

The globalization of business practices and expansion of companies beyond national and regional borders has necessitated the adaption of international marketing strategies that are aimed at consolidating business factors and utilizing cultural differences to ensure growth. Cultural differences in countries has necessitated the creation of different product promotion methods and other marketing strategies that tap into the specific cultural identity of the people. Corporations and multinationals have traditionally used several campaigns that are strategic to regions, countries or continents based on a unique shared common culture which they can use as the entry point for further sale.

Hofstede’s long-term orientation and short term orientation describes the cultural perspectives of people within given geographical boundaries. Young people have less drive to work for corporations and prefer to work within flexible time limits, spaces and workloads. For this reason, Amazon Inc. and Apple Inc. allows its employees, especially in countries where the population of the youth is more than 45%, to work remotely or through shifts. Additionally, their products are advertised as youth-friendly to draw on the cultural aspects of privacy, secrecy, security and freedom. In countries where the youth have a less vibrant culture, such products are promoted as necessities to the family and as products that bring wholesome family entertainment.

Trompenaars and Hampden-Turner’s cultural difference theories on collectivism and individualism has a major impact on marketing strategies employed by Nike Sports shoe company. The company produces several product promotion content that is aimed at tapping different cultural ideologies of people based on their locations (Antunes et al, 2013, p.40). The company advertised its products as a means to individual success in developed countries and low contact cultures to promote a sense of self-accomplishment in their clients (Antunes et al, 2013, p.40). The promotional material shows an NBA player save his team in a basketball game or a celebrity wow fans in his Nike sneakers. Essentially, developed nations like USA, Britain, France and Germany will react positively to such type of marketing strategy. However, in developing nations where communal gatherings are cherished and community achievements are hailed above individual power, Nike promotes its products in a way that encourages people to come together. This is through showcasing a family enjoying a live game wearing Nike shoes or a new family clad in Nike clothes. This theory is also applicable to beverage brands like Coca-Cola and Pepsi that shows a young guy in his room enjoying a drink in developed countries; while showcasing a family enjoying a large bottle of the beverage during family events.

Conclusion

In conclusion, it is accurate to state that cultural distances affect people’s lives and perceptions of food, drinks, clothes, communication and general settings. The theories advanced by Hofstede and Trompenaars and Hampden-Turner show that cultural distance theories are the fabric that should dictate the marketing strategies employed by multinationals. The accurate consideration of cultures and cultural diversities within nations results in the accurate prediction of consumption material and subsequently, preferred products. This helps multinationals tap into cultural uniqueness among people to develop marketing strategies similar to those used by corporates such as Apple and Nike.

Bibliography

Antunes, Isabel, Barandas-Karl, Hortensia, Martins, Francisco V. (2013). The impact of national cultures on international marketing strategy and subsidiary performances of Portuguese SMEs. International Journal of Management, 2(3): pp. 38-45.

Beugelsdijk, Sjoerd, Kostova Tatiana, Kunst, Vincent, Spadafora, Ettore & van Essen, Marc. (2018). Cultural distance and firm internationalization: A meta-analytical review and theoretical implications. Journal of Management, 44(1): pp. 89-130.

Drogendijk, Rian & Slangen, Arjen. (2006). Hofstede, Schwartz, or managerial perceptions? The effects of different cultural distance measures on establishment mode choices by multinational enterprises. International Business Review, 15(1): pp. 361-380.

Ferreira, Manuel P & Frias, Claudia S. (2014). Culture and Hoftsede (1980) in international business research: A bibliometric study in international periodicals of administration. Management Magazine, 21(3): pp. 379-399.

Makambe, Ushe & Pellissier, Rene. (2014). The application of Hofstede’s cultural dimensions at Botho University: A model for workplace harmony in a multi-cultural business environment. Information and Knowledge Management, 3(4): pp. 92-99.