In global business, sometimes it is surprising peoples from a different culture behave different from national culture. Before globalization, it was intended that generally that all humans are internally same but actually they are not. If a manager makes a decision in other culture without considering cultural differences, it could end with bad outputs (Paul, 2008, pp. 155). Therefore, today's mangers have to deal with a diverse workforce.
Discussion
In globalization, where economies are integrated along with technological, social and political arenas between countries, global businesses are developed at a rapid pace (Hamilton, 2008, pp. 10-11). Therefore, culture and transnational business is an important concern for social sciences. Globalization involves mangers to develop strategies that strengthen the transnational operation of business while considering cultural differences. Globalization might cover certain aspects of cultural differences, but there are still huge differences that might affect approaches to management and leadership (Stonehouse et al., 2007, pp. 52-53).
National culture is based on unique shared values, assumptions, behaviour, norms and beliefs (Stonehouse et al., 2007, pp. 52-53). National culture has influence on business management, and this influence comes from the structure of society such as political systems and education system (Pauleen, 2006, pp. 180).
Dr. Greet Hofstede deeply analyzed the effect of culture on workplace. During 1967-1973, working as a psychologist in IBM Hofstede collected data of 100,000 different peoples from 40 different countries. After analyzing results, he developed a model identifying four dimensions for differentiating cultures. Later fifth dimension is also added (Paul, 2008, pp. 155). These five dimensions are:
Power distance
Power distance mainly centres the degree of equality and inequality among people in the society of the country (Paul, 2008, pp. 155). High power distance indicates that power and wealth are evolved within society. While low power describes that society is not much focused on differences between people power and wealth (Paul, 2008, pp. 155). Individualism
Individualism is the society's focus on individual or collective success and interpersonal relationships. A High individual society is more focused on individual success. Low individual society is more focused on collective growth and success (Paul, 2008, pp. 156).
Masculinity
Masculinity refers to society's empowerment of male achievements and importance. If there is high masculinity it refers to male dominance and a high degree of gender differentiation. Low masculinity refers to a minimum level of differentiation in genders (Paul, 2008, pp. 156).
Uncertainty avoidance index
Uncertainty avoidance index refers to the intensity of tolerance for ambiguity and uncertainty. Therefore, high level of uncertainty avoidance refers to high level of tolerance and uncertainty, and low level of uncertainty refers to society's nominal tolerance and uncertainty (Paul, 2008, pp. 156).
Long term orientation
Long term orientation refers to the society's concern on focus of future consideration or their focus on achieving short term goals. Societies with a high level of long term orientation thrive for future success and adopt changes, and on the other hand societies with low long term orientation are more unadventurous and traditional, focus ...