Globalization is having a profound impact on numerous firms around the world. These organizations must adjust their strategies and business models in order to effectively promote their products / services to consumers inside specific areas. At the heart of these transformations, is the desire to adjust the way they operate and the atmosphere inside the company. This means that they have to take into account specific cultural factors. (House, 2004)
The Hofstede model found that national and cultural traditions will have a dramatic impact on the way an organization will deal with these challenges and the lasting effects it has on firms. In most cases, they will utilize neutral standards and expectations in conjunction with these variables. However, the problem is that various studies are limited and will take a detailed approach for understanding these factors.
For instance, Bloom (2006) found that there are significant cultural differences between American and EU firms. In general, the EU had reduced amounts of competition and there are more family owned entities. That is passed from one generation to the next. These issues are problematic, as they made it difficult to increase production and innovate. In the study he determined, those which are embracing US traditions, were more capable of evolving with new changes. This is because managers are thinking and reacting differently in contrast with the EU. In the future, these issues can create challenges for everyone in the workplace based upon cultural issues. (Bloom, 2008)
Moreover, there are differences between the various practices and techniques. This study is seeking to comprehend how these issues will contribute to changes in the way businesses operate. For instance, Kaynak (2012) determined that workers in many EU countries want to have more flexibility in their work schedule and will demand greater amounts of compensation beyond monetary benefits. This is different from the US, as most employers will establish a set schedule and demand employees to follow predetermined guidelines.
These areas increase their bottom line results and productivity. This means having strong relations with employees and creating an atmosphere that is helping them to realize specific goals in the process. Those who are doing this, will experience an increase in productivity and innovation. For example, Google applies these practices to attract / retain top talent and adjust with changes inside the marketplace. (Scott, 2008) These concepts are taking their strategy and it is augmenting them with specific cultural factors. Those who are able to do this, will see greater amounts of creativity and are more capable of evolving with transformations inside the industry.
- Bloom, N. (2006). Measuring and Explaining Management Practices. NBER. Retrieved from: http://www.nber.org/papers/w12216.pdf?new_window=1
- Hofstede, G. (1980). Culture’s Consequences: International Differences in Work Related Values. Beverly Hills, CA: Sage.
- House, R. (2004). Culture, Leadership and Organizations. Thousand Oaks, CA: Sage.
- Kaynak, E. (2012). Global Perspectives. New York, NY: Routledge.
- Pipenburg, K. (2011). Critical Analysis of Hofstede Model. Berlin: Verlag.