Nowadays, globalisation has turned out to be a popular term. As business becomes more and more international, companies try to expand and do business in foreign countries. In order for them to adapt in the global market they need to gain an insight into the different cultures. Understanding a country's business culture is a vital factor in setting up a successful business and communicating effectively. Cross-cultural awareness is a challenge for every international business person.
A lot of research has been done in the field of cross-cultural understanding and communication. The theories of many academics are and have been applied to business and management in our days.
One of these researchers is Edward Hall. He differentiates one culture from another by the style each one communicates (Schneider & Barsoux, 2003). Some cultures, where the message is explicit, are low-context (Germans, Scandinavian countries). Such cultures are characterized by flexible ingroups and outgroups. On the other hand, in high-context cultures (Japan, Arab countries) the message is unclear and it's difficult to be entered if the person is an outsider.
Another academic known for his research in the field is Geert Hofstede. He developed four cultural dimensions power distance, individualism, uncertainty avoidance and masculinity. Power distance is the emotional distance between superiors and subordinates. It's concerned with a society's level of inequality. Individualism, the opposite of collectivism, is the extent to which an individual belongs to a group. In individualistic countries, such as USA, everybody is responsible for himself. On the contrary, in collectivistic societies, such as Korea, the individual is protected by the group. Uncertainty avoidance deals with how comfortable people feel about unknown situation, their tolerance for ambiguity. Masculinity, the opposite of femininity, is the degree to which there is a differentiation between genders.
Trompenaars is a researcher who has developed cultural model with seven dimensions (Wikipedia). These include universalism vs particularism (what is more important rules or relationships), individualism vs communitarianism (similar to Hofstede's dimension individualism vs collectivism), neutral vs affective (the extent to which we show our feelings), achievement vs ascription (our status is either given to us or we have to prove ourselves to receive it), specific vs diffuse (how far do we get involved), time orientation (refers to time commitments), internal vs external control.
Ronald Inglehart developed a cultural map which illustrates the correlation of values in different cultures (World Values Survey). It is concerned with two dimensions: traditional/secular and survival/self-expression values. The traditional/secular values dimension indicates how religious the societies are. Fig 1. Inglehart Values Map
Sweden and Venezuela are our practical examples showing the extent to which culture can cause differences in doing business in foreign countries.
According to Anders Porter (2006) "knowing the tricks of the trade is key to succeeding in business, and it's fair to say that every country has its very own bag of tricks".
If we dig into Sweden's bag, we can see that it has some areas for consideration before doing business with Swedes. Generally speaking, Sweden has proven itself as a well-developed country and an international business leader. Brands such as Ikea and Volvo are examples of successful and effective business within the country.
Sweden has its own cultural characteristics different from the customs of other countries. That's why we have to examine the way they work before establishing a business there. We don't mean to stereotype the society but to catch the general idea of the key areas which can help avoiding any cultural misunderstanding.
According to Hofstede's...
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