Influence of National Culture on Business

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Hochschule Regensburg

Fakultät Allgemeinwissenschaften und Mikrosystemtechnik
International Relations and Management

Assignment

The Role of National Cultural Values in Business|

93053 Regensburg

Mentor:Prof. Dr. Nina Fritsch

Place, Date:Regensburg, April 15, 2012

Abstract

This paper analyses the influence of national culture on business. The suggested relationship is examined while taking account of today’s role of globalization. Cultural divergence and convergence are being weighed against each other, since a possible cultural convergence would suggest the origination of a global business culture. To demonstrate the opposite, this paper introduces cultural dimensions that allow to assess the grand impact of cultural values on international business. Thus, the results lend support to the divergence approach in international management research but also conclude that an individual approach under regard of the specific conditions of the business situation is appropriated.

Table Of Contents
AbstractIII
Table Of ContentsIV
1Introduction1
2Globalization And An Evolving Convergence Of Cultures2
2.1Changing Definition Of Globalization2
2.2Globalization As The Driving Force Of Cultural Convergence2
2.3Formation Of A Global Culture4
3Barriers To Cultural Convergence5
3.1Partial Globalization5
3.2Reinforced Nationalism5
4Impact Of Culture On Business6
4.1Emerging Autonomous Business Culture6
4.2National Culture Values Overshadow Effects Of Global Values7
4.3Definition Of Culture And Cultural Values7
4.4Cross-Cultural Comparative Studies8
4.4.1Hofstede’s Five Cultural Dimensions9
4.4.2Results Of Further Cultural Dimensions Studies12
4.5Cultural Impact On Individual Outcomes13
4.6Attribution Errors In Management14
5Conclusion15
6Bibliography16
Eidesstattliche Erklärung18

Introduction

“In the 1950s and 60s, the dominant belief, at least in Europe and the U.S., was that management was something universal. There were principles (…), which existed regardless of national environment”. (Budhwar, Schuler, & Sparrow, 2009).

This belief has become highly debated, as the phenomenon of spreading globalization evolved into a dominant force in today’s economy. The two different approaches of convergence and divergence in the study of international management were established. The convergence approach implies that businessmen and women across the world maintain similar behaviors and values as national culture becomes either homogenized or simply irrelevant due to the process of disembedding of economy from social structures. Business practices seem to dissolve from cultural boundaries and reduce the impact of cultural differences on organizational operations. On the other side, the approach of divergence suggests that despite the increase of economic and social approximation of different nations, management practices across countries remain deeply rooted in national cultural values.

The aim of the present study is to investigate whether or not national cultural values play a part in business. Are differences in national cultural values in business becoming less important as business people across the world share a common set of values, attitudes, norms and behaviors which overrule the diverse backgrounds of the people?

Globalization And An Evolving Convergence Of Cultures
Changing Definition Of Globalization

In the last two decades, “globalization” as an interconnection between overlapping interests of business and society has become one of the most fashionable buzzwords of contemporary social and business debate. The former used term of globalization refers to a “growing economic interdependence among countries, as reflected in the increased cross-border flow of three types of entities: goods and services, capital, and know-how” (Govindarajan & Gupata, 2001, S....
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