Germany: Hofstede Analysis
Germany- Hofstede Analysis
Germany is known for its majestic scenery and terrain. There is incredible chocolate, beer and of course, the unique architecture. All these things may be appealing to a firm, but an expanding company may discover complexities expanding into Germany, because “[w]hen you step into a foreign culture, suddenly things seem different. You don’t know what to do or say.” ( Hofstede’s Cultural Dimensions). “If your organization is planning to conduct business with [Germany], potential success depends upon a good understanding of [German] culture” (Doing Business in Switzerland, 1). This quote is a good advice for entering into any country. Germany is a good candidate for multinational firms to expand into because many similarities of culture to the competitive and strong economy; however, management should understand the culture in order to be successful.
As companies expand, various barriers have to be overcome or understood; culture happens to be one challenge or barrier. Geert Hofsted said, “Culture is more often a source of conflict than of synergy. Cultural differences are a nuisance at best and often a disaster.” Hofstede’s five primary dimensions facilitate an understanding of different cultures and how they compare. The following are Hofstede’s 5 dimensions and their definitions: “(1) Power Distance (PD) refers to the degree of inequality that exists - and is accepted - among people with and without power. (2) Individualism (IDV) refers to the strength of the ties people have to others within the community. (3) Masculinity (MAS) refers to how much a society sticks with, and values, traditional male and female roles. (4) Uncertainty Avoidance Index (UAI) relates to the degree of anxiety society members feel when in uncertain or unknown situations. (5) Long-Term Orientation (LTO) refers to how much society values long-standing - as opposed to short term - traditions and values” (Hofstede’s Cultural Dimensions).
The long-term/ short-term ranking is 22-24 which indicates the Germans “value equality, high creativity, individualism, treating others as they want to be treated, and self- actualiz[e]” (Geert Hofstede). Advice for doing business with the Germans, which is similar to Professor Petit’s advice; expect to live by the same standards and rule you create. When the Germany is compared to the United States there is a difference of 4-5 in the long-term orientation.
Other dimension rankings compared to the United States are very closely related; however, other rankings are exponentially different. The closest related, according to the rankings is the long/short-term orientation. According to individual scores,
Although there are many differences in the cultures of Germany and the United States, they are also very similar in many ways. An interesting analysis is looking at the scores rather than the ranks. I feel the scores give more insight to how closely related or how drastically different the two countries are.
For example, the rankings for individualism have a difference of 14 while the scores have a difference of 24. Therefore, the ranking is useful to show but the score shows exactly how different they are in that area. This is an important area for Americans to be aware of while doing business.
Germany is a great place for multinational companies to expand into, if and only if the German culture is understood by those doing business there. Those that need to have the best understanding are the managers, which will be dealing directly with the Germany. Even if there are managers in the firm which won’t be dealing directly with Germany, it is still a good idea for them to understand the Germans, thereby creating more synergy among all managers and employees.
On mindtools.com it says, “When you step into a foreign culture, suddenly things seem different. You don't know what to do or say. Using Hofstede's Cultural Dimensions...
References: Country Reports: http://www.countryreports.org/people/literacyrate.aspx?countryname=&countryid=91
Doing Business in Switzerland: 2007, http://www.communicaid.com/access/pdf/library/culture/doing-business-in/Doing%20Business%20in%20Switzerland.pdf
Global Road Warrior: http://www.globalroadwarrior.com/ContentInfo.asp?nid=13.04&cid=56&next_nid=13.05&ctry=Germany&parent=Business%20Culture
Hofstede, Geert: Cultural Dimensions, 1967; http://www.geert-hofstede.com/
Hofstede’s Cultural Dimensions: http://www.mindtools.com/pages/article/newLDR_66.htm
Nations, Encyclopedia: http://www.nationsencyclopedia.com/Europe/Germany-ETHNIC-GROUPS.html
Spending: German Spending Below Other Nations: OECD, http://www.dw-world.de/dw/article/0,,3633837,00.html
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