Description
You have been selected to open two subsidiaries of organization XYZ. The headquarters of the organization is in the KSA. The organization is dedicated to the production of mobile devices. One of these new subsidiaries will be located in Mexico and the other one will be located in Denmark.
As you can see in the image below, which is from Hofstede’s Cultural Dimension Theory, there are differences and similarities among the countries. Leaders should attempt to understand these differences to create effective organizational strategies. Specifically, these cultural dimensions can help leaders determine business approaches, how to address negotiations, and can aid in creating strong management and leadership styles.
Source: Hofstede Insights. (2021). Country comparison. https://www.hofstede-insights.com/country-comparison/denmark,mexico,saudi-arabia/
In additional to Hofstede’s Cultural Dimension Theory, the GLOBE research has identified six global leadership behaviors that are considered important in different cultures. These leadership behaviors are as follows:
- Charismatic/ Value-Based
- Team-Oriented
- Participative
- Humane-Oriented
- Autonomous
- Self-Protective
Now, thinking about the above information:
- Based on Hofstede’s cultural dimensions, briefly describe the similarities and differences between the dimensions in Denmark, the KSA, and Mexico.
- Analyze how the cultural dimensions of the three countries (i.e., Denmark, the KSA, and Mexico) impact leadership styles, leadership behaviors, and the decision-making process of leaders. What factors most greatly impact leadership qualities?
- Explain which type of leadership behaviors, based on the GLOBE research, should be understood and how these leadership behaviors may impact the different cultures (Mexico and Denmark).
- Explain why it is important for leaders to understand cultural differences before doing business in other countries.
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Explanation & Answer
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Question One
Cultural differences have a great impact on the operation of global organizations.
Hofstede's cultural dimensions theory developed by Geert Hofstede helps explain the effects of
cross cultures in multinational companies (Bukowski & Rudnicki, 2019). Hofstede's cultural
dimension framework is categorized into six dimensions, enabling the understanding of different
cultures on a national level. Hofstede's cultural dimension approach's six dimensions are power
distance, individualism, masculinity, uncertainty avoidance, long-term orientation, and
indulgence (Gerlach & Eriksson, 2021). For this paper, I will describe the similarities and
differences between the cultural dimensions of Saudi Arabia, Denmark, and Mexico.
Power distance refers to how openly a culture accepts or rejects that people are not equal
in society. In Denmark, the power distance is eighteen, and thus Denmark has a low power
distance. In Mexico, the power distance is eighty-one, thus having a high-power distance. In
Saudi Arabia, the power distance is ninety-five and thus has a high-power distance. Cultures with
a high-power distance have a strong sense of power, and they openly accept that bosses are of
higher positions and therefore deserve better treatment (Jie et al., 2020). In Mexico and Saudi
Arabia, leaders are accorded more formal respect and authority. In high power distance
communities, power is an integral power of the society, and people in power demand respect and
loyalty. In cultures with a low power distance, the superiors and subordinates see each other as
equals. In Denmark, power is decentralized, and they emphasize less formal organization
structures and equal rights.
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Individualism is the degree to which societies are integrated into groups and their level of
dependence on groups. Different communities have different perceptions of obligations and
emphasis on individual accomplishments and interdependence in the community. In Denmark,
the individualism score is seventy and thus has a high level of individualism (Gerlach &
Eriksson, 2021). In Mexico, there is a low individualism score of thirty. In Saudi Arabia, there is
a low individualism score of twenty-five. Denmark is an individualist community, while Mexico
and Saudi Arabia are collectivistic communities. In Denmark, people tend to prioritize their selfinterests and their immediate families and friends. Cult...