Task Solutions of Overseas Markets and Potential Markets: GMBA6007

Task Solutions of Overseas Markets and Potential Markets: GMBA6007

Introduction 

An expansion is the phase of the business cycle when the economy moves from a bottom to a peak. In this competitive world, many companies like to expand their business within the borders or across the borders. Huawei has decided to expand the business in the overseas markets and the potential markets are Mexico, Australia, and Germany. Huawei technologies co. ltd is a Chinese multinational networking and telecommunications equipment and service company who is having the headquartered in Shenzhen, Guangdong. The company has to face the cultural differences so an advisor is asked to provide the advice to guide a way for handling the best cultural differences that may arise. The report discusses the Hofstede’s cultural dimension of the culture.

Hofstede’s cultural dimension 

Psychologist Dr. Greet Hofstede introduced the cultural dimensions model at the completion of the year 1970s. This theory is a tool to analyze the values and beliefs of members and social culture of the country.  

Power distance index (PDI)

This dimension defines the level of inequality that exists and is accepted by the member of the country. A high PDI shows that the people accept the unequal hierarchical distributions of power and a low PDI shows that the power is distributed or shared among the members.  

Individualism versus Collectivism

This dimension shows the togetherness that the individuals have with others in the same community. A high IDV score reflects that there is the presence of the weak interpersonal connection among persons of community. In a collectivist society, the members are supposed to be trustworthy with members of their groups (Viberg & Grönlund 2013, p. 169).

Masculinity versus Femininity (MAS)

This dimension includes the spreading of the roles among men and women. The roles of the men and women overlap less in masculine society but in feminine society, there is the possibility of the overlap among roles of the males and female.

Uncertainty Avoidance Index (UAI)

This dimension shows how the people of the society can deal with the anxiety. The high score of the uncertainty avoidance reflects the effort to make life predictable and controllable as possible. The people having the low uncertainty avoidance are more open, inclusive and relaxed.  

Long-Term Orientation

This dimension reflects that the people of the society are strongly related to the nationalism and religiosity. The countries having the high Long-Term Orientation are pragmatic and the countries with low Long-Term Orientation are normative where the people likely to be more nationalistic.

Cultural profile of China, Mexico, Australia, and Germany

(Source: Hofstede Insights 2017)

Hofstede’s cultural dimension

China

Mexico

Australia

Germany

Power distance index

China has the high score than Australia and Germany.

Mexico is a hierarchical society with high score.

Australia scores less which shows that country has an unequal distribution of power.

With the low score, the society is highly decentralized.

Individualism versus Collectivism

The score of China is low which shows that there is collectivist culture.

The low score in this dimension shows the society of Mexico is Collectivistic society.

The culture of Australia is highly individualist.

The society of Germany is an individualist.

Masculinity versus Femininity

China has the masculine society same as other countries (Hofstede Insights 2017).

The society of Mexico is masculine.

The society of Australia is masculine.

The society of country is masculine.

Uncertainty Avoidance Index

China has low score of UAI

The score of this dimension is high which shows that the country has a high preference for avoiding uncertainty.  

Australia scores a very intermediate 51 on this dimension.

The country is having the slight preference for UAI.

Long-Term Orientation

China scores high which shows that the china has pragmatic culture.

With the low score, the culture of Mexico is normative.  

Australia is having a low score which shows normative culture.

The high score in this dimension shows the pragmatic culture of Germany (Hofstede Insights 2017).


Differences and similarities review of Australia, Mexico, and Germany as compared to China

China- Mexico

Similarities

· Both the countries have a hierarchical society with the high score in PDI which is shown in above graph.

· China and Mexico have a masculine society with the almost equal score.

Differences

· China scoreless in uncertainty avoidance than Mexico which shows that the country has a high preference for avoiding uncertainty (Dockery 2010, p. 315).

· The culture of China is pragmatic but Mexico’s culture is Normative.  

China- Australia

Similarities

· Both the countries have a masculine society which shows that the culture will be driven by success, competition and achievement.

· China has a low level of uncertainty avoidance which shows that the truth may be relative though in the immediate social circles. Similarly, Australia has the very intermediate score.  

Differences

· The culture of China is collectivism but Mexico’s culture is highly individualist.

· The culture of China is pragmatic with the high score in Long-Term orientation; on the other hand, the culture of Australia is normative (Promsri 2013, p. 35).

China- Germany

Similarities

· China and Germany have a masculine society that reflects that the society of the countries will be driven by achievement and success.

· Both the countries follow the pragmatic culture which shows that the people believe that truth depends on situation, time and context.

Differences

· China has collectivist culture; on the other hand, Germany has the high individualist culture.

· China has the hierarchical society where people wait for the orders of the leader; on the other hand, Germany has the decentralized society where the company gives the opportunities to their workers to enhance the skills of the people (Yoo, Donthu & Lenartowicz 2011, p. 193).


Recommendations 

The company selected Germany for the expansion of the business then below given are some of the recommendations.  

  • It is recommended to the Huawei to prepare the in-depth data and statistics before the negotiations to gain the concessions as a society of Germany take a long time because they believe in analyzing the information and statistics in great depth. If the people get all the details then they can make quick decisions (Kissinger & Hormann 2011).
  • Huawei should understand the difference between the corporate culture and values of the companies based in Germany as it is essential for the expansion into Germany.
  • Society of Germany strongly follows their social and cultural norms so it is recommended to the company while implementing the expansion or negotiations they should avoiding performing such activities that can create impact the negotiations among the countries (Tu 2015, p. 457).

Conclusion 

Hofstede’s five cultural dimensions are discussed in the report based on the three countries where the Huawei is looking for the expansion. The report includes the similarities and differences of China with Mexico, Australia, and Germany. The company has selected Germany for the negotiation and for the implementation of the expansions.

References 

Dockery, A.M 2010, ‘Culture and wellbeing: The case of Indigenous Australians’. Social Indicators Research, vol. 99, no. 2, pp. 315-332.

Hofstede Insights, 2017, Country Comparison, Hofstede Insights, Viewed 19th January 2018

Kissinger, H, & Hormann, N, 2011, On China, New York: Penguin Press.

Promsri, C 2013, ‘A comparison of Thailand and Germany in negotiation styles’. In Conference of the International Journal of Arts & Sciences, vol.6, no. 2, pp. 35-45.

Tu, Y.T  2015. ‘A Cross-Cultural Comparison of Brazil, Russia, India, and China (BRIC) on Negotiation Styles’. The Anthropologist, vol. 19, no. 2, pp. 457-467.

Viberg, O & Grönlund, Å 2013, ‘Cross-cultural analysis of users’ attitudes toward the use of mobile devices in second and foreign language learning in higher education: A case from Sweden and China’, Computers & Education, vol. 69, pp.169-180.

Yoo, B, Donthu, N, & Lenartowicz, T, 2011, ‘Measuring Hofstede’s five dimensions of cultural values at the individual level: Development and validation of CVSCALE.’ Journal of International Consumer Marketing, vol. 20, no. 3-4, pp. 193-210.

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