Cross-cultural management: A practical comparison of Spanish and English business culture

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Cross-cultural management: A practical comparison of Spanish and English business culture

Natalie Roberson

Bachelor of Arts Business in Europe

06/04/05

 

Contents

List of Tables…………………………………………………………………….2

List of Graphs     ………………………………………………………………...2

List of diagrams………………………………………………………………….2

Acknowledgements………………………………………………………………3

Executive Summary……………………………………………………………...4

Introduction………………………………………………………………………5

1 Literature Survey………………………………………………………………7

1.1 Geert Hofstede……………………………………………………………….7

1.1.2 Hofstede’s results for the United Kingdom……………………………….10

1.1.3 Hofstede’s results for Spain……………………………………………….12

1.1.4 A comparison of the dimensions between the United Kingdom and Spain…14

1.1.5 Critique of theory………………………………………………………….15

1.2 Fons Trompenaars and Charles Hampdon-Turner…………………………..17

1.2.1 Critique of Theory………………………………………………………….20

1.3 Nigel Holden…………………………………………………………………21

1.3.1 Critique of Holden’s Work…………………………………………………25

2 Methodology……………………………………………………………………26

3 Analysis…………………………………………………………………………30

3.1 Index Value results for Spain and the United Kingdom………………………33

4 Discussion……………………………………………………………………….34

5 Conclusion………………………………………………………………………36

6 Appendices………………………………………………………………………37

7 References ………………………………………………………………………41

List of Tables

Table 1: Hofstede’s Cultural Value results for the United Kingdom - 10

Table 2: Hofstede’s Cultural Value results for Spain - 12

Table 3: Value Surveys Model 1994 - 28

Table 4: Raw data from 112 call centre in Spain - 30

Table 5: Raw data from Lands End in the United Kingdom - 31

Table 6: Comparison of Index Value results for Spain and the United Kingdom - 33

Table 7: A Comparison of the Investigational Data with Hofstede’s Data - 34

List of Graphs

Graph 1: Cultural Value results for the United Kingdom - 11

Graph 2: World average value scores for Hofstede’s dimensions - 11

Graph 3: Cultural Value results for Spain - 12

Graph 4: Cultural value results for European Countries - 13

Graph 5: A comparison of scores from the United Kingdom and Spain - 14

Graph 6: Comparison of Index results for Spain and England - 33

List of Diagrams

Diagram 1: Process model of cross-cultural management and knowledge transfer - 23

Diagram 2: Concentric model of cross-cultural knowledge transfer wit atmosphere at the core - 24

Acknowledgements

I would like to dedicate this piece of work to my grandma who passed away earlier this year.  I would also like to thank my mum and John for their love and support even if their methods are strange sometimes.  A huge thanks to my boyfriend Geraint and my friends Lisa and Jessica for their help.

I would also like to thank the employees at the 112 call centre in Spain and the employees at Landsend who graciously completed the questionnaires.

Last but certainly not least thank you to olga my tutor for her kindness and support.

Executive Summary

In today’s global market place there is one issue that is increasingly becoming critical to the success of Multinational Corporation’s.  The issue is culture differences between countries and how these differences could affect the performance of a firm.  More specifically how employees assigned to manage subsidiaries or conduct business with managers of subsidiaries in foreign countries cope with cultural differences.  The importance of cross-cultural management is fundamental to the success of a firm.  

There are several cross-cultural theories that highlight basic differences in culture which can aid the manager in a cross-cultural situation.  One of the most prominent and discussed theories is the international study conducted by Geert Hofstede on cultural values in the workplace and their importance to managers.  

Hofstede’s is not the only theory available; another popular cultural theory was developed by Fons Trompenaars and Charles Hampdon-Turner which shall also be discussed.  One of the more modern cross-cultural theorists Nigel Holden will also be used as a comparison.  

To limit the scope of the report the theories will be analysed with particular attention to their relevance and aid in distinguishing between Spanish and English business cultures.  

Introduction

Cross-cultural management is important even essential to the well being and success of an enterprise.  According to Hoecklin (1995:23) these differences in culture if managed inappropriately could lead to “management frustration, costly misunderstandings, and even business failures,” and these are serious misfortunes indeed.

However the first aim of this report is not to highlight the importance of cross-cultural management but to examine some of the most important theories and their relevance as an aid to international managers.  The theories to be discussed are those of Geert Hofstede, Fons Trompenaars and Charles Hampdon-Turner and Nigel Holden.

Geert Hofstede has been under much scrutiny and criticism of his work but remains to be one of the leading theorists who has given practical guidelines with a sound framework.  For this reason his theory will be analysed in detail, with particular regard to the way business is conducted and the way managers operate in Spain and England.  The author of this report conducted a miniature replica of Hofstede’s work as an experiment with comparison potential. The results are inconclusive but shall be analysed.  Trompenaars and Charles Hampdon-Turner have developed a framework similar to hofstede’s about culture values.  A more modern theory of knowledge management developed by Nigel Holden shall be examined as well.

The second aim of this report is to attempt to highlight the cultural differences that may arise in a business transaction between Spain and the United Kingdom.  The author of this report conducted a miniature replica of Hofstede’s work to provide original data of the differences between Spanish and British business culture.  The results will be analysed, discussed and then compared with Hofstede’s results as a validation.

The difference between Spanish and English values and attitudes to life and work may be interesting to analyse from a distance but in the business world these cultural differences if ignored could cause serious harm.  The differences can be small such as the English tendency to arrive ten minutes early for any important appointment compared with the Spanish tendency to arrive ten minutes or more late.   Such minor misunderstandings as that and others could lead to problems in the working relationship.  The cultural differences in Spain and England according to the theories shall be discussed in further detail.  

1 – Literature Survey

The majority of cross-cultural management theories focus on the cultural part of that expression.  They illustrate how culture values vary from country to country.  They will dissect the culture into various dimensions to help differentiate values that are important to societies (Hofstede 2001, Trompenaars 1993).  It will be shown that differentiating cultures is not the only way to approach cross-cultural management.  Holden (2002) investigates and conceptualises a refreshing new way of a approaching the subject.  Instead of visualising cultural differences as terrible company destroying objects, Holden approaches the area from a knowledge management perspective.  With emphasis on knowledge and management as opposed to cross-cultural.  

1.1 Geert Hofstede

Prof. Geert Hofstede conducted what is considered by many to be a comprehensive study of how values in the workplace are influenced by culture.  Hofstede analysed value scores from IBM employee’s obtained by questionnaires.  The study conducted between 1967 and 1973 covered more than 70 countries, from which he used the 40 largest countries.  Since 2001 however Hofstede has continued and extended his work and value scores are now listed for 74 countries and regions.

From the results, Hofstede developed a model that identifies four primary Dimensions to assist in differentiating cultures: Power Distance - PDI, Individualism - IDV, Masculinity - MAS, and Uncertainty Avoidance - UAI.  Hofstede added a fifth dimension after conducting an additional international study with a survey instrument developed with Chinese employees and managers. That Dimension, based on Confucian dynamism, is Long-Term Orientation - LTO and was applied to 23 countries.  There is not a LTO index for Spain and for that reason the LTO dimension shall not be focused on in great depth.  These five Hofstede Dimensions can also be found to correlate with other country, cultural, and religious paradigms.

The dimensions try and illustrate different cultural values found in the workplace.  To avoid confusion and ambiguity the original terminology has been used to describe the dimensions. ()

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Power Distance Index (PDI) focuses on the degree of equality, or inequality, between people in the country's society.  Its suggests the level of a cultures inequality is endorsed not only by the leaders or the people above but by the people below as well.  All societies contain power and inequalities but each has different levels of them.  A High Power Distance ranking indicates that inequalities of power and wealth have been allowed to grow within the society. These societies are less likely to allow significant upward mobility of its citizens. A Low Power Distance ranking indicates the society de-emphasizes the differences ...

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