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Culture refers to the values as well as the beliefs of various individuals, communities as well as organizations (Mazanec and et. al., 2015). It is a certain value system that is followed and adopted by people belonging to a similar social setting. On the other hand, literature review is an in-depth analysis of a given piece of literature and effective synthesis of the presented information. The following report is based on critical evaluation of Hofstede’s Cultural Dimensions as well as a literature review on Corporate Social Responsibility. It follows critical analysis of Hofstede’s model and brings importance and significance of literature review to light.
Developed by psychologist Dr. Geert Hofstede, the cultural dimensions theory is widely recognized and universally accepted. The model emphasizes on cross-cultural differences which assists them in effectively distinguishes various cultures on basis of various factors. There is a huge significance of this model in the business scenario. For instance, comparison of various cultures through this model helps in gaining an insight about their tendencies and behavioral patterns that are followed by their individuals as well as organizations. It is a very crucial analysis which effectively and appropriately helps in comparing different nations despite of having being familiar with the entirety of a nation.
The article effectively showcases various cultural dimensions of Hofstede and appropriately evaluates extent to which they are applicable to the current business scenario. It discusses few of Hofstede’s most prominent and contributing cultural dimensions, such as, Individualism/Collectivism, Power Distance and Uncertainty Avoidance.
Individualism reflects upon self-orientation while collectivism reflects on group harmony. The theory could effectively be utilized and applied where national culture is concerned (Samaha, Beck and Palmatier, 2014). A nation as a whole could use this theory to differentiate between its individualistic and collectivist aspects. In a global context, it could appropriately help in distinguishing between various different cultures for instance of US and certain countries of Asia, where the former adopts a highly individualistic culture while the latter is collective. However, the article also mentions that it is not necessary that culture of employees working within an organization aligns with that of national culture. As an example, McDonald’s come from a country where individualism is encouraged, however, its success in various collectivist countries like India reflects that at individual level, such cultures have different applicability.
Similar is the case with uncertainty avoidance. Since organizational culture adopts their own cultures according to their mission statements regardless of the national culture, uncertainty avoidance too has different impact based on nature of organizations. For instance, some organizations like Apple effectively innovate and take risks with their designs and technologies irrespective of their global presence. Unanimous strategies are being adopted by this company where uncertainty avoidance depends on people of the organization rather than nation in which it deals in.
However, power distance could be reflected the same within the organization on an individual as well as national level. This factor is directly influenced by the culture of nation in which the firm is situated in. Thus, its applicability in respect of international business depends upon the culture and practices followed within the country.
Various suggestions made by the article on Hofstede’s cultural dimensions emphasizes upon how firms adopt their own culture and are required to adjust according to the nation they operate in. The diversity within their workforce is a part of their strategy to deal with a drastically different culture. However, with today’s international business scenario, culture adopted by employees might not be similar which and organizational culture might not appropriately reflect national culture. Thus, with such complex business scenario, multinational companies might risk themselves in failing to predict customer’s behavior which might force the firm in changing its culture.
Within various suggestions and cultural dimensions presented in the article, the most suitable one for companies in international business would be power culture. This is because while the other dimensions drastically differs where organizational and national culture are concerned, Power Distance seems likely to be influenced by national culture and reflects the same in its application within international business. In addition to this, effective power distance could also help a company in channelizing their leadership strategy to make employees perform at their best capabilities. Thus, it is likely that power distance, if used appropriately, could serve well at organizational level as well as national level.
Each theory, model or concept has an effective scope of improvement that enhances their capabilities where current and dynamic business environment is concerned. With constant change in business environment, it is imperative that cultural dimensions are applied effectively as per the organizational objectives, as well as national culture in which the firm operates in (Khlif, 2016). In other words, companies at global level must analyze these dimensions at individual, organizational and national level and determine its impact on the overall organization and their operations. This would help these companies in appropriately establishing culture that is effective and helps a contributing environment internally as well as externally. In addition to this, application of these dimensions within companies must be flexible enough to be modified as per the demand of changing culture and perceptions of individuals associated with the organization.
For instance, uncertainty avoidance must be utilized as a contributing factor in bringing innovation in offerings. Attention must be given to analysis of various after effects of changes or strategies implemented by these companies which would keep a strong and effective balance within the organization.
Individualism and collectivism also must be channelized in ways which provides benefits both at individual as well as organizational levels. Effective guidance must be included while guiding employees within organization to appropriately work up to their full potential. Their goals must be align with that of companies and a mutual understanding must be developed in case of accomplishment of both organizational as well as personal goal.
Lastly, where power distance is concerned, its applicability could be witnessed both at organizational as well as individual levels, however, this distance must aim at bringing positivity in the firm. For instance, employees must be informed and kept in loop of any important decision taken by the company as they are the ones likely to get affected by every move of the management. Power Distance must be prosperous enough to let individuals within an organization keep their point of view and those are appropriately considered by managers while decision-making. Moreover, there are various other aspects which include distribution of power. Each organization has various departments that have their own approach at working and delegating authority. This must aim at making employees more competent and effectively handle responsibility that would ensure collective growth of the organization (Maleki and de Jong, 2014).
What is Literature Review and What Does it Achieve?
A literature review refers to an analysis or evaluation of an article. It includes all the current knowledge about the subject matter along with various substantive findings. Methodological and theoretical contributions are also present about a certain specific topic (Hart, 2018).
There are various purposes associated with a literature review. Firstly, it is quite crucial as it helps in a detailed survey of a literature along with an appropriate synthesis of the present information. It further helps in organizing the literature and presents it in a form which is quite effective to be understood by readers.
Literature review has a quite prominent contribution in the field of study. This is because it helps to identify and understand useful information about a subject matter. In addition to this, there is a wide scope of critical evaluation which helps in carrying out an in-depth analysis of the chosen field of study. Thus, it helps in gaining useful knowledge and using the same for other researches. The specific role which literature review plays is that it broadens the spectrum of a literature and with its contributing findings; it helps in developing new areas of study which enhances the scope of knowledge (Machi and McEvoy, 2016). It acts as a guide and gives an overview to the researcher about the literature which could be used effectively for academic researches too. It develops a methodological focus as well as theoretical framework even if a new theory or concept is being proposed. It basically acts as a bridge between filling out gaps for previous researches and carving out ways for new one. Literature review is very contributing in the field of study and is widely used by researches to effectively investigate information about a specific subject area.
Literature Review on the topic “Corporate Social Responsibility”
Tai, F.M. and Chuang, S.H., 2014, define Corporate Social Responsibility as procedures undertaken by companies with an agenda of channelizing the activities of an organization and further encourage a positive and effective impact of its actions on each of the factors surrounding its business environment. According to them, the key aspects associated with a business firm are employees, consumers, communities as well as environment. It is the responsibility of companies to conduct their operations in their best interest. According to them, Corporate Social Responsibility is a global issue. There were various prominent examples being presented by them, for instance, green carbon used by Eiffel Tower, a complete mitigation of dealing in shark products by Singapore supermarkets. The new trend within business environment encourages companies worldwide in adopting practices that contribute to effective success of a their organization and yet be contributing towards community, environment and society as much as possible.
According to Cheng, B., Ioannou, I. and Serafeim, G., 2014, an effective performance of organizations in relation to Corporate Social Responsibility leads to betterment where acquisition of finance is concerned. CSR helps in maintaining appropriate and effective stakeholder engagement due to which, agency costs reduce. Another contributing aspect is that due to enhanced transparency, informational symmetry could be increased. Substantially, lower capital constraints are witnessed in companies that perform better on Corporate Social Responsibility.
Crowther, D. and Seifi, S. eds., 2018, emphasized on various issues that are required to be considered by organizations all over the world. They emphasize on aspects which arise need for further implementation of Corporate Social Responsibility. As per their point of view, global warming is one of the most crucial issues which incur the need for CSR within companies. There are various examples in their study like Hurricane Katrina devastating New Orleans in 2005 and more recently hurricanes devastating major parts of Caribbean and southern USA in 2018. The main reason for such drastic climate changes as pointed out by their study was global warming. Climate change is inevitable and has its impact on people and economies, however, there are various issues associated with business organizations which contribute in rise of global warming. One of the most evident examples of this would be greenhouse gases, especially Carbon dioxide, which is incurred by industries and various other organizations. Their study also emphasizes on the need of reduction in levels of these emissions as a long term strategy to combat issue like global warming and enhance Corporate Social Responsibility practices.
Another important factor that calls for effective CSR within companies is the depletion of natural resources. As per their study, the world is witnessing a decline in natural resources like lead and tin in the United Kingdom and crude oil within various countries that once were rich in these resources. Such aspects calls out for enhancing sustainability for which firms need to adopt a culture which contributes in enhancement of Corporate Social Responsibility. This would make these companies capable enough of appropriately supporting the protection and sustainability of environment.
As per Grayson, D. and Hodges, A., 2017, there are various drivers which forces organizations to adopt ethical, social as well as environmental standards that simultaneously results in grabbing untapped opportunities available to businesses. According to their study, these opportunities could be regarding non-traditional business models, market development and even for product and service innovation. They consider Corporate Social Responsibility as a prominent key to exploit all the opportunities for business growth and its long term sustainability. According to their view, there are various developments in technology and communication and evident market changes along with a shift in demographics which enhances the need of Corporate Social Responsibility. Their research took examples from almost 200 companies and identified a seven step process which could be applied by managers to successfully implement CSR appropriately within their business practices.
The first step according to them is to identify and determine the triggers for implementation of Corporate Social Responsibility within the strategies of the company. The next step calls for determining the scope of activities needed for this implementation. Managers of organizations must then develop a business case which is essential for a developing a framework along with the set objectives that organizations wish to achieve from CSR. Next step calls for committing to action and determining each aspect, factor and resource necessary for transforming the idea into reality. Managers must then determine as well as gather each and every resource which is necessary for establishing Corporate Social Responsibility along with other prominent strategies of the firm. However, with each new policy requires consent of stakeholders and thus, next stage requires managers to engage these stakeholders to come on board with them of implementing a culture which promotes CSR. The last and final step needs these managers to measure effectiveness of their strategies, report the same to higher management and implement further strategies to modify the same to maintain its effectiveness for long.
According to the viewpoints of Du, S., Bhattacharya, C.B. and Sen, S., 2010, organizations wishing to implement Corporate Social Responsibility practices within their firms are required to communicate these practices more effectively with their stakeholders. This is because their low awareness as well as unfavorable attributions towards CSR practices might be negative in respect o the firm and its long term strategies. Thus, to achieve utmost support from stakeholders, they are required to be communicated appropriately. Managers must emphasize on channels through which this communication could be established and even on the content which must emphasize on need of CSR as well as how it would benefit the firm and each of its stakeholders. Doing so would enhance the scope of success in implementing appropriate culture as per current trends of business environment.
Kemper, J., and et. al., 2013, states Corporate Social Responsibility as a moderator between an organization’s performance and marketing capabilities. According to them, firms which operate in an environment with high competitive intensity, there is a positive and strong impact of marketing capabilities on their performance. Their research also puts emphasis on the fact that while firms indulge into vigorous competition, Corporate Social Responsibility could appropriately be used as a major strategy to enhance marketing impact on performance.
Corporate Social Responsibility has its roots in the UK back in 1800 during industrial revolution and since then entrepreneurs within the country have treated this aspect as an important factor to be inclusive in their business environment (CSR in the United Kingdom, 2019). Each business, irrespective of its nature is adopting CSR as an effective method to enhance sustainability of their businesses. According to Hooker, N.H. and Monteiro, D.M.S., 2013, most prominent example for the same is food industry within the United Kingdom. The general grocers and retailers are engaging in more sophisticated approach towards CSR. They aim to provide effective sustainability to the environment as well as to their businesses. Even so, their strategies are channelized towards creating an effective shared value. From their production to distribution, these retailers and grocers consider CSR as an utmost strategy. In addition to this, they adopt various competitive as well as cooperative strategies which are associated with providing immense benefits to their business as well as to the society.
Apart from these retailers, various other organizations as per the article by Jason Hesse, take CSR quite seriously within their organizational framework (Six companies in the City of London that take CSR seriously, 2015). Barclays is one such organization in the UK which have partnership with Ian Mikardo High School and their employees provide kids with guidance in developing appropriate enterprise and employability skills. Another organization is Alium Partners, which have been working towards reducing the barriers graduates face in terms of getting employment. London Wildfire Trust within the country is a crucial example in implementing CSR as it works appropriately for communities to help them access the green spaces in socially deprived areas. All these companies, in one way or the other have implemented Corporate Social Responsibility to effectively achieve set standards and business objectives. Thus, CSR is important for attaining sustainability and better performance that provides benefit to community as much as the organization.
It is thus concluded from the above information that Hofstede’s cultural dimensions are important aspects to be considered for international business. It is necessary to effectively evaluate each dimension to determine their applicability to the current business scenario. In addition, suggestions must be presented and considered to improve their application within the business. Literature review helps in gaining insight on a certain field of study and effectively synthesizes information to enhance further knowledge of the subject matter. Corporate Social Responsibility is an essential practice that is required to be adopted by each organization irrespective of its nature and size. Various needs associated with CSR must be determined and it is important that companies adopt the stages for its implementation to cease market opportunities. Lastly, stakeholders must be effectively engaged in regards to establish CSR culture within an organization to ensure long term success and sustainability.
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