Cross-Cultural Management Issues: Comparative Study of Finland and Great Britain Essay Example
Cross-Cultural Management Issues: Comparative Study of Finland and Great Britain Essay Example

Cross-Cultural Management Issues: Comparative Study of Finland and Great Britain Essay Example

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  • Pages: 10 (2564 words)
  • Published: December 21, 2017
  • Type: Case Study
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Opening up a subsidiary in another country has to be planned extensively. There are many aspects that the management have to take into consideration before deciding on the feasibility of the operation. People’s natural tendency is to try and transplant the skills that work in their home country into the new environment. (Berger, 1998) The problem is that the management techniques that work in the home country are not always effective in another country. (Rodrigues, 1998) He also believed that this was due to managerial attitudes and values being linked to a societies culture.Therefore, as cultural values mirror how people are raised, they are deeply held and unlikely to change.

(Berger, 1998) This view is supported by many other theorists in the cross-cultural management area (Hofstede, 1991; Trompenaars & Hampden Turner, 2000, 2002) 1. 1 Benefits to the Hogshead As knowledge of the


value systems and other cultural aspects is a prerequisite for any company intending on penetrating a new market or country (Morden, 1995) The Hogshead needs to know about all these factors in order to help them establish a suitable organisational structure and systems.It is also important for any managers that are placed in Finland, to aid in the development of the subsidiary, to be aware of how to manage the staff effectively.


In order to compare the differences in culture between Great Britain and the host country, Finland, a number of Typologies are looked at. Geert Hofstede and Fons Trompenaars both carried out extensive research over many countries in order to try and measure the characteristics of culture.

HofstedeHofstede (1980) developed a typology that measured cultural differences on five dimensions; Power distance, Individualism/collectivism, masculinity/femininity uncertainty

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avoidance and long-term orientation. Finland was not included in the countries measured for the latter dimension so it has not been included.

In the workplace this is measured by the levels of dependence between a subordinate and their boss. Looking at the scores of Finland and Great Britain on this scale it shows that they are relatively low power distance countries. This means that the management style of the manager should be transferable between the two countries. In the Hogsheads case if a manager is sent out to Finland, their style should be more readily accepted.However Hofstede (1991) did find that even in the low power distance countries that the lower manual and unskilled jobs did require more authority from their supervisors. And it was only when you moved up the scale that the power distance was more applicable.

Individualism Vs Collectivism Hofstede (1991) found that nations tend more towards an individualistic nature or collectivism. This dimension measures the extent to which people are expected to look after themselves and their ties with others are loose, rather than being part of a cohesive group.The work goals associated with the more individualist pole are personal time, freedom and challenge.

This dimension correlates with the power distance; low power distance countries usually are less dependent not only from their superiors but also from others. (Hofstede, 1991) Both Finland and Britain are classified as Individualistic societies. However Garrisson & Rees (1994) found that while individualism is high on a personal level for Finns, there tends to be a consensus at the social level. In the workplace, the current practices of the Hogshead should work effectively regarding this dimension.

Masculinity vs.Femininity The Masculinity/Femininity

dimension is where Finland and Great Britain differ the greatest. Great Britain is considered a masculine society in which factors such as earnings, recognition, advancement and challenge have great importance attached to them. Finland on the other hand is a more nurturing feminine country where co-operation, living area and employment security are deemed more desirable. This reflects on the workplace with a number of issues.

In Finland there is a preference for resolving conflicts by compromise and negotiation, which reflects the high level of unionisation in the country. Suutari & Brewster, 2001) Britain does not rely on the unions as much as they have in the past, especially in the hospitality sector. Some managers may feel that it is interference, yet stronger union influence amongst this group (expatriates from other countries rarely being unionised) has led to a greater degree of awareness and learning about what makes for success. (Suutari & Brewster, 2001) The Hogshead should not necessarily look at the fact that Finland is a feminine country as a downside. Morden (1995) found that Feminine cultures excel at service industries.

This is due to their nurturing nature; needed when dealing so closely with people and making them feel wanted and welcome to the establishment. There is also a strong case for synergy between innovating and implementing cultures. The first supplying the idea, the second implementing it. Hofstede (1991) also believes that some cultures work together on a complimentary basis. If the other dimensions are similar then the Masculine achievement orientation of the British complements the people-oriented Finnish. (Morden, 1995)

Uncertainty avoidanceThe fourth dimension relates to how tolerant a society is of the unpredictable or in other words

‘the extent to which the members of a culture feel threatened by uncertain or unknown situations. (Hofstede, 1991) Britain is lower on the scale and generally less formal rules are made and needed. In fact among Europeans, the managers most at ease with risk and uncertainty are the British. (Tixier, 1994) Finland on the other hand was just above the middle range for this. Therefore an authoritative decision-making and leadership style would be effective as uncertainty is reduced when someone else assumes decision-making.

Universalism vs. Particularism Universalism is the scope of rules, codes and laws that apply to everyone.This dimension measures how people react to certain dilemmas- does one live by the universal law or attach more importance to standing by a relationship or friend. In the workplace this is important as in relationship to how people react towards the rules and distinguish the morally right. (Trompenaars & Hampden Turner, 2002) There is considerable evidence that Universalists are more common in Protestant societies which correlates with Finland in which the main church is the Lutheran church.

Neutral Vs. Emotional In relationships everyone shows emotion to a different degree. In trompenaars study it was found that 41% of Finnish would not openly show emotion compared to 45% of British. “For Finns, it is not done to be expressive, assertive or emotional” (Mole, 2001; 125) The British also suppress the direct display of feelings and tend to be polite and reserved. (Mole 2001)

Specific Vs. Diffuse Specific versus diffusism relates to how someone’s status in one area of their life is carried over to the others. Again British and Finnish workers score similarly on this dimension and tend towards the

specific pole. In the workplace, this means that private and business agendas are kept separate. Trompenaars & Hampden Turner, 2002) In Finland especially, it is unusual for work colleagues to socialise together outside the office (Mole, 2001) While in Britain it is more common yet this factor is unlikely to affect the success of the foreign subsidiary.

Achievement Vs. Ascription This dimension is measured by how status is accorded. Some cultures get status through achievement while others get it through who they are and what background they originate from.

In the workplace achievement oriented cultures will have respect for managers whose position is based on their knowledge and skills. Trompenaars & Hampden Turner, 2002) Achievement based rewards will work with most employees in this society. The actual reward given will differ depending on the other characteristics of the culture.


Motivation of employees is a critical success factor for any company. In the United Kingdom, motivational theories such as Maslow’s hierarchy of needs, Herzbergs etc can be applied. They are based on the increased achievement of the individual. Morden (1995) that there is no guarantee that these theories will fit into all cultures.Buchanan and Huczynski (1997) feel that this is due to it being based on middle-class American values which may well transfer to the United Kingdom but are very different to other cultures.

In Maslows Hierarchy, he places Self-Actualisation, Knowing and Understanding and Esteem as the three highest motivators. (Buchanan & Huczynski, 1997) In the United Kingdom things such as promotion, prestigious job titles accompanied by large salaries and performance appraisals, satisfy these needs. This is what is seen as achievement and the goals most British people strive for.


while reasonably individualistic, has more interest in the quality of work, safety and affiliation, which stems from a feminine characteristic that stresses interpersonal cooperation. Therefore Maslows Hierarchy of needs might need to be adapted as the motivators used in the United Kingdom are not considered vital and are sometimes even frowned upon. Tixier (1996) found that Finland differs from the United Kingdom in such that the Finnish manager maintains a low profile and it is the project that succeeds while a British manager will be motivated be the status they will receive by success.The Finnish employee will be more concerned with the security of the job and the relationships formed, the sense of belongingness.

In the Hogshead, incentive schemes are used to motivate employees. When taking this to Finland a different approach might need to be taken.

Gender Roles

While Britain prides itself on becoming a more equal country regarding gender there is much evidence to suggest that it still has a way to go. In a survey of pay rates, male bartenders are found to be still on higher pay than their female counterparts. Caterer and Hotelkeeper, 2002) In the British society it is still seen as the father who is the dominant figure and the mother is the housewife and carer for the children.

(Hofstede, 1991) Only recently did the Government publish its employment bill to give both parents more rights. (Bowers, 2001) Finland has much greater gender equality where both parents are considered equally responsible for provision and care of their offspring so it is no surprise that the Finnish language has no gender distinctions. Mole, 2002) Hofstede (1991) backed up this gender equality as he

found that the societal norm in family values in Finland is to have two equally dominant parents. These factors are important for the Human Resource Department to consider. When preparing contracts for the future employees it will be even more imperative that pay is equal and that leave for caring for children is allowed for both sexes.

Time and Culture

Kluckhorn and Strodtbeck identified three types of cultures; present-oriented, past-oriented, and future oriented. The way these cultures view time can have an effect on the business in a number of ways.Time is a factor in many management issues such as planning, motivating, promotions as well as product delivery. Great Britain and Finland both look at time in the short-term. Another aspect of time is whether it is sequential or synchronic. Britain is a sequential society where time is thought of in a straight line and everything is done in sequence.

This translates into the business environment through factors such as meeting scheduling and punctuality. Finland functions in a similar way to this. Mole (2001) says that for Finns punctuality is important and a precise and systematic approach is taken. Trompenaars & Hampden Turner, 2002)

Human Resource

Management From the HRM point of view it is important that Nordic countries represent feminine cultures where relationships are highly valued (Hofstede, 1984), and managers are employee-oriented, stressing factors such as decision participation and team work (Suutari & Brewster, 2001).

Expectations of managers are another facet. The masculine manager is expected to be assertive, decisive and aggressive while the feminine manager is less visible, intuitive and accustomed to seeking consensus.This was supported by Mole (2001) who found that British managers are expected to be effective,

decisive and tough. Although Britain rates high on the masculine end of the scale they have a good reputation for internal communication and managing human resources; they are much sought after for personnel positions, including those as Euro managers.

In multicultural teams, British executives are often the leaders who co-ordinate group efforts or who liase between the group and the surrounding environment. (Suutari & Brewster, 2001).

Organisational Control, Structure and Strategy

Deciding on the type of control exercised by the headquarters over its foreign subsidiary also needs to take culture into consideration. Rodrigues (1995) developed a conceptual framework to aid headquarters in this matter.

The framework consists of three relationships. Centralisation, Formalisation and normative integration. Comparing the Hogshead with the country characteristics it is recommended that a low formalisation/ centralised approach is taken. Rodrigues &Kaplan (1998) found that Britain as a whole tended towards a low degree of formalisation, while businesses in Finland take a more medium approach.This factor also depends on the size of the organisation.

As the Laurel Pub Company owns hundreds of pubs they have many more written-rules and regulations than some smaller British organisations would, in order to provide stability throughout their brands. Mole (2001) found that Finnish work best in a stable environment The strategy chosen by the Hogshead will also affect the formalisation. It is likely that a multi-domestic strategy will be used due to the nature of the business. The Hogshead will be competing with local competitors on a market-by–market basis. Organisations such as these tend to use moderate formalisation structures. Rodrigues &Kaplan, 1998) In the development of a subsidiary overseas most companies use an expatriate manager at first then employ locals when

it is established.

Franka 1973 cited by Rodrigues, 1998) The problem with this is the language. It may be difficult to find a Finnish-speaking manager in the company so hiring an English speaking Finn to work alongside a representative of the company could be more viable.


Looking at all the evidence the cultural differences between Finland and Great Britain are not that great. There are a number of differences, which will need to be considered.If the Hogshead is flexible enough to respond to the different environment no major problems should occur.

There are many more factors that do not need as much importance attached to them in regard to management issues yet would aide any British employee sent out to the subsidiary for a length of time. While the typologies give a fairly accurate assessment of each culture’s values and beliefs there are a number of problems with the framework. In reality each situation must be individually assessed as for example not every Finn will adhere to the feminine culture view nor will every British member of staff conform to the masculine ideals.Also the researchers and research methods are all culturally bias to a degree therefore it is only from a certain mindset that the results are valid.


  1. Instead of an English Manager being sent out to Finland an English speaking Finnish manager should be hired. This would enable them to ensure effective communication with the staff.
  2. Motivational tools should be designed with consultation of the Finish workers.
  3. Contracts are designed taking into consideration the higher level of gender equality and family roles.
  4. As a medium formalisation is required, operating procedures are more defined.
  5. A study of Finnish

Human Resource methods could complement and possibly improve the home countries systems.

  • All employees should be assessed individually as well. It should not be assumed that everyone’s values are exactly the same as their culture.
  • Any English employees sent out to the subsidiary should take part in a cultural awareness course.
  • Further research into cultural aspects of consumer behaviour, advertising methods and business transactions is needed.
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