Increasing Demands Of The Globalized World Commerce Essay Example
Increasing Demands Of The Globalized World Commerce Essay Example

Increasing Demands Of The Globalized World Commerce Essay Example

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  • Pages: 11 (2876 words)
  • Published: July 11, 2017
  • Type: Case Study
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The study of various factors responsible for organizational success has gained more attention due to the increasing demands of today's globalized and liberalized business environment (K'Obonyo and Dimba, 2007; Aycan et al., 2000). Existing literature suggests that culture is the most influential factor driving organizational success and contemporary workplace practices in a country (Aluko, 2003; K'Obonyo and Dimba, 2007). According to Hofstede (1980), culture is defined as "the collective mental programming of the mind which distinguishes one group or category of people from another." K'Obonyo and Dimba (2007) emphasize that this collective mental programming, known as national culture, is what sets a country apart from others.

Hofstede (1980) further emphasized that this shared culture is more evident to outsiders than to the individuals themselves. According to George and Jones (1996), the notion of National Culture includes the economic, political, and societal values that define the lifestyle and wo

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rk approach in a specific country. However, Ali et al. (2009) cautioned against conflating national culture with organizational culture.

According to Ali et al. (2009), organizational culture differentiates similar organizations within a specific country, while national culture differentiates similar types of people, organizations, and countries globally. Hofstede's (1984) pioneering research identified five dimensions that explain national cultures in terms of their influence on business activities. These dimensions are: collectivism versus individualism, power distance, femininity versus masculinity, uncertainty avoidance, and long-term versus short-term time orientation.

Consequently, the research question of comparative research is "How do Hofstede's national cultural values affect workplace patterns in different states?" (K'Obonyo and Dimba, 2007). The aim of this paper is to critically analyze Hofstede's cardinal dimensions of national civilization in Nigeria, a underdeveloped state. This paper wil

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consider the unique Nigerian work environment in organizations and discuss Hofstede's cultural dimensions in relation to their relevance to the Nigerian situation compared to a developed state like the United Kingdom. The challenges of Hofstede's dimensions will be emphasized. Finally, this paper will reflect on the dimension that presents the most challenging issue in Nigerian society and take into account recommendations on how to cope, with the goal of improving organizational performance.

The Nigerian Experience

Nigeria is a rapidly growing developing economy with a growing population and one of the world's largest oil producers.

Nigeria also has the potential for continuous growth in various economic sectors, which has placed it among the 54 developing countries considered emerging economies by the International Finance Corporation (IFC) in 1999 (Anakwe 2002; Hoskisson et al., 2000). As a result, Nigeria has opened up its market to international investors, attracting multinational corporations and becoming a credible player associated with the international market. The indigenous Nigerian workplace system demonstrates the traditional aspects of the key organizational principles underlying the African system of work organization as identified by Ahiazu (1989).

According to Anakwe (2002), the Nigerian society views 'modern' administrations, such as MNCs, and their contemporary practices as foreign and imported. As a result, Nigerian workers interpret and adopt these practices within their existing social context. The Nigerian culture has a significant impact on all aspects of their work behavior. To gain a deeper understanding of national cultural concepts in Nigeria, cross-cultural researchers have focused on Hofstede's cultural value dimensions (K'Obonyo and Dimba, 2007).

Hofstede's (1980) cultural dimensions are discussed below with regards to their relevance to Nigeria's situation.

Collectivism versus Individuality

The cultural dimension of Collectivism versus Individualism

describes the nature of the relationships between individuals in a society (Ali et al., 2009). Hofstede (1984) originally defined Individualism as the preference for a loosely connected societal structure, where individuals are expected to take care of themselves and their immediate families only. In contrast, Collectivism refers to the preference for a tightly connected societal structure, where individuals can rely on their relationships, kin, or other in-groups to take care of them in exchange for unquestionable loyalty. Hofstede's (1984) empirical research on individuality demonstrated that West African countries like Nigeria scored 20 on the index, while at the opposite extreme, Great Britain (UK) scored 89.

This passage highlights the notion of Nigeria as a leftist state, where issues are approached from a collective perspective. According to Ogbonna (2010), this collectivized culture is rooted in the societal fabric of extended families in Nigeria and other African societies. As a result, K'Obonyo and Dimba (2007) argue that Nigerian employees anticipate organizations to treat them like family members and protect their personal interests. This aligns with Nzelibe's (1986) assertion that individuals are not solely part of African communities, but also belong to a larger community. Various perspectives have been presented regarding the leftist aspect in Nigerian and African countries.

The significant discoveries made by Anakwe (2002) indicate that Nigeria's inclination towards collectivism aligns with the traditional organizational system described by Ahiazu (1986), where employees expect organizations and managers to be responsible for their well-being, whether contractual or not. Thus, in line with the collectivized culture, multinational corporations such as Shell and Exxon-Mobil in Nigeria offer their employees benefits like promotions, housing, subsidized meals, transportation, salary advancements during times of need,

holiday pay, access to company healthcare, company vehicles, pensions, and gratuities (Anakwe, 2002). Similarly, in the Niger-delta region, oil and gas companies like Shell and Exxon-Mobil implement specific recruitment campaigns targeting individuals from that area because the local population feels marginalized. Okpara and Wynn (2008) support this viewpoint by providing examples that demonstrate the influence of Nigeria's collectivized dimension on performance evaluations in the country.According to Okpara and Wynn (2008), there are situations where an employee may be evaluated as more successful than others if they come from the same family as key individuals in top management. They also mentioned that the leftist approach, which promotes teamwork, sometimes overrides the individual contributions of employees in tasks. This is different from the Western individualistic culture, which emphasizes specific job descriptions.

According to K'Obonyo and Dimba (2007) and Kanungo (1995), the impact of Bolshevism on training and development in African organizations has been studied. K'Obonyo and Dimba (2007) provided examples of employees receiving scholarships based on their request, rather than organizational need, as a way to reward their loyalty and long service. Baddar Al-Husan et al (2009) found that personal favoritism can lead to improper allocation of training resources, resulting in the wrong person receiving training or being sent to the wrong place.

This also reflects a scenario where the collectivized civilization and high power distance relationship create opportunities for nepotism which result in socio-cultural and political factors that impact preparation and development in Nigeria (Anakwe, 2002).

Power - Distance

Hofstede (1984) defined Power Distance as the degree to which individuals in a society accept and expect unequal distribution of power in their organizations and establishments. K'Obonyo and Dimba (2007) added

that power distance relates to how societies deal with inequality. In societies with high power distance, there is acceptance of a structured hierarchy that signifies inequality, while in societies with low power distance, there is a strive for power equalization and rejection of any form of inequality when it occurs (Hofstede, 1984). Pioneering research conducted by Hofstede (1984) showed that West African states like Nigeria scored 77 on power distance analysis, while the United Kingdom (UK) scored 35.

This suggests that Nigeria and other African states are perceived as having a high power distance civilization, where there is a strong belief in unequal distribution of power between citizens and a wide gap between the wealthy and the impoverished, with the divide between the haves and have-nots growing larger. According to Grzeda and Assogbavi (1999), African cultures are characterized by high power distance, meaning that "authority is assigned based on age and experience; and is enforced by a political system that centralizes power." This aligns with Ahiazu's (1989) study on the fundamental organizational principles underlying indigenous Nigerian workplaces. Ahiazu noted, among other Nigerian workplace rules, the recognized status differences between the group leader and its members, and the principle of using age as a determining factor in selecting individuals for leadership positions. Both principles reflect the cultural aspect of high power distance in Nigeria. Comparative studies conducted by Anakwe (2002) and Okpara and Wynn (2008) emphasized the impact of the cultural dimension of power distance on performance management and the recruitment and selection process in the context of Nigeria.

In the Nigerian fiscal services industry, assessment is based on the number of clients or finances brought

in by an individual. However, individuals who do not perform well can still escape consequences if they are favored by top management. As a result, line managers who are responsible for assessment show respect for the power distance culture and may classify these individuals as 'untouchable'. This can be linked to what Ifidon (2000) referred to as "godfatherism" or the "boy of the dirt" syndrome. The cultural dimensions of power distance also play a role in top management's involvement in making final decisions in Nigerian organizations. Hierarchy is respected and unquestioned, which often leads to final decisions being influenced by top management. Additionally, most organizations in Nigeria have a hierarchical organizational structure and information flows downwards. This high power distance creates a sense of segregation between directors and employees, leading to a dependence attitude, high functional barriers, and potentially hindering horizontal communication (K'Obonyo and Dimba, 2007; Dorfman and Howell, 1988; Ogbonna, 2010).

Femininity versus Masculinity

The concept of Femininity-Masculinity, also known as gender orientation, refers to the emphasis placed on traditional male traits of achievement and success versus traditional female traits of nurturing and harmonious relationships (Darley and Blankson, 2008). According to Hofstede (1984), masculinity is associated with a preference for achievement, assertiveness, gallantry, and material success, while femininity is associated with a preference for relationships, modesty, caring for the weak, and quality of life. Hofstede's early analysis suggests that Nigerian culture leans towards femininity, as it scored 46 on the masculinity index compared to Great Britain's 66. This view of femininity in African culture is supported by Grzeda and Assogbavi (1999), Kiggundi (1988), and Hasan and Ditsa (1999). Grzeda and Assogbavi

(1999) explain that Africa, in general, prioritizes interpersonal relationships and orientation towards others, which aligns with feminine characteristics. Ogbonna (2010) further states that care for one another is an intrinsic virtue embedded in Nigerian culture, resulting in predominantly feminine dimensions within the society.

In Nigerian small towns, when someone dies, the villagers do not go to farms or markets. Instead, they stay indoors with the bereaved family and sometimes even contribute money for burial rites. This shows that an individual's misfortune is viewed as a community matter, according to K'Obonyo and Dimba (2007). Kashima and Triandis (1986) call this effect "corporate header" in Nigerian culture, which makes it easier for individuals to cope with unpleasant life events. This feminine dimension is also observed in Nigerian governmental organizations, where members make personal financial contributions to help other members in trouble (Ogbonna, 2010). Grzeda and Assogbavi (1999) and Hasan and Ditsa (1999) support this view, arguing that in most African countries, feminine cultural dimensions predominate, as evidenced by the quality of life, the value placed on personal time, positive interpersonal relationships, and a strong desire to meet societal needs.

Uncertainty Avoidance and its Cultural Dimension

The concept of "Uncertainty Avoidance" refers to the level of discomfort that individuals in a society feel when faced with uncertainty and ambiguity (Hofstede 1984). Ogbonna (2010) explains that this cultural dimension highlights how people perceive and accept the risks associated with new situations and uncertainties. Hofstede (1984) categorizes cultures into high or low uncertainty avoidance. High or strong uncertainty avoidance societies tend to resist change and prefer to stick to familiar routines.

On the other hand, cultures with low or

weak uncertainty avoidance react positively to change, as they perceive it as constant and an opportunity for possibilities (Hofstede 1984). In Hofstede's (1984) study on cultural dimensions, West African countries (including Nigeria) scored 54 on uncertainty avoidance compared to Great Britain (UK) which scored 35. Studies by Kiggundu (1991) also suggested that African countries have strong uncertainty avoidance as they resist change and prefer routine, stability, and minimal managerial direction. Therefore, Ogbonna (2010) proposed that the current struggles and underdevelopment in certain parts of Africa can be partially attributed to the fear of trying new things in African culture. Several studies have highlighted the implications of the cultural dimension of high uncertainty avoidance in Nigeria. Ogbonna (2010) observed that the rejection and disregard of Government policies for effective change and improvement in the country can be attributed to Nigeria's high uncertainty avoidance.

El-Kot and Leat, (2008) also explain that developing countries with a strong leftist dimension and a tendency to avoid uncertainty tend to explore informal methods of advertising such as 'word of mouth' and internal referrals. This is not only because these methods are relatively inexpensive, but also because they alleviate uncertainty and ambiguity through prior knowledge and referral. This assertion reflects the impact of high uncertainty avoidance on recruitment processes of small companies in Nigeria, as suggested by previous studies (Anakwe, 2002; Okpara and Wynn, 2008).

Long-term versus Short-term Time Orientation

Long-term orientation is characterized by virtues oriented towards future rewards, such as perseverance, thrift, and a sense of shame. On the other hand, short-term orientation is characterized by virtues related to respect for tradition, saving face, and fulfilling social duties (Ali et al., 2009; Mbeta,

2007). This fifth dimension in Hofstede's model of cultural dimensions was added after the original four, using a survey conducted by Chinese scholars in 23 countries (Hofstede, 2001).

According to Hofstede and Bond (1988), this dimension is also known as 'Confucian Dynamism'. Hofstede's findings (1991) indicate that Nigeria has a score of 16, suggesting a very short-term orientation dimension. Similarly, like other European countries, Great Britain (UK) has a score of 25, indicating a short-term orientation as well. On the other hand, China and other East Asian countries occupy the top positions, reflecting their long-term orientation dimension. In their study, Hofstede and Minkov (2010) highlighted several correlations between the long/short term orientation dimensions, as well as their impact on family life and the business world.

The close household societal relationship in Nigeria reflects the country's short-term oriented disposition, which is also in line with the Nigerian leftist civilization explained by Anakwe (2002) and Okpara and Wynn (2008). In Nigerian culture, children adhere to codes of conduct, seek immediate satisfaction, and feel pressure to spend in order to keep up with societal trends, a phenomenon referred to by Hofstede and Minkov (2010) as "keeping up with the Joneses". These characteristics indicate that the national culture leans toward a short-term orientation. According to Hofstede and Minkov (2010), Nigeria's short-term orientation aligns with key work values in the business world, including freedom, rights, achievement, and independent thinking.

Directors and workers have different aspirations, as workers are mainly focused on short-term self-interest and question personal loyalties (Hofstede, 2001; Hofstede and Minkov, 2010).

Challenges of Hofstede's Cultural Dimensions

Although Hofstede's well-known model of cultural dimensions is useful for analyzing and understanding national cultures, some studies

have challenged the plausibility of the underlying assumptions (Fang, 2003; McSweeney, 2002; Jones, 2007).

McSweeney (2002) argues that using data from a single multinational corporation cannot fully reveal the secrets of entire national cultures. Jones (2007) questions whether a country's norms apply to individuals within that country.

Fang (2003) criticizes Hofstede's fifth dimension for a philosophical flaw based on the concept of Chinese Yin Yang principle and redundancy in the Chinese Value Survey (CVS). Fang questions whether the opinions of student populations accurately represent the cultural values held by the average person.Compared to the first four dimensions, is there a different background when trying to understand the 5th dimension, such as pupils versus...

IBM employees reflect a valid factor analysis to formalize its consequences according to Fang (2003). However, Jones (2007) concluded that, after weighing the evidence and observing a debate between Hofstede and his opponents, there is stronger support for Hofstede's work than there is for criticism. Therefore, it is believed that Hofstede's model should be used as a guide for understanding cultural differences between nations, rather than being seen as definitive, as exceptions to the model do exist (Clearlycultrual, 2009).

Decision

Hofstede's work on cultural dimensions remains highly valuable for both scholars and practitioners, and there is stronger support for Hofstede's work (Jones, 2007). Existing literature has provided different perspectives on the dimensions of national culture in Nigeria and their implications for organizations. Studies and evidence from Exxon-Mobil and Shell indicate that integrating Nigeria's national culture into organizational strategies leads to successful implementation of their strategies (Anakwe, 2002; Okpara and Wynn, 2008).

Thus, the aforementioned statements emphasize the importance for transnational corporations (MNC) to have a comprehensive understanding

of the fundamental aspects of national culture. This understanding is crucial in order for MNCs to establish standardized policies and practices in a host country like Nigeria. The organizational practices of MNCs in Nigeria exhibit a cross-vergence perspective, which is a combination of western influences and traditional Nigerian workplace organizational structure. Consequently, this paper highlights that among all the dimensions of culture in Nigeria, the collective culture and high power distance relationship are the primary influential factors in all organizational practices in the country. As a result, MNCs operating in Nigeria, especially those in the oil and gas industry, should consider these factors when developing organizational practices based on western individualist cultural dimensions. Doing so will provide valuable insights and long-term solutions to address the persistent conflicts and differences that MNCs face in Nigeria.

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