Purpose: This paper will address the feasibility of a US company entering the market of Hungary. I will explore four major cultural components of the country that affect doing business in Hungary.
Cultural Impact: According to the Hofstede Centre there are five dimensions of culture, Power Distance, Individualism, Masculine/Feminine, Uncertainty Avoidance, and long term orientation. According to the Hofstede Centre "Power distance is defined as the extent to which the less powerful members of institutions and organisations within a country expect and accept that power is distributed unequally." Hungary scored low on this dimension meaning that managers are not as revered as in a high power distance society, communication is direct as
…show more content…
Hungary scored high in this dimension meaning it is considered an Individualistic society, a society of which there is more emphasis based on individual achievements rather than collective goals. According to the Hofstede Centre Masculinity/ Feminity is " what motivates people, wanting to be the best (masculine) or liking what you do (feminine)." Hungary scores high in this dimension meaning that is a live to work type society. A society that places much on competition and beating others . According to the Hofstede Centre Uncertainty Avoidance is defined as "The extent to which the members of a culture feel threatened by ambiguous or unknown situations and have created beliefs and institutions that try to avoid these." On this dimension Hungary scored high meaning that they are conservative and like to avoid uncertain situations and outcomes. According to the Hofstede Centre Long Term Orientation is defined as " the extent to which a society shows a pragmatic future-oriented perspective rather than a conventional historical short-term point of view." On this dimension Hungary scored a 50 , meaning that is a long term oriented society, more focused on future goals, than present. When it comes to Specific cultural norms and folkways. Hungary has …show more content…
I would rate Hungary a C- at the current time. Culturally Hungary is very similar to the United States and the United Kingdom, formal, monochronic, and are ranked similarly to the United States on many of the MPI indicators. Both Individualistic society's as well. Economically speaking Hungary has a definite future but is not at the present time stable enough for a foreign direct investment . There has been political instability and economic instability in the country in the recent years. Slow growth as well. The market receptivity is just not at the current time at the level where it would be easy to recommend doing business in the country. Labor freedom is still a tough issue, as well as issues over property rights . I certainly believe that there are many more desirable emerging markets , Hungary wouldn't be the worst place in the world to go, but it also wouldn't be a place where you would be guaranteed success. If the market becomes more receptive than maybe it could be recommendable to go , but at the current time I don't think it would be worth
Business in US and The Czech Republic The purpose of this document is to present solutions and recommendations for Steve Kafka, an American of Czech origin and a franchisor for Chicago Style Pizza, who has decided to expand his business into the Czech Republic. This document focuses on the major differences and incompatibilities between the U.S. and Czech cultures. The script also shed lights on the business risks and mitigation on Czech culture. The paper also talks about the comparative advantages that exist in the Czech Republic and Hofstedes four primary dimensions for Steve to evaluate the Czech business environment.
The power distance in Singapore is 74 where in Canada it is 39, power distance shows the equality of people in society or culture and the distribution of power (Hofstede Centre, 2016). In Singapore, the distribution of power is not equal everyone is not treated same but in Canada the power is mostly distributed equally. Another metrics in the model is individualism vs collectivism, from the graph above we can see the Singapore is more in collectivism whereas Canada is more in individualism (Hofstede Centre, 2016). Uncertainty avoidance affects a human behavior or a culture in large hugely. In uncertainty avoidance Singapore’s score is 8. In Singapore people abide too many rules not because they have need for structure but because of high Power distance (Hofstede Centre, 2016).
Sakarya, S., Eckman, M. & Hyllegard, K. H. (2007). Market Selection for International Expansion - Assessing Opportunities in Emerging Markets. International Marketing Review, 24(2), 208-238.
Political and legal considerations were given first priority in this analysis with primary emphasis given to whether a country's legal or political system prohibits or impedes foreign investment. If a country's political or legal system discouraged or prevented foreign investment, that country was disqualified from further consideration. Factors considered when assessing the political and legal environment:
Hofstede has identified five different cultural dimensions. These dimensions include power-distance, individualism/collectivism, masculinity/femininity, uncertainty avoidance and lastly long term orientation. According to Hofstede, power distance is the first dimension which translates to how all individuals in a society aren't equal and there is a decent amount of inequality when it comes to the division of power. The second dimension involves the theme of individualism which translates to the degree of interdependence as well as how we identify ourselves in terms of "I" or "We". Additionally, Hofstede states that in individualist societies we tend to look only after ourselves and our blood family, however, in collectivistic societies individuals identify themselves as part of groups and take care of each other in exchange for loyalty. The third dimension would be masculinity/ femininity. A high score would translate to a masculine culture which demonstrates a culture driven by competition, achievement and success. On the other hand, a low score which demonstrates a feminine culture shows that the dominant traits involves caring for others and quality of life. The fourth dimension involves uncertainty avoidance which translates to how a society deals with not knowing how the future is going to turn out. This amount of vagueness brings about anxiety and different cultures deal with this issue differently. The fifth and final cultural dimension according to Hofstede is long term orientat...
How someone arrived to the stage in life they're into today, speaks bounds on not only their character, but also their bravery. As the United States progressed in the early 1900s and other countries struggled to duplicate its combination of material wealth and personal liberties, America became more and more desirable to those hoping to escape persecution, turmoil, or repressive political regimes. This “safe place” allowed a plethora of refugees to flock to its shores in the early 20th century, especially those immigrants who arrived prior to World War I. Hungarian immigrants were able to flee to the United States by using momentum caused by the precursory uprisings in World War I. Circa-1900s Hungary was in a frenzy of disarray.
Cultural Differences in Hofstede’s Six Dimensions According to Professor Geert Hofstede, dimensionalizing a culture requires a complex analysis of a multitude of categories including differing nations, regions, ethnic groups, religions, organizations, and genders. Hofstede defines culture as "the collective programming of the mind distinguishing the members of one group or category of people from another". Throughout his many years of contribution as a social scientist, he has conducted arguably the most comprehensive study of how values in the workplace are influenced by culture, leading to the establishment of the Six Dimensions of National Culture. From this research model, the dimensions of Power Distance, Individualism, Masculinity, Uncertainty Avoidance, Long Term Orientation, and Indulgence are defined according to their implication on individual countries, which when comparatively examined provide a broad understanding of cultural diversity as it relates to the workplace. Identification and Definition of the Six Dimensions In initially defining each of Hofstede's dimensions, a foundational understanding of the six categories is established, from which a greater understanding of different cultures can be built off of.
Steve Kafka, an American of Czech origin and a franchisor for Chicago Style Pizza, has decided to expand his business into the Czech Republic. He knows it is a risky decision; when he became a franchisor, he had to overcome a lot of difficulties. Steve anticipates he will face some of these difficulties again at the new location in Prague, Czech Republic. Although he was born in the United States, he has family and friends in the Czech Republic, speaks Czech fluently, and has visited the country of his origin several times. He knows the people and the culture. In this paper, I will analyze the cross-cultural differences between the United States and Czech Republic, determine comparative advantages in this country, and recommend ways to minimize the risks of establishing a franchise overseas.
Bahamas Government Online. 2012. Population by Sex and Age - All Bahamas. Bahamas Government Online. Available at: [Accessed Jan 13th, 2014]
“Red is a positive color in Denmark, but represents witchcraft and death in many African countries,” (Understand and heed, 1991, p.1). Simple understandings, such as this one, can make the difference in a business’ success or failure in a foreign country. Various countries have different customs and beliefs that need to be accustomed to when business are to be successful. American businesses especially have difficulties with this concept. “At times in the past, Americans have not had a good track record of being sensitive to cultural distinctions,” (Understand and heed, 1991, p.3). Perhaps this is because America is made up of so many different cultures that American people have become so used to easily adjusting to each other’s differences that they forget that other cultures are not as flexible. Today, more American’s are becoming more sensitive to the differences of other cultures. This sensitivity and understanding has come with a price, after a long string of business failures. It is not until a business fails miserably in another country that they see the adjustments that should have been made in order for their success to be a possibility. With an understanding and sensitivity to the customs and beliefs of other cultures, it is possible for successful businesses that have originated in western cultures to also be successful in foreign countries as well.
The first national culture dimension to be identified is the measurement of power distance. This can be defined as the degree of inequality among people built upon what the population of that country accepts as normal. In countries with high power distance like China, individuals are more likely to accept differences in authority or inequality. Management are inclined to be dictatorial, making autocratic and paternalistic decisions, with their subordinates remaining faithful and obedient to them at all times. Often these societies or institutions possess business structures that are typified by close control over all operations. Organisation structures tend to be tall hierarchies with numerous levels within a formal setting. One of the reasons that can be identified for the acceptance of this type of authority in China is derived from thousands of years of political centralisation, which tends to result in a tradition of obedience.
Reflected in its policies and attitudes toward business are a government's idea of how best to promote the national interest, considering its own resources and political philosophy. A government controls and restricts a company's activities by encouraging and offering support or by discouraging and banning or restricting its activities depending on the government. Here are steps in international law. International law recognizes the right of nations to grant or withhold permission to do business within its political boundaries and control its citizens when it comes to conducting business. Thus, political environment of countries is a critical concern for the international marketer and he should examine the salient political features of global markets they plan to enter.
With the proliferation of the internet international Business transactions are more common today than ever. Globalization is now a key factor when creating a business strategy for most companies whether they are small family own businesses or huge corporations. Globalization however does not just involve selling a product in other countries. There are legal and cultural concerns that must be addressed. The legal aspects are fairly simple because in most places the laws are spelled out. It's the local customs, and regional way of doing things that can be tricky. Research on globalization has shown that it is not an omnipotent, unidirectional force leveling everything in its path. Because a global culture does not exist, any search for it would be futile. It is more fruitful to instead focus on particular aspects of life that are indeed affected by the globalizing process. (1). In this new economy, as it has been in the past, it will be the people not the machines who will determine a company's success. Having an effective Human Resource Management team that effectively analyze your company's current and future personnel needs is key in any business organization.
On chapter 4 on the textbook, the author explains, “culture provides a member of a society with a common bond, a sense that we see certain facets of society in similar ways. We are living together at all depends on the fact that members of a society share a certain amount of cultural knowledge (Ch4, 132). Individualism and collectivism contribute greatly to the dimension of culture. For example, how many members of the culture define themselves apart from their group memberships. In individualist cultures, people are expected to develop and display their individual personalities and to choose their own affiliations. In collectivist cultures, people are defined and act mostly as a member of a long-term group, such as the family, a religious group, an age cohort, a town, or a profession, among others. This dimension was found to move towards the individualist end of the spectrum with increasing
"Trade in Services (% of GDP) in Mauritius." Trade in Services (% of GDP) in Mauritius. N.p., n.d. Web. 18 Nov. 2013. .