Hofstede's Five Significant Management Challenges In Global Business Management

A global business landscape presents significant management challenges. Managers must lead companies operating both physically and virtually in multiple countries. The cultures of the countries a business deals with give rise to varying management styles, which must be respected to operate effectively. Managers visiting offices in foreign countries experience different cultures and this can produce shock. The way management responds to these challenges impacts the globalization of business.

Contemporary companies utilize global resources and markets to produce and sell their products. Managing a multinational company is vastly more complex than running a retail store in one location. Operating internationally increases the complexity

Hofstede (1997) identifies five dimensions of national culture important to management. These are: Power Distance - acceptance of unequal distribution of power, Individualism – the strength of ties between individuals, Masculinity – the distinction of gender roles, Uncertainty avoidance – how threatened people feel by the unknown, and Confucian dynamism – long vs short term orientation. Understanding different cultural values allows more effective management. This means a manager in a country with high uncertainty avoidance such as Germany (“Germany” n.d.) would expect better performance if clear processes, procedures and expectations were provided. In matching management styles to host countries’ culture, management impacts the successful globalization of

By understanding the dimensions of local national cultures and applying suitable local business practices management can succeed in foreign cultures. By recognizing that immersion in foreign culture can be traumatic, that culture shock varies from person to person and consequently selecting appropriate candidates to travel overseas management can address culture shock. The way management responds to these challenges impacts the globalization of