Cultural distance assignment Essay

CDj is the pagan outstrip among the host untaught (j) and the kinsfolk plain (in this case Germany). It is cipher with a summation of 4 unlike variables indicating different heathen unisons. These be uncertainty shunning, power outdo, individualism/collectivism and masculinity/femininity. is the country js score on one of the quartet pagan dimension is the score of the home country (in this case Germany) on this dimension. is the stochastic variable of this token dimension. Firstly, the distance on apiece dimension betwixt the host country j and the home country (in this case Germany).Secondly, this issuing is squ atomic number 18d. After squaring electronegative each variable is divided by the variance of that variable. And finally, all these four variances atomic number 18 added together and divided by 4. 2. What is the leaving between fuddled and variance? Can you explain the congresswoman given in the call on the carpet in your own words? Mean and varian ce are twain about distri appenddion, simply mean refers to one flyer of the central tax for a probability distri yetion. It is the intermediate of a set of evaluatements. On the some other hand, variance is a barroom of how far a set of numbers pool is spread out.In a statistical probability graph the battle in variance is made visible in the height of the graph. A low variance indicates that the data points are close to the mean. This can be recognized in a normal distribution graph where the cut down is either flatter or steeper. A flat curve indicates a high variance as data points are far away(p) from the mean, whereas a steep curve indicates a small variance as the data points are close to the mean. 3. Calculate the distance on each dimension between Germany (our home country) and a specific host country utilize the excel program.? be given you can use the formula editor in Excel to calculate the distance on e. g. power distance between Germany and Argentina, the first country in the sample. You can copy-paste the formula in the other hagglings/columns. Power distance Argentina Germany 49-35 = 14 Uncertainty avoidance Argentina Germany 86-64 = 21 Individualism / collectivism Argentina Germany 46-67 = -21 ? 21 maleness / femininity Argentina Germany 56-66 = -10 ? 10 4. The Kogut-Singh index of ethnic distance alike contains the variance of each dimension.Answer the following questions a. In the bottom row of the columns you will find the variance for each culture ? dimension. What dimension has the highest variance? Individual collectivism b. What does a high variance mean Tip to calculate the variance yourself, you can use the formula editor of Excel and search for variance. A high variance means that the naming points are very spread out from the mean and from each other 5. Calculate the pagan distance using Kogut and Singh formula while using Germany as the home country.Tip follow the different steps as explained in the main lecture, and first calculate the deflexion, ? the squared difference, the variance, and the everywhereall ethnic distance. Cultural distance = 0,547 ? (14*14)/507,68 + (21*21)/559,42 + (-21*-21)/621,34 + (-10*-10)/329,58)/4 6. Which four countries have the lowest cultural distance to Germany? Switzerland, Italy, South Africa and Luxembourg 7. Which country has the highest cultural distance? Guatemala 8. What is the average cultural distance between Germany and these 57 other countries? 1,6046894 9.Pick a host country and relate the cultural distance score between Germany and that ? host country to the 7 points of critique raised by Shenkar as discussed in the lecture. We picked Egypt, which has a cultural distance score of 1,748. 1. The incantation of symmetry you can non assume that the cultural distance from Germany and Egypt is similar to the cultural distance from Egypt to Germany. Because of new-made conflicts in Egypt it is probably slight attractive for other countries, including Germany, to do production line or invest in Egypt, whereas for Egypt itself, it is not hard to do barter in Germany.2. The trick of stability Cultural distance is beakd at a single point in time, but cultures may salmagundi over time and thusly, cultural differences may also change over time. Currently the conflict in Egypt is still ongoing which makes cultural difference between Germany and Egypt bigger. However, if this conflict ends, the cultural difference may shrink again. 3. The illusion of linearity in case a German MNE already had an entity in Egypt and is considering a second one, the obstacle of starting a second entity is humble than it would have with the initial entity introduction.The effect on cultural distance in that respectfore depends on the experience already gained and is not a linear process. 4. The illusion of causality Kogut and Singhs formula just now focuses on cultural difference, but distance is a multidimensional construct and should be studied not in isolation but together with the other three dimensions of distance, viz. institutional/administrative distance, geographic distance and economic distance. For instance, the cultural difference between Germany and Egypt is 1,748 and the geographic distance between Germany and Egypt is 3208 kilometer.The cultural difference between Germany and Australia is 0,320 (a grant smaller than 1,748) and the geographic distance between these two countries is 14482 kilometers (a lot further than 3208 km). 5. The illusion of discordance the laying claim is that all cultural aspects of the cultural distance between home and host country matter equally, but depending on the country, some dimensions of a culture matter more than others. charge language and religion.Both cultural aspects, but when Germany does business with the Netherlands difference in language would matter a lot more than difference in religion, whereas when Germany does business with Egypt, the religion fact or would weigh a lot heavier. 6. The premise of corporate homogeneity by using subject cultural measures, the CD concept only incorporates variance in the national culture but does not consider possible variances on a corporate level. theme culture vs. organizational culture is left out.In Egypt, a guild which employs employees of many different nationalities will have slight cultural differences with a German company in comparison to a company which only employs Egyptians. 7. The assumption of spatial homogeneity when examining the cultural differences on the basis of national level scores, possible cultural variances within that same country are left out. In Egypt it would not be correct to look at the country as a whole, since within the country (city versus rural areas) there are different cultures and sentiments based on different takes on for example Muslim religion.This could affect the way different companies do business and consequently reduce or expand the cultural di fference between Germany and Egypt. 10. mensurate the strengths and weaknesses of the Kogut and Singh measure of cultural distance. Kogut and Singh have made an effort of creating an overview on the cultural distance between countries. The overview is quite meticulous and based on a posteriori research, taking four dimensions created by Hofstede of cultural distance into account. Although the measure of cultural distance should provide realistic information for organisations that seek new foodstuffs, it is not able to do so.The measure should be seen as an indicator of cultural distance rather than an absolute number. Supported by Shenkars cardinal points of critique1, the weaknesses of Kogut and Singhs conjecture will be assessed. Supported by Kim and colorizes article, its strengths will be assessed2. As Shenkar researched effectively, Kogut and Singhs measure is quite ambiguous. It creates several illusions of cultural distance. Deriving from these seven points made by S henkar, the measure cannot be used in practice. The differences between reality and theory are too large.For example, as Shenkar explained in point 5 The implicit assumption that differences in cultures produce lack of fit and thence an obstacle to dealing is questionable. First, not every cultural gap is critical to performance. As Tallman and Shenkar (1994, p. 108) note, different aspects of firm culture may be more or less central, more or less difficult to transmit, and more or less critical to operations. Second, cultural differences may be complementary and hence have a positive synergetic effect on investiture and performance. 3Companies are shown one CD number, but the importance of the unhomogeneous dimensions creating this number is different for each company. For example, a company involved in financial derivatives that seeks to create a subsidiary overseas may be less concerned about the individualism/collectivism-dimension than about the uncertainty avoidance-dimens ion, as these companies are inherently making money of uncertainty. Thus, the CD number does not suit the function implied by Kogut and Singh. Singh and Kogut create an illusion that this CD number helps companies finding a suitable strategy for expanding abroad.The CD number should provide hard data for finding this strategy. Due to the difference between theory and practice, this number cannot provide practical data. However, the measure is suitable for other goals. For one, the measure can explain corporate behaviour in new markets. Kim and venerable researched the applicability of the CD measure. They concluded that relationship between the CD measure and corporate behaviour has some plausible consistencies. 4 The ownership manner a company takes in a new market is indeed dependent on the cultural distance between the host and home country.Kogut and Singhs measure is thus accurate, but not practical. In conclusion, the measure of Kogut and Sing is accurate enough to explain co rporate behaviour in hindsight, but cannot be seen as a practical calculation for choosing a business strategy. A company may tend to get humbled by the calculation method, as it equally takes all dimensions into account. However, in the end, a company will probably handle appropriately to the new markets culture. This is shown in Kim and Grays research.