Hofstede's Five Dimensions Of National Culture Differences

Furthermore, the premise of national cultures is also another mainstream driver of success in international businesses. Another conceptual framework for understanding the drivers behind foreign investment was proposed by Hofstede (1997), which focuses on national cultural differences in order to determine a suitable foreign market. This model differs from Dunning’s (1988) framework which lacks an emphasis of cultural dimensions. Hofstede’s (1997) Five Dimensions of National Culture Differences consist of five dimensions; Power Distance, Uncertainty Avoidance, Individualism/Collectivism, Masculinity/Femininity and Long-Term Orientation (Hofstede, 1997). In terms of Hofstede comparison scores factors such as Power Distance, Individualism and Uncertainty Avoidance between the US and Germany scored vastly different (Hofstede, 2001), potentially explaining why Walmart significantly underperformed in these areas.

In terms of Uncertainty Avoidance, which is a vital dimension in the visualisation of cultural differences (Bialas, 2009), US employee-management practices did not align accordingly within German domain. One instance of this was Walmart’s policy whereby all employees were forced to attend a morning ritual and chant “Walmart” in order to supposedly increase employee-loyalty and boost their morale. This was taken as an annoyance in Germany (Christopherson, 2007), in addition to asking employees to spy on each other for misconduct which is not accepted in Germany