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The US and South Africa in Terms of Business Culture
Introduction
The way how companies conduct their business is subject to various internal and external factors. The country of a companys origin envelopes both types, as it hosts specific cultural features and environment that affects every companys decision. For example, if an American company decides to operate in an African country, it has to consider its values and principles since the effects might be genuinely unpredictable.
6-D Model
To be able to understand how an American or American-based company has to adapt to be successful in the African setting, there is a need to analyze the differences in cultural dimensions between societies first. In this context, Hofstede Insights 6-D Model can provide necessary guidance regarding these differences. It considers power distance, individualism, masculinity, uncertainty avoidance, long-term orientation, and indulgence as its main metrics.
The power distance dimension emphasizes the inequality between individuals in society, expressing their attitude toward it. Specifically, this dimension measures the extent to which individuals expect and accept unequal power distribution (Hofstede Insights, n.d.). Individualism stands for a degree of independence prevalent among society members (Hofstede Insights, n.d.). Individualistic societies are put in contrast with collectivistic ones whether people prefer to care for themselves or instead choose group responsibility that provides care for loyalty. The masculinity dimension indicates to what extent society is driven by competition, achievements, and success (Hofstede Insights, n.d.). The primary consideration in this dimension is what motivates people more the desire to be the best or to simply do what you enjoy.
Uncertainty avoidance is evaluated through the prism of the societal attitude toward the unknown future. In particular, it expresses how threatened society feels by unknown or uncertain situations and what it does to prevent their occurrence (Hofstede Insights, n.d.). Long-term orientation from the cultural perspective depicts the societal susceptibility to change and the ability to embrace new ideas in dealing with the future. In this context, some societies honor traditions and customs maintenance, whereas others seek new visions and solutions and are more concerned with planning ahead (Hofstede Insights, n.d.). Finally, the indulgence dimension represents the extent to which individuals suppress their personal desires, cravings, and impulses (Hofstede Insights, n.d.). It classifies societies into indulgent and restrained, highlighting such factors as optimism and attitudes toward joy and leisure.
Cultural Comparison Results
The comparison of the U.S. and South Africa through the 6-D Model yielded mixed results. On the one hand, these countries have almost no differences in terms of masculinity, uncertainty avoidance, and indulgence 62 and 63, 46 and 49, and 68 and 63 for the U.S. and South Africa, respectively (Hofstede Insights, n.d.). This fact categorizes American and South African societies as masculine, relaxed, and indulgent. People are highly motivated by personal success, are not threatened by innovation, and value their free time.
On the other hand, three other dimensions display small to significant disparities. First, the long-term societal orientation 26 for the U.S. and 34 for South Africa shows that American society has a slightly stronger emphasis on achieving quick results (Hofstede Insights, n.d.). Second, the scores on power distance dimensions showed 40 for the U.S. and 49 for South Africa; thus, African people are more accepting of the existing hierarchies (Hofstede Insights, n.d.). The third and most significant difference lies in the dimension of individualism. With a score of 65, compared to the American 91, African society proves to be far more collectivistic at its core (Hofstede Insights, n.d.). Consequently, factors such as devotion, loyalty, and group responsibility would play a more significant role in the African setting.
Implications Regarding Business
The prevalence of individualism over collectivism, with a weaker acceptance of established hierarchies, significantly contributes to the final vision of an American or American-based company. According to Leonard and Smith (2021), culture plays a major role in shaping social, political, and economic organization over time. Specifically, in the context of individualistic and collectivistic cultures, the former display higher rates of upward mobility through fostering vertical commercial relationships and incentivizing innovation (Leonard & Smith, 2021). Such tendencies can be explained by different risk preferences and perceptions of trust, work ethics, and beliefs regarding upward mobility.
Despite the evidence of individualisms influence on business perception, it requires specific channels for its effects to take place. Leonard and Smith (2021) define these channels as follows: formal policies, values transmission, and the causal effect of place. Firstly, the manifestation of individualistic culture is possible through governmental policies, such as redistributive policy. Particularly, the U.S. regions resembling the highest individualistic tendencies are the ones with lower taxes and governmental expenses (Leonard & Smith, 2021). In this context, the redistributive policy contributes to the overall mobility and influences the companies activity and decisions. Secondly, the resulting flexibility of the organizational structure and corporate environment implies the transmission of perceptions regarding work ethic, self-reliance, and innovative entrepreneurial efforts (Leonard & Smith, 2021). For instance, it might lead to weaker compliance with public policies, such as COVID-19 restrictions. Finally, the culture of individualism requires prolonged exposure to its influence for the effects to become evident (Leonard & Smith, 2021). In other words, a company built on individualistic principles is, to a great extent, a result of its respective environment, and its performance might vary depending on the place of its activity.
Thus, for an American company to become successful in the African collectivistic settings, it requires reconsidering its individualistic features. The Western vision greatly influenced the way how the business operates in South Africa; however, some peculiarities do not allow its complete manifestation. According to Adeleye et al. (2020), one of the main differences is the absence of a strong institutional presence. The African institutions can be considered weak, as they lack voice and accountability, governmental effectiveness, political stability, the rule of law, and corruption control (Adeleye et al., 2020). Thus, the company would not be able to rely on formal policies to the same extent as in the U.S. In addition, institutional weakness results in a specific relationship between the government and the business societies, where the latter can obtain a disturbingly strong influence on the former. In the context of African philanthropy, which directs this influence into the areas where the government cannot contribute, American individualism can have unpredictable effects (Adeleye et al., 2020). For instance, adverse and manipulative strategies would have a detrimental effect on corporate social responsibility and the business environment.
Conclusion
The individualism that serves as a foundation for the majority of American companies can significantly hinder the companys performance in the African setting. African culture is more collectivistic and less acceptable in terms of hierarchical changes. In addition, the weakness of African institutions implies lesser support in times of need and allows for detrimental unethical decisions. Consequently, the company would require adjusting to collectivistic terms, boosting its social responsibility, and preparing to emphasize cooperation.
References
Adeleye, I., Luiz, J., Muthuri, J., & Amaeshi, K. (2020). Business ethics in Africa: The role of institutional context, social relevance, and development challenges. Journal of Business Ethics, 161(4), 717-729.
Hofstede Insights. (n.d.). Country Comparison. Web.
Leonard, B., & Smith, S. M. (2021). Individualistic culture increases economic mobility in the United States. Proceedings of the National Academy of Sciences, 118(37).
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