Mnc Entering India (vodafone)

When Cross Border Mergers or Acquisitions happen the participating organizations need to understand the issue of differences in national cultural issues very well in order to set up a successful Joint Venture (JV). Each country has a different national culture and this needs to be recognized and addressed because it will ultimately impact upon the work culture of the fusion organization they are newly going to form.

Geert Hofstede developed a model which seeks to understand how values in the work place are influenced by culture. He started this study by looking at IBM operations between 1967 and 1973. Data was culled out from 50 different countries which were then extrapolated to 74 nations (the original 50 plus an additional 24). Initially Hofstede zeroed in upon four factors -

1. Power Distance (PD),

2. Uncertainty Avoidance (UA),

3. Individualism (IND) and

4. Masculinity (M).

Later on he added a fifth dimension as well. This fifth dimension arose out of his interactions with Chinese workers who as a general rule gave great weightage to their Confucian beliefs. Confucianism as such lays stress upon Long Term Orientation. Hofstede found it worthwhile to take up this fifth dimension as well since he found that this dimension is relevant in the workplace in both Confucian and non Confucian societies.

Hofstede’s view is that in strategic