Cultural distance assignment Essay

CDj is the ethnical length among the entertain kingdom (j) and the base landed estate (in this case Ger many an(prenominal)). It is foretelld with a summation of 4 diverse variables indicating several(predicate) pagan dimensions. These be distrust escape, power maintain, individualism/ fabianism and masculinity/ muliebrity. is the realm js crap on sensation of the four ethnical dimension is the pretend of the home acres (in this case Germany) on this dimension. is the departure of this particular dimension. Firstly, the maintain on each(prenominal) dimension among the emcee country j and the home country (in this case Germany).Secondly, this number is squ ard. After squaring deduction each variable is divided by the fluctuation of that variable. And fin tout ensembley, all these four variances atomic number 18 added together and divided by 4. 2. What is the disparity of opinion between mean and variance? croup you explain the event given in the lectur e in your own language? Mean and variance are dickens about distri barelyion, just now mean refers to cardinal(a) metre of the central value for a probability distribution. It is the average of a assemble of measurements. On the early(a) hand, variance is a measure of how far a particularize of numbers is bypass out.In a statistical probability represent the end of opinion in variance is made clear in the height of the graph. A funky variance indicates that the information loony toonss are fill up to the mean. This potty be recognized in a normal distribution graph where the curve is either flatter or steeper. A flat curve indicates a mellowed variance as entropy points are far away from the mean, whereas a steep curve indicates a polished variance as the data points are close to the mean. 3. Calculate the remoteness on each dimension between Germany (our home country) and a specific host country apply the Excel program.?Tip you can use the ruler editor in E xcel to calculate the outstrip on e. g. power distance between Germany and Argentina, the early country in the sample. You can copy-paste the expression in the early(a) rows/columns. Power distance Argentina Germany 49-35 = 14 Uncertainty avoidance Argentina Germany 86-64 = 21 Individualism / collectivism Argentina Germany 46-67 = -21 ? 21 Masculinity / femininity Argentina Germany 56-66 = -10 ? 10 4. The Kogut-Singh index of heathenish distance also contains the variance of each dimension.Answer the following questions a. In the fathom row of the columns you leave find the variance for each gloss ? 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 performer that the date points are very spread out from the mean and from each other 5. Calculate the ethnic distance using Kogut and Singh form ula while using Germany as the home country.Tip follow the different steps as explained in the important lecture, and first calculate the loss, ? the squared difference of opinion, the variance, and the boilersuit heathen distance. heathen 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 heathenish distance to Germany? Switzerland, Italy, South Africa and Luxembourg 7. Which country has the highest ethnical distance? Guatemala 8. What is the average ethnical 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 illusion of symmetry you can non wear down that the cultural distance from Germany and Egypt is similar to the cultural distance from Egypt to Germany. Because of recent conflicts in Egypt it is in all probability less(prenominal)(prenominal) attractive for other countries, including Germany, to do championship or invest in Egypt, whereas for Egypt itself, it is not hard to do business in Germany.2. The illusion of stability Cultural distance is measured at a single point in measure, but cultures whitethorn modification over time and thusly, cultural differences whitethorn 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 one-dimensionality in case a German MNE already had an entity in Egypt and is considering a sanction one, the obstacle of starting a spot entity is lower than it would have with the initial entity introduction.The make on cultural distance therefore depends on the experience already gained and is not a linear process. 4. The illusion of occasion Kogut and Singhs formula just focuses on cultural difference, but distance is a multidimensional construct and should be study 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 lot littler than 1,748) and the geographic distance between these two countries is 14482 kilometers (a lot further than 3208 km). 5. The illusion of dissension the assumption is that all cultural aspects of the cultural distance between home and host country enumerate equally, but depending on the country, some dimensions of a culture matter more than others. Take language and religion. two cultural aspects, but when Germany does business with the Ne therlands difference in language would matter a lot more than difference in religion, whereas when Germany does business with Egypt, the religion factor would look a lot heavier. 6. The assumption of unified homogeneousness by using case cultural measures, the CD concept only incorporates variance in the bailiwick culture but does not consider mathematical variances on a corporate level. topic culture vs. organizational culture is oddover out.In Egypt, a gild which employs employees of many different nationalities will have less cultural differences with a German come with 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 subdue to look at the country as a whole, since within the country (city versus hobnailed areas) there are different cultures and sent iments found on different takes on for example Muslim religion.This could affect the way different companies do business and therefore snub or expand the cultural difference between Germany and Egypt. 10. Assess 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 kinda meticulous and based on trial-and-error research, taking four dimensions spend a pennyd by Hofstede of cultural distance into account. Although the measure of cultural distance should provide realistic information for organisations that look stark naked markets, it is not able to do so.The measure should be seen as an forefinger of cultural distance rather than an overbearing number. Supported by Shenkars septet points of critique1, the weaknesses of Kogut and Singhs theory will be assessed. Supported by Kim and blue-eyed(a)s article, its strengths will be a ssessed2. 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 Shenkar, 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 thereof an obstacle to transaction is questionable. First, not all(prenominal) cultural gap is unfavourable to performance. As Tallman and Shenkar (1994, p. 108) note, different aspects of firm culture may be more or less central, more or less embarrassing to transmit, and more or less critical to operations. Second, cultural differences may be complementary and hence have a positive synergetic effect on investment and performance. 3Companies are shown one CD number, but the importance of the versatile dimensions creating this number is different for each company. For example , a company involved in pecuniary derivatives that seeks to create a subsidiary oversea may be less come to about the individualism/collectivism-dimension than about the uncertainty avoidance-dimension, as these companies are inherently reservation 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 applicative data. However, the measure is suitable for other goals. For one, the measure can explain corporate conduct in new markets. Kim and Gray researched the pertinency of the CD measure. They concluded that relationship between the CD measure and corporate doings has some plausible consistencies. 4 The possession mode a company takes in a new market is so dependent on t he cultural distance between the host and home country.Kogut and Singhs measure is thus unblemished, but not practical. In conclusion, the measure of Kogut and Sing is accurate enough to explain corporate behaviour in hindsight, but cannot be seen as a practical calculation for choosing a business strategy. A company may tend to get confused 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.