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Approaches to the Government towards business i.e. Restrictive or facilitating;

National culture is described as the body of general beliefs & the values that are shared by the nation. Beliefs & the values are generally seen as formed by the factors such as the history, language, religion, geographic location, government, & the education; thus firms begin a cultural analysis by seeking to understand these factors. The most well-known is that developed by Hofstede in1980.

His model proposes four dimensions of cultural values including individualism, uncertainty avoidance, power distance & masculinity.

Individualism is the degree to which a nation values & encourages individual action & decision making.

Uncertainty avoidance is the degree to which a nation is willing to accept & deal with uncertainty.

Power distance is the degree to which a national accepts & sanctions differences in power.

This model of cultural values has been used extensively because it provides data for a wide array of countries. Many academics & the managers found that this model helpful in exploring management approaches that would be appropriate in different cultures.

For example, in a nation that is high on individualism one expects individual goals, individual tasks, & individual reward systems to be effective, whereas the reverse would be the case in a nation that is low on individualism.

  • While analyzing social & cultural factors, the organization may consider the following aspects:
  • Approaches to society towards business in general & in specific areas;
  • Influence of social, cultural & religious factors on the acceptability of the product;
  • The lifestyle of people & the products used for them;
  • Level of acceptance of, or resistance to change;
  • Values attached to a particular product i.e. the possessive value or the functional value of the product;
  • Demand for the specific products for specific occasions;
  • The propensity to consume & to save.