CULTURAL DIMENSIONS IN BUSINESS LIFE: HOFSTEDE’S INDICES FOR GHANA

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ABSTRACT

Ghana has lately generated huge interest globally as a preferred destination for doing busi-ness in Africa. However, like many African countries not much has been documented on busi-ness culture in Ghana. Through the use of a questionnaire based on Hofstede’s elements of national culture, the opinions of both indigenous and expatriate business executives in Ghana are ascertained in order to synthesise and profile Ghana’s business culture.

The theoretical section is mainly based on the findings of Geert Hofstede analysis and ex-perimentation which consists of the following concepts: power distance, individualism versus collectivism, uncertainty avoidance, masculinity versus femininity and Confucian dynamism.

The results show that power distance is relatively big and management is not easily accessible in the Ghanaian business culture. Ghanaians tend to be more collectivistic in nature and may not be too keen on the uncertainty element.

Furthermore, as Ghanaians are identified to be more assertive in nature, the business culture could be said to be a very masculine one and was also shown to be a long term oriented cul-ture as far as the Hofstede’s fifth element of culture is concerned.


Keywords: Ghana, culture, Hofstede indices.


TABLE OF CONTENTS
1 Introduction
            1.1 Purpose of the thesis
            1.2 Research problem question
            1.3 Scope of the study
            1.4 Structure of the thesis

2 Theoretical review
            2.1 Country background
            2.2 Culture
            2.3 Cultural relativism and ethnocentricism
            2.4 Measuring cultural differences
            2.5 Evolution of hofstede’s framework
            2.6 Cultural dimensions (Hofstede’s framework)
                        2.6.1 Individualism versus collectivism
                        2.6.2 Power distance
                        2.6.3 Femininity versus masculinity
                        2.6.4 Uncertainty avoidance
                        2.6.5 Confucian dynamism as a fifth dimension
            2.7 Reconciliation of cultural differences
                        2.7.1 Cultural awareness
                        2.7.2 Clustering cultures
                        2.7.3 Determining the extent of global involvement
            2.8 Theoretical framework

3 Research methodology
            3.1 Research design and method
            3.2 Data sources
                        3.2.1 Primary sources
                        3.2.2 Secondary sources
            3.3 Data collection
            3.4 Population and sampling
            3.5 Validity and reliability

4 Empirical study
            4.1 Description of the respondents
            4.2 Data presentation and analysis
                        4.2.1 Collectivism versus individualism
                        4.2.2 Power distance
                        4.2.3 Uncertainty avoidance
                        4.2.4 Masculinity versus femininity
                        4.2.5   Long-term orientation versus short-term orientation

5 Conclusions
            5.1 Research Summary
            5.2 Limitations
            5.3 Recommendations
            5.4 Reflection
References
List of Figures
List of Tables
List of Appendices


1       Introduction

A major challenge to the global business community considering trade and investment in the sub-Saharan African countries is access to credible and timely analytical information in order to make informed, knowledgeable and definitive business decisions (African Business Guide, 2009). One dimension of this challenge is the question of culture: this is very important for the international management practitioner, whose first question often is; “how do they do things out there” (Usunier, 1998). There is a general consensus that, culture has a funda-mental influence on international business practices (Omar, O., Kirby, A. & Blankson, C. 2003. 81-97). This is further reinforced by the complex implementation process of interna-tional management decisions. Therefore, improving levels of cultural awareness can help companies build international competencies and enable individuals to become more globally sensitive.

At present, data and information on business and culture issues in the African economies is scattered in multiple data sources which are often inaccessible. In an era of economic inter-relationships in Africa, fuelled by global financial transactions and joint ventures between businesses in industrialized and developing countries within Africa (Ofosu and Hansen, 2002; Mmieh and Owusu-Frempong, 2004) and with growing attraction of foreign direct investment (FDI) to developing economies in Africa, it is surprising that very little is documented about African culture and its interface with international business practices. On the Internet, the growing body of information on African business resources remains scattered and largely in-visible. Researchers may spend countless frustrating and often unproductive hours searching for such information. It is also important to know that, in order for foreign companies to suc-ceed in Africa, the “understanding and appreciating African culture is not an option but a necessity” (Nwankwo, S. 2000).

As stated by Iguisi and Rutashobya (2002), the lack of proper integration of culture in man-agement in Africa is denying Africa the resultant synergy needed in national economic, mana-gerial and social development. To solve this void of lack of information on national cultures of most African countries, which has a big influence on doing business in these countries, there is the need not only to foster research in this area, but also to make this information readily available. One way to do this would be to profile the different cultures of different African countries and make them available to those who need them. Against this background, a deci-sion was made to conduct this study with the aim of profiling one country in Africa: Ghana’s national culture.


Ghana has in the past few years witnessed progressive increases in the FDI and now, with the discovery of oil, the country has attracted a huge global interest. From colonial times till now, Ghanaians have been in contact with people from other countries especially the British. There are a lot of foreign companies in Ghana doing business in various sectors especially in the mining and manufacturing sectors.

Through its historical, political, economic and social development, Ghana has evolved over time to carve its own national culture which has an impact on doing business in the country. The need for knowledge on Ghanaian national and business culture is therefore very impor-tant to those companies and those contemplating following suit. (Bond, P. 2005, 5).

1.1      Purpose of the thesis
Cultural factors have tremendous impact on businesses including management style, and have developed within the international business environment to become a major issue (Na-sierowski, W. and Mikula, B. 1998). In particular, the knowledge of the American, western European and Japanese influence on organisational management has become an essential tool for global actors. Ghana, like any country has its own business culture which invariably, is very much influenced by the national culture. It is however surprising that, like many other African countries, not much has been documented about Ghanaian business culture. It is therefore the researcher’s opinion that a study of the Ghanaian business culture will be inter-esting for academic analysis and contribute to the discourse of how national cultures affect international business. This way, the Ghanaian culture profile could be presented in order to see how it compares with others. Understanding one's own culture and the impact of culture on the actions of others is essential for effective global business interactions (ITAP Interna-tional, 2009). Knowing the cultural-profile of Ghana, therefore, will help business managers in Ghana know more about the similarities and difference between others. This will also serve as a good source of information to any individual or organisation interested in the busi-ness culture of Ghana.

1.2      Research problem question


With the purpose of the thesis in mind, the literature on national culture such as the works of Trompenaars and Hofstede were reviewed. Consequently, one overall research problem was identified: How to synthesise what constitutes the Ghanaian culture that is relevant to the international business practitioner. This synthesis process requires an evaluation tool: In other words, to profile and present what constitutes the aspects of Ghanaian culture relevant to the international business practitioner, certain predefined metrics or framework of study is needed. Answering this question requires relying heavily on emerging literature on national and international business culture. This will set the tone for understanding the various as-pects of national and business culture and help define the metrics to be used.

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