Cultural Distance Craton International Company is a multinational corporation ba

Question

Cultural Distance

Craton International Company is a multinational corporation based in the US that wants to expand to the three of the following countries: Argentina, Iraq, Indonesia, Lebanon, or Lithuania. Based just on cultural distance between US and these countries, what 3 countries they should expand?

You should use cultural dimensions ratings from https://www.hofstede-insights.com/country-comparison/ for you calculations of the cultural distance. Show all your calculations in your submissions and explain your recommendations.

Explanation / Answer

Following is the table of comparison of different dimensions of culture

Analysis of the different dimensions reveals that assimilation between factors like power distance, masculanity and individualism of people is crucial for the success of any business. Other factors like long term orientation and uncertainty avoidance are dependant on the prevailing socio economic, political and other situational factors affected by stability concerns and threats of unknown, which also need to be considered. Indulgence varies from culture to culture and is an important factor if the business is related to luxury and lifestyle.

On comparing, Argentina, Lebanon and Lithuania seem to be more rational choices of three markets. Iraq being very different in all dimentions, is the last choice, while Indonesia also differs hugely on all dimensions except masculanity and Uncertainty avoidance, making it another country with higher differences.

Country Power distance Individualism Masculanity Uncertainty Avoidance Long term orientation Indulgence United States 40 91 62 46 26 68 Argentina 49 46 56 86 20 62 Indonesia 78 14 46 48 62 38 Iraq 95 30 70 85 25 17 Lebanon 75 40 65 50 14 25 Lithuania 40 60 19 65 82 16

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