TOPIC and Prompt: Continue working with chosen least admired company “IBM INDUSTRIES” and its industry and complete the following:Identify Domestic and Global Environments (countries) that are in oppo

TOPIC and Prompt: Continue working with chosen least admired company “IBM INDUSTRIES” and its industry and complete the following:

  1. Identify Domestic and Global Environments (countries) that are in opposing cultural clusters (as identified in International business: theory and practice) identify which cluster(s) your two countries fit.
  2. Identify the socio-cultural parts of each country as related to business for your company.You will need to examine these with the aid of Geert Hofstede (see resources).
  3. Identify and discuss the various sociocultural aspects of each country. Do they differ? How? What are the similarities?
  4. How would these factors affect your company’s business in your Domestic and Global Environments (countries)?


  • Write a section of the final paper that details the items above.
  • Research requirement: 2-3 scholarly CREDIBLE sources.
  • Page requirement: 2-3 pages in APA format.


The S-C Environment in Country Clusters

The concept of country clusters probably took some of you by surprise. US multi-nationals tend to think (and report financial results) in terms of clusters when developing strategy, marketing plans, staffing plans, etc. and actually are required by the SEC to disclose financial results in clusters. A country cluster is a group of countries, not necessarily contiguous, where the countries and their consumers may share quite similar S-C Environments. Canada and the US are an indisputable example of a cluster, and some would argue that all, or most, of North and South America are one big cluster.

The EU has tried to develop a similar homogenous S-C Environment to reduce trade barriers and thus become more prosperous.  This has proven difficult, as culture, nationalism, language, currency, borders, taxes/tariffs and many other S-C differences have proven formidable obstacles. Other country clusters like South America, Asia and Eastern Europe have their own S-C Environments and issues that make working with them challenging, and IMHO they cannot be treated as homogenous clusters. For example, the S-C Environment in Japan, India and China are no way similar, even though some consider them part of an Asian cluster.It’s interesting to note that most US multi-nationals report their financial results by country cluster (or perhaps just US vs non-US) rather than by individual country. It may be that regulatory bodies like the SEC and the FASB recognize that US multi-nationals consider the details of their financial results at the country level highly proprietary and competitively sensitive information and do not want it disclosed. The financial results may also be broken down to a “lines of business” level of detail in the US, but probably not for country clusters. Again, this might be considered too sensitive to disclose to the public and competitors. “Line of business” reporting breaks revenue (but usually not expenses) down by some classification that makes sense to their operations.  For example, GE might report revenues by categories like Major Appliances, Jet Engines, Lighting, etc. 

What  Classical Business Theorists Say About the S-C Environment

The Assignment Instructions suggest you use Geert-Hofstede as a framework for discussing the S-C Environment with respect to the best and Worst companies you choose and the “country clusters” the operate within. Gerard Hendrik (Geert) Hofstede (born October2, 1928 in Haarlem) is a Dutch social psychologist, former IBM employee, and Professor Emeritus of Organizational Anthropology and International Management at Maastricht University in the Netherlands, well known for his pioneering research on cross-cultural groups and organizations.

His most notable work has been in developing cultural dimensions theory. Here he describes national cultures as describable along six dimensions: Power Distance, Individualism, Uncertainty Avoidance, Masculinity, Long Term Orientation, and Indulgence vs. restraint. He is known for his books Culture’s Consequences and Cultures and Organizations: Software of the Mind, co-authored with his son Geert Jan Hofstede.

You may find Dr. Hofstede’s work a little outdated. Not that his theories weren’t spot on         “back in the day”, but they are not exactly revolutionary today. Another familiar, and even older, theorist is Abraham Maslow, creator of his “hierarchy of needs”. Maslow and Hofstede together form the underpinning of how we think about societies and consumers, domestic as well as foreign.

Another Classification of Theorists – the Futurists –Their Views on the S-C Environment

What is a futurist and why would I choose to discuss them in the context of “business theorists”? As I stated in another lecture, most business theorists are more properly classified, in my not so humble opinion, as either economists (Galbraith) or business practitioners (Jack Welsh). I will add another classification, the futurists, notably Alvin and Heidi Toffler (“Future Shock” and “The Third Wave”), Steven Hawking (“A Brief History of Time”) and Thomas Friedman (“The World is Flat”).

The Toffler’s shocked the world in 1970 with the publication of “Future Shock” (it rocked my world). In it, they predicted startling new developments in science, technology, society and culture, most of which have already proven true, others are on the horizon. More importantly, they advanced the viewpoint that the increasingly rapid pace of change would disorient societies and obsolete, or at least destabilize, most of what we considered “truth” in 1970. Toffler famously said “change is the only constant”. How right he was.

Tom Friedman is an author and op-ed columnist for the New York Times. In his book, The World is Flat, Friedman recounts a journey to Bangalore, India, when he realized globalization has changed core economic concepts.] In his opinion, this flattening is a product of a convergence of personal computers with fiber-optic micro cable with the rise of work flow software. He termed this period as Globalization 3.0, differentiating this period from the previous Globalization 1.0 (in which countries and governments were the main protagonists) and the Globalization 2.0 (in which multinational companies led the way in driving global integration).

Steven Hawking may seem out of place in this list to many of you. He was best known as a theoretical physicist who wrote books that were baffling to the layman (“A Brief History of Time”). In these scientific writings he was the first to propose the existence of “black holes” in space and extensions of relativity theory. More recently, Hawking has begun writing on topics of more general interest (and more readable) regarding trends (many of them S-C trends) taking place and predictions on future developments.  These writings, while theoretical, may have great practical application to business theory, strategy and policy.

As business students, you should become familiar with the works of the theorists I’ve mentioned and many more. You may not see the practical, day-to-day application of these theories in business yet, but I would predict this knowledge will give you increased confidence as you climb the corporate ladder or help start and develop new businesses.

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