14. Corporate Culture

Question 1

<p>How is Asset Stripping defined?</p>

Answer 1

<p>The practice of buying businesses and breaking them up. The profitable parts are sold for cash and the rest are closed down.</p>

Question 2

<p>How is Evidence-based Decision Making defined?</p>

Answer 2

<p>An approach to decision making that involves gathering information and using a systematic and rational approach to reach a conclusion.</p>

Question 3

<p>How is Long Term defined?</p>

Answer 3

<p>The time period where decisions have an impact on the vision, mission and objectives of a business. Typically longer than five years.</p>

Question 4

<p>How is Short Term defined?</p>

Answer 4

<p>The time period where decisions only have an impact on the operational activities of a business – typically less than five years.</p>

Question 5

<p>How is Strategic Decisions defined?</p>

Answer 5

<p>Decisions concerning policy that can have a long-term impact on a business. Can be risky.</p>

Question 6

<p>How is Subjective Decision Making defined?</p>

Answer 6

<p>An approach to decision making where the personal opinions of the key decision maker strongly influence the course of the action chosen.</p>

Question 7

<p>What are some influences of business decisions?</p>

Answer 7

<p>- Corporate Influences
<br></br>- Corporate Culture
<br></br>- Stakeholder Perspective
<br></br>- Business Ethics</p>

Question 8

<p>How does Corporate Influences affect Business Decisions?</p>

Answer 8

<p>- Short term goals conflicting with long term objectives.
<br></br>- Focus on need for immediate profit can affect long term growth
<br></br>- For example - limiting pay rises
<br></br>- Another Corporate influence is whether business decision are based on evidence or the subjective view of key decision makers
<br></br>- Subjective decision making is likely to carry more risk</p>

Question 9

<p>How does Corporate Culture influence Business Decisions?</p>

Answer 9

<p>- The corporate culture can affect decision making.
<br></br>- Open cultures will be more flexible and innovative
<br></br>- More restrictive cultures can lead to being more cautious, leading to being less competitive</p>

Question 10

<p>How does Business Ethics influence Business Decisions?</p>

Answer 10

<p>- Some businesses will focus on corporate social responsibility
<br></br>- Others will have less consideration for factors such as environmental or local issues</p>

Question 11

<p>How does Stakeholder Perspective influence Business Decisions?</p>

Answer 11

<p>- Businesses focused on shareholder opinions tend to leave other stakeholders marginalized.
<br></br>- Others will consider a range of stakeholders, such as customers or workers, this focus may appeal to more customers</p>

Question 12

<p>What courses of action are Short-Termist Businesses likely to take?</p>

Answer 12

<p>- Maximise Short-Term Profits
<br></br>- Invest Less Money in Research and Development (R&D)
<br></br>- Invest less in Training
<br></br>- Return Cash to Shareholders
<br></br>- Engage in Asset Stripping
<br></br>- Arrange more Short-Term Contracts
<br></br>- Pursue External Growth rather than Organic Growth</p>

Question 13

<p>Why would a Short-Termist Business want to Maximise Short-Term Profits?</p>

Answer 13

<p>- Most companies that pursue short-term objective aim to increase shareholder value
<br></br>- They are likely to do this by trying to maximise short-term profits
<br></br>- For example. they might try to maximise revenue by charging higher prices, invest in advertisement, use cheaper resources etc.</p>

Question 14

<p>Why would a Short-Termist Business want to Invest Less Money in Research and Development (R&D)?</p>

Answer 14

<p>- This is because research and develop can be a big drain on cash reserves.
<br></br>- A company will prefer to use this to help fund short -term objectives
<br></br>- Investment in R&D is also risky, returns could be negative if R&D projects are fruitless
<br></br>- Even if R&D is successful, the financial returns can take many years to reap</p>

Question 15

<p>Why would a Short-Termist Business want to Invest Less in Training?</p>

Answer 15

<p>- Training staff is also expensive and the returns are not immediate
<br></br>-The returns from training are likely to be positive because workers will be better motivated, better equipped to do their job and staff turnover will be lower
<br></br>- However, it will take time for the benefit to materialise</p>

Question 16

<p>Why would a Short-Termist Business want to Return Cash to Shareholders?</p>

Answer 16

<p>- A business with a large cash reserves may pay special dividends to shareholders instead of investing for the long-term</p>

Question 17

<p>Why would a Short-Termist Business want to Engage in Asset Stripping?</p>

Answer 17

<p>- Once the other business has been asset stripped, the profitable parts are sold for cash and the loss-making sections are closed down.
<br></br>- This practice is often considered unethical because there is no regard for the future of the company and its stakeholders
<br></br>- However, in the short term it can generate a quick cash return for shareholders of the predator</p>

Question 18

<p>Why would a Short-Termist Business want to Arrange more Short-Term Contracts?</p>

Answer 18

<p>- They may also employ more agency and temporary staff, and favour short-term leases for machinery and other essential assets.
<br></br>- entering short-term contracts obviously does not really commit a business to any long-term objectives</p>

Question 19

<p>Why would a Short-Termist Business want to Pursue External growth rather than Organic Growth?</p>

Answer 19

<p>- Organic growth may be considered too slow for companies with a short-termist approach
<br></br>- growth through mergers and acquisitions is much faster and may generate swifter returns, if successful</p>

Question 20

<p>What are the Drawbacks of Short-Termism?</p>

Answer 20

<p>- Long term profitability of a business could be threatened by focusing on short term goals.
<br></br>- Companies can lose competitive edge, particularly in overseas markets
<br></br>- Requirements of financial reporting – particularly quarterly reports – mean that too much time is spent by executives focusing on non productive activities.
<br></br>- Over reliance on short term contract – can lead to inefficient use of resource in long term</p>

Question 21

<p>How is Long-Termism different from Short-Termism?</p>

Answer 21

<p>- Essentially, the benefits of long-termism is the opposite of short-termism.
<br></br>- Businesses less likely to miss profitable long term products as will be willing to accept longer payback periods
<br></br>- Increases in R&D spending will lead to greater chances of developing new products and other innovations
<br></br>- With increased training budgets, long term will lead to more qualified, experienced staff, improving productivity</p>

Question 22

<p>What are the Two Types of Decision Making?</p>

Answer 22

<p>- Evidence-based decision making --> requires a systematic and rational approach to researching analysing all the available information before a conclusion is reached
<br></br>- Subjective decision making --> is where the personal opinions of the key decision maker strongly influence the course of action chosen</p>

Question 23

<p>What is the process of Evidence-based Decision Making?</p>

Answer 23

<p>-Setting/Identifying Objectives
<br></br>- Gathering Ideas and Data
<br></br>- Analysing Ideas and Data
<br></br>- Making a Decision
<br></br>- Implementing the Decision
<br></br>- Monitoring and Evaluation</p>

Question 24

<p>What is the Identifying objective stage in Evidence-Based Decision Making?</p>

Answer 24

<p>- identify the objective a business wants to achieve
<br></br>- The objective might be a corporate objective, such as growth or survival in a poor trading period --> decisions are likely to be complex and might be taken by the board of directors
<br></br>- For lower-level objectives, such as filling a part-time vacancy, decisions may be taken by junior managers
<br></br>- Objectives might be different at different stages in its growth
<br></br>- government owned companies will have different objectives from PLCs
<br></br>-The business also needs to develop criteria to measure whether it has achieved its objectives
<br></br>- Quite often the objective is to solve a problem</p>

Question 25

<p>What is the Collecting Information and Ideas stage in Evidence-based Decisions?</p>

Answer 25

<p>- The amount and nature of the information needed will depend on the decision e.g. launching a new product would require alot of information compared to deciding who would be best to hire for a new position
<br></br>- It could take several months to collect all this information
<br></br>- Whereas some decisions can be made with the information a company already has e.g. dismissing an employee
<br></br>- A business may get this information with a working party set up in the firm who could produce reports and presentation
<br></br>- Alternatively, individual and departments might submit ideas and information</p>

Question 26

<p>What is the Analysing Information and Ideas stage of Evidence- Based Decision Making?</p>

Answer 26

<p>- the next stage in the process is to analyse information to look for alternative course of action
<br></br>-Possible course of action may be based on previous ideas or completely new ideas
<br></br>- The aim is to identify which course of action will best achieve the business's objective or solve the problem- it may be possible to test the alternatives before the one that is chosen is carried out</p>

Question 27

<p>What is the Making a Decision stage of Evidence-Based Decision Making?</p>

Answer 27

<p>- this is the most important stage in the process
<br></br>- decision makers have to commit themselves to one course of action
<br></br>- It is difficult to change the decision, so getting it right is vital e.g. if a new product doesn't sell, it can lead to a lose of money
<br></br>- Some decision can be reversed e.g. if a owner of a shop decisions to close on Tuesday afternoon but the loss of sales in intolerable, the owner can easily reopen
<br></br>- Sometimes the decision makers feel that they cannot reach a decision
<br></br>- They may have to obtain more information and complete the previous two stages in the process again</p>

Question 28

<p>What is the Communication stage of Evidence-Based Decision Making?</p>

Answer 28

<p>- once a decision has been made, personnel are informed and the decision is carried out
<br></br>- Quite often the people making the decision are not those that carry them out
<br></br>- Instructions may be passed by the decision makers to someone else, probably a manager, explaining what action should be taken</p>

Question 29

<p>What is the Outcome stage of Evidence-Based Decision Making?</p>

Answer 29

<p>- Once a decision has been carried out it will take time before the results are known
<br></br>- Sometimes this can be quite a long time e.g. the companies which decided to build to Channel tunnel will not know for several decades whether or not it will be a commercial success</p>

Question 30

<p>What is the Evaluate the Results of Evidence-Based Decision Making?</p>

Answer 30

<p>- Finally, decision makers need to evaluate the outcome of their decisions
<br></br>- This is often present as a report
<br></br>- It may be necessary to modify the course of action on the basis of the report e.g. revise the objective or collect some more information
<br></br>- there may be problems in following such as approach
<br></br>- Objectives may be difficult to identify or unrealistic
<br></br>- Information may be limited, incorrect or misleading
<br></br>- People making decisions in the process may have different views and this may lead to differences of opinion about what is the best course of action</p>

Question 31

<p>What is Subjective Decision Making?</p>

Answer 31

<p>- This method of making decisions involves “feelings” and “hunches”.
<br></br>- Some might argue that subjective decision making is too risky when making strategic decision
<br></br>- This is because subjective decision maybe based purely on the opinions and emotion of perhaps just one person</p>

Question 32

<p>Why may Subjective Decision Making be appropriate?</p>

Answer 32

<p>- If there is a lack of current, accurate and meaningful information relating to a decision
<br></br>- Some corporations are dominated by powerful and persuasive leaders, there may be occasions where such a leader makes strategic decisions singled-handedly, without consultation. This is acceptable, particularly if he leader is experience and has a good track record with decisions
<br></br>- In some industries subjective decision making may be quite normal e.g. the fashion industry
<br></br>-There are times when some decision have to be made very quickly and there maybe not be enough time to follow the scientific approach outlined earlier</p>

Question 33

<p>How is Cultural Dimension defined?</p>

Answer 33

<p>A set of characteristics that form the international context of business culture.</p>

Question 34

<p>How is Organisational, Organisation, Corporate or Business Culture defined?</p>

Answer 34

<p>The values, attitudes, beliefs, meanings and norms that are shared by people and groups within an organisation.</p>

Question 35

<p>How is Strong Culture defined?</p>

Answer 35

<p>A culture where the values, beliefs and ways of working are deeply embedded within the business and its employees.</p>

Question 36

<p>What are the advantages of a Strong Corporate Culture?</p>

Answer 36

<p>- It provides a sense of identity for employees. They feel part of the business. This may lead workers to be flexible when the company needs to change or is having difficulties.
<br></br>- Workers identify with other employees. This may help with aspects of the business such as teamwork.
<br></br>- It increases the commitment of employees to the company. This may prevent problems such as high labour turnover or industrial relations problems.
<br></br>- It motivates workers in their jobs. This may lead to increased productivity.
<br></br>- It helps employees understand what is going on around them. This can prevent misunderstanding in operations or instructions passed to them.
<br></br>- It helps to reinforce the values of the organisation and senior management.
<br></br>- It acts as a control device for management. This can help when setting company strategy.
<br></br>In comparison to a strong culture, a weak culture exists where it is difficult to identify the factors that form the culture or where a wide range of sub-cultures exists, making the culture difficult to define. There are certain factors that are likely to determine whether a business has a strong or weak culture.</p>

Question 37

<p>What is Weak Culture?</p>

Answer 37

<p>In comparison to a strong culture, a weak culture exists where it is difficult to identify the factors that form the culture or here a wide range of sub-cultures exist making the culture difficult to define</p>

Question 38

<p>What Factors define whether a Business Culture is Strong or Weak?</p>

Answer 38

<p>- Surface Manifestations
<br></br>- Core Organisation values
<br></br>- Basic Assumptions</p>

Question 39

<p>What are the Surface Manifestations that define whether a Business Culture is Strong or Weak?</p>

Answer 39

<p>- Artefacts
<br></br>- Ceremonials
<br></br>- Courses
<br></br>- Heroes of the Business
<br></br>- Language (used in a business-specific way)
<br></br>- Mottoes
<br></br>- Stories
<br></br>- Myths
<br></br>- Norms
<br></br>- Physical Layout (of the premises)
<br></br>- Rituals</p>

Question 40

<p>What is Artefacts as part of Surface Manifestations?</p>

Answer 40

<p>Such as furniture, clothes or tools- wearing a uniform would be an example.</p>

Question 41

<p>What is Ceremonials as part of Surface Manifestations?</p>

Answer 41

<p>Such as award-giving ceremonies or the singing of the company song at the start of work.</p>

Question 42

<p>What is Courses as part of Surface Manifestations?</p>

Answer 42

<p>Such as induction courses, or ongoing training courses for workers used to instil the organisational culture.</p>

Question 43

<p>What is Language (used in a business-specific way) as a part of Surface Manifestations?</p>

Answer 43

<p>Referring to workers as ‘colleagues’ or calling workers ‘crew members’.</p>

Question 44

<p>What is Mottoes as a part of Surface Manifestations?</p>

Answer 44

<p>Which are short statements that never change, expressing the values of an organisation.</p>

Question 45

<p>What is Stories as part of Surface Manifestations?</p>

Answer 45

<p>Which tell of some important even that exemplifies the values of the business, such as the history and role of the founders.</p>

Question 46

<p>What is Myths as part of Surface Manifestations?</p>

Answer 46

<p>Which are frequently told stories within a business about itself, but are not necessarily literally true.</p>

Question 47

<p>What is Norms as part of Surface Manifestations?</p>

Answer 47

<p>Which are the ways in which most workers behave, such as worrying if you turn up for work late, always being prepared to cover for workers who are off sick, or not using the company’s telephone to make personal calls.</p>

Question 48

<p>What is Physical Layout (of the premises) as part of Surface Manifestations?</p>

Answer 48

<p>Such as open plan offices, ‘hot desking’, or allocating the size of an office according to a manger’s place in the hierarchy.</p>

Question 49

<p>What is Rituals as part of Surface Manifestations?</p>

Answer 49

<p>Which are regular events that reinforce the culture of an organisation, such as always supporting Red Nose Day (we are a caring organisation), having a weekly ‘dress down day’ (we are a relaxed organisation), or holding an annual Christmas party (we are a sociable organisation).</p>

Question 50

<p>What is Heroes of Business as part of Surface Manifestations?</p>

Answer 50

<p>Living or dead, such as Bill Gates, Richard Branson or Walt Disney, whose way of working provides a role model within the business.</p>

Question 51

<p>What are Core Organisation Values that define whether a Business Culture is Strong or Weak?</p>

Answer 51

<p>- Core values are located below the surface manifestations of organisational culture.
<br></br>- They are consciously thought-out and expressed in words and policies.
<br></br>- The values expressed in a mission statement would be am example.
<br></br>- Often these are the values that have come from the top of an organisation.
<br></br>- They may have come from the original founders of the business, or the current senior management, which has attempted to impose a culture on the business.
<br></br>- Core organisational values can reflect the actual culture of a business, but, equally, they might not.
<br></br>- Workers at the bottom of the hierarchy might have very different values from the ones that senior management want them to possess.
<br></br>- For example, workers who face a very difficult environment where customers often complain might not share the views of the CEO that the customer is always right and at the heart of the business.</p>

Question 52

<p>What are Basic Assumption that defined whether a Business Culture is Strong or Weak?</p>

Answer 52

<p>- Basic assumptions are the unsaid beliefs and ways of working; they form the general attitude of the workforce and represent the totality of individuals’ beliefs and how they then behave. -- - They are ‘invisible’ and below the surface, and therefore often difficult to see, understand and change.</p>

Question 53

<p>What are the Classifications of Company Cultures?</p>

Answer 53

<p>There are many ways of classifying organisational culture. One attempt was made by Charles Handy in Understanding Organisations (1993). He argued that there were four main types of organisational culture.
<br></br>- Power Culture
<br></br>- Role Culture
<br></br>- Task Culture
<br></br>- Person Culture</p>

Question 54

<p>What is Power Culture?</p>

Answer 54

<p>- A power culture is one where there is a central source of power responsible for decision making.
<br></br>- There are few rules and procedures within the business and these are overridden by the individuals who wold power when it suits them.
<br></br>- There is a competitive atmosphere amongst employees.
<br></br>- Among other things, they compete to gain power because this allows them to achieve their own objectives. - This creates a political atmosphere within the business.
<br></br>- Relatively young, small-to medium-sized businesses, where a single owner founded the firm and is still very much in control, could typically have power cultures.</p>

Question 55

<p>What is Role Culture?</p>

Answer 55

<p>- In a role culture, decisions are made through well-established rules and procedures.
<br></br>- Power is associated with a role, such as marketing director or supervisor, rather than with individuals.
<br></br>- In contrast to a power culture, influence and control lies with the roles that individuals play rather than with the individuals themselves.
<br></br>- An organisation with a role culture will have a tall- or flat- hierarchy with a long chain of command.
<br></br>- Role cultures could be described as bureaucratic cultures.
<br></br>- The Civil Service is an example of a role culture.</p>

Question 56

<p>What is Task Culture?</p>

Answer 56

<p>In a task culture, power is given to those who can accomplish tasks.
<br></br>- Power therefore lies with those with expertise rather than a particular role, as in a role culture. In a task culture, team working is common, with teams made up of the experts needed to get a job done.
<br></br>- Teams are created and then dissolved as the work changes.
<br></br>- Adaptability and dynamism are important in this culture</p>

Question 57

<p>What is Person Culture?</p>

Answer 57

<p>- A person culture is one where there are a number of individuals in the business who have expertise, but who don’t necessarily work together particularly closely. - - The purpose of the organisation is to support those individuals.
<br></br>- The business will be full of people with a similar background, skills set and training.
<br></br>- Examples of person cultures could be firms of accountants, lawyers, doctors or architects.</p>

Question 58

<p>What factors do Organisation Culture affect?</p>

Answer 58

<p>- Motivation
<br></br>- Organisational Structures
<br></br>- New Management
<br></br>- Mergers and Takeovers</p>

Question 59

<p>How does Organisation Culture affect Motivation?</p>

Answer 59

<p>- Organisational culture affects the motivation of staff. - It can have a direct effect because the way in which treat each other impacts on motivation.
<br></br>- For example, motivation is likely to be greater if the culture of organisation respects individual workers and their achievements.
<br></br>- A highly competitive culture might motivate some workers and demotivate others.
<br></br>- Organisational culture can also indirectly affect motivation.
<br></br>- An organisational culture which leads to a successful business is likely in itself to motivate staff because they feel part of the successful business.</p>

Question 60

<p>How does Organisation Culture affect Organisational Structure?</p>

Answer 60

<p>- Organisational culture can affect the organisational structure of a business.
<br></br>- Differences can occur because a number of key workers share the senior management roles an example could be a Doctors’ Practice.
<br></br>- In contrast there are likely to more layers of management in a large multinational business that might require regional and divisional managers and multiple product teams
<br></br>- The larger the business, the more layers in the hierarchy there are likely to be as specialist role are assigned</p>

Question 61

<p>How does Organisation Culture affect New Management?</p>

Answer 61

<p>- One way for a business to change for new management to be appointed.
<br></br>- The greater the change needed, the more likely it is that the new management will have to confront the existing organisational culture.
<br></br>- The organisational culture is likely to be part of the problem that needs addressing if the business is to be turned around.</p>

Question 62

<p>How does Organisation Culture affect Mergers and Takeovers?</p>

Answer 62

<p>- The process of creating a single business out of the two organisations will involve changing organisational culture
<br></br>- In a takeover, one simple way of making that change quickly is for the senior management in the company being taken over to be made redundant.
<br></br>- Without powerful advocates at the top of the organisation, those lower down will find it difficult to resist the change that will be imposed upon them.
<br></br>- However, motivation and morale is often low in a company that has been taken over for the first year or so because they are being forced to change</p>

Question 63

<p>How can Business Culture be considered a Competitive Advantage?</p>

Answer 63

<p>- In the same way that you might identify a patent on an invention or an established brand as an asset, culture too can be a distinctive and sustainable competitive advantage.
<br></br>- Unit 45 discussed distinctive capabilities as a route to achieving competitive advantage for a business.
<br></br>- John Kay (1993) referred to 'architecture as one of the types of distinctive capability that could lead to competitive advantage.
<br></br>- Architecture refers to the relationships and networks within an organisation and those that it develops with its external stakeholder’s corporate culture would fall into this category.
<br></br>- Whenever discussing corporate culture, it is worth considering it in terms of an asset that can be used to add value and compete in the market.
<br></br>- However, it is also worth remembering that culture is very difficult to manipulate and shape in order to meet the changing needs of the business.</p>

Question 64

<p>How is Corporate Culture formed?</p>

Answer 64

<p>- Many factors contribute to the formation of organisational culture.
<br></br>- These include the role of the founding members of the organisation, their personalities and beliefs. often a strong leader's attitudes will permeate the organisation.
<br></br>- For example, Jan Koum, the CEO of WhatsApp, has refused to let advertisers buy space on the WhatsApp application.
<br></br>- His belief has influenced the strategy and values of the company.
<br></br>- Other factors that are likely to have a significant impact on the formation a firm's culture are the environmental factors that the business was born into.
<br></br>- For example, the history or heritage of a business may determine certain values and norms because they form part of what employees buy into.
<br></br>- However, such a factor may not play a part in a new company such as Pinterest, which was set up in 2010.
<br></br>- Similarly, the success of a company will play a big part in setting the values and expectations of staff.
<br></br>- Pinterest was the most rapidly growing social network site in 2012 and 2013, and was named one of the most innovative companies, all of which will contribute to the motivation and belief of its workforce.
<br></br>- The type of product is another factor in creating culture.
<br></br>- For example, the technological complexity of a product may determine the skill and expertise of the workforce (perhaps contributing to a role culture) and the pace of change or need for innovation.</p>

Question 65

<p>What are the Difficulties in change an Established Culture?</p>

Answer 65

<p>- From time to time it might be desirable for a business to change its culture to one that is stronger and more productive.
<br></br>- A firm's culture can provide with a competitive advantage over its rivals. The problem with organisational culture that although it may be easy to describe, identifying the factors that contribute towards that culture and their significance is very difficult.
<br></br> - Even changing one of these factors may not have significant influence on shifting the culture.
<br></br>- Furthermore, most organisations have sub-cultures within specific teams or functions.
<br></br>- Some aspects of organisational culture might also be easier to change than others.
<br></br>- For example, it might be easy to change the policies, rules and working practices within a firm these are tangible factors.
<br></br>- However, it is much harder to manipulate people's attitudes and beliefs.
<br></br>- Overall, culture can be changed if the right factors are influenced and the leaders within the organisation are strong. but changing culture is not easy and can be a long process
<br></br>- Many factors contribute to the formation of corporate culture. is important for the directors of a company to understand these factors and the role they play before they can hope to manage cultural change.</p>

Question 66

<p>What factors affect organisational structure and ways business may react in certain circumstances</p>

Answer 66

<ol><li><strong>Power distance</strong><br></br>This is the distance between managers and subordinates. A high-power distance culture suggests that managers will have significantly more power and privileges than their subordinates. They probably<br></br>will not socialise and communication is generally top down. A lower-power distance culture has greater collaboration and discussion between employees of different rank</li><li><strong>Individualism</strong><br></br>This is how people see themselves within their organisation. Where individualism is high, people tend to focus on their own success above that of the organisation or their team. The level of individualism versus collectivism within a culture can determine organisational structure, motivation and internal competition.</li><li><strong>Masculinity versus femininity</strong><br></br>Hofstede theorises the management style in a masculine organisation might be described as competitive and assertive. Its counterpart approach might be described as caring and co-operative. According to him, this could influence how people respond to targets and goals, and relate to one another in the business.</li><li><strong>Uncertainty avoidance</strong><br></br>This is the level at which an organisation will accept risk. A high level of uncertainty avoidance suggests a business will want evidence, security and proof before acting. By contrast a business with a low uncertainty avoidance might take 'a long shot' if it believes the rewards are worthwhile. Organisations with low uncertainty avoidance are more entrepreneurial and agile in their decision making.</li><li><strong>Long-term versus short-term orientation</strong> This addresses a culture's time horizon' and the<br></br>basis on which decisions are made. A high score indicates business decisions are made to achieve success in the long term. A low score suggests an organisation makes decisions to achieve short-term rewards and immediate gratification in terms of shareholder value.<br></br>Hofstede's cultural dimensions go beyond simply identifying behavioural differences — they present<br></br>a useful framework for understanding the cultural setting of a business. This is particularly useful when analysing businesses across borders and interpreting how international businesses might react and interact in different circumstances, such as international trade, partnerships, mergers and takeovers.<br></br><br></br><br></br></li></ol>

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