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Cultural Distance Assignment

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    What is the difference between mean and variance? Can you explain the example given in the lecture in your own words? The mean is the weighted average of all the potential values of a certain variable, whereas the variance of a variable measures the spread or variability of the distribution. This is easier explainable by using it in an example, for instance the lecture example. When the mean increases, so the weighted average increases, the graph will move to the right. However, when the variance increases only the shape of the graph will change, because the values become more spread. . Calculate the distance on each dimension between Germany (our home entry) and a specific host country using the Excel program. The country we decided to compare Germany with, is Spain. PDP 22 VA 21 MIND -16 MASS -24 4. The Gout-Sings index of cultural distance also contains the variance of each dimension. Answer the following questions: a. In the bottom row of the columns you will find the variance for each culture dimension. What dimension has the highest variance? The Individualism/Collectivism has the highest variance. MIND dimension). B. What does a high variance mean? It means that there is a high spread in the values of the variables calculated. . Calculate the cultural distance using Gout and Sings formula while using Germany as the home country. The cultural distance between the home country Germany and the host country (chosen by us) Spain is 0,975339. 6. Which four countries have the lowest cultural distance to Germany? Switzerland 0,034929 Italy 0,200216 south Africa 0,219359 Luxembourg 0,237383 7. Which country has the highest cultural distance?

    Guatemala has the highest cultural distance with the home country Germany, namely: 4,48705. 8. What is the average cultural distance between Germany and these 57 other countries? The average cultural distance between Germany and these 57 other countries is 1,60. 9. Pick a host country and relate the cultural distance score between Germany and that host country to the 7 points of critique raised by Sheehan as discussed in the lecture. 1. The illusion of symmetry: the culture distance is low. It will be fairly easy for Germany to do business with Spain and vice versa.

    Spain can provide Germany with fruits and wine, and Germany can provide Spain with all sorts of industrial goods. Germany’s economy however is way more successful than Spain’s economy. If Spain will therefore be able o successfully invest in Germany is not sure. Probably not. 2. The illusion of stability: The CD is considered to be a stable and constant. However, cultures change. Spain did not directly participate in World War II but after 1945 cultures between Germany and the rest of the European countries have greatly changed. 3.

    The illusion of linearity: Cultural distance is not linear, that is an illusion. There are lots of different approaches and perspectives to be kept in mind when Germany enters the Spain market, but also for Spain entering the German market. 4. The illusion of causality: In the calculation one should not forget the geographical distance. Spain is fairly close to Germany which would lower their cultural distance. They both do have a very different culture however. One should therefore not focus on the cultural difference only, but should also keep geographical distance in mind. . The illusion of discordance: Not all cultural dimensions have the same value. Some matter more than others. In Spain it is for example very common to have Siesta. German businessmen/women will have to keep in mind to not expect any phone calls being answered during the midday, because Siesta is valued very highly by the Spanish culture, whereas the German culture knows nothing like Siesta. Besides, in Spain they work longer, until about 8 to 10 pm. In the German culture it’s more common to stop at 5 pm. 6.

    The assumption of corporate homogeneity: The CD does not include the variance of corporate differences. Some Spanish companies for example could be very domestic with a high level of location bound Fess, which will not work out when doing business abroad. On the other hand there will be Spanish companies that do succeed in doing business abroad because of their internationally transferable Fess. It can sometimes differ between companies to a certain extent hat you cannot just use national cultural measures. 7.

    The assumption of spatial homogeneity: Difference in location within a country is not taken into account in the CD score. However, in Spain there is an enormous difference whether a company is located at the sea, or in the north below the Presses. It will make a huge difference in logistics and that is not used to measure the CD. 10. Assess the strengths and weaknesses of the Gout and Sings measure of cultural distance. Gout and Sings succeeded in generalizing cultural differences between several countries.

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