Explain why it is important for leaders to understand cultural differences before doing business in other countries.

You have been selected to open two subsidiaries of organization XYZ. The headquarters of the organization is in the KSA.

The organization is dedicated to the production of mobile devices.

One of these new subsidiaries will be located in Mexico and the other one will be located in Denmark.

As you can see in the image below, which is from Hofstede’s Cultural Dimension Theory, there are differences and similarities among the countries.

Leaders should attempt to understand these differences to create effective organizational strategies.

Specifically, these cultural dimensions can help leaders determine business approaches, how to address negotiations, and can aid in creating strong management and leadership styles.

Source: Hofstede Insights. (2021). Country comparison.  https://www.hofstede-insights.com/country-comparison/denmark,mexico,saudi-arabia/

In additional to Hofstede’s Cultural Dimension Theory, the GLOBE research has identified six global leadership behaviors that are considered important in different cultures. These leadership behaviors are as follows:

Charismatic/ Value-Based

Team-Oriented

Participative

Humane-Oriented

Autonomous

Self-Protective

Now, thinking about the above information:

Based on Hofstede’s cultural dimensions, briefly describe the similarities and differences between the dimensions in Denmark, the KSA, and Mexico.

Analyze how the cultural dimensions of the three countries (i.e., Denmark, the KSA, and Mexico) impact leadership styles, leadership behaviors, and the decision-making process of leaders. What factors most greatly impact leadership qualities?

Explain which type of leadership behaviors, based on the GLOBE research, should be understood and how these leadership behaviors may impact the different cultures (Mexico and Denmark).

Explain why it is important for leaders to understand cultural differences before doing business in other countries.