Question

Identify and describe how cultural differences in Israel can affect how an American (USA) company does business in Israel. Please use the HOFSTEDE MODEL as reference to support your response.

Answer 1

With the globalization, many companies are beginning to invest and increase their foothold in other countries or even continents. While there is nothing wrong with globalizing the business, it is very important to understand the culture of the country you are trying to enter or establish your company in. People from all around the world have different work cultures and failing to understand the culture of the other side may result in a complete disaster in any business venture.

There are many American companies who are trying to enter the Israeli market but most of them have failed to do so successfully except for some. The prime reason behind this failure is the huge cultural gap between the US and Isreal. Having failed to understand this gap, no company has a chance of surviving in Israel. Therefore, it is very important to understand how the Israeli culture is different from American culture and how to overcome the gaps.

The main difference between the culture can be determined by defining the Israeli culture as family-oriented and American culture as rules-oriented.

Just like there is less formality, more openness, honesty and directness with your family members, the Israelis will seem too forthright and direct or even pushy to the Americans.

Whereas the Americans may seem fake or phony to Israelis due to their adherence to being formal, out of politeness and respect for their Israelis counterpart.

It is very important to understand that no culture is right or wrong. They are just different from each other.

Therefore, to conduct a successful business, it is very important to understand these differences and smooth them over.

Helping to smooth over these cultural differences is the HOFSTEDE model of cultural dimensions.

Developed by Geert Hofstede, this model seeks to portray how cultural behavior is impacted by the values and beliefs of the particular culture. there are six dimensions to understand these cultural backgrounds namely:

a. Power distance - This explains how members of the society who are less powerful accept and expect the unequal power distrubituon in their society.

Societies which have large power distance are autocratic and somewhat centrally authorized They have a paternalistic management system with a lot of hierarchy levels and power inequality.

whereas societies with small power distance are more participative and consulting type management with a flatter organizational structure. Decision making is not centrally authorized here.

The Israelis have small power distance and power is decentralized with an informal atmosphere in their workplaces.

b. Uncertainty avoidance - It explains how much at ease the society is very uncertainity.

If a society has weak uncertainty avoidance, then they are more open to taking risks and generally more flexible than those societies which have high uncertainty avoidance who have no tolerance for any deviations and are tended to avoid risks.

The Israelis have weak uncertainty avoidance and there is a strong emphasis on security.

c. Individualism vs collectivism - This is to understand whether the people have leaned towards being left alone to look after themselves or if they prefer to stay in close knitted network

individualistic cultures have more leniency towards concentrating on their own goals, needs, and aspirations rather than collective cultures who put the societal norms and collective interest of the society over personal interest and gains.

The Isreali society is a blend of both the individualistic and collective culture and there is an emphasis on self-actualization along with a responsibility towards society and duty to others.

d. Masculinity vs femininity - It shows the preference of the society towards masculine qualities such as heroism and assertiveness or feminine qualities such as cooperation, modesty and caring for the weaker sections

Masculine cultures have distinct roles for each gender and are highly concentrated on material gains whereas the feminine cultures put their emphasis on the quality of their life and work and are more emphasize on the non-materialistic gains.

again, the Israeli culture is a blend of both but there is more leniency towards the masculine features such emphasis on high performance with direct assertiveness.

e. Long term vs short term orientation- long term orientation can be defined by a society which seeks virtue rather than short term orientation which is seeking the absolute truth in the society

Long term orientated cultures have high levels of perseverance and persistence and are positively associated with economic growth whereas short term oriented cultures are conventional with a static mentality and are negatively associated with economic growth and more emphasized on stability.

The Israeli culture is rather short-term oriented with a focus on respecting the traditions and dependence on normative thinking.

f. Indulgence vs Resistant - This shows the extent to which a society can exercise power and control over their desires.

an indulgent society is more inclined towards personal enjoyment and fun than a resistant society which put societal norms above personal gratifcitation.

again, this a blend of both. and the Israeli cultures have clearly defined rules of where to put personal gains first and where to put the society first.

Conclusion

Cultural differences can make or break a partnership of cross-country nature. however, the Hofstede model helps in bridging the gap and turning it into a successful venture by understanding the other culture and adapting it to meet the needs of the organizations.