The Czech Republic has its roots as a former communist state known as Czechoslovakia. The fall of communism and the transformation to a democratic government has seasoned this country’s history.
From the “Velvet Revolution” in 1989 to the charismatic leadership of the poet Vaclav Havel, the Czech Republic has developed well in the European cultures (Katz 2008). The Czech Republic had an estimated GDP of $288. 6 billion in 2011, which is ranked 45th against other world countries. Auto exports are the main economic driver with Germany being a large consumer of their export goods (The cia world, 2012). Context The classification of high-context or low-context gives us very useful cultural distinctions. A high-context culture relies heavily on unspoken cues in conversation.
They tend to want to establish trust first in business negotiations, value a personal relations and goodwill, agree by general trust, and negotiate in a slow ritualistic manner. A low-context culture generally gets straight to the point and does not bother with ritualistic negotiations or getting to know one another personally before business deals. A low-context culture usually values expertise and performance, likes to make agreements with legalistic types of contracts, and negotiates as effective as possible (Kreitner, 2012). People in the Czech Republic tend to use body language sparingly with little physical contact.
However, when communicating with them, silence could mean a problem, especially if they lower their eyes. The Czech people value punctuality and are a schedule oriented people. They like to schedule meetings in advance and require notification if one is going to be late. The Czech do like to get down to business, but the pace of business could be slow at first until you build relationship. The Czechs also prefer written terms and conditions when making business transactions (Katz 2008). All of these characteristics describe a low-context culture. The U. S. s a low-context culture as well (Kreitner, 2012), so doing business with Czech people will not seem too foreign to our U. S. company. Hofstede’s Model The Hofstede’s Model can be used to help classify the national culture of the Czech Republic and can give us insight into how the U. S. compares. With this information, we can determine if our company culture is a good fit for doing business in the Czech Republic. The 5 cultural dimensions of Hofstede’s model will be used: power distance, individualism, uncertainty avoidance, and long-term orientation and will be compared to our U. S. results.
Power distance is defined as a dimension that deals with the fact that not all individuals in society are equal. This dimension captures the attitude of a culture toward this reality. A low score would mean that the culture has an attitude that people should be equal in society, and a high score would represent an attitude of acceptance of these large inequalities in society. The U. S. scores low on this dimension (Hofstede & Hofstede, 2005). We subscribe to the mentality of “liberty and justice for all,” which can explain the low score. The Czech Republic has a slightly higher score than the U. S. hich means that they have an attitude more acceptable of societal inequalities (Hofstede & Hofstede, 2005). This can probably be traced back to their roots as a communist country, where societal members had to get used to the one party government that was highly hierarchal. The individualism dimension captures the degree of interdependence a society maintains among its members (Kreitner, 2012). The U. S. scores very high on the individualism dimension. We are accustomed to the idea that we need to take care of ourselves and our families. “Rugged individualism” is a characteristic of many Americans and politicians.
The Czech Republic, on the other hand, score much lower score on individualism, and tend to value the mentality that “we are in this together. ” This can be seen in their different types of advertising in their country. Their advertising constantly appeals to family happiness, togetherness, and friendship focusing on groups of people enjoying life together (Taylor, 2002). Masculinity is a dimension that characterizes a culture’s tendency toward valuing competition and success defined by winning at whatever the challenge, or the culture’s value of caring of others and quality of life.
A high masculinity score would be the former and a lower masculinity score would be the latter. The Czech Republic and the U. S. have a very similar score here (Hofstede & Hofstede, 2005). They are both right in the middle of the scale and can be categorized as having a good balance between competition and striving to be on top as the winner, and caring for others along the way. Uncertainty avoidance is a dimension that captures a society’s way that they deal with ambiguity. The anxiety of an unknown future can lead to a societal out pour that creates beliefs or institutions to try to avoid this anxiety (Hofstede & Hofstede, 2005).
In the Czech Republic, the older generations tend to want to avoid uncertainty and are reluctant to take risks. This can most likely be traced back to when the country was communist. The younger generations are, however, more open due to more international exposure, but the Czech Republic scores relatively high in this dimension (Katz 2008). The U. S. has a significantly lower score when it comes to uncertainty avoidance (Hofstede & Hofstede, 2005). The U. S. is willing to take risks and accepts risk as part of life and business. The U. S. culture is more open to new ideas and is willing to try something new or different.
The U. S. subscribes to the value of “freedom of expression. ” Long-term orientation is the measure of where a society is focused. It can be defined as “the extent to which a society shows a pragmatic future-oriented perspective rather than a conventional historical short-term point of view” (Hofstede & Hofstede, 2005). Both the Czech Republic and the U. S. score low on this dimension. This means that business measure their performance on a short-term basis. They are focused on what they can earn right now, and can be seen in the fact that profits are calculated on a quarterly reporting basis.
This drives people to struggle for quick results in the work place. The Czech Republic can be said to be competitive, but know the value of a long-term relationship (Katz 2008). Even with this said, the Czech Republic scores a lower score than the U. S. These five cultural dimensions described above can be seen graphically in the figures below (Hofstede & Hofstede, 2005). Figure 1: Hofstede dimensions of Czech Republic and U. S.
Czech business culture – trompenaaris classificaion
The Czech Republic could be classified as having a Guided Missile corporate culture.
Czechs highly value formal education and expertise. They recognize and value the power of knowledge (Katz 2008). The Czech people like the win-win negotiations and strive for this in business transactions. They place this mentality on business with a focus on task oriented business success (Katz 2008). Negotiations are competitive, but business men in the Czech Republic tend to hold their cards close to their chest and do not lie often (Katz 2008). Czech management is seen as a team leader with the organization predominantly a continuous process of solving problems successfully.
This is in somewhat contrast as to the U. S. company. The U. S. Company is described as an Incubator. This company is person-oriented and values giving power to the individual (Trompenaars, 2003). This is in contrast to the more structured corporate structure of the Guided Missile. The Incubator has the main characteristics that value commitment of oneself and professional recognition, where the Guided Missile’s characteristics are more of paying for performance and management by objectives (Trompenaars, 2003).
U. S. Business culture change needed
A culture change may or may not be needed for the U. S. Company to thrive in the Czech Republic. There will be some corporate cultural tension, however, which can be the catalyst or driving force for change according to Fons Trompenaars (Trompenaars, 2003). One way to manage corporate culture change when going from U. S. to the Czech Republics would be to restructure authority to managers who have show innovation and learning as their main objectives in their goals. Another way to foster change would be to make learning and improvement a part of day to day task descriptions. Finally it would be beneficial to the U. S.
Company to describe rewards in terms of clearly stated innovation outputs. These techniques described above will help foster culture change in the U. S. Company to move toward a more ideal corporate culture from an Incubator to a Guided Missile (Trompenaars, 2003).
Katz, L. (2008). Negotiating international business - the negotiator’s reference guide. (2nd ed. , pp. 1-5). Retrieved from http://www. globalnegotiationresources. com/cou/CzechRepublic. pdf (2012).
The cia world factbook. Washington D. C. : The U. S. Central Intelligence Agency. Retrieved from https://www. ia. gov/library/publications/the-world-factbook/geos/ez. html
Kreitner, R. (2012). Organizational behavior. (10 ed. ). Arizona: McGraw- Hill. Hofstede, G. , & Hofstede, G. J. (2005). Cultures and organizations: Software of the mind, by hofstede, 2nd revised and expanded edition.
New York: McGraw Hill. Taylor, Charles (2002). Advertising in the Czech Republic: Czech perceptions of effective advertising and advertising clutter. Vol. Iss: 12, pp. 137 - 149.
Trompenaars, F. (2003). A new framework for managing change across cultures. Journal of change management, 3(4), 361-375.