Long Term vs Short Term

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Long Term vs Short Term This is the last dimension discovered in the Hofstede Model . By looking at the terms itself, we can easily defined thatthis dimension is only a matter of time. Long term behavior will focusing on the future while short term applied to time perspectives by solving obstacles with time, if not with will and strength. Many people did not know that the origin of this dimension is strongly related to the theory of Confucianism. Now the question is, what is Confucianism theory and how is it related? According to Itim International ,an international consulting organization that utilized Prof Hofstede s concept , in their website stated that this dimension is discovered base from a questionnaire design by Chinese scholars among students in 23 countries around the globe. Both values in this dimension are applied in the confusias philosophy by a great Chinese philosopher. Hence, this dimension is mostly used in ASEAN countries who have Confucian heritage.

To put it in a nutshell, Hofstede has his own opinion in explaining this dimension. Long Term Orientation stands for the fostering of virtues oriented towards future rewards, in particular perseverance and thrift. It s opposite pole, Short Term Orientation, stands for the fostering of virtues related to the past and present, in particular, respect for tradition, preservation of face and fulfilling social obligations. Hofstede (2001), Culture s Consequences, 2nd ed., p 359

Now as we already know what is the definition of long and short term, let us look on how this dimension is related to management in organization. In real life, there are lots of differences in people s cultures geographically. It is their practice and believe in everyday life. However, in the modern world today, business will never acknowledge barrier. Every seconds billions of transaction occurs around the world and millions of agreements declared between countries. Hence, in order to succeed it is very important for organization to fully understand the difference in national cultures and ways to respect and adapt with it when dealing. In other words, this differences will directly impact people management in an organization. Hofstede helps us to encounter the differences using this dimension. For example, the ASEAN countries rather choose long term dimension. On the other hand, most western Europe countries apply short term dimension. Let us discuss more about this dimension by taking United States and China management as our model reference.

http://laofutze.files.wordpress.com/2010/01/hofstede01.jpg?w=305&h=441

We can clearly see the difference in the long term dimension of both countries. Referring to Appendix A.2, China leads the LTO by 115% meanwhile US only applied 29% LTO dimension. That means in China, the managers often accepting profit after a long period meanwhile the people management in US would like to see quick results. China is a giant economical power in the world. It has become the largest global recipient of foreign direct investment in recent years (UNCTAD, 2003). annual sales revenues for these ventures increased by $227 billion (China s National Bureau of Statistics,2004). So how can the international venture sustain their investment in a foreign country like China? They design their management back according to the culture in China. For example, if company A from US want to have an agreement with company B in China, they need to understand that management culture of people in company B are looking forward on future investment and profitability. Hence, company A will focusing their management in China by concentrating more to the long term profitability.

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