T.11 Hofstede’s cultural dimensions questions for IB Business Management

Sundara Batik

Sundara Batik (SB) is a private limited company in Yogyakarta, Indonesia, owned by Dewi Kartika and her brother Arif. SB employs 65 artisans who hand-draw batik patterns with wax on silk and cotton. Its main products are scarves and shirts, sold through two shops in Yogyakarta and Jakarta and through its own website.

Since 2023 SB has sold to customers in Japan through an international online marketplace. Japanese buyers value the craftsmanship, but some have complained about late deliveries and about colours that differ from the photographs on the website. Dewi wants to grow sales in Japan further.

SB has received an offer from Shirakawa, a Japanese department store chain with 22 stores. Shirakawa would buy 8 000 scarves a year, but wants a 45 % margin on the retail price, exclusive rights to sell SB products in Japan for three years and strict quality checks on every delivery. Arif prefers a different option: opening SB’s own concept store in Tokyo, which would cost IDR 3 500 million and require a five-year lease.

Table 1: SB’s sales revenue by market (IDR million)

Table 2: Selected Hofstede cultural dimension scores

Scores range from 0 to 100. A higher score means more power distance, individualism, masculinity, uncertainty avoidance, long-term orientation or indulgence (adapted from Hofstede’s published country scores).

Sacha Leaf S.A. (SAL)

Read the resources and answer the questions that follow.

Sacha Leaf S.A. (SAL) is a social enterprise in Tena, in Ecuador’s Amazon region, founded in 2015 by Paola Andrade and Wilson Grefa, a Kichwa community leader. It buys leaves of guayusa – a rainforest tree whose leaves contain caffeine and have been brewed for centuries by Kichwa families at dawn gatherings – from 1 200 Kichwa farming families who grow it among other forest trees rather than clearing land. SAL pays 30 % above the local market price, dries and packs the leaves, and sells loose tea and bottled iced guayusa in Ecuador. Sacha means “forest” in Kichwa. SAL now wants to sell abroad.

Image: a glass bottle of pale golden iced tea with dewdrops on it, beside a handful of glossy green guayusa leaves on a wooden table. Label: “Sacha Leaf Guayusa – the Amazon’s morning drink. Natural energy, living forest”.

Resource 1 – News article from *Andean Trade Monitor*

Amazon leaf eyes a place in the world’s energy drinks

Consumers in North America and Europe want “clean energy” drinks with natural caffeine and no added sugar, and guayusa has attracted interest from drinks companies. But some Indigenous organizations warn that big brands may use their traditions in advertising without sharing the benefits. Exporters must also meet each market’s labelling and food-safety rules and, in Europe, show a long history of safe use.

Table 1: SAL’s guayusa sales (tonnes of dried leaf)

SAL’s farmers could supply up to 300 tonnes a year. Ecuador uses the US dollar.

Resource 2 – Social media posts from Nina Grefa, a Kichwa student and SAL farmer’s daughter

Every morning my grandmother brewed guayusa before dawn and told us stories. Now people in Quito drink it too, and my family earns enough for me to study at university. Our forest is still standing. [1/2]

But I saw a foreign brand selling “Amazon Shaman Energy” with a fake picture of an Indigenous man. If SAL goes abroad, it must tell our story truthfully – and our communities must share in the money. [2/2]

Resource 3 – Internal email from Paola Andrade to SAL’s board

From: Paola Andrade, CEO

To: Board of directors

Subject: Three routes abroad

A. USA – licensing: TrailMark Natural Foods would make and sell bottled “Sacha Leaf” iced guayusa in the US using our leaf. It would buy 150 tonnes a year at USD 9 per kg and pay a 4 % royalty on its sales (it forecasts USD 8 million of sales a year). TrailMark would control recipes, prices and advertising.

B. Germany – exporting: Teehaus Brandauer, an organic tea importer, would buy 60 tonnes a year of certified organic, fair-trade loose tea packed in SAL’s own brand, at USD 22 per kg. Packaging costs us USD 2.50 per kg and certification about USD 45 000 a year. EU approval would take about 12 months.

C. China – joint venture: a Shanghai tea company proposes a 50/50 joint venture selling guayusa online. SAL would invest USD 400 000. No forecasts yet.

Our direct cost of dried leaf, including the farmers’ premium, is USD 5.50 per kg.

CONFIDENTIAL: this email and any attachments are intended only for the named recipients.

Resource 4 – Results of consumer taste tests (200 people in each city)

Resource 5 – Statement from the Napo Kichwa Federation

“We support SAL because it pays our families fairly and protects the forest. Any export agreement must: use Kichwa culture only with our approval; include a community fund of at least 5 % of SAL’s export revenue; and never allow guayusa to be grown on cleared land. Guayusa is part of who we are, not just a product.”

Resource 6 – Hofstede scores for selected countries (0–100)

KiwiSwirl

KiwiSwirl Ltd is a New Zealand frozen-yoghurt chain with 38 company-owned outlets. Customers serve themselves from yoghurt machines and choose from a bar of toppings, then pay by weight. Staff are encouraged to chat informally with customers, and the brand’s advertising is playful and slightly cheeky.

KiwiSwirl has been approached by Al Noor Hospitality, a Dubai-based group that operates restaurants in shopping malls across the United Arab Emirates (UAE). Al Noor wants to become KiwiSwirl’s master franchisee for the UAE, opening 12 outlets in five years. It would pay an initial fee of NZD 250 000 and royalties of 6 % of sales.

KiwiSwirl’s chief executive, Hemi Parata, believes franchising is the fastest way to grow abroad. The operations director, Sarah Lim, would prefer to open company-owned outlets so that KiwiSwirl keeps full control of quality and the customer experience, but this would require about NZD 6 million of investment.

Table 1: Selected Hofstede cultural dimension scores

Scores range from 0 to 100. A higher score means more power distance, individualism, masculinity, uncertainty avoidance, long-term orientation or indulgence (adapted from Hofstede’s published country scores).

Sông Lam Coffee (SLC)

SLC is a Vietnamese private limited company that runs 46 coffee shops in Hanoi and Ho Chi Minh City. It is known for strong, slow-dripped coffee served with condensed milk, and for egg coffee. Its managers are used to giving detailed instructions, and staff rarely question decisions.

In 2027 SLC will open its first international shop in Melbourne, Australia, a city with a strong coffee culture and a large Vietnamese community. SLC will send one Vietnamese manager, Trần Minh Khoa, and recruit 14 local employees. Table 2 shows the forecast for the Melbourne shop’s first year.

Table 1: Selected Hofstede cultural dimension scores

Scores range from 0 to 100. A higher score means more power distance, individualism, masculinity, uncertainty avoidance, long-term orientation or indulgence (adapted from Hofstede’s published country scores).

Table 2: Forecast for SLC’s Melbourne shop, year 1

Prairie Pantry Inc. (PP) is a US company that delivers weekly meal kits: boxes of ingredients and recipe cards for home cooking. Its advertising shows individuals “treating themselves” to a quick dinner after work. PP is planning to launch in Seoul, South Korea.

Table 1: Selected Hofstede cultural dimension scores

Scores range from 0 to 100. A higher score means more power distance, individualism, masculinity, uncertainty avoidance, long-term orientation or indulgence (adapted from Hofstede’s published country scores).

Van der Meulen and Tadokoro

Van der Meulen Ingenieurs B.V. (VDM), based in Rotterdam, the Netherlands, designs flood defences and coastal infrastructure. Tadokoro Sekkei K.K. (TS), based in Yokohama, Japan, designs earthquake-resistant bridges and port facilities. Both have about 900 employees. Their boards have agreed to merge to form VDM-Tadokoro, which would bid for large climate-adaptation projects in Asia and Europe that neither firm could win alone.

At VDM, project teams are small, engineers challenge senior partners openly and decisions are made quickly in informal meetings. At TS, decisions follow a formal consultation process across several levels of management, and long-term relationships with clients and staff loyalty are highly valued. Both boards have promised that no jobs will be lost.

Table 1: Hofstede’s cultural dimension scores for the Netherlands and Japan

Source: adapted from Hofstede Insights. Scores range from 0 to 100.