Purpose: This paper will address the feasibility of a US company entering the market of Hungary. I will explore four major cultural components of the country that affect doing business in Hungary.
Cultural Impact: According to the Hofstede Centre there are five dimensions of culture, Power Distance, Individualism, Masculine/Feminine, Uncertainty Avoidance, and long term orientation. According to the Hofstede Centre "Power distance is defined as the extent to which the less powerful members of institutions and organisations within a country expect and accept that power is distributed unequally." Hungary scored low on this dimension meaning that managers are not as revered as in a high power distance society, communication is direct as well. According to the Hofstede Centre Individualism is "the degree of interdependence a society maintains among its members". Hungary scored high in this dimension meaning it is considered an Individualistic society, a society of which there is more emphasis based on individual achievements rather than collective goals. According to the Hofstede Centre Masculinity/ Feminity is " what motivates people, wanting to be the best (masculine) or liking what you do (feminine)." Hungary scores high in this dimension meaning that is a live to work type society. A society that places much on competition and beating others . According to the Hofstede Centre Uncertainty Avoidance is defined as "The extent to which the members of a culture feel threatened by ambiguous or unknown situations and have created beliefs and institutions that try to avoid these." On this dimension Hungary scored high meaning that they are conservative and like to avoid uncertain situations and outcomes. According to the Hofstede Centre Long Term Orientation is defined as " the extent to which a society shows a pragmatic future-oriented perspective rather than a conventional historical short-term point of view." On this dimension Hungary scored a 50 , meaning that is a long term oriented society, more focused on future goals, than present. When it comes to Specific cultural norms and folkways. Hungary has some unique to their country. According to TJC GLOBAL, when it comes to appearance "business people dress in an elegant manner." And according to TJC GLOBAL it is a business sin in Hungary to wear white socks. According to TJC GLOBAL body language in Hungary is quite similar to that of Britain and America, and that you should shake hands on every meeting. According to GlobalEdge , Hungary is a monochromic society, meaning that they value punctuality. All business meetings are expected to take place on time.
Political Economy and MPI Analysis:
According to GlobalEdge using the market potential index( MPI) , here is what I have concluded about Hungary. It has a very small market size, calculated based on urban population and electricity consumption, and market growth which is based on average annual growth rate of energy use and real GDP...