This framework is used to understand the difference in cultures across countries and to discern the ways that business is done across different cultures. It helps to distinguish among different national cultures, the dimensions of cultures and the impact on business. Hofstede has defined six categories that define culture: 1. Power Distance Index 2. Collectivism vs Individualism 3. Uncertainty Avoidance Index 4. Femininity vs Masculinity 5. Short – term orientation vs Long - term Orientation 6. Restraint vs Indulgence 1. Power Distance : - The degree people are comfortable with influencing upwards. Accept inequality in distribution of power. High power distance index indicates about the culture which power difference and accepts inequality, it shows high respect for authority and rank, also encourages bureaucracy. Low power distance index reflects about the culture which encouraged flat and decentralized organizational structure. Emphasized on p
Value Chain- It comprises of all the activities that a firm has to perform to deliver valuable product or service. Value Chain Analysis - It is a process which allows a company to examine all the activities that company uses to create product or service. VCA helps to increase productivity, reduction in cost, differentiation etc. It divided in two activities Primary and Secondary. Value chain analysis helps a company understands and know better how it adds value to company and how subsequently, how it can sell its product or service for more than the cost of which is adding the value, which leads towards generating a profit margin. In other words, if they are run efficiently and effectively, the value obtained should exceed the costs of running them i.e. consumer should come back to the organisation and transact and interactr freely and willingly. Introduced by Michael Porter in 1980 , according to his it is conceptual notion which show how a value chain add value to the com