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ACCA Strategic Professional · Strategic Business Leader · Leadership and organisational culture

Alvarro Group is a Spanish-headquartered firm opening a subsidiary in a country where employees expect managers to make decisions, accept unequal power distribution and rarely challenge superiors. Alvarro's head office practices participative management. Applying Hofstede's dimensions, what is the likely issue?

The likely issue is high power distance in the host country. Employees accept unequal power and expect managers to decide, so Alvarro's participative style may be confusing or seen as weak leadership. The case gives no evidence of the other dimensions named in the distractors.

  1. AHigh power distance in the host country may make participative management ineffective or confusingCorrect
  2. BLow uncertainty avoidance in the host country will lead staff to demand detailed rules
  3. CHigh individualism in the host country will cause staff to prefer group-based rewards
  4. DShort-term orientation in the host country will make staff resist managers' authority

Explanation

Acceptance of unequal power and reluctance to challenge superiors describes high power distance. Staff in such cultures expect directive leadership, so participative methods may be misread as weak management. The other options attribute dimensions the case does not describe.

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