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Cultural Differences in Companies
The Globalization of Enterprise Software:
Comparing Oracle and SAP and Their Challenges
One of the most mercurial and fast-changing areas of technology today is enterprise software. Systems that enable large-scale enterprises to better serve their customers while orchestrating complex supply chains continue to rapidly evolve as Internet-based technologies and usability improve (Rettig, 2007). The approaches companies take however to those challenges differ drastically due to ethical, legal, social and political differences in their location and formation. Oracle, founded in Redwood City, California and SAP, founded in Walldorf, Germany exemplify these stark differences. The intent of this paper is to complete a comparative analysis of these two firms, analyzing the ethical, legal, social and political differences of each including an assessment of how these differences impact their decision-making processes as well. Recommendations and conclusions are included as well. There are also many potential frameworks to use for measuring the differences in cultures, yet the most precise and empirically proven is the Hofstede Model of Cultural Dimensions (Hofstede, 1993). This model and its five dimensions will be used for comparing the cultures of Germany and the United States.
Comparative Analysis of Oracle and SAP
For any company competing in the enterprise software industry, the intensity of effort to continually deliver innovative products, platforms and services...
The ability of enterprise software vendors to innovate however is more defined by their cultures internally and how well the manage the myriad of ethical, legal, social and political factors both within their home nations and across the many nations they also compete in (Engelstatter, 2012). Oracle's growth trajectory and future is defined by its continual reliance on maintenance fees and license revenues, which has forced the company over time to create a comprehensive legal department. In addition to the legality of enterprise software, the ethicacy of how pricing and maintenance fees are defined is also one of Oracle's key strengths (Rettig, 2007). These factors taken together have created a culture of exceptional competitive intensity within Oracle, which often uses Machiavellian political strategies internally and with government agencies to ensure their dominance in key markets (Engelstatter, 2012). Oracle's culture reflects a very competitive mindset and its interactions with customers, stakeholders and the broader community also validate this point. Using the Hofstede Model for Cultural Dimensions shown in Figure 1, the Individuality (IDV) dimension is significantly higher for the U.S. than Germany. In the context of the enterprise software community, Oracle is clearly dominant on the IDV attribute and the analysis shown in Figure 1 is accurate for the dynamics occurring in enterprise software globally today.
SAP typifies what many German-based engineering-centric companies value most from an ethical, legal,…
References
Chang, L. (2003). An examination of cross-cultural negotiation: Using Hofstede framework. Journal of American Academy of Business, Cambridge, 2(2), 567-570.
Engelstatter, B. (2012). It is not all about performance gains - enterprise software and innovations. Economics of Innovation and New Technology, 21(3), 223.
Hofstede, G. (1993). Cultural constraints in management theories. The Executive, 7(1), 81-81.
Hofstede, G.J., Jonker, C.M., & Verwaart, T. (2012). Cultural differentiation of negotiating agents. Group Decision and Negotiation, 21(1), 79-98.
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