Overview

For the given assignment, we interviewed a  female Hungarian with a Law degree, who is currently a Team Leader for the US lease abstraction team.  The company is a US based real estate firm that is offshoring its lease abstraction to Hungary, Budapest. We as team figured it would be very interesting to compare the two countries and their cultures. Therefore, we have arranged an interview in order to understand the differences and the intercultural communication between the two entities.

Our interviewee has been working for the company since 2017. The company is offering portfolio administration services to clients in order to manage their office, storage, warehouse leases. To earn more profit, the company is offshoring its back-office services to a cost benefit country. In this case to Budapest, Hungary. The clients are from all around the world; however, our interviewee is only responsible for the US client base. In the past 4 years she has been working with colleagues and clients from the US. Her job description requires her to understand the American culture for her team to provide quality lease abstraction within the given time frame. She believes that it took her time to understand the Americans and the way they deal with business in general. Various sorts of prohibitive and inhibitive conduct associated were explored throughout the interview. The Hungarian and the American culture were the focus of our study, and the conduct described is based on our interviewee’s personal experiences with this culture.

Hofstede Dimensions

Given the company has its origins in the United States and offshore its services in Hungary, the comparisons regarding the Hofstede Dimensions will be done between these two countries. Our interviewee and her business partner both have a great understanding of the Hungarian culture regarding to the theories of Hofstede. Besides that, they are both working for a multinational that has great American influences within the company as a result of its origins.

Values and Behaviors

Our interviewee introduced us to the Hungarian values and behaviors. When individuals in US inquire, “How are you?” the response is usually, “I’m fine.” “How are you doing?” This question frequently produces a ranting response of complaints in Hungary. Whether you call it pessimism or realism, Hungarians are outspoken and direct. Someone will let you know if they have even the tiniest issue with something. They could come out as unpleasant or abrupt, but that’s just who they are. She explained that it is inhibitive to talk with Hungarians about their history or challenge it. The Hungarian people have had a difficult history, with constant invasions and occupations attempting to suppress Hungarian culture. Mongols, Turks, Habsburgs, Germans, and Russians have all left lasting scars on the country. Suspicion, over-vigilance, and critical thinking are some of the cultural qualities that arise.

If you are invited to a Hungarian’s house, it is inhibitive not to bring a present; guests should offer a box of chocolates, liquor, or flowers for the host and their children. Moreover, it is inhibitive for guests not to remove their shoes before entering the home of a Hungarian host. The visitors are expected to maintain the hosts’ house clean and thus show their respect.

People in Hungary respect the elders and are family oriented. It is rather inhibitive and rude to not give your seat on the public transportation, to not offer them your help and to not address them politely.

Please find below common values that are shared between the people of Hungary:

• Pessimism (history)
• Weaver suggests that political actions could also be a result from cultural factors (Weaver, 2014)
• Respecting elderly

Power distance

“The extent to which the less powerful members of institutions and organizations within a society assume and accept that power is allocated unequally” is how power distance is defined (Hofstede G. & Hofstede G.I., 2002).

According to our interviewee, in Hungary there is somewhat of a power distance as they maintain a certain hierarchy that is accepted throughout the country. In the country, everyone listens to Viktor Orbán who is mainly in charge of the bigger decisions within Hungary. This has somewhat to do with Hungary’s past in which they were part of the Soviet Union. According to Hofstede’s index Hungary scores 46 on a scale of 100. If we compare this to the country the company originates from, the United States, we see that there’s little to no difference as they score a 40. 

This underlines the conversation we had about this dimension with our interviewee. She told us that she’s had a lot of interaction with her American colleagues from which she didn’t really experience somewhat of a discomfort regarding this dimension. She told us for example that during meetings there were the same manners to people who have seniority within the company, just like they do in Hungary. 

Individualism vs. Collectivism

“Individualism can be defined as a preference for a loosely-knit social framework in which individuals are expected to take care of only themselves and their immediate families. Collectivism represents a preference for a tightly-knit framework in society in which individuals can expect their relatives or members of a particular ingroup to look after them in exchange for unquestioning loyalty” is how individualism versus collectivism is defined (Hofstede Insights, 2021).

With a score of 80 out of 100 on Hofstede’s index for individualism versus collectivism, it can be said that Hungary is familiar with the concept of individualism. What such a high score on this scale shows us is that Hungarian people are expected to take care of themselves and their immediate families only.

When we compare the Hungarian score for individualism with the United States, we see the States score even higher, with a score of 91 out of 100. This means that a company the one we interviewed expects even more individualism from its Hungarian staff members then these members are used to.

Masculinity vs. Femininity

“The Masculinity side of the Masculinity versus Feminity dimension represents a preference in society for achievement, heroism, assertiveness, and material rewards for success. Its opposite, Feminity, stands for a preference for cooperation, modesty, caring for weak and quality of life” is how Masculinity versus Feminity is defined (Hofstede Insights, 2021).

Hungary scores 88 on a scale of 100 on Hofstede’s index when it comes to Masculinity. What this tells us is that the people in Hungary ‘live in order to work’. Managers are expected to be decisive and assertive. The emphasis is on equity, competition and performance and conflicts are resolved by fighting them out. The United States, the country the company originates from, also scores somewhat high on the Masculinity scale, with a score of 62. From this we can conclude that the United States is accustomed to the same work mentality as Hungary. This being the “Strive to be the best” and “winner takes all” mentality.

In the interview  it was confirmed that both Hungary and the United States share the same Masculine vision when it comes to work, but she also explained that Masculinity goes much further in Hungary, as the statistics show. The United States has a system that somewhat helps people getting back on their feet whenever they’re in trouble. In Hungary this is not the case. The focus is on being independent and being able to make it on your own.

Uncertainty avoidance

“The uncertainty avoidance dimension expresses the degree to which the members of a society feel uncomfortable with uncertainty and ambiguity” is how uncertainty avoidance is defined (Hofstede Insights, 2021).

Hungary scores 82 on a scale of 100 on Hofstede’s index when it comes to Uncertainty avoidance. What this says is that Hungary prefers avoiding uncertainty. This amplifies that the country is intolerant for unorthodox behaviour and ideas. There is a emotional need for rules (even if those rules never seem to work).

Please refer to the table below for the country comparison of Hungary and United States and their scores.

Outcome

The Hungarian offshore sites work with American colleagues on a day-to-day basis. The US Account Managers are providing the Hungarian Data Analyst with the leases and if something is not clear or the leases have discrepancies, they have to resolve the issue in a team. The level of employee skills at the offshored locations are essential when moving business services and operations. Given skills and knowledge are required of the employees to perform the goals set by the company.  In Hungary there is an adept talent pool with university and college degree graduates. However, miscommunication can be easily seen as Hungarians’ learnt English, and it is not their native language. Our interviewee told us that there have been delays in the SLAs because the Hungarian and the US team was going back and forth emailing and not resolving the problem. Moreover, the time difference made it difficult for them to keep track of the time. She also mentioned that the leases state the American way of putting the date mm/dd/yyyy while Hungarians are putting it yyyy/mm/dd. This resulted in using wrong lease agreement dates and commencement & expiration dates. Hungarians are way more straightforward as well and the Americans may have perceived it to be harsh or even offensive. Even though both the countries are western there are cultural differences that lead to miscommunication and less effective running of a company.

Possible solutions

To avoid miscommunication, the company is providing trainings for the Hungarian and also the US staff in order to understand the two countries cultures. Our interviewee informed us on the difficulties and how these norms, values and traditions may be bridged between the two nations. Moreover, there are English proficiency checkups as well to keep the quality abstraction of the leases and also to prevent miscommunication between the US and Hungary. Our interviewee said it is a long way to understand the two cultures as the employees come and go. Misunderstanding may occur but the leaders must communicate and resolve them internally.

Student Authors

Nikoletta Plantak (LinkedIn)
Student: Amsterdam School of International Business, Amsterdam University of Applied Sciences
Block 4, Semester 2, 2021

Stijn Koster (LinkedIn)
Student: Faculty of Business and Economics, Amsterdam University of Applied Sciences
Block 4, Semester 2, 2021

Daan Puijpe (LinkedIn)
Student: Faculty of Business and Economics, Amsterdam University of Applied Sciences
Block 4, Semester 2, 2021