Culture affects how employees relate to
each other; how they view the organisation; and how they go about their work.
It is therefore critical that organisational culture and practices be aligned
to the cultural values in the societies in which they operate.
ABC Limited operates across several
countries and is therefore bound to be affected by cultural differences in the
different countries. These differences can easily be explained by focussing on
the five cultural dimensions highlighted by Hofstede which include uncertainty
avoidance, individualism, power distance, masculinity and long term/ short term
orientation.
This report finds that it is necessary
that the cultural differences be taken into account in modifying the business
practices to ensure productivity is maximised at the subsidiary levels. This
move is expected to give rise to complications where teething problems could arise
in understanding how different subsidiaries work and how to relate with others
in different countries.
Among the remedies recommended for
resolving such issues are: undertaking trainings on cultural differences and
corresponding differences in business practice; provision of guidelines for
quick reference; strategic alignment of the different functions across
countries; and the rotation of staff to different countries.
Culture affects all facets of life as it
affects how individuals view themselves as well as how they view each other
(Tung and Verbeke, 2010). It guides the manner in which people relate to each
other and also how they perceive various messages and communications from
others. This impacts business practice in terms of work organisation,
relationships between workers and between the workers and their superiors, the
organisational culture, motivation schemes and other facets. Some of the
cultural dimensions that impact business practice include the power distance,
the level of individualism, the level of masculinity, type of orientation and
the uncertainty avoidance index (Hiroko, 2009).
ABC Limited is a UK
company that wishes to increase its level of involvement in the Chinese and
Indian markets. This comes with certain implications in that differences in
cultural perspectives are expected to surface and possibly inhibit the
effectiveness with which the organisational goals can be achieved.
Consideration of cultural differences is crucial in organisations operating
across different cultures. This paper
evaluates the cultural differences between the UK, India and China and
evaluates how they are likely to impact business practice. It then makes
recommendations on the best approaches for ABC Limited to take to ensure that
its cooperation with Indian and Chinese engineers produces the desired results.
According to the recommendations of
Geert Hofstede, there are five important cultural dimensions that could be used
to distinguish cultures across various countries. These dimensions include
power distance, uncertainty avoidance, long term versus short term orientation,
masculinity versus femininity, and individualism versus collectivism (Hofstede,
2012).
Source:
http://geert-hofstede.com/united-kingdom.html
This dimension refers to the extent to
which members of a population are comfortable with the fact that power is
distributed unevenly between different members of the society. Where power
distance is low, it means that the inequality in power is generally
unacceptable and those wielding power often required put under pressure to
account for such inequalities (Newman and Kollen, 1996). Organisations
operating in areas where the power distance is high tend to do well where
hierarchical models are adopted. The power distance index in the UK stands at
35 as compared to India’s 77 and China’s 80 (Hofstede, 2012). This means that
the hierarchical order is more acceptable in India and China than it is in the
UK.
Individualism refers to a situation
where members of a society are expected to be only responsible for themselves
and members of their immediate families. People are primarily seen as
individuals. In the collectivist perspective, people are seen as members of
groups who are expected to work towards the achievement of group objectives and
conduct themselves in a manner that reflects on the ideals of such groups
(Laroche, 2011). A comparison of the individualism index between the country
cultures under consideration places the UK at 89 followed by India and China
with 48 and 20 respectively (Hofstede, 2012). This means that China is a
strongly collectivist culture with the UK having a strongly individualist
culture.
A culture is said to be masculine when
it is dominated by the desire to be heroic and characterised by the search for
material reward for success. It emphasises competition and assertiveness.
Femininity on the other hand is characterised by cooperation, modesty and the
desire to take good care of the weak and is generally oriented towards the
building of consensus around pertinent issues (Suku and Nishal, 2007). The
masculinity index for UK, India and China stands at 66, 56, and 66 respectively
(Hofstede, 2012). In other words, there aren’t major cultural differences as
far as this dimension is concerned.
This
dimension describes the extent to which people are uncomfortable with ambiguity
(Jameson, 2007). This denotes the need to define processes in a manner that
ensures that all procedures are documented accordingly. Where the index is high,
operational procedures are held high. On the other hand, societies with a low
uncertainty avoidance index emphasise the importance of maintaining the overall
principles while paying little attention to the specific procedures to be
followed. Among the three cultures under consideration, the uncertainty
avoidance is highest in India with 40, followed by UK and China with 35 and 30
respectively (Hofstede, 2012).
This dimension deals with the search for
virtue by societies. Short term oriented societies emphasise on absolute
adherence to culture and achievement of quick results (Pranee, 2009). They also
tend to be less thrifty and will in many cases focus on attaining the highest
level of satisfaction in the shortest time possible. In the long term oriented
societies, focus is more on long term results where societies believe in saving
and thriftiness in their expenditure. Cultural aspects such as truth are not
greatly emphasised as cultural realities are bound to shift with time. The long
term orientation indexes for the UK, India and China are 25, 61 and 118
respectively (Hofstede, 2012).
It is important to understand that
business organisations are part and parcel of the societies and that they are
bound to be affected by the cultural values in their host countries. Numerous
studies have been conducted to establish the importance of aligning business
practices to cultural contexts with evidence strongly pointing towards the fact
that such alignments are necessary for survival (Kanungo, 2006). The dilemma
between the need to pursue a globalisation strategy and localisation strategy
comes to the fore with the advantage of the former being that the uniformity of
operations around different countries helps in ensuring the ease of reporting
and quality control. It also lessens the risk associated with the delegation of
too much power to country managers where wrong decisions could result in grave
consequences for the organisations. Analysts however view such advantages are
dismal as compared to the benefits associated with the adaptation of a
localisation approach (Tcharchar and Davis, 2005). This approach emphasises
country culture and unique characteristics that are considered as crucial
towards ensuring that the organisation runs successfully.
Employee productivity
which is closely related to the level of motivation among such employees is
known to rise when the business practices are in line with their cultural
orientations. The understanding of cultural differences helps in estimating the
impact of certain changes and the conducting of the cost benefit analysis
(Leung, et al., 2005). Where cultural differences are slight, there may be
little or no need to alter business practices. For instance, business practices
that would be directly impacted by the masculinity dimensions in the three
countries under consideration may not need to be altered since the differences
are only slight. However, where the dimensions such as Individualism and Long
term orientation are concerned, it becomes absolutely necessary that the
organisational practices affecting them be aligned accordingly (Randall, 1998).
It is important to focus on Hofstede’s dimensions of culture when focussing on
the implications of culture on business practice.
The impact of the power distance on
business practice affects the approach to leadership and the level of formality
within the organisations. The power distance in China and India are relatively
higher than in the UK and this calls for the establishment of a business model
that affects such a reality. Businesses in the UK tend to encourage for
casualness in the work place where employees see each other as colleagues and
comparatively equal partners in the delivery of organisational objectives
(Hiroko, 2009). On the other hand, it is expected that in the typical
organisation in China and India, a higher level of formality is practiced.
Seniors should be addressed with their titles at all times in appreciation of
their status. Similarly, the leadership style would tend to be more
authoritative with subordinates taking the view that the leaders should be the
ones to dictate how the organisation conducts its business (Hiroko, 2009). This
is different from the UK approach where democratic leadership tends to be more
common than other models.
This dimension affects the manner in
which work is organised and is largely associated with the approaches taken in
relation to human resource management. When translated into the business
context, cultural perspectives on individualism determine whether employees are
more effective when working as individuals or if they prefer to work in groups.
In strongly individualistic countries such as the UK, work organisation
emphasises on the responsibilities of the individual (Tung and Verbeke, 2010).
Similarly, reward schemes are mainly individual-based with employees often seen
as competitors seeking to out do each other and achieve the greatest merit. In
a collectivist context such as China, employees work best in teams where groups
are given goals to deliver. They thereafter allocate specific duties to each
other and are accountable to each other. All efforts are channelled towards
delivering on the group objectives. Where the preference for collectivism isn’t
very strong, a mixed approach could be taken where groups are assigned duties
but with provisions for recognising and awarding the group members that
contribute the most towards the success of such groups (Laroche, 2011). Such an
approach encourages group members to do their best despite the fact that their
efforts are simply meant to contribute to the success of their groups.
As has been mentioned above, there are
no significant differences among the countries under consideration as far as
masculinity is concerned. However, it is important to take note of the
underlying cultural values that could impact this cultural dimension. It is
expected that even though the masculinity indexes for China and Britain are
equal, the fact that China is strongly collectivist would see less emphasis on
competition between employees. The existence of cut throat competition among
employees can be detrimental to business especially where employees fail to
cooperate with each other in fear of the credit for achievements being taken by
others (Kanungo, 2006). A balance must be struck and this delicate balancing
should be done in a manner that ensures optimum productivity in the
organisations.
This cultural dimension often affects
the need to define authority limits and the need to introduce procedural
guidelines in business practice. It may also denote the level of trust given to
supervisors and managers where low levels of trust are synonymous with strict
controls and limits over the managers’ ability to alter standing procedures
(Jameson, 2007). Similarly, reporting lines, working schedules and normal
operations may need to be fixed depending on the level of uncertainty avoidance
in the society. A business in India would therefore need more precise
guidelines than one in the UK or China. In the context of ABC Ltd, it would be
expected that the Chinese engineers would be furnished with the overall plans
and left to figure out how to deliver on the goals while their Indian
counterparts would do better with precise instructions on what to do and what
not to do.
In business, the long term orientation
impacts the manner in which short term performance is viewed. Where a society
embraces the long term orientation, emphasis is on the long term outcome and
temporary setbacks are not taken as a cause to worry (Pranee, 2009). There’s
little emphasis on specific procedures in view of the fact that their importance
is only relative and not absolute. Persons under this culture are therefore
likely to ignore specified procedures and rules where they believe that the
overall goal is not jeopardised. For instance, in the construction of an
engineering design, a firm with a low long term orientation would emphasise on
the need to achieve certain periodic milestones with the absence of such
achievements often able to trigger panic over the viability of the entire
project. On the other hand, a long term oriented organisation would take such
set backs as only temporary and not necessarily able to jeopardise the entire
project.
In the context of an organisation such
as ABC Ltd whose activities span across different cultures, it is imperative
that areas of conflict between employees in different countries are identified
and pre-emptive measures taken to ensure that operations are smooth. The first
step should be to make a decision on whether to localise business practices in
the countries in question or to impose the global practices. It is recommended
that a localisation strategy would work best for the company.
The extent to which
localisation is done should be dependent on necessity as well as the cost and
benefit of the same (Hiroko, 2009). Slight cultural differences do not warrant
any modification of practices. However, it would be necessary to consider
modification in areas where cultural differences are significant. For instance,
business practices that would normally be affected by dimensions such as
Individualism, power distance, and long term orientation should be localised.
Localisation is
expected to generate problems especially where operational cooperation is
needed across the three countries. For instance, confusion may arise where an
individual in the UK is responsible for a dimension and has to work with a
group (not an individual) in China. Issues of procedure may also cause
confusion where there’s little emphasis on short term objectives. In view of
the fact that complete localisation may be counterproductive, it is important
that such moves be made only where it is necessary. In many cases, procedures
can be replicated across the globe albeit with slight modifications. The cases
where significant changes are made should be clear and easily understood. This
would call for training of all the persons to be involved. Engineers expected
to work closely with their Indian and Chinese counterparts need to be taken
through training where perspectives in each of the three countries are brought
forward. Simulations of problems likely to arise should be created and
demonstrations made on how such problems can be resolved amicably.
Periodic rotation of
key personnel across countries can also work well in ensuring that
understanding is fostered across cultural borders. When employees experience
the perceptions and operations in the different countries, they are better equipped
to know how to relate to each other and how their differences can be countered
to ensure the achievement of the overall goals.
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