Cross-cultural management theories

Discuss about the Cross-Cultural Management for Power Distance.

This report aims to discuss the various management styles need to be adopted while the mangers from one country operate in other region. As a consequence of globalization these cross cultural organizations of one specific country have started to operate in the market of other countries. They do this to gain opportunity in the labor cost hence transfer the manufacturing sector in one place and export them in another region (Coviello, 2015). For managing such types of business effectively, cross-cultural management theories have emerged to help these corporations to understand the prospects of the subsidiaries and maintain effective management there. With the guidance of cross-cultural knowledge, the managers come to know various dimension of culture which can shape the business culture (Gelfand et al., 2017).

The issue of cross cultural conflict is inevitable in the Australian organization which has a subsidiary in Indonesia. This is because the mangers do not agree with the fact the culture f these two countries are completely different hence become the chief contributing factor for encounter. The report analyses these issues from the aspect of cultural dimension theory by Hofstede and concludes with some recommendations to mitigate issues from their roots.

The company has opened a subsidiary in Indonesia and facing various issues regarding the dissatisfaction of the employees. The local staffs are not satisfied with the management as well as the policies of the company. This is due to the fact that the company has not applied the cross cultural management system in its subsidiary in Indonesia. The cultural difference of Australia where the company’s head quarter is situated, and its subsidiary in Indonesia is high enough to create critical situation in the organization. in order to solve this problem, the managers need to first analyses the reasons of gap among the managers and the local employees which has made the situation critical to operate effectively (Holmes, v2018). In this context, the cultural dimension introduced by Greet Hofstede can assist the mangers.

Power distance: in this index Indonesia scores high which means that people here follow the strict hierarchy in the organization there is inequality among the employees and the subordinates want to be dominated and guided by their managers the superiors are the power holders the leaders are directive hence the managers control every aspect of the organization. Unlike the Indonesian staff, the Australia do not want their organization to have high power distance or inequality (Jiang, Gollan & Brooks, 2015). Therefore, the issues can creep up between the managers and the employees. The Indonesian managers grant age along with experience to be the most important factors hence want to be honored and respected. On the contrary the Australian staffs do not ascribe with this view.

Cross-cultural conflict in the Australian organization with a subsidiary in Indonesia

Individualism: from the individualism index the mangers can identify the differed between these two cultures. The Australian society is highly individualistic where the staffs work for personal promotion and recognition (Knight et al., 2015). They work for themselves an only for their immediate family. Hence the relation among the staff are loosely knit. On the contrary, the Indonesians have collective society. They put priority for all-inclusive growth of the organization. they prefer to work in group and what they do, directly serve their group or teams. In this context, the Australian mangers face problems when they expect an individualistic effort for quality management, the Indonesian staffs divide the task among themselves and form a team to accomplish the task. This attempt may offend the managers.

Masculinity: Indonesian culture directly oppose the culture of Australia in this index. This is because the culture of Australia is highly masculine and the Indonesians score low in this index. This creates huge differences in the understanding as well as perceiving organizational matters. The Australians ate more competitive hence believe in personal achievements and recognition rather than caring for others (Moore, 2015). On the contrary, the people of Indonesia, care for others and help other staffs in achieving their goals together. The managers of Australian working in Indonesian subsidiary hence fail to gain competitive advantage from their employees’ ends.  

Uncertainty avoidance: in this index, both the cultures show similarities hence the Australian managers posted in the Indonesian subsidiary do not face much problem. The Indonesian staffs prefer to maintain relationship harmony in their workplace hence ambiguity is not a matter for these people.

Term orientation: the culture of Indonesia, ascribe with long term orientation while dealing with the present and future challenges but the Australian culture scores low, demonstrating a view assigning a relatively short term culture. According to this index, Australians have a normative culture which prefer to maintain the time honored traditions (Dalkir, 2013). They view the societal change with suspicion. Similarly, in the organization also the Australian staffs or the managers, have strong concern to establish the absolute truth but they try to achieve a quick result of their actions. On the other hand, the Indonesian people believe that the truth depends on the particular time, situation as well as context (Savage et al., 2014) Therefore, the people of this pragmatic society can easily adapt with the changed condition. They show great tendency to save as well as invest, perseverance to achieve the goals. In the Indonesian subsidiary, therefore critical situation may grow if the staffs want to introduce something new, the Australian mangers suspect them and finally prevent changes in the organization.

Cultural dimension theory by Hofstede

Indulgence: in this index, the Indonesian culture is much restrained than that of the Australian culture. This cultural dimension captures the idea of pessimism prevailed in the society which makes the people more cynic about everything. They do not put emphasis on the leisure time or enjoying their lives. Moreover, they control and gratify their desire to do something they want to do. The Australian society is just the opposite of this view. The people in this society possess positive attitude and give importance to leisure (Stahl, et al. 2017) The Australian managers therefore show a casual attitude which may not accepted by the Indonesian staffs which to dissatisfaction leading to irritation to the Australian side.

In order to maintain the business running, the Australian company working in Indonesia, needs to manage the employees in the Indonesian way. As discussed before, the Australian organizational culture has no similarity with the culture of Indonesia. The behavior, attitude, value and expectations are completely different between these two culture. In operating a successful subsidiary, in Indonesia, the managers first need to respect the Indonesian culture and know their perspectives and value system. In order to work as a team, the trust is a crucial element which the Australian authorities need to earn from their subordinates.

In order to manage a cross-cultural organization, the managers need to have an intense knowledge about each of the employees which will give him insight about their skills and knowledge. These employee teams must have unique style which the managers need to explore while they will be able to stop imposing their own culture on these staff. The Australian managers can easily overcome the disagreement or conflict with the Indonesian staffs if they build personal connections. There are various methods which will help these managers to foster individual relations and rapport with the employees of other culture.

For any kind of organization, conflict is inevitable. Hence for this cross-cultural organization, the mangers need to address any kind of conflict immediately. This will ensure that the small or manageable conflicts do not take a huge dimension which is impossible to manage. This will be only done if the leader understands the cultural perspectives of the employees and learn the way to manage problems in a way the people in that culture do.

The communication is one of the most important factors which help the managers to convey messages to their subordinates in one hand, and motivate them on the other. Unlike culture the communication style of the Australians and the Indonesians is completely different hence to maintain authority over the employees, the Australian staffs need to make them release according to their expectations. As mentioned before, the employees of the organization in the Indonesian subsidiary are comfortable with ambiguity and can adapt with the changes in the organization easily. Therefore, if the mangers think that what policies they follow in the parent company in Australia and the subsidiary in New Zealand will have the similar response from the Indonesian subsidiary also, it is completely wrong. Hence they must try new things and make new policies for their Indonesian subsidiary so that these Indonesian staff find the organization more of their preference and participate in the production process more engagingly.

Recommendations

As the company aims to do business in Indonesia there is no scope of misunderstanding the staff because this will lead to problems with the customers as well as the stakeholders. Therefore, the parent company must recognize and motivate its staff who are working in Indonesia so that they maintain their multinational skills. This will help these managers to feel appreciated as well as intellectually stimulated.  

Conclusion:

Therefore, it can be concluded that the proper knowledge about e difference in organizational culture is vary much important for the organizations which aim to do a successful business in the foreign market. Different countries have different style of management as well as organizational norms. Some of these are very specific whereas some are very general. The cultural difference in this case is not a subtle thing which may remain unnoticed by the management but has taken a huge sixe that is potential to affect the company by increasing its vulnerability. Due to this reason, the cultural dimension theory by Hofstede can be helpful for proper understanding of the cultural gap between the parent company of Australia and its subsidiary in Indonesia. There are cultural as well as behavioral values which shape the perspectives of the employees and make them ready to work with other cultures similarly from the managers’ they must follow the feedbacks of the native employees and get an intense knowledge about their subordinates. Only building deeper bond the Australian managers will be able to control the employee dissatisfaction in the work place. By respecting the cultural diversity in the organization the company will get the best of their employees.

Reference:

Coviello, N. (2015). Re-thinking research on born globals. Journal of International Business Studies, 46(1), pp.17-26.

Dalkir, K. (2013). Knowledge management in theory and practice. Routledge.

Gelfand, M.J., Aycan, Z., Erez, M., & Leung, K. (2017). Cross-cultural industrial organizational psychology and organizational behavior: A hundred-year journey. Journal of Applied Psychology, 102(3), p.514.

Holmes, B. (2018). Speaking to a Global Future: The Increasing Value of Language and Culture to British Business Post-Brexit. In Languages after Brexit (pp. 61-74). Palgrave Macmillan, Cham..

Jiang, Z., Gollan, P.J., & Brooks, G. (2015). Moderation of doing and mastery orientations in relationships among justice, commitment, and trust: A cross-cultural perspective. Cross Cultural Management, 22(1), pp.42-67.

Knight, G., Liesch, P., Zhou, L., & Reuber, R. eds. (2015). Creation and Capture of Entrepreneurial Opportunities Across National Borders. Journal of International Business Studies.

Kuratko, D.F. (2016). Entrepreneurship: Theory, process, and practice. Cengage Learning.

Mackenzie, K.D., Golembiewski, R.T., & Rahim, M.A. (2018). Introduction. In Current Topics in Management (pp. 9-24). Routledge.

Moore, F. (2015). Towards a complex view of culture: cross-cultural management,‘native categories’, and their impact on concepts of management and organisation. In The Routledge Companion to Cross-Cultural Management (pp. 69-77). Routledge.

Morgan, K. (2014). ‘Merely for Money’? Business Culture in the British Atlantic, 1750–1815 by Sheryllynne Haggerty. Enterprise & Society, 15(4), pp.923-925.

Savage, M., Barlow, J., Dickens, P., & Fielding, T. (2014). Property Bureaucracy & Culture: Middle Class Formation in Contemporary Britain. Routledge.

Stahl, G.K., Miska, C., Lee, H.J., & De Luque, M.S. (2017). The upside of cultural differences: Towards a more balanced treatment of culture in cross-cultural management research. Cross Cultural & Strategic Management, 24(1), pp.2-12.