Cross Cultural Dimension On Global Business Operations Business Essay

In the modern world, international managers face many challenges in business communication and in the workplace. Managers want to do business with their partners. Where sometimes it just does not work and leads to multiple implications for business operation.

National culture undeniably has a great influence on business culture. In order to have a successful business relationship with the members of other cultures, one should have cultural sensitivity and pay attention to cultural dimensions. Knowledge of characteristics that are typical to each cultural group can help international managers in cooperation with colleagues from other cultural backgrounds. I have focused on few categories of factors hampering-cross cultural dimensions on global business operations in general and especially in my business context.

Hofstede’s cultural dimensions model

Hall & Hall’s cultural value orientations

The cultural dimensions that affect our values, beliefs, attitudes and behaviors are what ultimately set cultures apart. People need to develop a deep understanding of these culture dimensions to be able to develop cultural sensitivity and a relationship to deal effectively in cross-cultural setting. (Tuleja, 2005)

Harischandra Going Global

While majority of businesses stay local, many have expanded their business operations beyond the national borders and many are on a verge of going international. As such, Harischandra Mills PLC, too has decided to go global. With popularity of environmentally friendly, quality yet convenient products at a reasonable rate and due to growing demand for the health and quality slow cooked food, Harischandra has to expand its chain of suppliers and manufacturers beyond Lankan borders. As a result, trade with international retailers and distributors increases and under those circumstances Harischandra is one of the many companies that has to experience cross-cultural barriers when dealing with business partners and customers abroad. Through many various struggles and learning experiences, these days Harischandra successfully collaborates with an international distributors European foods whole sellers Pvt Ltd for sale and distribution of company’s food items in Australian Market. Currently, Harischandra has nine permanent, full-time employees in head office in Australia although most of firm’s production is located in the home country – Sri Lanka. See Appendix 01 – Company Portfolio

Culture of Harischandra Mills

The culture of Harischandra reflects somewhat typical Sri Lankan social patterns and management practices. The decision making is centralized, where many decisions in the company were made over formal meeting throughout the day however although decisions are made mostly cooperatively, the final decision is always with the chairman. The culture of the company therefore reflects the social culture of the home country. Appendix 03: Austrian Business Etiquette and Culture will show the cultural difference in Australia while the [Table 01: Socio cultural differences for Australia Vs. Sri Lanka highlights and contrast some of such socio cultural differences between the home and host country.

Hofstede’s Cultural Dimensions Model

Power distance.

In given implications of cross-cultural dimension in business, considering the freshness into the international business partners the firm could be many barriers in culture, working patterns as well as in communication. Keeping in mind the fact that one’s culture has an effect on individual’s behavior, there could be misunderstandings between Harischandra and its international partners from a high power distance. Refer Appendix 04: Extremes of Hofstede’s ‘Power distance’ Dimension. Sri Lanka is known to be a high power distance culture which was reflected in the way we run our business up until today. Thus, interaction between managers from countries with different power distance may cause some dissatisfaction with either party. For instance, Local manager from home distance country might suggest that before making any final decisions, he/she would like to take the subject matter back to the team and have a discussion about it. In contrast, a Overseas manager would not hesitate to make a decision solely. For this reason, in order to have a successful business relationship with partners from high power distance countries, it is necessary for Harischandra to have a unique communication strategy in place.

In respect to the theory of Hofstede about cultural differences, discussing communication with partners from high power distance countries, there are some differences in decision making process. Harischandra has to consult and get ideas and values from the overseas partner as they are unsure of the product’s acceptability by the market. The market specific knowledge can only be obtained from the foreign partner; therefore its Autocratic decision making would not work in this case.

In European culture, scoring low in power distance, managers try to minimize inequalities like overt status and subordinates expect to be part of a discussion where their opinions are valued and are taken into consideration. In Harischandra, every employee is not part of developing process.

The company has now acknowledged that in Australian decisions are to be made differently compared to Sri Lanka: Managing director usually talks and employees should sit and listen and only listen to him. The level of power and influence of the top leadership are usually clearly oriented to hierarchy. The directions of the boss are strictly implemented and the main decisions are taken by the manager without consulting employees. In contrast, the level of privileges and freedom to act among employees is higher in companies oriented towards equality. Subordinates have a right to express disagreement with boss, provide their own opinion and the manager acts more like a consultant which is evident in the European partner. Therefore it is always preferred to have a balanced power distance in making effective business decisions.

Individualism vs. Collectivism

Compliance to the results of Hofstede, Sri Lanka shows high collectivism. Refer Appendix 05 Extremes of Hofstede’s Collectivist/Individualist Dimension. Hofstede mentions that in individualistic countries like US, Australia, people focus on tasks and they are not concentrated on personal relationships whereas in collectivistic cultures employees, oriented towards their job think more about well-being of an entire company. In contrast to Sri Lankan business culture, though the social patterns are highly collectivist in nature, the traditional companies with family owned history still practices individualism when it comes to decision making. Whereas European culture show characteristics of individualism in social behavior, it shows signs of collectivism when it comes to decision making as the decision are made collectively while single autocracy is highly disliked. European societies reflect equality and thus does not accept discrimination over a certain group. As such they would not want to do business with such firms who discriminate their lower levels of employees.

On the contrary, in Sri Lanka, there are so many employees that management does not need to know their names or consider their opinions. Moreover, it scores high in power distance therefore, with this hierarchy; communication between management and workers down the line is negligible. Therefore, it is more preferred to have collectivism inside a business than what the social behavior states. For example, no matter an individualistic or collectivist in the socio-cultural behavior is, it’s always beneficiary to be a collectivist when doing business as it motivates everybody in the company and may leads to new thinking and best business decisions being taken.

Uncertainty avoidance

Sri Lanka is a culture with moderately low uncertainty avoidance and low stress levels. According to Hofstede (1980) people from high uncertainty avoidance cultures try to ask many questions because they are not sure what will happen the next day which, in turn, often leads to stress and nervousness. Harischandra will face this when moving to US after Australian Business as it has a UAI of 46% which is not quite low.

Hofstede’s theory suggest that’s Sri Lanka is among the low uncertainty avoidance countries with lower levels of stress.

However when it comes to Australian business, Harischandra finds that uncertainty avoidance index (UAI) is also quite low in Australia (Geert Hofstede Analysis, n.d). Lankans and Aussies are more tolerant to uncertainty and ambiguity. Therefore it is unlikely that there will be a lot of questions being asked to ensure all the details as means of trying to minimize risks or uncertainty. Furthermore the expectancy of very tight contracts is low due to lower UAI.

Scollon and Scollon (2001) argue that it should be clear that “communication works better the more the participants share assumptions and knowledge about the world. Where two people have very similar histories, backgrounds, and experiences, their communication works fairly easily…” (p. 21). However it could be argued that personality has lot to do with, not only the culture.

Masculinity vs. Femininity

This dimension indicates which values are common in societies – male or female. Masculine cultures such as home country tend to be ambitious, assertive and competitive In masculine societies “dominant values in society are material success and progress; men should dominate in all settings; men should behave assertively, ambitious and tough; care for money and material objects are important” (Arrindell et. al, 2003). In feminine cultures like host country’s, the quality of life matters, people “work to live” and “not live to work.”. They consider quality of life and helping others to be very important. In feminine cultures dominant societal values are care and protection of others. Men and women usually share equal tasks.

According to Stets & Burke (2000) “In western culture, stereotypically, men are aggressive, competitive and instrumentally oriented while women are passive, cooperative and expressive”. (p. 3)

However for a success of a business, a balance between these two dimensional are vital as neither the two extremes would help organizational growth. For example: Employees are the most valued assets for any firm, working too hard may damage the work quality as well as their personal lives which will in turn again affect work adversely. Furthermore the other extreme of feminist would not be ‘so-productive’ and beneficial for a company either. Therefore a balance between the two is highly preferred in business decision making.

Short term/long term orientation

In this dimension, Hofstede (1997) discussed society’s “time horizon” where he compared people’s values on orientations and importance of time. In long term oriented cultures, people have values which are oriented towards the future, whereas in short term oriented societies, individuals are oriented towards the past and present.

For instance, in long term oriented cultures employees wish a long relationship with the company, they consider that time is needed to achieve business results. The difference is that people from short term oriented cultures need quick results. It is important for them to maintain personal stability and happiness in the present.

However, despite its popularity, Hofstede’s model of national cultural dimensions has been a subject to certain criticism since the publication of Culture’s Consequences in 1980. It has been stated that culture is hard to measure, especially by survey methods; that only one company – IMB has been used in the research and that such complicated phenomenon as culture cannot de defined by only several dimensions (McSweeney, 2002).

Hofstede replied to all the criticism and justified his research by stating that within one organization the culture is the same, and any possible differences may be only explained by cultural differences. However, as he later admitted organizational and national cultures are interconnected and often there are more than one organizational cultured within an organization.

Hofstede defines cultural differences based on national borders. However, some countries have more than one national culture within one border, i.e. Australia which has number if immigrants with different nationality, cultures and believes. Therefore, a question arises: how does one define national culture in such case?

It is would be not right to predict somebody’s behavior based solely on those dimensions – in every particular case other aspects have to be taken into account: family background, personal character, specific situation, etc. Hofstede’s model can be used as one of the many guidelines of looking upon culture.

High context vs. low context communication

It could be seen that during the communication process of the representatives from high-context and low-context cultures, the misunderstandings occurrence is common. In application to our Lankan firm Harischandra, which operates in high-context culture, the communication barriers may arise during a communication with international partner from a low-context culture. Indirect messages from people from high context culture according to Hall and Hall (1990), can be one of the reasons for major communication barriers in international business relations which can lead to adverse business decisions. It would be difficult for low context managers of European foods whole sellers Pvt Ltd to understand high context culture and to read “between the lines” home country does. Therefore Harischandra has to be direct in communication and avoid indirect communication.

Language

Everyone in the company related to the foreign dealing has to deal with cross-cultural communication issues on daily bases. As language can be a main barrier during interaction process with European foods whole sellers Pvt Ltd. Harischandra needs to have ‘big ears’ to try to understand. However, it is not only language difference that causes a barrier; it’s the cultural differences. The ways of expressing something can mean rude to other. Mostly to Harischandra as we don’t use our mother tought to converse with the foreign partner, leading to miscommunication which can lead to many incorrect business being taken.

“Nervous laughter” is one of the non-verbal communication ways (Scollon and Scollon, 2001). It has been observed that Asians tend to smile or laugh when they feel difficulty or embarrassment in course of communication. Such behavior, as Scollon states, is “often misinterpreted by westerners (p.156). Such differences in non-verbal communication, where same gesture differs from country to country, may cause misinterpretation. The translations errors in Harischandra have minimal existence since they are not using interpreters and language of communication with international customers is English. Moreover, the language on packaging on the back side of package is also English.

Technological

Miscommunication between partners caused by technology also seemed to be one of the frequently appearing implications in Harischandra’s day to day business activities.

Partner is emailing a lot where Harischandra is trying to chatch up with the technology as they did not use this mode of communication during the middle of their hierarchy. As such foreign partner may find it hard to get through with email.

While technology provides the opportunity for easy and low-cost communication for people across the world, it also creates problems. “Problems occur when the network goes down, the technology does not work, or the team member needs more training in how to use the electronic tools,” Grosse said (p.26). Harischandra they had a problem as they used fax all the time and took time to use email, but now we use email mostly and communication goes more quickly for both of us.

Grosse (2002) argues that all employees need to be trained in how to use the technologies and also they should be offered technical support anytime there is a necessity of it. However Customer Service Representatives complain that it is very frustrating when emails bounce back or don’t receive customers emails on time due to high dependency for this mode of communication that can lead to stress and difficulties when it fails.

It is worth noting that irrespective of potential technological problems, for European foods’, email communication is still preferred to phone calls regardless of matter urgency as they finds “It goes quicker and you can skip too much politeness, non efficient small chatting”. Even though we at home country prefer it the other way round, it could be argued that even though the phone might be faster, it is more difficult for people to speak than to write and it avoids misunderstandings. “The e-mail format and the time it allows both sender and receiver to construct meaning helps the non-native speaker of English (Harischandra in this case) to communicate more effectively” (Grosse, pg.35).

Dealing with and partners and customers of a different culture.

Considering the major difference in socio-cultural behaviors patterns and business decision makings between home and host country, it suggests Harischandra to have big ears and a small mouth. Harischandra should understand the differences in thinking and behavior patterns and listen to customers and the partner more often; to know what they are saying. Trying to adjust to the way business counterparts deals makes everything much easier, where each party feels themselves conformed and confident where mutual understanding among partners also plays a big role.

Keeping information inflow under control and dealing with emails in timely manner, Harischandra can avoid any potential miscommunications or problems that may arise if not given attention and priority as needed.

Ensuring effective communication

When communicating to distributors and retailers, Harischandra’s strategy should be to make it personal, to make them feel valued: Send newsletters retailers and the distributors can make them approach Harischandra personally is necessary. They should get email information, directly sent by the Chairman Mr. Bastiyan in Harischandra as it appeals more personal; So that they feel that they are important and it’s not automatic emails. This type of emails usually starts with: “Dear distributor or dear customer.” Straight forward and explicit statements are made in order to avoid misunderstandings which is typical way of communication in Australia.