International Business 2

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CLIENTS REVISION MESSAGE

Hi There
I need specific example that in the three countries please give an example for a company lets say ZARA for example that running in three countries and how is this company succes in different dimensions, culture..ets especially in manner or frame of “Managment aspect” .and how the managment of this company adopt with different culture in different country , what are skills for this managment to be succeed in different cultres

FORMER INSTRUCTIONS

The cultural distance of countries in which your firm operates is one of the many explanations of

significant differences that your Australian based employees face when travelling to different affiliates

worldwide. At the present time your firm has operations in the Saudi Arabia and Singapore as well as Australia.

Using the globalEDGE site and the Hofstede Resource Center, analyse the cultural dimensions of all the

countries you operate in and assess the management implications of the cultural differences of the

respective countries.

Abstract

This paper addresses the issue of cultural distance in international business by focusing on cultural dimensions of three countries. The three countries are Saudi Arabia, Singapore and Australia. The analysis of the cultural dimension within these countries occurs effectively through the use of global EDGE site and Hofstede Resource Center. An assessment of the implications of cultural dimensions on management also occurs consecutively.

The paper finds that there are different cultural dimensions within the three selected countries. In addition, cultural dimensions influence the decision making process of the organization and management, as well. Therefore, the management strategies adopted by a multinational business need to have an alignment with the cultural dimensions. The paper makes use of visual aids to aid in an effective analysis of the cultural dimensions.

Introduction:

Globalization has influenced the form of business that individuals engage into, in the current century. Business individual find it quite challenging and enriching to undertake their business operations in different systems, nations and cultures (Muritiba et al, 2010). Consequently, global businesses have to maneuver their way through differences that occur between two nations in order for them to find success in their operations. Some scholars refer to the differences as psychic distance (Muritiba et al, 2010). Comprehension of psychic distance dimension is quite complicated. Since cultural distance is intangible and the analysis occurs in a subjective manner, cultural distance appears as a complex dimension for analysis.

As such, due to the existence of cultural distance, individuals engaging in international business have to adjust their business policies in order to fit in the new business operation environment (Lee, Shenkar, &Lid, 2007). The dimensions inherent within cultural distance include culture, language and religion. Hofstede’s culture dimensions include uncertainty avoidance, individualism-collectivism, masculinity and power distance (Richard, Hosfstede, & Bond, 2007).

Business organizations and their concurrent countries, always perform an analysis that aids in market entry strategies formulation (Hyllegard, & Eckman, n.d). The market, cost, competitive advantage and government forms the globalization drivers that the country analysis basis the focus. This depicts weaknesses and strengths for a business to participate actively in the international market. Multinational business analysis, on the other hand, outlines the potentiality of the business to gain from the market participation. The analysis incorporates strategic levers such as marketing, location and product, and organization analysis such as culture, people, management and structure. Figure one depicts the framework that most of the organizations make use of when strategizing on market entry.

 

Country analysis

 

Globalization drivers

Multinational Business Analysis

 

Strategic levers and organization

 

 

 

Figure 1: Yip (1998) markert entry framework for an international business.

Culture is one of the factors that influence the decision making process of a business. In addition, the culture outlines the relationships, structures and communication models adopted by an organization (mead, 2005). Hofstede’s world average cultural dimensions appear as depicted in figure two (Hofstede, 2009).

Figure 2: Hofstede’s world average cultural dimensions.

Saudi Arabia:

According to Hofstede (2009), the cultural dimensions inherent in Saudi Arabia appear as depicted in figure 3 below.

Figure 3: Hofstede cultural dimensions for Saudi Arabia.

Saudi Arabia is a Muslim dominated monarchy located on the southwestern region of Asia. Saudi Arabia natives’ faith in Muslim religion plays a key role in their lives. The region has the characteristics of uncertainty avoidance and prolonged power distance. As such, the leaders within this region have to delegate specific and complete directives. In addition, the leaders have to keep a distance between themselves and the group for them to find acceptance in this region (Butler, 2007).

The established power distance (PDI of 80) in the region introduces a caste system, which limits upward movement of the region natives. The region has created a room for development of inequalities of wealth and power. As such, the natives have adapted rule-oriented system characterized by controls, laws, regulations and rules, with the aim of uncertainty reduction. The uncertainty prevalent in this region and large power distance leads to the emergence of a situation characterized of leadership with authority and ultimate power. Therefore, the society expects a distinction between the leaders and the society, which is not subverted upon the natives, but accepted by the community, has their inherent cultural heritage.

Saudi Arabian society has a high level of uncertainty (UAI of 68), which depicts that the society has no room for tolerating any degree of uncertainty. Any attempt towards the reduction of uncertainty results in adoption and implementation of strict laws, rules, regulations and policies. The natives in this region aim at having maximum control of all activities in order to avoid or eliminate any chances of unexpected. Therefore, the society in this region is risk adverse and acceptance of change has a barrier, which need overcoming.

Masculinity level is an average value of 52 from Hofstede Dimension, which depicts that Saudi Arabian women have a limitation to their rights. This may have a contribution from the established Muslim religion in the region. Individualism (IDV of 38) does not occur in this region according to Hofstede Dimension. Therefore, the Saudi Arabian society has a culture established on the basis of collectivism, which is paramount.

Saudi Arabia depicts a society where there is an established power distance and inherent risk adverse nature.  This calls for stipulating management strategies with maximum consultation with the established business consultants in the religion. This occurs since the management adopted is highly influenced by the cultural practices inherent in this region (At-Twaijri, & Al-Ghamdi, 1997). The management further needs to adopt bets practices measures for this region in order to achieve better results. Given that the inherent religion in this society is Muslim, there is a need of ensuring that the staffs that facilitate business transactions in this region have a background of Muslim religion. However, in circumstances of lack of Muslim staffs, there is a need of ensuring that the personnel operating in this region needs to understand Muslim religion vividly.

The risk adverse element in this region calls for an effective product entry strategy into the region. As such, there is a need of conducting market research on the region for analysis of the customer perception on products. The masculinity nature that exists in the society calls for adoption of a management structures that meet the societal culture. This will aid in preventing the emergence of unwanted conflict with cultural practices, which may impair the effectiveness of the business operations widely. Therefore, the management has to consider the leadership styles, the marketing strategies and staff training effectively with regard to this society.

Singapore:

According to Hofstede (2009), the cultural dimensions for Singapore appear as depicted in figure four.

Figure 4: Hofstede’s cultural dimensions for Singapore.

Buddhism is the main religion in Singapore with a percentage of 70 (Hofstede, 2009). The power distance index for Singapore is 70. This depicts that the society has an inherent hierarchical relationship, which results from Confucian teaching. The society has the belief that people have different ranks and the interactions between the parties are quite limited (Qiang, n.d). The.............


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