Cross-Culture – Business Environment Management in India

Keywords: Porter Diamond model, Hofstede cultural dimension theory, Cross-culture assignment Writing Service

In this essay, management environment in India will examine trough using ‘Porter diamond model’ and ‘Hofstede cultural dimension theory’. These analytical tools will help to analyse and evaluate the factors which affect the management environment.

Introduction

Budhwar and Bhatnagar (2014) stated that India is classified as emerging market and a large number of foreign companies have made the foreign direct investment. However, when a company enters the foreign market, it faces a range of uncontrollable and external factors which affect the performance, decisions and strategies.

There are numbers of specific macro environment factors such as culture, weather, government demographic or regulation. The management environment in India is complex and there are numbers of problems with problems exist. The demographic environment, cultural diversity and strong bureaucracy have a major impact on decision and strategies (Stacey, 2016).

Tenhunen and Saavala (2016) added that India has the second largest population, which made it difficult to tackle the demand for a large number of different stakeholders. The household structures such as joint families and the mix of the population (youth and religion) depict a different operating environment. Moreover, cultural dimension, geography, education and diversity represent complex situation which affect the management conditions in the country.

Analytical tools

Hofstede Model

Cullen and Parboteeah (2016) explained that the national culture has dominated impact in terms of management ability to operate efficiently. Culture decides what of strategy and policies to deploy in order to achieve success in the particular country. Hofstede theory is useful to study the national culture.

The five elements of the model are power distance, individualism, Masculinity, uncertainty avoidance as well as long-term orientation. Power distance defines the retention of authority and culture of low power distance; people expect the distribution of power. On the other hand, high power distance depicts the hierarchies and power inequalities. In addition, uncertainty avoidance represents the policies and set of rules. People who live in the culture of high uncertainty avoidance usually feel uncomfortable with the uncertain situation (Chatterjee and Nankervis, 2016).

Conklin (2015) elaborated that masculinity shows the focus on male-dominated culture and female usually have less power or status in such situation. Individualism means people prefer to show themselves as single whereas collectivism signifies a situation where people prefer to stay in the group.

Furthermore, short-term orientation represents employee prefer short-term achievement compared to long-term shows that people prefer a long-term relationship with the company.

According to Williamson (2015), advantages of the Hofstede model is that it is useful tool to understand the dimension of the culture and practices of the people. It is useful to generalise the national environment in a country which helps to eliminate the initial management problems associated with a particular country.

Furthermore, Ng, Lee and Soutar (2014) explained the value of theory that it helps to manage the risk associated with management failure in a country. In a global marketplace, management needs an understanding of national culture to effectively deal with the complex situation.

Nevertheless, Baskerville (2015) stated that there are limitations attached to this theory. A model presents the generalised approach as it is difficult to determine the behaviour of individual based on geographic diverse countries. In addition, Tavakoli, Keenan and Cranjak-Karanovic (2015) described that theory emphasises on the assumption of the author rather presenting an unbiased view.

Sivakumar and Nakata (2015) stated that one of the problems with the model is stereotyping practices of the country culture. For example, Germany usually prefer to have strong leadership and union member does not have representation in the upper manager of the company when compare with counterparts UK or US.

Porter Diamond

Porter diamond is useful to analyse the comparative advantages of the nations based the factors it inherits. The factors analyse are useful to determine the advantage in terms of natural resources, the size of population, manpower, firm structure and strategy as well as supporting industries in the country (Soaresa, Farhangmehra and Shohamb, 2015).

Johnson, Scholes and Whittington (2014) added that the demand condition represents the market of the product of the company. The demand condition in a country shows the national competitiveness and subsequently leading to innovation. The supporting industries highlight the competitiveness of local firms and how it can be used for advantage.

Moreover, local conditions affect the structure of the company which helps it to achieve its objectives. The role of government is to develop and provide conditions which support the nations. The policies and regulations in the market help to provide business condition suitable for effective management. The success of the company is based on the resources as well as capabilities of the local market infrastructure (Smit, 2017).

According to Van-Wyk (2015), the importance of the porter could not valueless as its highlight resources which help it have to achieve national advantages compare to other countries.

Sterns and Spreen (2015) explained that the model helps to highlight the determinants available in the market which helps the industries to be successful. In addition managers can use the during phase of internationalisation in order to realise in which country investment should be made based on the attractiveness and comparative advantage assessed through porter model. At last, not last, model is useful to identify advantages t home and on basis of which firm can compete internationally (Ozgen, 2015).

Besides, Choa, Moonb and Kimc (2016) presented criticism of the model is that it was produced 30 years ago and during that time business condition were different when compared to the current era of globalisation. The use of internet and advance technology in business has transformed the face of business.

Mann and Byun (2014) explained that porter fails to include the effect of multinational cooperation’s in terms of the resource, as well as knowledge transfer. Government give incentive to industries through favourable export policies and model has failed to address is cultural differences in the country. At last, not, model fails to address the financial crisis’s which could impact the management environment in a country (Goetz, Deller and Harris, 2014).

Hofstede Theory and Analyse of issues

The demographics in India is diverse which is based on young population, number of languages as well as a range of cultures. This results in a complicated situation for management to address the range of issues when it comes to managing the system.

The diagram below shows the four dimension of theory in two regions and average of the world. This shows the cultural trends of a country. This represents the national trend, values and cultural norms in a country (Hofstede, 2011).

hofstede cultural diemnsion -- india vs europe

Hofstede analysis shows that power distance is very high when compared to world average or European average. It means that in India have a lot more hierarchal structure and people in these countries do expect hierarchy structure. Therefore, when designing a system, it is important to integrate the aspect of hierarchy for better control in India (Chatterjee and Nankervis, 2015).

Sinha and Sinha (2015) added that the power structure strongly influences before things could implement in a country.  The hierarchy helps to maintain the control especially there are large cultural variations in the society. In India hierarchy mindset in every aspect which includes ideas, people and relationships.

The large power distance is consistency with caste systems, religions as well as social recognition. The workforce prefers to personal relationships as well as they found loyal to their companies compared to performance of the individual. Furthermore, it is evident from the work of in India formal contracts are values less and people tends to prefer personal relationship (Fang, 2013).

Ramamoorthy et al (2005) highlighted that another important factor which is prominent in India is high individualism compare to world average but still far lower than Europe. This reflects the preference of the workforce and sense of reasonability an individual prefers. On the other hand, in collectivism approach task are performed in a group.

One of the reasons for high score is the large percentage of India population is based on youth, i.e., it is important to consider the demographic as language, cultural variation and youth have prominent effect when designing a control system. Power is an important motivational factor for the individuals in India and financial rewards along insufficient to motivate the manager in India (Minkov and Hofstede, 2016).

The reward structure in terms of determination as well as its distribution in the India society is more dependent on the collectivist approach. The historical and cultural influence has strong influence and people prefer incremental change. The cultural variation such as language, food and dress along with religion factor are important determinants (Tripathi and Cervone, 2014).

The masculinity score in India is higher which represent a modest culture. Therefore, in a country where masculinity score is a score, then it is considered that in such country problems or conflict are resolved through the fight as well as recognition and achievement are important (Thakur, 2016).

Grainger and Chatterjee (2015) discussed that while adjusting to the country environment this may not represent many problems, however, the power should be distributed based on cultural hierarchy. Despite the high percentage of the female population the lower dominance and role in the system and there is large gap exists in the system.

Nevertheless, Indians are more adaptable to western practices but have traditional social relations. This makes it more than to determine whether people are happier with bureaucratic system or prefer autonomy.

Bono, Jones and Heijden (2015) mentioned that the uncertainty avoidance in India is very low which shows that people do not prefer change in the system. There is cultural association which resist the change and people do not accept new phenomena easy. Countries with high uncertainty avoidance score show that there are not rules or laws exist to tackle or manage such situation.

Uncertainty avoidance means that we foresee something but try to avoid it, despite the fact it is not completely unpredictable phenomena. The motivation factor in Indian workforce is both groups as well as individual and people prefer to make group decision making. The range of factors such as age, position and caste is taken as authority source as well as tends to avoid conflict (Messner, 2015).

Migliore (2015) elaborated that long-term orientation concentrates on the extent to which the general public acceptance, or does not accept long-term dedication to conventional, ground-breaking qualities. India’s high LTO score demonstrates the nation endorses to the estimations of long-haul duties and regard for convention. This is thought to bolster a solid hard working attitude where long-haul prizes are normal as an aftereffect of today’s diligent work.

Society focuses on the relationship and long-haul common commitments in the middle of people and associations. This relationship impacts a person to need to be in a situation where he feels had a place and incorporated (Fang, 2015).

The long terms orientation score in India shows the preference of people to have long-term relationship therefore, people prefer to more persistent as well as relationship are important to determine the social status. Nevertheless, due to changing economic environment trend and people prefer to change job (Minkov and Hofstede, 2015).

Conclusion

The workforce of India is long-term orientated which represent persistent approach. People prefer to have hierarchy structure and motivated with long-term plans. The generalization approach for Indian population would fill to deliver the desire results because of conditions, beliefs as well as cultural value.

The standardization could lead to problems because of the geographical as well as historical association and therefore, India should be taken as multicultural society based on region.

The management should tackle the complexities in the environment through the careful study based on region, religion, geographic along with demographic to devise a control system which addresses the need and requirement based locality rather applying a generalised approach.

The system based on hierarchy structure should have long-term orientation, as well as people, prefer stable, certain and long-term environment.

 

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