Cross-Cultural Issues in International Business.The Audi organization - Essay Example

?Cross-Cultural Issues in International Business This paper seeks to critically compare two cultures of different organizations, Audi organization that wishes to establish a manufacturing operation in the Far East and Asia, the Audi Car Company going to China. The paper will use the Chinese culture dimensions, hofstede five dimensions, the culture web and the 7 culture dimensions to assess the likely problems that will need to be addressed in order to ensure integration of the two organizations and their successful future growth. Finally, the paper will propose a solution that details the management style, structure and reporting methods that will provide a solution to the issues identified. The Establishing organization will have to work routinely with the new culture and background of the established company in China. Usually this relationship works well since the differences in culture are enriching and interesting. However, things may go wrong in some cases for reasons that may not be understood by the organization’s management. This is the reason why mastery of cultural differences is important, in order to work more effectively with people, and avoid misunderstandings (Ray, 2010). The Seven Dimensions of Culture is very essential in enhancing the mastery of cultural differences when effectively applied. The model was identified by Trompenaars Fons and Hampden Charles, management consultants, who published it in their book, "Riding the Waves of Culture." The founders found out that majority of people coming from different cultures do not just randomly differ from each other; but they are different in very unpredictable and even specific ways. This is due to the fact that every culture has its own way of thinking, its own beliefs and values. Different cultures also place different preferences on different varying factors. Trompenaars Fons and Hampden Charles concluded that wherever these preferences fall is what makes the differences in culture compared to one another as described on each of the seven dimensions of culture. These cultural dimensions include: universalism versus particularism, specific versus diffuse, individualism versus communitarianism, neutral versus emotional, sequential time versus synchronous time, achievement versus ascription, and internal direction versus outer direction (Schneider and Barsoux, 2003). The organization in Europe that wishes to establish an organization in the Far East can use this model to understand and master people from this region, who practice a totally different culture. This will enable the Audi Car Company to avoid misunderstandings with the people and enjoy a good working relationship. This is very significant when the company will be doing business with different people around the region who have different cultural background. Hence, it will ease the management of the diverse groups of people from different cultures. The Seven Dimensions of Culture will also help the management of the organization to understand that there is no particular culture that is worse or better than the other; this is because of the assertion of the model, that people coming from different cultural backgrounds are not necessarily different, but simply make differing choices. In contrary, the Seven Dimensions of Culture does not explain how the management can measure the preferences of people on the seven dimensions (Hampden and Trompenaars, 2000). Therefore, it will be in the best interest of the establishing company to simply use the Seven Dimensions of Culture as a general guide when dealing with the people coming from different cultural backgrounds. The model will enable the organization to explore the strategies that can be used among people fitting the highlighted characteristics of each of the dimensions as described below: The seven dimensions of culture The first cultural dimension is universalism and particularism; according to the model, universalism is characterized by people who place much emphasis on rules, obligations, laws, and values. These people attempt to fairly deal with others based on these areas of emphasis, however, the rules comes before any sort of relationships. The organization will use this dimension to; help people understands the ties of their work with their beliefs and values; give people clear instructions, procedures, and processes; remain consistent and keep promises; give the people enough time to make decisions; and use the organization’s objective process to explain the decisions made by the people of the other culture. Particularism on the other hand is characterized by people who believe that each relationship and circumstances dictates the laws and rules in which they live by. However, responses to differing situations may change, based on the events at the moment as well as the people involved in the organization. The establishing organization will use this dimension to: give autonomy to people in order to make their own informed decisions; respect the needs of others when making organizational decisions; remaining flexible in making decisions; building relationships with people and knowing them well so as to understand their needs better; and outline vital policies and rules that have to be followed in ensuring growth and development of the established organization in China (Holden, 2002). The other set of dimension is individualism versus communitarianism. People who value individualism believe in personal achievement and freedom. These people believe that one must make their own decisions and take care of them. The organization will use this dimension to: reward and praise performance of individuals; give autonomy to people in order to make their own decisions and take own initiatives; link the needs of the organization to those of the people; and enable people to remain creative as well as learn from their own mistakes. Communitarianism on the other hand is characterized by people who believe in the relevance of groups. They believe that a group is more effective than individuals. The organization will use this dimension to: reward and praise the performance of the groups in the organization; not to praise individuals in public places; give others chance to make their own decisions; and discourage favoritism. The other cultural dimension is specific versus diffuse. This dimension encourages people to keep separate their personal lives and work. They believe that there is not much impact on the objectives of work resulting from relationships. People believe that they can work just as good without good relationships. The organization will use this specific dimension to: remain direct and particular to the point; focus on the objectives of people before putting emphasis on the strength of relationships; providing clear processes instructions and procedures; and allowing people to have their home lives and work separated. Diffuse element on the other hand focuses on people who overlap between their personal life and work. These people believe that good relationships are very important in meeting the objectives of the business. The Audi organization will use this dimension to: emphasize good relationship building before focusing on the objectives of the organization; find out more about the people they are working with and the culture of the people doing the business with them; discuss the business on social events as well as personal discussions; and try not to turn down the social function invitations (Marx, 1999). The fourth dimension is neutral versus emotional. Neutral dimension involves people who make attempts to control their emotions, and have reasons influencing their actions more than their feelings do. The Audi organization will use this dimension to: manage the emotions of people effectively; ensure that people watch their body language not to convey emotions that are negative to other cultures; watch the reactions of people carefully and stick to the interactions and meetings. The emotional dimension entails those who want to have their emotions expressed at work. The organization will use this dimension to: open up to the people and build rapport and trust; encourage people to use their emotions to communicate their objectives; train people on how to effectively manage their conflicts before being personal; and to use positive body language and attitude. The other category of dimension is the achievement versus ascription. Achievement dimension includes people have a belief that one is that what they do and base their worth accordingly. Such cultures, no matter what a person is, value the performance. The organization will use this dimension to: recognize and reward appropriately good performance; be a role model and use titles whenever it is relevant. Ascription as a dimension includes people who believe that people should be valued for what they are. The culture defines behavior through power, position, and title. The Audi organization will use this dimension to: use titles to clarify the status of people in the organization; show respect to those in authority when challenging decisions; and not to let the authority bar good performance of the organization (Samovar, 2001). Still on the seven dimensions of culture, the organization will use sequential time versus synchronous time dimension. Sequential time involves people who likes order in events and believe in planning and punctuality as well as staying on schedule. The organization will use this dimension to: focus on the time of the project and focus on a particular activity; keep organizational deadlines; remain punctual; and set clear organizational deadlines. On the other hand, the synchronous time dimension is characterized by people that see future, present and past as periods that are interwoven. These people can work on more than one organizational project at once. The company will use this dimension to: ascertain flexibility in the work approach; allow people within the organization to remain flexible on the projects and tasks of the organization; and highlight the significance of deadlines and punctuality on the objectives of the company meetings. The seventh cultural dimension is the internal direction versus outer direction dimensions. Internal direction dimension is characterized by people who possess beliefs that they are able to control their environment and nature in order to achieve their goals. The Audi organization will use this dimension to: encourage people in China to take control of their learning and develop working skills; set defined objectives that the Chinese people agree upon; and remain open on disagreement and conflicts as well as allow people to participate in constructive conflict. The outer direction dimension on the other hand constitutes people who nature and environment control the achievement of their objectives and goals of the organization. The organization will use this dimension to: to offer the right resources that do work effectively; give the people within the organization regular feedback and a defined organizational direction in order to inform them how the nature and environment is affected by their actions; manage quickly and quietly conflict and reassure people that the job they are doing is good enough; balance positive and negative feedback; boost the confidence of the people; and encourage accountability and responsibility among people. The Audi organization will use this model entirely to understand people from the Far East region better so that they can promote growth and development of the established organization moving to China (Maybe, 2000). Chinese hofestede cultural dimension The other cultural dimension is the Chinese hofestede cultural dimensions. This model is based on individualism and long term orientation. Based on Hofstede's system, the company will use the following aspects to understand the cultural difference and solve the probable problems that may result from the relationships due to the different cultures. The first Chinese culture is the power distance index (PDI) from this perspective, Chinese culture values authority and power more, and this is founded from the monarchy years. This aspect enables the Chinese to learn to deal and relate well with their supervisors and leaders. This culture may a times encourage bureaucracy, but most importantly it maintains stability of the organization. The Audi organization will hence use this aspect to relate well with the people of China in developing and growing the organization. The other aspect of Chinese hofestede cultural dimensions is the individualism (IDM). This is the lowest Chinese cultural index. This is because the culture of China is collectivism. The Audi organization will be able to understand that the culture of China is that of harmony, which also means environmental blending. Is a person gets into the limelight too much, it may be considered arrogance or having flaws personality. The organization will connect individualism (IDV) with power distance index (PDI) as respect of power sacrifices individualism (Trompenaars & Hampden, 1997). This will help the organization to advertise the establishment in the Chinese culture. The other Chinese hofestede cultural dimension is the aspect of masculinity (MAS). This is vague in a way. It defines Chinese culture as that of agriculture and feminine fundamentally. This will enable the organization to understand that Chinese culture is that of a big family with social roles. This will help the organization unite the people of china with the others in the organization in order to promote growth and development of the organization. Another Chinese hofestede cultural dimension is the uncertainty avoidance index (UAI). This dimension will ensure that the organization recognizes that Chinese people are masters who ambiguously play with words and uncertainty. It has been difficult to understand the Chinese culture by the western countries, however, this dimension will ensure the culture of the Chinese people are well understood by the organization and incorporated in the organizational culture in order to create cultural diversity that promotes the growth of the organization. Lastly, the Audi organization will put into consideration is the long term orientation (LTO), a Chinese hofestede cultural dimension. This indicates the five year plan of the central government and the ten year plan. The aspect helps will help the organization to set the organizations goals of the period that will be achieved in the future. The graph of Chinese hofestede cultural dimension The dimension explains that Chinese people save for the future as well as plan for the some future. The Audi organization will use this dimension to set the direction of the established organization in China regarding the Chinese culture of saving and planning for the future. This will also help the organization to set the strategies that put into considerations the culture of Chinese people. This will ensure that the organization promote development and growth of the established organization in China. As described in this paragraph, the indexes are true about the culture of Chinese people. However, efficiency and individualism are given much attention, especially in more developed countries (Hofstede, 1999). Culture Web model The organization will use the Cultural Web approach in order to assess and transform the culture of the organization in order to match those of the people doing business with them. The Cultural Web will enable the organization to identify and expose cultural practices and assumption. The model will also ensure the work in the organization align its elements with the synergy as well as the elements of the organizational culture. The Cultural Web helps in identifying interrelated elements which helps in making up the work environment. The model will also be used by the Audi organization to identify, according to the culture of Chinese people, what may work, what may not work, and what needs to be changed. These elements include: stories which include the past occurrences that people talk about within and outside the organization; routines and rituals entailing the daily actions and behavior of people that may send a signal of behavior acceptance; symbols which include the visual representation of the company such as dress codes and company logos; organizational structure, this entails both influence that are valued due to the contribution to the organization and the organizational structure defined by the charts, and the unwritten power lines; control systems, which involves the way in which the organization is monitored and controlled. This also entails quality systems, financial systems and rewards; and power structures, which entails the real power pockets in the organization. This also involves senior executives as well as a department in general. The major aspect is that these elements ensure that people have largest amount of influence in the process of decision making, strategic direction and operations (Barsoux & Lawrence, 1990). The structure of Culture web model In summary, paper has critically compared the culture of Audi organization and the Chinese culture in which the organization wishes to establish a manufacturing operation. The paper has also used the Chinese culture dimensions, hofstede five dimensions, the culture web and the 7 culture dimensions to assess the likely problems that will need to be addressed in order to ensure integration of the two organizations and their successful future growth. List of References Barsoux J. L. & Lawrence P. 1990 Management in France, London: Cassell Education Hampden-Turner, C. Trompenaars, F. 2000. Building Cross-cultural competence, London: John Wiley & Sons Hofstede, G. 1999 Culture and Organisation: Software of the Mind, Boston: McGraw-Hill Holden, N. 2002. Cross-Cultural Management, a Knowledge Management Perspective, New York: Prentice Hall Marx, E. 1999. Breaking Through Culture Shock, London: Nicholas Brierley Ray French. 2010. Cross- Cultural Management in Work Organisations; 2nd Edition. The Chartered Institute of Personnel and Development Samovar, L. 2001. Communication between Cultures (2001) Communication between Cultures, New York: Wadsworth Schneider, S. and Barsoux, J-L. 2003. Managing across Cultures, London: Prentice Hall Tayeb, M. 2000. International Business, Financial Times, New York: Prentice Hall Trompenaars, C. & Hampden –Turner, F. 1997. Riding the Waves of Culture; London; Nicholas Brealey Read More