How Management Varies across Cultures - Essay Example

? Communication in Business: Management in Country X - how does it vary across cultures?  Executive Summary Management styles in different countries are different because of the differences in culture. An organization entering a foreign country for doing business should possess adequate knowledge about the culture of that country in order to devise better management strategies. Politics, economy, religion etc are some of the factors which can affect the perceptions of the people differently. The views of the public about universalism, particularism, equality, hierarchy, individualism, groupism etc can be different in different countries which can affect the business management process. The perceptions about time, the power of analysis and integration etc can also be different in different cultures. Political, economical, social and technological parameters can affect the business management process. These parameters are different across diverse cultures. Some countries may have democratic administrations whereas some other countries may have autocratic administrations. Moreover, economic growth, religions and the development of technology etc need not be the same in different countries. Business management styles need to be adjusted or fine tuned based on these parameters in order to manage a business successfully across cultures. Terms of Reference “In global firms, the effective management of cultural diversity which was once a concept, became imperative for the firms survival now” (Adler & Gunderson, 2007, p.128). I am working as a management consultant and Microsoft has recently approached me to prepare a management report for them in doing business in India. They specifically asked me to give more emphasize to the management challenges Microsoft may face in India. Microsoft discards the idea of a joint venture in India and they preferred making an independent unit in India. They are aware of the fact that because of the above decision, they have to do everything from A to Z in order to setup a business unit in India. So, they asked me to study the probable management issues they may face in India related to culture. This paper is written as a report to Microsoft about the possible management issues Microsoft may face in their Indian operations. Overview of the situation America and India are some of the largest democratic countries in the world even though, they differ heavily in many other aspects. Even though democracy is prevailing in both of the countries, the functioning of the political systems is entirely different. Even though both the countries are secular democratic, Christians dominate the American population whereas Hindus dominate the Indian population. “India is an enormously hierarchical society (arguably the most hierarchical in the world) and this, obviously, has an impact on management style” (Indian Management Style, n.d) Most of the Indian organizations consist of people from different parts of the country and the management should address the cultural diversity aspects all the time. India consists of 28 states and 6 union territories; most of them are extremely diverse as far as culture and language are concerned. Because of the influence of left parties, the influence of trade unionism in India is more than that in America. Left trade unions can create problems to Microsoft, because of their declared stands against the capitalist countries and monopolies. However, considering the huge growth potentials of India Microsoft can neglect these challenges. At the same time, Microsoft needs to spend more time on learning about the diverse Indian culture in order to manage their business successfully in India. “Management practices are always culturally bonded” (Guidham, 2002, p.52). Analysis based on Trompenaars and Hampden-Turner cultural model The major elements of Trompenaars and Hampden-Turner cultural model of management of international business are; Universalism vs. Particularism, Analyzing vs. Integrating, Individualism vs. Communitarianism, Inner-directed vs. Outer-directed, Time as sequence vs. Time as synchronisation, Achieved status vs. Ascribed status and Equality vs. Hierarchy (Trompenaars' and Hampden-Turner's cultural factors, 2011) A rule is said to be universal if it is applicable all over the world. It is not necessary that the rules framed by a particular society are applicable all over the world. For example, Muslims can marry more than one girl whereas Christian is permitted to keep only one wife. In other words, the rule acceptable to the Muslims may not be acceptable to the Christians. Same way, no organization can develop a universal management style. Management styles are culturally oriented. It is difficult to manage the American and Indian employees using the same management styles. In Indian conditions, Microsoft cannot implement a universal management style because of the extreme diverse population. The needs and cultures of the southern state Kerala and that of the northern state Kashmir are extremely different and hence Microsoft cannot implement a uniform management strategy in India. For each state, Microsoft needs to devise specific management strategies. For example, southern states like Kerala, Tamil Nadu etc are more literate than the northern states like Bihar or Rajasthan. In short, particularism seems to be a better management strategy in Indian conditions. Even though India is a secular democratic country, religious fundamentalism is growing across India at present mainly because of the clashes between the majority Hindus and the minorities like Muslims and Christians. Hindus believe that India is a Hindu country even though the architects of Indian constitutions declared India as a secular democratic country. Because of the above spreading beliefs, violence against the minorities is growing. Moreover, ‘Son of Soil” argument is also rapidly developing in India. In other words, the majority Hindus believe that the Indian soil entirely belongs to them and other are intruders. In short, integration seems to be a better management policy for the Indian conditions. Individualism deals with the rights of the individuals whereas Communitarianism deals with the rights of a group. According to (Adler & Gunderson, 2007), managers worldwide markedly vary in their orientation towards individualism (Adler & Gunderson, 2007, p.53). However, Communitarianism seems to be a better management option for Microsoft in India. Indian society is extremely fragmented and each fragment may have its own interests. Even among the same community different, fragments are there. Different classes and castes are existing among the Hindus and hence Microsoft cannot satisfy all the classes and castes even if they adopt communitarianism in their management style. In short, Microsoft needs to implement a mixed management approach in the Indian conditions and they should use individualism and communitarianism judiciously. Some people manage things independently. They will identify the solutions using their own wisdom and thinking abilities. On the other hand, many other people rely others for solving problems. They will wait for the responses of others in order to find solutions to a particular problem rather than doing something independently. Independent thinkers become leaders whereas the imitators become followers. Inner directed management approaches seem to be the best option for the Indian conditions considering the huge diversity visible in Indian culture. It is difficult to implement academic management theories in Indian conditions because of the complex parameters associated with Indian organizations. For example, Gujarat is believed to be an investor friendly state in India whereas states like Kerala and West Bengal are not believed to be investor friendly because of the influence left ideologies in these states. Some people manage things in a sequential order. They will manage issues one after another based on the priority. On the other hand, many other managers have the habit of managing many things at a time. It is difficult to manage things in a sequential order in Indian conditions. Too many organizational matters with equal priority may arise in Indian organizations. Managing one after other may take too much time for finishing whereas seeing events in a parallel or synchronized manner will speed up the management process. Achieved status and ascribed status are entirely different. One would achieve status in two ways; through performances and through seniority. The first one is labelled as the achieved status and the second one is labelled as the ascribed one. Ascribed status seems to be an exhausting as far as the organizational world in Indian conditions is concerned. Performance is taken as the measure to give rewards rather than the seniority in Indian organizational world at present. Equality is all about enjoying equal status and rights by all the people irrespective of the race, gender or ethnicity. The equality principle does not believe in hierarchy or tradition. Equality in all the aspects of life is ensured by the Indian constitution and organizational world is also not an exception. Discriminations related to race, ethnicity, religion or sex have been prohibited in India. “Germany and Italy have highly conservative view of the role of women and they tend to exclude women from senior management positions”(Guidham, 2002, p.63). However, India has not much concerns about appointing even female CEO’s. Microsoft needs to take such positive attitudes constructively in order to excel in Indian conditions. PEST Analysis Political India is currently one of the major allies of America in Asian region. The recent Indian visit by Obama and the Indian prime minister’s visit to America have strengthened the political and economical ties between these two diverse nations. Obama has signed trade deals worth billions of dollars with India in his recent visit. American companies found less difficulties in entering India because of the changing political atmosphere in the Asian region. However, Microsoft is facing lot of legal battles at present with respect to antitrust from its competitors. Even the US courts have alleged Microsoft for monopolizing the OS market. Political problems are less in India compared to some of its neighbours like Pakistan or Sri Lanka. Freedom of expression and human rights are respected in India and the American employees can assist Microsoft in building their business just like in their home country itself. Analysing all the above merits and demerits of India as a country, Microsoft can select India as a business hub for their Asian operations. Like most of the other countries, corruption seems to be the biggest curse of Indian politics. At the time of writing this paper, the opposition parties in India accused some of the present ministers as corrupts. The 2010 commonwealth games, the selling of 2G spectrum in telecom sector etc are some of the major areas of political corruption in India in the year of 2010. Microsoft may face corrupted bureaucrats and politicians in India and they must take precautions to deal with them. Economical Economic growth of a nation is controlled by many parameters like, political stability, people’s living standards, unemployment problems, educational levels, infrastructure developments, overall domestic peace levels and the relationships with the neighboring countries etc. Another major factor which controls the economic growth is the country’s ability to mobilize the internal resources along with attracting foreign direct investments (FDI) to the country. India is one of the rapidly developing economies in the world at present. Even the recent economic crisis has not affected them much. According to economic pundits, India will become an economic super power in the near future itself even though the huge population is causing slight concerns. India has started its economic reforms in the 90s during the period of the Narasimha Rao administration. The subsequent governments followed or continued the economic reformation policies irrespective of their differences in political ideologies which helped India to sustain their economic growth even though the power centres or administrations changed continuously. Earlier, India focussed mainly on agricultural sector for the economic development, but later they realized that need for industrialization for economic development. Infrastructure development is one of the major indicators of economic development and India did many things to improve the infrastructure facilities. Social India is a country which is having the second largest population in the world. Moreover, it is blessed with different religions, languages and cultures. In a diverse work environment, the needs of some employees may clash with the needs of some other employees. For example, Fridays are sacred for Muslims whereas Sundays are sacred for the Christians. So a work scheduled on Fridays will be difficult for the Muslims to accomplish whereas the work scheduled on Sundays may not be suited to the Christians. Diversity among the workforce is huge Indian conditions and Microsoft should take extreme care while managing diverse workforce in India. Clashes and conflicts can develop any time among the Indian workforce because of the contrasting cultures. Microsoft should take extreme care while managing such situations. Majority of the Indian population are highly sensitive and vulnerable. Even simple incidents can attain fearful proportion in short period of time and hence Microsoft should develop suitable management strategies to counter such situations. India is a secular democratic country and hence democratic means can be visible on entire activities in India. Most of the organizations have democratic management styles which accommodates and account for the cultural diversity of India. Some of the Indian states like Kerala and Karnataka have better literacy rates compared to other states. However, states like Bihar or Uttar Pradesh have extremely low levels of literacy. Because of low level literacy or education, public in these states can be easily agitated over simple incidents. However, person from Kashmir (northern state) can safely work in Kerala (southern state) without any problems because of the mutual respect and consideration Indian people exhibit towards others. Technological India is developing rapidly in technological aspects also. Recently Indian scientists succeeded in sending a satellite to moon which succeeded in identifying the presence of water in moon. Moreover, India has developed lot of sophisticated military weapons including nuclear arsenal. On the other hand, Microsoft is a technology driven company and it spends millions of dollars for the research and development of new products. In fact it updates its operating system Windows and internet explorer browser, and Office suit, frequently to cater the needs of the current world. A substantial amount of its revenue is utilized for innovating new products and updating the existing ones. However, recently Apple surpassed Microsoft in market capitalization and most of the Americans now consider Apple as the most valued company as far as technological advances are concerned. The expertise and skill sets of Indian IT professionals are world famous and making use of the Indian talents, Microsoft can rewrite the history of the IT world. In short, Microsoft can regain its lost place if they implement the right strategies to exploit the technological brilliance of Indians. Solutions and recommendations Indian managers are among the bests in their categories. Indian managers are currently working as the CEO’s of some of the biggest American companies like Pepsi. However the Indian management styles lack coherence because of the complex issues in India associated with the diversity and the cultural differences. Microsoft should try to bring some uniformity and coherence in Indian methods of management in order to make it more suitable to their needs. Microsoft should concentrate in developing and indigenous management style suited for the Indian conditions. At present most of the Indian organizations depend on the individual expertise to tackle with the management issues which should be changed. Collective efforts or team works are required to tackle the common issues like the environment problems, management problems, political problems, social problems etc in India. Recently the famous Indian business group Tata was forced to shift their car manufacturing plant from Bengal to Gujarat because of public agitation. Even though, Tata has suffered lot of financial losses because of it, no other Indian organizations have raised any word of support in favour of Tata which clearly shows the extent of organizational rivalry existing in India. Microsoft should take extreme care while selecting premises for establishing their units and they must do everything possible to reduce the organizational rivalry in India. Forecasts and Outcomes India is believed to be one among the rapidly developing economies in the world along with countries like, China, Russia and Brazil. Indian Prime Minister Dr. Man Mohan Singh himself is one among the renowned economists in the world. Under his leadership India was able to escape from the recent recession and still maintaining a growth rate of more than 8%. According to some reports, India’s growth rate has already crossed the 9% mark. In short, no second thought is required for Microsoft while selecting India for their future expansions. India is blessed with huge educated manpower. While most of the other countries like US, UK etc are struggling because of manpower shortage, India is able to provide the necessary manpower to these countries and making lot of revenues in that manner. Earlier, population growth was labelled as a curse by the economists; however, many economists at present believe that India and China like heavily populated countries were able to develop so rapidly because of their huge manpower. India’s political climate is stable and not much political problems reported from India in recent times. Moreover, the threats from the terrorists were also reduced considerably after the Mumbai attack because of the stern measures taken by the India government to counter terrorism. In short, Microsoft can invest heavily in India in order to regain its lost places in international market. References 1. Adler N.G. & Gunderson A. (2007), International Dimensions of organisational Behaviour Publisher: South-Western College Pub; 5 edition (June 29, 2007) 2. Guidham M. (2002), Interactive Behaviour at Work (third Edition) Essex pearson Education Ltd . 3. Indian Management Style, (n.d), [Online] Available at: http://www.worldbusinessculture.com/Indian-Management-Style.html [Accessed on 12 January 2011] 4. Trompenaars' and Hampden-Turner's cultural factors, (2011) [Online] Available at: http://changingminds.org/explanations/culture/trompenaars_culture.htm [Accessed on 12 January 2011] Read More