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Culture and Managerial Implications: Comparison of India and Australia

Info: 3980 words (16 pages) Dissertation
Published: 10th Dec 2019

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Tagged: Cultural StudiesInternational StudiesManagement

Culture and Managerial Implications

Table of Contents

Introduction

Comparison of Communication Style

Comparison of Organisational Environment

Comparison of Management Style and Work Patterns

Comparison of Negotiation Style

Conclusion

References

Introduction

Comparison of Communication Style

The main components of cross-cultural communication are verbal communication, nonverbal communication, communication style and cultural values (Bean, 2010). Verbal communication involves use of language, volume of speech and accent. Nonverbal communication includes body language such as eye movement or facial expression, and object language such as business attire or signs on the body e.g. tattoos. Communication style depends upon how individuals interact and express themselves to others. Cultural values depend upon an individual’s belief and how they view or judge others.

India has high context communication culture at workplaces. In high context cultures, communication is indirect and based upon nonverbal behaviour. A comprehensive background information is required in high context cultures to interpret the message (Neese, 2017). Indian managers are generally indirect in communication. For example, an Indian manager who is not interested in a business deal would be hesitant to say “No” directly and instead he would try to avoid the situation by making excuses. India has a hierarchical society and therefore during business meetings, it is expected that person with higher position or status should be greeted first with their title and last name. Generally during first business meeting, third party introduce people to each other. Some of the physical postures such as folded arms or pointing fingers at others are considered rude and must be avoided(Kwintessential, 2017b). In India, communication between manager and lower staff is quite formal in nature and managers generally don’t share information openly with their subordinates (Jackson, 2001). In India, managers don’t undertake any tasks which are generally completed by their subordinates because doing so would tarnish their image and reputation. Many Indian managers struggle to work in a multi-cultural environment because of their lack of experience with other cultures. In high context culture like India, people are sensitive and, a friendly debate may lead to a conflict at workplace.

                              Australia                                                                       India

Low- context cultures                             High-context cultures

On the other hand, Australia has low context communication culture. In low context cultures, communication is direct and information in the message is easy to understand (Neese, 2017). For example, Australian managers would straightway say “No” if they are not interested in a business deal instead of using indirect communication. During business meetings, people generally address each other with their first names. Australia is an open society and everyone is considered equal(Kwintessential, 2017a). Australian managers generally communicate openly and share information with subordinates when making important decisions. The managers treat all employees with respect and courtesy. No one is treated as inferior due to their role or status. Australian managers believe that every employee contributes toward company’s success by working as a part of a team(Kwintessential, 2017a). Australian managers are experienced in working in a multi-cultural environment and as a result they can work quite comfortably with other cultures. In low context cultures, people participate in friendly debates at workplace and don’t take disagreements personally.

Apart from differences, one similarity between Indian and Australian workplaces is use of English as a business language. Both Indian and Australian managers use English to communicate with their peers and subordinates at workplace(Arora, 2017). In a current global environment, it’s essential for global managers to learn and adapt towards local customs, and they need to be familiar with local business etiquettes and cross-cultural communication for business success.

Comparison of Organisational Environment

Organisational environments differ between different countries depending upon culture, religion and leadership. Some organisation operates under family model or personal relationships and some are more mechanistic and logical(Unice, 2008). In the below paragraphs comparison has been undertaken between organisational environment in India and Australia.

Indian organisations have generally hierarchical structures. Organisational environment based upon family model is quite common in India where organisations are controlled by strong individuals at top level who give directions down through the structural chain (Arora, 2017). Generally new business associations are only formed between close family members and friends. Business partnerships with strangers are avoided in India. Middle managers in India don’t have much influence over the operations of the business as most of the organisational decisions are made at higher level. For example, India’s largest organisation, Reliance Industries, was first started as a family business in 1960 and later it was expanded into a multinational organisation with operations all around the globe. Even today, most of the senior managers and executives at Reliance Industries are extended family members or close friends (Goodrich, 2006). Another example is Tata Group which despite being a multinational company still totally controlled by Tata family members. Global managers conducting business in India need to be mindful that they require to liaise with senior management for bilateral arrangements because middle management have lack of power in Indian organisations. Liaison with middle managers is considered waste of time as they don’t have any say in important decisions made by the organisation. Indian managers do not get ample opportunities for development and innovation (Jones, 2001). According to Hofstede’s model of cultural dimension, India scores 77 points for power distribution which demonstrates country’s steep hierarchical organisational structure with uneven distribution of power and less participation of staff in decision making process(Arora, 2017).

In contrast, Australian organisations are more people oriented and less hierarchical as compared to India ( (Jackson, 2001). Power is shared equally along the chain of command structure and senior management generally don’t interfere with the decisions made by middle management. Investors and shareholders have strong influence on organisations and they actively participate in decision making. Managers follow open door policy which means that every employee is welcome to give feedback and share their opinions. Every employee directly or indirectly involves in making organisational decisions. Australian organisations are subject to compliance of workplace health and safety laws. Australian managers are ethical and committed to ensure that all employees comply with health and safety laws (Jackson, 2001). Unlike India, nepotism has no place in Australian organisations which is evident from the fact that managers are hired on the merits of their skills, qualifications and experience. Professional development and innovation opportunities are easily available to Australian managers. Teamwork plays a significant role at Australian organisations and employees are expected to work as a part of team to deliver results. It is evident from Australia’s low score for power distribution on Hofstede’ model that Australian organisations strongly support equity at workplace(Mathew, 2013).

Some of the similarities between Indian and Australian organisational cultures are that they both value achievements and success. In both countries, there is gender equality and women are employed at senior managerial positions. Both Indian and Australian managers focus on achieving the targets and getting the job done (Jones, 2001).

According to Professor Pankaj Ghemawat’s AAA framework which stands for Adaptation, Arbitrage and Aggregation (Dennisbarber, 2015) as shown in above figure, International organisations may choose any of the three strategies to shape their global operations.  Both in India and Australia, international organisations have chosen adaptation strategy by adjusting their products and services to meet demands of local population. For example, fast food giant McDonald’s has adjusted its menu offerings according to local cultures in India and Australia. In India, the company does not offer beef products because majority of population practise Hinduism in which beef is forbidden(Unice, 2008). In Australia, McDonald’s restaurants in suburbs with sizeable Muslim population offer halal meat products to meet religious dietary requirements of local population. The above example demonstrates that customer demands are strongly influenced by the culture they follow which means that an international manager need to adapt its product to fulfil the demands of local population. Failure to do so will lead to loss of sales and revenue for the organisation (Unice, 2008).

Comparison of Management Style and Work Patterns

Management style strongly influence the behaviour of employees in organisation. Indian management style is autocratic in nature and power oriented(Shodhganga, 2017). This fits well with Indian’s high score for power distribution and low score for individualism as per Hofstede’s model. Indian managers are well qualified and competent; however, they lack positive attitude and they are status-conscious(Arora, 2017). Indian mangers generally don’t tolerate disagreements from their subordinates and tend to be more conscious towards monitoring the performance of employees. Indian managers generally follow “micro-management” style and as a result employees work under strict rules and discipline. Subordinates have more dependence on their managers because of their inability to work independently. Indian managers are more defensive in nature and blame others for business failures. They reluctant to share information with their subordinate and keep it to themselves. International managers from western cultures generally find it difficult to adapt to management style and organisational culture in India. This is mainly because of complex and relationship-oriented Indian culture. Indian employees are strongly influenced by paternalism and they look at their superior as “Father Figure” who can give commands but is there to protect and support them (Arora, 2017). It is essential for international manager to first develop a close relationship with Indian employees. To develop a close relationship, a superior is expected to show interest in subordinate’s professional as well as personal life. Once a strong relationship is formed then managers can easily achieve their targets and business goals.

In contrast, Australian management style is democratic or consultative in nature. In Australia, a general view is that we are all human beings and people are just doing different jobs. This democratic management style fits well with Australia’s low score for power distribution and higher score for individualism as per Hofstede’s model. It is common practice in Australia that subordinates openly challenge the opinion and ideas of their superiors during business meetings (Warburton, 2017). Both managers and employees participate in decision making process. It is common for senior managers to socialise with employees outside the work for drinks or meals. Australian managers are more ethical as compared to their Indian counterpart (Jackson, 2001). Due to democratic management style, Australian employees have positive attitude toward work and have greater job satisfaction. This style further lead to greater efficiency and more productivity for organisations. Australian managers are least focused towards performance of their employees and they generally don’t care as long as tasks are completed and job is done. Australian managers have relaxed attitude towards work. There is no doubt that democratic management style has led to strong team work oriented culture at Australian organisations. International manager can easily adapt to management style and organisational culture in Australia due to friendly work environment and relax atmosphere. International managers need to be aware that authoritarian type of management style is not accepted by Australian employees and it leads to conflicts at workplace(Warburton, 2017). Australia’s multi-cultural environment provides a unique opportunity to international managers for personal development and innovation.

There are no similarities between Australian and Indian management styles; however, paradigm shift towards democratic management style has been noticed recently in some of the Indian organisations (Jackson, 2001).Both Indian and Australian managers are well qualified and competent in their roles.

Comparison of Negotiation Style

Negotiations can be carried out at a smaller scale or larger scale depending upon relationship between organisational cultures. Large scale negotiations involve complex forms of consultation, discussion and communication. Small scale negotiation only involves some formal activities before signing of contracts (Chang, 2006).  In this section, negotiation styles between India and Australia are compared by using several negotiation factors as depicted in the figure below.

 

Negotiation goal is viewed differently in Indian and Australia. In Australia, it is just a signing of binding contract and obligations between two parties. In India, it is considered as a start of new business relationship rather than just an agreement. Indians prefer less detailed contracts so that there is a space for renegotiation in the future in case if there are any market changes which affect profitability. Australian prefer more formal and transparent contracts and expect loyalty.

For the second factor, Indians prefer win/lose approach as they believe that both parties can’t gain equally from negotiations. On the other hand, Australian prefer win/win approach and they commit towards a mutual beneficial outcome for both parties involved(Smith, 2017). Win/win negotiation style is considered a preferred option by global companies and western cultures.

Third factor, Personal Style defines interaction or communication style between negotiators at the table. Indian managers follow formal personal style and address others by their titles and surnames. They first greet the person with higher position or status and generally don’t talk about personal or family matters (Tidey, 2017). Australian managers follow informal personal style and they address other negotiators with their first names. They possess the tendency to quickly form a friendly and personal relationship with the other party. It is quite common for Australian managers (male) to roll up their sleeves during negotiation process at the table (Smith, 2017).

Fourth factor, Communication – direct or indirect relates to verbal and nonverbal behaviour. Indian managers use indirect communication based upon nonverbal behaviour which sometimes make it difficult for the other party to interpret the message. Australian managers use direct communication based upon language and they are quite straightforward. If they disagree with the other party, then they freely voice their opinion without any hesitation.

Fifth factor, Time Sensitivity defines importance of time for different cultures and timespan to finalise a deal. India has low time sensitivity which means that it takes longer to finalise negotiations. It is quite common in India that business meetings are cancelled at the last minute ( (Tidey, 2017). Indians have less regard for the time and managers generally arrive late for the meetings. On the other hand, Australians are very punctual and organised. Managers generally arrive on time and business deals are finalised within short timespan as compared to India.

Sixth factor, Emotionalism relates to extent of display of emotions. Indian managers generally display low emotions which make it difficult for other party to judge their behaviour. Indians generally don’t display aggression or frustration during business meetings. Australians display high emotions. For example, Australians would raise their voice to display aggression or shake their head to display frustration. Australian believe that emotions are integral part of human behaviour and there is no harm in openly showing emotions.

Seventh factor, Form of Agreement defines cultural preference for broader contracts or more general contracts. Australian prefer more specific or broader contracts which addresses everything in detail and cover all possible situations, scenarios and circumstances. Indians prefer general contracts with less detail as they expect that further negotiations can be made after signing the contract. Indians view signing of contract as just a beginning of new relationship which can be developed further during passage of time.

Eighth factor, Agreement building relates to processes involve in developing contracts. In a top bottom approach, only a basic framework is developed initially which is negotiated further before a final agreement. In a bottom up approach, all the essential components of an agreement such as cost, delivery and time frames are discussed during initial negotiations before proceeding any

further (Smith, 2017). Indians prefer top-down process; however, the Australians prefer bottom-up process.

Ninth factor, Team Organisation relates to organisation and decision making within the negotiation team itself. In Australia, generally a single person act as a leader who finalise the deal after taking suggestions from other members. Teams with one leader are more functional and are smaller in size. In consensus decision making team, authority to make decision lies with a group of people instead of a single person (Smith, 2017). Consensus teams are common in India because senior managers as well as external people such as bureaucrats are also involved in negotiations and finalising the deals. Consensus teams are larger in size and decision making involves consensus among group members. Conflicts likely to arise in these teams due to disagreement between members.

Last factor, Risk Taking relates to study on cultures in taking risks. Australians are considered high risk takers because they are more innovative and try new strategies or approach when signing deals. Another higher risk factor is that only one person makes decision and if he or she makes a wrong decision that would lead to loss for the organisation. On the other hand, Indians are known to take less risks that’s why group of people are involved in decision making process. Indians take longer to finalise the deal so that they can study every aspect of agreement to avoid unforeseen circumstances.

The above comparison demonstrate that Indians are more involved in negotiations and they take their time before making a final decision. They are very formal in their business dealings and tend to take less risks. Australians are less involved in negotiation and prefer a mutual beneficial solution for both parties. Australians tend to take higher risks.

Conclusion

 

 

 

 

References

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BEAN, R. 2010. Managing Cultural Diversity Training Manual. Training Program Resource Manual [Online]. Available: http://amf.net.au/library/uploads/files/MCD_Training_Program_Resource_Manual.pdf.

CHANG, D. L.-C. 2006. Differences in Business Negotiations between Different Cultures                                       The Journal of Human Resource and Adult Learning, 135-140.

DENNISBARBER. 2015. Pankaj Ghemawat’s AAA framework to evaluate Global Strategy [Online]. Available: https://dennisbarber.wordpress.com/2015/06/23/pankaj-ghemawats-aaa-framework-to-evaluate-global-strategy/ [Accessed 5/10/17 2017].

GOODRICH, M. S. A. J. A. 2006. Succession in Family-Owned Businesses: A Case Study of Reliance Industries-India. School of Management, 24.

JACKSON, J. J. A. T. 2001. Managing People and Change: Comparing Organisations and Management in Australia, China, India and South Africa. School of Commerce

 

JONES, J. 2001. Managing People and Change. School of Commerce.

KWINTESSENTIAL 2017a. Guide To Australia – Etiquette, Customs, Culture & Business.

KWINTESSENTIAL 2017b. Guide To India – Etiquette, Customs, Culture & Business.

MATHEW, T. C. 2013. Similarities and Differences in Perceived Work Motivation, Personality, and Culture: Snapshots of Australia and India Degree of Doctor of Philosophy

Bond University.

NEESE, B. 2017. Intercultural Communication: High- and Low-Context Cultures [Online]. Southeastern University. Available: http://online.seu.edu/high-and-low-context-cultures/ [Accessed 4/10/17 2017].

SHODHGANGA 2017. Leadership styles in India.

SMITH, M. 2017. INTERNATIONAL BUSINESS NEGOTIATIONS: A COMPARISON OF THEORY WITH THE PERCEIVED REALITY OF AUSTRALIAN PRACTITIONERS

School of Commerce.

TIDEY, E. 2017. How to close a deal in India [Online]. Available: http://www.kwintessential.co.uk/blog/news/how-to-close-a-deal-in-india/ [Accessed].

UNICE 2008. International Culture Chapter 5, RUGM.

WARBURTON, K. 2017. Global Business Culture [Online]. West Down, Chalk Hill, Soberton: Keith Warburton. Available: https://www.worldbusinessculture.com/ [Accessed 5/10/17 2017].

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