Cultural Intelligence in Companies System

Discuss about the Cultural Intelligence in Companies System.

Hofstede (2007) mentions that Asian cultures share a number of common attributes which make them distinct from their European and American counterparts. The cultural comparison figure shown below consider two Asian cultures namely India and China against two western cultures namely the United States of America and Australia (hofstede-insights.com, 2018). 

The figure above compares between these countries on the basis of six cultural dimensions namely, power distance, individualism, masculinity, uncertainty avoidance, long term orientation and indulgence. For example, the power distance shows the level of similarity of importance enjoyed by the less important members of groups compared to the senior and the more powerful members. As far as China and India are concerned, they sit at 77 and 80 respectively. This means that senior members in a particular institution like heads of families have far more power and say compared to young members (Saleem & Larimo, 2017). The power distance is low in the two western cultures, the US and Australia. Again, in India and China, collectivism is more important than individualism compared to the US and Australia. Thus, Asian cultures have distinct attributes which sets them apart from the western cultures.

The cultural dimensions in Asian cultures have profound influence on management in Asia. The managers have to consider these cultural dimensions mentioned in Hofstede’s tool both while dealing with subordinates and employees. For example, the western cultures like the US and the UK are extremely individualistic and the management principles prevailing in these two countries are also individualistic. The Asian cultures are more collectivist and the managers have to consider this while carrying out their business functions. The people belonging to eastern cultures are in general emotionally attached to their countries, religion, races and families. The managers while leading teams in Asian countries like India and China must ensure that they hurt the cultural or religious sentiments of their subordinates. Failure to understand the cultural sentiments of subordinates may give rise to resentment or even conflict among the employees which may also attract legal actions, thus jeopardizing the productivity of the entire department (Beugelsdijk, Kostova & Roth, 2017).

The managers similarly while dealing with customers should incorporate the cultural aspects in their marketing mix. This is evident from the integration of global and local business strategies in tune with the local market conditions. For example, offering discounts during festivals and incorporating cultural designs in the product strategy would enable the western companies create cultural relatedness with the local customers. The display of Chinese designs on the product packages would enable the Chinese customers relate more to foreign brands (Degens et al., 2017). This would enable the companies owning these brands sell more products in China and generate huge revenue. This shows that the influence of culture plays very important roles in management of both customers and employees in Asia.

A CEO of an Australian company operating an Asian subsidiary of the company should manage the subsidiary according to the Asian culture. As pointed above he should show respect for the cultural aspects of the Asian countries. For example, manager must incorporate Chinese cultural attributes while greeting important corporate personnel from Chinese companies. These cultural gestures would allow the CEO of the Australian company to exhibit cultural awareness and acceptance which would in turn create positive perception in the minds if the Chinese business partners (?urišová & ?ambál, 2015). This acceptance of the CEO among the business circle of the host Asian country would earn the company more lucrative deals. Similarly, the Australian can adopt the salient features of the culture of the Asian it is operating in as a part of marketing strategy. Thus, it can be inferred from the discussion that the CEO of the Australian company should incorporate the cultural behavioral aspects of the host Asian country to gain acceptance among the people in the country.

The CEO of the Australian company while leading team of employees at the Asian subsidiary can show similar cultural relatedness to Asia. For example, he can incorporate important festivals of the host country besides celebrating the Australian festivals. This would create a sense of belonging to the Australian company among the Asian employees. They would as a result cooperate with the CEO at a higher which enable more efficient management of the Asian subsidiary (Beugelsdijk, Kostova & Roth, 2017).

In order to establish a good business it is important to have a smooth system. Apart from the good system a good community is also necessary. The article named, “Creating shared value”, has described the actual needs in order to build up a good and profitable business. The two important concept is mentioned in the article. The concept of corporate social responsibility and the concept of CSV. CSV concentrates more on the value proposition and CSR concentrates on the citizenship of the company. By going through the word file it can be mentioned that CSR shows the interest on the well-being of the organization and it defines the responsibilities that the organization should take in order to keep the employees in good way. CSV concentrates on the delivery of the economic and the societal value in relation to the cost (Giuliani, Tuan & Calvimontes Cano, 2017).

CSV directly relates itself to the internal policies that have direct relation to the goals and the profit of the company (Porter & Kramer, 2019). It maintains he economical ethics of the company. It is important for any organization as it would help the organization to achieve the goals. It can be done by the three ways of creating shared value, those are the re-conceiving products and markets, redefining the processes in the value chain and the cluster development. This has been considered as the process of redefining in the context of international market. Redefining the markets and the products include the factors like inquiry and innovation. The sustainability of the product is another major factor that is considered under the CSV. The example of Uber is a perfect example in this case. Uber has created such an environment that has remained convenient for many people. Similarly the other food applications that requires the ordering of the food through online applications. It has given the opportunity to the customers to get the food on time in a smart way and the same time it has given the opportunity to the workers who work in the organization. The drivers of Uber has been given the opportunity to do income and it has given the opportunity to the riding public as well. The driver has been offered with lot of economic opportunity (Crane et al., 2014).

On the other hand the concept of redefining the products and the markets in the value chain includes the creativity and political will (Bowe & van der Horst, 2015). A company should always think and analyze what are the systems that should be considered in order to increase the sales of the products. It has to be strategic step. The example in the article is a good one where it states the strategic move of JetBlue. The company took the initiative to inflight the crew those are tasked to tidy up the aircraft in between short flights to optimize the duty hours of the crew.

However while concluding this can be mentioned that without the formulation of an effective strategy no company can make a progress. The CSV enables any organization to develop and support the eco-system of the business. CSV intends to do good not only for the company but also for the society and the community. Therefore this should be promoted in any organization.

References:

Beugelsdijk, S., Kostova, T., & Roth, K. (2017). An overview of Hofstede-inspired country-level culture research in international business since 2006. Journal of International Business Studies, 48(1), 30-47.

Bowe, C., & van der Horst, D. (2015). Positive externalities, knowledge exchange and corporate farm extension services; a case study on creating shared value in a water scarce area. Ecosystem Services, 15, 1-10.

Country Comparison - Hofstede Insights. (2018). Hofstede Insights. Retrieved 6 April 2018, from https://www.hofstede-insights.com/country-comparison/australia,china,india,the-usa/

Crane, A., Palazzo, G., Spence, L. J., & Matten, D. (2014). Contesting the value of “creating shared value”. California management review, 56(2), 130-153.

Degens, N., Endrass, B., Hofstede, G. J., Beulens, A., & André, E. (2017). ‘What I see is not what you get’: why culture-specific behaviours for virtual characters should be user-tested across cultures. AI & society, 32(1), 37-49.

?urišová, J., & ?ambál, M. (2015). Impact of multiculturalism on the industrial enterprises management. Procedia Economics and Finance, 34, 663-669.

Giuliani, E., Tuan, A., & Calvimontes Cano, J. A. (2017). Time to move forward: Creating shared value meets human rights.

Hofstede, G., 2007. Asian management in the 21st century. Asia pacific journal of management, 24(4), pp.411-420.

Porter, M. E., & Kramer, M. R. (2019). Creating shared value. In Managing Sustainable Business (pp. 327-350). Springer, Dordrecht.

Saleem, S., & Larimo, J. (2017). Hofstede cultural framework and advertising research: An assessment of the literature. In Advances in Advertising Research (Vol. VII) (pp. 247-263). Springer Gabler, Wiesbaden.