Two chosen countries and reason for choice

This report has aimed to identify the cultural differences between two countries Australia and India. Culture plays a key role in managing organizations and with the advent of globalisation, the diversity in work culture has also increased significantly.  The companies operating in global environment will always face challenges in working with people having different cultural background as they have their own set of cultural values and societal upbringings. National culture has been emphasized in major researches as it is one of the biggest constraints on organizational culture and management practice. Management is dependent on culture in an organization and development of a diversified culture is necessary in majority of the global organization due to the increase in variety of individuals working in an organization. Therefore, this report has aimed to identify the cultural differences between two countries (India and Australia) so that a level of sensitivity can be developed for success in the global business market.

The two countries that has been chosen for the report are India and Australia.  India is one of the most rapid progressing countries among the developing countries. The economic growth of the country is very high and the gross domestic product of the company has increased significantly. The GDP of the country has matched up to the GDP of United States. The amount of foreign direct investment flowing inwards has increased in the past few years and the huge population in the Indian market has gained interest majority of the global companies (Rahman and Mamun 2016). Australia is one of the developed countries in Oceania and has maintained a steady trade relationship with India. Globalisation has made the market in India as a free economy which has further increased the trade between the two countries. Australian exports travel to India and is one of the top target market for the Australian companies.

Australia is a country and a continent having huge amount of natural resources and is one of the wealthiest countries. The population of the country is quite less when compared to the area of the nation. It is a mixed market economy and export plays an important part in their GDP and contributes to almost 20% of the total gross domestic product. In the recent years, the trade relations between Australia and India has increased significantly (India.highcommission.gov.au 2018). Past data has shown that Australia has always been interested and eager to expand their businesses to India to the huge population. India and Australia has maintained a strong bilateral partnership for more than a decade and one of the largest export market for Australia is India. Moreover, the number of Indian students moving to Australia for higher education have also increased.  

Key cultural differences

The emergence of the Quad has weakened the bilateral relationship between Australia and India and the recent foreign policy of Australia shows that there is clear room for improvement and Malcolm Turnbull has released a new economic strategy for improving economic relationship with India (Ayres 2018). Therefore, understanding the cultural differences between the two countries is essential for the companies for both the countries to effectively develop a globalised cultural parity. Moreover, the cultural dimensions of both the countries are quite different so the report will be able to highlight the cross cultural management issues for effectively.

In this current report, the Hofstede’ cultural dimension has been used to illustrate the cultural differences between both the countries (Tjosvold 2017).  The national culture of a country has a deep impact and influence on organizational culture so this six dimensional model has been used to analyse the cultural dimension of India and Australia.

The different Hofstede’s cultural dimensions are power distance, individualism, masculinity, uncertainty avoidance, long term orientation and indulgence. Power distance deals with the fact that there is inequality among individuals in a society. The acceptance of the people regarding the unequal distribution of power in society is explained by power distance. India’s score on this dimension is 77 which is quite high and its shows that people appreciate the top down structure and hierarchy in organizations and society (Hofstede Insights 2018). This shows that employees in India are highly dependent on their bosses for direction and accepts the unequal distribution in power. This shows that employees in organization expect that their managers will direct them clearly about their goals and objectives. Communication between employees and managers is also top down and negative feedback does not go the ladder (Hur, Kang and Kim 2015).  The next factor is individualism which portrays the interdependence among the members in the society. India has a score of 48, which shows that India is in between and shares both individualist and collective traits.  The individual aspect prevails from the multi religious society where everyone has their right to choose the way they live and remaining aspect of the society is collective in nature where employer and employee relationship play a significant role in achieving the desired goal.  

The next dimension is masculinity and femininity where if the dominant values in the country are quality of life and caring for others, it is dominated by femininity. On the contrary, in masculinity the society is driven by success, completion and achievements. The score of India in this dimension is 56 which shows that both exists as being a spiritual country caring for individuals and quality in lifestyle is important but visual display of power and success is very evident which portrays the masculinity (Hofstede Insights 2018). The ability of the society to deal with future unknown instances is defined by uncertainty avoidance and India’s score is 40. This means the tendency to avoid uncertainty is medium which tolerance for the unexpected is high.  Long term orientation shows the ability of the society to deal with the past, present and future effectively. India’s score is 51 which shows that the country has great deal of tolerance for other religions and religious opinions for the country (Hofstede Insights 2018).  The last dimension is indulgence which determines the extent of people’s controlling nature of their impulses and desires. India’s score is 26 which shows that restraint is one of the major aspect of the culture and there is less amount of emphasis on gratifying the desires and leisure time.

Australia’s score on power dimension is 36 which shows that hierarchy is developed for convenience and managers rely on the individual expertise of the employees. Communication between the managers and employees are also direct, informal and participative. In individualism, Australia’s score is 90 which is very high which shows highly individualist society where people are concerned about their own needs and immediate families (Hofstede Insights 2018).  The masculinity score is 61 which shows that society is driven by success, achievement and competition. In uncertainty avoidance, Australia’s score is 51 which is moderate and this means that moderate tendency to avoid uncertainties. The score in long term orientation is 21 which means that normative culture is prevalent. Therefore, they are less focused on saving for the future. The indulgent score is 71, which shows that Australia is highly indulgent and society has the willing to fulfil their urges and desires. This shows that they give great emphasis on their leisure time (Hofstede Insights 2018).

The comparison between two countries show that Australia and India are very different countries in terms of their culture and practices prevailed in the society. Indian’s have no issues with working late hours but they tend to start late in the day whereas the Australians want to start early so that they have their leisure time (Chang 2016). It is difficult for the managers and executives to cope with the culture in Australian organizations. These means that different people will respond differently to diverse situations in the market. The power distance in Australia is very low and in India is very high and similarly, individualism score is also very different. This means that it is difficult for managers of Indian origin to manage employees of Australian origin as they are not open to criticism and are habituated to directing their subordinates (Nordström et al. 2017). Similarly, Australian will have a tough time dealing with the Indian employees as giving direction is something that the manager is not used to.

                                  

                                                                         (Source: Hofstede Insights 2018)

The managers of two countries will face issues as both have different ways of handling issues and dealing with subordinates. This will results in conflict of interest as both these managers will have opposite type of management characteristics. Therefore, being decisive is something that Australian managers cannot execute in India and it will take a long process of review before implementing something (Thomas and Peterson 2017). As power distance is high, sitting with the employees on the same floor is something that has to be avoided. This shows that companies in Australia while hiring Indian employees will face issues in keeping the core values intact as the society in India is quite different and people will have their own set of values that will contradict the values of the organization (Bird and Mendenhall 2016).

The best possible solution to this issues is understanding the cultural difference. The managers from countries will have to understand the difference in perspective to develop a culture that is moderate and diverse for the employees from both the countries. This will help in preserving the innate cultural values to some extent and move forward in developing a organizational culture that is more apt to the global business environment. The management should also develop cultural exchange programs to facilitate better mixing and understanding of the culture in both these organisations.  

Conclusion 

The report has portrayed the cultural differences between India and Australia by cultural dimension theory of Hofstede. The findings show that both these countries have different culture backgrounds and management of two countries will face issues in understanding the dimension of culture in both the culture.

References

Chang, O. 2016. The biggest cultural differences between companies in Australia and Asia, according to an Asia Pacific executive. [online] Business Insider Australia. Available at: https://www.businessinsider.com.au/this-intuit-exec-shares-the-5-biggest-cultural-differences-when-doing-business-in-australia-and-asia-2016-4 [Accessed 8 Sep. 2018].

Ayres, A. 2018. Australia Wants to Boost Economic Ties With India. [online] Council on Foreign Relations. Available at: https://www.cfr.org/blog/australia-wants-boost-economic-ties-india [Accessed 8 Sep. 2018].

India.highcommission.gov.au  2018. Doing Business with Australia- Australia’s Trade with India. [online] India.highcommission.gov.au. Available at: https://india.highcommission.gov.au/ndli/trade2.html [Accessed 8 Sep. 2018].

Rahman, M.M. and Mamun, S.A.K., 2016. Energy use, international trade and economic growth nexus in Australia: New evidence from an extended growth model. Renewable and Sustainable Energy Reviews, 64, pp.806-816.

Hofstede Insights 2018. Country Comparison – Hofstede Insights. [online] Hofstede Insights. Available at: https://www.hofstede-insights.com/country-comparison/india/ [Accessed 8 Sep. 2018].

Hur, W.M., Kang, S. and Kim, M., 2015. The moderating role of Hofstede’s cultural dimensions in the customer-brand relationship in China and India. Cross Cultural Management, 22(3), pp.487-508.

Hofstede Insights 2018. Country Comparison – Hofstede Insights. [online] Hofstede Insights. Available at: https://www.hofstede-insights.com/country-comparison/australia,india/ [Accessed 8 Sep. 2018].

Nordström, H., Laukka, P., Thingujam, N.S., Schubert, E. and Elfenbein, H.A., 2017. Emotion appraisal dimensions inferred from vocal expressions are consistent across cultures: a comparison between Australia and India. Royal Society open science, 4(11), p.170912.

Thomas, D.C. and Peterson, M.F., 2017. Cross-cultural management: Essential concepts. Sage Publications.

Tjosvold, D., 2017. Cross-cultural management: foundations and future. Routledge.

Bird, A. and Mendenhall, M.E., 2016. From cross-cultural management to global leadership: Evolution and adaptation. Journal of World Business, 51(1), pp.115-126.