Hofstede’s cultural dimension theory

Impact of National Culture on the Business Processes 

Culture can be defined as the norms and social behavior found in human societies. Culture is the knowledge and characteristics of specific group of people, encompassing, religion, language, social habits, cuisine, arts and music. The diverse practices of the business are greatly impacted by the national culture. The cultural differences between different nations create a significant impact on the behavior and thinking of the people (Kim & McLean 2014). Also, there are a lot of similarities and differences between the organizational culture and managerial processes of two countries.  Hofstede’s cultural dimension theory has been used for the purpose of ascertaining the impact of culture on the workplace of Australia and Sri Lanka.  This theory also examines various aspects such as such as impact of culture on communications, individualism versus group orientation, managing teams and superior subordinate relationships.

Hofstede’s cultural dimension theory

                                               

Power Distance

 This dimension is concerned with the fact that all the individuals are not equal in the society. The term power distance can be defined as the degree to which organizations and members of institutions having less power accept and except the unequal distribution of power. The score of Australia is low in this dimension (36). This means that the organizations in Australia have established hierarchy for convenience which implies that there is much reliance of the managers on the individual employees and the superiors are also accessible for providing their guidance and expertise (Jyoti & Kour 2015). Employees and managers both expect to be consulted while making major decisions in the organization. The sharing of information is also very frequent. The kind of communication adopted in Australian organizations is direct, informal and participative. In Australia, the leadership style adopted by the managers is neither autocratic nor delegated as the managers follow democratic leadership style.

On the other hand, Sri Lanka scores high in this dimension (80) and is therefore considered to be a hierarchical society. The hierarchical order which provides a place for every person in the organization is accepted by the people in Sri Lanka. Inherent inequalities are reflected by the organization’s hierarchy where centralization is more popular (Rebelo 2017). The bosses are required to tell their employees regarding the tasks to be done. The democratic leadership style is adopted by the leaders in Sri Lanka.

Power Distance

Individualism versus Collectivism (Group Orientation)

This dimension addresses the issue relating to the extent to which independence is maintained among its members by the society.  Collectivism can be defined as a tightly knit framework which is preferred by the society and the individuals expect that the individuals will be looked after by their society in exchange of unquestioning loyalty (Thomas & Peterson 2017). The score of Australia in this context is 90 which imply that it is a highly individualist culture. In other words, it is a loosely- knit society in which people look after their immediate families and themselves. In the organizational context, the employers expect the employees to display initiative and be self- reliant. The recruitment and selection along with the promotional decisions are taken on the basis of evidence or merit of the previously done work of the employee or his capability (Purnell 2018).

As far as Sri Lanka is concerned, it is a collectivistic society as it has scored low in this dimension (35). In a collectivist culture, loyalty is paramount and therefore it performs the function of overriding other rules and regulations of the society. In such as society, offence leads to loss of face and shame. Moral terms are linked with the employee/ employer relationships and the promotional and hiring (recruitment and selection) decisions are taken on the basis of employee’s in- group.

Masculinity Versus Femininity

A preference for assertiveness, achievement, heroism and material rewards for success in society is represented by the masculinity side of this dimension. On the other hand, femininity represents the preference for modesty, cooperation, quality of life and caring for the weak. Australia scores 61 in this dimension and therefore is considered among the masculine societies. The resolution of conflicts is made at individual level and the ultimate goal to win is pursued (Warren 2017). The successes and achievements are also celebrated by the Australians and are given prime importance at the time of making recruitment and selection and promotion decisions in the workplace. Equality is also very crucial in terms of gender roles (Kim et. al 2015). Both men and women work in the same industries and hold same authorities. Culture shock can result from the business performance by high- ranking women. Business ethics in Australia demands equal treatments to people irrespective of their social standing (Mach & Baruch 2015).   

Similarly, Sri Lanka is a feminine society with the low score of 10 in this dimension. Therefore, Sri Lanka focuses on working in order to live. The working lives of the people are supported by solidarity, quality and equality. Compromise and negotiation assist in resolving the conflicts in the organization. Flexibility and free time are the incentives that are valued by the employees. Sri Lanka has scored a low rank in terms of gender equality. Sri Lanka also faces issues relating to low social rights and political participation (Cross & Payne 2018).

Individualism versus Collectivism (Group Orientation)

Uncertainty Avoidance

 This dimension can be defined as the degree to which unknown and ambiguous situations crate a threat for the members of a culture and therefore believe in making attempts for avoiding these (Bakir et. al. 2015). The score of Australia in this dimension is 51which provides that vulnerability is not given much preference in Australia. More tension and pressure is taken by the individuals and require security for the jobs. The uncertainty avoidance level of Sri Lanka is also similar but a little less as compared to that of Australia. The score is 45 in the Hofstede’s dimension of culture analysis.

Long Term Orientation

 This dimension is focused on the manner in which links with the past are maintained by the society along with dealing with the challenges of the future and present. In this dimension, Australia has scored 21 and therefore is considered to be a normative culture. The thinking of the employees is also normative and they have strong concern regarding the establishment of absolute truth. Traditions are given prime importance and the complete focus is on the achievement of quick results. Business ethics in Australia means treating the customers and employees in a fair and honest manner regarding its business practices (Fernando & Moore 2015).

On the other hand, Sri Lanka scores 45 in this dimension. The countries which score high in this dimension are likely to make the adoption a business like strategy. This predicts that people take measures and act in a careful manner in order to deal with the future. The score of Sri Lanka is high in comparison to Australia and therefore it is often regarded as the not so strong culture as far as long term orientation is concerned. Business ethics are maintained in the corporate culture of the companies by way of embracing and promoting strong business principles and professional ethics at each level (Kafetsios et. al 2018).

Indulgence versus Restraint- this dimension is focused on the degree to which the desires and impulses are controlled by the people. Australia is an indulgent country as it has score high (71) in this dimension. The people belonging to the societies which score in this dimension exhibit a will for realizing their desires and impulses for having fun and enjoying the life.  A positive attitude is possessed by such people and has a tendency towards optimism. Also, leisure time is of prime importance to such people as money is spend by them in accordance with their wish.

Masculinity Versus Femininity

Similarity and Differences in Managerial Processes and Organizational Culture in Australia and Sri Lanka 

The managers of both the countries make the use of democratic leadership style for the purpose of guiding the employees in the organization. The leaders from both the countries are supportive and encourage participation of the employees in the process of decision making. Sri Lanka also makes the use of other leadership styles such as autocratic and delegated leadership along with democratic leadership for the purpose of managing and guiding the employees.

Communication and Negotiation Styles

Australians are considered to be transactional and they do not necessarily make business introductions through an intermediary. At the same time, relationship building and networking can act as the significant factor for the long term success of the Australian businesses (Kinloch & Metge 2014). Within the industry, most senior level executives know each other. Australia has a small population and the main aim of the people is to develop harmonious working relationships as they have to work with the same person again and again. Cross cultural management should be done by way of keeping this fact in mind. Direct communication is adopted by the organizations with their employees along with a bit of humor (del Mar Miras? Rodríguez et. al. 2015).

On the other hand, in Sri Lanka, personal relationships are given prime importance while conducting business. Respect and trust form the basis of the relationships. Perseverance, patience and persistence is needed while establishing communication with the Sri Lankans. Therefore, it can be concluded that the communication and the negotiation styles are similar in both the countries (Christopher et. al. 2014).

Decision Making

Decision making in Australia is done after consulting the employees in the matters affecting them. In this way, employees feel responsible for the success of the business and takes steps for the execution of the instructions given by the manager. The organizations in Australia are also guided by aggressiveness which results in quick thinking and fast decision making (Taylor 2018).

Decision making takes a lot of time in Sri Lanka and it is also difficult in ascertaining the actual decision maker. There is still the existence of caste system in the hierarchical country like Sri Lanka. Therefore, the managers speak to the employees in a kind manner. However, sometimes the managers also criticize the employees publicly. This behavior should not be emulated by the expatriate manager. The boss or manager is the ultimate authority in the organization and therefore, is needed to be treated with deference and respect. Similarly, paternalistic behavior and concern is expected from a manager for their employees. The boss is not challenged by the employees even when wrong action is taken by him. Therefore, both the countries give importance to their employees. The decision making pattern is not similar (Degens et. al 2017).

Uncertainty Avoidance

Managing Teams

Team management in Australia can be handled by the managers by way of recognizing and valuing the specialized knowledge possessed by the employees. The managers need to consult the employees while making major decisions for the greater good of the business. The managers also need to be task oriented for the purpose of managing the staff and teams. The managers need to harness the talent of the team and developing the resulting synergies.

 In Sri Lanka, the teams are managed by the managers with the help of paternalistic attitude. Professional concerns are also demonstrated by the managers for the teams.  However, lower ranking individuals of the teams are not consulted during the decision making process. Therefore, there is a wide difference in the process of team management in both the countries (French 2015).

Autocratic Versus Delegated Leadership

 In Australia, the leadership style adopted by the managers is neither autocratic nor delegated as the managers follow democratic leadership style. The organizations in Australia are also guided by aggressiveness which results in quick thinking and fast decision making (Yahaya & Ebrahim 2016). The leaders in the organization are also very supportive and give preference to mentoring and coaching instead of focusing on individual mistakes (Turner et. al 2016).

The democratic leadership style is adopted by the leaders in Sri Lanka. This style is also known as participative leadership style and therefore involves greater participation of the members in the process of decision making. There is free exchange and flow of ideas in the organization. However, delegated leadership and autocratic leadership are also adopted by the managers in accordance with the circumstances (Bird & Mendenhall 2016).

Superior- Subordinate Relationships

In Australia, participative and collaborative management style is adopted by the superiors. Superiors expect the subordinates to work late and to even give up their weekends for the purpose of meeting the deadlines. Intercultural management therefore requires the ability of the individual to meet the deadlines.

In Sri Lanka, superiors do not consult the lower ranking subordinates while making the major decisions of the organization. There is fluidity in timescales and deadlines in Sri Lanka. These are required to be set well in advance in a careful manner (Lussier et. al 2016).  These are flexible and are not rigid as in the case of Australia which creates a difference between the two.

All these factors are significantly affected by the culture prevalent in Australia and Sri Lanka. Cross cultural management needs to consider these factors while handling the business contexts. Culture is always an important part which governs the business operations of every country. other framework such as  GLOBE’S nine dimensions of culture (such as assertiveness, uncertainty avoidance, future orientation, power distance, gender differentiation, institutional collectivism, human orientation, performance orientation, family/ in- group collectivism) and Trompenaars’ seven dimensions of culture(such as universalism versus particularism, neutral versus emotional, achievement versus ascription, individualism versus collectivism, specific versus diffuse, attitude towards the environment and attitude towards time). The appropriate application of these frameworks will provide the different styles of interaction and communication that result from the cultural differences.

Long Term Orientation

Conclusion:

Therefore, it can be concluded that cross cultural management is concerned with overseeing employees or teams from other culture or countries. This report assessed the similarities and differences in the managerial processes and organizational culture which can be encountered by an international manager during the cross cultural working in Australia and Sri Lanka. Hofstede’s cultural dimension theory has been used for the purpose of ascertaining the impact of culture on the workplace of Australia and Sri Lanka.  This theory also examined various aspects such as impact of culture on communications, individualism versus group orientation, managing teams and superior subordinate relationships.

Direct communication is adopted by the organizations in Australia with their employees along with a bit of humor while Sri Lanka gives prime importance to the personal relations during business operations. Decision making in Australia is done after consulting the employees in the context of the matters affecting them. Decision making takes a lot of time in Sri Lanka and it is also difficult in ascertaining the actual decision maker. Team management in Australia can be handled by the managers by way of recognizing and valuing the specialized knowledge possessed by the employees. In Sri Lanka, the teams are managed by the managers with the help of paternalistic attitude. In Australia, the leadership style adopted by the managers is neither autocratic nor delegated as the managers follow democratic leadership style. Participative and collaborative management style is adopted by the superiors for the subordinates. The democratic leadership style is adopted by the leaders in Sri Lanka. Superiors do not consult the lower ranking subordinates while making the major decisions of the organization. Therefore, the communication and negotiation styles of both the countries are similar but decision making, team management, leadership and superior subordinate relationships are different.

Cross cultural management can be defined as overseeing employees or teams from other culture or countries. Organizations have their offices in a number of countries which are managed by the people in the head office (Barmeyer & Franklin 2016). Another scenario is related with the immigration of people from different countries in order to get an appropriate job. Effectiveness of the cross- cultural management can be ensured only when the manager identifies and acknowledges the differences in practices, cultures and preferences of the members of the team. Certain business systems or processes can be adapted or modified by the managers for the purpose of improving the efficacy of the workforce (Araújo & Pestana,2017).   

This report makes the assessment of the similarities and differences in the managerial processes and organizational culture which can be encountered by an international manager during the cross cultural working in Australia and Sri Lanka.

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