Cultural Dimension Analysis Of An Australian Technology Company: A Case Study Essay.

Discuss about the Cultural Issues Of Hofstede.

Organizational culture can be defined as the principles, conventions and methods of interaction within the organization which contribute to its social and psychological environment.  The culture of the organization comprise of the expectations, experiences, philosophy and values which guide the behavior of the team members. It is expressed in the self-image of the members and their interactions with the outside world (Ero?lu, 2014).

The organizational culture also comprise of  the vision , values, systems, norms , symbols, languages, habits and beliefs of the personnel working within the organization. The culture of the organization is a framework of shared assumptions which guides the actions of the personnel by explaining their behaviors for different situations (Hutnek, 2016).

So, in this report, the cultural issues confronted by the Australian technology company shall be analyzed in the light of various cultural dimensions as defined by Hofstede. Additionally, various recommendations shall also be stated to resolve the issues.

The Australian technology company has successfully expanded its business operations worldwide. It opened up its first subsidiary in New Zealand two years before. The HR Manager of the company decided to implement the same HR policies in the subsidiary which he used to implement in the parent company in order to maintain its identity. 

Last year the company opened up its second subsidiary in Indonesia and decided to follow the same strategy which it followed in the first subsidiary. But the HR policies were not so effective as they were during the implementation of the  first subsidiary. The policy of rewarding the outstanding employees by the individual employees has negatively influenced the team performance and unity.

The organization is being confronted by the various cultural issues due to the contradicting cultural beliefs  due to the variations in the  eastern  and western cultures. The eastern cultures are   greatly influenced by the religion whereas western culture is deeply influenced by European culture.

The variations in the beliefs of the organization and the working methods play a significant part in the contradiction of the cultural issues. The ethics, level of social engagement of the people along with the team work and the way of dealing with the customers also influence the cultural issues confronted by the organization (Fu & Kamenou, 2011). 

The purpose of research is to identify the following:

1. What are the differences between the organizational cultures of Indonesia and Australia?
2. Why do cultural practices differ in both the countries?
3. What type of culture is being adopted in both the countries according to Geert Hoftstede?
4. Which HR policies should be adopted in the Indonesian subsidiary to mitigate this difference?

The scope of this research is wide and it provides a framework which can be utilized to comprehend the management implications of variations in different cultures. It attempts to compare and contrast the cultures of Indonesia and Australia .Furthermore; it analyzes the difference in cultural practices in both the countries with respect to corporate culture.

Cultural Issues Confronted by the Australian Technology Company

The cultures adopted in both the countries will be assessed as the organizational cultures in both the countries vary in terms of individualism, power distance, masculinity, uncertainty avoidance,  indulgence  and long term orientation. Lastly, it evaluates the HR policies to be applied in the Indonesian organizations in order to accomplish the anticipated objectives.

According to Novitskaya (2015) the cultural differences can be analyzed with the help of Hofstede’s cultural dimension theory.  It is an agenda of cross cultural interactions amongst the personnel working in organizations operating in different cultures. It was developed by Dutch psychologist Geert Hofstede. It explains the impact of the culture of the society on the values and beliefs of its members and how these values play a part in governing their behavior.

The Hofstede model of national culture comprises of six dimensions  namely individualism versus collectivism , power distance index , uncertainty avoidance index, masculinity versus femininity , indulgence versus restraint and long term orientation versus short term normative orientation .These cultural dimensions signify prioritizing one state of affair over another over another which helps in distinguishing the culture of one country from another (Jouda et al., 2016).

As per Jariya (2012) the power distance index examines the intensity to which the least powerful individuals in the society admit and assume that the authority is dispersed   in an unequal manner. Thus, people in high power distance societies give their regards to personnel appointed  on higher designations as compared to people  working in the middle or lower management.   On the other hand, societies with low power distance, people struggle for equalization of power and demand justice for unequal distribution of authority.

Thus Indonesia has a higher power distance as compared to Australia. People are not considered equal in the Indonesian society. Therefore employees appointed on lower designation expect and accept less at their workplace as well. The concept of hierarchy is still followed and people liked to be called by the titles rather than direct name recognitions.

In the context of individualism and collectivism, it is the degree of dependence a society continues to have upon its members. It is related to the self-image of the people in terms of ‘I’ versus ‘We’. In the societies with high individualism , people  take care of themselves  and their immediate families whereas in the collectivist societies , people  believe in groups  and take care of each other in exchange  of faithfulness. The Indonesian society is a collectivist society as compared to Australia which is an individualist society (Groutsis et al., 2014).

Hofstede's Cultural Dimension Theory

Masculinity refers to the society which is driven by a sense of accomplishment, success and competition indicating that winner being defined   by success. This belief system starts at school and continues throughout the   life of the individual. On the other hand, in the feminist societies, quality of life signifies success. So Indonesian society has low masculinity whereas Australian society has high masculinity.

Uncertainty avoidance is associated with the belief that the society deals with the doubtful and unknown situations and has formulated institutions and beliefs   to mitigate these doubts. The organizational culture of Indonesia and Australia coincide in this case and both of them have the characteristics of low uncertainty avoidance. It implies that there is a strong preference of detachment of internal self from external self. It means that no matter how angry or disappointed a person is on his workplace, he will never show his anger in order to maintain peace and harmony on the workplace.

The other aspect is conflict resolution. Direct communication can be seen as a threatening situation in both the cultures rather the appointment of a third party intermediary is a more familiar route to rectify the situation (Rinuastuti et al., 2014).

Long term orientation explains how every civilization has to preserve some connection with its past along with managing the present and upcoming challenges. Societies with this kind of culture believe that truth is dependent on context, situation and time. They have the capability to adopt the traditions in accordance with the changed conditions and have a strong inclination towards savings and investment and determination towards accomplishing the results. Indonesian culture has a high long term orientation whereas Australian culture has a low long term orientation.

Indulgence is the degree up to which individuals try to restrain their wishes and expectations which is based on the way they are raised. The weaker control is known as indulgence and higher control is known as restraint.  The organizational culture of Indonesia has a culture of restraint whereas Australian organizations possess a high indulgent culture (Ourfali , 2015).

Thus  Indonesian culture is characterized  by the  higher power distance  index ,  collectivism and restraint cultures and low uncertainty  avoidance , masculinity and long term orientation whereas Australian culture  is characterized by low power distance and high collectivism , long term orientation, indulgence, masculinity and  intermediate uncertainty avoidance .

The HR policies to be adopted in the Indonesian subsidiary should comprise of safeguarding the interests of the employees against work place bullying and torture and those which encourage diversity at workplace and avoid discrimination. They should adopt the policy of participative management, career development and compensation (Mihaela , 2014).

Analysis of Cultural Dimensions between Indonesia and Australia

Conclusions

Hence to conclude it can be said that the human resource policies shall be adopted considering the relevant cultural frame works and socio economic variations between the countries. Based on the cultural variations in the Australian and Indonesian organizations, the policies should relate to valuing the seniority and the importance of humans in the organizations. In the global market scenario, the challenges faced by the multinational corporations are multifaceted so is the purpose of human resource management. It is directed here that the Indonesian employees should be able to align the policies and practices related to HR along with their values and beliefs pertaining to culture.

The efficiency and competitiveness are the two main ideas in the forefront which form the structure of the relations amongst the employees working in a modern multicultural corporate workplace. So the issues relating to these two ideologies become the primary reason for conflict when any problem or task needs to be addressed. 

Cultural differences such as the manner of communication and the power culture of the organization should be   considered while formulating the HR policies. The power distance of Indonesia is high, so suitable HR policies are recommended to safeguard the interest of the subordinates and mentoring them should be formulated. The higher management should regulate the up and down of the cultural scale. They should mentor the employees of the lower cadre and motivate them to perform better (Sarayrah et al., 2016).

In the context of collectivism, the practices relating to human resource helps in encouraging unity and team spirit amongst the employees . It will lead to increase in the performance and satisfaction of the employees which will reduce the employee turnover and absenteeism (Windiarti et al., 2014).

With reference to Masculinity, the score of Indonesia was low so the human resource practices related to the training of the employees to boost their morale should be formulated. It will increase their motivation and satisfaction. It will assist the organization in retaining people and maintaining good employee relations. They should be motivated to contribute in the decision making process of the administration so that they feel a sense of accountability and accomplishment in the business which will enhance their quality of life (Brewster et al., 2016).

The policies related to uncertainty avoidance should be formulated in such a way that for resolving the conflicts, third party or arbitrators should be appointed as the intermediary avoids the uncertainty related to confrontation (Siddique et al., 2016).

HR Policies for Indonesian Organizations

In the context of Long term orientation, the HR policies should be formulated according to the cultural beliefs and values of the organization. In the context of restraint cultures, the HR policies relating to provisions of yearly leaves to the employees should be formulated so that they can be relieved from the work pressure.  The organization can plan leisure   trips for the employees so that they can relax and spend time with their families.

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