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Benefits and disadvantages of multicultural teams

Discuss About The Managing Across Global Cultures Management.

In the recent overseas expansion of Best Bibs and Tuckers, in China, has adopted Ethnocentric approach of staffing for the new chain. This approach of staffing is adopted by the new CEO of the company, Mr. Francois Dubois. He has decided to appoint new managers and employees from the home country Australia. Ethnocentric approach  of cross staffing is the process in which parent company requires the control and management of the new branch in another hosting country, management and employee from the home country are selected for the job. This ensures that the parental values will be maintained in the hosting country as well. This requires shifting the existing managers and employees from the home country to the business in hosting country. In this given case new CEO has made the same decision to employ home country managers and employees for the newly acquired business chain of 30 stores in china. In this way Ethnocentric approach of staffing offers an opportunity to transfer the root key values of the parent company in the foreign country. Employees worked in the parent company know the company’s view about its work ethics, productivity, customer services, and other host issues (Verbeke, 2013). In this manner management staff of the parent company helps the organization to bring the company values to the other country.

As per the strategy planning of the company multicultural teams will have to work together in the hosting country to create a most favourable environment of the organization work. Working in multicultural teams will have its own benefits as well as disadvantages. These benefits and disadvantages are as following

Better financial result: working with multicultural teams company can perform better in terms of financial growth of the organization.

Global level competition: Multicultural teams can take an advantage of their cultural understanding about the other country and will result in competing successful at the global stage.

Fact based decision making: Diverse thinking will make better decision based on the facts of the host country.

Creative and innovative thinking: Different minds have different creativity and that can be used by the company while working with multicultural teams only.

Cross-cultural understanding: Multicultural teams will make a better understanding of different cultures that can help the organization in making business.

Difficulty in transitioning: While working in multicultural teams, employee may face difficulties in transitioning local language.

Product life-cycle of Best Bibs and Tucker

Short-term cost outlay: Depending upon the time period of company in the new country extra accommodation can make a significant financial loss to the organization (Verbeke, 2013).

Lack of freedom of speech: Working in multicultural teams, team members can feel a lack of freedom of speech.

Increased cost of training:  Working in multicultural work environment will increase an additional cost of training and development programmes for the employees of different cultures or language difference will require extra training efforts for different employees

In this business expansion of the company, Best Bibs and Tucker follow a project life cycle of 4 different stages. This project lifecycle consists of four different stages as, export strength, beginning of foreign production, competition of export market in foreign production, and import competition(Maurer, 2010).

Export strength:  Company has established its business in the home country very well and now company is capable for its expansion overseas. This requirement fulfilment makes the company eligible for its overseas expansion. Business of the company in its home country is much better and showing a growth rate consistently increasing over the last few years.

Foreign production start: Acquiring the retail store chain of similar business in China will increase the demand of its parent products manufactured in the home country. This phase will make it to use the company’s different products in foreign market as well (Maurer, 2010). This will increase product demand of parent company in the foreign market as well resulting in increasing the overall production of the organization (Ferraro, & Briody, 2013).  

Foreign production competitive in export market: At this phase when company will hire local employees it will be cut the cost of product with lower cost of the employees in the local market. This phase will replace the parent company managers and employees with the local managers and employees. This will cut the cost of foreign employees and will start making better business for the organization.

Import competition begins: As the company will start production in foreign country it will be beneficial for the company to import the same product with a lower cost as the company itself producing the required product with a lower cost of manufacturing (Chang, Lee, & Chen, 2014)..

First phase: The cross-culture environment of the organization in foreign country will benefit the company through its product life cycle mechanism. In the first phase of product life cycle new culture will make a demand for the original products of the company. this demand will make an increase in the production of the company from its home country and will export this production to the hosting country (Eden, 2009). In this way cultural diversity will impact the foreign export of the company in a positive way.

Utilization of culture in the mechanism through life cycle

Second phase: Diverse culture will demand for the variety of products which will increase the production of parental company in the home country. Therefore, introduction of new products to a completely new culture will help the company in increasing its production.

Third phase: Through this phase company lowering of the cost using the local employees understanding the culture of the host country can make the business efficient and effective. Employees of eh new culture will have a better understanding of the culture and its trends that can be utilised by the company to maximize the exports of the company (Moreland, Levine, & Wingert, 2013).

Fourth stage: Utilizing the new culture company can make less imports for the new country and can make the business more cost efficient. This will reduce the cost of import and maximize the export to the home country. This will increase the import of home country from its new branch in the foreign country.

It has been analysed that Best Bibs and Trucker is an Australian company that provides hats and bush clothing to the customers. The company has decided to initiate the work in China therefore various culture shock issues are faced by the company in China (Shi & Franklin, 2014). Some of the culture shock issues have been detailed below.

Language issue: It is one of the significant and foremost issues in China that would be faced by the company. Best Bibs and Trucker is an Australian company thus, language differences are encountered by the firm. Australian employees are unable to understand the language of Chinese people. It has been found that language differences and issues can become a problem during the business transactions where it is essential to have clear and open communication (Chapman & Ciment, 2015).

Miscommunication: It has been noted that expatriates managers generally complain that there is no open communication in the China. Therefore, the employees of Best Bibs and Trucker Company will feel frustrated when people remain silent during the seminars and meetings. Along with this, frankness is not esteemed by the Chinese. In this way, Australian are failed to maintain favourable communication with Chinese. This culture issue could affect the success and growth of the firm adversely in (China Hopkins, 2016).

High turnover rate: A high turnover rate is not good for the company because it reduces the productivity and efficiency of the firm. High turnover rate means that employees are leaving their job at a relatively high rate. If the company initiates its business in China then it leads to high turnover rate. All these culture issues are entertained by the company while relocating the business in China (Alesina & Giuliano, 2015).

The main culture shock issues that the initial workforce might face in relocating to China

If Best Bibs and Trucker Company is retuning in home country then ample of challenges would be faced by the company. Some of the key issues have been elaborated below.

  • Re-adoption is one of the significant issues in reverse culture shock issue that can be faced by the company while returning in home country.
  • Reverse homesickness and boredom can also be affected the efficiency and effectiveness of the workers in the home country (Martin & Nakayama, 2013).
  • It has been found that Best Bibs and Trucker Company will have to invest lot of money on the training and development of employees in home country therefore it could influence the profitability of the firm.
  • Apart from this, the organization will not be able to apply new skill, potential and knowledge in the home country. It will also lead to anxiety, depression and frustration among the workers in the home country.
  • Special consideration will be paid by the company to renter in the home country therefore it declines the profit and market share of the firm. All these issues would be faced by Bes Bibs and Trucker Company while returning in the home country.

There are plenty of challenges that would be faced by the company while implementing the business In China. The major challenges have been discussed below.

Lack of clarity: When working with group members who come from different countries and follow different culture, then translation issues are occurred at the workplace. It also affects the communication and collaboration of the employees within the organization.

Slow decision making: Due to lack of clarity, the employees are unable to make effective decision at the workplace for conducting business activities in China.

Disjointed conflict resolution: If the employees are working predominately through email then it is quite complex to deal and manage the harsh issues and obstacles. Tone and body language also play a vital role in effective communication and without these nuances, effective and delicate circumstances can be hard to manage and control correctly.

Conflicting corporate culture: Great and effective company culture depends on the interaction and bonding of the team members. Such type of amity can be more quite complex for global team to define, initiate and ultimately attain.  Such types of issues can be faced by the team in the global market. If Best Bibs and Trucker Company initiates its business activities and operations in China then culture can become a big issues for the firm in the foreign market. The company needs to focus on these key challenges to stand out against the competitors in the global marketing (Gunn, 2017).

It is one of the significant concepts that help in gaining competitive advantages in the China. The global mind-set may be defined as a combination of openness and awareness of diversity across the cultures and markets with a capability to see common patterns across the markets and countries. The global mind-set is important just because it helps in attaining desired goals and objectives (Cavusgil, Knight, Riesenberger, Rammal & Rose, 2014). Furthermore, it also helps to cope up with the competitors in the international market. It has been noted that Best Bibs and Trucker Company can use global mind-set strategy to attract maximum number of customers in the Chinese market. By using global mind-set concept, the company has been able to integrate the products and services in the competitive market. The organization is thinking that providing growth opportunities to low or unskilled employees will help them in developing and boosting their financial position and show their commitment to local involvement and expansion. By using global mind-set strategy, the firm has been able to build a deep insight and appreciation for the organizational values and management style in the workplace. Along with this, effective and unique policies, plans and strategies are made by Best Bibs and Trucker Company to destroy the competitors in the foreign market (Katzenbach & Smith, 2015).

References 

Shi, X., & Franklin, P. (2014). Business expatriates' cross?cultural adaptation and their job performance. Asia Pacific Journal of Human Resources, 52(2), 193-214.

Hopkins, B. (2016). Cultural differences and improving performance: How values and beliefs influence organizational performance. Routledge.

Alesina, A., & Giuliano, P. (2015). Culture and institutions. Journal of Economic Literature, 53(4), 898-944.

Martin, J. N., & Nakayama, T. K. (2013). Intercultural communication in contexts. New York: NY: McGraw-Hill.

Gunn, S. (2017). Globalisation, education and culture shock. Taylor & Francis.

Chapman, R., & Ciment, J. (2015). Culture wars: An encyclopedia of issues, viewpoints and voices. Routledge.

Katzenbach, J. R., & Smith, D. K. (2015). The wisdom of teams: Creating the high-performance organization. Harvard Business Review Press.

Cavusgil, S. T., Knight, G., Riesenberger, J. R., Rammal, H. G., & Rose, E. L. (2014). International business. Pearson Australia.

Verbeke, A. (2013). International business strategy. Cambridge University Press.

Ferraro, G. P., & Briody, E. K. (2013). The cultural dimension of global business. Upper Saddle River: Pearson.

Rosenbaum-Elliott, R., Percy, L., & Pervan, S. (2015). Strategic brand management. Oxford University Press, USA.

Chang, D., Lee, C. K. M., & Chen, C. H. (2014). Review of life cycle assessment towards sustainable product development. Journal of cleaner production, 83, 48-60.

Maurer, I. (2010). How to build trust in inter-organizational projects: The impact of project staffing and project rewards on the formation of trust, knowledge acquisition and product innovation. International journal of project management, 28(7), 629-637.

Gurvich, I., Luedtke, J., & Tezcan, T. (2010). Staffing call centers with uncertain demand forecasts: A chance-constrained optimization approach. Management Science, 56(7), 1093-1115.

Moreland, R. L., Levine, J. M., & Wingert, M. L. (2013). Creating the ideal group: Composition effects at work. Understanding group behavior, 2, 11-35.

Eden, L. (2009). Letter from the editor-in-chief: Time in international business.

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