Using relevant and appropriate frameworks developed during the module, you are required to compare and contrast the cultures of two countries of your choice. You are then required to choose organisation(s) that have expanded into these countries and analyse the issues they faced and how they responded to the cultural context.
HSBC is known for banking and financial services all over the world. It is headquartered in London, United Kingdom. It has about 9,500 branches in over 85 countries and a few arts in Europe, Africa, Middle East and America. It has listings in the stock exchange in London, New York, Bermuda and Paris. The shares are held by approximately 200,000 shareholders in a few countries and territories (HSBC, 2018). These shares are exchanged in New York stock exchange. HDFC provides the range of financial services as Ecommerce is growing on a rapid rate. The financial services include personal services, commercial banking, private banking, investment banking and other services. HSBC has made growth in the middle east region and get continuous success from that region every year (HSBC, 2018). All the operation in Asia have exceeded the expectations of the customers too and they believe in this bank.
Culture of any organization plays a very important role in aligning the employees, the procedures and overall ambience. The culture of HSBC always promotes integrity and teamwork. Its culture is based on the principles and values like high standards of truthfulness and fairness, decision making which is quick and apt, minimum bureaucracy, development which is sustainable etc. A good example of such principle and values is that in the inception of the recruitment process, the leadership says that good values are the best criteria for good leadership and grades (HSBCPlc, 2013). HSBC is always open for new innovations and any kind of changes necessary or good for growth. This organization seeks productive feedback so that it can amend the changes according to that and deals with the problems. The working hours are flexible for the employees and seniority is given importance in the organization.
With all such facilities, the employees also have the chance to solve their own personal life problems. The culture of the organization is lively, satisfying and exciting. It usually prevents arrogance from the internal environment (HSBC, 2018).
The cultures of most of the organizations depend on the overall culture of the countries. For example, in United Kingdom, mostly all the organizations will work according to the culture of UK. And the same goes for the culture in Malaysia. The culture of organization or the countries could be analyzed by Hofstede’s cultural Dimension.
Power Distance: This dimension refers to the individuals in the society and specifies that all are not equal. The attitude of the culture in this dimension is expressed by finding out the inequality between the individuals. It can be defined as the extent to which less powerful individuals of the organizations and the country and the power is distributed unequally. In case of Malaysia, this country scores high in this dimension (Hofstede, 2011). It means that people of Malaysia accepts the level of hierarchy order and everyone feels that they have a specific place and further needs to justification. The hierarchy in any organization in Malaysia reflects the inbuilt inequalities and centralization. People in the organization agree to the fact that the subordinates are the people who have to take orders from the boss as he is born to do so and is generous. The challenges in the leadership will not be very nicely received in HSBC Malaysia as the power distance is 100%.
Individualism or Collectivism: The issue which refers to this dimension can be said as the degree of interdependence which a society has to maintain within the members. It depends on the image of the people in terms of “I” or “We” (Rinuastuti, et al., 2014). In the society of individualists, people will take care of themselves as they are the only one’s responsible for it. In the society of collectivism, people will have to take care of the society and the groups of members too in the exchange of loyalty. In case of Malaysia, it is a collective society. In Malaysia, people take care of each other as a community. Such types of societies inculcate strong relationships and the offense leads to the shame. The relationship between the employer and the employee is taken in moral terms. The promotions and the hiring are done within the groups.
Masculinity: The high score of masculinity in this dimension refers to the society which is driven by success, competition and achievement (Irfan, 2016). The score of low femininity of this dimension means that caring, love and other values are the quality of life and they are dominant. With the middle score of 50, this dimension cannot be determined properly.
Uncertainty Avoidance: The society never knows what is stored in the future. It deals with the reality of not knowing the future (Bergiel, et al., 2012). The anxiety as to hold the future from bad things happening makes people threatened by the upcoming unknown situations (Afaneh, et al., 2014). This anxiety refers to the uncertainty avoidance. Malaysia on the score of 36 has lower preference for the avoidance of uncertainty. The groups with low UAI will always maintain relaxed attitude. The practice will always count more instead of principles and deviance. People working in Malaysia feel that there should be no rules which are unnecessary. Rules which are unclear should not exist or changed. There are flexible schedules and people work hard here and not for their own sake but for the society.
Long Term Orientation: This cultural dimension informs that the society has to maintain some connections in order to deal with the challenges of the past or the future. The society has to give different priorities to these two different goals (Wu, 2006). The societies which are low in this dimension are the ones which follow all the traditional norms and rules with all their heart but see the new changes suspiciously. On the other hand, the societies which are high in this dimension, they adapt to new changes keeping the broader approach of mind and encourage modernity. With having the score of 41 the dimension informs that Malaysia comes in the low dimension phase. This is known as the normative culture. In such societies people are low thinkers and will have concern in the establishment of truth. Respect for traditions will always be there but in case of any changes, people become rigid.
Cultural Analysis of Malaysia
Indulgence: Socialization for every human being is important. Without this, there is no existence of humans. This dimension is all about the desires and the impulses which people deal with according to their lifestyle or culture they are raised in (Matondo, 2012). Weak control is known as Indulgence and strong is known as Restraint. Hence, there are two types of cultures based on this dimension. This is Hofstede’s new culture dimension which most of the organizations does not know about. This cultural dimension is still in the growing phase. Malaysia’s score is 57 in this dimension which reflects that the culture is that of Indulgence. In indulgence, people show that they are eager to realize about their impulses and the wishes in terms of the enjoyment they are looking in life. They have positive attitude towards life. They give huge importance to the time of leisure that they get and spend the money as they wish to.
Power Distance: In United States, the power distance factor is low which means that there are people who are considered as equal (Mooij & Hofstede, 2010). People do not differ in terms of the organizational work or the designation etc. All are given equal opportunities according to the HSBC policy.
Individualism: The dimension score is generally 40 which are in the combination of 91 cultures in total. In USA, equal rights are given to every individual irrespective of the gender. Within organizations in America or HSBC, hierarchy exists just because of the convenience. If there will be superiors or the managers, people will be able to go for help to them and the work will keep on going (Jirwe, et al., 2006). The type of communication done is also informal. People are given the flexibility to do their work and the relationships are healthy within the organization. High degree of mobility geographically exists in US. People there never feel shy to connect with their counterparts and do their business openly. The employees of all the companies are self reliant and they initiate new things as well. Promotions are also done on the basis of the work employees are doing and not on the basis of designations.
The score of Masculinity is 62 in case of United States. It is the combination of the high masculinity drive with individualist drive. US people exhibit masculinity drive individually. UK also has the same culture in this aspect. For Example: it is seen in US that people at work or school etc. behave according to their values which are shared (Kulkarni, 2012). It says that the winner takes it all. Americans talk about their success in the most openly way possible. It is believed in the US that a degree of conflict brings out the best on people which pushes them to be the winner. The basic mentality there is to have justice for all members of the society.
Cultural Analysis of the United States
Uncertainty Avoidance: The score in this cultural dimension is below average which is 46. This means that new ideas and new innovations and the wish to try or build something new are fairly good irrespective of the technology, food or business practice. People are more liberal about the opinions and new ideas. There is no requirement of the rules and less emotional high scoring cultures (Ozman & Erdil, 2013).
Long Term Orientation: There is normative dimension and low score of 26 in this dimension in case of US. People of US are prone to checking of the information and its truthfulness. However, this does not mean that it makes the Americans practical but they are practical in terms of their can-do mentality. People there measure the business performance by short term goals accomplishments, with the profit they made, and loss incurred by the organization on quarterly basis. Quick results are delivered in such type of scenario (Lillevik, 2007).
Indulgence: Score is 68 for US in this sixth and new dimension of Hofstede. Work and play hard is the behavior and attitude which is followed by US people. The drug addiction though is higher because of this in US as compared to many other countries (Mishra & Kumar, 2014).
Power Distance: UK has the low ranking in the power distance index at the score of 35. This means that the country believes that the inequality should be minimized. This index is low when it comes to the higher-class people in UK. This score actually differs when it comes to the difference in the person’s birth place. This means that the person’s birth rank should not stop him from going as far as he can in life (Drogendijk & Slangen, 2006).
Individualism: By scoring 89, UK is the highest in individualism amongst all countries. British people are highly individualists and personal. Children there are taught to take care of themselves from the very young age. They are taught to find their passion and purpose in life. There is always an “I” culture in Britain (Fredricks & Tilley, 2014).
Masculinity: Masculine society is 66 in terms of the score which means high passion for success and purpose. The critical understanding of the UK culture is that one can read between the lines or not. In terms of femininity also, people live to work for them and for the society up to some extent and to have a clear ambition.
Impact of Culture on HSBC's Expansion
Uncertainty Avoidance: Britain has low number of 35 in UAI. This means that UK as a nation on the whole is quite happy in not knowing what is stored in future for them. British people are immune to think about the uncertainties and they are ready for them in case if they arrive. Not many rules are followed in UK but the rules which exist are maintained religiously by the people of Britain. In organizations, people are not very much detailed oriented. The end goal matters for them. Planning of the goals will be shorter (Podrug, et al., 2006).
Long Term Orientation: The score is 51 in this dimension. There are no such long term goals as compared to other counties and hence, the culture of Britain cannot be determined exactly in this dimension (TranslateMedia, 2018).
Indulgence: the high score 69 exists in this dimension which classifies Britain to be indulgent. It is the same as the USA culture where people feel good about experimenting about new ideas and innovations. They also believe in living life with fun and work hard. These people are also optimistic and give significance to their leisure time.
Hofstede's Comparison of UK, USA and Malaysia
Source: (hofstede-insights.com, 2018)
CQ or cultural intelligence means adapting to the new culture setting ability. It helps in studying the reason of some people being more effective than others when they are able to apapt themselves in new culture.
Culture intelligence has four components. They are:
Meta CQ: It is the consciousness of an individual in terms of culture. It helps in keeping the person aware when they interact with the people with different backgrounds. This is based on high level cognitive strategies and deep processing of information which allows the person to grow heuristics for the social interactions.
Cognitive CQ: It defines the knowledge of a person in terms of the norms, conventions and practices in various cultures that reflects fundamental knowledge of the cultures.
Motivational CQ: This is the capability of the individual of direct energy and the concentration towards differences in the cultures. According to the researchers, this capacity allows the control and that control is important for the intercultural communications as t hey involve some difficulties which generate uncertainty. The people who are high in this component will always have hanker, drive and efficiency of translating the information for generating new strategies in order to deal with the working with different cultures and new environment.
Behavioral CQ is a person’s capability to show verbal and non-verbal actions while communicating with the people who belong to other cultures. This allows individuals to manage and align their behavior when intercultural encounters are concerned so that there is less misperception (Ersoy, 2014).
When cultural diversities are seen in HSBC UK, Malaysia and USA, there are some issues which were identifies. The cultures are not exactly the same as all the countries are altogether in different geographical regions where people are very different from each other. The internal structure balance of the organizations is lost if they work in the similar way. HSBC provides huge range of services when it comes to the diverse practices to follow. It has also approached different models of the strategies to handle the cultures but lack of women bankers raises questions when it comes to the femininity and company practices. There are always questions raised as to what are the measures that the bank has taken in terms to reduce this issue (Patrick & Kumar, 2012).
Firstly, any company which wants to deal with the cultural gap in between itself and the country then it should stick to the diverse practices which are advised by the Government. This helps the company to easily manage the activities. Code of conduct is very necessary that should be taken by the top management and it should be followed by the staff very strictly. This code of conduct should be different form the normal code of ethics which only should focus on the cultural diversity issues. The values of the organization should be able to inculcated in the workers. The minor groups should be given equal opportunities to grow in the same organization as other people. HSBC should make sure that the programs should be designed in the way that it provides apt opportunities to the women to be hired in the bank and help them to sustain in this job. Also, safe and appropriate environment should be ensured for them. Evolution plan must be made which provides chance to avail the benefit of different cultural practices and make the organization earn profit by following all the cultural rules of the particular country. The practices that are followed by the organizations which are about the culture should be given the priority more than objective and goals (Neo, 2015).
In the conclusion, it can easily be said that HSBC is one of the leading banks and it is in continuous research for developing further. In the recent years, HSBC proved that it success is their aim. As a company, it makes all efforts to keep its employees satisfied and to always keep the culture of the organization intact so that the end result is growth and success. The growth of HSBC is steady in most of the regions of operations. In the last five year of HSBC, it has earned increase in shares too per year. The intercultural communication is also very important that HSBC gives importance to. The culture is usually seen in the employees’ context or the work-related assignments. When the company extends in other countries it has to work according to the culture of that country. The organization must learn to earn the respect of the people of that country and appreciate the differences of the culture and follow them. This essay focuses on the cultural environment of the HSBC bank headquarters in UK and the branches which exist in United states of America and Malaysia. The working cultural of USA and Malaysia is compared with the cultures of the UK with the help of Hofstede’s cultural dimension theory. It is found out that HSBC gives its employees freedom to work, put their opinion and ideas freely with the management and work flexibly. Though there are some issues which is faced by this organization and for clearing those issues there are recommendations also given in this essay. Culture of HSBC is strong and flexible which helps it to grow further and become a good example for other organizations too.
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