Executive Summary
The contemporary business environment is characterized by globalization. This makes it imperative for the companies to understand and adapt to the local cultures through their internationalization strategy. This paper builds on the theoretic implication of Hofstede cultural dimensions to shape the understanding of the importance of cultural adaptation in the internationalization of operation. The relationship between company strategy and culture is the focus on which this report considers the problems that businesses might have to deal whilst working across many cultures. The report will use Virgin Atlantic Airways to illustrate the challenges that firms might face while operating in Japan and German markets.
Part A
Background of Culture
The understanding of culture from the Hofstede perspective evidences the need to understand diverse cultures of different country within the dimension of management and business practice (Adler & Gundersen, 2007). From this conceptualization, it emerges that management employees from different backgrounds possess significant challenges to the companies as well as managers. The definition of culture in the internationalization strategy is anchored on the framework of programming the business mind. Hofstede developed a framework that attributed adapting and managing international context of culture as a measure to structure the existing differences between various groups of people (Hofstede, 1991). This definition views culture a pattern of behavior that informs the social construction. As a result, it emerges that culture spreads through the symbolic use of meanings to depict the local people’s achievement.
Within the business context, culture informs the observable social behavior. This implies that the organizational strategies must reflect the local culture to shape the thinking of business process such as the human resource approaches, compensation mechanism, and termination of contract and strategic influence (Armenakis & Brown, 2011). The plurality of perspectives exhibited in this report enhances the adoption of a working definition. This means that culture is understood as the byproduct of the views of majority in the society. The standpoint of such realization enhances the challenge of business management dictating the firms to initiate strategic directions that responds to cultural differences and views (Deal & Kennedy, 1982).
The importance of Culture to an International Firm
Hofstede (2013a) underscores that culture plays a leading role in the success of business practice. The implication of such generalization establishes the foundation of Linstead & Grafton-Small (1992) that international organization must effectively understand the principles of cultural management in a bid to align the strategic focus of the organization in the realization of the company’s objectives. By understanding the frameworks of culture, global firms stand better chances of innovation and constructing the tenets of creatively. Moore & Rees (2008) further outlines that the operation of the organization in diverse cultural setups requires the ability to support the localized workforce for efficiency in the development of business excellence.
Borrowing from the foundations of Hofstede low power distance, Hofstede (2013b) underscores that cultural adaptation must be characterized by principles of uncertainty avoidance to support the initiatives of creativity and innovation. From this perspective, it is plausible to note that global firms must recognize the innovative products and engage in effective human resources elements to motivate the employees, involve them in the business processes and as a result realize improved success. The cultural adaptation is the foundation of creativity, effective business decision making and communication success in the firm. To achieve this initiatives, the ability to use cultural adaptation facilitate cross-Cultural practices and international business spectrum as well as cross cultural practices and management practices (Ramachandran, Chong and Ismail, 2011). The basis of this trajectory reflects the understanding for effective innovation in the operations of the global firm, focus must be pegged on risk management to allow the employees in taking up the challenges for structuring business competences and excellences in the global firms.
Aligning the beliefs of the organization to the cultural climate in the local market, makes global firms to engage is strategy execution. According to Schein (1990), it is evident that the regulations, rules as well as values that inform the organizational culture must be a reflection of the cultural realities in the local social spectrum and extensively affect the behavior of the organization, employees and managements. The combination of such elements manifest the direction of business process allowing the organization to realize its goals and objectives though the formulated strategies (Sriussadaporn, 2006). By understanding and adapting to local cultures, business firms imbibe values that shape the level of commitment of employees to the needs of the market as well as the business objectives of the firm. The products of culture such as communication, team work, commitment and innovation and creativity determine the level of success in the internationalization strategy. The tenets of organizational culture and theory of international market entry demonstrate the springboard through which the mutual gains of both the stakeholders and shareholders are addressed.
Hofstede’s Cultural Dimensions
Greet Hofstede formulated a theory explaining the dynamics of culture in business environment and organizations. The results of the investigative study that sought to understanding the impacts of culture of IBM company in foreign markets led to a conclusion that the value of cultural dimension across cultures bordered on the avoidance of uncertainty, masculinity, power distance and Confucian work dynamics (Terry, 2007). The model of Hofstede’s Cultural Dimensions reflects the analytic tool that will guide the understanding of the need for a business organization to adapt to local culture and determine its internationalization strategy.
Power distance principles reflect the acceptance nature of power inequalities existing in the society. In view of this, Hofstede (1991) raised the need to understand the level of independence that exist between resources and beliefs in different cultures. The collectivist and individualist culture underscore that the company must focus on the group aspect of the society given the individual indication. Satterlee & Robinson (2008) further outline that the masculinity perspective of Hofstede cultural dimension characterize the achievement, success as well as competition framework of the people in the local cultures. This presents the design that the socialization of people enhances the quality of quality in work ethics. The avoidance of uncertainty related to the issues of social setup and culture determines the company’s long term orientation related to Confucian work dynamics, ethics and values (Shemla & Meyer, 2012).
The justification of Hofstede’s Cultural Dimensions is informed by the impact that cultural diversity has in the business functionality of global firm. The consequence of globalization and industrialization, as Hofstede (1991) highlights, has been the force through which firms embrace cultural diversity for economic and human resource mechanics. Accordingly, Hofstede’s Cultural Dimensions is important to the management of business process in global firms based on the effectiveness of instituting strategic direction for the management of diversity in the business environment. The sum total of social cultural discrepancies that exist among the workforce of business organization as well as culture is understood by the differing attitudes, principles of life and mindsets thus challenging the success management and administration of business practices (Griffin & Moorhead, 2011).
The need to realize cultural competence is the foundational inclination to understanding culture for a global firm. Hofstede (2013a) addresses the perspective towards ensuring an effective management of cultural diversity. The significance of such a strategic focus makes it imperative for managers to possess cultural competence tenets and thus have the capabilities of responding the opportunities as well as challenges that border on cultural diversity for global firms. According to Satterlee & Robinson (2008), the dimension of cultural knowledge, mindsets, sensitivity and skills is the bridge that global firms use to transform the prospects and demands of their business structures. The face of business environment as a result of globalization dictates that global firms must conform to the international strategy within the cultural and ethnic orientation. The existing challenges that establish the implementation of organizational change point to a human resource approach where the management of employees must be pegged on the tenets of organizational behaviors depending on the cultural systems of race, religion, moral perception and environmental relations (Adler & Gundersen, 1990).
Part B
Virgin Atlantic Airline
The cultural dimension of Virgin Atlantic Airline can be succinctly explored after a considerable background analysis of the company. Virgin Atlantic Airline is a British airline that is owned by both Singapore Airlines and Virgin Group. This represents a brand that competes in global market and employs overs fifty thousand employees. Founded in 1968, the company has grown penetrating the international market through increased operating divisions as well as subsidiaries. Such an expansion represent a global formation that is significant to the cultural dimension of the global market (Virgin, 2012).
The Complex operations at the Virgin Atlantic manifest a successful business model that is replicated in various markets across the world. With their characterize tag line of Virgin Everywhere, the company has addressed the principles of cultural dimension within the Hofstede model to launch new business. According to Armenakis & Brown (2011), the management of business resources and capability in Virgin Atlantic Airline portray a link between the involvements of the management in the developing of strategic direction informed by the local culture in different markets. The wealth of cultural management manifest the ability of the firm to achieve high quality business operations. The important concepts of cultural adaptation informs the need to look at the organizational behavior of Virgin Atlantic Airline structured through leadership, employee motivation and organizational cultures. The application of the principles of organizational behavior and culture identifies the management approach of Virgin Atlantic Airline in terms of the human resource alignment to cultural dimension to increase the satisfaction of employees. The interaction of business management strategy, internationalization strategy and cultural dimension of Virgin Atlantic Airline paint the significant picture of the impact of business practice. This enhances the conclusion that the perception of aspects of business practice must recognize the cultural component of organize to address the objectives distinct with market differences.
Virgin Atlantic Airline Operations in Japan and German
Virgin Atlantic Airlines operates on the existence of cultural difference in Japan and Germany. Underlying the power distance, Virgin Atlantic Airline aligns its human resource strategy to Hofstede cultural dimension and allows a highly decentralized organization of employees. The understanding of Deal & Kennedy (19882) shape the belief that the decision making criteria of Virgin Atlantic Airline in German is characterized by challenges of expertise and authority. On the other hand, the Japanese cultural orientation is anchored on high centralization of decision making processes. This is because, as Hofstede (1991) argues, the power distance in Europe and Asia assumes different hierarchical structures. This highlights the situation in Japan where the ratification of organizational decisions are made by the executive managers unlike German where in some instances, decisions have been made by employees in an all-inclusive and integrative process.
The attitude of work in German favors the objectives of Virgin Atlantic Airline because the inclination of the workers towards individualism embody a low collective cultural orientation. This implies that Virgin Atlantic Airline must understand that its internationalization strategy in German must consider advancing the human resource capacities of employees through self-actualization initiatives (Linstead & Grafton-Small, 1992). The general individualistic nature of Germans call for resources and reward approach making Virgin Atlantic Airline to distribute its takes to individuals rather than groups. This is to align the strategic direction of the company to the cultural dimension where the focus of employees is on job security and independence.
Virgin Atlantic Airline operates on the patriarchal characterization of the workforce in Japan. According to Moore & Rees (2008) the patriarchal nature of culture does not recognize women in positions of leadership. In view of those, Virgin Atlantic Airline has established recruitment and promotional approach that does not allow men under the dominion of women. In addition, Hofstede cultural dimension characterize Japan as a social unit with middle collectivism and individualism. The understanding of Japanese culture borders on the formal spectrum that is oriented towards hierarchy and group dynamics. In view of this, it is evident that Ramachandran, Chong and Ismail (2011) share the views of Schein (1990) to demonstrate the workforce in Japan as having low individualistic tendency thereby inclined to the interests and benefits of the organization. The implication of the uncertainty avoidance posits the need for strict rules and regulation to guide the performance of the workforce in Japan. This highlights Virgin Atlantic Airline approach to being patients with the workforce for attaining the goals, objectives and results.
Customization based on Cultural Differences
Virgin Atlantic Airline has customized its operations in both Japan and German. The social structure and cultural competency of the tow foreign markets demonstrate a power distance spectrum through which Virgin Atlantic Airline addresses its decision making processes and employee promotion strategies. According to Schein (1990), it emerges that the effective alignment of leadership strategies, organizational behavior and cultural orientation established Virgin Atlantic Airline as a business entity with the potential to increase its business success, market share and profitability.
Challenges faced by Virgin Atlantic Airline
While the company has faced the challenge of different expectation of employees, the management came up with the strategic approaches that enhanced understanding between the company and the cultural dimension. As a result, the company aligned its strategy to the distinct cultural environment in both markets. Virgin Atlantic Airline dimension of culture therefore embrace the Hofstede cultural dimension to understand the symbols, power structures, control systems, human resource routines and rituals as well as organizational structures existing in both German and Japan.
Conclusion
The level of cultural diversity has dramatically increased making it imperative for managers to understand the impact that local culture portend on the strategic direction and business practice. In view of this, it emerges that organizations must formulates strategic fit that respond to the local cultural expectation within the internationalization strategy. The relation of Virgin Atlantic Airline organizational culture shared the behavioral dynamics and values associated with market and country culture. The theoretical implication of Hofstede’s cultural dimension makes Virgin Atlantic Airline to encourage a feedback from employees in German as opposed to Japan. The organizational behavior of Virgin Atlantic Airline reflects the high uncertainty avoidance due to the strategic attempt that the company formulates in adopting to the innovative and creative approach.
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