Introduction
Global Financial Advising Consultants (GFAC) is a specialized tax and financial services consultancy firm with its headquarters in New York with branches in London and Tokyo. The company is led by senior consultants who are specialized in one or two clients that they gain expert knowledge about and develop competencies in guidance and advisory services for.
Recently, the company has created an offshore office in India which takes outsourced work from the New York, London and Tokyo offices of GFAC. This includes preliminary analytical works that combines data which culminates in information which is necessary for decision-making in these offices. However, there are some challenges to organizational success in the globally integrated company and most of this is due to cultural problems which ought to be addressed.
The purpose of this paper is to critically analyze and review the problems of cultural integration and how they can be addressed in order to promote the best interest for the company globally.
Sources of conflicts between the two groups
A diagnosis of the situation indicates that the main problems include issues with lateness in the presentation of deliverables from India, errors and the lack of professionalism from the Indian office, and a high level of turnover as well as the movement of as many as about half of the workers to competitor firm over a 6-month period.
The broader implication is that there is a lack of long-term commitment amongst the Indian workers in the company. This is because the work conditions do not get them to stay on and sacrifice and build strong ties. They are casual workers and they do what they can to meet goals and objectives assigned to them. There are variations in the way things are presented in India and in America. And timeliness is not something that is honored due to some internal issues and problems that promotes lateness.
National Cultures and Organizational Culture
Globalization creates a system whereby people from different parts of the world come together to work in the same environment. It involves hiring people in different countries and this means there is the challenge of creating an organizational culture from people who have different national cultures.
Culture is defined as the relatively stable rituals, values and norms that are accepted amongst a group of people. This is summed up by some authorities as the way things are done in a given place or group. Culture develops over a period of time and when it is consolidated and formulated, it becomes what is known as the software of the mind and controls the parameters within which people from a given group often think. Therefore, culture informs and shapes what is normal amongst people and defines the way things are to be done amongst them.
When there is internationalization, a company brings together different people from different backgrounds. Therefore, there is the home culture and the host culture. All these come together to define the way a unique organizational culture can develop and define the new globalized organization since it involves many new things and many new processes and systems.
In the case of GFAC, there is a new arrangement whereby the company has integrated the Indian branch as an important aspect of the company. Unlike the UK and Japan which are well known western liberal democracies that are considered developed countries, India struggles with many issues and matters of the third world. First of all, it is a diverse country that was put together by the British who brought different tribes and castes together. Hence, there are many accents and English is considered a foreign language.
Indians have their own unique culture which is diverse. There are many different cultures in India that are so different from all the dominant cultures of western nations. Hence, there is a unique national culture that lays the foundation for a cultural conflict. India and Indians are intelligent and clever. However, their education is modeled on the old British colonial system which has its own unique challenges. For instance, it is based more on instructions and rote learning as opposed to independent thinking which characterizes Ivy-league level education in the United States and top universities in the United Kingdom and Japan.
The nature of GFAC is such that the company has to operate on the premise of accuracy and high levels of certainty. They need to be sure of matters or else face major consequences like lawsuits and other situations that could be extremely expensive. Therefore, it is imperative upon the workers in India to consider themselves as a part of a global company that has to meet extreme standards and tight obligations with accuracy without errors. However, it appears that the Indian unit does not see things in that way. The level of individual accountability is not on the same level as the American partners. Obviously, the decision to outsource these functions to India was to cut down on the cost of hiring these professionals. Thus, the company is doing what it has to cut down cost in its Indian subsidiary. This is coming at a cost of creating an organizational culture that is impersonal and there is no sense of commitment as the company requires. Thus, long-termism is missing.
Communication traditions in India and the United States are different. Due to that, the company will have to act as a blackbox to bring together these differences and create a synthesis to create an effective work environment. This is because the language and instruction systems are different. Hence, whilst a person in New York gives instructions and expect a set of actions, the staff in India have a different perception and they interpret the information differently.
Corporate culture in an international organization is often formulated through a conscious change management process and this is to be done under a strong leadership. This is because the presentation of a new international unit brings on two or more conflicting national cultures. There is the need for the management to review facts and identify the main agents of change and what will need monitoring. This will inevitably lead to the formulation of plans and systems for dealing with the change in order to create a process whereby the company can formulate an acceptable organizational culture that will embrace the different needs of the different cultures. More significantly, organizational change management in times of international cultural synthesis is necessary to identify areas of potential conflict and create the blueprints for dealing with them and provide various learning processes to get workers to adapt and live with these changes and modifications.
Furthermore, leadership is necessary because change does not happen in vacuum. This is because there is the need for someone with the power and authority to coordinate affairs and ensure that complaints made in a period of change is handled and there is the proper streamlining of affairs in order to create a strong and an acceptable organizational culture that can be truly representative of all the staff members. This must be done by finding a manager or director who will play a routine role that will encompass the supervision of people from the different national cultures in order to formulate new systems of dealing with problems that may inevitably arise as the parties in the organization adjust to each other.
Theoretical Diagnosis of Cultural Problems
In order to understand the root of these problems, it is necessary to apply Hofstede’s cultural dimensions to the situation in order to understand the problems and issues as they occurred in GFAC in relation to the integration of their Indian unit to the global system.
The table above will give a fair understanding of the situation at hand and provide a basis for the identification of the intervention needs of the global company and help to solve the issues and problems.
Uncertainty Avoidance: The United States scores fairly high on this scale as compared to India. However, the job requirements of the two branches are different. Whilst the US branch of GFAC is meant to take top level strategic decisions which require a higher uncertainty avoidance, the Indian branch is meant to employ low level professionals who make basic decisions. This is meant to be a unit that is tolerant of uncertainty avoidance. Thus, issues like lateness and inaccuracies is acceptable in India whilst the American branch is declined to have a tough view on these issues and matters. Hence, there is a major variation and effort must be made to reduce the gaps and limits between the two units.
Power Distance: India has an extremely high power distance relationship. This means that subordinates are expected to accept the instructions from their superiors without question. This is not the case with the United States where subordinates are encouraged to ask questions. The Indians indicate that the Americans speak quickly. And due to the fact that they do not want to offend them, they deduce things as they wish. Due to this, they do things in a haste and try to work within bad work conditions and unpleasant situations without questioning them. Therefore, it might be appropriate to ask the Indian unit for updates regularly and try to help them and assist them to bring out the best in them.
Individualism V Collectivism: The United States is a highly individualized country. People are held accountable for delivering what they have to deliver. India on the other hand is collectivized. Everything is to a general group. This is evident in the fact that the American staff of GFAC expect results from the person a task is assigned. This is because people have to answer for their actions and inactions specifically. This is supposed to be the case with every worker in the Indian branch. On the other hand the nature of work in the Indian unit is somewhat messy. People are not treated fairly and no individual distinctions are made. People are treated like one large unit and due to that, they do things as they wish without any accountability. This contributes to low level of performance.
Long Term Orientation: The American society has a lower LTO. An American company could hire a person easily and fire the person equally easily. However, in India, there is a long-term view on employment and job security amongst others. Thus, workers are likely to give off their best in situations where they are sure of a future with a company. This explains the high levels of turnover. The Indian workers do not feel appreciated in the GFAC unit. They are treated with contracts that do not serve their future interests and as such, do not want to give off their best since they are not provided with the appropriate motivation to stay on.
Masculinity: Roles are strongly defined in the United States corporate culture. This is higher than India where people are able to change and switch roles fairly easily. The reality is that GFAC India is meant to employ lower level staff members. And the workers are recruited from highly qualified individuals who are trained to take up strategic roles. Due to that, they are being forced by Americans who are role-oriented to do specific low-level jobs which is proving problematic. Although Indians are more liberal in switching roles, these roles seem to be far below the employees hired by GFAC and the American insistence on exact performance is hurting their abilities and egos.
Intervention Approach
There should be a strict move towards the creation of a national culture. This national culture must be properly transposed to the Indian subsidiary into a system that is more compatible with the American unit. The Americans will also be able to get some kind of guidance that they need in order to operate and carry out their activities in ways that will bring optimal results and promote respect in the company.
In doing this, there must be a strong leadership that will be installed to promote coordination between the different branches – with an emphasis on New York and India. This leader or group of leaders must be tasked with the obligation of promoting cultural development through change management.
As a prerequisite, change management must be applied in the form of communication and data collection, data evaluation and the formulation of a new organizational culture for the international business. This can be done by unfreezing, move and refreezing new systems within the Lewin model in order to create a new organizational culture for a wider company.
Lateness can be handled by utilizing new project management systems. This can be done in ways that will allow for some lead time and prevent the excessive waste of time and energy on operations. Errors and professionalism can be instituted through a quality control unit that will vet and vouch every work that is presented by an Indian professional based on instructions from New York.
Communication liaising must also be done. There must be quick means for the provision of verification in order to deduce problems and provide for them in the operation of the New York and India branches.
The new leadership must be in charge of outsourcing and proper training of staff members. This will ensure that there is the proper evaluation and assessment of staff members in this will lead to better results in operations.
Also, employment systems and processes must be reviewed. The Indian cultural desires like job-security, respect for traditions like Diwali and others must be instituted. Time variations must be taken care of and where employees work outside normal office hours, they must be given overtime for their effort and sacrifice. Family values and collectivism in India must be duly compensated for in the organizational culture.
Data Collection Instruments
The institution and monitoring of a new system will include the collection of information and consistent monitoring of affairs. The new management tasked with creating a new corporate culture for the Indian unit will have to use various tools to check the efficiency of change management processes.
First, there must be observations as a means of gathering data about trends and processes. This should include the evaluation of the work environment and how things are done in the company. These observations must give an overview of the corporate culture and work environment.
Then there can be surveys and interviews that will follow. Interviews can collect views of workers who do not meet their obligations. This should be documented and used for further investigations and follow ups. Surveys should be used to gauge actions and sentiments across a larger population of staff in the US and India in order to identify general trends and processes. This can contribute to the understanding of change in the company and this will be used to institute and create a new corporate system that will work and eliminate problematic plans that are not working too well.
References
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