Cross- Cultural and HRM Issues

Running head: HOLDEN
Holden:
Automobile Company
Name of the student:
Name of the university:
Author note

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Executive summary
This report has focused on the functioning of the Australian based Holden automobile
company with respect to its business in Japan. The micro and macro environmental
factors were analyzed to find out the issues prevailing in the company. The key
research findings of the report has focused on the cross- cultural and HRM issues and
provided a strong recommendation for the same. It will help in the future business
transaction between the home and host countries.

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Table of Contents
Overview............................................................................................................................3
Macro environmental factors.............................................................................................3
Micro environmental factors..............................................................................................5
Issues faced by host country.............................................................................................7
Cross- cultural and HRM issues........................................................................................8
Recommendation.............................................................................................................10
References.......................................................................................................................11

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Overview
This report will focus on different micro and macro environmental factors as well
as the cross cultural and HRM issues faced by the Holden automobile company. While
discussing the various issues in the company, both the home and host countries will be
considered, which are Australia and Japan respectively. In the beginning of this report, it
is important to shed light on the company as well as the home and host countries. This
Australia- based company was established in the year 1856 and currently
headquartered in the Port Melbourne region of Victoria (Holden.com.au, 2018). The
prominent models offered by the company include Nissan, Chevrolet, Suzuki, Toyota
and others. The manufacturing of the company vehicles took place mostly in Elizabeth
and Melbourne. The company, based in Australia has connection with Japan due to the
models of Suzuki, Toyota. In the course of this report, different factors will be analyzed
which posed to be a barrier in the operation of two different countries. As Australia and
Japan are two nations of different cultures, there are different cultural issues faced by
the human resources management of Holden. This report will focus on such issues and
provide recommendation for the same.
Macro environmental factors
The Holden automobile has various issues related to the external factors in terms
of international business growth. These external factors can be termed as the macro
environmental factors, which affect the exterior environment of the company (Hillary
2017). In the case of Holden, the external environment analysis has helped in
identifying the threats and opportunities to pave the way for future growth and
development in the international automobile market. For instance, Holden has the scope
to grow its presence and operating functions in the international market of the
developing countries. The strategies that they will implement will need to counter the
threats raised due to the company’s business performance in the international market.
The important factors include, strong competitive advantages and their parallel
approaches must support the strategies and HR initiatives. This is because the
initiatives undertaken at the company need to support the position of the company in the

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international market. In this respect, it can be said that, the PESTLE analysis of the
Holden automobile company has been effective in recognizing the business concerns to
direct the efforts for organizational growth and development (Brink 2017).
P- Political  Extensive tax policies on the
combustion of automobiles
 Government promotion of public
vehicles and other such alternatives
 Political stability in the significant
markets
E- Economic  Economic dependence of important
markets
 Raid rate of increase of eth
developing markets
 Increasing competition in the
developing markets
S- Social  Rising demand for self- driven
vehicles
 Rising demand for the electric
automobiles
 Rising demand for shared
automobiles and the ride- hailing
programs (Bouazza, Ardjouman
and Abada 2015)
T- Technological  Increase in fuel efficiency of
automobiles
 Rise in implementation of
technology on the self- driven
vehicles
 Rise in the development of electric
vehicles

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L- Legal  Strong policies and procedures of
vehicular emission
 Extensive norms and policies of
automobile safety
 Extensive environmental rules and
regulations
E- Environmental  Increase in concerns due to change
in air quality for vehicular emissions
 Raid change in the climatic
conditions
 Increasing concern in business
sustainability (Luthra, Garg and
Haleem 2015)
From the PESTLE analysis, it can be summarized that the external or macro
environmental factors need to be considered by the Holden automobile company while
conducting business in home and host countries. This analysis has highlighted the
importance of transformation in their growth and development strategies in the
international market. This analysis was successful in recognizing different kinds of
issues that Holden needs to deal with.
Micro environmental factors
The micro environmental factors of the Holden automobile company is aimed at
addressing the strengths, weaknesses, opportunities and threats faced by the internal
environment of the company. The analysis of the internal factors or SWOT analysis of
the company helps the company management to recognize the strong internal factors.
In the case of Holden automobile company, the strengths of the business are related to
their potential in overcoming the challenges and issues faced by the automobile industry
(Noori and Tatari 2016). For instance, the size of the organization and their networking
is effective in implying the necessary strategies. The important fact in this respect is that

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the company must focus on the issues related to the rival companies and their business
administration. The policy makers and the management of the company must consider
the SWOT or the internal factors for implementing efficient strategies in the international
automobile market. These include smoothening, efficiency and reducing the successful
resistance while implementing the strategies (Peppard, Galliers and Thorogood 2014).
Therefore, Holden needs to deal with the internal strategic factors associated with its
business.
S- Strength  Strong brand image
 Economies of scale
 Expertise in human resources
management
W- Weakness  Restricted market presence in the
still developing countries
 Restricted diversification in the
business
 Bureaucracy in the organizational
structure and culture (Zhao and
Chen 2018)
O- Opportunity  Extensive growth in the market of
developing countries
 Combination of advanced
computing technologies in the
products of the company
 Decrease in bureaucracy in the
organizational structure and culture
T- Threat  Disorderly potential of the advanced
and innovative computing
technologies
 Government promotion of public
automobile and other such

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alternatives
 Extreme competition in the market
(Brewster, Chung and Sparrow
2016)
From the SWOT analysis, it can be analyzed that Holden holds a strong position
in the automobile industry in terms of brand, economy, HR expertise and others. These
factors are considered as significant in the growth and development of the company to
provide competitive advantage in the international market. They can make use of the
strengths to build positive impact in the business and implement strategic reforms to
work on their threats and weakness. In addition, they should also utilize the
opportunities that are accessible in the automobile market.
Issues faced by host country
As Australia and Japan are two countries of different viewpoints and cultural
diversity, therefore, Japan, as a host country had to come across different issues while
working with the Australian automobile company. In terms of economic diplomacy, the
Japan Australia Economic Partnership Agreement was signed between these two
countries. It has led to free of cost transportation of the automobile and vehicular parts
from Japan to Australia. Apart from this, there are several other issues, which are
coming as a barrier between the functioning of the two countries. Their business
transactions are at stake due to the constant threats from China (Deresky 2017).
There are issues of employment faced by the host country. The automobile
industry business with Australia and the local employment of Japan turned out to be
highly sensitive issues in politics. Similar to China, USA also posed challenges in the
business transactions between Japan and Australia. Although both these countries tried
to stand together by forming a mutual understanding but it turned to be another issue for
the host country (Moore 2015).

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On the other hand, difference in perception between the two countries regarding
China and its policies came out as a major issue for Japan. The issues related to the
natural resources, energy, minerals and food took large shape in the political sphere
and hampered bi-national relationship. With the increase in the cost of resources,
challenges in the form of resource security became prominent for Japan. In the case of
Holden, the host country was further affected when the automobile giant, Holden
decided to manufacturing vehicles in Australia in 2017. The Japanese model, Toyota
was worried due to its bleak future in the Australian region. This is because the
shutdown of its operation would result in the unemployment of 2900 people. As per the
management of this company, external environmental factors and negative influences
were the major reasons for taking up this decision (Sarala et al. 2016). Further research
has highlighted on the cross- cultural and HRM issues that prevailed in the automobile
company.
Cross- cultural and HRM issues
The traditional ways of carrying out human resource practices in Japan are on
the verge of changing. The culture of the host country and the well-established nature of
the practices have led to limitations in implementing the changes within organizations.
Individuals face different issues related to business transactions in Japan and Australia
(Moore 2015). Out of several cross- cultural and human resources management issues
between the home and host countries, seven prominent ones were identified. These
issues are outlined below:
1. Difference in lifestyle: the people of both these countries follow lifestyles, which
are wide apart. There is difference in timing in the two nations. On one hand the
shops in Japan closes at around 8pm- 10 pm, on the other, the shops in Australia
closes around 6 pm.
2. Difference in pace of decision-making: response to the market and decision-
making process took place at different pace in these two countries. The people in
Japan are more used to checking the idea before exposure or sealing of any kind
of commitment. However, the Australians are used to a time- consuming process

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of decision- making. This created a difference, as the Japanese were considered
unaware to deadlines (Gupta and Bhaskar 2016).
3. Mentoring and coaching styles: the Japanese are used to a more engaging
activity where the senior managers should immediately respond to a situation. It
is similar to both way of the hierarchy. For instance, if an employee resigns from
a company and joins another in the similar sector, then there is a tendency of the
socio- economic repercussions.
4. Difference in expectations: the views of the Japanese and Australians were
different regarding expectation from the meetings in an organization. According
to the Australians, meetings are a complete waste of time, as it does not lead to
any effective outcome. Rather they considered meeting as a platform to debate
and voice their disagreements with others. The Australians expressed their anger
when the Japanese expressed their views among themselves in their own
language. On the other hand, they were not ready to accept silence from the
Japanese too (Aklamanu, Degbey and Tarba 2016).
5. Difference in communication style: there was utter confusion regarding verbal
and non- verbal communication behaviors among the Australians and the
Japanese. The Australians were less status oriented than the Japanese and tried
to make adjustments while showing formal respect to the hierarchy.
Nevertheless, most of the time, they were not aware of the ways in which the
meetings need to be proceeded or the seating needs to be arranged.
6. Difference in emotions: the Australians could not agree with the fact that there
was an outburst in case of bad performance in a job. There was a difference with
the Japanese as they placed minimum value on relationships and therefore
power distance encouraged status differences (Sarala et al. 2016).
7. Difference in workplace relations: in Australia, language barrier is not seen as a
major problem and do not expect the same from the Japanese co- workers. The
Japanese employees do not use reports and memos in majority as a form of
internal communication. Moreover, the Australian managers were more
comfortable in approaching the Australian employees rather than the Japanese.

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Recommendation
It can be recommended from this report, that Holden needs to work on the issues
discussed throughout this report for overcoming the challenges faced by the company.
Hofstede’s cultural dimension can be significant in this respect as it considers
five important factors of power distance, individualism vs. collectivism,
masculinity vs. feminity, uncertainty avoidance and long- term vs. short- term
orientation. These factors will be effective in resolving the issue of cultural
diversity between the home and host countries. In case, the company shuts down,
there will be an extensive negative influence and it s required to avoid the same by
effective management. They need to consider the HRM theories and principles
applicable in other automobile companies and implement the same in their organization.
The implication of the effective practices needs to be followed up to measure their
success in the business. Moreover, different styles of communication need to be
evaluated in order to select the most appropriate one.

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References
Aklamanu, A., Degbey, W.Y. and Tarba, S.Y., 2016. The role of HRM and social capital
configuration for knowledge sharing in post-M&A integration: A framework for future
empirical investigation. The International Journal of Human Resource
Management, 27(22), pp.2790-2822.
Bouazza, A.B., Ardjouman, D. and Abada, O., 2015. Establishing the factors affecting
the growth of small and medium-sized enterprises in Algeria. American International
journal of Social science, 4(2), pp.101-115.
Brewster, C., Chung, C. and Sparrow, P., 2016. Globalizing human resource
management. Routledge.
Brink, C.H., 2017. Measuring political risk: risks to foreign investment. Routledge.
Deresky, H., 2017. International management: Managing across borders and cultures.
Pearson Education India.
Gupta, S. and Bhaskar, A.U., 2016. Doing business in India: cross-cultural issues in
managing human resources. Cross Cultural & Strategic Management, 23(1), pp.184-
204.
Hillary, R. ed., 2017. Small and medium-sized enterprises and the environment:
business imperatives. Routledge.
Holden.com.au. (2018). Holden About | Holden Australia. [online] Available at:
https://www.holden.com.au/discover-holden [Accessed 24 May 2018].
Luthra, S., Garg, D. and Haleem, A., 2015. Critical success factors of green supply
chain management for achieving sustainability in Indian automobile industry. Production
Planning & Control, 26(5), pp.339-362.
Moore, F., 2015. An unsuitable job for a woman: a ‘native category’approach to gender,
diversity and cross-cultural management. The International Journal of Human Resource
Management, 26(2), pp.216-230.