Developing Cross-Cultural Capability: Risks, Opportunities, and HR Considerations

This report discusses the risks and opportunities of shifting manufacturing to another country, HR-related considerations, and developing cross-cultural capability. It includes a case study of Arthur Knight shoes and their expansion to Vietnam.

Developing cross-
cultural capability

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Risks and opportunities of shift in manufacturing in association with a move to other country 1
HR.-related considerations .........................................................................................................3
CONCLUSION...............................................................................................................................6
.........................................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
In an organization, cross-cultural capability means that individuals have a capability to
understand and communicate with other people across different cultures whether in terms of
clients, customers or even suppliers. It is defined as knowledge and skills which are needed to
support, plan and making improvements in providing the services in an appropriate way. There
are five things involved in the related concept and these are cultural understanding, self-
reflection, collaboration, context and communication. They form the basis of complete cross
cultural learning and certain development activities (Bay-Cheng and et.al, 2021). It becomes
important to develop such skills and this can be done by planning cross-cultural communication.
For a business organization, there are lot of advanced opportunities which are available outside
the country and so they not to realize it for expanding the production aspect. The below report is
based on Arthur Knight shoes. It is a UK based small company and deals in online stockist of
designing footwear for both men and women. The company is now planing to expand their
production in Vietnam. The report includes risks and opportunities of shift in the manufacturing
while moving to another country, issues that are tackled by other departments and HR.-related
considerations in terms of the shift in production followed by conclusion.
MAIN BODY
Risks and opportunities of shift in manufacturing in association with a move to other country
There are many opportunities and risks that are available while shifting the
manufacturing of a company to another country. As per the chosen company, they also decided
to take a move to Vietnam and achieve production power. In order to gather effective
opportunities, it was required that they acquire best team members who have good experience in
determining different methods to manage the impact. With respect to Arthur Knight shoes, it is
being explained below: -
Opportunities: -
 Enhancement in the presence: - It is considered as one of the biggest opportunity for a
company while shifting the production in another country (Senbeto, 2021). As a small
business organization, it becomes a great opportunity to increase the presence in country
like Vietnam. While moving into another country more customers get to know about the
products which is a great benefit for small business.
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 Competitive advantage: - While expanding the production into another country, the
company receives an opportunity to achieve better competitive advantage in comparison
with other business organizations. In Vietnam, there are very less small businesses so it
was an advantage for them to build up effective brand awareness. At the same point of
time, the company is able to enhance their image in a more effective way. In relation with
Arthur shoes company, they were having the opportunity to initiate new marketing
campaigns in Vietnam.
 Improvement in reputation: - In comparison with large companies, small businesses don't
have much reputation in front of the customers. So, while expanding the production in
another country they get an opportunity to attract new customers and build up brand
recognition (Foster and Killick, 2021). In context with selected company, as they are
dealing in manufacturing shoes, they get great opportunity to enhance their reputation
and attract more consumers to buy their shoes.
 New customer base: - To take a shift in another country, company gets an opportunity to
sell current products to new customers as well. The business organization can also initiate
new products as it would help in attracting more number of consumers. In accordance
with Arthur shoes company, they were having the opportunity to initiate more business
and increment in overall sales.
Risks: -
 Political risk: - It is the biggest risk that an organization may face while expanding the
production into another country. As they may face certain trade obstacles and
government of that country may demand extra amount of funds because company is
expanding the production into their country (Balante, van den Broek and White, 2021). It
creates a risk for them because it may lead to negative impact on their revenue
generation. In context with chosen small business, the government of Vietnam can also
ask for funds because as a small business it may happen that company don't earn much
revenue at initial stage.
 Cross-Cultural risk: - It is associated with the differences in areas like lifestyles,
customers and many more. Every individual has their own mindset while doing
shopping. Arthur shoes company was doing the production in Northampton and they had
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proper idea about demands of consumers but as they decided to move the production in
Vietnam, they had the risk because they don't know much about shoppers behaviour.
 Choosing wrong practices: - It is another risk that is associated with the expansion of
production as wrong practices can be selected which would create negative situations in
the company (Stephan and et.al, 2021). The reason behind this is that organization can
assume the demands into wrong way which would lead to high investment in overall
time. In context with selected company, the also had this risk because in Vietnam, they
can choose wrong practices while manufacturing their shoes.
 Management of foreign currency: - During the expansion of production into another
country, managing foreign currency becomes a major risk for an organization. The
reason behind this is that company may get the payment in the country local currency
only rather than in their country currency. There are many fluctuations in the currency
amount due to which if any increase or decrease takes place then company had to suffer
due to which their profits would get affected. With respect to chosen company, they
were also having the risk of managing foreign currency because due to changes in the
currency amount, their organization profits would be affected.
HR.-related considerations
In accordance with the shift in production, there are certain considerations in the
department of human resource that takes place. In terms of this, as the company decided to
expand their production in Vietnam, there was cross-cultural capability with respect to different
issues. In the manufacturing industry, changes may take place at any point of time due to which
many issues get arise. There are different types of challenges like marketing, legal, logistics and
so on which is handled by several other departments. In context with Arthur shoes company, it is
being explained below: -
 Compliance with laws: - During the shift in production, many legal considerations takes
place. As company decided to take a shift in their production, legal compliance with laws
becomes a major HR consideration. There are several employment laws that keeps on
changing due to which it becomes difficult for the company to manage such changes
(Dai, Xie and Chu, 2021). During the shift in production in another country which is
Vietnam, the organization decided in certain situations that they should ignore
employment laws but due to which they may face several audits and even the ending of
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their small business. In context with cross-cultural capability, there are different laws in
each country so it becomes significant for Arthur shoes company also to make sure that
they are in compliance with all local, federal as well as state laws (Wei and et.al, 2021).
During the shift in production, this situation may emerge in different forms like
workplace safety or the war hiring practices are being done. In context with this HR
related consideration, it becomes important for the company to ensure that they are
following all such laws and regulations which are being taking place in another country.
 Promoting organization culture: - It is a HR related consideration that takes place during
the shift in production. As a small business company, it becomes more important for
them to promote their culture in another industry (Liao and Liu, 2021). There are both
positive as well as negative situations associated with this related consideration. In
context with selected company, their employees has different mindsets which was
efficient and beneficial for them as through this the company can promote their culture in
a more efficient way but at the same point of time consideration get arise in terms of
putting up different mindsets of people across the country cultural values. As business
decided to expand their production, the managers had to do lot of efforts in order to
match with other country's culture. During the shift in production, management of
cultural values emerge because all the countries follow different types of culture and
always prefer to pursue in their area only. The company is dealing in manufacturing of
shoes so each individual has different demands. In Northampton, people prefer different
kinds of footwear but on the other hand in Vietnam, people has different preference
towards shoes.
 New innovations: - It is one of the most important consideration that takes place while
shifting the production into another country. In today's business world, changes in the
technology continuously takes place so it becomes necessary for the company to adapt to
such changes and compete with other industries. With respect to manufacturing
companies, there are large number of competitors which create a difficult situation for
chosen organization (Schuhbert, 2021). As it becomes a challenge for them to deal with
all other companies. In context with chosen organization, they also decided to expand
their production in Vietnam. It was a challenge for their small business to gather efficient
employees who can learn new technology and build up more innovations in their shoe
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manufacturing company. So, in order to deal with such issues, the most important thing
for them is communication. As many changes can take place, so they need to set up clear
goals in relation with the expansion and provide all workers with best training so that
they can get comfortable with all such changes.
 Recruiting employees: - To expand production in another country, it becomes important
to recruit some more talented employees who can enhance the manufacturing of
organization. It becomes difficult for small businesses to recruit high level employees as
it requires high level of investment in terms of both time as well as money (Anderson and
et.al, 2021). It is not possible for small businesses to do such investment due to which it
becomes difficult for them to balance out the running business and hiring right people at
the right time period. So, in case of chosen organization, it is impossible for them also to
search for candidates in complete new country as whether a specific individual is good
for their business organization or not. In order to deal with such issues the company can
make the usage of staffing company. As with the help of this, their business gets the
chance of trying different candidates with no risk. Through this, company gets an
advantage of saving both money and time.
 Workplace diversity: - In different countries, there are lot of cultural differences as well
as multiple generation people are involved. It becomes a challenge for small business
organization to manage workplace diversity. The reason behind this is that the country in
which production is being expanded follow complete different culture in comparison with
current country. In context with Arthur shoe company also, as they decided to expand
their production in Vietnam, it became a challenge for the business organization to
protect their current employees from harassment which may take place due to cultural
differences (Mishra and Yadav, 2021). As a small business, they can solve it by
implementing a culture of efficient teamwork and respect through which complete work
environment would become positive and at the same point of time productivity gets
enhanced. Besides this, organization can initiate diversity training program also on the
basis of which all the employees would be responsible to set up certain standards of their
behaviour in the workplace.
 Flexible work hours: - For every individual, time is the most important thing for them.
Each one of them wants that there is proper balance between their time period . During
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the shift in production, it is one of the biggest challenge that gets arise and it create many
difficulties for small businesses to keep up the balance. The employees in every country
prefers different time periods in order to have flexible work arrangements (Tandon,
Chand and Mittal, 2021). On the basis of this, the shoes manufacturing company also
need to analyse what is the flexible time period so that employees don't feel stressed and
can face all the challenges in an efficient way. It becomes a main issue for them so in
order to solve such problems the managers need to monitor their production situations
regularly and implementing certain measures to deal with such challenges.
CONCLUSION
From the above report it has been concluded that , production in different countries
creates many kind of opportunities but at the same point of time carries certain risks also which
becomes important for the business organization to deal with such challenges in an efficient way.
There are many chances of success that company has to shift their production in other country
like improvement in reputation, better presence and many more. Through this, the profits of the
company gets increased. Besides this, there are many risks also like management of foreign
currency and different cultural problems. During the expansion of production, there are certain
HR related considerations which takes place in the business organization like new innovations,
compliance with regulations and laws, technology and many more. In terms of small business
organization it becomes more important for them to deal with such problems so that better
reputation can be built up.
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REFERENCES
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