Cross Cultural Management Implications for International Expansion of Frostwood Tourism Company

This report discusses the implications of cross cultural management for the international expansion of Frostwood Tourism Company in emerging economies like China and India. It covers topics such as the background of the company, organizational strategy and structure, cultural analysis of countries, and recommendations for improvement.

Cross Cultural
Management

Executive summary
The following is the business report on Cross Cultural Management Implications for
International expansion of Frostwood tourism company. This report describes the company
which is the part of hospitality business and the wants to expand its business in emerging
economies including countries like China and India. This report begins with introduction and
background about the cross culture and Frostwood tourism company. After that the aim of the
company and size of company has been described in this report. Thereafter, organizational
strategy and structure has showed the policies of company. To carry out effective diversification
of company Hofstede Model and Handy’s Model is used to carry out better operation and
expansion strategy. On the basis of desirable approaches and model certain recommendation are
made for improvement so that organization can maintain its unique position within host country
and gain enormous amount of success.

Table of Contents
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
Overview of company..................................................................................................................4
Cultural analysis of countries.......................................................................................................6
Practical issue.............................................................................................................................10
Recommendation.......................................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES................................................................................................................................1

INTRODUCTION
Cross-cultural management encompasses the impact of dynamic societal culture within
management practices that direct affect the performance of overall internal managers and
members of an organisation. It involve the role of external forces or societal culture that leads to
bring transition as it directly affect the performance of an organisation. Generally hospitality
organisations hire diverse or inclusive workforce that are exposed to various cultures but
function together to achieve the predetermined objective (Ali and Park, 2016). Thus, inclusive
efforts needs to be acknowledged by manager in order to produce desirable result and maximise
overall efficiency. To better define the report Frostwood which is a fictitious tourism
company of Germany has been selected. It is a part of hospitality industry and provide diverse
services like offer hotel, restaurant facility as well as organises tour packages. Thus, to establish
global image Frostwood tourism company plans to diversify its business within developing
countries of Asian market that is China and India. Utilising economies of scale can assist
company to tap the untapped opportunity by gaining additional revenue from emerging
economies. This report cover topics like explain the background of company which include its
size, name, strategy and other relevant information. Explain tools that can be used for national
analysis in terms to expand the operations of company within developing market. Further,
explain main issues which can be faced by company by offering recommendations in order to
overcome the problem. Apply approaches which act as a tool that determine usefulness for
selected countries are covered in the report.
MAIN BODY
Overview of company
Frostwood tourism company is a renowned hospitality business whose operations was
started by Thomas Jones in the year 2005 within Germany. Initially, the company started with
hotels for national and international traveller but later on it extend its operations and move into
tour services, car rental, accommodation, air charters as well as offer food and beverages. The
primary aim of company is to understand the requirement and changing preferences of client and
offer them wide range of services to maximise overall profitability, growth and success of
company national and international levels (Brett, Behfar and Sanchez-Burks, 2014). Recently the
company has planned to diversify its business in emerging economics of Asian market which

include India and China. This can assist company to successfully tap the untapped market and
gain the opportunity of additional revenue.
Size
The company has enormous size due to which it is takes decision to constantly expand its
operations. The organization is providing the facilities with the help of its 12000 employees who
worked with full integrity to satisfy the customer demands. Currently, the company operates with
twenty luxury hotels which entertain higher and middle income group people. Company is
gaining the popularity by providing the world class services and using special ethical standards
where they believe in customer first.
Aim
The aim of Frostwood company is to maintain the interest of their guests, people and
shareholders. To enhance the experiences of customer it basically uses digital technologies like
website, conduct live chats, email marketing and many more to capture the suggestion of
customer and accommodate their requirement by reducing the chances of dissonance. In addition
company has another aim to continue the tradition of pioneering in hospitality industry and gain
excellence by expanding in Asian market. The internal manager gain deep insight for which it
conduct market research in order to expand its operations successfully.
Strategy
The hospitality industry have accelerated growth and development by deliver immense
amount of services to the national as well as international traveller. In relation to Frostwood
company builds effective strategy in terms to remain competitive and gain excellence within
global market. It basically deliver high quality of services which are associated with hotel,
travelling, food and accommodation (Kitching, Mashruwala and Pevzner, 2016). This is
considered as an effective way to gain viable amount of cash inflow and widen up overall
profitability margin. The managers of Frostwood company have opted differentiation strategy
as after diversifying the operations in developing market the prime responsibility is to deliver
supreme level of services to maintain the trust and reliability. This helps to attract premium
customer that fall under the category of high as well as middle income group and are not price
sensitive. Therefore, all the services and strategy are thoroughly designed for the convenience of
potential customer

Organisation structure
Organisational structure outlines the overall activities of an organisation like determining
flow of communication, task allocation, maintaining cooperation and supervision of activities
which are classified with the objective to attain organisational objective. There are different
types of organisation structure such as divisional, hierarchy, functional, matrix and many more.
Amongst these structure managers of Frostwood tourism company have significantly adopted
functional structure. Based on this structure an organisation comprises of different functional
area where responsibilities are allotted to staff or employees according to their existing
knowledge, skill set, work capability and knowledge. Different department of company includes
marketing, information technology and so on is overviewed by functional head that have in-
depth knowledge which helps to overcome the problem significantly (Warner, 2014). This
further helps to maintain interrelation and coordination amongst diverse departments which helps
to effectively attain the collective target. Within both home and host countries like Germany, UK
and Denmark the manager have effectively adopted functional structure in order to make
effective decision and strengthen overall operations.
Therefore, company needs to effective analyse the external market such as political
condition, technology advancement, customer behaviours and systematically operate in dynamic
environment by applying functional structure. The representatives of organisation fix roles as
well as responsibility of team member who are accountable to carry out functioning effectively.
As the manager of company have successfully adopted different digital platform like use of
website, email marketing, SEO, social media, affiliate marketing that help to successfully
promote the brand. This create favourable situation in terms to gain the result at real time based
on which successfully strategies are articulated to outperform the overall operations. Investment
on digital platform helps to gain insight about changing trend with the help of analytical tool and
accordingly formulate the strategy to outperform the actions effectively.
Cultural analysis of countries
Hospitality sector offer wide range of services to customer due to which the company
which fall under this sector faces immense amount of competition in terms to survive and expand
its operations. The organisational culture is a part of dynamic system that comprises of belief,
experiences, values as well as philosophies that directly affect the individual and organisation

operation. To outperform task in global market it is essential for company to highly provide
training to their staff in terms to enhance their capabilities which help them to take desirable
initiative in terms to accomplishment overall objective within stipulated time period. The impact
of globalisation has helped to bring revolution within business by enhancing wider options and
desirable services to accommodate the requirement of different types of customer (Corfield and
Paton, 2016). This has significantly enhanced the cross culture and contribution of workforces to
overcome challenges and gain desirable amount of result. Each and every country has its own
legislation, reform, policies and regulation which needs to be abide by multinational organisation
to manage effective relationship with internal and external stakeholders. Herein, Frostwood
which is German based tourism company offer diverse services like organises tours, offer
accommodation facility in terms to make the journey of traveller desirable. To maintain the
image of company the research and development development gain detail information about
market and enhance market size to diverse business in periphery of India and China. Expansion
not only add profitability to company by maintaining global image but it also act as a threat in
terms to survive in new market and gain trust of local residence. Additionally, carry out effective
recruitment process for various countries and maintaining uniqueness is again a threat to
company which can affect decision making process (H. Akbar and Vujić, 2014). It is the
responsibility of HR manager to take desirable initiative in terms to overcome global
competitiveness by hiring potential candidate for the desirable position of an organisation. Staff
or employees are the main asset of hospitality company because they only interact with customer
and deliver them suitable services. Thus, the manager can only mitigate the chances of risk and
survive in competitive environment through the efforts of their competitive team. The
explanation of different types of approaches are examined below:
Ethnocentric approach: Within this approach the HR manager of an organisation hire
workforce for the vacant position from parent company. To carry out this recruitment procedure
manager of Frostwood company involves different evaluation rounds with the objective to hire
desirable candidate. Application of this approach assist employees to effectively represent the
responsibilities and suitably coordinate with home country to improve profitability and overcome
chances of hindrances. In simple words the people which are hired from home country can be
transferred to different region of country in terms to suitably fill up vacancy and perform their

task. Generally workforce that prefer exploring different countries are entertained for the suitable
implementation of approach (Scott, 2016).
Polycentric approach: It is the international recruitment method under which the
company hire workforce from host country who have better understanding about national
market. Based on this strategy if the Frostwood company expand its operations in host country
which is India and China then it hire local residence so that the customer of company too feel
related and communicate with them without any barrier. This approach is used to hire the
nationals of host country for the post of managers because those individuals know the country
culture analysis in more effective manner (French, 2015). This method also helps the company to
save the cost of operations. Also, it can also help in building a better relationship across borders.
Therefore, these approaches needs to be effectively implemented by Frostwood company
in terms to hire diverse workforce as well as manager from home and host country. Focus needs
to be given to hire competitive employees that can understand the needs of customer and
participate in effective decision making with the objective to enhance overall quality of services
effectively.
Handy's cultural model
This model was propounded by Charles Handy in 1999 which comprises of different
types of cultures that can be opt by an organisation to maintain significant level of cooperation.
The explanation of different organisational culture are determined below:
Power Culture: Within power culture few manager of an organisation leverage the
advantage to make vital decisions and influence the behaviour of people by effectively analyse
external environment. Application of this culture within Frostwood tourism company helps in
effective delegation of authority and systematic performance of responsibility.
Task Culture: As per task culture the organisation involve specialised team, that
collectively work together to attain shared objective. As Frostwood tourism company comprises
of diverse workforce so task culture emphasize to bring together desirable resources as well as
manpower in order to effectively complete assigned tasks (Rohlfer and Zhang, 2016).
Role Culture: Based on role culture the organisation delegate responsibilities to overall
workforce according to their specialisation, interest level, qualification so that they can derive
out favourable result. The managers of Frostwood company can apply this culture to help

workforce in terms to showcase their talent and accordingly accept challenges by participating in
Asian market.
Person Culture: According to this, the employees consider personal motives as more
valuable in comparison to organisation objective. They become the part of an organisational just
with the sake to gain monetary benefits (Steers and Sánchez‐Runde, 2017). Thus, the
administrator of Frostwood tourism company needs to associate monetary and non monetary
benefits with overall target. This enhances the participation of workforce to effective gain long
term competitive advantage.
Hence, the manager amongst different cultures effectively opt role culture where division
of workforce takes place on the basis of individual interest level and capabilities. This assist
company to effectively deliver specialised services and gain significant amount of productivity.
Hofstede model
It is a cross cultural framework which was developed by Geert Hofstede to effectively
understand culture of different countries. This is a comprehensive study which is related in
building up valuable culture and well as effectively working culture. Illustration of different
dimensions are explained underneath:
Individualism v/s Collectivism: As per individualism attempts are taken to analyse
personal strength in terms to become self reliant or sufficient to effectively achieve the particular
objective of an organisation. The desirable efforts of the personnel helps to make them
independent in terms to effective accomplish the overall objective of an organisation (Thomas
and Peterson, 2016). Managers of Frostwood company in terms to effectively opt differentiated
strategy and gain competitive advantage encourage staff to put forward valuable opinion or
suggestion. This helps to improve social network and gain advantage at ethnocentric level. On
contrary, as per Collectivism the staff consider them as an essential part of group due to which
all the performances are carried out collectively. In relation to Frostwood tourism company
expand their business or diversify their services via poly centric approach which widen up
coordination and generate sense of integrity within team members.
Power Distance: Power distance refer to the chance of inequality that exist within an
organisation on the basis of power shared amongst different peoples. In relation to Frostwood
tourism company to significantly maintain working pattern at ethnocentric level needs to identify

the abilities of employees. On the basis of which task are allocated to maintain job satisfaction
and motivation level to strengthen market size in desirable manner.
Uncertainty avoidance: On the basis of this element it is essential for internal manager to
analyse the chances of uncertainty that can be caused due to dynamic environment or
uncontrollable nature. As Frostwood company is going to diversify its operation from Germany
to Asian market, so with the helps of market research company needs to effectively analyse
existence of uncertain event (Vom Brocke and Rosemann, 2014). Further, collective efforts are
taken to overcome cultural issues and take corrective actions significantly.
Masculinity v/s femininity: The diverse role and attributes of gender also causes cultures
differentiate which can affect the functioning of business. As male orientations or masculinity
are considered as ambitious as well as can take quick and effective decision within stipulated
time (Wang, Solan and Xu, 2014). On contrary, femininity are more focused towards
maintaining harmony and quality performance. Frostwood company in terms to diversity its
hospitality operations within countries like India and China involve immense amount of
contribution to gain preferable amount of profitability. Additionally, it involve training and
development programme to expand profit and gain global success.
Practical issue
In business environment there are different types of companies such as local,
international and multinational who are running their business by innovating new ideas and
utilising resources. Frostwood company is a multinational organisation that is large size travel
and tourism company operating business by providing travelling and other services to customers.
It has faced many challenges while running business and implementing strategic planning. As it
is having skilled and experienced employees, resources and capabilities helped to mitigate the
risk and increasing productivity effectively (Lee, Shiue and Chen, 2016). For the purpose of
diversify the services and products in developed areas management is required to execute its
strategic plans and make a clear judgement which helps to maintain the business position. While
executing plans and carrying out whole design Frostwood is facing many practical issues that are
defined below:
Political risk: This is consider as main risk which can arise any time and need to focus
while running a business. In case of developing countries such as China, India, UK and others
political issues are becoming emerging trend that needed to solve. If political system and

government are constant in developing areas then it cab be an opportunity for travel and tourism
organisation to run its business successfully by following existing rules and regulations. On the
hand, in case of changing political system, policies and government regulations can be highly
challenging for Froswood company as it has to follow new rules and system which can be costly
and irrelevant of business. Due to this business activities of organisation can be reduced and
other organisation has chances to take competitive advantages (Stahl, G. and Tung, 2015).
Therefore, it has stated that before launching a business in to new or established market
organisation need to figure out the whole market which can help to make best strategy and plan
top run a business by implementing possible strategies. In context to India, enhance the
employment opportunity by establishing its business in different countries and reduces the
unemployment rate by increasing per capita income. On the other side, in China Facebook has
banned that is impacting due to government intervenes that is impacting negatively. To cope up
with practical issues and political risk management of organisation need to formulate alternative
plans that can help to perform function and business activities smoothly in new geographical
areas and helps to gain potential customers.
Supply chain complexity: When an enterprise decide to expand their business operations
and activities at international market then they need to find out supply chain. As it will help them
in reaching of its end of the customers (Malik and Pereira, 2015). As within existing nations i.e.
Australia, United Kingdom etc. Frostwood tourism company has great supplier supply relation
due to which they can easily cater the requirement to huge national as well as internal customer.
Commination barrier due to Cultural differences: Communication is effective tool used
by an organisation to communicate information information about their business to the
employees as well as customers. In order to maintain communication among different
stakeholders is more difficult for Frostwood tourism company as it take more time of the
organisation. Along with this, cultural difference causes behaviour, thinking, norms, language of
the stakeholders. As it has direct impact over business performance and success of an
organisation.
Therefore, the planning of Frostwood requires to be executed in such a manner. As it can
cope up with the number of challenges or issues and exploit the better chances by diversifying
the business operations and activities in effective manner. This will further support an
organisation in achievement of its competitive advantages.

Recommendation
As per above analyses Frostwood company has wider scope to effectively expand the
business in developing country and enhance existing customer base. On the basis of expansion
plan certain recommendations to carry out desirable operation are listed below:
 As it is advantageous for company to utilise the advantage of economies of scale and
diversify its business within emerging economies because it gives immense scope of
expansion. To attain the objective company should precisely understand external factor of
India and China in order to incorporate desirable decision. These factors involve social
cultural aspect, economic condition of country, level of competition, political condition
and many more. Thus, by gaining deep insights company can suitably target their
customer and gain desirable image.
 Company should effective use the online as well as traditional medium to spread the
market awareness and maintain suitable brand positioning. This helps to enhance
conversion rate by appealing the interest of various prospects within India and China.
Along with that manager of Frostwood company whether uses Ethnocentric or
Polycentric approach should focus on training and development session in order to
prepare the competitive team that can function effectively.
 The employment legislation should be followed by company and take initiative to
maintain sustainable relationship with internal and external stakeholders. This helps to
generate the loyalty of diverse party on company.
CONCLUSION
From the above report it has been determined that the large organisation needs to
manage cross-culture in terms to effectively expand operations within international market. It
helps in systematic management of business and generate immense amount of growth as well as
development. Effective management of diverse workforce acts as a challenge for company due to
which significant efforts needs to be taken to gain deep insights and accommodate the
requirement of workforce. Model like Handy's cultural and Hofstede's cultural needs to be
effectively implemented in order to successfully carry out functioning of business.

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