EXECUTIVE SUMMARY The mentioned report is based upon the idea of cross cultural management in which business concerns works in distinct nations and at same time faces diversity issues. Globalisation helps companies that are functioning under hospitality industry to grab opportunities addition to performing functions overseas. Capella Kempinski is selected firm for the report that works to take care of individuals who has motive to look into new locations addition to spend quality duration with other people. Moreover, executives with business owners are planning activities for expansion in developing areas including Russia and China. For this, cultural analysis for the two nations is done along with various identifying practical issues that can be faced by the enterprise. Further, for cross cultural management, organisational managers are recommended to follow cultural models including Handy's culture together with Hofstede's culture so that best expansion decisions can be made for the company. 2
Table of Contents Table of Contents.............................................................................................................................2 INTRODUCTION...........................................................................................................................3 MAIN BODY..................................................................................................................................3 Company overview......................................................................................................................3 Cultural analysis of two countries...............................................................................................6 Practical issues...........................................................................................................................11 Recommendations......................................................................................................................11 CONCLUSION..............................................................................................................................13 REFERENCES..............................................................................................................................14 3
INTRODUCTION Cross cultural management is characterised to managing people addition to things involving distinct cultural backgrounds. In other words, it comprises managing working of teams byconsideringdifferencesinpractices,consumerpreferencestogetherwithculturesat international level. It defines the ways certain external factors impacts on functioning of specific business concern together with on its staff members. In order to make the cross culture management effective, it is important for managers to identify as well as acknowledge the perspectives of different preferences, cultures along with practices performed by organisational workforce (Hutzschenreuter, Kleindienst,and Lange, 2014). When all the aspects are set to engagestaffmemberswithdistinctculture,departmentalheadsshoulddevelopproper understanding among all in context to pertaining work culture. To develop comprehension about cross cultural management, Capella Kempinski is chosen that is considered as leading hospitality businessconcerninGermanythatprovidesservicesincludingaccommodation,trek arrangements,organisingpackedholidays,foodwithbeveragefacilitiesandconducting reservations for numerous travellers. Executives along with owners of the company have planned the expansion of business trading operations in another two developing nations such as China and Russia who possessing growing economic conditions. In addition, the report focuses on key background information about the company along with its aims, structure, strategy and industry. It also include cultural analysis of two nations, practical issues that organisation may face and suggestion to overcome them. At last, valid recommendations are built so that the company can expand successfully. MAIN BODY Company overview Capella Kempinski is well considered among the leading hospitality business in Germany that performs operations to offer wide services to their targetted clients. The company has its head quarters located at Berlin, Germany since 2010 and from the date, the entity has gained huge growth not only in the native nation but also at international level by satisfying the wants, preferences or needs of travellers. The entity provides services such as adventurous holidaypackages,lodging,eventplanning,accommodation,organisingpackedholidays, administrating reservations addition to trek arrangements for its key travellers and potential 4
Paraphrase This Document
Need a fresh take? Get an instant paraphrase of this document with our AI Paraphraser
customers. In contrary, the tourism industry of Germany, the country is among the mostly visited nation having 8thrank over the globe. The total number of overnight visitors are more than 477.26 million and among them more than 68.83 million night outs are foreign visitors. Capella Kempinski's size The company provides employment to more than 1800 personnels all over the world in present time so to serve targetted customers in effective manner. In addition, the Capella Kempinski has around 10 lack rooms along with 350 offices in Germany and its surrounding nations that helped in becoming popular brand worldwide. However, the company has also gained attractions of travellers by targeting people belonging to middle level addition to high level income generators among the age group of 22 to 65 years so to offer services according to their spending pattern together with convenience. Aim of Capella Kempinski The aim of Capella Kempinski is to become top business concern at international level by effectively fulfilling requirementsof key and potential clients by delivering long lasting experiences. In addition, the company has other aim to communicate successfully with distant located audiences and catering them best services. For this, marketers of the firm has used promotionaltoolsincludingcustomersupportservices,telephonicconversations,e-mail marketing, websites and live chats. Other than this, Capella Kempinski has another aim to operatethefunctionsofbusinessineachpartoftheworld.Thishasraisednumerous opportunities such as expanding business via offering quality services to huge customer base of distinct countries like China as well as Russia. Strategy In present time, hospitality industry is growing with faster speed which unblocks working aspects for various companies within the industry to compete against the rivals so to accelerate the growth. The strategy adopted by management team of Capella Kempinski is based onvalue creation strategythrough which the entity emphasis on targeting portfolio audiences in order to gain reliability addition to trust through delivering unique and supreme quality services together with long lasting experiences (Baruch, and et. al., 2013). As per the organisational executives, adoption of value creation strategy helped them to build interest of external addition to internal stakeholders in various operations that resulted in sustaining in today's competitive business environment for long duration. 5
Organisational structure Top authorities of Capella Kempinski precede activities through functional organisational structure where individuals are grouped in teams according to their knowledge, specialization areaandskillset.Thefirmhasdistinctdepartmentsincludingmarketing,frontoffice, housekeeping, human resource,security and engineering. All the work related information are distributed among all the functional units in systematic and accurate manner (Kim, and Van Dyne, 2012). The team members are supervised and directed by functional managers possessing expertise in similar field. With this structure, all the relevant information flows between top level, medium level addition to low level management along with one department to other without any hurdles or delays. The company works in various developed countries such as Australia, USA, Germany, Denmark and UK where the same structure is followed. With this structure, the managers can also expand the business concern in other countries including Russia and China as it has various advantages associate with it. With the structure, the organisation can fix roles addition to responsibilities of each team member which can benefits in facilitating proper accountability of work, avoiding duplication of operations, providing securities to personnels and facilitating cooperation with communication within functions. In addition, efficientservicedeliveryalongwithbettereffortcoordination,themanagersofCapella Kempinski has planned to work with same strategies so t o expand the workings in other countries. However, the enterprise has to be extra cautious withexternal environment factors because of unstable political systems together with dynamic government conditions. Properly following the structure in other countries will help in managing all the conditions addition to capacity in deliberate manner. Other than this, from the beginning duration, organisational managers has adopted various technologies as well as continued bringing various innovative advancements which resulted in winning circumstances to spread awareness about pertaining hospitalityservicesthroughwebsitesorsuccessfultools.Hence,usageofcustomised advertisements addition to google analytics for different people has benefit respective firm to adopt best strategies to outreach potential customers in distinct economic parts in successful manner. 6
Cultural analysis of two countries At present market scenario of hospitality industry depicts that there is cut throat competition along with numerous challenges impacting on decision making procedures as well as performance level for reach business goals in prompt manner. In addition, concept of organisational culture involves philosophies, shared values, background as well as beliefs impacting directly orindirectlyonindividualswithleaders.Toremain in competition, companies require efficient and skilled personnels possessing capabilities for further initiatives withfullcontributionstoattainobjectivessuccessfully.Inaddition,rapidchangesin globalisation context, quantity with quality of staff members is also increasing as well as multicultural aspects imposes diverse challenges on human resource managers in order to handle together with manage employees by enhancing their satisfaction level (Brannen, Piekkari and Tietze, 2017). It is further said that rules, regulations as well as legislations in context to employment varies from region to region addition to place to place. Hence, it is important for all business entities to identifycapabilities, areas of interest and potentiality of personnel so to work in improved manner. Various people are recruited for improving the market share of Capella Kempinski in market. The human resource department of this organisation plays a key role in hiring of new personnel. The first step taken by HR department is to analyse business environment of different countries in which business has to be established. After this evaluation, recruiting strategies can be made for enhancing market share of the company. A good HR management is able to hire and manage effective and strong employees those can achieve goals and objectives of organisation in less time. This will help in increasing the profits and productivity of the company. There are someinternationalrecruitmentapproacheslikeethnocentric,geocentric,polycentric, regiocentric which are described below – Ethnocentric approach:This is an international recruitment method and in this type of approach, the human resource department hires right candidate for doing the job which is at international level. The person hired to work at international level must be able to mix with culture of different countries and have good communication skills. In this kind of recruitment process, organisation selects skilled and effective employees for its firm. Different employees are hired for working in various functional departments(Kreps, C., 2013). The key positions of the organisation are filled with employees of parent country. The responsibility of HR is to find the 7
Secure Best Marks with AI Grader
Need help grading? Try our AI Grader for instant feedback on your assignments.
best person who can work and manage company at international level. Several organisations adopt this type of recruitment procedure for keeping employees belonging to parent company to have competence for vacant posts. Recruitment process where ethnocentric approach can be applied while making selection of pool candidates are skill assessment, creating pool, self- selection and many other ways. Companies adopt these as per their requirements and demands. Polycentric approach:This is anotherinternational recruitment method in which HR hires person operating in international markets. The nationals of host country are recruited for posts of managers for carrying out operations of subsidiary organisation. The main reason for adopting this type of approach is that individuals of hot country analyse culture in more effective manner.Another advantage is that this helps in cost saving in conducting their foreign operations by company. Also, it can also help in building a better relationship across borders (Briscoe, Tarique,and Schuler, 2012). This also helps in increasing brand image of company in host country as well as in international market. The above mentioned approaches are effectively utilised by Capella kempinski for recruiting and selecting the right kind of person who can work in the firm effectively. This company was thinking of expanding in other countries so it needs more number of employees who can work in an effective manner. Also, the organisation must need to have some foreign investors. This will help in developing effective results in specified time frame. It is important for Capella Kemoinski to determine various trends that are needed by both host as well as subsidiary country. Also, there are some of models of culture which will help Capella Kempinski to meet requirements in an effective manner. Moreover,HR department of Capella Kempinski would also require to improve a range of factors like quality, equality and many more and take right type of decisions for making appropriate corrective actions for improving the working culture of firm. Hofstede model : Hofstede model created by Geert Hofstede is a key factor that helps us improve cross- cultural communication . It helps us explain why values of members of a society are directly interlinked with their culture. It takes into account various dimensions that scarcely interlinked with each other to help balance the principles of the workforce and create a positive and productive work environment. Developed in the 1980's, this model focuses mainly on evaluating 8
the beliefs of various cultures across the world for differences and similarities, which helps us determine a direct link between values and behaviours. Some dimensions are mentioned underneath that help understand this model better : Individualist:This dimension primarily focuses on the self-sufficiency and self reliance of a staff member. It analyses the individuals attempts to recognise superiors in order to establish a social communication system in a company setting. The individual efforts of a staff member are recorded in order to identify his efforts to achieve the general goal of the organisation.Thus it become critical for the superiors create a sound line of communication with each individual and rewarding the individual performing towards the general goals (Luthans, and Doh, 2012). It also encourages staff members to communicate with each other to boost the ethnocentric social platform. Collectivist:Unlike individualism collectivism focuses mainly on the ability of an individual to actively act as member to a larger group, communicating with various individuals in order to boost the collective output of the entire group rather than focusing on personal achievements. When dealing with a poly-centric workforce this factor becomes increasingly important as effective communication becomes an obstruction between two individuals with different cultures. Therefore employees are encouraged to interact with each other exchange ideas, strategies and opinions that not only improves the companies performance but also helps individuals perform better in future. It also enables them to support believes of various cultures that enhances organisational efficiency. PowerDistance:Thisdimensionexplainhowanindividualcopesupwiththe distribution of power into various tiers and identifies not only his position in the chain of command but also believes in growth of power through consistent positive performance and personal development (Caligiuri, and Tarique, 2012). This dimension also sheds some light on the ability of an individual to accept institution from a superior and act upon them, believing that each instruction is for the betterment of not only the individual but also the organisation itself Masculinity vs. Femininity:Masculinity and femininity are an important aspects of the human personality. It is a balance of both that make up the mental state of an individual. Both masculinity and femininity here are used more in a generic manner rather than the literal meaning. Masculinity corresponds to the self uplifting activities of an individual. These activities include acts to seek social appreciation as well as materialistic gains. These include acts of 9
heroism, attention seeking etc. On the other hand, Femininity represents the giving nature generally associated with females. The acts of supporting the weak, caring about the colleagues, cooperation with the team etc. This effort generally doesn’t come into light but are crucial for any organisation. The employees are nurtured to have an ideal balance of both masculinity and femininity in order to maximize both individual and team performance while mentioning a positively competitive work environment. Uncertainty Avoidance:With so many dimensions in play it is understood that not all employees are cut out for each and every work environment, an individual might not be comfortable in a certain environment and might even be reluctant to express the issue with others. There are many uncertainties that are present in a business environment. Not all uncertainties are avoidable but these can be effectively avoidable with deeper analysis. These avoidable uncertainties end up causing a lot of losses to organisations and thus should be avoided at all costs. Handy's cultural model According to Handy, culture is defined as way in which people share their bond and love. As per Charles handy, there are four types of culture i.e. power, role, task and person. This was stated by Charles in the year 1999. The various aspects involved in Handy's cultural model are given below - Power culture-In this type of organisation where power culture is followed, power is given to some respective individuals. They have the authority to communicate organisational goals and objectives among employees and subordinates. In this type of culture, there are some regulations and rules. People who have power within organisation are responsible for taking and making decisions. It is not necessary that decisions taken by them are best for long term interest of the company (Cavusgil, and et. al., 2014). Power culture is a strong culture but it may lead to toxic consequences sometimes. distribution of power is about an extent to which management of an organisation is open to be working with top- down and bottom up approach. In this, power remain in hands of some people and they are authorized to take the effective decisions. They can able to delegate the responsibilities to other staff members. In power culture, manager can be partial to other person. 10
Paraphrase This Document
Need a fresh take? Get an instant paraphrase of this document with our AI Paraphraser
Task culture-In this type of culture, various teams are made for doing a particular project. In other words, teams are formed within company for addressing specific problems or issues. Task is an important aspect and thus power in team changes continuously. The shifting of power takes place depending upon team members and the status of project or problem. Several team are created within an organisation for attaining goals and targets. Other factors includes solving various organisational issues. In context of Capella Kempinski, several teams are made for achieving goals and objectives in assigned time frame. Individuals having similar interests and preferences forms teams. Each team has four to five members and they all contribute to accomplish project assigned in specified time frame (Thomas,and Peterson, 2016). The effectiveness of team is determined by team dynamic. If teams are having right type of skills, leadership and personalities, team work is creative and productive. Person culture-The person culture is one in which individuals or employees see themselves as unique and more superior to the firm. The presence of organisation is there in order to make people work effectively. When an organisation is following person culture, it includes collection of people who are working in similar firm.In person culture, people see themselves as superior and unique to company. The employees working in Capella Kempinski are working for achieving organisational goals. People working in this firm are more concerned about objectives of the company (Emmerling, Boyatzis, and Emmerling, 2012). Employees work hard and this reflects their loyalty towards management of company. Role culture-In this type of culture, there are some rules and regulations. These are said to be highly controlled organisational cultures. In this, each and every individual working in the firm knows what are the roles and responsibilities of company. Power of role culture is estimated by determining position of power of the individual in organisational structure. The organisational structure which are generally tall adopts role culture. The decision making process in role culture is not quick, it is slow. Organisations which adopts this type of culture are said to take less risks while running business. The role culture adopting organisations are bureaucratic. In this type of culture, different members of staffare delegate roles and responsibilities depending upon their interests, educational qualification, and specialization top extract better out of them. Every individual is responsible for taking ownership to perform task assigned to them. 11
It is concluded from the above discussed cultures, Capella Kempinski is able to make effective actions for determining market conditions take initiative for positive working culture. This helps in enhancing productivity and efficiency of the company. Practical issues There are various multinational companies which integrate with other small or big firms for reducing the amount of risk generated in running a business. When the organisation has to provide services in developing countries then it has to conduct an effective research. There are various practical issues and ways for overcoming which are mentioned below –Political risk– This is known as a kind of risk which a firm face when political influence affects running of successful businesses. According to this there are different political events and issues that affects profitability and efficiency of an organisation. Some of the political issues include that each and every country has its own regulations and way of working. If the government of a country is not stable, then establishing business in these countriesisnoteasy(Emotionalandsocialintelligence(French,R.,2015.)For overcoming these political barriers, it is necessary for Capella Kempinski to critically evaluate the consequences of starting providing services in countries. It is suggested to thisorganisationdevelopaneffectivemarketingstrategybeforerunningbusiness effectively. Communication barriers– A cross cultural management requires to have effective communication so that there will be less conflicts and smooth running of all operations. Communication in cross culture is defined as process of meditating, negotiating or exchange of culture differences of a single person by language or non-verbal gestures. This is very important for carrying out business successfully. Every country has it’ s own language in which people communicate. For doing business in different countries, Capella kempinski requires to analyse more about language used in different regions, culture of people, etc. Some candidates can be recruited by this organisation for enabling communication between people from different culture. Recommendations There are several recommendations for Capella kampinski after doing the above report. There is huge chance of this organisation to get success in different countries. The following recommendations will help the organisation for expanding it’s business in an effective manner. It 12
is advised for this organisation to effectively conduct a research that will analyse culture of different region, behaviour of people, customer attitude, population, political stability, rules and regulations given by government etc. after evaluating these factors, Capella Kampinski is able to easily implement operations in different countries. There are following recommendations made for this organisation It is essential for countries to identify various factors like culture and customs before expanding business. People working in Capella Kampinski are ready to adopt culture of other countries and people for working in those areas. As this company wants to expand it’s services in China and Russia it is important for this company to know about each country’s consumers and the culture followed by them. Russian population is considered to be more attracted towards travelling, trekking and experiencing adventure. On the other hand, China people are more attracted towards culture. So, the analyses of both countries suggests that it is more easy for Capella Kampinski to start business in Russia. It is advisable for Capella kampinski to localise the brand and create positive brand image in front of customers. Marketing of organisation is always a great option while increasing brand image. This increment results in attractinga lot of customers towards brand. In context of Capella kampinski it is seen that it is easier to create brand image in Russian market than China market. Population of Russia is more prone towards having positive attitude for creativity and innovation. This is a great opportunity for increasing customer base. Russian people have more fond of travelling and exploring new places. So Capella kampinski has opportunity to expand business in this country. A right kind of marketing done at right time will provide best results to the company. Capella kampinski can attract Russian customers by providing discounts on holiday packages, giving extra benefits on festive time (). These are ways by which customers van be promoted in an effective manner. Culture of Russia and customer’s interest affects the company in a positive manner. There is a huge impact of rules and regulations given by government on the business operationsandactivitiesofCapellakampinski.Therearestrictregulationsfollowedby government of China. So this can have negative impact on smooth running of business. It will cost less for Capella kampinski to expand business in Russia as it has lowest registration fees across the world. 13
Secure Best Marks with AI Grader
Need help grading? Try our AI Grader for instant feedback on your assignments.
CONCLUSION From the above discussion, it has been analysed that it is important for every company to have proper cross culture management as it helps in reducing barriers to operate in more than one country. Different countries have different cultures and they are different form one another. It is essential for firms to adopt requisite structure and grab benefits. Effectiveness of business can be increased by Managerial personnel by adopting and applying tools ofcross- culture and manage diversity. Moreover, cross cultural management is a way of effectively promoting progress, development and improving communication to provide the better alternatives. There has been studied about the cultural analysis of different countries such as China and Russia by using Hofstede and Handy's cultural model. The Hofstede model stated about impact of culture in social group and on the other hand, Handy culture model is to rules which help in relate the organisational culture with structure. These both are helpful in create the awareness about different countries and also its values. When company conduct its business in different culture then it need to understand business environment to enlarge market share in to the new geographical region. It helps in provide advantages to company by enhancing productivity level. 14
REFERENCES Books and Journals Baruch, Y. and et. al., 2013. Exploring international work: Types and dimensions of global careers.The International Journal of Human Resource Management. 24(12). pp.2369- 2393. Brannen, M. Y., Piekkari, R. and Tietze, S., 2017. The multifaceted role of language in internationalbusiness:Unpackingtheforms,functionsandfeaturesofacritical challenge to MNC theory and performance. InLanguage in international businesspp. 139-162). Palgrave Macmillan, Cham. Briscoe, D., Tarique, I. and Schuler, R., 2012.International human resource management: Policies and practices for multinational enterprises. Routledge. Caligiuri, P. and Tarique, I., 2012. Dynamic cross-cultural competencies and global leadership effectiveness.Journal of World Business. 47(4). pp.612-622. Cavusgil, S. T. and et. al., 2014.International business. Pearson Australia. Emmerling, R., Boyatzis, R. E. and Emmerling, R. J., 2012. Emotional and social intelligence competencies:crossculturalimplications.CrossCulturalManagement:An International Journal. French, R., 2015.Cross-cultural management in work organisations. Kogan Page Publishers. Gillespie, K., 2015.Global marketing. Routledge. Hutzschenreuter, T., Kleindienst, I. and Lange, S., 2014. Added psychic distance stimuli and MNE performance: Performance effects of added cultural, governance, geographic, and economicdistanceinMNEs'internationalexpansion.JournalofInternational Management. 20(1), pp.38-54. Kim, Y. J. and Van Dyne, L., 2012. Cultural intelligence and international leadership potential: The importance of contact for members of the majority.Applied psychology. 61(2). pp.272-294. Kreps, C., 2013.Liberating culture: Cross-cultural perspectives on museums, curation and heritage preservation. Routledge. Luthans, F. and Doh, J. P., 2012.International management: Culture, strategy, and behavior. New York: McGraw-Hill. Thomas, D. C. and Peterson, M. F., 2016.Cross-cultural management: Essential concepts. Sage Publications. Online https://blog.hqrevenue.com/german-hotel-market-increasing-competitive-pressure-despite-high- demand(German hospitality industry. 2019) 15