Cross Cultural Management Implications For International Assignment

Cross Cultural
Management
Implications For
International
Expansion

EXECUTIVE SUMMARY
This study is based on cross cultural management which significantly affects the overall
functions of business. In this, study is based on Wanderer which is the chosen company for this
particular report. It is a leading travel agency which is offering wide range of customer services
at global level. In the modern business environment the key motive of the businesses is to attain
higher growth and success at global level. The present report contains the study over expansion
of business in different locations i.e. China and Russia. These two are recognised as the major
tourist attraction places and the growth within these two countries are effective for the
development of business at global level. In this culture analysis has been taken place among
China and Russia by applying ethnocentric and poly-centric. Along with this, Hofstede model
and Handy's cultural model helps the firm in adoption of culture of another country.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
OVERVIEW OF COMPANY................................................................................................1
CULTURAL ANALYSIS OF COUNTRIES........................................................................3
PRACTICAL ISSUE..............................................................................................................7
RECOMMENDATION..........................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
In present business world, cross cultural management can be defined as impact of all the
external factors on overall functioning of a particular business organisation and on staff as well.
It can be said that, diversified culture is something that is required to be understood by
management of a company. In order to engage employees with different culture in a particular
task, it is necessary for manager to develop understanding among them within a particular firm.
Along with this, existing report is going to be enclosed with a business organisation named as
Wanderer, which can be considered as one of leading travel agency performing it's services like
offering accommodation, adventurous holiday packages, trek arrangements among different
attractive locations and so on in all over Germany (Baruch and et. al., 2013). Board of directors
(BOD) of this agency has decided to expand its business operations among two developing
countries that are having growing economic conditions and these are China and Russia. On the
other hand, report will put light on overview of Wanderer, cultural analysis of both the countries,
practical issues that firm is going to faced while business expansion and recommendations will
be placed as well in the last portion of the assessment.
MAIN BODY
OVERVIEW OF COMPANY
Wanderer is being considered as one of the leading travel business agency of Germany,
which is offering targeted customers with number of services like accommodation, adventurous
holiday packages, arrangements for unique trek at most exotic mountains from all over the
world. Basically, this agency was launched in Munich, Germany in the year of 2014 and since
then firm has gained high growth within Germany and at international level as well through
providing people (travellers) with what they are looking for (Brannen, Piekkari and Tietze,
2017). On the other hand, if it is talked about travel and tourism business industry of Germany
then it is the eighth most visited country in all over the globe, considering the total of 407.26
million overnights during 2012. Along with this, 68.83 million nights out of 407.26 million
overnights belongs to foreign visitors.
Wanderer's size
In present time, Wanderer has around 1500 employees in all over the world that are
serving to targeted customers (adventure seekers) in much efficient and appropriate manner.
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Along with this, Wanderer is having around 200 offices in all over Germany and in other nations
as well and this has helped them in becoming a well known brand in all over world. On the other
hand, agency has basically targeting high along with middle level income generators who has the
age in between 20 to 45. the reason behind this is that, firm has found that this age group mainly
likes to visit new places.
Aim of Wanderer
Wanderer's aim is to become the leading travel and tourism business organisation in all
over the world through filling their clients with full of adrenaline, enthusiasm and through
satisfying their special and unique needs like expedition, trek and so on (Briscoe, Tarique and
Schuler, 2012). In present context, to promote the business in all over the world, business
organisation has basically utilised many of media like social, television and so on. Some of other
digital tools like e-mail marketing, customer service, website, live chats and many more has also
been utilised by the business company. Another aim, that came in front of Wanderer is to operate
their business in every single country of the world and this has raised ample number of
opportunities like expanding business and so on through offering quality services among
customers of nations like Russia and China.
Value creation strategy
Unique and exotic trek, wild life accommodation and with quality, where customers
could effectively feel adrenaline rush, fun and stays satisfied with all the adventurous related acts
that firm is offering to them. This is being considered as one of the effective value creation
strategy that Wanderer has made through which, company could gain client's trust along with
reliability as well through providing them with both uniqueness and quality. What board of
directors thinks is that, the best approach to stay present in today's business environment is first
to offer individuals with proper quality as this could effectively be considered as one of the best
and steady approach to sustain within the market for a longer period of time. Through this, both
external and internal stakeholders would not loose their interest from Wanderer's operations
(Caligiuri and Tarique, 2012).
Organisational structure
Basically, the organisational structure that has been followed by board of directors of
Wanderer is functional, where all the details in regards to performing a task gets distributed in a
systematic manner. From top level to medium and then to lower level management, this is being
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considered as the flow stays of overall information or data shifts from one department to another.
Along with this, at the time of expanding business company in China and Russia, firm would
require to change their organisational structure from functional to task based. This will lead them
to improve the overall performance level at international level. On the other hand, both of these
structures of a particular organisation carries both advantages and disadvantages. Here, it is
required to take chances in order to enhance the coordination level among employees. Since,
they will be unaware of In spite of the fact that inside creating nation the organization should be
additional careful of the outer condition because of precarious political and government
condition (Cavusgil and et. al., 2014). So ramifications of individual structure and help the
organization to manage the dynamic condition and capacity deliberately. Besides, from the at
first years the organization has likewise embraced the most recent innovation and continue
brining the most recent advancement.
CULTURAL ANALYSIS OF COUNTRIES
It has been identified with the help of help of present scenario of an industry that there is
high level of competition within the marketplace which directly affects the decision making
process of an organisation. Along with this, it has also been determined that the ability to attain
organisational objectives has also been affected in a prompt manner. Therefore, organisational
culture concept is dynamic in nature which includes belief, values, experience, philosophies,
background and so on which directly as well as indirectly affect on both leadership and
individual. In order to survive within the competitive marketplace, it has been identified that
organisation requires capable and skilled employees who can take initiative for the attainment of
goals and objectives of the company. By continuous improvement in the process of globalisation,
employees of an organisation become multicultural and highly diverse which cause huge
challenge for the Human Resource manager of an organisation. It has also been concluded that
each and every country have their own rules in context of employment which are different from
place to place and region to region (Emmerling, Boyatzis and Emmerling, 2012).
As mentioned by Wagner (2017), Russian culture is considering long and rich history,
ballet, steeped in literature, classical music and painting. On the other hand, Russia is also having
visual cultural past and this could effectively be seen through colours that they use along with the
costumes that are considering a range of religious symbols. Away with this, if it is talked about
Chinese culture then, there are ample number of reasons present for business firms to expand
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operations in China. Basically, this nation has become one of the popular business country. But,
Chinese culture and local structures of the business, which raise a range of concerns for multi
national companies. The main reason that came in front i.e. Chinese are specifically considering
the two factors like non-verbal society and high-context. Knowledge of Chinese people regularly
uplifts the conversations, which basically can be considered as one of the issue that impacts
negatively. The Chinese rely heavily on facial expressions and voice tone to determine how
someone feels. If it is talked about hiring and recruiting techniques then Wanderer would require
to make alterations in these existing techniques (French, 2015). The main reason that came in
front i.e. both the nations China and Russia are having different cultural and other perspectives
from Germany where the company has to make modifications in order to recruit members who
are already having good knowledge in regards to the culture followed by respective countries. It
can be said that, highly talented manpower is not that much easy for Wanderer to find out in both
the nations and the vital reason that came in front i.e. low investigation done by firm. This could
be considered as a threat for Wanderer that may impact negatively upon decisions made by
Board of Directors of Wanderer.
On the other hand, when it comes to recruiting personnel in order to improve the market
share of Wanderer, it will be required for HR department of this company to first analyse the
business environment of both the nations and then develop recruiting strategy. This will lead
firm in staffing the most suitable employees in Wanderer. Basically, this action may aid
Wanderer in enhancing the profit margins and improve productivity as well. In present context, a
few international recruitment approaches are ethnocentric, geocentric, poly centric, regiocentric
and these are presented underneath:
Ethnocentric approach: It is one of the main international recruitment method where HR
hires right person for right job for international businesses according to skills needed and
willingness of candidate to mix with culture of company. In this recruitment procedure, company
hires skilled employees for their different functional departments. Key positions in company are
filled with the staff members of parent country. Here human resource department makes
recruitment right person, for their business across globe (Gillespie, 2015). Main reason for
adopting this approach is that employee who belongs to parent company will posses required
competence for vacant position. Recruitment process where ethnocentric approach can be
applied while making selection of pool candidates are creating pool, skill assessment, self
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selection and many other ways. Any of these ways can be adopted by company according to their
requirement.
Polycentric approach: It is international recruitment method where HR hires personnel
for international businesses. National of host country are to be recruited for managerial positions
in order to carried out operations of subsidiary organisation. Reason behind using this approach
is that locals of host country know about their culture in better manner and also can run business
in an effective manner as compare to foreign counterparts. In this approach host country can be
used where host country managers are made responsible for operations of subsidiary company.
Main reason for adopting this approach is that people of host country will be better aware of their
culture. This will help them in conducting their task in a more better and effective manner as
compared to any other individual. Another advantage is that this helps in cost saving in
conducting their foreign operations by company (Hutzschenreuter, Kleindienst and Lange,
2014). Also, it can also help in building a better relationship across borders. This also helps in
increasing brand image of company in host country as well as in international market.
Both of these approaches can effectively be utilised by Wanderer's HR management in
order to recruit much more effective and efficient staff members. On the other side, company
was also aiming to enhance culture adaptation of employees of both Russia and China. Here, it
can be said that company would require to have good number of foreign investors as they may
lead to develop effective results within specified time frame. Thus, it is essential for Wanderer to
identify different range of trends that both the countries related to their culture and so on. Away
with this, it can be said that there are some of models of culture which may aid Wanderer in
meeting the requirements in much effective and efficient manner as well. On the other hand,
Wanderer's HR department 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 is framework for the cross- cultural communication that created through
Geert Hofstede. This explains effects of culture of society on values of members. It contains
different dimensions that vary from one another and make the concept underneath balancing the
principles of staff and the environment of excellent work (Kim and Van Dyne, 2012). This
model was developed in 1980's, which focused primarily on comparing beliefs with cultures
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across distinct nations. Hofstede model explains relationship among behaviour and values
through stricture based on the factor analysis. Some of its dimensions are listed below:
Individualist: It this dimension an employee attempts to identify individual or others
power to construct a social communication system within a particular company setting. The
individualist stats that the achievement of individual staff depends on being self-sufficient and
self-reliant to assist them achieve the organizational objective in their best efforts. Hence, with
respect to Wanderer, its executives are making an attempt to recognize their achievement and
promote them to discuss or communicate thoughts to other staff member to improve their
ethnocentric social platform.
Collectivist: This dimension is totally opposite to individualism because it includes
exactly the sort of resources that prefers to work in teams and its primary achievement lies in
operating while working as a group within company (Kreps, 2013). It is being analysed that
Wanderer, is the firm where cooperation and honesty of team employees is becoming a main
focus for them company that support to develop their market across a poly-centric strategy.
Therefore manager motivate each individual to engage in exchanging ideas or opinions and to
direct them to support each other's in beliefs to enhance general organizational efficiency.
Power Distance: It explains an extent to which the members which are not more
powerful in an organisation accepts and expect about distribution of the power that taken place in
an unequal manner. In context to Wanderer, power is distributed equally between all their
irrespective designations. All the employees can gain the equal rights and benefits.
Masculinity vs. Feminity: Under this, masculinity is related to the preference in the
society for heroism, materials rewards, achievement and the assertiveness for success. The
counterpart of masculinity represents preference for caring, modesty and cooperation for quality
of life. On the other hand, feminity is for preference for modesty, caring and cooperation for
weak. Under this, there is a need to Wanderer makes attempt to give better opportunities and also
provide the training to all the employees whether they are male or female so that they all can
work together and focus on enhancing the productivity of business (Luthans and Doh, 2012).
Uncertainty Avoidance: It expresses degree to which employees of an organisation feel
uncomfortable with ambiguity and uncertainty. The main issue that arise here is related to how
Wanderer deals with fact that future can never known. In this, low level of the uncertainty
avoidance indicate about willingness to accept risk, embrace change and work outside rules. This
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indicated the entrepreneurial national culture. On the other hand, high uncertainty level
avoidance suggest support of data, clarity of responsibility and rules.
Handy's cultural model
Handy explains culture as way the people love and also follow the unwritten norms and
rules. This framework is given through the Charles Handy in year 1999. The different aspects
involved in Handy's cultural model mention below:
Power culture- The 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 (Thomas and Peterson, 2016). In such
kind of culture, manager can be partial to other person.
Task culture- It forms when the teams in company are to be formed to address p-articular
issues. In an organisation, teams are developed to attain set target or solve issues to follow task
culture. In Wanderer, all the employees work in a team for achieve objectives within given time
period. The people with common specialisation and interests come together to form team. In a
team, there are mainly four to five members and they all contribute to accomplish task in
innovative manner.
Person culture- In person culture, people see themselves as superior and unique to
company. In this, Wanderer exists for the people to work effectively. The employees are
concerned regarding own self than company. In this manner, they are loyal towards management
and work in favour of firm.
Role culture- In this culture, where all the staff member's are delegate the roles and
responsibilities on the basis of educational qualification, interest and specialization top extract
better out of them (Brannen, Piekkari and Tietze, 2017). Each person is accountable for
something and take ownership of work that assigned to them.
From the above mention different culture, Wanderer company makes the better action in
determining condition of market in order to take the initiative to giving positive working culture
that aids in increasing high productivity as well as proficiency.
PRACTICAL ISSUE
The multinational companies at times integrate with different tour operators and travel
agencies and they also formulate strategic alliance with same or different form of business in
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order to minimise chances of risk factor. To diversify services in to developing countries, there is
a need to Wanderer organisation to conduct an investigation to know about the marketing
strategies and then implement its plan in an effective manner. Under this, there are some
practical issues and ways to overcome mention below:
Political risk- It is a kind of risk that faced through organisations, government and
investors that political events and decisions will be effect profitability of business. In context to
Russia and China, there are different opportunities to company to expand business. There are
some political risks like each country have different regulations (Emmerling, Boyatzis and
Emmerling, 2012). Issues such as instability of government, change in government policies
impact on organisation and its productivity in negative manner. In order to overcome from these
issues, there is a need to Wanderer to reach on whole market and develop its strategy before
expanding the business in different market.
Communication barrier- The communication in cross culture is process of negotiating,
mediating sand exchanging culture differences of one by language, space relationships and non-
verbal gestures. It plays a necessary role in carried out the business in successful manner. As in
Russia and China, language, way of taking, habits all are different from the each other. In order
to conduct the business in these countries, Wanderer requires to know about the language of
people, tourists needs, preferences etc. To overcome from this issue, Wanderer can recruit local
candidates so that they can able to deal with clients or tourists for the purpose of fulfil their
requirements (French, 2015).
RECOMMENDATION
As per the above report there is recommendation for the Wanderer company. This
company should expand its travel business in Russia. This recommendation will help respective
company to successful expand its business in Russia as well as implement its organisational
activates in effective and efficient way. For expanding business in new country or area,
respective company needs to identify its culture, people's attitude, behaviour, customers ,
government rules or regulations, laws and so on. By analysing all these factors Wanderer
company can easily implement its business activities as well as influences customers. In order to
increase sale and profits of respective company by expanding business in Russia some
recommendation are mention below:
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 Culture and customs of country is very important to identify before expanding business
into that area. People or customers of Russian are open towards adopting different culture
and they like to experience new things. Where as China is culture sensitive towards their
culture and it will be difficult for respective organisation to work according to its culture.
People of Russia are more travel enthusiastic and they travel more often. This will be
very helpful for Wanderer company to increase its sales as well as profitability by
providing its various holiday packages to customers.
 For Wanderer company it is very important to localize its brand and develop positive
image of brand. Marketing of its play a crucial role in enhancing brand image and
attracting large number of customers towards company. It will be easy for company to
creatively market it's brand in Russia market as compare to China. People of Russia have
positive attitude towards creativity and innovation which can be consider as a
opportunities for respective company to provide new and innovation services and
enhance its customer base. Customers of Russia have interest in travelling and Wanderer
company to market it brand in such as way that it will lead to attract more and more
customers. Wanderer company have to promote its holiday packages and tracking
facilities to Russian market area. Interest of customer and culture of Russia will have
positive impact on respective company.
Government rules and regulations have major impact on conducting business activities in
different country. China have very strict legislations and government policies which can effect
business in negative manner. Expanding business in Russia will be cheaper as it has lowest
registration fees in the world. Russia has less strict rules than China which will help Wanderer's
business to smoothly conducts its operations with interference of political or government body.
CONCLUSION
It has been concluded from above mention report that cross culture is related to dealing
with different cultural areas. The culture in various countries are differ from the each other and it
is necessary for company to follow the structure and gain benefits. Managerial personnel can
increase the business effectiveness with the helps of applying cross- cultural tools to manage the
diversity. It has been studied that the cross cultural management is an effective way to promote
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
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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.
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REFERENCES
Books and Journals
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Brannen, M. Y., Piekkari, R. and Tietze, S., 2017. The multifaceted role of language in
international business: Unpacking the forms, functions and features of a critical
challenge to MNC theory and performance. In Language in international business pp.
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: cross cultural implications. Cross Cultural Management: 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
economic distance in MNEs' international expansion. Journal of International
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
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Russian Culture: Facts, Customs & Traditions. 2017. [Online]. Available through :
<https://www.livescience.com/44154-russian-culture.html>.
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