Report on HR-related issues of a partial production shift to offshore locations

The report discusses the opportunities and risks associated with a move to another country, issues around marketing, logistics, legal, and purchasing, HR-related considerations with a shift in production in offshore locations, and the Hofstede model of culture. It emphasizes the importance of cross-cultural capabilities and the need to understand the cultural differences while expanding the production into another country.

Developing cross-
cultural capabilities

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Opportunities and risks in association with a move to another country.....................................1
Issues around marketing, logistics, legal and purchasing...........................................................3
Literature review on cross-cultural capability of Crown Northampton in terms of associated
country.........................................................................................................................................4
HR related considerations with a shift in production in offshore locations................................5
Hofstede model of culture...........................................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................8

INTRODUCTION
Cross-cultural capabilities is described as the knowledge and ability of understanding
other people who belong from different cultures and get indulge with them in an efficient way.
There are several elements involved in cross-cultural capability which are communication,
collaboration, context and many more. In terms of shift in production to offshore areas, there are
many problems associated with human resource such as data security, legal framework and so on
(Amzaleg and Masry-Herzallah, 2021). The report is Crown Northampton, United Kingdom
which is a small shoe manufacturing business established in the year 1908. The design of all the
shoes are based on British traditions and the heritage of particular location. The report involves
risks and opportunities in the shift of manufacturing, issues associated with all the departments,
Hofstede model and HR related considerations.
MAIN BODY
Opportunities and risks in association with a move to another country
In case of Crown Northampton, they decided to expand their production into China which
is considered as the most developed country. There are many opportunities that companies
receive during expansion but at the same point of time, by looking at the present scenario, there
are low cost platforms which creates a risk for business organisations while doing manufacturing
of all the products. In context with small businesses of United Kingdom, they mainly do the
business in China because it is considered as the favourite location for expansion though it
carries certain risks but also provides several opportunities. In context with chosen company, it is
being explained below: -
Opportunities: -
 Increased level of competitive advantage: - In association with expanding the production
into another country, the business gets a high opportunity to earn competitive advantage
in comparison with other small manufacturing businesses. While doing expansion into
another country, strong and effective brand awareness is built up which enhances the
image of company (Gonzalez and de Melo, 2021). It was an opportunity for the business
to do manufacturing in China because they has a developed marketplace which provides
many advantages to small businesses.
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 Lower labour costs: - In context with expanding the manufacturing into another country,
costs are the most important factor to be considered while running the business. So, it
was an opportunity for Crown Northampton to get access to low labour costs in China. In
terms of this, as a small business , company was able to do manufacturing at low
operational costs which is beneficial in maintaining the economy in a positive way. Right technological resources: - In present scenario, technology is the most significant
element on which every business should focus in order to attract maximum number of
consumers. So, in accordance with chosen shoe manufacturing company, it was an
opportunity for them because in China, high and advanced technologies are used which
provides many benefits for their small business to remain in regular contact with all
audiences.
Risks: -
 Political instability: - In context with different countries, there are different types of
culture due to which lot of instability gets arise especially in case of political terms. In
case of Crown Northampton, as they decided to expand their manufacturing in China,
their political climate was totally different in comparison with their own country
(Velásquez and Lara, 2021). So, it was a risk for their shoe company as they might face
instability in China and could suffer high amount of losses.
 Operational inefficiency: - It is considered as a major risk for the business because if they
are performing their operations into their own country, then company is well-aware about
the cultural capabilities but by doing expansion into another country, there are many risks
which might be faced by the business organisation in terms of culture, laws and many
more. In context with Crown Northampton, as they decided to expand their
manufacturing into China, operational inefficiency was a risk for them which created
many obstacles for their business.
 Shortening of supply lines: - In case of small manufacturing business, it becomes difficult
for the company to produce their products into China and then shipping it internationally
(Van de Wetering, 2021). There are several risks associated with it because it is both
time-consuming and at the same point of time, it involves high costs.
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Issues around marketing, logistics, legal and purchasing
In business organisations, there are several issues which are encountered the field of
management due to both internal and external elements. In context with Crown Northampton, it
is being explained below: -
 Purchasing issues: - While doing expansion in manufacturing to another country, the
company faces many problems and one of them is purchase behaviour. In every country,
there is a behaviour gap across each individual which creates an issue for business also.
The purchase behaviour of people gets affected by many factors like designing of
products and so on. Every country follows different types of culture like language,
dressing style and all decisions which are being taken is also based on their cultural
capabilities only (Gómez Sánchez, Schalock and Verdugo Alonso, 2021). In context
with chosen small business, as they decided to expand their production into China, they
might face the issue of purchasing gap because company cannot make predictions that
people living in China would prefer their products.
 Marketing issues: - In order to run a business in a proper manner, the most significant
thing is culture which must be followed efficiently. Marketing can be done through
several methods such as advertising, communication and so on. In context with the aspect
of advertising, the most important thing which is involved is language as all the people
buy products on the basis of those advertisements only. In accordance with chosen
business, they did the expansion into China through which they also need to do certain
modifications about marketing philosophies as people don't has an idea about another
country culture due to which various marketing issues would take place.
 Legal issues: - There are several legal issues which takes place while doing business in
another country. All business organisations might face legal issues and compliances
because government of every country follows different processes and set up diverse legal
policies which are not similar with respect to their own country. In accordance with
Crown Northampton, they decided to do manufacturing into China in which they may
face many legal problems like in context with any taxes, import duties and many more.
 Logistics issues: - There are several logistics issues like changes in government
regulations, economy modifications and many more. In context with doing expansion
into another country, company might face issue regarding currency due to which many
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additional problems also takes place irrespective of the future. Besides this, a company
might face the issue of distance between countries as during expansion of manufacturing
in another country, it takes lot of time to launch the product and at the same point of time
workers also don't has much idea about another preferences of another country people.
There are lot of cultural differences which takes place whether a business is carried on
internationally or globally because it is impossible for a business organisation to understand
about cultural differences quickly. In case of chosen small business, they also faced several
difficulties in maintaining and managing relationships because culture in both China and
Northampton is different (Killick and Foster, 2021). For example, in china, people don't prefer
communicating through mobile phones but in Northampton, telephonic conversation was
preferred. Due to this, it becomes difficult for them to change their way of communication with
other people and maintain effective relationship with everyone. In many cases, it happens that
when company do expansion into another country, they get several opportunities but on the other
hand, there are different issues also that business organisations might face in the future.
Literature review on cross-cultural capability of Crown Northampton in terms of associated
country
As per the view point of Ying Liu, Keyong Dong, 2021, china is the only country which
focuses on the performance of employees in Chinese culture and foreign decision makers. There
are several types of elements and culture on the basis of which relationships are managed and
maintained. With respect to China, a proper and organised culture is indulged but besides this, it
was also analysed that in certain aspects, they don't has a well-developed culture. So, in
accordance with this, the government implemented several cultural interventions which is
engaged with different elements like coordinated organised culture, cross-cultural
communication and many more.
It has been also analysed that all the people doesn't belong from same kind of culture so
company provides job role to the employee in their specific location from where they belong to
and has idea about cultural aspects. By determining Hofstede model, it was seen that Crown
Northampton adopts individualism culture in order to maintain good relationships with everyone
and achieve long term growth. Cross-cultural capabilities are required at every level and has an
ability to perform multiple tasks through which productivity can be increased.
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HR related considerations with a shift in production in offshore locations
During the expansion of company into another country, there are several considerations
associated with it which is being explained below: -
 Training: - This is one of the main consideration in which offshoring requires some extra
training for all the affected employees so that they could perform each HR related activity
in an efficient way (Buzzao and Rizzi, 2021). As there are different culture and
behaviour across the people of each country, so training is needed at every level in order
to interact with both colleagues and customers.
 Cultural bridge: - As the operations are set up in offshore locations, the human resource
department has to build up a cultural bridge within both domestic and overseas location.
It has been examined that due to differences in culture, employees also prefer to do the
work according to their own culture. Due to this, major gap gets occur in between both
the locations so proper benefits should be provided as per the location aspect.
Hofstede model of culture
Hofstede theory was created in 1980s by the researcher, Geert Hofstede and is purely
based on culture, consisting a framework which is used to understand the various forms of
cultures in alternate countries of the world and also identify the ways in which business is done
among different cultures (Boubakri and et. al., 2016). The Hofstede model theory consists of six
key features which are based on national culture and are as follows:
 Power distance index: - It is defined as the degree of inequality as the
institutions/organisations having less powerful members accepts and also expect that it's
power is unequally distributed. A high/low PDI score indicates whether that society
accepts or do not accepts the distribution of powers which are shared among peoples. In
context with Crown Northampton, the powers are equally shared between the peoples as
they have the power to share their reviews or ideas with other members of the
organisation and hence it follows the low PDI score.
 Individualism versus collectivism: -It is defined as degree of independence that a
particular society maintains among its members. Individualism refers to framework in
which individuals are expected to take care of themselves whereas, collectivism refers to
a framework where ones can expect from other members/relatives to look after them. In
reference with Crown Northampton, the members of the organization are highly
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individualist as members from the early age are taught to take care of themselves and
think how they can contribute for the organization.
 Masculinity versus femininity : -It is defined as the roles that are distributed among the
males and females as the values are mainly considered in the societies(Buafai and
Khunon, 2016). Masculinity, women in a respective society tends to show different
values as in feminine societies, women share its views equally with men. High MAS
score indicates that achievements as well as money are important whereas, low MAS
score indicates that oriented relations and focus on quality of life. In context with Crown
Northampton, it follows high MAS score as the work is equally distributed among the
members and is not differentiated between males and females.
 Long term versus short term orientation : -It is associated with the organization or society
in which it has to maintain actions with its past or the challenges of the present and
future(Sannino and et. al., 2020). Countries that shows lower degree index indicates that
the traditions are kept and honored whereas, the countries that shows the higher degree
index indicates the adaptation, realistic problem solving as a necessity. With reference to
Crown Northampton, it follows the long term orientation dimension as the members of
the organization are future oriented. They focus on the future and avoid short term
success.
 Indulgence versus restraint: -It is defined as degree of freedom as strong/weak controls
are required to fulfil their desires. In reference with Crown Northampton, members in the
organization are classified by high score in indulgence as they possess positive attitude.
 Uncertainty avoidance index: -UAI expresses the degree consists the members of
organization feels uncomfortable with uncertainty. In reference with Crown
Northampton, it follows low UAI dimensions as it maintains a relaxed attitude by which
tolerance for ambiguity is acceptable.
CONCLUSION
From the above report it has been concluded that there are lot of differences in cultural
capabilities within every country which creates both opportunities and risks for the business
organisations. While expanding the production into another country, there are different
opportunities like growth in competitive advantage but at the same point of time, there are
certain risks also like political instability. When the business manufacture in another country,
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there are different issues in context with marketing, purchasing which creates many obstacles for
the company. It was being determined that when consumers purchase the product, they buy it on
the basis of their own culture else they don't prefer to purchase it. It was also being examined
that as per Hofstede model of culture, it is associated with several elements like power distance
index through which it was analysed that power was distributed equally across the country.
REFERENCES
Books and Journals
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Amzaleg, M. and Masry-Herzallah, A., 2021. Cultural dimensions and skills in the 21st century:
the Israeli education system as a case study. Pedagogy, Culture & Society, pp.1-21.
Boubakri, N and et. al., 2016. National culture and privatization: The relationship between
collectivism and residual state ownership. Journal of International Business
Studies, 47(2), pp.170-190.
Buafai, T. and Khunon, S., 2016. Relationship between Hofstede’s cultural dimensions and
tourism product satisfaction. International Journal of Economics and Management
Engineering, 10(8), pp.2994-2998.
Buzzao, G. and Rizzi, F., 2021. On the conceptualization and measurement of dynamic
capabilities for sustainability: Building theory through a systematic literature review.
Business Strategy and the Environment, 30(1), pp.135-175.
Gómez Sánchez, L.E., Schalock, R.L. and Verdugo Alonso, M.Á., 2021. A new paradigm in the
field of intellectual and developmental disabilities: Characteristics and evaluation.
Psicothema.
Gonzalez, R.V.D. and de Melo, T.M., 2021. How do autonomy, cohesion and integration of
teamwork impact the dynamic capability?. Total Quality Management & Business
Excellence, 32(7-8), pp.794-810.
Killick, D. and Foster, M., 2021. Learner Relationships in Global Higher Education: A Critical
Pedagogy for a Multicultural World. Routledge.
Sannino, G and et. al., 2020. Cultural dimensions, Global Reporting Initiatives commitment, and
corporate social responsibility issues: New evidence from Organisation for Economic
Co‐operation and Development banks. Corporate Social Responsibility and
Environmental Management, 27(4), pp.1653-1663.
Talalova, L. and Werthschulte, D.K., 2020. Adapting two cultures (a glance through the
Hofstede's cultural dimensions model). In FUNCTIONAL ASPECTS OF
INTERCULTURAL COMMUNICATION. TRANSLATION AND INTERPRETING
ISSUES (pp. 12-18).
Van de Wetering, R., 2021. IT ambidexterity and patient agility: the mediating role of digital
dynamic capability. arXiv preprint arXiv:2105.09013.
Velásquez, R.M.A. and Lara, J.V.M., 2021. Knowledge management in two universities before
and during the COVID-19 effect in Peru. Technology in Society, 64, p.101479.
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