Managing Across the Cultures

This article discusses the importance of managing cultural differences in international business, using the case of Hertfordshire Business School's expansion into Chile. It covers topics such as external analysis, SWOT analysis, and marketing strategies.

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MANAGING ACROSS THE CULTURES
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1-9-2019

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Contents
Introduction................................................................................................................................2
External analysis........................................................................................................................3
PEST analysis.........................................................................................................................3
Internal analysis/ SWOT............................................................................................................4
Standardized and adaptive strategies.........................................................................................5
Marketing theory........................................................................................................................7
Cultural difference.....................................................................................................................9
Conclusion................................................................................................................................10
References................................................................................................................................11
Appendix 1...............................................................................................................................13
SWOT Table........................................................................................................................13

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Introduction
In today’s world, companies are gaining opportunities while going international,
nevertheless, there are various issues that a company has to face and handle while going
international like cultural differences in the home and the host country.
Culture is an important aspect while working in a global perspective organization. In an
organization, there are various cultures working together for the same objective. Managing
the culture is a difficult aspect for the company. In the report, the organizational case will be
considered for better understanding, the organization is Hertfordshire Business School, who
is willing to expand their business internationally, in this case, in Chile (Alvesson, 2016).
Hertfordshire University is located in Hatfield, the United Kingdom at De-Havilland. Part of
this university is this business school, which runs various courses. Moreover, Hertfordshire
Business School has link-ups with various other global universities. In the report, the external
analysis will be done in order to understand the external environment of Chile, where the
school is willing to enter. It is important to understand the internal aspects of the company
before expanding, for which the SWOT analysis of Hertfordshire Business School will be
considered in the report further (herts, 2018).

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External analysis
The initial aspect which is most important to consider is the external environment, which is
important to analyze. For this purpose, the PEST analysis will be conducted of Hertfordshire
Business School in Chile.
PEST analysis
1. Political environment – the multi-party system is adopted in the nation of Chile,
according to this system a president is awarded as both, chief of state with executive
powers and head of the government. The voting system is popular for the electing the
president, and it is the four-year contract, similar to that of United States. Considering
the political laws regarding education, the government is willing to spend on higher
education, which is observed to increase at a great pace in the preceding two decades
(Trivedi, 2016).
2. Economic environment – considering the stability of the economy of the nation, it is
stable and strong economy, who is focused over high support towards the primary
activities like the education sector, moreover, generally, positive changes are taken by
the country regarding the educational system. Therefore it can be said that the
economic factor is favorable for the company to expand.
3. Social environment – the social environment of the nation consists of community
welfare and individualistic society. While considering the religion, the majority of
residents are Roman Catholic or Protestant. The local community is responsible for
the higher education, which could be a challenging situation for the Hertfordshire
Business School to enter into the nation.
4. Technological environment – considering this factor of the environment, Chile is a
fast emerging nation, with the majority of youth. Moreover, the social media is great

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influencer among this nation. Moreover, the education system has also influenced due
to this reason, mobile learning technology has emerged in the nation due to this
reason (Ho, 2014).
Internal analysis/ SWOT
Another aspect to analyze is the internal factors of the Hertfordshire Business School, which
is analyzing the strengths and weakness of the school, which will be helpful in gaining
identifies opportunity and avoid certain threats. For this, one of the tools used is SWOT
analysis, from appendix 1:
Strengths
 Goodwill – the goodwill, brand name, and reputation of the company is really good,
which seems to be one of the strengths of the company, and this tends to enhance the
chances of brand recognition in the foreign market.
 Tie-ups with other universities – as already discussed, the tie-ups of the school is with
various other universities, which seems to be another strength of the company
 Awards gained – there are various awards gained by the organization, for instance
teaching excellence framework award, which indicates that the staff of the business
school are qualified, and have excellent teaching skills (Bull & Sitas, 2016)
Weakness
 Payment system – since the company is planning to invest in Chile, with a different
currency, a third party would be required by the organization for payment to be
received
 Competition – the competition would be very high in Chile, the reason being the
education is the responsibility of the local community (herts, 2018)

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Opportunities
 Growth opportunities – the growth opportunities increase while going international,
and scope to enter various other nations
 Increase customer database – through expansion, the organization will be able to
increase the database of customer (Adam & Kotler, 2014)
Threats
 Human resource availability – the availability of teaching experts is one of the threats
to the organization in Chile (Allen, 2017)
 Foreign exchange – fluency in foreign exchange can be one of the major threat to the
company and may affect the investment in the nation
Standardized and adaptive strategies
After understanding the SWOT of the Hertfordshire Business School, the marketing
strategies of the school could be either standardized or adoptive. Both the strategies have pros
and cons, to understand which strategy is suitable, it is important to understand both the
strategies.
The first strategy is a standardized strategy, where the organization to trade similar to that of
the home country in the host nation as well. The suitability of this strategy is where the
culture is similar to both the nations and no specific or big changes are to be brought to the
management process in the organization in both nations.
Whereas adaption strategy is understanding the cultural difference of both the nations, and
adapt the organization into the activities, which are preferred by the host country. This is
suitable where the culture has a large difference between both the countries.

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Understanding both the strategies, it can be said that Hertfordshire Business School would be
following adaption strategy among the two. This strategy shows the relevance of
customization among, for this school to enter into the education industry of Chile, it is
relevant for the company to understand the external environment of the host country and
identify the needs, requirements, and preference of the residents of Chile. Moreover, most
important is to analyze the educational system of Chile. And according to the finding and
analysis, the strategy is to be adapted. That is the school must provide the courses in English
as well as Chile language that is Spanish. Moreover, the courses and duration of courses is
also to be done according to Chile local education process, and systems (Chari & Feng, 2018)
Pros
 Local specification – the requirement of the local specification are considered with
this strategy. This is beneficial in this case because of the cultural difference, and the
requirement is to be considered in Chile
 Good local image – the local image created is good in this strategy, as their local
specification is included (Chung, 2015)
Cons
 High cost – the cost in this approach is very high, as this approach is not beneficial by
taking economies of scale. Therefore it can be said that this one of the disadvantages
of the adaption strategy
 Time-consuming – the time is very much consumed because of understanding of other
culture, and identify the requirement of the customers specifically, and then include to
the product mix

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 Know-how of the customers – one of the major issue is that the knowledge about the
customer is low of another culture, and the preferences and believes are difficult to
understand and indulge into the system and process (CultureWizard, 2018)
Marketing theory
Since the education is service provided by the organization to the students. The marketing
mix theory includes seven Ps. The 7P’s of Hertfordshire Business School are:
1. Product
As already discussed, the product strategy would be the adaption strategy for
Hertfordshire Business School, the reason being the cultural difference between UK
and Chile. Considering the product line, which will be similar to that of its original
product line, the only difference being the additional language with all the courses
available previously (Burdo, 2018). The courses the organization use to offer in UK
are nine courses for graduates, 15 courses of postgraduates, and three research degrees
or doctorate courses (herts, 2018)
2. Price – price skimming strategy would be used by Hertfordshire Business School, the
reason being the first mover advantage, it the first international organization in this
sector that would be investing in Chile. This will let the organization to keep their
prices high and recover the cost that they have to spend in adaption strategy.
Nevertheless, the payment system would be one of the issues, as the third party
payment system has to opt for the same (businessjargons, 2018)
3. Place – this factor considers the location and distribution strategy of the company.
There are various intermediaries involve in this process to reach out to the students.
The establishing location would be an area, where the students can reach easily and
transportation is easily available in the country. The reason being, it is unlike a

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product, it the service for which both the giving and receiving party has to be in
contact on a daily basis (chiefoutsiders, 2018)
4. Promotion – since Hertfordshire Business School is entering into a new nation, it is
important to create brand awareness, and extensive promotion is to be done, for this,
various promotional tools have to be used, like printing advertisement through
pamphlets, hoarding. Moreover, the sponsorship can be conducted, where the
workshops or the events related to literature or education purpose are sponsored by
the organization (business.qld.gov, 2018)
5. People – since it is one of the most popular and primary services, human resource
plays a most important role. The people involved in the business are crucial to select
and recruit, as in another nation people with their local language as well as English
speaking are essential (Ang & Rusli, 2018)
6. Process – the processing involves following the educational system of Chile and
improving g the quality of school, premise and education service in order to maintain
the set standard and sustain in the industry (Bach, 2017)
7. Physical evidence – the physical availability of the service is the school premises,
which needs to be high quality and maintained with all the basic availability like
considering health and safety, sports availability, clean and neat facilities, and
drinking water (Adam & Kotler, 2014)

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Cultural difference
Figure 1: Hofstede’s cultural dimensions of Chile and UK (Source: (hofstede-insights, 2018)(Here, Sky Blue colour bar
represents Chile data and purple represents United Kingdom data)
Key cultural difference:
 In Individualism dimension, United Kingdom is considered to be at a relatively high
degree of independence, and are living in an ‘I’ considered society. On the contrary,
Chile is more towards “We” concentrated society.
 The masculinity dimension of culture is scored high for the United Kingdom, which
indicates that the society is more towards achievement, success, and competition.
Whereas the Chile score is relatively low, which indicates that the society is more
focused on the quality of life and care for other individuals.
 Considering the uncertainty avoidance dimension, it can be said that the score for
Chile is quite high, which shows that the need for legal laws, system, rule are high in
this society moreover, the corruption level is low.
 Through the long term orientation dimension, it can be said that the culture is
normative in Chile, as the score is relatively low, people are more focused over truth
establishment, and are more concentrate on quick results (hofstede-insights, 2018).

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Conclusion
To conclude from the report, it can be said that the while doing an international business,
understanding and considering the cultural difference is very important in various aspect,
which the report was focused over. As an organizational case, Hertfordshire Business School
was established in United Kingdom, and is now willing to expand their business in Chile, for
which the culture is very different. Considering the external analysis through PEST. The
political factors are favourable focusing the political support towards the educational system.
Economic factors includes the primary activities of the Chile society, being education, which
makes this deal more profitable for the company. The issue is technological advancement in
the nation, which Hertfordshire Business School has to adopt in order to sustain.
For internal analysis, the SWOT analysis was conducted. The marketing strategy that is best
for the Hertfordshire Business School while expanding the business to Chile is adaption
strategy for product, price skimming strategy as it is the first mover for international
company to invest in this industry in this nation. Considering the cultural difference in both
the countries, the major difference are in three dimensions that is individualism, masculinity,
and uncertainty avoidance.

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References
Adam, S. & Kotler, P., 2014. Principles of marketing. Australia: Pearson Australia.
Allen, D., 2017. Recruitment and retention across cultures. Annual Review of Organizational
Psychology and Organizational Behavior, p. 153.
Alvesson, M., 2016. Organizational culture. New York: Sage.
Ang, C. & Rusli, H., 2018. The Impact of Marketing Mix 4Ps and Consumer Behavior
toward Purchase Decision of Adidas Products. iBuss Management, 6(2).
Bach, C., 2017. Demystifying McCarthy’s 4 P’s Of The Marketing Mix; To Be Or Not To
Be. Industrial Marketing Management, 26(1), p. 1.
Bull, J. & Sitas, N., 2016. Strengths, Weaknesses, Opportunities and Threats: A SWOT
analysis of the ecosystem services framework. Ecosystem Services, 17(1), p. 99.
Burdo, H., 2018. What Are the Five Principles of Marketing?. [Online]
Available at: https://bizfluent.com/about-5084578-five-principles-marketing.html
business.qld.gov, 2018. Implement a marketing plan. [Online]
Available at: https://www.business.qld.gov.au/running-business/marketing-sales/marketing-
promotion/marketing-plan/implement-plan
businessjargons, 2018. International Marketing. [Online]
Available at: https://businessjargons.com/international-marketing.html
Chari, S. & Feng, H., 2018. Research in marketing strategy. Journal of the Academy of
Marketing Science, pp. 1-26.
chiefoutsiders, 2018. Expert Marketing Strategy Implementation. [Online]
Available at: https://www.chiefoutsiders.com/strategic-services/marketing-strategy-

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implementation
Chung, T., 2015. The role of listening in e-contact center customer relationship management..
Journal of services marketing, 29(1), pp. 49-58.
CultureWizard, 2018. 5 Strategies for Working in Cross-Cultural Virtual Teams. [Online]
Available at: https://www.rw-3.com/blog/5-strategies-for-working-in-cross-cultural-virtual-
teams
herts, 2018. schools-of-study. [Online]
Available at: https://www.herts.ac.uk/study/schools-of-study/business
hofstede-insights, 2018. country-comparison. [Online]
Available at: https://www.hofstede-insights.com/country-comparison/chile,the-uk/
Ho, J., 2014. Formulation of a systemic PEST analysis for strategic analysis. European
academic research, 2(5), p. 6478.
Trivedi, M., 2016. PESTLE technique–a tool to identify external risks in construction
projects. International Research Journal of Engineering and Technology (IRJET), 3(1), pp.
384-388.

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Appendix 1
SWOT Table
Strengths
 Goodwill
 Tie-ups with other universities
 Awards gained
Weakness
 Payment system
 Competition
Opportunities
 Growth opportunities
 Increase customer database
Threats
 Human resource availability
 Foreign exchange