ABC Company's Cross-Cultural Management Challenges in India

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Added on  2021/06/16

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This report examines the cross-cultural management challenges faced by ABC Company, a US-based firm, as it expands into India. The report identifies seven key issues: communication barriers, cultural differences, staffing challenges, expatriation difficulties, compensation and benefits considerations, training and development needs, and the impact of the micro and macro environment. The report highlights the importance of understanding India's political and legal factors, as well as the 'Make in India' initiative. The report further discusses the implications of staffing decisions, including the choice between ethnocentric, polycentric, and geocentric approaches. The report addresses the challenges associated with expatriation, compensation, and benefits, and emphasizes the need for cultural awareness and training programs. Finally, the report recommends an ethnocentric approach, the identification of suitable expatriates, the implementation of cultural awareness programs, and the hiring of experienced Indian employees. The report concludes by emphasizing the importance of addressing these issues for a successful international venture and cites relevant academic sources to support its findings.
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Cross- cultural management
Name of the student:
Name of the university:
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Introduction
ABC company Pvt. Ltd. is based in America
It is trying to expand in India
Cultural difference between the two countries
Issues will evolve due to the difference in
communication, perception and language
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7 key issues and challenges
Diversity management
Cultural gaps
Challenges in micro and macro environment of
India
Problem in staffing
Expatriation issues
Compensation and benefits
Training and development of the host country
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Micro and Macro environment
India has strong government policy
The policies are become aggressive
for foreign investors
Political and legal factors are a
challenge
`Make in India` projects for
promoting indian companies
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Continued…
Foreign companies have the pressure of
recruiting Indian employees
Talented population of India is shifting to other
countries
Indians might demand higher salaries and
benefits due to their change in lifestyle.
Greater benefits while switching companies
Major challenge for the HR department of the
American company
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Staffing technique
Expansion in India will lead to sufficient
workforce
Staffing approach based on
ethnocentric, polycentric or geocentric
Choosing one of the techniques will be
difficult due to individual pros and cons
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Expatriation
Involve heavy investment
Transfer of the existing employees
Selecting technically sound employees
Employees might not be willing to leave their
home country
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Compensation and benefits
No prior experience of working in India
Unaware of the compensation and benefit
structure
Need a justified plan
Difference in salary of different employees
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Cultural gap
Major difference between India and America
Communication barrier
The US employees need to be aware of the
Indian culture
Problem in adjusting to the foreign
environment
Burden on the company resource
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Diverse workforce
Issue in managing people from different
countries
Diversity will lead to conflicts
Negative workplace environment
Productivity will be hampered
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Training and development
Issue in training the new employees
To meet the performance objectives
Designing of training and development
process will be different for different
employees
Require professionalism
Extensive and large investment
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Recommendation
Need to follow ethnocentric approach
Identify suitable employees for expatriates
Programs intended for increasing cultural
awareness
Need to hire Indian employees with prior
experience
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Conclusion
Challenge for IHRM to spread in India
7 issues were identified
Affect the expansion strategy
The benefits surpass the challenges
Proper recommendation can increase the scope of
foreign venture
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Heine, S., 2015. Cultural psychology:
Third International Student Edition.
s.l.:WW Norton & Company.
Lakshman, S., Lakshman, C. & Estay, C.,
2017. The relationship between MNCs’
strategies and executive staffing.
International Journal of Organizational
Analysis, 25(2), pp. 233-250.
Thomas, D. C. & Peterson, M. F., 2017.
Cross-cultural management: Essential
concepts. Sage Publications.. s.l.:Sage
Publications.
Yeaton, K. & Hall, N., 2008. Reducing
failure rates. Journal of Corporate
Accounting & Finance,, 19(3), pp. 75-78.
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