ABC Company's Cross-Cultural Management Challenges in India

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.

Cross- cultural management
Name of the student:
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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

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

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

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

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

Expatriation
• Involve heavy investment
• Transfer of the existing employees
• Selecting technically sound employees
• Employees might not be willing to leave their
home country

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

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

Diverse workforce
• Issue in managing people from different
countries
• Diversity will lead to conflicts
• Negative workplace environment
• Productivity will be hampered

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

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

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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Analysis, 25(2), pp. 233-250.
• Thomas, D. C. & Peterson, M. F., 2017.
Cross-cultural management: Essential
concepts. Sage Publications.. s.l.:Sage
Publications.
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Accounting & Finance,, 19(3), pp. 75-78.