International Human Resource Management: Australia-Indonesia Report

This report provides an in-depth analysis of the cultural differences between Australia and Indonesia within the context of international human resource management. The report begins with an executive summary and introduction, highlighting the importance of understanding cultural nuances when expanding into foreign markets. It then delves into a comparative analysis, focusing on key cultural dimensions such as individualism versus collectivism, power distance, uncertainty avoidance, and masculinity, using Hofstede's model as a framework. The report explores the challenges faced by organizations due to these cultural differences, particularly for Australian companies entering the Indonesian market. It provides detailed recommendations for expatriate managers, emphasizing the need to adapt leadership styles and organizational practices to align with Indonesian cultural values, such as fostering collectivism, acknowledging power distance, and promoting feminine values. The report concludes by reiterating the significance of cultural sensitivity and offering insights for creating successful subsidiaries in Indonesia, while acknowledging the shift in Indonesian work values towards individualism and femininity. The report emphasizes the importance of adapting to the local culture and leadership styles to create an effective subsidiary in Indonesia.

Running head: International Human resource management
International Human resource management

International Human resource management
Executive Summary
This report will give emphasize on the organizational cultural issues between Australia
and Indonesia. At the time of entering into a foreign market, it is essential to emphasize on the
cultural difference so that activities can be conducted in an effective manner. It can be analyzed
that there are differences between the culture of Australia and Indonesia which will be explained
in this report. The characteristic which is possessed of Australia is that it has a high degree of
individualism. So, these types of characteristics make the organization culture different from the
culture of Asian countries like Indonesia. By focusing on the culture of the organization the top
management should consider leadership and style of management.
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Table of Contents
Executive Summary.....................................................................................................................................1
Introduction.................................................................................................................................................2
2.0 Analysis..................................................................................................................................................2
3.0 Conclusion.............................................................................................................................................6
References...................................................................................................................................................6
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Introduction
1.1 Background
In the recent scenario, it is seen that many companies are focusing on expanding the
business activities in the international market so that good position can be attained in the market.
So, it is important to consider regional differences so that internal subsidiaries can be
acknowledged. The organizations in many different locations are influenced by the different
people, culture, and environment. So, at the time of entering a foreign market, it is essential to
consider the differences so that the differences can be addressed in a proper manner.
1.2 Identification
The report focuses on the international companies that have entered the Indonesian
market. The company has to face a problem related to the difference in culture in both the
countries.
1.3 Purpose
In this report, the difference in culture and activities are outlined of Australia and
Indonesia. The report will offer recommendations to consider the problems.
1.4 Scope
The report will offer recommendations to the expatriate managers who are working in
Indonesia.
2.0 Analysis
2.1 Expansion in Indonesia
At the time of enhancing the activities in a foreign country, the organization focuses on
the specific characteristics of the market so that it can be easy for the organization to achieve
success in the market. If specific characteristics are not considered than it can be difficult to
achieve overall goals and objectives in a proper manner. There are many differences related to
culture between Australia and Indonesia that should be evaluated so that subsidiary can be
established in the Indonesia market. It is seen that culture of both the countries is same. So, it can
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be useful to run subsidiary as it is beneficial in New Zealand (Shiraev & Levy, 2016). It can
help to achieve success in the market.
Also, the company has started a subsidiary in Indonesia. The difference is in the culture
of both the countries. Hence, it is important to adapt the differences and consider the leadership
style so that positive culture can be created in Indonesian subsidiary. By having proper
leadership style it can be easy to maintain the culture of the company and through this to achieve
success is also one of the easy task (Bird & Mendenhall, 2016).
There are many variations in the context of individualism and collectivism and also
power distance should be taken into consideration so that among various individuals
miscommunication and misunderstanding can be reduced.
2.2 The difference in Culture between Australia and Indonesia by focusing on the
Hofstede's Model (Problems faced by the organization)
In the Hofstede's research model, there are many characteristics related to the culture of
Indonesian like high power distance and collectivism and masculinity. The organizations will
several problems while expanding in Indonesia due to difference in culture of both the countries.
The Indonesia people have different approach towards work and coworkers. In reference to
Australia, it is seen that there are various characteristics like power distance and low uncertainty
avoidance (Hofstede1 Insight, 2018). By giving focus on the model it can be evaluated that the
individualism in Australia is at 90, which shows that employees are more focused towards the
verbal communication and they do not shy in showing the arguments. The people of Australia
do not hesitate in saying the word "no".
In Indonesia, the score is low which states that the society of Indonesia is a collectivist.
This means that the individuals in the society focus on securing their culture. The society is also
related to the strong interpersonal communication and gives assistance to the other people of the
society (Triandis, 2018). The individuals in the culture of collectivist try to reduce the issues by
provoking less people. The collectivism also showcases the long-term commitment level by
emphasizing on the children and senior members of the society. It can be evaluated that people
of Indonesia try to reduce the conflicts and consider nonverbal and indirect approaches to
showcase their discontent (Irawan, 2017).
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By emphasizing the power distance it is seen that in Australia, it is low and in Indonesia
it is high. Due to having low power distance, the Australian people consider the flat organization
structure (Yuliansyah, Rammal & Rose,2016). The balance between the authorities minimizes
and focus is given on the consultation. The people of Australia do not emphasize on giving
respect to the people of different age or position. There are many companies who prefer culture
but they do not assign any title of higher authorities to the individuals (Bleidorn et al., 2016). In
context to it, the power distance of Indonesia is high this states that the people who have less
power consider an unfair distribution of power in the company. The top management also has
high authority and they manage the decision process of the company. Respect is given to the
leaders by the subordinates in the company and they call their leaders with respect (Hallinger,
2018).
The hierarchy in Australia is created for convenience. Proper hierarchy is formed for
convenience of the employees. Equal treatment is given by the employer and employee to each
other. They take the decisions in the company by having a proper consultation with each other
(Gelfand, Aycan, Erez & Leung, 2017).
Next are uncertainty avoidance and masculinity. In this context, it is seen that Indonesia
has a low score and in Australia, the score is high in masculinity. In uncertainty avoidance,
Indonesia has a low score if the comparison is made with the world average that shows that
Indonesia community focuses on avoiding the conditions, that impact on the lives in a negative
manner (Popli, Akbar, Kumar & Gaur, 2016). In the culture of Australia, the individuals
disagree with the various situations by considering the logical arguments. The individuals do not
avoid the situation which is uncomfortable bout showcase their displeasure with the
circumstances. In Australia, it is seen that masculinity has a high score which showcases that the
Australian society is driven by the competition and achievement level. The People of Australia
focuses on winning (Mangundjaya, 2013).
The Hofstede dimensions of masculinity and femininity also state that there are various
differences which are concerned to the gender prominence. It evaluates the overall difference
between the forcefulness and also the care given to others. In the society of masculine, it is seen
that the individuals can analyze their success based on the various characteristics of income and
work progress (Rajadhyaksha, Korabik & Aycan, 2015). In the feminine society, the emphasis is
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given to the relations of the human. In this, it can be stated that Indonesia is a country where a
majority of Muslims are there, so it can be seen that the values are affected by the values related
to Islamic (Caprara et al., 2017). The people of Indonesia take into consideration more feminine
as compared to the people of Australia Therefore it can be analyzed that they give more
emphasis on taking care of the workers and their subordinates.
The perspective of Australia towards uncertainty avoidance is intermediate. This shows
that how individuals of the different situation can conduct the activities by knowing the fact that
future is not predictable. Each and every person considers that future can be never predicted but
should people sometimes to control the dilemma. The anxiety is seen towards ambiguity and
there are various people who deal with anxiety in different cases. The culture of Australia is
normative which states that people thinking pattern is also normative. They give respect to the
old traditions and emphasis on following traditions (Bratton & Gold, 2017).
2.3 Recommendations to create successful Subsidiary of Indonesia
It can be analyzed that managers from different areas have to face various challenges at
the time of leading and managing the individuals of a foreign country. To manage the people of
Australia is not same as managing the people of Indonesia. It can be evaluated that leadership
strategy cannot be effective in one culture same as it is effective in other culture (Liu, 2017).
There are many characteristics in reference to Indonesian culture like collective well-being in the
society and also it differentiates it from one culture to other. So, it is important for the company
to focus on the culture of the organization so that individuals can show compassion towards
other workers (Kurman, Liem, Ivancovsky, Morio & Lee, 2015).
As the activities of the company are conducted on a global basis, it is not important for
the managers to give influence towards the culture of the workers with their own culture. It can
be difficult to distinguish the culture of the host country from the practices related to
management. The managers should focus on maintaining weak and short-term society relation
between the employees. The managers should focus on the interest of the individuals. Since it
can be stated that Indonesia is a collectivist society which promotes individualism, it is essential
for the managers to introduce various values by considering the new environment.
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It can be analyzed that Indonesia value collectivism which has given negative impact on
the employee and employer relation. The woman has a different role in the society which is
created according to the traditional customer of Indonesia. The women have a higher authority in
the Australian market. In the present scenario, the managers are focusing on reducing the gender
difference at the workplace. In Indonesia, the leadership varies from time to time and also from
country to country. To be a good leader it is important to acknowledge the difference between
the various cultures. Leadership needs an intellectual understanding of the workers and the
various the culture. In Indonesia, the culture is analyzed by considering the high power distance
and also collectivism so that leaders can be treated in a proper manner (Mendenhall et al., 2017).
According to the research it is seen that there is a cultural shift in Indonesia. The overall
culture of the society is not dynamic and it changes from time to time.
3.0 Conclusion
So, it can be researched that there is a cultural shift in Indonesia. The work values have
shifted from collectivist to individualist and feminine. The human behavior is affected by the
socio-cultural factors. At the time of entering the foreign country, it can be evaluated that the
culture of the country is considered and also the leadership and culture style is considered to the
native culture. In the recent scenario, it is seen that the Australian company is trying to enhance
in Indonesia. The independent subsidiary is already situated in New Zealand. To enter the
foreign market of Indonesia the company evaluates the cultural feature of both the countries.
There are high collectivism and feminism is seen in the culture of Indonesia. This states that the
employer and the employees behave in a way a family stays so that goals of the organization can
be achieved. The culture is not related to the success of the individual.
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S. D. (2016). Age and gender differences in self-esteem—A cross-cultural
window. Journal of personality and social psychology, 111(3), 396.
Bratton, J., & Gold, J. (2017). Human resource management: theory and practice. Palgrave.
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