Analysis of Socio-Cultural Implications for Managers: BHP Billiton

This report examines the socio-cultural implications for managers at BHP Billiton, focusing on its operations in India. It explores the challenges arising from cultural differences between Australia and India, utilizing Hofstede's cultural dimensions to analyze these differences. The report highlights how BHP Billiton has successfully navigated these challenges through strategies such as community development programs, employee training, and encouraging employee participation in decision-making. It discusses the impact of cultural values on workplace culture and decision-making processes, emphasizing the importance of adapting management approaches to the local context. The report underscores the significance of understanding and addressing socio-cultural implications for achieving business success in a globalized environment, particularly in the context of BHP Billiton's expansion in India. The report also highlights the importance of understanding and addressing socio-cultural implications for achieving business success in a globalized environment. The report concludes by emphasizing the importance of cultural sensitivity and adaptation in international business operations.

ANALYSIS OF THE SOCIO-CULTURAL IMPLICATIONS FOR
MANAGERS
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Executive Summary
The present report focuses on the analysis of the implication of the sociocultural
factors on the managers of the business organization. Australian businesses are
successfully operating in India for the past many years. The economic changes in
India and Australia have brought several new opportunities for both the countries.
However, the difference in culture and the social environment has often affected the
success of the business unless the managers have handled them efficiently. The
impact would be analysed with a focus on BHP Billiton in Australia and India. The
present report evaluates the ways in which Billiton has been successful in India by
managing its socio-cultural impact. The report includes Hofstede's Cultural
Dimension analysis for analysing the difference between the culture in India and
Australia. The business organizations are highly impacted by the changes in culture.
The managers in BHP Billiton are more focused on their performance rather than
interpersonal relationship. Moreover, they were much more decisive. However, these
strategies were ineffective when they came to India. India is an individualistic country
where people are interdependent. Undertaking quick decisions would not help the
organizations to perform better in this country. BHP Billiton focused on different
employment and community development program that helped them understand the
needs of the community as well that of the employees. Training was yet another
important function of BHP Billiton that helped in reducing communication gap. The
Indian employees were encouraged to take part in the decision-making process and
put forward their ideas. Successful addressing of socio-cultural implications by BHP
has helped to strengthen its position within the country.
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Table of Contents
Introduction................................................................................................................. 4
Social-Cultural Evaluation through Hofstede’s Model.................................................6
Corresponding Challenges for Managers of BHP Billiton in India...............................8
Implication of the issues on the managers..................................................................9
Addressing the Socio-Cultural Implications...............................................................10
Conclusion................................................................................................................ 11
Bibliography.............................................................................................................. 12
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Introduction
Globalisation has resulted in improved communication and transportation.
Businesses are focused on expanding globally with the exciting new opportunities for
growth and profit. However, there are several challenges and issues associated with
sociocultural factors. The cultural difference between the nations can interfere with
the global business community (Homann, Koslowski & Luetge 2007). It has been
evident that the managers in the current global business community have come
across cultural differences that can create an impact on the competition of the
project. The government of Australia has strengthened the relationship with India for
busies expansion. The Indian market has a suitable competitive advantage
(Willcocks 2016). The operation of Australian business in India has become quite
easy for some common grounds such as a member of language, member of
Commonwealth and crickets. These social factors have developed a long-term
relationship between India and Australia leading to trade and investment.
Several businesses from Australia are successful in India. Strategic location, rapidly
growing consumer market, skilled workforce, and well-developed financial and
vibrant capital market has attracted the business from Australia to expand in India.
BHP Billiton is one such Australian company that expanded in India. BHP Billiton is a
multi-national mining, metal and petroleum listed dual public company. Founded in
the year 1885, the company has grown enormously and presently and in terms of
market value, it is the largest mining company in the world. The commodities
produced by BHP Billiton are iron ore, coal, copper, uranium and metallurgical coal.
Presently, the company has 65,000 employees and contractors. The business
focuses on the health and the safety of the individuals and ensures on creating an
environment that would cure fatalities, injuries and occupational illness (Billiton.com
2017).
Considering the progressive development in India, BHP Billiton expanded in India
and is presently focused on strengthening its position in India. The sustainable
economic growth is unlocked by the productivity gains in the advanced economy.
The high transformative growth in India is attained through reform transform in India.
BHP Billiton has been successful in India only because the managers have been
able to manage the socio-cultural implication on the business. It is a noteworthy fact
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that the India and Australia have huge socio-cultural difference in terms language,
culture, religion, lifestyle and history. While expanding the business, the senior
managers are bound to encounter challenges (Bhattacharyya & Cummings 2014).
The whole societal trend has been accepting the diversity and valuing it and this is
creating significant impact. This encourages the leaders of the company to behave in
a more enthused manner and address the diversity issues (Sinclair & Wilson 2000).
Valuing diversity is essential for business and BHP Billiton ensure respect by
embracing openness, teamwork, diversity and relationship that are mutually
beneficial. The senior managers are responsible for managing the sociocultural
implications so that business projects are successful. This aspect has been analysed
in this report. The present report analyses the importance of managing the socio-
cultural implication for attaining success in business. The report would shed light on
the ways in BHP Billiton has managed the socio cultural implication. The cross-
cultural theory of Geert Hofstede is evaluated in this report for further understanding
and analysis of the issues related to diversity.
Implication of Cultural Values in Work Place Culture
Culture refers to the ways in which an individual perceives the man-made part of
one's environment. Culture functions in different ways.
It is based on a culture that an individual behaves in a different situation and at the
same time interpret the behaviour of others. The decision-making process in the
business is often influenced by the culture. The decision-making approach of the
business can hinder the strategic planning as well as the operation of the business.
While carrying out overseas business, it is essential to evaluate the culture of
different countries so that the employees and the customers can be kept satisfied.
Australian culture is highly individualistic (McFarlane & Kennedy 2006).
(Aycan et al. 2000) put forward two socio-cultural dimensions which are called
paternalism and fatalism. In paternalism, the superior always provide guidance and
protection to the subordinate while the role of the subordinate is to remain loyal and
deferential to the superior. Fatalism focuses on the fact that it is not always possible
to control someone and fulfilling long-term plans. However, in business to keep the
employees satisfied as well as attract the customers, it becomes necessary for the
managers to guide the juniors and does not always control them. Addressing the
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cultural difference between the different nations is essential to keep the culture of the
business intact across the borders. Culture in India is based on relationship. The
managers of BHP Billiton have understood that fact being decisive does not work for
the Indian employees as compared to Australia where decisions are taken much
quickly (Chang, 2017).
Considering the socio-cultural implications, the managers of the business
organization needs to know cultural issues that affect the motivation of the
employees at work thereby creating an impact on the productivity and the
performance. India and Australia are distinctly different but the understanding of the
culture by the business organization has led to the increase in trade between the two
countries. Moreover, the removal of the ban on the sales of uranium in India and the
visit of the Indian Prime Minister in Australia has boosted the relationship of trade
between both the countries. This has further enabled BHP Billiton to strengthen its
position in India (Mathew 2013).
Social-Cultural Evaluation through Hofstede’s Model
The last few years have seen quite significant increase business between India and
Australia. The medium, as well as the large enterprises, are taking up opportunities
in the new globalization that help in making collaboration between the smallest of
firms possible in any part of the globe (Hebbani 2008). The progressive development
in India followed by material opportunities has drawn the attention of BHP Billiton in
India. However, while carrying out its business, the managers of the organization are
affected by the socio-cultural factors, as they are completely different from that of
India.
For examining the cultural difference between India and Australia and its impact on
the business of BHP Billiton and the managers of the organizations are taken into
consideration. BHP Billiton leaders engage in the full, frank and robust interchange
of what can be very different views, opinions and perspectives. The five dimensions
of Hofstede would help to reveal the cultural difference between India and Australia
as shown below:
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Power
Distance
Individualism Masculinity Uncertainity
Avoidance
Long-Term
Orientation
0
10
20
30
40
50
60
70
80
90
100
Cultural Dimension
India Australia
Figure 1: Cultural Dimension
(Source: Learner)
Power Distance: This aspect deals with the equality of the power among the
individuals. In India, the power distance has raking of 77, which is higher as
compared to the world average of 56.5. This shows a high level of inequality of
power and wealth in society. Australia's score is 36. Hence, organizations in
Australia have a different hierarchy for convenience and good communication
between the employees and managers as is seen in the case of BHP Billiton (Juhasz
2014).
Long-term Orientation: This shows the links of the society with its own past while
dealing with the challenges of the present and the future. India’s raking in this aspect
is 61 while the average of the world is 48. This shows that India is preservative and
parsimonious. While the score of Australia is, 21, which shows that it, have
normative culture. Australians are also exhibited great respect for their culture
(Geert-hofstede.com. 2017).
Masculinity: This highlights the extent to which the society is driven by success and
achievement. The masculinity rank of India is 56, which is third highest in the world,
and it shows a competitive and assertive society and the higher gap between men
and women. Australia’s rank is 61 that shows that behaviour in work is based on
shared values and considerable success, and achievements to be quite important
(Young & Thyil 2014).
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Uncertainty Avoidance: India has a lower rank in this aspect as it has 40th position
while the world average is 65. This shows that the culture is more open to
unstructured ideas and situations. Australia scores 51 positions in uncertainty
avoidance. Considering this difference, BHP Billiton has organized two Corporate
Community Leadership Program helping the Indian employees to gain practical
experience in complex social and environmental issues (Hofstede 2010).
Individualism: This aspect reveals the degree of interdependence between the
members in the society. India’s individual rank is 48, which is quite lower as
compared to that of Australia, which is 90. There are limited standards for rewarding
the employees and decisive working is not applicable in India. Development of
relationship is essential in India for carrying out business (Tripathi & Cervone 2008).
It is for this reason BHP Billiton has developed Community Leadership Program in
India for understanding the practical and theoretical of Oxfam CAA’s approach to
development.
Corresponding Challenges for Managers of BHP Billiton in India
Mining companies like those that BHP Billiton has focused on principles of
participative development for making the Indian employees work efficiently, also
influence, and share control, decisions and resources. Apart from the employees,
BHP Billiton has also focused on fulfilling its social responsibility to create goodwill in
the market and attract the customers based on their good purpose. For helping the
environment to develop, the managers provide reports about their activities for
developing mutual respect and trust. However, the issues, which are encountered by
the managers of BHP Billiton because of socio-cultural implications, are listed below:
1. Often the managers of BHP Billiton has encountered issues related to
relinquishing control over the employees as their conventional orientation for
operation and project control. Fundamentalism often plays an important role in
the business of India as the majority of the people of India have strictly
adhered to theological doctrines (Sharma & Singh 2015).
2. The concept of ‘power to the people' may create an impact on the power
structure as India has an instrumentalist view of power. Bureaucratic structure
creates an obstruction in the participation of the employees. Hence, BHP
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Billiton requires humanistic approach for participatory development within the
company.
3. BHP Billiton is an Australian company that focuses on the professional
relationship with the employees and expects the professionals and the
experts to be respected, as they are able to undertake the right decision for
the employees and the organization. Being decisive does not work for the
Indian employees as compared to Australia where decisions are taken much
quickly. In India, the managers need to develop a strong relationship not only
with the employees but also with the community people and the customers for
further development (BHP Billiton 2015).
4. BHP Billiton focused on making a long-term investment in people. They are
more concerned about seeing the outside result and made a little investment
in people. However, to strengthen their position in India, the company focused
on making an investment in the people for gaining the competitive advantage
in the market.
5. Another social issue, which was encountered by BHP Billiton, is the difficulty
in showing sensitiveness for the local context. Initially, the company does not
have enough knowledge about the local people, processes, relationship and
traditional domain of India that the business has to adapt to for carrying out its
exploration and excavations within the country (Business-humanrights.org.
2017)
Implication of the issues on the managers
The socio-cultural differences between India and Australia have potentially affected
the current and the future business interaction between India and Australia.
Managers from the individualist culture are much more concerned with their own
performance as compared to that interpersonal relationship. This reduces the loyalty
of the Indian employees as well as that of the customers towards the organization
(Bohlander & Snell 2006). To generate high commitment and responsibility on the
part of the employees, BHP Billiton has to focus on creating different types of loyalty
program not only for the employees but also for the community as a whole.
The managers in the BHP encountered issues related to the cross-cultural
competency of the workers for recognizing the cultural differences. Moreover, India
has Vertical Collectivism as the people accept ranking and inequality while Australia
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has Horizontal Individualism where people are regarded to be similar based on
certain attributes and status. Communication was a major issue for the managers
within the organization due to the culture and the language differences (Hebbani
2008). The managers also encountered issues related to diversity managers that
affected the performance of the employees. The organization needed to obtain
knowledge and skills and develop cultural competence. The conflict was major
issues between the cross-cultural employees in BHP Billiton, which affected the
performance of the organization. The managers of the organization needed to
ensure that the business in India is able to perform their task effectively. BHP Billiton
has to ensure that the organization focuses on social well-being and minimize the
environmental impact to strengthen its business within the country (BHP Billiton
2013).
Addressing the Socio-Cultural Implications
The socio-cultural differences between India and Australia have created major
implication on the managers of BHP Billiton. However, Billiton has been successful in
strengthening its position in the country has this has been done through the
formulation and the application of the effective strategies.
BHP Billiton realised that communication is the key to gain success in any business.
Overcoming the language barriers became quite essential for the Billiton. This
requires proper training of the existing as well as the newly recruited employees of
the organization. Proper communication also requires understanding the needs of
the employees and allowing them to put forward their views, complaints and
grievances (Vanclay et al. 2015).
BHP Billiton also focused on Group Dynamics that led to the understanding of Indian
culture and their interaction in Group. The above analysis has made it made it
evident inequality is quite common in India. However, BHP Billiton has created good
will in the market by creating a hierarchical organization where the employees in
India can easily communicate with the managers and can participate in the decision-
making process. In collectivist culture country like India, decisions are undertaken
significantly influenced by the group. Hence, BHP Billiton made strategies that only
highlighted the needs of the employees but of the entire community (Oracle.com.
2017).
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For addressing the socio-cultural implications, BHP Billiton has made policy
commitment for the development of the community. This policy is applicable not only
in India but in all the places where BHP has expanded. The three key policy
document of this organization include BHP Billiton Charter, Health, and Safety,
Environment and Community Policy and Guidelines on Community Development.
BHP has increased its focus on transparency, learning orientation local consideration
and self-reliance to address the socio-cultural implications (BHP Billiton 2011).
Development of Corporate Community Leadership Program (CCLP) has helped in
making payments to the members of the public direct exposure understand the
cultural and social aspects of development within the country (Billiton.com 2017).
The pilot CCLP projects have helped the employees to gain practical experience in
social and environmental issues in India. CCLP was an exposure program to create
awareness about the social issues. BHP Billiton relied on the local knowledge of
India for accessing the local people and organization for the field exposure. The
CCLP has resulted in a positive outcome in terms of participant learning as well as
relationship building that helped the organization to establish its position within India.
Conclusion
The present study explored the different socio-cultural factors that affect the
business across borders. The study has been carried out in the light of India and
Australia. BHP Billiton, an Australian mining company, has successfully established
its business in India. However, the business has undergone impact on several social
and cultural factors as both the country are distinctly different from each other.
Valuing diversity is essential for business and BHP Billiton ensure respect by
embracing openness, teamwork, diversity and relationship that are mutually
beneficial. Addressing the cultural difference between the different nations are
essential to keep the culture of the business intact across the borders.
Hofstede’s cultural dimensions revealed the differences in culture and religion that
affected the business of the organization. India is collectivist country while Australia
is individualistic. This has created major differences in terms of work culture and
expectation of the employees as well as that of the community people. The
progressive development in India followed by material opportunities has drawn the
attention of BHP Billiton in India. The leaders in BHP Billiton have focused on a
complete frank and robust interchange of what can be very different views, opinions
11

and perspectives. The organization has been successful in addressing the socio-
cultural implications in India through the development of effective strategies.
Leadership Program (CCLP) made payments to the members of the public direct
exposure understand the cultural and social aspects of development in India.
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