Cross-Cultural Management Issues for Wesfarmers in Hong Kong

This report provides an analysis of cross-cultural management issues faced by Wesfarmers, an Australian conglomerate, during its expansion into Hong Kong. The report begins with an introduction to the company and a brief overview, followed by an identification of key macro and micro environ...Read More

Running head: CROSS CULTURAL MANAGEMENT
CROSS CULTURAL MANAGEMENT
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Table of Contents
1. Introduction....................................................................................................................2
2. Brief overview of the company......................................................................................2
3. Identification of key macro and micro environmental factors........................................3
4. Identification of key cross-cultural and HRM issues......................................................6
4.1 Corporate company culture......................................................................................6
4.2 Professional industry culture....................................................................................7
4.3 National ethnic culture.............................................................................................8
5. Recommendations.........................................................................................................8
References.......................................................................................................................10

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1. Introduction
Communication and HRM issues help in maintaining the different levels of
changes in the structure and the performance of the business in the market. The
coordinated actions of the workforce help in maintaining the progression of the business
in the international markets. According to Greenblat, E. (2018), Wesfarmers, the
Australian company, has taken steps to invest in their new business development in
Hong Kong. It will be helping the organization to expand the scopes of marketing its
products worldwide. On the other hand, it will be contributing to the sustenance of the
organization in the market. Mr. Goyder, the CEO of the business stated that the proper
functioning of the workforce and the different innovations that are undertaken by the
business has significantly contributed to the sustenance and improvements of the same
while operating in the international markets (Group 2018). Identification of the issues
that are faced by the organization will be helping the same to avoid the situations of the
risks.
The report aims at evaluating the different aspects of the change that the
organization is required to undertake while expanding their business in Hong Kong. The
diversity management and the cross cultural framework that is undertaken by the
organization helps in perfecting the communication strategies of the business, which
helps in maintaining the involvements of the employees. The report examines the
different issues that are faced by the organization and the manner in which they can be
avoided.
2. Brief overview of the company
Wesfarmers Limited is an Australian conglomerate, which was established in
the year 1914 as a cooperative company. The company is
headquartered in Perth, Western Australia. The Company employs approximately
220,000 employees. The different changes in the company structure and its functioning
have helped the business to grow in the international markets. On the other hand, the
identification of the innovative approaches of the organization and the management

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policies that are undertaken by the business has helped in sustenance of the business
in the Australian markets. The progress of the organization is reflected through the
revenue of the business, which is A$65.98 billion as on 2016. The revenue has grown
by the end of the fiscal year 2017, which reflected an amount of A$ 68.45 billion. On the
other hand, the operating income and the net income of the organization have
increased from A$3.61 billion (2016) and A$2.35 billion (2016) to A$4 billion (2017) and
A$2.87 billion (2017) respectively. The activities and the strategies that are formed by
the business are aimed at bringing in innovation in the situation of the business in the
international markets. The key element of the change in the structure and the
functioning of the organization is dependent on the smooth functioning of the employees
as per the objectives of the business.
3. Identification of key macro and micro environmental factors
Political The stable political structure of the
organization helps in maintaining the different
levels of change in the systems of the
businesses (Kawar 2012). The bilingual policy
of the nation “One country, two system” has
helped in the identifying the liberal mindset of
the politics apart from all the political unrests.
It will be helping the organization to bring in
changes in the systems of the business while
operating in the international markets.
Economic The economic factors that might be faced by
the organization while expanding their
business in Hong Kong is the stiff rise of the
base rate by 25 basis points to 1.50% by the
Hong Kong Monetary Authority (HKMA). It
will be affecting the export functions and the
investments that are planned by the business

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while operating in Hong Kong. The economic
advancements in the nation has helped in
enhancing the lifestyle of the people and
thereby has enabled the growth of the
business in the markets.
Social Hong Kong is a bilingual society where people
from different nations have affected the
functioning of the multinational organization in
the market. The language that is frequently
used by some 95% of the population in the
nation is Cantonese. The supply of skilled
workforce will be helping the business to
undertake it smooth functioning. The key
elements of the change in the proper
functioning of the organization are dependent
on the supply of the skilled workforce.
Technological Hong Kong is a technologically improved
nation where the major aim of the
organizations to prosper in the markets is
marked on the basis of continuous innovation
(Kawar 2012). Continuous innovation in the
systems of the business operations are based
on the proper functioning of the strategies that
are formed by the organizations to bring in
changes in the systems of the same in the
market. The changes in the technologies have
helped in bringing forth progression in the
structure and the functioning of the business in
the market.
Environmental The health and safety standards that are
imposed by the government of the Hong Kong
have helped in maintaining the different safety

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standards in the nation. Therefore, as the
company is striving to grow in the Hong
Kong’s market, it must formulate policies to
adhere to the regulations that are formed by
the government of the nation for ensuring the
smooth performance of the same in the
market.
Legal
The legal environment of the nation is
specifically based on the liberalism in the tax
structures that are imposed by the
governments on the organizations (Moriano et
al. 2012). The key elements of the change in
the functioning of the business are dependent
on the transparency of the legal factors on
which the company will be framing the
strategies to meet the objectives of the
business (Emmerling and Boyatzis 2012).
The country offers free trade facilities, which
will be helping the organization to bring in
sustenance of the same in the Hong Kong’s
market structure.
4. Identification of key cross-cultural and HRM issues
The differences in the cross cultural activities of the organization is dependent on
the identification of the three factors- corporate company culture, professional
industry culture and national ethnic culture. Understanding the different cultures
helps in the identifying of the different possible unavoidable circumstances that might be
faced by Wesfarmers while operating in the Hong Kong’s markets. This section of the
report aims at understanding the key issues that might be faced by the concerned
organization while expanding their business in the Hong Kong market.

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4.1 Corporate company culture
Enforcement of the corporate company culture of the organization, Wesfarmers,
has brought about changes in the functioning of the business as per the needs of the
business to maintain its sustenance in the markets. The key elements of the change in
the company are facilitated through the involvement of the skilled workforce of the
business and the manner in which it will be helping the business to grow in the
international markets. The availability of the skilled workforce in the Hong Kong market
has helped the business in bringing forth changes in the systems. The application of the
ethics and the social responsibility of the organization on the functions is an
important point where the company has failed to match up with the culture that is
prevalent in the Hong Kong markets (Gesteland 2012). The changes in the
organizational structure are dependent on the identification of the varied aspects of the
trade cultures in Hong Kong. The clash in the cultures between the host market and the
company has affected the smooth functioning of the business.
On the other hand, the identification of the needs of the workforce based on
motivation and empowerment affects the smooth functioning of the business in the
market. The main issues that might be faced by the organization while operating in the
Hong Kong markets are based on the government norms of including the workforce
from the local regions of the nation. The inclusion of the people from the nation might
affect the proper functioning of the workforce in the absence of proper diversity
management (Kaynak, Fulmer and Keys 2013). However, the diversity in the
workforce will be helping the organization to bring in improvements in the systems and
the performance of the business in the market.
4.2 Professional industry culture
The identification of the different factors that influences the change in the
systems and the functioning of the business are dependent on the understanding of the
culture of the industry and the professional needs of the same. The identification of the
functional orientation while marketing the products and the proper distribution of the
workforce has affected the functioning of the organizations in the market (Ferraro and
Briody 2013). The delineation of the professional industry culture helps in the

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identification of the steps that helps in the proper functioning of the business in the
market. Coping up with the differences in the cultures in the Hong Kong is challenging
for a company, which is based in Australia (Emmerling and Boyatzis 2012). The
identification of the marketing and the other attributes depending on the supply of the
workforce has created a wall between the different aspects of the change that is
undertaken by the organization while operating in the market. The identification of the
professional cultures of the nation and the manner in which they can be implemented on
the structure of the business helps in bringing forth changes in the structure and the
performance of the business in the market.
4.3 National ethnic culture
The identification of the national ethnic culture that is prevalent in the nation will
be helping the organization to cope up with the different discrepancies that are faced by
the same while operating in the Hong Kong market (Bochner 2013). The identification
of the national ethnic culture of the host country will be helping Wesfarmers to bring in
changes in the model of their business. The flexibility of the business model helps in
maintaining the different levels of change in the structure and the functioning of the
business in the market. On the other hand, the key identification of the resources that
are required by the organization to bring in changes in the systems is supported through
the identification of the needs of the business to prosper in the business.
5. Recommendations
The recommended actions that might be undertaken by the business are
discussed in this section of the report.
 Identification of the culture prevalent in Hong Kong and thereby formulating
models that are flexible to cope up with different market conditions
 Involving the local communities in the business to adhere to the CSR (Corporate
Social Responsibility) needs of the organization as it will also help the
organization to bring in diversity in the workforce and thereby innovate on the
basis of the identification of the needs of the customers in the market.

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 Licensing stores in the different parts of the Hong Kong market to make the
people aware of the product and service offerings of the organization. It can also
be taken a marketing strategy of the organization, which will be helping the
business to grow in the respective markets.

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References
Bochner, S. ed., 2013. Cultures in contact: Studies in cross-cultural interaction (Vol. 1).
Elsevier.
Emmerling, R.J. and Boyatzis, R.E., 2012. Emotional and social intelligence
competencies: cross cultural implications. Cross Cultural Management: An International
Journal, 19(1), pp.4-18.
Emmerling, R.J. and Boyatzis, R.E., 2012. Emotional and social intelligence
competencies: cross cultural implications. Cross Cultural Management: An International
Journal, 19(1), pp.4-18.
Ferraro, G.P. and Briody, E.K., 2013. The cultural dimension of global business. Upper
Saddle River: Pearson.
Gesteland, R.R., 2012. Cross-cultural business behavior: a guide for global
management. Copenhagen Business School Press DK.
Greenblat, E. 2018. Wesfarmers eyes international expansion. [online] The Sydney
Morning Herald. Available at:
https://www.smh.com.au/business/companies/wesfarmers-eyes-international-
expansion-20140528-3930c.html [Accessed 18 May 2018].
Group, D. 2018. Industrials. [online] Wesfarmers.com.au. Available at:
http://www.wesfarmers.com.au/our-businesses/industrials [Accessed 19 May 2018].
Kawar, T.I., 2012. Cross-cultural differences in management. International Journal of
Business and Social Science, 3(6).
Kaynak, E., Fulmer, R.M. and Keys, J.B., 2013. Do cultural differences make a business
difference? Contextual factors affecting cross-cultural relationship success. In Executive
Development and Organizational Learning for Global Business(pp. 41-66). Routledge.