Cross-Cultural Management Report: Neinor Homes Expansion to Russia

This report examines the potential for Neinor Homes, a Spanish real estate developer, to expand its business operations into Russia. The study assesses the impact of macro-environmental and cultural factors on the company's success, utilizing Hofstede's Cultural Dimensions and Trompenaars and Hampden-Turner's Seven Dimensions of Culture models. The report begins with an executive summary and provides background information on Neinor Homes, including its policies, strategies, ethical values, HR management, marketing, and financial objectives. It then analyzes the cultural differences between Spain and Russia, focusing on power distance and long-term orientation using Hofstede's model, and individualism versus communitarianism using Trompenaars' model. The report also considers political, economic, social, technological, legal, environmental, and security factors relevant to the expansion. The findings suggest that while the company is likely to face some challenges, the expansion to Russia presents a feasible business opportunity. The report concludes with recommendations for Neinor Homes based on the analysis.

Running head: CROSS CULTURAL MANAGEMENT
Cross Cultural Management
Name of the Student
Name of the University
Author Note

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Table of Contents
Part a: Executive Summary:.......................................................................................................3
Part b: Background.....................................................................................................................3
Part c: Russia..............................................................................................................................5
Part d: Discussion, Conclusions and recommendations.............................................................8
Part e: References.....................................................................................................................10

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Part a: Executive Summary:
The study is based on a renowned real estate developer of Spain named as Neinor
Homes. The study is based on a context where the selected organization is considering the
plan of business expansions to Russia for the improvement of their financial sustainability
through generating larger amount of profit and increasing the sales of their services. The
study evaluates the impact of the macro environmental and cultural factors that can affect the
success of the company in expanding their business operations to Russia with the application
of the Hofstede model and Trompenaars and Hampden-Turner's Seven Dimensions of
Culture model. With a detailed understanding of the impact of these factors, the study
provides some important recommendations for the improvement of the company’s knowledge
in taking their decision regarding the business expansion.
Part b: Background
As mentioned earlier, the selected company is Neinor Homes. It is one of the largest
companies operating in the Spanish real estate industry. Neinor Homes is observed to have
the expertise of constructing top quality single and multi –family homes and buildings for
their customers (Neinorhomes.com 2020). Having said that, the business actions of the
company is seen to be limited within Spain and that certainly limits the ability of the
company in increasing their margin of profit. Considering the strategies and policies of the
company, it is understandable that the company is focused in maintaining the financial, social
and environmental sustainability through their business activities. As per the comments of
Al-sweity (2013), the business operations of majority of the companies operating in the
construction or real estate industry is largely affected by unethical business activities which
in other way, decreases the sustainability of the business actions of those companies and also
provides considerable amount of reputational damage to them.

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Considering the impact of business ethics in the construction or real estate industry,
the company is able to formulate their human resource strategies with inclusion of the strong
code of conduct that outlines the operational activities and the business actions of the
employees and other stakeholder of the company. Other than this, the operations strategy is
observed to be well built from the part of the company with the inclusion of the appropriate
risk management protocols or practices (Neinorhomes.com 2020). The excellent capability of
the company in establishing modern infrastructure for the professional management of the
risks is substantial in the enhancing their goodwill and service reputation amongst the
companies operating in the real estate industry. With a precise look at the mission statement
of the company, it is understandable that the company is dedicated in capturing the immense
market growth of the real estate industry. Along with that, the mission statement of the
company clearly reflects the urge of the company in delivering sustainable value to their each
and every stakeholder in addition to the high margin of returns (Neinorhomes.com. 2020).
With a precise look at the mission statement of the company, it is evident that the
organization is dedicated in the reference residence property developer in Spanish real estate
industry. Along with that, the mission statement of the company reflects the urge of the
company in becoming the pioneer business entity for transforming the sector into a new and
institutional model with the help of the customer insights, ethics, commitment and
transparency (Neinorhomes.com. 2020).
With a precise look at the core values that the company follows, it is understandable
that the customers of the company are the main point of focus for the decision making
process of the company, the company is dedicated in the management of a talented
workforce, the company is focused in incorporating social value in the products and services
of the company and the senior management of the company has the expertise of leading
humbly. Apart from this, the mission statement of the company is seen to be significant in

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stating the urge of the company in promoting the pragmatic innovation inside the company
and in incorporating good corporate governance in the business operations of the company
(Neinorhomes.com. 2020). With a precise look at activities that the company employ for the
management of their human resources, it is visible that the company established efficient
recruitment and selection procedures for sourcing top quality professionals for the
management of their services. On the other hand, the company is observed to be bit limited in
the management of their training and development owing to the lack of training
infrastructure. Having said that, the company is observed to gain a massive reputation of
providing industry standard wage to their customers which is playing an important role in
retaining the talented employees inside the company. Considering the marketing and
promotional activities of the company, the main focus of the company is seen to be on two
different online platforms such as YouTube and Twitter (Youtube.com 2020). Along with
that, the company utilizes the email subscription and their official business website for the
effective communication and interaction with the customers regarding their business
activities. In addition to this, the company conducts their employer branding activities
through LinkedIn. Considering the financial objectives of Neinor Homes, it is understandable
from the balance sheet of the company that one of the prime financial objective of the
company is to continuously improve the revenue of the organization. Other than this, the
company is determined in providing appropriate returns on the investment of their
shareholders and stakeholders. Other than this, the success of the company in utilizing their
resources in a professional manner is seen to lead them in earning larger revenue through the
efficient cost controlling.
Part c: Russia
The selected country for the expansion of the business operations of Neinor Homes is
Russia. The country is observed to be bit different that the host country of Neinor on the basis

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of the cultural values, social beliefs, business preferences and ideologies. A brief evaluation
of the cultural factors of both the countries with the application of hofstede model clearly
describes the differences that the countries have on the parameters such as Power Distance
and Long term Orientation. Russia with a score of 93 in the power distance aspect, clearly
portrays the high acceptance level of the employees and the other stakeholders of the
company towards the framed hierarchical formation of the company (Hofstede-insights.com
2020). The compliance of the less powerful members with the framed hierarchy, creates a top
down management structure and at the same time, it influences the employees of the
companies to participate in strict superior subordinate relationship. On the other hand,
Spanish society is observed to be considerate towards the hierarchical structures and that is
evident with the score of 57 in the power distance aspect (Hofstede-insights.com 2020).
However, the Spanish society belongs to a low power distance aspect than that of Russia
which influences a comparatively informal dialogue between the subordinate and senior
employees. Apart from this, another aspect of culture in which the countries portray
certain differences, is seen to be long term orientation. The score of 81 in the aspect of the
long term orientation clearly portrays the fact Russian society belongs to pragmatic mindset
(Hofstede-insights.com 2020). The citizens of Russian society is observed to believe that
truth is dependent on the time, context and situation. On the other hand, the score of 48
in the long term orientation clearly shows that the Spanish society is normative in nature
(Hofstede-insights.com 2020). The Spanish citizens are observed to be largely focused in
living each and every moment without any sort of significant concerns. Along with that, the
Spanish citizens are observed to look for quick results without any sort of delay and that is
certainly a major concern for the company in expanding its business to a pragmatic society
like Russia. Along with that, the cultural differences on the basis of the power distance
between the two countries is a major point of concern for the company in managing the

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expansion in a professional manner. Considering the Trompenaars and Hampden-Turner's
Seven Dimensions of Culture model, it is evident that the Spanish society follows
individualism and on the other hand, Russian society is observed to be bit communitarianism
in nature (Niemi 2019). Though both the countries are notably close in this aspect, however,
the citizens of Spanish society are observed to be goal oriented and that certainly reflects
their urge towards achievement. On the other hand, the citizens of Russian society is
observed to possess ascription oriented mentality (Patel 2017). Hence, it is understandable
that the success of the company in managing effective utilization of their vision and mission
is seen to be dependent on the ability of the company in executing ascription related
activities. At the same time, the preferences of the Russian society towards the inequality in
the hierarchical structure will certainly increase the ease of the company in managing their
operational and business level strategies in a professional manner. Hence, the expansion to
Russia is expected to be a feasible idea for the company.
Political factors:
The government of Russia and the portrayal of political pressure inside Russia are
observed to be dependent on two individuals which are Vladimir Putin and Prime Minister
Dmitriy Medvedev (Sharafutdinova and Turovsky 2017). Being one of the largest political
powers in the world, the political pressure on the citizens of the nation is notably high and
that is evident with the fact that the people of the nation do not feel free. Having said that, the
limited impact of the unionization on the construction industry of the nation is expected to
calm things down for Neinor. Hence, in spite of political pressure, the company has the
possibility of conducting a sustainable business in the selected company.
Economic factors:

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The economic stability of the country is seen to be largely concentrated at the top and
that is evident with majority of the companies choosing Moscow at their preferred
destination. The mining industry is observed to be main base of the Russian economy. Apart
from the sales of weapon at the global stage, the economy of the mentioned nation is seen to
be dependent on the production and sales of steel, oil, aluminium and gas (Government.ru.
2020). Having said that, the diversification of the economic streams will certainly boost the
national economy and in such situation, the construction industry is one of the most preferred
choices.
Social and Technological Factors:
With a precise look at the Russian society, it is evident that the pop7ultaion of the
country is getting restricted in a fine fashion and at the same time, the literacy rate of the
nation is seen to increase. The increment in the literacy rate clearly shows that the citizens of
the nation are focused towards their professional development and that certainly provides
sufficient scope to the company in souring skilled professionals for their operations. Along
with that, the government and private initiatives for building increased number of high tech
parks and zones is a clear reflection of the slowly growing IT market of the nation
(Export.gov. 2020). Hence, it is understandable that the company has a feasible scope of
incorporating the technology and innovative solutions in their business operations.
Legal, Environmental and Security Issues:
The Russian government is observed to be considerably strict with the formation of
the trade legislations and at the same time, the companies operating in the region are bound to
professionally manage the impact of the labour and employment legislations. Other than this,
the Ministry of Natural Resources and Environment of Russia is observed to be play a crucial
role with the formation of the legislations related to the environmental protection which the

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company requires to comply with, in a professional manner (Government.ru. 2020). Being
one of the largest weapon suppliers across the globe, the country is observed to be placed in a
secure position in managing the threats of the external security issues. Hence, it is
understandable that the company has the opportunity of conducting a stable business if it
professionally manages the environmental and legal concerns.
Part d: Discussion, Conclusions and recommendations
From the above analysis, it is understandable that both the countries, Russia and Spain
have considerably limited differences amongst them on the basis of the culture and at the
same time, the economic strength, social and technological evolution in Russia creates a
suitable context for the selected company in managing their business in a professional
manner. Having said that, the company is expected to face certain difficulty in managing the
trade related and environmental legislations. However, the possibility of riding the growth on
offer in the construction industry of the nation is a strong motivator for the company in
expanding its business operations to Spain.
The company is recommended to conduct a cross cultural training session for their
employees to educate the employees and other stakeholders regarding their suitable
behaviour and course of action in Russian market.
The company requires to expand their business to Russia with the establishment of the
joint ventures as that will enable them in managing the concern associated with the licensing
procedures or the trade legislations in a more effortless manner.
On a concluding note, it is evident that the company has the capability of conducting
sustainable business in the Russian market. However, the company requires to manage the
impact of the cultural differences primarily based on power distance and long term
orientation aspects. Along with that, the success of the company in expanding the business to

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Russian market is seen to be dependent on their ability in professionally managing the
environmental and trade legislations of the nation. Other than this, the economic strength of
the nation, the growth associated with the construction industry and the ability of the citizens
in managing the technological advancement are observed to important motivators for the
company in expanding their business operations to Russia.

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Part e: References
Al-sweity, A.Y., 2013. Unethical conduct among professionals in construction industry.
Unethical conduct among professionals in construction industry.
Export.gov. 2020. Russia - Information Technologies | export.gov. [online] Available at:
https://www.export.gov/article?id=Russia-Information-Technologies
Government.ru. 2020. Ministry of Industry and Trade of the Russian Federation - The
Russian Government. [online] Available at: http://government.ru/en/department/54/events/
Government.ru. 2020. Ministry of Natural Resources and Environment of the Russian
Federation - The Russian Government. [online] Available at:
http://government.ru/en/department/48/events/
Hofstede-insights.com 2020. Country Comparison - Hofstede Insights. [online] Available at:
https://www.hofstede-insights.com/country-comparison/russia,spain/
Neinorhomes.com 2020. Neinor Homes. [online] Neinor Homes. Available at:
https://www.neinorhomes.com/?lang=en
Neinorhomes.com. 2020. [online] Available at:
https://neinorhomes.com/doc/Mision_Vision_Valores-NeinorHomes_ENG.pdf
Niemi, R., 2019. With regard to programmatic advertising, are Lewis' findings on cultural
dimensions still valid for millennials in the 21st century?.
Patel, T., 2017. Multiparadigmatic studies of culture: Needs, challenges, and
recommendations for management scholars. European Management Review, 14(1), pp.83-
100.

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Sharafutdinova, G. and Turovsky, R., 2017. The politics of federal transfers in Putin’s
Russia: regional competition, lobbying, and federal priorities. Post-Soviet Affairs, 33(2),
pp.161-175.
Youtube.com 2020. Neinor Homes. [online] Available at:
https://www.youtube.com/channel/UCrgQVdQK6rwHsczmYT0wdrw