Cross-Cultural Management Report: ABC Tourism in India & China

This report provides an executive summary and detailed analysis of cross-cultural management within the context of ABC Tourism, a German-based hospitality company, as it plans to expand its business into the developing markets of India and China. The report examines the company's background, organizational structure, and strategies, including its value creation approach and functional organizational structure. It explores the importance of cross-cultural management in a globalized business environment, highlighting the challenges of managing a diverse workforce and the need to adapt to different cultural norms and regulations. The report also delves into the cultural analysis of India and China, and recommends the use of Hofstede and Handy's cultural models to navigate cross-cultural issues. Finally, the report discusses practical issues the company might face and offers recommendations for successful international expansion, emphasizing the importance of understanding and adapting to local cultures to ensure effective management practices and enhance workforce efficiency.

Cross Cultural
Management

EXECUTIVE SUMMARY
This report is based on the concept of cross culture management under which the
company operate in various countries and faces the issue of diversity. Due to globalisation
various multinational tourism company exploit the opportunity and function overseas. Within
this report ABC tourism company which fall under the hospitality industry basically take care of
the people who come out of their living area with the motive to explore new place or spend
quality time with one another. Thus, the company has planned to expand its business in
developing areas of Asian market that include India and China. Hence, to manage the cross
culture it is recommended for the company to follow different models like Hofstede and Handy's
culture to incorporate the best possible decision for country.

Table of Contents
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
Overview of company.................................................................................................................4
Cultural analyse of countries.......................................................................................................6
Practical issue..............................................................................................................................7
Recommendation.........................................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES................................................................................................................................1

INTRODUCTION
Cross cultural management refer to the influence of external societal culture on the
management practices that affect the functioning of internal managers and organisation
members. As an organisation comprises of various employees so it evolve the situation where
manager guide the employee of diverse culture or country due to which cross culture
management is significant (Ali and Park, 2016). Thus, for the adequate functioning the manager
need to acknowledge and practice each and every culture to enhance the efficiency of the
workforce. For the better understanding of report ABC company has been selected which is one
of the largest hospitality business of Germany. The company offer various services to the
traveller like organising packaged holidays, conduct reservation, offering accommodation as well
as food and beverage facilities to various part of the developed countries. Thus, in order to
enhance the market share the company is planning to take the advantage of its economies of
scale and expand its business in an emerging economies like India and China. It can assist the
business to gain the benefit of additional revenue by creating the worldwide image of company.
This report cover topics like detail explanation of the company on the basis of its structure,
strategy, background, aim and so on. Demonstrate the cultural analysis of the countries where
business is planning to expand. Along with this determine the issues that company can face by
suggesting the some of the recommendations to overcome such problem. Further, apply the tool
for the selected countries and determine its usefulness by using appropriate approaches are
covered in the report.
MAIN BODY
Overview of company
ABC travel and tourism company was incorporated in 2005 by Albert Jones which is
basically the company of Germany but function globally. The company's size is constantly
growing, currently it has nearly five lack rooms and three thousand branches of hotels which are
widespread for the convenience of international traveller. The company has gained the huge
attraction of the traveller as it target to the different middle as well as high income group people
and offer them the services as per their convenience and spending pattern (Brett, Behfar and
Sanchez-Burks, 2014). It has successfully organised business, adventurous and spouse trip by
taking care of the need of their traveller effectively. The aim of company is to successfully

communicate with the worldwide audience and deliver them best possible services (Thomas and
Peterson, 2016). Like, in order to retain memorable experience of the customer the company uses
various digital tool like email marketing, website, customer support services, live chats,
telephonic conversation and so on. Thus, such activities make sure the talent of the customer are
nurtured on the regular basis in order to make the positive difference within the society.
Being hospitality industry one of the fastest growing ones have unlocked different ways
on the basis of which they can compete with their competitor and accelerate its growth. The
company functions with the strategy to deliver the high quality services to the audience in order
to generate the cash inflow and gain long term profitability and productivity. ABC company
concentrate on the value creation strategy where firm focuses on the targeted portfolio audience
and gain their trust and reliability by delivering them supreme quality of the product. According
to the company this is only the prime method on the basis of which the company remain
competitive and gains the trust of their internal and external stakeholders. Moreover,
organisation structure refer to the different activities of business that consist of the roles and
responsibility which business need to carry out in order to achieve the goal of an organisation
(Corfield and Paton, 2016). Amongst different structure ABC company has successfully adopted
functional organisational structure under which the workforce are allotted work on the basis
of their skill-set, capability and knowledge. Here the company consist of various department
such as information technology, marketing department, research and so on and each department
has the functional head or specialist who have deep knowledge and insight regarding their
department. Such division of work creatures the transparency and help the employee to
coordinate their efforts in order to achieve best possible result. As the company function in
various part of the developed countries like USA, UK, Germany, Australia,. Denmark and so on
so everywhere it has adopted the same structure. Due to several advantage associated with
Functional structure like efficient delivery of the services and better coordination of effort ABC
company has too planned out to follow the same strategies while expanding its business in
certain developing countries like India and China. Although within developing country the
company need to be extra cautious of the external environment due to unstable political and
government condition. So implication of respective structure and assist the company to deal with
the dynamic condition and function systematically (French, 2015). Furthermore, from the
initially years the company has also adopted the latest technology and keep on brining the latest

innovation. Like, ABC company rests only on the digital platform such as social media, SEO,
email marketing and so on to promote its brand. Along with this affiliated marketing is one of the
most successful tools that is used by company to promote its website. Like, it creates win win
situation by spreading the awareness of their hospitality services via the most visited website
where traffic rate of the customer is relatively high (Vom Brocke and Rosemann, 2014).
Therefore, the use of google analytics, personalized messages as well as customised
advertisement for different income group people has relatively helped the ABC company to
adopt the best possible strategy and outreach each and every customer to different part of an
economy successfully.
Cultural analyse of countries
In current scenario of industry, there is an intense level of competition or challenges which
directly impact over firm's decision making process as well as their ability to achieve
organisational goal in an efficacious and prompt manner. However, the concept of organisational
culture is a dynamic system that encompasses shared value, beliefs, philosophies, experiences
and may more that impact positively and natively over individual and leadership (H. Akbar and
Vujić, 2014). To survive within competing marketplace, an organisation require highly skilled
workforce who can takes initiative to put their full contribution towards an accomplishment of
business goal or objective in a desired period of time. With the rapid modification in the
globalisation of business, workforces are becoming increasingly diverse and multicultural which
impose a huge challenge for HR managers in terms managing or handling the manpower in a
satisfactory level. Each country has their rules and regulation regarding employment which
varies from region to region and nation to nation. Thus, it is essential for an organisation to
identify the interest or capability of each individual so that mangers can easily acquire high level
of satisfaction or motivation form personnel in an improved way. In context of ABC Limited,
which is one of the leading hospitality firm in Germany which makes an attempt to offer wide
range of products like package holidays, accommodation, reservation and many more and serve
their business function across the globe. However, by understanding the level of competition
within business environment, ABC Limited empowered to enlarge their market share or size into
new geographical region i.e. India and China. Although, it bring several benefits to company's
productivity but at the same time it enforce various challenges or threat which ABC Limited has

to undergoes in terms of maintaining or managing cross border cultural relationships among
employees (Kitching, Mashruwala and Pevzner, 2016)(. However, for hiring or recruiting highly
talented manpower from different regions of countries becomes a huge threat for ABC Limited
and it influence its decision making process. While recruiting personnel for international
operations or functions, an establishment's HR managers takes an initiative to determine the
global competitiveness of potential applicants during recruitment or selection process. This is
because an effective or productive personnel will be able to put their best contribution by
acquiring novel or innovative ideas or opinion which lead them to bring increase in company's
proficiency and productivity. Hence, there are several approaches of international recruitment i.e.
ethnocentric, poly centric, geocentric, regiocentric.
Ethnocentric approach: Under this recruitment procedure, an organisation hire skilled
employees for their functional areas who is of same nationality of parent company. One of the
key rationale behind adopting this method is that the employees who belong to parent country
tend to represent the interest of headquarters effectively and link well with home nation without
nay hindrances. Some of the recruitment process which ethnocentric implies while selecting pool
of skilled personnel such as self selection, create pool, technical skill assessment, mutual
decision.
Polycentric approach: In this, nationals of host country are recruited for managerial
position in order to accomplish the functions or operation of subsidiary companies. The reason
behind acquiring this approach is that the locals of host country are aware about each and every
aspect of culture which make them more easier to carry out their task in an trenchant way
without any obstacles. Another benefit is that it decreases the cost of foreign operations
gradually and they can build better cross cultural relationship in order to improve the brand value
of firm within competing marketplace.
Additionally, these trends or techniques have transformed the role of manager into much more
complex form than it was before. This is because cultural adaption issues have become
ineluctable alongside the introduction of global business environment. As ABC Limited decides
to enhance their market size into India and China where many foreign investors and MNCs are
planning to place their product or service to obtain maximisation of profit in a desired time frame
Lee, Shiue and Chen, 2016). Thus, it is essential for ABC Limited to identify current or
emerging trend related to management of cross cultural which company may undergoes while

operating their business function at global pace. Here, some of the models of culture which help
ABC Limited to examine various issues as well as enable them to make corrective course of
action for improving the working culture of firm.
Hofstede model
It took place in the year of 1980 which mainly emphasis over comparison of values to culture
across different countries. It contain various dimension which varies from each other and render
the idea behind coordinating personnel values and firm working culture. Its dimensions are as
explained below:
Individualist: Under this, an individual makes an attempt to identifies one self or own
strength in order to build social network of interaction within particular business environment. In
this, the success of single personnel is depend upon being self sufficient and self dependent
which help them to provide their best effort an accomplishment of organisational goal. Thus, in
regard of ABC Limited, its managers makes an effort to acknowledge their accomplishment and
encourage them to debate or express ideas to other co-workers for improving their social network
at ethnocentric level.
Collectivist: It is opposite of individualism as it encompasses those kind of manpower
who prefer to associate themselves in groups or team and their main success lies over working as
a team or group. In context of ABC Limited, for expanding their market through poly centric
approach then coordination and integrity of team members becomes a focal point for firm's
superior. Thus, they motivates each person to take participate in sharing ideas or thoughts as well
as guide them to respect each other views in order to improve overall performance of
organisation.
Power Distance: This element is relates with the degree of inequality which exist
between people with or without power. It mostly occurs in workplace relationships, particularly
in the relationship among mangers and subordinates. In view of ABC Limited, for maintaining
better working culture at ethnocentric level, it identifies the abilities or capabilities of each
personnel and based on that they delegate roles or responsibilities which help them to gain
increased level of satisfaction and motivation in innovative manner. Moreover, they must adopt
suitable organisational structure which lead them to enhance their market size in an efficient
way.

Uncertainty avoidance: This phase deals with interpretation of uncertainty as well as
capability of staff to cope up with various issues or rivalry which is unpracticable and
uncontrollable in nature. Thus, ABC Limited who desires to enlarge their market share into India
and China has to create awareness about upcoming challenges and also empower them to bring
innovative or novel ideas in order to tackle over all cultural issues. Moreover, managers takes an
initiative to recognise each employees emotions, gestures and takes corrective course of action
without harming their morale (Malik and Pereira, 2015).
Masculinity- femininity: It is the extent to which cultures differentiate between gender
role. Each gender has their role and characteristic which differentiate them from each in every
aspect of business function. However, male orientations are viewed by ambition and excellence
on the other hand female hemisphere have prosperity more towards quality of life and harmony.
Thus, in relation to ABC Limited, decision behind expanding the market into India and China
benefits them in acquiring high level of productivity. In order to attain high level of proficiency,
ABC Limited makes an attempt to provide enormous opportunity as well as render training or
development program that enrich their profit margin in an impressive or productive manner.
Handy's cultural model
The concept of organisational structure can be further understood with the help of Handy's
cultural typology. It is a framework which is provided by Charles Handy in the year 1999. A
brief explanation of types of organisational culture are as follows:
Power Culture: In such organisations, power is possessed by some influential people
who are known to take crucial business decisions. The influential people are known to delegate
their responsibilities to subordinates who have to strictly follow the instructions provided.
Task Culture: These organisational culture are formed specifically to overcome a
difficulty of achieve a task. In such organisational culture, a team of specialised individual is
formed to accomplish the tasks assigned (Rohlfer and Zhang, 2016).
Role Culture: Under this, organisation assigns different roles and responsibilities to
various personnel based on their capability and potentiality that generate increased level of
satisfaction. IN regard of ABC Limited, while operating the business in India and China they
identifies the skill of every individual and based on that they delegate the work which help
company's manager to acquire best position within competing industry.

Person Culture: In this, people regard themselves as superior for business which restrict
and take less interest in improvement of organisation. Thus, ABC Limited makes an effort to
examine the behaviours or attitude of each personnel and empower them to take participate in
business activities in order to gain competitive advantage.
Henceforth, ABC Limited makes an appropriate action in identifying the market situation
as well as take initiative in providing better working culture which help them to attain increased
level of productivity and proficiency.
Practical issue
Multinational hotel companies like ABC company usually integrate with the various
travel agencies, tour operator and well as from strategic alliance with the other similar type of
businesses in order to develop and mitigate the chances of risk (Scott, 2016). In order to diversify
the services suitably especially in developing areas the company need to anticipate the external
market, plan out the significant strategy and need to execute its plan effectively. Thus, even after
carrying out the whole design and plan effectively the company may face certain practical issue
which are defined below:
Political risk: This is the most obvious risk that one has to bear while emerging the
travel and tourism business in internation country. In case of developing countries like India and
China which are the emerging and potential market due to which it may offer various
opportunities to the ABC company. But at the same time it poses the challenges of political
instability in companionship to the established market (Stahl and Tung, 2015). So before
launching the business in such market the company need to figure out the whole market so that
they can plan out best possible strategy. Issues like changing government and unstable policies
and affect the company and leads to negative return from its investment. In context to India
usually welcome the large companies like ABC that can enhance the employment opportunity
and help to enhance the per capital of income. But on other side, within China Facebook is
banned which is one of widely promotional source for selected company. So to cope up with
such practical issues the company need to have alternative plans so that they can smoothly
function in the new geographical area and gain the attention of their potential customer.
Supply chain complexity: When the company need to source the services overseas or on
other international market so in that case they need to analyse their supply chain in order to reach
out to the final consumer (Wang, Solan and Xu, 2014). As within existing countries like

Australia, UK and Germany ABC company has good supplier supply relationship due to which it
has cater the need to huge national and internal customer. Additionally, in terms of developing
country this may act as a practical issue for the company as it may take time for them to select
the best supplier and form close network with them. Even if on the basis of this company start
function then there is no guarantee that how long the relationship is managed by both the parties.
Hence, dependency on external stakeholder can act as a practical issue which may affect the
functioning of company.
Commination barrier due to Cultural differences: Communication is the source by
which one part can share their opinion, view and pass on the relevant information to the other
group (Steers and Sánchez‐Runde, 2017). Maintaining effective communication with the
different stakeholders of the company is possible one of the practice challenges that ABC
company will face and have to undergo with it by landed up making effective strategy. Although,
India and China are the Asian countries but there is huge diversity in terms of language, food
habits, dressing sense and so on. Thus, in both the cases the company with the help of reach and
development department can analyse that how much people avail the services of travel and
tourism and what are the possible ways they can frame their content. Thus, to deal with the issue
the company can also hire the local residence that can deal with the customer effectively and
help to overcome the cultural differences barrier (Warner, 2014).
Therefore, the planning of ABC company needs to be carried out in such a manner it can
cope up with the challenges and exploit the opportunity by diversifying the business effectively.
Recommendation
Thus, on the basis of background of the company and its expansion plan there are certain
recommendations that can help the company to exploit the opportunity effectively:
Determine external factor and use cross cultural model to analyse the success of
business: As there are enormous advantage associated with the diversification of business but
before carry out expansion ABC company should precisely focus on the external factor such as
environment condition, customer behaviour, economic condition, existing of competitor and so
on. Information of the current market can help the company to plan out the best possible strategy
like, within India and China company can set different pricing strategy in comparison to the
other countries. Further, by gaining the proper insights regarding the market the company will
come to know how they can create value addition and target the market suitably.

Constantly anticipate the changing behaviour of customer: Even if the the firm starts
functioning in the other countries still they should constantly work on their research and
development department to identify the best possible ways they can cater the market. AS within
developing market the trend, attitude and references of the customer changes on the constant
basis so the company need to match the pacer with the preferences of customer. Hence, if ABC
company remain successful to shape itself as per the customer behaviours they it will assist the
company to gain the trust of whole audience desirably.
Provide training to the internal staff: Training is the ability under which the existing
skill and knowledge of the individual enhances on the regular basis. As company carry out the
functioning in the dynamic environment which make it essential for them to make their internal
staff competitive so that they can welcome the changes and adopt the new ways of doing work.
In addition to it, the company should adopt the innovative technologies so that they can easily
deal with the various customer by reducing the waiting time of staff. Further, the company
should also focuses on its customer service support so that they can even handle the query of
potential market that is India and China.
CONCLUSION
From above study it has been found that Every culture operates and believes differently,
but managerial personnel can enhance efficiency in business area by applying cross-cultural tools
of managing diversity. Cross-cultural management is a excellent manner to promote growth and
progression, as well as improving communication to offer better alternatives. Managing the
diversity of the workforce is indeed a significant challenge for organisations. A managerial
personnel has to have an in-depth research to handle diverse workforce to know each individual
person's expectations and desires that will eventually offer a happier workforce. It enables an
organisation cope with individuals from one major cultural background and communicate with
individuals from other different cultural backgrounds. The model of Hofstede's cultural represent
effect of culture deep-rooted in social group or societies on belief and values of society's
members while handy's cultural model mainly emphasises upon rules which assist in linking
organisational culture to organisation's core structure.

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