Cross-Cultural Capability Assessment: Crown Northampton and China

This report analyzes the cross-cultural capabilities of Crown Northampton, a family-owned shoemaking company, in the context of shifting manufacturing to China. It explores the opportunities and risks associated with this shift, including labor costs, intellectual property protection, and supply chain considerations. The report utilizes Hofstede's model of cultural dimensions to understand the cultural nuances of China and their impact on business operations. It examines issues related to legal, marketing, purchasing, and logistics, highlighting the challenges and considerations that Crown Northampton faces in the Chinese market. The report emphasizes the importance of understanding cultural differences for effective communication, market segmentation, and achieving a competitive advantage. The findings highlight the need for managers to develop and implement strategies to navigate cross-cultural complexities and ensure successful business operations in China. The report concludes by emphasizing the importance of adapting to cultural differences and implementing strategies to mitigate risks.

Developing cross
cultural capability

Table of Contents
INTRODUCTION...........................................................................................................................3
Opportunities and risks of shift in manufacturing to other countries..........................................3
Hofstede model of cultural dimension in country China ...........................................................4
Literature review on cross cultural capabilities of Crown Northampton in context with China
.....................................................................................................................................................6
Issues around legal, marketing, purchases and logistics.............................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9
.......................................................................................................................................................10

INTRODUCTION
Cross cultural capabilities refers to the power of understanding people from different
cultures and engage with them efficiently. It is very important to have an effective
communication and work accordingly with respect to culture. The below report involve
opportunities and risks of shift of manufacturing, various issues, cross cultural and HR related
considerations which arise with shift in production. The report includes hofstede model. The
below report is based on Crown Northampton(Caligiuri and et.al, 2019). It is the fifth generation
family owned company which had effective knowledge as well as understand rich and important
shoemaking heritage of their own town. The designs were been established with progressive
mindset and all products included traditional British methods in context with construction
dealing in both men's as well as women's unisex styles. The company products were handmade
in England since 1908.
Opportunities and risks of shift in manufacturing to other countries
In case of China, while doing production brands mainly consider China only to produce
their products but now there is low cost export platforms so companies don't want to take risk
while manufacturing their products. In accordance with U.S. Companies they usually chose
Mexico because it was considered as a favoured spot. The working and functions of
manufacturing are different from country to country. Therefore, it is essential for chosen firm to
overview about these so that decision making is done in most effective way. There are many
opportunities and risks and these are explained as below:- Labour cost and competition for talent are rising:- China is considered as the most
cheap and abundant labour but it was also at risk. The major challenges which were been
faced was increased cost as well as increasing competition. Rising of costs:- When companies shifted their manufacturing the costs were also
increasing due to which company was not able to do business. The risk was also in

relation to increased electricity rates as well as corporate income tax rates(West and
et.al,2017). Intellectual property protection:- It became a major challenge for company to protect
their intellectual property but organisation also made progress to handle certain risks.
 Shortening of supply lines:- It is little difficult as well as risky to manufacture product in
China and then shipping it across whole world as it will cost very high and at the same
time it is time consuming.
While shifting manufacturing there was an opportunity for company which was
beneficial for them as China is the most developed marketplace and still developing as compared
to other country. If there will be effective compliance with respect to Chinese customs company
would be able to establish effective data management practices. It was an opportunity for
company to look beyond their labour costs and apply total cost decision model. Moreover,
market situation is flexible so there is huge impact in business operations when they take shift in
another country.
In case of Crown Northampton, they also shifted their manufacturing as it was an
opportunity for them to hire low wage workers which was beneficial for their shoe brand but
they also had a risk due to impact of Covid-19 which can create a major downfall in context with
their manufacturing. It is responsibility of manager to ensure that correct strategies & tactics are
used to identify opportunities as well as risk in well organised way(Chen and Huang, 2017).
Hofstede model of cultural dimension in country China
Hofstede theory of cultural dimension determine effect of society culture in relation to
value of its members and how certain values relate to behaviour. With help of this model, it is
easy to understand the forms of different cultures which has value & important role in market.
There are six dimensions involved in Hofstede theory and these are power distance index,
individualism and collectivism, masculinity and femininity, uncertainty avoidance index and
long term orientation. Power distance index:- It means to express the degree to which all less powerful
members accept and at the same time expect that power is been distributed unequally.
The major issue arise when society need to handle inequalities among them. In context
with Crown Northampton, people acknowledged the order where each individual no

longer required justification but they also faced certain inequalities. They were also
having an opportunity to analyse the concept of Centralisation. Individualism versus Collectivism:- Individualism means to have an expectation that all
people will take care of themselves and their immediate families. In case of collectivism,
people expect their relatives or even other members who are not in their group to look
upon them. The position on which society is determined whether there is use of “I” or “
We” . In case of Crown Northampton, the culture was mainly collectivism so they had an
opportunity to foster effective relationships and everyone take responsibility according to
rules but at the same time they had a risk as at some point of time there may be lack of
relationship also due to which they may face loss also. Masculinity versus Femininity:- In case of masculinity, it determines preferences of
audiences in relation to achievement, rewards for success but in case of femininity, the
preference is for cooperation, care and here the society is more consensus oriented. In
accordance with Crown Northampton, in terms of China state the opportunity they had
was equality but at the same time there was risk also as success can be harmed because
there will be many competitors. Uncertainty avoidance index:- It means the members of society who feel uncomfortable
with respect to uncertainty. The main issue which lies in this dimension is to deal with
issues that society face as their future is been known(Hu and et.al, 2020). In case of
Crown Northampton, China scored high because risks can't be ignored so innovation can't
be done as people don't want to indulge in certain risks due to which their profits gets
decreased but company also had an opportunity as their rules were relatively stable
through which they can perform their operations in effective manner and this will lead
them to increase their profits also.
 Long term orientation:- There are various challenges that people face so to deal with
them they had to maintain certain links with their past so that they can effectively deal
with all those risks. In case of Crown Northampton, they focused on applying pragmatic
approach due to which all employees can accept change if it arises. The company cannot
rely on same perspectives, they had to imply certain changes also but this is also
considered as a risk to them because if people won't accept changes them it will harm
their company(West and et.al, 2018).

After analysis of above matter, it has been examined that it is crucial to focus on
different culture on basis of which it is easy to generate new ideas and understand the perception
level of other people. In context of Crown Northampton, as they deals in shoes and boots, they
need to understand the concept of diversity as well as culture so that it is easy for them to select
appropriate market segment for business level. Moreover, it is through this it is easy for entity to
achieve competitive advantage in easy way.
Literature review on cross cultural capabilities of Crown Northampton in context with China
As per the view point of Keyong Dong, Ying Liu, China is the country who mainly
focused on foreign decision makers as well as employees and performance in Chinese culture
also. As there are different type of cultures there are various type of variables also who analyse
relationships in same as well as different variables also. In China, a complete different organised
culture is enclosed but at the same time it was examined that they were not having a well
developed culture also. So, the government introduced cultural interventions which involve
various elements like cross-cultural communication systems, co-ordinated organised culture and
cross-cultural training also.
It is been determined that all employees don't belong from same culture so company hires
people and assign their role in that particular location from where they belong to in order to
ensure fruitfulness as well as effective proficiency. As per hofstede culture company accepts
individualism culture so that they maintain effective relationships and can also ensure long term
survival(Hu, Hu and Wang, 2020). The cross cultural capabilities are needed at all level as an
organisation with people who belongs from different culture and has ability to perform multi -
tasking operations often increases productivity at workplace at higher scale.
Issues around legal, marketing, purchases and logistics
In business, various types of issues are encountered by management due to both internal
as well as external factors. Some of the issues are being discussed below- Legal issues:- In context with doing business in China and changing their manufacturing
department they faced many legal issues. As, there are certain government processes
which were not much transparent due to which the activities which are been performed
like in context with product approvals. When company changes their manufacturing
departments so there are some legal policies which are different from that of legal
policies that are followed in their country.

 Marketing issues:- To run a effective business, culture is the most important thing which
must be followed. Marketing can be done through different ways like with the help of
advertising, business communication and many more. In terms of advertising, the main
important thing which is included is Language. People purchase products by looking at
the structure of advertisements. When company change their manufacturing departments
and shift it to China, they had to change their marketing philosophies also as people don't
have knowledge about that culture, language so they will not understand it. The issues
also arise from business communication also. In today's world, markets are becoming
more global in nature due to which cultural change also gets arise. So, marketing issues
gets in as the level of communication is different and at the same time culture is also
different(Zhang, Wei and Zhou, 2017). Purchasing issues:- When manufacturing is shifted to another country the company
faces many issues and the major one which occurs is obstacles in accordance with
purchase behaviour. There is a attitude behaviour gap which gets involved. There are also
certain factors which affects purchase behaviour of individuals like product design or
various brands which affect people purchase decisions. Purchasing issues arise because
the choice of brand and choice of products are also different. Every country has different
whether its in the form of language, their clothing styles so their decisions are also based
on that only due to which company has to face. As, organisation is a shoe maker
company so it has also many competitors and it is not pre-decided that people living in
China will also prefer their company only. They have different choices and according to
that they buy products.
 Logistics issue:- It is also a major issue which can affect company profits. There are
many logistic issues like changed government regulations, economy related issues and
many more. So, when shifts their manufacturing to another country they also face
changed regulations, currency issues and due to this future problems get arise because it
becomes difficult for company to manage complete different currency(Lee and et.al,
2018). Another logistic issue is also related to distance because distance between
countries are very much and while shifting manufacturing it takes time to launch product
in a complete different country and employees don't have idea about perspectives of those
people.

There are many cultural differences which gets arise whether you run your business
internationally or even globally because it is not possible for any company to understand cultural
differences on fast basis. In case of Crown Northampton also, as they shifted their manufacturing
to another country that is China, they faced challenge in maintaining relationships because it is
not same like in Northampton, people prefer telephonic conversation but in China they don't so it
becomes a challenge for them to change their way of communication and maintain good
relationship. It is true that when company shift their manufacturing to another country there
many be many opportunities which they can get but at the same there are many issues also to
deal with. Issue are not less, there are many issues and employees can't deal with them overtime.
It requires much time which will affect their success also(Onifade and Bridges, 2018).
CONCLUSION
From the above report it is concluded that companies can achieve success as well as can
face risk because of cross-cultural capabilities. Every country has different culture whether its in
the form of language, clothing and many more. So, discussions have been made about concept
of cross cultural, Hofstede's model, Literature review on cross cultural capabilities, Issues
around legal, marketing, purchases and logistics. It becomes difficult to deal with cross-cultural
issues. There are different issues like purchasing decisions which create a major impact on
company because people prefer products according to their culture so these capabilities should
be assessed properly. Developing cross cultural capability is a critical procedure which is
required to be understood with proper considerations. Therefore, it is duty of manager of
organisation to make assure that effective training and development programmes are being
carried out within management so that it is easy to access competitive benefits.

REFERENCES
Books and Journals
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media usage and cultural intelligence.International Journal of Intercultural Relations,74,
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the dynamic capabilities development of multiunit organizations.Asia Pacific
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capability for librarians.IFLA journal,44(1), pp.44-55.
West, R., and et.al, 2018. Validation of the first peoples cultural capability measurement tool
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Online
Ying Liu, 2010.Cross‐cultural management in China,[Online]. Available through:
<https://www.emerald.com/insight/content/doi/10.1108/13527601011068333/full/html>