Cross-Cultural Management: An Analysis of HSBC Using Hofstede's Model

This report examines HSBC's cross-cultural management practices, focusing on the application of Hofstede's cultural dimensions theory. It analyzes how factors like power distance, individualism, uncertainty avoidance, masculinity, long-term orientation, and indulgence influence HSBC's business performance. The report compares cross-cultural management approaches between the UK and India, highlighting the impact of these dimensions on HSBC's operations and employee relations. It also explores the importance of cross-cultural management in strategic negotiations and overall organizational success, emphasizing how a multicultural workforce and effective management contribute to improved financial results and competitive advantage. The report concludes by summarizing the key findings and reiterating the significance of cross-cultural understanding for global business success, particularly for a multinational bank like HSBC.

Running head: CROSS CULTURAL MANAGEMENT
CROSS CULTURAL MANAGEMENT
Name of the Student
Name of the University
Authors note

1CROSS CULTURAL MANAGEMENT
Introduction
Hofstede's cultural dimensions theory serves as framework in analyzing the cross-
cultural communication. Implementation of this theory also facilitates in describing the
impacts of a society’s culture on the values related with their behavior. The objective of the
report is to analyze the Hofstede’s model in explaining the cross-cultural theoretical aspects
that persuades the business performance of selected British Company that is HSBC. HSBC
Holdings Plc. is British multinational banking along with financial organization that has
positioned itself as the seventh largest bank in the world.
Answer to question 1
Cross cultural communication has turned out to be strategically vital for the
companies that can support the growth of global business, internet and the technology.
Understanding the cross-cultural environment is vital for any organization that has global
business and has a diverse workforce. HSBC is selected for analyzing its Hofstede’s model
for the reason that it is one of the biggest examples of cultural diversification as it operates
globally and has diverse workforce belonging to different cultures.
In reference to the Hofstede’s model, the business performance of the HSBC
Company improved because in the United Kingdom the power distance is in lower ranking. It
means that the individuals in the society and in an organization is treated equally, the
opportunities are given to everyone. For instance, every employee in HSBC is treated well
and the company maintains a positive culture that helps in creating a good impact on
employees helps in improving the performance of the business in global business
surrounding.
The individualism of the HSBC Company is on high rating helped in improving and
strengthening the culture of the organization because they are independent in taking their

2CROSS CULTURAL MANAGEMENT
decisions. The hiring and promotional decisions are not made based on relationships which
leads in improving the performance of the business they do not believe in collectivisms
(French, Conrad and Shaaban, 2013).
The United Kingdom is a masculine society that is the HSBC company highly success
oriented which helps in improving the culture of the organization. Though it is highly success
oriented the business performance of the company is good and leading to a profitability. They
are having the clear performance ambition their value system continues throughout the
organizational life (Claus, Callahan and Sandlin, 2013).
The uncertainty avoidance in the HSBC company is low they immediately takes
action thus improving the workplace of the organization. The combination of high
individualist and curious nation is a high level of creativity and strong need of innovation.
The organizations is quite happy because to make it up and they go along with changing
plans as new information becomes known.
In accordance with the long-term orientation, the HSBC Company used to maintain
links with its own past by dealing with the challenges of present and future. The company
believes in long-term investment and maintaining the long-term relationship with its
employees because this will benefit them in future and can achieve the future organizational
goals. The pattern of long-term investments helps them to improve the financial performance
of the business.
In case of indulgence HSBC, company believes in humanity and they involve
themselves in lot of social responsibilities they believe in positivism because the economic
strength of the United Kingdom is strong enough. Because of their involvement in social
responsibility, it means that they are having the positive attitude towards optimism. The
indulgence helps them to explore their business more, this helps them in improving the

3CROSS CULTURAL MANAGEMENT
business performance because indulgence stands for the society that allows relatively free
gratification of basic, and natural human drives related to enjoying life and having fun.
However in the context of India the mangers must every workers equally, that is
opportunities so that they can explore their ideas. They must also get involved in the social
responsibilities so that there action do not get restrained by social norms also do not get
involved in unfair means because this badly effects the culture leads to bad performance. The
managers must value the performance of every individuals so that they feel motivated and
show their best performance in the organization that will also help in increasing the
productivity.
Answer to question 2
The comparison of cross-cultural management between United Kingdom and India, in
both the countries the cross-cultural management is different in a wider sense. The power
distance in India is higher than United Kingdom this means that in India the individuals in the
society and organizations not treated equally. It implies that the low-level workers not given
right opportunities, communication is down due to which it is affecting the culture of the
organization and negative feedback given to them. Whereas in United Kingdom the power
distance is low it means society believes that inequalities amongst people needs to minimized
that is they are treated equally. Everyone is getting equal job opportunities and it creates a
good relation with the top level and low-level people and creates a positive culture
(Sriramesh, 2013). There are certain CCM issues that are faced by HSBC in operating in
different nations having high cultural similarities and differences. Fir instance, HSBC goes
issues in operating within Japan due to high cultural differences from its home country.
Collectivism culture is followed in Japan that has controlling value and has negativity
because power is not distributed as per employee level; age and seniority that causes issues
for HSBC in maintain a supportive culture of workplace diversity. Moreover, CCM in certain

4CROSS CULTURAL MANAGEMENT
nations with culture similarities has also facilitated HSBC to maintain enthusiasm culture
among staff where changes are conducted in an orderly manner.
The next is the individualism in United Kingdom is high this implies that the degree
of interdependence is maintained among its members that is they are having their self-image.
It is having a good impact in the organization as well as in society because it is strengthening
the culture. Whereas in India it is low, it means that there is very less degree of
interdependence that is the hiring and promotional decisions are often made based on
relationships and because of personal image and this have a bad impact on the culture
(Gjersoe et al, 2014)
The third is the masculinity it is higher in United Kingdom it implies that it is highly
success oriented and driven. This means that the people in United Kingdom live in order to
work and have a clear performance ambition, which leads to underlying success and driven
value system in the culture. Whereas in India it is low, it is there is no concept of value
system in an organization and society (Hinchy, 2014).
The fourth is the uncertainty avoidance in India it is higher it has a medium low
preference for avoiding uncertainty that is there is acceptance of imperfection. People
generally do not take action initiatives due to which the environment of the business is
affected problem of misery often takes place. Whereas in United Kingdom it is low that is
they generally not avoid these things and take certain actions due to which the positive
culture created good image is maintained.
The fifth is the long-term orientation in both the countries it is same that is the
countries are maintaining some links with its own past while dealing with the challenges of
present and future. The score is intermediate that is dominant culture cannot be determined;

5CROSS CULTURAL MANAGEMENT
they do not take a more programmatic approach they do not encourage the thrift and efforts in
modern education old values are used which is not determining the perfect culture.
The sixth is the indulgence in United Kingdom it is high it implies that the people in
the societies and in an organization generally exhibit willingness to realize their impulses
with regard to enjoying life and having fun. They possess the positive attitude towards
optimism this is having a good effect in the organization culture they are free for their doing
due to which they do not indulge themselves in wrong activities. Whereas in India it is low
that is culture is described as restrained they do not put emphasis on leisure time and indulge
in wrong activities that creates issue for the organization (Kedmenec and Strašek,2017).
Answer to question 3
Cross culture, management involves managing work teams in ways that considers the
differences in culture, practices, and preferences of consumers in a global or international
market context. Cross culture management teach in which way the conflicts would be
handled of heterogeneity culture and actualize effective management. The importance of
cross-cultural management is that it helps an organization to become more effective and
efficient in multicultural business environment, helps in increasing the organization global
fluency. The global fluency could establish a good business relationship and creating a
competitive advantage in the global market place for the organization. Cross culture,
management creates an opportunity for the employees when working with people from
different countries and background (French, 2015).
Cross-cultural management leads to managers success and firms financial results
because cross culture leads to cultural diversity. A multicultural work environment
contributes the internal team by transforming the workplace into a place of learning and
practicing of new ideas. A multicultural workforce with different collective intelligence can

6CROSS CULTURAL MANAGEMENT
produce the higher quality good to meet the customers’ requirement, which will improve the
firms’ financial results because it help in increasing the organization effectiveness and
competitive advantage. The more mangers realize its existence the more it relates to
productivity of the organization. Cross-cultural management helps in product development,
service enhancement that helps in improving the financial results of the organization. The
cross-cultural management provides moral support to motive the employees and improves the
work performance and productivity (Kaynak, Fulmer, and Keys, 2013).
Strategic negotiations are observed to play a major role in ensuring effective
performance of companies operating globally in a cross cultural environment. CCM plays a
major role in strategic negotiations of HSBC bank globally. For instance, the bank and its
worker unions eventually negotiate settlements to deal with strikes causing at operations in
various branches of the bank worldwide. According to the Hofstede’s model if the
organization power distance is good then it helps in increasing the productivity of the
organization. Every people are treated are equally due to which they will show their best
performance in the company thus help in improving the financial results of the company.
Some organization rely on a team work the individuals with common interest work as a team
that is when the individuals exchange ideas the output will be more. The uncertainty
avoidance index refers to the tolerance level of employees if in an organization certain
actions are taken immediately them it will improve the culture and effects the financial
results. If in an organization the masculinity is high then the organization is driven by
competition achievement and success they are motivating the employees by also
concentrating on these factors and this will surely improve the financial results. The long-
term orientation means employees are attached towards the organization based on long term
that is they will show their better performance towards the organization. Employees who see
long-term investment in the relationship often feel more attached to the company and focus

7CROSS CULTURAL MANAGEMENT
on long-term goals. The planning will done more for achieving the long-term goals and thus
helps in increasing the productivity and improves the financial results of the particular
organization(Hofstede, 2015).
Conclusion
The objective of the report was to analyze the Hofstede’s model in explaining the
cross-cultural theoretical aspects that persuades the business performance of selected British
Company that is HSBC. It was gathered that the individualism of the HSBC Company is on
high rating helped in improving and strengthening the culture of the organization because
they are independent in taking their decisions. Cross-cultural management helps in product
development, service enhancement that helps in improving the financial results of the
organization. It has also been gathered that the global fluency could establish a good business
relationship and creating a competitive advantage in the global market place for the
organization.

8CROSS CULTURAL MANAGEMENT
References
French, T., Conrad, M. and Shaaban, H., 2013. Localized trust—the semiotics in culture and
e-culture. Int. J. Digit. Soc.(IJDS), 1(1), pp.817-825.
Claus, V.A., Callahan, J. and Sandlin, J.R., 2013. Culture and leadership: women in nonprofit
and for-profit leadership positions within the European Union. Human Resource
Development International, 16(3), pp.330-345.
Sriramesh, K., 2013. Power distance and public relations: An ethnographic study of Southern
Indian organizations. In International Public Relations (pp. 181-200). Routledge.
Gjersoe, N.L., Newman, G.E., Chituc, V. and Hood, B., 2014. Individualism and the
extended-self: Cross-cultural differences in the valuation of authentic objects. PloS one, 9(3),
p.e90787.

9CROSS CULTURAL MANAGEMENT
Hinchy, J., 2014. Obscenity, moral contagion and masculinity: Hijras in public space in
colonial North India. Asian Studies Review, 38(2), pp.274-294.
Kedmenec, I. and Strašek, S., 2017. Are some cultures more favourable for social
entrepreneurship than others?. Economic research-Ekonomska istraživanja, 30(1), pp.1461-
1476.
French, R., 2015. Cross-cultural management in work organisations. Kogan Page Publishers.
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.
Hofstede, G.J., 2015. Culture’s causes: the next challenge. Cross Cultural
Management, 22(4), pp.545-569.

10CROSS CULTURAL MANAGEMENT

11CROSS CULTURAL MANAGEMENT

12CROSS CULTURAL MANAGEMENT

13CROSS CULTURAL MANAGEMENT

14CROSS CULTURAL MANAGEMENT