Analyzing Socio-Cultural Factors Affecting International Business: CBA

This report provides an analysis of the socio-cultural factors that affect the international business operations of the Commonwealth Bank of Australia (CBA), focusing on its presence in both Australia and China. The report begins with an overview of the CBA and then delves into the socio-cultural landscapes of Australia and China, highlighting key differences based on Hofstede's cultural dimensions. Australia is characterized by individualism, masculinity, low power distance, low uncertainty avoidance, and a low long-term orientation, while China exhibits collectivism, masculinity, high power distance, low uncertainty avoidance, and a high long-term orientation. The report then discusses the implications of these cultural differences for managers, emphasizing the need for adaptation and understanding in order to succeed in the international business arena. The report concludes by summarizing the key findings and offering insights into how CBA can leverage cultural differences to enhance its business prospects.

Running head: MANAGING ACROSS BORDERS
Managing Across Borders
Name of the Student:
Name of the University:
Author’s Note:

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Executive Summary
This report will discuss about the socio-cultural factors which affect the business of the
various business organizations through the banking organization Commonwealth Bank which
is operational in the nations of Australia and China. The report will begin by introducing the
organization and give a brief overview of the social and the cultural differences between the
nations of Australia and China. Finally, the report will conclude with the implications which
the managers can derive from the differences in cultures and social backgrounds of the two
and the way they can use these differences to further enhance the prospects of their business.

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Table of Contents
Introduction................................................................................................................................3
“Commonwealth Bank of Australia”.........................................................................................4
Socio-Culture of Australia.........................................................................................................5
Socio-Culture of China..............................................................................................................7
Implications for managers..........................................................................................................9
Conclusion................................................................................................................................11
References................................................................................................................................13

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Introduction
The process of “globalization has transformed the entire world into a global village
where the business organizations from the various different nations of the world can transact
their business” (Taras, Steel and Kirkman 2012). The “concept of globalization in the specific
context of the business world gained prominence in the later part of the 19th century” with the
introduction of the steamboats and the telegraphic system(Taras, Steel and Kirkman 2012).
Therefore, the business organizations of the “contemporary business world are increasingly
taking the help of this particular concept to further enhance the prospects of their business”
(Schlagwein, Thorogood and Willcocks 2014). The most “important factor which the various
business organizations need to take into consideration for the process” of their international
business is the factor of culture (Schlagwein, Thorogood and Willcocks 2014). It is often seen
that the culture as well as the social background of the nation in which a particular business
organization expands is drastically different from the culture and the social background of the
country to which the organization originally belongs (Schlagwein, Thorogood and Willcocks
2014). Thus, it is often seen that these business organizations need to make several
adaptations as well as modifications in their style of business in the various other nations of
the world (Hirst, Thompson and Bromley 2015). Therefore, the various managers of these
organizations need to take the factors of culture as well as social factors “into consideration
for the purpose of their business” (Hirst, Thompson and Bromley 2015). It is generally seen
that the various business organizations fail to take these factors into consideration and as a
failure they fail to sustain themselves for very long in the competitive business world of these
nations (Hirst, Thompson and Bromley 2015). An example of this instance is the business
operation of the company Disney in the nation of Paris (Hirst, Thompson and Bromley 2015).
This report will discuss about the concept of social as well as the cultural factors “which the

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various managers need to take into consideration for the process of their business” in the
other nations of the world. The report will specifically focus on the business operations of
the Australian organization Commonwealth Bank in the nation of China in order to study the
way socio-cultural factors affect the business world in the present times.
“Commonwealth Bank of Australia”
The “Commonwealth Bank of Australia” founded in 1911 is “one of the largest
banking organizations not only of the nation of Australia but of the entire world itself”
(Commbank.com.au. 2018). The organization is an “Australian multinational bank” and
provides a wide range of banking as well as financial facilities to the people of the nation of
Australia (Commbank.com.au. 2018). The organization under discussion here not only
provides banking as well as financial services to the people of the nation of Australia but also
to the diverse business organizations of the nation (Commbank.com.au. 2018). The
organization at the time of its foundation intended to provided services only to the people of
the nation of Australia however in the recent times it is seen that “following the path of
globalization” the organization offers banking as well as financial services to the people and
the business organizations from the other nations of the world like New Zealand, China and
other Asian countries (Commbank.com.au. 2018). The services provided by the organization
include “financial services like retail, business and institutional banking, funds management,
superannuation, insurance, investment and broking services” (Commbank.com.au. 2018).
The organization became a completely owned private bank in 1996 and is generally
considered to be one of the economic pillars of the nation of Australia along with the other
top banks of the nation like “National Australia Bank (NAB), ANZ and Westpac”
(Commbank.com.au. 2018). The organization under discussion here “is the 58th largest
organization of the world in terms of the net revenue generated by it on yearly basis”

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(Forbes.com. 2018). The mission of the organization was adequately summed up by Julien
Vincent in the “Sydney Morning Herald” in the words “Australia's big four banks are leading
lenders to the massive expansion in coal and gas shipments…..The CBA, meanwhile,
highlighted its achievement to cut carbon emissions from operations by 35,000 tonnes in
2012. A single bulk carrier shipment of coal exported from Australia would result in final
emissions of four times those savings” (Commbank.com.au. 2018). It is a reflection of these
undertakings that within a very short time the organization has emerged as the largest private
banking organization of the Southern Hemisphere (Commbank.com.au. 2018). The below
given figures provides the important financial details of the organization-
Figure 1: “Financial Statistics of Commonwealth Bank of Australia”
Source: “Factset, Bloomberg, S&P Cap IQ; Forbes”
Socio-Culture of Australia
The society of the nation of Australia is a multicultural one and this particular state of
the society of the nation has a considerable impact on the business world of this particular
nation (Mazanec et al. 2015). Furthermore, the liberal society of the nation also wields a

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considerable impact on the business world of the nation (Mazanec et al. 2015). An analysis of
the nation on the Hofstede cultural model would reveal the following facts-
Figure 2: “Australia on Hofstede’s Cultural Model”
Source: “Hofstede’s Cultural Insights”
The above “figures clearly indicates that the people of the nation of Australia score
very on the index of individualism” which means that the citizens of this nation are likely to
indulge in individual works rather than collective kinds of works(Hofstede Insights 2018). It
is a reflection of this fact that the “various business organizations of the nation” have a
workplace environment where the general focus is on individual work rather on the concept
of collective work (Hirst, Thompson and Bromley 2015). The high score on the index of
masculinity is an indication of the fact that the people of the nation of Australia are more
likely to “get motivated by the concepts of success, achievement and competition” (Hofstede
Insights 2018). Therefore, the various business organizations of the nation of Australia in
order “to enhance the performance level of the employees” tend to create a competitive
environment (Hirst, Thompson and Bromley 2015). The low score on the index of power
distance is an “indicative of the fact that the people in the nation of Australia” do not have a
strict hierarchy within the workplace (Hofstede Insights 2018). It is significant to note that
the various hierarchical positions within the business organizations of the nation of Australia

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are created solely for the convenience purposes and the seniors are always accessible (Hirst,
Thompson and Bromley 2015). The “low score on the uncertainty avoidance section is an
indicative of the fact that the people of the nation generally like to take the help of the recent
technologies as well as innovations” for the purposes of their business (Hofstede Insights
2018). It is a “reflection of this particular fact that the various business organizations of the
nation of Australia generally like to take the help of the recent developments in the fields of
technology as well as innovations for the purposes” of their business (Hirst, Thompson and
Bromley 2015). The low score of the “long term orientation” section is an “indicative of the
fact that the people of the nation of Australia” generally do not like the access the success
attained by a particular business organization based on their recent performance within the
business world rather than on their overall performance (Hofstede Insights 2018). The high
score on the indulgence index is an indicative of the fact that the people of the nation of
Australia generally like to control their wishes as well as desires and prefer to keep their
personal and professional lives separate (Hofstede Insights 2018).
Socio-Culture of China
The nation of China is a very conservative one in terms of culture and the major
activities of the nation are controlled by the “Communist Party of China” (Taras, Steel and
Kirkman 2012). It is “a reflection of this particular aspect that the major business
organizations of the nation” are controlled by the “Communist Party of China” (Taras, Steel
and Kirkman 2012). An analysis of the nation on Hofstede’s cultural model would reveal the
following facts-

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Figure 3: “China on Hofstede’s Cultural Model”
Source: “Hofstede’s Cultural Insights”
The above “figure clearly indicates that the people of the nation of China score very
less on the individualism section” which is indicative of the fact that the people of the nation
of China are more likely to indulge in collective kinds of work rather on the individual kinds
of work(Hofstede Insights 2018). It is “a reflection of this particular fact that the various
business organizations of the nation of China” tend to create a collective kind of work
environment within their workplaces rather than an atmosphere which is based on the concept
of individualism (Taras, Steel and Kirkman 2012). The high “score on the masculinity index
is an indicative of the fact that the people of the nation of China” within the framework of the
business world are more likely to get “motivated by the concepts of success, achievement and
competition” (Hofstede Insights 2018). It is significant to note that the various business
organizations of the present times in the nation of China utilized this particular fact “not only
to enhance the individual performance of the various employees related to the organization
but also to bring about the overall growth as well as the development of their concerned
business organization” (Taras, Steel and Kirkman 2012). The high score on the power
distance index is “an indicative of the fact that the people of the nation of China” are more
likely to get influenced by the power division within the society of the nation (Hofstede
Insights 2018). It is significant to note that the various workplaces in the nation of China

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stringently follow the power division in the workplace and the senior members are not always
accessible (Taras, Steel and Kirkman 2012). The “low score on the uncertainty avoidance
section is an indicative of the fact that the people of the nation of China” like to avoid
uncertainty and it is a reflection of this particular fact that the business organizations of the
nation of China do not like to take the help of the “various recent development in the fields in
the fields of technology as well as innovations for the purpose of their business” (Hofstede
Insights 2018). The “high score on the long term orientation section is an indicative of the
fact that the people of the nation of China” judge the performance level of a particular
business organization on their past history and not on their recent performance within the
particular framework of the business world (Hofstede Insights 2018). The “low score on the
indulgence section is an indicative of the fact that the people of the nation of China” do not
like to control their desires as well as personal wishes and it is a reflection of this particular
fact that the cynicism as well as pessimism forms a common part of the various workplaces
of the nation of China (Hofstede Insights 2018).
Implications for managers
The banking organization under consideration here has 15 branches as well as 8 sub-
branches in the nation of China (Commbank.com.au. 2018). Furthermore, the banking
organization under discussion here has more than 20% shares in the banking organizations of
the China like “Qilu Bank and Bank of Hangzhou” (Commbank.com.au. 2018). In addition to
these, the banking organization under consideration here provides Net Banking, loan and
other kinds of facilities to its various to its customers in the different parts of the nation
(Commbank.com.au. 2018). Furthermore, the banking organization also provides various
kinds of commercial loans and other facilities to the various business organizations in the
nation of China (Commbank.com.au. 2018). Therefore, it would be apt to say that the

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banking organization under discussion here has major investments as well as interests in the
nation of China (Commbank.com.au. 2018). Therefore, it becomes all the more important for
the various managers and the leaders related to the organization to effectively take into
consideration the social as well as the cultural factors which influence the business
environment of the nation of China.
The above given Hofstede’s analysis of the two nations of Australia and China clearly
indicates that the culture as well as the society of these two nations are drastically different
from each other (Schlagwein, Thorogood and Willcocks 2014). Therefore, the practices as
well as the strategies which the Commonwealth Bank had followed in the nation of Australia
would not be adequate in the nation of China since the style of conducting business as well as
the culture of the nation of China is drastically different from the ones of Australia
(Schlagwein, Thorogood and Willcocks 2014). Therefore, if a particular manager following
the pattern of business which he or she had followed in the nation of Australia wishes to
attain the same level of China then he or she is bound to fail (Hirst, Thompson and Bromley
2015). For example, the people of the nation of China like to indulge in collective kinds of
work whereas the people of the nation of Australia like to indulge in individual kinds of work
therefore a manager in the nation of China although he or she is from the nation of Australia
would have to create a work environment where the collective kind of work atmosphere will
be given priority (Hirst, Thompson and Bromley 2015). Furthermore, the business
organizations of the nation of Australia like to take the help of help of technology for the
process of their business however the people of the nation of China like to avoid uncertainty
and therefore the manager of a particular business organization in the nation of China will
have to take this particular fact into consideration for the process of their business (Hirst,
Thompson and Bromley 2015). Furthermore, the various managers related to the organization
Commonwealth Bank also need to take into consideration the fact that the two nations differ

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widely on the index of “long term orientation” (Mazanec et al. 2015). Therefore, the
managers instead of focusing on the concept of short term goals as well as growth needs to
focus on the long term goals or objectives which will more in synchronization with the work
culture as well as the social background of the nation of China (Mazanec et al. 2015).
Moreover, the managers will also have to take into consideration the factor of the difference
between the two nations on the index of indulgence (Schlagwein, Thorogood and Willcocks
2014). It is a reflection of this particular factor that the people of the nation of Australia
normative culture where as the people of the nation of China do not (Schlagwein, Thorogood
and Willcocks 2014). These in short are some of the factors which the various international
managers of the banking organization Commonwealth Bank need to taken into consideration
for the process of their operation in the nation of China.
Conclusion
The factors of culture as well as social factors have “emerged as one of the most
important ones which affect the business of the various business organizations” during the
process of internationalization. It is “significant to note that the process of globalization” has
become an important necessity of “the various business organizations for the process of their
business”. However, it “is often seen that the various business organizations during the
process of globalization or internationalization” often tend to ignore the role which the
factors of culture as well as social background of the particular nation plays. Therefore, it
would be apt to say that it has become very important for the “various business organizations
as well as the diverse managers related to them” to take these factors into consideration for
the process of their business. It is significant to note that different nations have different
cultures and thus different style of conducting and therefore if a particular business
organization ignores this particular factor then that particular business organization cannot

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sustain itself for very long in that particular nation. The banking organization Commonwealth
Bank has been able to sustain itself in the business world of China on the basis of the fact that
it has taken into effective consideration the culture of the nation of China, which is very
different from the culture of the nation of Australia. Therefore, it would be apt to say that
“one of the major reasons for the success attained by the organization in the nation of China”
is taking into consideration the cultural as well as the social background of the nation.

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