Economic development of a country can now be well-defined as an ability to flourish globally. The success of a company is determined not only by its ability to do business internationally but how they improve upon their cross-cultural skills (Hummel, 2012). Culture varies everywhere, and depends on several factors such as time, generation and varies from individuals and their inclinations. It is a collective experience of beliefs and values which is passed on to an individual in the society and which in turn regulates his behavioural pattern (M. Keesing, 1981). From the above definition and several other definitions (which defines culture) it is evident that culture plays an important role in the way an individual or looking at a broader perspective, a company conducts business. An international manager can use these as a tool in formulating business strategies.
The main motive of this report is to understand and study the different managerial process styles, which an international manager needs to be aware of, when handling business operations in India and Australia. Giving an insight to how, different cultural elements plays a vital role in global business and how an international manager can enhance team performance and bring success to an organization. This report is being prepared after conducting a research on the cultural differences between India and Australia. It summarizes the observed similarities and differences between cultures and how organizational culture impacts the success of firms in India and Australia. Also, according to the report, an Indian businessman considers relationships to be more important and does not solely rely on contract and is influenced by a hierarchical or “caste system”, where no one questions a senior member or the “boss”, typically preferring an indirect communication (Hehl, n.d.). But for an Australian businessman, a long standing relationship is not so important before doing business and follows an egalitarian way with direct communication as a norm (Kwintessential, n.d.).
COMMUNICATION
Intercultural communication has become a fundamental element in a business not only due to globalization, but also due to the growing number of diverse workforce with-in the organization from different ethnicity and culture. Cultural aspects of an individual tends to show itself when everything is at stake, especially in a business environment. Business can happen in an around a small town or across countries which requires effective communication. Contract and terms of trade must be communicated effectively and must be comprehended by the other partner for a successful trading relation. To understand business communication across different cultures, we can use Edward T. Hall’s (1976) low-context and high-context concept.
In a high-context culture, the message is not specific, rather ‘hidden’, and requires a great deal of back-ground knowledge to understand it (Hooker, 2008). Most of the time a deep meaning is rooted in the message and can be understood through non-verbal cues, context and the listener must know how to read “between the lines”. People speak in a linear way and speaker is rarely disturbed in a high-context culture (Nishimura, et al., n.d.).
In a low-context culture, the messages are directly stated and most information is expected to be in the message communicated. Communication is direct, to the point, open as is based on emotions and feelings (Gudykunst, et al., 1988).
Indian style of communication is direct and specific especially when the individual knows that he/she is right, it is a low-context culture. But sometime to exhibit politeness, respect and to avoid conflicts an indirect method is used to stay linear with the culture. Indians speak very fast, they use body language and it is common for people to interrupt and overlap while someone is speaking to make a point, it is not considered as an insult. It might be hard to understand their accent sometimes, and a good method is always to ask them to speak slowly, in a polite way (Stetson-Rodriguez, n.d.).
Australians way of communication is direct, often blunt and also a low-context culture like India. Directness is appreciated and cherished, an indirect approach to transmit a message can be mistaken as hypocrisy or sarcasm. It is imperative that, one should not promote themselves while dealing with Australians, as it might be considered as bragging and raise a negative attitude. And finally, it is one of the cultures where humour is used quite often, even in business, which is accepted and is considered a norm in any circumstances. For example, it is normal for a CEO to use humour in an inappropriate time in Australia (WorldBusinessCulture, n.d.).
NEGOTIATION
Negotiations have been practiced from the beginning of trade and comprises of conflict tenacities, political negotiations and transitions in business. Evolution in modern technology and growing international trades has made negotiation a norm in business methods (Zarway, n.d.). By learning cultural back grounds we can, to an extent, predict exactly how the other party will react to a plan created for them and create a postulation how they will approach back. This can avoid cultural shocks and help in successfully interacting with other nationalities (LUBIN, 2014). Having people from different nationalities in the negotiating team can be worthwhile and can perform well by using shared knowledge and commitment with coordination (Zarway, n.d.).
To better understand how cultural variances can affect negotiations, we can use Jeswarld W. Salacuses “top ten” elements. These elements or frameworks can help in identifying those variances in culture which can affect a negotiation process and aid in predicting those misinterpretation (Salacuse, 2004). Appendix 2 will provide Salacuses “top ten” elements.
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Goal: Contract or Relationship
The goals of negotiation depends upon the culture of the negotiator. For some, business deals are merely a contract but for some, it is gateway to build a long-term relationship (Zarway, n.d.).
Indian negotiators precludes the requisite of building relationship at the onset of negotiations. But this does not necessarily mean that they prefer less time to be taken for negotiations. Moreover, relationships are more significant for Indians when they enter the operational phase as it helps in bringing forward the expectations and seriousness (Kumar, 2005). But as a collectivistic and long term goal oriented culture, according to Hofstede’s dimensions, they favour a long term business relationship as business methods change because of international business dispersion (Metcalf, et al., n.d.).
For Australian negotiators, the main goal is to build a relationship, to successfully come up with an agreement which is positive and satisfactory for both parties (Yudhi, et al., n.d.).
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Attitudes: Win – Lose or Win – Win
In a win / win situation both parties feels like they have won and resulting in a positive ending. In a win / lose situation, only one side feel like they have won and negotiations ended positively for them (Spangler, 2013).
Indians showed a really strong predilection towards win-lose attitude in a negotiation (Metcalf, et al., n.d.), while Australians inclined towards win-win attitude (Yudhi, et al., n.d.).
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Personal Styles: Informal or Formal
Formal negotiators prefer to be addressed by their title and refrain from asking anything about their counterpart’s personal lives. Informal negotiators on the other hand like to be addressed by their first name to build a friendly relationship with their counterpart (Salacuse, 1998).
Studies reveals that Indian are more likely to follow rules and regulations, they prefer a formal personal style, but the negotiation environment is usually friendly and feels welcomed (Metcalf, et al., n.d.).
Australians on the other hand are more casual and relaxed. Even though an Australian may say ‘Good Day Mate’, it sounds denigrating from an international counterpart. They prefer someone calling them by their first name (Kwintessential, n.d.).
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Communication: Direct or Indirect
In some culture, people like to use simple ways of communication and are direct. While, in other cultures, communication is a bit complex and indirect, they rely on gestures and sign languages to interpret a response (Smith, n.d.).
Both India and Australia likes to discuss the problems directly and choose to communicate clear specific details of the issues.
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Time Sensitivity: High or Low
It is defined as the attitude towards time and the duration dedicated for negotiation by people from different cultures. People with high sensitivity towards time wants to make a deal as soon as possible and wants to sign the contracts as soon as possible to avoid wasting of time (in some cultures time is money). In contrast to low sensitivity, where people wants to build relationships first before getting into deals (Zarway, n.d.).
Indians showed less sensitivity towards time compared to Australians according to Hofstede’s dimension. They conduct business taking their own time and do not follow a ‘time is money’ mentality (Metcalf, et al., n.d.).
Australians on the other hand follow a ‘time is money’ concept and punctuality is a key feature. They would like going straight to the point with facts and figures (Kwintessential, n.d.).
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Emotionalism: High or Low
This relates to the trend of exhibiting emotions on a negotiating phase and its appropriateness. Even though individual display of emotion is an aspect, different cultures have different rulebooks about exhibition of emotions in public (Salacuse, 2013).
Studies shows that Indians have less propensity to display emotions, but also the strongest tendency to show emotions. While for Australians emotions and feeling are not vital and tends not to display any (Kwintessential, n.d.).
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Agreement Form: Specific or General
This refers to whether the agreement embodied in the written form is a general type contract containing general principles or their culture prefers a very detailed agreement form which binds every terms and conditions (Zarway, n.d.).
For Indians a very detailed agreement form which contains specifics and future reference, which describes all future events as they are Long Term Oriented culture according to Hofstede’s dimensions, is preferred.
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Agreement Building: Bottom up or Top Down
Some negotiators prefer starting with general principles and later going into specifics as the negotiations continue, this is a top down process or also known as deductive process. For others, they prefer starting negotiation with specifics, every details which embodies the contract, this is called a bottom up or inductive process (Smith, n.d.).
When it comes to agreement building, both Indians and Australians prefer a bottom-up process, they prefer going into specifics and going through all details (Metcalf, et al., n.d.).
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Team Organization: One Leader or Consensus
This relates to how different cultures organise their team, if the decision is taken by one person, who possess all the power to make a decision or does this power rest on a group of people, where a decision is made through consensus. In the latter, the time taken for making any decision is more (Zarway, n.d.).
India has a high power distance index, according to Hofstede’s cultural dimension, and decisions are made by one individual who is at the highest level (Metcalf, et al., n.d.).
However, for Australia, with a low power distance index, even though decisions are made after consent with the group, a final decision comes from one leader (Yudhi, et al., n.d.).
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Risk Taking: High or Low
Different cultures have different averse to risk taking (Hofstede, 2001), this can be seen in Hofstede’s research, and highly influence the decisions made by the negotiator (Zarway, n.d.).
Risk-taking approach is favoured by Indians, they are ready to face any challenges and ambiguity, they scoreless in the uncertainty avoidance index of Hofstede. Meanwhile, Australians prefer not to take any risk and carefully go through all the facts and figures before making any decisions. And have an intermediate score in the uncertainty avoidance index (Metcalf, et al., n.d.).
DECISION MAKING
Many international business have confronted failures not because of their lack of understanding markets, but due to their lack of knowledge in cultural backgrounds. The decision making methods used by an individual are directly connected to their beliefs and values instilled by their culture (Podrug, 2011). To deeply understand the level to which employee involvement is allowed in an organisation, we will use Victor Vroom and Phillip Yetton’s framework called ‘normative decision model’, which are based on three decision methods, (i) Centralized – Decisions are made and problems are resolved by the senior member in charge, after a momentary discussion with the junior or subordinate members (ii) Consultative – Decisions are made by the senior member after proactively discussing the problems with the juniors or subordinate members (iii) Collaborative – Decisions are made jointly by the manager and subordinates, who actively takes part in the discussion (STEERS, et al., 2010).
Using the ‘normative decision model’ framework, we can categorise India under centralized decision making culture. Where decisions are made and passed to the subordinates from top level managers. For example, in most of the companies in India, a low-level employee becomes aware of a new decisions once it’s implemented and does not get a chance to participate or suggest an idea.
Similarly, Australia too comes under centralized decision making culture, where the decision making power lies at the top-level of the business hierarchy. However, it is observed, at times, managers consulting with low-level subordinates for opinions and suggestion (Kwintessential, n.d.).
LOYALTY
Defined as faithfulness and devotion, this must exist in every wage earners dictionary. Some relates success and development of an organisation directly with loyalty, while others do not (ToersBijns, 2011). Loyalty is cited in employees with great job satisfaction and in a work culture where an employee is recognised and rewarded for his/her good job (McCusker & Wolfman, 2002).
India being a collectivist culture, where loyalty is a necessity to survive, one expects loyalty to persevere in business relationships as well (Jacobsen, 2014). But, according to a report published in timesjobs.com, Indian employees where reported as the lowest employer loyalty in the Asian sub-continent. The report states that most companies in India fail to get the right engagement policy in place and creating a sense of job security (Sharma, 2014). According to Hofstede’s dimension, Indians have a long term oriented cultural background, and in accord to this, Indians prefer working in government sectors as it provides job security unlike private sector companies. This cultural element plays a role in the variance of loyalty towards employer and working in the same company for long term benefits.
Unlike Indians, Australian employees remains loyal to their employer. A fluctuating global economy or better pay conditions must be the reason for this loyalty and employees tend to work with the same employer for five years. However, this trend is changing, according to labour mobility stats released by Australian Bureau of Statistics (HCA, 2012).
REWARDS AND DISCIPLINE AT WORK
Rewards should not be all about raising salaries but choosing the right rewards to appreciate and motivate employees. The question that should be asked by every employer must be how to retain and make use of their talented employees. They should consult and work along with finance and human resource departments to find the most suitable form of rewards and recognition programmes and successfully implementing it (Haygroup, n.d.). It is notable that a good reward system can in turn aid in the cultivation of loyalty in employees. Creation of such work cultures should be cultivated with-in the organisation to recognise and reward employees who performs well and senior level managers should be proficient in counselling their subordinates in regard to their professional goals (McCusker & Wolfman, 2002).
In India, a rewards and recognition program is not place in most of the companies, and employees do not brag about it due to their high tolerance level, according to Hofstede’s dimensional framework. Hindi word ‘jugaad’ meaning ‘adjust’, is an acute phrase used by Indians, which has a variety of things embodied in it. Indian employees simply do not complain about such necessity of recognition as they simply ‘adjust’ (Jacobsen, 2014). This attitude has bought the Indian work environment to its desolation but at the same time the most endowing characteristic with great employment rates. Recognition of performers are greatly appreciated by Indians due to their long working hours they spend for the company (Jacobsen, 2014).
Australians favour upon a ‘hard day’s work’ and with solid labour ethics and celebration of their achievements, through annual Labour Day for instance. Employers in Australia try to create a rewarding environment for employees to reduce absenteeism and people leaving job. Discipline at Australian workplaces vary, depending on which professional sector they are working. For example, at law firms, accounting or financial firm’s employees wear formal clothes, business suits and all company policies are followed. But in other workplaces this is not the case an employees is allowed or prefer to wear a more casual attire (moving2plan, n.d.).
CONCLUSION
This report analyses several similarities and differences in managerial and organisational processes followed by India and Australia, which can be encountered by an International manager. Differences and similarities where compared in different business aspects like communication, negotiation, decision making styles, loyalty and rewards for both the countries.
In summary, India and Australia follows a direct communication approach, but India being richer in cultural diversity subjected to situational requirements tend to flow into an indirect style at time. Indians are more active in speaking and interruptions are allowed, they use body language to creatively communicate unlike Australians. Punctuality is important for Australians and are sensitive towards time, especially when it comes to business. But for Indians, relationships are more important and being late for a meeting is common and are not dealt with serious consequences or punishments.
Decisions are made and flow down from top-level to low-level hierarchy for both India and Australia. But involvement of subordinate members for opinions are more seen in an Australian business culture. Loyalty of employees is seen lowest among Indian employees, in contrast to Australians. And finally, the last aspect, rewards and discipline, Indians shows an ‘adjust’ attitude to cope and survive, so they care less whether their employer rewards them for their good work or not. But on the contrary, Australians favour a rewards culture and performers are recognised.
To conclude, inter-study of business cultures and preferences are imperative and key knowledge that an international manager should possess to face the growing diversity and complexity in workplaces.
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APPENDIX
Appendix 1:
| HOFSTEDE’S SIX DIMENSIONS | INDIA | AUSTRALIA |
| PDI | High Power Distance | Low on Power Distance |
| IDV | Collectivistic Culture | Individualistic Culture |
| MAS | Masculine Culture | Masculine Culture |
| UAI | Medium Low Uncertainty Avoidance Culture | Intermediate Uncertainty Avoidance Culture |
| LTO | Long Term Oriented | Short Term Oriented |
| IND | Restraint Culture | Indulgent Culture |
(Jose, 2015, p. 7)
PDI – Power Distance Index | IDV – Individualism versus Collectivism | MAS – Masculinity versus Femininity | UAI – Uncertainty Avoidance Index | LTO – Long Term Orientation versus Short Term Normative Orientation | IND – Indulgence versus Restraint
Appendix 2: Salacuse’s “top ten” elements affecting negotiations.
| Impact of culture on negotiation |
| Negotiation Factors |
| Goal Contract ßà Relationship |
| Attitudes Win / Lose ßà Win / Win |
| Personal Styles Informal ßà Formal |
| Communication Direct ßà Indirect |
| Time Sensitivity High ßà Low |
| Emotionalism High ßà Low |
| Agreement Form Specific ßà General |
| Agreement Building Bottom up ßà Top Down |
| Team Organization One Leader ßà Consensus |
| Risk Taking High ßà Low |
Source: (Salacuse, 1998, p. 223)
