The culture of the society whose market the company is going to enter is critical in the process of business planning as well as its HR management. Considering the chosen country’s cultural peculiarities and legislative norms can help a company choose the country suitable for its development model and work out a practical plan for entering its market. History is replete with companies using false advertising, hiring method, or business model for the chosen society. It is essential to study the cultures of countries whose societies are very different from the generally unified Western society because many of the actions of companies can lead to scandals or loss of reputation.
Israel and Kazakhstan, which are at the crossroads of different continents and have unique cultural characteristics, were chosen as examples of two countries whose cultural characteristics may affect the specifics of the business. To determine the main cultural aspects of the two countries, a comparative table was made based on the Hofstede classification of cultures. Although both countries are secular, both cultures have a prevailing religion and a set of well-established values that determine the work characteristics in this market (see table 1). Besides, a significant difference between countries can be considered a Power Distance factor, which means a commitment to the principles of democracy and directly impacts business security (Beugelsdijk, 2017). Finally, a significant difference is that Kazakhstani society is more collectivist than Israeli society, which can help create a more productive work environment. Still, difficulties with tolerating foreign companies and a collectivist society can create unforeseen difficulties (Dairabayeva, 2018).
Table 1: A comparison of the cultural frameworks of the two countries
Note. Data were adapted from an official website that uses Hofstede’s cultural assessment theory. Information about Kazakhstan (What about Kazakhstan, e.d.) and information about Israeli culture (What about Israel? e.d.).
For a more detailed study of the countries in which the company will develop, it is also worth considering its legislative peculiarities in the law on hiring employees. In Israel, there are two important laws governing employment within the country. Under these laws, the country prohibits refusing to hire and dismiss employees motivated by racism, nationalism, sexism, or other forms of discrimination. The law requires all employers who work in the country to provide employees with paid time off, which the country refers to as “wellness days” (Albin, 2020). The length of this leave varies depending on the employee’s length of service but is mandatory for all companies. In Kazakhstan, on the other hand, there is a law on labor relations. Under this legislation, representatives of foreign companies have a particular advantage of increased taxation and state support. Besides, the country has laws on special economic zones with different labor codes, tax rates, and benefits (Khamzina, 2020). In this way, the country seeks to attract foreign capital into its economy.
Thus, the peculiarities of the local legislation will strongly influence the choice of the country in which the company should start developing. It is because a company’s business model may not match the laws in force in the country, or vice versa; the laws of one country may be more favorable to the company than those of another. Israeli laws are similar to U.S. labor laws prohibiting discrimination in firing or hiring employees, but providing extended leave may be an unnecessary cost to the organization. Kazakhstan laws are geared toward international investment, and there are no specific features within the law that give employees more paid vacation days than in other countries. Still, cultural and economic factors should also be taken into account.
Due to several factors, Kazakhstan was chosen as a more suitable country for business development. Since it is impossible to consider the economic factors of the market of a separately selected country without information about the kind of activity of the organization, the main focus was on the cultural characteristics of the local society and the current legislation. At this point, this decision will benefit the company more than opening in Israel or developing in both countries, as it contains fewer risks and can potentially reduce the company’s cost to enter a new market.
In terms of recruitment, the Kazakhstan environment benefits from several factors. First, the country has officially introduced a policy of learning three languages, one of which is English (Dairabayeva, 2018). When recruiting in another country, it is essential how much effort the company will spend on training and professional development of its employees. Knowledge of English among the local population or at least a trend of increasing interest in this language is a beneficial advantage. In Israel, there is also a large segment of the population with knowledge of English. Still, the state continues the policy of strengthening the position of the state language (Albin, 2020), which can be a risk for the company in the future. Secondly, the state is trying to support foreign companies on its territory, which is also beneficial regarding the organization’s expenses on taxes, customs, and other administrative costs. It is incorrect to say that Israel has protectionist policies, but Kazakhstan’s business benefits are currently higher than Israel’s in several industries. Finally, Kazakhstan has a highly educated population and a lower average wage than Israel (Anker, 2017). A large number of undervalued skilled labor is a common factor for post-Soviet countries, distinguishing the country from Israel, where average incomes are close to European countries.
Hiring employees in Kazakhstan can be done in several ways, including the inclusion of the company in the state register of employers, the use of various online sites such as Head Hunter, and online advertising methods. One of the main advantages of foreign companies in this country can be the price factor, taking into account the relatively low average wage. Besides, when hiring employees, it is worth paying particular attention to the fact that in the country, there have often been precedents of nationalism towards employees of international companies who were representatives of other ethnicities (Khamzina, 2020). Such incidents occurred with Turkish and Chinese oil companies, where representatives of other countries earned many times more than the indigenous population.
Thus, developing a company in Kazakhstan can be beneficial in terms of reducing the company’s administrative and operating expenses. Besides, this decision can reduce the cost of training and professional development of new employees. Hiring in this country is facilitated by the lack of difficulty in providing additional vacation days and the country’s focus on the English language. In addition, foreign companies compare favorably to Kazakhstan’s labor market due to higher wages, making hiring and working in this country more accessible. Despite all of these advantages, when working in new countries, it is essential to consider the cultural characteristics of the local population, previous business practices of international companies, and many other factors that can affect the organization’s development.
References
Albin, E., & Mundlak, G. (2020). COVID-19 and Labour Law: Israel. Italian Labour Law E-Journal, 13(1S). Web.
Anker, R., & Anker, M. (2017). Living wages around the world: Manual for measurement. Edward Elgar Publishing.
Beugelsdijk, S., Kostova, T., & Roth, K. (2017). An overview of Hofstede-inspired country-level culture research in international business since 2006.Journal of International Business Studies, 48(1), 30-47. Web.
Dairabayeva, G. B., & Maldybek, A. Z. (2018). Turkic world and Kazakhstani model of interreligious and interethnic tolerance. Proceedings of the National Academy of Sciences of the Republic of Kazakhstan. 4(320), 68-75.
Doskeyeva, G. Z., Baitalassova, K. A., Omarkhan, D. N., Bekova, R. Z., & Rakhimbekova, A. E. (2019). Assessment of the current state of employment in the regions of Kazakhstan. Academy of Strategic Management Journal, 18(6), 1-5.
Khamzina, Z., Buribayev, Y., Almaganbetov, P., Tazhmagambet, A., Samaldykova, Z., & Apakhayev, N. (2020). Labor disputes in Kazakhstan: Results of legal regulation and prospects.Journal of Legal, Ethical and Regulatory Issues, 23(1), 1-14. Web.
What about Kazakhstan? (n.d.). Hofstede-insights. Web.
What about Israel? (n.d.). Hofstede-insights. Web.