Home > Free Essays > Business > Global Scale Management > Greenway Hotel’s Germany Expansion Strategy
Cite this

Greenway Hotel’s Germany Expansion Strategy Case Study


Introduction

This paper reports about the cultural differences between Germany and the United Kingdom (U.K) instead of an attempt by a UK-based hotel (Greenway Hotel Group) to venture into the German hospitality industry. The case study highlights different cultural issues related to the hotel’s global expansion strategy, including the language differences that exist between the two European countries, the implications of the cultural differences for the hotel, and the recommendations that the hotel could consider to minimize the negative impact of cultural diversity or maximize the hotel’s potential in harnessing the same. This report uses Hall’s theory of high-context and low-context cultural frameworks and Hofstede’s cultural dimension theory to explain these differences.

Cultural Differences between the U.K and Germany

The U.K and Germany have unique cultural differences that may affect Greenway’s expansion plans on the German market. Hall’s theory of high and low context cultures helps us to understand these differences because it provides a framework for understanding the cultural extremes of different societies (Liu 20).

Hall’s theory

Hall presents cultural differences between different groups as either being high-context or low-context (Liu 20). He uses people’s closeness within different cultural orientations to explain these differences (Djursaa 140). High-context cultures often emerge in societies where people share close relationships with their neighbors or acquaintances. Such types of cultures often cater to the needs of in-groups. People who subscribe to them base their business relationships on the same social relationships (Liu 20). Similarly, in these types of cultures, businesspersons often share information and knowledge among acquaintances and prefer to do business with people who are part of these groups (Djursaa 140).

Comparatively, low-context cultures cater to the needs of out-groups. Such cultures are prevalent in highly individualistic societies, such as America and the U.K (Djursaa 140). Here, people share business information and knowledge less exclusively. Similarly, businesspersons do not necessarily prefer to collaborate with people that they know or understand (Liu 20). The high and low context cultural frameworks emerge as useful tools for understanding the cultural differences between the U.K and Germany, where Greenway Hotel intends to concentrate its market expansion strategy. This section of the report shows that time and language are the most common differences that Greenway needs to consider in its international expansion strategy.

Time

We can evaluate the cultural differences between Germany and the U.K by understanding the orientations of time between the two countries. Monochronic and polychronic time orientations outline the two main criteria for doing so. Monochronic people tend to do one thing at a time by concentrating on one task (Greenberg 4). Comparatively, polychronic people undertake many things at once and prefer to focus on events that happen around them, as opposed to those that are set to occur before them (Greenberg 4). The UK is a polychronic country, while Germany is a monochronic country.

Language

Most businesses stand to benefit from the advantages of effective communication between partners (Clipa 10-11). Although every culture has its unique communication style, the most important aspect of this information exchange is language. The UK and Germany speak different languages because the British speak English, while the Germans speak German. Most people know the British to be a high-context group of people because, when communicating, they spend a lot of time “beating around the bush” instead of getting to the point (Greenberg 4). The British believe that getting straight to the point is often “rude” and would prefer to engage in “small talk” before doing so (Djursaa 141-143).

Liu (21) believes that in this cultural framework, the British expect people to be intelligent enough to understand the discourse from the context of the discussion. If they encounter a person who gets directly to the point, they might think the person undermines them (Liu 21). Comparatively, the Germans are “straight shooters” because they talk about business without engaging in many diversionary conversation tactics (GIZ 64). When doing so, the Germans also like to express their views more directly than the British would do (GIZ 64). These language differences show high potential for miscommunication between the British and the German workers.

Hofstede’s Cultural Dimensions Theory

Hofstede’s theory outlines a framework for understanding cross-cultural communication by evaluating different cultural dynamics in different societies. The theory highlights six cultural contexts for evaluating cross-cultural communication. They include individualism, power distance, masculinity, uncertainty avoidance, long-term orientation and indulgence (The Hofstede Center 1). These dimensions represent independent preferences for interaction among different countries, as opposed to individuals. The following section of this paper explains the meaning of these sets of cultural dimensions and the performance of the UK and Germany in the same regard.

Power Distance Index (PDI)

The PDI refers to the degree that most members of a society accept that power distribution occurs equally or unequally. Countries that have a high power distance often accept hierarchical power structures in their organizations, while those that have a low power distance adopt democratic leadership styles (The Hofstede Center 1). Both the UK and Germany have a low power distance index (GIZ 64).

Individualism

An individualistic culture is prevalent in societies where people are mostly concerned about their wellbeing, as opposed to the wellbeing of others (The Hofstede Center 3). In a collectivist culture, people are mostly concerned about the wellbeing of the majority and the influence of individual actions on the masses. The UK has a high individualism index, while Germany has a moderate individualism index (Greenberg 3).

Masculinity

Masculine cultures value achievement, heroism, and assertiveness as the dominant traits in organizational leadership, while feminine-oriented cultures value cooperation and modesty as the dominant traits that characterize leadership (The Hofstede Center 4). Both the UK and Germany have a moderate masculinity index (Greenberg 3).

Uncertainty Avoidance Index

This cultural dimension refers to the risk appetite levels in a country. Countries that have a high uncertainty avoidance index often have a low-risk appetite index, while those that have a high uncertainty avoidance index have a high-risk appetite (The Hofstede Center 3). The UK has a low uncertainty avoidance index, while Germany has a moderate uncertainty avoidance index (GIZ 64).

Pragmatism

Countries that have a high pragmatism index are often long-term oriented and tend to accept change better than countries, which have a low pragmatism index because they are often short-term oriented and perceive change suspiciously (The Hofstede Center 3). The UK has a moderate pragmatism index, while Germany has a high pragmatism index (Greenberg 3).

Indulgence

Highly indulgent societies often accept the pursuit of human gratification and desires. Similarly, they encourage people to have fun and enjoy life. Comparatively, countries that score low on the indulgence index suppress gratification or the pursuit of human desires through the implementation of strict cultural norms (The Hofstede Center 3). The UK has a high indulgence index, while Germany has a low indulgence index (GIZ 64).

Implications of the Cultural Differences for Greenway’s HR Practices

This paper has affirmed the presence of significant cultural differences between the U.K and German businesspersons. These cultural differences have different implications for the H.R practices of Greenway Hotel as it ponders on understanding the best market entry strategy to use in its international expansion strategy. The implications of the cultural diversity issues on the organization appear below

Hofstede Cultural Dimensions

Management Style

Based on the cultural differences between Germany and the U.K, Greenway needs to employ flexible managers that have vast experience in international businesses. The managers need to be flexible enough to accommodate the varying cultural dynamics of operating in a multicultural context. By extension, the cultural differences between the U.K and Germany would affect the recruitment practices of Greenway Hotel because the organization needs to have a robust recruitment plan that would attract culturally competent managers (Pathak 13).

More Rules

The high regard for rules and the lack of risk-taking in the UK culture could make employees more unwilling to take responsibility for their actions and become more resistant to change. It could also lead to the creation of more ritualistic behaviors in the organization (Pathak 13).

Individual Achievement

The focus on individualism in the German and UK cultures could lead to the creation of an “I” mentality at Greenway Hotel. It could also lead to an increased focus on independence among the hotel’s workers, as opposed to dependence on each other, thereby affecting different HR functions such as compensation and teamwork (Pathak 14).

Group Achievement

Increased emphasis on group achievement could make employees highly dependent on the organization because many employees will expect the organization to take care of them. This culture could undermine competition, which should lead to the improvement of the hotel’s services because the employees’ focus would be on cooperation, as opposed to healthy competition.

Pragmatism

Cultures that have a low-risk appetite are likely to be less innovative than their counterparts who have a high-risk appetite. Furthermore, these companies are likely to be more resistant to change and impede the organization’s development (The Hofstede Center 3).

Indulgence

Highly indulgent cultures are likely to see their employees demand more salaries and wages compared to those that do not subscribe to this culture. However, such employees are also likely to enjoy their jobs more than those who have restraint (Clipa 10-11).

Restraint

Increased restraint in the organization is likely to diminish the emphasis on leisure activities. While societies that accept this culture may not experience changes in productivity, hopelessness, stress, and reduced activity are possible outcomes in the corporate space (Clipa 10-11).

High-Context (British) vs. Low-Context (German) Cultures

Time

This paper has already shown that the UK is a polychromic country and Germany is a monochromic country. The implication of this difference is the possibility that the British could often change meeting schedules regularly, thereby making it difficult for the German workers to follow what they want. This outcome could create unpleasant vibes between the two groups of workers (GIZ 64).

Language

The language differences between the Germans and the British could make the latter find the communication style of the Germans offensively blunt. Comparatively, the tendency by the British to “beat around the bush” could make the Germans think they are secretive and untrustworthy. Moreover, since Germans have a direct communication style, the British could think they are insulting their intelligence for stating obvious facts. Comparatively, the Germans could misunderstand the British leadership style to be ineffective and unable to provide direction (Clipa 10-11)

Recommendations to Minimize Cultural Impact

While diversity may be an operational problem for many organizations that want to adopt successful globalization strategies, companies that learn how to manage this issue could benefit from addressing the problem and outwit their competitors in the same regard (Greenberg 3).

The purpose of managing diversity is to bring out the best in employees and, by extension, an organization. Although there are different strategies that different organizations could use to manage culture, Greenway Hotel should ask fundamental questions about this process, such as what key practices, beliefs, and processes would cause discontentment among Germans (about the organization’s practices) and what organizational (HR) practices could forge cohesion among employees? Similarly, it should ponder about which organizational changes it could undertake to accommodate employees of a diverse cultural background. This section of the report shows different strategies the hotel should consider if it wants to manage cultural diversity in the organization.

Hofstede’s Cultural Dimensions Theory

Uncertainty Avoidance

The management should have a precise and direct organization of the company’s operational processes so that everybody understands the direction that the organization should follow. By understanding this direction, employees would better understand which risks to take and which ones to avoid (Liu 21).

Individualism

To overcome some of the challenges that could emerge from an individualistic culture, the managers of Greenway Hotel should allow open discussion among employees and provide a clear vision and mission statement for the company. This way, the workers would understand which behavioral practices to avoid and which ones to promote. The management should also design organizational tasks in ways that allow it to give credit to teams as opposed to individuals (Liu 21).

Pragmatism

Navigating issues of pragmatism requires managers to set and communicate the long-term goal of the company. The team should also motivate employees with long-term rewards, as opposed to short-term rewards, to introduce a new focus in the organization where employees appreciate long-term success, as opposed to short-term accomplishments (Greenberg 5).

Indulgence

Managing indulgence issues of Greenway Hotel requires the hotel’s managers to set up company rules and policies that align with the organizational goals and require each employee to follow them (Greenberg 5).

High Context (British) vs. Low-Context (German) Cultures

Managing the cultural differences between the UK’s high-context and Germany’s low-context cultures requires Greenway’s managers to practice effective time management strategies to make sure no disagreements arise from different perceptions of time. Similarly, they need to recruit an interpreter to manage language issues between employees from both sets of cultures. They also need to provide language training for all employees and ensure that effective communication takes place among workers. Lastly, all communications within the company should be in German and English to prevent miscommunication among workers.

Internationalization Strategy and Timeline

Perlmutter (1-3) proposes three internationalization strategies, which are ethnocentric, polycentric, and geocentric. The ethnocentric approach is home-based because managers are from the parent country and the company’s policies are from the same location (Perlmutter 4). The polycentric approach is host-country oriented, as the company’s managers and policies suit the host location (Perlmutter 5).

Lastly, the geocentric approach does not have a cultural or nationalistic bias. It looks for the best manager, or policy, to use in a new country. Greenway Hotel has chosen the ethnocentric approach. However, this strategy could not work at Greenway because it would breed conflict. Instead, the hotel should adopt the geocentric approach because it is democratic and would accommodate the cultural diversity of the Germans and the British. The timeline for implementing the HR plan appears below.

Internationalization Strategy and Timeline

Conclusion

Cultural diversity is an important topic in global business because it defines the success, or failure, of international businesses. Greenway’s market expansion from the U.K to German is not different. The company needs to consider the impact of cultural diversity in its workplace plans. This paper has used Hall’s 1976 framework of contextual cultural factors and Hofstede’s theory of cultural dimensions to show that Germany and the U.K stand in different positions of the high-context and low-context continuum of cultural differences.

Germany is a low-context culture because people are more individualistic, while the U.K is a high-context culture because its business styles are “communal.” This report has explained these differences through the varied communication and relational attributes of the U.K and German people. It has also shown that these differences are bound to affect Greenway’s H.R practices through their effects on the company’s management styles and employee perceptions.

If unattended, they are likely to affect teamwork and group cohesion among employees. Furthermore, employees are bound to be suspicious of one another and fail to provide the synchrony that Greenway needs as it ventures internationally. The varying cultural dynamics of the two groups are also bound to be problematic for the hotel’s management as it formulates a workable leadership/management strategy that both sets of the employees would respect. To overcome some of the diversity issues that may arise in Greenway’s market expansion strategy, and to minimize them, it is pertinent to adopt some of the recommendations highlighted in this paper. Comprehensively, the managers of Greenway Hotel should adopt an open leadership structure that accommodates the views of everybody in the organization, as opposed to confining the decision-making process to U.K managers and reducing the German counterparts to implement what managers have decided.

Works Cited

Clipa, Flavian. “Cultural Diversity and Human Resource Management in Multinational Companies.” Ces Working Papers 1.1 (2009): 10-16. Print.

Djursaa, Malene. “North European Business Cultures: Britain vs. Denmark and Germany.” European Management Journal 12.2 (1994): 138-146. Print.

GIZ. . 2015. Web.

Greenberg, Josh. Diversity in the Workplace: Benefits, Challenges and Solutions. 2009. Web.

Liu, Jun. Asian Students’ Classroom Communication Patterns in U.S. Universities: An Emic Perspective, New York, NY: Greenwood Publishing Group, 2001. Print.

Pathak, Sonal. “Managing Cultural Diversities In Internationalization Of Business.” International Journal of Enterprise Computing and Business Systems 1.1 (2011): 1-16. Print.

Perlmutter, Howard. . 2014. Web.

The Hofstede Center. National Culture. 2014. Web.

This case study on Greenway Hotel’s Germany Expansion Strategy was written and submitted by your fellow student. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly.
Removal Request
If you are the copyright owner of this paper and no longer wish to have your work published on IvyPanda.
Request the removal

Need a custom Case Study sample written from scratch by
professional specifically for you?

Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar

301 certified writers online

GET WRITING HELP
Cite This paper

Select a referencing style:

Reference

IvyPanda. (2020, July 13). Greenway Hotel’s Germany Expansion Strategy. Retrieved from https://ivypanda.com/essays/greenway-hotels-germany-expansion-strategy/

Work Cited

"Greenway Hotel’s Germany Expansion Strategy." IvyPanda, 13 July 2020, ivypanda.com/essays/greenway-hotels-germany-expansion-strategy/.

1. IvyPanda. "Greenway Hotel’s Germany Expansion Strategy." July 13, 2020. https://ivypanda.com/essays/greenway-hotels-germany-expansion-strategy/.


Bibliography


IvyPanda. "Greenway Hotel’s Germany Expansion Strategy." July 13, 2020. https://ivypanda.com/essays/greenway-hotels-germany-expansion-strategy/.

References

IvyPanda. 2020. "Greenway Hotel’s Germany Expansion Strategy." July 13, 2020. https://ivypanda.com/essays/greenway-hotels-germany-expansion-strategy/.

References

IvyPanda. (2020) 'Greenway Hotel’s Germany Expansion Strategy'. 13 July.

More related papers