Introduction
Management entails a lot of activities which are very critical in the management of a company or a country. However, management styles differ in several countries because of the diverse cultural practices in these regions. Undertaking business in different business environments is challenging; it is inherent for organizational heads to learn business cultures practiced in different regions.
Several well established organizations such as multinationals operate in different countries and regions. These organizations undertake extensive research on cultural diversity in the regions they operate and the effect of culture on doing business in the specified region.
Cross-cultural effectiveness is critical in the development and sustenance of business activities in different regions globally. Many factors are employed in achieving cross-cultural effectiveness, but the most important of these factors include planning, organizing, staffing, directing, and controlling.
Managers and directors vested with the duty of managing their organizations have to understand the culture of their customers and employees for effective management. This essay is going to explore the development cross-cultural effectiveness in two diverse countries and deduce how different management styles are used in achieving this task. The essay will focus on achieving cross-cultural effectiveness in Saudi Arabia and China because of their diverse cultures.
Planning
Planning is the firs most important aspect that must be considered in undertaking a business venture. In examining cultural differences, we must look into the cultural history of each country especially when we are assessing our business goals. Saudi Arabia and China have different cultural systems thus necessitate mangers to analyze and understand these cultures before doing business in these countries. Saudi Arabia is country controlled in a monarchical style of leadership with strong religion emphasis and influence of Islam.
As a result, Islamic laws (Shariah laws) are used in controlling the country. Saudi Arabia leadership tends to be centralized for the reason that power is controlled by influential people in society such as the monarchy (Bannon, 2003). The country relies on Arabic as the official language but there is the influence of other internationally recognized languages.
The major cultural impediments to business management are religion and power. In the planning procedure, an organization with interest in undertaking business in Saudi Arabia should study Shariah laws and the Arabic language. Saudi Arabian people tend to socialize based on the family systems and people are friendly, hospitable, and welcoming to foreigners. Foreign organizations should come up with strategies where managerial power is concentrated with respect to Islamic laws (McGregor, 2007).
Chinese people practice Confucianism as their religion while their political systems are based on socialism. The Chinese have a culture of protectionism while power and control is vested with the government. Business culture in China is not very open given that the government has authoritative over most business activities in the country. Foreign organizations operating in China face a lot of challenges which include language barrier, corruption and protectionism (Gudykunst, 2003).
The Chinese religion is based on Confucianism which recognizes the respect of every human being and loyalty as the tenets of the religion. Organizations with interest in doing business in China should come up with strategies that inculcate delegation of power. The Chinese policy of protectionism favors Chinese over other firms and as a result, it would be prudent to delegate in management of the organization to Chinese managers.
Foreign organizations should also defuse strategies that inculcate training in sectors such as communication using Mandarin language and social interaction. Compliance with the Chinese government is necessary for organizations which operate in China since government restrictions might ban the operations of any company at any time (Hiu, 2001, p.330-334). For instance, Google faces several Chinese government restrictions in its operations including limiting searches to certain topics.
Organizing
Organizing entails a collection of activities undertaken to achieve a certain objective, organizing is the result of planning. Several considerations are looked into in the organizational part, but the most important factors are the definition of tasks and relationships. Organizations wishing to operate in Saudi Arabia could easily organize their operations based on time.
This is because the region is strategically located given that it is not heavily affected by time differences. Saudi Arabians are hospitable people since they respect personal space of an individual by allowing easy mingling and interaction (Lewis, 2006).
Saudi Arabians are a bit reserved, but they easily interact with people of different cultures with ease. For the country operates on strict Islamic rules; and companies have to respect the religious beliefs of Saudi Arabian nationals. Organizing involves analyzing market trends and competition in the Saudi Arabian market and how these factors are affected by culture.
The Saudi Arabian market is heavily affected by Islamic rules affecting some companies operating in different sectors. For instance, the brewing industry would not prosper in the Saudi Arabian market (Jeffrey, 2000, p.125). Competition in the Saudi Arabian market stems from the many foreign companies that have set up operations in the region and the upcoming local companies.
Designing and implementing organizational strategies in the Chinese market are extremely exigent. Companies have to identify with the customs of the Chinese people and come up with winning strategies that can conquer the Chinese market. The first and most important factor to consider in implementing strategies, ‘in the Chinese market’, is the organizational structure (Li, 2001). Most foreign companies in the region operate as Wholly Foreign Owned Entities (WFOE’s) as opposed to operating as selling agents.
The Chinese culture relies on Confucian principles influencing their behavior making the Chinese have trust, loyalty and benevolence towards their leaders (Barak, 2010). This Chinese culture has made them mistrust foreigners operating in China. Foreign companies in China must develop long-term strategies that are meant to build and foster relationship with their Chinese customers.
Trust and loyalty are important to the Chinese people and companies operating in China have to offer products that stay true to their strategies. The culture of socialism has been practiced in China for a long period of time. This has made the Chinese protective of their industries creating a competitive environment for foreign companies to operate in China (Whitney, 2000). As a result, foreign companies need to design and organize for long term strategies in the country.
Staffing
The use of human resources in production is a must and it is one of the most important factors in setting up of an organization. Saudi Arabia is a huge country with moderate workforce numbers and skilled workforce. The culture of education and business is new to Saudi Arabia; as a result, the country is coupled with semi-skilled workforce that does not enable the country to industrialize.
The Saudi Arabian culture does not allow women to work, and so the workforce is made up of predominantly male workers. Saudi Arabian workforce comprises of many foreign workers who immigrate to the country in search of better employment (Lundby, 2010). Due to pride and culture, Saudi Arabian citizens tend not to take lowly paying jobs and prefer hiring foreigners to take up low paying jobs.
Most Saudi Arabians ascribe to the Islamic faith, so they respect their religion even in the workplace. Organizations hiring Saudis or foreigners have to understand the influence of religion in the society and allow employees to practice their religion at the workplace. Companies in Saudi Arabia respect the Islamic calendar and events and in the work places eating habits of the Islamic faith have to be adhered to (Ho, 2001, p.7).
China’s huge population provides the much needed human resources in the Chinese production based economy. Human resources in China are organized into many categories because of the existence of numerous industries in the country. The continuous development of China into an industrial nation has seen the emergence of skilled labor that could be utilized in highly specialized industries such as the automotive industry.
The Chinese culture affects human resources through collectivism since most of the human resources in China are organized into large groups (Evans, 2008). The Chinese workforce is made up of unions which have a lot of influence in the way employees are remunerated and employee relations. The Chinese unions act as a political movement groups; organizations should build proper relations with these unions if they intend to achieve employee co-operation.
The Chinese have a tendency of hiring its employee based on a system referred to as Guanxi which is associated with the institution attended by the employee. Companies in need of working with Chinese employees should integrate this practice of Guanxi in their human resource acquisition (McGregor, 2007). The influence of Confucianism in employment is great in China; foreign companies should train its employees by integrating traditional Chinese philosophies in their staff training programs.
Directing
The role of directing employees is a role mainly left to organizational heads responsible for the organizational strategy. Directing involves undertaking several tasks that will ensure that employees are organized into a well structured unit capable of achieving the organizational goals.
Directing is generally directed to political leadership structures and understanding cultural leadership in the regions where these companies operate. Saudi Arabia is a country which is headed by a monarchial government with the law being structured within the Islamic laws. Saudi Arabians have respect and loyalty towards leadership in their practice of their cultural beliefs. An organization with interest in operating from the region will have to work closely with the government in rolling out their operations.
For organizational leaders to undertake the task of directing their employees, proper communication has to take place between all stakeholders. Communication is important in the Saudi Arabian culture which requires mutual respect for everybody (Jeffrey, 2000, p.125). The Islam culture does not allow women in a leadership position, so some of these cultures have to be respected.
Foreign owned companies in China face the challenge of leading their companies into achieving their goals and objectives. Many foreign owned companies face stiff competition from Chinese companies because local companies understand the Chinese culture.
Chinese companies have the power and control of the market due to the culture of protectionism of its industries from outside interference. Political authority in China is structured in the socialistic format since leadership is collective (Evans, 2008). The role of directing involves the task of managing human resources to achieve the company’s goals and objectives.
In the Chinese culture, they believe in the practice of building relationships to achieve harmony with each and every employee. The Chinese system of Guanxi revolves around its traditions of collectivism unlike the Saudi Arabian culture which relies on individualism must be properly understood. Leaders in Chinese organization should lead their organizations as a unit and not to consider each and every person as an individual (Browaeys, 2011).
Communication is important in the task of directing because the Chinese tend to communicate through the respect of every person’s stature in avoidance of embarrassment to anyone. The Chinese tend to have more respect to women compared to the Saudi’s and incorporating women in the organizations’ leadership is very important.
Controlling
Cross-cultural understanding is a process that involves a lot of activities, but the most important activity is being in control of your organization. Controlling involves evaluating performance of an organization while it is adjusting in a new country or region.
Saudi Arabia is a growing regional marketplace for a lot of foreign goods. Monitoring performance in the region is quite simple due to the small population and similarities in culture (Punnett, 2009). The Saudi Arabian government has adopted the western culture of being heavy spenders on the latest goods and services.
The business culture and environment of Saudi Arabia is favorable for large organizations trying to penetrate this market or the Middle East region. Making achievements in the Saudi Arabian market might take a short time compared to other markets like the Chinese or Japanese market. Performance of organizations in the Saudi Arabian market could also be measured according to the growth levels in those key markets.
Organizational heads have to control employees and take control of many factors that contribute to growth so as to stabilize the organization in the region. Saudi Arabian people are easy to manage because of their monarchial form of government; as a result, organizations can easily perform in the country (Lundby, 2010).
China is a large, populated country with people sharing similar culture among the different ethnic groups in the country. However, due to its large size, the Chinese market is dynamic with different preferences when it comes to buying products. For instance, people living in North China tend to have different preferences compared to those living in the South.
Organizations wishing to enter the Chinese market need to invest and have long-term plans for staying in the region for the long haul. The Chinese market takes a long time to understand and gain the confidence of the people of China. Feedback is best analyzed when the organizational goals have been met and when the competition has reduced to a level beneficial to the organization (Browaeys, 2011).
The task of monitoring control is suited for people living in the country where the organization has established its operations. Taking control of the Chinese market and human resources is challenging but once trust is built between your organization and the Chinese people organizational control can be easy. Performance in the Chinese market depends on the level of trust and social relations that exist between the organization and the people (Ghemawat, 2001, p. 45).
Conclusion
Understanding cross-cultural differences in different regions are very critical to surviving the competitive global business environment. Different countries have diverse cultural that affect the behaviors of their people.
As a result, organizations have the duty of understanding the cultures of different races, tribes or people in the development of their organizational strategies. Most cultures are influenced by religion or political systems that have been practiced over long periods of time. These cultural systems affect the behavior of consumers in different regions.
The task of analyzing cultural effects on business operations in different regions is important in the planning and implementation of business strategies. For easy of assessment of development of cross-cultural effectiveness in businesses, it is inherent to analyze two or more diverse regions and cultures. Saudi Arabia and China represent two diverse cultures and regions with different customer preferences.
Saudi Arabia represents a culture heavily influenced by religion which is similar to China which is influenced by Confucianism. However, the cultures of these countries are different and this affects business planning especially for foreign firms with intentions of operating in these regions.
Understanding cultural practices are important in planning strategies and drawing out a plan on the implementation of these strategic plans. Communication is very critical in the undertaking of business and many organizations face the challenge of communication (Barak, 2010). Saudi Arabian culture is very accommodating to foreigners, so this makes it easy for foreign firms to set operations in the country.
This is in contrast to protectionist Chinese culture notorious for seclusion from the rest of the globe. The Chinese culture is mainly based on trust and mutual understanding. Saudi Arabian culture is more male dominated because the emphasis is laid upon male individuals. This is in contrast to China where women have a greater role in the society; all this factors have to be considered in the quest of understanding cross-cultural developments.
References
Bannon, G. and Mattock, J., 2003. Cross-cultural communication: the essential guide to international business. Brisbane: Kogan Page Publishers.
Barak, M., 2010. Managing Diversity: Toward a Globally Inclusive Workplace. Manchester: SAGE.
Browaeys, J. and Prince, D., 2011. Developing Cultural Adaptability: How to Work Across Differences. Lowell, MA: John Wiley and Sons.
Evans, P., 2008. Teaching in the global business classroom. Chicago, IL: Edward Elgar Publishing.
Ghemawat, P., 2001. Distance Still Matters. Harvard Business Review, 9 (1), p.45.
Gudykunst, W., 2003. Cross-cultural and intercultural communication. Boston, MA: SAGE.
Hiu, A.,et al., 2001. An Investigation of Decision- Making Styles of Consumers in China. The Journal of Consumer Affairs, 35(2), 326-343.
Ho, M., 2001. Establishing an ‘ECL’ Culture in China: Organizational Difference or National Difference?. Harvard Business Review, 1 (1), p.1-8.
Jeffrey, M. and Delphi, C., 2000. Understanding Consumer Habits in the Arabian and Middle East Markets. The Journal of Consumer Affairs, 24(1), 123-128.
Lewis, R., 2006. Cross cultural communication: a visual approach. Austin, TX: Transcreen Publications.
Li, X. and Richter, F., 2001. Advances in Human Resource Management in Asia. Tokyo: Palgrave.
Lundby, K., 2010. Going Global: Practical Applications and Recommendations for HR and OD Professionals in the Global Workplace. Washington, WA: John Wiley and Sons.
McGregor, T., 2007. Barriers to Global Business. London: Pelican Books.
Punnett, B., 2009. International Perspectives on Organizational Behavior and Human Resource Management. Sydney: M.E. Sharpe.
Whitney, Alan, et al. 2000. Human Resources Strategies in China. Singapore: World Scientific Publishing Company, 1 (1), p.133-159.