Abstract
This report covers operational issues of Samsung Group and Al-Bilad Arabia Company Ltd (ABA) from a cultural perspective. Samsung is headquartered in South Korea, where the protestant’s culture thrives. ABA is headquartered in Arabia where the Islamic culture flourish. ABA faces operational challenges that arise due a high power distance score, which is a product of the religious culture of the residents.
Samsung Group, on the other hand, faces problems related to low power distance score. South Koreans appreciate the role of democratic rule. Theories and models of leadership indicate how each of the companies is managed in the culturally different atmospheres.
Report on Management Styles in Different Cultures
Societies have different cultural value systems. Culture is a code of norms, values and attitudes that determine the way people think and act. Social culture commonly develops into corporate culture, which is a combination of organizational and national /regional culture. International companies meet operational problems related to culture when performing their daily business operations. The problems commonly arise due to differences in power distance score (Kondra and Hurst, 2009).
Samsung Group faces exceptional operational challenges that arise due to the influence the Protestants’ culture. It uses democratic management methods to solve them. Al-Bilad Arabia Company Limited (ABA), on the other hand, is managed using traditional leadership styles such as the autocratic method. The styles are relevant due to the influence of the Islamic religion in Arabia.
Al-Bilad Arabia Company Limited (ABA) is headquartered in Arabia and has international business links. ABA is a leading IT service provider in Saudi and the neighbouring GCC countries. However, it also trades in gas, oil, and other forms of fuel. The company was founded in 2002 and has excelled in executing SAP projects. As a result, it built a SAP Support and Delivery Centre in Al-Khobar in 2009 to support customers in the area.
ABA built the facility because it recognized the different cultural needs of the people. It, therefore, took the opportunity to use the facility in managing the diversities effectively. According to the company, it can use its effective strategy, understanding of the market, and experience of the business needs in the region to accomplish two things. First, it can use the information to deliver its promises and, second, to maintain its position as a market leader (Chilmeran and Guyon, n.d.).
Samsung Group also has a unique background. The Group is headquartered in Samsung Town, Seoul, in South Korea and has affiliated businesses and subsidiaries internationally. It was founded in 1938 and has increasingly globalized its businesses. Currently, mobile phones and semi conductors are its most essential sources of income.
The Group has influence on South Korea’s economy, culture, media, and politics. Therefore, it believes that it is digital leader, responsible global citizen, multi-faceted family, and an ethical business. The corporation has developed an approach of trading that ensures it contributes more effectively in creating a better world (SAMSUNG, n.d).
Both Al-Bilad Arabia Company Limited (ABA) and Samsung Group are international companies. However, each of them has exceptional operational issues to handle, depending on the cultural issues in their areas of operation. Majority of ABA’s clients profess the Islamic faith, and the religion determines the community’s acceptable corporate culture and methods of management.
Hofstede calculated power distance scores for different countries and discovered that most countries in the Middle East have very high scores (Hofstede, 2001). High power distance scores imply that inequalities of power and wealth are accepted within the community. Islamic teachings emphasize on the need for expressing respect and loyalty towards leaders, which the locals fully embrace.
Therefore, ABA faces culturally related challenges when dealing with communication, competition, recruitment, and customer care matters. The management has to develop appropriate methods of communicating with junior staffs to trade successfully. The culture may become a communication barrier and lead the company to be unproductive, if it is poorly managed (Adler and Elmhorst, 2012). Moreover, the culture gives more authority to men than women.
The company has to employ a high number of men in managerial positions to compete effectively with similar companies trading in the region. At the same time, it needs to give special attention to its customers’ care system by being gender sensitive while employing staffs. The Group should also solve challenges relating to methods of communication with customers depending on ages and social status.
Notably, most of the challenges that Al-Bilad Arabia Company Limited (ABA) faces are related to Hofstede’s theory of power distance score (Hoftede, 2001). The company uses coercive style of leadership. The management system empowers supervisors to enforce company rules accordingly.
It also gives them power to instruct employees to respect the company and its managers. The company provides clear directions to all subordinates on what to do. Moreover, it keeps detailed reports to maintain tight control over workers. By implementing these rules, ABA uses the coercive leadership style to solve some of the cultural operational issues it faces.
However, it has also adopted the authoritative leadership style to take advantage of employees’ management skills tactfully. The company solicits some subordinate input in decision-making. However, it remains firm but fair when delivering orders and directions. Its managers balance positive and negative feedbacks but dominate team-members and use unilateralism to achieve team objectives. The leadership styles help the company to respect the society’s culture and identify with the customers’ needs.
Samsung Group and ABA encounter distinctive operational issues. However, the issues reflect on the culture of the society in which each of the two companies operate (Schmenner, 1998). Residents of the area in which Samsung Group operates accommodate the freedom of worship and democratic leadership.
Christians began to establish their presence in South Korea in 1794. Some protestant Christian missionaries later entered into the country in the 1880s. Moreover, other religion groups, such as Shamanist, Buddhists, and Muslims, have since established their presence in the country (South Korea-RELIOGION, n. d.). The idea of power in the country is based on the protestant ethic that emphasises on equality of people.
Consequently, Samsung Group faces problems when managing customers who embrace anti- democratic rule cultures. The Group also has problems managing supplies from such cultures. It cannot use local styles top manage customers and suppliers who do not believe in democratic leadership.
Besides, the company has problems in handling communication hierarchies while dealing with employees. The challenges are unique and require solutions that are relevant in solving issues related to the community’s cultural aspects. Since Samsung Group has survived stiff competition from Apple and other giant global businesses, it is correct to note that it uses appropriate management styles. These include coaching and modern democratic styles.
The company implements the democratic styles by rewarding adequate performance and avoiding punishing offenders or giving negative feed back. It also encourages subordinates to take part in management through offering to advise the management. The company sometimes implements the coaching method, as well.
It implements the method by asking subordinates to set their own goals, identify problems, and solve them. The two methods are effective in managing companies that operate in self-governing cultures, such as in South Korea where Samsung Group operates (Kim, 1998).
Samsung Group and ABA has certain conflicting issues relating to cross cultural management. The two companies utilize different methods to solve similar issues. To enhance communication, ABA has adopted a system that recognises the seniority of employees. It has an effective chain of command that serves the whole organization and its customers.
In 2009, it built a SAP Support and Delivery Centre in Al-Khobar to address the needs of customers in the region (Chilmeran and Guyon, n.d.). This shows that the company has a management structure that recognizes the role of customer support departments. Moreover, it has a president and chief executive officer who is the final decision maker.
Further, ABA has supervisors who interact freely with employees to ensure that the team produces the right quality and standard of IT and fuel products. The effectiveness of the company’s operational style, management structure, and corporate cultures are evident by studying its mode of operation. The theory of management states that the autocratic leadership and management style is more prevalent in the Muslim nations than in the democratic nations, such as South Korea or United States.
Samsung Group employs different strategies to manage its operations, communication and cross culture related issues. Evidently, it does not use the autocratic leadership style since, according to research, only the Muslim nations appreciate the style (Schmenner, 1998).
South Korea appreciates the democratic culture and, therefore, Samsung Group operates in the country by observing it. Unlike ABA, the Group operates without setting systems that recognize the seniority of employees. It understands that all employees are equal. The Group’s employees, therefore, form part of its management. However, it employs senior managers and has an operational chain of command. Some of the senior managers are in Samsung Town, Seoul.
They handle both local and global operational issues. However, the Group’s chain of command is for convenience, as the staffs take part in the democratic leadership system. The company solves cross-cultural differences using democratic methods, in which individual preferences are highly respected. It accommodates everyone’s interests, as along as business operations remain unaffected negatively.
This is in contrary to ABA’s system where managers have authority to give directions as they think appropriate, since it is culturally accepted. The Samsung Group also does not necessarily impose gender related restrictions when carrying out recruitments or procurement procedures since it is against its culture.
There are key cultural differences in the two companies. ABA believes that managers have the ability to instruct employees to accomplish tasks successfully. Samsung Group does not believe so. It believes that managers and employees should work together and achieve excellent results. The Group also believes that individual interests should be respected while the former believes religious teachings are more significant than individual rights (Schmenner, 1998).
The differences have led to developed of varied management structures in the two companies. ABA has a bureaucratic management structure that has respect for merit and well-defined duties and responsibilities (Schmenner, 1998). It also has a hierarchical structure. On the other hand, Samsung Group uses a functional structure, in which employees are grouped according to their level of expertise. They govern themselves and endeavour to produce standardized iPods and phones, among other products.
Cross-cultural management is essential in the current globalized market. It is imperative that the world is set to witness people from different cultures increasingly trading together. Global companies must lean to manage cultural differences effectively. ABA can increase its prospects in the market by opening SAP Support and Delivery Centre branches in other regions.
Moreover, apart from implementing autocratic and coercive leadership styles, it should implement the democratic style, at least partially. This style is effective in helping all stakeholders to feel recognized and respected. As a result, it may help the company to increase its chances of making higher profits.
Another recommendable way of increasing profits is changing management structure. The bureaucratic structure is essential in controlling production, as the management holds all the necessary information. However, ABA should use the coaching method to give employees the opportunity to use their innovation skills. Its information technology products may be out dated in case it fails to act accordingly.
In the same way, Samsung Group should improve its methods of managing cross-cultural differences. The company uses both coaching and democratic systems, which are useful in the modern world. However, while trading with Muslims, it should use the authoritative or coercive method. The traditional methods are still popular among Muslims, in particular.
It should empower its officials to take control of new recruits in Islamic regions, instruct them to obey the chain of command, and be hard working. The company should also improve its management structure by creating modern quality management systems. This will ensure that company safeguards its assets from staffs harbouring intentions to misuse the democratic space in undermining efforts of the business to increase quality and productivity.
References
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