This report discusses various factors which guide the companies for planning strategies for the international market. In doing global business in various countries, each business centers need to follow special norms because each of the company has different culture based on the tradition and value system in that region (Businessculture.org 2018). The norms that the multinational countries follow in doing business globally, originate from the culture and perspective of the host countries. For understanding these cultural aspects and apply them effectively, the companies mainly follow the theories and models by Bennet, Hall and Hofstede. These theories differentiate organizational cultures and discuss the perception of the employees in different region. In order to successfully run the business, the companies need to know the value system of that region. These cultural theories help the companies to judge the response of the employees and customers so that they can regulate their style according to the expectation and acceptability of the country.
The theory of proxemics by Hall states that various cultural frameworks are internalized in different people at unconscious level and this can be a factor of success and failure for any MNC. According to this theory, the most important issue that the companies face is associated with the communication system as well as value of time which differ from culture to culture. The high contextual and low context in the communication affect the organizations more intensely. For example, Germans use many words to describe certain processes or product imaginations, whereas Chinese keep their descriptions short which create problem in understanding for low context counties and directly affect the production of the organization. Similarly, the understanding of value of time between Australians and Brazilians is different.
Unilever Plc is a multinational consumer goods organization which provides fast moving consumer goods. The products of this companies include food, cleaning agents, beverages and personal care products. According to the company’s 2012 revenue, Unilever Plc is the world’s largest producer of food spreads. This company is one of the oldest MNCs in the world which has a huge brand recognition in more than 190 countries. This company has its headquarters in London, UK and Rotterdam, the Netherlands. It has more than 400 brands with 50 billion euros as annual turnover and 13 brands with sales over 1 billion euros. Unilever Plc. is a dual listed company based in both London as well as in Rotterdam but operates as single business. It has a common board of directors. Unilever Plc. is divided into four chief divisions such as personal care, foods, refreshment and home care. The company has two research as well as development facilities in the United Kingdom and one each in the Netherlands, USA, China and India (Unilever.com 2018). The company has primary listing on the London Stock Exchange along with a constituent of FTSE 100 Index.
Unilever Plc. has a strong hold in the Indian market where it operates in the name of Hindustan Unilever Limited. It was established in 1933 as Lever Brothers and transformed into as Hindustan Lever Limited in 1956. It was the result of merger among United Traders Ltd and Hindustan Vanaspati Mfg. Co. Ltd. This company was renamed in 2007 as Hindustan Unilever Limited. It has more than 16000 employees working with it and indirectly serving to facilitate over 65,000 people. the annual turnover of Hindustan Unilever is 30,170 crores. The main company Unilever has 67.25% shareholding in the HUL. In India the company has more than 37 factories with headquarter in Mumbai, Maharashtra. The operations involve approximately 2000 suppliers as well as associates. Along with the subsidiary in India, Unilever has operations with a host of subsidiaries operating in the markets of North America, South America, all countries in Europe, Asia pacific region, Africa and the countries of the Middle East. Some of the subsidiaries of this company include, Brooke Bond, Best Foods, Lipton, Dollar Shave Club. Chesebrough-Ponds, Ben & Jerry’s and Alberto-Culver. However, in operating in the Indian market, Unilever faces some cultural issues which are very much different from the culture of the UK as well as the Netherlands.
Leadership style:
This dimension is different in different cultures. Therefore, the company realizes differences in the value system of people working in its Indian factories. The leadership style in the UK is very much different form that of India where the managers follow a casual leadership style. According to this style the managers are helpful yet diplomatic. They ate willing to compromise their interest at times while capable of being ruthless as necessary. They seek to be fair with all their functionality. Traditional belief plays central role to this management style which can lead to failure to understand differing values in other people (Stahl et al. 2017). The leadership style in India is based on the consensus rule where the group is considered to be sacred and the leaders are seen to be benevolent. The mangers in India adopt a traditional organized tactic which is characterized by trade groups that form close personal relation and work together to face any challenge.
India as a subsidiary country has effect on the business culture of HUL. Inequality which is opposed in the British culture, is accepted in HUL as the idea of unequal rights between power privileged and people lesser down in the pecking order (Morgan 2014). Due to variety of language in India, they use more metaphors and covert messages which sometimes create problem in understanding the actual meaning. HUL follows managerial dominance which helps to maintain discipline in the workforce and directing the employees to one particular way but clearly oppose the organizational culture of its parent company.
According to the cross cultural dimension introduced by Hofstede, the culture of British organizations scores 35 which means the society believes in equalities among people. The organizations try to minimize inequalities associated with power among the employees (Moore 2015). This idea is predominant in the higher class of Britain but the lower class employees still believe in working under a powerful management. This score seems to be incongruent hence exposes inherent tensions in the British Culture but a sense of fair play in the organization dominates the idea that everyone must have equal power. On the contrary, India scores high in this dimension which indicates a consideration for marinating hierarchy as well as a top-down structure in both society as well as in the organization (Melling and Booth 2017). The employees are dependent on the high authority for direction.
There is a broad difference in the commination style between the culture of the UK and India. The organizational culture in the UK has high context communication where the employees in an organization are habituated with less verbally explicit communication style and limited written and formal information (Kuratko 2016). These people have internalized understanding of communication issues. These people have inward reactions but for the Indians the purpose of communication is not to exchange exact information but to maintain forge relationship and harmony in the organization. This country has different languages which vary throughout its subcontinent. Organizational process mainly follows English but has ambiguous expressions (Bird and Mendenhall 2016). The language has multiple meanings which easily leads to misinterpretation by others.
In individualism context the UK scores higher than India making people highly private and individualistic. The British are taught to think for themselves and identify the unique purpose in life. They prepare themselves to contribute to society. Their route to happiness is the personal fulfilment which has contributed in rampant consumerism as well as strengthening subjective culture. Indian culture sharply contrasts with the culture of the UK (Knight et al. 2015). This culture scores intermediately in this index. The Indians in one hand, shows preference for belonging to larger social framework where the they are expected for acting according to greater good. In individualistic aspect of the society can be seen as the result of dominant philosophy. This is the reason why the individuals are responsible for their way of life as well as success.
Autonomy in workplace refers to the concept of freedom enjoyed by the employees in the organization. For some organizations the employees can have freedom to set their own schedule or decide the methods to complete a task. Autonomy in the UK culture allows equality in decision making process among the employees. The manager allows the employees to set schedules and complete their assigned tasks within deadline. This however increases job satisfaction among the employees with better productivity (Jiang, Gollan and Brooks 2015). In the traditional work culture in India, the authorities maintain strict oversight at lower levels keeping power concentrated in the hands of the highest authorities. This autonomy of the higher authority can backfire because the it may be demotivating for the employees, increasing the employee turnover rate. On the other hand, less delegation can increase confusion in the company leading disorganization (Holmes 2018). For Unilever, the team autonomy increases the productivity of the employees where they help each other to transform weaknesses to strength.
The communication style of the UK and the Netherlands is more task oriented than a relationship oriented. The chief means of achieving the individual’s goals is to carefully manage task and time. The person is considered to be good if he can get the job done. Making decision is the responsibility of the individual based on the rank of the person specialization and track record. Discussion is encouraged at various levels and path to success is considered through accumulation of personal and professional achievements. On the contrary the culture of India is more relationship oriented where the individuals consider his team or group to be the first priority (Hul.co.in 2018). Decisions are made either top down and after reaching broad consensus. Professional track record is less important but mature judgment, political acumen, loyalty to group and social skills is important to maintain harmony. Individual decision making has no appreciation and a person is considered good when bring success on behalf of group.
The culture of the United Kingdom is quite similar with that of the Ireland, the Netherlands, Australia and west European countries from the aspect of communication, values and time management (Brewster et al. 2016). On the other hand, the Indian culture have some similarities with the Brazilian, Chinese and other countries of Asia pacific region from the context of collectivism, power distance and communication.
From the chronemics point of view, UK has a monochronous culture were the people are capable to complete one job at a time. Careful planning is important part of this culture. The task gets the most priority and the employees emphasis promptness of action. The employees think of achieving time without caring for the quality of task. Indian employees of the other hand can do different tasks at once but get distracted easily. To them, the importance of relationship is more important than job (Coviello 2015). The people think about the quality of task but do not show promptness as expected by the parent organization.
In the proxemics aspect, the culture of the UK follows high context where the employees take responsibilities more independently than the Indians. As oppose to the Indians, the British people accept failure and do not blame others. They have strong distinction between in-group and outgroup but high commitment to the long term relationship. India on the other hand shows a mixture of high and low context culture in current situation. The communication style changes according to the condition (Gelfand et al. 2017). Like low context culture the employees need to have visible and external directions for understanding the expectation of the higher authority properly. On the other hand, like High context it shows strong bonds in the team with affiliation.
Conclusion:
Therefore, it can be concluded that, Unilever faces much problems while working in India as the British culture and Indian culture have very little similarities among themselves. Despite these facts, Unilever has been working in Indian market for more than a century.
References:
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Brewster, C., Houldsworth, E., Sparrow, P. and Vernon, G., 2016. International human resource management. Kogan Page Publishers.
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Knight, G., Liesch, P., Zhou, L. and Reuber, R. eds., 2015. Creation and Capture of Entrepreneurial Opportunities Across National Borders. Journal of International Business Studies.
Kuratko, D.F., 2016. Entrepreneurship: Theory, process, and practice. Cengage Learning.
Mackenzie, K.D., Golembiewski, R.T. and Rahim, M.A., 2018. Introduction. In Current Topics in Management (pp. 9-24). Routledge.
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