Business Expansion: Australia As Host Country And Cultural Analysis

Purpose

Today companies are focusing to expand the business by opening business units in different countries. Home country and host country are two different terms that have different meanings in the situation of business. Host country is the country where the businessman wants to start the business and does investment and home country is the country where the business headquarters is situated. Home country is the country in which the businessman was born and brought up or where the businessman lives permanently (Škerlavaj, Štemberger& Dimovski, 2007). In the given report we have taken Singapore as the home country and Australia as the host country. Our business is related to herbal and natural products.

Australia is selected as host country as the country has many positive points for business perspective. Currently we are running an Ayurveda company, ABC Ayurveda, a fictitious company in Singapore and we want to open the business unit in Australia. The reason behind selection of Australia is, through research we have found that Australians are more conscious for their health and they like to spend money to keep themselves healthy and fit. Although there are many health and wellness products available in Australia but there are enough changes to earn good amount of profit from the market. From some researches we have analyzed that Australians pay more attention on health and they like to prefer natural herbal products instead of medicines. From the health survey it was analyzed that Australian use more organic health products than people live in UK, USA and New Zealand. Australians believe that herbal or organic products are safer than other healthcare products. Australians focus on their weight and for maintaining weight they prefer to use organic health products. From beauty products to health products Australians prefer to use natural products as these products will not give adverse effects. Many Australians prefer to live healthy life style.

Australia has recognized as the profitable market for companies. The entry barriers are low as legal and political policies of the country are supportive. The market of Australia is attractive and rewarding. Australian is the sixth largest nation after Canada, Russia, China, Brazil and USA. The population in Australia is relatively low than other countries but Australians are more educated than other countries’ people. Australians follow different cultures as Australia contains two territories and six states. Australians mainly come from Irish and British background. After Second World War many people came from other countries to Australia. The survey reported that about 1/3 Australians were born in other countries. Australia’s state and national government policies are formed to support different cultures (Li  & Harrison, 2008). There are some aspects of culture of Australia which are being discussed in the following mentioned points.

Cultural Analysis of Australia

Language

Over 200 languages including 45 indigenous languages are spoken in Australia and English is the national language. Mainly people talk in English but they use other languages too for communication. Australian English is totally different from American and British English but does not fluctuate regionally. Some social and cultural factors affect language style and accent. The social factors like class, education and age also give impact on language. People who came from other countries use their native languages. German, Italian, Chinese, Greek, Spanish, Polish, Filipino, Arabic, Vietnamese, Macedonian languages are also spoken in Australia (Sugahara & Boland, 2010).  

Attitude

Australians are known for their easy going attitude and there people like to prefer informal communication method to talk to each other. People respect each other’s feelings. Australians like entertaining environment and there people like to spend time with families (Zheng, Yang & McLean, 2010).

Work life

In Australia it has been seen that women work outside the home and men do house hold tasks like cooking and cleaning. Women are naturally more conscious towards their health.

Religion

Like language and other features Australian’s follow Christianity. In Australian many people came from other countries so those people follow their religions. Australia has no particular state religion and Australians are free to follow any religion. Australia is described as secular that means Australians do not follow strict religious style (Yagmurlu & Sanson, 2009).

Eating Habits

From the survey conducted in 2016 the outcome achieved was Australian consumers give more attention to their health and people generally take healthy diet. To cure various health problems people prefer to use herbal or natural products as these products do not give side effects. Instead of taking fast food Australians like to take natural fruits and vegetables. In Australia people belong to different cultures and like to take different food. In Australia people can get Chinese, Japanese, Thai, French, Italian, Greek, Mexican, Turkish dishes easily in the restaurants. Some iconic Australian foods are Chiko roll, Vegemite, Tim tans, ANZAC biscuits, Weetbix, Meat pies, Sausage rolls, Damper, Fish and Barramundi. Many Australians include health and nutritious food in breakfast, lunch and dinner. Although non veg is the main part of Australian’s diet but now it has been analyzed that numbers of vegetarians are also increasing in Australia (Garnett et al., 2009).  

Around 23 million people live in Australia and 25% of population came in Australia from other countries. According to Australian laws, Australians can express their beliefs and cultures and they can participate also in Australia’s national life. Australians follow some principles like freedom of speech, equality of women and men, equality of opportunity, peacefulness, freedom of religion and mutual respect. These principles are formulated to preserve Australia’s cultural diversity. Australia’ government also believe that Australians should not be disadvantaged only on the basis of cultural, country, gender, religious and religious belief’s differences.

Language

The business culture of Australia is elaborated by following mentioned points.

Business Mentality

Australians are considered as straightforward people when it comes to the business. Australians like innovative and creative ideas.  Australians only welcome those business ideas which are factual and can give benefits to them so in Australia the companies cannot think to implement aggressive sales methods. People will be impressed when they will think that business products are really beneficial for them. The decision making of Australians is slower as people take decisions by collaborative efforts (Minkov & Hofstede, 2012). People consult to experts like their mentors, supervisors and friends before taking any important decision. People take decisions right decision but slowly after considering all the factors. The unique thing is that Australians do not find it difficult to say ‘no’ to anyone. Australians give clear and straight forward answers (MacGregor & Kartiwi, 2010).

Communication Method

Australians generally speak English language. They are not very formal and they greet each other politely. In business meetings normally English language is used. In business meetings people avoid to discuss politics and religious matters. In Australia, business people also use other languages according to the need (Lindsey Parsons, 2010).

Singapore’s culture is the combination of European and Asian cultures. The culture is mainly influenced by East Asian, South Asian, Malay and Eurasian cultures. From the research it is analyzed that in Australia, employees are punctual as they start their work on time and finish their work on time. People like to go back home early and they like to spend time with family. In Singapore employees do not start their work on time and spend extra hours to complete the work. In Australia it has been examined that senior managers like to make good relationship with staff members but In Singapore senior managers discuss only work related matters with the staff members and believe in maintaining proper distance with staff members. In Australia business men prefer to communicate directly and they mostly use informal method of communication but in Singapore business people use formal communication method. Australians give more focus on individual needs whereas Singaporeans focus on community needs (Tellis, Yin & Bell, 2009).

Hofstede’s culture dimension framework is used for cross cultural communication. The framework was given by Geert Hofstede. This framework helps to understand cultural differences in different countries. Hofstede’s six cultural dimensions can be effectively used to work with people with different cultural and geographic backgrounds. Six dimensions are power distance index, individualism versus collectivism, masculinity versus femininity, uncertainty avoidance index, pragmatic versus normative and indulgence versus restraint. For each dimension Bond, Minkov and Hofstede have given score to each country on a scale of 0 to 100. Hofstede’s cultural dimensions of Australia are shown in the report. Foreign companies need to consider the information to operate effectively in Australia.

Attitude

 

(Source: Geert-hofstede, 2017)

Figure 1: Hofstede’s culture Dimensions of Australia

This dimension focuses on the fact that all persons in society are not equal. In different cultures inequality also exits among people. This dimension can also be elaborated as the extent to which less powerful people of the organizations accept and believe that power is distributed unequally. A high power distance index means society accepts that power is distribute unequally and on the other side low power index means society accepts that power is shared by all (Kreiser et al., 2010).

The score of Australia on this dimension is low (36). In Australia companies follow simple hierarchy structure in which managers are dependent on individual employees and teams for the work and they are always accessible. Information is shared frequently among members and managers take important decisions after consulting with other fellow members. Australians use direct, informal and participative communication approach.

This dimension explains nature of people whether people like to be alone and they only like to look after their families or they prefer to stay in a closely knitted network.  High IDV shows weak interpersonal relationship as people take less responsibility for others (Pinillos & Reyes, 2011).

In Australia the score on this dimension is high (90), which show highly individualist culture. The expectation is people only care about themselves and their families. Employees are expected to be display initiative and self-reliant in the business world. Promotions and hiring decisions are based on benefits and expectations as what one has done and can be achieved.

 

Figure 2:Hofstede’s Culture Dimensions

Masculinity shows society’s preference for heroism, assertiveness, material reward and achievement for attaining success whereas femininity represents preference for quality of life, cooperation, caring for the weak and modesty.   

 The score of Australia on this dimension is 61 as it is considered as masculine society. Australians enjoy their success and achievements that also support promotion and hiring decisions. Main goal of Australians is to win and conflicts are handled and resolved at individual level (Brock et al., 2008).

This dimension shows a society’s tolerance for uncertainty and ambiguity. This dimension can be described as the extent to which the members of the society feel threatened by unknown situations and have developed institutions and beliefs to avoid the situation (Han et al., 2010). In Australia the score for this dimension is 51.

Long term orientation shows the society’s preference toward searching for virtue whereas short term orientation shows society’s preference toward the formation of absolute truth. This dimension shows that people maintain some links with past while dealing with some present and future challenges. In some societies pragmatic approach is used in which people prepare themselves for future. Normative societies score low on this dimension and people belong to these societies prefer to maintain time honoured norms and traditions.

Work life

The score of Australia on this dimension is 21 that mean Australia has normative culture. People believe to establish absolute truth. In Australia people focus on getting fast results. They give respect to traditions and save little for future as they believe to live in present.

This dimension helps to measure a culture’s ability to fulfill personal desires and immediate needs of members. This dimensions shows that the level to which people control their impulses and desires. Relative weak control is known as Indulgence whereas relative strong control is known as Restraint.

In Australia, the score on this dimension is 71. Australians possess positive attitude and Australians believe in having fun. They mainly spend money to fulfill their wishes. They enjoy the life and believe in fulfilling personal desires (Imm Ng, Anne Lee & Soutar, 2007).

All the companies that want to establish business in Australia should consider all these cultural dimensions. As these dimensions give important details that are essential to understand before starting business in Australia. These dimensions will also help to understand market attractiveness for herbal products.

Conclusion

For expanding the business in global market the businessman target the countries from where they can get more benefits like more revenue and more customers. By cultural awareness and knowledge, the businessman can understand the attitude, value system, behavior, beliefs, language and tradition of the target audience. Through this knowledge the businessman can communicate effectively to target market audience. We are dealing in herbal products and our business is present in Singapore. We want to expand our business in Australia. In the report some reasons are described to select Australia as the host country.  Cultural analysis of Australia is also described. The report gives focus on the business culture of Australia and also shows differences between business culture of Singapore and business culture of Australia. At last Hofstede’s cultural dimension model is also presented. This model can provide essential information to foreign companies through which companies can formulate strategies for taking entry in target country’s market.

References

Brock, D. M., Shenkar, O., Shoham, A., & Siscovick, I. C. (2008). National culture and expatriate deployment. Journal of International Business Studies, 39(8), 1293-1309.

Garnett, S. T., Sithole, B., Whitehead, P. J., Burgess, C. P., Johnston, F. H., & Lea, T. (2009). Healthy country, healthy people: policy implications of links between Indigenous human health and environmental condition in tropical Australia. Australian Journal of Public Administration, 68(1), 53-66.

Geert-hofstede (2017). What about Australia?, Viewed on 28 July, 2017 from < https://geert-hofstede.com/australia.html>.

Han, S., Kang, T., Salter, S., & Yoo, Y. K. (2010). A cross-country study on the effects of national culture on earnings management. Journal Of International Business Studies, 41(1), 123-141.

Imm Ng, S., Anne Lee, J., & Soutar, G. N. (2007). Are Hofstede’s and Schwartz’s value frameworks congruent?. International Marketing Review, 24(2), 164-180.

Kreiser, P. M., Marino, L. D., Dickson, P., & Weaver, K. M. (2010). Cultural influences on entrepreneurial orientation: The impact of national culture on risk taking and proactiveness in SMEs. Entrepreneurship Theory and Practice, 34(5), 959-983.

Li, J., & Harrison, J. R. (2008). National culture and the composition and leadership structure of boards of directors. Corporate Governance: An International Review, 16(5), 375-385.

Lindsey Parsons, R. (2010). The effects of an internationalized university experience on domestic students in the United States and Australia. Journal of Studies in International Education, 14(4), 313-334.

MacGregor, R. C., & Kartiwi, M. (2010). Perception of barriers to e-commerce adoption in SMEs in a developed and developing country: a comparison between Australia and Indonesia. Journal of Electronic Commerce in Organizations, 8(1), 61-82.

Minkov, M., & Hofstede, G. (2012). Is national culture a meaningful concept? Cultural values delineate homogeneous national clusters of in-country regions. Cross-Cultural Research, 46(2), 133-159.

Pinillos, M. J., & Reyes, L. (2011). Relationship between individualist–collectivist culture and entrepreneurial activity: evidence from Global Entrepreneurship Monitor data. Small Business Economics, 37(1), 23-37.

Škerlavaj, M., Štemberger, M. I., & Dimovski, V. (2007). Organizational learning culture—the missing link between business process change and organizational performance. International Journal Of Production Economics, 106(2), 346-367.

Sugahara, S., & Boland, G. (2010). The role of cultural factors in the learning style preferences of accounting students: A comparative study between Japan and Australia. Accounting Education: an international journal, 19(3), 235-255.

Tellis, G. J., Yin, E., & Bell, S. (2009). Global consumer innovativeness: Cross-country differences and demographic commonalities. Journal of International Marketing, 17(2), 1-22.

Yagmurlu, B., & Sanson, A. (2009). Acculturation and parenting among Turkish mothers in Australia. Journal of Cross-Cultural Psychology, 40(3), 361-380.

Zheng, W., Yang, B., & McLean, G. N. (2010). Linking organizational culture, structure, strategy, and organizational effectiveness: Mediating role of knowledge management. Journal of Business research, 63(7), 763-771.