The companies are continuing to expand the business across the borders and the global markets are increasingly accessible for the medium-sized organisations (Mach and Baruch 2015). Cross-cultural workplace and teams are even more common today and the organisations get benefits from the diverse knowledge of the cross-cultural team as the employees from different cultural have insightful approaches to the issues of the business. However, the organisations in global arena mainly face the issues of communication of the expatriates, etiquette and organisational hierarchy.
Saba is an Australia based fashion brand and this organisation was established by Joe Saba in the year 1965. Saba provides a contemporary label for both menswear and women’s clothes. In the year 2005, Saba was owned by Apparel Group and the organisation has its office at Sydney (Saba.com.au 2018). Of late, Saba has its 30 brand stores throughout Australia and this brand is also available in some of the David Jones departmental stores as well. The main principle of the organisation is improvement and innovation. The modernity of each collection speaks to the heart of the brand.
The home country of Saba is Australia and the new host country is India. Therefore, cross-cultural issues between Australia and India are explained in this study. The issues of the cross-cultural team are mainly inadequate trust, perception, inaccurate biases and false communication.
Macro environment factors:
Political: India is one of the largest democracies and India has the relatively stable political condition. The political culture has less tolerance in India and Indian government wants to attract the foreign direct investment as well. However, Indian government mainly wants to provide emphasis on the ‘make in India’ strategy. A major area of concern in India is corruption.
Economic: India’s current GDP worth is $2.4 trillion and it is world’s 7th largest economy in the world. The current GDP growth in India is 3.3% (Kaushal and Pathak 2017). Foreign Direct Investment inflows in India hit almost US$ 60 billion in 2016-17. Foreign companies have to give 40% corporate tax and GDP per capita is $2.134 in 2018-19. India has large labour force and Indian ranks 100 in ease of doing business.
Socio-cultural: Human development index is 0.64% in India. India has gigantic customer market India offers cheap labour market. Labour force in India is expected to reach 170 million at the end of 2020 (Boutabba 2018). India has different multi-lingual and multi-ethnic people; communal harmony is important in India. Indian people have a diverse taste in fashion and food. Standard of living in India is gradually increasing and India has a large number of the middle class with a good amount of disposable income. In case of fashion brand, middle-class people spend money on fashion clothing.
Technological: India has been advancing in the technological field and many of the technological giant companies are in India. In the fashion industry, the companies use technological equipment to produces products. India has large numbers of IT skilled employees and large numbers of customers use the internet also. Technological advancement is seen in using mobile apps, e-commerce and business solutions. Technological advancement has increased the opportunities to spend on e-commerce sites and many urban people purchase clothes of fashion brands through e-commerce.
Demographic factors: Current population in India is 132 crore and population density in India is more than 1000 people per sq.km. Literacy rate in India is 79.8% and 31.8% of Indians are younger than 16 years of age (Agarwal 2017). In India, various religious people live and almost 23 languages are spoken.
Fashion Industry market size: Indian economy is one of the fast growing economies and it has been witnessing the shift in consumers’ preferences. In India, disposable income has increased along with brand awareness. Indian fashion retail market was worth US$ 46 billion in 2016 and the industry will grow approximately 9.7% to reach almost US$ 115 by the end of 2025 (Degens et al. 2017). In India, many of the international brands are coming and the preferences of the customers have been changing. The population of India is becoming the fashion conscious and favourable trade policies can contribute to growing in the fashion market.
Competitors: In India, fashion clothing brands are many and the customers have many options to choose from. In India, fashion clothing priced in different segments are available. The purchasing power of the customers is different in India; therefore, clothes with various price ranges are available. The competitors in the market are varied and it ranges from casual, formal and fashion garments. Competitors in the fashion market can be Allen Solly and it is one of the largest selling fashion brands. International brand Levi’s sells in India. Provogue, Van Heusen and Park Avenue are some of the largest fashion brands available in India. In India, Monte Carlo is famous and Louis Phillipe sells fashion clothes. Peter England sells the superior quality clothes and it targets mainly mid-segment customers.
Customers: In India, rapid transformation is observing regarding the customers’ preferences. Indian consumers mainly spend on apparel, clothing and lifestyle retail companies. The market for fashion clothing is growing with the steady growth of 11% (Agarwal 2017). The customers change their preferences in India when they get something new. The customers of India belong from mainly middle class; however, rich customers segment spend money on the fashion clothing.
|
2015-2016 |
|
|
RICH (annual income > US$ 4,700) |
7 million households |
|
Consuming (US$ 1000-4700) |
75 million |
|
Climbers (US500-1000) |
80 million |
|
Aspirants (US$350-500) |
50 million |
Table 1: Spending of the Indian customers
(Source: Agarwal 2017)
Suppliers: The fashion brands in India have low switching cost for the suppliers as the fashion brands have many of the suppliers. Raw materials for fashion brands are present in the market. Suppliers mainly supply raw materials like cotton and silk. Internal brands make supply directly from home countries.
Saba is an Australian company and it has 30 stand-alone stores in Australia. Saba is coming to India and it will open new stores in India. The main office will have more than 200 employees.
Language:
Language is an external expression and it is the way to communicate with others. Appropriateness of the language is necessary in order to work together in the workplace. In Australia, the people speak in English language and in India; most of the people speak in Hindi and other regional languages. Therefore, the difference between two language barriers is obvious. As stated by Helmreich and Meritt (2017), if a language is transmitted as part of the culture, it is no less true for the culture as a whole. Language is an important factor in the workplace when different culture people and different nationalities work together. If the human resource department of Saba takes the employees from India, the employees of India would have faced the issue of language difference and differences of learning behaviour of the social and cultural norms.
Different lifestyle:
Australia is in Southern hemisphere and India is in the Northern hemisphere. Australia belongs to the warm climate and the people are conducive to the outdoor lifestyle. Therefore the people in Australia spend a large amount of money in participating the sports and beach. The lifestyle of Australian people is different to India as India has less winter. In India, people are particularly focused on life and entire society focuses on the way people behave, live and think. Indian people provide value on religion and action (Vogel et al. 2015). Different lifestyles of Indian and Australian can avoid making lifestyle clash larger and more disruptive.
Expatriate staffing:
In Australia, Saba follows ethnocentric staffing when the organisation designates a home country employee as top ranking in global operations. Therefore, Saba will ask some of its senior managers to visit India for taking care of the operation. In addition, Saba will get the main benefits that allow the organisations to ensure that the people from Australia to get top positions. Therefore, the HR team will recruit top positions from Australia and the subordinate positions to the Indians. Therefore, Australia based senior employees will not understand the issue and desires of the Indians. The cultural difference between Indian and Australian will create the issue of lack of support and lack of transfer of local knowledge to the company.
Population difference:
India has a population of approximately 1.32 billion as it is the second largest populated country in the world. On the other side, Australia has a population of 24.40 million (Bakir et al. 2015). The total population of India is large and it is a crowded place to live. India’s metropolitan cities are crowded and population difference will make the issue for the expatriate to live in India. Australian employees will face issue to live in India as the different culture and large population will create issue.
Corporate company culture:
In Australia, time is considered is the most important factor and all employees are very particular about arriving and leaving. In India, in private sector; the employees generally get late and work till late to cover up the time. In India, the employees give first priority to the work-life; however, work should have just equal priority (Mach and Baruch 2015). In Australia, colleagues are just professional mates; however, in India, colleagues become friends with time. In Australia, breaks are short and in India, break is like gathering of the colleagues. In Australia, authority culture is not famous and employees at higher post do not show superiority. In India, hierarchy culture is very famous.
Power Distance:
This cultural dimension deals with the condition that all individuals in societies are unequal and it tells about culture and attitude. In Hofstede model, power distance is about relationship between less powerful and actual powerful people (Jiang et al. 2015). Australia scores just 36; therefore, it is evident that Australia scores low and workplace hierarchy is established for superiors and convenience (Hofstede-insights.com 2018). Both employees and managers can expect to share the information frequently. India score 77 and it indicates for the top-down structure as well as appreciation of hierarchy. Real power in India centralises in manager and team members should be obedient to the managers.
Long-term orientation:
The society describes two existential goal differently; normative society and pragmatic approach. Each of the society needs to maintain links with its own past dealing with issues of the present and future (Karin et al. 2014). Australia scores just 21 and it follows normative culture. People in Australia have strong concern with establishing the truth. This culture shows great respect for the tradition. India scores 51, and Karma dominates philosophical and religious thought. In India, there are many truths and it depends on the seeker.
Communication: Miscommunication across cultural differences is the most significant issue in multinational companies. The management should start its rule and one structure for the communication process. Equal type of communication for the employees for both Australia and India can solve the miscommunication issue. The employees will be asked not to use different assumptions as Saba should use single cultural aspect.
Clarify: Employees should come to the management when in doubt and it is significant to ensure the foreign colleagues must understand what Indian people say. The management of Saba can ask the people to share their feedback and this will help to discover and address major misunderstandings.
Cross-cultural training: Saba can arrange cross-cultural training and it is the process of shortening the learning curve. The policy of ethnocentric staffing can be solved through cross-cultural training. The training session will be shared the cross-cultural information to all employees from different nationalities.
Simplify the process: The senior managers in the main office can use simple words so that their words can be consistent and understood easily. The managers should not use any synonyms or technical jargon should be used.
Conclusion
Cross-cultural management involves managing workforce I ways that consider the variation in cultures, preferences and practices of customers or international business context. Saba is planning to expand its business in India and Indian workforce is multi-cultural and diverse. The micro and macro environmental factors of India establish that India can provide good opportunity in trade and investment. Cross-cultural issues like corporate company culture, power distance and long-term orientation. Saba can do the ethnocentric staffing where Australian senior management will work with Indian subordinates. Different languages and different cultures of Indian and Australian can help to provide greater development areas like marketing, finances and technological innovation.
Reference List
Agrawal, A.N., 2017. Indian economy. New Delhi: New Age International Pvt.
Bakir, A., Blodgett, J.G., Vitell, S.J. and Rose, G.M., 2015. A preliminary investigation of the reliability and validity of Hofstede’s cross-cultural dimensions. In Proceedings of the 2000 Academy of Marketing Science (AMS) Annual Conference (pp. 226-232). Springer, Cham.
Berry, J.W., 2015. Global psychology: implications for cross-cultural research and management. Cross-Cultural Management, 22(3), pp.342-355.
Boutabba, M.A., 2018. The impact of financial development, income, energy and trade on carbon emissions: Evidence from the Indian economy. Economic Modelling, 40, pp.33-41.
Degens, N., Endrass, B., Hofstede, G.J., Beulens, A. and André, E., 2017. ‘What I see is not what you get’: why culture-specific behaviours for virtual characters should be user-tested across cultures. AI & Society, 32(1), pp.37-49.
Helmreich, R.L. and Merritt, A.C., 2017. A culture at work in aviation and medicine: National, organizational and professional influences. Abingdon: Routledge.
Hofstede Insights. (2018). Country Comparison – Hofstede Insights. [online] Available at: https://www.hofstede-insights.com/country-comparison/australia,india/ [Accessed 18 May 2018].
Jiang, Z., Gollan, P.J. and Brooks, G., 2015. Moderation of doing and mastery orientations in relationships among justice, commitment, and trust: A cross-cultural perspective. Cross-Cultural Management, 22(1), pp.42-67.
Karin Andreassi, J., Lawter, L., Brockerhoff, M. and J. Rutigliano, P., 2014. The cultural impact of human resource practices on job satisfaction: A global study across 48 countries. Cross-cultural management, 21(1), pp.55-77.
Kaushal, L.A. and Pathak, N., 2017. The causal relationship among economic growth, financial development and trade openness in Indian economy. International Journal of Economic Perspectives, 9(2), p.5.
Mach, M. and Baruch, Y., 2015. Team performance in cross-cultural project teams: The moderated mediation role of consensus, heterogeneity, faultlines and trust. Cross-Cultural Management, 22(3), pp.464-486.
Saba Australia. 2018. About the company. Available at: https://www.saba.com.au/sabastyleourstory.html [Accessed 18 May 2018]
Thomas, D. C., and Peterson, M. F. 2017. Cross-cultural management: Essential Concepts. London: Sage Publications.
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