International Business And Cultural Differences

Contrasting the cultural factors of Singapore and UAE

International business is a concept that can easily mesmerize anyone whosoever indulges himself in achieving remarkable success in the field of business. International business has turned to be the need of the hour. Any nation that aspires to expand its investment and foreign exchange must be take part in making innovations and development that can enhance the it’s market for various goods and services. It is because of this international business that all the different economies are able to receive high profits at the same time getting acquainted with each other’s culture. Cultural diversions or differences among the nations determine the different ways in which the people of various nations talk to each other, dresses, maintain lifestyle and also do business activities (Thomas and Peterson 2017).

International business that is increasing along with globalization highly resists upon the cultural factors. As Geert Hofstede mentioned in his theory, there are various dimensions such as masculinity and femininity, power distance, etc that need to be considered while doing business with other countries because there is hardly any one particular method of management of business that is internationally or globally acclaimed. Thus, cultural diversities are something which should always be taken into account for achieving success in international business (Bird and Mendenhall 2016). 

In case of. Singapore, one can find Malaysian, Indian, Indonesian and Chinese cultures amalgamated into the Singaporean cultural norms. Peace and harmony have an upper hand in Singapore. However, UAE has its roots in one religion that is Islam though it is tolerant towards other religions. The lifestyle as well as conventions related to business are mainly based on Islam and its ways (Karin Andreassi et al. 2014).

Introducing oneself into a different cultural zone and with the motive of doing business with the same requires a core understanding of the cultural factors. A management team of a certain company is likely to possess certain rules and regulations which may not be applicable when it indulges in doing business with another nation. A businessman along with his group of managers should study well about the lifestyle and business culture of another economy where it aspires to market its products. The conditions related to work atmosphere, employees, training, business deals, maintenance of time, long and short-term orientation, individual roles and that of the group are very important. These factors should be taken into consideration to measure whether the environment is suitable for augmenting the business goals (Jyoti and Kour 2015).

After considerable research and studies Geert Hofstede, a social psychologist developed in association with others a six-dimension cultural model. Organisational psychology has been his interest of study. The intercultural and organizational culture determine the relation between the employer and employee to a great extent. The model developed by Hofstede inform about the national and cultural variations that highly influence the working of any social institution and one of them is business organization (French 2015).

The six-dimension model developed by Hofstede comprises the following dimensions or views:

• Power distance
• Individualism
• Masculinity
• Long term or short-term orientation
• Indulgence
• Uncertainty avoidance

1. Power distance-refer to the extent to which the employees of an organization allow themselves to be managed by the firm. This concept of power distance imposes great effects upon the work culture and productivity of a company.

In some cultures, or in some economies the impact of power is very high. The employees of an organization in particular cultural zone may not be accustomed with high rate of power distance. They may not feel comfortable at work if the relation between the employer and the employer is highly dependent on power and authority. However, in many countries the work culture calls for the authoritative power in managing the employees and functioning of the business (Richter et al. 2016).

1. Individualism-is another important factor that also determined the functioning of a business concern. A particular nation may emphasize the individual effort and individual achievements rather than the achievement made by a group. The individual is given more responsibility in the company while undertaking any project or so. However, the opposite may take place in some other nation or economy. It may prefer team work rather than emphasising individual work. The cultural zone of this particular nation may ask for more interaction and activities within the members of a team to accomplish a project(Hauff and Richter 2015).
2. Masculinity-is another aspect in which depends the success of a business organization. In some companies or in some work culture the presence of masculinity may become more dominant. In such cases where the there is a prevalence of masculinity, the decision making is done very quickly in various business dealings and every rules and regulations remain very stern without any ambiguity or changes(Gulistan Yunlu and Clapp-Smith 2014).
3. UncertaintyAvoidance- Many nations and the work culture of such nations remain highly dependent upon the certainty in planning and maintenance of proper rules and regulations. Some economies try their level best to ensure certainty in their work. The business organisations emphasize upon the confirmation of decisions without leaving any have of ambiguity. Such nations prefer to set legal rules and norms to keep any king of doubts at bay. On the other hand, some economies replay in their dealings and meetings that increase ambiguity without ensuring the employer and the employees about any certainty about achievements in business matters. They hardly set any strict rules for following certainty(Miska and Öner 2015).
4. Long term and short-term orientation vary from one business culture to another. In some countries, the long-term orientation is very high. Long term orientation refers to dependence of the firm upon the persistent behaviour and taking adequate time in the process of decision making. Long term orientation not in the work culture many leads to stability in the business structure. On the other hand, short term orientation may refer to the quick decision-making procedures of the organization or a particular work culture. Imposing much importance upon one’s culture or tradition is also one of the facets of short-term orientation. Business dealings that encompass the acceptance of rewards or gifts also come under the purview of short term orientation in work culture(Hur, Kang and Kim 2015).
5. Indulgenceor restriction predict the future of business achievements. Some work culture or some nations show a high rate of indulgence in many cases. The culture of a particular nation may allow its employees more of indulgence in business projects. On the other hand, in some nations the business organisations hardly allow their employees to get indulged in the dealings and know more than their work thereby restricting their information and movements(Calvin, Beale and Moore 2017).

Management across cultures and the challenges related:

Singapore has shown visible low rates of around 74, 48, and 8 approximately in cases of Power distance, Individualism, and long-term orientation respectively. Singapore having an amalgamation of Malaysian, Indonesian and some other cultures is recognised to be a country with a balanced and liberal culture. Recording a rate of low rates of power distance, Individualism and long-term orientation Singapore promises to be nation suitable for prosperous international business. It becomes favourable for any country to easily develop its strength for marketing or trading globally. But it has shown a high rate of about more than 50 approximately in Uncertainty Avoidance that is a good sign for the global marketers to set up their offices or business in Singapore (Misra et al. 2015).

On the other hand, based on the above discussions related to various dimensions of culture such as power distance, Individualism, Uncertainty Avoidance and long term orientation UAE has recorded a higher rate in each of the dimensions. A visible high rates of 80, 52, 48 with regard to power distance, Individualism, Uncertainty Avoidance made UAE somewhat less preferable than Singapore. However, a considerable high rate of Uncertainty Avoidance is profitable enough to attract the business concerns from other cultures. UAE is also tolerant to other religions and being economically developed UAE has invited many global traders across the world ensuring them with high gains. Although Singapore has always come up with new innovative measures and solutions UAE with its wealthy economy is the cynosure of eyes for the reputed companies (Gelfand et al. 2017).

When seen in terms of the above mentioned dimensions, then there comes up many challenges that the business organisations have to face.

Leadership is highly influenced by the all the above dimensions of Hofsteds model. The concept of power distance varies from one culture to another. A healthy leadership can be maintained in a business concern only when the employees or the members of a team in a company feel comfortable enough to indulge themselves completely into the work atmosphere. The members working under the leader should not feel the rate of power distance to be very high as it leads to imbalance in the system of business enterprise. A leader is always chosen in accordance with the level of responsibility and commitment he or she shows towards work. Therefore, it becomes very essential that a leader should have a strong sense of decision making and prudent enough to think about long term profits and goals of the concern. Leadership highly gets affected by the co-operative nature of the employees and the leader, when there’s balance between the two then only leadership can prove successful. In case of doing international business and trading the goods and services outside one’s culture or one’s nation call for understanding the mindset of the employees in different nation. Understanding another economy’s business policies would determine the extent and nature of leadership that can be exercised in the foreign work culture. The leader should maintain the correct form of balance needed to survive in the global market that will help to earn good will and gain. Many companies are coming up together in the arena of international trading. Therefore, it becomes important for the organisations to respect the leadership skills of each other and the employees’ of both the companies that are trading globally. Neither of the two cultures should take an authoritative power over the other and this will only ensure an amicable working environment (De Mooij 2015).

Brief of the individual factors

Negotiations are intensely affected when any company goes for international business. The policies of other nation will differ from those of the organization’s that indulges in marketing it’s products globally. While setting up the structure of merchandise in any other cultural atmosphere the act of negotiations plays a very vital role while dealing with the other foreign party. As and when a company makes itself well prepared with the qualitative arguments and facts then only the act of negotiation becomes successful. The dexterity of technical communication is also very valuable in the context of negotiation in international marketing zone. In case of global market, two or more countries participate in the negotiations with their different perspectives and demands. In such a situation, the business concern that excels in any kind of innovative measures and policies as well as remains equipped with technical communication can win over the negotiations of other parties. International business activities together with export and import call for negotiations between both the business companies involved in them. The either of the two organizations should take into account the necessary aspects while negotiating. These management team of both the parties should remain informed about and respect each other’s nations culture and other business-related norms in order to keep any kind of miscommunication at bay. Hiring a good consultant or negotiating team with excellent knowledge of technical communication would be essential for both the parties. This will help in making their grounds rationalized and strong. Knowledge about different business perspectives and records of the previous years will help in making the positions strong and capable for negotiations. Meeting each other in person is highly recommended in case of negotiations as it will help in putting forth each other’s thoughts and way of negotiating in amore more reasonable manner. Information about the other party’s annual growth and negotiating skills as well as it’s graph of success throughout the years matter the most while going to sit for negotiations. One should also be well informed about the languages or any other common medium of communication while choosing to business globally without which it will become a challenge (McLeary and Cruise 2015).

Ethics and its maintenance is highly recommended for maintaining a good business environment. Maintenance of ethics is highly inspired in some nations. Strict rules and laws are set by some nations so that the employees and employee in the marketing sector abide by them and follow them. A certain company while imitating it’s trading arena in any other cultural atmosphere should be informed well about the values and beliefs of the other nation. The values and beliefs of their two or more parties involved in the global trading of any product or service should be given utmost importance. The clients as well as the employees together help in the achievement of success of any business firm. In international trading atmosphere there are employees and clients who hail from various countries and cultures. Therefore, either of the nations must be cordial enough to respect each other’s beliefs, ways of thinking and values in order to carry out their activities in a proper way. International business has become need of this age which is why no organization or nation should assume that it as own ethics or values are the only correct way of approach and dealing. Laws and rules should be verified by every trading company in order to make the employees understand the balance between policies and flexible business structure. However, recognising the differences of other foreign culture is a challenge that is to be solved (Demuijnck 2015).

Cultural differences between Singapore and UAE based on Hofstede’s Cultural dimensions

Leadership skills, negotiating methods, maintenance of wellbeing of the employees along with upholding the values or of ethics are increasingly important for carrying out international business. Thus, high rates of masculinity, power distance, Uncertainty Avoidance, Individualism and long-term orientation are such cultural dimensions that need to be balanced to a great extent for establishment of successful international business.

1. In case of power distance, the management must be equipped enough to balance the distance or the authority of the employees and the employer. A leader can become successful only when he or she cooperates with the subordinate and allow them to explore their own skills. The entire association should feel that they are a part of the firm which in turn will enhance their productivity and efficiency(Lim, Innes and Meitner 2015).
2. In case of individualism, it can be said that individualism is necessary during some business dealings. The management or the authoritative power of the business firm may not allow any team or the employees to indulge in decision making process as the case may be. However, it should be always remembered that every business enterprise encompasses both profit and loss and a company cannot be run successfully without the employees and clients. Therefore, the authority of the trading company that is going to do international business must be able to competent and considerate enough to discuss with its employees and clients about important matters. This kind of methodology when followed in decision making can bring about an overall success of the firm (Groves, Feyerherm and Gu 2015).
3. Masculinity or prevalence of a strong sense of decision-making ability is necessary for running a trade. However, in case of global trade the management or the authoritative power should recognize the cultural affairs of the other culture or the country where it sets up it’s business. It should be able to collaborate well with the people and employees of the foreign country and then Only it can aspire to earn goodwill and profit(Babatunde and Low 2016).
4. Certainty is something which attracts business partners when any association chooses global trade. Therefore, upholding high rate of conformity and certainty in decisions and negotiations is highly recommended(Bartlett and Beamish 2018).
5. Long term and short-term orientation entirely depend upon the technology used in a business concern, the motto of the employer, his future goals and the culture of the nation to which it belongs. However, the long term and short-term orientation should be varied by the other once he gets engaged in global market. As many nations remain engaged in the global business zone, it becomes a foremost requirement for the companies to gauge the growth capacity of each other. Adequate information and good guidance from consultants can help an organization to decide about the long term and short-term orientation. Moreover, long term orientation is mostly recommended as it is only when a businessman is able to adapt himself to changes and differences in the field along with perseverance, he becomes confident enough to achieve future accomplishments(Van Witteloostuijn 2015).

Conclusion

As per the assertions of the assignment in Singapore firms, one can find Malaysian, Indian, Indonesian and Chinese cultures amalgamated into the Singaporean cultural norms. Peace and harmony have an upper hand in Singapore. However, UAE has its roots in one religion that is Islam though it is tolerant towards other religions. The lifestyle as well as conventions related to business are mainly based on Islam and its ways. Singapore has shown visible low rates of around 74, 48, and 8 approximately in cases of Power distance, Individualism, and long-term orientation respectively. On the other hand, based on the above discussions related to various dimensions of culture such as power distance, Individualism, Uncertainty Avoidance and long-term orientation UAE has recorded a higher rate in each of the dimensions. It can be further discerned that the management must be equipped enough to balance the distance or the authority of the employees and the employer. A leader can become successful only when he or she cooperates with the subordinate and allow them to explore their own skills.  

References

Babatunde, Y. and Low, S.P., 2016. Cross-Cultural Management and Quality Performance. SPRINGER Verlag, SINGAPOR.

Bartlett, C.A. and Beamish, P.W., 2018. Transnational Management: Text and Cases in Cross-border Management. Cambridge University Press.

Bird, A. and Mendenhall, M.E., 2016. From cross-cultural management to global leadership: Evolution and adaptation. Journal of World Business, 51(1), pp.115-126.

Calvin, J.R., Beale, R.L. and Moore, K., 2017. ACCULTURATION AND ALLIED CONTRIBUTING FACTORS THAT FURTHER ADVANCE CROSS-CULTURAL MANAGEMENT LEARNING AND EDUCATION: A CONCEPTUAL APPROACH. Journal of Organizational Culture, Communications & Conflict, 21(2).

De Mooij, M., 2015. Cross-cultural research in international marketing: clearing up some of the confusion. International Marketing Review, 32(6), pp.646-662.

Demuijnck, G., 2015. Universal values and virtues in management versus cross-cultural moral relativism: An educational strategy to clear the ground for business ethics. Journal of Business Ethics, 128(4), pp.817-835.

French, R., 2015. Cross-cultural management in work organisations. Kogan Page Publishers.

Gelfand, M.J., Aycan, Z., Erez, M. and Leung, K., 2017. Cross-cultural industrial organizational psychology and organizational behavior: A hundred-year journey. Journal of Applied Psychology, 102(3), p.514.

Groves, K.S., Feyerherm, A. and Gu, M., 2015. Examining cultural intelligence and cross-cultural negotiation effectiveness. Journal of Management Education, 39(2), pp.209-243.

Gulistan Yunlu, D. and Clapp-Smith, R., 2014. Metacognition, cultural psychological capital and motivational cultural intelligence. Cross Cultural Management, 21(4), pp.386-399.

Hauff, S. and Richter, N., 2015. Power distance and its moderating role in the relationship between situational job characteristics and job satisfaction: An empirical analysis using different cultural measures. Cross Cultural Management, 22(1), pp.68-89.

Hur, W.M., Kang, S. and Kim, M., 2015. The moderating role of Hofstede’s cultural dimensions in the customer-brand relationship in China and India. Cross Cultural Management, 22(3), pp.487-508.

Jyoti, J. and Kour, S., 2015. Assessing the cultural intelligence and task performance equation: Mediating role of cultural adjustment. Cross Cultural Management, 22(2), pp.236-258.

Karin Andreassi, J., Lawter, L., Brockerhoff, M. and J. Rutigliano, P., 2014. Cultural impact of human resource practices on job satisfaction: A global study across 48 countries. Cross cultural management, 21(1), pp.55-77.

Lim, S.S., Innes, J.L. and Meitner, M., 2015. Public awareness of aesthetic and other forest values associated with sustainable forest management: A cross-cultural comparison among the public in four countries. Journal of environmental management, 150, pp.243-249.

McLeary, C.N. and Cruise, P.A., 2015. A context-specific model of organizational trust: An examination of cognitive and socio-affective trust determinants in unique cultural settings. Cross Cultural Management, 22(2), pp.297-320.

Miska, C. and Öner, H., 2015. Global Leadership Practices: A Cross-Cultural Management Perspective.

Misra, K., Memili, E., Welsh, D.H., Reddy, S. and Sype, G.E., 2015. Cross-country technology gap in Latin America: Growth accounting and non-parametric approaches. Cross Cultural Management, 22(4), pp.630-648.

Richter, N.F., Hauff, S., Schlaegel, C., Gudergan, S., Ringle, C.M. and Gunkel, M., 2016. Using cultural archetypes in cross-cultural management studies. Journal of International Management, 22(1), pp.63-83.

Thomas, D.C. and Peterson, M.F., 2017. Cross-cultural management: Essential concepts. Sage Publications.

Van Witteloostuijn, A., 2015. Toward experimental international business: Unraveling fundamental causal linkages. Cross Cultural Management, 22(4), pp.530-544.