Concept of Distance in International Management

Question: Discuss about the Concept of Distance in International Management. Answer: Introduction The case study provided for the analysis revealed a lot of information regarding the cultural differences between the Indonesian markets and the markets in Australia and New Zealand. The case study described the irony of the countries to be geographically close to each other and still being miles apart in terms of their cultures, in a clear and effective way. The major intention of the case study was to describe the challenges present in the process of an organization from Australia or New Zealand expanding its operation into the Indonesian markets. This report takes the analysis further by analyzing the cultural difference between the countries, role of women in the target markets and the possible entry strategies of various businesses into the Indonesian markets (Griffin, 2012). Cultural differences The cultural differences between the countries are a significant factor affecting the effectiveness and performance of the organization. This section of the report analyzes the differences between the cultures of Indonesia and Australia. Trompenaars cultural dimensions There are a number of tools and models available to allow the organization to tackle the issue of the differences between the culture of the target market and the home county. Trompenaars cultural dimensions are such a culture model developed by Fons Trompenaars and Hampden-Turner, which defines the cultural differences between two countries based on the below dimensions (Raj, 2015). Universalism versus Particularism This dimension defines the differences between the culture of Australia and Indonesia based on the relative importance provided to the rules, obligations, values, standards and laws over personal relations and circumstance. The culture in Australia contains high value of universalism, which allows a set of rules, laws or standards to be applied in any practical scenarios irrespective of the circumstances. But in case of the culture in Indonesia, the value of particularism is high, which allows more values to be provided to the circumstance along with the personal relations than the rules and regulations (Kohler, 2014). Neutral versus emotional This dimension defines the way people behave in the corresponding country according to their inner feelings. Australia is a country with an emotional culture, where people show their inner feelings on their faces, may it be anger, sadness or happiness. Indonesia is a country which is known to have a culture of keeping the inner feelings in a check. So people in the Indonesian culture dont show anger or sadness on their face, but try to maintain a joyful smile on their faces (DellApa, 2014). Specific versus diffuse This dimension defines the way people perceive the connection between work and personal relations. Australia has a specific culture which allows the people to keep their work and personal lives separate. Although good relationships in the workplace are recommended, Australians believe the role of personal relationships arent very high for the achievement of business objectives. Whereas the Indonesian culture provides personal relationship a lot of value in the workplace as well. Achievement versus ascription The Australian culture is more focused on the achievements of an individual to define who he or she is. But in case of the Indonesian culture, the value of ascription weighs more than achievement, where an individual in society or workplace is defined by who he or she is, not on the basis of his or her achievements (McFarlin, 2014). Sequential versus synchronous time This dimension of the culture of a country defines how people in the corresponding country manage time. People in Australian culture prefer to do things sequentially in the scheduled plan, which in turn causes the people to be punctual and time-bound in professional life. But the culture of Indonesia allows the people to be lenient towards the schedule and timeline (Chhokar, 2013). Internal direction versus outer direction The internal direction culture allows the people to be more confident on their capabilities to change their nature and environment to achieve their goals, which is commonly the belief of the Australians. But in case of the Indonesian culture, people are directed outward and believe that they have to compromise with their surrounding and environment to survive in the world (Ferraro, 2015). GLOBE leadership style The GLOBE project for the leadership styles defines a number of dimensions, which can describe the leadership style generally implemented in various geographical locations or clusters. Performance orientation Generally, the leadership in Australian culture focuses on the performance of the individuals. But in case of the Indonesian culture, the leadership is more lenient towards performance of the individuals and put more values in the personal relationships. Assertiveness orientation The leadership practices in Australia are more confrontational and aggressive in terms of showing the emotions in the workplace. But in case of the Indonesian culture, the leadership in the workplace is more oriented towards assertive behavior, which allows leaders to avoid confrontation and conflicts (Dahles, 2013). Future orientation The Australian work culture is much more future oriented in comparison to the work culture of Indonesia. The leaders in Australian workplaces put a lot of effort and resources into planning and developing strategies along with delaying the sense of satisfaction. But in case of Indonesian work culture, the leaders put more value to early gratification with lenient mentality towards planning and strategizing (Tietze, 2013). Human orientation The work culture in Australian is oriented more towards the business objectives and professional goals than the human relationships. The aim to achieve the professional goals are given much more values to the development of personal relationships in Australian work culture. But in case of Indonesian work culture, the value of human relations are much more than achievements and business objectives (Chhokar, 2013). Gender egalitarianism The presence of gender equality is higher in the Australian work culture in comparison to the Indonesian work culture. Women take equal positions and roles in various Australian workplaces and there is virtually to inequalities between different genders in the Australian markets. The Indonesian work culture has grown a lot in the past few decades to decrease the gender inequalities. Currently the educated women in the urban regions take equal rights in the workplaces across various countries (Ambos, 2014). Australian beef industry exporting to Indonesia The Australian beef industry can expand its operations into the Indonesian markets by exporting livestock to the corresponding markets. This section of the report focuses on the entry strategies for the corresponding industry for the Indonesian markets along with the possible challenges for the same. Entry strategy The entry strategy of the Australian beef industry should focus on the quality, delivery time and costs of the livestock exported into the Indonesia. The Australian beef industry should put extra effort to market the high quality of the livestock being exported into Indonesia. An Indonesian law enforces the import of the livestock only from the countries having the disease-free status from the World Organization for Animal Health. Australia currently holds the corresponding status and can market the same to increase the value of the livestock being exported to Indonesia. Another factor to be focused in the entry strategy of the Australian beef industry is the delivery time of the livestock. The livestock can be delivered to the Indonesian markets within hours and days, instead of weeks required by other exporters. This should be marketed by the Australian beef industry to attract more customers. The Australian beef industry can ensure that the costs for the livestock to be exported t o the Indonesian markets are fair enough to attract more number of orders. The competitive pricing strategy of the Australian beef industry will allow significant increase of the livestock export to the Indonesian markets due to the optimum balance of price and high quality of the products being exported (Kahn, 2014). Challenges There are a number of challenges for the expansion of the Australian beef industry into the Indonesian markets, some of which are mentioned in this section of the report. Recent changes to the Indonesian law restricting import of various livestock from the countries having different areas with the diseased animals, allows the Indonesian markets to import the animals from disease-free zones of a country not having the disease-free status for the entire country. This in turn allows a number of competitors of the Australian beef industry, like India to be introduced in the mix, which in turn increase the competition for achieving the organizational objectives (Gleeson, 2012). The low costs of the livestock from other countries like India is another challenge for the Australian beef industry expanding into the Indonesian markets. The livestock being exported from Australia are generally priced higher due to the high quality, which in turn allows the Indonesian markets to find other cheaper options (Sun, 2012). The differences in the culture of Australia and Indonesia is another challenge for the expansion of the Australian beef industry into the Indonesian markets. The cultural differences between the two countries affect the business communications and operations negatively, which could lead to the failure of the expansion of the Australian beef industry (Kitley, 2014). These challenges can be managed by the Australian beef industry in an efficient manner by proper analysis and monitoring, which in turn leads to the effective expansion of the industry into the Indonesian markets. Role of women This section of the report focuses on the role of women in the Indonesian societies and their effects on the international human resource management of the organizations expanding to the Indonesian markets. Role of women in the Indonesian societies Indonesia is a country which has recently developed a lot in the recent decades in terms of women empowerment. The gender differences in the educational system has gone down a lot in the urban Indonesian regions and have decreased quite in the other regions of the country. The presence of women in the workplace of various industries has also gone up both in terms of the numbers and the equality in the rights, responsibilities and positions. More than 85% of the tertiary-educated women in the urban Indonesian regions have work as their primary activity. The work culture in the country has changed significantly to consider the women of the country to be reliable for bestowing the business responsibilities. The average age of marriage in the urban Indonesian regions has also gone up, which suggests the changes in the preference of the women to work instead of getting married at an early age. This in turn allows the women to have high aspirations and objectives in their professional live s. This allows the women in the workplaces of various industries in Indonesia to be more motivated to achieve their aims and objectives. The gender gap in the tertiary education system in the country has also decreased significantly in the recent past, which has led to the increase of the gender equality in the service industry. Women are not considered to only be inside the homes anymore and the lifestyle of having two earnings in a household is getting more demand in the current societies across the country (Ball, 2012). Effects on Australian companies IHRM The international human resource management process of an organization can be defined as the set of business processes which ensure optimal usage and effective management of the human resources available to the organization in the international locations. The Australian organizations planning to expand their business into Indonesian markets should analyze various effects on the international human resource management process before the business expansion (Koning, 2013). One of the factors that can potentially affect the international human resource management process of the Australian organizations in the Indonesian markets is the presence of female employees in the workplace and the role of women in the Indonesian societies (Harris, 2012). As mentioned earlier, Indonesian societies have developed a significant amount in terms of women empowerment in the last few decades. This in turn has allowed a revolution of women empowerment and engagement to be started across the urban locations of the country. Women have started getting equal rights, positions and responsibilities in the workplaces and educational systems. This in turn has allowed the women in the societies across the country to have more opportunities to achieve their goals and objectives. But a number of rural or less developed regions across the regions havent seen a lot of changes in terms of women empowerment. This in turn affects the international human resource management processes of the Australian organizations in Indonesia, who employs women in various positions in the workplace. Some of these changes or effects on the IHRM processes are mentioned in this section of the report (Nasir, 2016). The Australian organizations should ensure to have specific business guidelines to support the women empowerment revolution going in the country. So the management of the organization should give close monitoring and high amount of effort into ensuring the presence of gender inequalities in the workplace. The Australian organizations operating in the Indonesian markets should also ensure to provide attractive employment options to the women present in the corresponding societies to achieve both their organization objectives and corporate social responsibilities (Riany, 2016). The IHRM processes should also ensure the presence of stricter grievance and complaints facilities available for any kind of discrimination done to the female employees in the workplace based on gender. This allows the management of the Australian organizations to enforce gender inequalities in their workplaces in Indonesia (Munandar, 2014). These changes in the international human resource management processes of the Australian organization operating in the Indonesian markets allow the organization to have successful HRM strategy and successful international business expansion. The changes in the IHRM processes also allows the Australian organizations to get support from the regulations and government of Indonesia in terms of maintaining gender inequality in the workplace. References Ambos, B. and Hkanson, L., 2014. The concept of distance in international management research. Journal of International Management, 20(1), pp.1-7. Ball, D., Geringer, M., Minor, M. and McNett, J., 2012. International business. McGraw-Hill Higher Education. Chhokar, J.S., Brodbeck, F.C. and House, R.J. eds., 2013. Culture and leadership across the world: The GLOBE book of in-depth studies of 25 societies. Routledge. Dahles, H., 2013. Tourism, heritage and national culture in Java: Dilemmas of a local community. Routledge. 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