Group assignment cross culture management topic leadership across cultures

This essay choose Individual- Collectivism and Power Distance to compare the 2 countries India and China because these two factors have strong impact on Leadership style, which is the ma

UEH UNIVERSITY COLLEGE OF BUSINESS

SCHOOL OF INTERNATIONAL BUSINESS - MARKETING

GROUP ASSIGNMENT

CROSS - CULTURE MANAGEMENT

GROUP 1

Hồ Chí Minh city, January 16 , 2024th

UEH UNIVERSITY COLLEGE OF BUSINESS SCHOOL OF INTERNATIONAL BUSINESS - MARKETING

GROUP ASSIGNMENT

Course: Cross - Culture Management

Group 1

Topic: Leadership Across Cultures

Phan Thanh Tr4c (31211025020) Nguy&n Kim C5c (31221025709) Nguy&n Đông Qu:nh (31221022108) Nguy&n Đ<nh Kim Phi (31221026195)

TABLE OF CONTENT

I CONTEXT 1

1 Company 1

2 Countries 1

II CULTURAL FRAMEWORK 1

1 Benefits 1 :

2 Critics: 2

III Individual/Collectivism: 2

1 Similarity 2

2 Difference 2

IV POWER DISTANCE 3

V CONCLUSION: 4

REFERENCES 6

1 Company

Introduction: Starbucks, established in 1971 in Seattle, USA, is a global giant known for specialty coffee roasting, marketing, and retailing Originally rooted in the United States, Starbucks is shifting toward international expansion due to saturation in the domestic market Global expansion strategy:

● Aggressive pursuit of international expansion, particularly targeting emerging markets like China and India

● China serves as a foundational model for global ventures, showcasing rapid expansion and Starbucks' adaptability to Chinese consumer interests in Western culture Leadership challenge in India:

● James Fansdale, Starbucks India's country executive, faces a formidable challenge due to underwhelming performance, opposite to the initial vision

● Starbucks must promptly address the gap between expectations and actual performance in the dynamic Indian market, as optimism around the replicated joint venture model needed quick strategic adjustments

2 Countries

China: A crucial turning point for Starbucks, demonstrating the effectiveness of its joint venture strategy and establishing the country as a top performer Starbucks effectively utilized its brand as a Western cultural icon to charge premium rates in Chinese markets This success became the catalyst for further expansion, including India

India: The focus of the case study, India presents a complex and challenging market for

Starbucks The company seeked to apply former successful strategies from China to India, replicating the proven model Starbucks was optimistic about India's potential due to the

economic and population similarities between China and India, but slow growth, lagging performance, and a net loss in 2017 necessitated a strategic shift to achieve actual success

II CULTURAL FRAMEWORK

- The Hofstede Cultural Dimensions theory, developed by Dutch researcher Geert Hofstede

in 1980, analyzes cross-country cultural differences Based on a 1960s-1970s IBM survey, it explores values within the multinational company

- The The Hofstede model dimensions (Hofstede et al 2010):

+ Power distance

+ Individualism/collectivism:

+ Masculinity/femininity

+ Uncertainty avoidance

+ Long vs short term orientation

+ Restraint vs indulgence

1 Benefits:

+ Increased cross-cultural understanding: Hofstede's work is valuable for cross-cultural research, offering a useful framework, with correlations to actual behavior noted by Orr and

Hauser (2008) McSweeney (2002) sees it as a useful starting point for cultural analysis, acknowledging subsequent methodological advances

+ Help refine marketing for cultural relevance: Hofstede dimensions in content analysis reveal culture-specific advertising appeals, aiding understanding of cross-cultural consumer behavior (Mooij & Hofstede, 2010)

2 Critics:

+ Research may be culturally bound: This model has been criticized for not being appropriate

or fully reflecting some cultures worldwide, due to its Western-oriented viewpoint, such as Asia (Zhou & Kwon, 2020) or Arab (Abdul-Zahra, 2003)

+ Assumes a one-to-one relationship between culture and nation-state

While national culture is not the sole cultural identity within a nation, it serves to differentiate the collective cultural traits of one nation from another Though internal diversity may exist along various dimensions, Hofstede proposed that a unifying cultural thread, despite these differences, somehow binds the national population together (McSweeney, 2002) + Informants only worked within a single industry –computers – and within one company – IBM

This approach oversimplifies national culture and dismisses individual variations Hofstede's reliance on national uniformity leads to circular reasoning and questionable representativeness (a miniscule local sample like IBM employees), making his findings about national culture potentially unreliable (McSweeney, 2002)

This essay choose Individual- Collectivism and Power Distance to compare the 2 countries India and China because these two factors have strong impact on Leadership style, which is the main problem in this Case Study

III Individual/Collectivism:

1 Similarity

The similarities in collectivism between Chinese and Indian cultures are rooted in their

long-standing historical and cultural traditions Overall both countries are located in Asia; both countries are diverse in population and have high economic development rates so they

have some common points in the culture such as: both societies place a strong emphasis on

family values, hierarchical structures within society, and the importance of group harmony over individual aspirations Here are some key similarities:

● Family-Oriented Societies: Both China and India have cultures that are deeply

family-oriented They live in nuclear families and familial obligations take precedence over individual desires

● Hierarchical Social Structures: Hierarchical relationships are respected and

maintained in both cultures, with elders and superiors receiving deference and authority within the family and community

● Group Harmony: There is a shared emphasis on maintaining harmony and stability

within the group, whether it's the family, community, or workplace

2 Difference

different aspects

Religion Buddhists is the biggest

religion → Compared to

Indians, they had more engaged

feelings, and were more

in-group favorites

Hinduism, the predominant religion and

philosophy in India, encourages personal

responsibility by promoting the notion of a cycle of death and rebirth, where each

reincarnation is determined by the individual's previous life

Norms Collectivist Norms: The

Chinese society is influenced by

Confucian values, which

emphasize harmony, respect

for hierarchy, and the

importance of family and

community

Balanced Norms: Indian culture presents a

blend of collectivist and individualist

norms While there is a strong emphasis on

family unity and community, there is also

recognition of individual achievements

and entrepreneurship.

Value Focus on family values, and

in-group loyalty These values

support a collectivist mindset

where the well-being of the

group is considered

paramount

Respect for elders, honesty, hard work, and the significance of both formal and informal

education These values create a societal

framework that respects individual success within the context of family and community.

Belief Beliefs in Importance of

maintaining social order and

the concept of ‘saving face,’

further reinforce collectivist

behavior, ensuring that actions

contribute to the harmony

and stability of the group.

Revolve around religious and spiritual practices, which can influence social behaviors The cultural norms in India

support a sense of collective responsibility

while allowing for personal expression and freedom.

In summary, China exhibits a more collectivist culture, with societal norms, values, and beliefs that prioritize group harmony and cohesion India, on the other hand, shows a mix of collectivist and individualist traits, where there is a strong sense of community, but individual aspirations and freedoms are also valued

IV POWER DISTANCE

Leadership style: Both China and India have a significant power distance, therefore, the

management style of the two countries do not have many differences They are hierarchical

societies with a strong cultural emphasis on respect for elders and authority figures It seems

that Indian and Chinese society are inequality-accepted, the unequal power distribution can

be seen between senior and subordinate Real Power is centralized and communication is one-way However:

- Leadership styles in India are more likely to be participative than in China; Indians are highly receptive to soft power, such as the charisma of leadership, opinions of experts, or the inherent respect for authority figures Though culture has changed a bit, there is a wide gap between seniors and subordinates

- Chinese society prefers simple organizational structure that clearly define the

hierarchy between managers and subordinates, and disagreement with management

is frowned upon Although there is a principle based on Confucianism, allows for a

weaker member to call on a superior for favors, Chinese society traditionally emphasizes respect for authority figures and hierarchical structures

Employee’s desire: In both countries, work-life balance does not strongly affect employee

engagement Family and social relations are very important for the employees

- In India, employees seem to be significantly motivated by bonuses and promotions

- In China, employee engagement is driven by a sense of personal achievement,

training opportunities and fair pay

V CONCLUSION:

The differences in Collectivism/Individualism and power distance between China and India significantly influence their respective leadership styles:

China

- Authoritarian and Paternalistic: In China, with collectivism and high power distance

characteristics, leadership tends to be more hierarchical and group-oriented Leaders are expected to maintain harmony and collective well-being, often making decisions that prioritize the group over individuals

India:

- Participative: India, exhibits leadership that balances collectivist values with individualistic tendencies India’s lower power distance indicates a preference for consultative and participative leadership styles, where power is more evenly distributed

● Encouragement of Innovation: Leaders in India are increasingly valuing innovation

and creativity, which are hallmarks of individualistic cultures

● Adaptability: Indian leaders are adapting to a more globalized business environment

where individualistic traits are often valued

● Balanced Approach: While individualism is on the rise, Indian leaders still maintain

a balance with collectivist values, ensuring that family and community ties remain strong

Therefore, Starbuck should not maintain the same strategy in China when expanding to India Instead, Starbucks should

1 Adaptation to Cultural Norms: Companies should adapt their leadership and

management practices to align with the more individualistic tendencies in India This includes encouraging innovation and personal initiative among employees

2 Employee Empowerment: Strategies that empower employees, encourage

innovation, and support individual achievements can be more effective in India due to its cultural context

3 Human Resource Strategies: Adjusting HR strategies to accommodate the balance

between collectivism and individualism in India is crucial This might involve creating policies that recognize individual contributions while fostering a sense of team spirit

4 Market Approach: The market strategies should reflect the diverse consumer base in

India, which values both traditional collectivist ties and modern individualistic aspirations

5 Regulatory Compliance: Companies should be aware of the different regulatory

environments and may benefit from the recent relaxations in labor laws and other incentives offered by the Indian government to facilitate ease of doing business

6 Consultative Approach: A more consultative approach to decision-making may be

preferred in India, aligning with the cultural preference for lower power distance

1 anandamlegals “Companies Moving from China to India – What to Expect?”

TaxGuru, 2 June 2020, taxguru.in/corporate-law/companies-moving-china-india-expect.html.

Accessed 16 Jan 2024

2 Campion, Linda L., and Charles Xiaoxue Wang “Collectivism and Individualism: The Differentiation of Leadership.” TechTrends, vol 63, no 3, May 2019, pp 353–356, https://doi.org/10.1007/s11528-019-00399-x

3 Cheung, Chase “Comparing Chinese and American Leadership Styles: Cultural Insights & Business Approaches | NNRoad.” Nnroad.com, 17 Aug 2023,

nnroad.com/blog/chinese-and-american-leadership-styles/ Accessed 16 Jan 2024

4 “Companies Moving from China to India – What to Expect? - Corporate and

www.mondaq.com/india/corporate-and-company-law/955600/companies-moving-from-china-to-india-what-to-expect Accessed 16 Jan 2024

5 Ding, Xiaobin, et al “Individualism vs Collectivism: Influences on Attitudes in China toward the Search for Meaning in Life.” Current Psychology, 1 Dec 2023,

https://doi.org/10.1007/s12144-023-05482-4

6 Gurval, CORNEILLE “Collectivism vs Individualism in India: How It Shapes the

medium.com/@CGurval/collectivism-vs-individualism-in-india-how-it-shapes-the-culture-f001abdc0108 Accessed 16 Jan 2024

7 Ibrahim, Sammy M “Individualism-Collectivism Score for India Has Me Baffled….”

Sites.psu.edu, 2 Nov 2020,

sites.psu.edu/global/2020/11/02/individualism-collectivism-score-for-india-has-me-baffled/ Accessed 16 Jan 2024

8 “Outstanding Leadership Styles in Different Cultures: Chinese vs American

9 Tim, Yui, and Edward S Wong The Chinese at Work : Collectivism or Individualism?

1 Jan 2001 Accessed 16 Jan 2024

10 Wunderlin, Amy “The Shift from China Is Leading to India.” Www.scmr.com, 17 Nov 2023, www.scmr.com/article/shift-from-china-is-leading-to-india Accessed 16 Jan 2024

11 Zhang, Jie, and Tingting Han “Individualism and Collectivism Orientation and the Correlates among Chinese College Students.” Current Psychology, vol 42, no 3811 - 3821,

17 Apr 2021, https://doi.org/10.1007/s12144-021-01735-2

12 Zhou, Yan, and Jong-Wook Kwon “Overview of Hofstede-Inspired Research over the Past 40 Years: The Network Diversity Perspective.” SAGE Open, vol 10, no 3, July

2020, p 215824402094742, https://doi.org/10.1177/2158244020947425

13 Zhou, Y., & Kwon, J.-W (2020) Overview of Hofstede-Inspired Research Over the Past 40 Years: The Network Diversity Perspective SAGE Open, 10(3)

https://doi.org/10.1177/2158244020947425

14 Abdel-Zahra (2003), "The Cultural Relativity of Hofstede's Dimensions: Validating the Dimensions for Arab Countries," Journal of Management International, 19(4), p 77

15 McSweeney, B (2002), Hofstede's model of national cultural differences and their consequences: a triumph of faith – a failure of analysis Human Relations, 55(1): 89–117

16 Hofstede G., Hofstede G J., Minkov M (2010) Cultures and organizations: Software of the mind (3rd ed.) New York, NY: McGraw-Hill

17 Mooij, Marieke & Hofstede, Geert (2010) The Hofstede model Applications to global branding and advertising strategy and research International Journal of Advertising - INT J ADVERT 29 10.2501/S026504870920104X

18 McSweeney, B (2002) The essentials of scholarship: A reply to Geert Hofstede Human Relations, 55( 11), 1363-1372