Cross-cultural management is an important study for a company to expand itself in the international market because it plays an important role in influencing them to improve their creativity level and helps them to connect with new people from different cultures. IOI Corporation Berhad is a very large company in Malaysia and it is expanding its business in the international market. They face many problems and are also influenced by these factors regarding their business because of the different cultural problems. These affect globalization in the global market and lack the economical growth of the company. These problems are because of the different business parties in different countries, the variation of beliefs of the population, and communication. Choosing a global brand is an important task for a company. These aspects or factors help to influence the company to choose the international brand for the company.
The mentioned company here also faces cultural issues in Malaysian market and also at the time of expanding their business in the global market. The framework of Hofstede’s cultural theory helps to understand the different aspects of a company based on different cultures. In the business setting of the company in terms of the national aspect and also in the international aspect of globalization, there are some problems of culture that are faced by the company. These impact setting up the business in both fields (ABDELAZIM, 2022). IOI Corporation is trying to expand its business in the UK. Hofstede’s theory helps us to find the variations of culture for the company.
Figure 1: Cross-cultural competencies between Malaysian and UK market
This theory is related to the willingness of culture to accept the power of other cultures. At this level, the power is distributed in a balanced or uneven way. Malaysia has a high index of power distance. That means in comparison to the other cultures of different countries, a Malaysian company, IOI corporation has the power of better decision-making behaviour. It helps them to connect and build relationships very easily with other countries (Barmeyer et al., 2019). This theory reflects that the mentioned company can easily accept the difference of other cultures regarding power. On the other hand, the culture of the UK tends to equal distribution within the culture and thus it is seen that the companies in the UK have a low power distance index.
IOI has concern for other people and they consider the work in a group-centric approach. They follow that this approach can help them to finish their task and help them to succeed. That means they work in togetherness and collaboration. The identification of group work is preferred by the company. On the contrary, UK companies have a different approach. They believe in the culture of individualism, and their beliefs and aims are also guided by an individualistic approach (Boussebaa, 2020). They enjoy working for themselves depending on their own decisions. A company’s individualistic approach helps them to bring consciousness to them. Here the Malaysian company lacks because they do not have that individualistic approach and thus they are not brand conscious.
Masculinity is a factor that also has an impact on the company. It is a factor that is associated with the success of the company. The mentioned company has a low masculinity score which reflects that the level of inequality and differentiation between the genders is low. This type of reflection depicts that both males and females are given almost the same priority and the females are treated the same as the males (Chin et al., 2021). The masculinity level in the chase of UK companies is very high. That shows that there is a differentiation between the genders in the UK. The males play a dominant role in that society and the females are not treated like the males.
This cross-cultural factor is a factor that shows the level of the society’s uncertainty. It allows them to go for more experiments and variety for their part. Malaysia lacks this factor of uncertainty avoidance and the rules must be changed for the company otherwise it will affect them in building up their business. In contrast, the UK is very much aware of this factor and is comfortable with such situations (Davies and Lin, 2021). There are no such rules in society but some rules are there that they have to abide by.
This factor is very important because there are two aspects. They are short time orientation and long-term orientation. Malaysians follow a relaxed time manner, that is they prefer to do their work on a long-term basis and achieve their goals. They do not believe in the short time basis works. On the other hand, UK companies tend to do their work on a short time basis and it helps them to complete their task in a very short time and they also save time and do other work for their business. Therefore, here we see that Malaysian companies are behind in this factor (Eneh et al., 2021). Building up the business in the international market and the growth economy can fall for them concerning this factor. Long-term orientation helps to maintain the pressures of the society
The level of indulgence for Malaysian companies is high but not more than in the UK. They have some desires and a tendency of enjoying life to the fullest. This is positive behaviour. There is a possibility of the importance of their time and work on that. The UK also has a high level of indulgence factor but that is more than that of the Malaysian company. That is why they have a more positive approach towards the build-up of their business and they utilize their time in a very effective way (Lee and Gyamfi, 2021). This is the factor that helps both cultures very much.
In terms of cross-cultural issues, companies experience heavy obstacles and barriers for some reasons. These reasons lead them toward a very low level of success in the international market. The mentioned company here also faced certain challenges in building up its business strategy and making its mark in the international market (Muensriphum et al., 2021). One of the most threats or challenges the company faced during the expansion of its business in the global market is as follows.
The first major threat that the company faced is understanding the communication style of a community and being specific with their culture. Every country or religion has their manners and cultures. And also they have different styles and languages for communication. The IOI corporation also wanted to expand its market internationally. It is very important for the economic growth of the company. People from different communities communicate in different ways. In the UK the communication is very open-minded and they communicate very emotionally. This is known as the “low-context” cultural background (Nikitaev et al., 2021). The differences between the national and international aspects are not identified perfectly and thus it led them towards the challenge. The developing markets give preference to their consumers to help them with satisfaction and also to expand their business strategy. IOI also tries to overcome that challenge but they failed.
Cross culture management is very important for a company to do business in the international market. Trading globally is the main source of business. The main focus of the company is to communicate in the UK market and encourage them to grow simultaneously. There is a high risk of termination of the contract between the companies in the international market, and this also happened in the case of IOI. they wanted to do business in the field of the UK but they couldn’t manage to adopt the culture of the society of that country which thus led them to destruction because of the cultural difference (Romani et al., 2018). It also led them to lose their production and the growth of the economy also fall by a huge percentage.
It has an effective impact on the strategic manner of the business too. Some legal and ethical issues of a culture must be learnt by a company to expand its market in different countries and place them in the international market (Nikitaev et al., 2021). However, this is also the challenge that is faced by the IOI and thus they are affected by this and the international business is also affected ultimately.
The risk of cultural factors and human resource management is also a challenge or problem that is faced by the company. The businesses that fail to adopt the cultural aspect of a country, for them there is a key to acquiring that thing and that key is human resource management. Culture is nothing but all about behaviour. Telephonic communication with different countries and convincing them about the business share is one of the important and ethical ways to do business (Muensriphum et al., 2021). Cultural miscommunication can lead to the failure of the company.
The international market has different countries. And all those countries have different cultures and different languages. The demand of every cultural society is different from another. Therefore to build up its business strategy and grow simultaneously, the company must know the language of that culture or society (Romani et al., 2018). The company fails to understand the demand of the company and here they face issues regarding the language problem.
The skill of a very experienced negotiator must be followed by a global company to understand the culture of different countries. Goals can be achieved by a company and thus they can extend their business in the international market. Hard work and research is the main key to coming to a solution for a company. Thus this purpose can be achieved. Every culture has different perspectives (Szkudlarek et al., 2020). These perspectives are needed to be observed and worked on it. However, the Company faces workforce diversity challenge in present condition.
Opportunities are one of the main challenges that are affected by the company. The market presence is a must thing for the company because it helps the company to play an introductory role in terms of business. However, they sometimes fail to come to foreign companies (Yamen et al., 2021). This thing happened to IOI and thus they fall behind to get new opportunities and fail.
The complexity of a company’s exchange is differentiated because of this factor and they face a challenge of conflict among the stakeholders. Decision-making issues arise for this reason and they lack the margin of getting to the international market easily (Eneh et al., 2021). It also threatens the new approach and information and ideas.
Perception also plays a role in affecting a company to development and growth in the field of the international markets. The small and less developed country is often selected for business purposes, they had to measure some business strategy to overcome that situation and make themselves reliable to the other country or company (Romani et al., 2018). IOI also faced this issue and thus they are affected by this factor.
The above-mentioned challenges are faced during the expansion of business in the international market. IOI must follow diversity and inclusion methods and these can help them to focus and build their business in a greater aspect. Cross-cultural risk is very important for a company to do business in the global market. Cultural diversity can affect the company very effectively. The company must enter a business and before that, they should research and analyse4 the culture of that society because it will help them in building their business strategy (Nikitaev et al., 2021). It will help them to provide their products as per the requirements of their consumers and according to the tradition and culture of that society.
Local marketing strategy is also a key factor for a company to make its business success in the global market. They need to be specific and apply the strategy of localization and thus they can meet the demand of the people of that local market. And easily handle the difficult situation of cultural risks. Strict regulations and rules can be made for the people and their manner. These rules must be followed and thus the localization strategy can be performed. The company must meet their employees from different cultures and it will help them to know their culture and manner and thus they can very easily know the behaviour and culture of that group of people.
The business may rise and the path to entering the international market becomes very easy (Muensriphum et al., 2021). The culture and rituals of a person must not be discussed and thus they can feel their employees feel very comfortable. Motivating the employees is a unique technique for the company to expand their business. They must follow the strategy of developing the communication pattern effectively and thus they can openly interact with the people and such effective communication can help them in the progression of their business strategy. Understanding the values of cross-cultural factors is one of the greatest strategies that must be followed by a company to make their place in the global market.
The management of this cross-culture is very important to accompany to market themselves in the global market. It may make a company face some challenges. However, it also helps the company to do research on the culture of a different society or country and understand the culture of that country. The company gains knowledge of others’ cultures and it helps them to do business in the international market easily. Thus the company makes their growth in the economical aspect and grows very easily. It influences them in their business strategy and thus a company is helped in doing their business globally.
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