Business and Culture Essay “With increased globalization, economies have become more interdependent, making internationalization of operations critical for a company’s success in today’s competitive environment”. This essay will examine problems that Air New Zealand and Jet Star deal with whilst working internationally in a multi-cultural environment. Hofstede’s five cultural dimensions will help illustrate on an organizational level the importance for survival of these two companies when faced with their challenges in foreign markets.
It becomes a critical matter for such large corporations to understand their foreign markets well, as a huge financial loss can occur if their understanding is not efficient enough. Brand image can also become a loss if cultural differences are not taken into account when entering new markets. Working across foreign markets and integrating business operations, both factors become co-linked for a corporation to be successful in foreign waters.
Hofstede states that national culture is a collective occurrence and is learned from one’s social environment, it is a set of values, norms, practices, symbols of communication and rituals shared and recognized only by a group of people or society that share that culture. (Hofstede & Minkov, 2010). Taking into account cultural differences has become a side issue for businesses, the highly advanced growth of technology and communication has left businesses to undermine the importance that all cultures are different and need to be familiarized with if successful business practices and customer base will be formed. As national borders become porous and nations become multi ethnical, researchers should expect to find segments of society who were born in one national culture, reside in another, and perhaps hold citizenship in yet another. The concepts of acculturalization and deculturalization becomes apparent as to their affects on unconscious thought and ultimately behavior. ” (Arch, Woodside, John & Harrill, 2007).
Because of this it is important for companies to familiarize themselves with their international markets and understand the culture that is embedded within that particular market. Culture from a managerial perspective is “the collective programming of the mind which distinguishes the members of one human group from another . . . the interactive aggregate of common characteristics that influence a human group’s response to its environment. ” (Alder, 2002).
Hofstede states that national culture is a collective occurrence and is learned from one’s social environment (Hofstede & Minkov, 2010). Having knowledge of the cultures in which an organization operates is important as it has many influential factors upon things such as product outlay, advertising, human resource management practices, communication and the way in which the services are undertaken for consumers. “Why is it that one company succeeds in the global market and not another?
Some analysts claim that success is due to strategy, others say that it is a result of structure or technological innovation. ” ( Browaeys, M. J. , & Price 2011). By analyzing Air New Zealand one of the top airlines in the world to Jet Star a more lower level airline and looking at the business structures in a global environment we are able to see the strategic difference in many ways, and how that has an impact on the success of the corporations internationally.
Over the past few years Jetstar has encountered a number of issues within their organization in accordance to the way that their organization is set up, because they are a company that offer a variety of low-cost services and also a variety of different services alongside that, it has pushed the business to forget about what actually is important, the culture of their organization. It is important to take into account that although people are getting value for their money they also are all different individuals that travel on the aircraft, with different values and cultures.
This means that their focus is on business efficiency and “seems inevitable that these developments will alter the traditional management systems and the organizational culture associated with them. If the nature of these changes in culture is not considered carefully, the consequences could be harmful both in terms of employee relations and ultimate performance. ” David Smith, (1986). It could potentially mean that any problems that arise within work or outside of work can affect the productivity of the business and the motivation that mployees have towards the work that they are doing. This is where such things as policies and regulations need to be formed within the company to make sure that such problems do not occur, or can be fixed in the proper manner if raised at any time throughout the existence of the business. In many different cultures, although financial barriers are a concern, there are a variety of cultures around the world that do not necessarily believe that an airline which offers low prices also offers safety. When people from different cultural backgrounds interact, problems may arise from misinterpretation of the meaning or motives associated with certain behaviors. ” (Steven L. Cobb & Thomas Barker, 1993). This could be one of the reasons as to why Jetstar has not risen to the expectations they may have wanted with their low-cost airfares and inflight services. Air New Zealand however has shifted its focus onto giving its flyers a kiwi green and clean experience rather then having low-cost fares for their customers.
Air New Zealand’s organizational strategy allows their customers to have more knowledge of what it is like to be a New Zealander, they have done this with all their inflight products, such as their menu, their uniforms, as well as the inflight safety procedure movies, such as adding the All Blacks rugby team members in its movies. And although customers are paying a higher price for flying with the airline they are able to culturally familiarize them with a unique culture which can not be found in any other country globally.
Air New Zealand in the past also became the promoters of the movie The Hobbit that was filmed in New Zealand, by creating a plane that was covered in a large poster of the movies image. “New Zealand is the home of Middle-earth and The Hobbit movies will be hugely important to New Zealand’s tourism industry in the next couple of years as international tourists are inspired to come and see and experience for themselves the landscapes which have shaped the movies. (The National Business Review, 2012). This helped the business show it’s frequent flyers all over the globe an image of what New Zealand has to offer, which was also a very good marketing skill helping them to be unique and stand out, catching the attention of customers who would become interested and look more deep into what it is all about, these tactics become very useful in business operations, as they stand out nd catch the attention of consumers and tourists which will spend a lot of money within the country just to experience the culture of New Zealand. All these small changes within the corporation help it to become globally known and well established financially and reputation wise in order to gain a new customer base. Both companies have been able to become successful on an international level, however because of the different strategic approaches one companies success has risen over the others. The most important cultural differences influencing organizations is to manage efficiently in either a global or a domestic multi-cultural environment, we must recognize which differences are operating and learn to use them to our advantage, rather then either attempting to ignore the differences or simply allowing them to cause problems”. (Alder, J. N. , (2002).
In such a service industry as the airline industry it’s difficult to measure the cultural differences that arise amongst such a wide variety of countries and customers, although the approach to the way that a corporation handles this difficulty can prove to either be successful of demolishing. “In attempting to capture and explain systematic differences between cultures of different societies, culture-level cultural frameworks are necessary to provide a rigorous basis for research. (Karen, K ;amp; Boo. , H, V, 2007). To be able to deal with the impact of such problems caused by different cultures, it means that managers of such organizations need to have a well-structured policy and strategy of their customers. This means that they need to familiarize themselves and do research which acknowledges the differences that arise between cultures internationally and within the organization, not to put aside or overlook this important factor.
It could just well be the best option for such large corporations to be successful. This can be done by acknowledging what Hofstede calls his five cultural dimensions “Power Distance looks at inequality alongside hierarchy in a society and how people deal with it. His following dimension, which is Uncertainty Avoidance, measures as to what degree society accepts uncertain situations, tolerates uncertainty, and their willingness to take risks.
The third dimension which happens to be is Individualism verses Collectivism, which if focused on the relationship individuals have with other members of society”. (Hill, 2011). The fourth dimension “masculinity versus femininity focuses on the connection between gender and attitudes towards work roles such as how assertive the society is. Long-term orientation is the fifth of Hofstede’s dimensions, it looks at societies attitudes towards time, tradition and status”. Hofstede, G. (n. d). For managers of such large corporation as Air New Zealand and Jetstar having to pay attention to these different dimensions and familiarizing themselves with it could greatly help in the way that they would be able to create a strategy for their company which could potential save their business a lot of financial efforts and boost their airline globally as to being culturally informed and efficient.
Air New Zealand has a very strong company culture, and because of this they where voted the most attractive employer as stated by Paul Robinson “it’s no surprise Air New Zealand outshone again this year given how incredibly hard the airline works on fostering a strong, positive company culture” (Scoop Independent News, Business, 2013). Because of the fact that Air New Zealand is able to differentiate themselves as a business and have such a positive cultural system, they have made headlines which could be used as a given guideline for companies such as Jetstar to follow.
Companies such as Jetstar could benefit greatly by making analysis on other companies which are more successful and looking at the factors which make them so culturally positive and shape themselves to become a corporation which is more of a successful business in the airline industry. “A global or international airline must also develop a corporate culture that can serve an International clientele. ” (Chan. D, 2000).
This is looking back at the way in which the company has been run over the years, what system it has followed, how it was seen by people and what vision the creators of that organization had when it had began. Any organization which pays close attention to its culture, is aware of the changes that occur in the world with globalization taking a huge toll on many businesses today, through this they are able to become more successful and making sure that in contrast they will not have their current system crash within a few years, and potentially having to build it back up again for future reference.
It becomes a way of operating and a way of prevention, instead of going global blindsighted. Air New Zealand has a very strong organizational structure this is evident through their dominance of national identity portrayed throughout their corporation. Jetstar however does not have such a strong organization culture, as their focus is greater dependent on monetary value creation for their customers. One of the implications, which could arise from not being aware of such important cultural aspects, could result in culture shock.
Because us as humans are programmed with our own individualist values, norms, beliefs and perceptions throughout our lives, shaped within the environment in which we are brought up in. It becomes very difficult to step out of our box and see what is all around us and be able to familiarize and accept it. This is where even for managers of corporations that are internationally recognized, it proves to be difficult to make sure that problems are solved before they even have to arise.
Culture shock is where companies and their employees can get a shock when placed within a new environment in which they are not familiar with. Which could prove to become a real concern if not addressed for the employees of the company and for the reputation that the company holds. Modernization of cultures has also become a very big factor that businesses need to take into account, being technologically advanced and incorporating technology into their business is a factor that needs to be a very high priority for them.
It is difficult for any business to succeed internationally if this factor is not addressed. It does however cause issues for businesses as any problems that occur within the organization can be spread across the globe within a matter of minutes. As an example for Jetstar, because of their numerous flight cancellations there has been a website which was created by a very unhappy customer which is a page purely for customers to use as a tool to lay complaints. However because of this the company has suffered financial losses and also reputation battles within their industry.
Their customer base has lost trust in the airline company and because of this their profit has been affected. Although if looked at positively it could become a company basis for improvement for future flights globally, this is one instance where a company can be highly affected by the modernization of cultures through the use of technology in everyday life. It becomes inevitable in this day and age for any business that is so large as Air New Zealand and Jetstar to not become modernized not just with their aircrafts but also with their approaches towards the modern culture in which we live in today.
If properly applied and approached within any business it could become the reason as to why a company is more successful then others, if applied without the proper research of what customers want or need in today’s culture and how the business structure should be, differentiated or on common grounds it could prove to have drastic downturns. Throughout this essay it becomes clearly evident that there are a number of different factors that can influence a companies success internationally and on a global scale.
Air New Zealand’s strategic approach to the way in which they deal with having a variety of cultures is more advanced as to what Jetstar’s approach is with this matter. By having incorporated all the illustrated options stated above into their company, Jetstar could prove to also become a global leader in the airline industry in every shape or form. Reference List: Alder, J. N. , (2002). International Dimensions of Organizational Behavior, (4th Ed. ). Canada, CA. McGill University: South- Western Thomson Learning. Arch G.
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