International Business In Google - Case Study Example

? International Business in Google Introduction 1 International Business Culture 2 Purpose and Justification of the Study 3 Company Overview2. Theoretical Perspective 2.1 SWOT Analysis 2.2 Pestle Analysis 2.3 Hall‘s  Low-Context, High-Context approach 2.4 Hofstede’s 5 Elements of Culture 2.5 Hampden-Turner Cultural Dimensions 3. Google and International Business 3.1 Cultural Trends and Differences 3.2 Operational Strategy to Tackle cultural differences 4. Recommendations and Conclusion 4.1 Recommendations 4.2 Conclusions 5. References 1. Introduction 1.1 International Business Culture With the advent of multi-national corporations, it is difficult for organizations to not actively consider global business expansions. With globalization, the business strategy of the executives has widened to cross over geographical boundaries and expand their reach internationally. While international business has opened up many new avenues for the organizations, it also brought several challenges and one of them is the culture. The national culture has shown to have a high impact on major business activities and strategies (Chui et al, 2002). In international business parlance, culture can be defined as a set of values, believes, norms as well as behaviors that is characteristic of a particular geographical location. Diversity in culture based on the geographic location can be an advantage, but in many cases, it proves to be a big challenge too, because differences and complexities. The goal of a successful international business should be to ensure that the work culture of various locales converge over a period of time (Heuer et al, 1999). This will ensure that the international business related practices would become similar or same eventually. Hence, there would be a standard business practice, devoid of cultural influences, which would not have the characteristic inefficiencies or complexities that come into picture because of the divergent beliefs and practices. 1.2 Purpose and Justification of the Study This study tries to explore the way in which Google, an organization that has presence in more than 45 countries across the globe handles its international business (google.com/locations, n.d) operations in Asia, specifically India. Through an exploration of theoretical work, it analyzes the key social and cultural trends and how it has an impact on the organization. The study also highlights the strategy of the company with regards to an international market. As more and more organizations are entering a global industry phase, this research is key because it tries to find out how an organization could create cultural convergence by maintaining its presence across the globe. Google was chosen because of its vast presence across the globe and the cultural convergence that it was successful in bringing regardless of the geographical boundaries. Within a span of around 13 years, the company was able to establish presence across the world in a very consistent manner. Therefore, Google was selected as the company for this study. 1.3 Company Overview Google, which is now the search engine with the highest market share (Search Engine Market Share (2011) began in 1998, started a garage in Stanford University as a result of a collaborative effort between its founders Larry Page and Sergey Brin. Over the next two years, it formalized its operations and began expanding rapidly. From an organization that offered search services in one single language, it has not expanded to a company that offers many different services including various forms of advertising, applications, mobile operating systems, email service and so on. Innovation has been the key behind the success of this company that thrives on the philosophy of making information universally accessible. Over the past 13 years, the company has expanded its operations to more than 45 countries and provides its services to users across the globe and in many different languages. Apart from revolutionizing the internet industry across the globe, Google stands out as unique because of the way in which it has transformed itself from a search engine to an online solutions provider. Google is also known for its unique culture, because of which it is considered to be one of the best employers in the world (money.cnn.com, 2010). It is indeed commendable that the organization has been able to consistently succeed in cultural convergence over a period of time. 2. Theoretical Perspectives It is also important to take a looking at the theoretical framework to understand that importance of socio cultural influence in an international business. SWOT Analysis SWOT analysis is as strategic method that is used to identify the parameters of Strengths, Weaknesses, Opportunities and Threats, that are a part of any project. The method of analysis is attributed to Albert Humphrey (Hill and Westbrook, 1997). Through an identification of each of these parameters, future courses of action can be determined based on the results of the SWOT analysis. Through this analysis, the different internal and external factors that influence the success of any venture can be pre-empted, as it would lay out the favorable and the non favorable aspects in a clear manner. PESTLE Analysis PESTLE stands for Political, Economic, Social, Technological, Legal and Environmental. Similar to the SWOT, it is a strategy planning method that helps business to evaluate the external environment that they function in so that they are prepared to make the most of the advantages and tackle any challenges in an effective manner. Unlike SWOT, PESTLE focuses exclusively on the external environment or the big picture of the organization (oup.com, 2007). Hall‘s  Low-Context, High-Context approach In international businesses, company communication is very critical and to communicate effectively, it is necessary to consider the cultural differences in different cultures. Edward T Hall explains this in terms of low context and high context approaches to communication. Context means how much an individual needs to know before you can communicate in a proper manner. Employees belonging to high context cultures use very high context messages in regular communication, where as those belonging to low context culture user lower context (Hall, 1976). The way of communication caters to an in-group (group that has similar expectations as well as experiences). In a high context culture, culture explains a lot of things and hence, these things are left unsaid. Few words are chosen for the communication within the in-group. In a low context culture, the communication happens with more words and less context. Hofstede’s 5 Elements of Culture Geert Hofstede discovered 5 basic elements of national culture which can point out the different values in different cultures. The five dimensions found by Hofstede highlight the values that are embedded deeply in people who belong to different cultures. They are Power distance, Uncertainty Avoidance, Masculinity Vs Femininity, Individualism Vs Collectivism and Long Vs Short Term Orientation (Hofstede, 1980). High and low power distance refers to the various degrees of equality and Uncertainty Avoidance revolves around the different levels of tolerance for ambiguity. Masculinity and Femininity center around the extend of focus on seemingly masculine work related goals when compared to the seemingly personal and humanistic goals. Individualism and collectivism refer to the degrees of focus on individual versus the community and Long Vs Short term Orientation talks about the level of time commitment that individuals of a community see as ‘normal’ (Hofstede, and Minkov, 2010). Hampden-Turner Cultural Dimensions. During the 1990s, management consultants Trompenaars and Hapden-Turner came out with their article on Seven Dimensions of Culture. The seven dimensions are - Universalism Vs. Pluralism represents the contrast between the beliefs of codes, ethics and values being more important versus relationships and friendship being more important. Individualism Vs Communitarianism differentiates the tendency of the people is to place individuals before the community and vice versa. Specific Vs Diffuse talks about the various levels of individuals who have a high focus on specific elements versus those who have focus more is on the ‘whole’ and not on specific individual elements. Affectivity Vs Neutrality represents the various degrees of people who express their emotions openly and those who hide their emotions. Inner Directed Vs Outer Directed cultures are about how people look at the nature as a machine, which can be controlled through expertise versus human beings considered as one of the forces of nature. Achieved Status Vs Ascribed Status differentiates the various levels of status based on achievement or by factors like birth, age, gender or wealth. Sequential Time Vs Synchronized Time makes the difference between people who do one thing at a time and those who do multiple things at the same time (Hampden-Turner and Trompenaars 1997). 3. Google and International Business 3.1 Cultural Trends and Differences Google began expanding to Asia during the early 2000s by establishing operations in countries India, China, Japan and Singapore. In order to serve these markets better, they also launched country specific domains like google.co.in, google.ch and google.sg. The unique factor about expanding to Asia is that they gain a good and robust workforce for a very less investment (Prasso, 2007). Google’s headquarters are located in California, United States of America. The United States of America is considered to be a low context country, where as India and China are considered to be high context countries. Hence, there was a key difference in the way in which communication happened. This was even more challenging because of the time difference between the United States and these Asian countries. The main methods of communication that was used by Google were email and chat and hence, the difference in which both these organizations used context can create confusion as well as misunderstanding. The cultural difference can be further highlighted with the help of Hofstede’s five elements of culture. Power distance is one factor where an evident difference can be noticed. In most American organizations like Google, a flat structure can be observed. Even though there is hierarchy, there is a considerable amount of equality, which is evident in the way in which employees address each other by first name. However, in Indian organizations, the hierarchy is much evident, and the equality does not exist (morevisibility.com, 2007). For example, junior employees address their seniors by Sir or Madam. While the discourses of masculine and feminine powers exist in both the cultures, it comes out more strongly in an Indian context, as Google noticed that female employees were more comfortable with doing a location based job, when compared to field sales roles. Uncertainty Avoidance or the tolerance to ambiguity comes into focus more because of the difference in high context and low context cultures. Another key difference lies in the individualistic and collectivist approach. Individualistic culture such that of the United States, has a high focus on individual goals, and hence, there is not much of difference between in-group and out of group communication. While, Asian countries such as India and China have a predominantly collective culture, where the focus is on ‘we’ and there is a certain strong affinity to group philosophy. For Google, this meant that the organization structure as well as operative strategy could be drastically different in both these countries (Chardonneau, n.d). In a long-term orientation, focus is on a long term goal through perseverance, such as in India and China. However countries like the United States have a short term orientation, where the focus is on the present and efforts should produce quick results. This again, would create a difference in many key strategies and plans for Google. This difference is further highlighted when the perspectives of Hampden-Turner Cultural Dimensions are taken into consideration and some prominent ones are mentioned below. Universalist cultures such as that of the United States have a high focus on codes, and ethics when compared to relationships where as cultures such as China and India have a higher focus on relationships. This creates difference in perspectives and approaches on numerous projects and policies (Chardonneau, n.d). The aspects of specific versus diffuse cultures also comes out evidently while comparing the United States with India because it has been noticed that employees belonging to the United States have a much higher focus on distinguishing between their personal and professional life, where as in India, the lines of distinction often get blurred, which created difference during the cross office interactions in Google. Indian culture has the tendency to be more expressive with regards to the culture, where as people in the west mostly conceal their feelings. Google could have felt this difference when it came to internal communications (morevisibility.com (2007). Another aspect that comes is the sequential time culture followed by American employees and the synchronized time culture followed by Indian employees as it can affect the approach to a single project. A PESTLE analysis to measure the external environment can be carried out with regards to Google’s operations in India. This is important because the external environment also is largely influenced by culture. Political environment in India is largely stable and provides great support for foreign investment (Saxton, 2007). It is one of the developing economies and hence, the opportunity is tremendous (Gohring, 2007). Socially and culturally, there are a few conflicts in terms of religious and caste bases politics. Cultural barriers exist because of major differences in lifestyle, thought process and perception. Technologically, India has proved to be a very advanced country because of high focus on science and technology and many Indians prefer to work in the information technology industry. Legally, Google had to face a few problems because of certain regulations. For example, it had to moderate its advertising algorithm to ensure that no advertising related to adult content appeared on Indian domains because that was against the law. Environmentally, India is a challenging market, because of high population and pollution. A SWOT analysis reveals many different factors. The major strengths include, lower investment and higher gains, enthusiastic workforce, great scope for foreign investment and support from the government (Vise, 2005). Weaknesses of Google’s investment in India could include vast cultural barriers, difficulty to assimilate the India operations in global strategy and higher ‘growth and sustenance’ phase. Opportunities include the potential to reach a high number of Indian users and provide strategic solution to them and to build a world class technology center in India which provides excellent support to their global operations. The major threats could include legal complications because of regulations and social instability in the environment. 3.1 Operational Strategy to Tackle cultural differences While all the above factors of established that the culture of the United States and India are essential different, Google has managed to establish four offices in India and has the highest number of employees in India after its Headquarters (Jarvis, 2009). Google adopted many strategies to overcome these differences. For example, the communication issues where handled through a series of trainings that sets the uniform standards so that the context specificity is evened out. Similarly, to take advantage of the difference in individualism vs. communitarisim, it established the functions that needs a high scope of team work in India and channelized more Individual contributor roles in the United States. To overcome the differences in terms of context, more real time conversations were encouraged through video conferences. Google has also taken very strong steps to take advantage of the uniqueness that each of these cultures offered. For example, as the Indian workforce is good with asynchronous work, many projects that require multi-tasking are handled by the Indian office, and projects with a single focus are done in America. To improve cross cultural collaboration, the internal communication teams comes up with unique ice-breaking activities and trainer led sessions that educate the employees about these differences so that they are conscious and try to make efforts to overcome the differences Recommendation The key recommendations from this study are listed as follows 1. Cultural convergence is a continuous process and should not be treated as a onetime exercise. Hence, Google needs to continue its efforts in this direction in an ongoing manner with the help of different strategies and plans. 2. New challenges may come up at several stages in terms of culture. For example, the employees may react very differently to the ways to a global decision. Hence, the method in which these decisions are conveyed should be tailored according to the culture. 3. As a global company, Google should show consistent sensitivity to cultural aspects across the globe in terms of all different factors. For example, the fact that investment requirements and salary scales for India market are much lower, it should never result in any form of distinction or deviation. 4. Employee rights and equality should be maintained across the global offices. This has an indirect impact on any possible cultural barriers. Through this, any notions of one of the cultures being superior would go away. When equally appreciated, employees also tend to open up a bit more and take additional efforts to understand and co-operate with the employees who belong to different cultures, easing out cultural differences to a large extend. 5. Standardization process should be expanded so that any culture related gaps do not reflect in the work process. For example, in a very simple manner, jargons that are specific to particular cultures can be eliminated and a work jargon used across the world can be encouraged. This can not only improve communication, but it will also reduce the scope of any misunderstandings. Conclusion Cultural barriers can prove to be major challenges for any organization that is looking to expand into an international market. However, through constant efforts, organizations can effectively become global organizations. The case of Google is a testimonial to the way in efforts were put in to overcome socio-cultural barriers to become a true global company. 6. References Chardonneau, R ., n.d. Google's International Market. slideshare.net, [online] Available at: < http://www.slideshare.net/Nanor/google-international-marketing-presentation> [Accessed 17 July 2011] Chui, A.C.W., Lloyd, A.E. and Kwok, C.C.Y., 2002. The determination of capital structure: is national culture a missing piece to the puzzle? Journal of International Business Studies, 33(1), pp.99–127 Google.com., n.d. Google Offices. Google Corporate Information. [online] Available at: [Accessed 17 July 2011] Gohring, N., 2007. International markets continue to drive Google's growth; Q2 earnings miss mark. Computerworld.com. [online] Available at: [Accessed 17 July 2011] Hall, E.T., 1976. Beyond Culture. New York: Doubleday. Hampden-Turner, C and Trompenaars, F., 1997 Riding The Waves of Culture: Understanding Diversity in Global Business. New York: Mcgraw-Hill Heuer, M., Cummings, J.L. and Hutabarat, W., 1999. Cultural stability or change among managers in Indonesia. Journal of International Business Studies, 30(3), pp.599–610. Hill, T. & Westbrook, R., 1997. SWOT Analysis: It’s Time for a Product Recall. Long Range Planning, 30(1), pp.46–52. Hofstede, G., 1980 Culture's Consequences: International Differences in Work Related Values. Beverly Hills: Sage Publications Hofstede, G and Minkov , M., 2010 Cultures and Organizations. New York: McGraw-Hill Jarvis, J., 2009 What would Google Do? New York: Harper Business money.cnn.com., 2010. 100 Best Companies to Work. CNN Money [Online] Available at: [Accessed 17 July 2011] morevisibility.com., 2007. Google’s International Strategy. 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