A Comparison of Managerial Process and Organisation Culture in Australia and Indonesia - Coursework Example

A COMPARISON OF MANAGERIAL PROCESS AND ORGANIZATION CULTURE IN AUSTRALIA AND INDONESIA Student Name: Student No: Course: Faculty: University: Lecturer: Date of Submission: Table of Contents EXECUTIVE SUMMARY 2 INTRODUCTION 3 COMPARISON BETWEEN AUSTRALIA AND INDONESIA’S MANAGERIAL PROCESS AND ORGANIZATION CULTURE 4 HOW CULTURE AFFECTS INDIVIDUALISM VERSUS GROUP ORIENTATION 5 COMMUNICATION STYLE (DIRECT OR INDIRECT) 6 ATTITUDE TO GROUP WORK 8 ROLE OF WOMEN IN AN ORGANIZATION 9 MOTIVATION 9 AUTOCRATIC VERSUS DELEGATED LEADERSHIP 10 SUPERIOR-SUBORDINATE RELATIONSHIPS AND MANAGING TEAMS 10 DECISION MAKING 11 LONG-TERM ORIENTATION 12 A COMPARISON TABLE FOR LANGUAGE, CULTURE, CUSTOMS AND BUSINESS ETIQUETTE 12 CONCLUSION 13 REFERENCES 14 APPENDIX 17 EXECUTIVE SUMMARY This report will examine on a comparison between the managerial process and the organizational culture of Australia and that of Indonesia. Some of the main issues to be looked at include how culture impacts on individualism versus group orientation, the direct and indirect means of communication, group work attitude to work, the role of women in an organization, time orientation, the process of decision making, motivation, delegated versus autocratic leadership, the superior-subordinate relationships and the management teams. This report analyzes and makes reference to Hofstede’s five dimensional model on national culture. It also brings out a number of academic theories towards understanding of the national management styles employed in Australia and Indonesia. Management styles refer to different mechanism employed in decision making and the relationship with the subordinates. There are different management styles, with the main categories such as permissive, autocratic, paternalistic and democratic forms of management. Andrea (2007) argues that leadership style depends on the prevailing circumstances, and thus leaders are supposed to exercise different management styles but employ them in the most appropriate manner. Further, this paper gives an in-depth evaluation of the work done by Hofstede by evaluating and discussing different sides of the argument, and then recommends significant areas for further research and discussion. The findings of this research have been applied to the practical management environment regarding Indonesia and Australia. INTRODUCTION Bond (2002) and Hofstede (1997) recognize that the work of Hofstede is widely cited, and that his observations and analysis enables scholars and practitioners to obtain highly crucial insight into the dynamism of cross-cultural relationships. There are several important aspects of culture as far as business life is concerned. Business interfaces with employers, customers, suppliers and even stakeholders, and therefore, by undertaking a cross-cultural research on both Australia and Indonesia, scholars will find this read resourceful. Hofstede’s comparison model has been shown in the Appendix. It shows a comparisons of national cultures between Australia and Indonesia. The model is based on five dimensions, which include: Power Distance, Individualism, Uncertainty avoidance, Long-term orientation, and Masculinity or Femininity. From the model, a number of issues are discussed herein, through a detailed comparison on the managerial process and the organizational culture of both Indonesia and Australia. COMPARISON BETWEEN AUSTRALIA AND INDONESIA’S MANAGERIAL PROCESS AND ORGANIZATION CULTURE HOW CULTURE AFFECTS INDIVIDUALISM VERSUS GROUP ORIENTATION One of the key issues addressed by Hofstede’s dimension on individualism is about the extent of interdependence maintained by the society among its members (Bjorn, 1999). This has to do with how the self-image of the people is defined, either in terms of “We” and “I”. It can also be noted that individualism is simply a measure of people’s preferences towards working in groups or alone. Therefore, it illustrates the extent to which people are social or communally integrated. In individualistic societies, people look after themselves and their direct families unlike in collective societies where people are attached so closely to groups that looks after them in return for some loyalty. Australia is viewed as highly individualistic in terms of the culture of its management process. It is a closely knit society with the expectation of people looking after themselves and the immediate families (Samovar, Porter, & McDaniel, 2012). They prefer singular achievement and this would be attributed by the way its society is culturally brought up where its people are expected to work independently at their early development stages. In the business world, its organizational culture and the management process values self-reliance and exhibits initiative. The promotion, hiring and exchange are based on the evident and merit of what has been done by individuals. However, Indonesia has a low score on individualism and is, therefore, a collective society. This means that Indonesia has a higher preference towards embracing a social framework where individuals are supposed to conform to the society’s ideals and the in-groups to which the society belongs. One of the conspicuous thing about Indonesia is when a person wishes to marry. The people aim at meeting the family members of the woman since the family is so crucial to her. In other words, a man is taken serious if he makes the initiative to visit the woman’s family and formally introduce oneself to the girl’s parents. The Indonesians view the act of courting a woman without informing the parents as something inappropriate. Another example is that the Indonesian society advocates that their children should be committed to their parents (Constant, 2007). The children should take care of their parents, and give them support at their old age. The elders in Indonesia are kept at home rather than sending them away to some institutions for care. However, in individualistic societies, focus in on the nuclear families only. However, to some minimal extent, Indonesia appears to be collective in the sense that, its original culture is starting to fracture, thus necessitating a collective approach in the management processes and organizational culture. However, following the need to be at same level with other developed economies, some management systems have adopted the aspect of working in groups. For instance, the Indonesian society ascribes performance as a collective or cooperative achievement. The lifestyle of its people is based on close family ties, backed up by strong family support (Smith 1998). When we explore the culture of Indonesia using the five dimensional lens of Hofstede’s model, we can see several drivers of its culture as compared to Australia. Most organizations in Australia have adopted an hierarchy for convenience, such that the superiors can be accessed easily and individual employees and teams are relied upon by their managers because of their expertise (Dong & Liu, 2010). In fact, both employees and managers allow to be consulted and they share the information frequently. Further, their communication is direct, informal and participative. COMMUNICATION STYLE (DIRECT OR INDIRECT) Australia is a polyglot country that has over 100 languages, and different people have migrated to join the Australian population from different nations across the world. The official language of Australia is English and its people appear to prefer directness to diplomacy, and as such, their communication is more direct on several occasions unlike the indirectness of the Indonesia society where a majority wary about plain speaking for fear of bringing out a negative emotional effect on the people talked to. However, directness is cherished in Australia to extent that if you say what you do not mean, you may be mistaken for hypocrisy and evasiveness. In the Australian management process, one would not be too self-promotional about presenting to Australians. Hard sell approaches can easily be misconstrued for bragging and provoke some very negative responses. The organizational culture of Australia employs the use of factual description on issues because this would be received better than the use of a hyperbolic approach. Unlike Indonesia, Australians constantly use their first names in business situations. Humour is accepted in all circumstances. However, you cannot underestimate an Australian senior manager even if he or she makes some humour in what can be regarded as an inappropriate time. Indonesians are indirect communicators (Eisner, 2013). This implies that they do not at all times say what they mean but it is up to listeners to interpret or pay attention to body language and gestures in order to find the real message out of the conversation. Generally, Indonesians speak more quietly and with a subdued tone. Loud people are found to be slightly aggressive. The official language of the Indonesians is Indonesian. This is used in public places and in schools unlike other local dialects that are used in homes. It is a diverse society with several islands and their culture advocates for group thinking because of its strong pull towards group activities by use of units such as island, village or family. The structure of the family is still a traditional one, and the role of each is clearly defined, with some great sense of independence. Their greetings remain formal because they are supposed to show some respect. Handshake is common and accompanied with the word “selemat”. Many of the Indonesians may make a slight bow or place their hands on their heart after a handshake and when being introduced to a lot of people, one should start with the eldest or most senior member (Sun, 2012). In Indonesia, titles matter, and are used in conjunction with a person’s name. Further, hierarchal relationships are respected very much. Respect is not shown to anybody except those with age, position, power and status. ATTITUDE TO GROUP WORK Attitude is generally an evaluative tendency towards a thing, person or process. When an attitude is projected towards a certain object, then that is referred to as bias, and can predispose a person towards some evaluative response which can either be negative or positive (Geert 2001, Nilanjana & Weaver 2011). Different organizations in both Indonesia and Australia advocate for positive attitudes. Such attitudes lead to resilience, optimism, creativity, and confidence. The work discipline in Australia is lower. This is reflected by Hofstede’s low power distance index and the fact that Australians are more individualistic. They appear to be more self-centered and more independent, something that might cause more conflicts in them (Salacuse, 1998). Work discipline and regulations are not stressed so much whereas the Indonesians obviously acknowledge the power emanating from the hierarchies. Most Indonesians are taught to uphold the roles at school, home, company and event the society at large. This is inculcated from very early ages. Australians are fairly easy going people who can get along with each other from any nationality or religion (Hofstede, 1986). Except for a few troubled individuals, Australians have got a positive attitude to work and to their countrymen as well. They generally stand for their government and uphold the decisions made by the government and which may affect their managerial processes in one way or the other. They do not easily get offended with anyone who has an opposing persuasion. They remain royal to their set policies or laws. Most Indonesians do not only enjoy but also love what they do. Though the working environments differ from one class of people to the other-from superiors to employees, they all focus towards an authentic work life where everyone is comfortable to work. Even the few of those who do not like their jobs still cherish the fact that they got to work because that is the only way they can pay their bills, or build their ego. However, the main similarity between Australia and Indonesia is that work provides a mechanism of earning a livelihood. It supports any family set up, regardless of the background. ROLE OF WOMEN IN AN ORGANIZATION According to Gyurak et al., Hofstede’s dimension model indicates that society is driven more by achievement, competition, and success. The values for success start in schools and progress throughout one’s entire life, covering both leisure and work pursuits. According to Hofstede’s five dimensional model, Australia scores highly on individualism and on masculinity and femininity, it scores about 61, meaning it is a masculine society (Hofstede, 1980). However, the individuals within Australia share opinion and can challenge the authorities with a show of equality between the genders. However, in some fields like the military, genders do not show in equal numbers and authority roles differ to some extent. For Indonesia, it is a low masculine society as shown by Hofstede’s model. In fact, Indonesia is less masculine as compared to other Asian countries such as Japan, India and China. In most cases, it is what a person is holding in a given position that is more important. This is closely related to the Indonesian concept “gengsi” which is slightly related to “outward appearances”. In other words, it is crucial that the “gengsi” should be strongly maintained, thus bringing out a different outward appearance targeted at impressing and creating some aura of status. Although the two countries exhibit some gender differences or gender roles, this research shows that the level of inequality in Indonesia is more than that of Australia. MOTIVATION The decision making process for both Australia and Indonesia is common. It involves assessing and gathering of evidence, especially where there are some factual issues that have been determined or need to be evaluated in order to help the top management’s decision making process. In cases where the evidence on some management issues is both clear and even uncontested, or in situations where matters have no serious effects for employees, the decision making process is more straightforward. However, most organizations are huge and complex systems, and therefore, are faced with multi-facetted complaints. In such cases, both the Indonesian and Australian nations’ management would prefer the option of contesting the evidence brought forward in order to reach an amicable settlement. The parties at stake have to be brought on-board. In brief, the two countries use a six step approach in decision making. This involves: identification of key problems or issues, planning for a review of the issues, gathering evidence on the way forward, assessing the gathered evidence, making a decision and then recording the decision that has been obtained by consensus. AUTOCRATIC VERSUS DELEGATED LEADERSHIP The leadership style for Indonesia is more autocratic than delegated. In an autocratic leadership style, what is said by the authorities is final and not subject to challenge. Autocratic management is equated to dictatorship where the principle decision makers have to be obeyed unquestionably. Both authority and power are concentrated and the leaders are more concerned with the accomplishment of the tasks at hand rather than the welfare of the individuals under their command. Further, delegated leadership style is cherished more in Australia (Hofstede & Bond, 1988). The main features of this management style are: inclusiveness, self-determination, and equal participation of all the management members regardless of one’s rank. The leaders in this case are empathetic listeners and will therefore, encourage open communications at all management levels. The leaders in this case foster for a motivating, and a positive culture towards management. In fact, most organizations in Australia value teamwork and encourage participate decision making, thus encouraging a team of a professionals (Hofstede et al. 2010). However, the disadvantage of such a system is when an organization is faced with complex decisions. SUPERIOR-SUBORDINATE RELATIONSHIPS AND MANAGING TEAMS In fact, when it comes to Hofstede’s dimension of power distance, Indonesian has a higher score, meaning it depends so much on hierarchy (Hofstede, 1991). In such a situation, there are unequal rights among those who hold the power and those who do not. Such a leadership style is characterized by inaccessible superiors, directive leaders, and management controls. The managers count on how obedient their team members are rather than how resourceful they are towards the overall management. The employees in such an autocratic system expect to be told on what they are supposed to do. Further, negative feedbacks are normally hidden and the communications are indirect. However, Australia scores low on Hofstede’s model on power distance (Hofstede, 1980). This implies that within the Australian organizations, hierarchy is there for convenience purposes, and superiors are accessible. The managers have to depend on individual teams and employers for expertise. The parties involved in organizational management process can consult each other and communicate the decision as frequent as possible. Communication process is direct and informal. DECISION MAKING The process of decision making in Australia encompasses all members as opposed to Indonesian style where all major decisions emanate from the top management. The top management style of making decisions is not influenced by others and unlike in Australia all major decisions are influenced by all members from top level to lowest ranks (Kristin, 2011). In Indonesia, the work of decision making is more regarded as the role of supervisors and managers, and in most cases, ignores the opinions of the subordinators. The subordinates only come in to review the decision that has been made by the superiors and then implement the decision. In fact, many managers can make the decision individually and compare the decision. This is supported by the fact that Indonesia scores highly on Hofstede’s model index for power distance, where the authorities have the first and final say. Although Australia has a similar decision making process to Indonesia, the variation is exhibited in the presentation of decision makers (Lewis, 1996). Most business organization is Australia uphold the decisions of the employees. In other words, the lower management consisting of experts, alongside stakeholders, are considered key decision makers except when there is a complex crisis that demands only top management. In terms of their power distance, the Australians score lower as compared to the Indonesians. LONG-TERM ORIENTATION Long-term orientation can simply be interpreted as a society’s way of searching for virtue or the limits to which a society exhibits some pragmatic future-oriented perspectives as opposed to conventional short-term perspectives. According to Hofstede’s model, Australia’s organizational culture is short-term oriented because it focuses both traditions and the fulfillment of social obligations (Meredith & Stephen, 2002). From such a perspective, most Australian businesses are able to measure their performances for a short-term basis. Their loss and profit statements are based on a quarterly basis, thus driving individuals to work hard for quick results at their work place. However, in Indonesia, the management process is long-term oriented. Their organizational performances are measured on a long-term basis. A COMPARISON TABLE FOR LANGUAGE, CULTURE, CUSTOMS AND BUSINESS ETIQUETTE Indonesia Australia Languages Their primary language is Indonesian Their primary language is English Meeting Etiquette Greetings are held formal because they are supposed to show respect. Handshake is common but introducing many people has to be done according to protocol: seniors first. Greetings may be accompanied by some slight bow. Not very formal in their greetings. They remain relaxed and casual. A handshake followed by a smile can suffice. Business Cards Business cards can be exchanged after the first introduction without need for any formal ritual. If not given a business card, it cannot mean disrespect. Business cards exchanged after the first handshake and greeting, and they should be treated with some respect. However, you can accept or reject the card. Communication Style They communicate indirectly. They communicate directly. Culture The Indonesian nation is diverse Consists of 17500 islands Most people define themselves locally and then nationally. They are different cultural influences originating from their heritage. Hierarchy play a vital role in their culture and hierarchical relationships are maintained, emphasized and respected. The Australians value sincerity and authenticity. Prefer modest, humble, and people with some sense of humour. Do not draw much attention to their academic achievements. CONCLUSION The report provides a comparison report on the managerial process and the organizational culture of Indonesia and Australia by looking at various dimensions such as individualism, communication style, motivation, autocratic versus delegated leadership, relationship between superiors and subordinates, managing teams, and decision making process. The Australians are more individualistic as compared to Indonesian. Whereas the cooperate individuals in Australia hold their personal interests at the epicenter of their management process, it is a societal idea for the Indonesians. Australians are known for speaking informally but are straightforward. They do not spend much of their time in protracted negotiation processes. However, both Indonesia and Australian have a common approach towards decision making. It involves assessing and gathering of evidence, especially where there are some factual issues that have been determined or need to be evaluated in order to help the top management’s decision making process. In cases where the evidence on some management issues is both clear and even uncontested, or in situations where matters have no serious effects for employees, the decision making process is more straightforward. Further, Indonesians are more feminine whereas the Australians are masculine. The Australians embrace an informal communication style and a delegated system of communication whereas the Indonesians cherish formal communication autocratic system of leadership. Job titles are significant in Indonesia than in Australia. REFERENCES Andrea, B 2007, Influences of Culture on the Style of Business Behavior between Western and Arabian Managers, GRIN Verlag, Norderstedt. 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Meredith DA & Stephen AM, 2002, Leaders Talk Leadership: Top Executives Speak Their Minds, Oxford University Press, 2002. Nilanjana, B & Weaver, CK 2011, Public Relations in Global Cultural Contexts: Multi-paradigmatic Perspectives, Routledge, New York. Salacuse, JW 1998, Ten Ways that Culture Affects Negotiating Style: Some Survey Results, Negotiation Journal, vol.14, no. 3, pp. 221-240, via WILEY Online Library. Samovar, LA, Porter, RE & McDaniel, ER 2012, Intercultural communication: a reader, 13th ed., Wadsworth Cengage Learning, USA. Smith, M 1998, Culture & Organizational Change. Management Accounting. Sun, WP 2012, PRBM016- Cross Cultural Management: Assignment 1, Charles Darwin University, Darwin. APPENDIX Hofstede’s Comparison Model for Australia and Indonesia. Key Indonesia Australia PDI Power Distance IDV Individualism MAS Masculine/Feminine UAI Uncertainty Avoidance LTO Long-term Orientation Read More