A Cross-Cultural Briefing Regarding the Netherlands and Indonesia - Coursework Example

Comparison Exercise Exploring Theory and Empirical Evidence and Relating This to a Practical Critical Incident in Cross-Cultural Settings Table of Contents Section A 3 1. Brief Introduction 3 a) Current State of Globalisation 3 b) Aim of the Report 3 2. Overview of Macro-Level Facts of The Netherlands 4 a) Political 4 b) Economic 4 c) Social 5 d) Technological 5 e) Legal 5 f) Environmental 5 3. Value Comparison of Indonesia vs. The Netherlands 6 a) Power Distance 6 b) Individualism 7 c) Masculinity 7 d) Uncertainty Avoidance 8 e) Pragmatism 8 f) Indulgence 8 Section B 9 4. a) Critique of Hofstede’s Work in the Current Globalized Environment 9 4. b) Challenges of Business and Management 10 I. Globalisation 10 II. Decision Making 11 III. Negotiation and Communication 11 IV. Leadership and Cultural Intelligence 11 Section C 11 5. Conclusion 11 References 13 Section A 1. Brief Introduction a) Current State of Globalisation The world economy has changed significantly in the current era, primarily due to increased rapidity in globalisation trends, as most of the nations in the present day have welcomed globalisation with the belief that it is not only of significant benefit to business enterprises, but also to the economy of the nation. Globalisation is regarded to enhance resource flow within the nation, rewarding competitive advantages in a uniform manner. Correspondingly, countries including China, Russia, India, Brazil, The Netherlands and others have been greatly benefited from the recent development through globalisation. Concentrating on The Netherlands it is important to note that the nation’s economic climate has significantly developed with the impact of globalisation, particularly due to increase in import and export activities. In subsequence, the economy has also been quite welcoming to globalisation trends those have further influenced its structural dimensions largely (Malcolm, 2013; Michie, 2011). b) Aim of the Report The aim of this report is to provide a cross-cultural briefing regarding The Netherlands and Indonesia. This would significantly support the female managers from Windmills Apps, Indonesia to work effectively in Amsterdam. In this regard, the essay provides an overview of the macro-level facts about The Netherlands and its value in comparison with Indonesia. The essay also intends to provide a critical analysis of Hofstede’s model in the current globalized environment of The Netherlands. 2. Overview of Macro-Level Facts of The Netherlands a) Political The political scenario of The Netherlands is highly stable. Such stability greatly encourages investors to the nation. To attain benefits on this ground, it was evident that the country imposes almost no barrier to entry for any of the foreign investors. Rather, in order to encourage foreign investors, the government has implemented several policies those reward incentives. For instance, evidences to the context reveal that the government in recent years had also modified tax rates to encourage foreign investors with greater possibility of return on international trade (Romney, 2014). b) Economic The Netherlands is one of the fast developing nations in the world. As apparent from the recent evidences in the form of investigative reports published by OECD, accelerating foreign trades have been a major reason to its growth. It also has been successful in attaining a flourishing GDP that has helped the company to be ranked at the 16th position in competition with other global economies. The increased import and export rate of the nation has also been a major reason for its overall growth that has greatly encouraged foreign investors to invest in the nation (OECD, 2014). c) Social The social culture of The Netherlands is highly modern. The standard of life of the people in The Netherlands is subsequently high. For centuries, several migrants arrived in the nation from different parts of the world that resulted in a multicultural society in The Netherlands. It is in this context that this multicultural society of The Netherlands has a broader attitude in welcoming foreign investors (Jacobs, 2009; Allen, 2007). d) Technological The Netherlands is one of such nations in the world that reflects a significant technological development. Moreover, it is also observed that in the recent decades, there has been a significant development in the field of technology in The Netherlands. This is evident from the extensive development in the field of telecommunication and Information Technology. These technological developments in the nation have further greatly encouraged foreign investors (Mokhtari, 2001). e) Legal In the context of legal development, The Netherlands is not left behind. It is observed that the legal development of the nation has greatly encouraged the investors to penetrate the nation. In this regard, the consumer protection law, the anti-spam law, and others have been implemented for the proper business growth in the nation. These laws and Acts are accordingly revised as per the changing requirements of the modern world (Jacobs, 2009). f) Environmental The environmental factor of The Netherlands is also very favourable to the business enterprises. This is because of the favourable climate of the nation that encourages industrialisation. The climatic conditions of the nation have seldom been unfavourable that would have reduced the efficiency of the employees or limited industrial expansion in various dimensions. However, in the winter, the temperature drops significantly, which has been a major problem for foreign investors in the agricultural sector. Nevertheless, it is important to note that the geographic location of the nation is also favourable being located close to some of the developed nations of the world. Thus, it greatly encourages the investors and business processes to be executed effectively (Jacobs, 2009). 3. Value Comparison of Indonesia vs. The Netherlands In order to measure the cultural values of two nations, i.e. Indonesia and The Netherlands, Hofstede’s cultural dimensions are the best approaches, which includes six dimensions, in the form of power distance, individualism, masculinity, uncertainty avoidance, pragmatism, and indulgence (The Hofstede Centre, n.d.). These are individually discussed and compared below. a) Power Distance Degree of power distance of The Netherlands is significantly low as compared to Indonesia. The low power distance of The Netherlands suggests equal rights in the nation. Moreover, it also suggests of the decentralisation of power that enables higher participative decision-making process. This is unlike in the case of Indonesia that has a comparatively very high level of power distance. Thus, it is advisable to the manager to execute participative decision-making process within the nation for increasing the effectiveness of the organisation (Forgionne, 2002; The Hofstede Centre, n.d.). b) Individualism With regard to individualism, The Netherlands is one of such nations in the world that has higher individualism as compared to that of Indonesia. High individualism in The Netherlands suggests that the employee-employer relation is contract based. Moreover, it is also observed that the hiring of employee, termination, and promotion is completely based on merit. These are completely unlike in Indonesia, where the nation possesses an extremely high level of collectivism. Thus, it is also important from the perspective of the managers to adjust in an individualistic culture of The Netherlands. However, considering the need for team cohesion for effective growth of the organisation, the manager should motivate employees by suggesting mutual benefits obtainable through team cohesion (Allen, 2007; The Hofstede Centre, n.d.). c) Masculinity In the context of masculinity, it is observed that The Netherlands is one of such nations in the world that reflects lower masculinity. Indonesia, on the other hand, has a very high masculinity degree. The low level of masculinity in The Netherlands suggests of feminist culture in the nation. High feminist culture in an organisation signifies the importance of quality life. The employees provide greater importance to work life balance. In this regard, it is advisable to the manager to maintain the work life balance of the employees. This would lead to significant employee satisfaction whereby, higher level of employee satisfaction shall lead to their increasing efficiency and effectiveness (Hofstede, 1988; The Hofstede Centre, n.d.). d) Uncertainty Avoidance In the context of uncertainty avoidance, it is observed that both the nations, i.e., The Netherlands and Indonesia possess equal value in the index. In this regard, it is observed that both these nations are in the average level of uncertainty index. The average level of uncertainty avoidance suggests for the moderate resistance to innovations. It also suggests the importance of security as an important factor for each of the individuals. Moreover, it also suggests the inner desire to perform and secure their lives. Considering these aspects of uncertainty avoidance, it is important that the manager should recognise this cultural dimension (Mooij, 2013; The Hofstede Centre, n.d.). e) Pragmatism Pragmatism is also one of such dimensions of Hofstede’s cultural model, where both these nations, i.e., The Netherlands and Indonesia have equal value in the index. The higher level of pragmatism suggests of the links to the past traditions while dealing with the present or future circumstances. Moreover, it is observed that citizens of The Netherlands have a higher level of adaptability to their traditions when it comes to the changing circumstances in work life. Thus, it is advisable to the manager that she must incorporate to the pragmatic cultural dimension of the nation (Joshi, 2012; The Hofstede Centre, n.d.). f) Indulgence It is observed from the Hofstede’s cultural dimension index that The Netherlands possesses a higher level of indulgence, as compared to that of Indonesia. The higher level of indulgence suggests positive attitude of the people. Observably, citizens of The Netherlands provide significant importance to leisure time. From a comparative point of view, they are more optimistic than that of the people in Indonesia. It is worth mentioning in this context that the optimistic nature and positive attitude of the employees significantly encourages a manger to work in the nation (Aswathappa, 2007; The Hofstede Centre, n.d.). The following graphical representation depicts a comparison between The Netherlands and Indonesia in terms of the Hoftstede’s cultural dimensions. Source: (The Hofstede Centre, n.d.) Section B 4. a) Critique of Hofstede’s Work in the Current Globalized Environment When it comes to the adaptability of globalisation and its benefits in return, Netherlands is nowhere left behind. Evidence to the current state of globalisation is observed from the increased import and export of the nation. The increased foreign trade is certainly not limited to the European Union Nations, but to the nations in other continents as well. In this regard, it is observed that in the recent years, The Netherlands has been involved in extensive foreign trade with some of the nations like India, China, Brazil, US, Russia, and others. It is also asserted that the prime reason for the globalised environment in The Netherlands is its improved cultural dimensions, as suggested by Hofstede. As was observed in the previous section, The Netherlands possesses lower index value in power distance and masculinity. This suggests equality among the employees, participative decision-making and proper work life balance. This has greatly encouraged globalisation within the nation. Moreover, high pragmatism and indulgence, along with moderate uncertainty avoidance, simultaneously attracts globalisation. However, it is also observed that The Netherlands also has a higher level of individualism. Although, this discourages team cohesion and work, it is also observed that the employees have the urge for mutual benefits. This need for mutual benefit supports team cohesion. Thus, the Hofstede’s cultural dimensions have a major contribution to globalised environment in The Netherlands (Piepenburg, 2011; Walsh, 2006). 4. b) Challenges of Business and Management I. Globalisation Globalisation can be recognised as a major trend in the global business and management. However, it is also observed that there are certain challenges associated with globalisation. This includes the establishment of cross-border communication and collaboration. Moreover, it is also important to note that the development of cross-border communication and collaboration implies higher financial cost (Economist Intelligence Unit, 2012; OECD, 2012). II. Decision Making In the context of globalization, it is observed that decision-making process has certain challenges. In this regard, the major challenge in the decision making process involves consideration of ethics. It also includes the difference in motivational biases in the two nations. Moreover, it is also observed that an organization operating in other nations often faces challenges in undertaking rational decision-making. The prime reason behind such challenges is the cultural differences between the nations (Ladi, 2005; Forgionne, 2002). III. Negotiation and Communication A major challenge that an organization encounters in a negotiation process is the communication barrier. This communication barrier is extensive in other nations as well. In this regard, it is observed that Windmills Apps, an Indonesian organization would encounter significant challenge in communication. This is because of differences in language and culture (Qui, 2009). IV. Leadership and Cultural Intelligence The manager of Windmill Apps working in The Netherlands would probably face certain significant challenges in leadership. In this regard, it is expected that working in different culture demands substantial understanding of the differences persisting amid the two circles. Correspondingly, in this case scenario, the manager would face a significant challenge in generating team cohesion, as The Netherlands reflects high degree of individualism (Kouzes & Posner, 2006). Section C 5. Conclusion To recapitulate, it is observed that The Netherlands is a highly globalised nation. This is evident from the political, economic, social, technological, legal, and environmental developmental trends currently persisting in the country. Apparently, the development in these fields greatly encourages globalisation in the nation. It also encourages the manager from Windmills Apps to work effectively whereby the effectiveness of the manager also increases through developed cultural dimensions of the nation as suggested by Hofstede. Moreover, it is also observed that these cultural dimensions of Hofstede have greatly contributed to the establishment of globalisation within the nation. Despite the globalised environment, the expatriate manager in The Netherlands would encounter certain challenges, primitively with regard to decision-making, negotiation, and leadership. In this regard, it is advisable that the manager should adjust to the prevailing culture of The Netherlands. She should also encourage team cohesion and participative decision-making. These would lead her to become an effective expatriate manager. References Allen, J., 2007. Competencies, Higher Education and Career in Japan and The Netherlands. Berlin: Springer Science & Business Media. Aswathappa, K., 2007. International HRM. 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Ladi, S., 2005. Globalisation, Policy Transfer and Policy Research Institutes. Cheltenham: Edward Elgar Publishing. Malcolm, J. P., 2013. Financial Globalization and the Opening of the Japanese Economy. London: Routledge. Michie, J., 2011. The Handbook of Globalisation, Second Edition. Cheltenham: Edward Elgar Publishing. Mokhtari, M., 2001. Integration of Assistive Technology in the Information Age: ICORR 2001, 7th International Conference on Rehabilitation Robotics. Amsterdam: IOS Press. Mooij, M., 2013. Global Marketing and Advertising: Understanding Cultural Paradoxes. California: SAGE Publications. OECD, 2014. OECD Economic Surveys: Netherlands 2014. Paris: OECD Publishing. OECD, 2012. OECD Economic Surveys: Netherlands 2012. Paris: OECD Publishing. Piepenburg, K., 2011. Critical Analysis of Hofstede’s Model of Cultural Dimensions: To What Extent Are His Findings Reliable, Valid and Applicable to Organisations In The 21st Century? California: GRIN Verlag. Qui, Y., 2009. Risk-based Negotiation for Collaborative System Design in a Distributed Environment. Ann Arbor: ProQuest. Romney, S. S., 2014. New Netherland Connections: Intimate Networks and Atlantic Ties in Seventeenth-Century America. Carolina: UNC Press Books. The Hofstede Centre, No. Date. Country Comparison. Cultural Tools. [Online] Available at: http://geert-hofstede.com/netherlands.html [Accessed January 08, 2014]. Walsh, J., 2006. The Globalisation of Executives and Economies: Lessons from Thailand. Amsterdam: Elsevier. Read More