Cross-cultural And HRM Issues Faced By Holden Automobile Company

Design and create a meeting outline/overview of the proposed role-play simulation

This report will focus on different micro and macro environmental factors as well as the cross cultural and HRM issues faced by the Holden automobile company. While discussing the various issues in the company, both the home and host countries will be considered, which are Australia and Japan respectively. In the beginning of this report, it is important to shed light on the company as well as the home and host countries. This Australia- based company was established in the year 1856 and currently headquartered in the Port Melbourne region of Victoria (Holden.com.au, 2018). The prominent models offered by the company include Nissan, Chevrolet, Suzuki, Toyota and others. The manufacturing of the company vehicles took place mostly in Elizabeth and Melbourne. The company, based in Australia has connection with Japan due to the models of Suzuki, Toyota. In the course of this report, different factors will be analyzed which posed to be a barrier in the operation of two different countries. As Australia and Japan are two nations of different cultures, there are different cultural issues faced by the human resources management of Holden. This report will focus on such issues and provide recommendation for the same.

The Holden automobile has various issues related to the external factors in terms of international business growth. These external factors can be termed as the macro environmental factors, which affect the exterior environment of the company (Hillary 2017). In the case of Holden, the external environment analysis has helped in identifying the threats and opportunities to pave the way for future growth and development in the international automobile market. For instance, Holden has the scope to grow its presence and operating functions in the international market of the developing countries. The strategies that they will implement will need to counter the threats raised due to the company’s business performance in the international market. The important factors include, strong competitive advantages and their parallel approaches must support the strategies and HR initiatives. This is because the initiatives undertaken at the company need to support the position of the company in the international market. In this respect, it can be said that, the PESTLE analysis of the Holden automobile company has been effective in recognizing the business concerns to direct the efforts for organizational growth and development (Brink 2017).    

From the PESTLE analysis, it can be summarized that the external or macro environmental factors need to be considered by the Holden automobile company while conducting business in home and host countries. This analysis has highlighted the importance of transformation in their growth and development strategies in the international market. This analysis was successful in recognizing different kinds of issues that Holden needs to deal with. 

Identify and discuss at least 7 key issues and challenges that may arise when managing business and staff across the two cultures

The micro environmental factors of the Holden automobile company is aimed at addressing the strengths, weaknesses, opportunities and threats faced by the internal environment of the company. The analysis of the internal factors or SWOT analysis of the company helps the company management to recognize the strong internal factors. In the case of Holden automobile company, the strengths of the business are related to their potential in overcoming the challenges and issues faced by the automobile industry (Noori and Tatari 2016). For instance, the size of the organization and their networking is effective in implying the necessary strategies. The important fact in this respect is that the company must focus on the issues related to the rival companies and their business administration. The policy makers and the management of the company must consider the SWOT or the internal factors for implementing efficient strategies in the international automobile market. These include smoothening, efficiency and reducing the successful resistance while implementing the strategies (Peppard, Galliers and Thorogood 2014). Therefore, Holden needs to deal with the internal strategic factors associated with its business.

From the SWOT analysis, it can be analyzed that Holden holds a strong position in the automobile industry in terms of brand, economy, HR expertise and others. These factors are considered as significant in the growth and development of the company to provide competitive advantage in the international market. They can make use of the strengths to build positive impact in the business and implement strategic reforms to work on their threats and weakness. In addition, they should also utilize the opportunities that are accessible in the automobile market.  

As Australia and Japan are two countries of different viewpoints and cultural diversity, therefore, Japan, as a host country had to come across different issues while working with the Australian automobile company. In terms of economic diplomacy, the Japan Australia Economic Partnership Agreement was signed between these two countries. It has led to free of cost transportation of the automobile and vehicular parts from Japan to Australia. Apart from this, there are several other issues, which are coming as a barrier between the functioning of the two countries. Their business transactions are at stake due to the constant threats from China (Deresky 2017).

There are issues of employment faced by the host country. The automobile industry business with Australia and the local employment of Japan turned out to be highly sensitive issues in politics. Similar to China, USA also posed challenges in the business transactions between Japan and Australia. Although both these countries tried to stand together by forming a mutual understanding but it turned to be another issue for the host country (Moore 2015).

Identify key macro and micro environmental factors that are likely to impact the business’ success in the new ‘host’ country

On the other hand, difference in perception between the two countries regarding China and its policies came out as a major issue for Japan. The issues related to the natural resources, energy, minerals and food took large shape in the political sphere and hampered bi-national relationship. With the increase in the cost of resources, challenges in the form of resource security became prominent for Japan. In the case of Holden, the host country was further affected when the automobile giant, Holden decided to manufacturing vehicles in Australia in 2017. The Japanese model, Toyota was worried due to its bleak future in the Australian region. This is because the shutdown of its operation would result in the unemployment of 2900 people. As per the management of this company, external environmental factors and negative influences were the major reasons for taking up this decision (Sarala et al. 2016). Further research has highlighted on the cross- cultural and HRM issues that prevailed in the automobile company.       

The traditional ways of carrying out human resource practices in Japan are on the verge of changing. The culture of the host country and the well-established nature of the practices have led to limitations in implementing the changes within organizations. Individuals face different issues related to business transactions in Japan and Australia (Moore 2015).  Out of several cross- cultural and human resources management issues between the home and host countries, seven prominent ones were identified. These issues are outlined below:

1. Difference in lifestyle: the people of both these countries follow lifestyles, which are wide apart. There is difference in timing in the two nations. On one hand the shops in Japan closes at around 8pm- 10 pm, on the other, the shops in Australia closes around 6 pm.
2. Difference in pace of decision-making: response to the market and decision- making process took place at different pace in these two countries. The people in Japan are more used to checking the idea before exposure or sealing of any kind of commitment. However, the Australians are used to a time- consuming process of decision- making. This created a difference, as the Japanese were considered unaware to deadlines (Gupta and Bhaskar 2016).
3. Mentoring and coaching styles: the Japanese are used to a more engaging activity where the senior managers should immediately respond to a situation. It is similar to both way of the hierarchy. For instance, if an employee resigns from a company and joins another in the similar sector, then there is a tendency of the socio- economic repercussions.
4. Difference in expectations: the views of the Japanese and Australians were different regarding expectation from the meetings in an organization. According to the Australians, meetings are a complete waste of time, as it does not lead to any effective outcome. Rather they considered meeting as a platform to debate and voice their disagreements with others. The Australians expressed their anger when the Japanese expressed their views among themselves in their own language. On the other hand, they were not ready to accept silence from the Japanese too (Aklamanu, Degbey and Tarba 2016).
5. Difference in communication style: there was utter confusion regarding verbal and non- verbal communication behaviors among the Australians and the Japanese. The Australians were less status oriented than the Japanese and tried to make adjustments while showing formal respect to the hierarchy. Nevertheless, most of the time, they were not aware of the ways in which the meetings need to be proceeded or the seating needs to be arranged.
6. Difference in emotions: the Australians could not agree with the fact that there was an outburst in case of bad performance in a job. There was a difference with the Japanese as they placed minimum value on relationships and therefore power distance encouraged status differences (Sarala et al. 2016).
7. Difference in workplace relations: in Australia, language barrier is not seen as a major problem and do not expect the same from the Japanese co- workers. The Japanese employees do not use reports and memos in majority as a form of internal communication. Moreover, the Australian managers were more comfortable in approaching the Australian employees rather than the Japanese.    

It can be recommended from this report, that Holden needs to work on the issues discussed throughout this report for overcoming the challenges faced by the company. Hofstede’s cultural dimension can be significant in this respect as it considers five important factors of power distance, individualism vs. collectivism, masculinity vs. feminity, uncertainty avoidance and long- term vs. short- term orientation. These factors will be effective in resolving the issue of cultural diversity between the home and host countries. In case, the company shuts down, there will be an extensive negative influence and it s required to avoid the same by effective management. They need to consider the HRM theories and principles applicable in other automobile companies and implement the same in their organization. The implication of the effective practices needs to be followed up to measure their success in the business. Moreover, different styles of communication need to be evaluated in order to select the most appropriate one. 

References

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Deresky, H., 2017. International management: Managing across borders and cultures. Pearson Education India.

Gupta, S. and Bhaskar, A.U., 2016. Doing business in India: cross-cultural issues in managing human resources. Cross Cultural & Strategic Management, 23(1), pp.184-204.

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Holden.com.au. (2018). Holden About | Holden Australia. [online] Available at: https://www.holden.com.au/discover-holden [Accessed 24 May 2018].

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Noori, M. and Tatari, O., 2016. Development of an agent-based model for regional market penetration projections of electric vehicles in the United States. Energy, 96, pp.215-230.

Peppard, J., Galliers, R.D. and Thorogood, A., 2014. Information systems strategy as practice: Micro strategy and strategizing for IS. J. Strategic Inf. Sys., 23(1), pp.1-10.

Sarala, R.M., Junni, P., Cooper, C.L. and Tarba, S.Y., 2016. A sociocultural perspective on knowledge transfer in mergers and acquisitions. Journal of Management, 42(5), pp.1230-1249.

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