“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...