Malaysia is widely regarded for its fascinating cultural diversity. The country’s multi-ethnic society is predominantly Muslim and its official language is Malaysian ((The BBC, 2013). English is commonly used in instructional settings such as public schools as well as in the corporate and the wider business environment. There are multiple other ethnic languages used by respective ethnic groups in the country. Consequently, the language barrier between this country and the UK is quite significant. According to the BBC (2013), the country’s popularity in global tourism has enlightened and continues to influence its cultures. Accordingly, language and other cultural barriers including religious practices are likely to be mitigated. The business implications for HS Engineering of these cultural differences between Malaysia and the UK call for robust strategies aimed at addressing such concerns should the company venture into operating in Malaysia.
In this transformational context affecting HS Engineering, organisational culture is a key tenet to consider. Organisational culture, in this regard, refers to the shared basic assumptions, values and beliefs that characterize a setting and are passed on to newcomers as a proper way to conceptualize and view an organisation (Schneider, Ehrhart & Macey, 2013). The fact that the entity’s business environment is undergoing changes and the contemplated scenario involving offshore operations gives rise to complexities that can have serious implications for HS Engineering. According to Schein, (2010), organisational culture and its link with national culture are essential considerations for effective change in organisations in both local and global perspectives. This aspect of HS engineering is explored in detail in its current locality, and in the perspective incorporating Singapore.
HS Engineering’s organisational culture
Although HS Engineering is a family business with much of the power bestowed upon the family for about 40 years, the company’s current organisational culture involves mix of the different types of culture propounded by Handy to a varying degree. HS’ recent changes that have seen it look for experts from outside the organisation, a move that was necessitated by changes taking place in its business environment illustrates the elements of another culture type acting conjunctively with power culture in the company. Power culture is notably the dominant style in the organisation. In the actual sense, Schein (2010) observed that various organisations’ cultures are often characterised by different elements of Handy’s types of organisational cultures. Even so, Handy’s model conveniently explains the company’s organisational culture.
Power culture, being the dominant element in HS’ organisational culture, has several distinguishing characteristics. Schneider (2003) identified a number of features as being almost exclusively associated with power culture. Organisations with power culture are characterised by a centrally-concentrated power house similar to a spider in its web. Consequently, Moran, Harris, & Moran, (2011) argued that the closer one is to the centre, the more influential the individual to the organisation. In the context of HS Engineering, it might be argued that the family controls the business to a large degree. A disadvantage of this culture type is that succession is critical to the continued success of the company (Moran, Harris, & Moran, 2011). However, there are some significant challenges associated with power culture. Notably, this organisational culture can put respective organisations in a difficult position as far as managing operations with numerous links and tasks.
Cultural differences between the UK and Malaysia
Malaysia and the UK have significant differences in national cultures. The findings of major researchers in this area, notably Hofstede, Lewis and Trompenaaars show clear cut differences between the two nations’ cultures (Schneider, 2013). Hofstede’s framework categorises national cultures based on variables such as power distance, individualism, masculinity/femininity, uncertainty avoidance and long-term orientation. The figure below shows the comparison between the UK and Malaysia based on Hofstede’s framework (The Hofstede Centre).
Except for the case of Uncertainty avoidance, all the comparisons show significant differences as per Hofstede’s framework. Unlike the UK, Malaysia views individuals as being equal to a lesser degree and power culture may not have major negative impacts. In another variable, the UK culture is highly individualistic compared to Malaysia. Finally, the UK is driven more by competition, success and achievement.
Similarly, Lewis’ and Trompenaars’ classifications place the two countries in significantly different positions of world cultures. In his model, Lewis viewed the culture of the UK as being almost entirely linear-active. The interpretation is that the country is generally task-oriented and show high levels of organisation, planning and rely on facts in interactions (Spitz, Segall, & Campbell, 2000). On another note, he termed Malay as a country whose culture is a near balanced mix of multi-active and reactive styles. They exhibit intermediate levels of emotion, impulse, warmth, courtesy, listening in their interactions (). The differences have significant implications for management of HS Engineering.
Implications for HS Engineering
Both organisational culture and national culture are important considerations for HS Engineering. Whereas Moran, Harris and Moran (2011) argued that the later has even greater impact on businesses, it is has been identified in the previous sections that the relationship or link between the two is critical to organisational change. HS is not only affected by its own organisational culture with the bounds of the UK, but also the overseas culture of Malaysia if it decides to operate in this country. According to Black (2003), the implications for the company’s management are indispensable as it seeks to tap into the opportunities presented in the East as well as strengthen its weakened position in the domestic market. It is therefore critical to take into account the challenges or otherwise opportunities that may come because of the changes.
First, it is evident that the HS Engineering’s organisational culture does not meet the requirements of best practices in this era of a challenging global business environment. The business experiences problems due to the existing relationship with the owner, which is the family. This is also presented above as a power culture style. Consequently, this lack of independency between management and ownership calls for a different approach to organisational culture in order for the company to keep pace with the competition (Gerhard & Sylvia, 2004.). For instance, it may be difficult to effectively and successively manage projects in different locations using the best pool of knowledge under this culture.
Second, the differences in national cultures between the UK and Malaysia are dramatic. Despite the trend of globalisation, HS Engineering has to address this gap through strategic planning. The importance of national culture in the modern business environment has been underscored by many successful multi-national corporations with the slogan “think global, act local”. Adequate resources may therefore be necessary to change the situation at HS with respect to organisational culture.
Finally, the Malaysian culture will have impact on HE Engineering’s culture and hence other practices. As a result, organisational culture will have a major impact on the performance of HS Engineering in Malaysia. HS Engineering must understand the Malaysian culture and its differences in comparison to the UK culture in its attempt to exploit the opportunity in the country (Snir & Harpaz, 2009). The uniqueness of Malaysia is therefore more of an undermining factor to the presented opportunity in the East. Strategic adaptation is inevitable (Sternard, 2011).
Recommendations and conclusion
In hindsight, issues relating to the market and management issues affecting the company as well as the decision making process give rise to the recommendations below:
- The Oldham site remains open because of the tax incentive and it also employs a high skilled labour force which might be difficult to replace
- The Wolverhampton to be merged with the Leeds branch since they all specialise in the production of the same automotive parts
- There are also hidden set-up costs that may not be outlined and the cost of managing a business offshore is more likely to be higher. Moving operations to the far east is susceptible to counterfeiting of intellectual property which is a huge problem affecting overseas production, for example apple corporation. This can make the overall cost to skyrocket.
- Malaysia is a high context culture which engages emotions whereas a low context culture such as The UK is more logical and less personal. This may hinder communication between the managers of the company and that of the Malaysian employees or executives. To overcome this problem HS Engineering should train its managers if the decision to move operation is overseas is finalised through CCT (Cross Cultural Training) to enhance their confidence in communicating with their Malaysians counterparts and to reduce culture shock
The loss of manufacturing control and flexibility is an issue that needs to be addressed and proper measures put in place to safeguard any mishaps .This can be a huge detriment in relocating production overseas
Black, J. R. 2003. Organisational Culture: Creating the Influence Needed for Strategic Success. London: Universal Publishers.
Fitzgerald H. (2013). Disadvantages of Relocating a Factory Overseas. Available: http://www.ehow.com/info_8655059_disadvantages-relocating-factory-overseas.html. Last accessed 08/04/2013.
Gerhard, F. & Sylvia, M. 2004. Issues of Time in International, Intercultural Management: East and Central Europe from the perspective of Austrian Managers. Journal of East European Management Studies, 9(1): 61-84
Manzon, Gil B .(2005). Relocation of operations. Journal of Business Research. 58 (7), 981-988.
Moran, T. H., Harris, R. P. & Moran, V. S. 2011. Managing Cultural Differences: Global Leadership Strategies for Cross: Leadership Skills and Strategies for Working in a Global World. Harlow: Routledge
Roberto Pedersini. (2006 ). Relocation of production and industrial relations. Available: http://www.eurofound.europa.eu/eiro/2005/11/study/tn0511101s.htm. Last accessed 08/04/2013
Schein, E. 2010. Organisational Culture and Leadership. London: Sage Publications.
Schneider C. Susan. (2003). Managing Across Cultures. Harlow: Prentice Hall.
Schneider Benjamin, Ehrhart G. Mark & Macey H. William. 2013 Organisational Climate and Culture. Annual Review of Psychology, 64: 361-388.
Snir, R & Harpaz, I. 2009. Cross-Cultural Differences Concerning Heavy Work Investment. Cross-Cultural Research,43(4): 309-319. [Online] Available at http://ccr.sagepub.com/content/43/4/309. [Accessed 3 May 2013]
Sternard, D. 2011. Strategic Adaptation: Cross-Cultural Differences in Company Responses to an Economic Crisis. Berlin: Springer.
Spitz, H. H., Segall, H. M. & Campbell, 2000. T. D. Cross-Cultural Differences. American Association for the Advancement of Science,140 (3565) [Online] Available at http://www.jstor.org.proxyau.wrlc.org/stable/1710951[Accessed 2 May 2013]
Swenson,L.D. (2005). Overseas Assembly and Country Sourcing Choices. Journal of International Economics. 66 (1), 107-130.
The BBC. (2013) Malaysia Profile. [Online] Available at http://www.bbc.co.uk/news/world-asia-pacific-15356257 [Accessed 7 May 2013]
The Hofstede Centre (n.d) United Kingdom in Comparison with Malaysia. [Online] Available at http://geert-hofstede.com/united-kingdom.html [Accessed 2 May 2013]
Walter DeGruyter GmBH &KG. (1998). Origins & Weaknesses. Organisation Culture. Unknown (12), 453.