How the global banking industry manages change within different cultures look into Middle East (Saudi Arabia), Asia (China) and the west.
Now days the organizations are working into different countries and they have variety of growth options. One side global expansion is generating lots of profits from them and on the other hand companies are highly facing the problem of managing the people in effective manner. The companies are having their operations in countries which are completely different than each other and the impact of culture can be seen very easily on the working pattern and thought process of employees as well (Buch and Wetzel, 2001). It has been cited by various management experts that organizations are supposed to deal with this problem in appropriate manner. It will not only provide them competitive advantage but also drive them to focus on their operational as well as functional efficiency. It is also clear that without managing the cultural diversity it is impossible to handle the business operations and implementing the human resources strategies is completely impossible ((Lee and Yu, 2004)).
It is to acknowledge that in the era of globalization the concept of diversity works in two ways first is that company is active in any one part of world and they have various group of people belongs to different religions, values, ethics, beliefs, caste and creed etc. Second aspect of diversity is related to the expansion of company (Lund, 2003). Earlier the organization was running their operations in Asia and now they are focusing towards Australia or any other part of world. Thus in this way diversity can be categorized into two parts. Former one is related to the internal issue of the company which can be handled very easily but later problem is related to the environmental issues. If diversity is restricted towards the religious or value of any individual or group of people then company can draw certain rules and regulations and try to suppress the negative consequences of diversity. It will be useful in controlling the discriminatory activities and minimizing the personal grudges arises on the ground of trifle factors (Buch and Wetzel, 2001). But if situation demands to handle the macro level problem then the solutions should also be compatible to that.
Getting the hold on environmental issues is possible only through thorough market research or environmental scanning. Thus it is a very common factor which has become appropriate tool in front of companies which enable them to manage their people in well organized manner. Thus it is clear that market research or assessing the socio cultural environment has become the foremost step when ever company enters into any business territory (Rashid, Sambasivan and Rahman, 2004). This factor helps them to identify the social and cultural environment of the country or any particular region. It is to ascertain that analysis of social or cultural environment facilitates the business entity that they can understand the cultural aspects of any country and create their strategies related to human resource management in appropriate manner (At-Twaijri, 1991).
It has become major challenge in front of organizations that how they can manage their people especially when they are running their operations outside the familiar business environment. HR managers has lain down special emphasize on this aspect and it is enabling them to design such strategies which can eradicate the negative aspects of such kind of diversity. The analysis of social and cultural environment helps in enlightening the proper view point about the country’s norms and beliefs and company can bring adequate amount of changes into their business operations. Here one more factor which is equally considerable that when company go beyond the country then social and cultural issues mould their routine activities as well (Rashid, Sambasivan and Rahman, 2004). In order to develop accurate understanding about this fact let’s discuss about the MacDonald’s case when they enter into India. In India the use of beef is completely banned due to religious view points. However it is legal and political issue well but moreover it is cultural issue which force them to stop using beef in their products. Now another problem which they might have faced that if they would have continue to use beef (if government permitted them) then it won’t be possible for them to allot the franchise to all group of people, acquiring the employees and most importantly it can create huge question mark on the sustainability factor of company. Therefore on the employee’s perspective also it is mandatory for company that they should respect the local factors and give them adequate amount of considerations (Naranjo-Valencia, Jiménez-Jiménez and Sanz-Valle, 2011).
Apart from this above mentioned factor the contribution of outcomes, generated through social and cultural environment, are very high with respect to manage people within the organizations. Another factor which can’t be neglected at this juncture is that due to the proper assessment of cultural environment company become aware about the local beliefs and cultural environment and introduces certain changes in their human resource policies and strategies. It can be seen that companies try to put that cultural environment in their infrastructure as well. It creates positive psychological impact at the attitude and perception level of employees and association between company and employees become healthier and better (Taormina, 2008). In the context of banking industry also the evidence of bringing the change in business operations can be realized very easily. It has been found that due to religious views the banks operating in Islamic countries doesn’t charge interest and they are obligated towards any formalities related to interest (Naranjo-Valencia, Jiménez-Jiménez and Sanz-Valle, 2011).
It is not ethically approved in Islamic religion to take or give interest so banks are highly bound to follow certain aspects and give special consideration this aspect while opening their business in Islamic country. Further the reason that why companies are able to manage people in different countries is to hire the head or chief from that country to someone who is already familiar with that area or culture. There are various multinational companies who have national head or director for their different department, belongs to that area that look after the entire business operations (Fortado and Fadil, 2012). This is another factor which provides privilege to a company to win the trust of employees or to understand that what could be the future implications of cultural differences. The major expediency of this management fundamental is that banking organizations can gain the benefits of respective individual’s knowledge about the culture. They can provide their valuable suggestions while designing the human resource policies and any factor lying inside the cultural issues could be removed. Therefore in this way banking industry can implement their strategies regarding the management of people (Fortado and Fadil, 2012).
The role of organizational culture is also very immense with respect to ensure the proper management if people within the organization. An organization tries to create such environment or culture which must be favourable to employees and it put should positive psychological impact at mindset of employees (Jasimuddin, 2001). The management of people not only includes the discipline or performance measures but it involves addressing other aspects also like employee retention, employee satisfaction and employee motivation. It is to acknowledge that if banking organization will be having properly constructed organizational culture then employee retention will take place and their long term association will provide benefits to company only. Ahead it is also clear that the difference in organizational culture and societal values can create disturbing environment and can hamper the working efficiency. Another advantage of organizational culture is that it has direct relationship with the employee satisfaction (Rao, 2013). Banking organizations are supposed to understand that the counting of satisfied employees can be easily raised through inheriting the culture which is quiet comfortable and allow flexibility within organization. Overall banking sector can ensure command on entire HR related issues if there is effective alignment between the country’s culture and organizational culture. Hence these are certain trajectories or management practices adopted by business organizations which enable them to get rid of negative elements of cultural differences (Woodworth and Said, 1996).
In order to give more concentration on this factor the banking industry is preparing their managers in such a away so that they can promote high level of understanding regarding the proper management of people. Banking industry is working in two ways first they bring some changes in their operational aspects and second are related to the appropriate changes in the management aspects of managers (Woodworth and Said, 1996). A manager is supposed to put equal consideration on his management as well as leadership style which must be compatible to local culture and could be helpful with respect to manage the people within the organizations. It is to acknowledge that managers are those resources which have direct relationship with employees and help higher authorities to respond well towards the cultural differences. Banking industry like other industries is also dependent on the contribution of managers on various issues and challenges (Al-Hyari and et. al., 2012). They can prepare such kind of environment which can make proper alignment with the local culture. In order to manage the people the departmental managers can make collaboration and integration with human resource department. Banking industry works in very peculiar manner and the level of stress within the industry is very high as it demands such personnel are who can handle the human resources (Al-Hyari and et. al., 2012).
Proper coordination of departmental managers with human resource managers can create lots of beneficial result for them and they can develop their intellect in well organized manner. There is variety of skills which could be developed very easily if banking industry is providing appropriate training sessions to their managers (Auch and Smyth, 2010). Now days such training sessions include the fact that managers are required to create effective and healthy inter personal relationship so each and every person should understand their responsibility and deliver the performance with full efficiency. The manager must have caring and respect attitude towards the staff it will automatically lead towards the effective management of people (Auch and Smyth, 2010). Trust is another factor which also has immense contribution in making pleasant and healthy working environment. It boosts up the confidence level of employees and they started to show their commitment towards the organizational success. The managers of banking industry have to understand that trust is very significant in their industry which should be used very painstakingly (Auch and Smyth, 2010).
Further the rule of managing or leading the people can be successful under the conditions of effective communications. The managers needs that they must have proper communication process which will help them to understand the problems of employees and can convey various work related aspects to staff members. The element of feedback can work effectively and with the help of this factor banking industry can witness magical results in the management of people (Chung, Fam and Holdsworth, 2009). Two way communications is always efficient and fruitful for companies. Banking sector where the level of stress is very high and conflicts can take place very rapidly so the expediency of communication could be huge with respect to eradicate the negative aspects of low communication level (Busch, 1989). The human resource department of banking industry is supposed to train their managers on the ground of making strong interaction with their sub-ordinates so that they can make strong bonding with each another.
Apart from this creating such environment in which employees should feel more responsive and accountable towards the organizational success is also responsibility of managers. It is their duty to create such working environment where the managers are delegating the authorities to employees and encouraging them to perform better. Management of team is tougher task then the management of individual’s or single employee. Ultimately managers have to handle a team and have to give proper supervision (Chung, Fam and Holdsworth, 2009). The banking industry is providing such type of training which is highly focused on developing the skill set of managers in handling the team. The efficient controlling of team can enable the managers to mange people within organization. Further the managers can assign the task to team mates on the basis of their potential and can make effective utilization of individual’s talent or skill. Positive morale and recognition can be provided by managers and the factor of job satisfaction can take place (Chung, Fam and Holdsworth, 2009). Overall all these above mentioned change or transformations in the managers behaviour aspects can contribute immensely in the productivity enhancement of employees. Therefore in this way the banking industry can definitely pass on the instructions to the hr department and accordingly strategies for the management of people can be designed.
Managing the people not only represents the improvement in employee’s productivity but it has direct relationship with the discipline and other measures of individual’s personality trait. For the same purpose there is need of introducing some change in the human resource policies. Due to cultural differences it has been observed that discrimination on the ground of caste creed, sex, religion, values, beliefs etc. has become one of the major problems (Bjerke and Al-Meer, 1993). It seems to be very small problem but with respect to legal aspects it can tumble down the organizational image in the market. It has become major change in front of banking industry that they need to lower down the level of discrimination. The concrete and firm human resource policies have its positive impact and are helpful in the eradication of negative aspects of discrimination. Companies faced problem that due to discrimination the retention level of employees is minimizing and it put its impact at the performance and goodwill level of company (Bjerke and Al-Meer, 1993). It also lies under the category of management of employees and their activity. Here it is noticeable that every factor or employee activity which can put its both positive and negative impact must be managed by business entity in well structured manner (Jacqui CameroN and et al., 2012). If any activity is harmful for company then it should be removed from system and if something is positive then proper leverage is supposed to be taken. Another factor which also lie under the category of management of people is that they should not get indulges into the fraudulent or unethical activities. If once any employees found involved into any scam or work activity then it can create blunder for companies as their image is based on employee’s market image as well (Jacqui CameroN and et al., 2012). However this factor seems to be very small but its consequences could lower down the company’s performance at very large scale. Thus the management of people required huge level of monitoring on the various aspects of employees and it is not only handled in the internal environment but it is controlled and investigated in external business environment (Catherine and et al., 2003).
It is just like that company is handling their financial resources or any other resources for the benefit of company and likewise they have proper amount of hold on their human resources. Managing or leading the people is not very simple task especially if any banking industry is active in various countries and the reflection of various cultures can be seen on business operations and management activities. With the help of above discussion it has been found that human resource department can work in two ways (Catherine and et al., 2003). First they can develop the skill set of managers or immediate superiors and train them on various parameters. Second the human resource department can train individuals regarding their responsibilities. In this way banking sector handle their cultural differences and negative elements like low level of communication, high level of discrimination, low employee retention etc. could be removed effectively and efficiently (Edmonds, 2011).
The impact of Middle East country’s culture is also very huge on the banking industries operations. It is to acknowledge that these industries have to design their business trajectories as per the change in socio-cultural issues. In Saudi Arabia the traditions are completely different than any other country. Their rituals and customs restrict the banking industry to launch their strategies in effective manner, as mouldiness is required at very large scale (Shapiro and Kirkman, 1999). Here the relationship between the organizational culture and country’s culture is very different. The success or failure of banking industry could be dependent on the culture and personal beliefs of any country. The impact of culture can be seen on the job satisfaction and employee retention ratio. In this context it won’t be possible for companies to manage the change as well as the management of people will also become very tough (Shapiro and Kirkman, 1999). In Middle East this problem could be very high as the rituals and values are completely different as compare to Asian or western culture. On global level the banking industries can’t implement the same corporate level strategies and their core culture also demand huge level change. Like any country Saudi Arabia is also having banking system which supports immensely in ensuring the sound financial system, managing the foreign reserves, dealing with fluctuations of foreign reserves etc. Whenever any banking company enters into any country the structure of economy must be analyzed in proper manner (Mohanty and Yadav, 1996).
The major change which banks can face in Saudi Arabia is that there they don’t have common banking structure; Islamic banking is highly popular in Islamic countries. It is completely based on Islamic principles which are called as Sharia. Even the conventional western bank has to follow those principles in very stringent manner. It seems that prohibition of interest is only difference between Islamic banking and conventional banks (Mohanty and Yadav, 1996). There are various other differences which bring significant amount of gap between the thought processes of these two types of banking structure. Islamic banking represents the cultural values of Saudi Arabia which is based on Sharia. Thus it exonerated that it is biggest change which has been successfully managed by banks in Middle East countries. The changes can be experienced on the ground of (other than interest) prohibition on the usage of derivatives. The dealing in derivatives is not permitted in Islamic law so in Islamic banking also it is refrained by its users. Especially in the context of options the rules are more strict and stringent (Woo, Wilson And Liu, 2001). Now it is to ascertain that in modern global era Saudi Arabia has two types of banks first which is completely based on Shari laws and other one operates their business as per the conventional banking rules. It is another change which is introducing beneficial outcomes for banking industry in Middle East countries.
There should be different between social culture and national culture. The change in banking industry in Middle East countries can be seen on two basis first their religious beliefs and second is cultural values (Buttery and Leung, 1998). The personal behaviour is very much integrated with the national culture as an individual has grown up in such environment. In that scenario it becomes impossible for organizations to control or manage people in effective manner. A research scholar Hofstede has propounded a model of national culture which may put its impact on the organizational culture whether it is banking sector organization or any other (Buttery and Leung, 1998). He has measured the national culture on four parameters which are:
- Power distance: In this the less powerful members accept that the power within the company is distributed unequally.
- Uncertainty avoidance: It indicates the nation’s intolerance towards the uncertainty and ambiguity.
- Individualism and collectivism: It depicts that how much individual are ready to work in group or team.
- Masculinity and femininity: the level of competitiveness and modesty mainly judged into this factor (Hall, 1993).
The profile of Saudi Arabia, on the basis, is that they have high level of awareness to the fact that the power must be distributed equally. In research conducted by Hofstede it has been found that subordinates in Saudi Arabia are aware that their superiors have more power. Thus it depicts that the assessment of performance may be unavailable in the Middle Eastern country. Further with respect to uncertainty and ambiguity Saudi Arabia has shown high level of tendency towards the formulation of concrete rules and regulations which may lower down the risk of uncertainties (Rajaram and Bordia, 2011). Their acceptance towards the future change is very low. In Saudi Arabia the collectivism approach has gained huge priority. The emotional bond and tie ups with friends and relatives is more in Middle Eastern countries and it could be beneficial for organizations as they can integrate the team culture within the organizational culture. The environment of team is very essential for teams and here the alignment between organizational culture and national culture can be observed very effectively (Rajaram and Bordia, 2011).
The last dimension represents that Saudi Arabia has segregated the roles and responsibilities on the gender basis. It is one of the factors which are needed to be considered at very large scale. In Saudi Arabia the company can’t appoint the women on senior position as they don’t have huge acceptance towards Woking under any woman. This factor can go against the company and they can face operational as well functional problem. In this case the management of people can’t be done in well organized manner (Rajaram and Bordia, 2011). Therefore these are four dimensions of Saudi Arabia’s national culture which must be properly assessed by banking organizations. Thus with the help of above discussion it can be stated that in middle east countries the difference or change not only reflects on the organizational culture but it has its impact on their business operations as well (Li, Lam And Fu, 2000). Saudi Arabia is developing and transforming their culture very rapidly but still they need to have such kind of working environment where every industry can nurture and ensure their growth and development.
Other than above mentioned Hofstede’s research there are very general dimensions which can be referred by banking industry. It is to acknowledge that in Middle East countries the competitiveness is very low as compare to western countries (Li, Lam And Fu, 2000). The nature of work environment is required to be flexible in those countries. The company can’t set the benchmarks and parameters which have in the western countries. The nations’ culture of Saudi Arabia demands flexibility and openness which is required to inherit in organizational culture (Hall And Hall, 1990). There are varieties of changes which are needed to be managed in very painstaking manner. Global banking industry has to assess all the change related to cultural and societal environment and accordingly they can prepare their strategies. On the basis of various studies it has been found that Saudi banks enjoy the huge popularity among the employment seeker as they have same religious beliefs and depicts the same cultural values (Li, Lam And Fu, 2000). This factor provides comfortable working environment to the employees and they enjoy delivering their best to companies. Therefore conventional banks can learn from this factor and can create such organizational culture which is based on Islamic values and ethos. In this way they can manage people and cultural change in Saudi Arabia (Minkov. 2011).
Further with the help of this job satisfaction and organizational commitment can also increase. In order to manage the change the companies have to focus on increasing the number of highly satisfied employees. Out of all the factors which promote job satisfaction communication and operating condition is one of the major factors which must gain huge priority by conventional banks or global banking industry (Hall And Hall, 1990). Regular communication and positive operating conditions will help them to create positive thought process and putting the positive perception at the mindset of employees. It is vastly different than other factors as communication gap can lower down the satisfaction level and the ratio of organizational commitment could be hampered at very large scale (Brislin, 2008). There are four types of organizational culture; clan culture, adhocracy culture; market culture and hierarchy culture. All these types of culture have their own contribution and expediency in ensuring the organizational success. These four types of culture have positive relationship with job satisfaction, if implemented in proper manner (Hall And Hall, 1990). The socio cultural aspect of Saudi Arabia suggests that banking industry should prepare the proper combination of various cultures as per the market situation demands. The organizational culture must be correlated positively with the nation’s culture then only conventional banks will be in position to manage their employees in well systematic manner. High level of job satisfaction and organizational commitment along with the appropriate type of organizational culture will promote the low level of employee turnover (Cook, 1998). The staff members will stay associated with the company for the longer period of time and the management of people will take place automatically. In Saudi Arabia the working conditions are little different than any other Asian or western country but still effective and coordinated integration between organizational culture and national culture can help in managing the change and people. Therefore the major outcome of this study reveals that it’s not easy for global banking industry to get edge over the local Islamic banking until n unless they don’t have proper understanding about country’s beliefs and values (Woo, Wilson and Liu, 2001).
The working environment of Asian countries is far different than the Middle Eastern countries. Among all the countries in Asia China is most dominating and developed economy which allures banks to establish their business into the China’s border (Woo, Wilson and Liu, 2001). Economic development, economic prosperity etc. these are certain aspects which attracts the attention of global banking industry. But in China the political system is very rigid and on the ground of cultural differences also the banking industry faces lots of troubles (Woo, Wilson and Liu, 2001).
Here also the banking sector organizations have to focus on the four dimensions of the national culture which has been mentioned above. The Chinese culture is highly influenced by Buddhism, Confucianism and Taoism. The traditional and core values of chine given them unique identity and special factor is that local people are highly revered towards these values and cultural aspects (Chung, Fam and Holdsworth, 2009). The work ethics and ethical behaviour of Chinese culture is completely different than the western culture. In Chinese culture the ethics and personal beliefs gains huge priority. The mix of three philosophies can be seen very effectively. The duty has gained huge respect and weight in the Chinese culture (Chung, Fam and Holdsworth, 2009). The people are more inclined towards the fulfilment of their duty and hard work is in their nature. Along with this feature the Chinese culture represents the discipline and seriousness towards the work or duty. All these factors provide privilege to the banking sector organizations and provide lots of opportunities to develop their business in Chinese culture. Further it is to acknowledge that collectivism is again major factor which is common in Chinese culture and Islamic culture (Chung, Fam and Holdsworth, 2009). The role of government authorities is very immense in the Chinese society and it has impacted the culture at very large scale. Without government’s supports it is impossible for banking sector organization to establish its business in china. Hofstede first dimension power distance is available in the Chinese culture as the power and governance is available to restricted people only. This factor goes against the banking sector as it creates operational and legal barriers in front of companies (Naranjo-Valencia, Jiménez-Jiménez and Sanz-Valle, 2011). It is to acknowledge that it has been found that where the power or governance is restricted those countries has high level of corruption and bribery related activities which could be negative for private sector or global banking industry.
The very interesting factor which could be treated as positive aspect while operating in china is that the people who don’t have career development plans or seriousness about their future they generally treated as lazy and useless. Thus it is major factor which can in favour of banking sector (Naranjo-Valencia, Jiménez-Jiménez and Sanz-Valle, 2011). This kind of national culture can encourage employees to give their hundred percent towards the benefit of company and they can definitely ensure their growth and development. In such kind of environment the banking organizations can get the privilege of self disciplined working environment and can set highest benchmark in front of their employees. Another negative factor which should be considered at this juncture is that Chinese people generally don’t prefer the change and rapid uncertainties disturbs their mindset (Naranjo-Valencia, Jiménez-Jiménez and Sanz-Valle, 2011). Hofstede and other research scholars have corroborated the fact that private sector organizations need to design their strategies in such a way that it will facilitate them to achieve their organizational goals. The companies will be in position to utilize all strengthening factor and can eradicate the weak and negative aspects. For the same purpose the assessment of various cultural dimensions is essential for companies. With the help of this they can deal with various challenges and issues of cultural environment (Rashid, Sambasivan and Rahman, 2004).
Chinese culture is very rigid and its impact can be reflected very easily on the organizations. The management philosophies are highly focused on the Chinese values and ethics. Global banking organization operating in china has to have proper knowledge about these aspects and it will help them in proper decision making process (Rashid, Sambasivan and Rahman, 2004). The delegation of authorities in the organizations is very low and most importantly the involvement of employees is very less in organization’s decision making process. Now due to this factor it could be stated that job dissatisfaction level in china may be high and it is negative aspect from social point of view. The organizations in china focus on the autocratic leadership style to impart the change within the organizational activities (Lee and Yu, 2004). The local companies have fewer tendencies to accept the change which could work as positive factor for global organizations. They will be having more advanced techniques and management practices which can provide them leading edge over the Chinese organizations. The only challenge while operating in china is that they have various entry restrictions and legal norms which can put extra burden on banking sector companies (Buch and Wetzel, 2001).
Even Chinese banks or financial institutions can face such problems when they move outside the country. The global banks in china can get the leverage of highly professional banking practices and is ready to accept the change (Lee and Yu, 2004). Therefore it is clear with the help of above discussion that management of people in china is very tough as the people there are highly rigid with their values and cultural beliefs. However Chinese financial and economic system is integrating with the international system. The management of people in china is possible only if company is paying adequate amount of respect to the personal values and national culture (Buch and Wetzel, 2001).
While discussing the western culture it is required to be focused that it is completely different than any culture or societal values all across the globe. It has been cited by various management experts that western culture is completely beneficial for the operations of business operations. Most of the common business or management philosophies are based on the western culture and provide support to the business operations (Woodworth and Said, 1996). The management activities could become successful if they have proper integration with the local culture. With the help of above discussion it could be cited that none of the organization can survive in any other country if they don’t have proper understanding and knowledge regarding the local culture. With respect to global banking industry it can be stated that most of the banks are well known with the western culture and prepare their strategies accordingly (Woodworth and Said, 1996). Earlier western market was major factor which helps the banking industry to expand their business. Due to industrialization and globalization western countries has adopted the change in very effective manner and banks have already explored the cultural aspects of western countries. Banks can get the privilege of this factor that most of the management theories regarding the management of people or managing the change is constructed on the basis of western business environment (Fortado and Fadil, 2012).
According to general aspects it is exonerated that western culture more capitalist economy based where performance and profit has gained the huge priority. In order to improve the services banking sector has deal with technological change within the western countries in well organized manner. Further it is also clear that in western countries the four dimensions of Hofstede work in different manner. The power is moreover delegated in the employees working at different levels (Fortado and Fadil, 2012). Further it is also clear that with the help of this the company can gain the privilege of more innovative and confident employees. Under these circumstances the company can establish the highly effective communication and management of employees could be done in very effective manner. Further the worried issue is the less collectivism and more relying on the individualism (Auch and Smyth, 2010). The culture of western countries that people are more self centric and thus they can show less interest into the team work. Thus in these situations the problem for banking industry can become worst. In order to deal with this problem the banking sector should implement the proper management programs which can boost up the morale of employees and inherit the benefits of team culture (Auch and Smyth, 2010).
Through these seminars and conferences the company can create different organizational culture and enable the employees to adjust into group or team. Thus the management of people within the team could take place. This dimension of Hofstede’s cultural assessment study is very effective as none of the organization can neglect the power or outcomes of team. Banking sector has to create such teams which could be helpful with a view of managing the outcomes as well. Ahead it is also clear that with the help of this approach the company can eradicate the elements of discrimination and heinous issues like racism (Chung, Fam and Holdsworth, 2009). It is very common in western culture that castes or racism is very burning issue in western country which can put its impact at inside organizational culture as well. In order to deal with this factor there is requirement of giving proper consideration on the construction of HR policies. Due to such kind of racism or discriminatory it is impossible for companies to bring harmony within the organization. People make their own personal group rather than seeking the benefit of organization. Global banking industry needs that they should have proper business strategies which can eradicate such aspects and allow the employees to work at same platform (Chung, Fam and Holdsworth, 2009).
The management of change is very easy in western business environment. It is to acknowledge that in western culture people give preference to the money or capital so they understand that change, in different aspects of business, can create beneficial results for company. It is positive factor which work positively for companies and enable them to get the privilege of mature and ambitious culture or norms of employees (Chung, Fam and Holdsworth, 2009). However implementing the change is not very easy but as compare to Asian or Middle Eastern culture it is simpler in western culture. Global banking industry can ensure their rapid growth and business under these cultural situations. The banking sector and western culture both have positive relationship with each other. The western culture is moreover based on the generation of capital or income and banks maintain such culture where economic development should be at its peak (Bjerke and Al-Meer, 1993). Further negative aspect of western culture is that likewise in Middle East culture or Chinese culture the pattern of saving is very less in western countries. It is a major factor which put them into serious economic recession or slowdown.
This element of western culture was the main reason for economic recession. It is a factor which is required to be handled by banks in painstaking manner (Bjerke and Al-Meer, 1993). They have to ensure that adequate amount of customers must be deposited in form of collateral security as in case of economic turndown these similar problems or challenge could be faced by global banking industry. Saving pattern is the major reason which could facilitate the bank or common people to survive in such kind of situations or it could be stated that such situations could be avoided at very large scale if concrete and firm financial structure is handling the entire system. Flexibility is another factor which is highly present in the western culture (Shapiro and Kirkman, 1999). Here flexibility refers to the norms or beliefs which were very strict in Middle East (Islamic banking) and Chinese culture (power is restricted towards the government only). In western countries the government is not so strict however the legal rules and regulations are more stringent than any other country. This is a change which must be handled in well systematic way. Hence it is clear that the management of people in western culture is not so tough and western culture is most common culture with which all the global banking organizations are familiar (Shapiro and Kirkman, 1999). Apart from above mentioned three aspects of Hofstede’s cultural study the fourth dimensions masculinity and feminity is also good in western culture. There women have freedom to show their skills and they can take part in the decision making process. Women enjoy same power as to the men and have equal access to the power. The banking sector got such advantage that they need not worry about the longevity of women employees which was again a major issue in other cultures. Hence it can be stated that in western culture the management of people is easy (Shapiro and Kirkman, 1999).
With the help of above discussion it can be sated that culture is that part of society which has its impact at different aspects. The cultural values of different countries are completely diverse and it represents that how many troubles companies face when they enter into any market. If banking industry has not assessed the cultural environment of any country before entering into that market then it can not only put its adverse impact at their performance and productivity but the management of people will also become tough for them (Rajaram and Bordia, 2011). The creation of such cultural environment is very essential for company as with the help of this they can gain variety of benefits. According to Hofstede and other management scholars job satisfaction is major factor which could become part of company’s portfolio. They will be having more number of satisfied employees if they have proper alignment with the local culture. Here it is to refer that organizational culture must be adjusted in same manner as it depicts the local culture (Rajaram and Bordia, 2011). Then it will create comfort level for employees and they will surely stay associated with the company for longer period of time as it could be experienced with the case of Saudi Arabia’s local bank. There all the local banks that follow the Sharia law and follow the Islamic banking principles get the privilege of highly satisfied and engaged employees. They are comfortable in working in such environment and most importantly the company people have to understand that employee retention and employee engagement is another factor which could be easily attained by banking sector (Rajaram and Bordia, 2011).
If banking sector will show there adherence to the four dimensions of market research than they can make proper alignment with the rapid growth and development and moreover the company will be in position to understand the behaviour aspects of local residents and can prepare their work culture accordingly (Woo, Wilson and Liu, 2001). The four dimensions cover all the aspects which are very common and are compatible with the cultural aspects of company as well as society. While working in Chinese culture it is essential for companies that they should focus on rules and regulations drawn by local government. Following the legal norms without any failure is major factor which could be treated as mandatory factor for organizations. It can facilitate them to run their operations with fewer obstacles and for the longer period of time (Woo, Wilson and Liu, 2001). Further there are various aspects if local culture which can go against the profitability or business activity of companies. Banking sector has to undertake the concept of Islamic banking in Middle Eastern countries and according to that it restricts to charge any type of interest as it is against their religion but on the ground of company’s profitability it can put its impact at their revenue generation capacity (Li, Lam and Fu, 2000). Further the level of corruption and bureaucracy is high in the Chinese culture which is negative factor for banking companies active in banking sector. Thus it is a complete overview of cultural differences and its impact on the management of people along with the articulated description of solutions or strategy which can help in dealing with cultural differences and can ensure proper management of people (Li, Lam and Fu, 2000).
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