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MGMT5003 Culture and Ethics: Impact of Indigenous Culture On Business

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In this assignment focus on the impact/influence of Indigenous culture on business strategy.

The broad title for this assessment is Indigenous culture and business. In addition, you are also required to answer the question, “Are there any ethical implications? If so, what are they? In further developing your focus and approach for this assessment.

Answer:


Impact of Indigenous culture on business strategy

Today’s multinational organisations have people from different cultural backgrounds. Among them there are many people from different distinct or indigenous cultural backgrounds. This type of Culture has a deeper impact on the performance of the firm. In different parts of the world, there are different indigenous people living. Culture has impact on the decision making hence it has direct impact on way an organisation builds its strategy (Foley and O'Connor, 2013). Both internal and external strategies of the company get affected by such kind of diversity. The difference in the cultural background of the people also influences the environment at the workplace. It is essential for the organisations to understand the impact of these cultures on strategies of the firm.

Indigenous people are the ones that are highly attached with their culture and hence it has become essential for the organisation to understand their cultural demands and work upon it (Welford, 2013). In Australia, there are many people from the indigenous community working in different firms. Some of the large firms such as Wesfarmer have huge numbers of employees from indigenous community hence if their demands are not understood in a proper manner then it might create business challenges or ethical implications.

The strategies that are made by the firms in terms of diversity management, needs to focus on the culture of the people. If the culture is not maintained in a proper manner then it may lead to unpleasant atmosphere within the organisation (Luo and Shenkar. 2011). This is not good for any company that wants to grow at a faster pace without creating internal issues in the firm. It is essential that in any firm it is crucial that firm has representation from all the sections of the society. At the time of recruitment, firms prefer the candidates that are from the mainstream cultural backgrounds so that they do not have to invest a lot on training employees about the culture that is present in the company. Biggest problem that any firm faces in the case of indigenous culture is that is that it is unique and different from the people that are living in the mainland (Bonn and Fisher 2011). This creates a problem for the managers of the company as the people that are in the living in the mainland always tend to ignore these people. According to the power distance index since the powers need to be distributed unequally and higher degree of this index shows that hierarchy clearly exists in the society and hence strategies must be designed in such a manner that all the people inside the firm should enjoy equal power.  The ignorance of their culture can also be seen through the fact that no companies in Australia in any industry have adopted their culture as a part of their organisational culture. They are regarded as traditionally backward culture having lesser reach to advanced technologies (Smith, et. al. 2012).

Culturally divulging people are generally not easily accepted at the workplace and often had to face business challenges in making an effective team. These kinds of members do not easily mix with other major community. The strategy must ensure that in terms of individualism vs collectivism, the managers must focus on bringing collectivism at the workplace. This occurs due to several types of reasons in which the major reason is the language barrier and the challenges related to understanding each other behaviour (Pan, Rowney, and Peterson, 2012). Both these factors are highly influenced by the culture they belong from. In the case of indigenous community, this is a greater problem. This is the reason why internal strategies needs to designed checking the requirements of the indigenous people.

Hofstede’s cultural dimension needs to be properly addressed so as to improve the success in the market. If all the features of the cultural dimension are taken care in a proper manner, then the chances of strategic success for the company improves. Power index has to be on the lower side whereas collectivism needs to be promoted (Vom Brocke and Sinnl, 2011). Along with this uncertainty must be avoided at the highest of priority as indigenous people do not accept the uncertainties in an appropriate manner (Franks, et. al. 2014). Feminism and masculinity needs to be on the average so as to ensure that diversity is promoted in the business. In order to tackle the challenges that company might face in present and future times, long term orientation has to be built.

Every company while making their decision and in the development of strategy has to take care of the need of the indigenous people so as to ensure that they have greater success in areas where they have greater population (Nielsen and Wilson, 2012). There are certain companies which is targeting customers from indigenous culture. For them the influence of indigenous culture is very much important as they have to ensure that their products are according to the culture of the people they are targeting. Failing to do so may lead to long term failures for the organisation.

Marketing strategies are highly influenced by the indigenous culture. This is because the marketing done by the firms are generally done checking the culture of the indigenous people. If the company aims to have a long term long term relationship with the customers, they need to design the business relationship on the basis of the cultural aspects (Wilburn and Wilburn 2011). Some of the people are from the local background hence the company has to ensure that their needs are properly taken care while designing the marketing strategy. Understanding the needs of the individual is sometimes effective but takes a lot of time hence companies look for the collective cultural demands. The touch or the representation of the indigenous culture in the marketing campaign allows the firm to make sure that they have an effective strategy to target the people. The marketing strategies are also to be build seeking the plans they have for the particular community. Sometimes it is seen that companies design a campaign for promotions and at this time it is very essential for the firm to understand the cultural needs of the Indigenous people (Esteves and Barclay 2011).

In Australia, there are huge numbers of Indigenous people living and no company can afford to neglect such a large population in their marketing campaign. In the segmentation and targeting strategy of the company, it is crucial that firm checks the cultural aspects of the indigenous people also. Aboriginal people have very different kind of attitude which every company needs to be included while formulating their strategies related to product marketing (Crane and Matten 2016). Understanding the behaviour of the target customers is the major aspect in the modern day business. This is very much essential in the case of the service industry as their services are always been provided as per the demand of the market. To understand their company needs to look at the cultural variances they have in the market.

In the strategies related to growth, it is crucial that company checks the demands of these people while moving forward with their strategies. The strategies such as Innovation, it is always essential that company takes care of the need of people that are culturally different so as to expand the reach of the people in the market (Spiller, et. al.  2011). Innovation should also support or say respect the culture of the aboriginal people. This is necessary for converting them into their permanent customers. It is usually seen that indigenous people are attracted towards the products that supports their cultural identity. This call for the need that a company must have a product development strategy checking the cultural requirements of this section of the society as well. There are people from the local and urban areas who need to be dealt with equal attention. It is found that people from the indigenous background generally live in the rural areas and hence companies need to formulate the strategies based on their plans for the rural areas (Tan and Wang 2011).

Along with this it has also been seen that companies formulate the strategies related to the CSR activities based on the people that are from the local backgrounds. It is often seen that CSR strategies are motivated by the culture that is present in the country. It is often seen that CSR activities are conducted as per the conditions in the local market (Mobley, Wang, and Li, 2012). These activities have a reflection of culture that is present in the country. More the cultural reflection of the aboriginal community is present in the CSR strategies made by the company more is the chance that they can gain attention of the people. It is the role of the strategist to involve the indigenous culture in the CSR activities. This not only let the people to join with the campaign but also makes many potential customers (Smith, 2013). In order to build an effective marketing plan that advocates the culture of the indigenous people, it is essential that a company have strategist from all the cultural backgrounds.

In making of the effective business partnership or relationship, culture plays a very essential role. There are many businesses in different parts of the world that are dependent on the indigenous people especially for the raw materials (Leonidou, et. al. 2013). For example the dairy industry in both Australia and New Zealand are dependent on the milk products that are given by the people from the community such as Maori and other indigenous people. Many other firms like the retail firms of groceries are also dependent on the farmers that are mostly from the indigenous cultural background. If the company fails to make a healthy cultural bond with these people, it could create sustainability challenges for the companies.

With the change in the global business environment, the severe change can also be noted in the way society has changed whether it may be of the mainstream communities or the indigenous communities. This is also essential for the growth of the indigenous people that are living in many parts of the world. In such an environment, it is essential that company understands need for cultural management not only at the workplace but also at the business level. Power index has to be lowered down so as to improve the condition. In many firms the strategies are made in such a manner that it directly targets the indigenous people. For example the firm recruits the sales person at the stores so that they can easily understand the demand of the customers that are from specific background and hence gives service to them. This is necessary for achieving higher customer satisfaction (Kolk, 2016). In many cases it has been seen that companies make strategies to communicate with the customers directly. In such cases the strategies of diversity management at the workplace become very much useful. This is because the people from the same community are able to communicate with each other without any specific kind of communicational barrier. By doing this, firms can easily make sure that they address each and every needs of these people. Long-term orientation vs. short-term orientation has to keep on the lower side by the company so as to ensure that their strategies are honoured.

In order to answer the questions that are there any ethical implications, it is very much obvious that if the company fails to address the issues related to the culture of the indigenous people then the chances of business disruption is very much likely. Indulgence as a dimension needs to be promoted at the workplace so that managers could easily improve the relationship with the indigenous community. As in the above part of the report it can be seen that there are multiple aspects of the business and its strategy where the culture of the indigenous people an influence hence if they are not been managed in a proper manner may lead to bigger ethical challenges for the organisation. This can be understood by the fact that if company’s HRM strategies do not support the recruitment and selection of the people from different cultural backgrounds then it may go against the ethics of business in Australia and other parts of the world. In this the strategy against any type of exploitation of the stakeholder (from indigenous cultural background) by any other stakeholder becomes very essential. This is why company’s governance plays a very important role in the cultural management at the workplace. It is also essential that company involves people from different cultural background in the process of decision making. This will ensure that strategies are not made against the ethics of the any culture (Jondle, Ardichvili, and Mitchell 2014). For example if any community restricts itself from any particular type of activities then he or she must not be compel to do so in their job. Since the uncertainty avoidance in the indigenous culture is lower side hence strategies must be designed as per the ethical norms in the society.  

If the company is not able to transform itself into a firm that looks the cultural aspect of each and every people then it will create ethical situations for the company. It is also essential that company makes policies that support the diversity management at the workplace. If not doing so they might lose their values which are again a bigger ethical challenge for the company. If the strategies are made according to the cultural dimensions of the indigenous people, there is a chance that it might gain the respect in the minds of the people that are from the same community. This will also help the company in gaining the support of the society and the government which is very much essential for the growth of the company (Peredo and McLean 2013). If Long-term orientation vs. short-term orientation is on the lower side then there will be chance current and future challenges of the company can be addressed properly. Ethical implications will also be highlighted if the company do not have a proper plan for the cultural strategic management. The stakeholders that are from the specific indigenous community might start to differ from the business. It is also essential that company adopts the good points of the cultural variances. If the company fails to do so then it can be possible that people might get out from the relationship they have with the company.

It is seen that the natural land or forests are generally the property of the indigenous people. In other words they have a great attachment towards these properties and hence the strategy for taking use of these resources needs to be done in a proper manner. For example in the case of land acquisition, company must think about the interests of the people from whom the land is acquired. Indigenous people should be given the highest priority in the strategy related to resource development as failing to do so may increase the tension between the local people and the firm (Spiller, et. al.  2011). Compensations must be given as per the industry and national standards so as to avoid any kind clashes. Since indigenous people can prove to be as an excellent market for any company hence the representation of the community is very much essential. In order avoid all the ethical implications company must have a member from such cultural backgrounds in their strategy making team.

References

Bonn, Ingrid, and Josie Fisher. "Sustainability: the missing ingredient in strategy." Journal of business strategy 32, no. 1 (2011): 5-14.

Crane, Andrew, and Dirk Matten. Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford University Press, 2016.

Esteves, Ana Maria, and Mary-Anne Barclay. "Enhancing the benefits of local content: integrating social and economic impact assessment into procurement strategies." Impact Assessment and Project Appraisal 29, no. 3 (2011): 205-215.

Foley, Dennis, and Allan John O'Connor. "Social capital and the networking practices of indigenous entrepreneurs." Journal of Small Business Management 51, no. 2 (2013): 276-296.

Franks, Daniel M., Rachel Davis, Anthony J. Bebbington, Saleem H. Ali, Deanna Kemp, and Martin Scurrah. "Conflict translates environmental and social risk into business costs." Proceedings of the National Academy of Sciences (2014): 201405135.

Jondle, Douglas, Alexandre Ardichvili, and James Mitchell. "Modeling ethical business culture: Development of the ethical business culture survey and its use to validate the CEBC model of ethical business culture." Journal of Business Ethics119, no. 1 (2014): 29-43.

Kolk, Ans. "The social responsibility of international business: From ethics and the environment to CSR and sustainable development." Journal of World Business 51, no. 1 (2016): 23-34.

Leonidou, Leonidas C., Olga Kvasova, Constantinos N. Leonidou, and Simos Chari. "Business unethicality as an impediment to consumer trust: The moderating role of demographic and cultural characteristics." Journal of Business Ethics 112, no. 3 (2013): 397-415.

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Mobley, William H., Ying Wang, and Ming Li, eds. Advances in global leadership. Emerald Group Publishing Limited, 2012.

Nielsen, Noah, and Erica Wilson. "From invisible to indigenous-driven: A critical typology of research in indigenous tourism." Journal of Hospitality and Tourism Management 19 (2012).

Pan, Yaotian, Julie A. Rowney, and Mark F. Peterson. "The structure of Chinese cultural traditions: An empirical study of business employees in China." Management and Organization Review 8, no. 1 (2012): 77-96.

Peredo, Ana María, and Murdith McLean. "Indigenous development and the cultural captivity of entrepreneurship." Business & Society 52, no. 4 (2013): 592-620.

Smith, Linda Tuhiwai. Decolonizing methodologies: Research and indigenous peoples. Zed Books Ltd., 2013.

Smith, Peter B., Claudio Torres, Chan-Hoong Leong, Pawan Budhwar, Mustafa Achoui, and Nadezhda Lebedeva. "Are indigenous approaches to achieving influence in business organizations distinctive? A comparative study of guanxi, wasta, jeitinho, svyazi and pulling strings." The International Journal of Human Resource Management 23, no. 2 (2012): 333-348.

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Wilburn, Kathleen M., and Ralph Wilburn. "Achieving social license to operate using stakeholder theory." Journal of International Business Ethics Vol 4, no. 2 (2011).

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